Final
Exhibit A
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NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO
WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY SUCH SECURITIES PROVIDED THAT THE PLEDGEE IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF REGULATION D PROMULGATED UNDER THE
SECURITIES ACT.
IMPAX LABORATORIES, INC.
Common Stock Purchase Warrant
To Purchase _______ Shares of Common Stock
Expiring May 7, 2008
Hayward, CA
No.__ Dated: May 7, 2003
IMPAX LABORATORIES, INC., a Delaware corporation (the "Company"), for
value received, hereby certifies that _____________, or registered assigns (the
"Holder"), is entitled to purchase from the Company, at any time and from time
to time as specified in Section 1.1, ____________________ (_______) shares (the
"Warrant Shares") (subject to adjustment as hereinafter provided) of duly
authorized, validly issued, fully paid and non-assessable shares of Common
Stock, par value $.01 per share (the "Common Stock"), of the Company, at an
initial exercise price equal to $7.421 per share, subject, however, to the
provisions and upon the terms and conditions hereinafter set forth (such
exercise price, as from time to time adjusted in accordance with the terms
hereof, being hereinafter referred to as the "Warrant Price"). This Common Stock
Purchase Warrant (this "Warrant") is one of a duly authorized issue of Warrants
of like tenor of the Company to be issued from time to time pursuant to the
terms of, and subject to, that certain Common Stock and Warrant Purchase
Agreement, dated May 6, 2003, by and among the Company and the purchasers named
in Schedule 1 thereto (the "Purchase Agreement"). This Warrant may only be
transferred in accordance with Section 6 of the Purchase Agreement. Any
transferee of this Warrant, by acceptance hereof, assumes and agrees to the
rights and restrictions set forth herein and in the Purchase Agreement.
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In addition to the terms defined elsewhere in this Warrant, capitalized
terms that are not otherwise defined herein have the meanings given to such
terms in the Purchase Agreement; references to a "Section", unless otherwise
specified, are to one of the sections of this Warrant.
1. Exercise of Warrant.
1.1. Time of Exercise1.2. . This Warrant may be exercised, in whole
or in part, any time and from time to time from the date first set forth above
until 6:30 p.m. New York City time on May 7, 2008 (the "Expiration Date"). If
this Warrant is not exercised on or prior to the Expiration Date, it shall
become null and void and all rights hereunder shall cease as of that time;
provided, however, that if the average of the Closing Prices for the five
Trading Days immediately prior to (but not including) the Expiration Date
exceeds the Exercise Price on the Expiration Date, then this Warrant shall be
deemed to have been exercised in full (to the extent not previously exercised)
on a "cashless exercise" basis at 6:30 P.M. New York City time on the Expiration
Date.
1.2. Manner of Exercise. A Holder may exercise this Warrant by
delivering to the Company (i) an exercise notice, in the form attached hereto
(the "Exercise Notice"), appropriately completed and duly signed, (ii) the
original Warrant and (iii) payment of the Exercise Price for the number of
Warrant Shares as to which this Warrant is being exercised (which may take the
form of a "cashless exercise" if so indicated in the Exercise Notice), and the
date such items are delivered to the Company (as determined in accordance with
the notice provisions hereof) is an "Exercise Date." Notwithstanding anything to
the contrary, the Holder shall not be required to deliver the original Warrant
in order to effect an exercise hereunder but shall deliver such Warrant (or
other instruments required pursuant to Section 5.3) as soon as reasonably
practicable thereafter. Execution and delivery of the Exercise Notice shall have
the same effect as a request to cancel the original Warrant and to issue a New
Warrant evidencing the right to purchase the remaining number of Warrant Shares.
1.3. Delivery of Stock Certificates, etc.
(a) Upon exercise of this Warrant, the Company shall promptly (but
in no event later than five Trading Days after the Exercise Date) issue or cause
to be issued and cause to be delivered to or upon the written order of the
Holder and in such name or names as the Holder may designate, a certificate for
the Warrant Shares issuable upon such exercise, free of restrictive legends
unless a registration statement covering the resale of the Warrant Shares and
naming the Holder as a selling stockholder thereunder is not then effective and
the Warrant Shares are not freely transferable without volume restrictions
pursuant to Rule 144 under the Securities Act. The Holder, or any Person so
designated by the Holder to receive Warrant Shares, shall be deemed to have
become Holder of record of such Warrant Shares as of the Exercise Date. The
Company shall, upon request of the Holder, use its reasonable best efforts to
deliver Warrant Shares hereunder electronically through the Depository Trust
Corporation or another established clearing corporation performing similar
functions.
