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Issuer Free Writing Prospectus
Filed Pursuant to Rule 433
Registration No. 333- 133087 and Registration No. 333-145524
Final Term Sheet
For
Financing
of
Emisphere Technologies, Inc.
By reading the information contained within this document, the recipient agrees with Emisphere
Technologies, Inc. to maintain in confidence such information, together with any other non-public
information regarding Emisphere Technologies, Inc. obtained from Emisphere Technologies, Inc. or
its agents during the course of the proposed financing and to comply with the recipient’s
obligations under applicable U.S. and state securities laws.
Emisphere Technologies, Inc. (the “Company”) has filed a registration statement (Registration
No. 333-133087, including a prospectus) and, if necessary, a registration statement pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, with the SEC for the offering to which
this communication relates. Before you invest, you should read the prospectus in that registration
statement and other documents the Company has filed with the SEC for more complete information
about the Company and this offering. You may get these documents for free by visiting EDGAR on the
SEC website at www.sec.gov. Alternatively, the Company will arrange to send you the base prospectus
and any other offering documents if you request them by calling (914) 347-2220.
CONFIDENTIAL SUMMARY OF TERMS AND CONDITIONS
This Confidential Summary of Terms and Conditions is not intended to be contractually binding,
other than the cover sheet and the section entitled “Confidential Information,” and is subject in
all respects (other than with respect to such section) to the execution of the Subscription
Agreement.
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Issuer:
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Emisphere Technologies, Inc., a Delaware
corporation (the “Company”). |
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Securities Offered:
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Up to an aggregate of
(i) 455,362 shares
(the “Shares”) of the Company’s common
stock, $0.01 par value per share (the
“Common Stock”), and (ii) 91,073 warrants
to purchase Common Stock (such number being
20% of the number of Shares so purchased,
the “Warrants”, and together with the
Shares, the “Securities”), for a purchase
price of $3.785 per unit (the “Offering”).
The Shares and Warrants are immediately
separable and will be issued separately.
There is no minimum offering amount. |
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Warrants:
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The exercise price of the Warrants shall be
$3.948 per share. The Warrants shall have
the rights, preferences, privileges and
restrictions substantially as set forth in
the Form of Warrant attached hereto. |
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Purchase Price:
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$3.785 per unit |
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Use of Proceeds to Company:
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We expect to use the net proceeds from the
sale of these Securities for general
corporate purposes, including further
development of our lead clinical programs,
capital expenditures and to meet working
capital needs. “Net proceeds” is what we
expect to receive after we pay the estimated expenses for this
Offering. |
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We will retain broad discretion in the
allocation of the net proceeds of this
Offering. Pending the uses described
above, we intend to invest the net proceeds
of this Offering in short-term
interest-bearing securities. We cannot
predict whether the proceeds will be
invested to yield a favorable return. |
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Subscription and Closing Date:
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The Company and each investor participating
in the Offering (each an “Investor” and
collectively the “Investors”) shall execute
a Subscription Agreement in substantially
the form attached hereto. It is expected
that the closing of the Offering shall
occur, and the Securities shall be issued
to the Investors and funds paid to the
Company therefor, on or about August 22,
2007 (the “Closing Date”). |
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Risk Factors:
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The Securities offered involve a high
degree of risk. See the disclosure
relating to the risks affecting the Company
set forth in the base prospectus included
in the registration statement relating to
this Offering and the documents filed by
the Company with the SEC under the
Securities Exchange Act of 1934, as
amended. |
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NASDAQ Global Market Symbol:
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EMIS |
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Confidential Information:
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The recipient of this Confidential Summary
of Terms and Conditions and the materials
attached hereto agrees with the Company to
maintain in confidence this disclosed
information, together with any other
non-public information regarding the
Company obtained from the Company or its
agents during the course of the proposed
Offering, and to comply with the
recipient’s obligations under U.S. and
state securities laws. |
Subscription Agreement
This subscription agreement (this “Subscription Agreement”) is dated August 16, 2007, by and
between the investor identified on the signature page hereto (the “Investor”) and Emisphere
Technologies, Inc., a Delaware corporation (the “Company”), whereby the parties agree as
follows:
1. Subscription.
Investor agrees to buy and the Company agrees to sell and issue to Investor (i) such number of
shares of common stock, par value $0.01 per share (the “Common Stock”), of the Company, set
forth on the signature page hereto (the “Shares”), and (ii) warrants to purchase such
number of shares of Common Stock set forth on the signature page hereto (the “Warrants” and
together with the Shares, the “Securities”) for an aggregate purchase price set forth on
the signature page hereto (the “Purchase Price”).
