Exhibit 4.4
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PLACEMENT AGENT WARRANT AGREEMENT
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This WARRANT AGREEMENT (this "Agreement") dated December 6, 2004, by and
between Innovative Drug Delivery Systems, Inc., a Delaware corporation (the
"Company") and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC ("R&R," or the "Placement Agent").
W I T N E S S E T H
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WHEREAS, the Placement Agent has agreed, pursuant to that certain Placement
Agency Agreement, dated October 1, 2004, by and between the Placement Agent and
the Company, as amended (the "Placement Agency Agreement"), to act as a
placement agent in connection with the Company's proposed private placement (the
"Offering") of shares of the Company's common stock, $0.001 par value per share
("Common Stock") at a purchase price of $3.00 per share for minimum gross
proceeds of $15,000,000 and maximum gross proceeds of $25,000,000; and
WHEREAS, the Company has agreed to issue to the Placement Agent and/or its
designees, for nominal consideration, warrants (the "Placement Agent Warrant")
to purchase, at an initial exercise price per share of $3.00, a number of shares
of Common Stock equal to fifteen percent (15%) of the aggregate number of shares
of Common Stock placed by the Placement Agent (the "Warrant Shares"); and
WHEREAS, the Placement Agent Warrants to be issued pursuant to this
Agreement will be issued in connection with the Closing (as such term is defined
in the Placement Agency Agreement) in consideration for, and as part of each
Placement Agent's respective compensation in connection with the Placement Agent
acting as a placement agent pursuant to the Placement Agency Agreement.
NOW, THEREFORE, in consideration of the promises, the agreements herein set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Grant. Subject to the terms and conditions hereinafter set forth, the
Holders (as defined in Section 3.1 below) are hereby granted the right to
purchase Warrant Shares, subject to the terms and conditions of this Agreement.
2. Warrant Certificates. The Placement Agent Warrant certificates (the
"Warrant Certificates") delivered and to be delivered pursuant to this Agreement
shall be in the form set forth in Exhibit A attached hereto and made a part
hereof, with such appropriate insertions, omissions, substitutions, and other
variations as required or permitted by this Agreement.
3. Exercise of the Placement Agent Warrants.
3.1 Method of Exercise. The Placement Agent Warrants are initially
exercisable for Warrant Shares at the Exercise Price (as defined in Section 5.2
hereof), subject to adjustment as provided in Section 7 hereof, payable by
certified or official bank check or cash. Upon surrender of a Warrant
Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the Exercise Price for the Warrant Shares at the
Company's principal offices, currently at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, the registered holder of a Warrant Certificate ("Holder" or "Holders")
shall be entitled to receive a certificate or certificates for the Warrant
Shares so purchased. The purchase rights represented by each Warrant Certificate
are exercisable at the option of the Holder(s) thereof, in whole or in part (but
not as to fractional shares of the Warrant Shares). The Placement Agent Warrants
may be exercised to purchase all or part of the Warrant Shares represented
thereby. In the case of purchase of less than all the Warrant Shares purchasable
under any Warrant Certificate, the Company shall cancel such Warrant Certificate
upon the surrender thereof and shall execute and deliver a new Warrant
Certificate of like tenor for the balance of the Warrant Shares.
3.2 Net Exercise by Surrender of the Placement Agent Warrants. In addition
to the method of payment set forth in Section 3.1 and in lieu of any cash
payment required thereunder, the Holder(s) of the Placement Agent Warrants shall
have the right at any time and from time to time to exercise the Placement Agent
Warrants in full or in part by surrendering a Warrant Certificate in the manner
specified in Section 3.1 in exchange for the number of Warrant Shares computed
by using the following formula:
X = Y (A - B)
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A
Where X = the number of Warrant Shares to be issued to the Holder(s)
pursuant to the net exercise.
Y = the number of Warrant Shares subject to the Placement Agent
Warrant being exercised or, if only a portion of such
Placement Agent Warrant is being exercised, the portion of
such Placement Agent Warrant being canceled (at the time of
such calculation).
A = the Fair Market Value of one share of Common Stock (at the
date of exercise).
