CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT
Exhibit 10.1
This
Convertible Note and Warrant Purchase Agreement, dated as of
December __, 2019 (this “Agreement”), is entered
into by and among AzurRx BioPharma, Inc., a Delaware corporation
(the “Company”), and the other
signatories hereto (each a “Lender” and collectively,
the “Lenders”).
RECITALS
A. On
the terms and subject to the conditions set forth herein, the
Lenders are willing to purchase from the Company and the Company is
willing to issue and sell to the Lenders, Convertible Promissory
Notes in the principal amount of up to Eight Million Dollars
($8,000,000), substantially in the form attached hereto as Exhibit
A (each a “Note” and collectively,
the “Notes”);
B. Each
Note shall be convertible into that number of shares (the
“Conversion
Shares”) of the Company’s common stock, $0.0001
par value per share (“Common Stock”), equal to
the principal amount of each Note divided by (i) the lower of (A)
the closing price of the Common Stock immediately preceding the
date of this Agreement, or (B) the average closing price of the
Common Stock for the five (5) trading days immediately preceding
such date, plus (ii) $0.0625 (the “Conversion
Price”);
C. As
additional consideration for the issuance of the Notes by the
Company, the Company is issuing to the Lenders warrants, in
substantially the form attached hereto as Exhibit B
(“Warrants”), to purchase
that number of shares of Common Stock equal to 50% of the total
number of Conversion Shares issuable upon conversion of Notes
purchased pursuant to this Agreement by each Lender (the
“Warrant
Shares”), at an exercise price equal to 110% of the
Conversion Price; and
D. In
connection with the purchase of Notes and Warrants pursuant to this
Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement, in substantially the form attached
hereto as Exhibit C (the “Registration Rights
Agreement”), pursuant to which the Company has agreed
to register the Conversion Shares and Warrant Shares under the
Securities Act of 1933, as amended (the “Securities Act”), and the
rules and regulations promulgated thereunder. This Agreement, the
Notes, the Warrants, the Registration Rights Agreement and the
Escrow Agreement (as defined herein) are referred to herein
collectively as the “Transaction
Documents”).
AGREEMENT
NOW, THEREFORE, in consideration of the
foregoing, and the representations, warranties, and conditions set
forth below, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Issuance and Sale of the Note and
Warrants. In reliance upon the representations, warranties
and covenants of the parties set forth herein, the Company agrees
to issue, sell and deliver to each Lender, and each Lender agrees,
severally and not jointly, to purchase from the Company a Note in
the principal amount set forth below such Lender’s name on
the signature page hereto, which Note shall include a Warrant
exercisable for that number of Warrant Shares set forth below
Lender’s name on the signature page hereto. The purchase
price for the Note and Warrant shall be equal to the principal
amount indicated on the face of the Note and set forth below
Lender’s name on the signature page hereto. The Company and
the Lender are executing and delivering this Agreement and issuing
the Notes and Warrants in accordance with, and in reliance upon,
the exemption from securities registration afforded by Section 4(2)
of the Securities Act, including Regulation D (“Regulation D”), and/or
upon such other exemption from the registration requirements of the
Securities Act as may be available with respect to any or all of
the investments to be made hereunder. The Notes, the Warrants and
the Warrant Shares are sometimes collectively referred to herein as
the “Securities”.
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2. Closing; Delivery. The Company
will deliver to Lenders the Notes against receipt by the Company of
the purchase price for the Notes in an aggregate purchase price of
up to Eight Million Dollars ($8,000,000) (the “Purchase Price”). Each
Warrant shall be issued within three (3) business days following
the receipt by the Company of the purchase price for the Note. The
closings (each, a “Closing”) of the purchase
and sale of the Notes and Warrants to be acquired by the Lenders
from the Company under this Agreement shall take place at such time
or times as Lenders have executed this Agreement to purchase at
least One Million Dollars ($1,000,000) principal amount of Notes,
and all of the conditions set forth in Sections 5 and 6 hereof and
applicable to the Closing shall have been fulfilled or waived in
accordance herewith (each, a “Closing Date”). At the
Closing, each Lender shall deliver its Purchase Price by wire
transfer to an escrow account designated by the escrow agent in the
Escrow Agreement substantially in the form attached hereto as
Exhibit D (“Escrow
Agreement”).
3. Representations and Warranties of the
Company. Subject to any exceptions set forth in schedules
attached hereto, which schedules are incorporated herein by this
reference, the Company hereby represents and warrants to each
Lender that:
(a) Organization and Standing. The
Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to carry on its business as
now conducted and proposed to be conducted. The Company and each
such Subsidiary (as defined in Section 3(h)) is duly qualified as a
foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary except for
any jurisdiction(s) (alone or in the aggregate) in which the
failure to be so qualified will not have a Material Adverse Effect.
For the purposes of this Agreement, “Material Adverse Effect”
means any material adverse effect on the business, operations,
properties, prospects, or financial condition of the Company and
its Subsidiaries and/or any condition, circumstance, or situation
that would prohibit or otherwise materially interfere with the
ability of the Company to perform any of its obligations under this
Agreement in any material respect.
(b) Corporate Power. The Company
has all requisite legal and corporate power and authority to enter
into and perform this Agreement and the other Transaction
Documents, and to consummate the transactions contemplated hereby
and thereby and to issue the Securities, in accordance with the
terms hereof and thereof. This Agreement, and, upon issuance, the
Notes and Warrants will be, valid and binding obligations of the
Company, enforceable in accordance with their respective terms,
except as the same may be limited by bankruptcy, insolvency,
moratorium, and other laws of general application affecting the
enforcement of creditors’ rights.
