NOTE AND WARRANT AMENDMENT AGREEMENT
Exhibit
10.1
This NOTE AND WARRANT AMENDMENT AGREEMENT
(this “Amendment”), dated as
of December 31, 2009, by and among NovaDel Pharma Inc., a Delaware corporation
(the “Company”), and
ProQuest Investment II, L.P., ProQuest Investment Advisors Fund II, L.P. and
ProQuest Investments III, L.P. (the “Holders”).
WHEREAS, the Holders own
certain promissory notes (the “Notes”) issued by the
Company, which may or may not be convertible into shares of the Company’s common
stock, par value $0.001 per share (the “Common Stock”), and
certain warrants to purchase shares of Common Stock (the “Warrants”), in each
case, as set forth on Schedule A hereto;
and
WHEREAS, to induce the
conversion by the Holders of the Notes, the Company and the Holders now desire
to amend the Notes and Warrants to reduce the conversion price of each Note and
the exercise price of each Warrant as set forth herein, and in consideration
therefor, the Holders have agreed to convert all of the Notes held by the
Holders;
NOW, THEREFORE, in
consideration of the premises and mutual covenants herein below, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Note
Amendment. Effective upon the Effective Date (as defined
below) and immediately prior to the conversion of the Notes contemplated hereby,
Section 8(a) of each Note is hereby amended and restated in its entirety to read
as follows:
(a) Conversion into Common
Shares. The Holder shall have the option to convert, as a
whole or in part, up to the entire amount outstanding under this Note (including
the accrued but unpaid interest) into Common Shares at any time or from time to
time at a conversion price equal to $0.1574 per share (the “Conversion Price”),
subject to adjustments in the event of any stock splits, reverse stock splits,
stock dividends or other similar recapitalization or reorganization transactions
that affect all shareholders equally as set forth in Section 9.
2. Warrant
Amendment. Effective upon the Effective Date, the exercise
price of each Warrant as set forth on Schedule A (referred to herein as the “Old
Warrant”) is hereby amended such that the new exercise price of each Warrant
shall be $0.1888 per share (referred to herein as the “New
Warrant”). In addition to the foregoing, effective upon the Effective
Date, the number of shares of Common Stock underlying certain Warrants (referred
to as the PIPE Warrants) shall be reduced by 10% as reflected on Schedule A
hereto. The Company agrees that, as soon as reasonably practicable
after the Effective Date, the Company will issue New Warrants to the Holders in
exchange for the Old Warrants.
3. Effective
Date. This Amendment shall only become effective upon receipt
by the Company of an irrevocable notice of conversion of all Notes held by the
Holders (referred to herein as the “Effective Date”). At the
Effective Date, any accrued but unpaid interest as set forth on Schedule A
hereto shall be paid in kind with Notes on the same terms as Section 1
above;
provided,
that, such Notes shall be immediately converted to Common Stock pursuant to this
Section 3, and thereafter, there shall be no interest (in cash or in kind) due
under the Notes; provided, however, that such interest shall continue to accrue
if the Company shall fail to issue the shares of Common Stock upon conversion as
per the conversion terms of the Notes. For purposes of clarity, the
parties hereto acknowledge that, immediately after the Effective Date and
immediately upon the conversion of the Notes pursuant to their terms, the
security interest underlying the Notes shall be terminated pursuant to the terms
of the Notes.
4. Except
as amended hereby, the terms and provisions of each Note and Warrant remain in
full force and effect.
5. This
Amendment shall be enforced, governed and construed in all respects in
accordance with the laws of the State of New York and shall be binding upon the
Holders, the Holders’ heirs, estate, legal representatives, successors and
assigns and shall inure to the benefit of the Company, its successors and
assigns
6. This
Amendment may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which together shall be deemed to be one and
the same instrument, and may be executed by facsimile signatures.
IN WITNESS WHEREOF, this
Amendment has been duly executed by the parties hereto as of the date first
written above.
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By:
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/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Title: Interim
President and Chief Executive Officer
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PROQUEST
INVESTMENTS II, L.P.
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By:
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ProQuest
Associates II, LLC,
its
general partner
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By:
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/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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Title:
Managing Member
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PROQUEST
INVESTMENTS II ADVISORS FUND, L.P.
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By:
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ProQuest
Associates II, LLC,
its
general partner
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By:
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/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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Title: Managing
Member
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PROQUEST
INVESTMENTS III, L.P.
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By:
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ProQuest
Associates III, LLC,
its
general partner
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By:
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/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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Title: Managing
Member
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SCHEDULE
A
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Description
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Shares
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Price/Share
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Total
Value
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Pre-Conversion:
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Convertible
Notes
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May
2008
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1,610,169 | $ | 0.295 | $ | 475,000 | |||||||
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October
2008
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10,744,621 | $ | 0.235 | $ | 2,525,000 | |||||||
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Total:
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12,354,790 | $ | 3,000,000 | |||||||||
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Registration
Penalty Notes
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$ | 171,778 | ||||||||||
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Accrued
Interest
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$ | 485,739 | ||||||||||
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Total:
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$ | 657,517 | ||||||||||
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Warrants
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May
2008
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3,000,000 | $ | 0.369 | |||||||||
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October
2008
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6,446,809 | $ | 0.294 | |||||||||
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PIPE
(May 2005)
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1,615,597 | $ | 1.300 | |||||||||
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PIPE
(April 2006)
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206,899 | $ | 1.600 | |||||||||
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PIPE
(December 2006)
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384,766 | $ | 1.700 | |||||||||
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Total
Warrants
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11,654,071 | |||||||||||
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Post-Conversion:
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Convertible
Notes
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May
2008
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1,610,169 | $ | 0.1574 | $ | 253,441 | |||||||
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October
2008
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10,744,621 | $ | 0.1574 | $ | 1,691,203 | |||||||
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Additional
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6,704,930 | $ | 0.1574 | $ | 1,055,356 | |||||||
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Total
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19,059,720 | $ | 3,000,000 | |||||||||
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Registration
Penalty
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4,177,363 | $ | 0.1574 | $ | 657,571 | |||||||
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Notes
& Accrued Interest
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Total
Shares Issued
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23,237,083 | |||||||||||
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Warrants
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May
2008
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3,000,000 | $ | 0.1888 | |||||||||
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October
2008
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6,446,809 | $ | 0.1888 | |||||||||
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PIPE
(May 2005)
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1,615,597 | $ | 0.1888 | |||||||||
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PIPE
(April 2006)
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206,899 | $ | 0.1888 | |||||||||
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PIPE
(December 2006)
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384,766 | $ | 0.1888 | |||||||||
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Warrant
Reduction
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(220,726 | )* | ||||||||||
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(10%
PIPE Only)
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Total
Warrants
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11,433,345 | |||||||||||
*Upon the
Effective Date, the number of shares underlying the May 2005 PIPE Warrants shall
be reduced by 220,726 shares to an amount equal to 1,394,871 shares. The number
of shares underlying the April 2006 PIPE Warrants and the December 2006 PIPE
Warrants shall remain unchanged.