EXHIBIT 4.18
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT TRANSFERABLE WITHOUT THE
EXPRESS WRITTEN CONSENT OF MANHATTAN PHARMACEUTICALS, INC. (THE "COMPANY") AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
EXEMPTION THEREFROM. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO APPLICABLE STATE
SECURITIES LAWS.
MANHATTAN PHARMACEUTICALS, INC.
Warrant for the Purchase of Shares of
Common Stock
CSW No. ___S [____] Shares
FOR VALUE RECEIVED, MANHATTAN PHARMACEUTICALS, INC., a
Delaware corporation (the "COMPANY"), hereby certifies that MAXIM GROUP, LLC or
its registered assigns (the "Holder") is entitled to purchase from the Company,
subject to the provisions of this Warrant, at any time commencing from the date
hereof until 5:00 p.m. (New York City time) on November 5, 2008 (the
"TERMINATION DATE"), __________________________ fully paid and non-assessable
shares of Common Stock, at an initial per share exercise price equal to $1.10.
The shares of Common Stock or other securities or property deliverable upon such
exercise are hereinafter sometimes referred to as the "WARRANT SHARES." The
exercise price of a share of Common Stock in effect at any time is hereinafter
sometimes referred to as the "PER SHARE EXERCISE PRICE" and the aggregate
purchase price payable for the Warrant Shares hereunder is hereinafter sometimes
referred to as the "AGGREGATE EXERCISE PRICE." This Warrant is one of a duly
authorized issue of Warrants constituting components of units sold by the
Company on the date hereof (collectively, the "WARRANTS").
1. DEFINITIONS.
"CHANGE OF CONTROL" means the (i) acquisition by an individual
or legal entity or group (as defined in Rule 13d-5 of the Securities Exchange
Act of 1934, as amended) of more than one-half of the voting rights or equity
interests in the Company; (ii) sale, conveyance, or other disposition of all or
substantially all of the assets, property or business of the Company, (iii) any
reclassification of the Company's capital, or (iv) the merger into or
consolidation with any other corporation or other entity (other than a wholly
owned subsidiary corporation) or effectuation of any transaction or series of
related transactions where holders of the Company's voting securities prior to
such transaction or series of transactions fail to continue to hold at least 50%
of the voting power of the Company.
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"COMMON STOCK" means (except where the context otherwise
indicates) the Common Stock, $0.001 par value per share, of the Company as
constituted on the date hereof, and any capital stock into which such Common
Stock may thereafter be changed or converted, and shall also include (i) capital
stock of the Company of any other class (regardless of how denominated) issued
to the holders of shares of Common Stock upon any reclassification thereof which
is also not preferred as to dividends or assets on liquidation over any other
class of stock of the Company and which is not subject to redemption and (ii)
shares of common stock of any successor or acquiring corporation received by or
distributed to the holders of Common Stock of the Company in the circumstances
contemplated by Section 5.3.
2. EXERCISE OF WARRANT.
(a) This Warrant may be exercised in whole or in part, at any
time by the Holder commencing upon the date hereof and prior to the Termination
Date:
(i) by presentation and surrender of this Warrant
(with the subscription form at the end hereof duly executed) at the address set
forth in Section 11 hereof, together with payment, by certified or official bank
check payable to the order of the Company, of the Aggregate Exercise Price or
the proportionate part thereof if exercised in part; or
(ii) by the surrender of this Warrant (with the
cashless exercise form at the end hereof duly executed) (a "Cashless Exercise")
at the address set forth in Section 11 hereof. Such presentation and surrender
shall be deemed a waiver of the Holder's obligation to pay the Aggregate
Exercise Price, or the proportionate part thereof if this Warrant is exercised
in part. In the event of a Cashless Exercise, the Holder shall exchange this
Warrant for that number of Warrant Shares subject to such Cashless Exercise
multiplied by a fraction, the numerator of which shall be the difference between
(A) the last sale price of the Common Stock on the trading day prior to such
date or, in case no such reported sales take place on such day, the average of
the last reported bid and asked prices of the Common Stock on such day, in
either case on the principal national securities exchange on which the Common
Stock is admitted to trading or listed, or if not listed or admitted to trading
on any such exchange, the representative closing sale price of the Common Stock
as reported by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ"), or other similar organization if NASDAQ is no
longer reporting such information, or, if the Common Stock is not reported on
NASDAQ, the high per share sale price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or if not so available, the fair market value of the Common Stock
as determined in good faith by the Board of Directors (the "Current Market
Price") and (B) the Per Share Exercise Price, and the denominator of which shall
be the then Current Market Price. For purposes of any computation under this
Section 2(a), the then Current Market Price shall be based on the trading day
immediately prior to the Cashless Exercise.
