EX-4.8
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICH OPINION
IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCH REGISTRATION
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.
------------
Date: ____, 2004 ------------
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WARRANT FOR THE PURCHASE OF _______ SHARES OF
COMMON STOCK OF ELITE PHARMACEUTICALS, INC.
Exercise Price: $1.23 per share, subject to adjustment as provided below (the
"Exercise Price")
THIS IS TO CERTIFY that, for value received, ___________________ and
its successors and assigns (collectively, the "Holder"), is entitled to
purchase, subject to the terms and conditions hereinafter set forth, up to
_______ shares (the "Warrant Shares") of the common stock ("Common Stock"), of
Elite Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and to
receive certificates for the Common Stock so purchased.
1. EXERCISE PERIOD. The period (the "Exercise Period") in which to
purchase shares of Common Stock is the period beginning on the earlier of (i)
the effectiveness of a registration statement covering shares of the Common
Stock issued upon conversion of the Series A Preferred Stock, par value $0.01
per share, of the Company, sold by the Company in a private placement pursuant
to the Placement Agent Agreement dated August 12, 2004, and (ii) October __,
2005; and end at 5:00 p.m., New York time on the earlier of (x) the fifth
anniversary of the effectiveness of such registration statement and (y) October
__, 2010. This Warrant will terminate automatically and immediately upon the
expiration of the Exercise Period.
2. EXERCISE OF WARRANT; CASHLESS EXERCISE. This Warrant may be
exercised, in whole or in part, at any time and from time to time during the
Exercise Period. Such exercise shall be accomplished by tender to the Company of
Exercise Price, either (a) in cash, by wire transfer or by certified check or
bank cashier's check, payable to the order of the Company, or (b) by
surrendering all or a portion of the Warrant using the amount by which the Fair
Market Value, as defined, exceeds the Exercise Price to purchase a number of
shares of Common Stock without the payment of any cash as illustrated in the
formula below in this Section 2 (a "Cashless Exercise"), together with
presentation and surrender to the Company of this Warrant with an
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executed subscription in substantially the form attached hereto as EXHIBIT A
(the "Subscription"). Upon receipt of the foregoing, the Company will deliver to
the Holder, as promptly as possible but in no event more than three business
days, a certificate or certificates representing the shares of Common Stock so
purchased, registered in the name of the Holder or its transferee (as permitted
under Section 3 below). With respect to any exercise of this Warrant, the Holder
will for all purposes be deemed to have become the holder of record of the
number of shares of Common Stock purchased hereunder on the date this Warrant is
delivered to the Company with a properly executed Subscription and payment of
the Exercise Price (the "Exercise Date"), irrespective of the date of delivery
of the certificate evidencing such shares, except that, if the date of such
receipt is a date on which the stock transfer books of the Company are closed,
such person will be deemed to have become the holder of such shares at the close
of business on the next succeeding date on which the stock transfer books are
open. Fractional shares of Common Stock will not be issued upon the exercise of
this Warrant. In lieu of any fractional shares that would have been issued but
for the immediately preceding sentence, the Holder will be entitled to receive
cash equal to the current Fair Market Value of such fraction of a share of
Common Stock on the trading day immediately preceding the Exercise Date. In the
event this Warrant is exercised in part, the Company shall issue a new Warrant
to the Holder covering the aggregate number of shares of Common Stock as to
which this Warrant remains exercisable for.
If the Holder elects to conduct a Cashless Exercise, the Company shall
cause to be delivered to the Holder a certificate or certificates representing
the number of shares of Common Stock computed using the following formula:
X = Y (A-B)
A
Where:
X = the number of shares of Common Stock to be issued
to Holder;
Y = the portion of the Warrant (in number of shares
of Common Stock) being exercised by Holder (at the
date of such calculation) on a cashless basis;
A = the Fair Market Value of one share of Common
Stock on the Exercise Date (as calculated below);
and
B = Exercise Price.
For purposes of the above calculation, the fair market value of one share shall
mean: (i) if the principal trading market for such securities is a national
securities exchange, the Nasdaq Stock Market or the Over-the-Counter Bulletin
Board (OCBB) (or a similar system then in use), the average last reported sales
or if only traded on the OCBB, the average last closing price on the principal
market for the five trading days immediately prior to the Exercise Date; or (ii)
if (i) is not applicable, and if bid and asked prices for shares of Common Stock
are reported by the National Quotation Bureau, Inc., the average of the high bid
and low asked prices so reported for the five trading days immediately prior to
the Exercise Date. Notwithstanding the foregoing, if
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there is no last reported sales or closing price or bid and asked prices, as the
case may be, for the period in question, then the fair market value of one share
on the Exercise Date shall be determined in good faith by, and reflected in a
formal resolution of, the board of directors of the Company.
