PURCHASE AGREEMENT
NexMed, Inc.
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxx Xxxxxx 00000
Ladies & Gentlemen:
The undersigned purchaser (the "Purchaser") hereby confirms its agreement
with you as follows:
1. This Purchase Agreement (the "Purchase Agreement") is made by and
between NexMed, Inc., a Nevada corporation (the "Company"), and the Purchaser as
of the date this Purchase Agreement is accepted by the Company below (the
"Effective Date").
2. This Purchase Agreement is one of a series of purchase agreements of the
Company relating to the offering (the "Offering") of Units ("Units"), each Unit
consisting of five shares of the Company's Common Stock, par value $.001 per
share (the "Common Stock"), and one two (2) year warrant (the "Warrant") to
purchase one share of the Company's Common Stock. A maximum of $8.5 million will
be raised in the Offering. Each Unit of five shares of Common Stock and one
Warrant will be sold for $11.25 (the "Purchase Price"). Each Warrant will have
an exercise price of $2.81.
3. The Company and the Purchaser agree that the Purchaser will purchase
from the Company, and the Company will sell to the Purchaser _______ Units, at
the Purchase Price per Unit and pursuant to the Terms and Conditions for
Purchase of Common Stock attached hereto as Annex I and incorporated herein by
reference as if fully set forth herein.
4. The Company makes no representation that this Purchase Agreement will be
accepted by the Company; however, the Company will accept or reject this
Purchase Agreement by no later than 5:00 P.M. (Eastern Standard Time) on July
15, 2002.
5. Purchaser hereby agrees not to engage, directly or indirectly, in any
short sale or third party short sales of Common Stock or hold a "put equivalent
position" with respect to the Common Stock (as defined in Rule 16a-1 of the 0000
Xxx) of the Company's Common Stock for a twenty (20) day period prior to and for
a one hundred fifty (150) day period following the Closing Date (as defined in
Annex 1).
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
PURCHASER
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Print Name
By:
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Title:
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Address:
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ACCEPTED as of ____________, 2002
NEXMED, INC.
By:________________________________
Title:_______________________________
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF COMMON STOCK
1. Authorization and Sale of the Securities.
1.1 Authorization of the Common Stock. The Company has authorized the
issuance and sale of up to three million seven hundred eighty eight thousand
(3,788,000) shares of the Company's Common Stock, par value $.001 per share (the
"Common Stock") and the issuance of up to 757,600 warrants to purchase one (1)
share of the Company's Common Stock each (the "Warrant") in the form attached
hereto as Exhibit 1.1.
1.2 Sale of Common Stock. Subject to the terms and conditions hereof, the
Purchaser will purchase the number of Units agreed upon by the Purchaser at the
Purchase Price, as set forth in the Purchase Agreement by and between the
Company and the Purchaser (the "Purchase Agreement"). For each Unit, the
Purchaser shall receive five shares of Common Stock and a Warrant to purchase a
share of Common Stock. The shares of Common Stock sold to Purchaser pursuant to
the Purchase Agreement are hereinafter referred to as the "Initial Shares" and
the shares of Common Stock arising from the exercise of the Warrant are
hereinafter referred to as the "Warrant Shares." The Initial Shares, the Warrant
and the Warrant Shares are hereinafter collectively referred to as the
"Securities."
2. Closing Date.
2.1 Closing Date. The closing of the purchase and sale of the Common Stock
in the Offering hereunder (the "Closing") shall be held at the offices of Xxxxxx
Xxxxxx Xxxxx Xxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00
a.m. New York time, on June 28, 2002 or at such other time within ten (10)
business days thereof as the Company may select. The date of the Closing of the
purchase or sale of Common Stock in connection with the Offering is hereinafter
referred to as the "Closing Date." As of the Closing Date, the Company shall
prepare a certificate or certificates registered in the name of the Purchaser
representing the Initial Shares to be purchased by such Purchaser under the
Purchase Agreement, and the Purchaser shall send to the Company a wire transfer
(in accordance with the instructions set forth on Exhibit 2.1(a) hereto) in the
amount of the purchase price of the Common Stock to be purchased by such
Purchaser, payable to the Company's order. Funds received prior to the Closing
Date will not bear interest.
2.2 Warrant Issuance. The Company will issue a Warrant to purchase
one-fifth (1/5th) of a share of the Company's Common Stock per whole share of
Common Stock purchased by the Purchaser at the Closing at an exercise price per
share of Common Stock of $2.81 per share. The Warrant will be issued as of the
Closing and the Company shall deliver the Warrant Certificate to the Purchaser
as promptly as practicable after the Closing Date.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Purchaser as of the Closing Date as follows:
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3.1 Organization and Standing. Each of the Company and its material
subsidiaries has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation with full
corporate power and corporate authority to own, lease and operate its properties
and conduct its businesses as described in the SEC Documents (as defined below);
each of the Company and its material subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the ownership or leasing of properties or the conduct of its business
as presently conducted require such qualification, except where the failure to
be so qualified would not have a material adverse effect on the condition
(financial or otherwise), earnings, operations, or business of the Company and
its material subsidiaries taken as a whole.
