EXHIBIT 10.2

Form of Inducement Warrant

PURCHASE WARRANT

Issued to:

Alpha Venture Capital Partners, LP

Exercisable to Purchase

1,000,000 Shares of Common Stock

of

CYTODYN INC.

Warrant No. A-80

Void after June 24, 2020

THIS WARRANT HAS NOT BEEN REGISTERED

UNDER THE SECURITIES ACT OF 1933

AND IS NOT TRANSFERABLE

EXCEPT AS PROVIDED HEREIN

--------------------------------------------------------------------------------

This is to certify that, for value received and subject to the terms and
conditions set forth below, the Warrantholder (hereinafter defined) is entitled
to purchase, and the Company (hereinafter defined) promises and agrees to sell
and issue to the Warrantholder, at any time on or after the Issue Date and on or
before the fifth anniversary of the Issue Date, up to 1,000,000 shares of Common
Stock (hereinafter defined) at the per share Exercise Price (hereinafter
defined).

This Warrant Certificate is issued subject to the following terms and
conditions:

1. Definitions of Certain Terms. Except as may be otherwise clearly required by
the context, the following terms have the following meanings:

(a) “Cashless Exercise” means an exercise of a Warrant in which, in lieu of
payment of the Exercise Price in cash, the Warrantholder elects to receive a
lesser number of Securities in payment of the Exercise Price, as determined in
accordance with Section 2(b).

(b) “Closing Date” means the date or dates on which a closing under the Offering
occurs.

(c) “Commission” means the Securities and Exchange Commission.

(d) “Common Stock” means the common stock, no par value, of the Company.

(e) “Company” means CytoDyn Inc., a Colorado corporation.

(f) “Exercise Price” means the price at which the Warrantholder may purchase one
share of Common Stock or other Securities upon exercise of a Warrant as
determined from time to time pursuant to the provisions hereof, multiplied by
the number of Securities as to which the Warrant is being exercised. The
Exercise Price is $0.675 per share of Common Stock.

(g) “Issue Date” means the Closing Date on which this Warrant is issued.

(h) “Rules and Regulations” means the rules and regulations of the Commission
adopted under the Securities Act.

(i) “Securities” means the securities obtained or obtainable upon exercise of
the Warrant or securities obtained or obtainable upon exercise, exchange, or
conversion of such securities.

(j) “Securities Act” means the Securities Act of 1933, as amended.

(k) “Warrant” means the warrant evidenced by this certificate, or any
certificate obtained upon transfer or partial exercise of the Warrant evidenced
by any such certificate.

(l) “Warrant Certificate” means a certificate evidencing the Warrant.

(m) “Warrantholder” means a record holder of the Warrant or Securities.

--------------------------------------------------------------------------------

2. Exercise of Warrant.

(a) All or any part of the Warrant represented by this Warrant Certificate may
be exercised commencing on the Issue Date and ending at 5:00 p.m. Pacific Time
on June 24, 2020 (the “Expiration Date”) by surrendering this Warrant
Certificate, together with the Exercise Price and appropriate instructions, duly
executed by the Warrantholder or by its duly authorized attorney, at the office
of the Company, 1111 Main Street, Suite 660, Vancouver, Washington, 98660; or at
such other office or agency as the Company may designate. The date on which such
instructions are received by the Company shall be the date of exercise. If the
Warrantholder has elected a Cashless Exercise, such instructions shall so state.

(b) If the Warrantholder elects a Cashless Exercise, the Warrantholder may
surrender in payment of the Exercise Price, shares of Common Stock equal in
value to the Exercise Price by surrender of this Warrant at the principal office
of the Company together with notice of such election, in which event the Company
shall issue to the Warrantholder a number of shares of Common Stock computed
using the following formula:

 

LOGO [g949891ex10_2pg003.jpg]

 

Where: X = The number of shares of Common Stock to be issued to the
Warrantholder pursuant to this Cashless Exercise Y = The number of shares of
Common Stock in respect of which the Cashless Exercise election is made A = The
fair market value of one share of Common Stock at the time the Cashless Exercise
election is made B = The Exercise Price (as adjusted to the date of the Cashless
Exercise)

For purposes of this Section 2(b), the fair market value of one share of Common
Stock as of a particular date shall be determined as follows: (i) if traded on a
securities exchange, the value shall be deemed to be the average of the closing
prices of the Common Stock on such exchange over the thirty (30) day period
ending one (1) day prior to the Cashless Exercise; (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) of the Common Stock over the thirty
(30) day period ending one (1) day prior to the Cashless Exercise; and (iii) if
there is no active public market, the value shall be the fair market value
thereof, as determined in good faith by the Board of Directors of the Company.

