Document:

Exhibit 4.1

 

Form of Warrant Issued to

Western States Investment Corporation

for Lease Guaranty

 

Warrant Related To Common Stock and Warrant Purchase Agreement, Lpath
Therapeutics Inc., June 2005

 

 

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

	
  Warrant
  No. 23

  	
   

  	
  Number of
  Shares: 588,000

  
	
  Date of
  Issuance: September 6, 2005 (the “Issue Date”)

  	
   

  	
  (subject to adjustment

  
	
   

  	
   

  	
  pursuant to Section 2)

  

 

LPATH THERAPEUTICS INC.

 

Common Stock Purchase Warrant

 

Lpath Therapeutics Inc., a Delaware corporation (the “Company”), for value
received, hereby certifies that Western States Investment Corporation, or its
registered assigns (the “Registered
Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at any time after the date hereof and on or before
the Expiration Date (as defined in Section 5 below), up to 588,000 shares
of Common Stock of the Company, at a purchase price of $0.80 per share (each as
adjusted from time to time pursuant to the provisions of this Warrant).  The shares purchasable upon exercise of this
Warrant and the purchase price per share, as adjusted from time to time
pursuant to the provisions of this Warrant, are sometimes hereinafter referred
to as the “Warrant Stock”
and the “Purchase Price,”
respectively.

 

This Warrant is one of a series of warrants issued
pursuant to a Common Stock and Warrant Purchase Agreement dated June 30,
2005 between the Company and each of
the Buyers (as defined therein) (the “Purchase Agreement”) and is subject to
the terms and conditions of the Purchase Agreement.

 

1.             Exercise.

 

(a)           Manner of Exercise.  This Warrant may be exercised by the
Registered Holder, in whole or in part, by surrendering this Warrant, with the
purchase/exercise form appended hereto as Exhibit A duly executed
by such Registered Holder or by such Registered Holder’s duly authorized
attorney, at the principal office of the Company, or at such other office or
agency as the Company may designate, accompanied by payment in full of the
aggregate Purchase Price payable in respect of the number of shares of Warrant
Stock purchased upon such exercise.  The
Purchase Price may be paid by cash, check or wire transfer to a bank account
designated by the Company.

 

(b)           Effective Time of Exercise.  Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
day on which this 

 

2

 

Warrant shall have been surrendered to the Company as provided in Section 1(a) above.  At such time, the person or persons in whose
name or names any certificates for Warrant Stock shall be issuable upon such
exercise as provided in Section 1(d) below shall be deemed to have
become the holder or holders of record of the Warrant Stock represented by such
certificates.

 

(d)           Delivery to Holder.  As soon as practicable after the exercise
of this Warrant in whole or in part, and in any event within ten (10) days
thereafter, the Company at its expense will cause to be issued in the name of,
and delivered to, the Registered Holder, or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct:

 

(i)            a
certificate or certificates for the number of shares of Warrant Stock to which
such Registered Holder shall be entitled, and

 

(ii)           in
case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, calling in the aggregate on the face or faces thereof
for the number of shares of Warrant Stock equal (without giving effect to any
adjustment therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares purchased by the Registered Holder upon
such exercise as provided in Section 1(a) above.

 

2.             Adjustments.

 

(a)           Stock Splits and Dividends.  If outstanding shares of the Company’s Common
Stock shall be subdivided into a greater number of shares or a dividend in
Common Stock shall be paid in respect of Common Stock, the Purchase Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately
reduced.  If outstanding shares of Common
Stock shall be combined into a smaller number of shares, the Purchase Price in
effect immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased.  When any adjustment is required to be made in
the Purchase Price, the number of shares of Warrant Stock purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing (i) an
amount equal to the number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Purchase Price in
effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.

 

(b)           Reclassification, Etc.  In case of any reclassification or change
of the outstanding securities of the Company or of any reorganization of the
Company (or any other corporation the stock or securities of which are at the time
receivable upon the exercise of this Warrant) or any similar corporate
reorganization on or after the date hereof, then and in each such case the
holder of this Warrant, upon the exercise hereof at any time after the
consummation of such reclassification, change, reorganization, merger or
conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities or property to which such holder
would have been entitled upon such consummation if such holder had exercised
this Warrant immediately prior thereto, all subject to further adjustment as
provided in Section 2(a); and in 

 

3

 

each such case, the terms of this Section 2 shall be applicable to
the shares of stock or other securities properly receivable upon the exercise
of this Warrant after such consummation.

