THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN...
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933, AS AMENDED OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED.
|
No.
W-M809-PA
|
Void
after: August 26, 2014
|
THIS
WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME
ON AUGUST
26, 2014 (THE “EXPIRATION DATE”)
WARRANT TO PURCHASE
SHARES
This
Warrant is being issued to the Maxim Partners LLC (“Holder”) by CNS
Response, Inc., a Delaware corporation (the “Company”) in
connection with its services under the Placement Agency Agreement, dated August
3, 2009, by and between the Company and the Holder in connection with the
Company’s private offering to select, accredited investors of units, each unit
comprised of 180,000 shares of Common Stock and a five-year warrant to purchase
90,000 shares of the Company’s Common Stock at an exercise price of $0.30 per
share, in accordance with, and subject to, the terms and conditions described in
the Company’s private offering pursuant to that certain Private Placement
Memorandum dated August 26, 2009, as amended or supplemented from time to time
(the “Memorandum”).
Simultaneously
with the issuance of this Warrant, the Holder and the Company shall enter into a
Registration Rights Agreement, dated as of the date hereof (the “Agreement”). All
capitalized terms not defined in this Warrant shall have the meaning ascribed to
them in the Agreement.
1. Purchase of
Shares. Subject to the terms and conditions hereinafter set
forth and set forth in the Agreement, the holder of this Warrant is entitled,
upon surrender of this Warrant at the principal office of the Company (or at
such other place as the Company shall notify the holder hereof in writing), to
purchase from the Company two hundred and seventy-four thousand, eight hundred
and sixty-seven (274,867) fully paid and nonassessable Shares (as defined below)
at the Exercise Price (as defined below) (subject to adjustment as set forth in
Section 6 below).
2. Definitions.
(a) Exercise
Price. The exercise price for the Shares initially shall be
110% of the Investor Warrant exercise price issued in the Company’s private
offering pursuant to the Memorandum, or $0.33 per share (such price, as adjusted
from time to time, is herein referred to as the “Exercise
Price”).
(b) Exercise
Period. This Warrant shall be exercisable, in whole or in
part, during the term commencing on the date hereof and ending on the Expiration
Date.
(c) The
Shares. The term “Shares” shall mean
shares of the Company’s common stock, par value $0.001 per share, and the term
“Warrant
Shares” shall mean the Shares purchasable upon exercise of this
Warrant.
3. Method of
Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 2 above, the holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise
shall be effected by:
(i) the
surrender of the Warrant, together with a notice of exercise to the Secretary of
the Company at its principal offices; and
(ii) the
payment to the Company of an amount equal to the aggregate Exercise Price for
the number of Warrant Shares being purchased.
4. Certificates for
Shares. Upon the exercise of the purchase rights evidenced by
this Warrant, one or more certificates for the number of Warrant Shares so
purchased shall be issued as soon as practicable thereafter, and in any event
within thirty (30) days of the delivery of the subscription notice.
5. Issuance of
Shares. The Company covenants that the Warrant Shares, when
issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof.
6. Adjustment of Exercise Price
and Number of Shares. The number of and kind of Warrant Shares
and the Exercise Price shall be subject to adjustment from time to time as
follows:
(a) Subdivisions, Combinations
and Other Issuances. If the Company shall at any time prior to
the expiration of this Warrant subdivide the Shares, by split-up or otherwise,
or combine its Shares, or issue additional shares of its Shares as a dividend,
the number of Warrant Shares shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination. Appropriate adjustments shall also be made to
the purchase price payable per share, but the aggregate purchase price payable
for the total number of Warrant Shares (as adjusted) shall remain the
same. Any adjustment under this Section 6(a) shall become
effective at the close of business on the date the subdivision or combination
becomes effective, or as of the record date of such dividend, or in the event
that no record date is fixed, upon the making of such dividend.
