Document:

exv4w2

 

Exhibit 4.2

UNLESS PERMITTED UNDER APPLICABLE CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THESE
SECURITIES MUST NOT TRADE THE SECURITIES IN CANADA BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY
AFTER THE LATER OF (i) JUNE 26, 2007 AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY
PROVINCE OR TERRITORY OF CANADA.

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR APPLICABLE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED IN ACCORDANCE WITH THE ACT OR UNLESS IT IS
OTHERWISE ESTABLISHED TO THE SATISFACTION OF THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER
THE ACT IS AVAILABLE.

THIS WARRANT WILL BE VOID AND OF NO VALUE UNLESS EXERCISED WITHIN THE TIME LIMITS PROVIDED HEREIN.

ANTARES PHARMA, INC.

a company incorporated under the laws of the State of Delaware

Warrant for the Purchase of Shares of Common Stock

THIS IS TO CERTIFY THAT, in consideration of the payment of $1.00 to ANTARES PHARMA, INC. (the
“Company”) and for other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the Company hereby grants to MMV FINANCIAL INC. (the “Holder”) the right to
purchase at any time up to 5:00 o’clock in the afternoon (Eastern Standard Time) on February 26,
2012 (the “Expiry Time”) that number of shares of common stock of the Company (the “Shares”) equal
to the lower of the Maximum Warrant Shares (as defined below) or the number of Shares as determined
in accordance with the following formula:

	 	 	 	 	 	 	 
	z =

	 	USD$400,080
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	x	 	 	 	 
	where
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	x =	 	USD$1.25 (the “Exercise Price”)
	 
	 	 	 	 	 	 
	z =	 	the total number of Shares issuable to the Holder (rounded to the nearest Share) upon exercise of this Warrant in full, subject to
adjustment as provided herein

If the Company completes a financing after the date of this warrant involving the issuance of
equity, debt with warrants or convertible debt, where the relevant equity is issued (or is
issuable), at an effective price per Share less than the Exercise Price (a “New Exercise Price”),
provided this Warrant has not been fully exercised, then “x” in the above stated formula and the
Exercise Price shall be deemed to be the New Exercise Price, provided that in no event will the
total number of Shares issuable to the Holder as a result of any such adjustment to the Exercise
Price

 

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or otherwise exceed the Maximum Warrant Shares (before giving effect to any other adjustments
pursuant to paragraphs 5 through 8 below).

In addition, notwithstanding the foregoing, if pursuant to that certain Credit Agreement dated of
even date herewith between, inter alia, the Holder and the Company (the “Credit Agreement”), the
Second Tranche (as such term is defined in the Credit Agreement) is not drawn down by and advanced
to the Company on or before December 31, 2007 for any reason, then the above stated formula shall
be deleted and replaced with the following (the “Alternate Formula”):

	 	 	 	 	 
	z=

	 	USD$250,050
	 	 
	 

	 	 

x	 	 

Prior to the Second Funding Date, the number of Shares for which this Warrant exercisable shall be
limited to the number of Shares derived by using the Alternate Formula. In addition,
notwithstanding anything contained in Credit Agreement or this Warrant to the contrary, this
Warrant shall not be exercisable with respect to any Shares unless and until such time as the
American Stock Exchange has approved for listing the issuance of the Shares pursuant to the
exercise of this Warrant. The Company has applied for such listing with the American Stock
Exchange.

For the purposes of this Warrant, the term “Maximum Warrant Shares” means 400,080 Shares initially
and 250,050 Shares in the event that that Second Tranche (as such term is defined in the Credit
Agreement) is not drawn down by and advanced to the Company on or before December 31, 2007 for any
reason (in each case subject to further adjustment pursuant to paragraphs 5 through 8 below).
Notwithstanding the foregoing, in no event shall the Maximum Warrant Shares exceed any amount the
issuance of which would require approval of the Company’s stockholders to comply with any
requirements or policies of any exchanges or markets on which or through which the Company’s
securities are traded from time to time, or any securities regulatory authority having
jurisdiction, including without limitation, the American Stock Exchange.

For the purposes of this Warrant, “Change of Control” means any sale, transfer, exchange, exclusive
license or other disposition of all or substantially all of the assets or shares of the Company, or
any acquisition, reorganization, consolidation, amalgamation, or merger of the Company where the
Holders of the Company’s outstanding voting equity securities immediately prior to the transaction
beneficially own less than 50.1% of the outstanding voting equity securities of the surviving or
successor entity immediately following the transaction.

Prior to the Expiry Date, the rights represented by this Warrant may be exercised by the Holder, in
whole or, from time to time and at any time, in part, by surrender of this Warrant at the
registered office of the Company at 250 Phillips Boulevard, Suite 290, Ewing, New Jersey, 08618
(the “Exercise Location”), together with: (i) payment of the Exercise Price of the Shares
subscribed for and the subscription form attached hereto as Schedule “A”, completed and signed by
the Holder; or (ii) the net issuance election form attached hereto as Schedule “C”, completed and
signed by the Holder.

The Company covenants and agrees that the Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon payment and issuance, be fully paid and non-

 

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assessable and free of all liens, charges, and encumbrances of any nature whatsoever, and the
Holder shall be deemed to have become the holder of record of such Shares on the date of the
Closing (as defined below). The Company further covenants and agrees that during the period within
which the rights represented by this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of Shares in the capital of the Company (including as
may be required pursuant to any adjustment under paragraphs 5 to 8 below) to provide for the
exercise of the rights represented by this Warrant.