 

(c)           Adjustment Certificate.  When any adjustment is required to be
made in the Warrant Stock or the Purchase Price pursuant to this Section 2,
the Company shall promptly mail to the Registered Holder a certificate setting
forth (i) a brief statement of the facts requiring such adjustment, (ii) the
Purchase Price after such adjustment and (iii) the kind and amount of
stock or other securities or property into which this Warrant shall be
exercisable after such adjustment.

 

3.             Transfers.

 

(a)           Unregistered Security.  Each holder of this Warrant acknowledges that
this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), and agrees
not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose
of this Warrant or any Warrant Stock issued upon its exercise in the absence of
(i) an effective registration statement under the Securities Act as to
this Warrant or such Warrant Stock and registration or qualification of this
Warrant or such Warrant Stock under any applicable U.S. federal or state
securities law then in effect or (ii) an opinion of counsel, satisfactory
to the Company, that such registration and qualification are not required.  Each certificate or other instrument for
Warrant Stock issued upon the exercise of this Warrant shall bear a legend
substantially to the foregoing effect.

 

(b)           Transferability.  Subject to the provisions of Section 3(a) hereof
and the Purchase Agreement, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of the Warrant with a
properly executed assignment (in the form of Exhibit B hereto) at
the principal office of the Company.

 

(c)           Warrant Register.   The Company will maintain a register
containing the names and addresses of the Registered Holders of this
Warrant.  Until any transfer of this
Warrant is made in the warrant register, the Company may treat the Registered
Holder of this Warrant as the absolute owner hereof for all purposes; provided,
however, that if this Warrant is properly assigned in blank, the Company
may (but shall not be required to) treat the bearer hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the contrary.  Any Registered Holder may change such
Registered Holder’s address as shown on the warrant register by written notice
to the Company requesting such change.

 

4.             No Impairment.  The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will (subject to Section 13 below) at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.

 

5.             Termination.  This Warrant (and the right to purchase
securities upon exercise hereof) shall terminate upon the earliest to occur of
the following (the “Expiration
Date”): (a)

 

4

 

May 31, 2007 or (b) the
sale, conveyance or disposal of all or substantially all of the Company’s
property or business or the Company’s merger with or into or consolidation with
any other corporation (other than a wholly-owned subsidiary of the Company) or
any other transaction or series of related transactions in which more than
fifty percent (50%) of the voting power of the Company is disposed of, provided
that this Section 5(b) shall not apply to a merger effected
exclusively for the purpose of changing the domicile of the Company or to an
equity financing in which the Company is the surviving corporation.

 

6.             Notices of Certain
Transactions.  In case:

 

(a)           the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time deliverable upon the exercise of this Warrant) for
the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares
of stock of any class or any other securities, or to receive any other right,
to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

 

(b)           of any
capital reorganization of the Company, any reclassification of the capital
stock of the Company, any consolidation or merger of the Company, any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the surviving entity),
or any transfer of all or substantially all of the assets of the Company, or

 

(c)           of the
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i) the
date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be
fixed, as of which the holders of record of Common Stock (or such other stock
or securities at the time deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up) are to be determined.  Such
notice shall be mailed at least ten (10) days prior to the record date or
effective date for the event specified in such notice.

 

7.             Reservation of Stock.  The Company will at all times reserve and
keep available, solely for the issuance and delivery upon the exercise of this
Warrant, such shares of Warrant Stock and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.

 

8.             Exchange of
Warrants.  Upon the surrender by
the Registered Holder of any Warrant or Warrants, properly endorsed, to the
Company at the principal office of the Company, the Company will, subject to
the provisions of Section 3 hereof, issue and deliver to or upon the order
of such Holder, at the Company’s expense, a new Warrant or Warrants of like
tenor, in the 

 

5

 

name of such Registered Holder or as such Registered Holder (upon
payment by such Registered Holder of any applicable transfer taxes) may direct,
calling in the aggregate on the face or faces thereof for the number of shares
of Common Stock called for on the face or faces of the Warrant or Warrants so
surrendered.

