FORM OF WARRANT AGREEMENT
Exhibit 4.1
FORM
OF WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the “Agreement”) is dated as of October ___, 2006 between Critical
Therapeutics, Inc., a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a New
Jersey limited liability company (the “Warrant Agent”).
The Company proposes to issue stock purchase warrants (hereinafter called the “Warrants”).
Each Warrant entitles the holder thereof to purchase, within five years from the offering date, one
share of common stock, par value $0.001 per share (the “Common Stock”), at a purchase price equal
to $ per share. The Warrant Agent, at the request of the Company, has agreed to act as the
agent of the Company in connection with the issuance, registration, transfer, exchange, and
exercise of Warrants.
NOW, THEREFORE, in consideration of the premises and mutual agreements herein set forth:
Section 1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent
to act as agent for the Company in accordance with the instructions hereinafter set forth in this
Agreement, and the Warrant Agent hereby accepts such appointment. The Company may from time to time
appoint such Co-Warrant Agents as it may deem necessary or desirable. The Warrant Agent shall have
no duty to supervise, and shall in no event be liable for, the acts or omissions of any such
Co-Warrant Agents. The Company shall promptly notify the Warrant Agent from time to time in writing
of the number of Warrants to be issued and furnish written instructions in connection therewith.
Section 2. Form of Warrant Certificates. The Warrant Certificates (and the forms of
election to purchase shares and of assignment to be printed on the reverse thereof) shall be
substantially of the tenor and purport recited in Exhibit A hereto and may have such
letters, numbers or other marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Warrant Agreement, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Warrants may from time to time be listed, or to conform to usage,
but any of which do not affect the rights, immunities, duties or liabilities of the Warrant Agent
under this Agreement. The Warrant Certificates shall be dated as of the date of issuance thereof by
the Warrant Agent, either upon initial issuance or upon transfer or exchange, and initially shall
entitle the holders thereof to purchase one share of Common Stock, but the number of such shares
and the purchase price per share of Common Stock shall be subject to adjustments as provided
herein.
Section 3. Countersignature and Registration. The Warrant Certificates shall be
executed on behalf of the Company by the President, the Chief Financial Officer, the Chief
Operating Officer or the Secretary, by facsimile signature. The Warrant Certificates shall be
manually countersigned by the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company before countersignature by the Warrant
Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless, may be
countersigned by the Warrant Agent, issued and delivered with the same force and effect as though
the person who signed such Warrant Certificates had not ceased to be such officer of the Company;
and any Warrant Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Warrant Certificates, shall be a proper officer of the Company
to sign such Warrant Certificates, although at the date of the execution of this Warrant Agreement
any such person was not such an officer.
The Warrant Agent will keep or cause to be kept, at its office designated for such purposes,
books for registration and transfer of the Warrant Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Warrant Certificates, the number of
Warrants evidenced on its face by each of the Warrant Certificates, and the date of each of the
Warrant Certificates.
The Warrant Agent shall countersign a Warrant Certificate only (a) upon initial issuance of
the Warrants in accordance with the written order signed by the President or any Vice President or
(b) upon exchange, transfer or substitution for one or more previously countersigned Warrant
Certificates as hereinafter provided.
Section 4. Transfer and Exchange. Subject to Section 6 hereof, the Warrants shall not
be sold or transferred unless the applicable Warrant Certificate is surrendered for transfer to the
Warrant Agent properly endorsed, or accompanied by appropriate instruments of transfer and written
instructions for transfer, at which time the Warrant Agent shall register the transfer of such
outstanding Warrant Certificate upon the books to be maintained by the Warrant Agent for that
purpose. Upon any such registration of transfer, a new Warrant Certificate shall be issued to the
transferee and the surrendered Warrant Certificate shall be canceled by the Warrant Agent. Any
Warrant Certificate may be exchanged at the option of the holder thereof, upon surrender at the
office of the Warrant Agent specified in Section 21 hereof, for another Warrant Certificate, or
other Warrant Certificates of different denominations, representing in the aggregate the right to
purchase a like number of shares of Common Stock. No fractional Warrant Certificates will be
issued. The Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of Warrant Certificates. The
Warrant Agent shall have no duty or obligation to take any action under any Section of this
Agreement which requires the payment by a holder of a Warrant Certificate of applicable taxes and
charges unless and until the Warrant Agent is satisfied that all such taxes and/or charges have
been paid.
