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EXHIBIT 4.08
PURCHASE AGREEMENT
THIS AGREEMENT is made as of the __ day of September, 1999, by and between
Guilford Pharmaceuticals Inc. (the "Company"), a corporation organized under the
laws of the State of Delaware, with its principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the purchaser whose name and address is
set forth on the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of up to
__________ shares (the "Shares") of common stock, par value $0.01 per share (the
"Common Stock"), of the Company.
SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing (as
defined in Section 3), the Company will sell to the Purchaser, and the Purchaser
will buy from the Company, upon the terms and conditions hereinafter set forth,
the number of Shares (at the purchase price) shown below:
Price Per
Number to Be Share In Aggregate
Purchased Dollars Price
--------- ------- -----
The Company proposes to enter into this same form of purchase agreement
with certain other investors (the "Other Purchasers") and expects to complete
sales of the Shares to them. The Purchaser and the Other Purchasers are
hereinafter sometimes collectively referred to as the "Purchasers," and this
Agreement and the agreements executed by the Other Purchasers are hereinafter
sometimes collectively referred to as the "Agreements." The term "Placement
Agent" shall mean the Prudential Vector Healthcare Group, a unit of Prudential
Securities Incorporated.
SECTION 3. Delivery of the Shares at the Closing. The completion of the
purchase and sale of the Shares (the "Closing") shall occur as soon as
practicable and as agreed by the parties hereto following notification by the
staff of the Securities and Exchange Commission (the "Commission") to the
Company of the staff's willingness to grant acceleration of effectiveness of the
registration statement to be filed by the Company pursuant to Section 7.1 hereof
(the "Registration Statement") at a place and time (the "Closing Date") to be
agreed upon by the Company and the Placement Agent and of which the Purchasers
will be notified by
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facsimile transmission or otherwise, provided that in no event shall the closing
occur earlier than the expiration of any required waiting period under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended.
At the Closing, the Company shall deliver to the Purchaser one or more
stock certificates registered in the name of the Purchaser, or in such nominee
name(s) as designated by the Purchaser in writing, representing the number of
Shares set forth in Section 2 above. The name(s) in which the stock certificates
are to be registered are set forth in the Stock Certificate Questionnaire
attached hereto as part of Appendix I. The Company's obligation to complete the
purchase and sale of the Shares and deliver such stock certificate(s) to the
Purchaser at the Closing shall be subject to the following conditions, any one
or more of which may be waived by the Company: (a) receipt by the Company of
same-day funds in the full amount of the purchase price for the Shares being
purchased hereunder; (b) completion of the purchases and sales under the
Agreements with all of the Other Purchasers; and (c) the accuracy of the
representations and warranties made by the Purchasers and the fulfillment of
those undertakings of the Purchasers to be fulfilled prior to the Closing. The
Purchaser's obligation to accept delivery of such stock certificate(s) and to
pay for the Shares evidenced thereby shall be subject to the following
conditions: (a) the staff of the Commission having notified the Company of the
staff's willingness to accelerate the effectiveness of the Registration
Statement on or prior to the 75th day after the date the Registration Statement
was filed by the Company; and (b) the accuracy in all material respects of the
representations and warranties made by the Company herein and the fulfillment in
all material respects of those undertakings of the Company to be fulfilled prior
to Closing, including the Company's undertaking to prepare and file the
Registration Statement pursuant to Section 7.1(a) hereof. The Purchaser's
obligations hereunder are expressly not conditioned on the purchase by any or
all of the Other Purchasers of the Shares that they have agreed to purchase from
the Company.
SECTION 4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Purchaser, as
of the date hereof, as follows:
4.1 Organization and Qualification. The Company and each of its significant
subsidiaries (as that term is defined under the rules and regulations under
Securities Act of 1933) ("subsidiaries") is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and the Company and each of its subsidiaries is qualified to do
business as a foreign corporation in each jurisdiction in which qualification is
required, except where the failure to so qualify would not individually or in
the aggregate have a material adverse effect on the financial condition, results
of operations or prospects of the Company and its subsidiaries taken as a whole
(a "Material Adverse Effect").
