EXHIBIT 99.48
THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES WHICH MAY BE ISSUED UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS. NO SALE OR DISTRIBUTION
HEREOF OR THEREOF MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER APPLICABLE SECURITIES LAWS.
WARRANT AGREEMENT
-----------------
WARRANT AGREEMENT (this "Agreement"), dated as of January 31, 2006, by and
between Vyteris Holdings (Nevada), Inc., a Nevada corporation (the "Company"),
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Specialty Group, LLC, a Delaware limited liability company
(the "Warrant Holder").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the parties have entered into that certain Note and Warrant
Purchase Agreement, dated as of January 31, 2006, by and between the Company and
the Warrant Holder (the "Note and Warrant Purchase Agreement"); and
WHEREAS, pursuant to the Note and Warrant Purchase Agreement, the Warrant
Holder has agreed to loan to the Company Two Hundred Fifty Thousand ($250,000)
Dollars (the "Loan Amount"), subject to the issuance by the Company of a
convertible subordinated promissory note (the "Note"), and the Company has
agreed to issue to the Warrant Holder a warrant (the "Warrant") to purchase
52,083 shares of the Company's common stock, par value $.0001 per share (the
"Common Stock"), subject to the terms set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and promises contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. WARRANT.
1.1 COMMON STOCK. The Company hereby grants to the Warrant Holder, subject
to the terms set forth herein, the right to purchase at any time during the term
(the "Warrant Exercise Term") commencing on the date hereof and ending at 5:30
p.m., New York time, on the seventh anniversary of the date hereof (the
"Expiration Date") 52,083 shares of Common Stock (the "Shares"), at an initial
exercise price of $2.88 per share, subject to adjustment as provided in Sections
1.2 and 3 hereof (as in effect from time to time, the "Exercise Price").
2. EXERCISE OF WARRANT.
2.1 EXERCISE. The Warrant may be exercised by the Warrant Holder, in
whole or in part, by delivering the Notice of Exercise purchase form, attached
as EXHIBIT A hereto (the "Notice of Exercise"), duly executed by the Warrant
Holder to the Company at its principal office, or at such other office as the
Company may designate, accompanied by payment, in cash or by wire transfer or
check payable to the order of the Company, of the amount obtained by multiplying
the number of Shares designated in the Notice of Exercise by the Exercise Price
(the "Purchase Price"). The Purchase Price may also be paid, in whole or in
part, by delivery of such purchase form and of shares of Common Stock owned by
the Warrant Holder having a Fair Market Value (as defined in Section 2.3 hereof)
on the last business day ending the day immediately prior to the Exercise Date
(as defined below) equal to the portion of the aggregate Exercise Price being
paid in such shares. In addition, the Warrant may be exercised, pursuant to a
cashless exercise by providing irrevocable instructions to the Company, through
delivery of the Notice of Exercise with an appropriate reference to this Section
2.1 to issue the number of shares of the Common Stock equal to the product of
(a) the number of shares as to which the Warrant is being exercised multiplied
by (b) a fraction, the numerator of which is the Fair Market Value of a share of
the Common Stock on the last business day preceding the Exercise Date less the
Exercise Price therefor and the denominator of which is such Fair Market Value.
For purposes hereof, "Exercise Date" shall mean the date on which all deliveries
required to be made to the Company upon exercise of the Warrant pursuant to this
Section 2.1 shall have been made.
2.2 ISSUANCE OF CERTIFICATES. As soon as practicable after the
exercise of the Warrant (in whole or in part) in accordance with Section 2.1
hereof, the Company, at its expense, shall cause to be issued in the name of and
delivered to the Warrant Holder (i) a certificate or certificates for the number
of fully paid and non-assessable Shares to which the Warrant Holder shall be
entitled upon such exercise and (if applicable) (ii) a new warrant agreement of
like tenor to purchase all of the Shares that may be purchased pursuant to the
portion, if any, of the Warrant not exercised by the Warrant Holder. The Warrant
Holder shall for all purposes be deemed to have become the holder of record of
such Shares on the date on which the Notice of Exercise and payment of the
Purchase Price in accordance with Section 2.1 hereof were delivered and made,
respectively, irrespective of the date of delivery of such certificate or
certificates, except that if the date of such delivery, notice and payment is a
date when the stock transfer books of the Company are closed, such person shall
be deemed to have become the holder of record of such Shares at the close of
business on the next succeeding date on which the stock transfer books are open.