3.2 Corporate Power; Authorization. The Company has all requisite legal and
corporate power and has taken all requisite corporate action to execute and
deliver the Purchase Agreement, to sell and issue the Securities and to carry
out and perform all of its obligations hereunder. The Purchase Agreement has
been duly authorized, executed and delivered on behalf of the Company and
constitutes the valid and binding agreement of the Company, enforceable in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally and (iii) rights to indemnification hereunder may be
limited by applicable law.
3.3 Validity of Securities. The Company has full corporate power and lawful
authority to sell the Common Stock on the terms and conditions contemplated
herein, and when so sold against payment therefor as provided herein, the
Initial Shares and, when issued, the Warrants will be validly authorized and
issued, fully paid and nonassessable. The issuance and delivery of each of the
Initial Shares and the Warrants is not subject to preemptive or any similar
rights of the stockholders of the Company or any liens or encumbrances arising
through the Company and when the Warrant Shares are issued in accordance with
the terms of the Warrants, they will be validly issued and outstanding, fully
paid and nonassessable.
3.4 SEC Documents; Financial Statements. The Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2001, the Company's Quarterly
Report on Forms 10-Q for the quarterly period ended March 31, 2002, and the
Company's Current Report on Form 8-K dated June 12, 2002 (the "SEC Documents")
as filed by the Company with the Securities and Exchange Commission (the
"Commission") have been made available to the Purchaser. The SEC Documents
conform in all material respects to the requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as applicable, and the rules,
regulations and instructions of the Commission thereunder. The SEC Documents did
not as of their dates contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto. Except as may be
indicated in the notes to the Financial Statements, the Financial Statements
have been prepared in accordance with
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generally accepted accounting principles consistently applied and fairly
present, in all material respects, the consolidated financial position of the
Company and its subsidiaries at the dates thereof and the consolidated results
of their operations, stockholders' equity and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal, recurring
adjustments).
3.5 Subsequent Events. Since March 31, 2002 and except as disclosed in the
SEC Documents, (i) neither the Company nor any of its subsidiaries has incurred
any liabilities or obligations, contingent or otherwise, that are material in
the aggregate to the Company and its subsidiaries, taken as a whole, except in
the ordinary course of business, and (ii) there has been no material adverse
change in the condition (financial or otherwise), earnings, operations, business
of the Company and its subsidiaries, taken as a whole, as presently conducted.
3.6 Legal Proceedings. Except as set forth in the SEC Documents, there are
no material legal proceedings or to the knowledge of the Company threatened, to
which the Company or any subsidiary is a party or to which property of the
Company or any subsidiary is subject.
3.7 Government Approval. Subject to compliance with the provisions of
applicable securities laws of state or foreign jurisdictions, no other approval
of any public body (state or federal) is or will, on the Closing Date be
necessary in connection with the offer, issue and sale of the Initial Shares and
the Warrant as contemplated herein.
3.8 No Breach. The consummation of the transactions contemplated in the
Purchase Agreement and the fulfillment of the terms thereof will not result in a
breach of any of the terms or provisions of, or constitute a default under, the
Company's Certificate of Incorporation, the Company's by-laws, or any material
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company is a party or by which it is bound.
3.9 Licenses and Consents. To the knowledge of the Company, each of the
Company and its material subsidiaries is in possession of and operating in
compliance with all authorizations, licenses, certificates, consents, orders and
permits from state, federal and other regulatory authorities that are material
to the conduct of its business, all of which are valid and in full force and
effect, except to the extent that the failure to have or be in compliance with
such would not have a material adverse effect on the Company's business or
results of operations.
3.10 Outstanding Stock. All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable; all issued and outstanding shares of capital stock of each
material subsidiary of the Company have been duly authorized and validly issued
and are fully paid and nonassessable.
3.11 Intellectual Property. Except as set forth in the SEC Documents, to
the best of the Company's knowledge, each of the Company and its subsidiaries
owns or possesses adequate rights to use all material patents, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names and
copyrights which are described in the SEC Documents; except as set forth in the
SEC Documents, the Company has not received any notice of, and has no knowledge
of, any infringement of or conflict with asserted rights of the Company by
others with respect to any patent, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names and copyrights which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business of the Company and its material subsidiaries,
taken as a whole, as presently conducted; and, except as set forth in the SEC
Documents, the Company has not received any notice of, and has no
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knowledge of, any infringement of or conflict with the asserted rights of others
with respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names and copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a material adverse effect on the condition (financial or otherwise),
earnings, operations, or business of the Company and its material subsidiaries,
taken as a whole, as presently conducted.