B = the Exercise Price (as adjusted to the date of such
calculation).
For purposes of this Section 3.2, the "Fair Market Value" of one share of
Common Stock shall equal: (i) the average of the closing sale price of the
Common Stock (or any other security for which the Placement Agent Warrants are
then exercisable) as quoted on the Nasdaq Stock Market or in the
Over-The-Counter Market or the closing price quoted on any national securities
exchange on which such securities are listed, whichever is applicable, for the
five trading days immediately prior to the date of exercise or, (ii) if no sales
take place on any such trading day, the average of the closing bid and asked
prices on such trading day; or (iii) if the Common Stock (or any other security
for which the Placement Agent Warrants are then exercisable) is not quoted on
the Nasdaq Stock Market or Over-The-Counter or on a national securities
exchange, the Fair Market Value of the Common Stock shall be established in good
faith by the disinterested members of the Company's Board of Directors.
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3.3 Exercise Period. The Placement Agent Warrants shall be exercisable, in
whole or in part, during the term commencing ninety (90) days following the date
that a registration statement filed with the Securities and Exchange Commission
(the "SEC") covering the resale of the shares sold in the Offering is declared
effective by the SEC, and ending on the date five (5) years after the Closing.
4. Issuance of Certificates.
4.1 In the event of any exercise of the rights represented by the
Placement Agent Warrants, as promptly as practicable on or after the date of
exercise and in any event within ten (10) business days thereafter, the Company
at its expense shall issue and deliver to the Person or Persons (as hereinafter
defined) entitled to receive the same a certificate or certificates representing
the number of Warrant Shares issued upon such exercise. In the event that the
Placement Agent Warrants are exercised in part, as promptly as practicable on or
after the date of exercise and in any event within ten (10) business days
thereafter, the Company at its sole expense will execute and deliver new
Warrants Certificates of like tenor exercisable for the number of Warrant Shares
for which the Placement Agent Warrants may then be exercised. As used herein,
the term "Person" or "Persons" means any individual or any corporation,
partnership, trust, limited liability company or other entity or organization of
any kind.
4.2 The issuance of the Warrant Shares upon the exercise of the Placement
Agent Warrants, and the delivery of certificates or other instruments
representing such Warrant Shares, shall be made without charge to the Holder(s)
for any tax or other charge of whatever nature in respect of such issuance and
the Company shall bear any such taxes in respect of such issuance.
5. Exercise Price.
5.1 Initial and Adjusted Exercise Price. Except as otherwise provided in
Section 7 hereof, the Placement Agent Warrants shall be exercisable to purchase
Warrant Shares at an initial price of $3.00 per share. The adjusted exercise
price shall be the price that shall result from time to time from any and all
adjustments of the initial Exercise Price in accordance with the provisions of
Section 7 hereof.
5.2 Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
6. Transfer of Securities.
6.1 Legends. Each Holder, by acceptance of a Warrant Certificate,
covenants and agrees that it is acquiring the Placement Agent Warrants evidenced
thereby and the Warrant Shares for its own account as an investment and not with
a view to the distribution thereof. The Placement Agent Warrants and Warrant
Shares have not been registered under the Securities Act of 1933 (the "Act"), or
any state securities laws and no transfer of any Placement Agent Warrant or
Warrant Shares shall be permitted unless the Company has received notice of such
transfer, at the address of its principal office set forth in Section 3.1
hereof, in the form of assignment attached hereto, accompanied by an opinion of
counsel reasonably satisfactory to the Company that an exemption from
registration of such Placement Agent Warrant or Warrant Shares under the Act is
available for such transfer.
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
SUCH LAWS IS AVAILABLE.
THE TRANSFER, EXCHANGE AND EXERCISE OF THE PLACEMENT AGENT
WARRANTS REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED IN
ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
6.2 Removal of Legend. Upon request of a Holder of a certificate with the
legends required by Section 6.1 hereof, the Company shall issue to such Holder a
new certificate therefor free of any transfer legend, if, with such request, the
Company shall have received an opinion of counsel satisfactory to the Company in
form and substance to the effect that any transfer by such Holder of the shares
evidenced by such certificate will not violate the Act and any applicable state
securities laws. Any purported transfer of any Placement Agent Warrant or
Warrant Shares not in compliance with the provisions of this Section 6 shall be
null and void.