 

9.             Replacement of
Warrants.  Upon receipt 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)
upon delivery of an indemnity agreement (with surety if reasonably required) in
an amount reasonably satisfactory to the Company, or (in the case of
mutilation) upon surrender and cancellation of this Warrant, the Company will
issue, in lieu thereof, a new Warrant of like tenor.

 

10.           Notices.  Any notice required or permitted by this
Warrant shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by courier, overnight delivery service or confirmed
facsimile, or forty-eight (48) hours after being deposited in the regular mail
as certified or registered mail (airmail if sent internationally) with postage
prepaid, addressed (a) if to the Registered Holder, to the address of the
Registered Holder most recently furnished in writing to the Company and (b) if
to the Company, to the address set forth below or subsequently modified by
written notice to the Registered Holder.

 

11.           No Rights as
Stockholder.  Until the exercise
of this Warrant, the Registered Holder of this Warrant shall not have or
exercise any rights by virtue hereof as a stockholder of the Company.

 

12.           No Fractional Shares.  No fractional shares of Common Stock will be
issued in connection with any exercise hereunder.  In lieu of any fractional shares which would
otherwise be issuable, the Company shall pay cash equal to the product of such
fraction multiplied by the fair market value of one share of Common Stock on
the date of exercise, as determined in good faith by the Company’s Board of
Directors.

 

13.           Amendment or Waiver.  Any term of this Warrant may be amended
or waived as set forth in Section 5.2 of the Purchase Agreement.  By acceptance hereof, the Registered Holder
acknowledges that in the event the required consent is obtained, any term of this
Warrant may be amended or waived with or without the consent of the Registered
Holder; provided, however, that any amendment hereof that would
materially adversely affect the Registered Holder in a manner different from
the holders of the remaining warrants issued pursuant to the Purchase Agreement
shall also require the consent of Registered Holder.

 

14.           Headings.  The headings in this Warrant are for purposes
of reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.

 

6

 

15.           Governing Law.
This Warrant shall be governed, construed and interpreted in accordance with
the laws of the State of California, without giving effect to principles of
conflicts of law.

 

 

	
   

  	
  LPATH THERAPEUTICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Scott
  Pancoast, President

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  6335 Ferris Square, Suite A

  
	
   

  	
   

  	
  San Diego, CA 92121

  
					

 

7

 

EXHIBIT A

 

PURCHASE/EXERCISE FORM

 

	
  To:

  	
  Lpath
  Therapeutics Inc.

  	
  Dated:

  	
   

  	
   

  

 

The undersigned,
pursuant to the provisions set forth in the attached Warrant No.       ,
hereby irrevocably elects to (a) purchase                    shares
of the Common Stock covered by such Warrant and herewith makes payment of $                   ,
representing the full purchase price for such shares at the price per share
provided for in such Warrant, or (b) exercise such Warrant for                    shares
purchasable under the Warrant pursuant to the Net Issue Exercise provisions of Section 1(c) of
such Warrant.

 

The undersigned acknowledges that it has reviewed the
representations and warranties contained in Section 2.2 of the Purchase Agreement (as defined in the
Warrant) and by its signature below hereby makes such representations and
warranties to the Company. Defined terms contained in such representations and
warranties shall have the meanings assigned to them in the Purchase Agreement, provided
that the term “Buyer” shall refer to the undersigned and the term “Securities”
shall refer to the Warrant Stock.

 

The undersigned further acknowledges that it has
reviewed the market standoff provisions set forth in Section 2.2(k) of the Purchase Agreement and agrees to be
bound by such provisions.

 

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name (print):

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title (if applic.)