The Company or, if appointed, the transfer agent for the Shares (the “Transfer Agent”) and every
subsequent transfer agent for any shares of the Company’s capital stock issuable upon the exercise
of any of the rights of purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such purpose. The Company
will keep a copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company’s capital stock issuable upon the exercise of the
rights of purchase represented by the Warrant. The Company will furnish such Transfer Agent a copy
of all notices of adjustments and certificates related thereto, transmitted to each Holder.

Before taking any action which would cause an adjustment pursuant to the provisions contained
herein to reduce the Exercise Price below the then par value of the Shares, the Company will take
any corporate action which may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue to the Holder fully
paid and non-assessable Shares at the Exercise Price as so adjusted.

THE FOLLOWING ARE THE TERMS AND CONDITIONS

REFERRED TO IN THIS WARRANT

	1.	 	After the Expiry Date, all rights under this Warrant in respect of which the right of
subscription and purchase provided for has not been exercised will wholly cease and terminate,
and this Warrant will be void and of no force or effect.
	 
	2.	 	This Warrant and either: (i) the duly completed and executed subscription form together with
payment of the Exercise Price of the Shares subscribed for; or (ii) the duly completed and
executed net issuance election form will be deemed to be surrendered only upon personal
delivery of the same to the Company or, if sent by mail or other means of transmission, upon
actual receipt by the Company.
	 
	3.	 	The closing (the “Closing”) of each subscription for Shares by the Holder will take place at
the Exercise Location at 3:00 p.m. on the fifth Business Day (being a day which is not a
Saturday, Sunday or statutory holiday in the State of New Jersey) after this Warrant and the
completed subscription form or the net issuance election form, as the case may be, are
received by the Company. If the Holder has submitted a completed subscription form, then at
the Closing the Holder will deliver to the Company a certified cheque, bank draft or other
immediately available funds payable to or to the order of the Company in an amount equal to
the Exercise Price for the Shares subscribed for in lawful money of the United States. The
Company will concurrently deliver to the Holder, without charge, a certificate representing
the Shares purchased and will enter the name of the Holder in the share register of the
Company in respect of such Shares. If the Holder exercises this

 

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	 	 	Warrant only in part, and provided this Warrant has not expired, the Company will also
deliver concurrently to the Holder, without charge, a new Warrant representing the number of
Shares, if any, with respect to which this Warrant has not then been exercised.
	 
	4.	 	No fractional Shares will be issued on the exercise of the Warrant. In lieu of fractional
Shares, if any, the Company will pay to the Holder at the Closing, an amount in lawful money
of the United States equal to the then current market value of such fractional Share.
	 
	5.	 	If the Company at any time or from time to time after the date hereof effects a subdivision
of the outstanding Shares or consolidates the outstanding Shares, then the Exercise Price
shall be adjusted to that price determined by multiplying the Exercise Price immediately prior
to such event by a fraction:

	 	(a)	 	the numerator of which shall be the total number of outstanding Shares
immediately prior to such event; and
	 
	 	(b)	 	the denominator of which shall be the total number of outstanding Shares
immediately after such event.

	 	 	Upon each adjustment of the Exercise Price as provided herein, the Holder shall thereafter
be entitled to acquire, at the Exercise Price resulting from such adjustment, the number of
Shares (calculated to the nearest tenth of a Share) obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Shares which may be
acquired hereunder immediately prior to such adjustment and dividing the product thereof by
the Exercise Price resulting from such adjustment.
	 
	6.	 	If the Company at any time or from time to time after the date hereof makes, or fixes a
record date for the determination of holders of Shares entitled to receive a dividend or other
distribution payable in additional Shares, in each such event the Exercise Price that is then
in effect shall be decreased as of the time of such issuance or, in the event such record date
is fixed, as of the close of business on such record date, by multiplying the Exercise Price
then in effect by a fraction:

	 	(a)	 	the numerator of which is the total number of Shares issued and outstanding
immediately prior to the time of such issuance or the close of business on such record
date; and
	 
	 	(b)	 	the denominator of which is the total number of Shares issued and outstanding
immediately prior to the time of such issuance or the close of business on such record
date plus the number of Shares issuable in payment of such dividend or distribution;

	 	 	provided, however, that if such record date is fixed and such dividend is not fully paid or
if such distribution is not fully made on the date fixed therefor, the Exercise Price shall
be recomputed accordingly as of the close of business on such record date and thereafter the
Exercise Price shall be adjusted pursuant to this paragraph to reflect the actual payment of
such dividend or distribution.

 

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	7.	 	If the Company at any time or from time to time after the date hereof makes, or fixes a
record date for the determination of holders of Shares entitled to receive, a dividend or
other distribution payable in securities of the Company other than Shares, in each such event
provision shall be made so that the Holder shall receive upon exercise of this Warrant, in
addition to the number of Shares receivable thereupon, the amount of other securities of the
Company which it would have received had this Warrant been converted into Shares on the date
of such event and had they thereafter, during the period from the date of such event to and
including the conversion date, retained such securities receivable by them as aforesaid during
such period, subject to all other adjustments called for during such period under this
paragraph with respect to the rights of the Holder or with respect to such other securities by
their terms.
	 