4.2 Authorized Capital Stock. Except as disclosed in the Confidential
Private Placement Memorandum dated August 27, 1999 prepared by the Company
(including all Exhibits (except Exhibit G), supplements and amendments thereto
and documents expressly incorporated by reference in any Exhibits (except
Exhibit G), the "Private Placement Memorandum"), the Company had authorized and
outstanding capital stock as set forth under the
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heading "Capitalization" in the Private Placement Memorandum as of the date set
forth therein; the issued and outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, were not issued
in violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities, and conform in all material respects to the
description thereof contained in the Private Placement Memorandum. Except as
disclosed in the Private Placement Memorandum and except for shares issuable
under other Agreements and options issued under the Company's stock plans after
August 13, 1999, the Company does not have outstanding any options or warrants
to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any shares of
capital stock of any subsidiary and there is no commitment, plan or arrangement
to issue, any securities or obligations convertible into any shares of capital
stock of the Company or its subsidiaries or any such options, rights convertible
securities or obligations. The description of the Company's capital stock, stock
bonus and other stock plans or arrangements and the options or other rights
granted and exercised thereunder, contained in the Private Placement Memorandum
accurately and fairly presents the information required to be shown with respect
to such capital stock, plans, arrangements, options and rights.
4.3 Issuance, Sale and Delivery of the Shares. The Shares have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform in all material respects to the description
thereof set forth in the Private Placement Memorandum. The issued shares of
capital stock of each of the Company's subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable and are owned by the
Company free and clear of any perfected security interest, or any other security
interests, liens, encumbrances, equities or claims. No preemptive rights or
other rights to subscribe for or purchase exist with respect to the issuance and
sale of the Shares by the Company pursuant to this Agreement. Except for rights
disclosed in the Private Placement Memorandum, no stockholder of the Company has
any right (which has not been waived or has not expired by reason of lapse of
time following notification of the Company's intent to file the Registration
Statement) to request or require the Company to register the sale of any shares
owned by such stockholder under the Securities Act of 1933, as amended (the
"Securities Act"), in the Registration Statement. No further approval or
authority of the stockholders or the Board of Directors of the Company will be
required for the issuance and sale of the Shares to be sold by the Company as
contemplated herein.
4.4 Due Execution, Delivery and Performance of the Agreements. The Company
has full legal right, corporate power and authority to enter into the Agreements
and perform the transactions contemplated hereby and thereby. The Agreements
have been duly authorized, executed and delivered by the Company. The execution,
delivery and performance of the Agreements by the Company and the consummation
of the transactions herein and therein contemplated will not violate any
provision of the organizational documents of the Company or any of its
subsidiaries and will not result in the creation of any lien, charge, security
interest or encumbrance upon any assets or property of the Company or any of its
subsidiaries pursuant to
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the terms or provisions of, or will not conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the passage of
time or both, a default under any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective assets or properties may be bound or
affected or, to the Company's knowledge, any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental body applicable to the Company or
any of its subsidiaries or any of their respective properties. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution,
delivery and performance of the Agreements or the consummation of the
transactions contemplated hereby or thereby, except for compliance with the Blue
Sky laws and federal securities laws applicable to the offering of the Shares.
Upon their execution and delivery, and assuming the valid execution thereof by
the respective Purchasers, the Agreements will constitute legal, valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as the
indemnification agreements of the Company in Section 7.3 hereof may be legally
unenforceable.
4.5 Accountants. KPMG LLP have expressed their opinion with respect to the
audited consolidated financial statements to be incorporated by reference into
the Registration Statement and the Prospectus which forms a part thereof from
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998, and are independent accountants as required by the Securities Act and the
rules and regulations promulgated thereunder (the "Rules and Regulations"). The
Company's consolidated financial statements (including all notes and schedules
thereto) included in the Private Placement Memorandum present fairly the
financial position, the results of operations, the statements of cash flows and
the statements of stockholders' equity and the other information purported to be
shown therein of the Company and its subsidiaries at the respective dates and
for the respective periods to which they apply and such consolidated financial
statements have been prepared in conformity with generally accepted accounting
principles, consistently applied throughout the periods involved.
