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Exhibit 4.1

SERIES A-1 WARRANT

 

VISTAGEN THERAPEUTICS, INC.

 

Warrant To Purchase Common Stock

 

Warrant
No.:                                                                                                                                           

Number
of Shares of Common Stock:_____________

Date of
Issuance: [___], 2017 ("Issuance
Date")

 

VistaGen
Therapeutics, Inc., a company organized under the laws of Nevada
(the "Company"), hereby
certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [HOLDER], the
registered holder hereof or its permitted assigns (the
"Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company,
at the Exercise Price (as defined below) then in effect, at any
time or times on or after March 7, 2018 (the “Initial Exercisability Date”), but
not after 11:59 p.m., New York time, on the Expiration Date, (as
defined below), ______________ (_____________)1 fully paid non-assessable shares of
Common Stock (as defined below), subject to adjustment as provided
herein (the
"Warrant Shares"). Except as
otherwise defined herein, capitalized terms in this Warrant to
Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, this
"Warrant"), shall have the
meanings set forth in Section 16. This Warrant is one of the
Warrants to purchase Common Stock (the "Warrants") issued pursuant to (i) that
certain Underwriting Agreement, dated as of [ ], 2017 (the
"Subscription Date") by and
between the Company and Oppenheimer & Co. Inc., (ii) the
Company's Registration Statement on Form S-3 (File number
333-215671) (the "Registration
Statement") and (iii) the Company's prospectus supplement
dated as of [ ], 2017.

 

1. EXERCISE
OF WARRANT.

 

(a) Mechanics of Exercise. Subject
to the terms and conditions hereof (including, without limitation,
the limitations set forth in Section 1(f)), this Warrant may be
exercised by the Holder at any time or times on or after the
Initial Exercisability Date, in
whole or in part, by delivery (whether via facsimile, electronic
mail or otherwise) of a written notice, in the form attached hereto
as Exhibit A (the
"Exercise Notice"), of the
Holder's election to exercise this Warrant. Within one (1) Trading
Day following the delivery of the Exercise Notice, the Holder shall
make payment to the Company of an amount equal to the Exercise
Price in effect on the date of such exercise multiplied by the
number of Warrant Shares as to which this Warrant is being
exercised (the "Aggregate Exercise
Price") in cash by wire transfer of immediately available
funds or, if the provisions of Section 1(d) are applicable, by
notifying the Company that this Warrant is being exercised pursuant
to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original Warrant in order to
effect an exercise hereunder, nor shall any ink-original signature
or medallion guarantee (or other type of guarantee or notarization)
with respect to any Exercise Notice be required. Execution and
delivery of the Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of
the original Warrant and issuance of a new Warrant evidencing the
right to purchase the remaining number of Warrant Shares. On or
before the first (1st) Trading Day
following the date on which the Company has received the applicable
Exercise Notice, the Company shall transmit by facsimile or
electronic mail an acknowledgment of confirmation of receipt of the
Exercise Notice, in the form attached to the Exercise Notice, to
the Holder and the Company's transfer agent (the "Transfer Agent"). So long as the Holder
delivers the Aggregate Exercise Price (or notice of a Cashless
Exercise) on or prior to the first (1st) Trading Day following the
date on which the Exercise Notice has been delivered to the
Company, then on or prior to the earlier of (i) the second (2nd)
Trading Day and (ii) the number of Trading Days comprising the
Standard Settlement Period, in each case following the date on
which the Exercise Notice has been delivered to the Company, or, if
the Holder does not deliver the Aggregate Exercise Price (or notice
of a Cashless

 

 

1 138% of the number
of shares of Common Stock purchased under the Underwriting
Agreement by such Holder less the number of Series A-2 Warrants to
be issued to such Holder.

 

 

 

-1-

 

 

Exercise) on or
prior to the first (1st) Trading Day following the date on which
the Exercise Notice has been delivered to the Company, then on or
prior to the first (1st) Trading Day following the date on which
the Aggregate Exercise Price (or notice of a Cashless Exercise) is
delivered (such earlier date, the “Share Delivery Date”), the Company
shall (X) provided that the Transfer Agent is participating in The
Depository Trust Company ("DTC") Fast Automated Securities Transfer
Program, credit such aggregate number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the Holder's or
its designee's balance account with DTC through its Deposit /
Withdrawal At Custodian system, or (Y) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer
Program, issue and dispatch by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the
name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise.
The Company shall be responsible for all fees and expenses of the
Transfer Agent and all fees and expenses with respect to the
issuance of Warrant Shares via DTC, if any, including without
limitation for same day processing. Upon delivery of the Exercise
Notice, the Holder shall be deemed for all corporate purposes to
have become the holder of record and beneficial owner of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date such Warrant Shares are
credited to the Holder's DTC account or the date of delivery of the
certificates evidencing such Warrant Shares, as the case may be. If
this Warrant is physically delivered to the Company in connection
with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an
exercise, then the Company shall as soon as practicable and in no
event later than three (3) Trading Days after any exercise and at
its own expense, issue and deliver to the Holder (or its designee)
a new Warrant (in accordance with Section 7(d)) representing the
right to purchase the number of Warrant Shares issuable immediately
prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised. No
fractional Warrant Shares are to be issued upon the exercise of
this Warrant, but rather the number of Warrant Shares to be issued
shall be rounded to the nearest whole number. The Company shall pay
any and all transfer, stamp, issuance and similar taxes, costs and
expenses (including, without limitation, fees and expenses of the
Transfer Agent) which may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this Warrant. The
Company's obligations to issue and deliver Warrant Shares in
accordance with the terms and subject to the conditions hereof are
absolute and unconditional, irrespective of any action or inaction
by the Holder to enforce the same, any waiver or consent with
respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination;
provided,
however, that the
Company shall not be required to deliver Warrant Shares with
respect to an exercise prior to the Holder’s delivery of the
Aggregate Exercise Price (or notice of a Cashless Exercise) with
respect to such exercise.

 

(b) Exercise Price. For purposes of
this Warrant, "Exercise
Price" means $1.82 per share, subject to adjustment as
provided herein.

 

(c) Company's Failure to Timely Deliver
Securities. If either (I) the Company shall fail for any
reason or for no reason to issue to the Holder on or prior to the
applicable Share Delivery Date, if (x) the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer
Program, a certificate for the number of shares of Common Stock to
which the Holder is entitled and register such Common Stock on the
Company's share register or (y) the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, to credit
the Holder's balance account with DTC, for such number of shares of
Common Stock to which the Holder is entitled upon the Holder's
exercise of this Warrant or (II) a registration statement (which
may be the Registration Statement) covering the issuance or resale
of the Warrant Shares that are the subject of the Exercise Notice
(the "Exercise Notice Warrant
Shares") is not available for the issuance or resale, as
applicable, of such Exercise Notice Warrant Shares and (x) the
Company fails to promptly, but in no event later than one (1)
Business Day after such registration statement becomes unavailable,
to so notify the Holder and (y) the Company is unable to deliver
the Exercise Notice Warrant Shares electronically without any
restrictive legend by crediting such aggregate number of Exercise
Notice Warrant Shares to the Holder’s or its designee’s
balance account with DTC through its Deposit / Withdrawal At
Custodian system (the event described in the immediately foregoing
clause (II) is hereinafter referred as a "Notice Failure" and together with the
event described in clause (I) above, an "Exercise Failure"), then, in addition to
all other remedies available to the Holder, if on or prior to the
applicable Share Delivery Date either (I) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer
Program, the Company shall fail to issue and deliver a certificate
to the Holder and register such shares of Common

 

 

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Stock
on the Company's share register or, if the Transfer Agent is
participating in the DTC Fast Automated Securities Transfer
Program, credit the Holder's balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled
upon the Holder's exercise hereunder or pursuant to the Company's
obligation pursuant to clause (ii) below or (II) a Notice Failure
occurs, and if on or after such Trading Day the Holder purchases
(in an open market transaction or otherwise) Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common
Stock issuable upon such exercise that the Holder anticipated
receiving from the Company (a "Buy-In"), then the Company shall, within
three (3) Trading Days after the Holder's request and in the
Holder's discretion, either (i) pay cash to the Holder in an amount
equal to the Holder's total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (the "Buy-In Price"), at which point the
Company's obligation to deliver such certificate (and to issue such
shares of Common Stock) or credit such Holder's balance account
with DTC for such shares of Common Stock shall terminate, or (ii)
promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such shares of Common
Stock or credit such Holder's balance account with DTC, as
applicable, and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) any trading price of
the Common Stock selected by the Holder in writing as in effect at
any time during the period beginning on the applicable Exercise
Date and ending on the applicable Share Delivery Date. Nothing
shall limit the Holder's right to pursue any other remedies
available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive
relief with respect to the Company's failure to timely deliver
certificates representing Warrant Shares (or to electronically
deliver such Warrant Shares) upon the exercise of this Warrant as
required pursuant to the terms hereof. While this Warrant is
outstanding, the Company shall cause its transfer agent to
participate in the DTC Fast Automated Securities Transfer Program.
In addition to the foregoing rights, (i) if the Company fails to
deliver the applicable number of Warrant Shares upon an exercise
pursuant to Section 1 by the applicable Share Delivery Date, then
the Holder shall have the right to rescind such exercise in whole
or in part and retain and/or have the Company return, as the case
may be, any portion of this Warrant that has not been exercised
pursuant to such Exercise Notice; provided that the rescission of
an exercise shall not affect the Company’s obligation to make
any payments that have accrued prior to the date of such notice
pursuant to this Section 1(c) or otherwise, and (ii) if a
registration statement (which may be the Registration Statement)
covering the issuance or resale of the Warrant Shares that are
subject to an Exercise Notice is not available for the issuance or
resale, as applicable, of such Exercise Notice Warrant Shares and
the Holder has submitted an Exercise Notice prior to receiving
notice of the non-availability of such registration statement and
the Company has not already delivered the Warrant Shares underlying
such Exercise Notice electronically without any restrictive legend
by crediting such aggregate number of Warrant Shares to which the
Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its
Deposit / Withdrawal At Custodian system, the Holder shall have the
option, by delivery of notice to the Company, to (x) rescind such
Exercise Notice in whole or in part and retain or have returned, as
the case may be, any portion of this Warrant that has not been
exercised pursuant to such Exercise Notice; provided that the
rescission of an Exercise Notice shall not affect the
Company’s obligation to make any payments that have accrued
prior to the date of such notice pursuant to this Section 1(c) or
otherwise, and/or (y) switch some or all of such Exercise Notice
from a cash exercise to a Cashless Exercise.

 

(d) Cashless Exercise.  Notwithstanding anything contained
herein to the contrary, if a registration statement (which may be
the Registration Statement) covering the issuance or resale of the
Exercise Notice Warrant Shares is not available for the issuance or
resale, as applicable, of such Exercise Notice Warrant Shares, the
Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in
payment of the Aggregate Exercise Price, elect instead to receive
upon such exercise the "Net Number" of shares of Common Stock
determined according to the following formula (a "Cashless Exercise"):

 

 

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Net
Number = (A x B) - (A x
C)

                                   
B

 

For
purposes of the foregoing formula:

 

A= the
total number of shares with respect to which this Warrant is then
being exercised.

 

B= as
applicable: (i) the Closing Sale Price of the Common Stock on the
Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and
delivered pursuant to Section 1(a) hereof on a day that is not a
Trading Day or (2) both executed and delivered pursuant to Section
1(a) hereof on a Trading Day prior to the opening of “regular
trading hours” (as defined in Rule 600(b)(64) of Regulation
NMS promulgated under the federal securities laws) on such Trading
Day, (ii) at the option of the Holder, either (y) the Weighted
Average Price on the Trading Day immediately preceding the date of
the applicable Notice of Exercise or (z) the Bid Price of the
Common Stock as of the time of the Holder’s execution of the
applicable Exercise Notice if such Exercise Notice is executed
during “regular trading hours” on a Trading Day and is
delivered within two (2) hours thereafter pursuant to Section 1(a)
hereof or (iii) the Closing Sale Price of the Common Stock on the
date of the applicable Exercise Notice if the date of such Exercise
Notice is a Trading Day and such Exercise Notice is both executed
and delivered pursuant to Section 1(a) hereof after the close of
“regular trading hours” on such Trading
Day.

 

C= the
Exercise Price then in effect for the applicable Warrant Shares at
the time of such exercise.

 

If Warrant Shares are issued in such a cashless exercise, the
Company acknowledges and agrees that in accordance with Section
3(a)(9) of the Securities Act of 1933, as amended, the Warrant
Shares shall take on the registered characteristics of the Warrants
being exercised, and the holding period of the Warrants being
exercised may be tacked on to the holding period of the Warrant
Shares. The Company agrees not to take any position contrary to
this Section 1(d).

 

(e) Disputes. In the case of a
dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall
promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section
11.

