EXHIBIT 10.1
BIOPURE CORPORATION
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") is made and entered
into as of August 17, 2006, by and among Biopure Corporation, a Delaware
corporation (the "COMPANY"), and each of the purchasers listed on Exhibit A
attached hereto (collectively, the "PURCHASERS" and individually, a
"PURCHASER").
RECITALS
WHEREAS, the Company desires to issue and sell to the Purchasers, and the
Purchasers desire to purchase from the Company, up to 7,575,754 units (each, a
"UNIT"), each unit consisting of one share of Class A Common Stock, par value
$0.01 per share, of the Company (the "COMMON STOCK") and one five-year warrant
to purchase one share of Common Stock, on the terms and conditions set forth in
this Agreement;
WHEREAS, the Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("REGULATION D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "SECURITIES ACT").
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
(a) Authorization. The Company's Board of Directors has
authorized the issuance and sale, pursuant to the terms and conditions of this
Agreement, of up to 7,575,754 Units, each Unit to consist of (i) one share of
Common Stock (the "PURCHASED SHARES") and (ii) one five-year warrant exercisable
to purchase one share of Common Stock at $0.89 per share, substantially in the
form attached hereto as Exhibit B (the "PURCHASED WARRANTS" and together with
the Purchased Shares, the "PURCHASED SECURITIES").
(b) Agreement to Purchase and Sell Securities. Subject to the
terms and conditions of this Agreement, each Purchaser severally agrees to
purchase, and the Company agrees to sell and issue to each Purchaser, at the
Closing (as defined below), that number of Units set forth opposite such
Purchaser's name on Exhibit A attached hereto. The purchase price of each Unit
(the "PER UNIT PRICE") shall be $0.71.
(c) Use of Proceeds. The Company intends to apply the net
proceeds from the sale of the Purchased Securities for working capital and
general corporate purposes, including clinical trials and regulatory activities.
(d) Obligations Several Not Joint. The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other
Purchaser under this Agreement. Nothing contained herein, and no action taken by
any Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by
this Agreement. Each Purchaser shall be entitled to independently protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
2. CLOSING. The purchase and sale of the Purchased Securities shall
take place at the offices of Ropes & Xxxx LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000-0000 at 9:00 a.m., Boston, Massachusetts time, on August 23,
2006, or at such other time and place as the Company and Purchasers representing
a majority of the Units to be purchased, mutually agree upon (which time and
place are referred to in this Agreement as the "CLOSING"). At the Closing, the
Company shall, against delivery of payment for the Purchased Securities by wire
transfer of immediately available funds in accordance with the Company's
instructions, (i) authorize its transfer agent to issue to each Purchaser one or
more stock certificates (the "CERTIFICATES") registered in the name of such
Purchaser (or in such nominee name(s) as designated by such Purchaser in the
Stock Certificate Questionnaire (attached hereto as Appendix I) (the "STOCK
CERTIFICATE QUESTIONNAIRE"), representing the number of Purchased Shares set
forth opposite the appropriate Purchaser's name on Exhibit A hereto, and bearing
the legend set forth in Section 4(j) herein and (ii) issue the number of
Purchased Warrants set forth across such Purchaser's name on Exhibit A hereto.
Closing documents may be delivered by facsimile with original signature pages
sent by overnight courier. The date of the Closing is referred to herein as the
Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
in the SEC Documents (as defined below) or the disclosure letter delivered
concurrently with this Agreement, the Company hereby represents and warrants to
each Purchaser that:
(a) 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 Delaware and has all corporate power and authority required
to (i) carry on its business as presently conducted and (ii) enter into this
Agreement and the other agreements, instruments and documents contemplated
hereby, and to consummate the transactions contemplated hereby and thereby. The
Company is qualified to do business and is in good standing in each jurisdiction
in which the failure to so qualify would have a Material Adverse Effect. As used
in this Agreement, "MATERIAL ADVERSE EFFECT" means a material adverse effect on,
or a material adverse change in, or a group of such effects on or changes in,
the business, operations, financial condition, results of operations, assets or
liabilities of the Company and its subsidiaries, taken as a whole.
(b) Capitalization. The capitalization of the Company, prior to
the issuance of the Purchased Securities, is as follows:
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(i) The authorized capital stock of the Company consists
of 200,000,000 shares of Common Stock, par value $0.01 per share, and 179 shares
of Class B Common Stock, par value $1.00 per share (the "CLASS B COMMON STOCK").
(ii) As of May 31, 2006, the issued and outstanding
capital stock of the Company consisted of (A) 41,507,670 shares of Common Stock
and (B) 117.7 shares of Class B Common Stock. The shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and have not been issued in violation
of or are not otherwise subject to any preemptive or other similar rights.
(iii) As of May 31, 2006, the Company had (1) 2,736,144
shares of Common Stock reserved for issuance upon exercise of outstanding
options and (2) 16,871,480 shares of Common Stock reserved for issuance upon
exercise of outstanding warrants.
(iv) As of May 31, 2006, the Company's outstanding 117.7
shares of Class B Common Stock were convertible into 175,399 shares of Common
Stock.
With the exception of the foregoing in this Section 3(b), as of May 31,
2006, there were no outstanding subscriptions, options, warrants, convertible or
exchangeable securities or other rights granted to or by the Company to purchase
shares of Common Stock or other securities of the Company, and there were no
commitments, plans or arrangements to issue any shares of Common Stock or any
security convertible into or exchangeable for Common Stock.
(c) Subsidiaries. Except for the entities listed in the
disclosure letter (the "SUBSIDIARIES"), the Company does not have any
subsidiaries and the Company does not own any capital stock of, assets
comprising the business of, obligations of, or any other interest (including any
equity or partnership interest) in, any person or entity.
(d) Due Authorization. All corporate actions on the part of the
Company necessary for the authorization, execution, delivery of, and the
performance of all obligations of the Company under this Agreement and the
authorization, issuance, reservation for issuance and delivery of all of the
Purchased Securities being sold under this Agreement have been taken, no further
consent or authorization of the Company or the Board of Directors or its
stockholders is required, and this Agreement constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except (i) as may be limited by (1) applicable bankruptcy,
insolvency, reorganization or others laws of general application relating to or
affecting the enforcement of creditors' rights generally and (2) the effect of
rules of law governing the availability of equitable remedies and (ii) as rights
to indemnity or contribution may be limited under federal or state securities
laws or by principles of public policy thereunder.
(e) Valid Issuance of Purchased Securities.
(i) Purchased Securities. The Purchased Shares will be,
upon payment therefor by the Purchasers in accordance with this Agreement, duly
authorized, validly issued, fully paid and non-assessable, and free from all
taxes, liens and charges with respect to the issue thereof.
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(ii) Purchased Warrants. The warrants to be issued
pursuant to this Agreement will be, upon payment therefor by the Purchasers in
accordance with this Agreement, duly authorized and validly issued, and free
from all taxes, liens and charges with respect to the issue thereof.