	8.	 	In case of:

	 	(a)	 	any reclassification or change of Shares issuable upon exercise of this
Warrant;
	 
	 	(b)	 	any consolidation or merger of the Company with or into another corporation or
corporations;
	 
	 	(c)	 	the sale of the properties and assets or shares of the Company substantially as
an entirety to any other corporation or corporations followed by a winding-up of the
Company or a distribution of its assets to the shareholders;
	 
	 	(d)	 	the sale of the properties and assets or shares of the Company substantially as
an entirety to another person or persons in exchange for cash or securities in or of
such other person or persons or any affiliate or any combination thereof; or
	 
	 	(e)	 	the conversion of all outstanding preferred stock in the capital of the Company
into common stock in accordance with their terms,

	 	 	the Holder shall have the right thereafter to convert this Warrant (or any portion thereof)
into, and shall accept in lieu of the Shares, the kind and amount of shares or other
securities and property receivable on such reclassification, merger, sale, change or
conversion that the Holder would have been entitled to receive thereupon had the Holder been
the registered holder of the number of Shares into which this Warrant might have been
converted immediately prior thereto. The provisions of this section shall similarly apply
to successive reclassifications and changes or conversions of shares and to successive
consolidations, mergers and sales.
	 
	9.	 	Notwithstanding paragraph 8 above, without limiting the right of the Holder to exercise this
Warrant in whole or in part at any time prior to the completion of a Change of Control
transaction, the Company shall not complete any Change of Control unless the resulting
successor or acquiring entity (if not the Company) assumes all of the Company’s obligations
under this Warrant in writing.
	 
	10.	 	If any event shall occur to which the other provisions of paragraphs 5 to 8 hereof are not
strictly applicable and the failure to make any adjustment to the Exercise Price would not
fairly protect the exercise right represented by this Warrant in accordance with the

 

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	 	 	essential intent and principles hereof or, if strictly applicable, would not fairly protect
the conversion rights represented by this Warrant in accordance with such essential intent
and principles, then the Company shall make such adjustment, if any, on a basis consistent
with the essential intent and principles established in this Warrant, necessary to preserve
the conversion rights represented by this Warrant.
	 
	11.	 	In each case of an adjustment to the Exercise Price, the Company, at its expense, shall
compute such adjustment in accordance with the provisions hereof and prepare a certificate
showing such adjustment and shall mail such certificate to the Holder at the Holder’s address
as shown in the Company’s books. The certificate shall set forth such adjustment showing in
detail the facts upon which such adjustment is based, including a statement of the adjusted
Exercise Price.
	 
	12.	 	Except as otherwise provided herein, paragraphs 5 to 8 hereof are intended to operate
independently of one another. If an event occurs that requires the application of more than
one subsection, all applicable subsections shall be given independent effect, but there shall
be no duplicate adjustments if two separate subsections provide the same protection.
	 
	13.	 	This Warrant shall not entitle the Holder to any rights as a shareholder of the Company,
including voting rights, except that the Company shall concurrently furnish to the Holder a
copy of all notices which are furnished to holders of the Shares in the capital of the
Company.
	 
	14.	 	Any Shares acquired pursuant to this Warrant may be subject to a hold period under the
securities laws of Ontario and the securities laws of the United States and may bear the
following legends:

“UNLESS PERMITTED UNDER APPLICALBE CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THESE SECURITIES
MUST NOT TRADE THE SECURITIES IN CANADA BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE
LATER OF (i) JUNE 26, 2007 AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE
OR TERRITORY OF CANADA.

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR APPLICABLE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED IN ACCORDANCE WITH THE ACT OR UNLESS IT IS
OTHERWISE ESTABLISHED TO THE SATISFACTION OF THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER
THE ACT IS AVAILABLE.”

	15.	 	This Warrant is exchangeable upon its surrender by the Holder at the registered office of the
Company at the address set out herein for new warrants of like tenor representing in the
aggregate the right to subscribe for and purchase the number of Shares which may be subscribed
for and purchased hereunder, each of such new warrants to represent the right

 

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	 	 	to subscribe for and purchase such number of Shares as shall be designated by the Holder at
the time of such surrender.
	 
	16.	 	The Holder agrees that this Warrant shall be amended as required to bring this Warrant into
conformity with any requirements or policies of any exchanges or markets on which or through
which the Company’s securities are traded from time to time, or any securities regulatory
authority having jurisdiction.
	 
	17.	 	If this Warrant becomes mutilated, lost, destroyed, or stolen, the Company will issue and
deliver a new Warrant of like date and tenor as the one mutilated, lost, destroyed, or stolen
in exchange for and in place of and upon cancellation of such mutilated, lost, destroyed, or
stolen Warrant. In the case of any assignment, division, or transfer of the Holder’s rights
under this Warrant, the Company, at the request of the Holder or its transferee or assignee,
will issue such replacement Warrant of like date and tenor as this Warrant and registered in
the name or names requested by the Holder or its transferee or assignee. The applicant for
the issue of a new Warrant pursuant to this section 18 shall bear the cost of the issue
thereof and in the case of loss, destruction or theft shall, as a condition precedent to the
issue thereof, furnish to the Company such evidence of ownership and of the loss, destruction
or theft satisfactory to the Company, and such applicant may also be required to furnish
indemnity in form satisfactory to the Company.
	 
	18.	 	The Holder may elect to receive at any time or from time to time before the Expiry Date,
without the payment by the Holder of any additional consideration, Shares (or other shares of
the Company if the Shares have been automatically converted into such shares) equal to the
value of this Warrant or any portion thereof, as calculated in accordance with the formula set
out on the first page hereof, by the surrender of this Warrant or such portion to the Company,
together with the net issuance election notice annexed hereto as Schedule “C” duly executed,
at the Exercise Location (the “Net Issuance Right”). Thereupon, the Company shall issue to the
Holder such number of fully-paid and non-assessable Shares as is computed by the following
formula:

	 	 	 	 	 	 	 
	 

	 	X =
	 	Y (A-B)
	 	 
	 

	 	 	 	 

A
	 	 
	 
	 	 	 	 	 	 
	 

	 	where	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	X =     the number of Shares that shall be issued to the Holder.
	 
