EXHIBIT 4.7
[FORM OF] SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (this "Agreement") made as of the date set forth
on the signature page hereof between InKine Pharmaceutical Company, Inc., a New
York corporation (the "Company"), and the undersigned (the "Subscriber").
WITNESSETH:
WHEREAS, the Company is offering in a private placement to accredited
investors (the "Offering") a minimum (the "Minimum Offering") of 1,290,323
shares of its common stock, par value $.0001 per share (the "Common Stock") and
a maximum (the "Maximum Offering") of 3,225,806 shares of Common Stock, all at a
purchase price of $1.55 per share as well as warrants to purchase thirty-five
percent (35%) of the total number of Shares sold pursuant to this Offering. The
shares of Common Stock offered hereby are sometimes referred to as the "Shares"
and the warrants offered hereby are sometimes referred to as the "Warrants" (the
"Shares" and the "Warrants" collectively, the "Securities"); and
WHEREAS, the Subscriber desires to purchase that number of Securities
set forth on the signature page hereof on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
representations and covenants hereinafter set forth, the parties hereto agree as
follows:
I. SUBSCRIPTION FOR SECURITIES AND REPRESENTATIONS BY SUBSCRIBER
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1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber
hereby irrevocably subscribes for and agrees to purchase from the Company such
number of Securities as is set forth upon the signature page hereof at a price
of $1.55 per Share and the Company agrees to sell such Securities to the
Subscriber for said purchase price. The purchase price is payable by personal or
business check, wire transfer of immediately available funds or money order made
payable to "InKine Pharmaceutical Company, Inc." contemporaneously with the
execution and delivery of this Agreement by the Subscriber. All wires should be
sent to:
BANK: First Union Bank
BRANCH: Plymouth Meeting
ABA #: 000000000
A/C: InKine Pharmaceutical Company, Inc.
A/C#: 2014197930831
Certificates for the Securities will be delivered by the
Company to the Subscriber within 2 business days of the Closing (as herein
defined).
1.2 The Subscriber recognizes that the purchase of Securities involves a high
degree of risk in that (i) an investment in the Company is highly speculative
and only investors who can afford the loss of their entire investment should
consider investing in the Company; (ii) the Subscriber may not be able to
liquidate its investment; (iii) transferability of the Securities is extremely
limited; and (iv) in the event of a disposition, the Subscriber could sustain
the loss of its entire investment.
1.3 The Subscriber represents that the Subscriber is an "accredited investor"
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended, (the "Act") as indicated by the responses to
the questions contained in Section VII hereof, and that the Subscriber is able
to bear the economic risk and illiquidity of an investment in the Securities.
1.4 The Subscriber hereby acknowledges and represents that (i) the Subscriber
has prior investment experience, including investment in non-listed and
unregistered securities, or that the Subscriber has employed the services of an
investment advisor, attorney and/or accountant to read all of the documents
furnished or made available by the Company both to the Subscriber and to all
other prospective investors to evaluate the merits and risks of such an
investment on the Subscriber's behalf; (ii) the Subscriber recognizes the highly
speculative nature of an investment in the Securities; and (iii) the Subscriber
is able to bear the economic risk and illiquidity which the Subscriber assumes
by investing in the Securities.
1.5 The Subscriber (i) hereby acknowledges that it has had a reasonable
opportunity to review the Company's SEC Filings (as herein defined) under the
Act or the Exchange Act (as herein defined) and exhibits thereto on the SEC's
XXXXX database or otherwise; (ii) hereby represents that the Subscriber has been
furnished by the Company during the course of this transaction with all
information regarding the Company which the Subscriber has requested or desired
to know; (iii) has been afforded the opportunity to ask questions of and receive
answers from duly authorized officers or other representatives of the Company
concerning the terms and conditions of the Offering; and (iv) has received any
additional information which the Subscriber has requested.
1.6 (a) In making the decision to invest in the Securities, the Subscriber
has relied solely upon the information contained in the Company's SEC Filings.
To the extent necessary, the Subscriber has retained, at its own expense, and
relied upon the advice of appropriate professionals regarding the investment,
tax and legal merits and consequences of this Agreement and its purchase of the
Securities hereunder.
(b) The Subscriber covenants that no Securities were offered or sold to
it by means of any form of general solicitation or general advertising, and in
connection therewith the Subscriber did not (i) receive or review any
advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether
closed circuit or generally available; or (ii) attend any seminar, meeting or
industry investor conference whose attendees were invited by any general
solicitation or general advertising.
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1.7 The Subscriber hereby acknowledges that the Offering has not been
reviewed by the United States Securities and Exchange Commission (the "SEC")
because of the Company's representations that this Offering is intended to be
exempt from the registration requirements of Section 5 of the Act pursuant to
Sections 3(b), 4(2), or 4(6) thereof or Regulation D promulgated under the Act.
The Subscriber agrees that the Subscriber will not sell or otherwise transfer
the Securities unless they are registered under the Act or unless an exemption
from such registration is available.
1.8 The Subscriber understands that none of the Securities have been
registered under the Act by reason of a claimed exemption under the provisions
of the Act which depends, in part, upon the Subscriber's investment intention.
In this connection, the Subscriber hereby represents that the Subscriber is
purchasing the Securities for the Subscriber's own account for investment and
not with a view toward the resale or distribution thereof to others. The
Subscriber, if an entity, was not formed for the purpose of purchasing the
Securities. The Subscriber understands that Rule 144 promulgated under the Act
requires, among other conditions, a one-year holding period prior to the resale
(in limited amounts) of securities acquired in a non-public offering without
having to satisfy the registration requirements under the Act.