3.12 Common Stock Registration. The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is quoted on the NASDAQ Stock Market and
the Company has taken no action designed to, or, to the Company's knowledge,
likely to, have the effect of terminating the registration of the Common Stock
under the Exchange Act or removing the Common Stock from quotation on the NASDAQ
Stock Market, nor has the Company received notification that the Commission or
NASD is contemplating terminating such registration or quotation.
3.13 Private Placement. The Company has not taken any action inconsistent
with the treatment of the sale of the Common Stock pursuant to the Purchase
Agreement as a private placement exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act") pursuant to the
provisions of Section 4(2) thereof and Regulation D thereunder. Assuming the
accuracy of the purchasers' representations and warranties in the Purchase
Agreement and the compliance by each purchaser with all of its covenants and
agreements, the offer, sale, and issuance by the Company of the Common Stock to
the purchasers as contemplated herein constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act.
4. Representations and Warranties of the Purchaser; Access to Information;
Independent Investigation. The Purchaser hereby represents and warrants to the
Company as follows:
4.1 Investment Intent. The Purchaser is purchasing the Common Stock and
Warrants for investment for its own account only and not with a view to, or for
resale in connection with, any "distribution" thereof within the meaning of the
Securities Act. The Purchaser understands that the Securities have not been
registered under the Securities Act or registered or qualified under any state
securities law in reliance on specific exemptions therefrom, which exemptions
may depend upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
4.2 Investment Experience. The Purchaser is an "accredited investor" within
the meaning of Rule 501 of the Commission, and was not organized for the
specific purpose of
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acquiring the Common Stock. The Purchaser is aware of the Company's business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Common Stock and Warrants. The Purchaser has such business and financial
experience as is required to give it the capacity to protect its own interests
in connection with the purchase of the Securities.
4.3 Authorization. This Purchase Agreement has been duly and validly
authorized, executed and delivered on behalf of the Purchaser and is a valid and
binding agreement of the Purchaser enforceable in accordance with its terms,
subject as to enforceability to general principles of equity and to bankruptcy,
insolvency, moratorium and other similar laws affecting the enforcement of
creditors' rights generally.
4.4 Compliance with Securities Laws and Regulations. All subsequent offers
and sales of the Securities by the Purchaser shall be made pursuant to
registration under the Securities Act and qualification under the applicable
state securities laws or pursuant to exemptions from registration and
qualification.
4.5 Reliance by Company. The Purchaser understands that the Common Stock
and Warrants are being offered and sold to it in reliance on specific exemptions
from the registration and qualification requirements of United States federal
and state securities laws and that the Company is relying upon the truth and
accuracy of, and the Purchaser's compliance with the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Purchaser to acquire the Securities.
4.6 No Government Approval. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Common Stock and
Warrants.
4.7 No Legal, Tax or Investment Advice. The Purchaser understands that
nothing in the Purchase Agreement or any other materials presented to the
Purchaser in connection with the purchase and sale of the Common Stock and
Warrants constitutes legal, tax or investment advice. The Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Securities.
4.8 Access to Information. The Purchaser acknowledges that it has had the
opportunity to ask questions, to receive answers concerning the terms and
conditions of the Offering from the Company and to obtain any additional
information from the Company that the Company possesses or can acquire without
unreasonable effort or expense regarding the Offering. Purchaser has received
and read the SEC Documents and acknowledges that no private placement memorandum
or similar document has been prepared in connection with the Offering and the
Company has not made any representations or warranties other than as
specifically set forth herein.
4.9 Individual Investor. If Purchaser is a natural person, Purchaser makes
the additional representations and warranties set forth on Exhibit 4.9 attached
hereto.
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4.10 Sufficiency of Proceeds. The Purchaser acknowledges and understands
that the Company's current expenditure for its general corporate overhead and
the ongoing clinical studies is approximately $1.8 million per month. The
Company currently has approximately $8 million in cash and cash equivalents. The
Company intends to use the proceeds of this Offering for general corporate
purposes.
