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Exhibit 4.4
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.
_______________, 2005
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 ______, 2010 (the "Expiration Date") and the
termination of this
Warrant as provided in Section 8 hereof, that number of shares of
Common Stock,
par value $0.001 per share, of the Company (the "Common Stock")
equal to
___________ divided by 50% of the purchase price per share in the
Company's next
round of equity financing resulting in gross proceeds to the
Company of at least
$5,000,000 (the "Exercise Price"), as adjusted upon the occurrence
of certain
events as set forth in Section 3 of this Warrant. The date on which
the number
of shares of Common Stock underlying this Warrant and the Exercise
Price of this
Warrant are determined is referred to herein as the "Determination
Date". The
shares of stock issuable upon exercise of this Warrant is
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 time, the
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person or persons in whose name or names any certificates for
Warrant Stock
shall be issuable upon such exercise as provided in Section 1.3
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, 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, after the Determination Date,
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.
3.2 Reorganizations and Reclassifications. If, after the
Determination
Date, there shall occur any capital reorganization or
reclassification of
the
Common Stock (other
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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. Subject to the
provisions
of
Section 8, if, after the Determination Date, 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, 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 at any time after the
Determination Date 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 (but not increased) to a price determined by
dividing (A)
an
amount equal to the sum of (x) the number of shares of Common
Stock
outstanding immediately prior to such issue (determined on a
fully-diluted
basis; i.e., treating as outstanding all shares of Common Stock
issuable
upon
exercise, exchange or conversion of all outstanding options (to
the
extent then vested and exercisable), warrants, or other
securities
exercisable or exchangeable for or convertible into, directly
or
indirectly, shares of Common Stock) multiplied by the then
existing
Exercise Price, plus (y) the consideration, if any received by the
Company
upon
such issue, by (B) the total number of shares of Common Stock
outstanding immediately after such issue or sale (determined on
a
fully-diluted basis as aforesaid). For the purpose of determining
the
consideration received by the Company upon any such issue pursuant
to
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clause (y) above, if the consideration received by the Company is
other
than
cash, its value will be deemed its fair market value, which if
not
readily determinable shall be determined in good faith by the Board
of
Directors of the Company. An adjustment made pursuant to the
paragraph
shall be made on the next business day following the date on which
any such
issuance is made and shall be effective retroactively immediately
after the
close of business on such date. 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,
pursuant to
a
stock option plan approved by the Board of 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
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.
3.4 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, 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 deems necessary under any applicable law
(including
without limitation state securities or "blue sky" laws).
4.2 Investment Letter. Without limiting the generality of Section
4.1,
unless the offer and sale of any shares of Warrant Stock shall have
been
effectively registered under
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the
Securities Act, the Company shall be under no obligation to issue
the
Warrant Stock unless and until the Holder shall have executed an
investment
letter in form and substance 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, 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, 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