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Company (if applic.):

  	
   

  	
   

  
							

 

 

EXHIBIT B

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED,                                                                                   
hereby sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant with respect to the number of shares of Common Stock covered
thereby set forth below, to:

 

	
  Name of Assignee

  	
   

  	
  Address/Fax Number

  	
   

  	
  No. of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Witness:Exhibit 4.2

 

Form of Warrant Issued to

Investors Pursuant to the

Common Stock and Warrant Purchase
Agreement

dated June 30, 2005.

 

Warrant Related To Common Stock and Warrant
Purchase Agreement, Lpath Therapeutics, Inc., June 2005

 

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

	
  Warrant
  No. 20

  	
  Number of
  Shares:             

  
	
  Date of
  Issuance: August     , 2005

  	
  (subject to adjustment

  
	
   

  	
  pursuant to Section 2)

  

 

LPATH THERAPEUTICS, INC.

 

Common Stock Purchase Warrant

 

Lpath Therapeutics, Inc., a Delaware corporation
(the “Company”),
for value received, hereby certifies that                                 
or its registered assigns (the “Registered Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company, at any time after the date
hereof and on or before the Expiration Date (as defined in Section 5
below), up to                 
shares of Common Stock of the Company, at a purchase price of $0.60 per share
(each as adjusted from time to time pursuant to the provisions of this
Warrant).  The shares purchasable upon
exercise of this Warrant and the purchase price per share, as adjusted from
time to time pursuant to the provisions of this Warrant, are sometimes
hereinafter referred to as the “Warrant Stock” and the “Purchase Price,” respectively.

 

This Warrant is one of a series of warrants issued
pursuant to a Common Stock and Warrant Purchase Agreement dated June 30,
2005 between the Company and each of
the Buyers (as defined therein) (the “Purchase Agreement”) and is subject to
the terms and conditions of the Purchase Agreement.

 

1.             Exercise.

 

(a)           Manner of Exercise.  This Warrant may be exercised by the
Registered Holder, in whole or in part, by surrendering this Warrant, with the
purchase/exercise form appended hereto as Exhibit A duly executed
by such Registered Holder or by such Registered Holder’s duly authorized attorney,
at the principal office of the Company, or at such other office or agency as
the Company may designate, accompanied by payment in full of the aggregate
Purchase Price payable in respect of the number of shares of Warrant Stock
purchased upon such exercise.  The
Purchase Price may be paid by cash, check or wire transfer to a bank account
designated by the Company.

 

(b)           Effective Time of Exercise.  Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
day on which this 

 

2

 

Warrant shall have been surrendered to the Company as provided in Section 1(a) above.  At such time, the person or persons in whose
name or names any certificates for Warrant Stock shall be issuable upon such
exercise as provided in Section 1(d) below shall be deemed to have
become the holder or holders of record of the Warrant Stock represented by such
certificates.

 

(d)           Delivery to Holder.  As soon as practicable after the exercise
of this Warrant in whole or in part, and in any event within ten (10) days
thereafter, the Company at its expense will cause to be issued in the name of,
and delivered to, the Registered Holder, or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct:

 

(i)            a certificate or certificates for
the number of shares of Warrant Stock to which such Registered Holder shall be
entitled, and

 

(ii)           in case such exercise is in part
only, a new warrant or warrants (dated the date hereof) of like tenor, calling
in the aggregate on the face or faces thereof for the number of shares of
Warrant Stock equal (without giving effect to any adjustment therein) to the
number of such shares called for on the face of this Warrant minus the number
of such shares purchased by the Registered Holder upon such exercise as
provided in Section 1(a) above.

 

2.             Adjustments.

 

(a)           Stock Splits and Dividends.  If outstanding shares of the Company’s Common
Stock shall be subdivided into a greater number of shares or a dividend in
Common Stock shall be paid in respect of Common Stock, the Purchase Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately
reduced.  If outstanding shares of Common
Stock shall be combined into a smaller number of shares, the Purchase Price in
effect immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased.  When any adjustment is required to be made in
the Purchase Price, the number of shares of Warrant Stock purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing (i) an
amount equal to the number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Purchase Price in
effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.