2.3 FAIR MARKET VALUE. The "Fair Market Value" of a share of Common
Stock on any determined date means: (a) if the principal market for the Common
Stock is The New York Stock Exchange, any other national securities exchange or
The Nasdaq National Market, the closing sales price of the Common Stock on such
day as reported by such exchange or market, or on a consolidated tape reflecting
transactions on such exchange or market, or (b) if the principal market for the
Common Stock is not a national securities exchange or The Nasdaq National Market
and the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System, the mean between the closing bid and the closing
asked prices for the Common Stock on such day as quoted on such System, or (c)
if the Common Stock is not quoted on the National Association of Securities
Dealers Automated Quotations System, the mean between the highest bid and lowest
asked prices for the Common Stock on such day as reported by the National
Quotation Bureau, Inc.; provided, that if none of (a), (b) or (c) above is
applicable, or if no trades have been made or no quotes are available for such
day, the Fair Market Value of the Common Stock shall be determined, in good
faith, by the Board of Directors of the Company.
3. ADJUSTMENTS.
3.1 STOCK SPLITS, STOCK DIVIDENDS AND COMBINATIONS. If the Company at
any time subdivides the outstanding shares of the Common Stock or issues a stock
dividend (in Common Stock) on the outstanding shares of the Common Stock, the
2
Exercise Price in effect immediately prior to such subdivision or the issuance
of such stock dividend shall be proportionately decreased, and the number of
Shares subject hereto shall be proportionately increased, and if the Company at
any time combines (by reverse stock split or otherwise) the outstanding shares
of Common Stock, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased, and the number of Shares subject
hereto shall be proportionately decreased, effective at the close of business on
the date of such subdivision, stock dividend or combination, as the case may be.
3.2 MERGER OR CONSOLIDATION. In the case of any consolidation of the
Company with, or merger of the Company with or into another entity (other than a
consolidation or merger which does not result in any reclassification or change
of the outstanding capital stock of the Company), the entity formed by such
consolidation or merger shall execute and deliver to the Warrant Holder a
supplemental warrant agreement providing that the Warrant Holder of the Warrant
then outstanding or to be outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such Warrant, the kind
and amount of shares of capital stock and other securities and property
receivable upon such consolidation or merger by a holder of the number of Shares
for which such Warrant might have been exercised immediately prior to such
consolidation or merger. Such supplemental warrant agreement shall provide for
adjustments which shall be identical to the adjustments provided in Section 3.1
hereof and to the provisions of Section 10 hereof. This Section 3.2 shall
similarly apply to successive consolidations or mergers.
3.3 The Exercise Price shall also be subject to adjustment as
follows:
(1) SPECIAL DEFINITIONS. For purposes of this Section 3.3, the
following definitions shall apply:
(A) "Options" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities.
(B) "Original Issue Date" shall mean the date of this
Agreement.
(C) "Convertible Securities" shall mean any evidence of
indebtedness, shares of capital stock (other than Common Stock) or other
securities convertible into or exchangeable for Common Stock.
