EXHIBIT 4.2
PLACEMENT AGENTS WARRANT AGREEMENT
This WARRANT AGREEMENT (this "Agreement") dated November 7, 2005, by and
among Javelin Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and
Xxxxxx & Xxxxxxx, LLC ("R&R"), and Riverbank Capital Securities, Inc.
("Riverbank", and collectively with R&R the "Placement Agents").
W I T N E S S E T H
WHEREAS, the Placement Agents have agreed, pursuant to that certain Letter
Agreement, dated September 30, 2005, and as amended on October 31, 2005, by and
between the Placement Agents and the Company (the "Placement Agency Agreement"),
to act as the placement agents in connection with the Company's proposed private
placement (the "Offering") of 14,222,215 shares of the Company's common stock,
$0.001 par value per share ("Common Stock"), and stock purchase warrants ("the
Warrants") to purchase up to 711,111 shares of Common Stock, at an aggregate
purchase price of $32 million (the "Placement"). The Warrants are exercisable at
a price of $2.25 per share, subject to customary anti-dilution provisions, for
an exercise period of five years; and
WHEREAS, the Company has agreed to issue to the Placement Agents and/or its
designees, warrants (the "Placement Agents Warrant") to purchase 853,333 shares
of Common Stock at an exercise price of $2.48 per share exercisable for five
years; and
WHEREAS, the Placement Agents Warrants to be issued pursuant to this
Agreement will be issued in connection with the closing of the Offering in
consideration for, and as part of each Placement Agents' respective compensation
in connection with the Placement Agents acting as the placement agents pursuant
to the Placement Agency Agreement.
NOW, THEREFORE, in consideration of the promises, the agreements herein set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Grant. Subject to the terms and conditions hereinafter set forth, the
Holders (as defined in Section 3.1 below) are hereby granted the right to
purchase shares of Common Stock ("Warrant Shares"), subject to the terms and
conditions of this Agreement. Initially, each of R&R and Riverbank is to receive
Placement Agents Warrants for the purchase 853,333 Warrant Shares.
2. Warrant Certificates. The Placement Agents Warrant certificates (the
"Warrant Certificates") delivered and to be delivered pursuant to this Agreement
shall be in the form set forth in Exhibit A attached hereto and made a part
hereof, with such appropriate insertions, omissions, substitutions, and other
variations as required or permitted by this Agreement.
3. Exercise of the Placement Agents Warrants.
1
3.1 Method of Exercise. The Placement Agents Warrants are initially
exercisable for Warrant Shares at the Exercise Price (as defined in Section 5.2
hereof), subject to adjustment as provided in Section 7 hereof, payable by
certified or official bank check or cash. Upon surrender of a Warrant
Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the Exercise Price for the Warrant Shares at the
Company's principal offices, currently at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX
00000, the registered holder of a Warrant Certificate ("Holder" or "Holders")
shall be entitled to receive a certificate or certificates for the Warrant
Shares so purchased. The purchase rights represented by each Warrant Certificate
are exercisable at the option of the Holder(s) thereof, in whole or in part (but
not as to fractional shares of the Warrant Shares). The Placement Agents
Warrants may be exercised to purchase all or part of the Warrant Shares
represented thereby. In the case of purchase of less than all the Warrant Shares
purchasable under any Warrant Certificate, the Company shall cancel such Warrant
Certificate upon the surrender thereof and shall execute and deliver a new
Warrant Certificate of like tenor for the balance of the Warrant Shares.
3.2 Net Exercise by Surrender of the Placement Agents Warrants. In
addition to the method of payment set forth in Section 3.1 and in lieu of any
cash payment required thereunder, the Holder(s) of the Placement Agents Warrants
shall have the right at any time and from time to time to exercise the Placement
Agents Warrants in full or in part by surrendering a Warrant Certificate in the
manner specified in Section 3.1 in exchange for the number of Warrant Shares
computed by using the following formula:
X = Y (A-B)
-------
A
Where X = the number of Warrant Shares to be issued to
the Holder(s) pursuant to the net exercise.
Y = the number of Warrant Shares
subject to the Placement Agents
Warrant being exercised or, if
only a portion of such Placement
Agents Warrant is being exercised,
the portion of such Placement
Agents Warrant being canceled (at
the time of such calculation).
