Lev Pharmaceuticals, Inc. Warrant for the Purchase of Shares of Common Stock
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED
FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW. THIS WARRANT AND SUCH
SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE PLEDGED, TRANSFERRED OR
HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR DELIVERY OF AN OPINION
OF
COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE
ACT
OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT.
Lev
Pharmaceuticals, Inc.
Warrant
for the Purchase of Shares of
Common Stock
No. B2007-01
|
900,000
Shares
|
FOR
VALUE
RECEIVED, Lev Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
hereby certifies that Mast Credit Opportunities I Master Fund, its designee
or
its permitted assigns is entitled to purchase from the Company, at any time
or
from time to time commencing on November 2, 2007 and prior to 5:00 P.M., New
York City time, on November 1, 2010 (the “Exercise
Period”),
900,000 fully paid and non-assessable shares of common stock, $.01 pa value
per
share (the “Common
Stock”),
of
the Company for a purchase price per share of $1.6576. Hereinafter, (i) said
common stock of the Company, is referred to as the “Common
Stock”;
(ii)
the shares of the Common Stock (subject to adjustment as set forth herein)
purchasable hereunder or under any other Warrant (as hereinafter defined) are
referred to as the “Warrant
Shares”;
(iii)
the aggregate purchase price payable for the Warrant Shares purchasable
hereunder is referred to as the “Aggregate
Warrant Price”;
(iv)
the price payable for each of the Warrant Shares hereunder is referred to as
the
“Per
Share Warrant Price”;
(v)
this Warrant, any similar Warrants issued on the date hereof and any warrants
hereafter issued in exchange or substitution for this Warrant or such similar
Warrants are referred to as the “Warrants”;
(vi)
the holder of this Warrant is referred to as the “Holder”
and
the
holder of this Warrant and all other Warrants and Warrant Shares are referred
to
as the “Holders”
and
Mast Capital Management, LLC, LLC is referred to as the “Holders’
Agent”;
and
(vii) the then “Current
Market Price”
per
share of the Common Stock shall be deemed to be the
average closing sale price of the Common Stock for the ten (10) Trading Days
(as
defined below) immediately prior
to
such date or, in case no such reported sales take place on such day, the average
of the last reported bid and asked prices of the Common Stock on such day,
in
either case on the principal national securities exchange on which the Common
Stock is admitted to trading or listed, or if not listed or admitted to trading
on any such exchange, the representative closing sale price of the Common Stock
as reported by the National Association of Securities Dealers, Inc. Automated
Quotations System (“NASDAQ”),
or
other similar organization if NASDAQ is no longer reporting such information,
or, if the Common Stock is not reported on NASDAQ, the closing share price
for
the Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization, or if not so available, the fair
market value of the Common Stock as determined in good faith by the Company’s
Board of Directors. A “Trading
Day”
shall
mean any day on which shares of the Company’s Common Stock are sold, or eligible
for sale, on the respective exchange, quotation system or over-the-counter
market. The Aggregate Warrant Price is not subject to
adjustment.
This
Warrant, together with any warrants of like tenor, constituting in the aggregate
Warrants to purchase 900,000 Warrant Shares, is being issued in connection
with
that certain
Term
Loan Agreement, dated as of November 2, 2007 (as it may be amended or modified
from time to time the “Credit
Agreement”)
by and
among the Company, its wholly-owned subsidiary, Lev Development Corp.
(collectively, the “Borrowers”),
the
lenders from time to time party thereto (the “Lenders”),
and
Mast Capital Management, LLC as administrative agent and collateral agent (the
“Agent”)
1. Exercise
of Warrant.
(a) This
Warrant may be exercised in whole at any time, or in part from time to time,
by
the Holder during the Exercise Period:
(i) by
the surrender of this Warrant (with the subscription form at the end hereof
duly
executed) at the address set forth in subsection 9(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part, with payment for the Warrant Shares made
by certified or official bank check payable to the order of, or wire transfer
of
immediately available funds to, the Company; or
(ii) by
the surrender of this Warrant (with the cashless exercise form at the end hereof
duly executed) (a “Cashless
Exercise”)
at the address set forth in subsection 9(a) hereof. Such presentation and
surrender shall extinguish the Holder’s obligation to pay the Aggregate Warrant
Price, or the proportionate part thereof if this Warrant is exercised in part.
