Exhibit 10.2


 


FORM OF


 


COMMON STOCK PURCHASE WARRANT


 


THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR UNDER
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH
REGISTRATION, PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN OPINION OF
COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING
THE AVAILABILITY OF SUCH EXEMPTION.


 


Dated:
September 11, 2003


 


No.                         AXONYX
INC.


 


WARRANT TO
PURCHASE           SHARES
OF COMMON STOCK


 


THIS CERTIFIES THAT, for value received,
               
(the “Holder”) is entitled to subscribe for and purchase
               shares
(as adjusted pursuant to Section 4 hereof) of the fully paid and
nonassessable Common Stock, par value $0.001 per share (the “Shares”), of
Axonyx Inc., a Nevada corporation (the “Company”), at the price of $3.50  per
share (the “Exercise Price”) (as adjusted pursuant to Section 4 hereof),
upon the terms and subject to the conditions hereinafter set forth.


 


1.                                       Method
of Exercise; Payment.


 


(a)                                  Cash
Exercise.  The purchase rights
represented by this Warrant may be exercised by the Holder, in whole or in
part, at any time or from time to time, by the surrender of this Warrant (with
the notice of exercise form attached hereto as Exhibit A duly
executed) at the principal office of the Company, and by the payment to the
Company, by certified, cashier’s or other check acceptable to the Company, of
an amount equal to the aggregate Exercise Price of the shares being purchased.


 


(b)                                 Net
Issue Exercise.


 


(i)                                     If,
at any time which is more than one year after the issuance date of this Warrant
there is not an effective registration statement registering the Warrant Shares
for resale by the Holder (other than as permitted by Section 5.6 of the
Purchase Agreement), then in lieu of exercising this Warrant for cash, 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 the
portion thereof being cancelled) 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 Holder a number of shares of the Company’s Common
Stock computed using the following formula:


 

















 


	
  X

  	
   

  	
  =

  	
   

  	
  Y (A-B)

  
	
   

  	
   

  	
   

  	
   

  	
  A

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Where:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X

  	
   

  	
  =

  	
   

  	
  the number of shares of
  Common Stock to be issued to the Holder.

  
	
  Y

  	
   

  	
  =

  	
   

  	
  the number of shares of
  Common Stock purchasable under this Warrant, or if only a portion of this
  Warrant is being exercised, the number of shares of Common Stock represented
  by the portion of the Warrant being exercised.

  
	
  A

  	
   

  	
  =

  	
   

  	
  the fair market value
  of one share of the Company’s Common Stock at the time the net issue exercise
  election is made.

  
	
  B

  	
   

  	
  =

  	
   

  	
  the Exercise Price (as
  adjusted to the date of such calculation).

  



 


(c)                                  Fair
Market Value.  For purposes of this
Section 1, the fair market value of the Company’s Common Stock shall mean:


 


(i)                                     if
the Company’s Common Stock is traded on a securities exchange, the closing
price on the trading day prior to the day on which the fair market value of the
securities is being determined;


 


(ii)                                  if
the Company’s Common Stock is actively traded over-the counter, the average of
the closing bid and asked prices quoted on the NASDAQ system (or similar
system) on the trading day prior to the day on which the fair market value of the
securities is being determined; or


 


(iii)                               if
at any time the Company’s Common Stock is not listed on any securities exchange
or quoted in the NASDAQ System or the over-the-counter market, then as
determined by the board of directors of the Company in good faith.


 


(d)                                 Stock
Certificates.  This 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 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 soon as practicable, but
in any event no later than five days after such date, the Company shall issue
and deliver to the person or persons entitled to receive the same a certificate
or certificates for the number of whole Shares issuable upon such
exercise.  Unless this Warrant has been
fully exercised or has expired, a new Warrant representing the Shares with
respect to which this Warrant shall not have been exercised shall also be
issued to the Holder within such time.