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(b) If this Warrant is exercised in part only, the Company
shall, upon presentation of this Warrant upon such exercise, execute and deliver
(with the certificate for the Warrant Shares purchased) a new Warrant evidencing
the rights of the Holder hereof to purchase the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions as herein set forth.
Upon proper exercise of this Warrant, the Company promptly shall deliver
certificates for the Warrant Shares to the Holder duly legended as authorized by
the subscription form together with cash in lieu of any fraction of a share, as
hereinafter provided, but, in any event, within three (3) business days after
such exercise. No fractional shares shall be issued upon exercise of this
Warrant. With respect to any fraction of a share called for upon exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the Current Market Price of one (1) share of Common
Stock. The stock certificate or certificates so delivered shall be, to the
extent possible, in such denomination or denominations as the Holder shall
request in the notice and shall be registered in the name of the Holder or such
other name as shall be designated by the Holder. This Warrant shall be deemed to
have been exercised and such certificate or certificates shall be deemed to have
been issued, and the 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 when the notice, together with the payment of the
applicable exercise price and this Warrant, is received by the Company as
described above.
3. RESERVATION OF WARRANT SHARES; FULLY PAID SHARES; TAXES.
The Company hereby undertakes until expiration of this Warrant to reserve for
issuance or delivery upon exercise of this Warrant, such number of shares of the
Common Stock as shall be required for issuance and/or delivery upon exercise of
this Warrant in full in accordance with the terms hereof, and agrees that all
Warrant Shares so issued and/or delivered shall be validly issued, fully paid
and non-assessable and not subject to any preemptive rights, and further agrees
to pay all taxes and charges that may be imposed upon such issuance and/or
delivery.
4. REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED. The
Holder of this Warrant shall be entitled to registration rights with respect to
the Warrant Shares to the same extent and on the same terms as those provided to
investors pursuant to Article V of the Subscription Agreement (the "Subscription
Agreement") dated October ____, 2003 between the Company and purchasers of the
Company's Series A Convertible Preferred Stock. If the Holder is not a party to
the Subscription Agreement, by acceptance of this Warrant the Holder agrees to
comply with provisions of Article V thereof to the same extent as if it were a
party thereto.
5. ADJUSTMENTS. The number of shares of Common Stock for which
this Warrant is exercisable, and the price at which such shares may be purchased
upon exercise of this Warrant, shall be subject to adjustment from time to time
as set forth in this Section 5. The Company shall give the Holder notice of any
event described below which requires an adjustment pursuant to this Section 5 in
accordance with Sections 6.1 and 6.2.
5.1 Stock Dividends, Subdivisions and Combinations. If at any
time while this Warrant is outstanding the Company shall:
i. take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend
payable in, or other distribution of, additional shares of
Common Stock,
ii. subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, or
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iii. combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock,
then:
(1) the number of shares of Common Stock
acquirable upon exercise of this Warrant
immediately after the occurrence of any such
event shall be adjusted to equal the number
of shares of Common Stock which a record
holder of the same number of shares of
Common Stock that would have been acquirable
under this Warrant immediately prior to the
occurrence of such event would own or be
entitled to receive after the happening of
such event, and
(2) the Per Share Exercise Price shall be
adjusted to equal:
(A) the Per Share Exercise Price in
effect immediately prior to the
occurrence of such event multiplied
by the number of shares of Common
Stock into which this Warrant is
exercisable immediately prior to the
adjustment, divided by
(B) the number of shares of Common Stock
into which this Warrant is
exercisable immediately after such
adjustment.
Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
shareholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clauses (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.
5.2 Fractional Interests. In computing adjustments under this
Section 5, all calculations shall be made to the nearest 1/100th of a share.
5.3 Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets.
(a) If, prior to the Termination Date, there shall
occur a Change of Control and, pursuant to the terms of such Change of Control,
shares of common stock of the successor or acquiring corporation, or any cash,
shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder of this Warrant shall have the right thereafter
to receive, upon the exercise of the Warrant, the number of shares of common
stock of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and the Other Property receivable upon or as a result of
such Change of Control by a holder of the number of shares of Common Stock into
which this Warrant is exercisable immediately prior to such event.