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(b) This Warrant is exercisable, either in its entirety or, from
time to time, for a portion of the number of Warrant Shares. Upon surrender of
this Warrant following one or more partial exercises, the Company shall issue or
cause to be issued, at its expense, a New Warrant (as defined in Section 5.2
herein) evidencing the right to purchase the remaining number of Warrant Shares.
(c) In addition to any other rights available to a Holder, if the
Company fails to deliver to the Holder a certificate representing Warrant Shares
on the date on which delivery of such certificate is required by this Warrant,
such Holder may notify the Company via facsimile, mail or any other means, of
its failure to deliver the certificate (a "Delivery Failure Notice"). If the
Company fails to deliver to the Holder a certificate representing Warrant Shares
by the third Trading Day after delivery of the Delivery Failure Notice by the
Holder and if after such third Trading Day after the delivery of the Delivery
Failure Notice the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares that the Holder anticipated receiving from the Company (a
"Buy-In"), then in the Holder's sole discretion, the Company shall within three
Trading Days after the Holder's request, either (i) pay cash to the Holder in an
amount equal to the Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the "Buy-In
Price"), at which point the Company's obligation to deliver such certificate
(and to issue such Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to the Holder a certificate or certificates representing
such Common Stock and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (A) such number of shares of
Common Stock, times (B) the Closing Price on the date of the event giving rise
to the Company's obligation to deliver such certificate.
(d) The Company's obligations to issue and deliver Warrant Shares
in accordance with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or
consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person (other
than the Securities Act and applicable state securities laws), and irrespective
of any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Holder's right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company's
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.
(e) Issuance and delivery of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, withholding tax, transfer agent fee or other
incidental tax or expense in respect of the issuance of such certificates, all
of which taxes and expenses shall be paid by the Company; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for
Warrant Shares or Warrants in a name other than that of the Holder. The Holder
shall be responsible for all other tax liability that may arise as a result of
holding or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.
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1.4. Payment of Exercise Price. The Holder shall pay the Exercise Price
in one of the following manners:
(a) Cash Exercise. The Holder may deliver immediately available
funds; or
(b) Cashless Exercise. The Holder may satisfy its obligation to pay
the Exercise Price through a "cashless exercise," in which event the Company
shall issue to the Holder the number of Warrant Shares determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the Holder.
Y = the number of Warrant Shares with
respect to which this Warrant is
being exercised.
A = the average of the Closing Prices
for the five Trading Days immediately
prior to (but not including) the
Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities Act, it is
intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date this Warrant was originally issued pursuant to the
Purchase Agreement.
2. Certain Adjustments.
2.1. Adjustment of Warrant Price and Number of Shares. The number
and kind of securities purchasable upon the exercise of this Warrant and the
Warrant Price shall be subject to adjustment from time to time upon the
happening of any of the following events after the date hereof:
(a) Recapitalization, Reorganization, Reclassification,
Consolidation, Merger or Sale. If, at any time while this Warrant is
outstanding, (i) the Company effects any merger or consolidation of the Company
with or into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities, cash or property, or (iv)
the Company effects any reclassification of the Common Stock or any compulsory
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share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock covered by Section 2.1(b)
and (c)(i) below) (in any such case, a "Fundamental Transaction"), then the
Holder shall have the right thereafter to receive, upon exercise of this
Warrant, the same amount and kind of securities, cash or property as it would
have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant (the "Alternate Consideration"). The aggregate Exercise Price
for this Warrant will not be affected by any such Fundamental Transaction, but
the Company shall apportion such aggregate Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock
are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. At the Holder's request, any successor
to the Company or surviving entity in such Fundamental Transaction shall issue
to the Holder a new warrant consistent with the foregoing provisions and
evidencing the Holder's right to purchase the Alternate Consideration for the
aggregate Exercise Price upon exercise thereof. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this paragraph (c) and insuring that the Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction. If any Fundamental Transaction constitutes or
