Exhibit 10.3
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR
UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT
TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THOSE LAWS. THE COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED TO THE EXTENT THAT AN OPINION IS REQUIRED PURSUANT TO THE
AGREEMENT UNDER WHICH THE SECURITIES WERE ISSUED.
MEMORY PHARMACEUTICALS CORP.
WARRANT TO PURCHASE COMMON STOCK
No.
________________
December 19,
2005 Void
After December 18, 2010
This Certifies That, for
value received, The Stanley Medical Research Institute, with its
principal office at 5430 Grosvenor Lane, Suite 200 Bethesda,
MD, 20814 or its successors and permitted assigns (the
“Holder” ), is entitled to subscribe for
and purchase at the Exercise Price (defined below) from Memory
Pharmaceuticals Corp., a Delaware corporation, with its principal
office at 100 Philips Parkway, Montvale, New Jersey 07645 (the
“Company” ) up to 154,128 shares of the
common stock of the Company, par value $.001 per share (the
“Common Stock” ), subject to adjustment
as provided herein. This Warrant is being issued pursuant to the
terms of the Securities Purchase Agreement, dated December 19,
2005, among the Company and the original Holder of this Warrant
(the “Purchase Agreement” ). Capitalized
terms not otherwise defined herein shall have the respective
meanings ascribed to such terms in the Purchase Agreement.
1. Definitions . As
used herein, the following terms shall have the meanings ascribed
to them below:
(a) “Exercise
Period” shall mean the period commencing
180 days after the date hereof and ending December 18,
2010 at 5:00 p.m., unless sooner exercised or terminated as
provided below.
(b) “Exercise
Price” shall mean $2.62 per share, subject to
adjustment pursuant to Section 5 below.
(c) “Warrant
Shares” shall mean the shares of the Common Stock
issued upon exercise of this Warrant, subject to adjustment
pursuant to the terms herein, including but not limited to
adjustment pursuant to Section 5 below.
2. Exercise of Warrant
.
2.1. Method of Exercise . The
rights represented by this Warrant may be exercised in whole or in
part at any time during the Exercise Period, by delivery of the
following to the Company at its address set forth above (or at such
other address as it may designate by notice in writing to the
Holder):
(a) an executed Notice of
Exercise in the form attached hereto;
(b) payment of the Exercise
Price either (i) by check payable to the order of the Company,
or (ii) pursuant to a Cashless Exercise, as described below;
and
(c) this Warrant.
Upon the exercise of the rights
represented by this Warrant, shares of Common Stock shall be issued
for the Warrant Shares so purchased, and shall be registered in the
name of the Holder or persons affiliated with the Holder, if the
Holder so designates, within a reasonable time after the rights
represented by this Warrant shall have been so exercised and shall
be issued in certificate form and delivered to the Holder, if so
requested.
The person in whose name any Warrant
Shares are to be issued upon exercise of this Warrant shall be
deemed to have become the holder of record of such shares on the
date on which this Warrant was surrendered and payment of the
Exercise Price was made, irrespective of the date of issuance of
the shares of Common Stock, except that, if the date of such
surrender and payment is a date when the stock transfer books of
the Company are closed, such person shall be deemed to have become
the holder of such shares at the close of business on the next
succeeding date on which the stock transfer books are open.
2.2. Cashless Exercise .
Notwithstanding any provisions herein to the contrary, if, at any
time during the Exercise Period, the Current Market Price (as
defined below) of one share of Common Stock is greater than the
Exercise Price (at the date of calculation as set forth below), in
lieu of exercising this Warrant by payment of cash, the Holder may
exercise this Warrant by a cashless exercise by surrender of this
Warrant at the principal office of the Company together with the
properly endorsed Notice of Exercise and the Company shall issue to
the Holder a number of shares of Common Stock computed using the
following formula:
X = (Y*(B-A)/B)
X
= the number of shares of Common Stock to be issued to
the Holder.
Y
= the number of shares of Common Stock purchasable upon
exercise of all of the Warrant or, if only a portion of the Warrant
is being exercised, the portion of the Warrant being exercised.
A
= the Exercise Price.
B
= the Current Market Price of one share of Common
Stock.
“Current Market
Price” means on any particular date:
(a) if the Common Stock is
traded on the Nasdaq SmallCap Market or the Nasdaq National Market,
the average of the closing prices of the Common Stock on such
market over the five trading days ending immediately prior to the
applicable date of valuation;
(b) if the Common Stock is
traded on any registered national stock exchange but is not traded
on the Nasdaq SmallCap Market or the Nasdaq National Market, the
average of the closing prices of the Common Stock on such exchange
over the five trading days ending immediately prior to the
applicable date of valuation;
(c) if the Common Stock is
traded over-the-counter, but not on the Nasdaq SmallCap Market, the
Nasdaq National Market or a registered national stock exchange, the
average of the closing bid prices over the 30-day period ending
immediately prior to the applicable date of valuation; and
(d) if there is no active
public market for the Common Stock, the value thereof, as
determined in good faith by the Board of Directors of the Company
upon due consideration of the proposed determination thereof by the
Holder.
2.3. Partial Exercise . If
this Warrant is exercised in part only, the Company shall, upon
surrender of this Warrant, execute and deliver, within 10 days
of the date of exercise, a new Warrant evidencing the rights of the
Holder, or such other person as shall be designated in the Notice
of Exercise, to purchase the balance of the Warrant Shares
purchasable hereunder. In no event shall this Warrant be exercised
for a fractional Warrant Share, and the Company shall not
distribute a Warrant exercisable for a fractional Warrant Share.
Fractional Warrant Shares shall be treated as provided in
Section 6 hereof.
2.4. Delivery . Certificates
for shares purchased hereunder 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 system if the
Company is a participant in such system (and so long as the legend
may be removed in accordance with Section 3.8(b) of the
Purchase Agreement), and otherwise by physical delivery to the
address specified by the Holder in the Notice of Exercise.
3. Covenants of the
Company .
3.1. Covenants as to Warrant
Shares . The Company covenants and agrees that if at any time
during the Exercise Period the number of authorized but unissued
shares of Common Stock shall not be sufficient to permit exercise
of this Warrant, the Company will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock (or other securities
as provided herein) to such number of shares as shall be sufficient
for such purposes.
3.2. No Impairment . Except
and to the extent as waived or consented to by the Holder or
otherwise in accordance with Section 10 hereof, the Company
will not, by amendment of its Certificate of Incorporation (as such
may be amended from time to time), or through any means, avoid or
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 Warrant and in the taking of all such action as
may be necessary or appropriate in order to protect the exercise
rights of the Holder against impairment.
3.3. Notices of Record Date .
In the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Company shall mail to
the Holder, at least ten days prior to the date specified herein, a
notice specifying the date on which any such record is to be taken
for the purpose of such dividend or distribution.
4. Representations of
Holder .
4.1. Acquisition of Warrant for
Personal Account . The Holder represents and warrants that it
is acquiring the Warrant and the Warrant Shares solely for its
account and not with a present view toward the public or
distribution of said Warrant or Warrant Shares or any part thereof
and has no intention of selling or distributing said Warrant or
Warrant Shares or any arrangement or understanding with any other
persons regarding the sale or distribution of said Warrant or,
except in accordance with the provisions of Article 6 of the
Purchase Agreement, the Warrant Shares, and except as would not
result in a violation of the Securities Act. The Holder will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) the Warrant except in accordance with
the Securities Act and will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any
offers to buy, purchase or otherwise acquire or take a pledge of)
the Warrant Shares except in accordance with the provisions of
Article 6 of the Purchase Agree