Section 5. Common Stock and Warrant Common Stock. As hereinafter used in this
Agreement, Common Stock shall mean stock of the Company of any class, whether now or hereafter
authorized, which has the right to participate in the distribution of either earnings or assets of
the Company without limit as to amount or percentage, and Warrant Common Stock shall mean only
Common Stock, and stock of any other class into which such presently authorized Common Stock may
hereafter be changed, issuable upon exercise of Warrant. In case, by reason of the operation of
Section 7, the Warrants shall entitle the registered holders thereof
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to purchase any other shares of stock or other securities or property of the Company or of any
other corporation, any reference in this Agreement to the exercise of Warrants shall be deemed to
refer to and include the purchase of such other shares of stock or other securities or property
upon such exercise.
Section 6. Warrant Price and Stock Conversion Date of Warrants. The registered holder
of any Warrant Certificate may exercise the Warrants evidenced thereby in whole or in part at any
time on or after the date hereof upon surrender of the Warrant Certificate with the form of
election to purchase on the reverse side thereof duly executed, to the Warrant Agent at the Warrant
Agent’s office designated for such purpose, together with payment of the purchase price for each
share of Common Stock as to which the Warrants are exercised, at or prior to 3:30 p.m. Eastern Time
on October ___, 2011 (the “Exercise Date”).
The purchase price for each share of Common Stock
pursuant to the exercise of a Warrant (the
“Warrant Price”) shall be equal to
$ per share, in each case as adjusted pursuant to Section 7
hereof, and shall be payable in lawful money of the United States of America.
Anything in this Agreement to the contrary notwithstanding, the Warrant Agent shall have no
duty (i) to determine or calculate the Warrant Price or (ii) confirm or verify the accuracy or
correctness of the Warrant Price; the Warrant Agent’s sole duty under this Section is to accept the
Warrant Certificates and take possession for the benefit of the Company of the payment of the
Warrant Price delivered to it by a holder of the Warrant Certificate.
Section 7. Warrant Adjustments.
(a) Stock Dividends, Subdivisions, Combinations and Reclassifications. In case the
Company shall at any time after the date of this Agreement (i) declare a dividend on the Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, (iii) combine
the outstanding Common Stock into a smaller number of shares, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing corporation), the
Warrant Price in effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and/or the number and kind of shares of
capital stock issuable upon exercise of the Warrants on such date shall be proportionately adjusted
so that the holder of any Warrant exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Warrant had been exercised
immediately prior to such date and at a time when the Common Stock transfer books of the Company
were open, such holder would have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) Distributions. If at any time after the date hereof the Company shall fix a record
date for the making of a distribution to all holders of its Common Stock of evidences of its
indebtedness or assets (excluding distributions of shares of Common Stock and cash distributions
made as a dividend payable out of earnings or out of surplus legally available for
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dividends under the laws of the jurisdiction of the Company), then in each case provision
shall be made so that the holder of any Warrants will thereafter receive, upon the exercise thereof
in accordance with the terms of this Agreement, in addition to the number of shares of Common Stock
issuable thereunder, the kind and amount of indebtedness or assets which the holder of the Warrant
would have been entitled to receive had the Warrant been exercised on the date of such event and
had the holder of the Warrant thereafter, during the period from the date of such event to and
including the actual date of exercise of the Warrant determined pursuant to Section 9, retained any
such securities receivable during such period, giving application to all adjustments called for
during such period under this Section 7 with respect to the rights of the holder of the Warrant.
(c) Consolidation, Merger or Sale of Assets. If, prior to the exercise of any
Warrants, the Company shall at any time consolidate with or merge into another corporation in a
transaction in which the Common Stock is converted into or exchanged for other securities or
property, the holder of any Warrants will thereafter receive, upon the exercise thereof in
accordance with the terms of this Agreement, the securities or property to which the holder of the
number of shares of Common Stock then deliverable upon the exercise or conversion of such Warrants
would have been entitled upon such consolidation or merger, and the Company shall take such steps
in connection with such consolidation or merger as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to any
securities or property thereafter deliverable upon the exercise of the Warrants. The Company or the
successor corporation, as the case may be, shall execute and deliver to the Warrant Agent a
supplemental agreement so providing. A sale of all or substantially all the assets of the Company
for a consideration (apart from the assumption of obligations) consisting primarily of securities
shall be deemed a consolidation or merger for the foregoing purposes. The provisions of this
subsection (c) shall similarly apply to successive mergers or consolidations or sales or other
transfers.
(d) Calculations to the Nearest Cent and One-Hundredth of a Share. No adjustment in
the Warrant Price shall be required unless such adjustment would require an increase or decrease of
at least 1% in such price; provided, however, that any adjustments which by reason of this Section
7(d) are not required to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 7 shall be made to the nearest cent and to the
nearest one-hundredth of a share as the case may be. Notwithstanding the first sentence of this
subsection (d), any adjustment required by this Section 7 shall be made no later than the earlier
of six months from the date of the transaction which mandates such adjustment or the expiration of
the right to exercise any Warrant.