4.6 No Defaults. Neither the Company nor any of its subsidiaries is (i) in
violation or default in any material respect of any provision of its certificate
of incorporation, bylaws or other organizational documents, or (ii) in breach of
or default with respect to any provision of any agreement, judgment, decree,
order, mortgage, deed of trust, lease, franchise, license, indenture, permit or
other instrument to which it is a party or by which it or any of its assets or
properties are bound, except for breaches and defaults which individually or in
the aggregate would not have a Material Adverse Effect; and there does not exist
any state of fact which, with notice or lapse of time or both, would constitute
an event of default on the part of the Company or any of its subsidiaries as
defined in such documents, except such defaults which individually or in the
aggregate would not have a Material Adverse Effect.
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4.7 Contracts. The contracts described in the Private Placement Memorandum
that are material to the Company and its subsidiaries are in full force and
effect on the date hereof and are valid and enforceable by the Company in
accordance with the terms thereof, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, and except as may be limited by general principles of equity
and public policy; and neither the Company nor any of its subsidiaries, nor, to
the Company's knowledge, any other party are in breach of or default under any
of such contracts, which breaches and defaults would individually or in the
aggregate have a Material Adverse Effect.
4.8 No Actions. Except as disclosed in the Private Placement Memorandum,
there are no legal or governmental actions, suits or proceedings pending or, to
the Company's knowledge, threatened to which the Company or any of its
subsidiaries is or may be a party or of which property owned or leased by the
Company or any of its subsidiaries is or may be the subject, or related to
environmental or discrimination matters, which actions, suits or proceedings,
individually or in the aggregate, might prevent or might reasonably be expected
to materially and adversely affect the transactions contemplated by this
Agreement or result in a Material Adverse Effect; and no labor disturbance by
the employees of the Company or any of its subsidiaries exists or, to the
Company's knowledge, is imminent which might reasonably be expected to have a
Material Adverse Effect. Except as disclosed in the Private Placement
Memorandum, neither the Company nor any of its subsidiaries is a party to or
subject to the provisions of any material injunction, judgment, decree or order
of any court, regulatory body administrative agency or other governmental body.
4.9 Properties. Each of the Company and its subsidiaries has good and
marketable title to all the properties and assets reflected as owned by them in
the consolidated financial statements included in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except (i) those, if any,
reflected in such consolidated financial statements, or (ii) those which are not
material in amount and do not materially and adversely affect the use made and
intended to be made of such property by the Company or its subsidiaries. Each of
the Company and its subsidiaries holds its leased properties under valid and
binding leases, with such exceptions as are not materially significant in
relation to the business of the Company and its subsidiaries, taken as a whole.
Except as disclosed in the Private Placement Memorandum, each of the Company and
its subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted.
4.10 No Material Change. Since June 30, 1999 (i) neither the Company nor
its subsidiaries have incurred any liabilities or obligations, indirect, or
contingent, or entered into any verbal or written agreement or other transaction
which is not in the ordinary course of business or which could reasonably be
expected to result in a material reduction in the future earnings of the Company
or its subsidiaries or in a Material Adverse Effect; (ii) neither the Company
nor its subsidiaries have sustained any material loss or interference with its
businesses or properties from fire, flood, windstorm, accident or other calamity
not covered by insurance; (iii) neither the Company nor its subsidiaries have
paid or declared any dividends or other distributions with respect to its
capital stock and neither the Company nor its subsidiaries is in
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default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock of the
Company other than the sale of the Shares hereunder and shares or options issued
pursuant to exercise of outstanding warrants or employee and director stock
option plans approved by the Company's Board of Directors, or indebtedness
material to the Company (other than in the ordinary course of business); and (v)
except for operating losses and changes to the Company's financial condition
resulting therefrom, there has not been a change that would result in a Material
Adverse Effect.