(c) Authorization. The execution
and delivery of this Agreement, the Notes, the Warrants, the
Conversion Shares and the Warrant Shares by the Company and the
consummation by it of the transactions contemplated hereby and
thereby (including without limitation, the issuance of the Notes
and the Warrants, as well as the issuance and reservation for
issuance of the Conversion Shares issuable upon conversion of the
Notes and the issuance and reservation for issuance of the Warrant
Shares upon exercise of the Warrants) have been duly authorized by
the Company’s Board of Directors and no further consent or
authorization of the Company, its Board of Directors, its
shareholders, or its debt holders is required. When paid for and
issued in accordance with the terms hereof, the Notes (and
Conversion Shares issuable upon conversion thereof) shall be
validly issued and outstanding, free and clear of all liens,
encumbrances and rights of refusal of any kind. When the Warrant
Shares are issued and paid for in accordance with the terms of this
Agreement, such Warrant Shares will be duly authorized by all
necessary corporate action and validly issued and outstanding,
fully paid and nonassessable, free and clear of all liens,
encumbrances and rights of refusal of any kind and the holders
shall be entitled to all rights accorded to a holder of Common
Stock.
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(d) Capitalization.
i. The authorized
capital stock of the Company as of the date hereof is set forth on
Schedule 3(d)
hereto. All of the outstanding shares of the Common Stock and any
other outstanding security of the Company have been duly and
validly authorized and validly issued, fully paid and
nonassessable. Except as set forth in this Agreement, no shares of
Common Stock or any other security of the Company are entitled to
preemptive rights, registration rights, rights of first refusal or
similar rights and there are no outstanding options, warrants,
scrip, rights to subscribe to, call or commitments of any character
whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of the Company. The Company is not a
party to or bound by any agreement or understanding granting
registration or anti-dilution rights to any person with respect to
any of its equity or debt securities. The Company is not a party
to, and it has no knowledge of, any agreement or understanding
restricting the voting or transfer of any shares of the capital
stock of the Company. Except as disclosed below, (i) there are no
outstanding debt securities, or other form of material debt of the
Company or any of its Subsidiaries, (ii) there are no contracts,
commitments, understandings, agreements or arrangements under which
the Company or any of its Subsidiaries is required to register the
sale of any of their securities under the Securities Act, (iii)
there are no outstanding securities of the Company or any of its
Subsidiaries which contain any redemption or similar provisions,
and there are no contracts, commitments, understandings, agreements
or arrangements by which the Company or any of its Subsidiaries is
or may become bound to redeem a security of the Company or any of
its Subsidiaries, (iv) there are no securities or instruments
containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities, (v) the Company does
not have any stock appreciation rights or “phantom
stock” plans or agreements, or any similar plan or agreement
and (vi) as of the date of this Agreement, to the Company’s
and each of its Subsidiaries’ knowledge, no person or group
of related persons beneficially owns (as determined pursuant to
Rule 13d-3 promulgated under the Exchange Act (as defined below))
or has the right to acquire by agreement with or by obligation
binding upon the Company, beneficial ownership of in excess of 5%
of the Common Stock. Any person with any right to purchase
securities of the Company that would be triggered as a result of
the transactions contemplated hereby or by any of the other
Transaction Documents has waived such rights or the time for the
exercise of such rights has passed, except where failure of the
Company to receive such waiver would not have a Material Adverse
Effect. There are no options, warrants or other outstanding
securities of the Company (including, without limitation, any
equity securities issued pursuant to any Company Plan) the vesting
of which will be accelerated by the transactions contemplated
hereby or by any of the other Transaction Documents. None of the
transactions contemplated by this Agreement or by any of the other
Transaction Documents shall cause, directly or indirectly, the
acceleration of vesting of any options issued pursuant the
Company’s stock option plans.
ii. The Conversion
Shares and Warrant Shares are duly authorized and reserved for
issuance and, upon conversion of the Notes or exercise of the
Warrants (as applicable) in accordance with their respective terms,
will be validly issued, fully paid and non-assessable, and free
from all taxes, liens, claims and encumbrances with respect to the
issue thereof and shall not be subject to preemptive rights or
other similar rights of shareholders of the Company and will not
impose personal liability upon the holder thereof.
(e) No Conflicts. The execution,
delivery and performance by the Company of its obligations under
the Transaction Documents will not: (i) conflict with or result in
a breach of or a default under any of the terms or provisions of,
(A) the Company’s certificate of incorporation (the
“Certificate”) or by-laws
(“Bylaws”), or (B) any
material provision of any indenture, mortgage, deed of trust or
other material agreement or instrument to which the Company is a
party or by which it or any of its material properties or assets
(including, without limitation, the Collateral) is bound, (ii)
result in a violation of any material provision of any law,
statute, rule, regulation, or any existing applicable decree,
judgment or order by any court, Federal or state regulatory body,
administrative agency, or other governmental body having
jurisdiction over the Company, or any of its material properties or
assets or (iii) result in the creation or imposition of any
material lien, charge or encumbrance upon any material property or
assets of the Company or any of its subsidiaries pursuant to the
terms of any agreement or instrument to which any of them is a
party or by which any of them may be bound or to which any of their
property or any of them is subject except, in the case of clauses
(ii) and (iii), for such violations, breaches, conflicts, defaults
or other occurrences which, individually or in the aggregate, would
not have a Material Adverse Effect.
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(f) No Approvals. No consent,
approval or authorization of or designation, declaration or filing
with any governmental authority on the part of the Company is
required in connection with the valid execution and delivery of the
Transaction Documents.
(g) Commission Documents, Financial
Statements. The Common Stock of the Company is registered
pursuant to Section 12(b) or 12(g) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and the
Company has filed all reports, schedules, forms, statements and
other documents required to be filed by it with the Commission
pursuant to the reporting requirements of the Exchange Act (all of
the foregoing including filings incorporated by reference therein
being referred to herein as the “Commission Documents”).
