Exhibit 4.2
THE SECURITIES REPRESENTED BY THIS WARRANT (AND/OR THE
SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE HEREOF) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR WITH ANY STATE SECURITIES COMMISSION, AND MAY
NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A
REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT
AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR
TO THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT
VIOLATION OF THE SECURITIES ACT AND OTHER APPLICABLE STATE LAWS AND
RULES. NOTWITHSTANDING THE FOREGOING, THE SECURITIES (AND/OR THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF) MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES (AND/OR THE
SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE HEREOF).
Date: June 3, 2009
WARRANT TO PURCHASE
40,000,000 SHARES OF COMMON STOCK OF ELITE
PHARMACEUTICALS, INC.
Exercise Price: $0.0625
per share,
subject to adjustment as provided below (the "Exercise Price")
THIS IS TO CERTIFY that, for
value received, Epic Investments, LLC, a Delaware limited liability
company, and its successors and assigns (collectively, the
"Holder"), is entitled to purchase, subject to the terms and
conditions hereinafter set forth, up to 40,000,000 fully paid and
nonassessable shares (the "Warrant Shares") of the common stock,
par value $0.01 per share (as amended by the Amendment) ("Common
Stock"), of Elite Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), and to receive certificates for the Common Stock
so purchased. This Warrant to Purchase Common Stock (including any
Warrant(s) to Purchase Common Stock issued in exchange, transfer or
replacement hereof, the "Warrant") has been issued pursuant to the
terms and conditions of the Strategic Alliance Agreement, dated as
of March 18, 2009, by and between the Company and the initial
holder hereof, as amended by that certain Amendment, dated as of
April 30, 2009, and that certain Second Amendment, dated as of June
1, 2009 (the "Strategic Agreement"; capitalized terms used herein
and not otherwise defined shall have the meanings assigned to them
in the Strategic Agreement).
1. EXERCISE PERIOD. The Holder
may purchase all or a portion of the Warrant Shares pursuant to
Section 2 at any time or times on or after the date of issuance of
this Warrant but not after 5:00 p.m., New York time on the seventh
(7 th ) anniversary of the date of issuance of this
Warrant (such period, the “Exercise Period”).
2. EXERCISE OF WARRANT.
(a) MECHANICS OF EXERCISE. (i)
This Warrant may be exercised, in whole or in
part, at any time and from time to time during the Exercise
Period. Such exercise shall be accomplished by:
(x) payment to the Company of an
amount equal to the then applicable Exercise Price multiplied by
the number of Warrant Shares as to which this Warrant is being
exercised (the "Aggregate Exercise Price") in cash, by wire
transfer to an account designated by the Company or by certified
check or bank cashier's check, payable to the order of the Company,
and
(y) physical delivery of this
Warrant with an original executed Exercise Notice in substantially
the form attached hereto as Exhibit A (the "Exercise
Notice") to the Company (the requirements referred to in clauses
(x) and (y) being referred to as the "Exercise Delivery
Requirements").
(b) Upon satisfaction of the
Exercise Delivery Requirements, the Company will (x) transmit to
the Company's transfer agent (the "Transfer Agent") instructions to
issue the Warrant Shares in the amount set forth in the Exercise
Delivery Requirements and (y) as promptly as possible, but in no
event more than three (3) business days after satisfaction of the
Exercise Delivery Requirements, (A) provided that the Transfer
Agent is participating in The Depository Trust Company ("DTC") Fast
Automated Securities Transfer Program, upon the request of the
Holder, credit such aggregate number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise to the
Holder's or its designee's balance account with DTC through its
Deposit Withdrawal Agent Commission system, or (B) if the Transfer
Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the
address as specified in the Exercise Notice, a certificate or
certificates representing the shares of Common Stock so purchased,
registered in the Company's share register in the name of the
Holder or its transferee (as permitted under Section 3 below), for
the number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise. With respect to any exercise of
this Warrant, the Holder will for all purposes be deemed to have
become the holder of record of the number of shares of Common Stock
purchased hereunder on the date this Warrant is delivered to the
Company with a properly executed Exercise Notice and payment of the
Exercise Price (the "Exercise Date"), irrespective of the date of
delivery of the certificate evidencing such shares, except that, if
the date of such receipt is a date on which the stock transfer
books of the Company are closed, such Person will be deemed to have
become the holder of such shares at the close of business on the
next succeeding date on which the stock transfer books are open.
Fractional shares of Common Stock will not be issued upon the
exercise of this Warrant. In lieu of any fractional shares that
would have been issued but for the immediately preceding sentence,
but rather the number of shares of Common Stock to be issued shall
be rounded up to the nearest whole number. In the event this
Warrant is exercised in part, the Company shall issue a new Warrant
to the Holder covering the aggregate number of shares of Common
Stock as to which this Warrant remains exercisable for as soon as
practicable and in no event later than five (5) business days after
any exercise. The Company shall pay any and all taxes (other than
income or withholding taxes) which may be payable with respect to
the issuance and delivery of Warrant Shares upon exercise of this
Warrant.