3. TRANSFERABILITY AND EXCHANGE.
(a) This Warrant, and the Common Stock issuable upon the
exercise hereof, may not be sold, transferred, pledged or hypothecated unless
the Company shall have been provided with an opinion of counsel, or other
evidence reasonably satisfactory to it, that such transfer is not in violation
of the Securities Act, and any applicable state securities laws. Subject to the
satisfaction of the aforesaid condition, this Warrant and the underlying shares
of Common Stock shall be transferable from time to time by the Holder upon
written notice to the Company. If this Warrant is transferred, in whole or in
part, the Company shall, upon surrender of this Warrant to the Company, deliver
to each transferee a Warrant evidencing the rights of such transferee to
purchase the number of shares of Common Stock that such transferee is entitled
to purchase pursuant to such transfer. The Company may place a legend similar to
the legend at the top of this Warrant on any replacement Warrant and on each
certificate representing shares issuable upon exercise of this Warrant or any
replacement Warrants. Only a registered Holder may enforce the provisions of
this Warrant against the Company. No transfer of this Warrant may be effective
upon a failure to deliver by the Registered Holder to the Company of this
Warrant and Assignment substantially in the form set forth in EXHIBIT B attached
hereto.
(b) This Warrant is exchangeable upon its surrender by the
registered Holder to the Company for new Warrants in form and substance
representing in the aggregate the right to purchase the number of shares
purchasable hereunder.
4. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SHARES SUBJECT TO
WARRANT. The Exercise Price and the number of shares of Common Stock purchasable
upon the exercise of this Warrant are subject to adjustment from time to time
upon the occurrence of any of the events specified in this Section 4.
(a) DIVIDENDS, ETC. In case the Company shall, with respect to
the holders of its Common Stock, (i) pay a Common Stock dividend or make a
distribution to its stockholders in shares of Common Stock or other securities,
(ii) split or subdivide its outstanding shares of Common Stock into a greater
number of shares, or (iii) combine its outstanding shares of Common Stock into a
smaller number of shares, then the Exercise Price in effect at the time of the
record date for such dividend or on the effective date of such split,
subdivision or combination, and/or the number and kind of securities issuable on
such date, shall be proportionately adjusted so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the aggregate number and kind
of shares of Common Stock (or such other securities other than Common Stock, as
the case may be) of the Company, at the same aggregate Exercise Price, that, if
such Warrant had been exercised immediately prior to such date, the Holder would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, distribution, split, subdivision or combination. Such adjustment shall
be made successively whenever any event listed above shall occur.
(b) MERGER, ETC. If at any time after the date hereof there
shall be a merger or consolidation of the Company with or into or a transfer of
all or substantially all of the assets of
3
the Company to another entity, then the Holder shall be entitled to receive upon
or after such transfer, merger or consolidation becoming effective, and upon
payment of the Exercise Price then in effect, the number of shares or other
securities or property of the Company or of the successor corporation resulting
from such merger or consolidation, which would have been received by the Holder
for the shares of stock subject to this Warrant had this Warrant been exercised
just prior to such transfer, merger or consolidation becoming effective or to
the applicable record date thereof, as the case may be. The Company will not
merge or consolidate with or into any other corporation, or sell or otherwise
transfer its property, assets and business substantially as an entirety to
another corporation, unless the corporation resulting from such merger or
consolidation (if not the Company), or such transferee corporation, as the case
may be, shall expressly assume in writing the due and punctual performance and
observance of each and every covenant and condition of this Warrant to be
performed and observed by the Company.
(c) RECLASSIFICATION, ETC. If at any time after the date
hereof there shall be a reorganization or reclassification of the securities as
to which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, then the Holder shall
thereafter be entitled to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the Exercise Price then in effect,
the number of shares or other securities or property resulting from such
reorganization or reclassification, which would have been received by the Holder
for the shares of stock subject to this Warrant had this Warrant at such time
been exercised.