At the times of their respective filings, the Form 10-Q for the
fiscal quarter ended September 30, 2019, June 30, 2019 and March
31, 2019 (collectively, the “Form 10-Q”) and the Form
10-K for the fiscal year ended December 31, 2018, (the
“Form
10-K”) complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of
the Commission promulgated thereunder, and the Form 10-Q and Form
10-K did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company
included in the Commission Documents complied as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the Commission. Such financial
statements have been prepared in accordance with generally accepted
accounting principles (“GAAP”) applied on a
consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes
thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or
summary statements), and fairly present in all material respects
the financial position of the Company and its Subsidiaries as of
the dates thereof and the results of operations and cash flows for
the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
(h) Subsidiaries. Schedule 3(h) hereto sets forth
each Subsidiary of the Company, showing the jurisdiction of its
incorporation or organization and showing the percentage of each
person’s ownership of the outstanding stock or other
interests of such Subsidiary. For the purposes of this Agreement,
“Subsidiary” shall mean
any corporation or other entity of which at least a majority of the
securities or other ownership interest having ordinary voting power
(absolutely or contingently) for the election of directors or other
persons performing similar functions are at the time owned directly
or indirectly by the Company and/or any of its other Subsidiaries.
All of the outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued, and are fully paid
and nonassessable. There are no outstanding preemptive, conversion
or other rights, options, warrants or agreements granted or issued
by or binding upon any Subsidiary for the purchase or acquisition
of any shares of capital stock of any Subsidiary or any other
securities convertible into, exchangeable for or evidencing the
rights to subscribe for any shares of such capital stock. Neither
the Company nor any Subsidiary is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of the capital stock of any Subsidiary or any
convertible securities, rights, warrants or options of the type
described in the preceding sentence. Neither the Company nor any
Subsidiary is party to, nor has any knowledge of, any agreement
restricting the voting or transfer of any shares of the capital
stock of any Subsidiary.
(i) No Material Adverse Change.
Since September 31, 2019, the Company has not experienced or
suffered any Material Adverse Effect.
(j) No Undisclosed Liabilities.
Neither the Company nor any of its Subsidiaries has incurred any
liabilities, obligations, claims or losses (whether liquidated or
unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those incurred in the ordinary course of
the Company’s or its Subsidiaries respective businesses or
which, individually or in the aggregate, are not reasonably likely
to have a Material Adverse Effect.
(k) No Undisclosed Events or
Circumstances. Since September 31, 2019, no event or
circumstance has occurred or exists with respect to the Company or
its Subsidiaries or their respective businesses, properties,
prospects, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly
announced or disclosed.
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(l) Indebtedness. Schedule 3(l) hereto sets forth
as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or Indebtedness for
which the Company or any Subsidiary has commitments. For the
purposes of this Agreement, “Indebtedness” shall mean
(a) any liabilities for borrowed money or amounts owed in excess of
$100,000 (other than trade accounts payable incurred in the
ordinary course of business), (b) all guaranties, endorsements and
other contingent obligations in respect of Indebtedness of others,
whether or not the same are or should be reflected in the
Company’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business; and (c) the present value of any lease payments in excess
of $100,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in
default with respect to any Indebtedness.
(m) Title to Assets. Each of the
Company and the Subsidiaries has good and valid title to all of its
real and personal property reflected in the Commission Documents,
free and clear of any mortgages, pledges, charges, liens, security
interests or other encumbrances, except for those that,
individually or in the aggregate, do not cause a Material Adverse
Effect. Any leases of the Company and each of its Subsidiaries are
valid and subsisting and in full force and effect.
(n) Actions Pending. There is no
action, suit, claim, investigation, arbitration, alternate dispute
resolution proceeding or other proceeding pending or, to the
knowledge of the Company, threatened against the Company or any
Subsidiary which questions the validity of this Agreement or any of
the other Transaction Documents or any of the transactions
contemplated hereby or thereby or any action taken or to be taken
pursuant hereto or thereto. There is no action, suit, claim,
investigation, arbitration, alternate dispute resolution proceeding
or other proceeding pending or, to the knowledge of the Company,
threatened against or involving the Company, any Subsidiary or any
of their respective properties or assets, which individually or in
the aggregate, would reasonably be expected, if adversely
determined, to have a Material Adverse Effect. There are no
outstanding orders, judgments, injunctions, awards or decrees of
any court, arbitrator or governmental or regulatory body against
the Company or any Subsidiary or any officers or directors of the
Company or Subsidiary in their capacities as such, which
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(o) Compliance with Law. The
business of the Company and the Subsidiaries has been and, to the
best of the Company’s knowledge is, presently being conducted
in accordance with all applicable federal, state and local
governmental laws, rules, regulations and ordinances, except where,
individually or in the aggregate, the noncompliance therewith could
not reasonably be expected to have a Material Adverse Effect. The
Company and each of its Subsidiaries have all franchises, permits,
licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of its
business as now being conducted by it unless the failure to possess
such franchises, permits, licenses, consents and other governmental
or regulatory authorizations and approvals, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(p) Taxes. The Company and each of
the Subsidiaries has accurately prepared and filed all federal,
state and other tax returns required by law to be filed by it, has
paid or made provisions for the payment of all taxes shown to be
due and all additional assessments, and adequate provisions have
been and are reflected in the financial statements of the Company
and the Subsidiaries for all current taxes and other charges to
which the Company or any Subsidiary is subject and which are not
currently due and payable. None of the federal income tax returns
of the Company or any Subsidiary have been audited by the Internal
Revenue Service. The Company has no knowledge of any additional
assessments, adjustments or contingent tax liability (whether
federal or state) of any nature whatsoever, whether pending or
threatened against the Company or any Subsidiary for any period,
nor of any basis for any such assessment, adjustment or
contingency.