(e) Notice of Warrant Adjustment. Whenever the Warrant Price or the number of shares
purchasable upon exercise of a Warrant shall be adjusted as provided in this Section 7, the Company
shall forthwith file with the Warrant Agent a certificate, signed by the Company’s Chief Financial
Officer, showing in detail the facts requiring such adjustment and the Warrant Price and number of
shares so purchasable that will be effective after such adjustment. The Company shall also cause a
notice setting forth any adjustments to be sent by mailing first class, postage prepaid, to each
registered holder of a Warrant or Warrants at its address appearing on the Warrant register and, at
its option, may cause a copy of such notice to be published once in an English language newspaper
of general circulation in the City of New York, New York. The
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Warrant Agent shall have no duty with respect to any certificate filed with it except to keep
the same on file and available for inspection by registered holders of Warrants during reasonable
business hours. The Warrant Agent shall not at any time be under any duty or responsibility to any
holder of a Warrant to determine whether any facts exist which may require any adjustment of the
Warrant Price, or with respect to the nature of any adjustment of the Warrant Price when made, or
with respect to the method employed in making such adjustment. The Warrant Agent shall not be
deemed to have knowledge of any adjustment or any such event unless and until it shall have
received such certificate.
(f) Other Notices. In case the Company after the date hereof shall propose to take any
action of the type described in subsections (b) and (c) of this Section 7 or fix a record date for
the purpose of determining the holders thereof who are entitled to receive any right to subscribe
for, purchase or otherwise acquire shares of Common Stock (or securities convertible into shares of
Common Stock), the Company shall file with the Warrant Agent a certificate, signed by the President
or any Vice President of the Company and by its Treasurer or Assistant Treasurer or Secretary or
Assistant Secretary specifying, in the case of any action of the type specified in subsection (c),
the date on which such action shall take place and shall also set forth such facts with respect
thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such
facts may be known on the date of such notice) on the Warrant Price and the number, or kind, or
class of shares or other securities or property which shall be purchasable upon exercise of
Warrants. Such notice shall be given in the case of any action of the type specified in subsection
(b) or any action to fix a record date for rights to subscribe, at least 12 days prior to the
record date with respect thereto and in the case of any action of the type specified in subsection
(c) at least 12 days prior to the taking of such proposed action. The Company shall also cause a
notice setting forth any adjustments to be sent by mailing first class, postage prepaid, to each
registered holder of a Warrant Certificate or Warrant Certificates at its address appearing on the
Warrant register and, at its option, may cause a copy of such notice to be published once in an
English language newspaper of general circulation in the City of New York, New York. Failure to
give such notice or any defect therein shall not affect the legality or validity of such action.
(g) No Change in Warrant Terms on Adjustment. Irrespective of any of the adjustments
in the Warrant Price or the number of shares of Warrant Common Stock, Warrant Certificates
theretofore or thereafter issued may continue to express the same prices and number of shares as
are stated in a similar Warrant Certificate issuable initially, or at some subsequent time,
pursuant to this Agreement and such number of shares specified therein shall be deemed to have been
so adjusted.
(h) Treasury Shares. Shares of Common Stock at any time owned by the Company shall not
be deemed to be outstanding for purposes of any computation under this Section 7.
(i) Optional Reduction in Warrant Price. Anything in this Section 7 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the Warrant Price, in
addition to those adjustments required by this Section 7, as it in its sole discretion shall
determine to be necessary in order that any consolidation or subdivision of the Common Stock,
issuance wholly for cash of any Common Stock at less than the Current Market Price, issuance
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wholly for cash of Common Stock or securities which by their terms are convertible into or
exchangeable for Common Stock, stock dividend, issuance of rights, options or warrants referred to
hereinabove in this Section 7, hereinafter made by the Company to its common stockholders, shall
not be taxable to them.
The Company may, at its option, at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of Directors of the Company,
for any length of time.
Section 8. Current Market Price. For all purposes of this Agreement, the Current
Market Price per share of Common Stock on any date shall be deemed to be the average of the daily
closing prices for the five consecutive business days commencing before such date. The closing
price for each day shall be the average of the closing bid and asked prices, as reported by the
Nasdaq Global Market or a similar source selected from time to time by the Company for the purpose.
