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Exhibit 4.5
THIS WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY
EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY
NOT BE SOLD
OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS
(1) EITHER
(A) A REGISTRATION WITH RESPECT TO THERETO SHALL BE EFFECTIVE UNDER
THE
SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION
OF COUNSEL
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION
UNDER THE
SECURITIES ACT IS AVAILABLE, AND (2) THERE SHALL HAVE BEEN
COMPLIANCE WITH ALL
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
___________, 2006
WARRANT TO PURCHASE STOCK
OF
INTELLECT NEUROSCIENCES, INC.
(A DELAWARE CORPORATION)
INTELLECT NEUROSCIENCES, INC., a Delaware corporation (the
"Company"), for
value received, hereby certifies that ___________ (the "Holder"),
is entitled,
subject to the terms set forth below, to purchase from the Company,
at any time
or from time to time at or before the earlier of 5:00 p.m. New York
City time on
___________, 2011 (the "Expiration Date") and the termination of
this Warrant as
provided in Section 8 hereof, up to ___________ shares of Common
Stock, par
value $0.001 per share, of the Company (the "Common Stock"), at a
purchase price
(the "Exercise Price") equal to $___________ per share, as adjusted
upon the
occurrence of certain events as set forth in Section 3 of this
Warrant. The
shares of stock issuable upon exercise of this Warrant are
hereinafter referred
to as the "Warrant Stock".
1.
Exercise.
1.1 Manner of Exercise: Payment in Cash. This Warrant may be
exercised
by
the Holder, in whole or in part, by surrendering this Warrant, with
the
purchase form appended hereto as Exhibit A duly executed by the
Holder, at
the
principal office of the Company, or at such other place as the
Company
may
designate, accompanied by payment in full of the Exercise Price
payable
in
respect of the number of shares of Warrant Stock purchased upon
such
exercise. Payment of the Exercise Price shall be in cash or by
certified or
official bank check payable to the order of the Company.
1.2 Effectiveness. Each exercise of this Warrant shall be deemed
to
have
been effected immediately prior to the close of business on the day
on
which this Warrant shall have been surrendered to the Company as
provided
in
Section 1.1 above. At such
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time, the person or persons in whose name or names any certificates
for
Warrant Stock shall be issuable upon such exercise as provided in
Section
1.5
below shall be deemed to have become the holder or holders of
record of
the
Warrant Stock represented by such certificates.
1.3. Delivery of Certificates. As soon as practicable after the
exercise of this Warrant in full or in part, and in any event
within ten
(10)
business days thereafter, the Company at its sole expense will
cause
to
be issued in the name of, and delivered to, the Holder, or, subject
to
the
terms and conditions hereof, such person as such Holder (upon
payment
by
such Holder of any applicable transfer taxes) may direct:
(a) A certificate or certificates for the number of full shares
of Warrant Stock to which such Holder shall be entitled upon
such
exercise plus, in lieu of any fractional share to which such
Holder
would otherwise be entitled, cash in an amount determined pursuant
to
Section 2 hereof, and
(b) In case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the
aggregate on the face or faces thereof for the number of shares
of
Warrant Stock (without giving effect to any adjustment therein)
equal
to the number of such shares called for on the face of this
Warrant
minus the number of such shares purchased by the Holder upon
such
exercise as provided in Section 1.1 above.
2.
Fractional Shares. The Company shall not be required upon the
exercise
of
this Warrant to issue any fractional shares. 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.
3.
Certain Adjustments.
3.1 Changes in Common Stock. If the Company shall (i) combine
the
outstanding shares of Common Stock into a lesser number of shares,
(ii)
subdivide the outstanding shares of Common Stock into a greater
number of
shares, or (iii) issue additional shares of Common Stock as a
dividend or
other distribution with respect to the Common Stock, the number of
shares
of
Warrant Stock shall be equal to the number of shares which the
Holder
would have been entitled to receive after the happening of any of
the
events described above if such shares had been issued immediately
prior to
the
happening of such event, such adjustment to become effective
concurrently with the effectiveness of such event. The Exercise
Price in
effect immediately prior to any such combination of Common Stock
shall,
upon
the effectiveness of such combination, be proportionately
increased.
The
Exercise Price in effect immediately prior to any such subdivision
of
Common Stock or at the record date of such dividend shall upon
the
effectiveness of such subdivision or immediately after the record
date of
such
dividend be proportionately reduced.