(q) Certain Fees. The Company has
not employed any broker or finder or incurred any liability for any
brokerage or investment banking fees, commissions, finders’
structuring fees, financial advisory fees or other similar fees in
connection with the Transaction Documents, other than pursuant to
an Engagement Agreement, dated as of November 14, 2019, by and
between the Company and Alexander Capital L.P.
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(r) Disclosure. To the
Company’s knowledge, neither the representations and
warranties contained in this Section 3 or the schedules hereto nor
any other documents, certificates or instruments furnished to the
Lenders by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made herein
or therein, in the light of the circumstances under which they were
made herein or therein, not misleading.
(s) Intellectual Property. The
Company and the Subsidiaries own or possess the requisite licenses
or rights to use all patents, patent applications, patent rights,
inventions, know-how, trade secrets, trademarks, trademark
applications, service marks, service names, trade names and
copyrights (“Intellectual Property”)
necessary to enable them to conduct their business as now operated
(and, as presently contemplated to be operated in the future);
there is no claim or action by any person pertaining to, or
proceeding pending, or to the Company’s knowledge threatened,
which challenges the right of the Company or of a Subsidiary with
respect to any Intellectual Property necessary to enable it to
conduct its business as now operated (and, as presently
contemplated to be operated in the future); to the best of the
Company’s knowledge, the Company’s or the
Subsidiaries’ current and intended products, services and
processes do not infringe on any Intellectual Property or other
rights held by any person; and the Company is unaware of any facts
or circumstances which might give rise to any of the foregoing. The
Company and the Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of their
Intellectual Property.
(t) Environmental Compliance. To
the best of the Company’s knowledge, the Company and the
Subsidiaries have obtained all material approvals, authorization,
certificates, consents, licenses, orders and permits or other
similar authorizations of all governmental authorities, or from any
other person, that are required under any Environmental Laws.
“Environmental
Laws” shall mean all applicable laws relating to the
protection of the environment including, without limitation, all
requirements pertaining to reporting, licensing, permitting,
controlling, investigating or remediating emissions, discharges,
releases or threatened releases of hazardous substances, chemical
substances, pollutants, contaminants or toxic substances, materials
or wastes, whether solid, liquid or gaseous in nature, into the
air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of hazardous substances, chemical
substances, pollutants, contaminants or toxic substances, material
or wastes, whether solid, liquid or gaseous in nature. To the
Company’s knowledge, the Company has all necessary
governmental approvals required under all Environmental Laws as
necessary for the Company’s business or the business of any
of its subsidiaries. Except for such instances as would not
individually or in the aggregate have a Material Adverse Effect and
to the knowledge of the Company, there are no past or present
events, conditions, circumstances, incidents, actions or omissions
relating to or in any way affecting the Company or the Subsidiaries
that violate or may violate any Environmental Law after the Closing
Date or that may give rise to any environmental liability, or
otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study or investigation (i) under any
Environmental Law, or (ii) based on or related to the manufacture,
processing, distribution, use, treatment, storage (including
without limitation underground storage tanks), disposal, transport
or handling, or the emission, discharge, release or threatened
release of any hazardous substance.
(u) Books and Records; Internal Accounting
Controls. The records and documents of the Company and the
Subsidiaries accurately reflect in all material respects the
information relating to the business of the Company and the
Subsidiaries, the location of their assets, and the nature of all
transactions giving rise to the obligations or accounts receivable
of the Company or any Subsidiary. The Company and each of the
Subsidiaries maintain a system of internal accounting controls
sufficient, in the judgment of the Company’s board of
directors, to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate actions are taken with respect to any
differences.
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(v) Securities Act of
1933.
i. Based in material
part upon the representations herein of the Lenders, the Company
has complied and will comply with all applicable federal and state
securities laws in connection with the offer, issuance and sale of
the Securities hereunder. Neither the Company nor anyone acting on
its behalf, directly or indirectly, has or will sell, offer to sell
or solicit offers to buy any of the Securities or similar
securities to, or solicit offers with respect thereto from, or
enter into any negotiations relating thereto with, any person, or
has taken or will take any action so as to bring the issuance and
sale of any of the Securities under the registration provisions of
the Securities Act and applicable state securities laws. Neither
the Company nor any of its affiliates, nor any person acting on its
or their behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D under the
Securities Act) in connection with the offer or sale of any of the
Securities.
ii. None of the
Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of
20% or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, nor any
promoter (as that term is defined in Rule 405 under the Securities
Act) connected with the Company in any capacity at the time of sale
(each, an “Issuer
Covered Person”) is subject to any of the “Bad
Actor” disqualifications described in Rule 506(d)(1)(i) to
(viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or
(d)(3). The Company has exercised reasonable care to determine
whether any Issuer Covered Person is subject to a Disqualification
Event.
(w) Employees. Neither the Company
nor any Subsidiary has any collective bargaining arrangements or
agreements covering any of its employees. Neither the Company nor
any Subsidiary has any employment contract, agreement regarding
proprietary information, non-competition agreement,
non-solicitation agreement, confidentiality agreement, or any other
similar contract or restrictive covenant, relating to the right of
any officer, employee or consultant to be employed or engaged by
the Company or such Subsidiary required to be disclosed in the
Commission Documents that is not so disclosed. No officer,
consultant or key employee of the Company or any Subsidiary whose
termination, either individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, has terminated
or, to the knowledge of the Company, has any present intention of
terminating his or her employment or engagement with the Company or
any Subsidiary.
(x) Transactions with Affiliates.
Except for arm’s length transactions pursuant to which the
Company or any of the Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than the Company or
any of the Subsidiaries could obtain from third parties and other
than the grant of stock options described in the Commission
Documents, none of the officers, directors, or employees of the
Company is presently a party to any transaction with the Company or
any of the Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer,
director, trustee or partner.