results in a Change of Control, then at the request of the Holder delivered
before the 90th day after such Fundamental Transaction, the Company (or any such
successor or surviving entity) will purchase the Warrant from the Holder for a
purchase price, payable in cash within five Trading Days after such request (or,
if later, on the effective date of the Fundamental Transaction), equal to the
lesser of: (i) the Black Scholes value of the remaining unexercised portion of
this Warrant on the date of such request and (ii) the product of $5.00
multiplied by the number of Warrant Shares for which the remaining unexercised
portion of this Warrant may be exercised on such date. For the purposes of this
Section, "Change of Control" shall mean the occurrence of any of the following
in one or a series of related transactions: (i) an acquisition after the date
hereof by an individual or legal entity or "group" (as described in Rule
13d-5(b)(1) under the Exchange Act) of more than a majority of the voting rights
or equity interests in the Company; (ii) a replacement of more than one-half of
the members of the Company's board of directors that is not approved by those
individuals who are members of the board of directors on the date hereof (or
other directors approved by such individuals or their successors who are so
approved); (iii) a merger or consolidation of the Company or any Subsidiary
(other than a merger with another Subsidiary of the Company or the Company
itself, unless following such transaction, the holders of the Company's
securities prior to such transaction hold less than a majority of the voting
rights and equity interests in the surviving entity) or a sale of more than a
majority of the assets of the Company in one or a series of related
transactions, unless following such transaction or series of transactions, the
holders of the Company's securities prior to the first such transaction continue
to hold at least a majority of the voting rights and equity interests in the
surviving entity or acquirer of such assets; (iv) a recapitalization,
reorganization or other transaction involving the Company or any Subsidiary that
constitutes or results in a transfer of more than a majority of the voting
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rights or equity interests in the Company unless following such transaction, the
holders of the Company's securities prior to such transaction continue to hold
at least a majority of the voting rights and equity interests in the surviving
entity or acquirer of such assets; (v) consummation of a "Rule 13e-3
transaction" as defined in Rule 13e-3 under the Exchange Act with respect to the
Company, or (vi) the execution by the Company or its controlling shareholders of
an agreement providing for any of the foregoing events.
(b) Subdivision or Combination of Shares. If the Company, at
any time while this Warrant is outstanding, shall subdivide or combine any class
or classes of its Common Stock, (i) in case of subdivision of shares, the
Warrant Price shall be proportionately reduced (as at the effective date of such
subdivision or, if the Company shall take a record of Holders of its Common
Stock for the purpose of so subdividing, as at the applicable record date,
whichever is earlier) to reflect the increase in the total number of shares of
Common Stock outstanding as a result of such subdivision, or (ii) in the case of
a combination of shares, the Warrant Price shall be proportionately increased
(as at the effective date of such combination or, if the Company shall take a
record of Holders of its Common Stock for the purpose of so combining, as at the
applicable record date, whichever is earlier) to reflect the reduction in the
total number of shares of Common Stock outstanding as a result of such
combination. In the event that an adjustment pursuant to this subsection (b) is
made as of the record date for purposes of any subdivision or combination and
such subdivision or combination is not so made, the Warrant Price shall again be
adjusted to be the Warrant Price which would then be in effect if such record
date had not been fixed.
(c) Certain Dividends and Distributions.
(i) Stock Dividends. If the Company shall pay a dividend
in, or make any other distribution of, shares of any class or classes of Common
Stock, the Warrant Price shall be adjusted, as at the date the Company shall
take a record of the Holders of such class or classes of Common Stock, for the
purpose of receiving such dividend or other distribution (or if no such record
is taken, as at the date of such payment or other distribution), to that price
determined by multiplying the Warrant Price in effect immediately prior to such
record date (or if no such record is taken, then immediately prior to such
payment or other distribution), by a fraction (1) the numerator of which shall
be the total number of shares of Common Stock outstanding immediately prior to
such dividend or distribution, and (2) the denominator of which shall be the
total number of shares of Common Stock outstanding immediately after such
dividend or distribution (plus in the event that the Company paid cash for
fractional shares, the number of additional shares which would have been
outstanding had the Company issued fractional shares in connection with said
dividends); provided, however, that in the event such dividend or distribution
is not so paid or made, the Warrant Price shall again be adjusted to be the
Warrant Price which would then be in effect if such record date had not been
fixed.