(iii) Underlying Shares of Common Stock. The issuance of
the shares of Common Stock issued or issuable from time to time upon the
exercise of the Purchased Warrants (the "UNDERLYING SHARES") will be, and at all
times prior to such exercise, will have been, duly authorized, duly reserved for
issuance upon such exercise and payment of the exercise price of the Purchased
Warrants, and will be, upon such exercise and payment, validly issued,
fully-paid and non-assessable, and free from all taxes, liens and charges with
respect to the issue thereof.
(iv) Compliance with Securities Laws. Subject to the
accuracy of the representations made by the Purchasers in Section 4 hereof, the
Purchased Securities (assuming no change in applicable law and no unlawful
distribution of the Purchased Securities by the Purchasers or other parties)
will be issued to the Purchasers in compliance with applicable exemptions from
(A) the registration and prospectus delivery requirements of the Securities Act
and (B) the registration and qualification requirements of all applicable
securities laws of the states of the United States.
(f) Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, or notice to, any federal, state or local governmental authority or
self regulatory agency on the part of the Company is required in connection with
the issuance of the Purchased Securities to the Purchasers, or the consummation
of the other transactions contemplated by this Agreement, except (i) such
filings as have been made prior to the date hereof, (ii) the filing of a
notification form with the Nasdaq Global Market ("NASDAQ") and (iii) such
additional post-Closing filings as may be required to comply with applicable
state and federal securities laws and the listing requirements of Nasdaq.
(g) Non-Contravention. Assuming the accuracy of the
representations and warranties made by the Purchasers in Section 4 hereof, the
execution, delivery and performance of this Agreement by the Company, and the
consummation by the Company of the transactions contemplated hereby (including
issuance of the Purchased Securities), do not (i) contravene or conflict with
the Certificate of Incorporation (the "CERTIFICATE OF INCORPORATION") or Bylaws
(the "BYLAWS") of the Company; (ii) constitute a violation of any provision of
any federal, state, local or foreign law, rule, regulation, order or decree
applicable to the Company; or (iii) constitute a default or require any consent
under, give rise to any right of termination, cancellation or acceleration of,
or to a loss of any material benefit to which the Company is entitled under, or
result in the creation or imposition of any lien, claim or encumbrance on any
assets of the Company under, any material contract to which the Company is a
party or any material permit, license or similar right relating to the Company
or by which the Company may be bound or affected, except in the case of clauses
(ii) and (iii), for such violations, breaches or defaults as would not be
reasonably likely to have a Material Adverse Effect.
(h) Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation ("ACTION") pending or, to the Company's knowledge,
threatened in writing: (i)
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against the Company, its activities, properties or assets, or any officer,
director or employee of the Company in connection with such officer's,
director's or employee's relationship with, or actions taken on behalf of, the
Company, that is reasonably likely to have a Material Adverse Effect on the
Company, or (ii) that seeks to prevent, enjoin, alter, challenge or delay the
transactions contemplated by this Agreement (including the issuance of the
Purchased Securities). The Company is not a party to or subject to the
provisions of, any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality that is reasonably likely to have a
Material Adverse Effect.
(i) Compliance with Law and Charter Documents. The Company is
not in violation or default of any provisions of the Certificate of
Incorporation or the Bylaws. The Company has complied and is currently in
compliance with all applicable statutes, laws, rules, regulations and orders of
the United States of America and all states thereof, foreign countries and other
governmental bodies and agencies having jurisdiction over the Company's business
or properties, except for any instance of non-compliance that has not had, and
would not reasonably be expected to have, a Material Adverse Effect.
(j) SEC Documents.
(1) Reports. The Company has filed in a timely manner
all reports, schedules, forms, statements and other documents required to be
filed by it with the SEC pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and the rules
and regulations promulgated thereunder, except for where the failure to do so
would not be reasonably likely to have a Material Adverse Effect. The Company
has filed on the SEC's XXXXX system, prior to the date hereof, its Annual Report
on Form 10-K for the fiscal year ended October 31, 2005 (the "FORM 10-K"), its
quarterly reports on Form 10-Q for the fiscal quarters ended January 31, 2006
and April 30, 2006 (the "FORM 10-QS"), its Proxy Statement for its Annual
Meeting of Stockholders held on March 22, 2006 (the "PROXY STATEMENT"), and any
Current Report on Form 8-K ("FORM 8-KS") required to be filed by the Company
with the SEC for events occurring since May 31, 2006 and prior to the date of
this Agreement (the Form 10-K, Form 10-Qs, Proxy Statement and Form 8-Ks,
together with all exhibits, schedules and other attachments that are filed with
such documents, are collectively referred to herein as the "SEC DOCUMENTS").
Each SEC Document, as of its date (or, if amended or superseded by a filing
prior to the Closing Date, then on the date of such filing), did not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Each SEC Document, as it may have
been subsequently amended by filings made by the Company with the SEC prior to
the date hereof, complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Document.
(2) Xxxxxxxx-Xxxxx. The Chief Executive Officer and the
Chief Financial Officer of the Company have signed, and the Company has
furnished to the SEC, all certifications required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act of 2002. Such certifications contain no exceptions to the
matters certified therein and have not been modified or withdrawn; and neither
the Company nor any of its officers has received notice from any governmental
entity questioning or challenging the accuracy of such certifications. The
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Company is otherwise in compliance with all applicable effective provisions of
the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations issued thereunder
by the SEC, except where such non-compliance would not be reasonably likely to
have a Material Adverse Effect.
(3) Financial Statements. The financial statements of
the Company in the SEC Documents present fairly, in accordance with United
States generally accepted accounting principles ("GAAP"), the financial position
of the Company as of the dates indicated, and the results of its operations and
cash flows for the periods therein specified, subject, in the case of unaudited
financial statements for interim periods, to normal year-end audit adjustments
and abbreviated footnote disclosure.
(k) Absence of Certain Changes Since the Balance Sheet Date.
Since May 31, 2006, the business and operations of the Company have been
conducted in the ordinary course consistent with past practice, and there has
not been:
(i) any declaration, setting aside or payment of any
dividend or other distribution of the assets of the Company with respect to any
shares of capital stock of the Company or any repurchase, redemption or other
acquisition by the Company or any subsidiary of the Company of any outstanding
shares of the Company's capital stock dividends;
(ii) any damage, destruction or loss, whether or not
covered by insurance, except for such occurrences, individually and
collectively, that have not had, and would not reasonably be expected to have, a
Material Adverse Effect;
(iii) any waiver by the Company of a valuable right or of
a material debt owed to it, except for such waivers, individually and
collectively, that have not had, and would not reasonably be expected to have, a
Material Adverse Effect;
(iv) any material change or amendment to, or any waiver
of any material right under a material contract or arrangement by which the
Company or any of its assets or properties is bound or subject;
(v) any change by the Company in its accounting
principles, methods or practices or in the manner in which it keeps its
accounting books and records, except any such change required by a change in
GAAP or by the SEC; or
(vi) any other event or condition of any character,
except for such events and conditions that have not resulted, and are not
expected to result, either individually or collectively, in a Material Adverse
Effect.