(y) No Integrated Offering. Neither
the Company, nor any of its affiliates, nor any person acting on
its or their behalf, has directly or indirectly made any offers or
sales in any security or solicited any offers to buy any security
under circumstances that would require registration under the
Securities Act of the issuance of the Securities to the Lenders.
The issuance of the Securities to the Lenders will not be
integrated with any other issuance of the Company’s
securities (past, current or future) for purposes of any
shareholder approval provisions applicable to the Company or its
securities.
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(z) Insurance. The Company and each
of the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in
the businesses in which the Company and the Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has any reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse
Effect.
(aa) Foreign
Corrupt Practices. Neither the Company, nor any of the
Subsidiaries, nor any director, officer, agent, employee or other
person acting on behalf of the Company or any Subsidiary has, in
the course of his actions for, or on behalf of, the Company, used
any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political
activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended, or made any
bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.
(bb) Solvency.
The Company (after giving effect to the transactions contemplated
by this Agreement) is solvent (i.e., its assets have a fair market
value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and
matured) and currently the Company has no information that would
lead it to reasonably conclude that the Company would not, after
giving effect to the transaction contemplated by this Agreement,
have the ability to, nor does it intend to take any action that
would impair its ability to, pay its debts from time to time
incurred in connection therewith as such debts mature. The
Company’s financial statements for its most recent fiscal
year end and interim financial statements have been prepared
assuming the Company will continue as a going concern, which
contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.
(cc) No
Investment Company. The Company is not, and upon the
issuance and sale of the Securities as contemplated by this
Agreement will not be an “investment company” required
to be registered under the Investment Company Act of 1940 (an
“Investment
Company”). The Company is not controlled by an
Investment Company.
(dd) No
Off Balance Sheet Arrangements. There is no transaction,
arrangement, or other relationship between the Company or any of
its Subsidiaries and an unconsolidated or other off balance sheet
entity that is required to be disclosed by the Company in its
Commission Documents and is not so disclosed or that otherwise
could be reasonably likely to have a Material Adverse
Effect.
4. Representations and Warranties by
Lender. Each Lender represents and warrants severally
and not jointly, to the Company as of the time of issuance of the
Note and Warrant as follows:
(a) Organization and Standing. If
Lender is an entity, Lender is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization
and has all requisite corporate or other entity power and authority
to carry on its business as now conducted and proposed to be
conducted. If Lender is an entity, the address of its principal
place of business is as set forth on the signature page hereto, and
if Lender is an individual, the address of its principal residence
is as set forth on the signature page hereto.
(b) Power. If Lender is an entity,
Lender has all requisite legal and corporate or other entity power
and authority to enter into, execute and deliver each of the
Transaction document to which it is a party. Each Transaction
Document to which Lender is a party has been duly and validly
authorized, executed and delivered by Lender is the valid and
binding obligation of Lender, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
moratorium, and other laws of general application affecting the
enforcement of creditors’ rights.
(c) Authorization. If Lender is an
entity, all corporate or other entity and legal action on the part
of Lender, its officers, directors, managers, shareholders,
partners, or members, as applicable, necessary for the execution
and delivery of the Transaction Documents to which it is a party,
the purchase of the Note and the performance of Lender’s
obligations such Transaction Documents have been
taken.
-8-
(d) No Conflict; Required Filings and
Consents. Neither the execution and delivery of this
Agreement or the other Transaction Documents by Lender nor the
performance by Lender of its obligations hereunder will: (i) if
Lender is an entity, conflict with Lender’s certificate of
incorporation or bylaws, or other similar organizational documents;
(ii) violate any statute, law, ordinance, rule or regulation,
applicable to Lender or any of the properties or assets of Lender;
or (iii) violate, breach, be in conflict with or constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or permit the termination of any
provision of, or result in the termination of, the acceleration of
the maturity of, or the acceleration of the performance of any
obligation of Lender under, or result in the creation or imposition
of any lien upon any properties, assets or business of Lender
under, any material contract or any order, judgment or decree to
which Lender is a party or by which it or any of its assets or
properties is bound or encumbered except, in the case of clauses
(ii) and (iii), for such violations, breaches, conflicts, defaults
or other occurrences which, individually or in the aggregate, would
not have a material adverse effect on its ability to perform its
obligations under the Transaction Documents.
(e) Acquisition for Investment.
Lender is purchasing the Securities solely for its own account for
the purpose of investment and not with a view to or for sale in
connection with distribution. Lender does not have a present
intention to sell any of the Securities, nor a present arrangement
(whether or not legally binding) or intention to effect any
distribution of any of the Securities to or through any person or
entity; provided,
however, that by
making the representations herein, such Lender does not agree to
hold the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in
accordance with federal and state securities laws applicable to
such disposition. Lender acknowledges that it (i) has such
knowledge and experience in financial and business matters such
that Lender is capable of evaluating the merits and risks of
Lender’s investment in the Company, (ii) is able to bear the
financial risks associated with an investment in the Securities,
(iii) has been given full access to such records of the Company and
to the officers of the Company as it has deemed necessary or
appropriate to conduct its due diligence investigation, and (iv)
has had the opportunity to ask representatives of the Company
certain questions and request certain additional information
regarding the finances, operations, business and prospects of the
Company and has had any and all such questions and requests
answered to its satisfaction.
(f) Rule 144. Lender understands
that the Securities are “restricted securities” as
defined in Rule 144, and must be held indefinitely unless such
Securities are registered under the Securities Act or an exemption
from registration is available. Lender acknowledges that such
person is familiar with Rule 144 of the rules and regulations of
the Commission, as amended, promulgated pursuant to the Securities
Act (“Rule
144”), and that such Lender has been advised that Rule
144 permits resales only under certain circumstances. Lender
understands that to the extent that Rule 144 is not available, such
Lender will be unable to sell any Securities without either
registration under the Securities Act or the existence of another
exemption from such registration requirement.