(ii) Special Dividend or Distribution. If the Company, at
any time while this Warrant is outstanding, distributes to holders of Common
Stock (i) evidences of its indebtedness, (ii) any security (other than a
distribution of Common Stock covered by the preceding paragraph), (iii) rights
or warrants to subscribe for or purchase any security, or (iv) any other asset
(in each case, "Distributed Property"), then in each such case the Exercise
Price in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution shall be adjusted (effective
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on such record date) to equal the product of such Exercise Price times a
fraction of which the denominator shall be the average of the Closing Prices for
the five Trading Days immediately prior to (but not including) such record date
and of which the numerator shall be such average less the then fair market value
of the Distributed Property distributed in respect of one outstanding share of
Common Stock, as determined by the Company's independent certified public
accountants that regularly examine the financial statements of the Company (an
"Appraiser"). In such event, the Holder, after receipt of the determination by
the Appraiser, shall have the right to select an additional appraiser (which
shall be a nationally recognized accounting firm), in which case such fair
market value shall be deemed to equal the average of the values determined by
each of the Appraiser and such appraiser.
(d) Subsequent Equity Sales.
(i) If, at any time while this Warrant is outstanding, the
Company or any Subsidiary issues or agrees to issue any Common Stock or Common
Stock Equivalents, at an effective net price to the Company per share of Common
Stock (the "Effective Price") less than the Exercise Price (as adjusted
hereunder to such date), then (x) if such issuance occurs on or prior to May 7,
2004 (including such date), the Exercise Price shall be reduced to equal the
Effective Price, and (y) if such issuance occurs after May 7, 2004, the Exercise
Price shall be reduced to equal the product of (A) the Exercise Price in effect
immediately prior to such issuance of Common Stock or Common Stock Equivalents
multiplied by (B) a fraction, the numerator of which is the sum of (1) the
number of shares of Common Stock outstanding immediately prior to such issuance,
plus (2) the number of shares of Common Stock which the aggregate Effective
Price of the Common Stock or Common Stock Equivalents issued (or deemed to be
issued) would purchase at the Exercise Price, and the denominator of which is
the aggregate number of shares of Common Stock outstanding or deemed to be
outstanding immediately after such issuance. For purposes of this paragraph, in
connection with any issuance of any Common Stock Equivalents, (A) the maximum
number of shares of Common Stock potentially issuable at any time upon
conversion, exercise or exchange of such Common Stock Equivalents (the "Deemed
Number") shall be deemed to be outstanding upon issuance of such Common Stock
Equivalents, (B) the Effective Price applicable to such Common Stock Equivalents
shall equal the minimum dollar value of consideration payable to the Company to
purchase such Common Stock Equivalents and to convert, exercise or exchange them
into Common Stock (net of any discounts, fees, commissions and other expenses),
divided by the Deemed Number, and (C) no further adjustment shall be made to the
Exercise Price upon the actual issuance of Common Stock upon conversion,
exercise or exchange of such Common Stock Equivalents.
(ii) If, at any time while this Warrant is outstanding, the
Company or any Subsidiary issues Common Stock Equivalents with an Effective
Price or a number of underlying shares that floats or resets or otherwise varies
or is subject to adjustment based (directly or indirectly) on market prices of
the Common Stock (a "Floating Price Security"), then for purposes of applying
the preceding paragraph in connection with any subsequent exercise, the
Effective Price will be determined separately on each Exercise Date and will be
deemed to equal the lowest Effective Price at which any holder of such Floating
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Price Security is entitled to acquire Common Stock on such Exercise Date
(regardless of whether any such holder actually acquires any shares on such
date).
(iii) Notwithstanding the foregoing, no adjustment will be
made under this paragraph (d) in respect of any Excluded Stock.
(e) Other Action Affecting Common Stock. In case after the date
hereof the Company shall take any action affecting its Common Stock, other than
an action described in any of the foregoing subsections (a) through (d) of this
Section 2, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 2, then the Warrant Price shall
be adjusted in such manner and at such time as the Holder hereof and the Company
shall jointly determine.
(f) Adjustment of Number of Shares. Upon each adjustment in the
Warrant Price pursuant to any provision of this Section 2, the number of shares
of Common Stock issuable upon exercise hereof shall be adjusted, rounded up to
the nearest whole share, to the product obtained by multiplying such number of
shares purchasable immediately prior to such adjustment in the Warrant Price by
a fraction, the numerator of which shall be the Warrant Price immediately prior
to such adjustment and the denominator of which shall be the Warrant Price
immediately thereafter. If the Company shall be in default under any provision
contained in Section 3 of this Warrant so that shares issued at the Warrant
Price adjusted in accordance with this Section 2 would not be validly issued,
the adjustment of number of shares provided for in the foregoing sentence shall
nonetheless be made and the Holder of this Warrant shall be entitled to purchase
such greater number of shares at the lowest price at which such shares may then
be validly issued under applicable law. Such exercise shall not constitute a
waiver of any claim arising against the Company by reason of its default under
Section 3 of this Warrant.