In the event of a Cashless Exercise, the Holder shall exchange its Warrant
for
that number of Warrant Shares subject to such Cashless Exercise as is equal
to
the product of (A) the number of Warrant Shares with respect to which this
Warrant is being exercised multiplied by (B) a fraction, the numerator of which
shall be the difference between the then Current Market Price and the Per Share
Warrant Price, and the denominator of which shall be the then Current Market
Price.
(b) If
this Warrant is exercised in part, this Warrant must be exercised for a number
of whole shares of the Common Stock and the Holder is entitled to receive a
new
Warrant covering the Warrant Shares that have not been exercised and setting
forth the proportionate part of the Aggregate Warrant Price applicable to such
Warrant Shares. Upon surrender of this Warrant in connection with the exercise
of this Warrant pursuant to the terms hereof, the Company will (i) issue a
certificate or certificates in the name of the Holder for the largest number
of
whole shares of the Common Stock to which the Holder shall be entitled upon
such
exercise and, if this Warrant is exercised in whole, in lieu of any fractional
share of the Common Stock to which the Holder shall be entitled, pay to the
Holder cash in an amount equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the Company
shall determine), and (ii) deliver the other securities and properties
receivable upon the exercise of this Warrant, or the proportionate part thereof,
if this Warrant is exercised in part, pursuant to the provisions of this
Warrant.
2
2. Reservation
of Warrant Shares; Listing.
The
Company agrees that, prior to the expiration of this Warrant, the Company shall
at all times (a) have authorized and in reserve, and shall keep available,
solely for issuance and delivery upon the exercise of this Warrant, the shares
of the Common Stock and other securities and properties as from time to time
shall be receivable upon the exercise of this Warrant, free and clear of all
restrictions on sale or transfer, other than under Federal or state securities
laws, and free and clear of all preemptive rights and rights of first refusal
and (b) if the Company hereafter lists its Common Stock on any national
securities exchange, use its commercially reasonable efforts to keep the Warrant
Shares authorized for listing on such exchange upon notice of
issuance.
3. Certain
Adjustments.
(a) In
case
the Company shall hereafter (i) pay a dividend or make a distribution on its
Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares
of
Common Stock into a greater number of shares or (iii) combine or reverse-split
its outstanding shares of Common Stock into a smaller number of shares, then
the
Per Share Warrant Price and the number of Warrant Shares shall forthwith be
proportionately decreased and increased, respectively, in the case of a
subdivision, distribution or stock dividend, or proportionately increased and
decreased, respectively, in the case of a combination or reverse stock split.
The Aggregate Warrant Price payable for the then total number of Warrant Shares
available for exercise under this Warrant shall remain the same. Adjustments
made pursuant to this subsection 3(a) shall become effective on the record
date
in the case of a dividend or distribution, and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification. If such dividend, distribution, subdivision or combination
is not consummated in full, the Per Share Warrant Price and Warrant Shares
shall
be readjusted accordingly.
(b) In
case
of any capital reorganization or reclassification, any consolidation or merger,
or any sale, transfer or other disposition of all or substantially all of its
property, assets or shares to which the Company is a party, the Holder of this
Warrant shall have the right thereafter to receive upon the exercise of this
Warrant the kind and amount of securities, cash or other property which the
Holder would have owned or have been entitled to receive immediately after
such
reorganization, reclassification, consolidation, merger or reorganization had
this Warrant been exercised immediately prior to the effective date of such
transaction and in any such case, if necessary, appropriate adjustment shall
be
made in the application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder of this Warrant
to
the end that the provisions set forth in this Section 3 shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation
to any shares of stock or other securities or property thereafter deliverable
on
the exercise of this Warrant. The above provisions of this subsection 3(b)
shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers or other dispositions. The Company shall require the
issuer of any shares of stock or other securities or property thereafter
deliverable on the exercise of this Warrant to be responsible for all of the
agreements and obligations of the Company hereunder. Notice
of
any such reorganization, reclassification, consolidation or merger, shall be
mailed to the Holders of Warrants not less than twenty (20) days prior to such
event.