(l) Intellectual Property. The Company owns or possesses
sufficient rights to use all patents, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names, copyrights or other
intellectual property (collectively, "INTELLECTUAL PROPERTY"), which are
necessary to conduct its businesses as currently conducted, except where the
failure to currently own or possess would not reasonably be expected to result,
either individually or in the aggregate, in a Material Adverse Effect. The
Company has not received any written notice of, and has no actual knowledge of,
any infringement of or conflict with asserted rights of others with respect to
any Intellectual Property which, either individually or in the aggregate, would
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reasonably be expected to have a Material Adverse Effect, and to the Company's
knowledge, none of the patent rights owned or licensed by the Company are
unenforceable or invalid.
(m) Registration Rights. The Company is not subject to any
agreement providing any person or entity any rights (including piggyback
registration rights) to have any securities of the Company included in the
Registration Statement (as defined in Section 5(a)(i)).
(n) Title to Property and Assets. The properties and assets of
the Company are owned by the Company free and clear of all mortgages, deeds of
trust, liens, charges, encumbrances and security interests except for (i)
statutory liens for the payment of current taxes that are not yet delinquent and
(ii) liens, encumbrances and security interests that arise in the ordinary
course of business and do not materially detract from the value of the
properties and assets of the Company. With respect to the property and assets it
leases, the Company is in compliance with such leases in all material respects.
(o) Taxes. The Company has filed or has valid extensions of the
time to file all necessary federal, state, and foreign income and franchise tax
returns due prior to the date hereof and has paid or accrued all taxes shown as
due thereon, and the Company has no knowledge of any material tax deficiency
which has been asserted against it.
(p) Insurance. The Company maintains insurance of the types and
in the amounts that the Company reasonably believes is prudent and adequate for
its business, all of which insurance is in full force and effect in all material
respects.
(q) Labor Relations. No material labor dispute exists or, to
the knowledge of the Company, is imminent with respect to any of the employees
of the Company.
(r) Internal Accounting Controls. The Company and its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP 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.
(s) Transactions With Officers and Directors. None of the
officers or directors of the Company has entered into any transaction with the
Company or any Subsidiary that would be required to be disclosed pursuant to
Item 404(a), (b) or (c) of Regulation S-K of the SEC.
(t) General Solicitation. Neither the Company nor any other
person or entity authorized by the Company to act on its behalf has engaged in a
general solicitation or general advertising (within the meaning of Regulation D
of the Securities Act) of investors with respect to offers or sales of the
Purchased Securities.
(u) Registration Statement Matters. The Company meets the
eligibility requirements for use of a registration statement on Form S-3 for the
resale of the Purchased
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Shares by the Purchasers. Assuming the completion and timely delivery of the
Registration Statement/Suitability Questionnaire (attached hereto as Appendix
II) (the "REGISTRATION STATEMENT QUESTIONNAIRE") by each Purchaser to the
Company, the Company is not aware of any facts or circumstances that would
prohibit or delay the preparation and filing of a registration statement with
respect to the Registrable Shares (as defined below).
(v) No Integrated Offering. Neither the Company, nor any
affiliate of the Company, nor 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 cause this
offering of the Purchased Securities to be integrated with prior offerings by
the Company for purposes of the Securities Act, or any applicable stockholder
approval provisions, including, without limitation, under the rules and
regulations of the Nasdaq, nor will the Company take any action or steps that
would cause the offering of the Purchased Shares to be integrated with other
offerings.
(w) Nasdaq Listing Matters. The Common Stock of the Company is
quoted on Nasdaq under the ticker symbol "BPUR." The Company has not received
any notice that it is not in compliance with the listing or maintenance
requirements of Nasdaq. The issuance and sale of the Purchased Shares under this
Agreement does not contravene the rules and regulations of Nasdaq.
(x) Investment Company. The Company is not now, and after the
sale of the Purchased Securities under this Agreement and the application of the
net proceeds from the sale of the Purchased Shares described in Section 1(c)
herein will not be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE
PURCHASERS. Each Purchaser hereby represents and warrants to the Company,
severally and not jointly, and agrees that:
(a) Organization Good Standing and Qualification. The Purchaser
has all corporate, membership or partnership power and authority required to
enter into this Agreement and the other agreements, instruments and documents
contemplated hereby, and to consummate the transactions contemplated hereby and
thereby.
(b) Authorization. The execution of this Agreement has been
duly authorized by all necessary corporate, membership or partnership action on
the part of the Purchaser. This Agreement constitutes the Purchaser's legal,
valid and binding obligation, enforceable in accordance with its terms, except
(i) as may be limited by (A) applicable bankruptcy, insolvency, reorganization
or other laws of general application relating to or affecting the enforcement of
creditors' rights generally and (B) the effect of rules of law governing the
availability of equitable remedies and (ii) as rights to indemnity or
contribution may be limited under federal or state securities laws or by
principles of public policy thereunder.
(c) Litigation. There is no Action pending, or to its knowledge
threatened, to which such Purchaser is a party that is reasonably likely to
prevent, enjoin, alter or delay the transactions contemplated by this Agreement.
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(d) Purchase for Own Account. The Purchased Securities are
being acquired for investment for the Purchaser's own account, not as a nominee
or agent, and not with a view to the public resale or distribution thereof
within the meaning of the Securities Act, without prejudice, however, to such
Purchaser's right at all times to sell or otherwise dispose of all or any part
of such securities in compliance with applicable federal and state securities
laws and as otherwise contemplated by this Agreement. The Purchaser also
represents that it has not been formed for the specific purpose of acquiring the
Purchased Securities.
(e) Investment Experience. The Purchaser understands that the
purchase of the Purchased Securities involves substantial risk. The Purchaser
has experience as an investor in securities of companies and acknowledges that
it can bear the economic risk of its investment in the Purchased Securities and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of this investment in the Purchased
Securities and protecting its own interests in connection with this investment.
(f) Accredited Investor Status. The Purchaser is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act.
(g) Reliance Upon Purchaser's Representations. The Purchaser
understands that the issuance and sale of the Purchased Securities to it will
not be registered under the Securities Act on the ground that such issuance and
sale will be exempt from registration under the Securities Act pursuant to
Section 4(2) thereof, and that the Company's reliance on such exemption is based
on each Purchaser's representations set forth herein.
(h) Receipt of Information. The Purchaser has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the issuance and sale of the Purchased Securities and
the business, properties, prospects and financial condition of the Company and
to obtain any additional information requested and has received and considered
all information it deems relevant to make an informed decision to purchase the
Purchased Securities. Neither such inquiries nor any other investigation
conducted by or on behalf of such Purchaser or its representatives or counsel
shall modify, amend or affect such Purchaser's right to rely on the truth,
accuracy and completeness of such information and the Company's representations
and warranties contained in this Agreement.