The Securities have been registered on a Registration Statement on Form S-3, Registration No.
333-133087, which registration statement (together with any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act, the “Registration Statement”) has been
declared effective by the Securities and Exchange Commission (the
“Commission”) and has remained effective since such
date and is effective on the date hereof.
Subject to the last sentence of this Section 1, on August 22, 2007 (the “Closing Date”), Investor shall remit by wire transfer the
amount of funds equal to the Purchase Price for the Securities being purchased by Investor to the
following account:
Chase Bank NYC
ABA: 021-000-021
Account Name: Lehman Brothers Inc.
Account Number: 140-094-221
FFC: Emisphere Technologies Inc
FFC#: 831-37354-1-0-894
NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS SUBSCRIPTION AGREEMENT BY
THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR
ACCOUNTS TO BE CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN
(“DWAC”) INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES ON THE
CLOSING DATE.
Upon receipt of the Purchase Price by the Company (i) shall cause its transfer agent to
deliver to Investor the Shares via the Depository Trust Company’s (“DTC”) Deposit or
Withdrawal at Custodian system and (ii) shall deliver to Investor the Warrants via the instructions
set forth on the signature page hereto, such Shares and Warrants to be registered in such name or
names as designated by the Investor on the signature page hereto. The Shares and Warrants shall be
unlegended and free of any resale restrictions.
The obligations of the
Investor set forth in this Section 1 shall be conditioned upon the consummation of the transactions contemplated
by the Placement Agency Agreement, dated as of the date hereof, by and between the Company and
ThinkEquity Partners LLC, provided that in no event shall the Investor be required to purchase in
excess of 22.7681032% of the aggregate number of securities to be sold on the
Closing Date pursuant to the Registration Statement.
2. Company Representations and Warranties. The Company represents and warrants that:
(a) it has full right, power and authority to enter into this Subscription Agreement
and to perform all of its obligations hereunder; (b) this Subscription Agreement has been duly
authorized and executed by and constitutes a valid and binding agreement of the Company enforceable
in accordance with its terms; (c) the execution and delivery of this Subscription Agreement and the
consummation of the transactions contemplated hereby including, without limitation, the issuance
of shares of Common Stock upon exercise of the Warrants, do not conflict with or result in a breach or violation of
(i) the Company’s Amended and Restated Certificate of
Incorporation or Bylaws; (ii) any material agreement to which
the Company is a party or by which any of its property or assets is bound; (iii) any applicable federal and state securities laws or
(iv) the rules and regulations of the National Association of Securities Dealers (“NASD”); (d) the Shares have been
duly authorized for sale and issuance, and when issued and delivered by the Company against payment
therefor pursuant to this Subscription Agreement, will be validly issued, fully paid and
nonassessable, the Warrants have been duly and validly authorized by the Company and upon delivery
to the Investor at the Closing Date will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights and
remedies of creditors generally or subject to general principles of equity, the shares of Common
Stock issuable upon exercise of the Warrants have been duly authorized and reserved for
sale and issuance, and when issued and delivered by the Company against payment therefor in
accordance with the terms thereof, will be validly issued, fully paid and nonassessable; (e) the
Registration Statement and any post-effective amendment thereto, at the time it became effective,
did not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading; (f) the prospectus
contained in the Registration Statement, as amended or supplemented, did not contain as of the
effective date thereof, and as of the date hereof does not contain, any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading; (g) all preemptive
rights, rights of first refusal or any other restrictions on the transfer or issuance of the Company’s Common Stock held by stockholders of the Company and applicable to the
transactions contemplated hereby have been duly satisfied or waived in accordance with the terms of
the agreements between the Company and such stockholders conferring such rights; and (h) (i) no consent
or approval of the Company’s stockholders is required for the execution, delivery and performance by the Company of this Subscription Agreement and the consummation of the transactions contemplated hereby by the rules and regulations of the NASD and (ii) the National Association of Securities Dealers Automated Quotations will not subject the Company to de-listing if the Company
issues the Securities or the shares of the Common Stock issuable upon exercise of the Warrants without stockholder approval on the terms contained in this Subscription Agreement .