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(c) No
adjustment in the Per Share Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least $0.01 per share
of
Common Stock; provided,
however,
that any adjustments which by reason of this subsection 3(c) are not required
to
be made shall be carried forward and taken into account in any subsequent
adjustment; provided,
further,
however, that adjustments shall be required and made in accordance with the
provisions of this Section 3 (other than this subsection 3(c)) not later than
such time as may be required in order to preserve the tax-free nature of a
distribution, if any, to the Holder of this Warrant or Common Stock issuable
upon the exercise hereof. All calculations under this Section 3 shall be made
to
the nearest cent or to the nearest 1/100th of a share, as the case may be.
Anything in this Section 3 to the contrary notwithstanding, the Company shall
be
entitled to make such reductions in the Per Share Warrant Price, in addition
to
those required by this Section 3, as it in its discretion shall deem to be
advisable in order that any stock dividend, subdivision of shares or
distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable.
(d) Whenever
the Per Share Warrant Price or the number of Warrant Shares is adjusted as
provided in this Section 3 and upon any modification of the rights of a Holder
of Warrants in accordance with this Section 3, the Company shall promptly
prepare a brief statement of the facts requiring such adjustment or modification
and the manner of computing the same and cause copies of such certificate to
be
mailed to the Holders of the Warrants. The Company may, but shall not be
obligated to unless requested by the Holders’ Agent, obtain, at its expense, a
certificate of a firm of independent public accountants of recognized standing
selected by the Board of Directors (who may be the regular auditors of the
Company) setting forth the Per Share Warrant Price and the number of Warrant
Shares in effect after such adjustment or the effect of such modification,
a
brief statement of the facts requiring such adjustment or modification and
the
manner of computing the same and cause copies of such certificate to be mailed
to the Holders of the Warrants.
(e) If
the Board of Directors of the Company shall declare any dividend or other
distribution with respect to the Common Stock, the Company shall mail notice
thereof to the Holders of the Warrants not less than twenty (20) days prior
to the record date fixed for determining stockholders entitled to participate
in
such dividend or other distribution.
(f) If,
as a
result of an adjustment made pursuant to this Section 3, the Holder of any
Warrant thereafter surrendered for exercise shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose determination
shall be conclusive and shall be described in a written notice to the Holder
of
any Warrant promptly after such adjustment) shall determine,
in good faith,
the
allocation of the adjusted Per Share Warrant Price between or among shares
or
such classes of capital stock or shares of Common Stock and other capital
stock.
4
4. Fully
Paid Stock; Taxes.
The shares of the Common Stock represented by each and every certificate for
Warrant Shares delivered on the proper exercise of this Warrant shall, at the
time of such delivery, be duly authorized, validly issued and outstanding,
fully
paid and nonassessable, and not subject to preemptive rights or rights of first
refusal imposed by any agreement to which the Company is a party, and the
Company will take all such actions as may be necessary to assure that the par
value, if any, per share of the Common Stock is at all times equal to or less
than the then Per Share Warrant Price. The Company shall pay, when due and
payable, any and all Federal and state stamp, original issue or similar taxes
which may be payable in respect of the issue of any Warrant Share or any
certificate thereof to the extent required because of the issuance by the
Company of such security.
5. Registration
Under Securities Act of 1933.
(a) The
Holder shall be entitled to all of the rights and subject to all of the
obligations regarding registration of the Warrant Shares, as described in that
certain Registration Rights Agreement between the Company and the original
holder hereof and dated as of the original issue date of this
Warrant.
(b) Until
all of the Warrant Shares have been sold under a Registration Statement or
pursuant to an exemption from registration under the Act, including pursuant
to
Rule 144, so long as the Company’s Common Stock remains registered under the
Act, the Company shall use its commercially reasonable efforts to file with
the
Securities and Exchange Commission all current reports and the information
as
may be necessary to enable the Holder to effect sales of its shares in reliance
upon Rule 144 promulgated under the Act.
6. Investment
Intent; Limited Transferability.