 

(f) Beneficial
Ownership. Notwithstanding
anything to the contrary contained herein, the Company shall not
effect the exercise of any portion of this Warrant, and the Holder
shall not have the right to exercise any portion of this Warrant,
pursuant to the terms and conditions of this Warrant and any such
exercise shall be null and void and treated as if never made, to
the extent that after giving effect to such exercise, the Holder
together with the other Attribution Parties collectively would
beneficially own in excess of [4.99][9.99]% (the
"Maximum
Percentage") of the number
of shares of Common Stock outstanding immediately after giving effect to
such exercise. For purposes of the foregoing sentence, the
aggregate number of shares of Common Stock beneficially owned by the Holder and the other
Attribution Parties shall include the number of shares of
Common Stock held by the Holder and
all other Attribution Parties plus 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, unexercised portion of
this Warrant beneficially owned by the Holder or any of the other
Attribution Parties and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the
Company (including, without limitation, any convertible notes or
convertible preferred stock or warrants, including the other
Warrants) beneficially owned by the Holder or any other Attribution
Party subject to a limitation on conversion or exercise analogous
to the limitation contained in this Section 1(f). For purposes of
this Section 1(f), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"). For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock
the Holder may acquire upon the
exercise of this Warrant without exceeding the Maximum Percentage,
the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the
Company's most recent Annual Report on

 

 

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Form 10-K, Quarterly Report on Form 10-Q and
Current Reports on Form 8-K or other public filing with the
Securities and Exchange Commission (the "SEC"), as the case may be, (y) a more
recent public announcement by the Company or (3) any other written
notice by the Company or the Transfer
Agent setting forth the number of shares of Common Stock
outstanding (the "Reported Outstanding Share
Number"). If the Company
receives an Exercise Notice from the Holder at a time when the
actual number of outstanding shares of Common Stock
is less than the Reported Outstanding
Share Number, the Company shall (i) notify the Holder in writing of
the number of shares of Common Stock then outstanding and, to the extent that such
Exercise Notice would otherwise cause the Holder's beneficial
ownership, as determined pursuant to this Section 1(f), to exceed
the Maximum Percentage, the Holder must notify the Company of a
reduced number of Warrant Shares to be purchased pursuant to such
Exercise Notice (the number of
shares by which such purchase is reduced, the "Reduction
Shares") and (ii) as soon as
reasonably practicable, the Company shall return to the Holder any
exercise price paid by the Holder for the Reduction Shares.
For any reason at any time, upon the written or oral request of the
Holder, the Company shall within one
(1) Business Day confirm orally and in writing or by electronic
mail to the Holder the number of shares of Common Stock
then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this
Warrant, by the Holder and any other Attribution Party since the
date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of Common Stock
to the Holder upon exercise of this
Warrant results in the Holder and the other Attribution Parties
being deemed to beneficially own, in the aggregate, more than the
Maximum Percentage of the number of outstanding shares of
Common Stock (as determined under
Section 13(d) of the 1934 Act), the number of shares so issued by
which the Holder's and the other Attribution Parties' aggregate
beneficial ownership exceeds the Maximum Percentage (the
"Excess
Shares") shall be deemed null
and void and shall be cancelled ab initio, and the Holder shall not
have the power to vote or to transfer the Excess Shares. As soon as
reasonably practicable after the issuance of the Excess Shares has
been deemed null and void, the Company shall return to the Holder
the exercise price paid by the Holder for the Excess Shares.
Upon delivery of a written notice to the Company, the Holder may
from time to time increase or decrease the Maximum Percentage to
any other percentage not in excess of 9.99% as specified in such
notice; provided that (i) any such increase in the Maximum
Percentage will not be effective until the sixty-first
(61st) day
after such notice is delivered to the Company and (ii) any such
increase or decrease will apply only to the Holder and the other
Attribution Parties and not to any other holder of Warrants that is
not an Attribution Party of the Holder. For purposes of clarity,
the shares of Common Stock issuable pursuant to the terms of this
Warrant in excess of the Maximum Percentage shall not be deemed to
be beneficially owned by the Holder for any purpose including for
purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No
prior inability to exercise this Warrant pursuant to this paragraph
shall have any effect on the applicability of the provisions of
this paragraph with respect to any subsequent determination of
exercisability. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(f) to
the extent necessary to correct this paragraph or any portion of
this paragraph which may be defective or inconsistent with the
intended beneficial ownership limitation contained in this Section
1(f) or to make changes or supplements necessary or desirable to properly give effect to
such limitation. The limitation contained in this paragraph may not
be waived and shall apply to a successor holder of this
Warrant.

 

(g) Required Reserve Amount. 
So long as this Warrant remains outstanding, the Company shall at
all times keep reserved for issuance under this Warrant a number of
shares of Common Stock at least equal to 100% of the maximum number
of shares of Common Stock as shall be necessary to satisfy the
Company’s obligation to issue shares of Common Stock under
the Warrants then outstanding (without regard to any limitations on
exercise) (the "Required Reserve
Amount"); provided that at no time shall
the number of shares of Common Stock reserved pursuant to this
Section 1(g) be reduced other than in connection with any exercise
of Warrants or such other event covered by Section 2(c)
below.  The Required Reserve Amount (including, without
limitation, each increase in the number of shares so reserved)
shall be allocated pro rata among the holders of the Warrants based
on the number of shares of Common Stock issuable upon exercise of
Warrants held by each holder thereof on the Issuance Date (without
regard to any limitations on exercise) (the "Authorized Share Allocation"). In the
event that a holder shall sell or otherwise transfer any of such
holder’s Warrants, each transferee shall be allocated a pro
rata portion of such holder’s Authorized Share Allocation.
Any shares of Common Stock reserved and allocated to any Person
which ceases to hold any Warrants shall be allocated to the
remaining holders of Warrants, pro rata based on the number of
shares of Common Stock issuable upon exercise of the Warrants then
held by such holders thereof (without regard to any limitations on
exercise).

 

 

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(h) Insufficient Authorized Shares.
If at any time while this Warrant remains outstanding the Company
does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for
issuance the Required Reserve Amount (an "Authorized Share Failure"), then the
Company shall promptly take all action reasonably necessary to
increase the Company's authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required
Reserve Amount for this Warrant then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure,
but in no event later than ninety (90) days after the occurrence of
such Authorized Share Failure, the Company shall hold a meeting of
its stockholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement
and shall use its reasonable best efforts to solicit its
stockholders' approval of such increase in authorized shares of
Common Stock and to cause its Board of Directors to recommend to
the stockholders that they approve such proposal. Notwithstanding
the foregoing, if at any such time of an Authorized Share Failure,
the Company is able to obtain the written consent of a majority of
the shares of its issued and outstanding shares of Common Stock to
approve the increase in the number of authorized shares of Common
Stock, the Company may satisfy this obligation by obtaining such
consent and submitting for filing with the SEC an Information
Statement on Schedule 14C.

 

2. ADJUSTMENT OF EXERCISE PRICE AND
NUMBER OF WARRANT SHARES. The Exercise Price and the number
of Warrant Shares shall be adjusted from time to time as
follows:

 

(a) Voluntary Adjustment
By Company. The Company may at
any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the
Company.

 

(b) Adjustment
Upon Subdivision or Combination of
Common Stock. If the Company at any time on or after the
Subscription Date subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares,
the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced and the number of Warrant Shares
will be proportionately increased. If the Company at any time on or
after the Subscription Date combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price
in effect immediately prior to such combination will be
proportionately increased and the number of Warrant Shares will be
proportionately decreased. Any adjustment under this Section 2(c)
shall become effective at the close of business on the date the
subdivision or combination becomes effective.

 

(c) Other
Events. If any event occurs of
the type contemplated by the provisions of this Section 2 but not
expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom
stock rights or other rights with equity features), then the
Company's Board of Directors will make an appropriate adjustment in
the Exercise Price and the number of Warrant Shares, as mutually
determined by the Company’s Board of Directors and the
Required Holders, so as to protect the rights of the Holder;
provided that no such adjustment pursuant to this Section 2(d) will
increase the Exercise Price or decrease the number of Warrant
Shares as otherwise determined pursuant to this Section
2.

 

3. RIGHTS UPON DISTRIBUTION OF
ASSETS. In addition to any adjustments pursuant to Section 2
above, if, on or after the Subscription Date and on or prior to the
Expiration Date, the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property, options, evidence of
indebtedness or any other assets by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or
other similar transaction) (a "Distribution"), at any time after the
issuance of this Warrant, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant (without regard to any limitations or
restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) immediately before the date on
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in
such

 

 

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Distribution
(provided,
however, that to
the extent that the Holder's right to participate in any such
Distribution would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not
be entitled to participate in such Distribution to such extent (and
shall not be entitled to beneficial ownership of such shares of
Common Stock as a result of such Distribution (and beneficial
ownership) to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such
time or times as its right thereto would not result in the Holder
and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such
Distribution (and any Distributions declared or made on such
initial Distribution or on any subsequent Distribution held
similarly in abeyance) to the same extent as if there had been no
such limitation).

 

4. PURCHASE RIGHTS; FUNDAMENTAL
TRANSACTIONS.

 

(a) Purchase Rights. In addition to
any adjustments pursuant to Section 2 above, if at any time on or
after the Subscription Date and on or prior to the Expiration Date
the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of
Common Stock but excluding shares of Common Stock deemed to have
been issued or sold by the Company in connection with any Excluded
Securities (the "Purchase Rights"), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations or restrictions on exercise of this
Warrant, including without limitation, the Maximum Percentage)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common
Stock are to be determined for the grant, issuance or sale of such
Purchase Rights (provided, however, that to the extent
that the Holder's right to participate in any such Purchase Right
would result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (and
shall not be entitled to beneficial ownership of such Common Stock
as a result of such Purchase Right (and beneficial ownership) to
such extent) and such Purchase Right to such extent shall be held
in abeyance for the benefit of the Holder until such time or times as its right thereto
would not result in the Holder and the other Attribution
Parties exceeding the Maximum
Percentage, at which time or times the Holder shall be granted such
right (and any Purchase Right granted, issued or sold on
such initial Purchase Right or on any subsequent Purchase Right to
be held similarly in abeyance) to the
same extent as if there had been no such
limitation).

 

(b) Fundamental Transaction. 
The Company shall not enter into or be party to a Fundamental
Transaction unless the Successor Entity assumes in writing all of
the obligations of the Company under this Warrant in accordance
with the provisions of this Section 4(b), including agreements to
deliver to the Holder in exchange for this Warrant a security of
the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant,
including, without limitation, which is exercisable for a
corresponding number of shares of capital stock equivalent to the
shares of Common Stock acquirable and receivable upon exercise of
this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
adjustments to the number of shares of capital stock and such
exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such
Fundamental Transaction). Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be
substituted for the Company (so that from and after the date of the
applicable Fundamental Transaction, the provisions of this Warrant
and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant
with the same effect as if such Successor Entity had been named as
the Company herein. Upon consummation of each Fundamental
Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this
Warrant at any time after the consummation of the applicable
Fundamental Transaction, in lieu of the shares of Common Stock (or
other securities, cash, assets or other property (except such items
still issuable under Sections 3 and 4(a) above, which shall
continue to be receivable thereafter)) issuable upon
the

 

 

-7-

 

 

exercise of this
Warrant prior to the applicable Fundamental Transaction, such
shares of common stock (or its equivalent) of the Successor Entity
(including its Parent Entity) which the Holder would have been
entitled to receive upon the happening of the applicable
Fundamental Transaction had this Warrant been exercised immediately
prior to the applicable Fundamental Transaction (without regard to
any limitations on the exercise of this Warrant), as adjusted in
accordance with the provisions of this Warrant. Notwithstanding the
foregoing, and without limiting Section 1(f) hereof, the Holder may
elect, at its sole option, by delivery of written notice to the
Company to waive this Section 4(b) to permit the Fundamental
Transaction without the assumption of this Warrant. In addition to
and not in substitution for any other rights hereunder, prior to
the consummation of each Fundamental Transaction pursuant to which
holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for
shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon an exercise of this
Warrant at any time after the consummation of the applicable
Fundamental Transaction but prior to the Expiration Date, in lieu
of the shares of the Common Stock (or other securities, cash,
assets or other property (except such items still issuable under
Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of the Warrant prior to
such Fundamental Transaction, such shares of stock, securities,
cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights) (collectively, the
“Corporate Event
Consideration”) which the Holder would have been
entitled to receive upon the happening of the applicable
Fundamental Transaction had this Warrant been exercised immediately
prior to the applicable Fundamental Transaction (without regard to
any limitations on the exercise of this Warrant). The provision
made pursuant to the preceding sentence shall be in a form and
substance reasonably satisfactory to the Holder. The provisions of
this Section 4(b) shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events. Notwithstanding the
foregoing, in the event of a Change of Control (other than a Change
of Control which was not approved by the Board of Directors, as to
which this right shall not apply), at the request of the Holder
delivered before the 30th day after such Change of Control, the
Company (or the Successor Entity) shall purchase this Warrant from
the Holder by paying to the Holder, within five Business Days after
such request (or, if later, on the effective date of the Change of
Control), an amount equal to the Black Scholes Value of the
remaining unexercised portion of this Warrant on the effective date
of such Change of Control, payable in cash; provided, that if the
applicable Change of Control was not approved by the Company's
Board of Directors, such amount shall be payable, at the option of
the Company in either (x) Common Stock (or corresponding Corporate
Event Consideration, as applicable) valued at the value of the
consideration received by the shareholders in such Change of
Control or (y) cash.

 

5. NONCIRCUMVENTION. The Company
hereby covenants and agrees that the Company will not, by amendment
of its Restated and Amended Articles of Incorporation or Bylaws, or
through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issuance 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,
and will at all times in good faith carry out all of the provisions
of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the
foregoing, the Company (i) shall not increase the par value of
any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, (ii) shall
take all such actions 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 (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued shares of Common
Stock, solely for the purpose of effecting the exercise of the
Warrants, the number of shares of Common Stock as shall from time
to time be necessary to effect the exercise of the Warrants then
outstanding (without regard to any limitations on
exercise).

 

 

-8-

 

 

6. WARRANT HOLDER NOT DEEMED A
STOCKHOLDER. Except as otherwise specifically provided
herein, the Holder, solely in such Person's capacity as a holder of
this Warrant, shall not be entitled to vote or receive dividends or
be deemed the holder of capital stock of the Company for any
purpose, nor shall anything contained in this Warrant be construed
to confer upon the Holder, solely in such Person's capacity as the
Holder of this Warrant, any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which such Person is then entitled to
receive upon the due exercise of this Warrant. In addition, nothing
contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 6, the
Company shall provide the Holder with copies of the same notices
and other information given to the stockholders of the Company
generally, contemporaneously with the giving thereof to the
stockholders.