(b) Reclassification,
Reorganization and Consolidation. In case of any
reclassification, capital reorganization, or change in the capital stock of the
Company (other than as a result of a subdivision, combination, or stock dividend
provided for in Section 6(a) above), then the Company shall make
appropriate provision so that the holder of this Warrant shall have the right at
any time prior to the expiration of this Warrant to purchase, at a total price
equal to that payable upon the exercise of this Warrant, the kind and amount of
shares of stock and other securities and property receivable in connection with
such reclassification, reorganization, or change by a holder of the same number
of Shares as were purchasable by the holder of this Warrant immediately prior to
such reclassification, reorganization, or change. In any such case
appropriate provisions shall be made with respect to the rights and interest of
the holder of this Warrant so that the provisions hereof, including Sections
6(a), shall thereafter be applicable with respect to any shares of stock or
other securities and property deliverable upon exercise hereof, and appropriate
adjustments shall be made to the purchase price per share payable hereunder,
provided the aggregate purchase price shall remain the same.
(c) Notice of
Adjustment. When any adjustment is required to be made in the
number or kind of Warrant Shares, or in the Exercise Price, the Company shall
promptly notify the holder of such event and of the number of Warrant Shares or
other securities or property thereafter purchasable upon exercise of this
Warrant.
7. No Fractional
Shares. No fractional shares shall be issued upon the exercise
of this Warrant, but in lieu of such fractional shares the Company shall make a
cash payment therefor on the basis of the Exercise Price then in
effect.
8. Representations of the
Company. The Company represents and warrants to Holder as
follows:
(a) This
Warrant has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company enforceable in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies.
(b) The
execution and delivery of, or performance by the Company under this Warrant
conflicts with or violates, or will result in the creation or imposition of any
lien, charge or other encumbrance upon any of the assets of the Company under,
any agreement or other instrument to which the Company is a party or by which
the Company or its assets may be bound, any term of the certificate of
incorporation or by-laws of the Company, or any license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or any of
its assets, except where such conflict, violation or creation would not have a
material adverse effect on the Company.
9. Representations and
Warranties by the Holder. The Holder represents and warrants
to the Company as follows:
(a) The
Holder is an “accredited investor” as defined by Rule 501 under the Securities
Act of 1933, as amended (the “Act”), and is capable
of evaluating the merits and risks of its investment in the Warrant and the
Warrant Shares, and has the ability and capacity to protect its
interests.
(b) The
Holder understands that the Warrant and the Warrant Shares are not presently
registered, but the Holder is entitled to certain rights as set forth in the
Agreement.
(c) The
Holder is acquiring the Warrant and the Warrant Shares for investment purposes
and not with a view to distribution or resale, nor with the intention of
selling, transferring or otherwise disposing of all or any part thereof for any
particular price, or at any particular time, or upon the happening of any
particular event or circumstance, except selling, transferring, or disposing the
Warrant Shares made in full compliance with all applicable provisions of the
Act, the rules and regulations promulgated by the SEC thereunder, and applicable
state securities laws; and that an investment in the Warrant and the Warrant
Shares is not a liquid investment.
10. Restrictive
Legend.
The Warrant Shares (unless registered
under the Act) shall be stamped or imprinted with a legend in substantially the
following form:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS. COPIES OF THE AGREEMENT COVERING THE PURCHASE
OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY.
THE SALE
OF SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105
OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO
THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED
UNLESS THE SALE IS SO EXEMPT.
In
addition, the Holder understands that the certificates representing the Warrant
Shares, and any and all securities issued in replacement thereof or in exchange
therefor, shall bear such legend as may be required by the securities laws of
the jurisdiction in which the Holder resides. Because of the legal
restrictions imposed on resale, the Holder understands that the Company shall
have the right to note stop-transfer instructions in its stock transfer records,
and the Holder has been informed of the Company’s intention to do
so. Any sales, transfers, or other dispositions of the Warrant or the
Warrant Shares by the Holder, if any, will be made in compliance with the Act
and all applicable rules and regulations promulgated thereunder.
