Exhibit 4.3
NOVABAY PHARMACEUTICALS,
INC.
Warrant
to Purchase Common Stock
Number of
Shares of Common Stock:
Date of
Issuance: August 21, 2009 (“ Issuance Date
”)
NovaBay
Pharmaceuticals, Inc., a California corporation (the “
Company ”), certifies that, for good and valuable
consideration, the receipt and sufficiency of which are
acknowledged, [________] , the registered holder
hereof or its permitted assigns (the “ Holder
”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below)
then in effect, upon surrender of this Warrant to Purchase Common
Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, the “
Warrant ”), at any time or times on or after 180 days
from the date hereof (the “ Exercisability Date
”), but not after 5:30 p.m., New York Time, on the Expiration
Date (as defined below), August , 2014 ([_______]) fully
paid and nonassessable shares of Common Stock (as defined below)
(the “ Warrant Shares
”). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth
in Section 14. This Warrant is one of a series of
warrants to purchase shares of Common Stock (collectively, the
“ Warrants ”) issued pursuant to those certain
Subscription Agreements, dated as of August , 2009 (the “
Subscription Date ”), by and among the Company and the
investors (the “ Investors ”) referred to
therein (the “ Subscription Agreements ”)
pursuant to the Company’s Registration Statement on Form S-3
(No. 333-159917) (as amended).
(a)
Mechanics of Exercise
. Subject to the terms and conditions hereof (including,
without limitation, the limitations set forth in Section 1(e)),
this Warrant may be exercised by the Holder on any day on or after
the Exercisability Date, in whole or in part (but not as to
fractional shares), by (i) delivery of a written notice, in the
form attached hereto as Exhibit A (the “ Exercise
Notice ”), of the Holder’s election to exercise
this Warrant and (ii) if both (A) the Holder is not electing a
Cashless Exercise (as defined below) pursuant to Section 1(d) of
this Warrant and (B) a registration statement registering the
issuance of the Warrant Shares under the Securities Act of 1933, as
amended (the “ Securities Act ”), is effective
and available for the issuance of the Warrant Shares, or an
exemption from registration under the Securities Act is available
for the issuance of the Warrant Shares, payment to the Company of
an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which this Warrant is being
exercised (the “ Aggregate Exercise Price ”) in
cash or wire transfer of immediately available funds (a “
Cash Exercise ”). The Holder shall not be
required to surrender this Warrant in order to effect an exercise
hereunder, provided that this Warrant is surrendered to the
Company by the third Trading Day following the date on which the
Company has received each of the Exercise Notice and, if this
Warrant is being exercised pursuant to a Cash Exercise, the
Aggregate Exercise Price (the “ Exercise Delivery
Documents ”). On or before the first Trading
Day following the date on which the Company has received the
Exercise Delivery Documents, the Company shall transmit by
facsimile or e-mail transmission an acknowledgment of confirmation
of receipt of the Exercise Delivery Documents to the Holder and the
Company’s transfer agent for the Common Stock (the “
Transfer Agent ”). The Company shall deliver any
objection to the Exercise Delivery Documents on or before the
second Trading Day following the date on which the Company has
received all of the Exercise Delivery Documents. On or
before the third Trading Day following the date on which the
Company has received all of the Exercise Delivery Documents and
after the Company shall have received this Warrant (the “
Share Delivery Date ”), the Company shall, (X)
provided that the Transfer Agent is participating in The
Depository Trust Company (“ DTC ”) Fast
Automated Securities Transfer Program (the “ FAST
Program ”) and so long as the certificates therefor are
not required to bear a legend regarding restriction on
transferability, 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 (Y), if the Transfer Agent
is not participating in the FAST Program or if the certificates are
required to bear a legend regarding restriction on transferability,
issue and dispatch by overnight courier to the address as specified
in the Exercise Notice, a certificate, registered in the
Company’s share register in the name of the Holder or its
designee, for the number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise. Upon
delivery of the Exercise Delivery Documents and surrender of this
Warrant, the Holder shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date
such Warrant Shares are credited to the Holder’s DTC account
or the date of delivery of the certificates evidencing such Warrant
Shares, as the case may be. If this Warrant is submitted
in connection with any exercise pursuant to this Section 1(a) and
the number of Warrant Shares represented by this Warrant submitted
for exercise is greater than the number of Warrant Shares being
acquired upon an exercise, then the Company shall as soon as
practicable and in no event later than five Trading Days after any
exercise and at its own expense, issue a new Warrant (in accordance
with Section 7(e)) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to
which this Warrant is exercised. The Company shall pay
any and all taxes and other expenses of the Company (including
overnight delivery charges) that may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this
Warrant; provided , however , that the Company shall
not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for
Warrant Shares or Warrants in a name other than that of the Holder
or an affiliate thereof. The Holder shall be responsible
for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.