(a) By
accepting this Warrant, the Holder represents to the Company that it understands
that this Warrant and any securities obtainable upon exercise of this Warrant
have not been registered for sale under Federal or state securities laws and
are
being offered and sold to the Holder pursuant to one or more exemptions from
the
registration requirements of such securities laws. In the absence of an
effective registration of such securities or an exemption therefrom, any
certificates for such securities shall bear the legend set forth on the first
page hereof; provided however, that following the effective date of the
Registration Statement (as such term is defined in the Registration Rights
Agreement), such legend may, at the request of the Holder, be removed from
the
certificates evidencing such Warrant Shares prior to the resale thereof and
the
Company will rescind any stop transfer orders with respect to such shares given
to the Company’s transfer agent, provided that the Holder represents and
covenants to the Company in writing (in a form reasonably acceptable to the
Company and its counsel) that (1) such Holder will sell such Warrant Shares
only
pursuant to and in the manner contemplated by the Registration Statement,
including the Plan of Distribution section contained therein, and otherwise
in
compliance with the Act, including the prospectus delivery requirements of
such
Act and (2) such other agreements or covenants as the Company or its counsel
may
reasonably request. Subject to the foregoing, at such time and to the extent
a
legend is no longer required for the Warrant Shares, the Company will use its
best efforts to, no later than three (3) trading days following the delivery
to
the Company or the Company’s transfer agent by the holder of such Warrant Shares
of a legended certificate representing such Warrant Shares (together with such
accompanying documentation or representations as reasonably required by counsel
to the Company), deliver or cause to be delivered a certificate representing
such Warrant Shares that is free from the foregoing legend. The Holder
understands that it must bear the economic risk of its investment in this
Warrant and any securities obtainable upon exercise of this Warrant for an
indefinite period of time, as this Warrant and such securities have not been
registered under Federal or state securities laws and therefore cannot be sold
unless subsequently registered under such laws, unless an exemption from such
registration is available. The Holder further represents to the Company, by
accepting this Warrant that it has full power and authority to accept this
Warrant and make the representations set forth herein.
5
(b) The
Holder, by its acceptance of this Warrant, represents to the Company that it
is
acquiring this Warrant and will acquire any securities obtainable upon exercise
of this Warrant for its own account for investment and not with a view to,
or
for sale in connection with, any distribution thereof in violation of the Act.
The Holder agrees, by acceptance of this Warrant, that this Warrant and any
such
securities issuable
under this Warrant will
not
be sold or otherwise transferred unless
(i) a registration statement with respect to such transfer is effective under
the Act and any applicable state securities laws or (ii) such sale or transfer
is made pursuant to one or more exemptions from the Act.
(c) In
addition to the limitations set forth in Section 1 and in accordance with the
legend on the first page hereof, this Warrant may not be sold, transferred,
assigned or hypothecated by the Holder except in compliance with the provisions
of the Act and the applicable state securities “blue sky” laws, and is so
transferable only upon the books of the Company which it shall cause to be
maintained for such purpose. The Company may treat the registered Holder of
this
Warrant as it appears on the Company’s books at any time as the Holder for all
purposes. The Company shall permit any Holder of a Warrant or its duly
authorized attorney, upon written request during ordinary business hours, to
inspect and copy or make extracts from its books showing the registered Holders
of Warrants. All Warrants issued upon the transfer or assignment of this Warrant
will be dated the same date as this Warrant, and all rights of the holder
thereof shall be identical to those of the Holder unless, in each case,
otherwise prohibited by applicable law.
(d) The
Holder has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the Warrants or the exercise of the
Warrants; and (ii) the opportunity to request such additional information which
the Company possesses or can acquire without unreasonable effort or
expense.
(e) The
Holder did not (i) receive or review any advertisement, article, notice or
other
communication published in a newspaper or magazine or similar media or broadcast
over television or radio, whether closed circuit, or generally available; or
(ii) attend any seminar, meeting or investor or other conference whose attendees
were, to such Holder’s knowledge, invited by any general solicitation or general
advertising.
6
(f) The
Holder is an “accredited investor” within the meaning of Regulation D under the
Act. Such Holder is acquiring the Warrants for its own account and not with
a
present view to, or for sale in connection with, any distribution thereof in
violation of the registration requirements of the Act, without prejudice,
however, to such Holder’s right, subject to the provisions of this Warrant, at
all times to sell or otherwise dispose of all or any part of such Warrants
and
Warrant Shares.
(g) Either
by reason of such Holder’s business or financial experience or the business or
financial experience of its professional advisors (who are unaffiliated with
and
who are not compensated by the Company or any affiliate, finder or selling
agent
of the Company, directly or indirectly), such Holder has the capacity to protect
such Holder’s interests in connection with the transactions contemplated by this
Warrant and the Credit
Agreement.
The Holder, by its acceptance of this Warrant, represents to the Company that
it
is able to fend for itself, can bear the economic risk of its investment and
has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in this Warrant.