If on any such date the shares of Common Stock are not quoted by any such source, the fair value of
such shares on such date, as determined by the Board of Directors of the Company, shall be used.
Anything in this Agreement to the contrary notwithstanding, the Warrant Agent shall have no duty
(i) to determine or calculate the Current Market Price or (ii) confirm or verify the accuracy or
correctness of the Current Market Price.
Section 9. Exercise of Warrants. Subject to the provisions of this Agreement, each
registered holder of Warrants shall have the right, which may be exercised as in such Warrant
Certificates expressed, to purchase from the Company (and the Company shall issue and sell to such
registered holders of Warrants) all or part of the number of fully paid and nonassessable shares of
Warrant Common Stock specified in such Warrant Certificates (subject to the adjustments as herein
provided), upon surrender to the Company at the office of the Warrant Agent designated for such
purpose, of such Warrant Certificates with the exercise form on the reverse thereof duly filled in
and signed, and upon payment to the Warrant Agent to the account of the Company of the Warrant
Price for the number of shares of Warrant Common Stock in respect of which such Warrants are then
exercised. The date of exercise of any Warrant shall be deemed to be the date of its receipt by the
Warrant Agent duly filled in and signed and accompanied by proper funds as hereinafter provided.
Payment of such Warrant Price may be made in wire transfer in immediately available funds, cash, or
by certified or official bank check. No adjustment shall be made for any cash dividends on shares
of Warrant Common Stock issuable upon exercise of a Warrant. Upon such surrender of Warrants, and
payment of the Warrant Price as aforesaid, the Company shall issue and cause to be delivered with
all reasonable dispatch to or upon the written order of the registered holder of such Warrants and
in such name or names as such registered holder may designate, a certificate or certificates for
the number of full shares of Warrant Common Stock so purchased upon the exercise of such Warrants
together with cash as provided in Section 11 of this Agreement, in respect of any fraction of a
share of such stock issuable upon such surrender.
Each person in whose name any certificate for shares of Common Stock is issued upon the
exercise of Warrants shall for all purposes be deemed to have become the holder of record of the
Common Stock represented thereby on, and such certificate shall be dated, the date upon which the
Warrant Certificate evidencing such Warrants was duly surrendered and payment of the Warrant Price
(and any applicable transfer taxes) was made; provided, however, that if the
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date of such surrender and payment is a date upon which the Common Stock transfer books of the
Company are closed, such person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding business day on which the Common Stock
transfer books of the Company are open.
Anything in this Agreement to the contrary notwithstanding, the Warrant Agent shall have no
duty (i) to determine or calculate the Warrant Price or (ii) confirm or verify the accuracy or
correctness of the Warrant Price; the Warrant Agent’s sole duty under this Section is to accept the
Warrant Certificates and take possession for the benefit of the Company of the payment of the
Warrant Price delivered to it by a holder of the Warrant Certificate.
Section 10. Unexercised Warrants. To the extent that any Warrant Certificates remain
outstanding at the expiration of the period during which the Warrants are exercisable, the
unexercised Warrants represented thereby shall be deemed null and void.
Section 11. Elimination of Fractions. The Company shall not be required to issue
fractional shares of stock upon any exercise of Warrants. As to any final fraction of a share which
the same registered holder of one or more Warrants, the rights under which are exercised in the
same transaction or series of related transactions, 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 the same fraction of the Current Market Price (as determined in the manner
prescribed in Section 8 hereof) on the business day which next precedes the day of exercise. The
Warrant Agent shall be fully protected in relying upon such a Warrant and shall have no duty with
respect to, and shall not be deemed to have knowledge of, any payment for fractional shares of
stock under any Section of this Agreement relating to the payment of fractional shares of stock
unless and until the Warrant Agent shall have received appropriate instructions from the Company
and sufficient monies.
Section 12. Issue Taxes. The Company will pay documentary stamp taxes, if any,
attributable to the initial issuance of shares of Warrant Common Stock upon the exercise of any
Warrant; provided, however, that neither the Company nor the Warrant Agent shall be required to pay
any taxes or charges which may be payable in respect of any transfer involved in the issue or
delivery of any certificates for shares of Warrant Common Stock in a name other than that of the
registered holder of Warrants, in respect of which such shares are initially issued.
Section 13. Reservation of Shares. The Company shall at all times reserve and keep
available out of its authorized but unissued stock, for the purpose of effecting the issuance of
stock upon exercise of Warrants, such number of shares of its duly authorized Warrant Common Stock
as shall from time to time be sufficient to effect the issuance of shares of Warrant Common Stock
upon exercise of all Warrants at the time outstanding.