 

7. REISSUANCE OF
WARRANTS.

 

(a) Transfer of Warrant. If this
Warrant is to be transferred, the Holder shall surrender this
Warrant to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Warrant (in
accordance with Section 7(d)), registered as the Holder may
request, representing the right to purchase the number of Warrant
Shares being transferred by the Holder and, if less than the total
number of Warrant Shares then underlying this Warrant is being
transferred, a new Warrant (in accordance with Section 7(d)) to the
Holder representing the right to purchase the number of Warrant
Shares not being transferred.

 

(b) Lost, Stolen or Mutilated
Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to
the Company in customary form (but without the obligation to post a
bond) and, in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company shall execute and deliver
to the Holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then
underlying this Warrant.

 

(c) Exchangeable for Multiple
Warrants. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a
new Warrant or Warrants (in accordance with Section 7(d))
representing in the aggregate the right to purchase the number of
Warrant Shares then underlying this Warrant, and each such new
Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such
surrender.

 

(d) Issuance of New Warrants.
Whenever the Company is required to issue a new Warrant pursuant to
the terms of this Warrant, such new Warrant (i) shall be of like
tenor with this Warrant, (ii) shall represent, as indicated on the
face of such new Warrant, the right to purchase the Warrant Shares
then underlying this Warrant (or in the case of a new Warrant being
issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares
designated by the Holder which, when added to the number of shares
of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of
Warrant Shares then underlying this Warrant), (iii) shall have an
issuance date, as indicated on the face of such new Warrant which
is the same as the Issuance Date, and (iv) shall have the same
rights and conditions as this Warrant.

 

 

-9-

 

 

8. NOTICES. Whenever notice is
required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in writing, (i) if delivered (a)
from within the domestic United States, by first-class registered
or certified airmail, or nationally recognized overnight express
courier, postage prepaid, electronic mail or by facsimile or (b)
from outside the United States, by International Federal Express,
electronic mail or facsimile, and (ii) will be deemed given (A) if
delivered by first-class registered or certified mail domestic,
three (3) Business Days after so mailed, (B) if delivered by
nationally recognized overnight carrier, one (1) Business Day after
so mailed, (C) if delivered by International Federal Express, two
(2) Business Days after so mailed and (D) on the date of
transmission, if delivered by electronic mail to each of the email
addresses specified in this Section 8 prior to 5:00 p.m. (New York
time) on a Trading Day, (E) the next Trading Day after the date of
transmission, if delivered by electronic mail to each of the email
addresses specified in this Section 8 on a day that is not a
Trading Day or later than 5:00 p.m. (New York time) on any Trading
Day and (E) if delivered by facsimile, upon electronic confirmation
of receipt of such facsimile, and will be delivered and addressed
as follows:

 

(i)            
if to the Company, to:

VistaGen
Therapeutics, Inc.

343
Allerton Ave.

South
San Francisco, CA 94090

Attention: [
]

Facsimile: [
]

Email:
[ ]

 

(ii) if
to the Holder, at such address or other contact information
delivered by the Holder to Company or as is on the books and
records of the Company.

 

The
Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable
detail a description of such action and the reason therefor.
Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon any
adjustment of the Exercise Price, setting forth in reasonable
detail, and certifying, the calculation of such adjustment and (ii)
at least fifteen (15) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend
or distribution upon the shares of Common Stock, (B) with respect
to any grants, issuances or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or
other property to holders of shares of Common Stock or (C) for
determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation; provided in each case that such
information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder. It is
expressly understood and agreed that the time of exercise specified
by the Holder in each Exercise Notice shall be definitive and may
not be disputed or challenged by the Company.

 

9. AMENDMENT AND WAIVER. Except as
otherwise provided herein, the provisions of this Warrant may be
amended or waived and the Company may take any action herein
prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written
consent of the Holder.

 

 

-10-

 

 

10. GOVERNING LAW; JURISDICTION; JURY
TRIAL. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this
Warrant shall be governed by, the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. The Company hereby
irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or
that the venue of such suit, action or proceeding is improper. The
Company hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to the Company at the address
set forth in Section 8(i) above or such other address as the
Company subsequently delivers to the Holder and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by
law. Nothing contained herein shall be deemed or operate to
preclude the Holder from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the
Company's obligations to the Holder, to realize on any collateral
or any other security for such obligations, or to enforce a
judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

 

11. VARIABLE RATE TRANSACTIONS.
Notwithstanding anything to the contrary contained herein, from and
after the Subscription Date and on or prior to the Expiration Date,
the Company shall be prohibited from effecting or entering into an
agreement to effect any issuance by the Company or any of its
Subsidiaries of Common Stock, Convertible Securities or Options (or
a combination thereof) involving a Variable Rate Transaction. As
used herein, "Variable Rate
Transaction" means a transaction in which the Company or any
of its Subsidiaries (i) issues or sells any debt or equity security
that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock
either (A) at a conversion price, exercise price or exchange rate
or other price that is based upon and/or varies with the trading
prices of or quotations for the shares of Common Stock at any time
after the initial issuance of such debt or equity securities., or
(B) with a conversion, exercise or exchange price that is subject
to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock or (ii) enters into
any agreement, including, but not limited to an equity line of
credit or at-the-market offering, whereby the Company or any of its
Subsidiaries may issue securities at a future determined price. For
the avoidance of doubt, the issuance of a Common Stock Equivalent
with a fixed exercise or conversion price with a standard price
only full ratchet or weighted average anti-dilution provision shall
not be considered to be a Variable Rate Transaction.

 

12. DISPUTE RESOLUTION. In the case
of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall
submit the disputed determinations or arithmetic calculations via
facsimile or electronic mail within two (2) Business Days of
receipt of the Exercise Notice or other event giving rise to such
dispute, as the case may be, to the Holder. If the Holder and the
Company are unable to agree upon such determination or calculation
of the Exercise Price or the Warrant Shares within three (3)
Business Days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall,
within two (2) Business Days submit via facsimile or electronic
mail (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and
approved by the Holder or (b) the disputed arithmetic calculation
of the Warrant Shares to the Company's independent, outside
accountant. The Company shall cause at its expense the investment
bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the
Holder of the results no later than ten (10) Business Days from the
time it receives the disputed determinations or calculations. Such
investment bank's or accountant's determination or calculation, as
the case may be, shall be binding upon all parties absent
demonstrable error.

 

 

-11-

 

 

13. REMEDIES, OTHER OBLIGATIONS, BREACHES
AND INJUNCTIVE RELIEF. The remedies provided in this Warrant
shall be cumulative and in addition to all other remedies available
under this Warrant and any other Transaction Documents, at law or
in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the
Holder to pursue actual damages for any failure by the Company to
comply with the terms of this Warrant. The Company acknowledges
that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any
such breach may be inadequate. The Company therefore agrees that,
in the event of any such breach or threatened breach, the holder of
this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other
security being required.

 

14. TRANSFER.  This Warrant
and the Warrant Shares may be offered for sale, sold, transferred,
pledged or assigned without the consent of the
Company.

 

15. SEVERABILITY; CONSTRUCTION;
HEADINGS.   If any provision of this Warrant is
prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be
valid and enforceable, and the invalidity or unenforceability of
such provision shall not affect the validity of the remaining
provisions of this Warrant so long as this Warrant as so modified
continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the
respective expectations or reciprocal obligations of the parties or
the practical realization of the benefits that would otherwise be
conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or
unenforceable provision(s). This Warrant shall be deemed to be
jointly drafted by the Company and the Holder and shall not be
construed against any Person as the drafter hereof. The headings of
this Warrant are for convenience of reference and shall not form
part of, or affect the interpretation of, this
Warrant.

 

16. DISCLOSURE. Upon receipt or
delivery by the Company of any notice in accordance with the terms
of this Warrant, unless the Company has in good faith determined
that the matters relating to such notice do not constitute
material, nonpublic information relating to the Company or its
subsidiaries, the Company shall contemporaneously with any such
receipt or delivery publicly disclose such material, nonpublic
information on a Current Report on Form 8-K or otherwise. In the
event that the Company believes that a notice contains material,
nonpublic information relating to the Company or its subsidiaries,
the Company so shall indicate to such Holder contemporaneously with
delivery of such notice, and in the absence of any such indication,
the Holder shall be allowed to presume that all matters relating to
such notice do not constitute material, nonpublic information
relating to the Company or its subsidiaries.

 

17. CERTAIN DEFINITIONS. For
purposes of this Warrant, the following terms shall have the
following meanings:

 

(a) "Affiliate" means, with respect to any
Person, any other Person that directly or indirectly controls, is
controlled by, or is under common control with, such Person, it
being understood for purposes of this definition that "control" of
a Person means the power directly or indirectly either to vote 10%
or more of the stock having ordinary voting power for the election
of directors of such Person or direct or cause the direction of the
management and policies of such Person whether by contract or
otherwise.

 

 

-12-

 

 

(b) "Approved Stock Plan" means the
Company’s 2016 Amended and Restated Stock Incentive Plan and
any employee benefit plan which has been approved by a majority of
the disinterested members of the Board of Directors of the Company,
in each case pursuant to which the Company’s securities may
be issued to any employee, officer or director for services
provided to the Company.

 

(c) "Attribution Parties" means,
collectively, the following Persons and entities: (i) any
investment vehicle, including, any funds, feeder funds or managed
accounts, currently, or from time to time after the Subscription
Date, directly or indirectly managed or advised by the Holder's
investment manager or any of its Affiliates or principals, (ii) any
direct or indirect Affiliates of the Holder or any of the
foregoing, (iii) any Person acting or who could be deemed to be
acting as a Group together with the Holder or any of the foregoing
and (iv) any other Persons whose beneficial ownership of the
Company's Common Stock would or could be aggregated with the
Holder's and the other Attribution Parties for purposes of Section
13(d) of the 1934 Act. For clarity, the purpose of the foregoing is
to subject collectively the Holder and all other Attribution
Parties to the Maximum Percentage.

 

(d)  “Bid
Price” means, for any security as of the particular
time of determination, the bid price for such security on the
Principal Market as reported by Bloomberg as of such time of
determination, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the bid
price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported
by Bloomberg as of such time of determination, or if the foregoing
does not apply, the bid price of such security in the
over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg as of such time of determination,
or, if no bid price is reported for such security by Bloomberg as
of such time of determination, the average of the bid prices of any
market makers for such security as reported in the “pink
sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC)
as of such time of determination. If the Bid Price cannot be
calculated for a security as of the particular time of
determination on any of the foregoing bases, the Bid Price of such
security as of such time of determination shall be the fair market
value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market
value of such security, then such dispute shall be resolved in
accordance with the procedures in Section 11. All such
determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar
transaction during such period.

 

(e) "Black Scholes Value" means the value of
this Warrant based on the Black-Scholes Option Pricing Model
obtained from the "OV" function on Bloomberg determined as of the
day immediately following the first public announcement of the
applicable Fundamental Transaction, or, if the Fundamental
Transaction is not publicly announced, the date the Fundamental
Transaction is consummated, for pricing purposes and reflecting (i)
a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the remaining term of this Warrant as of such
date of request, (ii) an expected volatility equal to the greater
of 100% and the 100-day volatility obtained from the HVT function
on Bloomberg as of the day immediately following the public
announcement of the applicable Fundamental Transaction, or, if the
Fundamental Transaction is not publicly announced, the date the
Fundamental Transaction is consummated, (iii) the underlying price
per share used in such calculation shall be the highest Weighted
Average Price during the five (5) Trading Days prior to the closing
of the Fundamental Transaction, (iv) a zero cost of borrow and (v)
a 360 day annualization factor.

 

(f) "Bloomberg" means Bloomberg Financial
Markets.

 

(g) "Business Day" means any day other than
Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain
closed.

 

 

-13-

 

 

(h) “Change of Control” means any
Fundamental Transaction other than (i) any reorganization,
recapitalization or reclassification of the Common Stock in which
holders of the Company’s voting power immediately prior to
such reorganization, recapitalization or reclassification continue
after such reorganization, recapitalization or reclassification to
hold publicly traded securities and, directly or indirectly, are,
in all material respect, the holders of the voting power of the
surviving entity (or entities with the authority or voting power to
elect the members of the board of directors (or their equivalent if
other than a corporation) of such entity or entities) after such
reorganization, recapitalization or reclassification, (ii) pursuant
to a migratory merger effected solely for the purpose of changing
the jurisdiction of incorporation of the Company or (iii) a merger
in connection with a bona fide acquisition by the Company of any
Person in which (x) the gross consideration paid, directly or
indirectly, by the Company in such acquisition is not greater than
20% of the Company’s market capitalization as calculated on
the date of the consummation of such merger and (y) such merger
does not contemplate a change to the identity of a majority of the
board of directors of the Company. Notwithstanding anything herein
to the contrary, any transaction or series of transaction that,
directly or indirectly, results in the Company or the Successor
Entity not having Common Stock or common stock, as applicable,
registered under the 1934 Act and listed on an Eligible Market
shall be deemed a Change of Control.

 

(i) "Closing Bid Price" and "Closing Sale Price" means, for any
security as of any date, the last closing bid price and last
closing trade price, respectively, for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not
designate the closing bid price or the closing trade price, as the
case may be, then the last bid price or the last trade price,
respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not
the principal securities exchange or trading market for such
security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no closing
bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask
prices, respectively, of any market makers for such security as
reported in the OTC Link or "pink sheets" by OTC Markets Group Inc.
(formerly Pink OTC Markets Inc.). If the Closing Bid Price or the
Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such
security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the
Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section
11. All such determinations to be appropriately adjusted for any
stock dividend, stock split, stock combination, reclassification or
other similar transaction during the applicable calculation
period.