3. Investor Representations, Warranties and Acknowledgments. The Investor represents
and warrants to, and covenants with, the Company that (a) the Investor is knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions with respect to,
investments in securities presenting an investment decision like that involved in the purchase of
the Securities, including investments in securities issued by the Company and investments in
comparable companies, and has requested, received, reviewed and considered all information it
deemed relevant in making an informed decision to purchase the Securities, and (b) the Investor, in
connection with its decision to purchase the number of Securities set forth on the Signature Page,
relied only upon any or all of the following: the Registration Statement, the Base Prospectus, the
Prospectus Supplement, the Company’s regular reports on Forms 10-K, 10-Q and 8-K as filed by the
Company with the Commission, that certain Final Term Sheet dated August 16, 2007, and any other free writing
prospectus provided to the Investor and the representations and warranties of the Company contained
herein.
The Investor acknowledges, represents and agrees that no action has been or will be taken in
any jurisdiction outside the United States by the Company that would permit an offering of the
Securities, or possession or distribution of offering materials in connection with the issue of the
Securities in any jurisdiction outside the United States where action for that purpose is required.
Each Investor outside the United States will comply with all applicable laws and regulations in
each foreign jurisdiction in which it purchases, offers, sells or delivers Securities or has in its
possession or distributes any offering material, in all cases at its own expense.
The Investor acknowledges, represents and agrees that the purchase of Securities pursuant to
this Subscription Agreement satisfies all rights to purchase the Company’s securities in connection
with the current offering that Investor may have pursuant to the Company’s Amended and Restated
Certificate of Incorporation, the Letter Agreement between the Company and Investor dated March 31,
2005 (the “Side Letter”) and any other agreement between the Company and Investor. The Investor hereby agrees not to exercise any piggy-back registration rights it has pursuant to the
Side Letter or any other agreement between the
Company and Investor solely in connection with the offerings pursuant to the Registration Statement
closing on the Closing Date. The Side Letter and any other agreement between the Company’s and Investor relating to registration rights shall remain unchanged and in full force and effect..
The Investor understands that nothing in this Agreement or any other materials presented to
the Investor in connection with the purchase and sale of the Securities constitutes legal, tax or
investment advice. The Investor has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its purchase of Securities.
The Investor represents, warrants and agrees that, since the earlier to occur of (i) the date
on which the Company first contacted the Investor about the Offering and (ii) the date that is the
tenth (10th) trading day prior to the date of this Agreement, it has not engaged in any short
selling of the Company’s securities, or established or increased any “put equivalent position” as
defined in Rule 16(a)-1(h) under the Securities Exchange Act of 1934 with respect to the Company’s
securities.
The Investor represents and warrants that: (a) it has full right, power and authority to enter
into this Subscription Agreement and to perform all of its obligations hereunder; (b) this
Subscription Agreement has been duly authorized and executed by the Investor and constitutes a
valid and binding agreement of the Investor enforceable against the Investor in accordance with its
terms; (c) the execution and delivery of this Subscription Agreement and the consummation of the
transactions contemplated hereby do not conflict with or result in a breach of (i) the Investor’s
certificate of incorporation or by-laws (or other governing documents), or (ii) any material
agreement or any law or regulation to which the Investor is a party or by which any of its property
or assets is bound; and (d) prior to the execution hereof, Investor has received in portable
document format, or has otherwise had access to, the Company’s base prospectus dated April 7, 2006.
4. Miscellaneous.
This Subscription Agreement constitutes the entire understanding and agreement between the
parties with respect to its subject matter, and there are no agreements or understandings with
respect to the subject matter hereof which are not contained in this Subscription Agreement. This
Subscription Agreement may be modified only in writing signed by the parties hereto.
This Subscription Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and shall become effective when counterparts
have been signed by each party and delivered to the other parties hereto, it being understood that
all parties need not sign the same counterpart. Execution may be made by delivery by facsimile.
The provisions of this Subscription Agreement are severable and, in the event that any court
or officials of any regulatory agency of competent jurisdiction shall determine that any one or
more of the provisions or part of the provisions contained in this Subscription Agreement shall,
for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Subscription Agreement and this Subscription Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part
of such provision, had never been contained herein, so that such provisions would be valid, legal
and enforceable to the maximum extent possible, so long as such construction does not materially
adversely effect the economic rights of either party hereto.