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(b) In case of any such Change of Control, the
successor or acquiring corporation (if other than the Company) shall expressly
assume the due and punctual observance and performance of each and every
covenant and condition contained in this Warrant to be performed and observed by
the Company and all of the Company's obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined in
good faith by resolution of the Board of Directors of the Company) in order to
provide for adjustments of shares of the Common Stock into which this Warrant is
exercisable which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 5.
5.4 Other Action Affecting Common Stock. In case at any time
or from time to time the Company shall take any action in respect of its Common
Stock, then, unless such action will not have a materially adverse effect upon
the rights of the holder of this Warrant, the number of shares of Common Stock
or other stock into which this Warrant is exercisable and/or the purchase price
thereof shall be adjusted in such manner as may be equitable in the
circumstances.
5.5 Certain Limitations. Notwithstanding anything herein to
the contrary, the Company agrees not to enter into any transaction which, by
reason of any adjustment hereunder, would cause the Per Share Exercise Price to
be less than the par value per share of Common Stock.
6. NOTICES TO WARRANT HOLDERS.
6.1. Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of the Per Share Exercise Price, or the number
of shares of Common Stock and the amount, if any, of other property which at the
time would be received upon exercise of the Warrants owned by such Holder, the
Company, at its expense, shall promptly compute such adjustment or readjustment
in accordance with the terms hereof and prepare and furnish to the Holder of
this Warrant a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Company shall, upon the written request at any time of the Holder of this
Warrant, furnish or cause to be furnished to such Holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) the Per Share
Exercise Price at the time in effect and (iii) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the exercise of Warrants owned by such Holder.
6.2. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, or any right to subscribe for or purchase any evidences of
its indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) there shall be any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger of the Company with, or any sale,
transfer or other disposition of all or substantially all the property, assets
or business of the Company to, another corporation or other person, or
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(c) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 15 days' prior written notice of the record date selected for such
dividend, distribution or right or for determining rights to vote in respect of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, and (ii) in the
case of any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 15 days'
prior written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to the Holder at the last address of the Holder
appearing on the books of the Company and delivered in accordance with Section
11. The failure to give any notice required by this Section 6.2 shall not
invalidate any such corporate action.
6.3. Notice to Stockholders. The Holder shall be entitled to
the same rights to receive notice of corporation action as any holder of Common
Stock.
7. NO IMPAIRMENT. The Company shall not by any action,
including, without limitation, amending its certificate of incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, 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 actions as may be necessary or appropriate to
protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par value of
any shares of Common Stock receivable upon the exercise of this Warrant above
the amount payable therefor upon such exercise immediately prior to such
increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant, and
(c) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
Upon the request of the Holder, the Company will at any time during the period
this Warrant is outstanding acknowledge in writing, in form satisfactory to the
Holder, the continuing validity of this Warrant and the obligations of the
Company hereunder.
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8. LIMITED TRANSFERABILITY.
(a) The Holder represents that by accepting this Warrant it
understands that this Warrant and any securities obtainable upon exercise of
this Warrant have not been registered for sale under Federal or state securities
laws and are being offered and sold to the Holder pursuant to one or more
exemptions from the registration requirements of such securities laws. In the
absence of an effective registration of such securities or an exemption
therefrom, any certificates for such securities shall bear the legend set forth
on the first page hereof. The Holder understands that it must bear the economic
risk of its investment in this Warrant and any securities obtainable upon
exercise of this Warrant for an indefinite period of time, as this Warrant and
such securities have not been registered under Federal or state securities laws
and therefore cannot be sold unless subsequently registered under such laws,
unless an exemption from such registration is available.
(b) The Holder, by its acceptance of this Warrant, represents
to the Company that it is acquiring this Warrant and will acquire any securities
obtainable upon exercise of this Warrant for its own account for investment and
not with a view to, or for sale in connection with, any distribution thereof in
violation of the Securities Act of 1933, as amended (the "Act"). The Holder
agrees that this Warrant and any such securities may not be sold or otherwise
transferred unless (i) a registration statement with respect to such transfer is
effective under the Act and any applicable state securities laws or (ii) such
sale or transfer is made pursuant to one or more exemptions from the Act.