	 	 	 	 	 	 
	 	 	Y =     the number of shares covered by this Warrant in respect of which the net
issuance election is being made.
	 
	 	 	 	 	 	 
	 	 	A =     the “Fair Market Value” (as defined below) of one Share as at the time the net
issuance election is made.
	 
	 	 	 	 	 	 
	 	 	B =    the Exercise Price

“Fair Market Value” of a Share (or a share of the Company if the Shares have been
automatically converted into such shares) as of a particular date (the “Determination Date”)
shall mean:

 

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	 	(a)	 	if the shares are traded on a securities exchange, the Fair Market Value shall
be deemed to be the average of the closing prices on such exchange over the 30-trading
day period ending 5 business days prior to the Determination Date;
	 
	 	(b)	 	if the shares are quoted for trading on the Nasdaq Stock Market or other
over-the-counter system, the Fair Market Value shall be deemed to be the average of the
closing bid prices over the 30-trading day period ending 5 business days prior to the
Determination Date; and
	 
	 	(c)	 	if there is no public market for the shares, the Fair Market
Value of the shares shall be determined by mutual agreement of the Holder and the Board of Directors
of the Company, each acting reasonably.

	19.	 	This Warrant may only be transferred or assigned by the Holder upon the Holder delivering to
the Company an executed transfer in the form attached as Schedule “B” and complying with
applicable securities laws. Upon giving written notice thereof to the Company and complying
with applicable securities laws, this Warrant shall be assignable by the Holder.
	 
	 	 	The Company will pay all documentary stamp taxes attributable to the initial issuance of
Shares upon the exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer involved in
the issue of any Warrant Certificates or any certificates for Shares in a name other than
that of the registered Holder of a Warrant Certificate surrendered for registration of
transfer or upon the exercise of a Warrant, and the Company shall not be required to issue
or deliver such Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall have
established to the reasonable satisfaction of the Company that such tax has been paid.
	 
	20.	 	Any notice required or permitted to be given hereunder shall be in writing and may be given
by mailing the same postage prepaid or delivering the same addressed to the Company at:

ANTARES PHARMA, INC.

250 Phillips Boulevard, Suite 290

Ewing, New Jersey, 06818

Attention:      Chief Financial Officer

and to the Holder at:

MMV Financial Inc.

95 Wellington Street West, 22nd Floor

Toronto, Ontario

M5J 2N7

Attention:      Ron Patterson, Executive Vice-President, Finance

 

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Any notice, if delivered, shall be deemed to have been given or made on the date on which it was delivered, or, if mailed, shall be deemed to have been given on the third business day following the day on which it was mailed. Either of the parties hereto may change its address for service from time to time by notice given in accordance with the foregoing.

	21.	 	This Warrant shall be governed by and construed in accordance with the laws of the State of
New York.

[Signature Page Follows]

 

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The Parties hereto intending to be contractually bound, have each caused this Warrant to be signed
by its duly authorized officer this 26th day of February, 2007.

	 	 	 	 	 
	 	ANTARES PHARMA, INC.

 	 
	 	Per:  	/s/  JACK E. STOVER
 	 
	 	 	Name:  	Jack E. Stover 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	MMV FINANCIAL INC.

 	 
	 	Per:  	/s/  RON PATTERSON
 	 
	 	 	Name:  	Ron Patterson 	 
	 	 	Title:  	Executive Vice-President 	 

 

 

	 	 	 	 	 

SCHEDULE “A”

SUBSCRIPTION FORM

TO: ANTARES PHARMA, INC.

	(1)	 	The undersigned holder of a preferred share purchase Warrant (the “Warrant”) hereby
subscribes for
                     shares of common stock referred to in the Warrant (the “Shares")
in the capital of ANTARES PHARMA, INC. (the “Company”) (or such other securities into which
the warrant is exercisable) at the Exercise Price (as defined in the Warrant) on the terms and
conditions referred to in the Warrant and herewith makes payment of the purchase price by
certified cheque, bank draft or other immediately available funds payable to the order of the
Company for the said number of Shares.
	 
	(2)	 	The undersigned hereby irrevocably directs that the said Shares (or such other securities
into which the warrant is exercisable) hereby subscribed for be issued, registered and
delivered as follows:

	 	 	 	 	 
	Names in full	 	Address in full	 	No. of Shares
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 

(Please print full name in which share certificate(s) are to be issued.)

DATED this                      day of                                         , 20     .

	 	 	 	 	 	 	 
	 	 	MMV FINANCIAL INC.	 	 
	 
	 

	 	Per:
	 	c/s	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

 

 

SCHEDULE “B”

FORM OF TRANSFER

FOR VALUE RECEIVED, the undersigned holder of the Warrant of ANTARES PHARMA, INC. evidenced by the
within Warrant, hereby sells, assigns and transfers such Warrant unto

 

of

 

DATED this       day of                     , 20   .

	 	 	 	 	 	 	 
	 	 	MMV FINANCIAL INC.	 	 
	 
	 

	 	Per:
	 	c/s	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

 

 

SCHEDULE “C”

NET ISSUANCE ELECTION NOTICE

To: ANTARES PHARMA, INC.

The undersigned hereby elects to exercise its Net Issuance Right pursuant to the attached Warrant
with respect to
                     shares of common stock. The certificate(s) of the shares issuable
upon such net issue election shall be issued in the name of the undersigned or as otherwise
indicated below.