 

(j) "Common Stock" means (i) the
Company's Common Stock, par value $0.001 per share, and
(ii) any capital stock into which such Common Stock shall have
been changed or any capital stock resulting from a reclassification
of such Common Stock.

 

(k) "Convertible Securities" means any stock
or securities (other than Options) directly or indirectly
convertible into or exercisable or exchangeable for shares of
Common Stock.

 

(l) "Eligible Market" means The NASDAQ
Capital Market, the NYSE American LLC, The NASDAQ Global Select
Market, The NASDAQ Global Market or The New York Stock Exchange,
Inc.

 

 

-14-

 

 

(m)  "Excluded Securities" means any shares of
Common Stock issued or issuable, or deemed issued or issuable
pursuant to Section 2(a): (i) in connection with any Approved Stock
Plan, (ii) upon exercise of the Warrants; provided, that the terms
of such Warrants are not amended, modified or changed on or after
the Subscription Date, (iii) upon conversion, exercise or exchange
of any Options or Convertible Securities which are outstanding on
the day immediately preceding the Subscription Date.; provided, that the terms
of such Options or Convertible Securities are not amended, modified
or changed on or after the Subscription Date and (iv) issued as
payment of regular dividends pursuant to the terms of the
Company’s Series B Preferred Stock;  provided, that the
terms of the Series B Preferred Stock are not amended, modified or
changed on or after the Subscription Date.

 

(n) "Expiration Date" means the date
[sixty
(60)] months
after the Initial Exercisability Date or, if such date falls on a day other
than a Business Day or on which trading does not take place on the
Principal Market (a "Holiday"), the next day that is not a
Holiday.

 

(o) "Fundamental Transaction" means (A) that
the Company shall, directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related
transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Subject Entity,
or (ii) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company or
any of its "significant subsidiaries" (as defined in Rule 1-02 of
Regulation S-X) to one or more Subject Entities, or (iii) make, or
allow one or more Subject Entities to make, or allow the Company to
be subject to or have its shares of Common Stock be subject to or
party to one or more Subject Entities making, a purchase, tender or
exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the
outstanding shares of Common Stock calculated as if any shares of
Common Stock held by all Subject Entities making or party to, or
Affiliated with any Subject Entities making or party to, such
purchase, tender or exchange offer were not outstanding; or (z)
such number of shares of Common Stock such that all Subject
Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become
collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common
Stock, or (iv) consummate a stock purchase agreement or other
business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with one or more Subject Entities whereby all such
Subject Entities, individually or in the aggregate, acquire, either
(x) at least 50% of the outstanding shares of Common Stock, (y) at
least 50% of the outstanding shares of Common Stock calculated as
if any shares of Common Stock held by all the Subject Entities
making or party to, or Affiliated with any Subject Entity making or
party to, such stock purchase agreement or other business
combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the
beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of
at least 50% of the outstanding shares of Common Stock, or (v)
reorganize, recapitalize or reclassify its shares of Common Stock.,
(B) that the Company shall, directly or indirectly, including
through subsidiaries, Affiliates or otherwise, in one or more
related transactions, allow any Subject Entity individually or the
Subject Entities in the aggregate to be or become the "beneficial
owner" (as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in
outstanding shares of Common Stock, merger, consolidation, business
combination, reorganization, recapitalization, spin-off, scheme of
arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50%
of the aggregate ordinary voting power represented by issued and
outstanding shares of Common Stock, (y) at least 50% of the
aggregate ordinary voting power represented by issued and
outstanding shares of Common Stock not held by all such Subject
Entities as of the Subscription Date calculated as if any shares of
Common Stock held by all such Subject Entities were not
outstanding, or (z) a percentage of the aggregate ordinary voting
power represented by issued and outstanding shares of Common Stock
or other equity securities of the Company sufficient to allow such
Subject Entities to effect a statutory short form merger or other
transaction requiring other stockholders of the Company to
surrender their Common Stock without approval of the stockholders
of the Company or (C) directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related
transactions, the issuance of or the entering into any other
instrument or transaction structured in a manner to circumvent, or
that circumvents, the intent of this definition in which case this
definition shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this definition to the
extent necessary to correct this definition or any portion of this
definition which may be defective or inconsistent with the intended
treatment of such instrument or transaction.

 

 

-15-

 

 

(p) "Group" means a "group" as that term is
used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.

 

(q) "Option Value" means the value of an
Option based on the Black-Scholes Option Pricing model obtained
from the "OV" function on Bloomberg determined as of the day of the
most recent Closing Sale Price of the Common Stock prior to the
public announcement of the pricing of the applicable Option (or, if
the pricing is not publicly announced, on the most recent Closing
Sale Price of the Common Stock prior to the pricing of the
applicable Option) and reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the
remaining term of the applicable Option as of the applicable date
of determination, (ii) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function
on Bloomberg as of (A) the Trading Day immediately following the
first public announcement of the pricing of the transaction that
includes the applicable Option if such pricing is publicly
announced or (B) the Trading Day immediately following the issuance
of the applicable Option if the pricing of such transaction is not
publicly announced, (iii) an underlying price per share equal to
the most recent Closing Sale Price of the Common Stock prior to the
public announcement of the pricing of the applicable Option (or, if
the pricing is not publicly announced, on the most recent Closing
Sale Price of the Common Stock prior to the pricing of the
applicable Option), (iv) a zero cost of borrow and (v) a 360-day
annualization factor.

 

(r) "Options" means any rights, warrants or
options to subscribe for or purchase shares of Common Stock or
Convertible Securities.

 

(s) "Parent Entity" of a Person means an
entity that, directly or indirectly, controls the applicable
Person, including such entity whose common stock or equivalent
equity security is quoted or listed on an Eligible Market (or, if
so elected by the Holder, any other market, exchange or quotation
system), or, if there is more than one such Person or such entity,
the Person or such entity designated by the Holder or in the
absence of such designation, such Person or entity with the largest
public market capitalization as of the date of consummation of the
Fundamental Transaction.

 

(t) "Person" means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a
government or any department or agency thereof.

 

(u) "Principal Market" means The NASDAQ
Capital Market.

 

(v) "Required Holders" means the holders of
the Warrants representing at least a majority of the shares of
Common Stock underlying the Warrants then outstanding.

 

(w) “Standard Settlement Period”
means the standard settlement period, expressed in a number of
Trading Days, for the Company’s primary trading market or
quotation system with respect to the Common Stock that is in effect
on the date of receipt of an applicable Conversion
Notice.

 

(x) "Subject Entity" means any Person,
Persons or Group or any Affiliate or associate of any such Person,
Persons or Group.

 

(y) "Successor Entity" means one or more
Person or Persons (or, if so elected by the Holder, the Company or
Parent Entity) formed by, resulting from or surviving any
Fundamental Transaction or one or more Person or Persons (or, if so
elected by the Holder, the Company or the Parent Entity) with which
such Fundamental Transaction shall have been entered
into.

 

 

-16-

 

 

(z) "Trading Day" means any day on which the
Common Stock is traded on the Principal Market, or, if the
Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities
market on which the Common Stock is then traded.

 

(aa) “Transaction
Documents” means any agreement entered into by and
between the Company and the Holder, as applicable.

 

(bb) "Weighted
Average Price" means, for any security as of any date, the
dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New
York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00
p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported
by Bloomberg through its "Volume at Price" function or, if the
foregoing does not apply, the dollar volume-weighted average price
of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at
9:30:01 a.m., New York time (or such other time as such market
publicly announces is the official open of trading), and ending at
4:00:00 p.m., New York time (or such other time as such market
publicly announces is the official close of trading), as reported
by Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average
of the highest Closing Bid Price and the lowest closing ask price
of any of the market makers for such security as reported in the
OTC Link or "pink sheets" by OTC Markets Group Inc. (formerly Pink
OTC Markets Inc.). If the Weighted Average Price cannot be
calculated for a security on a particular date on any of the
foregoing bases, the Weighted Average Price of such security on
such date shall be the fair market value as mutually determined by
the Company and the Holder. If the Company and the Holder are
unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 11 with the term
"Weighted Average Price" being substituted for the term "Exercise
Price." All such determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination,
reclassification or other similar transaction during the applicable
calculation period.

 

[Signature Page Follows]

-17-

 

 

 

IN WITNESS WHEREOF, the Company has
caused this Warrant to Purchase Common Stock to be duly executed as
of the Issuance Date set out above.

 

 

VISTAGEN
THERAPEUTICS, INC.

 

 

By:___________________________

Name:

Title:

 

 

 

 

-18-

 

  EXHIBIT A

 

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS

WARRANT TO PURCHASE COMMON STOCK

 

VISTAGEN THERAPEUTICS, INC.

The
undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("Warrant Shares") of VistaGen
Therapeutics, Inc., a company organized under the laws of Nevada
(the "Company"), evidenced
by the attached Warrant to Purchase Common Stock (the "Warrant"). Capitalized terms used herein
and not otherwise defined shall have the respective meanings set
forth in the Warrant.

 

1. Form
of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:

 

____________ 

a "Cash Exercise" with respect to
_________________ Warrant Shares; and/or

 

____________ 

a "Cashless Exercise" with
respect to _______________ Warrant Shares.

 

2.
Payment of Exercise Price. In the event that the holder has elected
a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the Aggregate
Exercise Price in the sum of $___________________ to the Company in
accordance with the terms of the Warrant.

 

3.
Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the
Warrant.

 

4.
Variable Price Securities. By checking the box in this Item 4, the
holder elects to exercise the Warrant by substituting the Variable
Price for the Exercise Price pursuant to Section 2(d) of the
Warrant, which Variable Price equals $___________ per share.
☐

 

 

 

 

Date:
_______________ __, ______

 

 

 

   Name
of Registered Holder

 

 

By:           

Name:

Title:

 

 

 

-19-

 

 

ACKNOWLEDGMENT

 

 

The
Company hereby acknowledges this Exercise Notice and hereby directs
[TRANSFER AGENT] to issue the above indicated number of shares of
Common Stock on or prior to the applicable Share Delivery
Date.

 

VISTAGEN
THERAPEUTICS, INC.

 

 

 

By:________________________________

Name:

Title:

 

 

 

 

 

-20-Blueprint

 

Exhibit 4.2

SERIES A-2 WARRANT

 

VISTAGEN THERAPEUTICS, INC.

 

Warrant To Purchase Common Stock

 

Warrant
No.:                                                                                                                                           

Number
of Shares of Common Stock:_____________

Date of
Issuance: [___], 2017 ("Issuance
Date")

 

VistaGen
Therapeutics, Inc., a company organized under the laws of Nevada
(the "Company"), hereby
certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [HOLDER], the
registered holder hereof or its permitted assigns (the
"Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company,
at the Exercise Price (as defined below) then in effect, at any
time or times on or after the Issuance Date (the
“Initial Exercisability
Date”), but not after 11:59 p.m., New York time, on
the Expiration Date, (as defined below), ______________
(_____________)1 fully paid non-assessable shares of
Common Stock (as defined below), subject to adjustment as provided
herein (the
"Warrant Shares"). Except as
otherwise defined herein, capitalized terms in this Warrant to
Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, this
"Warrant"), shall have the
meanings set forth in Section 16. This Warrant is one of the
Warrants to purchase Common Stock (the "Warrants") issued pursuant to (i) that
certain Underwriting Agreement, dated as of [ ], 2017 (the
"Subscription Date") by and
between the Company and Oppenheimer & Co. Inc., (ii) the
Company's Registration Statement on Form S-3 (File number
333-215671) (the "Registration
Statement") and (iii) the Company's prospectus supplement
dated as of [ ], 2017.