(i) Restricted Securities. The Purchaser understands that the
Purchased Securities have not been registered under the Securities Act and will
not sell, offer to sell, assign, pledge, hypothecate or otherwise transfer any
of the Purchased Securities unless (i) pursuant to an effective registration
statement under the Securities Act, (ii) such holder provides the Company with
an opinion of counsel, in form and substance reasonably acceptable to the
Company and its counsel, to the effect that a sale, assignment or transfer of
the Purchased Securities may be made without registration under the Securities
Act and the transferee agrees to be bound by the terms and conditions of this
Agreement, or (iii) such holder provides the Company with reasonable assurances
(in the form of seller and broker representation letters) that the Purchased
Shares or the Underlying Shares, as the case may be, can be sold pursuant to
Rule 144 promulgated under the Securities Act ("RULE 144").
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(j) Legends.
(i) Purchased Shares and Underlying Shares. The
Purchaser agrees that the Certificates for the Purchased Shares and Underlying
Shares shall bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY."
The Company shall cause its counsel to issue a legal opinion to the
Company's transfer agent promptly after the date on which the Registration
Statement is declared effective (the "EFFECTIVE DATE"), if required by the
Company's transfer agent, to effect the removal of the legend hereunder upon
receipt of a letter from the transferee that it has complied with the prospectus
delivery requirements under the Securities Act.
Each Purchaser, severally and not jointly with the other Purchasers,
agrees that the removal of the restrictive legend from certificates representing
securities as set forth in this Section 4(j) is predicated upon the Purchaser's
warranty that the Purchaser will sell any securities pursuant to the
registration requirements of the Securities Act, including any applicable
prospectus delivery requirements.
In addition, the Purchaser agrees that the Company may place stop
transfer orders with its transfer agent with respect to such Certificates in
order to implement the restrictions on transfer set forth in this Agreement. The
appropriate portion of the legend and the stop transfer orders will be removed
promptly upon delivery to the Company of such satisfactory evidence as
reasonably may be required by the Company that such legend or stop orders are
not required to ensure compliance with the Securities Act.
(ii) Warrant. The Purchaser agrees that Warrants shall
bear the following legend:
"THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR WITH
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ANY STATE SECURITIES COMMISSION, AND MAY NOT BE TRANSFERRED OR
DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A REGISTRATION
STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT AND
APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO
THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT
VIOLATION OF THE SECURITIES ACT AND OTHER APPLICABLE STATE LAWS
AND RULES."
(k) Questionnaires. The Purchaser has completed or caused to be
completed the Stock Certificate Questionnaire and the Registration Statement
Questionnaire for use in preparation of the Registration Statement (as defined
in Section 5(a)(ii) below), and the answers to such questionnaires are true and
correct as of the date of this Agreement; provided, that the Purchasers shall be
entitled to update such information by providing written notice thereof to the
Company at least 48 hours before the effective date of the Registration
Statement.
(l) Restrictions on Short Sales. The Purchaser represents,
warrants and covenants that neither the Purchaser nor any affiliate of such
Purchaser which (x) had knowledge of the transactions contemplated hereby, (y)
has or shares discretion relating to such Purchaser's investments or trading or
information concerning such Purchaser's investments, including in respect of the
Purchased Securities, or (z) is subject to such Purchaser's review or input
concerning such affiliate's investments or trading, has or will, directly or
indirectly, during the period beginning on the date on which the Company first
contacted such Purchaser regarding the transactions contemplated by this
Agreement (and involving the Company) and ending on the Closing Date, engage in
(i) any "short sales" (as such term is defined in Rule 3b-3 promulgated under
the Exchange Act) of the Common Stock, including, without limitation, the
maintaining of any short position with respect to, establishing or maintaining a
"put equivalent position" (within the meaning of Rule 16a-1(h) under the
Exchange Act) with respect to, entering into any swap, derivative transaction or
other arrangement (whether any such transaction is to be settled by delivery of
Common Stock, other securities, cash or other consideration) that transfers to
another, in whole or in part, any economic consequences or ownership, or
otherwise disposes of, any of the Purchased Securities by the Purchaser or (ii)
any hedging transaction which establishes a net short position with respect to
the Purchased Securities (clauses (i) and (ii) together, a "SHORT SALE"); except
for (1) Short Sales by the Purchaser or an affiliate of such Purchaser which
was, prior to the date on which such Purchaser was first contacted by the
Company regarding the transactions contemplated by this Agreement, a market
maker for the Common Stock, provided that such Short Sales are in the ordinary
course of business of such Purchaser or an affiliate of such Purchaser and are
in compliance with the Securities Act, the rules and regulations of the
Securities Act and such other securities laws as may be applicable, (2) Short
Sales by the Purchaser or an affiliate of such Purchaser which by virtue of the
procedures of such Purchaser are made without knowledge of the transactions
contemplated by this Agreement or (3) Short Sales by the Purchaser or an
affiliate of such Purchaser to the extent that such Purchaser or such affiliate
of such Purchaser is acting in the capacity of a broker-dealer executing
unsolicited third-party transactions.
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5. FORM D FILING; REGISTRATION; COMPLIANCE WITH THE SECURITIES ACT.
