Date: December 30, 2005 WARRANT TO PURCHASE COMMON STOCK OF PROTALEX, INC.
EXHIBIT
4.7
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933. SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED HEREUNDER MAY
NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF
THESE
SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST
BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
No.
2005
- ____
Date:
December 30, 2005
WARRANT
TO PURCHASE COMMON STOCK
OF
PROTALEX,
INC.
This
certifies that, for value received, ______________ (“Holder”)
is
entitled, subject to the terms and conditions set forth below, to purchase
from
PROTALEX,
INC.,
a
Delaware corporation (the “Company”),
________ shares [TO BE DETERMINED PURSUANT TO SECTION 2.2 OF THE PURCHASE
AGREEMENT] of the Company’s Common Stock (the “Warrant
Shares”)
at an
exercise price of $2.99 [TO BE DETERMINED PURSUANT TO SECTION 2.2 OF THE
PURCHASE AGREEMENT] per share (the “Exercise
Price”).
The
number, character and Exercise Price of the Warrant Shares are subject to
adjustment as provided below and all references to “Warrant Shares” and
“Exercise Price” herein shall be deemed to include any such adjustment or series
of adjustments. This Warrant is issued pursuant to Section
2
of that
certain Warrant and Common Stock Purchase Agreement between the Company and
certain “Purchasers” thereunder, dated as of December 16, 2005 (the
“Purchase
Agreement”),
pursuant to which such Purchasers including the Holder, purchase this Warrant
and Common Stock shares of the Company. The holder of this Warrant is subject
to
certain restrictions, and entitled to certain rights, as set forth in the
Registration Rights Agreement, dated as of December 16, 2005 (the “Registration
Rights Agreement”).
This
Warrant is one of a duly authorized series of Warrants of the Company (which
are
identical except for the variations necessary to express the identification
numbers, names of the holder, number of shares issuable upon exercise thereof
and Warrant issue dates) issued in connection with the Purchase Agreement and
designated for reference purposes as “Series
2005 II Common Stock Warrants.”
The term
“Common
Stock Warrant”
as
used
herein shall also mean this Common Stock Warrant, and any Common Stock Warrants
delivered in substitution or exchange therefor as provided herein.
This
Common Stock Warrant is subject to the following terms and
conditions:
1. Term
of Common Stock Warrant.
Subject
to the terms and conditions set forth herein, this Common Stock Warrant shall
be
exercisable, in whole or in part, on any business day during the period (the
“Exercise
Period”)
commencing on the Effective
Date
(as
defined in the Purchase Agreement) and ending on the fifth anniversary date
of
the Effective Date.
-1-
2. Exercise
of Common Stock Warrant.
(a) Cash
Exercise.
This
Common Stock Warrant may be exercised by the Holder during the Exercise Period
by (i) the surrender of this Common Stock Warrant to the Company, with the
Notice of Exercise annexed hereto duly completed and executed on behalf of
the
Holder, at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address
of
the Holder appearing on the books of the Company) and (ii) the delivery of
payment to the Company, for the account of the Company, by cash, wire transfer
of immediately available funds to a bank account specified by the Company,
or by
certified or bank cashier’s check, in an amount equal to the Exercise Price
multiplied by the number of Warrant Shares for which this Common Stock Warrant
is being exercised as specified in the Notice of Exercise, such payment to
be
made in lawful money of the United States of America. The Company agrees that
such Warrant Shares shall be deemed to be issued to the Holder as the record
holder of such Warrant Shares as of the close of business on the date on which
this Common Stock Warrant shall have been exercised and surrendered and payment
made for the Warrant Shares as aforesaid. A stock certificate or certificates
for the Warrant Shares specified in the Notice of Exercise shall be delivered
to
the Holder as promptly as practicable, and in any event within five (5) business
days, thereafter. If this Common Stock Warrant shall have been exercised only
in
part and has not otherwise expired, the Company shall, at the time of delivery
of the stock certificate or certificates, deliver to the Holder a new Common
Stock Warrant evidencing the right to purchase the remaining Warrant Shares,
which new Common Stock Warrant shall in all other respects be identical with
this Common Stock Warrant. No adjustments shall be made on Warrant Shares
issuable on the exercise of this Common Stock Warrant for any cash dividends
or
distributions paid or payable to holders of record of any capital stock of
the
Company prior to the date as of which the Holder shall be deemed to be the
record holder of such Warrant Shares.