4.11 Intellectual Property. Except as otherwise disclosed in the Private
Placement Memorandum, (i) The Company and its subsidiaries own or have obtained
valid licenses, options or rights to use for the material inventions, patent
applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights and trade secrets necessary for the conduct of the
Company's and its subsidiaries' respective businesses as currently conducted and
as the Private Placement Memorandum indicates the Company and its subsidiaries
contemplate conducting in all material respects (collectively, the "Intellectual
Property"); (ii) neither the Company nor any of its subsidiaries has received
notice of any third parties who have any ownership rights to any Intellectual
Property that is owned by, or has been licensed to, the Company or its
subsidiaries for the product indications described in the Private Placement
Memorandum that would preclude the Company or its subsidiaries from conducting
their respective businesses as currently conducted and as the Private Placement
Memorandum indicates the Company and its subsidiaries contemplate conducting in
all material respects; (iii) to the Company's knowledge there are currently no
sales of any products that would constitute an infringement by third parties of
any material Intellectual Property owned, licensed or optioned by the Company or
its subsidiaries; (iv) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the rights of
the Company or its subsidiaries in or to any material Intellectual Property
owned, licensed or optioned by the Company or its subsidiaries; (v) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the validity or scope of any material Intellectual
Property owned, licensed or optioned by the Company or its subsidiaries; and
(vi) there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others that the Company or its subsidiaries
infringe or otherwise violate any patent, trademark, copyright, trade secret or
other proprietary right of others as would reasonably be expected to result in a
Material Adverse Effect.
4.12 Compliance. Neither the Company nor any of its subsidiaries has been
advised, and has no reason to believe, that it is not conducting its business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, including, without limitation, all
applicable local, state and federal environmental laws and regulations; except
where failure to be so in compliance would not individually or in the aggregate
have a Material Adverse Effect.
4.13 Taxes. Each of the Company and its subsidiaries has filed or obtained
filing extensions with respect to all federal, state, local and foreign income
and franchise tax returns material to the Company and the subsidiaries, taken as
a whole and has paid or accrued all taxes shown as due thereon, and neither the
Company nor any of its subsidiaries has
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knowledge of a tax deficiency which has been or might be asserted or threatened
against it which would reasonably be expected to have a Material Adverse Effect.
4.14 Transfer Taxes. On the Closing Date, all stock transfers or other
taxes (other than income taxes) which are required to be paid in connection with
the sale and transfer of the Shares to be sold to the Purchaser hereunder will
be, or will have been, fully paid or provided for by the Company and all laws
imposing such taxes will be or will have been fully complied with.
4.15 Insurance. Each of the Company and its subsidiaries maintains
insurance of the type and in the amount that the Company reasonably believes is
adequate for its business, including, but not limited to, insurance covering all
real and personal property owned or leased by the Company or its subsidiaries
against risks customarily insured against by similarly situated companies, all
of which insurance is in full force and effect.
4.16 Contributions. Neither the Company at any time since its incorporation
nor its subsidiaries at any time since they were acquired or formed by the
Company have, directly or indirectly, (i) made any unlawful contribution to any
candidate for public office, or failed to disclose fully where required by law
any contribution in violation of law, or (ii) made any payment to any federal or
state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof and in each case except
for instances that would not have a Material Adverse Effect.
4.17 Year 2000 Compliance. The Company has reviewed its operations to
evaluate the extent to which the business or operations of the Company and its
subsidiaries will be affected by the Year 2000 Problem (as defined below). As a
result of such review, the Company has no reason to believe, and does not
believe, that the Year 2000 Problem will have a Material Adverse Effect. The
"Year 2000 Problem" as used herein means any significant risk that computer
hardware or software used in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission or other utilization of data or
in the operation of mechanical or electrical systems of any kind will not, in
the case of dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
4.18 Investment Company. The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.
4.19 Offering Materials. The Company has not distributed and will not
distribute prior to the Closing Date any offering material in connection with
the offering and sale of the Shares other than the Private Placement Memorandum
or any amendment or supplement thereto. The Company has not nor will it take any
action independent of the Placement Agent to sell, offer for sale or solicit
offers to buy any securities of the Company which would reasonably
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be expected to cause the offer or sale of the Shares, as contemplated by this
Agreement, to be within the provisions of Section 5 of the Securities Act.
4.20 Related Party Transactions. No transaction has occurred between or
among the Company and its affiliates, officers or directors or any affiliate or
affiliates of any such officer or director that is required to be described in
the Company's reports and other filings under the Securities Exchange Act of
1934 (the "Exchange Act") attached as Exhibits to the Private Placement
Memorandum that is not so described.