(a) Form D Filing; Registration of the Purchased Shares and the
Underlying Shares. The Company hereby agrees that it shall:
(i) file in a timely manner a Form D relating to the
sale of the Purchased Securities under this Agreement, pursuant to Regulation D
promulgated under the Securities Act;
(ii) prepare and file with the SEC as soon as practicable
and in no event later than thirty (30) days following the Closing, a
registration statement on Form S-3 (the "REGISTRATION STATEMENT"), to enable the
resale of the Purchased Shares and the sale of the Underlying Shares (together
with any shares of Common Stock issued as a dividend or other distribution with
respect to, or in exchange for, or in replacement of, the Purchased Shares or
the Underlying Shares, the "REGISTRABLE SHARES") by the Purchasers from time to
time on Nasdaq and use commercially reasonable efforts to cause such
Registration Statement to be declared effective, within ninety (90) days
following the Closing Date or, in the event of a review of the Registration
Statement by the SEC, within one hundred twenty (120) days following the Closing
Date, and, subject to exceptions provided herein, to remain continuously
effective until the earlier of (A) the second anniversary of the effective date
of the Registration Statement, (B) the date on which all Registrable Shares
purchased by the Purchasers pursuant to this Agreement have been sold thereunder
or (C) the date on which the Registrable Shares can be sold by nonaffiliates of
the Company pursuant to Rule 144(k) promulgated under the Securities Act (the
"REGISTRATION PERIOD"). In the event that the Company does not meet the
requirements for the use of Form S-3, the Company shall use such other form as
is available for such a registration, and shall convert such other form to Form
S-3, or file a replacement registration statement on Form S-3, promptly after
the first date on which it meets such requirements;
(iii) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the Prospectus (as defined below) used in connection therewith as
may be necessary to keep the Registration Statement effective at all times until
the end of the Registration Period;
(iv) furnish to each Purchaser with respect to the
Registrable Shares registered under the Registration Statement a copy of each
final Prospectus (as defined below) in which such Purchaser is listed as a
selling securityholder in order to facilitate the public sale or other
disposition of all or any of the Registrable Shares by the Purchasers;
(v) promptly notify each Purchaser named as a selling
securityholder when the Registration Statement has been declared effective;
(vi) promptly notify the Purchasers in writing of the
existence of any fact or the happening of any event, during the Registration
Period (but not as to the substance of any such fact or event), that makes any
statement of a material fact made in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the
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Registration Statement or the Prospectus in order to make the statements therein
not misleading (provided, however, that no notice by the Company shall be
required pursuant to this subsection (vi) in the event that the Company either
contemporaneously files a prospectus supplement to update the Prospectus or a
Form 8-K or other appropriate Exchange Act report that is incorporated by
reference into the Registration Statement, which, in either case, contains the
requisite information with respect to such material event that results in such
Registration Statement no longer containing any such untrue or misleading
statements);
(vii) furnish to each Purchaser upon written request, from
the date of this Agreement until the end of the Registration Period, one copy of
its periodic reports filed with the SEC pursuant to the Exchange Act and the
rules and regulations promulgated thereunder, if, during such period, such
documents cease to be filed on the SEC's XXXXX system or a successor thereto;
and
(viii) bear all expenses in connection with the procedures
described in paragraphs (i) through (viii) of this Section 5(a) and the
registration of the Registrable Shares pursuant to the Registration Statement
other than fees and expenses, if any, of legal counsel or other advisers to the
Purchasers or underwriting discounts, brokerage fees and commissions incurred by
the Purchasers, if any.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 5(a) with respect to Registrable Shares
held by a Purchaser that such Purchaser shall timely furnish to the Company a
completed Registration Statement Questionnaire on or before the Closing Date and
such other written information regarding itself, the Registrable Shares to be
sold by such Purchaser, and the intended method of disposition of the
Registrable Shares as shall be required to effect the registration of the
Registrable Shares. The Purchasers shall update such information as and when
necessary by written notice to the Company.
(b) Liquidated Damages.
(i) Delay in Filing or Effectiveness of Registration
Statement. In the event that the Registration Statement is not (A) filed with
the SEC within thirty (30) days following the Closing Date or (B) declared
effective within ninety (90) days following the Closing Date or, in the event of
a review of the Registration Statement by the SEC, within one hundred twenty
(120) days following the Closing Date, the Company shall pay to each Purchaser
who has provided the documents contemplated by Section 4(k) liquidated damages
at a rate equal to 1.5% per month (pro rata on a 30 day basis) of the total
purchase price of the Purchased Securities purchased by such Purchaser pursuant
to this Agreement. Notwithstanding the foregoing provisions, in no event shall
the Company be obligated to pay such liquidated damages (a) to more than one
Purchaser in respect of the same Purchased Securities for the same period of
time or (b) in an aggregate amount that exceeds 12% of the purchase price paid
by the Purchasers for the Units pursuant to this Agreement. Such liquidated
damages shall be payable within ten (10) days of the end of each one (1) month
anniversary of the applicable filing or effectiveness deadline set forth in this
section 5(b)(i).
(ii) Lapse in Effectiveness of Registration Statement. In
the event that the Registration Statement is filed and declared effective but,
during the Registration Period,
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shall thereafter cease to be effective or useable or the prospectus included in
the Registration Statement (the "PROSPECTUS", as amended or supplemented by any
prospectus supplement and by all other amendments thereto and all material
incorporated by reference in such Prospectus), other than as permitted hereby,
ceases to be usable, in either case, in connection with resales of Registrable
Shares, without such lapse being cured within ten (10) business days (the "CURE
PERIOD") by a post-effective amendment to the Registration Statement, a
supplement to the Prospectus or a report filed with the SEC pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act that cures such lapse, then the
Company shall pay to each Purchaser then listed as a Selling Securityholder in
the Prospectus, liquidated damages, for the period from and including the first
day following the expiration of the Cure Period until, but excluding, the
earlier of (1) the date on which such failure is cured and (2) the date on which
the Registration Period expires, at a rate equal to 1.5% per month (pro rata on
a 30 day basis) of the total purchase price of the Purchased Shares purchased by
such Purchaser pursuant to this Agreement that are immediately prior to such
lapse covered by the Registration Statement. Such liquidated damages shall be
payable within ten (10) days of the end of each one (1) month anniversary of the
expiration of the Cure Period. Such liquidated damages shall be the Purchaser's
sole monetary remedy for such lapse.
(c) Transfer of Registrable Shares After Registration;
Suspension.
(i) Each Purchaser agrees that it will not offer to sell
or make any sale, assignment, pledge, hypothecation or other transfer with
respect to the Registrable Shares that would constitute a sale within the
meaning of the Securities Act except pursuant to (1) the Registration Statement,
(2) Rule 144 of the Securities Act or (3) another exemption from registration
under the Securities Act, and that it will promptly notify the Company of any
changes in the information set forth in the Registration Statement after it is
prepared regarding the Purchaser or its plan of distribution to the extent
required by applicable law.
(ii) In addition to any suspension rights under paragraph
(iii) below, upon the happening of any pending corporate development, public
filing with the SEC or similar event, that, in the judgment of Company's Board
of Directors, renders it advisable to suspend use of the Prospectus, or upon the
request by an underwriter in connection with an underwritten public offering of
the Company's securities, the Company may, on not more than two (2)
non-consecutive occasions for not more than ninety (90) days on each such
occasion, suspend use of the Prospectus, on written notice to each Purchaser
(which notice will not disclose the content of any material non-public
information and will indicate the date of the beginning and end of the intended
period of suspension, if known), in which case each Purchaser shall discontinue
disposition of Registrable Shares covered by the Registration Statement or
Prospectus until copies of a supplemented or amended Prospectus are distributed
to the Purchasers or until the Purchasers are advised in writing by the Company
that sales of Registrable Shares under the applicable Prospectus may be resumed
and have received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such Prospectus. The
suspension and notice thereof described in this Section 5(c)(ii) shall be held
in strictest confidence and shall not be disclosed by the Purchasers.