(c) Subject to the provisions below, upon receipt of notice of exercise, the
Company shall promptly prepare or cause the preparation of certificates for the
Securities to be received by the Warrantholder upon completion of the Warrant
exercise. After such certificates are prepared, the Company shall notify the
Warrantholder and, upon payment in full by the

--------------------------------------------------------------------------------

Warrantholder, in lawful money of the United States, of the Exercise Price
payable with respect to the Securities being purchased, or, in the case of a
Cashless Exercise, upon deemed surrender of Securities equal in value to the
Exercise Price, deliver such certificates to the Warrantholder, or as per the
Warrantholder’s instructions, promptly after such funds are available, if
applicable, and otherwise promptly thereafter. The Securities to be obtained on
exercise of the Warrant will be deemed to have been issued, and any person
exercising the Warrant will be deemed to have become a holder of record of those
Securities, as of the date of receipt by the Company of (a) available funds in
cash in payment of the Exercise Price, or (b) notice of Cashless Exercise.

(d) If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and deliver to
the Warrantholder a new Warrant Certificate (dated the date hereof), in form and
tenor similar to this Warrant Certificate, evidencing that portion of the
Warrant not exercised.

(e) Notwithstanding the foregoing, in no event shall such Securities be issued,
and the Company is authorized to refuse to honor the exercise of the Warrant, if
such exercise would result in the opinion of the Company’s Board of Directors,
upon advice of counsel, in the violation of any law.

3. Adjustments in Certain Events. The number, class, and price of Securities for
which this Warrant Certificate may be exercised are subject to adjustment from
time to time upon the happening of certain events as follows:

(a) If the outstanding shares of the Company’s Common Stock are divided into a
greater number of shares or a dividend in stock is paid on the Common Stock, the
number of shares of Common Stock for which the Warrant is then exercisable will
be proportionately increased and the Exercise Price will be proportionately
reduced; and, conversely, if the outstanding shares of Common Stock are combined
into a smaller number of shares of Common Stock, the number of shares of Common
Stock for which the Warrant is then exercisable will be proportionately reduced
and the Exercise Price will be proportionately increased. The increases and
reductions provided for in this Section 3(a) will be made with the intent and,
as nearly as practicable, the effect that neither the percentage of the total
equity of the Company obtainable on exercise of the Warrants nor the price
payable for such percentage upon such exercise will be affected by any event
described in this Section 3(a).

(b) In case of any change in the Common Stock through merger, consolidation,
reclassification, reorganization, partial or complete liquidation, purchase of
substantially all the assets of the Company, or other change in the capital
structure of the Company, then, as a condition of such change, lawful and
adequate provision will be made so that the Warrantholder will have the right
thereafter to receive upon the exercise of the Warrant the kind and amount of
shares of stock or other securities or property to which the Warrantholder would
have been entitled if, immediately prior to such event, the Warrantholder had
held the number of shares of Common Stock obtainable upon the exercise of the
Warrant. In any such case, appropriate adjustment will be made in the
application of the provisions set forth herein with respect to the rights and
interest thereafter of the Warrantholder, to the end that the provisions set
forth herein will thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other securities or property thereafter
deliverable upon the

--------------------------------------------------------------------------------

exercise of the Warrant. The Company will not permit any change in its capital
structure to occur unless the issuer of the shares of stock or other securities
to be received by the holder of this Warrant Certificate, if not the Company,
agrees to be bound by and comply with the provisions of this Warrant
Certificate.

(c) When any adjustment is required to be made in the number of shares of Common
Stock, other securities, or the property purchasable upon exercise of the
Warrant, the Company will promptly determine the new number of such shares or
other securities or property purchasable upon exercise of the Warrant and
(i) prepare and retain on file a statement describing in reasonable detail the
method used in arriving at the new number of such shares or other securities or
property purchasable upon exercise of the Warrant and (ii) cause a copy of such
statement to be mailed to the Warrantholder within thirty (30) days after the
date of the event giving rise to the adjustment.

(d) No fractional shares of Common Stock or other Securities will be issued in
connection with the exercise of the Warrant, and the number of shares of Common
Stock to be issued shall be rounded to the nearest whole number.

