Exhibit 10.5
This Warrant has not been registered under the Securities Act of 1993, as
amended, or any applicable state securities laws, and may not be sold or
transferred unless such sale or transfer is in accordance with the registration
requirements of such Act and applicable laws or some other exemption from the
registration requirements of such Act and applicable laws is available with
respect thereto.
APPLIED NEUROSOLUTIONS, INC.
COMMON STOCK PURCHASE WARRANT
Warrant No. ANS-A-15 Number of Shares: 37,500
Void after November 4, 2009
1. Issuance. This Warrant is issued to ▇▇▇▇▇▇▇ ▇▇▇▇▇ by Applied
NeuroSolutions, Inc., a Delaware corporation (the "Company").
2. Number of Shares; Purchase Price. Subject to the terms and conditions
hereinafter set forth, the registered holder of this Warrant (the "Holder"),
commencing on the date hereof, is entitled upon surrender of this Warrant with
the subscription form annexed hereto duly executed, at the office of the
Company, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other
office as the Company shall notify the Holder of in writing, to purchase from
the Company, 37,500 fully paid and nonassessable shares of Common Stock, $0.0025
par value, of the Company (the "Common Stock"). The purchase price per share
(the "Purchase Price") shall equal $0.25. Until such time as this Warrant is
exercised in full or expires, the Purchase Price and the securities issuable
upon exercise of this Warrant are subject to adjustment as hereinafter provided.
3. Payment of Purchase Price. The Purchase Price may be paid (i) in cash or
by check, (ii) by the surrender by the Holder to the Company of any promissory
notes or other obligations issued by the Company, with all such notes and
obligations so surrendered being credited against the Purchase Price in an
amount equal to the principal amount thereof plus accrued interest to the date
of surrender, (iii) through delivery by the Holder to the Company of other
securities issued by the Company, with such securities being credited against
the Purchase Price in an amount equal to the Fair Market Value (as defined
herein), or (iv) by any combination of the foregoing. The Board of Directors of
the Company (the "Board") shall promptly respond in writing to an inquiry by the
Holder as to the Fair Market Value of any securities the Holder may wish to
deliver to the Company pursuant to clause (iii) above.
4. Net Issue Election. The Holder may elect to receive, without the payment
by the Holder of any additional consideration, shares equal to the value of this
Warrant or any portion hereof by the surrender of this Warrant, or such portion
to the Company, with the net issue election notice annexed hereto duly executed,
at the office of the Company. Thereupon, the Company shall issue to the Holder
such number of fully paid and nonassessable shares of Common Stock as is
computed using the following formula:
X = Y ( A - B )
-----------
A
where X = the number of shares to be issued to the Holder pursuant to this
Section 4.
Y = the number of shares covered by this Warrant in respect of which
the net issue election is made pursuant to this Section 4.
A = the Fair Market Value of one share of Common Stock (defined
herein), as at the time the net issue election is made pursuant to
this Section 4.
B = the Purchase Price in effect under this Warrant at the time the
net issue election is made pursuant to this Section 4.
For purposes of Sections 3 and 4, the "Fair Market Value" of a security of the
Company as of a particular date shall be determined as follows: (i) if traded on
a securities exchange or through the Nasdaq National Market, the value shall be
deemed to be the average of the closing prices of the securities on such
exchange over the thirty (30) day period ending three (3) days prior to the net
issue election; (ii) if traded over-the-counter, the value shall be deemed to be
the average of the closing bid or sale prices (whichever is applicable) over the
thirty (30) day period ending three (3) days prior to the net issue election;
and (iii) if there is no active public market, the Fair Market Value shall be
determined in good faith by the Board; provided, however, that, if the Warrant
is being exercised upon the closing of the Company's initial public offering,
the Fair Market Value of the securities to be sold in the initial public
offering will be the initial "Price to Public" of such securities specified in
the final prospectus with respect to such offering. The Board shall promptly
respond in writing to an inquiry by the Holder as to the Fair Market Value of
the Company's securities.
5. Partial Exercise. This Warrant may be exercised in part, and the Holder
shall be entitled to receive a new warrant, which shall be dated as of the date
of this Warrant, covering the number of shares in respect of which this Warrant
shall not have been exercised.
6. Issuance Date. The person or persons in whose name, or name, any
certificate representing shares of Common Stock is issued hereunder shall be
deemed to have become the holder of record of the shares represented thereby as
at the close of business on the date this Warrant is exercised with respect to
such shares, whether or not the transfer books of the Company shall be closed.