	 	 	 	 	 
	 

	 	MMV FINANCIAL INC.
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature/Title	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name for Registration	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Mailing Addressexv4w3

 

Exhibit 4.3

UNLESS PERMITTED UNDER APPLICABLE CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THESE
SECURITIES MUST NOT TRADE THE SECURITIES IN CANADA BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY
AFTER THE LATER OF (i) JUNE 26, 2007 AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY
PROVINCE OR TERRITORY OF CANADA.

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR APPLICABLE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED IN ACCORDANCE WITH THE ACT OR UNLESS IT IS
OTHERWISE ESTABLISHED TO THE SATISFACTION OF THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER
THE ACT IS AVAILABLE.

THIS WARRANT WILL BE VOID AND OF NO VALUE UNLESS EXERCISED WITHIN THE TIME LIMITS PROVIDED HEREIN.

ANTARES PHARMA, INC.

a company incorporated under the laws of the State of Delaware

Warrant for the Purchase of Shares of Common Stock

THIS IS TO CERTIFY THAT, in consideration of the payment of $1.00 to ANTARES PHARMA, INC. (the
“Company”) and for other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the Company hereby grants to HSBC CAPITAL (CANADA) INC. (the “Holder”) the
right to purchase at any time up to 5:00 o’clock in the afternoon (Eastern Standard Time) on
February 26, 2012 (the “Expiry Time”) that number of shares of common stock of the Company (the
“Shares”) equal to the lower of the Maximum Warrant Shares (as defined below) or the number of
Shares as determined in accordance with the following formula:

	 	 	 	 	 
	z =

	 	USD$399,920	 	 
	 

	 	 	 	 
	 

	 	x	 	 
	 
	 	 	 	 
	where
	 	 	 	 
	 
	 	 	 	 
	x =	 	USD$1.25 (the “Exercise Price”)
	 
	 	 	 	 
	z =	 	the total number of Shares issuable to the Holder (rounded to the
nearest Share) upon exercise of this Warrant in full, subject to
adjustment as provided herein

If the Company completes a financing after the date of this warrant involving the issuance of
equity, debt with warrants or convertible debt, where the relevant equity is issued (or is
issuable), at an effective price per Share less than the Exercise Price (a “New Exercise Price”),
provided this Warrant has not been fully exercised, then “x” in the above stated formula and the
Exercise Price shall be deemed to be the New Exercise Price, provided that in no event will the
total number of Shares issuable to the Holder as a result of any such adjustment to the Exercise
Price

 

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or otherwise exceed the Maximum Warrant Shares (before giving effect to any other adjustments
pursuant to paragraphs 5 through 8 below).

In addition, notwithstanding the foregoing, if pursuant to that certain Credit Agreement dated of
even date herewith between, inter alia, the Holder and the Company (the “Credit Agreement”), the
Second Tranche (as such term is defined in the Credit Agreement) is not drawn down by and advanced
to the Company on or before December 31, 2007 for any reason, then the above stated formula shall
be deleted and replaced with the following (the “Alternate Formula”):

	 	 	 	 	 
	z=

	 	USD$249,950
	 	 
	 

	 	 	 	 
	 

	 	x	 	 

Prior to the Second Funding Date, the number of Shares for which this Warrant exercisable shall be
limited to the number of Shares derived by using the Alternate Formula. In addition,
notwithstanding anything contained in Credit Agreement or this Warrant to the contrary, this
Warrant shall not be exercisable with respect to any Shares unless and until such time as the
American Stock Exchange has approved for listing the issuance of the Shares pursuant to the
exercise of this Warrant. The Company has applied for such listing with the American Stock
Exchange.

For the purposes of this Warrant, the term “Maximum Warrant Shares” means 399,920 Shares initially
and 249,950 Shares in the event that that Second Tranche (as such term is defined in the Credit
Agreement) is not drawn down by and advanced to the Company on or before December 31, 2007 for any
reason (in each case subject to further adjustment pursuant to paragraphs 5 through 8 below).
Notwithstanding the foregoing, in no event shall the Maximum Warrant Shares exceed any amount the
issuance of which would require approval of the Company’s stockholders to comply with any
requirements or policies of any exchanges or markets on which or through which the Company’s
securities are traded from time to time, or any securities regulatory authority having
jurisdiction, including without limitation, the American Stock Exchange.

For the purposes of this Warrant, “Change of Control” means any sale, transfer, exchange, exclusive
license or other disposition of all or substantially all of the assets or shares of the Company, or
any acquisition, reorganization, consolidation, amalgamation, or merger of the Company where the
Holders of the Company’s outstanding voting equity securities immediately prior to the transaction
beneficially own less than 50.1% of the outstanding voting equity securities of the surviving or
successor entity immediately following the transaction.

Prior to the Expiry Date, the rights represented by this Warrant may be exercised by the Holder, in
whole or, from time to time and at any time, in part, by surrender of this Warrant at the
registered office of the Company at 250 Phillips Boulevard, Suite 290, Ewing, New Jersey, 08618
(the “Exercise Location”), together with: (i) payment of the Exercise Price of the Shares
subscribed for and the subscription form attached hereto as Schedule “A”, completed and signed by
the Holder; or (ii) the net issuance election form attached hereto as Schedule “C”, completed and
signed by the Holder.

The Company covenants and agrees that the Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon payment and issuance, be fully paid and non-

 

- 3 -

assessable and free of all liens, charges, and encumbrances of any nature whatsoever, and the
Holder shall be deemed to have become the holder of record of such Shares on the date of the
Closing (as defined below). The Company further covenants and agrees that during the period within
which the rights represented by this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of Shares in the capital of the Company (including as
may be required pursuant to any adjustment under paragraphs 5 to 8 below) to provide for the
exercise of the rights represented by this Warrant.

