COMMON STOCK PURCHASE
WARRANT
PALATIN TECHNOLGIES,
INC.
|
|
| Warrant Shares: 474,242 |
Issuance Date: August 17, 2009 |
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, Xxxxxx & Xxxxxxx, LLC (the “Holder”) is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any time or
times on or after the Issuance Date (the “Exercisability Date”), but not after
11:59 p.m., New York time, on November 27, 2012 (the “Termination Date”), to subscribe for and purchase from
Palatin Technologies, Inc., a Delaware corporation (the “Company”), up to 474,242
shares (the “Warrant Shares”) of Common Stock.
Section
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated August 12, 2009, by and between the Company and the signatories thereto. This
Warrant is one of a series of warrants issued by the Company as of the date hereof
(individually, a “Warrant,” and collectively, the “Company Warrants”)
pursuant to (i) Section 2 of the Purchase Agreement and (ii) the Company’s
Registration Statement on Form S-3 (File number 333-146392) (the “Registration
Statement”).
Section
2. Exercise.
| |
a)
Exercise of Warrant. Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Exercisability Date and on or before the Termination Date by delivery to the Company (or
such other office or agency of the Company as it may designate by notice in writing to
the registered Holder at the address of the Holder appearing on the books of the Company)
of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto; and,
within three (3) Trading Days of the date said Notice of Exercise is delivered to the
Company, the Company shall have received payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank or, if available, pursuant to the cashless exercise procedure specified in
Section 2(c) below. Notwithstanding anything herein to the contrary, the Holder shall not
be required to physically surrender this Warrant to the Company until the Holder has
purchased all of the Warrant Shares available hereunder and the Warrant has been
exercised in full, in which case, the Holder shall surrender this Warrant to the Company
for cancellation within three (3) Trading Days of the date the final Notice of Exercise
is delivered to the Company. Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have the effect
of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal
to the applicable number of Warrant Shares purchased. The Holder and the
|
1
| |
Company shall
maintain records showing the number of Warrant Shares purchased and the date of such
purchases. The Company shall deliver any objection to any Notice of Exercise Form within
2 Business Days of receipt of such notice. The Holder and any assignee, by acceptance of
this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares hereunder, the number of
Warrant Shares available for purchase hereunder at any given time may be less than the
amount stated on the face hereof. |
| |
b)
Exercise Price. The exercise price per share of the Common Stock
under this Warrant shall be $0.4125, subject to adjustment hereunder (the
“Exercise Price”).
|
| |
c)
Cashless Exercise. If at the time of exercise hereof there is no
effective registration statement registering, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the
Holder or an exemption from registration is not available such that the
Holder (unless the Holder is at the time of exercise is an Affiliate of
the Company) could not immediately resell all Warrant Shares without any
filing or limitation on volume, then this Warrant may also be exercised,
in whole or in part, at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a certificate for the number
of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)]
by (A), where:
|
| |
|
(A) |
|
=
the VWAP on the Trading Day immediately preceding the date on which Holder
elects to exercise this Warrant by means of a “cashless exercise,” as
set forth in the applicable Notice of Exercise; |
| |
|
(B) |
|
=
the Exercise Price of this Warrant, as adjusted hereunder; and |
| |
|
(X) |
|
=
the number of Warrant Shares that would be issuable upon exercise of this
Warrant in accordance with the terms of this Warrant if such exercise were
by means of a cash exercise rather than a cashless exercise. |
| |
“VWAP”means,
for any date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume
weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by
Bloomberg L.P. (“Bloomberg”) (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time), (b) if the OTC Bulletin Board is not
a Trading Market, the volume weighted average price of the Common Stock for such date (or
the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not
then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published by Pink OTC Markets,
Inc. (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Company and
reasonably acceptable to the Holders of a majority in interest of the Securities then
outstanding, the fees and expenses of which shall be paid by the Company.
|
2
| |
In
the event the Registration Statement is effective at the time this Warrant is exercised,
there is no circumstance that would require the Company to net cash settle this Warrant.
|
| |
d)
Mechanics of Exercise.
|
| |
i.