4.21 Books and Records. The books, records and accounts of the Company
accurately and fairly reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of, the Company,
all to the extent required by generally accepted accounting principles. The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurances 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 accordance 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 action
is taken with respect to any differences.
4.22 Additional Information. The Company represents and warrants that each
of the following documents, which the Placement Agent has furnished to the
Purchaser, or will furnish prior to the Closing, as of its date (or date of
filing with the Commission, as applicable), does not or will not contain an
untrue statement of a material fact or omit or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were or will be made, not misleading:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
(b) the Company's Quarterly Reports on Form 10-Q for the periods ended
March 31, 1999 and June 30, 1999;
(c) the Company's Proxy Statement for the 1999 Annual Meeting of
Stockholders;
(d) the Resale Registration Statement;
(e) the Private Placement Memorandum, including all addenda and exhibits
thereto (other than the Appendices); and
(f) all other documents, if any, filed by the Company with the Securities
and Exchange Commission since June 30, 1999 pursuant to the reporting
requirements of the Exchange Act.
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4.23 Legal Opinions. Prior to and as a condition to the Closing, (i) ▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP, counsel to the Company, will deliver its legal opinion to the
Placement Agent in form and substance as agreed with the Placement Agent and
(ii) intellectual property counsel to the Company will deliver its legal opinion
to the Placement Agent as to certain intellectual property matters in form and
substance as agreed with the Placement Agent. Each such opinion shall also state
that each of the Purchasers may rely thereon as though it were addressed
directly to such Purchaser.
4.24 Certificate. At the Closing, the Company will deliver to the Purchaser
a certificate executed by the Chairman of the Board or President and the chief
financial or accounting officer of the Company, dated the Closing Date, to the
effect that the representations and warranties of the Company set forth in this
Section 4 are true and correct in all material respects as of the date of this
Agreement and as of the Closing Date (except for such changes or modifications
as are specified therein), and the Company has complied with all the agreements
and satisfied all the conditions herein on its part to be performed or satisfied
on or prior to such Closing Date.
SECTION 5. Representations, Warranties and Covenants of the Purchaser. (a)
The Purchaser represents and warrants to, and covenants with, the Company that:
(i) the Purchaser is knowledgeable, sophisticated and experienced in making, and
is qualified to make, decisions with respect to investments in shares
representing an investment decision like that involved in the purchase of the
Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the Shares; (ii) the Purchaser is
acquiring the number of Shares set forth in Section 2 above in the ordinary
course of its business and for its own account for investment only and with no
present intention of distributing any of such Shares or any arrangement or
understanding with any other persons regarding the distribution of such Shares
(it being understood that the foregoing does not limit the Purchaser's right to
sell Shares pursuant to the Registration Statement or, other than with respect
to any claims arising out of a breach of this Section 5, the Purchaser's right
to indemnification pursuant to Section 7.3); (iii) the Purchaser will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Shares except in compliance with the Securities Act and the Rules
and Regulations; (iv) the Purchaser has completed or caused to be completed the
Registration Statement Questionnaire and the Stock Certificate Questionnaire,
both attached hereto as Appendix I, for use in preparation of the Registration
Statement, and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the effective date of the Registration
Statement; (v) the Purchaser has, in connection with its decision to purchase
the number of Shares set forth in Section 2 above, relied solely upon the
Private Placement Memorandum and the documents included therein and the
representations and warranties of the Company contained herein; (vi) the
Purchaser is an "accredited investor" within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act; and (vi) the Purchaser is not
a "dealer" within the meaning of the Securities Act or a "broker" or "dealer"
within the meaning of the Exchange Act.