A = the Fair Market Value of one
share of Common Stock (at the date
of exercise).
B = the Exercise Price (as adjusted to the date
of such calculation).
For purposes of this Section 3.2, the "Fair Market Value" of one share of
Common Stock shall equal: (i) the average of the closing sale price of the
Common Stock (or any other security for which the Placement Agents Warrants are
then exercisable) as quoted on the Nasdaq Stock Market or in the
Over-The-Counter Market or the closing price quoted on any national securities
exchange on which such securities are listed, whichever is applicable, for the
five trading days immediately prior to the date of exercise or, (ii) if no sales
take place on any such trading day, the average of the closing bid and asked
prices on such trading day; or (iii) if the Common Stock (or any other security
for which the Placement Agents Warrants are then exercisable) is not quoted on
the Nasdaq Stock Market or Over-The-Counter Bulletin Board or on a national
securities exchange, the Fair Market Value of the Common Stock shall be
established in good faith by the disinterested members of the Company's Board of
Directors.
2
3.3 Exercise Period. The Placement Agents Warrants shall be exercisable,
in whole or in part, during the term commencing ninety (90) days following the
date that a registration statement filed with the Securities and Exchange
Commission (the "SEC") covering the resale of the shares sold in the Offering is
declared effective by the SEC, and ending on the date five (5) years after the
closing of the Offering.
4. Issuance of Certificates.
4.1 In the event of any exercise of the rights represented by the
Placement Agents Warrants, as promptly as practicable on or after the date of
exercise and in any event within ten (10) business days thereafter, the Company
at its expense shall issue and deliver to the Person or Persons (as hereinafter
defined) entitled to receive the same a certificate or certificates representing
the number of Warrant Shares issued upon such exercise. In the event that the
Placement Agents Warrants are exercised in part, as promptly as practicable on
or after the date of exercise and in any event within ten (10) business days
thereafter, the Company at its sole expense will execute and deliver new
Warrants Certificates of like tenor exercisable for the number of Warrant Shares
for which the Placement Agents Warrants may then be exercised. As used herein,
the term "Person" or "Persons" means any individual or any corporation,
partnership, trust, limited liability company or other entity or organization of
any kind.
4.2 The issuance of the Warrant Shares upon the exercise of the Placement
Agents Warrants, and the delivery of certificates or other instruments
representing such Warrant Shares, shall be made without charge to the Holder(s)
for any tax or other charge of whatever nature in respect of such issuance and
the Company shall bear any such taxes in respect of such issuance.
5. Exercise Price.
5.1 Initial and Adjusted Exercise Price. Except as otherwise provided in
Section 7 hereof, the Placement Agents Warrants shall be exercisable to purchase
Warrant Shares at an exercise price of $2.48 per share exercisable for five
years.
5.2 Exercise Price. The term "Exercise Price" herein shall mean the
exercise price provided in Section 5.1 hereof.
6. Transfer of Securities
6.1 Legends. Each Holder, by acceptance of a Warrant Certificate,
covenants and agrees that it is acquiring the Placement Agents Warrants
evidenced thereby and the Warrant Shares for its own account as an investment
and not with a view to the distribution thereof. The Placement Agents Warrants
and Warrant Shares have not been registered under the Securities Act of 1933
(the "Act"), or any state securities laws and no transfer of any Placement
Agents Warrant or Warrant Shares shall be permitted unless the Company has
received notice of such transfer, at the address of its principal office set
forth in Section 3.1 hereof, in the form of assignment attached hereto,
accompanied by an opinion of counsel reasonably satisfactory to the Company that
an exemption from registration of such Placement Agents Warrant or Warrant
Shares under the Act is available for such transfer.
3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT
AND SUCH LAWS IS AVAILABLE.
THE TRANSFER, EXCHANGE AND EXERCISE OF THE PLACEMENT AGENTS
WARRANTS REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED IN
ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
6.2 Removal of Legend. Upon request of a Holder of a certificate with the
legends required by Section 6.1 hereof, the Company shall issue to such Holder a
new certificate therefor free of any transfer legend, if, with such request, the
Company shall have received an opinion of counsel satisfactory to the Company in
form and substance to the effect that any transfer by such Holder of the shares
evidenced by such certificate will not violate the Act and any applicable state
securities laws. Any purported transfer of any Placement Agents Warrant or
Warrant Shares not in compliance with the provisions of this Section 6 shall be
null and void.