(D) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued by the Company on or after the Original Issue
Date, other than shares of Common Stock issued at any time:
(i) upon exercise of the Warrant or conversion of the
Note issued pursuant to the Note and Warrant Purchase Agreement;
(ii) pursuant to the exercise of options, warrants or
other Common Stock purchase rights issued (or to be issued) to employees,
officers or directors of, or consultants or advisors to, or any strategic ally
of, the Company pursuant to any stock purchase or stock option plan or other
arrangement approved by the Board of Directors;
3
(iii) pursuant to the exercise of options, warrants or
Convertible Securities outstanding as of the Original Issue Date; or
(iv) in connection with the acquisition of all or part
of another entity by stock acquisition, merger, consolidation or other
reorganization, or by the purchase of all or part of the assets of such other
entity (including securities issued to persons formerly employed by such other
entity and subsequently hired by the Company and to any brokers or finders in
connection therewith) where the Company or its stockholders own more than fifty
(50%) percent of the voting power of the acquired, surviving, combined or
successor company.
(2) ISSUANCE OF OPTIONS AND CONVERTIBLE SECURITIES. Subject to
Section 3.3(1)(D) hereof, in the event the Company at any time or from time to
time after the Original Issue Date shall issue any Options or Convertible
Securities, then the number of shares of Common Stock actually issued upon the
exercise of such Options or, in the case of Convertible Securities, the actual
conversion or exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock.
(3) ADJUSTMENT OF EXERCISE PRICE UPON ISSUANCE OF ADDITIONAL
SHARES OF COMMON STOCK. In the event the Company, after the Original Issue Date,
shall issue Additional Shares of Common without consideration or for a
consideration per share less than the then-applicable Exercise Price, then and
in such event, such Exercise Price shall be reduced, concurrently with such
issue, to a price (calculated to the nearest cent) determined by multiplying the
then-applicable Exercise Price by a fraction, (i) the numerator of which shall
be the number of shares of Common Stock issued and outstanding (on a
fully-diluted basis) immediately prior to such issuance plus the quotient
obtained by dividing (x) the aggregate consideration received by the Company for
the total number of Additional Shares of Common Stock so issued by (y) the
Conversion Price, and (ii) the denominator of which shall be the number of
shares of Common Stock issued and outstanding (on a fully-diluted basis)
immediately prior to such issuance plus the number of Additional Shares of
Common Stock so issued. Upon each such adjustment of the then-applicable
Exercise Price pursuant to the provisions of this Section 3.3(3), the number of
Warrant Shares purchasable upon the exercise of each Warrant shall be adjusted
to the nearest full amount by multiplying a number equal to the Exercise Price
in effect immediately prior to such adjustment by the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price.
(4) Determination of Consideration. For purposes of this Section
3, the consideration received by the Company for the issue of any Additional
Shares of Common Stock shall be computed as follows:
(A) Cash and Property. Such consideration shall:
(i) insofar as it consists of cash, be computed at the
gross amount of cash received by the Company, excluding only expenses, discounts
and commissions actually paid by the Company in connection with such issuance or
sale and amounts paid or payable for accrued interest.
4
(ii) insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such issue, as
reasonably determined in good faith by the Board of Directors, excluding only
the expenses as set forth in clause (i) above; and
(iii) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the Company
for consideration that covers both cash and property other than cash, the
proportion of such consideration so received, computed as provided in clauses
(i) and (ii) above, shall be as reasonably determined in good faith by the Board
of Directors.
(B) OPTIONS AND CONVERTIBLE SECURITIES. The consideration
per share received by the Company for Additional Shares of Common Stock issued
pursuant to Section 3.3(2), relating to Options and Convertible Securities,
shall be determined by dividing:
(i) the total amount, if any, received by the Company
as consideration for the issuance of such Options or Convertible Securities,
plus the aggregate amount of additional consideration paid or payable to the
Company upon the exercise of such Options or the conversion or exchange of such
Convertible Securities, or in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities (subject to any adjustments in the
exercise price thereof), by
(ii) the number of shares of Common Stock issued or
issuable upon the exercise of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities.