1.9 The Subscriber understands and hereby acknowledges that the Company is
under no obligation to register the Securities under the Act or any state
securities or "blue sky" laws other than as set forth in Section V. The
Subscriber consents that the Company may, if it desires, permit the transfer of
the Securities out of the Subscriber's name only when the Subscriber's request
for transfer is accompanied by an opinion of counsel reasonably satisfactory to
the Company that neither the sale nor the proposed transfer results in a
violation of the Act or any applicable state "blue sky" laws (collectively,
"Securities Laws").
1.10 The Subscriber consents to the placement of a legend on any certificate
or other document evidencing the Securities indicating that such Securities have
not been registered under the Act or any state securities or "blue sky" laws and
setting forth or referring to the restrictions on transferability and sale
thereof contained in this Agreement. The Subscriber is aware that the Company
will make a notation in its appropriate records and issue "stop transfer"
instructions to its transfer agent with respect to the restrictions on the
transferability of such Securities.
1.11 The Subscriber understands that the Company will review this Agreement
and, if such Subscriber is an individual, hereby gives authority to the Company
to call Subscriber's bank or place of employment or otherwise review the
financial standing of the Subscriber; and it is further agreed that and the
Company reserve the unrestricted right, without further documentation or
agreement on the part of the Subscriber, to reject or limit any subscription, to
accept subscriptions for Securities and to close the Offering to the Subscriber
at any time.
1.12 The Subscriber hereby represents that the address of the Subscriber
furnished by the Subscriber on the signature page hereof is the Subscriber's
principal residence if the Subscriber is an individual or its principal business
address if it is a corporation or other entity.
1.13 The Subscriber represents that the Subscriber has full power and
authority (corporate, statutory and otherwise) to execute and deliver this
Agreement and to purchase the Securities subscribed for hereby. This Agreement
constitutes the legal, valid and binding obligation of the Subscriber,
enforceable against the Subscriber in accordance with its terms.
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1.14 If the Subscriber is a corporation, partnership, limited liability
company, trust, employee benefit plan, individual retirement account, Xxxxx
Plan, or other entity, then (a) it is authorized and qualified to become an
investor in the Company and the person signing this Agreement on behalf of such
entity has been duly authorized by such entity to do so, and (b) it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.
1.15 The Subscriber acknowledges that if he or she is a registered
representative of a National Association of Securities Dealers, Inc. ("NASD")
member firm, he or she must give such firm the notice required by the NASD's
Rules of Fair Practice, receipt of which must be acknowledged by such firm in
Section 7.4 below.
1.16 The Subscriber represents and warrants that it has not engaged,
consented to nor authorized any broker, finder or intermediary to act on its
behalf, directly or indirectly, as a broker, finder or intermediary in
connection with the transactions contemplated by this Agreement. The Subscriber
shall indemnify and hold harmless the Company from and against all fees,
commissions or other payments owing to any such person or firm acting on behalf
of such Subscriber hereunder.
1.17 The Subscriber, whose name appears on the signature line below, shall
be the beneficial owner of the Securities for which such Subscriber subscribes.
1.18 The Subscriber agrees that from the time the Subscriber first contacted
the Company regarding this Offering until a point in time equal to the earlier
of (i) the date that the Registration Statement (as defined in Section 5.2(a))
is declared effective by the SEC, or (ii) four months from the date hereof, the
Subscriber has not and shall not, directly or indirectly, through related
parties, affiliates or otherwise, (A) sell "short" or "short against the box"
(as those terms are generally understood) any equity security of the Company or
(B) otherwise engage in any transaction that involves hedging of the
Subscriber's position in any equity security of the Company.
II. REPRESENTATIONS BY THE COMPANY
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The Company hereby represents and warrants to the Subscriber that:
2.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York and has full corporate power and lawful authority to
conduct its business as described in the SEC Filings (as defined herein). The
Company is duly qualified to do business as a foreign corporation and is in good
standing in the Commonwealth of Pennsylvania and in each jurisdiction in which
the nature of the business conducted, or as proposed to be conducted in the SEC
Filings (as defined herein), by it or the properties owned, leased or operated
by it, makes such qualification or licensing necessary and where the failure to
be so qualified or licensed would have a material adverse effect upon the
business, prospects or financial condition of the Company other than
Pennsylvania, where the Company will be so qualified prior to the Closing (as
defined in Section 3.2).
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2.2 Capitalization and Voting Rights. The authorized, issued and outstanding
capital stock of the Company is as set forth on Schedule 2.2; all issued and
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable. Except as set forth on Schedule 2.2, there are no
outstanding options, warrants, agreements, commitments, convertible securities,
preemptive rights or other rights to subscribe for or to purchase any shares of
capital stock of the Company nor are there any agreements, promises or
commitments to issue any of the foregoing, or discussions concerning same, which
have not been disclosed in writing. Except as set forth on Schedule 2.2, in this
Agreement and as otherwise required by law, there are no restrictions upon the
voting or transfer of the Securities pursuant to the Company's Certificate of
Incorporation, as amended, (the "Certificate of Incorporation"), By-laws or
other governing documents or any agreement or other instruments to which the
Company is a party or by which the Company is bound.
2.3 Authorization; Enforceability. The Company has all corporate right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. All corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement by the Company, the
authorization, sale, issuance and delivery of the Securities and the performance
of the Company's obligations hereunder has been taken. This Agreement has been
duly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies, and to limitations
of public policy. The Securities (and the Common Stock issuable upon exercise of
the Warrants) have been duly and validly authorized and, upon the issuance and
delivery thereof and payment therefor as contemplated by this Agreement, will be
free and clear of liens, duly and validly authorized and issued, fully paid and
nonassessable. The issuance and sale of the Securities contemplated hereby will
not give rise to any preemptive rights or rights of first refusal on behalf of
any person.