7. Adjustment of Exercise Price and Number of Warrant Shares. The number
of Warrant Shares purchasable upon the exercise of the Placement Agents Warrants
(in the case of paragraphs (a) and (c) below) and the Exercise Price therefore
(in the case of paragraphs (a), (b) and (c) below) shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:
(a) Adjustment for Reclassification, Consolidation or Merger. If
while any Placement Agents Warrant, or any portion thereof, remains outstanding
and unexpired there shall be (i) a reorganization or recapitalization (other
than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), (ii) a merger or consolidation of the Company
with or into another Person in which the Company is not the surviving entity, or
a reverse merger in which the Company is the surviving entity but the shares of
the Company's capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash, or otherwise, or (iii) a sale or transfer of the Company's
properties and assets as, or substantially as, an entirety to any other Person
in one transaction or a series of related transactions, then, as a part of such
reorganization, recapitalization, merger, consolidation, sale or transfer,
unless otherwise directed by the Holder(s), all necessary or appropriate lawful
provisions shall be made so that the Holder(s) shall thereafter be entitled to
receive upon exercise of its Placement Agents Warrant, during the period
specified herein and upon payment of the Exercise Price then in effect, the
greatest number of shares of stock or other securities or property that a holder
of Warrant Shares deliverable upon exercise of such Placement Agents Warrant
4
would have been entitled to receive in such reorganization, recapitalization,
consolidation, merger, sale or transfer if such Placement Agents Warrants had
been exercised immediately prior to such reorganization, recapitalization,
merger, consolidation, sale or transfer, all subject to further adjustment as
provided in this Section 7. If the per share consideration payable to the
Holder(s) for Warrant Shares in connection with any such transaction is in a
form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company's Board of
Directors. The foregoing provisions of this paragraph shall similarly apply to
successive reorganizations, recapitalizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation that are
at the time receivable upon the exercise of such Placement Agents Warrant. In
all events, appropriate adjustment shall be made in the application of the
provisions of the Placement Agents Warrants (including adjustment of the
Exercise Price and number of Warrant Shares purchasable pursuant to the terms
and conditions of the Placement Agents Warrants) with respect to the rights and
interests of the Holder(s) after the transaction, to the end that the provisions
of each Placement Agents Warrant shall be applicable after that event, as near
as reasonably may be, in relation to any shares or other property deliverable or
issuable after such reorganization, recapitalization, merger, consolidation,
sale or transfer upon exercise of each Placement Agents Warrant.
(b) Adjustments for Split, Subdivision or Combination of Warrant
Shares. If the Company at any time while the Placement Agents Warrants, or any
portion thereof, remain outstanding and unexpired shall split or subdivide any
class of securities as to which purchase rights under the Placement Agents
Warrants exist, into a different number of securities of the same class, the
number of shares of such class issuable upon exercise of the Placement Agents
Warrants immediately prior to such split or subdivision shall be proportionately
adjusted and the Exercise Price for such class of securities shall be
proportionately adjusted. If the Company at any time while the Placement Agents
Warrants, or any portion thereof, remain outstanding and unexpired shall combine
any class of securities as to which purchase rights under this Agreement exist,
into a different number of securities of the same class, the number of shares of
such class issuable upon exercise of the Placement Agents Warrants immediately
prior to such combination shall be proportionately adjusted and the Exercise
Price for such class of securities shall be proportionately adjusted.
(c) Adjustments for Dividends in Stock or Other Securities or
Property. If while the Placement Agents Warrants, or any portion thereof, remain
outstanding and unexpired, the Holders shall have received, or, on or after the
record date fixed for the determination of eligible stockholders, shall have
become entitled to receive, without payment therefore, other or additional stock
or other securities or property (other than cash) of the Company by way of
dividend, then and in each case, the Placement Agents Warrants shall represent
the right to acquire, in addition to the number of shares of such class of
security receivable upon exercise of the Placement Agents Warrants, and without
payment of any additional consideration therefore, the amount of such other or
additional stock or other securities or property (other than cash) of the
Company that such holder would hold on the date of such exercise had it been the
holder of record of the class of security receivable upon exercise of the
Placement Agents Warrants on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
5
during said period, giving effect to all adjustments called for during such
period by the provisions of this Section 7.