4.11 Risk and Suitability. The Purchaser acknowledges and realizes that
Purchaser's purchase of the Securities involves a high degree of risk. In
addition the Purchaser has such knowledge and experience in business and
financial matters, including, without limitation, investment in restricted
securities of biotechnology and pharmaceutical companies, as will enable
Purchaser to evaluate the merits and risks of an investment in the Securities
and to make an informed investment decision. The Purchaser understands that the
Company anticipates, based on currently proposed plans and assumptions relating
to its operations, that the proceeds of this Offering, together with the
Company's available cash and cash equivalents, will provide sufficient working
capital to meet the Company's needs for approximately the next 8 months
(assuming the sale of all the shares of Common Stock offered). In the event that
the Company's plans change or its assumptions change or prove to be inaccurate
(due to unanticipated expenses, delays, problems, difficulties or otherwise),
the Company would be required to seek additional financing sooner than
anticipated. The Company has no current arrangements with respect to, or sources
of, additional financing, and it is not anticipated that existing stockholders
will provide any portion of the Company's future financing requirements. There
can be no assurance that additional financing will be available to the Company
on commercially reasonable terms, or at all.
5. Restrictions on Transfer, Information and Registration Rights.
5.1 Restrictions on Transferability. The Securities shall not be
transferable in the absence of a registration under the Securities Act or an
exemption therefrom, or in the absence of compliance with any term of the
Purchase Agreement. Without limiting the foregoing, (i) the Securities may be
offered, resold, pledged or otherwise transferred only (A) in a transaction
meeting the requirements of Rule 144 of the Commission ("Rule 144"), or in
accordance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company so requests)
or (B) pursuant to an effective registration statement under the Securities Act,
in each case in accordance with the applicable securities laws of any state of
the United States or any other applicable jurisdiction and (ii) Purchaser will
be required to notify any subsequent purchaser of the resale restrictions set
forth above. The Company shall be entitled to give stop transfer instructions to
the transfer agent with respect to the Securities in order to enforce the
foregoing restrictions.
5.2 Restrictive Legends. Each certificate representing any of the
Securities shall bear substantially the following legend (in addition to any
legends required under applicable securities laws).
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In the Case of All Securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER
THE SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE SECURITIES
LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS OR
UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS
THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER
RESTRICTIONS, AND THE HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS BOUND BY THE TERMS OF A
PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY
(COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).
5.3 Registration on Form S-3.
5.3.1 Filing of Registration Statement. The Company shall use its best
efforts to secure effectiveness of, as soon as practicable, and shall file
no later than sixty (60) days after the Closing Date (unless such
registration is not permitted under the applicable rules and regulations of
the Commission), a registration statement on Form S-3 (the "Registration
Statement") with the Commission under the Securities Act to register the
resale of the Initial Shares and Warrant Shares (the "Registrable
Securities"); provided however, that in the event the Company fails (due to
an action or inaction of the Company) to be eligible to file a registration
statement on Form S-3, the Company shall file a registration statement on
Form S-1.
5.3.2 Registration Expenses. The Company shall pay all Registration
Expenses (as defined below) in connection with any registration,
qualification or compliance hereunder, and each holder of Registrable
Securities (the "Holders") shall pay all Selling Expenses (as defined
below) and other expenses that are not Registration Expenses relating to
the Registrable Securities resold by such Holder. "Registration Expenses"
shall mean all expenses, except for Selling Expenses, incurred by the
Company in complying with the registration provisions herein described,
including, without limitation, all registration, qualification and filing
fees, printing expenses, fees and disbursements 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. "Selling Expenses" shall mean all
selling commissions,
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underwriting fees and stock transfer taxes applicable to the Registrable
Securities and all fees and disbursements of counsel for any Holder.
5.3.3 Additional Company Obligations. In the case of any registration
effected by the Company pursuant to these registration provisions, the
Company will use its reasonable efforts to: (i) keep such registration
effective until two years after the Closing Date (or such earlier date as
all of the Registrable Securities have been sold or may be sold under Rule
144); (ii) prepare and file with the SEC such amendments and supplements to
the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of the Registrable
Securities; (iii) furnish such reasonable number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Holder from time to time may reasonably request; (iv)
cause all such Registrable Securities registered as described herein to be
listed on each securities exchange and quoted on each quotation service on
which similar securities issued by the Company are then listed or quoted;
(v) provide a transfer agent and registrar for all Registrable Securities
registered pursuant to the Registration Statement and a CUSIP number for
all such Registrable Securities; (vi) reasonable efforts to comply with all
applicable rules and regulations of the Commission, and (vii) file the
documents required of the Company and otherwise use its best efforts to
maintain requisite blue sky clearance in (A) all jurisdictions in which any
of the Registrable Securities are originally sold and (B) all other states
specified in writing by a Holder as may reasonably be required to sell such
Holder's Registrable Securities, provided as to clause (B), however, that
the Company shall not be required to qualify to do business or consent to
service of process in any state in which it is not now so qualified or has
not so consented.
5.3.4 Rule 144(k); Holder Information. No Holder shall be entitled to
sell under the Registration Statement with respect to a resale of
Registrable Securities if Rule 144(k) is available with respect to such
sale. In addition, each Holder of Registrable Securities shall furnish to
the Company such information and such representations and covenants
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
described herein. Such Holder shall represent that such information is true
and complete.