(g) No General Solicitation. The
Lender acknowledges that the Securities were not offered to such
Lender by means of any form of general or public solicitation or
general advertising, or publicly disseminated advertisements or
sales literature, including (i) any advertisement, article, notice
or other communication published in any newspaper, magazine, or
similar media, or broadcast over television, radio or the internet,
or (ii) any seminar or meeting to which such Lender was invited by
any of the foregoing means of communications. Lender, in making the
decision to purchase the Securities, has relied upon independent
investigation made by it and has not relied on any information or
representations made by third parties.
(h) Accredited Investor. Lender is
an “accredited investor” as such term is defined in
Rule 501 of Regulation D under the Securities Act and as set forth
in Exhibit E attached hereto and made a part hereof, and such
Lender has such experience in business and financial matters that
it is capable of evaluating the merits and risks of an investment
in the Securities. Such Lender is not required to be registered as
a broker-dealer under Section 15 of the Exchange Act and such
Lender is not a broker-dealer. Lender acknowledges that an
investment in the Securities is speculative and involves a high
degree of risk.
-9-
5. Conditions Precedent to the Obligation
of the Company to Close and to Sell the Securities. The
obligation hereunder of the Company to close and issue and sell the
Securities to the Lenders at the Closing is subject to the
satisfaction or waiver, at or before the Closing of the conditions
set forth below. These conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole
discretion.
(a) Accuracy of the Lenders’
Representations and Warranties. The representations and
warranties of each Lender shall be true and correct in all material
respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be
true and correct in all respects) as of the date when made and as
of the Closing Date as though made at that time, except for
representations and warranties that are expressly made as of a
particular date, which shall be true and correct in all material
respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be
true and correct in all respects) as of such date.
(b) Performance by the Lenders.
Each Lender shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by the Lenders at or prior to the Closing Date.
(c) No Injunction. No statute,
rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated
by this Agreement.
(d) Delivery of Purchase Price. The
Purchase Price for the Securities shall have been delivered to the
Company on the Closing Date.
(e) Delivery of Transaction
Documents. The Transaction Documents shall have been duly
executed and delivered by the Lenders and, with respect to the
Escrow Agreement, the escrow agent, to the Company.
6. Conditions Precedent to the Obligation
of the Lenders to Close and to Purchase the Securities. The
obligation hereunder of the Lenders to purchase the Securities and
consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver, at or before the Closing, of
each of the conditions set forth below. These conditions are for
the Lenders’ sole benefit and may be waived by the Lenders at
any time in their sole discretion.
(a) Accuracy of the Company’s
Representations and Warranties. Each of the representations
and warranties of the Company in this Agreement and the other
Transaction Documents shall be true and correct in all material
respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be
true and correct in all respects) as of the date when made and as
of the Closing Date as though made at that time, except for
representations and warranties that are expressly made as of a
particular date, which shall be true and correct in all material
respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be
true and correct in all respects) as of such date.
(b) Performance by the Company. The
Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date.
(c) No Injunction. No statute,
rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated
by this Agreement.
(d) No Proceedings or Litigation.
No action, suit or proceeding before any arbitrator or any
governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been
threatened, against the Company or any Subsidiary, or any of the
officers, directors or affiliates of the Company or any Subsidiary
seeking to restrain, prevent or change the transactions
contemplated by this Agreement, or seeking damages in connection
with such transactions.
-10-
(e) Notes. At or prior to the
Closing Date, the Company shall have delivered to the Lenders the
Notes (in such denominations as each Lender may
request).
(f) Secretary’s Certificate.
The Company shall have delivered to the Lenders a secretary’s
certificate, dated as of the Closing Date, as to (i) the
resolutions adopted by the Board of Directors approving the
transactions contemplated hereby, (ii) the Certificate, (iii) the
Bylaws, each as in effect at the Closing, and (iv) the authority
and incumbency of the officers of the Company executing the
Transaction Documents and any other documents required to be
executed or delivered in connection therewith.
(g) Officer’s Certificate. On
the Closing Date, the Company shall have delivered to the Lenders a
certificate signed by an executive officer on behalf of the
Company, dated as of the Closing Date, confirming the accuracy of
the Company’s representations, warranties and covenants as of
the Closing Date and confirming the compliance by the Company with
the conditions precedent set forth in paragraphs (b)-(d) of this
Section 6 as of the Closing Date (provided that, with respect to
the matters in paragraphs (d) of this Section 6, such confirmation
shall be based on the knowledge of the executive officer after due
inquiry).
(h) Material Adverse Effect. No
Material Adverse Effect shall have occurred at or before the
Closing Date.
(i) Registration Rights Agreement.
At the Closing, the Company shall have executed and delivered the
Registration Rights Agreement.
7. Covenants. The Company
covenants with each Lender as follows, which covenants are for the
benefit of each Lender and their respective permitted
assignees.
(a) Securities Compliance. The
Company shall notify the Commission in accordance with its rules
and regulations, of the transactions contemplated by any of the
Transaction Documents and shall take all other necessary action and
proceedings as may be required and permitted by applicable law,
rule and regulation, for the legal and valid issuance of the
Securities to the Lenders, or their respective subsequent holders.
In furtherance and in limitation of the foregoing, the Company
agrees to file a Form D with respect to the Securities as required
under Regulation D and to provide a copy thereof to each Buyer
promptly after such filing. The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Securities for sale to the
Lenders at the applicable closing pursuant to this Agreement under
applicable securities or “blue sky” laws of the states
of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so
taken to the Lenders on or prior to the Closing Date.