(b) Net
Issue Exercise.
In lieu
of exercising this Common Stock Warrant pursuant to Section 2(a)
above,
during the Exercise Period, the Holder may elect to convert this Common Stock
Warrant or any portion hereof into Warrant Shares, the aggregate value of which
shares shall be equal to the value of this Common Stock Warrant or portion
thereof being so converted. The conversion right may be exercised by the Holder
by surrender of this Common Stock Warrant to the Company, with a duly executed
Notice of Exercise marked to reflect the Holder’s intention to exercise the
conversion right hereunder, in which event the Company shall issue to the Holder
a number of shares computed using the following formula:
X
=
Y
(A-B)
A
|
Where
|
X
=
|
the
number of shares to be issued to Holder under this Section
2(b)
upon exercise of the conversion rights under this Section
2(b);
|
|
Y
=
|
the
number of Warrant Shares otherwise purchasable under this Common
Stock
Warrant or, if only a portion of the Common Stock Warrant is exercised,
the portion of the Common Stock Warrant being exercised (as adjusted
to
the date of such calculation);
|
-2-
|
A
=
|
the
fair market value (determined in the manner provided below) of one
share
of the Warrant Shares subject to this Common Stock Warrant as of
the date
of exercise of this Common Stock
Warrant;
|
|
B
=
|
the
Exercise Price (as adjusted to the date of such
calculation).
|
(c) Fair
Market Value.
For
purposes of the above calculation, fair market value of one share of Warrant
Shares shall be determined as of the applicable date by the Company’s Board of
Directors in good faith; provided,
however, that where there exists a public market for the Company’s Common Stock
at the time of such exercise, the fair market value per share shall be the
average of the closing bid and asked prices of the Common Stock quoted in the
Over-The-Counter Market Summary or the last reported sale price of the Common
Stock or the closing price quoted on the Nasdaq National Market or any exchange
on which the Common Stock is listed, whichever is applicable, as published
in
the Western Edition of The Wall Street Journal (or such other reference
reasonably relied upon by the Board of Directors if not so published), for
the
five (5) trading days prior to the date as of which the fair market value is
being determined.
(d) This
Common Stock Warrant shall be deemed to have been exercised immediately prior
to
the close of business on the date of its surrender for exercise as provided
above, and the person entitled to receive the shares of Warrant Shares issuable
upon such exercise shall be treated for all purposes as the holder of record
of
such shares as of the close of business on such date. As promptly as practicable
on or after such date and in any event within five (5) business days thereafter,
the Company at its expense shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates for the number of
shares issuable upon such exercise. In the event that this Common Stock Warrant
is exercised in part, the Company at its expense will execute and deliver a
new
Common Stock Warrant of like tenor exercisable for the number of shares for
which this Common Stock Warrant may then be exercised.
3. No
Fractional Shares or Scrip/Minimum Exercise.
No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Common Stock Warrant. In lieu of any fractional share
to
which the Holder would otherwise be entitled, the Company shall make a cash
payment equal to the Exercise Price multiplied by such fraction (after
aggregating all shares issuable upon exercise thereof). In no event shall this
Warrant be exercised for less than 5% of the Warrant Shares or, if less, the
Warrant Shares remaining to be exercised hereunder.
4. Replacement
of Common Stock Warrant.
On
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Common Stock Warrant and, in the case of
loss,
theft or destruction, on delivery of an indemnity agreement and security
reasonably satisfactory in form and substance to the Company or, in the case
of
mutilation, on surrender and cancellation of this Common Stock Warrant, the
Company at its expense shall execute and deliver, in lieu of this Common Stock
Warrant, a new Common Stock Warrant of like tenor and amount.