The Company or, if appointed, the transfer agent for the Shares (the “Transfer Agent”) and every
subsequent transfer agent for any shares of the Company’s capital stock issuable upon the exercise
of any of the rights of purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such purpose. The Company
will keep a copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company’s capital stock issuable upon the exercise of the
rights of purchase represented by the Warrant. The Company will furnish such Transfer Agent a copy
of all notices of adjustments and certificates related thereto, transmitted to each Holder.

Before taking any action which would cause an adjustment pursuant to the provisions contained
herein to reduce the Exercise Price below the then par value of the Shares, the Company will take
any corporate action which may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue to the Holder fully
paid and non-assessable Shares at the Exercise Price as so adjusted.

THE FOLLOWING ARE THE TERMS AND CONDITIONS

REFERRED TO IN THIS WARRANT

	1.	 	After the Expiry Date, all rights under this Warrant in respect of which the right of
subscription and purchase provided for has not been exercised will wholly cease and terminate,
and this Warrant will be void and of no force or effect.
	 
	2.	 	This Warrant and either: (i) the duly completed and executed subscription form together with
payment of the Exercise Price of the Shares subscribed for; or (ii) the duly completed and
executed net issuance election form will be deemed to be surrendered only upon personal
delivery of the same to the Company or, if sent by mail or other means of transmission, upon
actual receipt by the Company.
	 
	3.	 	The closing (the “Closing”) of each subscription for Shares by the Holder will take place at
the Exercise Location at 3:00 p.m. on the fifth Business Day (being a day which is not a
Saturday, Sunday or statutory holiday in the State of New Jersey) after this Warrant and the
completed subscription form or the net issuance election form, as the case may be, are
received by the Company. If the Holder has submitted a completed subscription form, then at
the Closing the Holder will deliver to the Company a certified cheque, bank draft or other
immediately available funds payable to or to the order of the Company in an amount equal to
the Exercise Price for the Shares subscribed for in lawful money of the United States. The
Company will concurrently deliver to the Holder, without charge, a certificate representing
the Shares purchased and will enter the name of the Holder in the share register of the
Company in respect of such Shares. If the Holder exercises this

 

- 4- 

	 	 	Warrant only in part, and provided this Warrant has not expired, the Company will also
deliver concurrently to the Holder, without charge, a new Warrant representing the number of
Shares, if any, with respect to which this Warrant has not then been exercised.
	 
	4.	 	No fractional Shares will be issued on the exercise of the Warrant. In lieu of fractional
Shares, if any, the Company will pay to the Holder at the Closing, an amount in lawful money
of the United States equal to the then current market value of such fractional Share.
	 
	5.	 	If the Company at any time or from time to time after the date hereof effects a subdivision
of the outstanding Shares or consolidates the outstanding Shares, then the Exercise Price
shall be adjusted to that price determined by multiplying the Exercise Price immediately prior
to such event by a fraction:

	 	(a)	 	the numerator of which shall be the total number of outstanding Shares
immediately prior to such event; and
	 
	 	(b)	 	the denominator of which shall be the total number of outstanding Shares
immediately after such event.

	 	 	Upon each adjustment of the Exercise Price as provided herein, the Holder shall thereafter
be entitled to acquire, at the Exercise Price resulting from such adjustment, the number of
Shares (calculated to the nearest tenth of a Share) obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Shares which may be
acquired hereunder immediately prior to such adjustment and dividing the product thereof by
the Exercise Price resulting from such adjustment.
	 
	6.	 	If the Company at any time or from time to time after the date hereof makes, or fixes a
record date for the determination of holders of Shares entitled to receive a dividend or other
distribution payable in additional Shares, in each such event the Exercise Price that is then
in effect shall be decreased as of the time of such issuance or, in the event such record date
is fixed, as of the close of business on such record date, by multiplying the Exercise Price
then in effect by a fraction:

	 	(a)	 	the numerator of which is the total number of Shares issued and outstanding
immediately prior to the time of such issuance or the close of business on such record
date; and
	 
	 	(b)	 	the denominator of which is the total number of Shares issued and outstanding
immediately prior to the time of such issuance or the close of business on such record
date plus the number of Shares issuable in payment of such dividend or distribution;

	 	 	provided, however, that if such record date is fixed and such dividend is not fully paid or
if such distribution is not fully made on the date fixed therefor, the Exercise Price shall
be recomputed accordingly as of the close of business on such record date and thereafter the
Exercise Price shall be adjusted pursuant to this paragraph to reflect the actual payment of
such dividend or distribution.

 

- 5- 

	7.	 	If the Company at any time or from time to time after the date hereof makes, or fixes a
record date for the determination of holders of Shares entitled to receive, a dividend or
other distribution payable in securities of the Company other than Shares, in each such event
provision shall be made so that the Holder shall receive upon exercise of this Warrant, in
addition to the number of Shares receivable thereupon, the amount of other securities of the
Company which it would have received had this Warrant been converted into Shares on the date
of such event and had they thereafter, during the period from the date of such event to and
including the conversion date, retained such securities receivable by them as aforesaid during
such period, subject to all other adjustments called for during such period under this
paragraph with respect to the rights of the Holder or with respect to such other securities by
their terms.
	 