(g) Calculations. All calculations under this Section 2 shall
be made to the nearest cent or the nearest 1/100th of a share, as applicable.
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, and the
disposition of any such shares shall be considered an issue or sale of Common
Stock.
2.2. Notices to Holders.
(a) Whenever the Warrant Price or number of shares of Common
Stock issuable upon exercise of this Warrant shall be adjusted pursuant to
Section 2 hereof, the Company shall prepare and execute a certificate setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board made any determination hereunder),
and the Warrant Price and number of shares of Common Stock issuable hereunder
after giving effect to such adjustment, and shall cause copies of such
certificate to be mailed (by first class mail postage prepaid) to the Holder
hereof promptly after each adjustment.
(b) In the event of:
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(i) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right; or
(ii) any taking by the Company that authorizes, approves,
enters into any agreement contemplating or solicits stockholder approval for any
Fundamental Transaction; or
(iii) any voluntary or involuntary dissolution,
liquidation, or winding-up of the Company (clauses (i), (ii) and (iii), the
"Notice Events"), then, in each event, the Company will give to the Holder
hereof a written notice specifying (x) the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right, and (y) the
date on which any such Fundamental Transaction, dissolution, liquidation, or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock for securities or other property
deliverable on such Notice Event is to take place, and the time, if any is to be
fixed, as of which the holders of record of Common Stock shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable on such Notice Event. Such notice shall be given prior to the date
specified in such notice on which any such action is to be taken, and in no
event later than the earlier of (x) 20 calendar days prior to the date on which
such action is taken and (y) one Trading Day after the date that notice of such
event is given to holders of record of the Company's Common Stock.
2.3. Fractional Shares. No fractional shares of Common Stock will
be issued in connection with any exercise hereof, but in lieu of such fractional
shares, the Company shall make a cash payment therefor equal in amount to the
product of the applicable fraction multiplied by the Closing Price on the date
of such event.
2.4. Covenant Regarding Common Stock, etc.
(a) The Company covenants and agrees that all shares of Common
Stock issuable upon exercise of this Warrant will, upon such issuance, be
validly issued, fully paid and non-assessable.
(b) The Company further covenants and agrees that, in the event
of a "cashless exercise" it shall take or cause to be taken such action as will
permit the exercise of this Warrant without any additional payment by the Holder
hereof.
(c) The Company covenants that it will at all times reserve and
keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (taking into account the adjustments and
restrictions of Section 2). The Company covenants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable
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Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable. The Company will take all
such action as may be necessary to assure that such shares of Common Stock may
be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of any securities exchange or automated
quotation system upon which the Common Stock may be listed. If the Common Stock
is or becomes listed on any Eligible Market, the Company shall also list such
shares on such exchange subject to notice of issuance or maintain the listing of
its Common Stock on its Trading Market, as the case may be.
3. No Impairment. The Company will not, by amendment of its certificate
of incorporation or through any consolidation, merger, reorganization, transfer
of assets, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be reasonably
necessary in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company
(a) will not permit the par value of any shares of Common Stock
receivable upon the exercise of this Warrant to exceed the amount payable
therefor upon such exercise,
(b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock on the exercise of any Warrant from
time to time outstanding,
(c) will not close its shareholder books or records in any
manner which interferes with the timely exercise of this Warrant, and
(d) will not take any action which would result in the total
number of shares of outstanding Common Stock, plus those issuable upon the
exercise of all of the Warrants, exceeding the total number of shares of Common
Stock then authorized by the Company's certificate of incorporation or the total
number of such shares available for the purpose of issue upon such exercise
being fewer than the number required to be issued upon such exercise.
4. Availability of Information. For so long as the Company has a class
of securities registered under Section 12 of the Exchange Act or is required to
file reports pursuant to Sections 13 or 15(d) of the Exchange Act, the Company
will comply with the reporting requirements of Sections 13 and 15(d) of the
Exchange Act and will comply with all other public information reporting
requirements of the Commission (including, upon the written request of a Holder,
Rule 144 promulgated by the Commission under the Securities Act) from time to
time in effect and relating to the availability of an exemption from the
Securities Act for the sale of the Warrant or any shares of Common Stock issued
or issuable upon exercise of the Warrant.