 


2.                                                                                       (e)                                  Limitation
on Exercise.  The Holder shall not
have the right to exercise any portion of this Warrant, to the extent that
after giving effect to such issuance after exercise, the Holder (together with
the Holder’s Affiliates), as set forth on the applicable Notice of Exercise,
would beneficially own in excess of 4.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to such issuance.  For
purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (A) exercise of
the remaining, nonexercised portion of this Warrant beneficially owned by the
Holder or any of its Affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any 


 


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other securities of the Company (including, without
limitation, any other Warrants) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially owned by the
Holder or any of its Affiliates.  Except as set forth in the preceding
sentence, for purposes of this Section 1(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act.  For purposes of this Section 1(e), in
determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (x)
the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a
more recent public announcement by the Company or (z) any other notice by the
Company or the Company’s Transfer Agent setting forth the number of shares of
Common Stock outstanding.  Upon the written or oral request of the Holder,
the Company shall within two Trading Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding
shares of Company Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this Warrant, by
the Holder or its Affiliates since the date as of which such number of
outstanding shares of Common Stock was reported.  The provisions of this Section 1(e) may be waived by the
Holder upon, at the election of the Holder, not less than 61 days’ prior notice
to the Company, and the provisions of this Section 1(e) shall continue to
apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver). Each delivery of an
Exercise Notice hereunder will constitute a representation by the Holder that
it has evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph.


 


3.                                       Stock
Fully Paid; Reservation of Shares. 
All of the Shares issuable upon the exercise of the rights represented
by this Warrant will, upon issuance and receipt of the Exercise Price therefor,
be fully paid and nonassessable, and free from all preemptive rights, taxes,
liens and charges with respect to the issue thereof.  During the period within which the rights represented by this
Warrant may be exercised, the Company shall at all times have authorized and
reserved for issuance upon exercise of the rights evidenced by this Warrant,
sufficient shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.


 


4.                                       Adjustment
of Exercise Price and Number of Shares. 
Subject to the provisions of Section 12 hereof, the number and kind
of securities purchasable upon the exercise of this Warrant and the Exercise
Price therefor shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:


 


(a)                                  Reclassification,
Consolidation or Merger.  In case of
any reclassification or change of the Common Stock (other than a change in par
value, or as a result of a subdivision or combination), or in case of any consolidation
or merger of the Company with or into another corporation (other than a merger
with another corporation in which the Company is a continuing corporation and
which does not result in any reclassification or change of outstanding
securities issuable upon exercise of this Warrant), or in case of any sale of
all or substantially all of the assets of the Company, the Company or such
successor or purchasing corporation, as the case may be, shall execute a new
Warrant, providing that the holder of this Warrant shall have the right to
exercise such new Warrant, and procure upon such exercise and payment of the
same aggregate Exercise Price, in lieu of the shares of Common Stock
theretofore issuable upon exercise of this Warrant, the kind and amount of shares
of stock, other securities, money and property receivable upon such
reclassification, change, consolidation, sale of all or substantially all of
the Company’s assets or merger by a holder of 
an equivalent number of shares of 


 


3

















 


Common Stock. 
Such new Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 3.  The provisions of this
Section 3(a), subject to Section 12 hereof, shall similarly apply to
successive reclassifications, changes, consolidations, mergers, transfers and
the sale of all or substantially all of the Company’s assets.


 


(b)                                 Stock
Splits, Dividends and Combinations. 
In the event that the Company shall at any time subdivide the
outstanding shares of Common Stock or shall issue a stock dividend on its
outstanding shares of Common Stock the number of Shares issuable upon exercise
of this Warrant immediately prior to such subdivision or to the issuance of
such stock dividend shall be proportionately increased, and the Exercise Price
shall be proportionately decreased, and in the event that the Company shall at
any time combine the outstanding shares of Common Stock the number of Shares
issuable upon exercise of this Warrant immediately prior to such combination
shall be proportionately decreased, and the Exercise Price shall be
proportionately increased, effective at the close of business on the date of
such subdivision, stock dividend or combination, as the case may be.


 


5.                                       Notice
of Adjustments.  Whenever the number
of Shares purchasable hereunder or the Exercise Price thereof shall be adjusted
pursuant to Section 3 hereof, the Company shall provide notice by first
class mail to the holder of this Warrant setting forth, in reasonable detail,
the event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the number of Shares which may be
purchased and the Exercise Price therefor after giving effect to such
adjustment.