 

1. EXERCISE
OF WARRANT.

 

(a) Mechanics of Exercise. Subject
to the terms and conditions hereof (including, without limitation,
the limitations set forth in Section 1(f)), this Warrant may be
exercised by the Holder at any time or times on or after the
Initial Exercisability Date, in
whole or in part, by delivery (whether via facsimile, electronic
mail or otherwise) of a written notice, in the form attached hereto
as Exhibit A (the
"Exercise Notice"), of the
Holder's election to exercise this Warrant. Within one (1) Trading
Day following the delivery of the Exercise Notice, the Holder shall
make payment to the Company of an amount equal to the Exercise
Price in effect on the date of such exercise multiplied by the
number of Warrant Shares as to which this Warrant is being
exercised (the "Aggregate Exercise
Price") in cash by wire transfer of immediately available
funds or, if the provisions of Section 1(d) are applicable, by
notifying the Company that this Warrant is being exercised pursuant
to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original Warrant in order to
effect an exercise hereunder, nor shall any ink-original signature
or medallion guarantee (or other type of guarantee or notarization)
with respect to any Exercise Notice be required. Execution and
delivery of the Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of
the original Warrant and issuance of a new Warrant evidencing the
right to purchase the remaining number of Warrant Shares. On or
before the first (1st) Trading Day
following the date on which the Company has received the applicable
Exercise Notice, the Company shall transmit by facsimile or
electronic mail an acknowledgment of confirmation of receipt of the
Exercise Notice, in the form attached to the Exercise Notice, to
the Holder and the Company's transfer agent (the "Transfer Agent"). So long as the Holder
delivers the Aggregate Exercise Price (or notice of a Cashless
Exercise) on or prior to the first (1st) Trading Day following the
date on which the Exercise Notice has been delivered to the
Company, then on or prior to the earlier of (i) the second (2nd)
Trading Day and (ii) the number of Trading Days comprising the
Standard Settlement Period, in each case following the date on
which the Exercise Notice has been delivered to the Company, or, if
the Holder does not deliver the Aggregate Exercise Price (or notice
of a Cashless

 

 

1 Insert the number of
shares of Common Stock equal the Holder's pro rata portion of
503,641 shares of Common Stock.

 

 

 

-1-

 

 

Exercise) on or
prior to the first (1st) Trading Day following the date on which
the Exercise Notice has been delivered to the Company, then on or
prior to the first (1st) Trading Day following the date on which
the Aggregate Exercise Price (or notice of a Cashless Exercise) is
delivered (such earlier date, the “Share Delivery Date”), the Company
shall (X) provided that the Transfer Agent is participating in The
Depository Trust Company ("DTC") Fast Automated Securities Transfer
Program, credit such aggregate number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the Holder's or
its designee's balance account with DTC through its Deposit /
Withdrawal At Custodian system, or (Y) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer
Program, issue and dispatch by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the
name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise.
The Company shall be responsible for all fees and expenses of the
Transfer Agent and all fees and expenses with respect to the
issuance of Warrant Shares via DTC, if any, including without
limitation for same day processing. Upon delivery of the Exercise
Notice, the Holder shall be deemed for all corporate purposes to
have become the holder of record and beneficial owner of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date such Warrant Shares are
credited to the Holder's DTC account or the date of delivery of the
certificates evidencing such Warrant Shares, as the case may be. If
this Warrant is physically delivered to the Company in connection
with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an
exercise, then the Company shall as soon as practicable and in no
event later than three (3) Trading Days after any exercise and at
its own expense, issue and deliver to the Holder (or its designee)
a new Warrant (in accordance with Section 7(d)) representing the
right to purchase the number of Warrant Shares issuable immediately
prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised. No
fractional Warrant Shares are to be issued upon the exercise of
this Warrant, but rather the number of Warrant Shares to be issued
shall be rounded to the nearest whole number. The Company shall pay
any and all transfer, stamp, issuance and similar taxes, costs and
expenses (including, without limitation, fees and expenses of the
Transfer Agent) which may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this Warrant. The
Company's obligations to issue and deliver Warrant Shares in
accordance with the terms and subject to the conditions hereof are
absolute and unconditional, irrespective of any action or inaction
by the Holder to enforce the same, any waiver or consent with
respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination;
provided,
however, that the
Company shall not be required to deliver Warrant Shares with
respect to an exercise prior to the Holder’s delivery of the
Aggregate Exercise Price (or notice of a Cashless Exercise) with
respect to such exercise.
 

(b) Exercise Price. For purposes of
this Warrant, "Exercise
Price" means $1.82 per share, subject to adjustment as
provided herein.

 

(c) Company's Failure to Timely Deliver
Securities. If either (I) the Company shall fail for any
reason or for no reason to issue to the Holder on or prior to the
applicable Share Delivery Date, if (x) the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer
Program, a certificate for the number of shares of Common Stock to
which the Holder is entitled and register such Common Stock on the
Company's share register or (y) the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, to credit
the Holder's balance account with DTC, for such number of shares of
Common Stock to which the Holder is entitled upon the Holder's
exercise of this Warrant or (II) a registration statement (which
may be the Registration Statement) covering the issuance or resale
of the Warrant Shares that are the subject of the Exercise Notice
(the "Exercise Notice Warrant
Shares") is not available for the issuance or resale, as
applicable, of such Exercise Notice Warrant Shares and (x) the
Company fails to promptly, but in no event later than one (1)
Business Day after such registration statement becomes unavailable,
to so notify the Holder and (y) the Company is unable to deliver
the Exercise Notice Warrant Shares electronically without any
restrictive legend by crediting such aggregate number of Exercise
Notice Warrant Shares to the Holder’s or its designee’s
balance account with DTC through its Deposit / Withdrawal At
Custodian system (the event described in the immediately foregoing
clause (II) is hereinafter referred as a "Notice Failure" and together with the
event described in clause (I) above, an "Exercise Failure"), then, in addition to
all other remedies available to the Holder, if on or prior to the
applicable Share Delivery Date either (I) if the Transfer Agent is
not participating in the DTC Fast Automated Securities
Transfer

 

 

 
-2-

 

 

Program, the
Company shall fail to issue and deliver a certificate to the Holder
and register such shares of Common Stock on the Company's share
register or, if the Transfer Agent is participating in the DTC Fast
Automated Securities Transfer Program, credit the Holder's balance
account with DTC for the number of shares of Common Stock to which
the Holder is entitled upon the Holder's exercise hereunder or
pursuant to the Company's obligation pursuant to clause (ii) below
or (II) a Notice Failure occurs, and if on or after such Trading
Day the Holder purchases (in an open market transaction or
otherwise) Common Stock to deliver in satisfaction of a sale by the
Holder of shares of Common Stock issuable upon such exercise that
the Holder anticipated receiving from the Company (a "Buy-In"), then the Company shall, within
three (3) Trading Days after the Holder's request and in the
Holder's discretion, either (i) pay cash to the Holder in an amount
equal to the Holder's total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (the "Buy-In Price"), at which point the
Company's obligation to deliver such certificate (and to issue such
shares of Common Stock) or credit such Holder's balance account
with DTC for such shares of Common Stock shall terminate, or (ii)
promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such shares of Common
Stock or credit such Holder's balance account with DTC, as
applicable, and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) any trading price of
the Common Stock selected by the Holder in writing as in effect at
any time during the period beginning on the applicable Exercise
Date and ending on the applicable Share Delivery Date. Nothing
shall limit the Holder's right to pursue any other remedies
available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive
relief with respect to the Company's failure to timely deliver
certificates representing Warrant Shares (or to electronically
deliver such Warrant Shares) upon the exercise of this Warrant as
required pursuant to the terms hereof. While this Warrant is
outstanding, the Company shall cause its transfer agent to
participate in the DTC Fast Automated Securities Transfer Program.
In addition to the foregoing rights, (i) if the Company fails to
deliver the applicable number of Warrant Shares upon an exercise
pursuant to Section 1 by the applicable Share Delivery Date, then
the Holder shall have the right to rescind such exercise in whole
or in part and retain and/or have the Company return, as the case
may be, any portion of this Warrant that has not been exercised
pursuant to such Exercise Notice; provided that the rescission of
an exercise shall not affect the Company’s obligation to make
any payments that have accrued prior to the date of such notice
pursuant to this Section 1(c) or otherwise, and (ii) if a
registration statement (which may be the Registration Statement)
covering the issuance or resale of the Warrant Shares that are
subject to an Exercise Notice is not available for the issuance or
resale, as applicable, of such Exercise Notice Warrant Shares and
the Holder has submitted an Exercise Notice prior to receiving
notice of the non-availability of such registration statement and
the Company has not already delivered the Warrant Shares underlying
such Exercise Notice electronically without any restrictive legend
by crediting such aggregate number of Warrant Shares to which the
Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its
Deposit / Withdrawal At Custodian system, the Holder shall have the
option, by delivery of notice to the Company, to (x) rescind such
Exercise Notice in whole or in part and retain or have returned, as
the case may be, any portion of this Warrant that has not been
exercised pursuant to such Exercise Notice; provided that the
rescission of an Exercise Notice shall not affect the
Company’s obligation to make any payments that have accrued
prior to the date of such notice pursuant to this Section 1(c) or
otherwise, and/or (y) switch some or all of such Exercise Notice
from a cash exercise to a Cashless Exercise.

 

(d) Cashless Exercise.  Notwithstanding anything contained
herein to the contrary, if a registration statement (which may be
the Registration Statement) covering the issuance or resale of the
Exercise Notice Warrant Shares is not available for the issuance or
resale, as applicable, of such Exercise Notice Warrant Shares, the
Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in
payment of the Aggregate Exercise Price, elect instead to receive
upon such exercise the "Net Number" of shares of Common Stock
determined according to the following formula (a "Cashless Exercise"):

 

 

 
-3-

 

 

Net
Number = (A x B) - (A x
C)

B

 

For
purposes of the foregoing formula:

 

A= the
total number of shares with respect to which this Warrant is then
being exercised.

 

B= as
applicable: (i) the Closing Sale Price of the Common Stock on the
Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and
delivered pursuant to Section 1(a) hereof on a day that is not a
Trading Day or (2) both executed and delivered pursuant to Section
1(a) hereof on a Trading Day prior to the opening of “regular
trading hours” (as defined in Rule 600(b)(64) of Regulation
NMS promulgated under the federal securities laws) on such Trading
Day, (ii) at the option of the Holder, either (y) the Weighted
Average Price on the Trading Day immediately preceding the date of
the applicable Notice of Exercise or (z) the Bid Price of the
Common Stock as of the time of the Holder’s execution of the
applicable Exercise Notice if such Exercise Notice is executed
during “regular trading hours” on a Trading Day and is
delivered within two (2) hours thereafter pursuant to Section 1(a)
hereof or (iii) the Closing Sale Price of the Common Stock on the
date of the applicable Exercise Notice if the date of such Exercise
Notice is a Trading Day and such Exercise Notice is both executed
and delivered pursuant to Section 1(a) hereof after the close of
“regular trading hours” on such Trading
Day.

 

C= the
Exercise Price then in effect for the applicable Warrant Shares at
the time of such exercise.

 

If Warrant Shares are issued in such a cashless exercise, the
Company acknowledges and agrees that in accordance with Section
3(a)(9) of the Securities Act of 1933, as amended, the Warrant
Shares shall take on the registered characteristics of the Warrants
being exercised, and the holding period of the Warrants being
exercised may be tacked on to the holding period of the Warrant
Shares. The Company agrees not to take any position contrary to
this Section 1(d).

 

(e) Disputes. In the case of a
dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall
promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section
11.

 

(f) Beneficial
Ownership. Notwithstanding
anything to the contrary contained herein, the Company shall not
effect the exercise of any portion of this Warrant, and the Holder
shall not have the right to exercise any portion of this Warrant,
pursuant to the terms and conditions of this Warrant and any such
exercise shall be null and void and treated as if never made, to
the extent that after giving effect to such exercise, the Holder
together with the other Attribution Parties collectively would
beneficially own in excess of [4.99][9.99]% (the
"Maximum
Percentage") of the number
of shares of Common Stock outstanding immediately after giving effect to
such exercise. For purposes of the foregoing sentence, the
aggregate number of shares of Common Stock beneficially owned by the Holder and the other
Attribution Parties shall include the number of shares of
Common Stock held by the Holder and
all other Attribution Parties plus 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, unexercised portion of
this Warrant beneficially owned by the Holder or any of the other
Attribution Parties and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the
Company (including, without limitation, any convertible notes or
convertible preferred stock or warrants, including the other
Warrants) beneficially owned by the Holder or any other Attribution
Party subject to a limitation on conversion or exercise analogous
to the limitation contained in this Section 1(f). For purposes of
this Section 1(f), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"). For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock
the Holder may acquire upon the
exercise of this Warrant without exceeding the Maximum Percentage,
the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the
Company's most recent Annual Report on

 

 

-4-

 

 

Form 10-K, Quarterly Report on Form 10-Q and
Current Reports on Form 8-K or other public filing with the
Securities and Exchange Commission (the "SEC"), as the case may be, (y) a more
recent public announcement by the Company or (3) any other written
notice by the Company or the Transfer
Agent setting forth the number of shares of Common Stock
outstanding (the "Reported Outstanding Share
Number"). If the Company
receives an Exercise Notice from the Holder at a time when the
actual number of outstanding shares of Common Stock
is less than the Reported Outstanding
Share Number, the Company shall (i) notify the Holder in writing of
the number of shares of Common Stock then outstanding and, to the extent that such
Exercise Notice would otherwise cause the Holder's beneficial
ownership, as determined pursuant to this Section 1(f), to exceed
the Maximum Percentage, the Holder must notify the Company of a
reduced number of Warrant Shares to be purchased pursuant to such
Exercise Notice (the number of
shares by which such purchase is reduced, the "Reduction
Shares") and (ii) as soon as
reasonably practicable, the Company shall return to the Holder any
exercise price paid by the Holder for the Reduction Shares.
For any reason at any time, upon the written or oral request of the
Holder, the Company shall within one
(1) Business Day confirm orally and in writing or by electronic
mail to the Holder the number of shares of Common Stock
then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this
Warrant, by the Holder and any other Attribution Party since the
date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of Common Stock
to the Holder upon exercise of this
Warrant results in the Holder and the other Attribution Parties
being deemed to beneficially own, in the aggregate, more than the
Maximum Percentage of the number of outstanding shares of
Common Stock (as determined under
Section 13(d) of the 1934 Act), the number of shares so issued by
which the Holder's and the other Attribution Parties' aggregate
beneficial ownership exceeds the Maximum Percentage (the
"Excess
Shares") shall be deemed null
and void and shall be cancelled ab initio, and the Holder shall not
have the power to vote or to transfer the Excess Shares. As soon as
reasonably practicable after the issuance of the Excess Shares has
been deemed null and void, the Company shall return to the Holder
the exercise price paid by the Holder for the Excess Shares.
Upon delivery of a written notice to the Company, the Holder may
from time to time increase or decrease the Maximum Percentage to
any other percentage not in excess of 9.99% as specified in such
notice; provided that (i) any such increase in the Maximum
Percentage will not be effective until the sixty-first
(61st) day
after such notice is delivered to the Company and (ii) any such
increase or decrease will apply only to the Holder and the other
Attribution Parties and not to any other holder of Warrants that is
not an Attribution Party of the Holder. For purposes of clarity,
the shares of Common Stock issuable pursuant to the terms of this
Warrant in excess of the Maximum Percentage shall not be deemed to
be beneficially owned by the Holder for any purpose including for
purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No
prior inability to exercise this Warrant pursuant to this paragraph
shall have any effect on the applicability of the provisions of
this paragraph with respect to any subsequent determination of
exercisability. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(f) to
the extent necessary to correct this paragraph or any portion of
this paragraph which may be defective or inconsistent with the
intended beneficial ownership limitation contained in this Section
1(f) or to make changes or supplements necessary or desirable to properly give effect to
such limitation. The limitation contained in this paragraph may not
be waived and shall apply to a successor holder of this
Warrant.