5. Ownership, Transfer and Substitution of Warrants.
5.1. Ownership of Warrants5.2. . The Company shall register this
Warrant, upon records to be maintained by the Company for that purpose (the
"Warrant Register"), in the name of the record Holder hereof from time to time.
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The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual written notice to the
contrary.
5.2. Transfer and Exchange of Warrants. 5.3. The Company shall
register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto duly
completed and signed, to the Transfer Agent or to the Company at its address
specified herein. Upon any such registration or transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such new
warrant, a "New Warrant"), evidencing the portion of this Warrant so transferred
shall be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the
transferring Holder. The acceptance of the New Warrant by the transferee thereof
shall be deemed the acceptance by such transferee of all of the rights and
obligations of a Holder of a Warrant.
5.3. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant
held by any Person upon delivery of indemnity reasonably satisfactory to the
Company in form and amount or, in the case of any such mutilation, upon
surrender of such Warrant for cancellation at the principal office of the
Company, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
12
6. Limitation on Exercise. Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such exercise
(or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Holder's for
purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% (the
"Maximum Percentage") of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise). For such purposes, beneficial ownership shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. Each delivery of an Exercise Notice
hereunder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this paragraph and determined that issuance of the
full number of Warrant Shares requested in such Exercise Notice is permitted
under this paragraph. The Company's obligation to issue shares of Common Stock
in excess of the limitation referred to in this Section shall be suspended (and
shall not terminate or expire notwithstanding any contrary provisions hereof)
until such time, if any, as such shares of Common Stock may be issued in
compliance with such limitation. By written notice to the Company, the Holder
may waive the provisions of this Section or increase or decrease the Maximum
Percentage to any other percentage specified in such notice, but (i) any such
waiver or increase will not be effective until the 61st day after such notice is
delivered to the Company, and (ii) any such waiver or increase or decrease will
apply only to the Holder and not to any other holder of Warrants.
(b) Notwithstanding anything to the contrary contained herein,
if the Trading Market is the Nasdaq National Market or the Nasdaq SmallCap
Market or any other market or exchange with similar applicable rules, then the
maximum number of shares of Common Stock that the Company may issue pursuant to
the Transaction Documents at an effective purchase price less than the Closing
Price on the Trading Day immediately preceding the Closing Date is 9,572,408
shares of Common Stock (the "Issuable Maximum"), unless the Company obtains
shareholder approval in accordance with the rules and regulations of such
Trading Market (the "Shareholder Approval Requirement"). If, at the time any
Holder requests an exercise of any of the Warrants, the Actual Minimum
(excluding any shares issued or issuable at an effective purchase price in
excess of the Closing Price on the Trading Day immediately preceding the Closing
Date) exceeds the Issuable Maximum (and if the Company has not previously
obtained the required shareholder approval), then the Company shall issue to the
Holder requesting such exercise a number of shares of Common Stock not exceeding
such Holder's pro-rata portion of the Issuable Maximum (based on such Holder's
share (vis-a-vis other Holders) of the aggregate purchase price paid under the
Purchase Agreement and taking into account any Warrant Shares previously issued
to such Holder), and the remainder of the Warrant Shares issuable in connection
with such exercise or conversion (if any) shall constitute "Excess Shares"
pursuant to Section 11(c) below.
(c) In the event that any Holder's receipt of shares of Common
Stock upon exercise of this Warrant is restricted based on the Issuable Maximum,
the Company shall either: (i) use reasonable best efforts to obtain the required
shareholder approval necessary to permit the issuance of such Excess Shares as
soon as is reasonably possible, but in any event not later than the 90th day
after the event giving rise to such Excess Shares, or (ii) within five Trading
Days after such event, pay cash to such Holder, as liquidated damages and not as
13
a penalty, in an amount equal to the Black Scholes value of this Warrant with
respect to the portion of this Warrant which is unexercisable due to the
Issuable Maximum after giving effect to the limitations in Section 6(b),
measured as of the date of such event or, if greater, the date of payment (such
difference, the "Cash Amount"). No shares of Common Stock that were issued
pursuant to the Transaction Documents may be entitled to vote to approve the
issuance of such Excess Shares. If the Company elects the first option under the
first sentence of this Section 6(c) and the Company fails to obtain the required
shareholder approval on or prior to the 90th day after such event, then within
five Trading Days after such 90th day, the Company shall pay the Cash Amount to
such Holder, as liquidated damages and not as a penalty; provided, however, that
the Company shall not be required to pay the Cash Amount to the extent such
payment would violate the Shareholder Approval Requirement or subject the
Company to delisting under the rules and interpretations of the Trading Market
on which the Company's Common Stock is listed. The portion of this Warrant in
respect of which the Cash Amount has been paid (or is not required to be paid by
virtue of the proviso in the preceding sentence) shall be cancelled and retired
and the Company shall have no further obligation with respect thereto.