-3-
5. Rights
of a Stockholder.
Subject
to Section
10
of this
Common Stock Warrant, the Holder shall not be entitled to vote or receive
dividends or be deemed the holder of Warrant Shares for any purpose, and nothing
contained herein shall be construed to confer upon the Holder, as such, any
of
the rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action (whether upon
any recapitalization, issuance of stock, reclassification of stock, change
of
par value, or change of stock to no par value, consolidation, merger, conveyance
or otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Common Stock Warrant shall have
been
exercised as provided herein and then only as to the shares for which this
Common Stock Warrant has been so exercised.
6. Transfer
of Common Stock Warrant.
(a) Common
Stock Warrant Register.
The
Company will maintain a register (the “Common
Stock Warrant Register”)
containing the names and addresses of the Holder or Holders. Any Holder of
this
Common Stock Warrant or any portion thereof may change such Holder’s address as
shown on the Common Stock 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 delivered or given by mail to such
Holder as shown on the Common Stock Warrant Register and at the address shown
on
the Common Stock Warrant Register. Until this Common Stock Warrant is
transferred on the Common Stock Warrant Register of the Company, the Company
may
treat the Holder as shown on the Common Stock Warrant Register as the absolute
owner of this Common Stock Warrant for all purposes, notwithstanding any notice
to the contrary.
(b) Common
Stock Warrant Agent.
The
Company may, by written notice to the Holder, appoint an agent for the purpose
of maintaining the Common Stock Warrant Register referred to in Section
6(a)
above,
issuing the Common Stock Warrant Shares or other securities then issuable upon
the exercise of this Common Stock Warrant, exchanging this Common Stock Warrant,
replacing this Common Stock Warrant or any or all of the foregoing. Thereafter,
any such registration, issuance, exchange or replacement, as the case may be,
shall be made at the office of such agent.
(c) Transferability
and Nonnegotiability of Common Stock Warrant.
This
Common Stock Warrant may not be transferred or assigned in whole or in part
without compliance with all applicable federal and state securities laws by
the
transferor and the transferee (including the delivery of investment
representation letters, legal opinions and market standoff agreements reasonably
satisfactory to the Company, if such are requested by the Company) and
compliance with the requirements set forth in Section
6(d)
below.
Subject to the provisions of this Common Stock Warrant, title to this Common
Stock Warrant may be transferred by endorsement (by the Holder executing the
Assignment Form annexed hereto) and delivery in the same manner as a negotiable
instrument transferable by endorsement and delivery. This Common Stock Warrant
and Warrant Shares are subject to certain lock-up provisions and restrictions
on
short sales, put options or similar instruments set forth in Section
6
of the
Purchase Agreement.
-4-
(d) Exchange
of Common Stock Warrant Upon a Transfer.
On
surrender of this Common Stock Warrant for exchange, properly endorsed on the
Assignment Form and subject to the provisions of this Common Stock Warrant
with
respect to compliance with the Act and applicable state securities laws and
with
the limitations on assignments and transfers and contained in this Section
6,
the
Company at its expense shall issue to or on the order of the Holder a new Common
Stock Warrant or Common Stock Warrants of like tenor, in the name of the Holder
or as the Holder (on payment by the Holder of any applicable transfer taxes)
may
direct, for the number of shares issuable upon exercise hereof.
(e) Compliance
with Securities Laws.
(i) The
Holder of this Common Stock Warrant, by acceptance hereof, acknowledges that
this Common Stock Warrant and the Warrant Shares to be issued upon exercise
hereof are being acquired solely for the Holder’s own account and not as a
nominee for any other party, and for investment, and that the Holder will not
offer, sell or otherwise dispose of this Common Stock Warrant or any Warrant
Shares to be issued upon exercise hereof except under circumstances that will
not result in a violation of the Act or any applicable state securities laws.