7. Adjustment of Exercise Price and Number of Warrant Shares. The number
of Warrant Shares purchasable upon the exercise of the Placement Agent Warrants
(in the case of paragraphs (a) and (c) below) and the Exercise Price therefore
(in the case of paragraphs (a), (b) and (c) below) shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:
(a) Adjustment for Reclassification, Consolidation or Merger. If while
any Placement Agent Warrant, or any portion thereof, remains outstanding and
unexpired there shall be (i) a reorganization or recapitalization (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), (ii) a merger or consolidation of the Company with or into
another Person in which the Company is not the surviving entity, or a reverse
merger in which the Company is the surviving entity but the shares of the
Company's capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash, or otherwise, or (iii) a sale or transfer of the Company's
properties and assets as, or substantially as, an entirety to any other Person
in one transaction or a series of related transactions, then, as a part of such
reorganization, recapitalization, merger, consolidation, sale or transfer,
unless otherwise directed by the Holder(s), all necessary or appropriate lawful
provisions shall be made so that the Holder(s) shall thereafter be entitled to
receive upon exercise of its Placement Agent Warrant, during the period
specified herein and upon payment of the Exercise Price then in effect, the
greatest number of shares of stock or other securities or property that a holder
of Warrant Shares deliverable upon exercise of such Placement Agent Warrant
would have been entitled to receive in such reorganization, recapitalization,
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consolidation, merger, sale or transfer if such Placement Agent Warrants had
been exercised immediately prior to such reorganization, recapitalization,
merger, consolidation, sale or transfer, all subject to further adjustment as
provided in this Section 7. If the per share consideration payable to the
Holder(s) for Warrant Shares in connection with any such transaction is in a
form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company's Board of
Directors. The foregoing provisions of this paragraph shall similarly apply to
successive reorganizations, recapitalizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation that are
at the time receivable upon the exercise of such Placement Agent Warrant. In all
events, appropriate adjustment shall be made in the application of the
provisions of the Placement Agent Warrants (including adjustment of the Exercise
Price and number of Warrant Shares purchasable pursuant to the terms and
conditions of the Placement Agent Warrants) with respect to the rights and
interests of the Holder(s) after the transaction, to the end that the provisions
of each Placement Agent Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable or
issuable after such reorganization, recapitalization, merger, consolidation,
sale or transfer upon exercise of each Placement Agent Warrant.
(b) Adjustments for Split, Subdivision or Combination of Warrant
Shares. If the Company at any time while the Placement Agent Warrants, or any
portion thereof, remain outstanding and unexpired shall split or subdivide any
class of securities as to which purchase rights under the Placement Agent
Warrants exist, into a different number of securities of the same class, the
number of shares of such class issuable upon exercise of the Placement Agent
Warrants immediately prior to such split or subdivision shall be proportionately
adjusted and the Exercise Price for such class of securities shall be
proportionately adjusted. If the Company at any time while the Placement Agent
Warrants, or any portion thereof, remain outstanding and unexpired shall combine
any class of securities as to which purchase rights under this Agreement exist,
into a different number of securities of the same class, the number of shares of
such class issuable upon exercise of the Placement Agent Warrants immediately
prior to such combination shall be proportionately adjusted and the Exercise
Price for such class of securities shall be proportionately adjusted.
(c) Adjustments for Dividends in Stock or Other Securities or
Property. If while the Placement Agent Warrants, or any portion thereof, remain
outstanding and unexpired, the Holders shall have received, or, on or after the
record date fixed for the determination of eligible stockholders, shall have
become entitled to receive, without payment therefore, other or additional stock
or other securities or property (other than cash) of the Company by way of
dividend, then and in each case, the Placement Agent Warrants shall represent
the right to acquire, in addition to the number of shares of such class of
security receivable upon exercise of the Placement Agent Warrants, and without
payment of any additional consideration therefore, the amount of such other or
additional stock or other securities or property (other than cash) of the
Company that such holder would hold on the date of such exercise had it been the
holder of record of the class of security receivable upon exercise of the
Placement Agent Warrants on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during said period, giving effect to all adjustments called for during such
period by the provisions of this Section 7.