All communications hereunder, except as may be otherwise specifically provided herein, shall
be in writing and shall be mailed, hand delivered, sent by a recognized overnight courier service
such as Federal Express, or sent via facsimile and confirmed by letter, to the party to whom it is
addressed at the following addresses or such other address as such party may advise the other in
writing:
To the Company: as set forth on the signature page hereto.
To the Investor: as set forth on the signature page hereto.
All notices hereunder shall be effective upon receipt by the party to which it is addressed.
This Subscription Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York for contracts to be wholly performed in such state and without giving
effect to the principles thereof regarding the conflict of laws. To the extent determined by such
court, the prevailing party shall reimburse the other party for any reasonable legal fees and
disbursements incurred in enforcement of, or protection of any of its rights under this
Subscription Agreement.
If the foregoing correctly sets forth our agreement, please confirm this by signing and
returning to us the duplicate copy of this Subscription Agreement.
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EMISPHERE TECHNOLOGIES, INC.
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By: |
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Name: |
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Title: |
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| Number of Shares: |
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| Number of Warrants: |
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| (such number to be equal to 20% of the number |
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| of Shares being purchased by the Investor) |
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| Purchase Price Per Unit: $3.785 |
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| Aggregate Purchase Price: |
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Address for Notice: |
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| INVESTOR: |
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765 Old Saw Mill River Road |
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Tarrytown, New York 10591 |
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Facsimile: (914) 593-8253 |
By:
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Attention: Chief Executive Officer |
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Name: |
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Title: |
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| Address for Notice and Delivery of the Warrants: |
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| Facsimile: |
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| Attention: |
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| DWAC Instructions for Delivery of the Shares: |
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Name of DTC Participant: |
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DTC Participant Number: |
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Account Number: |
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Form of Warrant
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN SECTION 3 HEREOF.
EMISPHERE TECHNOLOGIES, INC.
WARRANT
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| Warrant No. ___
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Original Issue Date: August ___, 2007 |
EMISPHERE TECHNOLOGIES, INC., a Delaware corporation (the “Company”), hereby certifies
that, for value received, ___or its permitted registered assigns (the
“Holder”), is entitled to purchase from the Company up to a total of ___shares of
common stock, $0.01 par value (the “Common Stock”), of the Company (each such share, a
“Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price
equal to $3.948 per share (as adjusted from time to time as provided herein, the “Exercise
Price”), at any time and from time to time on or after the date occurring six months after the
Closing Date (the “Trigger Date”) and through and including August ___, 2012 (the
“Expiration Date”), and subject to the following terms and conditions:
This Warrant is one of a series of warrants issued pursuant to those certain Subscription
Agreements, each dated August 16, 2007, by and between the Company and each the purchasers
identified therein (the “Subscription Agreements”). All such warrants are referred to
herein, collectively, as the “Warrants.” The original issuance of the Warrants by the
Company pursuant to the Subscription Agreements has been registered pursuant to a Registration
Statement on Form S-3 (File No. 333-133087) (together with any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act, the “Registration Statement”).
1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
the Subscription Agreements.
As used herein, the term “Affiliate” of a person means a person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the person specified.
2. List of Warrant Holders. 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 (which shall include the initial Holder or, as the case may be, any registered
assignee to which this Warrant is permissibly assigned hereunder 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.
3. List of Transfers; Restrictions on Transfer.
(a) This Warrant and the Warrant Shares are subject to the restrictions on transfer set forth
in this Section 3.
(b) The Company shall register any such transfer of all or any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly
completed and signed, to the Company at its address specified herein. Upon any such registration or
transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any
such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred
shall be issued to the transferee and a New Warrant evidencing the remaining portion of this
Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of
the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all
of the rights and obligations in respect of the New Warrant that the Holder has in respect of this
Warrant.
(c) 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 Holder or transferee of
this Warrant, as the case may be, furnish to the Company a written opinion of counsel (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 holder 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)
promulgated under the Securities Act.
4. Exercise and Duration of Warrants.
(a) All or any part of this Warrant shall be exercisable by the registered Holder in any
manner permitted by Section 10 of this Warrant at any time and from time to time on or after the
Trigger Date and through and including the Expiration Date. Subject to Section 11 hereof, at 5:00
p.m., New York City time, on the Expiration Date, the portion of this Warrant not exercised prior
thereto shall be and become void and of no value and this Warrant shall be terminated and no longer
outstanding. In addition, if cashless exercise would be permitted under Section 10(b) of this
Warrant, then all or part of this Warrant may be exercised by the registered Holder utilizing such
cashless exercise provisions at any time, or from time to time, on or after the Trigger Date and
through and including the Expiration Date.
