SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
13D
(Amendment
No. 3)
Under
the Securities Exchange Act of 1934
NovaDel
Pharma Inc.
(Name
of
Issuer)
Common
Stock, par value $.001 per share
(Title
of
Class of Securities)
66986X106
(CUSIP
Number)
Lindsay
A. Rosenwald, M.D.
787
Seventh Avenue
New
York, NY 10019
(212)
554-4300
(Name,
Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April
19, 2006
(Date
of
Event which Requires Filing of this Statement)
If
the
filing person has previously filed a statement on Schedule 13G to report
the
acquisition which is the subject of this Statement because of Rule 13d-1(b)(3)
or (4), check the following: o
Check
the
following box if a fee is being paid with this Statement: o
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1.
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NAMES
OF REPORTING PERSONS
S.S.
OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lindsay
A. Rosenwald, M.D.
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2.
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CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
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3.
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4.
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SOURCE
OF FUNDS*
OO
(see Item 3 below)
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CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO
ITEM
2(d) or 2(e)
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CITIZENSHIP
OR PLACE OF ORGANIZATION
United
States
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7.
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NUMBER
OF
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SHARES
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BENEFICIALLY
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8.
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OWNED
BY
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0
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EACH
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REPORTING
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9.
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PERSON
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WITH
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10.
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11.
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
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12,338,926
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12.
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CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES*
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13.
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PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
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14.
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TYPE
OF REPORTING PERSON (See Instructions)
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IN
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This
Amendment No. 3 amends and supplements the following items of the Statement
on
Schedule 13D filed by Lindsay A. Rosenwald (the “Reporting Person”) on December
21, 2001, as amended by Amendment No. 1 filed March 14, 2002 and Amendment
No. 2
filed January 23, 2006 (the "Schedule").
Item
3. Source
and Amount of Funds or Other Consideration.
Item
3 is
hereby amended and supplemented by adding the following to the end
thereof:
Paramount
BioCapital, Inc. (“Paramount”), an NASD member broker dealer, acted as
co-placement agent for the Issuer in a private placement of the Issuer’s
securities consummated on April 19, 2006. In connection with such activities,
Paramount has designated to the Reporting Person, among other compensation,
warrants
to purchase 103,390 shares of common stock, par value $.001 per share (the
“Common Stock”), of the Issuer.
The
Reporting Person is chairman, Chief Executive Officer and sole stockholder
of
Paramount.
Item
5. Interest
in Securities of Issuer.
Item
5(a)
is hereby amended as follows:
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As
of the date hereof, the Reporting Person may be deemed to beneficially
own
12,338,926
Shares comprised of (i) 5,055,660 Shares and (ii) 7,283,266 Shares
issuable upon exercise of the common stock purchase warrants owned
directly by the Reporting Person. Such Shares constitute approximately
21.9% of the Issuer’s outstanding shares of Common
Stock.
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Item
5(c)
is hereby amended as follows:
(c) Item
3 is
incorporated herein by reference.
Item
6. Contracts,
Arrangements, Understandings or Relationships with respect to
Securities
of the Issuer
Item
6 is
hereby amended as follows:
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Paramount
has acted as placement agent for the Issuer in private placements
of the
Issuer’s securities in April 2003, May 2003, November 2003, December 2003,
May 2005 and April 2006. In connection with such activities, Paramount’s
designees (including the Reporting Person himself) have received
cash fees
and warrants (described in (d) below) to purchase securities of the
Issuer. Although no agreement has been executed, it is possible that
Paramount will be engaged by the Issuer to raise private capital
in the
future. The Reporting Person is chairman, Chief Executive Officer
and sole
stockholder of Paramount.
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As
a result of its contractual rights resulting from the Reporting Person’s
purchase of securities of the issuer in December 2001, the Reporting
Person exercised his right to appoint a director of the Company (Jay
Lobell) and have an observer at meetings of the Board of Directors.
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Included
in the 7,283,266 warrants to purchase Shares referred to in 5(a)(ii)
above, the Reporting Person owns 6,278,637 warrants to purchase Shares
at
any time until December 12, 2008 at an exercise price of $.46321
per
share. The warrants contain certain anti-dilution provisions providing
for
the adjustment of the exercise price upon the occurrence of certain
dividends, subdivisions, combinations or reclassifications. In addition,
the exercise price is subject to adjustment following the occurrence
of
any issuances of Shares or securities convertible into shares with
a sale
or exercise price (as applicable) that is lower than the current
market
price or exercise price under the
warrants.