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(d) Notice of Adjustments. Upon any adjustment of the Exercise Price
and any increase or decrease in the number of Warrant Shares purchasable upon
the exercise of the Placement Agent Warrants, then, and in each such case, the
Company, within 30 days thereafter, shall give written notice thereof to the
Holder(s) at the address of such Holder(s) as shown on the books of the Company
which notice shall state the Exercise Price as adjusted and, if applicable, the
increased or decreased number of Warrant Shares purchasable upon the exercise of
the Placement Agent Warrants, setting forth in reasonable detail the method of
calculation of each.
8. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder(s) at the principal office of the Company, for a new Warrant
Certificate of like form, tenor and date representing in the aggregate the right
to purchase the same number of securities in such denominations as shall be
designated by the Holder(s) thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Placement Agent
Warrants, if mutilated, the Company will make and deliver a new Warrant
Certificate of like form and tenor in lieu thereof.
9. Fractional Shares. No fractional shares will be issued in connection
with any exercise hereunder. Instead, the Company shall pay to Holder(s) an
amount in cash equal to any fractional share to which the Holder(s) would be
entitled, multiplied by the Fair Market Value of the Common Stock.
10. Stock Fully Paid; Reservation of Shares. The Company shall at all
times reserve and keep available out of its authorized Common Stock, solely for
the purpose of issuance upon the exercise of the Placement Agent Warrants, such
number of Warrant Shares into which the Placement Agent Warrants are
exercisable. The Company covenants and agrees that, upon exercise of the
Placement Agent Warrants and payment of the Exercise Price therefore, all shares
of Common Stock shall be duly and validly issued, fully paid, non-assessable and
not subject to the preemptive rights of any stockholder, except as set forth in
the Memorandum (as defined in the Placement Agency Agreement).
11. Rights of Stockholders. Except as expressly provided in Section 3
hereof, no Holder, as such, shall be entitled to vote or receive dividends or be
deemed the holder of the Warrant Shares or any other securities of the Company
that may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the Holder(s), as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, consolidation, merger, conveyance, or otherwise) or to receive
notice of meetings, or to receive dividends or subscription rights or otherwise
until the Placement Agent Warrants shall have been exercised and the Warrant
Shares purchasable upon the exercise thereof shall have been issued, as provided
herein.
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12. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to a registered Holder(s) of the Placement Agent Warrants, to
the address of such Holder(s) as shown on the books of the Company; or
(b) If to the Company, at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, President, or at such other address as may
have been furnished in writing by the Company, with a copy ▇▇▇▇▇▇ ▇▇▇▇ &
Priest LLP ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇,
Esq.; or
(c) If to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLC, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer, or
at such other address as may have been furnished in writing by ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLC, with a copy to Morse, Zelnick, Rose & Lander, LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
Esq.
13. Supplements and Amendments. The Company and the Placement Agent may
from time to time supplement or amend this Agreement without the approval of any
Holder(s) in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any provision
herein, or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Placement Agent may deem necessary
or desirable and which the Company and the Placement Agent deem shall not
adversely affect the interests of the Company and/or the Holder(s). Other
amendments to this Agreement may be made only with the written consent of the
Company and the Holder(s) of the majority of the outstanding Warrant Shares
issuable upon exercise of the Placement Agent Warrants.
14. Successors. All the covenants and provisions of this Agreement shall
be binding upon and inure to the benefit of the Company, the Holder(s) and their
respective successors and assigns hereunder.
15. Termination. This Agreement shall terminate at the close of business
on the expiration time.