5.3.5 Additional Holder Obligations. Each Holder covenants and agrees
with the Company that it will promptly notify the Company in writing (i) if
any information previously supplied by such Holder to the Company for
inclusion in the registration statement is no longer complete or accurate
and (ii) when it has completed the sale of all Registrable Securities
registered under the registration statement.
5.3.5.1 Allowed Delay. For not more than twenty (20) consecutive days
on which there is trading in the Common Stock on the principal market or
exchange on which the Common Stock is then trading (a "Trading Day"), and
for a total of not more than thirty (30) Trading Days in any twelve (12)
consecutive month period, the Company may delay the disclosure of material
non-public information concerning the Company, by terminating or suspending
effectiveness of any registration contemplated by this Section not
containing such
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information, the disclosure of which at the time is not, in the good faith
opinion of the Company, in the best interests of the Company (an "Allowed
Delay"); provided, that the Company shall promptly (a) notify the Purchaser
in writing of the existence of (but in no event, without the prior written
consent of the Purchaser, shall the Company disclose to the Purchaser any
of the facts or circumstances regarding) material non-public information
giving rise to an Allowed Delay, and (b) advise the Purchaser in writing
(as provided in Section 6.6 hereof) to cease all sales under the
Registration Statement until the end of the Allowed Delay. The Allowed
Delay shall commence when such notice is received by Purchaser. The Company
shall have no further obligation to keep the Registration Statement in
effect after the second anniversary of the Closing Date (the "Registration
Period"). The duration of the Registration Period will be extended by the
number of days of any and all Allowed Delays.
5.3.5.2 Mechanics. Each Purchaser hereby covenants and agrees that it
will not sell any Registrable Securities pursuant to the Registration
Statement during the periods of an Allowed Delay as set forth in this
Section 5.3.5. Subject to the foregoing, when a Holder is entitled to sell
and gives notice of its intent to sell pursuant to the Registration
Statement, the Company shall furnish to such Holder a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchaser(s) of such
shares, such prospectus shall not include an untrue statement of material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or incomplete in
the light of the circumstances then existing.
5.4 Indemnification and Contribution.
5.4.1 Indemnification by the Company. The Company agrees to indemnify
and hold harmless each Holder from and against any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) to which such
Holder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of, or are based upon, any untrue statement
of a material fact contained in the Registration Statement, on the
effective date thereof; provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damages or
liability arises out of, or is based upon (i) an untrue statement or
alleged untrue statement made in such Registration Statement in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of such Holder specifically for use in preparation of the
Registration Statement or (ii) any untrue statement in any prospectus that
is corrected in any subsequent prospectus that was delivered to the Holder
prior to the pertinent sale or sales by the Holder.
5.4.2 Indemnification by Holder. Each Holder, severally and not
jointly, agrees to indemnify and hold harmless the Company from and against
any losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) to which the Company may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or
are based upon an untrue statement made in such Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder specifically for use in preparation
of the Registration Statement, provided, however, that no Holder shall be
liable in
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any such case for (i) any untrue statement included in any Prospectus which
statement has been corrected, in writing, by such Holder and delivered to
the Company at least three business days before the sale from which such
loss occurred or (ii) any untrue statement in any prospectus that is
corrected in any subsequent prospectus that was delivered to the Holder
prior to the pertinent sale or sales by the Holder, and each Holder,
severally and not jointly, will, as incurred, reimburse the Company for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim. No Holder shall
be required to indemnify the Company in an amount in excess of the net
amount received by the Holder from the sale of the Registrable Securities
to which such indemnity relates.
5.4.3 Indemnification Procedures. Promptly after receipt by any
indemnified person of a notice of a claim or the beginning of any action in
respect of which indemnity is to be sought against an indemnifying person
pursuant to this Section 5.4, such indemnified person shall notify the
indemnifying person in writing of such claim or of the commencement of such
action, and, subject to the provisions hereinafter stated, in case any such
action shall be brought against an indemnified person and the indemnifying
person shall have been notified thereof, the indemnifying person shall be
entitled to participate therein, and, to the extent that it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to the
indemnified person. After notice from the indemnifying person to such
indemnified person of the indemnifying person's election to assume the
defense thereof, the indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided,
however, that if there exists or shall exist a conflict of interest that
would make it inappropriate in the reasonable opinion of counsel for the
indemnified person for the same counsel to represent both the indemnified
person and such indemnifying person or any affiliate or associate thereof,
the indemnified person shall be entitled to retain its own counsel at the
expense of such indemnifying person; provided, however, that in the case of
the immediately preceding proviso the indemnifying person shall not be
responsible for the legal expenses of more than one counsel for all
indemnified persons.