Holder hereby represents and warrants that such Holder is an “accredited
investor” as such term is defined under Regulation D promulgated by the
Securities and Exchange Commission. Upon exercise of this Common Stock Warrant,
the Holder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that Holder remains an accredited investor and
the
Warrant Shares so purchased are being acquired solely for the Holder’s own
account and not as a nominee for any other party, for investment, and not with
a
view toward distribution or resale. Any transferee of this Common Stock Warrant
shall represent the same as condition to such transfer and any subsequent
exercise thereof.
(ii) This
Common Stock Warrant and all Warrant Shares issued upon exercise hereof shall
be
stamped or imprinted with a legend in substantially the following form (in
addition to any legend required by state securities laws and the Purchase
Agreement):
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933. SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED HEREUNDER MAY
NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF
THESE
SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST
BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
7. Reservation
of Stock.
The
Company covenants that during the Exercise Period, the Company will reserve
from
its authorized and unissued Warrant Shares a sufficient number of shares to
provide for the issuance of Warrant Shares upon the exercise of this Common
Stock Warrant. The Company further covenants that all shares issued upon the
exercise of rights represented by this Common Stock Warrant and payment of
the
Exercise Price, in the amount and otherwise all as set forth herein, shall
be
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously or otherwise
specified herein).
-5-
8. Notices.
All
notices required or permitted hereunder to be given shall be in writing and
shall be telecopied or mailed by registered or certified mail, postage prepaid,
or otherwise delivered by hand or by messenger,
If
to the
Company:
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇. ▇▇▇▇
With
a
copy to:
▇▇▇▇
▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If
to any
of the Holders:
The
address set forth on the Company’s records.
9. Amendments.
Any
term of this Common Stock Warrant hereunder may be amended, waived or terminated
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company, and the holders
of
at least a majority in interest of the Warrant Shares then exercisable under
all
Series 2005 II Common Stock Warrants. Any amendment, waiver or termination
effected in accordance with this Section
9
shall be
binding upon the Company, each of the Holders and each transferee of the Common
Stock Warrants (and of any securities into which this Warrant is convertible).
The Holder acknowledges that by the operation of this Section
9,
the
holders of a majority in interest of the Warrant Shares then exercisable under
all Series 2005 II Common Stock Warrants will have the right and power to
diminish or eliminate certain rights of the Holder under this Warrant. The
foregoing shall not limit or otherwise affect the Holder’s right to waive any of
such Holder’s rights hereunder with respect to itself without obtaining the
consent of any other holders of Series 2005 II Common Stock
Warrants.
10. Adjustments.
The
Exercise Price and the number of shares purchasable hereunder are subject to
adjustment from time to time as follows:
(a) Reclassification,
etc.
If the
Company, at any time while this Common Stock Warrant or any portion thereof
is
exercisable and remains outstanding and unexpired, by reclassification of
securities or otherwise, shall change any of the securities as to which purchase
rights under this Common Stock Warrant exist into the same or a different number
of securities of any other class or classes, this Common Stock Warrant shall
thereafter represent the right to acquire such number and kind of securities
as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Common Stock
Warrant immediately prior to such reclassification or other change and the
Exercise Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section
10.
-6-
(b) Split,
Subdivision or Combination of Shares.
If the
Company, at any time while this Common Stock Warrant or any portion thereof
is
exercisable and remains outstanding and unexpired, shall split, subdivide or
combine the outstanding shares of Warrant Shares into a different number of
shares of Warrant Shares, then (i) in the case of a split or subdivision, the
Exercise Price for such securities shall be proportionately decreased and the
Warrant Shares issuable upon exercise of this Common Stock Warrant shall be
proportionately increased, and (ii) in the case of a combination, the Exercise
Price for such Warrant Shares shall be proportionately increased and the
securities issuable upon exercise of this Common Stock Warrant shall be
proportionately decreased. If the Warrant Shares are convertible into any other
stock or securities of the Company, then if all of the outstanding Warrant
Shares should be converted at any time prior to the Expiration Date into shares
of the Company’s Common Stock or other stock or securities of the Company then
(i) this Common Stock Warrant immediately shall become exercisable for that
number of shares of such stock or securities (subject to further adjustment
as
herein provided) which would have been received if this Common Stock Warrant
had
been exercised in full and the Warrant Shares received thereupon had been
simultaneously converted immediately prior to such event, (ii) the Exercise
Price hereunder shall be appropriately adjusted and (iii) all references herein
to Warrant Shares shall be automatically deemed amended to be references to
the
stock or securities into which the Warrant Shares was converted.