Holder also represents it has not been organized for the purpose of acquiring
this Warrant.
7. Loss,
etc., of Warrant.
Upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to the Company, if lost, stolen or destroyed, and upon surrender
and cancellation of this Warrant, if mutilated, the Company shall execute and
deliver to the Holder a new Warrant of like date, tenor and
denomination.
8. Warrant
Holder Not Stockholder.
This Warrant does not confer upon the Holder any right to vote on or consent
to
or receive notice as a stockholder of the Company, as such, in respect of any
matters whatsoever, nor any other rights or liabilities as a stockholder, prior
to the exercise hereof; this Warrant does, however, require certain notices
to
Holders as set forth herein.
9. Communication.
No notice or other communication under this Warrant shall be effective or deemed
to have been given unless, the same is in writing and is mailed by first-class
mail, postage prepaid, or via recognized overnight courier with confirmed
receipt, addressed to:
(a) the
Company at Lev Pharmaceuticals, Inc., 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
XX
00000, Attn: Chief Executive Officer, or other such address as the Company
has
designated in writing to the Holder; or
(b) the
Holder at the address in the Credit Agreement, or other such address as the
Holder has designated in writing to the Company.
10. Headings.
The headings of this Warrant have been inserted as a matter of convenience
and
shall not affect the construction hereof.
11. Applicable
Law.
This Warrant shall be governed by and construed in accordance with the law
of
the State of New York without giving effect to the principles of conflicts
of
law thereof.
7
12. Amendment,
Waiver, etc.
Except as expressly provided herein, neither this Warrant nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought; provided, however, that any
provisions hereof may be amended, waived, discharged or terminated upon the
written consent of the Company and the Holders’ Agent.
*
* * * *
8
IN
WITNESS WHEREOF,
the Company has caused this Warrant to be signed by the undersigned duly
authorized officer as of November 2, 2007.
Lev
Pharmaceuticals, Inc.
By:/s/
Xxxxxx X. Xxxxxx
Name: Xxxxxx
X. Xxxxxx
Title:Chief
Executive Officer
SUBSCRIPTION (cash)
The
undersigned, ___________________, pursuant to the provisions of the foregoing
Warrant, hereby agrees to subscribe for and purchase ____________________ shares
of the Common Stock of Lev Pharmaceuticals, Inc. covered by said Warrant, and
makes payment therefor in full at the price per share provided by said
Warrant.
Dated:
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Signature:
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Address:
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CASHLESS
EXERCISE
The
undersigned _____________, pursuant to the provisions of the foregoing Warrant,
hereby elects to exchange its Warrant for ___________________ shares of Common
Stock of Lev Pharmaceuticals, Inc. pursuant to the Cashless Exercise provisions
of the Warrant.
Dated:
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Signature:
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Address:
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ASSIGNMENT
FOR
VALUE RECEIVED _______________ (“Assignor”)
hereby sells, assigns and transfers unto ____________________ (“Transferee”)
the foregoing Warrant and all rights evidenced thereby, and does irrevocably
constitute and appoint _____________________, attorney, to transfer said Warrant
on the books of Lev Pharmaceuticals, Inc. By acceptance of the foregoing
Warrant, Transferee shall become a Holder under said Warrant and subject to
the
rights, obligations and representations of Holder set forth in said
Warrant.
ASSIGNOR:
Dated:
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Signature:
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Address:
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TRANSFEREE:
Dated:
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Signature:
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Address:
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PARTIAL
ASSIGNMENT
FOR
VALUE RECEIVED _______________ (“Assignor”)
hereby assigns and transfers unto ____________________ (“Transferee”)
the right to purchase _______ shares of Common Stock of Lev Pharmaceuticals,
Inc. covered by the foregoing Warrant, and a proportionate part of said Warrant
and the rights evidenced thereby, and does irrevocably constitute and appoint
____________________, attorney, to transfer such part of said Warrant on the
books of Lev Pharmaceuticals, Inc. By acceptance of the proportionate part
of
foregoing Warrant, Transferee shall become a Holder under said proportionate
part of said Warrant and subject to the rights, obligations and representations
of Holder set forth in said Warrant.
ASSIGNOR:
Dated:
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Signature:
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Address:
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TRANSFEREE:
Dated:
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Signature:
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Address:
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