EXHIBIT 3(a)
EXECUTION VERSION
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
(COLLECTIVELY WITH THIS WARRANT, THE "SECURITIES") HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY OTHER
APPLICABLE FEDERAL OR STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED, UNLESS REGISTERED UNDER THE
SECURITIES ACT AND ANY OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS, OR
UPON DELIVERY TO THE ISSUER OF THE SECURITIES OF AN OPINION OF COUNSEL IN FORM
AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THE SECURITIES THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR SUCH OTHER APPLICABLE
FEDERAL OR STATE SECURITIES LAWS PURSUANT TO AVAILABLE EXEMPTIONS THEREFROM. THE
TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS RESTRICTED PURSUANT TO THE
TERMS HEREOF.
WARRANT
TO PURCHASE SHARES OF COMMON STOCK,
U.S.$0.01 PAR VALUE,
OF
ELITE PHARMACEUTICALS, INC.
This is to certify that VGS PHARMA, LLC, a Delaware limited
liability company, or its successors and assigns (collectively, the "HOLDER"),
is the owner of a Warrant (this "WARRANT"), which entitles the Holder to
purchase from Elite Pharmaceuticals, Inc., a Delaware corporation (the
"COMPANY"), up to Four Hundred Seventy-Eight Thousand Six Hundred Ninety-Eight
(478,698) duly authorized, validly issued, fully paid and nonassessable shares
of common stock, par value U.S.$0.01 per share, of the Company (the "COMMON
STOCK") at such times prior to the Expiration Time (as defined in Section 13) as
are specified in Section 1, and at an exercise price of U.S.$3.00 per share of
Common Stock (the "EXERCISE PRICE"), all on the terms and subject to the
conditions hereinafter set forth.
The number of shares of Common Stock issuable upon the full exercise
of this Warrant (the "NUMBER ISSUABLE"), which is initially Four Hundred
Seventy-Eight Thousand Six Hundred Ninety-Eight (478,698), is subject to
adjustment from time to time pursuant to the provisions of Section 2 of this
Warrant. All references to the Number Issuable shall be deemed to mean the
Number Issuable as so adjusted as of the time of determination. The Exercise
Price, which is initially U.S.$3.00, is subject to adjustment from time to time
pursuant to the provisions of Section 3 of this Warrant. All references to the
Exercise Price shall be deemed to mean the
Exercise Price as so adjusted as of the time of determination.
Capitalized terms used herein but not otherwise defined shall have
the respective meanings ascribed to them in Section 13.
1. MANNER OF EXERCISE OF WARRANT.
(a) This Warrant may be exercised by the Holder, in whole or in
part, following the Issue Date and prior to the Expiration Time upon delivery to
the Company at the principal executive office of the Company in the United
States of America, of (i) this Warrant, (ii) a written notice stating that the
Holder elects to exercise this Warrant in accordance with the provisions of this
Section 1 and specifying the number of shares of Common Stock for which this
Warrant is then being exercised and the name or names in which the Holder wishes
the certificate or certificates for shares of Common Stock to be issued, (iii)
payment of the aggregate Exercise Price for shares of Common Stock issuable upon
such exercise, which shall be payable either in cash or by a certified or
official bank check payable to the order of the Company, at the Holder's option,
and (iv) such other documents and instruments, duly and properly executed, as
the Company shall reasonably require from the Holder or the Holder's transferees
(collectively, the "WARRANT EXERCISE DOCUMENTATION"). Any request to issue
shares of Common Stock in a name other than the name of the Holder shall be
deemed a transfer of this Warrant subject to compliance with Section 7. Evidence
of registration or an opinion of counsel in the manner described in Section 7
shall, in such cases, be deemed to be part of the required Warrant Exercise
Documentation.