Delivery of Certificates Upon Exercise. Certificates for shares purchased
hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through its
Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is then a
participant in such system and either (A) there is an effective Registration Statement
covering the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder
or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical
delivery to the address specified by the Holder in the Notice of Exercise by the date
that is three (3) Trading Days after the latest of (A) the delivery to the Company of the
Notice of Exercise Form, (B) surrender of this Warrant (if required) and (C) payment of
the aggregate Exercise Price as set forth above (including by cashless exercise, if
permitted) (such date, the “Warrant Share Delivery Date”). This Warrant shall
be deemed to have been properly exercised on the first date on which all of the foregoing
have been delivered to the Company. The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all purposes, as of the date the
Warrant has been exercised, with payment to the Company of the Exercise Price (or by
cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any,
pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid.
|
| |
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been
exercised in part, the Company shall, at the request of a Holder and upon surrender of
this Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
|
| |
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent
to transmit to the Holder a certificate or the certificates representing
the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share
Delivery Date, then, the Holder will have the right to rescind such
exercise as provided in the Purchase Agreement.
|
| |
iv.
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.
In addition to any other rights available to the
|
3
| |
Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate
or the certificates representing the Warrant Shares pursuant to an exercise on or before
the Warrant Share Delivery Date, and if after such Warrant Share Delivery Date, the
Holder is required by its broker to purchase (in an open market transaction or otherwise)
or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of
Warrant Shares that the Company was required to deliver to the Holder in connection with
the exercise at issue times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the Holder, either reinstate
the portion of the Warrant and equivalent number of Warrant Shares for which such
exercise was not honored (in which case such exercise shall be deemed rescinded) or
deliver to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For
example, if the Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A)
of the immediately preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence
of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms hereof. |
| |
v.
No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such exercise, the Company shall, pay a cash
adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.
|
| |
vi.
Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which transfer taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the
|
4
| |
Holder or in such name or names as
may be directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant
when surrendered for exercise shall be accompanied by a written assignment of this
Warrant substantially in the form attached hereto (the “Assignment Form”) duly
executed by the Holder and the Company may require, as a condition thereto, the payment
of a sum sufficient to reimburse it for any transfer tax incidental thereto. |
| |
vii.
Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
|
| |
e)
Xxxxxx’s Exercise Limitations. The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise,
to the extent that after giving effect to such issuance after exercise as
set forth on the applicable Notice of Exercise, the Holder (together with
the Holder’s Affiliates, and any other Persons acting as a group
together with the Holder or any of the Holder’s Affiliates), would
beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is
being made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by the Holder or any of its Affiliates
and (ii) exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company (including, without limitation, any
other Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially owned
by the Holder or any of its Affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder, it
being acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section 13(d) of
the Exchange Act and the Holder is solely responsible for any schedules
required to be filed in accordance therewith. To the extent that the
limitation contained in this Section 2(e) applies, the determination of
whether this Warrant is exercisable (in relation to other securities owned
by the Holder together with any Affiliates) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the Holder, and
the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination and shall have no
liability for exercises of the Warrant that are not in compliance with the
Beneficial Ownership Limitation. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
|
5
| |
promulgated thereunder.