11. Warrants
Transferable. Subject to compliance with the terms and
conditions of this Section 11, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the Holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed or
accompanied by written instructions of transfer in the form attached
hereto. With respect to any offer, sale or other disposition of this
Warrant or any Warrant Shares prior to registration of such Warrant or the
Warrant Shares, the Holder hereof agrees to give written notice to the Company
prior thereto, describing briefly the manner thereof, together with a written
opinion of such Xxxxxx's counsel, or other evidence, if requested by the
Company, to the effect that such offer, sale or other disposition may be
effected without registration or qualification (under the Act as then in effect
or any federal or state securities law then in effect) of this Warrant or the
Warrant Shares and indicating whether or not under the Act certificates for this
Warrant or the Warrant Shares to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order to
ensure compliance with such law. Upon receiving such written notice
and reasonably satisfactory opinion or other evidence, if so requested, the
Company, as promptly as practicable, shall notify such Holder that such Holder
may sell or otherwise dispose of this Warrant or such Warrant Shares, all in
accordance with the terms of the notice delivered to the Company. If
a determination has been made pursuant to this Section 11 that the opinion of
counsel for the Holder or other evidence is not reasonably satisfactory to the
Company, the Company shall so notify the Holder promptly with details thereof
after such determination has been made. Each certificate representing
this Warrant or the Warrant Shares transferred in accordance with this Section
11 shall bear a legend as to the applicable restrictions on transferability in
order to ensure compliance with such laws, unless in the aforesaid opinion of
counsel for the Holder, such legend is not required in order to ensure
compliance with such laws. The Company may issue stop transfer
instructions to its transfer agent in connection with such
restrictions. Notwithstanding the foregoing, Holder may assign this
Warrant or the Warrant Shares to an affiliated entity without the prior written
consent of the Company so long as such assignment complies with applicable
law.
12. Rights of
Stockholders. No holder of this Warrant shall be entitled, as
a Warrant holder, to vote or receive dividends or be deemed the holder of the
Shares or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the holder of this Warrant, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised and the Warrant shall have become deliverable,
as provided herein.
13. Notices. All
notices and other communications given or made hereunder shall be in writing and
shall be deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the
next business day, with a copy to be sent by United States first class mail,
postage prepaid, (c) five (5) days after being sent by registered or certified
mail, return receipt required, postage prepaid, or (d) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be
sent to the respective parties at their address or fax number as set forth on
the signature page to the Agreement or to such electronic mail address,
facsimile number or address as subsequently modified by written notice given in
according with this Section 14.
14. Governing
Law. This Warrant and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflicts of law
provisions of the State of New York or of any other state.
15. Rights and Obligations
Survive Exercise of Warrant. Unless otherwise provided herein,
the rights and obligations of the Company, of the holder of this Warrant and of
the holder of the Warrant Shares, shall survive the exercise of this
Warrant.
[Signature
Page Follows]
Issued
this __ day of _______, 2009.
|
By:
|
||
|
Name: Xxxxxx
Xxxxxxxxx
|
||
|
Its: Chief
Executive Officer
|
||
|
Address: 0000
Xxxxxxx Xxxxxx, Xxxxx 000
|
||
|
Costa Mesa, CA
92626
|
||
Accepted
and agreed:
|
|
Address:
EXHIBIT A
NOTICE OF
EXERCISE
Attention:
Chief Executive Officer
1. The
undersigned hereby elects to purchase __________ Shares of _____________
pursuant to the terms of the attached Warrant.
2. The
undersigned elects to exercise the attached Warrant by means of a cash payment,
and tenders herewith payment in full for the purchase price of the shares being
purchased, together with all applicable transfer taxes, if any.
3. Please
issue a certificate or certificates representing said Shares in the name of the
undersigned or in such other name as is specified below:
|
(Name)
|
|
(Address)
|
4. The
undersigned hereby represents and warrants that the aforesaid Shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale, in connection with the distribution thereof, and that the
undersigned has no present intention of distributing or reselling such shares
and all representations and warranties of the undersigned set forth in the
attached Warrant are true and correct as of the date hereof.
|
(Signature)
|
||
|
(Name)
|
||
|
(Date)
|
(Title)
|
FORM
OF TRANSFER
(To be
signed only upon transfer of Warrant)
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
_______________________________________________ the right represented by the
attached Warrant to purchase ____________ shares
of ________________________ of CNS Response, Inc. to which the
attached Warrant relates, and appoints ______________ Attorney to transfer such
right on the books of __________, with full power of substitution in the
premises.
|
Dated:
____________________
|
|
(Signature
must conform in all respects to name of
Xxxxxx as specified on the face of the Warrant) |
||
|
Address:
|
||
Signed in
the presence of:
_______________________________________