(d) Issuances Below Exercise Price. Subject to the terms set forth
herein, if and whenever the Company shall issue or sell, or is, in accordance
with any of subsections (d)(l) through (d)(5) hereof, deemed to have issued or
sold, any shares of Common Stock for no consideration or for a consideration per
share less than the Exercise Price in effect immediately prior to the time of
such issue or sale, then and in each such case (a "Trigger Issuance") the
then-existing Exercise Price, shall be reduced, as of the close of business on
the effective date of the Trigger Issuance, to a price determined as follows:
Adjusted Exercise Price = (A x B) + D
-----------
A+C
where
"A" equals the number of shares of Common Stock outstanding, treating for
this purpose as outstanding all shares of Common Stock issuable upon exercise of
Options outstanding immediately prior to such issue or upon conversion of
Convertible Securities outstanding immediately prior to such issue, immediately
preceding such Trigger Issuance;
"B" equals the Exercise Price in effect immediately preceding such Trigger
Issuance;
"C" equals the number of Additional Shares of Common Stock issued or deemed
issued hereunder as a result of the Trigger Issuance; and
"D" equals the aggregate consideration, if any, received or deemed to be
received by the Company upon such Trigger Issuance;
provided, however, that in no event shall the Exercise Price after giving
effect to such Trigger Issuance be greater than the Exercise Price in effect
prior to such Trigger Issuance.
For purposes of this subsection (d), "Additional Shares of Common Stock"
shall mean all shares of Common Stock issued by the Company or deemed to be
issued pursuant to this subsection (d), other than Excluded Issuances (as
defined in subsection (e) hereof).
For purposes of this subsection (d), the following subsections
(d)(l) to (d)(5) shall also be applicable:
(d)(1) Issuance of Rights or Options. In case at any time the Company
shall in any manner grant (directly and not by assumption in a merger or
otherwise) any warrants or other rights to subscribe for or to purchase, or any
options for the purchase of, Common Stock or any stock or security convertible
into or exchangeable for Common Stock (such warrants, rights or options being
called "Options" and such convertible or exchangeable stock or securities being
called "Convertible Securities") whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately exercisable,
6
and the price per share for which Common Stock is issuable upon the exercise of
such Options or upon the conversion or exchange of such Convertible Securities
(determined by dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount, if any, received or receivable by the
Company as consideration for the granting of such Options, plus (y) the
aggregate amount of additional consideration payable to the Company upon the
exercise of all such Options, plus (z), in the case of such Options which relate
to Convertible Securities, the aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon the conversion
or exchange of all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Exercise Price in effect immediately prior
to the time of the granting of such Options, then the total number of shares of
Common Stock issuable upon the exercise of such Options or upon conversion or
exchange of the total amount of such Convertible Securities issuable upon the
exercise of such Options shall be deemed to have been issued for such price per
share as of the date of granting of such Options or the issuance of such
Convertible Securities and thereafter shall be deemed to be outstanding for
purposes of adjusting the Exercise Price. Except as otherwise provided in
subsection (d)(3), no adjustment of the Exercise Price shall be made upon the
actual issue of such Common Stock or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities.
(d)(2) Issuance of Convertible Securities. In case the Company shall
in any manner issue (directly and not by assumption in a merger or otherwise) or
sell any Convertible Securities, whether or not the rights to exchange or
convert any such Convertible Securities are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (i) the sum (which sum shall constitute the
applicable consideration) of (x) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible Securities,
plus (y) the aggregate amount of additional consideration, if any, payable to
the Company upon the conversion or exchange thereof, by (ii) the total number of
shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of all
such Convertible Securities shall be deemed to have been issued for such price
per share as of the date of the issue or sale of such Convertible Securities and
thereafter shall be deemed to be outstanding for purposes of adjusting the
Exercise Price, provided that (a) except as otherwise provided in subsection
(d)(3), no adjustment of the Exercise Price shall be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities and (b) no further adjustment of the Exercise Price shall be made by
reason of the issue or sale of Convertible Securities upon exercise of any
Options to purchase any such Convertible Securities for which adjustments of the
Exercise Price have been made pursuant to the other provisions of subsection
(d).