5.4.4 Contribution in Lieu of Indemnity. If the indemnification
provided for in this Section 5.4 is unavailable to or insufficient to hold
harmless an indemnified party under Section 5.4.1 or 5.4.2 above in respect
of any losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as
result of such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations.
The relative fault 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 relates to
information supplied by the Company on the one hand or a Holder on the
other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 5.4.4 were determined by pro rata
allocation (even if the Holders 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 above in this Section 5.4.4.
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this Section 5.4.4 shall be deemed to include any
legal or other
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expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5.4.4, no Holder shall be required to contribute
any amount in excess of the net amount received by the Holder from the sale
of the Registrable Securities to which such loss relates. No person or
entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations in this Section 5.4.4 to contribute are several in
proportion to their respective sales of Registrable Securities to which
such loss relates and not joint.
5.5.1 Reports Under the Exchange Act. With a view to make available to
the Purchasers or Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any
time permit a Purchaser or Holder to sell Securities to the public without
registration or pursuant to a registration on Form S-3, the Company will
covenant and agree to use reasonable efforts to: (i) make and keep public
information available, as those terms are understood and defined in Rule
144, at all times after the Closing; (ii) file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and (iii) furnish to any Purchaser or
Holder, so long as the Purchaser or Holder owns any Securities forthwith
upon request, (A) a written statement by the Company that it has complied
with the reporting requirements of Rule 144, the Securities Act and the
Exchange Act, (B) a copy of the most recent annual or quarterly report of
the Company, and (C) such other information as may be reasonably requested
in order to avail any Purchaser or Holder of any rule or regulation of the
SEC that permits the selling of any such Securities without registration or
pursuant to such Form S-3.
5.6 Placement Agent Commission. In the event the Offering is
consummated, the Company will pay to Security Research Associates, Inc.
("SRA") a Transaction Fee consisting of (i) 5% of the gross proceeds from
the Offering received by the Company from investors introduced by SRA to
the Company (the "SRA Investors"), and (ii) 3 year warrants to acquire a
number of shares of the Company's common stock equal to 10% of the
aggregate gross proceeds from the Offering received by the Company from SRA
Investors divided by the price per share of the Company's securities paid
by the SRA Investors. The warrants will have an exercise price of $2.81 per
warrant share. All warrants issued will have piggyback registration rights
and will include customary adjustments in the event of stock dividends
and/or stock splits, reclassifications, reorganizations and/or business
combinations involving the Company. These are similar to the registration
rights the Company is providing to the SRA Investors. The Company will also
reimburse SRA periodically, upon request, or upon termination of its
services for its reasonable out-of-pocket expenses incurred in connection
with its financial advisory services and the Offering, including the fees
and expenses of legal counsel, travel expenses and printing, provided that
any item of expense exceeding one thousand dollars ($1,000) shall have been
approved by the Company in writing prior to incurrence.
6. Miscellaneous.
6.1 Waivers and Amendments. With the written consent of the Company
and the record holders of more than fifty percent (50%) of the Securities
(on a converted-to-Common
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Stock basis) then outstanding that have not previously been sold in a
public offering, the terms of the Purchase Agreement may be waived or
amended.
6.2 Governing Law. This Purchase Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
without regard to its conflicts of laws principles. The Purchaser hereby
irrevocably submits to the jurisdiction of any State or United States
Federal court sitting in the State of New York over any action or
proceeding arising out of or relating to this Purchase Agreement or any
agreement contemplated hereby, and the Purchaser hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such State or Federal court. The Purchaser further waives any
objection to venue in such State and any objection to an action or
proceeding in such State on the basis of a non-convenient forum. The
Purchaser further agrees that any action or proceeding brought against the
Company shall be brought only in the State or United States Federal courts
sitting in the State of New York. THE PURCHASER AGREES TO WAIVE ITS RIGHTS
TO A JURY TRIAL OR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS PURCHASE AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED
HEREBY.
6.3 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by the Company
or the Purchaser and the Closing.
6.4 Successors and Assigns. Subject to Section 5, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto
(specifically including successors in interest to the Securities).
6.5 Entire Agreement. The Purchase Agreement (including all Exhibits
thereto) constitutes the full and entire understanding and agreement
between the parties with regard to the subject hereof.
6.6 Notices, etc. All notices and other communications required or
permitted hereunder shall be effective upon receipt and shall be in writing
and may be delivered in person, by facsimile, or nationally recognized
overnight delivery service, addressed (a) if to the Purchaser, at the
address set forth on the signature page hereof or at such other address as
the Purchaser shall have furnished the Company in writing, or (b) if to the
Company, at its address set forth at the beginning of the Purchase
Agreement, or at such other address as the Company shall have furnished to
the Purchaser in writing.