(b) As promptly as practicable, and in any event within five (5)
Business Days after receipt of all Warrant Exercise Documentation, the Company
shall deliver or cause to be delivered (i) a certificate or certificates
representing the number of shares of Common Stock specified in the Warrant
Exercise Documentation, and (ii) if applicable, cash in lieu of any fractional
share, as hereinafter provided. Such exercise shall be deemed to have been made
at the close of business on the date of delivery of all Warrant Exercise
Documentation so that the Person entitled to receive shares of Common Stock upon
such exercise shall be treated for all purposes as having become the record
holder of such shares of Common Stock at such time. No such surrender shall be
effective to constitute the Person entitled to receive such shares as the record
holder thereof while the transfer books of the Company for the Common Stock are
closed for any purpose (which transfer books shall not be closed for the
purposes of the exercise of this Warrant for any period in excess of five (5)
consecutive Business Days); but any such surrender of this Warrant for exercise
during any period while such transfer books are so closed shall become effective
for exercise immediately upon the reopening of such transfer books, as if the
exercise had been made on the date the Warrant Exercise Documentation was
received.
(c) The issuance of certificates for Common Stock issuable upon
exercise of this Warrant shall be made without charge to the Holder for any
issuance tax in respect thereof, if any, other than taxes in connection with the
issuance of a certificate for Common Stock in the name of any Person other than
the Holder.
(d) In connection with the exercise of this Warrant, no fractions of
shares of Common Stock shall be issued, but, in lieu thereof, the Company shall
pay a cash adjustment in
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respect of such fractional interest in an amount equal to such fractional
interest multiplied by the fair market value of such share on the Business Day
which next precedes the date of exercise, as determined in good faith by the
Board.
2. ADJUSTMENT OF NUMBER ISSUABLE. The Number Issuable shall be
subject to adjustment from time to time as follows:
(a) In case the Company shall at any time or from time to time after
the Issue Date:
(i) pay a dividend or make a distribution on the issued and
outstanding shares of Common Stock in shares of the capital stock of the Company
for no additional consideration;
(ii) subdivide the issued and outstanding shares of Common
Stock into a larger number of shares; or
(iii) combine the issued and outstanding shares of Common
Stock into a smaller number of shares;
then, and in each such case, the Number Issuable in effect immediately prior to
such event shall be adjusted so that the Holder shall, upon exercise thereafter,
be entitled to receive the number of shares of Common Stock or other securities
of the Company which the Holder would have owned or had been entitled to receive
upon or by reason of any of the events described above, had such Warrant been
exercised in full immediately prior to the happening of such event. An
adjustment made pursuant to this Section 2(a) shall become effective
retroactively (A) in the case of any such dividend or distribution, to a date
immediately following the close of business on the record date for the
determination of holders of shares of Common Stock entitled to receive such
dividend or distribution, or (B) in the case of any such subdivision or
combination, to the close of business on the date upon which such corporate
action became effective.
(b) In the event of a merger, consolidation, reorganization or
recapitalization of the Company (or its capital stock) or the occurrence of a
similar event or transaction, which would have a dilutive effect on the Number
Issuable or alter the type of security or other property which may be issued
upon exercise of this Warrant (other than an action described in Section 2(a)),
then the Number Issuable and/or, as appropriate, the type of security or other
property which may be issued upon exercise of this Warrant, shall be adjusted in
such manner and at such time as the Board determines in good faith to be
equitable under the circumstances (such determination to be evidenced in a
notice which shall be mailed by the Company to the Holder).
(c) Notwithstanding anything herein to the contrary, no adjustment
under this Section 2 need be made to the Number Issuable unless such adjustment
would require an increase or decrease of at least 1% of the Number Issuable then
in effect. Any lesser adjustment shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment, which, together
with any adjustment or adjustments so carried forward, shall amount to an
increase or decrease of at least 1% of such Number Issuable. Any adjustment to
the
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Number Issuable carried forward and not theretofore made shall be made
immediately prior to the partial or full exercise of this Warrant pursuant
hereto.
3. ADJUSTMENT OF EXERCISE PRICE. Upon each adjustment to the Number
Issuable hereunder, the Exercise Price shall be adjusted to the product obtained
by multiplying the Exercise Price in effect immediately prior to such adjustment
by a fraction, the numerator of which shall be the Number Issuable immediately
prior to such adjustment and the denominator of which shall be the Number
Issuable immediately thereafter.
4. REDEMPTION. The Company shall not have any right to redeem this
Warrant.