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Included
in the 7,283,266 warrants to purchase Shares referred to in 5(a)(ii)
above, the Reporting Person owns 1,004,629 warrants to purchase Shares
received by reporting person as placement commissions a result of
the
Reporting Person’s ownership interest in Paramount (the “Placement
Warrants”). The Placement Warrants include (1) a unit purchase option to
purchase (i) 568,135 Shares at $1.16 per share (subject to adjustment)
on
or before January 30, 2009 and (ii) warrants to purchase 170,440
Shares at
$1.37 per share (subject to adjustment) on or before January 30,
2009; (2)
warrants to purchase 162,664 Shares at $1.30 per share (subject to
adjustment) on or before November 26, 2010; and (3) warrants to purchase
103,390 Shares at $1.60 per share (subject to adjustment) on or before
October 19, 2011. The Placement Warrants contain anti-dilution provisions
providing for the adjustment of the per share exercise price upon
the
occurrence of stock dividends, subdivsions, combinations and
reclassifications and certain of the Placement Warrants will adjust
upon
the issuance of Shares or securities convertible into Shares with
a sale
or exercise price (as applicable) that is lower than the current
market
price or exercise price under the warrants.
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Item
7. Material
to be filed as Exhibits.
Item
7 is
hereby amended and supplemented as follows:
2. Form
of
Warrant Certificate for the Placement Warrants.
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
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| Dated: |
April
21, 2006 |
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New
York, NY |
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By: |
/s/
Lindsay A. Rosenwald, M.D. |
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Lindsay A. Rosenwald,
M.D. |
FORM
OF CLASS E WARRANT
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
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
APPLICABLE
STATE SECURITIES LAWS, 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 OR “BLUE SKY” LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE
OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
NOVADEL
PHARMA INC.
Class
E Warrant for the Purchase of Shares of Common Stock
Issue
Date: April [__], 2006
Original
Date of Issuance: April [__], 2006
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________
Shares
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THIS
COMMON STOCK PURCHASE WARRANT (this “Warrant”)
certifies that, for value received, _____________
(the
“Holder”),
is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the six month
anniversary of the original date of issuance of this Warrant (the “Initial
Exercise Date”)
and on
or prior to the close of business on the fifth anniversary of the Initial
Exercise Date (the “Termination
Date”)
but
not thereafter, to subscribe for and purchase from NovaDel Pharma Inc., a
Delaware corporation (the “Company”),
up to
______
shares
(the “Warrant
Shares”)
of
common stock, par value $0.001 per share, of the Company (the “Common
Stock”).
The
purchase price of one share of Common Stock under this Warrant shall be equal
to
the Exercise Price, as defined in Section 2(b).
Section
1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”),
dated
April 11, 2006, among the Company and the purchasers signatory
thereto.
Section
2. Exercise.
(a) Exercise
of Warrant.
Exercise of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial Exercise Date
and
on or before the Termination Date by delivery to the office of the Company,
25
Minneakoning Road, Flemington, NJ 08822, of a duly executed facsimile copy
of
the Notice of Exercise Form annexed hereto (or such other office or agency
of
the Company as it may designate by notice in writing to the registered Holder
at
the address of such Holder appearing on the books of the Company); provided,
however,
within
five (5) Trading Days of the date said Notice of Exercise is delivered to the
Company, the Holder shall have surrendered this Warrant to the Company and
the
Company shall have received payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank.
(b) Exercise
Price.
The
exercise price of the Common Stock under this Warrant shall be $1.60, subject
to
adjustment hereunder (the “Exercise
Price”).
(c) Cashless
Exercise.
This
Warrant may also be exercised at any time, but in no event prior to the Initial
Exercise Date, by means of a “cashless exercise” in which the Holder shall be
entitled to receive a certificate for the number of Warrant Shares equal to
the
quotient obtained by dividing [(A-B) (X)] by (A), where:
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(A)
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the
Closing Price on the Trading Day immediately preceding the date of
such
election;
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(B)
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the
Exercise Price of this Warrant, as adjusted; and
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(X)
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the
number of Warrant Shares issuable upon exercise of this Warrant in
accordance with the terms of this Warrant by means of a cash exercise
rather than a cashless exercise.
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(d) Mechanics
of Exercise.
(i) Authorization
of Warrant Shares.
The
Company covenants that all Warrant Shares which may be issued upon the exercise
of the purchase rights represented by this Warrant will, upon exercise of the
purchase rights represented by this Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges in
respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).
(ii) Delivery
of Certificates Upon Exercise.