(d)(3) Change in Option Price or Conversion Rate. Upon the happening
of any of the following events, namely, if the purchase price provided for in
any Option referred to in subsection (d)(l) hereof, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in subsections (d)(l) or (d)(2), or the rate
7
at which Convertible Securities referred to in subsections (d)(l) or (d)(2) are
convertible into or exchangeable for Common Stock shall change at any time
(including, but not limited to, changes under or by reason of provisions
designed to protect against dilution), the Exercise Price in effect at the time
of such event shall forthwith be readjusted to the Exercise Price which would
have been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. On the termination of any Option for which any
adjustment was made pursuant to this subsection (d) or any right to convert or
exchange Convertible Securities for which any adjustment was made pursuant to
this subsection (d) (including without limitation upon the redemption or
purchase for consideration of such Convertible Securities by the Company), the
Exercise Price then in effect hereunder shall forthwith be changed to the
Exercise Price which would have been in effect at the time of such termination
had such Option or Convertible Securities, to the extent outstanding immediately
prior to such termination, never been issued.
(d)(4) Consideration for Stock. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the net amount received by
the Company therefor, after deduction therefrom of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for a consideration other than cash, the
amount of the consideration other than cash received by the Company shall be
deemed to be the fair value of such consideration as determined in good faith by
the Board of Directors of the Company, after deduction of any expenses incurred
or any underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any Options shall be issued in connection with the
issue and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
for such consideration as determined in good faith by the Board of Directors of
the Company. If Common Stock, Options or Convertible Securities shall be issued
or sold by the Company and, in connection therewith, other Options or
Convertible Securities (the "Additional Rights") are issued, then the
consideration received or deemed to be received by the Company shall be reduced
by the fair market value of the Additional Rights (as determined using the
Black-Scholes option pricing model or another method selected in good faith by
the Company's Board of Directors). The Board of Directors of the Company shall
respond promptly, in writing, to an inquiry by the Warrantholder as to the fair
market value of the Additional Rights.
(d)(5) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company or any of its wholly-owned subsidiaries, and the
disposition of any such shares (other than the cancellation or retirement
thereof) shall be considered an issue or sale of Common Stock for the purpose of
this subsection (d).
(e) Excluded Issuances. Anything herein to the contrary
notwithstanding, the Company shall not be required to make any adjustment of the
Exercise Price in the case of the issuance of (A) capital stock, Options or
Convertible Securities issued to directors, officers, employees or consultants
8
of the Company in connection with their service as directors of the Company,
their employment by the Company or their retention as consultants by the Company
pursuant to an equity compensation program approved by the Board of Directors of
the Company or the compensation committee of the Board of Directors of the
Company, (B) shares of Common Stock issued upon the conversion or exercise of
Options or Convertible Securities issued prior to the date hereof, provided such
securities are not amended after the date hereof to increase the number of
shares of Common Stock issuable thereunder or to lower the exercise or
conversion price thereof, (C) securities issued in the Placement and securities
issued upon the exercise or conversion of those securities, (D) shares of Common
Stock issued or issuable by reason of a dividend, stock split or other
distribution on shares of Common Stock (but only to the extent that such a
dividend, split or distribution results in an adjustment in the Exercise Price
pursuant to the other provisions of this Agreement), (E) shares of Common Stock
issued in an offering for cash for the account of the Company that is
underwritten on a firm commitment basis and is registered with the SEC under the
Act (other than an "at-the-market offering" as defined in Rule 415(a)(4) under
the 1933 Act and "equity lines"), (F) shares of Common Stock issued or issuable
to the lessor or vendor in any office lease or equipment lease or similar
equipment financing transaction in which the Company or any Subsidiary obtains
the use of such office space or equipment for its business, approved in good
faith by the Board of Directors, (G) shares of Common Stock issued or issuable
to a bank or similar financial institution in connection with a credit line or
facility, and (H) shares of Common Stock issued to parties that are suppliers,
customers or strategic partners investing in connection with a commercial
relationship with the Company, approved in good faith by the Board of Directors,
the primary purpose of which issuance is not to raise capital (collectively,
"Excluded Issuances").