(b) The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice,
in the form attached hereto (the “Exercise Notice”), completed and duly signed, and (ii) if
such Holder is not utilizing the cashless exercise provisions set forth in this Warrant, payment of
the Exercise Price for the number of
Warrant Shares as to which this Warrant is being exercised. The date such items are delivered
to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise
Date.” The Holder shall not be required to deliver the original Warrant in order to effect an
exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as
cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase
the remaining number of Warrant Shares.
5. Delivery of Warrant Shares.
(a) Upon exercise of this Warrant, the Company shall promptly (but in no event later than
three Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered
to or upon the written order of the Holder and in such name or names as the Holder may designate
(provided that, if the Registration Statement is not then effective and the Holder directs the
Company to deliver a certificate for the Warrant Shares in a name other than that of the Holder or
an Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an opinion of
counsel reasonably satisfactory to the Company to the effect that the issuance of such Warrant
Shares in such other name may be made pursuant to an available exemption from the registration
requirements of the Securities Act and all applicable state securities or blue sky laws), a
certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends unless
the Registration Statement is not then effective or the Warrant Shares are not freely transferable
without volume restrictions pursuant to Rule 144(k) under the Securities Act. The Holder, or any
Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have
become the holder of record of such Warrant Shares as of the Exercise Date. If the Warrant Shares
can be issued without restrictive legends, the Company shall, upon the written request of the
Holder, use its best efforts to deliver, or cause to be delivered, Warrant Shares hereunder
electronically through the Depository Trust and Clearing Corporation or another established
clearing corporation performing similar functions, if available; provided, that, the Company may,
but will not be required to, change its transfer agent if its current transfer agent cannot deliver
Warrant Shares electronically through the Depository Trust and Clearing Corporation.
(b) If by the close of the third Trading Day after delivery of an Exercise Notice, the Company
fails to deliver to the Holder a certificate representing the required number of Warrant Shares in
the manner required pursuant to Section 5(a), and if after such third Trading Day and prior to the
receipt of such Warrant Shares, the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall, within three Trading Days after the Holder’s request and in the Holder’s sole discretion,
either (1) pay in cash to the Holder an amount equal to the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so purchased (the
“Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and
to issue such Warrant Shares) shall terminate or (ii) promptly honor its obligation to deliver to
the Holder a certificate or certificates representing such Warrant Shares and pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of Warrant Shares, times (B) the closing bid price on the date
of the event giving rise to the Company’s obligation to deliver such certificate.
(c) To the extent permitted by law, the Company’s obligations to issue and deliver Warrant
Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any
action or inaction by the Holder to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any Person or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of any other
circumstance that might otherwise limit such obligation of the Company to the Holder in connection
with the issuance of Warrant Shares. 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.
6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue
or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax that may be payable in
respect of any transfer involved in the registration of any certificates for Warrant Shares or
Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax
liability that may arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.
7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the
Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Warrant.
8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares that are then issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the
Holder (taking into account the adjustments and restrictions of Section 9). The Company
covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment
of the applicable Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.
9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this
Section 9.
(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of
Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.
(b) Pro Rata Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to all holders of Common Stock for no consideration (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding
paragraph), (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other
asset (in each case, “Distributed Property”), then, upon any exercise of this Warrant that
occurs after the record date fixed for determination of stockholders entitled to receive such
distribution, the Holder shall be entitled to receive, in addition to the Warrant Shares otherwise
issuable upon such exercise (if applicable), the Distributed Property that such Holder would have
been entitled to receive in respect of such number of Warrant Shares had the Holder been the record
holder of such Warrant Shares immediately prior to such record date.
(c) Fundamental Transactions. If, at any time while this Warrant is outstanding (i)
the Company effects any merger or consolidation of the Company with or into another Person, in
which the shareholders of the Company as of immediately prior to the transaction own less than a
majority of the outstanding stock of the surviving entity, (ii) the Company effects any sale of all
or substantially all of its assets in one or a series of related transactions, (iii) 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 (iv) 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, cash or property (each, a “Fundamental Transaction”), then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant,
the same amount and kind of securities, cash or property as it would have been entitled to
receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon
exercise in full of this Warrant (the “Alternate Consideration”). The Company shall not
effect any such Fundamental Transaction unless prior to or simultaneously with the consummation
thereof, any successor to the Company, surviving entity or the corporation purchasing or otherwise
acquiring such assets or other appropriate corporation or entity shall assume the obligation to
deliver to the Holder, such Alternate Consideration as, in accordance with the foregoing
provisions, the Holder may be entitled to purchase, and the other obligations under this Warrant.