2.4 No Conflict; Governmental Consents.
(a) The execution and delivery by the Company of this Agreement, the
consummation of the transactions contemplated hereby and the offer and sale of
the Securities will not result in the violation of any law, statute, rule,
regulation, order, writ, injunction, judgment or decree of any court or
governmental authority to or by which the Company is bound, or of any provision
of the Certificate of Incorporation or By-laws of the Company, and will not
conflict with, or result in a breach or violation of, any of the terms or
provisions of, or constitute (with due notice or lapse of time or both) a
default under, any lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the Company is a party or by
which it is bound or to which any of its properties or assets is subject, nor
result in the creation or imposition of any lien upon any of the properties or
assets of the Company.
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(b) No consent, waiver, approval, authorization or other order of any
governmental authority or other third-party is required to be obtained by the
Company in connection with the authorization, execution and delivery of this
Agreement or with the authorization, issuance and sale of the Securities (and
the Common Stock issuable upon exercise of the Warrants), except such filings as
may be required to be made, and which shall have been made at or prior to the
required time, with the SEC, the NASD and the National Association of Securities
Dealers Automated Quotation System ("Nasdaq"), and with any state or foreign
blue sky or securities regulatory authority.
2.5 Licenses. The Company has all licenses, permits and other governmental
authorizations currently required for the conduct of its business or ownership
of properties and is in all material respects complying therewith, except for
any licenses, permits or other governmental authorizations which would not
materially adversely affect the business, property, financial condition, results
of operations or prospects of the Company.
2.6 Litigation. The Company knows of no pending or threatened legal or
governmental proceedings against the Company which could materially adversely
affect the business, property, financial condition, results of operations or
prospects of the Company.
2.7 Accuracy of Reports. All reports required to be filed by the Company
within the three years prior to the date of this Agreement under the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") have been duly and timely
filed with the SEC, complied at the time of filing in all material respects with
the requirements of their respective forms and, except to the extent updated or
superseded by any subsequently filed report, were complete and correct in all
material respects as of the dates at which the information was furnished, and
contained (as of such dates) no untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
2.8 Investment Company. The Company is not an "investment company" within
the meaning of such term under the Investment Company Act of 1940, as amended,
and the rules and regulations of the SEC thereunder.
2.9 Listing. The Company shall promptly file an Application for Listing of
Additional Shares with the Nasdaq SmallCap Market and hereby represents and
warrants to the Subscriber that it will take any other necessary action in
accordance with the rules of the Nasdaq SmallCap Market or the OTC Bulletin
Board to enable the Securities (and the Common Stock issuable upon exercise of
the Warrants) to trade on the Nasdaq SmallCap Market or the OTC Bulletin Board.
2.10 No Material Adverse Change. Since the filing of the Company's most
recent Quarterly Report on Form 10-Q, (i) there has not been any material
adverse change (financial or otherwise) in the assets, properties, financial
condition, operating results or business of the Company, and (ii) there has been
no event or condition of any character that might have a material adverse effect
(financial or otherwise) in the assets, properties, financial condition,
operating results or business of the Company.
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2.11 Financial Statements. The financial statements included in the
Company's most recent Annual Report on Form 10-K for the fiscal year ended
December 31, 2001, and all other reports filed by the Company pursuant to the
Exchange Act since the filing of such Annual Report on Form 10-K and prior to
the date hereof (collectively, the "SEC Filings") present fairly and accurately
in all material respects the financial position of the Company as of the dates
shown and its results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis. Except as set
forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof, to the best of the Company's knowledge, the
Company has no liabilities, contingent or otherwise, except those which
individually or in the aggregate are not material to the financial condition or
operating results of the Company.
2.12 Compliance with Laws. Neither the Company nor, to the Company's
knowledge, any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D of
the Act) in connection with the offer or sale of the Securities. Neither the
Company nor any of its Affiliates, nor, to the Company's knowledge, any Person
acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would adversely affect reliance by the Company on Section
4(2) of the Act for the exemption from registration for the transactions
contemplated hereby or would require registration of the Securities under the
Act. The Company is in compliance with all applicable Nasdaq continued listing
requirements. There are no proceedings pending or to the Company's knowledge
threatened against the Company relating to the continued listing of the
Company's Common Stock on the Nasdaq SmallCap Market and the Company has not
received any notice of, nor to the knowledge of the Company is there any basis
for, the delisting of the Common Stock from the Nasdaq SmallCap Market.
III. TERMS OF SUBSCRIPTION
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3.1 The Offering is for a minimum of 1,290,323 Shares and a maximum of
3,225,806 Shares.
3.2 This Offering shall close (the "Closing"), at the Company's sole
discretion, upon the Company's acceptance of such subscriptions which exceed the
Minimum Offering but no more than the Maximum Offering. The date of such closing
shall be the "Closing Date" and in no event shall occur later than December 31,
2002. The purchase price is payable by personal or business check, wire transfer
of immediately available funds or money order made payable to "InKine
Pharmaceutical Company, Inc." as provided in Section 1.1.
3.3 Pending the sale of the Securities, all subscription funds paid
hereunder shall be deposited with First Union Bank (as set forth in Section
1.1). If the Closing shall not have occurred on or before December 31, 2002,
then this subscription shall be void and all funds paid hereunder by the
Subscriber shall be promptly returned to the Subscriber, without deduction
therefrom and with interest thereon, in accordance with Section 3.5 hereof.