(e) If securities of the Company or securities of any subsidiary of the Company
are distributed pro rata to holders of Common Stock, such number of securities
will be distributed to the Warrantholder or its assignee upon exercise of its
rights hereunder as such Warrantholder or assignee would have been entitled to
if this Warrant had been exercised prior to the record date for such
distribution. The provisions with respect to adjustment of the Common Stock
provided in this Section 3 will also apply to the securities to which the
Warrantholder or its assignee is entitled under this Section 3(e).

(f) Notwithstanding anything herein to the contrary, there will be no adjustment
made hereunder on account of the sale by the Company of the Common Stock or any
other Securities purchasable upon exercise of the Warrant.

4. Reservation of Securities. The Company agrees that the number of shares of
Common Stock or other Securities sufficient to provide for the exercise of the
Warrant upon the basis set forth above will, at all times during the term of the
Warrant, be reserved for issuance.

5. Validity of Securities. All Securities delivered upon the exercise of the
Warrant will be duly and validly issued in accordance with their terms and, upon
payment of the Exercise Price, will be fully paid and non-assessable. The
Company will pay all documentary and transfer taxes, if any, in respect of the
original issuance thereof upon exercise of the Warrant.

6. Transferability. Neither this Warrant Certificate, the Warrant, or the shares
of Common Stock issuable upon its exercise may offered for sale, sold,
transferred or assigned unless and until (i) the Warrantholder shall have
delivered to the Company (if requested by the Company) an opinion of counsel to
the Warrantholder, in a form reasonably acceptable to the Company, to the effect
that such Warrant Certificate, Warrant or Securities to be sold, transferred or
assigned may be transferred or assigned pursuant to an exemption from
registration under the Securities Act; or (ii) the Warrantholder provides the
Company with reasonable assurance (which may include customary representation
letters) that such Warrant Certificate, Warrant or Securities can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the
Securities Act.

--------------------------------------------------------------------------------

7. Securities Act Compliance. The Warrantholder hereby represents: (a) that this
Warrant and any Common Stock to be acquired by the Warrantholder on exercise of
the Warrant will be acquired for investment for the Warrantholder’s own account
and not with a view to the resale or distribution of any part thereof, and
(b) that the Warrantholder is an accredited investor as defined in Rule 501(a)
of Regulation D promulgated under the Securities Act. In addition, as a
condition of its delivery of certificates for the Common Stock, the Company will
require the Warrantholder to deliver to the Company representations regarding
the Warrantholder’s sophistication, investor status, investment intent,
acquisition for its own account and such other matters as are reasonable and
customary for purchasers of securities in an unregistered private offering as
set forth in the attached Exercise Form. The Company may place conspicuously
upon each certificate representing the Common Stock a legend substantially in
the following form, the terms of which are agreed to by the Warrantholder:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER
JURISDICTIONS AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND
SUCH OTHER APPLICABLE LAWS.”

8. No Rights as a Shareholder. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of the Warrant, be entitled to
any rights of a shareholder of the Company but will, upon written request to the
Company, be entitled to receive such quarterly or annual reports as the Company
distributes to its shareholders.

9. Notice. Any notices required or permitted to be given hereunder will be in
writing and may be served personally or by mail, including by e-mail; and if
served will be addressed as follows:

 

If to the Company:

CytoDyn Inc.

Attn: Michael D. Mulholland

1111 Main Street, Suite 660

Vancouver, Washington, 98660

Email: mmulholland@cytodyn.com

--------------------------------------------------------------------------------

with a copy to:

Lowenstein Sandler, LLP

Attn: Steven M. Skolnick

65 Livingston Avenue

Roseland, New Jersey 07068

Email: sskolnick@lowenstein.com

If to the Warrantholder:

c/o Carl C. Dockery

Alpha Advisors, LLC

P.O. Box 2477

Lakeland, FL 33806-2477

Any notice so given by mail will be deemed effectively given 48 hours after
mailing when deposited in the United States mail, registered or certified mail,
return receipt requested, postage prepaid and addressed as specified above. Any
notice given by e-mail must be accompanied by confirmation of receipt, and will
be deemed effectively given upon confirmation of such receipt. Any party may by
written notice to the other specify a different address for notice purposes.

10. Applicable Law. This Warrant Certificate will be governed by and construed
in accordance with the laws of the State of Oregon, without reference to
conflict of laws principles thereunder. All disputes relating to this Warrant
Certificate shall be tried before the courts of Oregon located in Multnomah
County, Oregon to the exclusion of all other courts that might have
jurisdiction.