3.4 CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Exercise Price pursuant to this Section 3, the
Company, at its expense, shall promptly compute such adjustment or readjustment
of the Exercise Price in accordance with the terms hereof and furnish to each
Holder of a Warrant a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based, including a statement of (i) the consideration received or deemed to be
received by the Company for any Additional Shares of Common Stock issued or
deemed to have been issued, (ii) the Exercise Price in effect immediately prior
to such adjustment or readjustment, (iii) the number of Additional Shares of
Common Stock issued or deemed to have been issued and (iv) the number of shares
of Common Stock and the amount, if any, of other securities or property that at
the time would be received upon the exercise of the Warrant. The Company shall,
upon the written request at any time of any Holder of a Warrant, furnish or
cause to be furnished to such Holder a like certificate setting forth (x) all
adjustments and readjustments of the Exercise Price since the Original Issue
Date and (y) the Exercise Price then in effect.
3.5. ASSURANCES WITH RESPECT TO EXERCISE RIGHTS. The Company shall
not, by amendment of its Certificate of Incorporation or By-laws or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but shall at all times, in good faith, assist in the
carrying out of all the provisions of this Agreement and in taking of all such
actions as may be necessary or appropriate in order to protect the exercise
rights of the Warrant Holder against impairment or dilution.
5
4. TRANSFERS.
4.1 UNREGISTERED SECURITIES. Warrant Holder hereby acknowledges and
agrees that the Warrant and the Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and are "restricted
securities" under the Securities Act inasmuch as they are being acquired in a
transaction not involving a public offering, and the Warrant Holder agrees not
to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of
the Warrant or any Shares issued upon exercise of the Warrant in the absence of
(a) an effective registration statement under the Act as to the Warrant or such
Shares and registration and/or qualification of the Warrant or such Shares under
any applicable Federal or state securities law then in effect or (b) an opinion
of counsel, reasonably satisfactory to the Company, that such registration and
qualification are not required.
4.2 TRANSFERABILITY. Subject to the provisions of Section 4.1 hereof,
the rights under this Agreement are freely transferable, in whole or in part, by
the Warrant Holder, and such transferee shall have the same rights hereunder as
the Warrant Holder.
4.3 WARRANT REGISTER. The Company will maintain a register containing
the names and addresses of the Warrant Holders of the Warrant. Until any
transfer of Warrant in accordance with this Agreement is reflected in the
warrant register, the Company may treat the Warrant Holder as the absolute owner
hereof for all purposes. Any Warrant Holder may change such Warrant Holder's
address as shown on the warrant register by written notice to the Company
requesting such change.
5. NO FRACTIONAL SHARES. Any adjustment in the number of Shares
purchasable hereunder shall be rounded to the nearest whole share.
6. INVESTMENT REPRESENTATIONS. The Warrant Holder agrees and acknowledges
that it is acquiring the Warrant and will be acquiring the Shares for its own
account and not with a view to any resale or distribution other than in
accordance with Federal and state securities laws. The Warrant Holder is an
"accredited investor" within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act.
7. COVENANTS AS TO THE SHARES. The Company covenants and agrees that the
shares of capital stock issuable upon exercise of the Warrant, will, upon
issuance in accordance with the terms hereof, be duly and validly issued and
outstanding, fully paid and nonassessable, with no personal liability attaching
to the ownership thereof, and free from all taxes, liens and charges with
respect to the issuance thereof imposed by or through the Company; PROVIDED,
HOWEVER, that the Company shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of any
certificates in respect of such shares in a name other than that of the Warrant
Holder and the Company shall not be required to issue or deliver such
certificates unless or until the person(s) requesting the issuance thereof shall
have paid to the Company the amount of such tax or it shall be established to
the satisfaction of the Company that such tax has been paid. The Company further
covenants and agrees that the Company will at all times have authorized and
reserved, free from preemptive rights imposed by or through the Company, a
6
sufficient number of shares of capital stock to provide for the exercise of the
rights represented under this Agreement.
8. LEGEND. Any certificate evidencing the Shares issuable upon exercise
hereof will bear a legend indicating that such securities have not been
registered under the Securities Act or under any state securities laws and may
not be sold or offered for sale in the absence of an effective registration
statement as to the securities under the Securities Act and any applicable state
securities law or an opinion of counsel reasonably satisfactory to the Company
that such registration is not required.