(iii) Subject to paragraph (iv) below, in the event of:
(A) any request by the SEC or any other federal or state governmental authority
during the period of
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effectiveness of the Registration Statement for amendments or supplements to a
Registration Statement or related Prospectus or for additional information, (B)
the issuance by the SEC or any other federal or state governmental authority of
any stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (C) the receipt by the Company
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Shares for sale in any
jurisdiction or the initiation of any proceeding for such purpose, or (D) any
event or circumstance which necessitates the making of any changes in the
Registration Statement or Prospectus, or any document incorporated or deemed to
be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, then the Company shall deliver a certificate in
writing to the Purchasers (the "SUSPENSION NOTICE") to the effect of the
foregoing (which notice will not disclose the content of any material non-public
information and will indicate the date of the beginning and end of the intended
period of suspension, if known), and, upon receipt of such Suspension Notice,
the Purchasers will discontinue disposition of Registrable Shares covered by the
Registration Statement or Prospectus (a "SUSPENSION") until the Purchasers'
receipt of copies of a supplemented or amended Prospectus prepared and filed by
the Company, or until the Purchasers are advised in writing by the Company that
the current Prospectus may be used, and have received copies of any additional
or supplemental filings that are incorporated or deemed incorporated by
reference in any such prospectus. In the event of any Suspension, the Company
will use its commercially reasonable efforts to cause the use of the Prospectus
so suspended to be resumed as soon as possible after delivery of a Suspension
Notice to the Purchasers.
(iv) In the event of a sale of Registrable Shares by a
Purchaser, such Purchaser must also deliver to the Company's transfer agent,
with a copy to the Company, a certificate of subsequent sale reasonably
satisfactory to the Company, so that ownership of the Registrable Shares may be
properly transferred. The Company will cooperate to facilitate the timely
preparation and delivery of certificates (unless otherwise required by
applicable law) representing Registrable Shares sold.
(d) Indemnification. For the purpose of this Section 5(d), the
term "REGISTRATION STATEMENT" shall include any preliminary or final Prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 5(a).
(i) Indemnification by the Company. The Company agrees
to indemnify and hold harmless each Purchaser and each person, if any, who
controls any Purchaser within the meaning of the Securities Act, to the fullest
extent permitted by law, against any and all losses, claims, damages,
liabilities or reasonable expenses, joint or several, to which such Purchasers
or such 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 the Company, which consent
shall not be unreasonably withheld), insofar as such losses, claims, damages,
liabilities or reasonable expenses (or actions in respect thereof as
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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, 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 any of them, in light of the circumstances under which they were made, not
misleading, and will reimburse each Purchaser and each such controlling person
for any reasonable legal and other expenses as such reasonable expenses are
incurred by such Purchaser or such controlling person 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, expense or action arises out of or is based upon (A) an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment to or supplement of
the Registration Statement or Prospectus made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the
Purchaser expressly for use in the Registration Statement or the Prospectus, (B)
the failure of such Purchaser to comply with the covenants and agreements
contained in this Agreement respecting resale of the Purchased Shares or the
sale of the Underlying Shares, or (C) any untrue statement or omission of a
material fact required to make such statement not misleading in any Prospectus
that is corrected in any subsequent Prospectus that was delivered to the
Purchaser before the pertinent sale or sales by the Purchaser.
(ii) Indemnification by the Purchaser. Each Purchaser
will severally and not jointly 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, against any losses, claims, damages, liabilities or expenses to
which the Company, its directors, its officers who signed the Registration
Statement and any controlling persons 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, which consent shall not be unreasonably withheld) 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, the Prospectus, or any amendment or supplement to the Registration
Statement or Prospectus, or arise out of or are based upon the 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 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 or
on behalf of such Purchaser expressly for use therein, and the Purchaser will
reimburse the Company, each of its directors, each of its officers who signed
the Registration Statement, and any controlling persons for any reasonable legal
and other expense incurred by the Company, its directors, its officers who
signed the Registration Statement, and any controlling persons, in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the
Purchaser shall not be liable for any such untrue statement or alleged untrue
statement or omission or alleged omission with respect to which the Purchaser
has delivered to the Company
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in writing a correction before the occurrence of the event from which such loss
was incurred. Notwithstanding the provisions of this Section 5(d), the Purchaser
shall not be liable for any indemnification obligation under this Agreement in
excess of the aggregate amount of net proceeds received by the Purchaser from
the sale of the Registrable Shares pursuant to the Registration Statement.
(iii) Indemnification Procedure.
(A) Promptly after receipt by an indemnified
party under this Section 5(d) of notice of the threat or commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 5(d), promptly notify the
indemnifying party in writing of the claim; 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 under the indemnity
agreement contained in this Section 5(d) or otherwise, to the extent it is not
prejudiced as a result of such failure.
(B) 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
are legal defenses available to it or other indemnified parties that 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 5(d) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless:
a) 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, representing all of the
indemnified parties who are parties to such action); or
b) the indemnifying 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
the action against the indemnified party, in each of which cases the reasonable
fees and expenses of counsel for the indemnified party shall be at the expense
of the indemnifying party.
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(iv) Contribution. If the indemnification provided for in
this Section 5(d) is required by its terms but is for any reason held to be
unavailable to, or is otherwise insufficient to hold harmless, an indemnified
party under this Section 5(d) with respect to any losses, claims, damages,
liabilities or expenses referred to in this Agreement, then each 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
in this Agreement:
(1) in such proportion as is appropriate to
reflect the relative faults 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,
or
(2) if the allocation provided by clause (1)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative faults referred to in clause (1) above but the
relative benefits received by the Company and the Purchaser from the sale of the
Purchased Securities.
The respective 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 to which the consideration paid by such Purchaser to the Company
pursuant to this Agreement for the Purchased Securities 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
Purchased Securities that were sold pursuant to the Registration Statement and
the amount received by such Purchaser from such sale. The relative fault of the
Company and each Purchaser shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate material fact 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 Section 5(d)(iii), any reasonable legal
or other fees or expenses incurred by such party in connection with
investigating or defending any such action or claim. The provisions set forth in
Section 5(d)(iii) 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 Section 5(d)(iv); provided, however, that no additional notice shall be
required with respect to any threat or action for which notice has been given
under Section 5(d)(iii) for purposes of indemnification. The Company and each
Purchaser agree that it would not be just and equitable if contribution pursuant
to this Section 5(d)(iv) were determined solely by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) 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
5(d)(iv), no Purchaser shall 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 is not guilty of such
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fraudulent misrepresentation. The Purchasers' obligations to contribute pursuant
to this Section 5(d)(iv) are several and not joint.
(e) Rule 144 Information. For two (2) years after the date of
this Agreement, the Company shall file in a timely manner all reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations promulgated thereunder and shall take such further action to the
extent required to enable the Purchasers to sell the Purchased Shares and the
Underlying Shares pursuant to Rule 144 under the Securities Act (as such rule
may be amended from time to time).
6. CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT CLOSING. The
obligations of the Purchasers under Section 1(b) of this Agreement are subject
to the fulfillment or waiver, on or before the Closing, of each of the following
conditions:
(a) Representations and Warranties True. Each of the
representations and warranties of the Company contained in Section 3 shall be
true and correct in all material respects on and as of the date hereof
(provided, however, that such qualification shall only apply to representations
or warranties not otherwise qualified by materiality) and on and as of the date
of the Closing with the same effect as though such representations and
warranties had been made as of the Closing (except for representations and
warranties that speak as of a specific date).