 

(g) Required Reserve Amount. 
So long as this Warrant remains outstanding, the Company shall at
all times keep reserved for issuance under this Warrant a number of
shares of Common Stock at least equal to 100% of the maximum number
of shares of Common Stock as shall be necessary to satisfy the
Company’s obligation to issue shares of Common Stock under
the Warrants then outstanding (without regard to any limitations on
exercise) (the "Required Reserve
Amount"); provided that at no time shall
the number of shares of Common Stock reserved pursuant to this
Section 1(g) be reduced other than in connection with any exercise
of Warrants or such other event covered by Section 2(c)
below.  The Required Reserve Amount (including, without
limitation, each increase in the number of shares so reserved)
shall be allocated pro rata among the holders of the Warrants based
on the number of shares of Common Stock issuable upon exercise of
Warrants held by each holder thereof on the Issuance Date (without
regard to any limitations on exercise) (the "Authorized Share Allocation"). In the
event that a holder shall sell or otherwise transfer any of such
holder’s Warrants, each transferee shall be allocated a pro
rata portion of such holder’s Authorized Share Allocation.
Any shares of Common Stock reserved and allocated to any Person
which ceases to hold any Warrants shall be allocated to the
remaining holders of Warrants, pro rata based on the number of
shares of Common Stock issuable upon exercise of the Warrants then
held by such holders thereof (without regard to any limitations on
exercise).

 

 

-5-

 

 

(h) Insufficient Authorized Shares.
If at any time while this Warrant remains outstanding the Company
does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for
issuance the Required Reserve Amount (an "Authorized Share Failure"), then the
Company shall promptly take all action reasonably necessary to
increase the Company's authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required
Reserve Amount for this Warrant then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure,
but in no event later than ninety (90) days after the occurrence of
such Authorized Share Failure, the Company shall hold a meeting of
its stockholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement
and shall use its reasonable best efforts to solicit its
stockholders' approval of such increase in authorized shares of
Common Stock and to cause its Board of Directors to recommend to
the stockholders that they approve such proposal. Notwithstanding
the foregoing, if at any such time of an Authorized Share Failure,
the Company is able to obtain the written consent of a majority of
the shares of its issued and outstanding shares of Common Stock to
approve the increase in the number of authorized shares of Common
Stock, the Company may satisfy this obligation by obtaining such
consent and submitting for filing with the SEC an Information
Statement on Schedule 14C.

 

2. ADJUSTMENT OF EXERCISE PRICE AND
NUMBER OF WARRANT SHARES. The Exercise Price and the number
of Warrant Shares shall be adjusted from time to time as
follows:

 

(a) Adjustment Upon Issuance of Common
Stock. If and whenever on or after the Subscription Date
until the Trading Day immediately following the date of
consummation of the transaction pursuant to which the Company has
raised, through the issuance of Common Stock and/or Common Stock
Equivalents from and after the date of issuance of this Warrant, at
least $20.0 million in gross proceeds in the aggregate (not
including, for the avoidance of doubt, any proceeds raised by the
Company pursuant to the issuance or exercise of this Warrant or
other warrants issued contemporaneously with this Warrant or the
issuance of any shares of Common Stock issued contemporaneously
with the issuance of this Warrant), the Company issues or sells, or
in accordance with this Section 2 is deemed to have issued or sold,
any shares of Common Stock (including the issuance or sale of
shares of Common Stock owned or held by or for the account of the
Company, but excluding shares of Common Stock deemed to have been
issued or sold by the Company, either before or after the
Subscription Date, in connection with any Excluded Securities) for
a consideration per share (the "New
Issuance Price") less than a price (the "Applicable Price") equal to the Exercise
Price in effect immediately prior to such issuance or sale or
deemed issuance or sale (the foregoing a "Dilutive Issuance"), then immediately
after such Dilutive Issuance, the Exercise Price then in effect
shall be reduced to an amount equal to the New Issuance
Price. For purposes of
determining the adjusted Exercise Price under this Section 2(a),
the following shall be applicable:

 

(i)           Issuance
of Options. If the Company in any manner grants or sells any
Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Options or
upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Options is less than the
Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company
at the time of the granting or sale of such Options for such price
per share. For purposes of this Section 2(a)(i), the "lowest price
per share for which one share of Common Stock is issuable upon the
exercise of any such Options or upon conversion, exercise or
exchange of any Convertible Securities issuable upon exercise of
any such Options" shall be equal to the sum of the lowest amounts
of consideration (if any) received or receivable by the Company
with respect to any one share of Common Stock upon the granting or
sale of the Options, upon exercise of the Options and upon
conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Options less any consideration paid
or payable by the Company with respect to such one share of Common
Stock upon the granting or sale of such Options, upon exercise of
such Options and upon conversion exercise or exchange of any
Convertible Security issuable upon exercise of such Options. No
further adjustment of the Exercise Price shall be made upon the
actual issuance of such shares of Common Stock or of such
Convertible Securities upon the exercise of such Options or upon
the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities.

 

 

-6-

 

 

(ii)           Issuance
of Convertible Securities. If the Company in any manner
issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange thereof is less than the
Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company
at the time of the issuance or sale of such Convertible Securities
for such price per share. For the purposes of this Section
2(a)(ii), the "lowest price per share for which one share of Common
Stock is issuable upon the conversion, exercise or exchange
thereof" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon the issuance or sale
of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security less any consideration paid
or payable by the Company with respect to such one share of Common
Stock upon the issuance or sale of such Convertible Security and
upon conversion, exercise or exchange of such Convertible Security.
No further adjustment of the Exercise Price shall be made upon the
actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities, and if any
such issuance or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of the Exercise Price
has been or is to be made pursuant to other provisions of this
Section 2(a), no further adjustment of the Exercise Price shall be
made by reason of such issuance or sale.

 

(iii)           Change
in Option Price or Rate of Conversion. If the purchase price
provided for in any Options, the additional consideration, if any,
payable upon the issue, conversion, exercise or exchange of any
Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for
shares of Common Stock increases or decreases at any time, the
Exercise Price in effect at the time of such increase or decrease
shall be adjusted to the Exercise Price, which would have been in
effect at such time had such Options or Convertible Securities
provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the
case may be, at the time initially granted, issued or sold. For
purposes of this Section 2(a)(iii), if the terms of any Option or
Convertible Security that was outstanding as of the Subscription
Date are increased or decreased in the manner described in the
immediately preceding sentence, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such increase or decrease. No
adjustment pursuant to this Section 2(a) shall be made if such
adjustment would result in an increase of the Exercise Price then
in effect.

 

(iv)           Calculation
of Consideration Received. In case any Option is issued in
connection with the issuance or sale of other securities of the
Company, together comprising one integrated transaction, (x) the
Options will be deemed to have been issued for the Option Value of
such Options and (y) the other securities issued or sold in such
integrated transaction shall be deemed to have been issued or sold
for the difference of (I) the aggregate consideration received by
the Company less any consideration paid or payable by the Company
pursuant to the terms of such other securities of the Company, less
(II) the Option Value of such Options; provided, that if the value
determined pursuant to clause (y) above would result in a value
less than the par value of the Common Stock, then the other
securities issued or sold in such integrated transaction shall be
deemed to have been issued or sold for the par value of the Common
Stock. If any shares of Common Stock, Options or Convertible
Securities are issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor will be deemed to be
the net amount received by the Company therefor. If any shares of
Common Stock, Options or Convertible Securities are issued or sold
for a consideration other than cash, the amount of such
consideration received by the Company will be the fair value of
such consideration, except where such consideration consists of
publicly traded securities, in which case the amount of
consideration received by the Company will be the Closing Sale
Price of such publicly traded securities on the date of receipt of
such publicly traded securities. If any shares of Common Stock,
Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the
Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration
other than cash or publicly traded securities will be determined
jointly by the Company and the Required Holders. If such parties
are unable to reach agreement within ten (10) days after the
occurrence of an event requiring valuation (the "Valuation Event"), the fair value of
such consideration will be determined within five (5) Business Days
after the tenth (10th) day following the Valuation Event by an
independent, reputable appraiser jointly selected by the Company
and the Required Holders. The determination of such appraiser shall
be final and binding upon all parties absent manifest error and the
fees and expenses of such appraiser shall be borne by the
Company.

 

(v)           Record
Date. If the Company takes a record of the holders of Common
Stock for the purpose of entitling them (A) to receive a
dividend or other distribution payable in shares of Common Stock,
Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of
the issuance or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or the
making of such other distribution or the date of the granting of
such right of subscription or purchase, as the case may
be.

 

(vi)           No
Readjustments. For the avoidance of doubt, in the event the
Exercise Price has been adjusted pursuant to this Section 2(a) and
the Dilutive Issuance that triggered such adjustment is unwound or
is cancelled after the facts for any reason whatsoever, in no event
shall the Exercise Price be readjusted to the Exercise Price that
would have been in effect if such Dilutive Issuance had not
occurred or been consummated.]

 

(b) Voluntary Adjustment By
Company. The Company may at any time during the term of this
Warrant reduce the then current Exercise Price to any amount and
for any period of time deemed appropriate by the Board of Directors
of the Company.

 

(c) Adjustment Upon Subdivision or
Combination of Common Stock. If the Company at any time on
or after the Subscription Date subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes
of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of
Warrant Shares will be proportionately increased. If the Company at
any time on or after the Subscription Date combines (by
combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of
Warrant Shares will be proportionately decreased. Any adjustment
under this Section 2(c) shall become effective at the close of
business on the date the subdivision or combination becomes
effective.

 

(d) Other Events. If any event
occurs of the type contemplated by the provisions of this Section 2
but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then
the Company's Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of Warrant Shares,
as mutually determined by the Company’s Board of Directors
and the Required Holders, so as to protect the rights of the
Holder; provided
that no such adjustment pursuant to this Section 2(d) will increase
the Exercise Price or decrease the number of Warrant Shares as
otherwise determined pursuant to this Section 2.]

 

3. RIGHTS UPON DISTRIBUTION OF
ASSETS. In addition to any adjustments pursuant to Section 2
above, if, on or after the Subscription Date and on or prior to the
Expiration Date, the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property, options, evidence of
indebtedness or any other assets by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or
other similar transaction) (a "Distribution"), at any time after the
issuance of this Warrant, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant (without regard to any limitations or
restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) immediately before the date on
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such
Distribution (provided, however, that to the extent
that the Holder's right to participate in any such Distribution
would result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder

 

 

-7-

 

 

shall
not be entitled to participate in such Distribution to such extent
(and shall not be entitled to beneficial ownership of such shares
of Common Stock as a result of such Distribution (and beneficial
ownership) to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such
time or times as its right thereto would not result in the Holder
and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such
Distribution (and any Distributions declared or made on such
initial Distribution or on any subsequent Distribution held
similarly in abeyance) to the same extent as if there had been no
such limitation).

 

4. PURCHASE RIGHTS; FUNDAMENTAL
TRANSACTIONS.

 

(a) Purchase Rights. In addition to
any adjustments pursuant to Section 2 above, if at any time on or
after the Subscription Date and on or prior to the Expiration Date
the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of
Common Stock but excluding shares of Common Stock deemed to have
been issued or sold by the Company in connection with any Excluded
Securities (the "Purchase Rights"), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations or restrictions on exercise of this
Warrant, including without limitation, the Maximum Percentage)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common
Stock are to be determined for the grant, issuance or sale of such
Purchase Rights (provided, however, that to the extent
that the Holder's right to participate in any such Purchase Right
would result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (and
shall not be entitled to beneficial ownership of such Common Stock
as a result of such Purchase Right (and beneficial ownership) to
such extent) and such Purchase Right to such extent shall be held
in abeyance for the benefit of the Holder until such time or times as its right thereto
would not result in the Holder and the other Attribution
Parties exceeding the Maximum
Percentage, at which time or times the Holder shall be granted such
right (and any Purchase Right granted, issued or sold on
such initial Purchase Right or on any subsequent Purchase Right to
be held similarly in abeyance) to the
same extent as if there had been no such
limitation).