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3.4 The Subscriber hereby authorizes and directs the Company to deliver the
Securities to be issued to the Subscriber pursuant to this Agreement directly to
the Subscriber's residential or business address indicated on the signature page
hereto.
3.5 The Subscriber hereby authorizes and directs the Company to return any
funds related to unaccepted subscriptions to the same account from which the
funds were drawn.
IV. CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS AND THE COMPANY
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4.1 The Subscribers' obligation to purchase the Securities at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions, which conditions may be waived at the option of each Subscriber to
the extent permitted by law:
(a) Representations and Warranties. The representations and warranties
made by the Company in Section II hereof shall be true and correct in all
material respects when made, and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been
made on and as of said date.
(b) Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to such purchase shall
have been performed or complied with in all material respects.
(c) No Legal Order Pending. There shall not then be in effect any legal
or other order enjoining or restraining the transactions contemplated by this
Agreement.
(d) No Law Prohibiting or Restricting Such Sale. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or approval of any person to issue the Securities which
consent or approval shall not have been obtained (except as may otherwise be
provided in this Agreement).
(e) Minimum Subscriptions. The Company shall have received binding
subscriptions for at least the Minimum Offering.
4.2 The Company's obligation to sell the Securities at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions, which conditions may be waived at the option of the Company to the
extent permitted by law:
(a) Acknowledgements, Representations and Warranties. The
acknowledgements, representations and warranties made by the Subscriber in
Section I hereof shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date with
the same force and effect as if they had been made on and as of said date. If
any such representations, warranties or acknowledgements shall not be true and
accurate in any respect prior to the Closing, the undersigned shall give
immediate written notice of such fact to the Company, specifying which
representations, warranties or acknowledgements are not true and accurate and
the reason therefor.
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(b) Covenants. All covenants, agreements and conditions contained in
this Agreement to be performed by the Subscriber on or prior to such purchase
shall have been performed or complied with in all material respects.
(c) No Legal Order Pending. There shall not then be in effect any legal
or other order enjoining or restraining the transactions contemplated by this
Agreement.
(d) No Law Prohibiting or Restricting Such Sale. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or approval of any person to issue the Securities which
consent or approval shall not have been obtained (except as may otherwise be
provided in this Agreement).
(e) Minimum Subscriptions. The Company shall have received binding
subscriptions for at least the Minimum Offering.
V. REGISTRATION RIGHTS
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5.1 As used in this Agreement, the following terms shall have the following
meanings:
(a) "Affiliate" shall mean, with respect to any Person (as defined
below), any other Person controlling, controlled by, or under direct or indirect
common control with, such Person (for the purposes of this definition "control,"
when used with respect to any specified Person, shall mean the power to direct
the management and policies of such person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" shall have meanings correlative to the
foregoing).
(b) "Business Day" shall mean a day, Monday through Friday, on which
banks are generally open for business in New York, New York and Philadelphia,
Pennsylvania;
(c) "Holders" shall mean the Subscriber and any person holding
Registrable Securities as defined below or any person to whom the rights under
Section V have been transferred in accordance with Section 5.10 hereof, and who,
if known by the Company, shall be specifically named by the Company as selling
stockholders in the Registration Statement (as defined below).
(d) "Person" shall mean any person, individual, corporation, limited
liability company, partnership, trust or other nongovernmental entity or any
governmental agency, court, authority or other body (whether foreign, federal,
state, local or otherwise).
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(e) The terms "register," "registered" and "registration" refer to the
registration effected by preparing and filing with the SEC a registration
statement in compliance with the Act, and the declaration or ordering by the SEC
of the effectiveness of such registration statement.
(f) "Registrable Securities" shall mean (i) the Shares and (ii) the
shares of Common Stock issuable upon the exercise of the Warrants; provided,
however, that securities shall only be treated as Registrable Securities if and
only for so long as they (A) have not been disposed of pursuant to a
registration statement declared effective by the SEC, (B) have not been sold in
a transaction exempt from the registration and prospectus delivery requirements
of the Act so that all transfer restrictions and restrictive legends with
respect thereto are removed upon the consummation of such sale, and (C) are held
by a Holder or a permitted transferee pursuant to Section 5.10.
(g) "Registration Expenses" shall mean all expenses incurred by the
Company in complying with Section 5.2 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and expenses of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to, or required by, any such registration
(but excluding the aggregate fees of legal counsel for all Holders).
(h) "Registration Statement" shall have the meaning ascribed to such
term in Section 5.2 (a).
(i) "Registration Period" shall have the meaning ascribed to such term
in Section 5.4 (a).
(j) "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
5.2 The Company shall, as soon as practicable, but not later than sixty (60)
days after the Closing Date (such sixtieth day herein referred to as the "Filing
Date"), (i) use reasonable efforts to file with the SEC a registration statement
(the "Registration Statement") with respect to the resale of the Registrable
Securities and use reasonable efforts to have such Registration Statement
declared effective by the SEC within 120 days after the Closing Date and (ii)
cause such Registration Statement to remain effective until the earlier of such
date as the Holders have completed the distribution described in the
Registration Statement and such time as such Securities are no longer, by reason
of Rule 144(k) under the Act, required to be registered for the sale thereof by
such Holders. If the Company fails to file the Registration Statement within 60
days of the Closing Date or the Registration Statement is not declared effective
by the SEC within 120 days of the Closing Date, the Company will pay to the
Holder a penalty equal to 1.5% of the amount invested for every 30 days that the
Company is in default of the registration requirements of this Section 5.2. The
penalty shall be paid in cash and will be due and payable within 5 days of
default.