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(b) The Purchaser hereby covenants with the Company not to make any sale of
the Shares under the Registration Statement without effectively causing the
prospectus delivery requirement under the Securities Act to be satisfied, and
the Purchaser acknowledges and agrees that such Shares are not transferable on
the books of the Company unless the certificate submitted to the transfer agent
evidencing the Shares is accompanied by a separate officer's certificate: (i) in
the form of Appendix II hereto, (ii) executed by an officer of, or other
authorized person designated by, the Purchaser, and (iii) to the effect that (A)
the Shares have been sold in accordance with the Registration Statement and (B)
the requirement of delivering a current prospectus has been satisfied. The
Purchaser acknowledges that there may occasionally be times when the Company
must suspend the use of the prospectus forming a part of the Registration
Statement until such time as an amendment to the Registration Statement has been
filed by the Company and declared effective by the Commission, or until such
time as the Company has filed an appropriate report with the Commission pursuant
to the Exchange Act. The Purchaser hereby covenants that it will not sell any
Shares pursuant to said prospectus during the period commencing at the time at
which the Company gives the Purchaser written notice of the suspension of the
use of said prospectus and ending at the time the Company gives the Purchaser
written notice that the Purchaser may thereafter effect sales pursuant to said
prospectus. The Purchaser further covenants to notify the Company promptly of
the sale of all of its Shares.
(c) The Purchaser further represents and warrants to, and covenants with,
the Company that (i) the Purchaser has full right, power, authority and capacity
to enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action, obtained all necessary consents and
has satisfied or will satisfy all notification and filing requirements necessary
to authorize the execution, delivery and performance of this Agreement by the
Purchaser, and (ii) upon the execution and delivery of this Agreement, this
Agreement shall constitute a legal, valid and binding obligation of the
Purchaser, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification agreements of the Purchaser in Section 7.3
hereof may be legally unenforceable.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement or by the
Placement Agent, all covenants, agreements, representations and warranties made
by the Company and the Purchaser herein and in the certificates for the Shares
delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares being purchased and the payment
therefor.
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SECTION 7. Registration of the Shares; Compliance with the Securities Act.
7.1 Registration Procedures and Expenses. The Company shall:
(a) as soon as practicable, prepare and file with the Commission the
Registration Statement on Form S-3 relating to the sale of the Shares
by the Purchaser from time to time on the Nasdaq National Market or
the facilities of any national securities exchange on which the Common
Stock is then traded or in privately-negotiated transactions;
(b) use its reasonable efforts, subject to receipt of necessary
information from the Purchasers, to cause the staff of the Commission
to notify the Company of the staff's willingness to grant acceleration
of the effective date of the Registration Statement within 75 days
after the Registration Statement is filed by the Company;
(c) prepare and file with the Commission such amendments and supplements
to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement
effective until the earlier of (i) two years after the effective date
of the Registration Statement or (ii) the date on which the Shares may
be resold by the Purchasers without registration by reason of Rule
144(k) under the Securities Act or any other rule of similar effect;
(d) furnish to the Purchaser with respect to the Shares registered under
the Registration Statement (and to each underwriter, if any, of such
Shares) such number of copies of prospectuses and such other documents
as the Purchaser may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Shares by the
Purchaser; provided, however, that the obligation of the Company to
deliver copies of prospectuses to the Purchaser shall be subject to
the receipt by the Company of reasonable assurances from the Purchaser
that the Purchaser will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such prospectuses;
(e) file documents required of the Company for normal blue sky clearance
in states specified in writing by the Purchaser; provided, however,
that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not
now so qualified or has not so consented; and
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(f) bear all expenses in connection with the procedures in paragraphs (a)
through (e) of this Section 7.1 and the registration of the Shares
pursuant to the Registration Statement, other than fees and expenses,
if any, of counsel or other advisers to the Purchaser or the Other
Purchasers or underwriting discounts, brokerage fees and commissions
incurred by the Purchaser or the Other Purchasers, if any.
7.2 Transfer of Shares After Registration. The Purchaser agrees that it
will not effect any disposition of the Shares or its right to purchase the
Shares that would constitute a sale within the meaning of the Securities Act,
except as contemplated in the Registration Statement referred to in Section 7.1,
and that it will promptly notify the Company of any changes in the information
set forth in the Registration Statement regarding the Purchaser or its plan of
distribution.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Purchaser/Affiliate" shall mean the Purchaser and any person
who controls the Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act; and
(ii) the term "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1.