(b)
Exercise Price . For purposes of
this Warrant, “ Exercise Price ” means $2.75 per
share of Common Stock, subject to adjustment as provided
herein.
(c)
Failure to Timely Deliver Shares . In addition to
any other rights available to a Holder, if the Company fails to
deliver to the Holder a certificate representing Warrant Shares by
the third Trading Day after the date on which delivery of such
certificate is required by this Warrant, and if after such third
Trading Day the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares that the Holder
anticipated receiving from the Company (a “ Buy-In
”), then the Company shall, within three Trading Days after
the Holder’s request and in the Holder’s discretion,
either (i) pay cash to the Holder in an amount equal to the
Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased
less the Exercise Price (the “ Buy-In Price ”),
at which point the Company’s obligation to deliver such
certificate (and to issue such Common Stock) shall terminate, or
(ii) promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such Common Stock and pay
cash to the Holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (A) such number of shares of
Common Stock, times (B) the Closing Price on the date of the event
giving rise to the Company’s obligation to deliver such
certificate.
(d)
Cashless Exercise . Notwithstanding anything
contained herein to the contrary, if a registration statement
registering the issuance of the Warrant Shares under the Securities
Act is not effective or available for the issuance of the Warrant
Shares, the Holder may, in its sole discretion, exercise this
Warrant in whole or in part and, in lieu of making the cash payment
otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the “Net Number” of shares
of Common Stock determined according to the following formula (a
“ Cashless Exercise ”):
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For purposes of
the foregoing formula:
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the total
number of shares with respect to which this Warrant is then being
exercised.
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the Weighted
Average Price of the shares of Common Stock (as reported by
Bloomberg) on the date immediately preceding the date of the
Exercise Notice.
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the Exercise
Price then in effect for the applicable Warrant Shares at the time
of such exercise.
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For purposes of Rule 144(d) promulgated
under the Securities Act, as in effect on the date hereof, assuming
the Holder is not an affiliate of the Company, it is intended that
the Warrant Shares issued in a Cashless Exercise shall be deemed to
have been acquired by the Holder, and the holding period for the
Warrant Shares shall be deemed to have commenced, on the closing
date of the offering pursuant to which the Company was obligated to
issue this Warrant.
(e)
Limitations on Exercises
. (1) The Company shall not effect the
exercise of this Warrant, and the Holder shall not have the right
to exercise this Warrant, to the extent that after giving effect to
such exercise, such Holder (together with such Holder’s
affiliates and any other Persons acting as a group together) would
beneficially own in excess of 4.99% (the “ Maximum
Percentage ”) of the shares of Common Stock outstanding
immediately after giving effect to such exercise. For
purposes of the foregoing sentence, the aggregate number of shares
of Common Stock beneficially owned by such Person and its
affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude
shares of Common Stock which would be issuable upon (i) exercise of
the remaining, unexercised portion of this Warrant beneficially
owned by such Person and its affiliates and (ii) exercise or
conversion of the unexercised or unconverted portion of any other
securities of the Company beneficially owned by such Person and its
affiliates (including, without limitation, any convertible notes or
convertible preferred stock or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence,
for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”), it being acknowledged that the Company is not
representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act, and the Holder is solely
responsible for any schedules required to be filed in accordance
therewith. For purposes of this Warrant, in determining the number
of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in (1)
the Company’s most recent Form 10-K, Form 10-Q, Current
Report on Form 8-K or other public filing with the Securities and
Exchange Commission, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company
or the Transfer Agent setting forth the number of shares of Common
Stock outstanding. For any reason at any time, upon the
written or oral request of the Holder, where such request indicates
that it is being made pursuant to this Warrant, the Company shall
within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then
outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including
the Warrants, by the Holder and its affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported. By written notice to the Company, the Holder
may increase or decrease the Maximum Percentage to any other
percentage not in excess of 9.99% specified in such notice;
provided , that (i) any such increase will not be effective
until the 61 st
day after such notice is delivered
to the Company and (ii) any such increase or decrease will apply
only to the Holder and not to any other holder of
Warrants.