 

(b) Fundamental
Transaction.   The Company shall not enter into or
be party to a Fundamental Transaction unless the Successor Entity
assumes in writing all of the obligations of the Company under this
Warrant in accordance with the provisions of this Section 4(b),
including agreements to deliver to the Holder in exchange for this
Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this
Warrant, including, without limitation, which is exercisable for a
corresponding number of shares of capital stock equivalent to the
shares of Common Stock acquirable and receivable upon exercise of
this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
adjustments to the number of shares of capital stock and such
exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such
Fundamental Transaction). Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be
substituted for the Company (so that from and after the date of the
applicable Fundamental Transaction, the provisions of this Warrant
and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant
with the same effect as if such Successor Entity had been named as
the Company herein. Upon consummation of each Fundamental
Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this
Warrant at any time after the consummation of the applicable
Fundamental Transaction, in lieu of the shares of Common Stock (or
other securities, cash, assets or other property (except such items
still issuable under Sections 3 and 4(a) above, which shall
continue to be receivable thereafter)) issuable upon the exercise
of this Warrant prior to the applicable Fundamental Transaction,
such shares of common stock (or its

 

 

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equivalent) of the
Successor Entity (including its Parent Entity) which the Holder
would have been entitled to receive upon the happening of the
applicable Fundamental Transaction had this Warrant been exercised
immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the exercise of this
Warrant), as adjusted in accordance with the provisions of this
Warrant. Notwithstanding the foregoing, and without limiting
Section 1(f) hereof, the Holder may elect, at its sole option, by
delivery of written notice to the Company to waive this Section
4(b) to permit the Fundamental Transaction without the assumption
of this Warrant. In addition to and not in substitution for any
other rights hereunder, prior to the consummation of each
Fundamental Transaction pursuant to which holders of shares of
Common Stock are entitled to receive securities or other assets
with respect to or in exchange for shares of Common Stock (a
“Corporate
Event”), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive
upon an exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction but prior to the
Expiration Date, in lieu of the shares of the Common Stock (or
other securities, cash, assets or other property (except such items
still issuable under Sections 3 and 4(a) above, which shall
continue to be receivable thereafter)) issuable upon the exercise
of the Warrant prior to such Fundamental Transaction, such shares
of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights)
(collectively, the “Corporate
Event Consideration”) which the Holder would have been
entitled to receive upon the happening of the applicable
Fundamental Transaction had this Warrant been exercised immediately
prior to the applicable Fundamental Transaction (without regard to
any limitations on the exercise of this Warrant). The provision
made pursuant to the preceding sentence shall be in a form and
substance reasonably satisfactory to the Holder. The provisions of
this Section 4(b) shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events. Notwithstanding the
foregoing, in the event of a Change of Control (other than a Change
of Control which was not approved by the Board of Directors, as to
which this right shall not apply), at the request of the Holder
delivered before the 30th day after such Change of Control, the
Company (or the Successor Entity) shall purchase this Warrant from
the Holder by paying to the Holder, within five Business Days after
such request (or, if later, on the effective date of the Change of
Control), an amount equal to the Black Scholes Value of the
remaining unexercised portion of this Warrant on the effective date
of such Change of Control, payable in cash; provided, that if the
applicable Change of Control was not approved by the Company's
Board of Directors, such amount shall be payable, at the option of
the Company in either (x) Common Stock (or corresponding Corporate
Event Consideration, as applicable) valued at the value of the
consideration received by the shareholders in such Change of
Control or (y) cash.

 

5. NONCIRCUMVENTION. The Company
hereby covenants and agrees that the Company will not, by amendment
of its Restated and Amended Articles of Incorporation or Bylaws, or
through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issuance 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,
and will at all times in good faith carry out all of the provisions
of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the
foregoing, the Company (i) shall not increase the par value of
any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, (ii) shall
take all such actions 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 (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued shares of Common
Stock, solely for the purpose of effecting the exercise of the
Warrants, the number of shares of Common Stock as shall from time
to time be necessary to effect the exercise of the Warrants then
outstanding (without regard to any limitations on
exercise).

 

6. WARRANT HOLDER NOT DEEMED A
STOCKHOLDER. Except as otherwise specifically provided
herein, the Holder, solely in such Person's capacity as a holder of
this Warrant, shall not be entitled to vote or receive dividends or
be deemed the holder of capital stock of the Company for any
purpose, nor shall anything contained in this Warrant be construed
to confer upon the Holder, solely in such Person's capacity as the
Holder of this Warrant, any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which such Person is then entitled to
receive upon the due exercise of this Warrant. In addition, nothing
contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 6, the
Company shall provide the Holder with copies of the same notices
and other information given to the stockholders of the Company
generally, contemporaneously with the giving thereof to the
stockholders.

 

 

-9-

 

 

7. REISSUANCE OF
WARRANTS.

 

(a) Transfer of Warrant. If this
Warrant is to be transferred, the Holder shall surrender this
Warrant to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Warrant (in
accordance with Section 7(d)), registered as the Holder may
request, representing the right to purchase the number of Warrant
Shares being transferred by the Holder and, if less than the total
number of Warrant Shares then underlying this Warrant is being
transferred, a new Warrant (in accordance with Section 7(d)) to the
Holder representing the right to purchase the number of Warrant
Shares not being transferred.

 

(b) Lost, Stolen or Mutilated
Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to
the Company in customary form (but without the obligation to post a
bond) and, in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company shall execute and deliver
to the Holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then
underlying this Warrant.

 

(c) Exchangeable for Multiple
Warrants. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a
new Warrant or Warrants (in accordance with Section 7(d))
representing in the aggregate the right to purchase the number of
Warrant Shares then underlying this Warrant, and each such new
Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such
surrender.

 

(d) Issuance of New Warrants.
Whenever the Company is required to issue a new Warrant pursuant to
the terms of this Warrant, such new Warrant (i) shall be of like
tenor with this Warrant, (ii) shall represent, as indicated on the
face of such new Warrant, the right to purchase the Warrant Shares
then underlying this Warrant (or in the case of a new Warrant being
issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares
designated by the Holder which, when added to the number of shares
of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of
Warrant Shares then underlying this Warrant), (iii) shall have an
issuance date, as indicated on the face of such new Warrant which
is the same as the Issuance Date, and (iv) shall have the same
rights and conditions as this Warrant.

 

8. NOTICES. Whenever notice is
required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in writing, (i) if delivered (a)
from within the domestic United States, by first-class registered
or certified airmail, or nationally recognized overnight express
courier, postage prepaid, electronic mail or by facsimile or (b)
from outside the United States, by International Federal Express,
electronic mail or facsimile, and (ii) will be deemed given (A) if
delivered by first-class registered or certified mail domestic,
three (3) Business Days after so mailed, (B) if delivered by
nationally recognized overnight carrier, one (1) Business Day after
so mailed, (C) if delivered by International Federal Express, two
(2) Business Days after so mailed and (D) on the date of
transmission, if delivered by electronic mail to each of the email
addresses specified in this Section 8 prior to 5:00 p.m. (New York
time) on a Trading Day, (E) the next Trading Day after the date of
transmission, if delivered by electronic mail to each of the email
addresses specified in this Section 8 on a day that is not a
Trading Day or later than 5:00 p.m. (New York time) on any Trading
Day and (E) if delivered by facsimile, upon electroni

 

 

-10-

 

 

9. confirmation of
receipt of such facsimile, and will be delivered and addressed as
follows:

 

(i)            
if to the Company, to:

VistaGen
Therapeutics, Inc.

343
Allerton Ave.

South
San Francisco, CA 94090

Attention: [
]

Facsimile: [
]

Email:
[ ]

 

 

(ii) if
to the Holder, at such address or other contact information
delivered by the Holder to Company or as is on the books and
records of the Company.

 

The
Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable
detail a description of such action and the reason therefor.
Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon any
adjustment of the Exercise Price, setting forth in reasonable
detail, and certifying, the calculation of such adjustment and (ii)
at least fifteen (15) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend
or distribution upon the shares of Common Stock, (B) with respect
to any grants, issuances or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or
other property to holders of shares of Common Stock or (C) for
determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation; provided in each case that such
information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder. It is
expressly understood and agreed that the time of exercise specified
by the Holder in each Exercise Notice shall be definitive and may
not be disputed or challenged by the Company.

 

10. AMENDMENT AND WAIVER. Except as
otherwise provided herein, the provisions of this Warrant may be
amended or waived and the Company may take any action herein
prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written
consent of the Holder.

 

11. GOVERNING LAW; JURISDICTION; JURY
TRIAL. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this
Warrant shall be governed by, the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. The Company hereby
irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or
that the venue of such suit, action or proceeding is improper. The
Company hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to the Company at the address
set forth in Section 8(i) above or such other address as the
Company subsequently delivers to the Holder and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by
law. Nothing contained herein shall be deemed or operate to
preclude the Holder from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the
Company's obligations to the Holder, to realize on any collateral
or any other security for such obligations, or to enforce a
judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

 

 

-11-

 

 

12. VARIABLE RATE TRANSACTIONS.
Notwithstanding anything to the contrary contained herein,
including without limitation, the provisions set forth in Section
2(d) of this Warrant], from and after the Subscription Date and on
or prior to the Expiration Date, the Company shall be prohibited
from effecting or entering into an agreement to effect any issuance
by the Company or any of its Subsidiaries of Common Stock,
Convertible Securities or Options (or a combination thereof)
involving a Variable Rate Transaction. As used herein,
"Variable Rate Transaction"
means a transaction in which the Company or any of its Subsidiaries
(i) issues or sells any debt or equity security that are
convertible into, exchangeable or exercisable for, or include the
right to receive additional shares of Common Stock either (A) at a
conversion price, exercise price or exchange rate or other price
that is based upon and/or varies with the trading prices of or
quotations for the shares of Common Stock at any time after the
initial issuance of such debt or equity securities., or (B) with a
conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt
or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock or (ii) enters into
any agreement, including, but not limited to an equity line of
credit or at-the-market offering, whereby the Company or any of its
Subsidiaries may issue securities at a future determined price. For
the avoidance of doubt, the issuance of a Common Stock Equivalent
with a fixed exercise or conversion price with a standard price
only full ratchet or weighted average anti-dilution provision shall
not be considered to be a Variable Rate Transaction.

 

13. DISPUTE RESOLUTION. In the case
of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall
submit the disputed determinations or arithmetic calculations via
facsimile or electronic mail within two (2) Business Days of
receipt of the Exercise Notice or other event giving rise to such
dispute, as the case may be, to the Holder. If the Holder and the
Company are unable to agree upon such determination or calculation
of the Exercise Price or the Warrant Shares within three (3)
Business Days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall,
within two (2) Business Days submit via facsimile or electronic
mail (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and
approved by the Holder or (b) the disputed arithmetic calculation
of the Warrant Shares to the Company's independent, outside
accountant. The Company shall cause at its expense the investment
bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the
Holder of the results no later than ten (10) Business Days from the
time it receives the disputed determinations or calculations. Such
investment bank's or accountant's determination or calculation, as
the case may be, shall be binding upon all parties absent
demonstrable error.

 

14. REMEDIES, OTHER OBLIGATIONS, BREACHES
AND INJUNCTIVE RELIEF. The remedies provided in this Warrant
shall be cumulative and in addition to all other remedies available
under this Warrant and any other Transaction Documents, at law or
in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the
Holder to pursue actual damages for any failure by the Company to
comply with the terms of this Warrant. The Company acknowledges
that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any
such breach may be inadequate. The Company therefore agrees that,
in the event of any such breach or threatened breach, the holder of
this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other
security being required.

 

15. TRANSFER.                           This
Warrant and the Warrant Shares may be offered for sale, sold,
transferred, pledged or assigned without the consent of the
Company.

 

16. SEVERABILITY; CONSTRUCTION;
HEADINGS.    If any provision of this Warrant
is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be
valid and enforceable, and the invalidity or unenforceability of
such provision shall not affect the validity of the remaining
provisions of this Warrant so long as this Warrant as so modified
continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the
respective expectations or reciprocal obligations of the parties or
the practical realization of the benefits that would otherwise be
conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or
unenforceable provision(s). This Warrant shall be deemed to be
jointly drafted by the Company and the Holder and shall not be
construed against any Person as the drafter hereof. The headings of
this Warrant are for convenience of reference and shall not form
part of, or affect the interpretation of, this
Warrant.

 

 

-12-

 

 

17. DISCLOSURE. Upon receipt or
delivery by the Company of any notice in accordance with the terms
of this Warrant, unless the Company has in good faith determined
that the matters relating to such notice do not constitute
material, nonpublic information relating to the Company or its
subsidiaries, the Company shall contemporaneously with any such
receipt or delivery publicly disclose such material, nonpublic
information on a Current Report on Form 8-K or otherwise. In the
event that the Company believes that a notice contains material,
nonpublic information relating to the Company or its subsidiaries,
the Company so shall indicate to such Holder contemporaneously with
delivery of such notice, and in the absence of any such indication,
the Holder shall be allowed to presume that all matters relating to
such notice do not constitute material, nonpublic information
relating to the Company or its subsidiaries.

 

18. CERTAIN DEFINITIONS. For
purposes of this Warrant, the following terms shall have the
following meanings:

 

(a) "Affiliate" means, with respect to any
Person, any other Person that directly or indirectly controls, is
controlled by, or is under common control with, such Person, it
being understood for purposes of this definition that "control" of
a Person means the power directly or indirectly either to vote 10%
or more of the stock having ordinary voting power for the election
of directors of such Person or direct or cause the direction of the
management and policies of such Person whether by contract or
otherwise.

 

(b) "Approved Stock Plan" means the
Company’s 2016 Amended and Restated Stock Incentive Plan and
any employee benefit plan which has been approved by a majority of
the disinterested members of the Board of Directors of the Company,
in each case pursuant to which the Company’s securities may
be issued to any employee, officer or director for services
provided to the Company.

 

(c) "Attribution Parties" means,
collectively, the following Persons and entities: (i) any
investment vehicle, including, any funds, feeder funds or managed
accounts, currently, or from time to time after the Subscription
Date, directly or indirectly managed or advised by the Holder's
investment manager or any of its Affiliates or principals, (ii) any
direct or indirect Affiliates of the Holder or any of the
foregoing, (iii) any Person acting or who could be deemed to be
acting as a Group together with the Holder or any of the foregoing
and (iv) any other Persons whose beneficial ownership of the
Company's Common Stock would or could be aggregated with the
Holder's and the other Attribution Parties for purposes of Section
13(d) of the 1934 Act. For clarity, the purpose of the foregoing is
to subject collectively the Holder and all other Attribution
Parties to the Maximum Percentage.