 


6.                                       Fractional
Shares.  No fractional shares of
Common Stock will be issued in connection with any exercise hereunder.  In lieu of such fractional shares, the
Company shall make a cash payment therefor based upon the Fair Market Value of
one share of Common Stock of the Company on the date of such exercise.


 


7.                                       Representations
of the Company.  The Company
represents that all corporate actions on the part of the Company, its officers,
directors and stockholders necessary for the sale and issuance of the Shares
pursuant hereto and the performance of the Company’s obligations hereunder were
taken prior to and are effective as of the effective date of this Warrant.


 


8.                                       Representations
and Warranties by the Holder.  The
Holder represents and warrants to the Company as follows:


 


(a)                                  This
Warrant and the Shares issuable upon exercise thereof are being acquired for
its own account, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act of 1933, as amended (the “Act”).  Upon exercise of this Warrant, the Holder
shall, if so requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the securities issuable upon exercise of this
Warrant are being acquired for investment and not with a view toward
distribution or resale.


 


(b)                                 The
Holder understands that the Warrant and the Shares have not been registered
under the Act by reason of their issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Act pursuant to
Section 4(2) thereof, and that they must be held by the Holder
indefinitely, and that the Holder must therefore bear the economic 


 


4

















 


risk of such investment indefinitely, unless a
subsequent disposition thereof is registered under the Act or is exempted from
such registration.


 


(c)                                  The
Holder has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of the purchase of this
Warrant and the Shares purchasable pursuant to the terms of this Warrant and of
protecting its interests in connection therewith.


 


(d)                                 The
Holder is able to bear the economic risk of the purchase of the Shares pursuant
to the terms of this Warrant.


 


9.                                       Restrictive
Legend.


 


The Shares issuable upon
exercise of this Warrant (unless registered under the Act) shall be stamped or
imprinted with a legend in the following form:


 


THESE SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR
UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH
REGISTRATION, PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN OPINION OF
COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING
THE AVAILABILITY OF SUCH EXEMPTION.


 


10.                                 Restrictions
Upon Transfer and Removal of Legend.


 


(a)                                  The
Company need not register a transfer of Shares bearing the restrictive legend
set forth in Section 8 hereof, unless the conditions specified in such
legend are satisfied.  The Company may
also instruct its transfer agent not to register the transfer of the Shares,
unless one of the conditions specified in the legend referred to in
Section 8 hereof is satisfied.


 


(b)                                 Notwithstanding
the provisions of Section 8(a) above, no opinion of counsel or “no-action”
letter shall be necessary for a transfer without consideration by any holder
(i) to an affiliate of the holder, (ii) if such holder is a
partnership, to a partner or retired partner of such partnership who retires
after the date hereof or to the estate of any such partner or retired partner,
(iii) if such holder is a corporation, to a stockholder of such
corporation, or to any other corporation under common control, direct or
indirect, with such holder, (iv) if such holder is a limited liability company,
to a member or retired member of such limited liability company who retires
after the date hereof or to the estate of any such member or retired member, or
(v) by gift, will or intestate succession of any individual holder to his
spouse or siblings, or to the lineal descendants or ancestors of such holder or
his spouse, if the transferee agrees in writing to be subject to the terms
hereof to the same extent as if such transferee were the original holder
hereunder.


 


11.                                 Rights
of Stockholders.  No holder of this
Warrant shall be entitled, as a Warrant holder, to vote or receive dividends or
be deemed the holder of Common Stock or any other 


 


5

















 


securities of the Company which may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the holder of this Warrant, 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, consolidation, merger, conveyance, or otherwise) or
to receive notice of meetings, or to receive dividends or subscription rights
or otherwise until the Warrant shall have been exercised and the Shares
purchasable upon the exercise hereof shall have become deliverable, as provided
herein.


 


12.                                 Registration
Rights.  All Shares issuable upon
exercise of this Warrant shall be deemed to be “Registrable Securities” or such
other definition of securities entitled to registration rights pursuant to
Section 5 of the Common Stock and Warrant Purchase Agreement dated September 11,
2003, by and between the Company and the Holder (the “Purchase Agreement”), and
are entitled, subject to the terms and conditions of the Purchase Agreement, to
all rights granted to holders of Registrable Securities thereunder.