For purposes of this Section 2(e), in determining the number of outstanding shares of
Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as
reflected in (A) the Company’s most recent periodic or annual report filed with the
Commission, as the case may be, (B) a more recent public announcement by the Company or
(C) a more recent written notice by the Company or the Transfer Agent setting forth the
number of shares of Common Stock outstanding. Upon the written or oral request of a
Holder, the Company shall within two Trading Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding as established by (A), (B),
or (C) above, as applicable. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its Affiliates since
the date as of which such number of outstanding shares of Common Stock was reported. The
“Beneficial Ownership Limitation” shall be 4.9% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock issuable upon exercise of this Warrant. The Holder, upon not less than 61
days’ prior notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock
upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e)
shall continue to apply. Any such increase or decrease will not be effective until the
61st day after such notice is delivered to the Company and shall only be effective with
respect to such Holder. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this
Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in this paragraph shall apply to a successor holder
of this Warrant. |
Section
3. Certain Adjustments.
| |
a)
Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise makes a
distribution or distributions on shares of its Common Stock or any other
equity or equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of Common
Stock issued by the Company upon exercise of this Warrant), (ii)
subdivides outstanding shares of Common Stock into a larger number of
shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or
(iv) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the
number of shares of Common Stock outstanding immediately after such event,
and the number of shares
issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
|
6
| |
made
pursuant to this Section 3(a) shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification. |
| |
c)
Rights Upon Distribution of Assets. If at any time or from time to
time the holders of Common Stock of the Company (or any shares of stock or
other securities at the time receivable upon the exercise of this Warrant)
shall have received or become entitled to receive, without payment
therefore:
|
| |
(i)
Common Stock or any shares of stock or other securities which are at any time
directly or indirectly convertible into or exchangeable for Common Stock, or
any rights or options to subscribe for, purchase or otherwise acquire any of
the foregoing by way of dividend or other distribution (other than a dividend
or distribution covered in Section 3(a) above);
|
| |
(ii)
any cash paid or payable otherwise than as a cash dividend; or
|
| |
(iii)
Common Stock or additional stock or other securities or property (including
cash) by way of spinoff, split-up, reclassification, combination of shares or
similar corporate rearrangement (other than shares of Common Stock pursuant to
Section 3(a) above), then and in each such case, the Holder hereof will,
upon the exercise of this Warrant, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of stock and other securities
and property (including cash in the cases referred to in clauses (ii) and
(iii) above) which such Holder would hold on the date of such exercise had
such Holder been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such
shares or all other additional stock and other securities and property.
|
| |
d)
Fundamental Transaction. If, at any time while this Warrant is
outstanding, (i) the Company, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Company
with or into another Person (but excluding a migratory merger effected
solely for the purpose of changing the jurisdiction of incorporation of
the Company), (ii) the Company, directly or indirectly, effects any sale,
assignment, transfer or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct
or indirect, purchase offer, tender offer or exchange offer (whether by
the Company or another Person) is completed pursuant to which holders of
Common Stock are permitted to sell, tender or exchange their shares for
other securities, cash or property and has been accepted by the holders of
50% or more of the outstanding Common Stock, (iv) the Company, directly or
indirectly, in one or more related transactions effects any
reclassification, reorganization or recapitalization of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or
property, (v) the Company,
directly or indirectly, in one or more related transactions consummates a stock or share
purchase agreement or other business combination (including, without limitation,
|
7
| |
a
reorganization, recapitalization, spin-off or scheme of arrangement) with another Person
whereby such other Person acquires more than 50% of the outstanding shares of Common
Stock (not including any shares of Common Stock held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making or party
to, such stock or share purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such Fundamental Transaction, at the
option of the Holder (without regard to any limitation in Section 2(e) on the exercise of
this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such
Fundamental Transaction by a holder of the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental Transaction in
which the Company is not the survivor (the “Successor Entity”) to assume in
writing all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to
written agreements in form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction
and shall, at the option of the holder of this Warrant, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which is exercisable for a
corresponding number of shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior
to such Fundamental Transaction, and with an exercise price which applies the exercise
price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the
value of such shares of capital stock, such number of shares of capital stock and such
exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any
such Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant and the other Transaction |
8
| |
Documents referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume all of
the obligations of the Company under this Warrant and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company herein. |
| |
e)
Calculations. All calculations under this Section 3 shall be made to
the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the sum of
the number of shares of Common Stock (excluding treasury shares, if any)
issued and outstanding.
|
| |
i.
