Exhibit 4.2
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUED UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 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 DISPOSITION MAY BE AFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
LEV PHARMACEUTICALS, INC.
WARRANT TO PURCHASE
__________ SHARES
OF COMMON STOCK
(SUBJECT TO ADJUSTMENT)
(Void after ___________, 2010)
No: PAW:__
This certifies that for value, Xxxxxxx & Company (UK) Ltd. or
registered assigns (the "Holder"), is entitled, subject to the terms set forth
below, at any time from and after ______ __, 2005 (the "Original Issuance Date")
and before 5:00 p.m., Eastern Time, on ________ __, 2010 (the "Expiration
Date"), to purchase from Lev Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), ___________________________ (_________) shares (subject to
adjustment as described herein), of common stock, par value $0.01 per share, of
the Company (the "Common Stock"), upon surrender hereof, at the principal office
of the Company referred to below, with a duly executed subscription form in the
form attached hereto as Exhibit A and simultaneous payment therefor in lawful,
immediately available money of the United States or otherwise as hereinafter
provided, at an initial exercise price per share of $1.35 (the "Purchase Price")
The Purchase Price is subject to further adjustment as provided below, and the
term "Common Stock" shall include, unless the context otherwise requires, the
stock and other securities and property at the time receivable upon the exercise
of this Warrant. The term "Warrants," as used herein, shall mean this Warrant
and any other Warrants delivered in substitution or exchange therefor as
provided herein.
This Warrant was issued in connection with the Company's private
placement (the "Offering") of up to 150 Units for an aggregate purchase price of
$7,500,000, as described in the Company's Confidential Information Memorandum,
dated April 1, 2005 (the "Memorandum"). Xxxxxxx & Company (UK) Ltd. acted as
placement agent for the Offering (the "Placement Agent").
1. Exercise. This Warrant may be exercised at any time or from time to
time from and after the Original Issuance Date and before 5:00 p.m., Eastern
Time, on the Expiration Date, on any business day, for up to the full number of
shares of Common Stock called for hereby, by surrendering it at the principal
office of the Company, at 000 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000 with the subscription form duly executed, together with payment in an
amount equal to (a) not more than the number of shares of Common Stock called
for on the face of this Warrant, multiplied (b) by the Purchase Price. Payment
of the Purchase Price must be made in immediately available funds This Warrant
may be exercised for less than the full number of shares of Common Stock at the
time called for hereby, except that the number of shares of Common Stock
receivable upon the exercise of this Warrant as a whole, and the sum payable
upon the exercise of this Warrant as a whole, shall be proportionately reduced.
Upon a partial exercise of this Warrant in accordance with the terms hereof,
this Warrant shall be surrendered, and a new Warrant of the same tenor and for
the purchase of the number of such shares not purchased upon such exercise shall
be issued by the Company to Holder without any charge therefor. A Warrant shall
be deemed to have been exercised immediately prior to the close of business on
the date of its surrender for exercise as provided above, and the person
entitled to receive the shares of Common Stock issuable upon such exercise shall
be treated for all purposes as the holder of such shares of record as of the
close of business on such date. Within five (5) business days after such date,
the Company shall issue and deliver to the person or persons entitled to receive
the same a certificate or certificates for the number of full shares of Common
Stock issuable upon such exercise, together with cash, in lieu of any fraction
of a share, equal to such fraction of the then Fair Market Value on the date of
exercise of one full share of Common Stock.
"Fair Market Value" shall mean, as of any date: (i) if shares of the
Common Stock are listed on a national securities exchange, the average of the
closing prices as reported for composite transactions during the five (5)
consecutive trading days preceding the trading day immediately prior to such
date or, if no sale occurred on a trading day, then the mean between the closing
bid and asked prices on such exchange on such trading day; (ii) if shares of the
Common Stock are not so listed but are traded on the Nasdaq SmallCap Market
("NSCM"), the average of the closing prices as reported on the NSCM during the
five (5) consecutive trading days preceding the trading day immediately prior to
such date or, if no sale occurred on a trading day, then the mean between the
highest bid and lowest asked prices as of the close of business on such trading
day, as reported on the NSCM; or if applicable, the Nasdaq National Market
("NNM"), or if not then included for quotation on the NNM or NSCM, the average
of the highest reported bid and lowest reported asked prices as reported by the
OTC Bulletin Board or the National Quotations Bureau, as the case may be; or
(iii) if the shares of the Common Stock are not then publicly traded, the fair
market price of the Common Stock as determined in good faith by at least a
majority of the Board of Directors of the Company.
2. Shares Fully Paid; Payment of Taxes. All shares of Common Stock issued
upon the exercise of a Warrant shall be validly issued, fully paid and
non-assessable, and the Company shall pay all taxes and other governmental
charges (other than income taxes to the holder) that may be imposed in respect
of the issue or delivery thereof.