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5.3 All Registration Expenses incurred in connection with any registration,
qualification, exemption or compliance pursuant to Section 5.2 shall be borne by
the Company. All Selling Expenses relating to the sale of securities registered
by or on behalf of Holders shall be borne by such Holders pro rata on the basis
of the number of securities so registered.
5.4 In the case of the registration, qualification, exemption or compliance
effected by the Company pursuant to this Agreement, the Company shall, upon
reasonable request, inform each Holder as to the status of such registration,
qualification, exemption and compliance. At its expense the Company shall:
(a) use reasonable efforts to keep such registration, and any
qualification, exemption or compliance under state securities laws which the
Holders reasonably request the Company to obtain, continuously effective until
the Holders have completed the distribution described in the registration
statement relating thereto. The period of time during which the Company is
required hereunder to keep the Registration Statement effective is referred to
herein as the "Registration Period." Notwithstanding the foregoing, at the
Company's election, the Company may cease to keep such registration,
qualification, exemption or compliance effective with respect to any Registrable
Securities, and the registration rights of a Holder with respect to such
Registrable Securities shall expire, at such time as the Holder may sell all
Registrable Securities then held by such Holder under Rule 144 under the Act in
a three-month period; but this sentence shall not relieve the Company of any
obligation to comply with this Section V as to any shares of Common Stock
issuable upon exercise of the Warrants;
(b) advise the Holders:
(i) when the Registration Statement or any amendment thereto has
been filed with the SEC and when the Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the SEC for amendments or supplements to the
Registration Statement or the prospectus included therein or for additional
information;
(iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for such purpose;
(iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable Securities included
therein for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(v) subject to the limitations set forth in Section 5.7(b)(ii), of
the happening of any event that requires the making of any changes in the
Registration Statement or the prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the prospectus, in the light of the circumstances under which they
were made) not misleading;
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(c) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of any Registration Statement at the earliest
possible time;
(d) during the Registration Period, deliver to each Holder, without
charge, a reasonable number of copies of the prospectus included in such
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use, consistent with the
provisions hereof, of the prospectus and any amendment or supplement thereto by
each of the selling Holders of Registrable Securities in connection with the
offering and sale of the Registrable Securities covered by the prospectus and
any amendment or supplement thereto;
(e) prior to any public offering of Registrable Securities pursuant to
any Registration Statement, register or qualify or obtain an exemption for the
offer and sale under the securities or blue sky laws of such jurisdictions as
any such Holders reasonably request in writing, provided that the Company shall
not for any purpose be required to qualify generally to transact business as a
foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction, and do any and
all other acts or things reasonably necessary or advisable to enable the offer
and sale in such jurisdictions of the Registrable Securities covered by such
Registration Statement;
(f) cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold pursuant
to any Registration Statement free of any restrictive legends to the extent not
required at such time and in such denominations and registered in such names as
Holders may request at least ten (10) business days prior to sales of
Registrable Securities pursuant to such Registration Statement;
(g) upon the occurrence of any event contemplated by Section 5.4(b)(v)
above, the Company shall promptly prepare a post-effective amendment to the
Registration Statement or a supplement to the related prospectus, or file any
other required document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the prospectus will not include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and
(h) use reasonable efforts to comply with all applicable rules and
regulations of the SEC, and make generally available to the Holders not later
than 45 days (or 90 days if the fiscal quarter is the fourth fiscal quarter)
after the end of its fiscal quarter in which the first anniversary date of the
effective date of the Registration Statement occurs, an earnings statement
satisfying the provisions of Section 11 (a) of the Act.
12
5.5 The Holders shall have no right to take any action to restrain, enjoin
or otherwise delay any registration pursuant to Section 5.2 hereof as a result
of any controversy that may arise with respect to the interpretation or
implementation of this Agreement.
5.6 (a) To the extent permitted by law, the Company shall indemnify each
Holder, each underwriter of the Registrable Securities and each person
controlling such Holder and each such underwriter within the meaning of Section
15 of the Act, with respect to which any registration, qualification or
compliance has been sought pursuant to this Agreement, against all claims,
losses, expenses, costs, damages and liabilities (or action in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened (subject to Section 5.6(c) below), arising out of or
based on (i) any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus or offering circular,
or any amendment or supplement thereof, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances in which
they were made, or (ii) any violation or alleged violation by the Company of the
Act, the Exchange Act, or any rule or regulation promulgated under the Act or
the Exchange Act, and shall reimburse each Holder, each underwriter of the
Registrable Securities and each person controlling such Holder and each such
underwriter, for legal and other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action as
incurred; provided that the Company shall not be liable in any such case to the
extent that any untrue statement or omission or allegation thereof is made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder or underwriter and stated to be
specifically for use in preparation of such registration statement, prospectus
or offering circular; provided that the Company shall not be liable in any such
case where the claim, loss, damage or liability arises out of or is related to
the failure of the Holder to comply with the covenants and agreements contained
in Section 5.7 hereof, and except that the foregoing indemnity agreement is
subject to the condition that, insofar as it relates to any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the preliminary prospectus but eliminated or remedied in the amended prospectus
on file with the SEC at the time the registration statement becomes effective or
in the amended prospectus filed with the SEC pursuant to Rule 424(b) of the Act
or in the prospectus subject to completion under Rule 434 of the Act, which
together meet the requirements of Section 10(a) of the Act (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
such Holder, any such underwriter or any such controlling person, if a copy of
the Final Prospectus furnished by the Company to the Holder for delivery was not
furnished to the person or entity asserting the loss, liability, claim or damage
at or prior to the time such furnishing is required by the Act and the Final
Prospectus would have cured the defect giving rise to such loss, liability,
claim or damage. Notwithstanding any provision herein to the contrary, the
Company shall reimburse each Holder, upon such Holder's demand, for all
reasonably necessary expenses and costs which are incurred by such Holder as a
result of the indemnification claims described in this Section 5.6(a). Such
demand may be made from time to time prior to resolution of the claim. In no
event shall the Company be liable for the expenses and costs of more than one
attorney on behalf of the Holders unless in the reasonable judgement of a
Holder, based upon written advice of its counsel, a conflict of interest exists
between the Holders with respect to such claims, in which case the Company shall
reimburse the Holders for additional attorneys.