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3.2 Reorganizations and Reclassifications. If there shall occur
any
capital reorganization or reclassification of the Common Stock
(other than
a
change in par value or a subdivision or combination as provided for
in
Section 3.1), then, as part of any such reorganization or
reclassification,
lawful provision shall be made so that the Holder shall have the
right
thereafter to receive upon the exercise hereof the kind and amount
of
shares of stock or other securities or property which such Holder
would
have
been entitled to receive if, immediately prior to any such
reorganization or reclassification, such Holder had held the number
of
shares of Common Stock which were then purchasable upon the
exercise of
this
Warrant. In any such case, appropriate adjustment (as
reasonably
determined by the Board of Directors of the Company) shall be made
in the
application of the provisions set forth herein with respect to the
rights
and
interests thereafter of the Holder such that the provisions set
forth
in
this Section 3 (including provisions with respect to adjustment of
the
Exercise Price) shall thereafter be applicable, as nearly as is
reasonably
practicable, in relation to any shares of stock or other securities
or
property thereafter deliverable upon the exercise of this
Warrant.
3.3 Merger, Consolidation or Sale of Assets. If there shall be
a
merger or consolidation of the Company with or into another
corporation
(other than a merger or reorganization involving only a change in
the state
of
incorporation of the Company or the acquisition by the Company of
other
businesses where the Company survives as a going concern), or the
sale of
all
or substantially all of the Company's capital stock or assets to
any
other person, then as a part of such transaction, provision shall
be made
so
that the Holder shall thereafter be entitled to receive the number
of
shares of stock or other securities or property of the Company, or
of the
successor corporation resulting from the merger, consolidation or
sale (and
at a
total purchase price not to exceed that payable upon the exercise
in
full
of this Warrant), to which the Holder would have been entitled if
the
Holder had exercised its rights pursuant to the Warrant immediately
prior
thereto. In any such case, appropriate adjustment shall be made in
the
application of the provisions of this Section 3 to the end that
the
provisions of this Section 3 shall be applicable after that event
in as
nearly equivalent a manner as may be practicable.
3.4 Certain Anti-Dilution Adjustments. If during the time while
any
portion of this Warrant remains outstanding, the Company shall
issue shares
of
Common Stock (or rights, warrants, or other securities convertible
into
or
exchangeable for shares of Common Stock), other than issuances
covered
by
Sections 3.1, 3.2 or 3.3 above, at a price per share (or having
an
exercise, conversion, or exchange price per share) less than the
Exercise
Price in effect as of the date of issuance of such shares or of
such
rights, warrants, or other convertible or exchangeable securities,
then,
and
in each such case, the Exercise Price shall be reduced to a price
equal
to
the issuance, conversion, exchange or exercise price, as
applicable, of
any
such securities so issued. Notwithstanding anything contrary in
this
Section, there shall be no reduction to the Exercise Price pursuant
to this
Section with respect to (i) the issuance or sale of options to
purchase
shares of Common Stock to employees, consultants and directors,
(ii)
securities issued in connection with the Company's initial public
offering
of
its securities pursuant to a registration statement declared
effective
by
the Securities and Exchange Commission which raises gross proceeds
to
the
Company of at least Ten Million Dollars ($10,000,000) or any
securities
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issued by the Company thereafter, (iii) the issuance of securities
pursuant
to
the conversion or exercise of convertible or exercisable securities
as
of
the date of this Warrant, (as adjusted for recapitalizations,
stock
splits, and the like) which are currently outstanding as of the
date of
this
Warrant or (iv) the issuance of securities as consideration for a
bona
fide
business acquisition of or by the Company, whether by merger,
consolidation, sale of assets, sale or exchange of stock or
otherwise,
which involves a third party which is not affiliated with the
Company or
its
current stockholders or in a strategic allowance.
3.5 No Impairment. The Company will not, by amendment of its
Articles
of
Incorporation or any other organizational or shareholder rights
documents of the Company, or through any reorganization,
recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or
sale of
securities or any other voluntary action, seek to avoid the
observance or
performance of any of the terms to be observed or performed
hereunder by
the
Company, but will at all times in good faith assist in the carrying
out
of all the provisions
of this Section 3 and in the taking of all such
action as may be necessary or appropriate in order to protect the
rights of
the
holder of this Warrant against impairment.
3.6 Certificate of Adjustment. When any adjustment is required to
be
made
in the Exercise Price, the Company shall promptly mail to the
Holder a
certificate setting forth the Exercise Price after such adjustment
and
setting forth a brief statement of the facts requiring such
adjustment.