-2-
3. Transfer and Exchange. This Warrant and all rights hereunder are
transferable, in whole or in part, on the books of the Company maintained for
such purpose at its principal office referred to above by Holder in person or by
duly authorized attorney, upon surrender of this Warrant together with a
completed and executed assignment form in the form attached as Exhibit B,
payment of any necessary transfer tax or other governmental charge imposed upon
such transfer and an opinion of counsel reasonably acceptable to the Company
stating that such transfer is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"). Upon any partial transfer,
the Company will issue and deliver to Holder a new Warrant or Warrants with
respect to the shares of Common Stock not so transferred. Each taker and holder
of this Warrant, by taking or holding the same, consents and agrees that this
Warrant when endorsed in blank shall be deemed negotiable and that when this
Warrant shall have been so endorsed, the holder hereof may be treated by the
Company and all other persons dealing with this Warrant as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, or to the transfer hereof on the books of the Company, any
notice to the contrary notwithstanding; but until such transfer on such books,
the Company may treat the registered Holder hereof as the owner for all
purposes.
This Warrant is exchangeable at such office for Warrants for
the same aggregate number of shares of Common Stock, each new Warrant to
represent the right to purchase such number of shares as the Holder shall
designate at the time of such exchange.
4. Anti-Dilution Provisions.
A. Adjustment for Dividends in Other Stock and Property
Reclassifications. In case at any time or from time to time the holders of the
Common Stock (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) shall have received, or, on or after the
record date fixed for the determination of eligible shareholders, shall have
become entitled to receive, without payment therefor,
(1) other or additional stock or other securities or property
(other than cash) by way of dividend,
(2) any cash or other property paid or payable out of any source
other than retained earnings (determined in accordance with generally accepted
accounting principles), or
(3) other or additional stock or other securities or property
(including cash) by way of stock-split, spin-off, reclassification, combination
of shares or similar corporate rearrangement (other than (x) additional shares
of Common Stock or any other stock or securities into which such Common Stock
shall have been changed, (y) any other stock or securities convertible into or
exchangeable for such Common Stock or such other stock or securities or (z) any
stock purchase rights, issued as a stock dividend or stock-split, adjustments in
respect of which shall be covered by the terms of Section 4.B, Section 4.C or
Section 4.D, then and in each such case, Holder, upon the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (2) and (3) above) which such Holder would hold on the date of such
exercise if on the Original Issuance Date Holder had been the holder of record
of the number of shares of Common Stock called for on the face of this Warrant,
as adjusted in accordance with the first paragraph of this Warrant, and had
thereafter, during the period from the Original Issuance Date to and including
the date of such exercise, retained such shares and/or all other or additional
stock and other securities and property (including cash in the cases referred to
in clause (2) and (3) above) receivable by it as aforesaid during such period,
giving effect to all adjustments called for during such period by Section 4.A
and Section 4.B.
-3-
B. Adjustment for Reorganization, Consolidation and Merger. In case
of any reorganization of the Company (or any other corporation the stock or
other securities of which are at the time receivable on the exercise of this
Warrant) after the Original Issuance Date, or in case, after such date, the
Company (or any such other corporation) shall consolidate with or merge into
another corporation or entity or convey all or substantially all its assets to
another corporation or entity, then and in each such case Holder, upon the
exercise hereof as provided in Section 1 at any time after the consummation of
such reorganization, consolidation, merger or conveyance, shall be entitled to
receive, in lieu of the stock or other securities and property receivable upon
the exercise of this Warrant prior to such consummation, the stock or other
securities or property to which such Holder would have been entitled upon such
consummation if Holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided in Sections 4.A, Section 4.B, Section
4.C, and Section 4.D; in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property receivable
upon the exercise of this Warrant after such consummation.
C. Adjustment for Certain Dividends and Distributions. If the Company
at any time or from time to time makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in additional shares of Common Stock, then and in
each such event:
(1) the Purchase Price then in effect shall be decreased as of the
time of such issuance or, in the event such record date is fixed, as of the
close of business on such record date, by multiplying the Purchase Price then in
effect by a fraction (A) the numerator of which is the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and (B) the denominator
of which shall be the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date as the case may be, plus the number of shares of
Common Stock issuable in payment of such dividend or distribution; provided,
however, that if such record date is fixed and such dividend is not fully paid
or if such distribution is not fully made on the date fixed therefor, the
Purchase Price shall be recomputed accordingly as of the close of business on
such record date, and thereafter the Purchase Price shall be adjusted pursuant
to this Section 4.C as of the time of actual payment of such dividends or
distributions; and
(2) the number of shares of Common Stock theretofore receivable
upon the exercise of this Warrant shall be increased, as of the time of such
issuance or, in the event such record date is fixed, as of the close of business
on such record date, in inverse proportion to the decrease in the Purchase
Price.