The provisions of this paragraph (c) shall similarly apply to subsequent transactions analogous to
a Fundamental Transaction.
(d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraph (a) of this Section 9, the number of Warrant Shares that may be purchased
upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares
shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.
(e) Calculations. All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of
Common Stock outstanding at any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be considered an issue or sale
of Common Stock.
(f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will, at the written request of the Holder, promptly
compute such adjustment in accordance with the terms of this Warrant and prepare a certificate
setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted
number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and showing in detail the
facts upon which such adjustment is based. Upon written request, the Company will promptly deliver
a copy of each such certificate to the Holder and to the Company’s Transfer Agent.
(g) Notice of Corporate Events. If, while this Warrant is outstanding, the Company (i)
declares a dividend or any other distribution of cash, securities or other property in respect of
its Common Stock, including without limitation any granting of rights or warrants to subscribe for
or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters
into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the
Company, then, except if such notice and the contents thereof shall be deemed to constitute
material non-public information, the Company shall deliver to the Holder a notice describing the
material terms and conditions of such transaction at least 10 Trading Days prior to the applicable
record or effective date on which a Person would need to hold Common Stock
in order to participate in or vote with respect to such transaction, and the Company will take
all reasonable steps to give Holder the practical opportunity to exercise this Warrant prior to
such time; provided, however, that the failure to deliver such notice or any defect therein shall
not affect the validity of the corporate action required to be described in such notice.
10. Payment of Exercise Price. The Holder may pay the Exercise Price in one of the
following manners:
(a) Cash Exercise. The Holder may deliver immediately available funds; or
(b) Cashless Exercise. If an Exercise Notice is delivered at a time when the
Registration Statement (or, in lieu thereof, a resale registration statement on Form S-3 covering
the resale of the Warrant Shares) is not then effective, then the Holder may notify the Company in
an Exercise Notice of its election to utilize cashless exercise, in which event the Company shall
issue to the Holder the number of Warrant Shares determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the Holder.
Y = the number of Warrant Shares with respect to which this Warrant is being
exercised.
A = the average of the Closing Prices for the five Trading Days immediately prior
to (but not including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to
have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued.
If, but only if, at any time after the Trigger Date there is no effective Registration
Statement registering the Warrant Shares, the Company shall use its best efforts to file a new
Registration Statement on Form S-3 pursuant to General Instruction I.B.4(a)(3) (including
compliance with General Instruction I.B.4(b) and I.B.4(c) as required thereby) registering the
Warrant Shares issuable upon exercise of the Warrant.
11. Limitations on Exercise.
(a) Notwithstanding anything to the contrary contained herein, the number of Warrant Shares
that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by such Holder and
its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% of the
total number of issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Each delivery of an Exercise Notice hereunder will constitute a
representation by the Holder that it has evaluated the limitation set forth in this Section and
determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is
permitted under this Section. The Company’s obligation to issue shares of Common Stock in excess
of the limitation referred to in this Section shall be suspended (and, except as provided below,
shall not terminate or expire notwithstanding any contrary provisions hereof) until such time, if
any, as such shares of Common Stock may be issued in compliance with such limitation; provided,
that, if, as of 5:00 p.m., New York City time, on the Expiration Date, the Company has not received
written notice that the shares of Common Stock may be issued in compliance with such limitation,
the Company’s obligation to issue such shares shall terminate. This provision shall not restrict
the number of shares of Common Stock that a Holder may receive or beneficially own in order to
determine the amount of securities or other consideration that such Holder may receive in the event
of a Fundamental Transaction as contemplated in Section 9 of this Warrant. By written notice to the
Company, the Holder may waive the provisions of this Section but any such waiver will not be
effective until the 61st day after such notice is delivered to the Company, nor will any
such waiver effect any other Holder. This provision shall not apply to Holders who, together with Affiliates, as of the
Closing Date beneficially own (as determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) in excess of 5% of the total number of issued and outstanding shares
of Common Stock.