Section 14. Merger or Consolidation or Change of Name of Warrant Agent. Any person or
entity into which the Warrant Agent may be merged or with which it may be consolidated, or any
person or entity resulting from any merger or consolidation to which the Warrant Agent shall be a
party, or any person or entity succeeding to the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
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notwithstanding. In the case of Warrants which have been countersigned by the Warrant Agent,
but not delivered at the time any such successor to the Warrant Agent succeeds to the agency
created by this Agreement, any such successor may adopt the countersignature of the original
Warrant Agent and deliver such Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, any successor to the Warrant Agent may countersign such
Warrants either in the name of the predecessor Warrant Agent or in the name of the successor
Warrant Agent; and in all such cases such Warrants shall have the full force and effect provided in
the Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and at such time any of the
Warrants shall have been countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Warrant Certificates so countersigned, and in
case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in its changed name;
and in all such cases such Warrant Certificates shall have the full force and effect provided in
the Warrant Certificates and in this Agreement.
Section 15. Disposition of Proceeds on Exercise of Warrants, etc. The Warrant Agent
shall account promptly to the Company with respect to Warrants exercised and concurrently pay to
the Company all moneys received by the Warrant Agent for the purchase of shares of Common Stock
through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement available for inspection by holders of
Warrants during normal business hours at its office specified in Section 21 hereof.
Section 16. Supplements and Amendments. The Warrant Agent may (but is not required if
the supplement or amendment changes the rights, immunities, duties or liabilities of the Warrant
Agent) from time to time, join the Company in making supplements or amendments to this Agreement
without the approval of any holders of Warrants (i) to cure any ambiguity or to correct or
supplement any provision contained in this Agreement that may be defective or inconsistent with any
other provision contained herein and which supplement or amendment shall not materially adversely
affect the interests of the registered holders of the Warrants, or (ii) to make such other
provisions with respect to any change or any supplemental agreement as the parties may deem
necessary or desirable and which supplement or amendment shall not adversely affect the interests
of the registered holders of the Warrants.
Section 17. Mutilated or Missing Warrant Certificates. If any Warrant shall be
mutilated, lost, stolen or destroyed the Warrant Agent shall deliver a new Warrant Certificate of
like tenor and denomination in exchange and substitution therefor upon surrender and cancellation
of the mutilated Warrant Certificate or, in the case of a lost, stolen or destroyed Warrant
Certificate, upon receipt of evidence satisfactory to the Company and the Warrant Agent of the
loss, theft or destruction of such Warrant Certificate and, in either case, upon receipt of such
indemnity as the Company and the Warrant Agent may reasonably require. Applicants for substitute
Warrant Certificates shall also comply with such other reasonable regulations and pay such other
reasonable charges as the Warrant Agent or the Company may prescribe. Any such new Warrant
Certificate shall constitute an original contractual obligation of the Company,
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whether or not the allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be
at any time enforceable by anyone.
Section 18. Duties of the Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Warrant Agreement upon the following terms and conditions, by all of
which the Company and the holders of Warrants, by their acceptance thereof, shall be bound:
The Warrant Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Warrant Certificates (except its countersignature
thereof and except such as describes the Warrant Agent or action taken or to be taken by it) or be
required to verify the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only. The Warrant Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof or in respect of the
validity or execution of any Warrant Certificate (except its countersignature thereof); nor shall
it be responsible for any breach by the Company of any covenant or condition contained in this
Agreement or in any Warrant Certificate to be complied with by the Company; nor shall it be
responsible for the making of any adjustment in the Warrant Price or the number of shares issuable
upon the exercise of a Warrant required under the provisions of Section 7 or responsible for the
manner, method or amount of any such change or the ascertaining of the existence of facts that
would require any such change; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares to be issued
pursuant to this Agreement or any Warrant or as to whether any shares will, when issued, be validly
issued and fully paid and non-assessable.
The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through its attorneys, agents or employees.
The Warrant Agent may consult at any time with legal counsel satisfactory to it (who may be
legal counsel for the Company) and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Warrant Agent as to any action taken or omitted by it in good
faith and in accordance with such advice or opinion.
The Warrant Agent shall incur no liability or responsibility to the Company or to any holder
of a Warrant Certificate for any action taken in reliance on any notice, resolution, waiver,
consent, order, certificate, or other paper, document or instrument believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.