5. NOTICE OF CERTAIN EVENTS. In case at any time or from time to
time the Holder is entitled to notice pursuant to the terms of Section 2, such
notice shall provide (a) the date on which a record is to be taken for the
purpose of such dividend, distribution, subdivision or combination of shares of
Common Stock, or similar event or transaction, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to or affected by such dividend, distribution, subdivision or combination of
shares of Common Stock, or similar event or transaction, are to be determined,
or (b) the date on which such consolidation, merger, dissolution, liquidation,
winding-up, sale of all or substantially all of the assets or capital stock of
the Company or similar event or transaction is expected to become effective.
6. REGISTERED HOLDER. The Person in whose name this Warrant is
registered shall be deemed the owner hereof for all purposes.
7. TRANSFER OF WARRANTS. Neither this Warrant nor the rights of the
Holder hereunder may be transferred, encumbered or otherwise disposed of without
the prior written consent of the Company. Any transfer of this Warrant or the
rights represented hereby permitted by the Company, shall be effected by the
surrender of this Warrant, along with the form of assignment attached hereto,
duly and properly completed and executed by the Holder hereof, at the principal
executive office of the Company in the United States of America; PROVIDED,
HOWEVER, that (a) a registration statement with respect to the disposition of
this Warrant, shall be effective under the Securities Act and other applicable
federal or state securities laws, or (b) the Company shall have received an
opinion of counsel reasonably satisfactory to it that no violation of such act
and other applicable federal or state securities laws will be involved in such
disposition. Thereupon, the Company shall issue in the name or names specified
by the Holder and, in the event of a partial disposition, in the name of the
Holder as well, a new warrant certificate or certificates of like tenor
evidencing the right to purchase, in aggregate, such number of shares of Common
Stock as shall be equal to the aggregate number of shares of Common Stock then
purchasable pursuant to this Warrant.
8. NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof as set forth in Section 1.
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9. DENOMINATIONS. The Company covenants that it will, at its own
expense, promptly upon surrender of this Warrant at the principal executive
office of the Company in the United States of America, execute and deliver to
the Holder a new warrant certificate or certificates of like tenor in
denominations specified by the Holder evidencing the right to purchase, in
aggregate, such number of shares of Common Stock (or other capital stock or
property) as shall be equal to the aggregate number of shares of Common Stock
(or other capital stock or property) then purchasable pursuant to this Warrant.
10. REPLACEMENT OF WARRANTS. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (with or without requirement of a surety bond in the
Company's sole discretion), and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and (if mutilated) upon surrender and
cancellation of this Warrant, the Company shall make and deliver to the Holder a
new warrant certificate of like tenor in lieu of this Warrant. Any replacement
warrant certificate made and delivered in accordance with this Section 10 shall
be dated as of the date hereof.
11. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT TO
ANY CHOICE OR CONFLICT OF LAWS PROVISIONS).
12. BENEFITS OF WARRANT. This Warrant will inure to the benefit of
and be binding upon the Holder, the Company and their respective successors and
permitted assigns. Nothing in this Warrant shall be construed to give the Holder
any rights as a holder of shares of Common Stock until such time, if any, as
this Warrant is exercised in accordance with the provisions hereof.
13. DEFINITIONS. For the purposes of this Warrant, the following
terms shall have the meanings indicated below:
"BOARD" means the Board of Directors of the Company.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or a
legal holiday in the State of New York.
"COMMON STOCK" shall have the meaning ascribed to such term in the
Preamble hereof.
"COMPANY" shall have the meaning ascribed to such term in the
Preamble hereof.
"EXERCISE PRICE" shall have the meaning assigned to such term in the
Preamble hereof.
"EXPIRATION TIME" means 5:00 p.m., New York time, on December 6,
2011.
"ISSUE DATE" means December 6, 2006.
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"NUMBER ISSUABLE" shall have the meaning ascribed to such term in
the Preamble hereof.
"PERSON" means any individual, corporation, limited liability
company, partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"WARRANT" shall have the meaning assigned to such term in the
Preamble.
"WARRANT EXERCISE DOCUMENTATION" shall have the meaning ascribed to
such term in Section 1(a).