(b) Notwithstanding anything to the contrary contained herein, the number of Warrant Shares
that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by such Holder and
its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% of the
total number of issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Each delivery of an Exercise Notice hereunder will constitute a
representation by the Holder that it has evaluated the limitation set forth in this Section and
determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is
permitted under this Section. The
Company’s obligation to issue shares of Common Stock in excess of the limitation referred to
in this Section shall be suspended (and, except as provided below, shall not terminate or expire
notwithstanding any contrary provisions hereof) until such time, if any, as such shares of Common
Stock may be issued in compliance with such limitation; provided, that, if, as of 5:00 p.m., New
York City time, on the Expiration Date, the Company has not received written notice that the shares
of Common Stock may be issued in compliance with such limitation, the Company’s obligation to issue
such shares shall terminate. This provision shall not restrict the number of shares of Common
Stock that a Holder may receive or beneficially own in order to determine the amount of securities
or other consideration that such Holder may receive in the event of a Fundamental Transaction as
contemplated in Section 9 of this Warrant. By written notice to the Company, the Holder may waive
the provisions of this Section but any such waiver will not be effective until the 61st
day after such notice is delivered to the Company, nor will any such waiver effect any other
Holder. This provision shall not apply to Holders who, together with Affiliates, as of the Closing Date beneficially own (as determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) in
excess of 10% of the total number of issued and outstanding shares of Common Stock.
12. No Fractional Shares. No fractional Warrant Shares will be issued in connection
with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be
issuable, the Company shall pay cash equal to the product of such fraction multiplied by the
closing price of one Warrant Share as reported by the applicable Trading Market on the Exercise
Date.
13. Notices. Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section at or prior to 5:00 p.m.
(New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number specified in this
Section on a day that is not a Trading Day or later than 5:00 p.m. (New York City time) on any
Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required
to be given. The addresses for such notices or communications shall be: if to the Company, to
Emisphere Technologies, Inc., 765 Old Saw Mill River Road, Tarrytown, New York 10591. Attention:
Chief Executive Officer, Facsimile No.: (914) 593-8253 (or such other address as the Company shall
indicate in writing in accordance with this Section) or (ii) if to the Holder, to the address or
facsimile number appearing on the Warrant Register (or such other address as the Company shall
indicate in writing in accordance with this Section).
14. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or any corporation to
which the Company or any new warrant agent transfers substantially all of its corporate trust or
shareholders services
business shall be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown
on the Warrant Register.
15. Miscellaneous.
(a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall
be construed to give to any Person other than the Company and the Holder any legal or equitable
right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder, or their successors and assigns.
(b) All questions concerning the construction, validity, enforcement and interpretation of
this Warrant shall be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement and defense of this
Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a
party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in
the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of
any New York Court, or that such Proceeding has been commenced in an improper or inconvenient
forum. Each party hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Warrant or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then
the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s
fees and other costs and expenses incurred with the investigation, preparation and prosecution of
such Proceeding.
(c) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.
(d) In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or impaired thereby and
the parties will attempt in good faith to agree upon a valid and enforceable provision which shall
be a commercially reasonable substitute therefore, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.
(e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of by being a
Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.
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EMISPHERE TECHNOLOGIES, INC.
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EXERCISE NOTICE
EMISPHERE TECHNOLOGIES, INC.
WARRANT NO. ___DATED AUGUST ___, 2007
Ladies and Gentlemen:
(1) The undersigned hereby elects to exercise the above-referenced Warrant with respect to shares of Common Stock. Capitalized terms used herein and not otherwise defined herein
have the respective meanings set forth in the Warrant.
(2) The Holder intends that payment of the Exercise Price shall be made as (check one):
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(3) If the Holder has elected a Cash Exercise, the holder shall pay the sum of $___to the
Company in accordance with the terms of the Warrant.
(4) Pursuant to this Exercise Notice, the Company shall deliver to the Holder the number of Warrant
Shares determined in accordance with the terms of the Warrant.
(5) By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company
that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in
excess of the number of shares of Common Stock (as determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934) permitted to be owned under Section 11 of this Warrant to
which this notice relates.
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HOLDER:
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13
WARRANT ORIGINALLY ISSUED AUGUST ___, 2007
WARRANT NO. ____
FORM OF ASSIGNMENT
To be completed and signed only upon transfer of Warrant
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the right represented by the within Warrant to purchase
shares of Common Stock to which the within Warrant relates and appoints attorney to transfer said right on the books of the Company with full power of
substitution in the premises.
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