(c) This Warrant may not be sold, transferred, assigned or
hypothecated for six (6) months from the date hereof except (i) to any firm or
corporation that succeeds to all or substantially all of the business of Maxim
Group, LLC, (ii) to any of the officers, employees, associates or affiliated
companies of Maxim Group, LLC, or of any such successor firm, (iii) to any NASD
member participating in the offering of the Company's Series A Convertible
Preferred Stock or any officer or employee of any such NASD member or (iv) in
the case of an individual, pursuant to such individual's last will and testament
or the laws of descent and distribution, and is so transferable only upon the
books of the Company which the Company shall cause to be maintained for such
purpose. The Company may treat the registered Holder of this Warrant as it
appears on the Company's books at any time as the Holder for all purposes. The
Company shall permit any Holder of a Warrant or its duly authorized attorney,
upon written request during ordinary business hours, to inspect and copy or make
extracts from its books showing the registered Holders of Warrant. All Warrants
issued upon the transfer or assignment of this Warrant will be dated the same
date as this Warrant, and all rights of the holder thereof shall be identical to
those of the Holder.
9. LOSS, ETC., OF WARRANT. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and of indemnity reasonably satisfactory to the Company, if lost,
stolen or destroyed, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and deliver to the Holder a new Warrant of
like date, tenor and denomination.
10. STATUS OF HOLDER. This Warrant does not confer upon the
Holder any right to vote or to consent to or receive notice as a stockholder of
the Company, as such, in respect of any matters whatsoever, or any other rights
or liabilities as a stockholder, prior to the exercise hereof.
11. NOTICES. No notice or other communication under this
Warrant shall be effective unless, but any notice or other communication shall
be effective and shall be deemed to have been given if, the same is in writing
and is mailed by first-class mail, postage prepaid, addressed to:
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If to the Holder: Maxim Group, LLC, 405 Lexington Avenue,
New York, New York 10174; or
If to the Company: c/o Manhattan Pharmaceuticals, Inc.
787 Seventh Avenue, 48th Floor,
New York, New York 10019, Attn: Secretary
12. HEADINGS. The headings of this Warrant have been inserted
as a matter of convenience and shall not affect the construction hereof.
13. APPLICABLE LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of law. The parties agree to settle any disputes
through binding arbitration in the city, county and State of New York.
14. SUCCESSORS AND ASSIGNS. Subject to compliance with the
provisions of Section 8, this Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors of the Company and
the successors and assigns of the Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant,
and shall be enforceable by any such Holder, but nothing in this Warrant shall
be construed to give any person or corporation or other entity, other than the
Company and the Holder and their respective successors and assigns, any legal or
equitable right, remedy or cause under this Warrant.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its President and its corporate seal to be hereunto affixed and
attested by its Secretary this 5th day of November, 2003.
MANHATTAN PHARMACEUTICALS, INC.
By: _________________________________
Name: Leonard Firestone, MD
Title: President & CEO
ATTEST:
___________________________________
Secretary
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SUBSCRIPTION
The undersigned, ___________________, pursuant to the
provisions of the foregoing Warrant, hereby elects to exercise the within
Warrant to the extent of purchasing ____________________ shares of Common Stock
thereunder and hereby makes payment of $___________ by certified or official
bank check in payment of the exercise price therefor.
The undersigned hereby represents and warrants to the Company
that the undersigned is acquiring the shares of the Company's Common Stock
pursuant to exercise of the within Warrant for investment purposes only. The
undersigned hereby further acknowledges that the undersigned understands that
such shares (a) have not been registered under the Securities Act of 1933, as
amended, and are being issued to the undersigned by the Company in reliance upon
the foregoing representation and warranty and (b) may not be resold except in
accordance with the requirements of the Act, including Rule 144 thereunder, if
applicable. The undersigned further consents to the placing of a legend on the
certificates for the shares being purchased to the foregoing effect.
Dated:_______________ Signature:____________________
Address:______________________
ASSIGNMENT
FOR VALUE RECEIVED _______________ hereby sells, assigns and
transfers unto ____________________ the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
_____________________, attorney, to transfer said Warrant on the books of
Manhattan Pharmaceuticals, Inc.
Dated:_______________ Signature:____________________
Address:______________________
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CASHLESS EXERCISE
The undersigned ___________________, pursuant to the
provisions of the foregoing Warrant, hereby elects to exchange its Warrant for
___________________ shares of Common Stock, par value $.001 per share, of
Manhattan Pharmaceuticals, Inc. pursuant to the Cashless Exercise provisions of
the Warrant.
Dated:_______________ Signature:____________________
Address:______________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _______________ hereby assigns and
transfers unto ____________________ the right to purchase _______ shares of the
Common Stock, no par value per share, of Pain Management, Inc. covered by the
foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced thereby, and does irrevocably constitute and appoint
____________________, attorney, to transfer that part of said Warrant on the
books of Manhattan Pharmaceuticals, Inc.
Dated:_______________ Signature:____________________
Address:______________________
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