14
7. No Rights or Liabilities as Stockholder. Nothing contained in this
Warrant shall be construed as conferring upon the Holder hereof (as a holder of
this Warrant and prior to its exercise) any rights as a stockholder of the
Company (including, without limitations, the right to vote, to receive dividends
or other distributions, to exercise any preemptive rights or to receive any
notice of any proceedings of the Company) or as imposing any obligation on such
Holder to purchase any Common Stock or as imposing any liabilities on such
Holder as a stockholder of the Company, whether such obligation or liabilities
are asserted by the Company or by creditors of the Company.
8. Notices. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices or communications shall be as
set forth in the Purchase Agreement.
9. Warrant Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.
10. Miscellaneous.
10.1. Subject to the restrictions on transfer set forth on the
first page hereof, this Warrant may be assigned by the Holder. This Warrant may
not be assigned by the Company except to a successor in the event of a
Fundamental Transaction. This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns.
Subject to the preceding sentence, nothing in this Warrant shall be construed to
give to any Person other than the Company and the Holder any legal or equitable
right, remedy or cause of action under this Warrant. This Warrant may be amended
only in writing signed by the Company and the Holder and their successors and
assigns.
10.2. GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (OTHER THAN ANY CONFLICT OF LAW RULES THAT MIGHT
RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION). EACH PARTY
HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND
15
FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND HOLDER EACH
HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.
10.3. The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.
10.4. In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
16
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.
IMPAX LABORATORIES, INC.
By:
----------------------------------------
Name: Barry R. Edwards
Title: Co-Chief Executive Officer
17
Final
FORM OF EXERCISE NOTICE
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)
To: Impax Laboratories, Inc.
The undersigned is the Holder of Warrant No. _______ (the "Warrant") issued by
Impax Laboratories, Inc.], a Delaware corporation (the "Company"). Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.
1. The Warrant is currently exercisable to purchase a total of
______________ Warrant Shares. The undersigned has not previously
transferred, sold or assigned the Warrant.
2. The undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the Warrant.
3. The Holder intends that payment of the Exercise Price shall be made as
(check one):
____ "Cash Exercise" under Section 1.4(a)
____ "Cashless Exercise" under Section 1.4(b)
4. If the holder has elected a Cash Exercise, the holder shall pay the
sum of $____________ to the Company in accordance with the terms of
the Warrant. In addition, if the exercise is by (i) the Purchaser or
(ii) any subsequent holder during any period when the Warrant Shares
are not registered for issuance pursuant hereto under the Securities
Act, the holder makes the following representation: In exercising this
Warrant, the undersigned hereby confirms and acknowledges that the
shares of Common Stock to be issued upon exercise hereof are being
acquired solely for the account of the undersigned and not as a
nominee for party, and for investment, and that the undersigned will
not offer, sell or otherwise dispose of any such shares of Common
Stock except under circumstances that will not result in a violation
of the Securities Act of 1933, as amended, or any applicable state
securities laws.
5. Pursuant to this exercise, the Company shall deliver to the holder
_______________ Warrant Shares in accordance with the terms of the
Warrant. The undersigned shall deliver the original Warrant to which
this Exercise Notice relates as soon as reasonably practicable after
the date hereof.
6. Following this exercise, the Warrant shall be exercisable to purchase
a total of ______________ Warrant Shares.
Dated: , Name of Holder:
---------------- -------
(Print)____________________________
By:________________________________
Name:______________________________
Title:_____________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of Impax Laboratories,
Inc. to which the within Warrant relates and appoints ________________ attorney
to transfer said right on the books of Impax Laboratories, Inc. with full power
of substitution in the premises.
Dated: ,
---------------- ----
------------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
-------------------------------
Address of Transferee
-------------------------------
-------------------------------
In the presence of:
- -------------------------------