6.7 Severability. If any provision of the Purchase Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
6.8 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of the Purchase Agreement are for convenience of reference
and shall not, by themselves, determine the construction of the Purchase
Agreement.
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6.9 Counterparts. The Purchase Agreement may be executed in any number
of counterparts, each of which be an original, but all of which together
shall constitute one instrument.
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EXHIBIT 1.1
Warrant No. ____________
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS REGISTERED UNDER THE SECURITIES ACT AND QUALIFIED UNDER
APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS
BOUND BY THE TERMS OF A PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND
THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).
WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF NEXMED, INC.
This certifies that _______ (the "Holder"), for value received is entitled
to purchase from NexMed, Inc., a Nevada corporation (the "Company"), ___________
(________) fully paid and nonassessable shares of the Company's Common Stock,
par value $.001 per share (the "Warrant Shares") at a price of Two Dollars and
Eighty-One Cents ($2.81) per share (the "Stock Purchase Price") at any time or
from time to time on or after the Commencement Date (as defined below) up to and
including 5:00 p.m. (Eastern time) on the Expiration Date (as defined below),
upon surrender to the Company at its principal office at 000 Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx, Xxx Xxxxxx 00000 (or at such other location as the
Company may advise Holder in writing) of this Warrant properly endorsed with the
Form of Subscription attached hereto duly filled in and signed and upon payment
by cash, cashier's check or wire transfer of immediately available funds of the
aggregate Stock Purchase Price for the number of shares for which this Warrant
is being exercised determined in accordance with the provisions hereof, such
exercise to be conditioned upon the accuracy of all representations and
warranties contained in such Form of Subscription. The Stock Purchase Price and
the number of shares purchasable hereunder are subject to adjustment as provided
in Section 3 of this Warrant. "Commencement Date" means the date of issuance of
this Warrant and "Expiration Date" means the earlier of (i) two (2) years from
the date hereof, or (ii) the occurrence of an event, the proposal of which is
described in subsection (d) of Section 3.4 which causes termination of this
Warrant under Section 3.4. This Warrant is issued pursuant to the Purchase
Agreement between the Company and Holder dated as of the date hereof (the
"Purchase Agreement"). Terms not specifically defined herein shall in
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this Warrant and the exhibits hereto have the meanings ascribed to them in the
Purchase Agreement.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates: Payment for Shares. This Warrant is
exercisable at the option of Holder at any time or from time to time on or after
the Commencement Date and prior to or on the Expiration Date for all or a
portion of the shares of Warrant Shares which may be purchased hereunder. The
Company agrees that the shares of Warrant Shares purchased under this Warrant
shall be and are deemed to be issued to Holder as the record owner of such
shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares. Subject to the provisions of
Section 2, certificates for the shares of Warrant Shares so purchased, together
with any other securities or property to which Holder is entitled upon such
exercise, shall be delivered to Holder by the Company's transfer agent at the
Company's expense within a reasonable time after this Warrant has been
exercised. Each stock certificate so delivered shall be in such denominations of
Warrant Shares as may be requested by Holder and shall be registered in the name
of Holder or such other name as shall be designated by Holder, subject to the
limitations contained in Section 2. If, upon exercise of this Warrant, fewer
than all of the shares of Warrant Shares evidenced by this Warrant are purchased
prior to the date of expiration of this Warrant, one or more new warrants
substantially in the form of, and on the terms in, this Warrant will be issued
for the remaining number of shares of Warrant Shares not purchased upon exercise
of this Warrant.
2. Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any stockholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will use its best efforts to at all times have authorized and reserved,
for the purpose of issue or transfer upon exercise of this Warrant, a sufficient
number of shares of authorized but unissued Common Stock. When and as required
to provide for the exercise of the rights represented by this Warrant, the
Company will take all such action as may be necessary to assure that such shares
of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange or automated quotation system upon which the Common Stock may be
listed.
3. Adjustment of Stock Purchase Price; Number of Shares. The Stock Purchase
Price and the number of Warrant Shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3.