(d) WEIGHTED AVERAGE ADJUSTMENT. If at any time after the date
hereof, the Company shall issue shares of Common Stock or rights, options,
warrants or other securities to subscribe for or purchase Common Stock, or
securities convertible or exercisable into or exchangeable for Common Stock
("Common Stock Equivalents") (excluding shares, rights, options, warrants, or
convertible or exchangeable securities, issued or issuable (i) in any of the
transactions with respect to which an adjustment of the Exercise Price is
provided pursuant to Sections 4(a) -(c) above, (ii) upon exercise of the
Warrants or any other Common Stock Equivalents outstanding as of the date
hereof, (iii) upon conversion of the Series A Preferred Stock, par value $0.01
per share, of the Company, (iv) pursuant to any stock option plans, stock bonus
plans or stock incentive plans, (v) in connection, or as consideration for, any
merger, consolidation, acquisition of a majority of the voting equity of any
entity, acquisition of any discrete business unit of any entity or acquisition
of assets (in each case, whether directly with, by, or into the Company or a
direct or indirect subsidiary of the Company) or (vi) with respect to any
issuance or transaction as to which holders of a majority of the Company's
Series A Preferred Stock, par value $0.01 per share, have provided written
consent), at a price per share lower than the Exercise Price per share of Common
Stock in effect immediately prior to such issuance, then the Exercise Price
shall be reduced on the date of such issuance to a price (calculated to the
nearest cent) determined by multiplying the Exercise Price in effect immediately
prior to such issuance by a fraction, (1) the numerator of which shall be an
amount equal to the sum of (A) the number of shares of Common Stock on a fully
diluted basis (assuming conversion, exchange or exercise of all Common Stock
Equivalents) immediately prior to such issuance plus (B) the quotient obtained
by dividing the consideration received by the Company upon such issuance by the
Exercise Price, and (2) the denominator of which shall be the total number of
shares of Common Stock on a fully diluted basis (assuming conversion, exchange
or exercise of all Common Stock Equivalents) immediately after such issuance.
For the purposes of such adjustments, the maximum number of shares which the
holders of any such
4
Common Stock Equivalents shall be entitled to subscribe for or purchase or
convert or exchange such securities into shall be deemed to be issued and
outstanding as of the date of such issuance (whether or not such Common Stock
Equivalent is then exercisable, convertible or exchangeable), and the
consideration received by the Company therefor shall be deemed to be the
consideration received by the Company for such Common Stock Equivalents, plus
the minimum aggregate consideration or premiums stated in such Common Stock
Equivalents, to be paid for the shares covered thereby. No further adjustment of
the Exercise Price shall be made as a result of the actual issuance of shares of
Common Stock on exercise of such Common Stock Equivalents. On the expiration or
the termination of such Common Stock Equivalents, or the termination of such
right to convert or exchange, the Exercise Price shall forthwith be readjusted
(but only with respect to that portion of the Warrants which has not yet been
exercised) to such Exercise Price as would have obtained had the adjustments
made upon the issuance of such Common Stock Equivalents, been made upon the
basis of the delivery of only the number of shares of Common Stock actually
delivered upon the exercise of such Common Stock Equivalents; and on any change
of the number of shares of Common Stock deliverable upon the exercise of any
such Common Stock Equivalents, or any change in the consideration to be received
by the Company upon such exercise, conversion, or exchange, including, but not
limited to, a change resulting from the anti-dilution provisions thereof, the
Exercise Price, as then in effect, shall forthwith be readjusted (but only with
respect to that portion of the Warrants which has not yet been exercised or
converted after such change) to such Exercise Price as would have been obtained
had an adjustment been made upon the issuance of such Common Stock Equivalents
not exercised prior to such change, or securities not converted or exchanged
prior to such change, on the basis of such change. In case the Company shall
issue shares of Common Stock or any such Common Stock Equivalents, for a
consideration consisting, in whole or in part, of property other than cash or
its equivalent, then the "price per share" and the "consideration received by
the Company" for purposes of the first sentence of this Section 4(d) shall be as
determined in good faith by the Board of Directors of the Company. Shares of
Common Stock owned by or held for the account of the Company or any
majority-owned subsidiary shall not be deemed outstanding for the purpose of any
such computation. In the event of any adjustment in the Exercise Price pursuant
to this Section 4(d), the number of Warrant Shares issuable hereunder upon
exercise shall be inversely proportionately increased or decreased as the case
may be, such that aggregate purchase price for Warrant Shares upon full exercise
of this Warrant shall remain the same.
(e) Notwithstanding any provision herein to the contrary, no
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Exercise Price; provided,
however, that any adjustments which by reason of this Section 4(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4 shall be made to
the nearest cent or the nearest one-hundredth of a share, as the case may be.