(c) Adjustments
for Dividends in Stock or Other Securities or Property.
If,
while this Common Stock Warrant or any portion hereof is exercisable and remains
outstanding and unexpired, the holders of Warrant Shares (or any shares of
stock
or securities at the time receivable upon exercise of this Common Stock Warrant)
shall have received, or, on or after the record date fixed for the determination
of eligible stockholders, shall have become entitled to receive, without payment
therefor, capital stock or any other securities that are at any time directly
or
indirectly convertible into or exchangeable for capital stock of the Company,
or
any rights or options to subscribe for, purchase or otherwise acquire any of
the
foregoing by way of dividend, then and in each case, this Common Stock Warrant
shall represent the right to acquire, in addition to the number of shares of
the
security receivable upon exercise of this Common Stock Warrant, and without
payment of any additional consideration therefor, the amount of such capital
stock and other securities that the Holder would hold on the date of such
exercise had it been the holder of record of such capital stock as of the date
on which the holders of capital stock received or became entitled to receive
such capital stock or other securities.
(d) Merger,
Consolidation or Sale of Assets.
If at
any time or from time to time there shall be a capital reorganization of the
Common Stock (other than a subdivision, combination, reclassification or
exchange of shares provided for elsewhere in this Section
10)
or a
merger or consolidation of the Company with or into any other person or entity,
or the sale of all or substantially all of the Company’s assets and properties
to any other person or entity, then as a part of such reorganization, merger,
consolidation or sale, provision shall be made so that the Holder shall
thereafter be entitled to receive upon the exercise of this Warrant, the number
of shares of stock or other securities or property of the Company, or of the
successor corporation resulting from such reorganization, merger, consolidation
or sale, to which a holder of the number of shares of Common Stock issuable
upon
the exercise of this Warrant would have received if this Warrant had been
exercised immediately prior to such reorganization, merger, consolidation or
sale; provided, that, as a condition to any merger, consolidation, or sale
of
substantially all of the assets of the Company, the Company shall require that
the surviving corporation assume in writing the obligations pursuant to this
Warrant.
-7-
11. Adjustment
of Exercise Price for Dilutive Issuances.
The
Exercise Price shall be subject to adjustment from time to time as
follows:
(a) For
purposes of this Section
11,
the
following definitions shall apply:
(i) “Excluded
Stock”
shall
mean:
(1) all
shares of Common Stock issued and outstanding on the date of this Warrant and
all shares of Common Stock issued after the date of this Warrant pursuant to
Sections 2.1 and 2.2 of the Purchase Agreement and all shares of Common Stock
issued or issuable upon the exercise or conversion of any convertible securities
outstanding on the date of this Warrant (provided that the terms of such
convertible securities are not modified or changed except as otherwise
contemplated by the Purchase Agreement) and all shares of Common Stock issued
or
issuable upon the exercise of this Warrant and all other Series 2005 II Common
Stock Warrants;
(2) all
shares of Common Stock or other securities hereafter issued or issuable to
officers, directors, employees, scientific advisors or consultants of the
Company pursuant to any employee or consultant stock offering, plan or
arrangement approved by the majority of the members of the Board of Directors
of
the Company;
(3) all
shares of Common Stock or other securities hereafter issued in connection with
or as consideration for the acquisition or licensing of technology approved
by
the majority of the members of the Board of Directors of the Company;
and
(4) all
shares of Common Stock or other securities issued in connection with equipment
leasing or equipment financing arrangements approved by the majority of members
of the Board of Directors of the Company.
(ii) “Options”
means
options to purchase or rights to subscribe for Common Stock (other than Excluded
Stock).