(f) Notice of Adjustments. Upon any adjustment of the Exercise Price
and any increase or decrease in the number of Warrant Shares purchasable upon
the exercise of the Placement Agents Warrants, then, and in each such case, the
Company, within 30 days thereafter, shall give written notice thereof to the
Holder(s) at the address of such Holder(s) as shown on the books of the Company
which notice shall state the Exercise Price as adjusted and, if applicable, the
increased or decreased number of Warrant Shares purchasable upon the exercise of
the Placement Agents Warrants, setting forth in reasonable detail the method of
calculation of each.
8. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder(s) at the principal office of the Company, for a new Warrant
Certificate of like form, tenor and date representing in the aggregate the right
to purchase the same number of securities in such denominations as shall be
designated by the Holder(s) thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Placement Agents
Warrants, if mutilated, the Company will make and deliver a new Warrant
Certificate of like form and tenor in lieu thereof.
9
9. Fractional Shares. No fractional shares will be issued in connection
with any exercise hereunder. Instead, the Company shall pay to Holder(s) an
amount in cash equal to any fractional share to which the Holder(s) would be
entitled, multiplied by the Fair Market Value of the Common Stock.
10. Stock Fully Paid; Reservation of Shares. The Company shall at all
times reserve and keep available out of its authorized Common Stock, solely for
the purpose of issuance upon the exercise of the Placement Agents Warrants, such
number of Warrant Shares into which the Placement Agents Warrants are
exercisable. The Company covenants and agrees that, upon exercise of the
Placement Agents Warrants and payment of the Exercise Price therefore, all
shares of Common Stock shall be duly and validly issued, fully paid,
non-assessable and not subject to the preemptive rights of any stockholder,
except as set forth in the Memorandum (as defined in the Placement Agency
Agreement).
11. Rights of Stockholders. Except as expressly provided in Section 3
hereof, no Holder, as such, shall be entitled to vote or receive dividends or be
deemed the holder of the Warrant Shares or any other securities of the Company
that may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the Holder(s), as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, consolidation, merger, conveyance, or otherwise) or to receive
notice of meetings, or to receive dividends or subscription rights or otherwise
until the Placement Agents Warrants shall have been exercised and the Warrant
Shares purchasable upon the exercise thereof shall have been issued, as provided
herein.
12. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to a registered Holder(s) of the Placement Agents Warrants,
to the address of such Holder(s) as shown on the books of the Company; or
(b) If to the Company, at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxxx X. Xxxx, Chief Executive Officer, or at such other address as
may have been furnished in writing by the Company, with a copy Xxxxxx Xxxx &
Priest LLP 000 Xxxxx Xxxxxx, Xxx Xxxx, XX, 00000, Attention: Xxxxx X. Xxxx,
Esq.; or
(c) If to Xxxxxx & Xxxxxxx LLC, at 0000 Xxxxxx xx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Chief Financial Officer, or at such other address as
may have been furnished in writing by R&R, or
(d) If to Riverbank Capital Securities, Inc., at 000 0xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxx, or any such other
address as may have been furnished in writing by Riverbank.
13. Supplements and Amendments. The Company and the Placement Agents may
from time to time supplement or amend this Agreement without the approval of any
10
Holder(s) in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any provision
herein, or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Placement Agents may deem necessary
or desirable and which the Company and the Placement Agents deem shall not
adversely affect the interests of the Company and/or the Holder(s). Other
amendments to this Agreement may be made only with the written consent of the
Company and the Holder(s) of the majority of the outstanding Warrant Shares
issuable upon exercise of the Placement Agents Warrants.
14. Successors. All the covenants and provisions of this Agreement shall
be binding upon and inure to the benefit of the Company, the Holder(s) and their
respective successors and assigns hereunder.
15. Termination. This Agreement shall terminate at the close of business
on the expiration time.