14. NOTICES. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be sufficient if
delivered personally or sent by telecopy (with confirmation of receipt) or by
registered or certified mail, postage prepaid, return receipt requested, (a) if
to the Holder, at 475 Bernardsville Road, Mendham, New Jersey 07945; Facsimile:
(908) 766-4006 and (b) if to the Company, to 165 Ludlow Avenue, Northvale, New
Jersey 07647, Attention: Chief Executive Officer; Facsimile: (201) 391-7693.
Each such notice, request or communication shall be effective when received or,
if given by mail, when delivered at the address specified in this Section 14 or
on the fifth (5th) Business Day following the date on which such communication
is posted, whichever occurs first.
15. SHARE LEGEND. Each certificate representing shares of Common
Stock or any other securities issued upon exercise of this Warrant shall bear a
legend substantially to the following effect unless such shares or other
securities have been registered under the Securities Act and any other
applicable federal and state securities laws:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR OTHER APPLICABLE FEDERAL OR STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED, UNLESS REGISTERED UNDER THE ACT AND OTHER APPLICABLE FEDERAL OR
STATE SECURITIES LAWS, OR UPON DELIVERY TO THE ISSUER OF THE SECURITIES
REPRESENTED HEREBY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER OF THE SECURITIES REPRESENTED HEREBY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT OR SUCH OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS
PURSUANT TO AVAILABLE EXEMPTIONS THEREFROM. THE TRANSFER OF THE SECURITIES
REPRESENTED HEREBY IS RESTRICTED PURSUANT TO THE TERMS HEREOF."
16. AMENDMENTS AND WAIVERS. No modification, amendment or waiver of
any term of, or consent required by, this Warrant, nor any consent to any
departure herefrom, shall be effective unless it is in writing and signed by the
Company and the Holder. Such modification,
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amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
17. ASSIGNMENT. Neither this Warrant, nor the rights of the Holder hereunder,
shall be assignable or transferable except in connection with a transfer or
assignment of this Warrant as permitted in accordance with Section 7. Any
instrument purporting to make a transfer or assignment in violation of this
Section 17 shall be void and of no effect.
18. CONSENT TO EXCLUSIVE JURISDICTION AND SERVICE OF PROCESS. The
Company and the Holder each hereby irrevocably and unconditionally submits to
the jurisdiction of the courts of the State of New York and of the Federal
courts sitting in the State of New York in any action or proceeding directly or
indirectly arising out of or relating to this Warrant or the transactions
contemplated hereby (whether based in contract, tort, equity or any other
theory). The Company and the Holder each agrees that all actions or proceedings
arising out of or relating to this Warrant must be litigated exclusively in any
such State of New York or, to the extent permitted by law, Federal court that
sits in the County of New York, and accordingly, each party irrevocably waives
any objection which he or it may now or hereafter have to the laying of the
venue of any such action or proceeding in any such court. The Company and the
Holder each further irrevocably consents to service of process in the manner
provided for notices in Section 14. Nothing in this Warrant will affect the
right of the Company or the Holder to serve process in any other manner
permitted by law.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the Issue Date.
ELITE PHARMACEUTICALS, INC.
By: /s/ Bernard Berk
---------------------------------
Name: Bernard Berk
Title: Chief Executive Officer
FORM OF ASSIGNMENT OF WARRANT
The undersigned hereby assigns and transfers this Warrant to
[__________], whose Social Security Number or Tax ID Number is [__________] and
whose address of record shall be [__________], and irrevocably appoints the
Secretary of Elite Pharmaceuticals, Inc. as agent to transfer this security to
such assignee on the books of Elite Pharmaceuticals, Inc. Such agent may
substitute another to act for such agent.
Dated:_____________________ __________________________________________
Name of Registered Holder
Address:
__________________________________________
__________________________________________
__________________________________________
Attention:________________________________
Telecopy:_________________________________
IF REGISTERED HOLDER IS AN INDIVIDUAL:
__________________________________________
Signature of Registered Holder
IF REGISTERED HOLDER IS NOT AN INDIVIDUAL:
__________________________________________
Signature of Authorized Signatory
__________________________________________
Name of Authorized Signatory
__________________________________________
Title of Authorized Signatory