(d) DISPUTES. In the case of a
dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall
promptly issue to the Holder
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the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 15.
(e) FORCE MAJEURE. The Company
shall not be liable for or incur penalties for delays or
nonperformance in compliance with the issuance or delivery of the
Warrant Shares upon the exercise of the Warrant, if such delay or
nonperformance was caused by: (i) act of God, act of war, strike,
fire, natural disaster, terrorism, quarantine or accident; or (ii)
lack of availability of materials, fuel or utilities.
3. TRANSFERABILITY AND
EXCHANGE.
(a) TRANSFERABILITY. The Warrant
and the other rights of the Holder pursuant to this Warrant
certificate are not severable from this Warrant certificate, and
shall not be assignable or transferable except in connection with a
transfer or assignment of this Warrant certificate in accordance
with the terms hereof. Any instrument purporting to make a transfer
or assignment in violation of this Section 3(a) shall be void and
of no effect. Subject to compliance with any applicable securities
laws and the conditions set forth in Section 3(e) hereof and to the
provisions of Section 4.1 of the Strategic Agreement, this Warrant
and all rights hereunder (including, without limitation, any
registration rights) are transferable, in whole or in part, upon
surrender of this Warrant certificate at the principal office of
the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon compliance with the foregoing and such
surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee
or assignees and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled.
(b) WARRANT REGISTER. The Company
shall register this Warrant, upon records to be maintained by the
Company for that purpose, in the name of the record Holder hereof
from time to time. 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 notice to the contrary.
(c) LOST, STOLEN OR MUTILATED
WARRANT. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to
the Company in customary form and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall
execute and deliver to the Holder a new Warrant representing the
right to purchase the Warrant Shares then underlying this
Warrant.
(d) ISSUANCE OF NEW WARRANTS.
Whenever the Company is required to issue a new Warrant pursuant to
the terms of this Warrant, such new Warrant (i) shall be of like
tenor with this Warrant, (ii) shall represent, as indicated on the
face of such new Warrant, the right to purchase the Warrant Shares
then underlying this Warrant (or in the case of a new
Warrant(s)
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being issued pursuant to Section 3(a), the Warrant Shares
designated by the Holder which, when added to the number of shares
of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of
Warrant Shares then underlying this Warrant), (iii) shall have an
issuance date, as indicated on the face of such new Warrant, which
is the same as the issuance date hereunder and (iv) shall have the
same rights and conditions as this Warrant.
(e) SECURITIES LAWS. This Warrant
and the Warrant Shares issuable upon the exercise hereof may not be
sold, transferred, pledged or hypothecated unless the Company shall
have been provided with an opinion of counsel, or other evidence
reasonably satisfactory to it, that such transfer is not in
violation of the Securities Act, and any applicable state
securities laws or, with respect to the Warrant Shares, a
registration statement has been filed pursuant to the Securities
Act and has been declared effective with respect to such
disposition.
4. ADJUSTMENTS TO EXERCISE PRICE
AND NUMBER OF SHARES SUBJECT TO WARRANT. The Exercise Price and the
number of shares of Common Stock purchasable upon the exercise of
this Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4.
(a) DIVIDENDS, ETC. In case the
Company shall, with respect to the holders of its Common Stock, (i)
pay a Common Stock dividend or make a distribution to its
stockholders in shares of Common Stock or other securities, (ii)
split or subdivide its outstanding shares of Common Stock into a
greater number of shares, or (iii) combine its outstanding shares
of Common Stock into a smaller number of shares, then the Exercise
Price in effect at the time of the record date for such dividend or
on the effective date of such split, subdivision or combination,
and/or the number and kind of securities issuable on such date,
shall be proportionately adjusted so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the aggregate
number and kind of shares of Common Stock (or such other securities
other than Common Stock, as the case may be) of the Company, at the
same aggregate Exercise Price, that, if such Warrant had been
exercised immediately prior to such date, the Holder would have
owned upon such exercise and been entitled to receive by virtue of
such dividend, distribution, split, subdivision or combination.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) MERGER, ETC. If at any time
after the date hereof there shall be a merger or consolidation of
the Company with or into or a transfer of all or substantially all
of the assets of the Company to another entity, then the Holder
shall be entitled to receive upon or after such transfer, merger or
consolidation becoming effective, and upon payment of the Exercise
Price then in effect, the number of shares or other securities or
property of the Company or of the successor corporation resulting
from such merger or consolidation, which would have been received
by the Holder for the shares of stock subject to this Warrant had
this Warrant been exercised just prior to such transfer, merger or
consolidation becoming effective or to the applicable record date
thereof, as the case may be. The Company will not merge or
consolidate with or into any other corporation, or sell or
otherwise tra