At the
written request of the Holder, the Company shall cause certificates for Warrant
Shares purchased hereunder to be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime broker with
the Depository Trust Company through its Deposit Withdrawal Agent Commission
(“DWAC”)
system
if the Company is a participant in such system, and otherwise by physical
delivery to the address specified by the Holder in the Notice of Exercise,
within three Trading Days from the receipt by the Company of the Notice of
Exercise Form, surrender of this Warrant and payment of the aggregate Exercise
Price as set forth above (“Warrant
Share Delivery Date”).
This
Warrant shall be deemed to have been exercised on the date the Exercise Price
is
received by the Company, if such date is after the Notice of Exercise Form
and
this Warrant are received by the Company. The Warrant Shares shall be deemed
to
have been issued, and the Holder or any other Person so designated to be named
therein shall be deemed to have become a holder of record of such Warrant Shares
for all purposes, as of the date the Warrant has been exercised by payment
to
the Company of the Exercise Price and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(d)(vii) prior to the issuance of such
shares, have been paid.
(iii) Delivery
of New Warrants Upon Exercise.
If this
Warrant shall have been exercised in part, the Company shall, within five
Trading Days after the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to the Holder a new Warrant evidencing
the
rights of the Holder to purchase the unpurchased Warrant Shares called for
by
this Warrant, which new Warrant shall in all other respects be identical with
this Warrant.
(iv) Rescission
Rights.
If the
Company fails to cause its transfer agent to transmit to the Holder a
certificate or certificates representing the Warrant Shares pursuant to this
Section 2(d)(iv) by the 2nd Trading Day immediately following the Warrant Share
Delivery Date, then the Holder will have the right to rescind such
exercise.
(v) Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise.
In
addition to any other rights available to the Holder, if the Company fails
to
cause its transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to a proper and conforming exercise
on
or before the 2nd
Trading
Day immediately following the Warrant Share Delivery Date, and if after such
date the Holder is required by its broker to purchase in a bona fide arm’s
length transaction for fair market value (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 which the Holder anticipated receiving upon such
exercise (a “Buy-In”),
then
the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount equal to (A) the
number of Warrant Shares that the Company was otherwise required to deliver
to
the Holder in connection with the exercise at issue, multiplied by (B) the
price
per share at which the sell order giving rise to such purchase obligation was
executed, and (2) at the option of the Holder given within three Trading Days
of
the failure to deliver, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored
or
deliver to the Holder the number of shares of Common Stock that would have
been
issued had the Company timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise
to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence, the Company shall be required to pay the Holder $1,000.
The
Holder shall provide the Company a detailed written notice indicating the
amounts payable to the Holder in respect of the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the Company. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock
upon
exercise of the Warrant as required pursuant to the terms hereof.
(vi) No
Fractional Shares or Scrip.
No
fractional shares or scrip representing fractional shares of Common Stock shall
be issued upon the exercise of this Warrant. As to any fraction of a share
of
Common Stock which 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.
(vii) Charges,
Taxes and Expenses.
Issuance of certificates for Warrant Shares shall be made without charge to
the
Holder for any issue or transfer tax or other incidental expense in respect
of
the issuance of such certificate, all of which taxes and expenses shall be
paid
by the Company, and such certificates shall be issued in the name of the Holder
or in such name or names as may be directed by the Holder; provided,
however,
that in
the event that certificates representing Warrant Shares are to be issued in
a
name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly
completed and executed by the Holder; and the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for any
expenses incidental thereto. 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 thereof.
(viii) Closing
of Books.
Subject
to applicable law, the Company will not close its stockholder books or records
in any manner which prevents the timely exercise of this Warrant, pursuant
to
the terms hereof.
Section
3. Certain
Adjustments.
(a) Stock
Dividends and Splits.
If the
Company, at any time while this Warrant is outstanding: (A) pays a stock
dividend or otherwise make a distribution or distributions on shares of its
Common Stock, or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company pursuant to this Warrant), (B)
subdivides outstanding shares of Common Stock into a larger number of shares,
(C) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (D) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then
in each case the Exercise Price shall be multiplied by a fraction of which
the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Simultaneously with any adjustment to the Exercise
Price pursuant to this Section 3(a), the number of Warrant Shares which may
be
purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment, the aggregate amount of the
adjusted Exercise Price multiplied by the aggregate adjusted amount of Warrant
Shares shall equal the aggregate amount of the unadjusted Exercise Price
multiplied by the aggregate unadjusted amount of Warrant Shares. Any adjustment
made pursuant to this Section 3(a) shall (x) with respect to clause (A) of
the
first sentence of this Section 3(a), become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and (y) with respect to clauses (B) - (D) of the first
sentence of this Section 3(a), become effective immediately after the effective
date in the case of a subdivision, combination or
re-classification.