	8.	 	In case of:

	 	(a)	 	any reclassification or change of Shares issuable upon exercise of this
Warrant;
	 
	 	(b)	 	any consolidation or merger of the Company with or into another corporation or
corporations;
	 
	 	(c)	 	the sale of the properties and assets or shares of the Company substantially as
an entirety to any other corporation or corporations followed by a winding-up of the
Company or a distribution of its assets to the shareholders;
	 
	 	(d)	 	the sale of the properties and assets or shares of the Company substantially as
an entirety to another person or persons in exchange for cash or securities in or of
such other person or persons or any affiliate or any combination thereof; or
	 
	 	(e)	 	the conversion of all outstanding preferred stock in the capital of the Company
into common stock in accordance with their terms,

	 	 	the Holder shall have the right thereafter to convert this Warrant (or any portion thereof)
into, and shall accept in lieu of the Shares, the kind and amount of shares or other
securities and property receivable on such reclassification, merger, sale, change or
conversion that the Holder would have been entitled to receive thereupon had the Holder been
the registered holder of the number of Shares into which this Warrant might have been
converted immediately prior thereto. The provisions of this section shall similarly apply
to successive reclassifications and changes or conversions of shares and to successive
consolidations, mergers and sales.
	 
	9.	 	Notwithstanding paragraph 8 above, without limiting the right of the Holder to exercise this
Warrant in whole or in part at any time prior to the completion of a Change of Control
transaction, the Company shall not complete any Change of Control unless the resulting
successor or acquiring entity (if not the Company) assumes all of the Company’s obligations
under this Warrant in writing.
	 
	10.	 	If any event shall occur to which the other provisions of paragraphs 5 to 8 hereof are not
strictly applicable and the failure to make any adjustment to the Exercise Price would not
fairly protect the exercise right represented by this Warrant in accordance with the

 

- 6 -

	 	 	essential intent and principles hereof or, if strictly applicable, would not fairly protect
the conversion rights represented by this Warrant in accordance with such essential intent
and principles, then the Company shall make such adjustment, if any, on a basis consistent
with the essential intent and principles established in this Warrant, necessary to preserve
the conversion rights represented by this Warrant.
	 
	11.	 	In each case of an adjustment to the Exercise Price, the Company, at its expense, shall
compute such adjustment in accordance with the provisions hereof and prepare a certificate
showing such adjustment and shall mail such certificate to the Holder at the Holder’s address
as shown in the Company’s books. The certificate shall set forth such adjustment showing in
detail the facts upon which such adjustment is based, including a statement of the adjusted
Exercise Price.
	 
	12.	 	Except as otherwise provided herein, paragraphs 5 to 8 hereof are intended to operate
independently of one another. If an event occurs that requires the application of more than
one subsection, all applicable subsections shall be given independent effect, but there shall
be no duplicate adjustments if two separate subsections provide the same protection.
	 
	13.	 	This Warrant shall not entitle the Holder to any rights as a shareholder of the Company,
including voting rights, except that the Company shall concurrently furnish to the Holder a
copy of all notices which are furnished to holders of the Shares in the capital of the
Company.
	 
	14.	 	Any Shares acquired pursuant to this Warrant may be subject to a hold period under the
securities laws of Ontario and the securities laws of the United States and may bear the
following legends:

“UNLESS PERMITTED UNDER APPLICALBE CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THESE SECURITIES
MUST NOT TRADE THE SECURITIES IN CANADA BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE
LATER OF (i) JUNE 26, 2007 AND (ii) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE
OR TERRITORY OF CANADA.

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR APPLICABLE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED IN ACCORDANCE WITH THE ACT OR UNLESS IT IS
OTHERWISE ESTABLISHED TO THE SATISFACTION OF THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER
THE ACT IS AVAILABLE.”

	15.	 	This Warrant is exchangeable upon its surrender by the Holder at the registered office of the
Company at the address set out herein for new warrants of like tenor representing in the
aggregate the right to subscribe for and purchase the number of Shares which may be subscribed
for and purchased hereunder, each of such new warrants to represent the right

 

- 7 -

	 	 	to subscribe for and purchase such number of Shares as shall be designated by the Holder at
the time of such surrender.
	 
	16.	 	The Holder agrees that this Warrant shall be amended as required to bring this Warrant into
conformity with any requirements or policies of any exchanges or markets on which or through
which the Company’s securities are traded from time to time, or any securities regulatory
authority having jurisdiction.
	 
	17.	 	If this Warrant becomes mutilated, lost, destroyed, or stolen, the Company will issue and
deliver a new Warrant of like date and tenor as the one mutilated, lost, destroyed, or stolen
in exchange for and in place of and upon cancellation of such mutilated, lost, destroyed, or
stolen Warrant. In the case of any assignment, division, or transfer of the Holder’s rights
under this Warrant, the Company, at the request of the Holder or its transferee or assignee,
will issue such replacement Warrant of like date and tenor as this Warrant and registered in
the name or names requested by the Holder or its transferee or assignee. The applicant for
the issue of a new Warrant pursuant to this section 18 shall bear the cost of the issue
thereof and in the case of loss, destruction or theft shall, as a condition precedent to the
issue thereof, furnish to the Company such evidence of ownership and of the loss, destruction
or theft satisfactory to the Company, and such applicant may also be required to furnish
indemnity in form satisfactory to the Company.
	 
	18.	 	The Holder may elect to receive at any time or from time to time before the Expiry Date,
without the payment by the Holder of any additional consideration, Shares (or other shares of
the Company if the Shares have been automatically converted into such shares) equal to the
value of this Warrant or any portion thereof, as calculated in accordance with the formula set
out on the first page hereof, by the surrender of this Warrant or such portion to the Company,
together with the net issuance election notice annexed hereto as Schedule “C” duly executed,
at the Exercise Location (the “Net Issuance Right”). Thereupon, the Company shall issue to the
Holder such number of fully-paid and non-assessable Shares as is computed by the following
formula:

	 	 	 	 	 	 	 
	 

	 	X =
	 	Y (A-B)
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	A	 	 
	 
	 	 	 	 	 	 
	 	 	where
	 
	 	 	 	 	 	 
	 	 	X =       the number of Shares that shall be issued to the Holder.
	 