(iii) “Convertible
Securities”
means
securities by their terms convertible into or exchangeable for Common Stock
(other than Excluded Stock) and options to purchase or rights to subscribe
for
such convertible or exchangeable securities.
(iv) “Purchase
Rights”
means
Options and Convertible Securities.
(v) “Dilutive
Issuance”
means
an issuance of Purchase Rights or Common Stock, which is not Excluded Stock,
without consideration or for a consideration per share less than the then
applicable Exercise Price. “Dilutive Issuance” excludes any stock dividend,
subdivision or split-up, stock combination, dividend or transaction described
in
Section
10.
-8-
(b) If
the
Company issues or is deemed to issue any Common Stock or Purchase Rights in
a
Dilutive Issuance, the applicable Exercise Price in effect after each such
issuance shall be adjusted to a price equal to the following: the applicable
Exercise Price in effect immediately prior to the Dilutive Issuance (the
“Old
Exercise Price”)
multiplied by the quotient obtained by dividing:
(i) an
amount
equal to the sum of (x) the total number of shares of Common Stock outstanding
immediately prior to the Dilutive Issuance plus the total number of shares
of
Common Stock then issuable upon conversion of Convertible Securities and
exercise of outstanding options and warrants, plus (y) the number of shares
of
Common Stock which the consideration received by the Company upon the Dilutive
Issuance would purchase at such Old Exercise Price, by
(ii) the
total
number of shares of Common Stock outstanding immediately after the Dilutive
Issuance plus the total number of shares of Common Stock issuable on conversion
of Convertible Securities and exercise of outstanding options and
warrants.
(c) For
purposes of any adjustment of the applicable Exercise Price pursuant to
Section
11(b)
above,
the following provisions shall be applicable:
(i) In
the
case of the issuance of Common Stock for cash, the consideration shall be deemed
to be the amount of cash paid therefor.
(ii) In
the
case of the issuance of Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash shall be deemed to be the
fair market value thereof as determined in good faith and in the exercise of
reasonable judgment by the Board of Directors of the Company, in accordance
with
generally accepted accounting principles; provided, however, that if at the
time
of such determination, the Company’s Common Stock is traded in the
over-the-counter market or on a national or regional securities exchange, such
fair market value as determined by the Board of Directors of the Company shall
not exceed the aggregate “Current
Market Price”
(as
defined below) of the shares of Common Stock being issued.
(iii) In
the
case of the issuance of Purchase Rights in a Dilutive Issuance:
(1) the
aggregate maximum number of shares of Common Stock deliverable upon exercise
of
Options shall be deemed to have been issued at the time such Options were issued
and for a consideration equal to the consideration (determined in the manner
provided in Section
11(c)(i)
and
(ii)
above),
if any, received by the Company upon the issuance of such Options plus the
minimum purchase price provided for in such Options;
(2) the
aggregate maximum number of shares of Common Stock deliverable upon conversion
or exercise of or exchange for any Convertible Securities shall be deemed to
have been issued at the time such Convertible Securities were issued and for
a
consideration equal to the consideration received by the Company for any such
Convertible Securities (excluding any cash received on account of accrued
interest or accrued dividends), plus the minimum additional consideration,
if
any, to be received by the Company upon the conversion or exchange of such
Convertible Securities (determined in the manner provided in Section
11(c)(i)
and
(ii)
above);
-9-
(3) on
any
change in the number of shares of Common Stock deliverable upon exercise of
any
such Purchase Rights or on any change in the minimum purchase price of such
Purchase Rights, other than a change resulting from the antidilution provisions
of such Purchase Rights, the applicable Exercise Price shall forthwith be
readjusted to such Exercise Price as would have been obtained had the adjustment
made upon (x) the issuance of such Purchase Rights not exercised, converted
or
exchanged prior to such change, as the case may be, been made upon the basis
of
such change or (y) the issuance of options or rights related to such securities
not converted or exchanged prior to such change, as the case may be, been made
upon the basis of such change; and
(4) on
the
expiration of any Purchase Rights, the applicable Exercise Price shall forthwith
be readjusted to such Exercise Price as would have obtained had the adjustment
made upon the issuance of such Purchase Right been made upon the basis of the
issuance of only the number of shares of Common Stock actually issued upon
the
exercise of such Purchase Rights.