16. ARBITRATION, CHOICE OF LAW; COSTS. THE PARTIES HERETO AGREE TO SUBMIT
ALL CONTROVERSIES TO ARBITRATION IN ACCORDANCE WITH THE PROVISIONS SET FORTH
BELOW AND UNDERSTAND THAT (A) ARBITRATION IS FINAL AND BINDING ON THE PARTIES,
(B) THE PARTIES ARE WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING
THE RIGHT TO A JURY TRIAL, (C) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE
LIMITED AND DIFFERENT FROM COURT PROCEEDINGS, (D) THE ARBITRATOR'S AWARD IS NOT
REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY PARTY'S RIGHT TO
APPEAL OR TO SEEK MODIFICATION OF RULES BY ARBITRATORS IS STRICTLY LIMITED, (E)
THE PANEL OF NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (THE "NASD")
ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE
AFFILIATED WITH THE SECURITIES INDUSTRY, AND (F) ALL CONTROVERSIES WHICH MAY
ARISE BETWEEN THE PARTIES CONCERNING THIS AGREEMENT SHALL BE DETERMINED BY
ARBITRATION PURSUANT TO THE RULES THEN PERTAINING TO THE NASD. JUDGMENT ON ANY
AWARD OF ANY SUCH ARBITRATION MAY BE ENTERED IN THE SUPREME COURT OF THE STATE
OF NEW YORK OR IN ANY OTHER COURT HAVING JURISDICTION OVER THE PERSON OR PERSONS
AGAINST WHOM SUCH AWARD IS RENDERED. THE PARTIES AGREE THAT THE DETERMINATION OF
THE ARBITRATORS SHALL BE BINDING AND CONCLUSIVE UPON THEM. THE PREVAILING PARTY,
AS DETERMINED BY SUCH ARBITRATORS, IN A LEGAL PROCEEDING SHALL BE ENTITLED TO
COLLECT ANY COSTS, DISBURSEMENTS AND REASONABLE ATTORNEY'S FEES FROM THE OTHER
PARTY.
17. Entire Agreement; Modification. This Agreement (including the
Placement Agency Agreement to the extent portions thereof are referred to
herein) contains the entire understanding between the parties hereto with
respect to the subject matter hereof and may not be modified or amended except
as provided in Section 13 hereof.
11
18. Severability. If any provision of this Agreement shall be held to be
invalid and unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
19. Captions. The caption headings of the Sections of this Agreement are
for convenience of reference only and are not intended, nor should they be
construed, as a part of this Agreement and shall be given no substantive effect.
20. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person, entity or corporation other than the Company
and the Placement Agents and any other registered Holder(s) of the Warrant
Certificates, Warrant Shares any legal or equitable right, remedy or claim under
this Agreement; and this Agreement shall be for the sole and exclusive benefit
of the Company and the Placement Agents and any Holder(s) of the Warrant
Certificates or Warrant Shares.
21. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterpart shall for all purposes be deemed to be
an original, and such counterparts shall together constitute but one and the
same instrument.
22. Assignment. Any Person or Persons to whom the Placement Agents
Warrants are transferred by the Placement Agents shall agree to be bound by all
of the provisions hereof; and the transferring Placement Agents shall not
transfer any Placement Agents Warrants unless the transferring Placement Agents
first provide a written instrument to the Company notifying the Company of such
transfer pursuant to which the transferee agrees in writing to be bound by the
terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Placement Agents
Warrant Agreement to be duly executed as of the day and year first above
written.
JAVELIN PHARMACEUTICALS, INC.
By:/s/ Xxxxxx X. Xxxx
--------------------------------
Name: Xxxxxx X. Xxxx, MD
Title: Chief Executive Officer
Attest:
/s/ Xxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
12
XXXXXX & XXXXXXX, LLC
By:/s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
RIVERBANK CAPITAL SECURITIES, INC.
By:/s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Chairman
13
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR (ii) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE ISSER, THAT
AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
LAWS IS AVAILABLE.
THE TRANSFER, EXCHANGE AND EXERCISE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE ARE RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO
HEREIN.
No. [o] ________Warrants
November 7, 2005
WARRANT CERTIFICATE
This Warrant Certificate certifies that [Xxxxxx & Xxxxxxx, LLC] [Riverbank
Capital Securities, Inc.], or its registered assigns, is the registered holder
of _________ warrants (the "Warrants") to purchase initially, at any time
commencing three-months after the effective date of the Securities Act
Registration Statement to be filed covering the resale of the Shares sold in the
Offering and terminating at 5:30 p.m. New York time on November 7, 2010 (the
"Expiration Date"), up to __________ fully paid and non-assessable shares of
Common Stock, $0.001 par value per share ("Common Stock") of the Company, at the
exercise price, subject to adjustment in certain events (the "Exercise Price"),
of $2.48 (subject to adjustment) upon surrender of this Warrant Certificate and
payment of the Exercise Price at an office or agency of the Company, or by
surrender of this Warrant Certificate in lieu of cash payment, but subject to
the conditions and adjustments set forth in the Warrant Agreement dated as of
November 7, 2005 entered into by and between the Company, Xxxxxx & Xxxxxxx LLC
and Riverbank Capital Securities, Inc. (the "Warrant Agreement"). Except as
otherwise provided in Section 3.2 of the Warrant Agreement, payment of the
Exercise Price shall be made by certified or official bank check in New York
Clearing House funds payable to the order of the Company.