(f) In the event that at any time, as a result of an
adjustment made pursuant to Section 4(a) or (b) above, the Holder of any Warrant
thereafter exercised shall become entitled to receive any shares of capital
stock of the Company other than shares of Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in this
5
Section 4, and the other provisions of this Warrant shall apply on like terms to
any such other shares.
(g) In case any event shall occur as to which the other
provisions of this Section 4 are not strictly applicable but the failure to make
any adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles hereof, then, in
each such case, the Company shall effect such adjustment, on a basis consistent
with the essential intent and principles established in this Section 4, as may
be necessary to preserve, without dilution, the purchase rights represented by
this Warrant. In no event shall any adjustment be required or result from the
sale by the Company of securities or convertible securities or the grant or sale
of options or warrants to purchase shares of its Common Stock or other
securities.
5. REGISTRATION RIGHTS. The Holder shall be entitled to the benefits of
the Registration Rights Agreement the form of which is attached hereto as
EXHIBIT C.
6. RESERVATION OF SHARES. The Company agrees at all times to reserve
and hold available out of its authorized but unissued shares of Common Stock the
number of shares of Common Stock issuable upon the full exercise of this
Warrant. The Company further covenants and agrees that all shares of Common
Stock that are delivered upon the exercise of this Warrant will, upon delivery,
be fully paid and nonassessable and free from all taxes, liens and charges with
respect to the purchase thereof hereunder.
7. NOTICES TO HOLDER. Upon any adjustment of the Exercise Price (or
number of shares of Common Stock purchasable upon the exercise of this Warrant)
pursuant to Section 4, the Company shall promptly thereafter, but in no event
later than 10 days after the event causing the adjustment has occurred, cause to
be given to the Holder written notice of such adjustment. Such notice shall
include the Exercise Price (and/or the number of shares of Common Stock
purchasable upon the exercise of this Warrant) after such adjustment, and shall
set forth in reasonable detail the Company's method of calculation and the facts
upon which such calculations were based. Where appropriate, such notice shall be
given in advance and included as a part of any notice required to be given under
the other provisions of this Section 7.
In the event of (a) any fixing by the Company of a record date with
respect to the holders of any class of securities of the Company for the purpose
of determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares of capital stock of any class or any other securities or property, or to
receive any other right or to give effect to any split, (b) any capital
reorganization of the Company, or reclassification or recapitalization of the
capital stock of the Company or any transfer of all or substantially all of the
assets or business of the Company to, or consolidation or merger of the Company
with or into, any other entity or person, or (c) any voluntary or involuntary
dissolution or winding up of the Company, then and in each such event the
Company will give the Holder a written notice specifying, as the case may be (i)
the record date for such split, dividend, distribution, or right, and stating
the amount and character of such split, dividend, distribution, or right; or
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, conveyance, 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 capital stock or
securities receivable upon the exercise of this Warrant)
6
shall be entitled to exchange their shares of Common Stock (or such other stock
securities) for securities or other property deliverable upon such event. Any
such notice shall be given at least 10 days prior to the earliest date therein
specified.
8. NO RIGHTS AS A STOCKHOLDER. This Warrant does not entitle the Holder
to any voting rights, distribution rights, dividend rights or other rights as a
stockholder of the Company, nor to any other rights whatsoever except the rights
herein set forth.
9. ADDITIONAL COVENANTS OF THE COMPANY. If the Common Stock is listed
for trading on any national securities exchange or Nasdaq, the Company shall,
upon issuance of any shares for which this Warrant is exercisable, at its
expense, promptly obtain and maintain the listing of such shares.
The Company shall comply with the reporting requirements of Sections 13
and 15(d) of the Exchange Act for so long as and to the extent that such
requirements apply to the Company.
The Company shall not, by amendment of its Certificate of Incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue 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. Without limiting the generality of the foregoing, the Company (a) will
not increase the par value of any shares of capital stock receivable upon
exercise of this Warrant above the amount payable therefor upon such exercise,
(b) will take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable stock,
and (c) the Company shall not, by amendment of its Certificate of Incorporation
or Bylaws or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issuance, or sale of securities or any other voluntary
action, avoid, circumvent, or seek to avoid the observance or performance of any
of the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions of
this Warrant and in taking all such action as may be necessary or appropriate to
protect Holder's rights under this Warrant against impairment.
10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Company, the Holder and their respective successors
and permitted assigns.