Dated as of June 24, 2015

 

CYTODYN INC. By:

 

Name: Nader Z. Pourhassan Title: President and Chief Executive Officer

--------------------------------------------------------------------------------

EXERCISE FORM

(To Be Executed by the Warrantholder

to Exercise the Warrant)

 

TO: CYTODYN INC.

 

1. The undersigned hereby irrevocably elects to exercise the right to purchase
1,000,000 shares of Common Stock, represented by Warrant No. A-80 as follows:

 

  [    ] Exercise for Cash. Pursuant to Section 2(a) of the Warrant, the Holder
hereby elects to exercise the Warrant for cash and tenders payment herewith (or
has made a wire transfer) to the order of CytoDyn Inc. in the amount of
$        .

 

2. [    ]

Cashless Exercise. Pursuant to Section 2(b) of the Warrant, the Holder hereby
elects to exercise the Warrant on a cashless basis.

 

3. The undersigned requests that the applicable number of shares of Common Stock
be issued and delivered to the following address:

 

Name:

 

Address:

 

 

Email:

 

SSN:

 

 

4. The undersigned understands, agrees and recognizes that:

 

  (a) No federal or state agency has made any finding or determination as to the
fairness of the investment or any recommendation or endorsement of the
securities.

 

  (b) All certificates evidencing the shares of Common Stock, if any, may bear a
legend substantially similar to the legend set forth in Section 7 of the Warrant
regarding resale restrictions.

Representations of the undersigned.

--------------------------------------------------------------------------------

5. The undersigned acknowledges that the undersigned has received, read and
understood the Warrant and agrees to abide by and be bound by its terms and
conditions.

 

6. (i) The undersigned has such knowledge and experience in business and
financial matters that the undersigned is capable of evaluating the Company and
the proposed activities thereof, and the risks and merits of this prospective
investment.

[    ]  YES    [    ]  NO

(ii) If “No”, the undersigned is represented by a “purchaser representative,” as
that term is defined in Regulation D under the Securities Act of 1933, as
amended (the “Securities Act”).

[    ]  YES    [    ]  NO

 

7. (i) The undersigned is an “accredited investor,” as that term is defined in
the Securities Act.

[    ]  YES    [    ]  NO

(ii) If “Yes,” the undersigned comes within the following category of that
definition (check one):

 

  [    ] The undersigned is a natural person whose present net worth (or whose
joint net worth with his or her spouse), excluding the value of the
undersigned’s primary residence, exceeds $1,000,000. For purposes of calculating
the undersigned’s present net worth, the undersigned has included the following
as liabilities: (i) any indebtedness that is secured by the undersigned’s
primary residence in excess of the estimated fair market value of the
undersigned’s primary residence at the time of the sale of the shares, and
(ii) any incremental debt secured by the undersigned’s primary residence that
was incurred in the 60 days before the sale of the shares, other than as a
result of the acquisition of the undersigned’s primary residence.

 

  [    ] The undersigned is a natural person who had individual income in excess
of $200,000 in each of the last two years or joint income with the undersigned’s
spouse in excess of $300,000 during such two years, and the undersigned
reasonably expects to have the same income level in the current year.

 

  [    ] The undersigned is an officer or director of the Company.

 

  [    ] The undersigned is a corporation or partnership not formed for the
specific purpose of acquiring the securities offered, with total assets in
excess of $5,000,000.

 

  [    ] The undersigned is a trust with total assets in excess of $5,000,000
whose purchase is directed by a person with such knowledge and experience in
financial and business matters that such person is capable of evaluating the
merits and risks of the prospective investment.

 

  [    ] The undersigned is an entity, all of whose equity owners are accredited
investors under one or more of the categories above.

--------------------------------------------------------------------------------

8. The undersigned understands that the shares purchased hereunder have not been
registered under the Securities Act, in reliance upon the exemption from the
registration requirements under the Securities Act pursuant to Section 4(a)(2)
of the Securities Act and Rule 506 promulgated thereunder; and, therefore, that
the undersigned must bear the economic risk of the investment for an indefinite
period of time since the securities cannot be sold, transferred or assigned to
any person or entity without compliance with the provisions of the Securities
Act

Dated:             , 20    .

 

By:

 

Name:

 

Print:

 

Note: Signature must correspond with the name as written upon the face of the
Warrant in all respects, without alteration or enlargement or any change
whatsoever.