Adjustment to Exercise Price. Whenever the Exercise Price is
adjusted pursuant to any provision of this Section 3, the Company shall
promptly mail to the Holder a notice setting forth the Exercise Price
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.
|
| |
ii.
Notice to Allow Exercise by Xxxxxx. If during the term in which this
Warrant may be exercised by the Holder (A) the Company shall declare a
dividend (or any other distribution in whatever form) on the Common Stock,
(B) the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class or of
any rights, (D) the approval of any stockholders of the Company shall be
required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the
affairs of the Company, then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the
Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or warrants, or if a
record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as
of which it is expected that holders of the Common Stock of record shall
be entitled to exchange
their shares of the Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger,
|
9
| |
sale, transfer or share exchange; provided
that the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified in such
notice. To the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, the
Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein. |
Section
4. Transfer of Warrant.
a)
Transferability. Subject to compliance with applicable securities laws, this
Warrant and all rights hereunder (including, without limitation, any registration rights)
are transferable, in whole or in part, upon surrender of this Warrant at the principal
office of the Company or its designated agent, together with the Assignment Form duly
executed by the Holder or its agent or attorney and funds sufficient to pay any transfer
taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly
be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
Notwithstanding the foregoing, for a period of six months after the issuance date of this
Warrant (which shall not be earlier than the closing date of the offering pursuant to
which this Warrant is being issued), neither this Warrant nor any Warrant Shares issued
upon exercise of this Warrant shall be sold, transferred, assigned, pledged, or
hypothecated, or be the subject of any hedging, short sale, derivative, put, or call
transaction that would result in the effective economic disposition of the securities by
any person for a period of 180 days immediately following the date of effectiveness or
commencement of sales of the offering pursuant to which this Warrant is being issued,
except the transfer of any security:
(i) by operation of law or by reason
of reorganization of the Holder;
(ii) to any FINRA member firm
participating in the offering and the officers or partners thereof, if all securities so
transferred remain subject to the lock-up restriction in this Section 4 for the remainder
of the time period;
(iii) if the aggregate amount of
securities of the Company held by the Holder or related person do not exceed 1% of the
securities being offered;
(iv) that is beneficially owned on a
pro-rata basis by all equity owners of an investment fund, provided that no participating
member manages or otherwise directs investments by the fund, and participating members in
the aggregate do not own more than 10% of the equity in the fund; or
10
(v) the exercise or conversion of
any security, if all securities received remain subject to the lock-up restriction in
this Section 4 for the remainder of the time period.
b)
New Warrants. This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Notwithstanding anything to the contrary
herein, in no event shall this Warrant be subdivided into units of less than 5,000
Warrant Shares and such new Warrants shall not be further subdivided. Subject to
compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance with such
notice. All Warrants issued on transfers or exchanges shall include reference to the
initial issuance date set forth on the first page of this Warrant and shall be identical
with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise
hereof or any distribution to the Holder, and for all other purposes, absent actual
notice to the contrary.
d)
Understandings or Arrangements. Such Holder is acquiring this Warrant as
principal for its own account and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution of such Warrant (this
representation and warranty not limiting such Holder’s right to sell the Warrant
pursuant to the Registration Statement or otherwise in compliance with applicable federal
and state securities laws.) Such Holder is acquiring this Warrant hereunder in the
ordinary course of its business.
Section
5. Miscellaneous.
| |
a)
No Rights as Stockholder Until Exercise. Except as otherwise
provided herein, this Warrant does not entitle the Holder to any voting
rights, including, without limitation, any right to consent to any
corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise)
nor any right to receive notice of meetings, nor does it entitle the
Holder to any right to receive dividends or subscription rights, or any
other rights as a stockholder of the Company prior to the exercise hereof
as set forth in Section 2(d)(i).
|
| |
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock certificate relating to the
Warrant Shares, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock
|
11
| |
certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate. |
| |
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken
or such right may be exercised on the next succeeding Business Day.
|
| |
The
Company covenants that, during the period the Warrant is outstanding, it will reserve
from its authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights under
this Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for the Warrant Shares
upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be
issued as provided herein without violation of any applicable law or
|
| |
regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed.