The Company agrees to pay to the Warrant Agent reasonable compensation for all services
rendered by the Warrant Agent in the execution of this Warrant Agreement, to reimburse the Warrant
Agent for all expenses (including reasonable counsel fees), taxes and governmental charges and
other charges of any kind and nature incurred by the Warrant Agent in the preparation,
administration, delivery, execution and amendment of this Warrant Agreement. The Company hereby
further agrees to indemnify the Warrant Agent and save it harmless against any and all losses,
liabilities and expenses, including judgments, damages, fines, penalties, claims, demands,
settlements, costs and reasonable counsel fees and expenses, for anything done,
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suffered or omitted by the Warrant Agent arising out of or in connection with this Agreement
except as a result of its gross negligence, willful misconduct or bad faith (each as finally
determined by a court of competent jurisdiction). The costs and expenses incurred by the Warrant
Agent in enforcing the right to indemnification shall be paid by the Company unless it is
determined by a final order, judgment, decree or ruling of a court of competent jurisdiction that
the Warrant Agent is not entitled to indemnification due to its own gross negligence, willful
misconduct or bad faith.
The Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may
buy, sell, or deal in any of the Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under
this Warrant Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
The Warrant Agent shall act hereunder solely as agent for the Company and in a ministerial
capacity, and its duties shall be determined solely by the express provisions hereof (and no
duties, unless expressly stated shall be implied). The Warrant Agent shall not be liable for
anything which it may do or refrain from doing in connection with this Agreement except for its own
gross negligence, willful misconduct or bad faith (each as finally determined by a court of
competent jurisdiction). In no event will the Warrant Agent be liable for special, indirect,
incidental, punitive or consequential loss or damage of any kind whatsoever, even if the Warrant
Agent has been advised of the possibility of such loss or damage. Any liability of the Warrant
Agent under this Agreement to the Company will be limited to the amount of fees agreed to be paid
by the Company to the Warrant Agent.
In the event that the Warrant Agent shall in any instance, after seeking the advice of legal
counsel pursuant to this Agreement, in good faith be uncertain as to its duties or rights
hereunder, it shall be entitled to refrain from taking any action in that instance until it shall
be directed otherwise in writing by the Chairman of the Board, the President, a Vice President, the
Secretary or the Treasurer of the Company which eliminates such ambiguity or uncertainty to the
satisfaction of Warrant Agent, or by a final, nonappealable order of a court of competent
jurisdiction; provided, however, in the event that the Warrant Agent has not received such written
direction or court order within one hundred eighty (180) calendar days after requesting the same,
it shall have the right to interplead the Company in any court of competent jurisdiction and
request that such court determine its rights and duties hereunder.
The Warrant Agent is hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from any one of the Chairman of the Board, the President, a
Vice President, the Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and such instructions shall be full
authorization and protection to the Warrant Agent, and the Warrant Agent shall not be liable for
any action taken, suffered or omitted to be taken by it in accordance with instructions of any such
officer.
No provision of this Agreement shall require the Warrant Agent to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its duties hereunder
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or in the exercise of its rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
The provisions of this Section shall survive the termination of this Agreement, the exercise
or expiration of the Warrants and the resignation or removal of the Warrant Agent.
Section 19. Change of Warrant Agent. The Warrant Agent may resign and be discharged
from its duties under this Agreement, subject to appointment of a successor Warrant Agent in
accordance with the terms of this Section 19, upon 30 days’ notice in writing mailed to the Company
by registered or certified mail, and to the holders of the Warrant Certificates by first-class
mail. The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice
in writing, mailed to the Warrant Agent or successor Warrant Agent, as the case may be, and to each
transfer agent of the Common Stock by registered or certified mail, and to the holders of the
Warrant Certificates by first-class mail. If the Warrant Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to the Warrant Agent.
If the Company shall fail to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the holder of a Warrant Certificate (who shall, with such notice,
submit such holder’s Warrant Certificate for inspection by the Company), then the registered holder
of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of
a new Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or by such a
court, shall be an entity organized and doing business under the laws of the United States or any
state of the United States, in good standing, which is subject to supervision or examination by
federal or state authority. After appointment, the successor Warrant Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally named as Warrant
Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to
the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of such appointment the Company shall file notice thereof in writing with the
predecessor Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the registered holders of the Warrant Certificates. Failure to give any notice provided
for in this Section 19, however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant
Agent, as the case may be.
Section 20. Identity of Transfer Agent. Forthwith upon the appointment of any
subsequent Transfer Agent for shares of the Common Stock, the Company will file with the Warrant
Agent a statement setting forth the name and address of such Transfer Agent.
Section 21. Notices. Any notice pursuant to this Agreement to be given by the Warrant
Agent or by the registered holder of any Warrant to the Company shall be sufficiently given if sent
by first-class mail, postage prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent) as follows:
Critical Therapeutics, Inc.