13
(b) Each Holder will severally, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter of the Registrable Securities and
each person who controls the Company and each underwriter of the Registrable
Securities within the meaning of Section 15 of the Act, against all claims,
losses, expenses, costs, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened (subject to Section 5.6(c) below), arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, prospectus or offering
circular, or any amendment or supplement thereof, incident to any such
registration, qualification or compliance or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances in which they were made, and will reimburse the Company, such
directors and officers, each underwriter of the Registrable Securities and each
person controlling the Company and each underwriter of the Registrable
Securities for reasonable legal and any other expenses or costs reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action as incurred, in each case to the extent, but only to
the extent, that such untrue statement or omission or allegation thereof is made
in reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of the Holder and stated to be specifically for use in
preparation of such registration statement, prospectus or offering circular;
provided that the indemnity shall not apply to the extent that such claim, loss,
damage or liability results from the fact that a current copy of the prospectus
or offering circular was not made available to the Holder and such current copy
of the prospectus or offering circular would have cured the defect giving rise
to such loss, claim, expense, costs, damage or liability. Notwithstanding the
foregoing, in no event shall a Holder be liable for any such claims, losses,
expenses, costs, damages or liabilities in excess of the proceeds received by
such Holder in that offering, except in the event of fraud by such Holder.
(c) Each party entitled to indemnification under this Section 5.6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense with its
own counsel at such Indemnified Party's expense unless the named parties to any
proceeding covered hereby (including any impleaded parties) include both the
Company or any others the Company may designate and one or more Indemnified
Persons, and representation of the Indemnified Persons and such other parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them, and provided further that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party
of its obligations under this Agreement, unless such failure is materially
prejudicial to the Indemnifying Party in defending such claim or litigation. An
Indemnifying Party shall not be liable for any settlement of an action or claim
effected without its written consent (which consent will not be unreasonably
withheld).
14
(d) If the indemnification provided for in this Section 5.6 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage, cost or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party thereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, cost or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions which resulted in such loss,
liability, claim, damage, cost or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied or which
should have been supplied by the Indemnifying Party or by the Indemnified Party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
5.7 (a) Subject to the limitations set forth in Section 5.7(b)(ii) below,
upon receipt of any notice from the Company of the happening of any event
requiring the preparation of a supplement or amendment to a prospectus relating
to Registrable Securities so that, as thereafter delivered to the Holders, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, each Holder shall forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
contemplated by Section 5.2 until its receipt of copies of the supplemented or
amended prospectus from the Company and, if so directed by the Company, each
Holder shall deliver to the Company all copies, other than permanent file copies
then in such Holder's possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice.
(b) Any Holder which owns five percent (5 %) or more (and with respect
to 5.7(b)(ii), "any Holder") of the Company's outstanding Common Stock shall
suspend, upon request of the Company, any disposition of Registrable Securities
pursuant to the Registration Statement and prospectus contemplated by Section
5.2 during (i) any period not to exceed one 120 day period within any one 12
month period the Company requires in connection with a primary underwritten
offering of equity securities and (ii) any period, not to exceed two 45 day
periods with any twelve month period, when the Company determines in good faith
that offers and sales pursuant thereto should not be made by reason of the
presence of material undisclosed circumstances or developments with respect to
which the disclosure that would be required in such a prospectus in premature,
would have an adverse effect on the Company or is otherwise inadvisable.
15
(c) As a condition to the inclusion of its Registrable Securities, each
Holder shall furnish to the Company such information regarding such Holder, the
securities of the Company owned beneficially or of record by such Holder and the
distribution proposed by such Holder as the Company may request in writing
because it is required in connection with any registration, qualification or
compliance referred to in this Section V.
(d) With respect to any sale of Registrable Securities pursuant to a
Registration Statement filed pursuant to this Section V, each Holder hereby
covenants with the Company not to make any sale of the Registrable Securities
without effectively causing the prospectus delivery requirements under the Act
to be satisfied.
(e) Each Holder acknowledges and agrees that the Registrable Securities
sold pursuant to the Registration Statement described in this Section are not
transferable on the books of the Company unless the stock certificate submitted
to the transfer agent evidencing such Registrable Securities is accompanied by a
certificate reasonably satisfactory to the Company to the effect that (i) the
Registrable Securities have been sold in accordance with such Registration
Statement and (ii) the requirement of delivering a current prospectus has been
satisfied.
(f) Each Holder shall not take any action with respect to any
distribution deemed to be made pursuant to such registration statement, which
would constitute a violation of Regulation M under the Exchange Act or any other
applicable rule, regulation or law.
(g) At the end of the period during which the Company is obligated to
keep the Registration Statement current and effective as described above, the
Holders of Registrable Securities included in the Registration Statement shall
discontinue sales of shares pursuant to such Registration Statement upon receipt
of notice from the Company of its intention to remove from registration the
shares covered by such Registration Statement which remain unsold.