The Company covenants that all Warrant Shares which may be issued upon the exercise of
the purchase rights represented by this Warrant will, upon exercise of the purchase
rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such
issue). |
| |
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any
action, including, without limitation, amending its certificate of incorporation or
through any reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of Holder as set forth
in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount
payable therefor upon such exercise immediately prior to such increase in par value, (ii)
take all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise
of this Warrant and (iii) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be, necessary to enable the Company to perform its
obligations under this Warrant.
|
12
| |
Before
taking any action which would result in an adjustment in the number of Warrant Shares for
which this Warrant is exercisable or in the Exercise Price, the Company shall use
commercially reasonable efforts to obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
|
| |
e)
Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.
|
| |
f)
Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, and the
Holder does not utilize cashless exercise, will have restrictions upon
resale imposed by state and federal securities laws.
|
| |
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder’s rights, powers
or remedies. Without limiting any other provision of this Warrant or the
Purchase Agreement, if the Company willfully and knowingly fails to comply
with any provision of this Warrant, which results in any
|
| |
material
damages to the Holder, the Company shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to, reasonable
attorneys’fees, including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder. |
| |
h)
Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.
|
| |
i)
Limitation of Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder,
shall give rise to any liability of Holder for the purchase price of any
Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
|
| |
j)
Remedies. The Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and
hereby agrees to waive and not to assert the defense in any action for
specific performance that a remedy at law would be adequate.
|
| |
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are intended to be for
|
13
| |
the
benefit of any Holder from time to time of this Warrant and shall be enforceable by the
Holder or holder of Warrant Shares. |
| |
l)
Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and Holders holding
Warrants at least equal to 67% of the Warrant Shares issuable upon
exercise of all then outstanding Warrants.
|
| |
m)
Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Warrant.
|
| |
n)
Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
|
********************
(Signature Pages Follow)
14
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized as of the date first above indicated.
|
|
|
|
| |
PALATIN TECHNOLOGIES, INC. |
|
| |
| |
By: |
|
|
| |
|
Name:
Title: |
|
15
NOTICE OF EXERCISE
TO: PALATIN TECHNOLGIES, INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the
Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
| |
[ ] in lawful money of the United States; or |
| |
[ ] [if permitted] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the cashless
exercise procedure set forth in subsection 2(c). |
(3)
Please issue a certificate or certificates representing said Warrant Shares in
the name of the undersigned registered holder:
| |
__________________________________________________ |
The Warrant Shares shall be delivered
to the following DWAC Account Number or by physical delivery of a certificate to:
| |
__________________________________________________ |
| |
__________________________________________________ |
| |
__________________________________________________ |
[SIGNATURE OF HOLDER]
Name of Investing Entity:
________________________________________________________________________
Signature of
Authorized Signatory of Investing Entity:
_________________________________________________
Name of Authorized Signatory:
___________________________________________________________________
Title of
Authorized Signatory: ____________________________________________________________________
Date:
________________________________________________________________________________________
ASSIGNMENT FORM
(To assign the
foregoing warrant, execute
this form and supply required information.
Do not use this form
to exercise the warrant.)
FOR
VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to
_______________________________________________
whose address is
_______________________________________________.
_______________________________________________
|
|
| |
Dated: ______________, _______ |
|
|
|
|
| |
Holder's Signature: |
|
____________________________________________ |
| |
| |
Holder's Address: |
|
____________________________________________ |
| |
| |
|
|
____________________________________________ |
Signature Guaranteed:
___________________________________________
NOTE: The signature to this
Assignment Form must correspond with the name as it appears on the face of the Warrant,
without alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank or trust company. Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the foregoing
Warrant.
