Exhibit 4.2
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
IGI LABORATORIES, INC.
PREFERRED STOCK PURCHASE WARRANT
Warrant No. A-__
[___________] shares
Original Issue Date: March 13,
2009
THIS CERTIFIES THAT, FOR VALUE RECEIVED,
[_________] or its registered assigns (“ Holder
”) is entitled to purchase, on the terms and subject to the
conditions set forth herein, at any time or from time to time
during the Exercise Period (as defined below), but not thereafter,
up to [______________] ([______]) shares of the Series B-2
Preferred Stock, $0.01 par value per share (the “ Series
B-2 Preferred Stock ”), of IGI Laboratories, Inc., a
Delaware corporation (the “ Company ”), at a
price of $6,000.00 per share (the “ Exercise Price
”), such number of shares and Exercise Price being subject to
adjustment pursuant to the terms set forth in Section 3 of
this Warrant. Each share of Series B-2 Preferred Stock for which
this Warrant is exercisable is a “ Warrant Share
” and all such shares are collectively referred to as the
“ Warrant Shares .” Holder and Issuer hereby
agree that the stated value of this Warrant is $100.00.
Section 1.
Exercise Period; Exercise of
Warrant .
(a)
This Warrant shall be exercisable, in
whole or in part, during the term commencing on July 31, 2009 and
ending at 5:00 p.m., Eastern Time, on July 31, 2013, or if such
date is not a day on which the Company is open for business, then
the next succeeding day on which the Company is open for business;
provided, however, that if the convertible promissory note issued
by the Company to Holder on the date hereof (the “
Convertible Promissory Note ”) converts into shares of
Series B-1 Preferred Stock of the Company, $0.01 par value per
share, in accordance with its terms, on or prior to July 31, 2009,
this Warrant shall not become exercisable and shall be null and
void for all purposes (the “ Warrant Termination Event
”). In the event of an Exit Event (as defined below) on or
after August 1, 2009, and provided that the Warrant Termination
Event has not occurred, then this Warrant shall become exercisable,
in whole or in part, immediately prior to (and contingent upon) the
consummation by the Company of such Exit Event; provided ,
however , that if this Warrant is not exercised
in
whole immediately prior to the
consummation by the Company of such Exit Event, then immediately
following the consummation by the Company of such Exit Event, this
Warrant will not be exercisable and shall be null and void for all
purposes. For purposes hereof, an “ Exit Event ”
shall mean a Liquidation Event as such term is defined for purposes
of Section 4 of the Certificate of Designation of the Relative
Rights and Preferences of the Series B-1 Convertible Preferred
Stock and Series B-2 Preferred Stock of the Company, as the same
may be amended from time to time.
(b)
This Warrant may, at the option of
Holder, be exercised in whole or in part from time to time during
the exercise periods set forth in Section 1(a) by delivery
to the Company at its principal office: (i) a written notice of
such Holder’s election to exercise this Warrant (the “
Exercise Notice ”), which notice may be in the form of
the Notice of Exercise attached hereto, properly executed and
completed by Holder or an authorized officer thereof; (ii) a check
payable to the order of the Company and/or cancellation of
indebtedness owed by the Company to Holder, in each case in an
amount equal to the product of the Exercise Price multiplied by the
number of Warrant Shares specified in the Exercise Notice; and
(iii) this Warrant (the items specified in (i), (ii), and (iii) are
collectively the “ Exercise Materials
”).
(c)
As promptly as practicable, and in any
event within five (5) business days after its receipt of the
Exercise Materials, the Company shall execute or cause to be
executed and delivered to Holder a certificate or certificates
representing the number of Warrant Shares specified in the Exercise
Notice, together with cash in lieu of any fraction of a share, and
if this Warrant is partially exercised, a new warrant on the same
terms for the unexercised balance of the Warrant Shares. The stock
certificate or certificates shall be registered in the name of
Holder or such other name or names as shall be designated in the
Exercise Notice. The date on which the Warrant shall be deemed to
have been exercised (the “ Effective Date ”),
and the date the person in whose name any certificate evidencing
the Warrant Shares issued upon the exercise hereof is issued shall
be deemed to have become the holder of record of such shares, shall
be the date the Company receives the Exercise Materials,
irrespective of the date of delivery of a certificate or
certificates evidencing the Warrant Shares issued upon the exercise
hereof, provided, however, that if the Exercise Materials are
received by the Company on a date on which the transfer agent of
the Company is closed, the Effective Date shall be the next
succeeding date on which the transfer agent is open. In the event
that this Warrant is exercised, in whole or in part, in connection
with an Exit Event, the Effective Date shall be the date of the
consummation by the Company of such Exit Event. All Warrant Shares
will, upon issuance, be fully paid and nonassessable and free from
all taxes, liens, and charges with respect thereto.
Section 2.
Net Exercise . In lieu of exercising this Warrant pursuant to
Section 1(b) , Holder may elect to receive, without payment
by Holder of any additional consideration, shares of Series B-2
Preferred Stock equal to the value of this Warrant (or the portion
thereof being cancelled) by surrender of this Warrant at the
principal office of the Company together with an Exercise Notice,
in which event the Company shall issue to Holder a number of shares
of Series B-2 Preferred Stock computed using the following
formula:
Y (A - B)
X=
A
2
Where:
X =
The number of shares of Series B-2
Preferred Stock to be
issued to Holder pursuant to this net
exercise;
Y =
The number of Warrant Shares in respect
of which the net
issue election is made;
A =
The fair market value of one (1) share of
Series B-2
Preferred Stock at the time the net issue
election is made;
and
B =
The Exercise Price (as adjusted to the
date of the net
issuance)
For purposes of this Section 2 ,
the fair market value of one (1) share of Series B-2 Preferred
Stock as of a particular date shall be determined as follows: (i)
if listed or quoted for trading on a securities market or exchange,
the value shall be deemed to be the average closing price of the
securities on such exchange over the thirty (30) day period ending
three (3) days prior to the net exercise election; (ii) if traded
over-the-counter, the value shall be deemed to be the average of
the closing bid or sale prices (whichever is applicable) over the
thirty (30) day period ending three (3) days prior to the net
exercise election; and (iii) if there is no active public market,
the value shall be the fair market value thereof, as jointly
determined in good faith by Holder and the Company’s Board of
Directors. If Holder and the Company’s Board of Directors are
unable to reach such a determination, Holder and the
Company’s Board of Directors shall jointly select an
appraiser, who is experienced in such matters. The decision of such
appraiser shall be final and conclusive, and the cost of such
appraiser shall be borne equally by Holder and the
Company.
Section 3.
Adjustment of Exercise Price and
Number of Warrant Shares . The
number of and kind of securities purchasable upon exercise of this
Warrant and the Exercise Price shall be subject to adjustment from
time to time as follows:
(a)
Subdivisions, Combinations and Other
Issuances . If the Company
shall at any time prior to the expiration of this Warrant subdivide
its Series B-2 Preferred Stock, by split-up or otherwise, or
combine its Series B-2 Preferred Stock, or issue additional shares
of its Series B-2 Preferred Stock or Common Stock as a dividend
with respect to any shares of its Series B-2 Preferred Stock, the
number of Warrant Shares issuable on the exercise of this Warrant
shall forthwith be proportionately increased in the case of a
subdivision or stock dividend, or proportionately decreased in the
case of a combination. Appropriate adjustments shall also be made
to the purchase price payable per share, but the aggregate purchase
price payable for the total number of Warrant Shares purchasable
under this Warrant (as adjusted) s