D. Stock Split and Reverse Stock Split. If the Company at any time or
from time to time effects a stock split or subdivision of the outstanding Common
Stock, the Purchase Price then in effect immediately before that stock split or
subdivision shall be proportionately decreased and the number of shares of
Common Stock theretofore receivable upon the exercise of this Warrant shall be
proportionately increased. If the Company at any time or from time to time
effects a reverse stock split or combines the outstanding shares of Common Stock
into a smaller number of shares, the Purchase Price then in effect immediately
before that reverse stock split or combination shall be proportionately
increased and the number of shares of Common Stock theretofore receivable upon
the exercise of this Warrant shall be proportionately decreased. Each adjustment
under this Section 4.D shall become effective at the close of business on the
date the stock split, subdivision, reverse stock split or combination becomes
effective.
-4-
E. Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of a
Warrant a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based. The
Company shall, upon the written request at any time of any holder of a Warrant,
furnish or cause to be furnished to such holder a like certificate setting forth
(i) such adjustments and readjustments, (ii) Purchase Price at the time in
effect, and (iii) the number of shares of Common Stock and the amount, if any,
of other property which at the time would be received upon the exercise of the
Warrant.
5. Notices of Record Date. In case:
A. the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time receivable upon the exercise of the
Warrants) for the purpose of entitling them to receive any dividend or other
distribution, or any 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
with or into another corporation, or any conveyance of all or substantially all
of the assets of the Company to another corporation, or
C. of any voluntary dissolution, liquidation or winding-up of the
Company, then, and in each such case, the Company will mail or cause to be
mailed to each holder of a Warrant at the time outstanding a notice specifying,
as the case may be, (a) 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 (b) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is expected to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock (or
such stock or securities at the time receivable upon the exercise of the
Warrants) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up, such notice shall be mailed at least ten
(10) days prior to the date therein specified.
-5-
6. Loss or Mutilation. Upon receipt by the Company of evidence
satisfactory to it (in the exercise of reasonable discretion) of the ownership
of and the loss, theft, destruction or mutilation of any Warrant and (in the
case of loss, theft or destruction) of indemnity satisfactory to it (in the
exercise of reasonable discretion), and (in the case of mutilation) upon
surrender and cancellation thereof, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor.
7. Reservation of Common Stock. The Company shall at all times reserve and
keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All of the shares of Commons
Stock issuable upon the exercise of the rights represented by this Warrant will,
upon issuance and receipt of the Purchase Price therefor, be fully paid and
nonassessable, and free from all preemptive rights, rights of first refusal or
first offer, taxes, liens and charges of whatever nature, with respect to the
issuance thereof.
8. Registration Rights Agreement. The Holder of this Warrant is entitled
to have the shares of Common Stock purchased in the Offering and the Warrant
Shares issuable upon exercise of this Warrant registered for resale under the
1933 Act, pursuant to and in accordance with the Registration Rights Agreement
dated as of the date hereof by and between the Holder and the Company.
9. Notices. All notices and other communications from the Company to the
Holder of this Warrant shall be mailed by first class, registered or certified
mail, postage prepaid, to the address furnished to the Company in writing by the
Holder.
10. Change; Modifications; Waiver. No terms of this Warrant may be
amended, waived or modified except by the express written consent of the Company
and the Holder.
11. Headings. The headings in this Warrant are for purposes of convenience
in reference only, and shall not be deemed to constitute a part hereof.
12. Governing Law, Etc. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to the
conflicts of laws principles thereof. The parties hereto hereby irrevocably
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or under this Warrant, shall be brought solely in a federal or state court
located in the City, County and State of New York. By its execution hereof, the
parties hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto waive any claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with respect
thereto. In the event of any such action or proceeding, the party prevailing
therein shall be entitled to payment from the other party hereto of all of its
reasonable legal fees and expenses.
-6-
Dated: , 2005
LEV PHARMACEUTICALS, INC.
By:
--------------------------------------
Name:
Title:
-7-
EXHIBIT A
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant and purchases _______ of the number of shares of Common Stock of
Lev Pharmaceuticals, Inc., purchasable with this Warrant, and herewith makes
payment therefor (either in cash or pursuant to the cashless exercise provisions
set forth in Section 1 of the Warrant), all at the price and on the terms and
conditions specified in this Warrant.
Dated:
--------------------------------------
--------------------------------
(Signature of Registered Owner)
--------------------------------
(Street Address)
--------------------------------
(City / State / Zip Code)
EXHIBIT B
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock set forth below:
Name of Assignee Address Number of Shares
---------------- ------- ----------------
and does hereby irrevocably constitute and appoint __________________________
Attorney to make such transfer on the books of Lev Pharmaceuticals, Inc.,
maintained for the purpose, with full power of substitution in the premises.
Dated:
--------------------------------------
---------------------------------------------
(Signature)
---------------------------------------------
(Witness)
The undersigned Assignee of the Warrant hereby makes to Lev
Pharmaceuticals, Inc., as of the date hereof, with respect to the Assignee, all
of the representations and warranties made by the Holder, and the undersigned
Assignee agrees to be bound by all the terms and conditions of the Warrant and
the Lev Pharmaceuticals, Inc. Registration Rights Agreement, dated as of April
__, 2005, by and between Lev Pharmaceuticals, Inc. and the Holder.
Dated:
--------------------------------
--------------------------------
(Signature)