 


13.                                 Expiration
of Warrant.  This Warrant shall
expire and shall no longer be exercisable at 5:00 p.m., New York local
time, on the date that is five (5) years after the date of issuance of this
Warrant as set forth on the first page of this Warrant.


 


14.                                 Call
Provision.  Beginning one year after
the Registration Statement has become effective, the Company shall have the
right, upon five (5) business days’ prior written notice to the Holder (the “Call
Right Notice”), to call this Warrant, provided that (i) the Warrant Shares are
registered for resale pursuant to the Securities Act or are freely tradable
without restriction or legend, (ii) the Common Stock shall be listed or quoted
for trading on the Nasdaq SmallCap Market or a national securities exchange  immediately preceding the date of the Call
Right Notice and (iii) the volume weighted average price (as reported by
Bloomberg LP) for 25 of the 30 business days immediately preceding the date of
the Call Right Notice were equal to or greater than $8.00 (subject to adjustment for
reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Stock that occur after the date of this
Warrant).  If this Warrant has not been
exercised in full upon the expiration of such five (5) business day notice
period, this Warrant shall terminate automatically without any further action
on the part of the Holder or the Company.


 


15.                                 Notices,
Etc.  Any request, consent, notice
or other communication required or permitted under this Warrant shall be in
writing and shall be deemed duly given and received when delivered personally
or transmitted by facsimile, or one business day after being deposited for
next-day delivery with a nationally recognized overnight delivery service, or
three days after being deposited as first class mail with the United States
Postal Services, all charges or postage prepaid, and properly addressed to the
party to receive the same.  Any party
may, at any time, by providing ten days’ advance written notice to the other
party hereto, designate any other address in substitution of the an address
established pursuant to the foregoing. 
The Company’s and the Holder’s notice address shall be as set forth on
the Purchase Agreement or as may have been subsequently furnished by the Company
or the Holder, as the case may be, to the other in writing.


 


16.                                 Governing
Law; Headings.  This Warrant is
being delivered in the State of New York and shall be construed and enforced in
accordance with and governed by the laws of such 


 


6

















 


State.  The
headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof.


 


17.                                 Amendment;
Waiver.  Any term of this Warrant
may be amended, and the observance of any term of this Warrant may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and the Holder.


 


18.                                 Severability.  If one or more provisions of this Warrant
are held to be unenforceable under applicable law, such provision(s) shall be
replaced with a provision that accomplishes, to the extent possible, the
original business purpose of such provision in a valid and enforceable manner,
and the balance of the Warrant shall be interpreted as if such provision were
so modified and shall be enforceable in accordance with its terms.


 


19.                                 No
Impairment.  The Company will not,
by amendment of its certificate of incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of
securities, sale of assets 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 protect the rights of the Holder of this Warrant against
impairment.  Without limiting the
generality of the foregoing, the Company (a) will not increase the par value of
any shares of stock issuable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and (b) will take all such action as may
be necessary or appropriate in order that the Company may validly issue fully
paid and non-assessable Shares upon exercise of this Warrant.


 


20.                                 Attorneys’
Fees.  In the event any party is
required to engage the services of any attorneys for the purpose of enforcing
this Warrant, or any provision thereof, the prevailing party shall be entitled
to recover its reasonable expenses and costs in enforcing this Warrant,
including attorneys’ fees.


 


21.                                 Loss
or Mutilation.  Upon receipt by the
Company of evidence reasonably satisfactory to it of the ownership and the
loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to it, and (in the case of mutilation) upon surrender
and cancellation of this Warrant, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor.


 


22.                                 Taxes.  The Company shall pay all taxes and other
governmental charges that may be imposed in respect of the issue or delivery of
any Shares.


 


[Signatures appear on the following
page.]


 


7

















 


IN WITNESS WHEREOF, this Warrant has been executed as of the date first
written above by an authorized officer of the Company and the Warrant Holder.


 


	
   

  	
  AXONYX INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARRANT HOLDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								



 


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