(d) All
calculations under this Section
11
shall be
made to the nearest cent or to the nearest one hundredth (1/100) of a share,
as
the case may be.
(e) For
the
purpose of any computation pursuant to this Section
11,
the
“Current
Market Price”
at
any
date of one share of Common Stock, shall be deemed to be the average of the
highest reported bid and the lowest reported offer prices on the preceding
business day as reported by Nasdaq (or other recognized source of quotations);
provided, however, that if the Common Stock is not traded in such manner that
the quotations referred to in this Section
11(e)
are
available for the period required hereunder, Current Market Price shall be
determined in good faith and in the exercise of reasonable judgment by the
Board
of Directors of the Company.
(f) No
adjustment in the Exercise Price need be made if such adjustment would result
in
a change in the Exercise Price of less than $0.01. Any adjustment of less than
$0.01 which is not made shall be carried forward and shall be made at the time
of and together with any subsequent adjustment which, on a cumulative basis,
amounts to an adjustment of $0.01 or more in the Conversion Price.
(g) Any
notice required by the provisions of this Section
11
to be
given to the holder of Warrants shall be deemed given if deposited in the United
States mail, postage prepaid, and addressed to each holder of record at such
holder’s address appearing on the books of the Company.
12. No
Impairment.
The
Company will not, by any voluntary action, 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 Sections
10
and
11
and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder against impairment.
-10-
13. Notice
of Adjustments and Record Dates.
Whenever the Exercise Price or the number of shares of Common Stock purchasable
hereunder shall be adjusted pursuant to Sections
10
or
11
(or
otherwise), the Company shall promptly notify the Holder in writing of each
adjustment or readjustment of the Exercise Price hereunder and the number of
shares of Common Stock (or any shares of stock or other securities which may
be)
issuable upon the exercise of this Warrant, Such notice shall state the
adjustment or readjustment and show in reasonable detail the facts on which
that
adjustment or readjustment is based. Upon (i) 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 (ii) any acquisition or other capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company, any merger or consolidation of the Company with or into any other
person or entity, or any sale of all or substantially all of the assets or
any
voluntary or involuntary dissolution, liquidation or winding up of the Company,
the Company shall mail to each holder of this Warrant at least fifteen (15)
days
prior to the record date specified therein (or such shorter period approved
by
holders
of at least a majority in interest of the Warrant Shares then exercisable under
all Series 2005 II Common Stock Warrants)
a
notice specifying (A) the date on which any such record is to be taken for
the
purpose of such dividend or distribution and a description of such dividend
or
distribution, (B) the date on which any such acquisition, reorganization,
reclassification, transfer, consolidation, merger, asset sale, dissolution,
liquidation or winding up is expected to become effective, and (C) the date,
if
any, that is to be fixed as to when the holders of record of Common Stock (or
other securities) shall be entitled to exchange their shares of Common Stock
(or
other securities) for securities or other property deliverable upon such
acquisition, reorganization, reclassification, transfer, consolidation, merger,
asset sale, dissolution, liquidation or winding up.
14. Miscellaneous.
(a) This
Common Stock Warrant and all acts and transactions pursuant hereto and the
rights and obligations of the parties hereto shall be governed, construed and
interpreted in accordance with the laws of the State of Delaware without regard
to the conflict of law provisions thereof. Any dispute arising in relation
to
this Common Stock Warrant shall be resolved and venue shall be established
in
the competent courts within the State of Delaware.
(b) In
the
event of a dispute with regard to the interpretation of this Common Stock
Warrant, the prevailing party may collect the cost of attorney’s fees,
litigation expenses or such other expenses as may be incurred in the enforcement
of the prevailing party’s rights hereunder.