9. RIGHTS APPLICABLE TO THE WARRANT SHARES. The parties hereby
acknowledge and agree that the Shares, when issued in accordance with the terms
hereof, shall be entitled to all of rights and privileges provided to the
Registration Rights Agreement (as such term is defined in the Note and Warrant
Purchase Agreement).
10. DIVIDENDS AND OTHER DISTRIBUTIONS. In the event that the Company
shall, at any time prior to the exercise of all Warrants, declare a dividend
(other than a dividend consisting solely of shares of Common Stock) or otherwise
distribute to its stockholders any assets, properties, rights, evidence of
indebtedness, securities (other than shares of Common Stock), whether issued by
the Company or by another person, or any other thing of value, the Warrant
Holder shall thereafter be entitled, in addition to the shares of Common Stock
or other securities and property receivable upon the exercise thereof, to
receive, upon the exercise of such Warrant, the same property, assets, rights,
evidences of indebtedness, securities or any other thing of value that the
Warrant Holder would have been entitled to receive at the time of such dividend
or distribution as if the Warrant had been exercised immediately prior to such
dividend or distribution. At the time of any such dividend or distribution, the
Company shall make (and maintain) appropriate reserves to ensure the timely
performance of the provisions of this Section 10.
11. MISCELLANEOUS.
11.1 WAIVERS AND AMENDMENTS. This Agreement or any provisions hereof
may be changed, waived, discharged or terminated only by a statement in writing
signed by the Company and by the Warrant Holder.
11.2 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.
11.3 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given when delivered by hand or by
facsimile transmission, when telexed, or upon receipt when mailed by registered
or certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(i) If to the Company:
Vyteris, Inc.
▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
7
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which copy shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Warrant Holder:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Specialty Group, LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which copy shall not constitute notice) to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
11.4 HEADINGS. The headings in this Agreement are for convenience of
reference only, and shall not limit or otherwise affect the terms hereof.
11.5 CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any Shares issued or issuable upon the exercise of
the Warrant in a manner that interferes with the timely exercise of the Warrant.
11.6 NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Agreement shall
not entitle the Warrant Holder hereof to any voting rights or other rights as a
stockholder of the Company with respect to the Shares prior to the exercise of
the Warrant. No provision of this Agreement, in the absence of affirmative
action by the Warrant Holder to purchase the Shares, and no mere enumeration
herein of the rights or privileges of the Warrant Holder, shall give rise to any
liability of such Holder for the Exercise Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
8
11.7 SUCCESSORS. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns and transferees.
11.8 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.
[SIGNATURE PAGE FOLLOWS]
9
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first written above.
Vyteris Holdings (Nevada), Inc.
By:
---------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ SPECIALTY GROUP, LLC
By:
---------------------------------------
Name:
Title:
10
EXHIBIT A
---------
NOTICE OF EXERCISE
------------------
(To be signed only on exercise of Warrant)
Dated:
---------------------------
To: Vyteris Holdings (Nevada), Inc.
The undersigned, pursuant to the provisions set forth in the attached
Warrant Agreement, hereby irrevocably elects to:
[ ] purchase _____ shares of Common Stock covered by such Warrant
Agreement and herewith makes a cash payment of $_____________, representing the
full purchase price for such shares at the price per share provided for in such
Warrant Agreement.
[ ] purchase _____ shares of Common Stock covered by such Warrant
Agreement and herewith delivers _____ shares of Common Stock having a Fair
Market Value as of the last trading day preceding the date hereof of $______,
representing the full purchase price for such shares at the price per shares
provided for in such Warrant Agreement.
[ ] acquire in a cashless exercise _____ shares of Common Stock pursuant
to the terms of Section 2.1 of such Warrant Agreement.
Please issue a certificate or certificates representing such shares of
Common Stock in the name of the undersigned or in such other name as is
specified below.
Signature:
----------------------------
Name (print):
-------------------------
Title (if applicable):
----------------
Company (if applicable):
--------------