(b) Performance. The Company shall have performed and complied
in all material respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by it on or before the Closing and shall have obtained all approvals, consents
and qualifications necessary to complete the purchase and sale described herein;
provided, however, that the Company may furnish to each Purchaser a facsimile
copy of the warrant representing the Purchased Warrants and of the stock
certificate representing the Purchased Shares, with the original warrant and
original stock certificate held in trust by counsel for the Company until
delivery thereof on the next business day.
(c) Compliance Certificate. The Company will have delivered to
the Purchasers a certificate signed on its behalf by its Chief Executive Officer
or Chief Financial Officer certifying that the conditions specified in Sections
6(a) and 6(b) hereof have been fulfilled.
(d) Agreement. The Company shall have executed and delivered to
the Purchasers this Agreement.
(e) Securities Exemptions. The offer and sale of the Purchased
Shares to the Purchasers pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act and the registration and/or
qualification requirements of all applicable state securities laws.
(f) No Suspension of Trading or Listing of Common Stock. The
Common Stock of the Company (i) shall be designated for quotation or listed on
Nasdaq and (ii) shall not have been suspended from trading on Nasdaq.
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(g) Good Standing Certificates. The Company shall have
delivered to the Purchasers a certificate of the Secretary of State of the State
of Delaware, dated as of a date within five days of the date of the Closing,
with respect to the good standing of the Company.
(h) Secretary's Certificate. The Company shall have delivered
to the Purchasers, a copy of a certificate of the Company executed by the
Company's Secretary attaching and certifying to the truth and correctness of (A)
the Certificate of Incorporation, (B) the Bylaws and (C) the resolutions adopted
by the Company's Board of Directors in connection with the transactions
contemplated by this Agreement.
(i) Opinion of Company Counsel. The Purchasers will have
received an opinion on behalf of the Company, dated as of the date of the
Closing, from Ropes & Xxxx LLP, counsel to the Company, in the form attached as
Exhibit C.
(j) No Statute or Rule Challenging Transaction. No statute,
rule, regulation, executive order, decree, ruling, injunction, action,
proceeding or interpretation shall have been enacted, entered, promulgated,
endorsed or adopted by any court or governmental authority of competent
jurisdiction or any self-regulatory organization or the staff of any of the
foregoing, having authority over the matters contemplated hereby which questions
the validity of, or challenges or prohibits the consummation of, any of the
transactions contemplated by this Agreement.
(k) Amount Invested. The Purchasers under this Agreement shall
have tendered at closing no less than $4.5 million in the aggregate for the
Purchased Securities.
(l) Other Actions. The Company shall have executed such
certificates, agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by the Purchasers in
connection with the transactions contemplated hereby.
(m) Closing. The Closing shall occur by no later than September
15, 2006.
7. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The
obligations of the Company to the Purchasers under this Agreement are subject to
the fulfillment or waiver, on or before the Closing, of each of the following
conditions:
(a) Representations and Warranties True. The representations
and warranties of the Purchasers contained in Section 4 shall be true and
correct in all material respects on and as of the date hereof (provided,
however, that such qualification shall only apply to representations and
warranties not otherwise qualified by materiality) and on and as of the date of
the Closing with the same effect as though such representations and warranties
had been made as of the Closing.
(b) Performance. The Purchasers shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing and shall have obtained all
approvals, consents and qualifications necessary to complete the purchase and
sale described herein.
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(c) Agreement. The Purchasers shall have executed and delivered
to the Company this Agreement (and Appendix I and II hereto).
(d) Securities Exemptions. The offer and sale of the Purchased
Securities to the Purchasers pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act and the registration and/or
qualification requirements of all applicable state securities laws.
(e) Payment of Purchase Price. The Purchasers shall have
delivered to the Company's escrow agent by wire transfer of immediately
available funds, full payment of the purchase price for the Purchased Securities
as specified in Section 1(b).
(f) Other Actions. The Purchasers shall have executed such
certificates, agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by the Company in
connection with the transactions contemplated hereby.
(g) No Statute or Rule Challenging Transaction. No statute,
rule, regulation, executive order, decree, ruling, injunction, action,
proceeding or interpretation shall have been enacted, entered, promulgated,
endorsed or adopted by any court or governmental authority of competent
jurisdiction or any self-regulatory organization or the staff of any of the
foregoing, having authority over the matters contemplated hereby which questions
the validity of, or challenges or prohibits the consummation of, any of the
transactions contemplated by this Agreement.
8. MISCELLANEOUS.
(a) Successors and Assigns. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the Purchasers holding at least a majority of the total aggregate
number of Purchased Shares and Underlying Shares then outstanding (excluding any
shares sold to the public pursuant to Rule 144 or otherwise). Any Purchaser may
assign its rights under this Agreement to any person to whom the Purchaser
assigns or transfers any Purchased Securities, provided that such transferee
agrees in writing to be bound by the terms and provisions of this Agreement, and
such transfer is in compliance with the terms and provisions of this Agreement
and permitted by federal and state securities laws.
(b) Governing Law. This Agreement will be governed by and
construed and enforced under the internal laws of the State of New York, without
reference to principles of conflict of laws or choice of laws. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
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(c) Survival. The representations and warranties of the Company
and the Purchasers contained in Sections 3 and 4 of this Agreement shall survive
until the second (2nd) anniversary of the Closing Date.
(d) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(e) Headings. The headings and captions used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules will, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by reference.
(f) Notices. Any notices and other communications required or
permitted under this Agreement shall be in writing and shall be delivered (i)
personally by hand or by courier, (ii) mailed by United States first-class mail,
postage prepaid or (iii) sent by facsimile directed (1) if to the Purchaser, at
the Purchaser's address or facsimile number set forth on Exhibit A to this
Agreement, or at such address or facsimile number as the Purchaser may designate
by giving at least ten (10) days' advance written notice to the Company or (2)
if to the Company, to its address or facsimile number set forth below, or at
such other address or facsimile number as the Company may designate by giving at
least ten (10) days' advance written notice to the Purchaser. All such notices
and other communications shall be deemed given upon (i) receipt or refusal of
receipt, if delivered personally, (ii) three days after being placed in the
mail, if mailed, or (iii) confirmation of facsimile transfer, if faxed.
The address of the Company for the purpose of this Section 9(f) is as
follows:
Biopure Corporation
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Tel: 000.000.0000
Fax: 000.000.0000
Attention: Xxxxxxx X. Xxxxxx, Chief Financial Officer
with a copy to:
Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Tel: 000.000.0000
Fax: 000.000.0000
Attention: Xxxx Xxxxxxxx
(g) Amendments and Waivers. This Agreement may be amended and
the observance of any term of this Agreement may be waived only with the written
consent of the Company and the Purchasers holding at least a majority of the
total aggregate number of
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Purchased Shares and Underlying Shares then held by the Purchasers; provided
that any provision for the sole benefit of the Company may be waived by the
Company. Any amendment effected in accordance with this Section 8(g) will be
binding upon the Purchasers, the Company and their respective successors and
permitted assigns.