(b) Pro
Rata Distributions.
If the
Company, at any time prior to the Termination Date, shall distribute to all
holders of Common Stock (and not to Holders of the Warrants) evidences of its
indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock (which
shall be subject to Section 3(b)), then in each such case the Exercise Price
shall be adjusted by multiplying the Exercise Price in effect immediately prior
to the record date fixed for determination of stockholders entitled to receive
such distribution by a fraction of which the denominator shall be the Closing
Price determined as of the record date or effective date, as the case may be,
mentioned in Section 3(a), and of which the numerator shall be such Closing
Price on such date less the then per share fair market value at such date of
the
portion of such assets or evidence of indebtedness so distributed applicable
to
one outstanding share of the Common Stock (determined by dividing the amount
distributed by the then issued and outstanding shares of Common Stock) as
determined by the Board of Directors in good faith. In either case the
adjustments shall be described in a statement provided to the Holders of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.
(c) Fundamental
Transaction.
If, at
any time while this Warrant is outstanding, (A) the Company effects any merger
or consolidation of the Company with or into another Person, (B) the Company
effects any sale of all or substantially all of its assets in one or a series
of
related transactions, (C) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property or (D) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities (other than capital
stock of the Company), cash or property (in any such case, a “Fundamental
Transaction”),
then,
upon any subsequent conversion of this Warrant, the Holder shall have the right
to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such Fundamental Transaction,
upon exercise of this Warrant, the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (“Alternate
Consideration”)
receivable upon, or as a result of, such Fundamental Transaction by a Holder
holding the number of Warrant Shares underlying this Warrant immediately prior
to the occurence of such event. For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply
to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in connection with such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders
of
Common Stock are given any choice as to the securities, cash or property to
be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to such securities, cash or property that it receives upon any
exercise of this Warrant following such Fundamental Transaction. To the extent
necessary to effectuate the foregoing provisions, any successor to the Company
or surviving entity in such Fundamental Transaction shall issue to the Holder
a
new warrant consistent with the foregoing provisions and evidencing the Holder’s
right to exercise such warrant into Alternate Consideration. The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the
provisions of this Section 3(c) and insuring that this Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.
(d) Calculations.
All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section
3,
the number of shares of Common Stock deemed to be issued and outstanding as
of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding at the close of the Trading
Day
on or, if not applicable, most recently preceding, such given date.
(e) Minimum
Adjustment.
Notwithstanding anything in this Warrant to the contrary, no adjustment in
the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least $0.01 per share of Common Stock; provided,
however,
that
any adjustments which by reason of this Subsection 3(f) are not required to
be
made shall be carried forward and taken into account in any subsequent
adjustment; provided,
further,
however, that adjustments shall be required and made in accordance with the
provisions of this Section 3 (other than this Subsection 3(f)) not later than
such time as may be required in order to preserve the tax-free nature of a
distribution, if any, to the Holder of this Warrant or the Warrant Shares.
Notwithstanding anything in this Section 3 to the contrary, the Company shall
be
entitled to make such reductions in the Exercise Price, in addition to those
required by this Section 3, as it in its discretion shall deem to be advisable
in order that any stock dividend, subdivision of shares or distribution of
rights to purchase stock or securities convertible or exchangeable for stock
hereafter made by the Company to its stockholders shall not be
taxable.
(f) Notice
to Holders.
(i) Adjustment
to Exercise Price.
Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company
shall promptly mail to the Holder a notice setting forth the Exercise Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.
(ii) Notice
to Allow Exercise by Holder.
If: (A)
the Company shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend on
or
a redemption of the Common Stock; (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of the Company shall be required in connection
with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of
the
assets of the Company, of any compulsory share exchange whereby the Common
Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding
up of
the affairs of the Company; then, in each case, the Company shall cause to
be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register (defined below) of the Company, at least 20 calendar days prior to
the
applicable record or effective date hereinafter specified, a notice stating
(x)
the record date established for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date
as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined
or
(y) the record date established for such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided,
that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. Subject to applicable law, the Holder is entitled to exercise
this Warrant during the 20-day period commencing on the date of such notice
to
the effective date of the event triggering such notice. Notwithstanding the
foregoing, the delivery of the notice described in this Section 3(h) is not
intended to and shall not bestow upon the Holder any voting rights whatsoever
with respect to outstanding unexercised Warrants.