16. ARBITRATION, CHOICE OF LAW; COSTS. THE PARTIES HERETO AGREE TO SUBMIT
ALL CONTROVERSIES TO ARBITRATION IN ACCORDANCE WITH THE PROVISIONS SET FORTH
BELOW AND UNDERSTAND THAT (A) ARBITRATION IS FINAL AND BINDING ON THE PARTIES,
(B) THE PARTIES ARE WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING
THE RIGHT TO A JURY TRIAL, (C) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE
LIMITED AND DIFFERENT FROM COURT PROCEEDINGS, (D) THE ARBITRATOR'S AWARD IS NOT
REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY PARTY'S RIGHT TO
APPEAL OR TO SEEK MODIFICATION OF RULES BY ARBITRATORS IS STRICTLY LIMITED, (E)
THE PANEL OF NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (THE "NASD")
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ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE
AFFILIATED WITH THE SECURITIES INDUSTRY, AND (F) ALL CONTROVERSIES WHICH MAY
ARISE BETWEEN THE PARTIES CONCERNING THIS AGREEMENT SHALL BE DETERMINED BY
ARBITRATION PURSUANT TO THE RULES THEN PERTAINING TO THE NASD. JUDGMENT ON ANY
AWARD OF ANY SUCH ARBITRATION MAY BE ENTERED IN THE SUPREME COURT OF THE STATE
OF NEW YORK OR IN ANY OTHER COURT HAVING JURISDICTION OVER THE PERSON OR PERSONS
AGAINST WHOM SUCH AWARD IS RENDERED. THE PARTIES AGREE THAT THE DETERMINATION OF
THE ARBITRATORS SHALL BE BINDING AND CONCLUSIVE UPON THEM. THE PREVAILING PARTY,
AS DETERMINED BY SUCH ARBITRATORS, IN A LEGAL PROCEEDING SHALL BE ENTITLED TO
COLLECT ANY COSTS, DISBURSEMENTS AND REASONABLE ATTORNEY'S FEES FROM THE OTHER
PARTY.
17. Entire Agreement; Modification. This Agreement (including the
Placement Agency Agreement to the extent portions thereof are referred to
herein) contains the entire understanding between the parties hereto with
respect to the subject matter hereof and may not be modified or amended except
as provided in Section 13 hereof.
18. Severability. If any provision of this Agreement shall be held to be
invalid and unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
19. Captions. The caption headings of the Sections of this Agreement are
for convenience of reference only and are not intended, nor should they be
construed, as a part of this Agreement and shall be given no substantive effect.
20. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person, entity or corporation other than the Company
and the Placement Agent and any other registered Holder(s) of the Warrant
Certificates, Warrant Shares any legal or equitable right, remedy or claim under
this Agreement; and this Agreement shall be for the sole and exclusive benefit
of the Company and the Placement Agent and any Holder(s) of the Warrant
Certificates or Warrant Shares.
21. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterpart shall for all purposes be deemed to be
an original, and such counterparts shall together constitute but one and the
same instrument.
22. Assignment. Any Person or Persons to whom the Placement Agent Warrants
are transferred by a Placement Agent shall agree to be bound by all of the
provisions hereof, and the transferring Placement Agent shall not transfer any
Placement Agent Warrants unless the transferring Placement Agent first provides
a written instrument to the Company notifying the Company of such transfer
pursuant to which the transferee agrees in writing to be bound by the terms of
this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Placement Agent
Warrant Agreement to be duly executed as of the day and year first above
written.
INNOVATIVE DRUG DELIVERY
SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: President
Attest:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
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EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR (ii) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE ISSUER, THAT
AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
LAWS IS AVAILABLE.
THE TRANSFER, EXCHANGE AND EXERCISE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE ARE RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO
HEREIN.