5.8 With a view to making available to the Holders the benefits of certain
rules and regulations of the SEC which at any time permit the sale of the
Registrable Securities to the public without registration, the Company shall use
reasonable efforts:
(a) to make and keep public information available, as those terms are
understood and defined in Rule 144 under the Act, at all times;
(b) to file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act; and
16
(c) so long as a Holder owns any Registrable Securities, to furnish to
such Holder upon any reasonable request a written statement by the Company as to
its compliance with Rule 144 under the Act, and of the Exchange Act.
VI. MISCELLANEOUS
-----------------
6.1 Any notice or other communication given hereunder shall be deemed
sufficient in writing and sent by (a) telecopy or facsimile at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received); or (b) registered or certified mail,
return receipt requested, or delivered by hand against written receipt therefor,
addressed to InKine Pharmaceutical Company, Inc., 0000 Xxxxxx Xxxxxxx West,
Building 18, Xxxxx 000, Xxxx Xxxx, XX 00000, Facsimile: 000-000-0000, Attention:
Xxxxxx X. Apple, with a copy to Xxxx Xxxxx LLP, Centre Square West, 0000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, XX 00000, Facsimile: 000-000-0000, Attention:
Xxxxxxx X. Xxxx, Esquire. Notices shall be deemed to have been given or
delivered on the date of mailing, except notices of change of address, which
shall be deemed to have been given or delivered when received.
6.2 Except as set forth in Section 5.9, this Agreement shall not be changed,
modified or amended except by a writing signed by the parties to be charged, and
this Agreement may not be discharged except by performance in accordance with
its terms or by a writing signed by the party to be charged.
6.3 Upon the execution and delivery of this Agreement by the Subscriber,
this Agreement shall become a binding obligation of the Subscriber with respect
to the purchase of Securities as herein provided, subject to acceptance by the
Company; subject, however, to the right hereby reserved to the Company to enter
into the same agreements with other subscribers and to add and/or delete other
persons as subscribers.
6.4 Notwithstanding the place where this Agreement may be executed by any of
the parties hereto, the parties expressly agree that all the terms and
provisions hereof shall be construed in accordance with and governed by the laws
of the State of New York without regard to principles of conflicts of law.
6.5 The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect. If any
provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, such provision shall be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions shall be deemed dependent upon any other covenant
or provision unless so expressed herein.
17
6.6 It is agreed that a waiver by either party of a breach of any provision
of this Agreement shall not operate, or be construed, as a waiver of any
subsequent breach by that same party.
6.7 The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.
6.8 This Agreement may be executed in two or more counterparts each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument. This Agreement, once executed by a party, may be delivered
to the other parties hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement. In
the event any signature is delivered by facsimile transmission, the party using
such means of delivery shall cause the manually executed Execution Page(s)
hereof to be physically delivered to the other party within five (5) days of the
execution hereof, provided that the failure to so deliver any manually executed
Execution Page shall not affect the validity or enforceability of this
Agreement.
6.9 The Subscriber agrees not to issue any public statement with respect to
the Subscriber's investment or proposed investment in the Company or the terms
of any agreement or covenant between them and the Company without the Company's
prior written consent, except such disclosures as may be required under
applicable law or under any applicable order, rule or regulation.
6.10 Nothing in this Agreement shall create or be deemed to create any
rights in any person or entity not a party to this Agreement, except for the
holders of Registrable Securities.
6.11 Any pronoun herein shall include all genders and/or the plural or
singular as appropriate from the context.
18
VII. CONFIDENTIAL INVESTOR QUESTIONNAIRE
-----------------------------------
7.1 The Subscriber represents and warrants that he, she or it comes within
one category marked below, and that for any category marked, he, she or it has
truthfully set forth, where applicable, the factual basis or reason the
Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS
SECTION VII WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to
furnish any additional information which the Company deems necessary in order to
verify the answers set forth below.
Category A ____ The undersigned is an individual (not a partnership,
corporation, etc.) whose individual net worth, or
joint net worth with his or her spouse, presently
exceeds $1,000,000.
Explanation. In calculating net
worth you may include equity in
personal property and real estate,
including your principal residence,
cash, short-term investments, stock
and securities. Equity in personal
property and real estate should be
based on the fair market value of
such property less debt secured by
such property.
Category B ____ The undersigned is an individual (not a partnership,
corporation, etc.) who had an individual income in
excess of $200,000 in each of the two most recent
years, or joint income with his or her spouse in
excess of $300,000 in each of those years (in each
case including foreign income, tax exempt income and
full amount of capital gains and losses but excluding
any income of other family members and any unrealized
capital appreciation) and has a reasonable
expectation of reaching the same income level in the
current year.
Category C ____ The undersigned is a director or executive officer of
the Company.
Category D ____ The undersigned is a bank; a savings and loan
association; insurance company; registered investment
company; registered business development company;
licensed small business investment company or "SBIC";
or employee benefit plan within the meaning of Title
1 of Employee Retirement Income Security Act or
"ERISA" and (a) the investment decision is made by a
plan fiduciary which is either a bank, savings and
loan association, insurance company or registered
investment advisor, or (b) the plan has total assets
in excess of $5,000,000 or is a self-directed plan
with investment decisions made solely by persons that
are accredited investors.
____________________________________
____________________________________
(describe entity)
19
Category E ____ The undersigned is a private business development
company as defined in section 202(a)(22) of the
Investment Advisors Act of 1940.
____________________________________
____________________________________
(describe entity)
Category F ____ The undersigned is either a corporation, partnership,
Massachusetts business trust, or nonprofit
organization within the meaning of Section 501(c)(3)
of the Internal Revenue Code, in each case not formed
for the specific purpose of acquiring the Securities
and with total assets in excess of $5,000,000.