00 Xxxxxxxx Xxxxxx
00 Xxxxxxxx Xxxxxx
00
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Chief Financial Officer
Facsimile: 000-000-0000
Attention: Chief Financial Officer
with copies to:
Critical Therapeutics, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Vice President of Legal Affairs
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Vice President of Legal Affairs
and
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: 617-526-5000
Attention: Xxxxxx X. Xxxxxx, Esq.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: 617-526-5000
Attention: Xxxxxx X. Xxxxxx, Esq.
Any notice pursuant to this Agreement to be given by the Company or by the registered holder
of any Warrant to the Warrant Agent shall be sufficiently given if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the
Company) as follows:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000
Attention: Company Items Department
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000
Attention: Company Items Department
With a copy to:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000
Attention: General Counsel
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000
Attention: General Counsel
Section 22. Successors. All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 23. Governing Law. This Agreement and each Warrant issued hereunder shall be
deemed to be a contract made under the laws of the state of New York, and for all purposes shall be
construed in accordance with the laws of the state of New York, without regard to principles of
conflict of laws.
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Section 24. Benefits of this Agreement. Nothing in this Agreement shall be construed
to give to any person or entity other than the Company, the Warrant Agent and the registered
holders of the Warrant Certificates any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent and the registered holders of the Warrant Certificates.
Section 25. Counterparts. This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
Section 26. Registration of Shares of Common Stock. The Company will furnish to the
Warrant Agent, upon request, an opinion of counsel to the effect that (i) a Registration Statement
under the Securities Act of 1933, as amended (the “Act”) is then in effect with respect to the
Warrants and/or the shares of Warrant Common Stock issuable upon exercise of the Warrants; or (ii)
a Registration Statement under the Act with respect to said warrants and/or shares is not required
(such opinion to also contain appropriate advice regarding the legending of such shares). In the
event that said opinion states that such a Registration Statement is in effect the Company will,
from time to time, furnish the Warrant Agent with current Prospectuses meeting the requirements of
the Act and all rules and regulations thereunder in sufficient quantity to permit the Warrant Agent
to deliver a Prospectus to each holder of a Warrant Certificate upon exercise or conversion
thereof. The Company further agrees to pay all fees, costs and expenses in connection with the
preparation and delivery to the Warrant Agent of the foregoing opinions and Prospectuses.
If any shares of Warrant Common Stock issuable upon the exercise of the Warrants or the
issuance thereof requires registration or approval of any governmental authority, including,
without limitation, the filing of necessary amendments, supplements or post-effective amendments to
a Registration Statement, or the taking of any other action under the laws of the United States of
America or any political subdivision hereof or under the laws of any state of the United States of
America before such shares may be validly and legally issued, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure and keep effective such
registration or approval or to take such other action, as the case may be.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to be executed and
delivered as of the day and year first above written.
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| CRITICAL THERAPEUTICS, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| MELLON INVESTOR SERVICES LLC | ||||||
| as Warrant Agent | ||||||
| By: | ||||||
| Name: | ||||||
| Title: |
14
EXHIBIT A
FORM OF WARRANT
WARRANT CERTIFICATE
CRITICAL THERAPEUTICS, INC.
CRITICAL THERAPEUTICS, INC.
NO. W-
WARRANTS
WARRANTS
This certifies that or registered assigns is the registered
holder of the number of Warrants set forth above, and is entitled, upon surrender of this Warrant
Certificate at the office of Mellon Investor Services LLC, Warrant Agent (or any successor as such
Warrant Agent), designated by the Warrant Agent for such purpose, at any time on or after the
offering date and at or prior to 3:30 p.m. Eastern Time on October ___, 2011, to purchase
shares of Common Stock, par value $0.001, of Critical Therapeutics, Inc., a Delaware corporation
(the “Company”), at the price equal to
$____ per share.
The applicable per share purchase price shown above and the number of shares issuable upon
exercise of the Warrants represented by this Warrant Certificate are subject to adjustment for the
occurrence of certain events, including stock dividends and split-ups, combinations,
reorganizations and reclassifications, as set forth in the Warrant Agreement hereinafter referred
to. A complete statement with respect to such adjustments and to other terms and conditions
pertaining to the Warrants is contained in the Warrant Agreement, dated as of October ___, 2006,
between the Company and Mellon Investor Services LLC, Warrant Agent, a copy of which may be
examined by the registered holder hereof at the office of the Warrant Agent.
To exercise the Warrants represented by this Warrant Certificate the form of election to
purchase on the reverse hereof must be duly executed and the accompanying instructions for the
registration and delivery of the stock must be filled in.