 

(d)  “Bid
Price” means, for any security as of the particular
time of determination, the bid price for such security on the
Principal Market as reported by Bloomberg as of such time of
determination, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the bid
price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported
by Bloomberg as of such time of determination, or if the foregoing
does not apply, the bid price of such security in the
over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg as of such time of determination,
or, if no bid price is reported for such security by Bloomberg as
of such time of determination, the average of the bid prices of any
market makers for such security as reported in the “pink
sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC)
as of such time of determination. If the Bid Price cannot be
calculated for a security as of the particular time of
determination on any of the foregoing bases, the Bid Price of such
security as of such time of determination shall be the fair market
value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market
value of such security, then such dispute shall be resolved in
accordance with the procedures in Section 11. All such
determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar
transaction during such period.

 

 

-13-

 

 

(e) "Black Scholes Value" means the value of
this Warrant based on the Black-Scholes Option Pricing Model
obtained from the "OV" function on Bloomberg determined as of the
day immediately following the first public announcement of the
applicable Fundamental Transaction, or, if the Fundamental
Transaction is not publicly announced, the date the Fundamental
Transaction is consummated, for pricing purposes and reflecting (i)
a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the remaining term of this Warrant as of such
date of request, (ii) an expected volatility equal to the greater
of 100% and the 100-day volatility obtained from the HVT function
on Bloomberg as of the day immediately following the public
announcement of the applicable Fundamental Transaction, or, if the
Fundamental Transaction is not publicly announced, the date the
Fundamental Transaction is consummated, (iii) the underlying price
per share used in such calculation shall be the highest Weighted
Average Price during the five (5) Trading Days prior to the closing
of the Fundamental Transaction, (iv) a zero cost of borrow and (v)
a 360 day annualization factor.

 

(f) "Bloomberg" means Bloomberg Financial
Markets.

 

(g) "Business Day" means any day other than
Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain
closed.

 

(h) “Change of Control” means any
Fundamental Transaction other than (i) any reorganization,
recapitalization or reclassification of the Common Stock in which
holders of the Company’s voting power immediately prior to
such reorganization, recapitalization or reclassification continue
after such reorganization, recapitalization or reclassification to
hold publicly traded securities and, directly or indirectly, are,
in all material respect, the holders of the voting power of the
surviving entity (or entities with the authority or voting power to
elect the members of the board of directors (or their equivalent if
other than a corporation) of such entity or entities) after such
reorganization, recapitalization or reclassification, (ii) pursuant
to a migratory merger effected solely for the purpose of changing
the jurisdiction of incorporation of the Company or (iii) a merger
in connection with a bona fide acquisition by the Company of any
Person in which (x) the gross consideration paid, directly or
indirectly, by the Company in such acquisition is not greater than
20% of the Company’s market capitalization as calculated on
the date of the consummation of such merger and (y) such merger
does not contemplate a change to the identity of a majority of the
board of directors of the Company. Notwithstanding anything herein
to the contrary, any transaction or series of transaction that,
directly or indirectly, results in the Company or the Successor
Entity not having Common Stock or common stock, as applicable,
registered under the 1934 Act and listed on an Eligible Market
shall be deemed a Change of Control.

 

(i) "Closing Bid Price" and "Closing Sale Price" means, for any
security as of any date, the last closing bid price and last
closing trade price, respectively, for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not
designate the closing bid price or the closing trade price, as the
case may be, then the last bid price or the last trade price,
respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not
the principal securities exchange or trading market for such
security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no closing
bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask
prices, respectively, of any market makers for such security as
reported in the OTC Link or "pink sheets" by OTC Markets Group Inc.
(formerly Pink OTC Markets Inc.). If the Closing Bid Price or the
Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such
security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the
Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section
11. All such determinations to be appropriately adjusted for any
stock dividend, stock split, stock combination, reclassification or
other similar transaction during the applicable calculation
period.

 

(j) "Common Stock" means (i) the
Company's Common Stock, par value $0.001 per share, and
(ii) any capital stock into which such Common Stock shall have
been changed or any capital stock resulting from a reclassification
of such Common Stock.

 

 

-14-

 

 

(k) "Convertible Securities" means any stock
or securities (other than Options) directly or indirectly
convertible into or exercisable or exchangeable for shares of
Common Stock.

 

(l) "Eligible Market" means The NASDAQ
Capital Market, the NYSE American LLC, The NASDAQ Global Select
Market, The NASDAQ Global Market or The New York Stock Exchange,
Inc.

 

(m)  "Excluded Securities" means any shares of
Common Stock issued or issuable, or deemed issued or issuable
pursuant to Section 2(a): (i) in connection with any Approved Stock
Plan, (ii) upon exercise of the Warrants; provided, that the terms
of such Warrants are not amended, modified or changed on or after
the Subscription Date, (iii) upon conversion, exercise or exchange
of any Options or Convertible Securities which are outstanding on
the day immediately preceding the Subscription Date.; provided, that the terms
of such Options or Convertible Securities are not amended, modified
or changed on or after the Subscription Date and (iv) issued as
payment of regular dividends pursuant to the terms of the
Company’s Series B Preferred Stock;  provided, that the
terms of the Series B Preferred Stock are not amended, modified or
changed on or after the Subscription Date.

 

(n) "Expiration Date" means the date
[sixty
(60)] months
after the Initial Exercisability Date or, if such date falls on a day other
than a Business Day or on which trading does not take place on the
Principal Market (a "Holiday"), the next day that is not a
Holiday.

 

(o) "Fundamental Transaction" means (A) that
the Company shall, directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related
transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Subject Entity,
or (ii) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company or
any of its "significant subsidiaries" (as defined in Rule 1-02 of
Regulation S-X) to one or more Subject Entities, or (iii) make, or
allow one or more Subject Entities to make, or allow the Company to
be subject to or have its shares of Common Stock be subject to or
party to one or more Subject Entities making, a purchase, tender or
exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the
outstanding shares of Common Stock calculated as if any shares of
Common Stock held by all Subject Entities making or party to, or
Affiliated with any Subject Entities making or party to, such
purchase, tender or exchange offer were not outstanding; or (z)
such number of shares of Common Stock such that all Subject
Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become
collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common
Stock, or (iv) consummate a stock purchase agreement or other
business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with one or more Subject Entities whereby all such
Subject Entities, individually or in the aggregate, acquire, either
(x) at least 50% of the outstanding shares of Common Stock, (y) at
least 50% of the outstanding shares of Common Stock calculated as
if any shares of Common Stock held by all the Subject Entities
making or party to, or Affiliated with any Subject Entity making or
party to, such stock purchase agreement or other business
combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the
beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of
at least 50% of the outstanding shares of Common Stock, or (v)
reorganize, recapitalize or reclassify its shares of Common Stock.,
(B) that the Company shall, directly or indirectly, including
through subsidiaries, Affiliates or otherwise, in one or more
related transactions, allow any Subject Entity individually or the
Subject Entities in the aggregate to be or become the "beneficial
owner" (as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in
outstanding shares of Common Stock, merger, consolidation, business
combination, reorganization, recapitalization, spin-off, scheme of
arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50%
of the aggregate ordinary voting power represented by issued and
outstanding shares of Common Stock, (y) at least 50% of the
aggregate ordinary voting power represented by issued and
outstanding shares of Common Stock not held by all such Subject
Entities as of the Subscription Date calculated as if any shares of
Common Stock held by all such Subject Entities were not
outstanding, or (z) a percentage of the aggregate ordinary voting
power represented by issued and outstanding shares of Common Stock
or other equity securities of the Company sufficient to allow such
Subject Entities to effect a

 

 

-15-

 

 

statutory short
form merger or other transaction requiring other stockholders of
the Company to surrender their Common Stock without approval of the
stockholders of the Company or (C) directly or indirectly,
including through subsidiaries, Affiliates or otherwise, in one or
more related transactions, the issuance of or the entering into any
other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in
which case this definition shall be construed and implemented in a
manner otherwise than in strict conformity with the terms of this
definition to the extent necessary to correct this definition or
any portion of this definition which may be defective or
inconsistent with the intended treatment of such instrument or
transaction.

 

(p) "Group" means a "group" as that term is
used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.

 

(q) "Option Value" means the value of an
Option based on the Black-Scholes Option Pricing model obtained
from the "OV" function on Bloomberg determined as of the day of the
most recent Closing Sale Price of the Common Stock prior to the
public announcement of the pricing of the applicable Option (or, if
the pricing is not publicly announced, on the most recent Closing
Sale Price of the Common Stock prior to the pricing of the
applicable Option) and reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the
remaining term of the applicable Option as of the applicable date
of determination, (ii) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function
on Bloomberg as of (A) the Trading Day immediately following the
first public announcement of the pricing of the transaction that
includes the applicable Option if such pricing is publicly
announced or (B) the Trading Day immediately following the issuance
of the applicable Option if the pricing of such transaction is not
publicly announced, (iii) an underlying price per share equal to
the most recent Closing Sale Price of the Common Stock prior to the
public announcement of the pricing of the applicable Option (or, if
the pricing is not publicly announced, on the most recent Closing
Sale Price of the Common Stock prior to the pricing of the
applicable Option), (iv) a zero cost of borrow and (v) a 360-day
annualization factor.

 

(r) "Options" means any rights, warrants or
options to subscribe for or purchase shares of Common Stock or
Convertible Securities.

 

(s) "Parent Entity" of a Person means an
entity that, directly or indirectly, controls the applicable
Person, including such entity whose common stock or equivalent
equity security is quoted or listed on an Eligible Market (or, if
so elected by the Holder, any other market, exchange or quotation
system), or, if there is more than one such Person or such entity,
the Person or such entity designated by the Holder or in the
absence of such designation, such Person or entity with the largest
public market capitalization as of the date of consummation of the
Fundamental Transaction.

 

(t) "Person" means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a
government or any department or agency thereof.

 

(u) "Principal Market" means The NASDAQ
Capital Market.

 

(v) "Required Holders" means the holders of
the Warrants representing at least a majority of the shares of
Common Stock underlying the Warrants then outstanding.

 

(w) “Standard Settlement Period”
means the standard settlement period, expressed in a number of
Trading Days, for the Company’s primary trading market or
quotation system with respect to the Common Stock that is in effect
on the date of receipt of an applicable Conversion
Notice.

 

(x) "Subject Entity" means any Person,
Persons or Group or any Affiliate or associate of any such Person,
Persons or Group.

 

 

-16-

 

 

(y) "Successor Entity" means one or more
Person or Persons (or, if so elected by the Holder, the Company or
Parent Entity) formed by, resulting from or surviving any
Fundamental Transaction or one or more Person or Persons (or, if so
elected by the Holder, the Company or the Parent Entity) with which
such Fundamental Transaction shall have been entered
into.

 

(z) "Trading Day" means any day on which the
Common Stock is traded on the Principal Market, or, if the
Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities
market on which the Common Stock is then traded.

 

(aa) “Transaction
Documents” means any agreement entered into by and
between the Company and the Holder, as applicable.

 

(bb) "Weighted
Average Price" means, for any security as of any date, the
dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New
York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00
p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported
by Bloomberg through its "Volume at Price" function or, if the
foregoing does not apply, the dollar volume-weighted average price
of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at
9:30:01 a.m., New York time (or such other time as such market
publicly announces is the official open of trading), and ending at
4:00:00 p.m., New York time (or such other time as such market
publicly announces is the official close of trading), as reported
by Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average
of the highest Closing Bid Price and the lowest closing ask price
of any of the market makers for such security as reported in the
OTC Link or "pink sheets" by OTC Markets Group Inc. (formerly Pink
OTC Markets Inc.). If the Weighted Average Price cannot be
calculated for a security on a particular date on any of the
foregoing bases, the Weighted Average Price of such security on
such date shall be the fair market value as mutually determined by
the Company and the Holder. If the Company and the Holder are
unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 11 with the term
"Weighted Average Price" being substituted for the term "Exercise
Price." All such determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination,
reclassification or other similar transaction during the applicable
calculation period.

 

[Signature Page Follows]

-17-

 

 

IN WITNESS WHEREOF, the Company has
caused this Warrant to Purchase Common Stock to be duly executed as
of the Issuance Date set out above.

 

 

VISTAGEN
THERAPEUTICS, INC.

 

 

By:___________________________

Name:

Title:

 

 

-18-

 

  EXHIBIT A

 

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS

WARRANT TO PURCHASE COMMON STOCK

 

VISTAGEN THERAPEUTICS, INC.

The
undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("Warrant Shares") of VistaGen
Therapeutics, Inc., a company organized under the laws of Nevada
(the "Company"), evidenced
by the attached Warrant to Purchase Common Stock (the "Warrant"). Capitalized terms used herein
and not otherwise defined shall have the respective meanings set
forth in the Warrant.

 

1. Form
of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:

 

____________ 

a "Cash Exercise" with respect to
_________________ Warrant Shares; and/or

 

____________ 

a "Cashless Exercise" with
respect to _______________ Warrant Shares.

 

2.
Payment of Exercise Price. In the event that the holder has elected
a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the Aggregate
Exercise Price in the sum of $___________________ to the Company in
accordance with the terms of the Warrant.

 

3.
Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the
Warrant.

 

4.
Variable Price Securities. By checking the box in this Item 4, the
holder elects to exercise the Warrant by substituting the Variable
Price for the Exercise Price pursuant to Section 2(d) of the
Warrant, which Variable Price equals $___________ per share.
☐

 

 

 

 

Date:
_______________ __, ______

 

 

 

   Name
of Registered Holder

 

 

By:           

Name:

Title:

 

 

 

-19-

 

ACKNOWLEDGMENT

 

 

The
Company hereby acknowledges this Exercise Notice and hereby directs
[TRANSFER AGENT] to issue the above indicated number of shares of
Common Stock on or prior to the applicable Share Delivery
Date.

 

VISTAGEN
THERAPEUTICS, INC.

 

 

 

By:________________________________

Name:

Title:

 

 

 

 

 

-20-

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