7. Expiration Date; Automatic Exercise. This Warrant shall expire at the
close of business on the date five years after issuance, and shall be void
thereafter. Notwithstanding the foregoing, this Warrant shall automatically be
deemed to be exercised in full pursuant to the provisions of Section 4 hereof,
without any further action on behalf of the Holder, immediately prior to the
time this Warrant would otherwise expire pursuant to the preceding sentence.
8. Reserved Shares; Valid Issuance. The Company covenants that it will at
all times from and after the date hereof reserve and keep available such number
of its authorized shares of Common Stock free from all preemptive or similar
rights therein, as will be sufficient to permit, respectively, the exercise of
this Warrant in full. The Company further covenants that such shares as may be
issued pursuant to such exercise and conversion will, upon issuance, be duly and
validly issued, fully paid and nonassessable and free from all preemptive
rights, taxes, liens and charges with respect to the issuance thereof. The
Company covenants that the issuance of this Warrant shall constitute full
authority to its officers to execute and issue the Common Stock upon exercise of
this Warrant.
9. Stock Dividends. If the Company shall subdivide the Common Stock, by
split-up or otherwise, or combine the Common Stock, or issue additional shares
of Common Stock in payment of a stock dividend on the Common Stock, the number
of shares issuable on the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock dividend, or
proportionately decreased in the case of a combination, and the Purchase Price
shall forthwith be proportionately decreased in the case of a subdivision or
stock dividend, or proportionately increased in the case of a combination.
10. Mergers and Reclassifications. If there shall be any reclassification,
capital reorganization or change of the Common Stock (other than as a result of
a subdivision, combination or stock dividend provided for in Section 9 hereof),
or any consolidation of the Company with, or merger of the Company into, another
corporation or other business organization (other than a consolidation or merger
in which the Company is the continuing corporation and which does not result in
any reclassification or change of the outstanding Common Stock), or any sale or
conveyance to another corporation or other business organization of all or
substantially all of the assets of the Company, then, as a condition of such
reclassification, reorganization, change, consolidation, merger, sale or
conveyance, lawful provisions shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be delivered to the
Holder, so that the Holder shall thereafter have the right to purchase at a
total price not to exceed that payable upon exercise of the Warrant in full, the
kind and amount of shares of stock and other securities and property receivable
upon such reclassification, reorganization, change, consolidation, merger, sale
or conveyance by a holder of the number of shares of Common Stock which might
have been purchased by the Holder immediately prior to such reclassification,
reorganization, change, consolidation, merger, sale or conveyance, and in any
such case appropriate provisions shall be made with respect to the rights and
interests of the Holder to the end that the provisions hereof (including without
limitation, provisions for the adjustment of the Purchase Price and the number
of shares issuable hereunder) shall thereafter be applicable in relation to any
shares of stock or other securities and property thereafter deliverable upon
exercise hereof. The Company will not, by amendment to its Certificate of
Incorporation or through any reorganization, recapitalization or other voluntary
action, avoid or seek to avoid the observance hereof but will at all times in
good faith assist in carrying out the provisions hereof in order to protect the
rights of the Holder against impairment.
11. Fractional Shares. In no event shall any fractional share of Common
Stock be issued upon any exercise of this Warrant. If, upon exercise of this
Warrant as an entirety, the Holder would be entitled to receive a fractional
share of Common Stock, then the Company shall issue the next higher number of
full shares of Common Stock, issuing a full share with respect to such
fractional share.
12. Certificate of Adjustment. Whenever the Purchase Price is adjusted, as
herein provided, the Company shall promptly deliver to the Holder a certificate
of the Company setting forth the Purchase Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.
13. Notices of Record Date. Etc. In the event of:
(a) 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 or other distribution,
or any right to subscribe for, purchase or otherwise acquire any shares
of stock of any class or any other securities or property, or to
receive any other right,
(b) any reclassification of the capital stock of the Company,
capital reorganization of the Company, consolidation or merger
involving the Company, or sale or conveyance of all or substantially
all of its assets, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
any such reclassification, reorganization, consolidation, merger, sale or
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record in respect of
such event are to be determined. Such notice shall be mailed at least 20 days
prior to the date specified in such notice on which any such action is to be
taken.