The Warrants represented by this Warrant Certificate are transferable (subject to the
conditions set forth in the preceding paragraphs and in the Warrant Agreement) at the office of the
Warrant Agent (or of its successor as Warrant Agent) designated for such purpose by the registered
holder thereof in person or by attorney duly authorized in writing, upon surrender of this Warrant
Certificate. Upon any such transfer, a new Warrant Certificate, representing the right to purchase
a like number of shares of the Company’s Common Stock, will be issued to the transferee in exchange
for this Warrant Certificate.
This Warrant Certificate and similar Warrant Certificates when surrendered at the office of
the Warrant Agent (or of its successor as Warrant Agent) designated for such purpose by the
registered holder hereof in person or by attorney duly authorized in writing may be exchanged
15
for another Warrant Certificate or Warrant Certificates, representing in the aggregate the
right to purchase a like number of shares of the Company’s Common Stock.
If the Warrants evidenced by this Warrant Certificate remain outstanding at the expiration of
the period during which Warrants are exercisable, as set forth in the first paragraph of this
Warrant Certificate, such Warrants shall thereupon be deemed null and void.
No fractional shares of Common Stock will be issued upon the exercise of any Warrant or
Warrants evidenced hereby, but in lieu thereof, a cash payment will be made, as provided in the
Warrant Agreement.
No holder of this Warrant Certificate shall be entitled to vote or receive cash dividends or
be deemed for any purpose the holder of Common Stock or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall anything contained in the
Warrant Agreement or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issue of stock, reclassification of stock, change of par value,
consolidation, merger, conveyance, or otherwise) or, except as provided in the Warrant Agreement,
to receive notice of meetings, or to receive dividends or subscription rights or otherwise, until
the Warrant or Warrants evidenced by this Warrant Certificate shall have been exercised as provided
in the Warrant Agreement.
| CRITICAL THERAPEUTICS, INC. | ||||||
| By: | ||||||
| (Title) | ||||||
This Warrant Certificate is not valid until countersigned by the Warrant Agent.
| Dated: | Countersigned: | |||||
| MELLON INVESTOR SERVICES LLC | ||||||
| as Warrant Agent | ||||||
| By: | ||||||
16
FORM OF EXERCISE
(FORM OF EXERCISE TO BE EXECUTED BY THE WARRANT
HOLDER AT THE TIME OF EXERCISE)
HOLDER AT THE TIME OF EXERCISE)
To MELLON INVESTOR SERVICES LLC or its successor as Warrant Agent:
The undersigned, holder of the within Warrant Certificate, hereby (1) irrevocably exercises
the undersigned’s right to purchase
shares of Common Stock, par value $0.001 per share,
of Critical Therapeutics, Inc. (the “Company”) which the undersigned is entitled to purchase under
the terms of the within Warrant Certificate, or such other securities as the undersigned shall be
entitled to purchase under the terms of the Warrant Agreement referred to in such Warrant
Certificate by reason of the occurrence of certain events specified therein, and (2) elects to make
payment in full for the number of shares of Common Stock so purchased
by payment of $___ in wire
transfer in immediately available funds, cash or by certified or official bank check.
Please issue the certificate for shares of Common Stock in the name of, and pay any cash for
any fractional share to:
Print or type name
Social Security or other Identifying Number
Street Address
City State Zip Code
If such number of shares shall not be all the shares purchasable upon the exercise of the
Warrants evidenced by this Warrant Certificate, a new Warrant Certificate for the balance of such
Warrants remaining unexercised shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
(Please print name and address)
Dated:
17
| Signature: | ||||||
| (Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate) | ||||||
(Signature Medallion Guaranteed):
Date:
(If the Common Stock, cash in lieu of fractional shares, or Warrants for any unexercised
balance are to be issued or paid to a person other than the person in whose name the within Warrant
is registered, or if otherwise requested by the Company or the Warrant Agent, a signature Medallion
guarantee is required.)
ASSIGNMENT
(FORM OF ASSIGNMENT TO BE EXECUTED IF WARRANT
HOLDER DESIRES TO TRANSFER WARRANT)
HOLDER DESIRES TO TRANSFER WARRANT)
FOR VALUE RECEIVED, hereby sells, assigns, and transfer
unto this Warrant Certificate together with all right, title or interest
therein and does hereby irrevocably appoint attorney to transfer the within
Warrant Certificate on the books of the Warrant Agent with full power of substitution in the
premises.
Dated:
| Signature: | ||||||
| (Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate) | ||||||
(Signature Medallion Guaranteed):
Date:
18