(a) The Company agrees to indemnify and hold harmless the Purchaser and
each Purchaser/Affiliate, against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Purchaser or such Purchaser/Affiliate
may become subject, under the Securities Act, the Exchange Act, or any other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, as amended at the
time of effectiveness of the Registration Statement, including any information
deemed to be a part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules and
Regulations, or the prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state in any of them a material
fact required to be stated therein or necessary to make the statements in the
Registration Statement or any amendment or supplement thereto not misleading or
in the Prospectus or any amendment or supplement thereto not misleading in the
light of the circumstances under which they were made, or arise out of or are
based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained in this Agreement, or any failure of the
Company to perform its obligations
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hereunder, and will reimburse the Purchaser and each such Purchaser/Affiliate
for any legal and other expenses as such expenses are reasonably incurred by
such Purchaser or such Purchaser/Affiliate in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by the Purchaser expressly for use therein, or (ii) the failure of such
Purchaser to comply with the covenants and agreements contained in Sections 5(b)
or 7.2 hereof respecting the sale of the Shares, or (iii) the inaccuracy of any
representations made by such Purchaser herein or (iv) any statement or omission
in any Prospectus that is corrected in any subsequent Prospectus that was
delivered to the Purchaser prior to the pertinent sale or sales by the
Purchaser.
(b) The Purchaser will indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act and the Exchange Act, against any losses, claims, damages, liabilities or
expenses to which the Company, each of its directors, each of its officers who
signed the Registration Statement or controlling person may become subject,
under the Securities Act, the Exchange Act, or any other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Purchaser) insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof as contemplated below) arise out of
or are based upon (i) any failure to comply with the covenants and agreements
contained in Sections 5(b) or 7.2 hereof respecting the sale of the Shares or
(ii) the inaccuracy of any representation made by such Purchaser herein or (iii)
any untrue or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or (iv) the omission or alleged omission to state in the Registration Statement,
the Prospectus or any amendment or supplement thereto a material fact required
to be stated therein or necessary to make the statements in the Registration
Statement or any amendment or supplement thereto not misleading or in the
Prospectus or any amendment or supplement thereto not misleading in the light of
the circumstances under which they were made, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by the Purchaser
expressly for use therein, and will reimburse the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person for any legal and other expense reasonably incurred by the
Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action.
(c) Promptly after receipt by an indemnified party under this Section 7.3
of notice of the threat or commencement of any action, such indemnified party
will, if a claim in
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respect thereof is to be made against an indemnifying party under this Section
7.3 promptly notify the indemnifying party in writing thereof; but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 7.3 or to the extent it is not
prejudiced as a result of such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be a conflict between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 7.3 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel,
approved by such indemnifying party in the case of paragraph (a), representing
the indemnified parties who are parties to such action, plus local counsel, if
appropriate) or (ii) the indemnified party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of action, in each
of which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party.
(d) If the indemnification provided for in this Section 7.3 is required by
its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b) or
(c) of this Section 7.3 in respect to any losses, claims, damages, liabilities
or expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Purchaser from the placement of the Common Stock
contemplated by this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
the relative fault of the Company and the Purchaser in connection with the
statements or omissions or inaccuracies in the representations and warranties in
this Agreement that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and each Purchaser on the other
shall be deemed to be in the same proportion as the amount paid by such
Purchaser to the
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Company pursuant to this Agreement for the Shares purchased by such Purchaser
that were sold pursuant to the Registration Statement bears to the difference
(the "Difference") between the amount such Purchaser paid for the Shares that
were sold pursuant to the Registration Statement and the amount received by such
Purchaser from such sale. The relative fault of the Company on the one hand and
each Purchaser on the other shall be determined by reference to, among other
things, whether the untrue or alleged statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company or by such Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in paragraph (c) of this
Section 7.3, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in paragraph (c) of this Section 7.3 with respect to the
notice of the threat or commencement of any threat or action shall apply if a
claim for contribution is to be made under this paragraph (d); provided,
however, that no additional notice shall be required with respect to any threat
or action for which notice has been given under paragraph (c) for purposes of
indemnification. The Company and each Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 7.3 were determined
solely by pro rata allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 7.3, the Purchaser shall not be
required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
7.4 Termination of Conditions and Obligations. The conditions precedent
imposed by Section 5 or this Section 7 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Shares on the date
all such Shares are eligible for sale under Rule 144(k) or at such time as an
opinion of counsel satisfactory in form and substance to the Company shall have
been rendered to the effect that such conditions are not necessary in order to
comply with the Securities Act.