Delivery of such certificate shall be deemed to be a final and
binding
determination with respect to such adjustment unless challenged by
the
Holder within ten (10) days of receipt thereof. Such certificate
shall also
set
forth the kind and amount of stock or other securities or property
into
which this Warrant shall be exercisable following the occurrence of
any of
the
events specified in this Section 3.
4.
Compliance with Securities Act.
4.1 Unregistered Securities. The Holder acknowledges that this
Warrant
and
the Warrant Stock have not been registered under the Securities Act
of
1933, as amended, and the rules and regulations thereunder, or
any
successor legislation, and agrees not to sell, pledge, distribute,
offer
for
sale, transfer or otherwise dispose of this Warrant or any
Warrant
Stock in the absence of (i) an effective registration statement
under the
Securities Act covering this Warrant or such Warrant Stock and
registration
or
qualification of this Warrant or such Warrant Stock under any
applicable
"blue sky" or state securities law then in effect, or (ii) an
opinion of
counsel, reasonably satisfactory to the Company, that such
registration and
qualification are not
required. The Company may delay issuance of the
Warrant Stock until completion of any action or obtaining of any
consent,
which the Company reasonably deems necessary under any applicable
law
(including without limitation state securities or "blue sky"
laws);
provided, that the Company will use reasonable best efforts to
complete
such
action or obtain such consent as soon as practicable.
4.2 Investment Letter. Without limiting the generality of Section
4.1,
unless
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the
offer and sale of any shares of Warrant Stock shall have been
effectively registered under the Securities Act, the Company shall
be under
no
obligation to issue the Warrant Stock unless and until the Holder
shall
have
executed a customary investment letter in form and substance
reasonably satisfactory to the Company, including a warranty at the
time of
such
exercise that the Holder is acquiring such shares for its own
account,
for
investment and not with a view to, or for sale in connection with,
the
distribution of any such shares.
4.3 Legend. Certificates delivered to the Holder pursuant to
Section
1.3
shall bear the following legend or a legend in substantially
similar
form:
"THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN TAKEN FOR
INVESTMENT
AND
THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON,
INCLUDING
A
PLEDGEE, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE
SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"),
OR
AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT AN
EXEMPTION
FROM
REGISTRATION IS THEN AVAILABLE."
5.
Registration Rights.
5.1 Certain Definitions.
As used in this Section 5, the following terms shall have the
following respective meanings:
"Holder" shall mean the record owner of Registrable Securities.
The terms "Register" "Registered" and "Registration" refer to a
registration effected by preparing and filing a registration
statement in
compliance with the Securities Act ("Registration Statement"), and
the
declaration or ordering of the effectiveness of such
Registration
Statement.
"Registrable Securities" shall mean all Common Stock not
previously
sold
to the public and issued to the Holder pursuant to the exercise
of
this
Warrant, Common Stock issued to the Holder upon conversion of
the
Promissory Note issued to the Holder concurrent with the purchase
of this
Warrant or Common Stock issued with respect to such shares pursuant
to
stock splits, stock dividends and similar distributions with
respect to
such
shares, provided, however, that shares of Common Stock which
are
Registrable Securities shall cease to be Registrable Securities at
such
time, and for so long as, such shares are eligible for sale
pursuant to
Rule
144(k) under the Securities Act.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Section 5.2 of this Agreement, including,
without
limitation, all federal and state registration, qualification and
filing
fees, printing expenses, fees and disbursements of counsel for the
Company,
blue
sky fees and the expense of any special
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audits incident to or required by any such registration, but shall
not
include Selling Expenses.
"Selling Expenses" shall mean all underwriting discounts and
selling
commissions applicable to the sale of Registrable Securities
pursuant to
this
Agreement and all expenses of any special counsel for the
Holder.
5.2 Piggyback Registration.
5.2.1 Notice of Piggyback Registration and Inclusion of
Registrable Securities. Subject to the terms of this Agreement, in
the
event the Company decides to Register any of its Common Stock for
cash
(either for its own account or the account of a security
holder),
other than pursuant to a Registration Statement which
exclusively
relates to the Registration of securities under an employee
stock
option, purchase, bonus or other benefit plan, then for so long as
the
Holder holds Registrable Securities, the Company will: (1)
promptly
give the Holder written notice thereof (which shall include a list
of
the jurisdictions in which the Company intends to attempt to
qualify
such securities under the applicable Blue Sky or other state
securities laws) and (2) include in such Registration (and any
related
qualification under Blue Sky laws or other compliance), and