(h) Severability. If any provision of this Agreement is held to
be unenforceable under applicable law, such provision will be excluded from this
Agreement and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.
(i) Entire Agreement. This Agreement, together with all
exhibits and schedules hereto and thereto constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties with respect to the
subject matter hereof.
(j) Further Assurances. From and after the date of this
Agreement, upon the request of the Company or the Purchasers, the Company and
the Purchasers will execute and deliver such instruments, documents or other
writings, and take such other actions, as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
(k) Meaning of Include and Including. Whenever in this
Agreement the word "include" or "including" is used, it shall be deemed to mean
"include, without limitation" or "including, without limitation," as the case
may be, and the language following "include" or "including" shall not be deemed
to set forth an exhaustive list.
(l) Fees, Costs and Expenses. Except as otherwise provided for
in this Agreement, all fees, costs and expenses (including attorneys' fees and
expenses) incurred by any party hereto in connection with the preparation,
negotiation and execution of this Agreement and the exhibits and schedules
hereto and the consummation of the transactions contemplated hereby and thereby
(including the costs associated with any filings with, or compliance with any of
the requirements of any governmental authorities), shall be the sole and
exclusive responsibility of such party.
(m) 8-K Filing and Publicity. As soon as practicable following
the execution of this Agreement but in no event later than 9:30 a.m. EST on the
day following the execution of this Agreement, the Company shall file a Current
Report on Form 8-K with the SEC describing the transaction contemplated by this
Agreement as an exhibit to such filing (the "8-K FILING" including all
attachments). Neither the Company nor any Purchaser shall issue any press
releases or any other public statements with respect to the transaction
contemplated by this Agreement; provided, however, that the Company shall be
entitled, without the prior approval of any Purchaser, to issue any press
release or make any other public disclosure (including a press release pursuant
to Rule 135(c) under the Securities Act) (i) in substantial conformity with the
8-K Filing or (ii) as is required by applicable law, regulations, and Nasdaq
rules.
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(n) Stock Splits, Dividends and other Similar Events. The
provisions of this Agreement shall be appropriately adjusted to reflect any
stock split, stock dividend, reorganization or other similar event that may
occur with respect to the Company after the date hereof and prior to the Closing
Date.
(o) Remedies. In addition to being entitled to exercise all
rights provided herein, each Purchaser and the Company will be entitled to
specific performance under this Agreement. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agrees to
waive in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.
[Remainder of page intentionally left blank.]
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
BIOPURE CORPORATION
By: /s/ XXXXXXX X. XXXXXX
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
[Purchaser signature pages to follow.]
[SECURITIES PURCHASE AGREEMENT]
[SECURITIES PURCHASE AGREEMENT]
SIGNATURE PAGE TO
SECURITIES PURCHASE AGREEMENT
DATED AS OF AUGUST 17, 2006
BY AND AMONG
BIOPURE CORPORATION
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Biopure Corporation the
Purchase Agreement (the "AGREEMENT") to which this signature page is attached
effective as of the date of the Agreement, which Agreement and signature page,
together with all counterparts of such Agreement and signature pages of the
other Purchasers named in such Agreement, shall constitute one and the same
document in accordance with the terms of such Agreement.
Number of Units: __________
[PURCHASER]
Signature: ___________________________
Name: ________________________________
Title: _______________________________
Address: _____________________________
_____________________________
_____________________________
Tel: _________________________________
Fax: _________________________________
Tax ID Number: _______________________
[SECURITIES PURCHASE AGREEMENT]
EXHIBIT A
SCHEDULE OF PURCHASERS
No. Name and Address Number of Shares
--- ---------------- ----------------
1. IFS Ltd. 1,338,028
2. Xxxxxx Xxxxxx 739,436
3. Southridge Partners LP 563,380
4. Cranshire Capital, L.P. 563,380
5. Nite Capital LP 492,957
6. Nu Vision Holdings llc. 352,112
7. Castle Creek Technology Partners LLC 352,112
8. Xxxxxxxx and Xxxxxx Xxxxxxxx 323,943
9. Iroquois Master Fund Ltd. 281,690
10. Crescent International Ltd. 281,690
11. Bristol Investment Fund, Ltd. 281,690
12. Cansco LLC 239,436
13. Xxx Xxxxxxx 205,633
14. Xxxxxx Bay Fund LP 175,000
15. Southshore Capital Fund Ltd. 140,845
16. Xxxxxxxxxxx X. Xxxxx 105,633
17. Xxxxxxx Xxxxx 77,464
18. Xxxxxx Bay Overseas Fund Ltd. 75,000
19. Xxxxx X. Xxxxx 70,422
20. Trust U/W Xxxxx Xxxxx 70,422
27
No. Name and Address Number of Shares
--- ---------------- ----------------
21. Sun West Holdings, Inc. 70,422
22. Xxxxxxx Xxxxxx 70,422
23. M & I Dehy Inc. 63,380
24. Xxxx Family Trust, Xxxxxxx Xxxx TTEE 56,338
25. Xxxxx X. Xxx/Xxxxxxx X. Xxx 40,845
26. Xxxxxx X. Xxxxx 35,211
27. Xxxxxxx Xxxxxxx 35,211
28. Xxxxxx X. Xxxxx MD PC Pension 35,211
29. Xxxxxx X. & Xxxxxxx X. Xxxxx 35,211
30. Xxxx Xxxxx Xxxxxxxxxxx 35,211
31. Xxxx Xxxxxxxxx 30,985
32. Xxxxxx Eng 29,577
33. Xxxxxx Xxxxxx Xxxxxxxx 28,169
34. Xxxxx X. Xxxxxxx 28,169
35. Xxxxxxx X. Xxxxx 28,169
36. Xxxxxx X. & Xxxxxx X. Xxxxx 28,169
37. Xxxxxx X. Xxxxx MD 21,126
38. Xxx Xxxxx - Xxxxxx Xxxxx 20,281
39. Xxxxx X. Xxxxxxxxx 20,281
40. Xxxxx X. Xxx 20,281
41. Xxxxx Xxxxxx 17,605
28
No. Name and Address Number of Shares
--- ---------------- ----------------
42. Xxxxx X. Xxxxxx 14,084
43. Xxxxxxxx Xxxxxxx & Xxxx Xxxxxxx 14,084
44. Xxx Xxxxxxx 14,084
45. Xxxxxxx X. Xxxxxx 14,084
46. Xxxxx Xxxxxxx 14,084
47. Xxxxxx Xxxxx 11,267
48. Xxxxxx Xxxxxxxx 7,042
49. Xxxxxx & Xxxxxx Xxxxxxxxx 6,478
29
EXHIBIT B
[FORM OF WARRANT]
30
EXHIBIT C
[FORM OF R&G OPINION]
31
APPENDIX I
[STOCK CERTIFICATE AND WARRANT QUESTIONNAIRE]
32
APPENDIX II
[REGISTRATION STATEMENT/SUITABILITY QUESTIONNAIRE]
33