 

(b)           Reclassification, Etc.  In case of any reclassification or change
of the outstanding securities of the Company or of any reorganization of the
Company (or any other corporation the stock or securities of which are at the
time receivable upon the exercise of this Warrant) or any similar corporate
reorganization on or after the date hereof, then and in each such case the
holder of this Warrant, upon the exercise hereof at any time after the
consummation of such reclassification, change, reorganization, merger or
conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities or property to which such holder
would have been entitled upon such consummation if such holder had exercised
this Warrant immediately prior thereto, all subject to further adjustment as
provided in Section 2(a); and in 

 

3

 

each such case, the terms of this Section 2 shall be applicable to
the shares of stock or other securities properly receivable upon the exercise
of this Warrant after such consummation.

 

(c)           Adjustment Certificate.  When any adjustment is required to be
made in the Warrant Stock or the Purchase Price pursuant to this Section 2,
the Company shall promptly mail to the Registered Holder a certificate setting
forth (i) a brief statement of the facts requiring such adjustment, (ii) the
Purchase Price after such adjustment and (iii) the kind and amount of
stock or other securities or property into which this Warrant shall be
exercisable after such adjustment.

 

3.             Transfers.

 

(a)           Unregistered Security.  Each holder of this Warrant acknowledges that
this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), and agrees
not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose
of this Warrant or any Warrant Stock issued upon its exercise in the absence of
(i) an effective registration statement under the Securities Act as to
this Warrant or such Warrant Stock and registration or qualification of this
Warrant or such Warrant Stock under any applicable U.S. federal or state
securities law then in effect or (ii) an opinion of counsel, satisfactory
to the Company, that such registration and qualification are not required.  Each certificate or other instrument for
Warrant Stock issued upon the exercise of this Warrant shall bear a legend
substantially to the foregoing effect.

 

(b)           Transferability.  Subject to the provisions of Section 3(a) hereof
and the Purchase Agreement, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of the Warrant with a
properly executed assignment (in the form of Exhibit B hereto) at
the principal office of the Company.

 

(c)           Warrant Register.   The Company will maintain a register
containing the names and addresses of the Registered Holders of this
Warrant.  Until any transfer of this
Warrant is made in the warrant register, the Company may treat the Registered
Holder of this Warrant as the absolute owner hereof for all purposes; provided,
however, that if this Warrant is properly assigned in blank, the Company
may (but shall not be required to) treat the bearer hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the contrary.  Any Registered Holder may change such
Registered Holder’s address as shown on the warrant register by written notice
to the Company requesting such change.

 

4.             No Impairment.  The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will (subject to Section 13 below) at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.

 

5.             Termination.  This Warrant (and the right to purchase
securities upon exercise hereof) shall terminate upon the earliest to occur of
the following (the “Expiration
Date”): (a)

 

4

 

August 25, 2007 or (b) the
sale, conveyance or disposal of all or substantially all of the Company’s
property or business or the Company’s merger with or into or consolidation with
any other corporation (other than a wholly-owned subsidiary of the Company) or
any other transaction or series of related transactions in which more than
fifty percent (50%) of the voting power of the Company is disposed of, provided
that this Section 5(b) shall not apply to a merger effected
exclusively for the purpose of changing the domicile of the Company or to an
equity financing in which the Company is the surviving corporation.

 

6.             Notices of Certain Transactions.  In case:

 

(a)           the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time deliverable upon the exercise of this Warrant) for
the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares
of stock of any class or any other securities, or to receive any other right,
to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

 

(b)           of
any capital reorganization of the Company, any reclassification of the capital
stock of the Company, any consolidation or merger of the Company, any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the surviving entity),
or any transfer of all or substantially all of the assets of the Company, or

 

(c)           of
the voluntary or involuntary dissolution, liquidation or winding-up of the
Company,

 

then, and in each such
case, the Company will mail or cause to be mailed to the Registered Holder of
this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or right,
or (ii) the effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time
deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up) are to be determined.  Such notice shall be mailed at least ten (10) days
prior to the record date or effective date for the event specified in such
notice.

 

7.             Reservation of Stock.  The Company will at all times reserve and
keep available, solely for the issuance and delivery upon the exercise of this
Warrant, such shares of Warrant Stock and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.