	 	 	 	 	 	 
	 	 	Y =       the number of shares covered by this Warrant in respect of which the net
issuance election is being made.
	 
	 	 	 	 	 	 
	 	 	A =       the “Fair Market Value” (as defined below) of one Share as at the time the net
issuance election is made.
	 
	 	 	 	 	 	 
	 	 	B =       the Exercise Price

“Fair Market Value” of a Share (or a share of the Company if the Shares have been
automatically converted into such shares) as of a particular date (the “Determination Date”)
shall mean:

 

- 8 -

	 	(a)	 	if the shares are traded on a securities exchange, the Fair Market Value shall
be deemed to be the average of the closing prices on such exchange over the 30-trading
day period ending 5 business days prior to the Determination Date;
	 
	 	(b)	 	if the shares are quoted for trading on the Nasdaq Stock Market or other
over-the-counter system, the Fair Market Value shall be deemed to be the average of the
closing bid prices over the 30-trading day period ending 5 business days prior to the
Determination Date; and
	 
	 	(c)	 	if there is no public market for the shares, the Fair Market
Value of the shares shall be determined by mutual agreement of the Holder and the Board of Directors
of the Company, each acting reasonably.

	19.	 	This Warrant may only be transferred or assigned by the Holder upon the Holder delivering to
the Company an executed transfer in the form attached as Schedule “B” and complying with
applicable securities laws. Upon giving written notice thereof to the Company and complying
with applicable securities laws, this Warrant shall be assignable by the Holder.
	 
	 	 	The Company will pay all documentary stamp taxes attributable to the initial issuance of
Shares upon the exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer involved in
the issue of any Warrant Certificates or any certificates for Shares in a name other than
that of the registered Holder of a Warrant Certificate surrendered for registration of
transfer or upon the exercise of a Warrant, and the Company shall not be required to issue
or deliver such Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall have
established to the reasonable satisfaction of the Company that such tax has been paid.
	 
	20.	 	Any notice required or permitted to be given hereunder shall be in writing and may be given
by mailing the same postage prepaid or delivering the same addressed to the Company at:

ANTARES PHARMA, INC.

250 Phillips Boulevard, Suite 290

Ewing, New Jersey, 06818

Attention:      Chief Financial Officer

and to the Holder at:

HSBC CAPITAL (CANADA) INC.

70 York Street, 7th Floor

Toronto, Ontario M5J 1S9

Attention:       Paul Eldridge

 

- 9 -

Any notice, if delivered, shall be deemed to have been given or made on the date on which it was delivered, or, if mailed, shall be deemed to have been given on the third business day following the day on which it was mailed. Either of the parties hereto may change its address for service from time to time by notice given in accordance with the foregoing.

	21.	 	This Warrant shall be governed by and construed in accordance with the laws of the State of
New York.

[Signature Page Follows]

 

- 10 -

The Parties hereto intending to be contractually bound, have each caused this Warrant to be signed
by its duly authorized officer this 26th day of February, 2007.

	 	 	 	 	 
	 	ANTARES PHARMA, INC.

 	 
	 	Per:  	/s/  JACK E. STOVER
 	 
	 	 	Name:  	Jack E. Stover 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	HSBC CAPITAL (CANADA) INC.

 	 
	 	Per:  	/s/  PAUL ELDRIDGE
 	 
	 	 	Name:  	Paul Eldridge 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 

SCHEDULE “A”

SUBSCRIPTION FORM

TO: ANTARES PHARMA, INC.

	(1)	 	The undersigned holder of a preferred share purchase Warrant (the “Warrant”) hereby
subscribes for
                     shares of common stock referred to in the Warrant (the “Shares")
in the capital of ANTARES PHARMA, INC. (the “Company”) (or such other securities into which
the warrant is exercisable) at the Exercise Price (as defined in the Warrant) on the terms and
conditions referred to in the Warrant and herewith makes payment of the purchase price by
certified cheque, bank draft or other immediately available funds payable to the order of the
Company for the said number of Shares.
	 
	(2)	 	The undersigned hereby irrevocably directs that the said Shares (or such other securities
into which the warrant is exercisable) hereby subscribed for be issued, registered and
delivered as follows:

	 	 	 	 	 
	Names in full	 	Address in full	 	No. of Shares
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 

(Please print full name in which share certificate(s) are to be issued.)

DATED this       day of                     , 20   .

	 	 	 	 	 
	 	HSBC CAPITAL (CANADA) INC.

 	 
	 	Per:  	c/s
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

SCHEDULE “B”

FORM OF TRANSFER

FOR VALUE RECEIVED, the undersigned holder of the Warrant of ANTARES PHARMA, INC. evidenced by the
within Warrant, hereby sells, assigns and transfers such Warrant unto

 

of

 

DATED this       day of                     , 20   .

	 	 	 	 	 
	 	HSBC CAPITAL (CANADA) INC.

 	 
	 	Per:  	c/s
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

SCHEDULE “C”

NET ISSUANCE ELECTION NOTICE

To: ANTARES PHARMA, INC.

The undersigned hereby elects to exercise its Net Issuance Right pursuant to the attached Warrant
with respect to
                     shares of common stock. The certificate(s) of the shares issuable
upon such net issue election shall be issued in the name of the undersigned or as otherwise
indicated below.

	 	 	 	 	 
	 	 HSBC CAPITAL (CANADA) INC.

 	 
	 	 	 
	 	Signature/Title	 
	 
	 	Name for Registration
	 
	 
	 	

Mailing Address

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