No Warrant may be exercised after 5:30 p.m. (New York time) on the
Expiration Date, at which time the Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and to which reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Company and the registered holder(s) of the Warrants.
14
As set forth in Section 7 of in the Warrant Agreement, certain adjustments
may be made to the Exercise Price and the type and/or number of the Company's
securities issuable upon their exercise. In the event of such an adjustment, the
Company will, at the request of the holder, issue a new Warrant Certificate
evidencing the adjustment in the Exercise Price and the number and/or type of
securities issuable upon the exercise of the Warrants; provided, however, that
the failure of the Company to issue such new Warrant Certificates shall not in
any way change, alter or otherwise impair the rights of the holder as set forth
in the Warrant Agreement.
Upon due presentment of transfer of this Warrant Certificate and the
executed form of assignment attached hereto at an office or agency of the
Company, a new Warrant Certificate or Warrant Certificates of like form and
tenor and evidencing in the aggregate a like number of Warrants shall be issued
to the transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided herein and in the Warrant Agreement, without any charge
except for any tax or other governmental charge imposed in connection with such
transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All capitalized terms used and not defined in this Warrant Certificate
shall have the meanings ascribed to them in the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed as of November 7, 2005.
JAVELIN PHARMACEUTICALS, INC.
By:/s/ Xxxxxx X. Xxxx
--------------------------------
Name: Xxxxxx X. Xxxx, MD
Title: Chief Executive Officer
Attest:
/s/ Xxxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
15
[FORM OF ELECTION TO PURCHASE]
TO: Javelin Pharmaceuticals, Inc.
Attention: President
1._______The undersigned hereby irrevocably elects to exercise the right,
represented by the attached Warrant Certificate, to purchase _____________
(leave blank if you choose Alternative No. 2 below) shares of Common Stock
pursuant to the terms of the Warrant Agreement entered into by and among Javelin
Pharmaceuticals, Inc., Xxxxxx & Xxxxxxx LLC, and Riverbank Capital Securities,
Inc., dated November 7, 2005 (the "Warrant Agreement"), and tenders herewith
payment of the purchase price of such shares in full. (Initial here if the
undersigned elects this alternative). __________
2. In lieu of exercising the attached Warrant Certificate for cash or
check, the undersigned hereby elects to effect the net exercise provision set
forth in Section 3.2 of the Warrant Agreement and receive _____________ (leave
blank if you choose Alternative No. 1 above) shares of Common Stock of the
Company. (Initial here if the undersigned elects this alternative).
_____________
Capitalized terms used and not herein defined shall have the meanings
ascribed to them in the Warrant Agreement.
Please issue a certificate or certificates representing said securities in
the name of the undersigned or in such other name as is specified below:
---------------------------------------------------------
(Name)
---------------------------------------------------------
---------------------------------------------------------
(Address)
------------------------------------------
(Signature and Date)
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate)
------------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
16
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED _________________________ (the "Transferor") hereby
sells, assigns and transfers unto ____________________ (the "Transferee")
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________ as its Attorney
to transfer the within Warrant Certificate on the books of Javelin
Pharmaceuticals, Inc., with full power of substitution. The Transferor has
provided a written instrument to the Company notifying the Company of such
transfer and pursuant to which the Transferee hereunder has agreed in writing to
be bound by the terms of the Warrant Agreement dated November 7, 2005 by,
between and among Javelin Pharmaceuticals, Inc., a Delaware corporation, Xxxxxx
& Xxxxxxx LLC, and Riverbank Capital Securities, Inc., a copy of which has been
provided to the Transferee by the Transferor.
Dated: Signature__________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate)
------------------------------------------
(Insert Social Security or other
Identifying Number of Holder)
17