 

8.             Exchange of Warrants.  Upon the surrender by the Registered Holder
of any Warrant or Warrants, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 3
hereof, issue and deliver to or upon the order of such Holder, at the Company’s
expense, a new Warrant or Warrants of like tenor, in the 

 

5

 

name of such Registered Holder or as such Registered Holder (upon
payment by such Registered Holder of any applicable transfer taxes) may direct,
calling in the aggregate on the face or faces thereof for the number of shares
of Common Stock called for on the face or faces of the Warrant or Warrants so
surrendered.

 

9.             Replacement of Warrants.  Upon receipt 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) upon delivery of
an indemnity agreement (with surety if reasonably required) in an amount
reasonably satisfactory to the Company, or (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will issue, in lieu
thereof, a new Warrant of like tenor.

 

10.           Notices. 
Any notice required or permitted by this Warrant shall be in writing and
shall be deemed sufficient upon receipt, when delivered personally or by
courier, overnight delivery service or confirmed facsimile, or forty-eight (48)
hours after being deposited in the regular mail as certified or registered mail
(airmail if sent internationally) with postage prepaid, addressed (a) if
to the Registered Holder, to the address of the Registered Holder most recently
furnished in writing to the Company and (b) if to the Company, to the
address set forth below or subsequently modified by written notice to the
Registered Holder.

 

11.           No Rights as Stockholder.  Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.

 

12.           No Fractional Shares.  No fractional shares of Common Stock will be
issued in connection with any exercise hereunder.  In lieu of any fractional shares which would
otherwise be issuable, the Company shall pay cash equal to the product of such
fraction multiplied by the fair market value of one share of Common Stock on
the date of exercise, as determined in good faith by the Company’s Board of
Directors.

 

13.           Amendment or Waiver.  Any term of this Warrant may be
amended or waived as set forth in Section 5.2 of the Purchase
Agreement.  By acceptance hereof, the
Registered Holder acknowledges that in the event the required consent is
obtained, any term of this Warrant may be amended or waived with or without the
consent of the Registered Holder; provided, however, that any
amendment hereof that would materially adversely affect the Registered Holder
in a manner different from the holders of the remaining warrants issued
pursuant to the Purchase Agreement shall also require the consent of Registered
Holder.

 

14.           Headings.  The headings in this Warrant are for purposes
of reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.

 

6

 

15.           Governing Law. This Warrant shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

 

 

	
   

  	
  LPATH THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Scott
  Pancoast, President

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  6335 Ferris Square, Suite A

  
	
   

  	
   

  	
  San Diego, CA 92121

  
					

 

7

 

EXHIBIT A

 

PURCHASE/EXERCISE FORM

 

	
  To:

  	
  Lpath
  Therapeutics Inc.

  	
  Dated:

  	
   

  	
   

  

 

The undersigned, pursuant to the provisions set forth
in the attached Warrant No.       , hereby
irrevocably elects to (a) purchase                       shares
of the Common Stock covered by such Warrant and herewith makes payment of $                   ,
representing the full purchase price for such shares at the price per share
provided for in such Warrant, or (b) exercise such Warrant for                       shares
purchasable under the Warrant pursuant to the Net Issue Exercise provisions of Section 1(c) of
such Warrant.

 

The undersigned acknowledges that it has reviewed the
representations and warranties contained in Section 2.2 of the Purchase Agreement (as defined in the
Warrant) and by its signature below hereby makes such representations and
warranties to the Company. Defined terms contained in such representations and
warranties shall have the meanings assigned to them in the Purchase Agreement, provided
that the term “Buyer” shall refer to the undersigned and the term “Securities”
shall refer to the Warrant Stock.

 

The undersigned further acknowledges that it has
reviewed the market standoff provisions set forth in Section 2.2(k) of the Purchase Agreement and agrees to be
bound by such provisions.

 

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name (print):

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title (if applic.)

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Company (if applic.):

  	
   

  	
   

  
							

 

 

EXHIBIT B

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED,                                                                                   
hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant with respect to the number of shares of Common Stock
covered thereby set forth below, to:

 

 

	
  Name of Assignee

  	
   

  	
  Address/Fax Number

  	
   

  	
  No. of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Witness:

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