Section
4. Transfer
of Warrant.
(a) Transferability.
Subject
to compliance with any applicable securities laws and the conditions set forth
in Sections 6(a) and 4(d) hereof and to the provisions of Section 4.1 of the
Purchase Agreement, this Warrant and all rights hereunder are transferable,
in
whole or in part, upon surrender of this Warrant at the principal office of
the
Company, 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 such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants dated the same date as this
Warrant 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, if any, of this Warrant not
so
assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly
assigned, may be exercised by a new holder for the purchase of Warrant Shares
without having a new Warrant issued.
(b) New
Warrants.
This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with
Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants
in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
(c) Warrant
Register.
The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant
Register”),
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. The Company shall permit
any Holder of a Warrant or its duly authorized attorney, upon written request
during ordinary business hours, to inspect and copy or make extracts from its
books showing the registered Holders of Warrants.
(d) Transfer
Restrictions.
If,
at the
time
of
the surrender of this Warrant in connection with any transfer of this Warrant,
the transfer of this Warrant shall not be registered pursuant to an effective
registration
statement under the Securities Act
and
under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the transferor or transferee of
this Warrant, as the case may be, furnish to the Company a written opinion
of
counsel satisfactory to the Company (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to
the
effect that such transfer may be made without
registration under
the
Securities Act and under applicable state securities or blue sky laws, (ii)
that
the transferor or transferee execute and deliver to the Company an investment
letter in form and substance acceptable to the Company and (iii) that the
transferee be an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
promulgated under the Securities Act or a qualified institutional buyer as
defined in Rule 144A(a) promulgated under the Securities Act.
Section
5. Investment
Intent; Limited Transferability.
(a) By
accepting this Warrant, the Holder represents to the Company that it understands
that this Warrant has not been, and any securities obtainable upon exercise
of
this Warrant may not have not been registered for sale under the Securities
Act
or any state securities or “blue sky” laws and are being offered and sold to the
Holder pursuant to one or more exemptions from the registration requirements
of
the Securities Act and applicable State securities or “blue sky” laws. In the
absence of an effective registration of such securities or an exemption
therefrom, any certificates for such securities shall bear a legend
substantially similar to the legend set forth in the Purchase Agreement. The
Holder understands that it may have to bear the economic risk of its investment
in this Warrant and any securities obtainable upon exercise of this Warrant
for
an indefinite period of time, until such securities have been registered under
the Securities Act and any applicable state securities or “blue sky” laws and
therefore cannot be sold unless subsequently registered under such laws, or
an
exemption from such registration is available. The Holder further represents
to
the Company, by accepting this Warrant, that it has full power and authority
to
accept this Warrant and make the representations set forth herein.
(b) The
Holder agrees, by acceptance of this Warrant, that (i) this Warrant will not
be
sold or otherwise transferred prior to the six-month anniversary of the date
hereof, and only pursuant to one or more exemptions from the Securities Act
and
any applicable state securities or “blue sky” laws and (ii) the Warrant Shares
and any other shares of Common Stock issued to the Holder in connection with
the
Warrant or the Warrant Shares will not be sold or otherwise transferred prior
to
the six-month anniversary of the date hereof, and only pursuant to (A) an
effective registration statement under the Securities Act and any applicable
state securities or “blue sky” laws which registers such shares or (B) one or
more exemptions from the Securities Act and any applicable state securities
or
“blue sky” laws.
(c) The
Holder agrees and acknowledges that this
Warrant may not be sold, transferred, assigned or hypothecated by the Holder
except in compliance with the provisions of the Securities Act and any
applicable State securities or “blue sky” laws.
Section
6. Miscellaneous.
(a) Title
to Warrant.
Prior
to the Termination Date and subject to compliance with applicable laws and
Section 4 of this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by
the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed and the
legal
opinion required under Section 4(d). The transferee shall sign an investment
letter in form and substance reasonably satisfactory to the
Company.
(b) No
Rights as Shareholder Until Exercise.
This
Warrant does not entitle the Holder to any voting rights or other rights as
a
shareholder of the Company prior to the exercise hereof. Upon the surrender
of
this Warrant and the payment of the aggregate Exercise Price (or by means of
a
cashless exercise), the Warrant Shares so purchased shall be and be deemed
to be
issued to such Holder as the record owner of such shares as of the close of
business on the later of the date of such surrender and payment.