11. NOTICES. The Company agrees to maintain a ledger of the ownership
of this Warrant (the "Ledger"). Any notice hereunder shall be given by
registered or certified mail if to the Company, at its principal executive
office and, if to the Holder, to its address shown in the Ledger of the Company;
provided, however, that the Holder may at any time on three business days
written notice to the Company designate or substitute one other address where
notice is to be given. Notice shall be deemed given and received when a
certified or registered letter, properly addressed with postage prepaid, is
deposited in the U.S. mail.
12. SEVERABILITY. Every provision of this Warrant is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Warrant.
13. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of choice of laws thereof.
7
14. ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Warrant, the prevailing party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedy.
15. ENTIRE AGREEMENT. This Warrant (including the Exhibits attached
hereto) constitutes the entire understanding between the Company and the Holder
with respect to the subject matter hereof, and supersedes all prior
negotiations, discussions, agreements and understandings relating to such
subject matter.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer as of the date first set forth above.
Elite Pharmaceuticals, Inc.
By:
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Xxxxxxx Xxxx, Chief Executive Officer
9
EXHIBIT A
SUBSCRIPTION FORM
(To be Executed by the Holder to Exercise the Rights To Purchase Common Stock
Evidenced by the Within Warrant)
The undersigned hereby irrevocably subscribes for _______ shares of the
Common Stock of the Company pursuant to and in accordance with the terms and
conditions of the Warrant to which this form is a part, and hereby makes payment
of $_______ therefor by tendering cash, wire transferring or delivering a
certified check or bank cashier's check, payable to the order of the Company (or
by electing a Cashless Exercise as provided in Section 2 of the Warrant). The
undersigned requests that a certificate for the Common Stock be issued in the
name of the undersigned and be delivered to the undersigned at the address
stated below. If said certificate for the Common Stock is less than all of the
shares purchasable pursuant to the Warrant, the undersigned requests that a new
Warrant of like tenor for the balance of the remaining shares purchasable
thereunder be delivered to the undersigned at the address stated below.
In connection with the issuance of the Common Stock, I hereby represent
to the Company that I am acquiring the Common Stock for my own account for
investment and not with a view to, or for resale in connection with, a
distribution of the shares within the meaning of the Securities Act of 1933, as
amended (the "Securities Act") except to the extent, the Common Stock is
registered under the Securities Act for distribution.
I understand that because the Common Stock has not been registered
under the Securities Act, I must hold such Common Stock indefinitely unless the
Common Stock is subsequently registered and qualified under the Securities Act
or is exempt from such registration and qualification. I shall make no transfer
or disposition of the Common Stock unless (a) in the opinion of counsel
reasonably satisfactory to the Company such transfer or disposition can be made
without registration under the Securities Act by reason of a specific exemption
from such registration and such qualification, or (b) a registration statement
has been filed pursuant to the Securities Act and has been declared effective
with respect to such disposition.
I agree that each certificate representing the Common Stock delivered
to me shall bear substantially the same legend as set forth on the front page of
the Warrant.
I further agree that the Company may place stop orders on the
certificates evidencing the Common Stock with the transfer agent, if any, to the
same effect as the above legend. The legend and stop transfer notice referred to
above shall be removed only upon my furnishing to the Company of an opinion of
counsel (reasonably satisfactory to the Company) to the effect that such legend
may be removed.
A-1
Date:_______________________________ Signed:________________________________
Address:_______________________________
A-2
EXHIBIT B
ASSIGNMENT
(To be Executed by the Holder to Effect Transfer of the Warrant)
For Value Received __________________________ hereby sells, assigns and
transfers to _________________________ the Warrant attached hereto and the
rights represented thereby to purchase _________ shares of Common Stock in
accordance with the terms and conditions hereof, and does hereby irrevocably
constitute and appoint _________________________ as attorney to transfer such
Warrant on the books of the Company with full power of substitution.
The Assignor shall not transfer or dispose of the Warrant unless (a) in
the opinion of counsel reasonably satisfactory to the Company, such transfer or
disposition can be made without registration under the Securities Act of 1933,
as amended (the "Securities Act"), by reason of a specific exemption from such
registration and such qualification, or (b) a registration statement has been
filed pursuant to the Securities Act and has been declared effective with
respect to such disposition.
Dated:________________________ Signed: _____________________________
Please print or typewrite Please insert Social Security
name and address of or other Tax Identification
assignee: Number of Assignee:
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B-1
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
C-1