(f)
No Fractional Shares or Scrip
. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share that the Holder
would otherwise be entitled to purchase upon such exercise, the
Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the
Exercise Price.
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT
SHARES . The Exercise Price and the number of
Warrant Shares shall be adjusted from time to time as
follows:
(a)
Adjustment upon Subdivision or Combination of
Shares of Common Stock . If the Company at any time
on or after the Subscription Date subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes
of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of
Warrant Shares will be proportionately increased. If the
Company at any time on or after the Subscription Date combines (by
combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of
Warrant Shares will be proportionately decreased. Any
adjustment under this Section 2(a) shall become effective at the
close of business on the date the subdivision or combination
becomes effective.
(b)
Other Events . If any event occurs of the
type contemplated by the provisions of Section 2(a) but not
expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom
stock rights or other rights with equity features to the holders of
the Company’s equity securities), then the Company’s
Board of Directors will make an appropriate adjustment in the
Exercise Price and the number of Warrant Shares so as to protect
the rights of the Holder; provided , that no such adjustment
pursuant to this Section 2(b) will increase the Exercise Price or
decrease the number of Warrant Shares as otherwise determined
pursuant to this Section 2.
(c)
Notwithstanding anything to the contrary in this Warrant, in no
event shall the Exercise Price be reduced below the par value of
the Company's Common Stock
3.
RIGHTS UPON DISTRIBUTION OF ASSETS . If the
Company shall declare or make any dividend or other distribution of
its assets (or rights to acquire its assets) to holders of shares
of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin
off, reclassification, corporate rearrangement, scheme of
arrangement or other similar transaction) (a “
Distribution ”), at any time after the issuance of
this Warrant, then, in each such case:
(a)
any Exercise Price in effect immediately
prior to the close of business on the record date fixed for the
determination of holders of shares of Common Stock entitled to
receive the Distribution shall be reduced, effective as of the
close of business on such record date, to a price determined by
multiplying such Exercise Price by a fraction of which (i) the
numerator shall be the Weighted Average Price of the shares of
Common Stock on the Trading Day immediately preceding such record
date minus the value of the Distribution (as determined in good
faith by the Company’s Board of Directors) applicable to one
share of Common Stock, and (ii) the denominator shall be the
Weighted Average Price of the shares of Common Stock on the Trading
Day immediately preceding such record date; and
(b)
the number of Warrant Shares shall be increased
to a number of shares equal to the number of shares of Common Stock
obtainable immediately prior to the close of business on the record
date fixed for the determination of holders of shares of Common
Stock entitled to receive the Distribution multiplied by the
reciprocal of the fraction set forth in the immediately preceding
paragraph (a); provided , that in the event that the
Distribution is of shares of Common Stock or common stock of a
company whose common shares are traded on a national securities
exchange or a national automated quotation system (“ Other
Shares of Common Stock ”), then the Holder may elect to
receive a warrant to purchase Other Shares of Common Stock in lieu
of an increase in the number of Warrant Shares, the terms of which
shall be identical to those of this Warrant, except that such
warrant shall be exercisable into the
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