(c) Loss,
Theft, Destruction or Mutilation of Warrant.
The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any bond),
and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.
(d) Saturdays,
Sundays, Holidays, etc.
If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.
(e) Authorized
Shares.
The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise
of
any purchase rights under this Warrant. The Company further covenants that
its
issuance of this Warrant shall constitute full authority to its officers who
are
charged with the duty of executing stock certificates to execute and issue
the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action
as
may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be listed.
Except
and to the extent as waived or consented to by the Holder, the Company shall
not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of
this
Warrant, but will at all times in good faith assist in the carrying out of
all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value,
(b)
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
(f) Jurisdiction.
All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the governing law
provisions set forth in the Purchase Agreement.
(g) Restrictions.
The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws and will contain a restrictive legend substantially
in the following form:
THESE
SECURITIES 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 OR “BLUE SKY” LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE
OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED
BY
SUCH SECURITIES.
(h) Nonwaiver
and Expenses.
No
course of dealing or any delay or failure to exercise any right hereunder on
the
part of the Holder shall operate as a waiver of such right or otherwise
prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that
all rights hereunder terminate on the Termination Date. If the Company willfully
and knowingly fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the Holder
such
amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by the Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(i) Notices.
Unless
otherwise specifically set forth herein, any notice, request or other document
required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Purchase
Agreement.
(j) Limitation
of Liability.
No
provision hereof, in the absence of any affirmative action by the Holder to
exercise this Warrant or purchase Warrant Shares, and no enumeration herein
of
the rights or privileges of the Holder, shall give rise to any liability of
Holder for the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors
of
the Company.
(k) Remedies.
The
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of
its
rights under this Warrant. The Company agrees that monetary damages would not
be
adequate compensation for any loss incurred by reason of a breach by it of
the
provisions of this Warrant and hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(l) Successors
and Assigns.
Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of all Holders
from time to time of this Warrant and shall be enforceable by any such
Holder.
(m) Amendment.
This
Warrant may only be modified or amended or the provisions hereof waived with
the
written consent of the Company and the Holder.
(n) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(o) Headings.
The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
********************
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated:
April __, 2006
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NOVADEL
PHARMA INC.
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By: |
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Name:
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Title:
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NOTICE
OF EXERCISE
1. The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full),
and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
2. Payment
shall take the form of (check applicable box):
[
] in
lawful money of the United States; or
[
] the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).
3. Please
issue a certificate or certificates representing said Warrant Shares in the
name
of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following:
_______________________________
_______________________________
_______________________________
4. Accredited
Investor.
The
undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of
Investing Entity:
_______________________________________________________
Signature
of Authorized Signatory of Investing Entity:
_________________________________
Social
Security or Tax ID#, if applicable:
____________________________________________
Name
of
Authorized Signatory:
___________________________________________________
Title
of
Authorized Signatory:
____________________________________________________
Date:
_______________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this
form
and supply required information.
Do
not
use this form to exercise the warrant.)
FOR
VALUE
RECEIVED _______________ hereby sells, assigns and transfers unto
____________________ the foregoing Warrant and all rights evidenced thereby,
and
does irrevocably constitute and appoint _____________________, attorney, to
transfer said Warrant on the books of NovaDel Pharma Inc. (the “Company”).
As a
condition to this assignment, the Holder acknowledges that its assignee must
deliver a written instrument to the Company complying with the provisions of
Section 4(d) of the Warrant.
| Dated:_______________ |
Signature:
___________________________
Address:
___________________________
___________________________
|
PARTIAL
ASSIGNMENT
FOR
VALUE
RECEIVED _______________ hereby assigns and transfers unto ____________________
the right to purchase _______ shares of the common stock, par value $.001 per
share, of NovaDel Pharma Inc. (the “Company”),
as
set forth in the foregoing Warrant, and a proportionate part of said Warrant
and
the rights evidenced thereby, and does irrevocably constitute and appoint
____________________, attorney, to transfer that part of said Warrant on the
books of the Company. As a condition to this assignment, the Holder acknowledges
that its assignee must deliver a written instrument to the Company complying
with the provisions of Section 4(d) of the Warrant.
| Dated:_______________ |
Signature:
___________________________
Address:
___________________________
___________________________
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| NOTE: |
The
signature to the Assignment Form must correspond with the name as
it
appears on the face of the Warrant, without alteration or enlargement
or
any change whatsoever, and must be guaranteed by a bank or trust
company.
Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority
to assign
the foregoing Warrant.
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