(c) The
Holder agrees that the Warrant Shares be bound by such market standoff
provisions (i.e.,
restrictions on stock resale provisions following the Company’s sale of
securities in the public market) as provided in the Purchase Agreement with
respect to this Common Stock Warrant and the Warrant Shares.
(d) This
Common Stock Warrant shall be exercisable as provided for herein, except that
in
the event that the expiration date of this Common Stock Warrant shall fall
on a
day other than a business day, the expiration date for this Common Stock Warrant
shall be extended to 5:00 p.m. Eastern standard time on the first business
day
following such day. For all purposes of this Common Stock Warrant, a business
day shall mean any day, other than a Saturday or a Sunday, upon which banks
are
open for business in Delaware.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-11-
IN
WITNESS WHEREOF, PROTALEX, INC. has caused this Common Stock Warrant to be
executed as of the date first above written.
Number
of
Warrant Shares: _________
COMPANY:
PROTALEX,
INC.
a
Delaware corporation
By:
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇
President
and Chief Executive Officer
AGREED
AND ACCEPTED:
HOLDER:
[Signature]
[Print
Name]
[Title
(if not an individual)]
-12-
NOTICE
OF EXERCISE
| To: |
PROTALEX,
INC.
|
| (1) |
The
undersigned hereby:
|
| _______ |
elects
to purchase __________ shares of Warrant Shares (as defined in
the
attached Common Stock Warrant) of PROTALEX, INC. pursuant to
the terms of
the attached Common Stock Warrant, and tenders herewith payment
of the
purchase price for such shares in full;
or
|
| _______ |
elects
to exercise the conversion right features under Section
2(b)
of
the attached Common Stock Warrant with respect to __________
shares of
Warrant Shares of PROTALEX, INC. pursuant to the terms of such
Common
Stock Warrant.
|
| (2) |
In
exercising this Common Stock Warrant, the undersigned hereby confirms
and
acknowledges that the shares of Warrant Shares (and any securities
issuable upon conversion thereof) are being acquired solely for the
account of the undersigned and not as a nominee for any other party,
or
for investment, and that the undersigned will not offer, sell or
otherwise
dispose of any such shares of Warrant Shares except under circumstances
that will not result in a violation of the Securities Act of 1933,
as
amended, or any applicable state securities
laws.
|
| (3) |
Please
issue a certificate or certificates representing said shares of Warrant
Shares in the name of the
undersigned:
|
(Name)
(Name)
| (4) |
Please
issue a new Common Stock Warrant for the unexercised portion of the
attached Common Stock Warrant in the name of the
undersigned:
|
(Name)
(Date)
(Signature)
-13-
ASSIGNMENT
FORM
FOR
VALUE
RECEIVED, the undersigned registered owner of this Common Stock Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights
of
the undersigned under this Common Stock Warrant, with respect to the number
of
shares of Warrant Shares (as defined in the this Common Stock Warrant) set
forth
below:
|
Name
of Assignee
|
Address
|
No.
of Shares
|
and
does
hereby irrevocably constitute and appoint the Secretary of the Company to make
such transfer on the books of PROTALEX, INC. maintained for such purpose, with
full power of substitution in the premises.
The
undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Common Stock Warrant and the shares of stock to be issued
upon exercise hereof or conversion thereof are being acquired for investment
and
that the Assignee will not offer, sell or otherwise dispose of this Common
Stock
Warrant or any shares of stock to be issued upon exercise hereof or conversion
thereof except under circumstances which will not result in a violation of
the
Securities Act of 1933, as amended, or any applicable state securities laws.
Further, the Assignee has acknowledged that upon exercise of this Common Stock
Warrant, the Assignee shall, if requested by the Company, confirm in writing,
in
a form satisfactory to the Company, that the shares of stock so purchased are
being acquired for investment and not with a view toward distribution or
resale.
Dated:_______________
Signature
of Holder
The
undersigned hereby agrees to be bound by the terms of the attached Common Stock
Warrant on this __ day of __________, 200_.
ASSIGNEE:
[Name]
By:____________________________________
Title:___________________________________
|
-14-
|
|||