Exhibit 4.10
NEITHER THIS SECURITY NOR THE SECURITIES INTO
WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY
SUCH SECURITIES.
COMMON STOCK PURCHASE
WARRANT
LPATH, INC.
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Warrant Shares:
[ ]
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Initial Exercise Date:
, 2008
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THIS COMMON STOCK PURCHASE WARRANT
(the “ Warrant ”) certifies that, for value
received,
(the “ Holder ”) is entitled, upon the terms and
subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the
“ Initial Exercise Date ”) and on or prior to
the close of business on the fifth year anniversary of the Initial
Exercise Date (the “ Termination Date ”) but not
thereafter, to subscribe for and purchase from Lpath, Inc., a
Nevada corporation (the “ Company ”), up to
shares (the “ Warrant Shares ”) of Class A
common stock, par value $0.001 per share, of the Company (the
“ Common Stock ”). The purchase price of
one share of Common Stock under this Warrant shall be equal to the
Exercise Price, as defined in Section 2(b).
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
, 2008, among the Company and the
purchasers signatory thereto.
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 Initial Exercise Date and on or
before the Termination Date by delivery to the Company of a duly
executed facsimile copy of the Notice of Exercise
Form annexed hereto (or such
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other office or agency of the
Company as it may designate by notice in writing to the registered
Holder at the address of such Holder appearing on the books of the
Company) and payment to the Company of the aggregate Exercise Price
of the shares thereby purchased and the amount of any transfer tax
required to be paid by Holder, if any, pursuant to
Section 2(e)(vii) hereof by wire transfer or
cashier’s check drawn on a United States bank within 3
Trading Days of the date said Notice of Exercise is delivered to
the Company. 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 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 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. In the event of any dispute or discrepancy, the
records of the Holder shall be controlling and determinative in the
absence of manifest error. 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 $1.25, subject to
adjustment hereunder (the “ Exercise Price
”).
c)
Cashless Exercise . If at any time after one year from
the date of issuance of this Warrant there is no effective
Registration Statement registering the resale of the Warrant Shares
by the Holder at a time when such Registration Statement is
otherwise required to be effective pursuant to the Registration
Rights Agreement (and subject to any suspension or blackout periods
provided for therein), this Warrant may also be exercised 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 (as defined in
the Purchase Agreement) on the Trading Day immediately preceding
the date of such election;
(B) = the Exercise Price of
this Warrant, as adjusted; and
(X) = the number of Warrant
Shares issuable upon exercise of this Warrant in accordance with
the terms of this Warrant by means of a cash exercise rather than a
cashless exercise.
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d)
[OPTIONAL TO EACH PURCHASER] 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(c) or otherwise, to the extent that after
giving effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, such Holder (together with such
Holder’s Affiliates, and any other person or entity acting as
a group together with such Holder or any of such Holder’s
Affiliates), as set forth on the applicable Notice of Exercise,
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 such 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 (A) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by such Holder or any of
its Affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Warrants) subject
to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by such Holder or
any of its Affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 2(d), 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 a
Holder that the Company is not representing to such Holder that
such calculation is in compliance with Section 13(d) of
the Exchange Act and such 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(d) applies, the determination of whether this
Warrant is exercisable (in relation to other securities owned by
such Holder together with any Affiliates) and of which a portion of
this Warrant is exercisable shall be in the sole discretion of a
Holder, and the submission of a Notice of Exercise shall be deemed
to be each Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by such Holder
together with any Affiliates) and of which portion of this Warrant
is exercisable, in each case subject to such aggregate percentage
limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. 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 promulgated thereunder. For purposes of this
Section 2(d), 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 (x) the Company’s
most recent Form 10-Q or Form 10-K, as the case may be,
(y) a more recent public announcement by the Company or
(z) any other notice by the Company or the Company’s
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 such Holder the number of shares of Common Stock then
outstanding. 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 such 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 4.99% of the number of shares of the
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Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock
issuable upon exercise of this Warrant. The Beneficial
Ownership Limitation provisions of this Section 2(d) may
be waived by such Holder, at the election of such Holder, upon not
less than 61 days’ prior notice to the Company to change the
Beneficial Ownership Limitation to 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,
and the provisions of this Section 2(d) shall continue to
apply. Upon such a change by a Holder of the Beneficial
Ownership Limitation from such 4.99% limitation to such 9.99%
limitation, the Beneficial Ownership Limitation may not be further
waived by 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(d) 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.
e)
Mechanics of Exercise .
i.
Authorization of Warrant Shares . 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,
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).
ii.
Delivery of Certificates Upon Exercise . After the
Effective Date of each Registration Statement covering the Warrant
Shares, Certificates for shares purchased hereunder, to the extent
such shares are covered by such effective Registration Statement,
shall be transmitted by the transfer agent of the Company 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 a participant in such system, and otherwise by physical
delivery to the address specified by the Holder in the Notice of
Exercise within 3 Trading Days from the date on which all of the
following have occurred: the delivery to the Company of the Notice
of Exercise Form, surrender of this Warrant (if required) and
payment of the aggregate Exercise Price and transfer taxes, if any,
as set forth above in Section 2(a) hereof (“
Warrant Share Delivery Date ”). This Warrant
shall be deemed to have been exercised on the date the Exercise
Price is received by 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 by payment to the Company
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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(e)(vii) prior to the issuance of such shares,
have been paid. If the Company fails for any reason to deliver to
the Holder certificates evidencing the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to such Holder, in cash, as liquidated damages and not as
a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated
damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such certificates are
delivered.
iii. 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.
iv. Rescission
Rights . If the Company fails to cause its transfer agent
to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this
Section 2(e) by the Warrant Share Delivery Date, then the
Holder will have the right to rescind such exercise which right
lapses upon delivery of the Warrant Shares to Holder.
v.
Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Exercise . In addition to any other
rights available to the Holder, if the Company fails to cause its
transfer agent to transmit to the Holder a certificate or
certificates representing the Warrant Shares pursuant to an
exercise on or before the Warrant Share Delivery Date, and if after
such 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, upon presentation
of documentation establishing the loss occasioned by such Buy-in,
shall (1) pay in cash to the Holder the amount 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
(A) the number of Warrant Shares that the Company was required
to deliver to the Holder in connection with the exercise at issue
by (B) the price at which the sell order giving rise to such
purchase obligation was executed, and (2) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of
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Warrant Shares for which such
exercise was not honored 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 (1) 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.
vi. 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
Holder would otherwise be entitled to purchase upon such exercise,
the Company shall at its election, either pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole
share.
vii. 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 taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name
of the 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 the Assignment Form attached
hereto 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.
viii. 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.
Section 3
.
Certain Adjustments .
a)
Stock Dividends and
Splits . If the Company,
at any time while this Warrant is outstanding:
(A) pa