(b) Compliance with Laws. The
Company shall comply, and cause each Subsidiary to comply, with all
applicable laws, rules, regulations and orders, noncompliance with
which would be reasonably likely to have a Material Adverse
Effect.
(c) Keeping of Records and Books of
Account. The Company shall keep and cause each Subsidiary to
keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied,
reflecting all financial transactions of the Company and its
Subsidiaries, and in which, for each fiscal year, all proper
reserves for depreciation, depletion, obsolescence, amortization,
taxes, bad debts and other purposes in connection with its business
shall be made.
(d) Other Agreements. The Company
shall not enter into any agreement in which the terms of such
agreement would restrict or impair the right or ability to perform
of the Company or any Subsidiary under any Transaction
Document.
-11-
(e) Reporting Status;
Listing.
i. So long as any
Lender beneficially owns any of the Securities, the Company shall
timely file all reports required to be filed with the Commission
pursuant to the Exchange Act, and the Company shall not terminate
its status as an issuer required to file reports under the Exchange
Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.
ii. So long as any
Lender beneficially owns any of the Securities, the Company shall
maintain the listing and trading of its Common Stock on Nasdaq or
any equivalent replacement exchange and will comply in all respects
with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Financial Industry Regulatory
Authority and such exchanges, as applicable.
(f) Disclosure of Transaction. The
Company shall file with the Commission a Current Report on Form 8-K
(the “Form
8-K”) describing the material terms of the
transactions contemplated hereby (and attaching as exhibits thereto
this Agreement, the form of Note, and any press release) as soon as
practicable following the Closing Date but in no event more than
four (4) Trading Days following the Closing Date.
“Trading
Day” means any day during which the principal exchange
on which the Common Stock is traded shall be open for
trading.
(g) No Integration. The Company has
not and shall not make any offers or sales of any security (other
than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder
under the Securities Act or cause the offering of the Securities to
be integrated with any other offering of securities by the Company
for the purpose of any stockholder approval provision applicable to
the Company or its securities.
(h) Subsequent Variable Rate
Transactions. From the date hereof until such time as the
Lenders no longer hold the Notes or any of the Conversion Shares,
the Company shall be prohibited from effecting or entering into an
agreement involving a Variable Rate Transaction.
“Variable Rate
Transaction” means a transaction in which the Company
(i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the
right to receive, additional shares of Common Stock either (A) at a
conversion price, exercise price or exchange rate or other price
that is based upon, and/or varies with, the trading prices of or
quotations for the shares of Common Stock at any time after the
initial issuance of such debt or equity securities or (B) with a
conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt
or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock or (ii) enters into
any agreement, including, but not limited to, an equity line of
credit, whereby the Company may issue securities at a future
determined price. Any Lender shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which
remedy shall be in addition to any right to collect
damages.
(i) Use of Proceeds. The Company
shall use the net proceeds from the sale of the Notes hereunder for
(i) the satisfaction and payment in full of any and all obligations
of the Company to ADEC Private Equity Investments, LLC
(“ADEC”), or any successor
in interest to ADEC, under the terms of two Senior Convertible
Notes, each dated February 14, 2019, in the aggregate principal
amount of $2.0 million, including without limitation, accrued but
unpaid interest thereon (the “ADEC Notes”), which ADEC
Notes shall be paid contemporaneously with the closing of the sale
of the Notes; and (ii) for general working capital
purposes.
-12-
8. Indemnification.
(a) General Indemnity. The Company
agrees to indemnify and hold harmless the Lenders (and their
respective directors, officers, affiliates, agents, successors and
assigns) from and against any and all losses, liabilities,
deficiencies, costs, damages and expenses (including, without
limitation, reasonable attorneys’ fees, charges and
disbursements) incurred by the Lenders as a result of any
inaccuracy in or breach of the representations, warranties or
covenants made by the Company herein. Each Lender severally but not
jointly agrees to indemnify and hold harmless the Company and its
directors, officers, affiliates, agents, successors and assigns
from and against any and all losses, liabilities, deficiencies,
costs, damages and expenses (including, without limitation,
reasonable attorneys’ fees, charges and disbursements)
incurred by the Company as result of any inaccuracy in or breach of
the representations, warranties or covenants made by such Lender
herein. The maximum aggregate liability of each Lender pursuant to
its indemnification obligations under this Section 8 shall not
exceed the portion of the Purchase Price paid by such Lender
hereunder.
(b) Indemnification Procedure. Any
party entitled to indemnification under this Section 8 (an
“indemnified party”) will give written notice to the
indemnifying party of any matters giving rise to a claim for
indemnification; provided, that the failure of
any party entitled to indemnification hereunder to give notice as
provided herein shall not relieve the indemnifying party of its
obligations under this Section 8 except to the extent that the
indemnifying party is actually prejudiced by such failure to give
notice. In case any action, proceeding or claim is brought against
an indemnified party in respect of which indemnification is sought
hereunder, the indemnifying party shall be entitled to participate
in and, unless in the reasonable judgment of the indemnified party
a conflict of interest between it and the indemnifying party may
exist with respect of such action, proceeding or claim, to assume
the defense thereof with counsel reasonably satisfactory to the
indemnified party. In the event that the indemnifying party advises
an indemnified party that it will contest such a claim for
indemnification hereunder, or fails, within thirty (30) days of
receipt of any indemnification notice to notify, in writing, such
person of its election to defend, settle or compromise, at its sole
cost and expense, any action, proceeding or claim (or discontinues
its defense at any time after it commences such defense), then the
indemnified party may, at its option, defend, settle or otherwise
compromise or pay such action or claim. In any event, unless and
until the indemnifying party elects in writing to assume and does
so assume the defense of any such claim, proceeding or action, the
indemnified party’s costs and expenses arising out of the
defense, settlement or compromise of any such action, claim or
proceeding shall be losses subject to indemnification hereunder.