No. RR- _______ Warrants
December 6, 2004
WARRANT CERTIFICATE
This Warrant Certificate certifies that ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, or its
registered assigns, is the registered holder of ____________________ warrants
(the "Warrants") to purchase initially, at any time commencing three-months
after the effective date of the Securities Act Registration Statement to be
filed covering the resale of the Shares sold in the Offering and terminating at
5:30 p.m. New York time on December 5,, 2009 (the "Expiration Date"), up to
__________ fully paid and non-assessable shares of Common Stock, $0.001 par
value per share ("Common Stock") of the Company, at the initial exercise price,
subject to adjustment in certain events (the "Exercise Price"), of $3.00 upon
surrender of this Warrant Certificate and payment of the Exercise Price at an
office or agency of the Company, or by surrender of this Warrant Certificate in
lieu of cash payment, but subject to the conditions and adjustments set forth in
the Warrant Agreement dated as of December 6, 2004 entered into by and between
the Company and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLC (the "Warrant Agreement"). Except as
otherwise provided in Section 3.2 of the Warrant Agreement, payment of the
Exercise Price shall be made by certified or official bank check in New York
Clearing House funds payable to the order of the Company.
No Warrant may be exercised after 5:30 p.m. (New York time) on the
Expiration Date, at which time the Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and to which reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Company and the registered holder(s) of the Warrants.
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As set forth in Section 7 of in the Warrant Agreement, certain adjustments
may be made to the Exercise Price and the type and/or number of the Company's
securities issuable upon their exercise. In the event of such an adjustment, the
Company will, at the request of the holder, issue a new Warrant Certificate
evidencing the adjustment in the Exercise Price and the number and/or type of
securities issuable upon the exercise of the Warrants; provided, however, that
the failure of the Company to issue such new Warrant Certificates shall not in
any way change, alter or otherwise impair the rights of the holder as set forth
in the Warrant Agreement.
Upon due presentment of transfer of this Warrant Certificate and the
executed form of assignment attached hereto at an office or agency of the
Company, a new Warrant Certificate or Warrant Certificates of like form and
tenor and evidencing in the aggregate a like number of Warrants shall be issued
to the transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided herein and in the Warrant Agreement, without any charge
except for any tax or other governmental charge imposed in connection with such
transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All capitalized terms used and not defined in this Warrant Certificate
shall have the meanings ascribed to them in the Warrant Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed as of December 6, 2004.
INNOVATIVE DRUG DELIVERY
SYSTEMS, INC.
By:
------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: President
Attest:
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
12
[FORM OF ELECTION TO PURCHASE]
TO: Innovative Drug Delivery Systems, Inc.
Attention: President
1. The undersigned hereby irrevocably elects to exercise the right,
represented by the attached Warrant Certificate, to purchase _______________
(leave blank if you choose Alternative No. 2 below) shares of Common Stock
pursuant to the terms of the Warrant Agreement entered into by and among
Innovative Drug Delivery Systems, Inc. and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLC, dated November
[30,] 2004 (the "Warrant Agreement"), and tenders herewith payment of the
purchase price of such shares in full. (Initial here if the undersigned elects
this alternative). __________
2. In lieu of exercising the attached Warrant Certificate for cash or
check, the undersigned hereby elects to effect the net exercise provision set
forth in Section 3.2 of the Warrant Agreement and receive _______________ (leave
blank if you choose Alternative No. 1 above) shares of Common Stock of the
Company. (Initial here if the undersigned elects this alternative). __________
Capitalized terms used and not herein defined shall have the meanings
ascribed to them in the Warrant Agreement.
Please issue a certificate or certificates representing said securities in
the name of the undersigned or in such other name as is specified below:
----------------------------------
(Name)
----------------------------------
----------------------------------
(Address)
------------------------------------------
(Signature and Date)
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate)
------------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
13
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED __________________________________ (the "Transferor")
hereby sells, assigns and transfers unto _______________________________________
(the "Transferee")
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________ as
its Attorney to transfer the within Warrant Certificate on the books of
Innovative Drug Delivery Systems, Inc., with full power of substitution. The
Transferor has provided a written instrument to the Company notifying the
Company of such transfer and pursuant to which the Transferee hereunder has
agreed in writing to be bound by the terms of the Warrant Agreement dated
December 6, 2004 by, between and among Innovative Drug Delivery Systems, Inc., a
Delaware corporation, and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLC, a copy of which has been
provided to the Transferee by the Transferor.
Dated: Signature
--------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate)
------------------------------------------
(Insert Social Security or other
Identifying Number of Holder)
14