7.5 Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Purchaser, the Company will
furnish to the Purchaser:
(a) as soon as practicable after available (but in the case of the
Company's Annual Report to Stockholders, within 120 days after the end
of each fiscal year of the Company), one copy of (i) its Annual Report
to Stockholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants), (ii)
if not included in substance in the Annual Report to Stockholders, its
Annual Report on
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Form 10-K, (iii) its Quarterly Reports on Form 10-Q, (iv) its Current
Reports on Form 8-K, and (v) a full copy of the particular
Registration Statement covering the Shares (the foregoing, in each
case, excluding exhibits);
(b) upon the written request of the Purchaser, all exhibits excluded by
the parenthetical to subparagraph (a)(v) of this Section 7.5; and
(c) upon the written request of the Purchaser, a reasonable number of
copies of the prospectuses to supply to any other party requiring such
prospectuses in connection with the Purchaser's prospectus delivery
requirements under the Securities Act;
and the Company, upon the reasonable request of the Purchaser, will meet with
the Purchaser or a representative thereof at the Company's headquarters to
discuss information relevant for disclosure in the Registration Statement
covering the Shares, subject to appropriate confidentiality limitations as the
Company may require.
SECTION 8. Broker's Fee. The Purchaser acknowledges that the Company
intends to pay to the Placement Agent a fee in respect of the sale of the Shares
to the Purchaser. Each of the parties hereto hereby represents that, on the
basis of any actions and agreements by it, there are no other brokers or finders
entitled to compensation in connection with the sale of the Shares to the
Purchaser.
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SECTION 9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:
(a) if to the Company, to:
Guilford Pharmaceuticals Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Silver
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person at such other place as the Company shall
designate to the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth at the end of this
Agreement, or at such other address or addresses as may have been
furnished to the Company in writing.
SECTION 10. Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Purchaser.
SECTION 11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 12. Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the federal
law of the United States of America.
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SECTION 14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
GUILFORD PHARMACEUTICALS INC.
By:
---------------------------------
Name:
Title:
Print or Type:
Name of Purchaser
(Individual or Institution):
---------------------------------
Name of Individual representing
Purchaser (if an Institution):
---------------------------------
Title of Individual representing
Purchaser (if an Institution):
---------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
---------------------------------
Address:
-------------------------------
Telephone:
-------------------------------
Facsimile:
-------------------------------
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Appendix I
(one of two)
GUILFORD PHARMACEUTICALS INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of this Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be registered in (this is the name
that will appear on your stock certificate(s)). You may use a nominee name
if appropriate:
-----------------------
2. The relationship between the Purchaser of the Shares and the Registered
Holder listed in response to item 1 above:
-----------------------
3. The mailing address of the Registered Holder listed in response to item 1
above:
-----------------------
----------------------
----------------------
----------------------
4. The Social Security Number or Tax Identification Number of the Registered
Holder listed in response to item 1 above:
-----------------------
21
GUILFORD PHARMACEUTICALS INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Stockholder" section of the Registration
Statement, please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the number of shares that you or your organization will
own immediately after Closing, including those Shares purchased by you or your
organization pursuant to this Agreement and those shares purchased by you or
your organization through other transactions:
3. Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its affiliates?
Yes No
----- -----
If yes, please indicate the nature of any such relationships below:
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
22
APPENDIX II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly authorized by]
_____________________________________________________________
[fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of
the shares evidenced by the attached certificate, and as such,
sold such shares on ________ in accordance with
[date]
Registration Statement number _____________________________________
[fill in the number of or otherwise
________________________________ and the requirement of delivering a
identify Registration Statement]
current prospectus by the Company has been complied with in connection with such
sale.
Print or Type:
Name of Purchaser
(Individual or
Institution): ______________________
Name of Individual
representing
Purchaser (if an
Institution) ______________________
Title of Individual
representing
Purchaser (if an
Institution): ______________________
Signature by:
Individual Purchaser
or Individual
representing Purchaser: ______________________