The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the
indemnified party, which relates to such action or claim. The
indemnifying party shall keep the indemnified party fully apprised
at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects
to defend any such action or claim, then the indemnified party
shall be entitled to participate in such defense with counsel of
its choice at its sole cost and expense. The indemnifying party
shall not be liable for any settlement of any action, claim or
proceeding affected without its prior written consent.
Notwithstanding anything in this Section 8 to the contrary, the
indemnifying party shall not, without the indemnified party’s
prior written consent, settle or compromise any claim or consent to
entry of any judgment in respect thereof which imposes any future
obligation on the indemnified party or which does not include, as
an unconditional term thereof, the giving by the claimant or the
plaintiff to the indemnified party of a release from all liability
in respect of such claim. The indemnification required by this
Section 8 shall be made by periodic payments of the amount thereof
during the course of investigation or defense, as and when bills
are received or expense, loss, damage or liability is incurred, so
long as the indemnified party irrevocably agrees to refund such
moneys if it is ultimately determined by a court of competent
jurisdiction that such party was not entitled to indemnification.
The indemnity agreements contained herein shall be in addition to
(a) any cause of action or similar rights of the indemnified party
against the indemnifying party or others, and (b) any liabilities
the indemnifying party may be subject to pursuant to the
law.
9. Miscellaneous
(a) Fees and Expenses. Each party
shall pay the fees and expenses of its advisors, counsel,
accountants and other experts, if any, and all other expenses,
incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement.
-13-
(b) Confidentiality; Non-Public
Information. Lender acknowledges and agrees that that the
existence of this Agreement and the information contained herein
and in the other Transaction Documents is of a confidential nature
and shall not, without the prior written consent of the Company, be
disclosed by Lender to any person or entity, other than
Lender’s personal financial and legal advisors for the sole
purpose of evaluating an investment in the Company, and that it
shall not, without the prior written consent of the Company,
directly or indirectly, make any statements, public announcements
or release to trade publications or the press with respect to the
subject matter of this Agreement. Lender further acknowledges and
agrees that the information contained herein and in the other
documents relating to this transaction may be regarded as material
non-public information under United States federal securities laws,
and that United States federal securities laws prohibit any person
who has received material non-public information relating to the
Company from purchasing or selling securities of the Company, or
from communicating such information to any person under
circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell securities of the Company.
Accordingly, until such time as any such non-public information has
been adequately disseminated to the public, Lender shall not
purchase or sell any securities of the Company, or communicate such
information to any other person.
(c) Governing Law. This Agreement
and all actions arising out of or in connection with this Agreement
shall be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflicts of law
principles, which would result in the application of the
substantive law of another jurisdiction. This Agreement shall not
be interpreted or construed with any presumption against the party
causing this Agreement to be drafted.
(d) Consent to Jurisdiction; Venue.
The parties agree that venue for any dispute arising under this
Agreement will lie exclusively in the state or federal courts
located in New York, and the parties irrevocably waive any right to
raise forum non conveniens
or any other argument that New York is not the proper venue. The
parties irrevocably consent to personal jurisdiction in the state
and federal courts of the state of New York. The Company and each
Lender consent to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address
in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of
process and notice thereof. Nothing in this Section 9(d) shall
affect or limit any right to serve process in any other manner
permitted by law. The Company and the Lenders hereby agree that the
prevailing party in any suit, action or proceeding arising out of
or relating to the Securities, this Agreement or the other
Transaction Documents, shall be entitled to reimbursement for
reasonable legal fees from the non-prevailing party. The parties
hereby waive all rights to a trial by jury.
(e) Entire Agreement. This
Agreement together with the exhibits attached hereto constitutes
the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof.
(f) Notices. All notices and other
communications required or permitted hereunder shall be in writing
and shall be hand delivered or sent via facsimile, overnight
courier service or mailed by certified or registered mail, postage
prepaid, return receipt requested, addressed or sent to the
addresses listed on the signature page hereto or at such other
addresses as the parties shall have furnished to each other in
writing. Notices sent via hand delivery shall be effective when
received, notices sent facsimile shall be effective upon written
confirmation of transmission (if also sent by another form of
notice permitted hereunder within 24 hours of sending the
facsimile), notices sent by overnight courier shall be effective
upon receipt, and notices mailed by certified or registered mail,
postage prepaid return receipt requested, shall be effective five
business days after deposit with the U.S. Postal
Service.
(g) Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns. After the Closing, the
assignment by a party to this Agreement of any rights hereunder
shall not affect the obligations of such party under this
Agreement. The Lenders may assign the Securities and its rights
under this Agreement and the other Transaction Documents and any
other rights hereto and thereto without the consent of the
Company.
(h) No Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns and is not
for the benefit of, nor may any provision hereof be enforced by,
any other person.
(i) Validity. If any provision of
this Agreement or the Note shall be judicially determined to be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(j) Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall
be an original, but all of which together shall be deemed to
constitute one instrument.
[Remainder of Page Intentionally Left Blank]
-14-
IN
WITNESS WHEREOF, the parties have caused this Convertible Note and
Warrant Purchase Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the date and year
first written above.
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ADDRESS:
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000
Xxxxxxxx Xxxxxx
Xxxxxxxxx
Biotechnology Incubator,
Xxxxx
000
Xxxxxxxx,
XX 00000
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By:
Xxxxx
Xxxxxxxxxx
Chief
Executive Officer
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-15-
|
ADDRESS:
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LENDER:
|
|
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By:
Name:Title:
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|
|
Principal
Amount of Note Purchased: $_________
|
|
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Number
of Warrant Shares (Number of Conversion Shares Issuable upon
Conversion of Note Purchased Multiplied by 50%):
_________
___________
|
-16-