14. Amendment. The terms of this Warrant may be amended, modified or waived
only with the written consent of the Company and the holders of Warrants
representing at least two-thirds of the number of shares of Common Stock then
issuable upon the exercise of the Warrants. No such amendment, modification or
waiver shall be effective as to this Warrant unless the terms of such amendment,
modification or waiver shall apply with the same force and effect to all of the
other Warrants then outstanding.
15. Warrant Register; Transfers, Etc.
A. The Company will maintain a register containing the names
and addresses of the registered holders of the Warrants. The Holder may
change its address as shown on the warrant register by written notice
to the Company requesting, such change. Any notice or written
communication required or permitted to be given to the Holder may be
given by certified mail or delivered to the Holder at its address as
shown on the warrant register.
B. Subject to compliance with applicable federal and
securities laws, this Warrant may be transferred by the Holder with
respect to any or all of the shares purchasable hereunder. Upon
surrender of this Warrant to the Company, together with the assignment
hereof properly endorsed, for transfer of this Warrant as an entirety
by the Holder, the Company shall issue a new warrant of the same
denomination to the assignee. Upon surrender of this Warrant to the
Company, together with the assignment hereof properly endorsed, by the
Holder for transfer with respect to a portion of the shares of Common
Stock purchasable hereunder, the Company shall issue a new warrant to
the assignee, in such denomination as shall be requested by the Holder
hereof, and shall issue to such Holder a new warrant covering the
number of shares in respect of which this Warrant shall not have been
transferred.
C. In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor and
denomination and deliver the same (i) in exchange and substitution for
and upon surrender and cancellation of any mutilated Warrant, or (ii)
in lieu of any Warrant lost, stolen or destroyed, upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft or
destruction of such Warrant (including a reasonably detailed affidavit
with respect to the circumstance of any loss, theft or destruction) and
of indemnity reasonably satisfactory to the Company. Issuance of Common
Stock upon exercise of this Warrant and all transfers of this Warrant
shall be made without charge to the Holder.
D. Except as otherwise provided in this Section 16, the
Company will not seek reimbursement from the Holder for any costs
associated with the issuance of any shares of Common Stock upon the
exercise of this Warrant or any permitted transfers of this Warrant by
Holder.
16. No Impairment. The Company will not, by amendment of its Certificate of
Incorporation or through any reclassification, capital reorganization,
consolidation, merger, sale or conveyance of assets, dissolution, liquidation,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
promote the rights of the Holder.
17. Governing Law. The provisions and terms of this Warrant shall be
governed by and construed in accordance with the internal laws of the State of
Illinois.
18. Successors and Assigns. This Warrant shall be binding upon the
Company's successors and permitted assigns and shall inure to the benefit of the
Holder's successors, legal representatives and permitted assigns. The
obligations of the Company hereunder shall not be assigned by the Company
without the prior written consent of the Holder.
19. Business Days. If the last or appointed day for the taking of any
action required or the expiration of any right granted herein shall be a
Saturday or Sunday or a legal holiday in Illinois, then such action may be taken
or right may be exercised on the next succeeding day which is not a Saturday or
Sunday or such a legal holiday.
Dated: As of
-------------------------------
APPLIED NEUROSOLUTIONS, INC.
By: ____________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
Subscription
To: Date
--------------------------------- --------------------------------
The undersigned hereby subscribes for ________________ shares of Common
Stock covered by this Warrant. The certificate(s) for such shares shall be
issued in the name of the undersigned or as otherwise indicated below:
-------------------------------------
Signature
-------------------------------------
Name for Registration
-------------------------------------
Mailing Address
Net Issue Election Notice
To: Date
--------------------------------- --------------------------------
The undersigned hereby elects under Section 4 to surrender the right to
purchase shares of Common Stock pursuant to this Warrant. The certificate(s)
for the shares issuable upon such net issue election shall be issued in the
name of the undersigned or as otherwise indicated below.
-------------------------------------
Signature
-------------------------------------
Name for Registration
-------------------------------------
Mailing Address
Assignment
For value received ________________________ hereby sells, assigns and transfers
unto ___________________________________________________________________________
[Please print or typewrite name and address of Assignee]
the within Warrant, and does hereby irrevocably constitute and appoint _________
_______________________ its attorney to transfer the within Warrant on the books
of the within named Company with full power of substitution on the premises.
Dated:
------------------------------
-------------------------------------
In the Presence of:
-------------------------------------------