____________________________________
____________________________________
(describe entity)
Category G ____ The undersigned is a trust with total assets in
excess of $5,000,000, not formed for the specific
purpose of acquiring the Securities where the
purchase is directed by a "sophisticated person" as
defined in Regulation 506(b)(2)(ii) under the Act.
Category H ____ The undersigned hereby certifies that it is an
accredited investor because all of its equity owners
are accredited investors. The Company, in its sole
discretion, may request information regarding the
basis on which such equity owners are accredited.
Category I ____ The undersigned hereby certifies that it is an
accredited investor because it has total assets in
excess of $5,000,000 and was not formed for the
specific purpose of acquiring the Securities.
Category J ____ The undersigned is not within any of the categories
above and is therefore not an accredited investor.
The Company will notify a prospective Subscriber whether such
Subscriber is eligible to purchase Securities pursuant to this Agreement (and
the Company, in its sole discretion, retains the right to accept or reject all
such purchases). The undersigned agrees that it will notify the Company at any
time on or prior to the Closing Date in the event that the representations and
warranties in this Investor Questionnaire shall cease to be true, accurate and
complete.
20
7.2 SUITABILITY (please answer each question)
(a) For an individual Subscriber, please describe your current
employment, including the company by which you are employed and its principal
business:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(b) For an individual Subscriber, please describe any college or
graduate degrees held by you:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(c) For all Subscribers, please list types of prior investments:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
21
(d) For all Subscribers, please state whether you have you participated
in other private placements before:
YES _____________ NO _______________
(e) If your answer to question (d) above was "YES", please indicate
frequency of such prior participation in private placements of:
Biotechnology,
Pharmaceutical and
Public Private Other Life Science
Companies Companies Companies*
--------- --------- ----------
Frequently __________________ ___________________ __________________
Occasionally __________________ ___________________ __________________
Never __________________ ___________________ __________________
*indicate how many companies, whether public or private, are in the
biotechnology, pharmaceutical or other life sciences sectors.
(f) For an individual Subscriber, do you expect your current level of
income to significantly decrease in the foreseeable future?
YES _____________ NO _______________
(g) For trust, corporate, partnership and other institutional
Subscribers, do you expect your total assets to significantly decrease in the
foreseeable future?
YES _____________ NO _______________
(h) For all Subscribers, do you have any other investments or contingent
liabilities which you reasonably anticipate could cause you to need sudden cash
requirements in excess of cash readily available to you?
YES _____________ NO _______________
(i) For all Subscribers, are you familiar with the risk aspects and the
nonliquidity of investments such as the securities for which you seek to
subscribe?
YES _____________ NO _______________
22
(j) For all Subscribers, do you understand that there is no guarantee of
financial return on this investment and that you run the risk of losing your
entire investment?
YES _____________ NO _______________
7.3 MANNER IN WHICH TITLE IS TO BE HELD. (circle one)
(a) Individual Ownership
(b) Community Property
(c) Joint Tenant with Right of
Survivorship (both parties
must sign)
(d) Partnership*
(e) Tenants in Common
(f) Company*
(g) Trust*
(h) Other
*If Securities are being subscribed for by an entity, the attached
Certificate of Signatory must also be completed.
7.4 NASD AFFILIATION.
Are you affiliated or associated with an NASD member firm (please check
one)?
YES _____________ NO _______________
If Yes, please describe:**
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
**If Subscriber is a Registered Representative with an NASD member firm,
have the following acknowledgment signed by the appropriate party:
23
The undersigned NASD member firm acknowledges receipt
of the notice required by Article 3, Sections 28(a) and (b) of the
Rules of Fair Practice.
_________________________________
Name of NASD Member Firm
By: _____________________________
Authorized Officer - Signature
_________________________________
Authorized Officer - Printed Name
Date: _____________________, 2002
7.5 COMPANY RELIANCE ON THIS QUESTIONNAIRE
The undersigned is informed of the significance to the Company of the
foregoing representations and answers contained in this Section VII and such
answers have been provided under the assumption that the Company and its counsel
will rely on them.
24
SIGNATURE PAGE Date Signed: December _____ , 2002
--------------
Number of Shares:
Multiplied by Offering Price Per Share: x $__________________________
Equals Subscription Amount: = $
=========================
Warrants for ______ number of shares
____________________________________ ________________________________________
Signature Second Signature (if purchasing jointly)
____________________________________ ________________________________________
Printed Name Printed Second Name
____________________________________ ________________________________________
Entity Name Entity Name
____________________________________ ________________________________________
Address Address
____________________________________ ________________________________________
City, State and Zip Code City, State and Zip Code
____________________________________ ________________________________________
Telephone-Business Telephone--Business
____________________________________ ________________________________________
Facsimile-Business Facsimile--Business
____________________________________ ________________________________________
Tax ID # or Social Security # Tax ID # or Social Security #
Name in which securities should be issued:______________________________________
25
This Subscription Agreement is agreed to and accepted as of December _____,
2002.
INKINE PHARMACEUTICAL COMPANY, INC.
By: ___________________________________
Name: Xxxxxx X. Apple
Title: Executive Vice President and
Chief Financial Officer
26
CERTIFICATE OF SIGNATORY
(To be completed if Securities are being subscribed for by an entity)
I, _____________________________, am the ___________________________ of
__________________________________________________ (the "Entity").
I certify that I am empowered and duly authorized by the Entity to
execute and carry out the terms of the Subscription Agreement and to purchase
and hold the Securities, and certify further that the Subscription Agreement has
been duly and validly executed on behalf of the Entity and constitutes a legal
and binding obligation of the Entity.
IN WITNESS WHEREOF, I have set my hand this ___ day of December, 2002.
____________________________________
(Signature)
27