3.1 Adjustment of Purchase Price. In the event that the Company at any
time or from time to time after the issuance of this Warrant shall declare
or pay, without consideration, any dividend on the Common Stock payable in
Common Stock or in any right to
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acquire Common Stock for no consideration, or shall effect a subdivision of
the outstanding shares of Common Stock into a greater number of shares of
Common Stock (by stock split, reclassification or otherwise than by payment
of a dividend in Common Stock or in any right to acquire Common Stock), or
in the event the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser number of
shares of Common Stock, then the Stock Purchase Price in effect immediately
prior to such event shall, concurrently with the effectiveness of such
event, be proportionately decreased or increased, as appropriate. In the
event that the Company shall declare or pay, without consideration, any
dividend on the Common Stock payable in any right to acquire Common Stock
for no consideration, then the Company shall be deemed to have made a
dividend payable in Common Stock in an amount of shares equal to the
maximum number of shares issuable upon exercise of such rights to acquire
Common Stock. Upon each adjustment of the Stock Purchase Price pursuant to
this Section 3.1, the holder of this Warrant shall thereafter be entitled
to purchase, at the Stock Purchase Price resulting from such adjustment,
the number of shares of Common Stock obtained by multiplying the Stock
Purchase Price in effect immediately prior to such adjustment by the number
of shares of Common Stock purchasable pursuant hereto immediately prior to
such adjustment, and dividing the product thereof by the Stock Purchase
Price resulting from such adjustment.
3.2 Adjustments for Reclassification and Reorganization. If the Common
Stock shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of
shares provided for in Section 3.1), the Stock Purchase Price then in
effect shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that this Warrant shall
represent the right to purchase, in lieu of the number of shares of Common
Stock which this Warrant would otherwise represent the right to purchase, a
number of shares of such other class or classes of stock equivalent to the
number of shares of Common Stock which this Warrant would have otherwise
entitled the holder to purchase immediately before that change.
3.3 Notice of Adjustment. Upon any adjustment of the Stock Purchase
Price or any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise of this Warrant, the Company shall within
five business days give written notice thereof, by first class mail,
postage prepaid (or by international delivery service, for international
addresses), addressed to the registered holder of this Warrant at the
address of such holder as shown on the books of the Company. The notice
shall be signed by the Company's chief financial officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon
the exercise of this Warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.
3.4 Other Notices. If at any time:
(a) the Company shall propose to declare any cash dividend upon
its Common Stock;
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(b) the Company shall propose to declare or make any dividend or
other distribution to the holders of its Common Stock, whether in
cash, property or other securities;
(c) the Company shall propose to effect any reorganization or
reclassification of the capital stock of the Company or any
consolidation or merger of the Company with or into another
corporation or any sale, lease or conveyance of all or substantially
all of the property of the Company; or
(d) the Company shall propose to effect a voluntary or
involuntary dissolution, liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by certified or
registered mail, postage prepaid, or international delivery service for
international deliveries, addressed to the holder of this Warrant at the address
of such holder as shown on the books of the Company, (i) at least fifteen (15)
business days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend or distribution
or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding-up, and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding-up, at least fifteen (15) business days' written notice
of, the date when the same shall take place. Any notice given in accordance with
clause (i) above shall also specify, in the case of any such dividend or
distribution, the record date for such dividend or distribution, if after the
Commencement Date. Any notice given in accordance with clause (ii) above shall
also specify the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property, if any,
deliverable upon such reorganization, reclassification, consolidation/merger,
sale, lease, conveyance, dissolution, liquidation or winding-up, as the case may
be and in connection with the occurrence of an event described in clause (d)
above such notice shall specify the anticipated net equity value that will
accrue to Common Stock holders so that the Holder can make an informed decision
whether or not to exercise this Warrant. In the event that the Holder of the
Warrant does not exercise this Warrant prior to the occurrence of an event
described in clause (a) or (b) above, the Holder shall not be entitled to
receive the benefits accruing to existing holders of the Common Stock in such
event. Upon the occurrence of an event described in clause (c), the Holder shall
be entitled thereafter, upon payment of the Stock Purchase Price in effect
immediately prior to such action, to receive upon exercise of this Warrant the
class and number of shares which the Holder would have been entitled to receive
after the occurrence of such event had this Warrant been exercised immediately
prior to such event. In connection with the transactions described in clause
(c), the Company will require each person (other than the Company) that may be
required to deliver any cash, stock, securities or other property upon the
exercise of this Warrant as provided herein to assume, by written instrument
delivered to, and reasonably satisfactory to, the Holder of this Warrant (x) the
obligations of the Company under this Warrant and (y) the obligation to deliver
to such Holder such cash, stock, securities or other property as such Holder may
be entitled to receive in accordance with the provisions of this Section 3. Upon
the occurrence of an event the proposal of which is described in clause (d),
this Warrant shall terminate. Notwithstanding any other provision hereof, no
Holder shall have the right to obtain an injunction or restraining order
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or otherwise interfere with or prevent the occurrence of any of the actions
described in (a) - (d) above.
4. Issue Tax. The issuance of certificates for the Warrant Shares upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.
5. No Voting or Dividend Rights; Limitation of Liability. Nothing contained
in this Warrant shall be construed as conferring upon the Holder hereof the
right to vote or to consent or to receive notice as a stockholder in respect of
meetings of stockholders for the election of directors of the Company or any
other matters or any rights whatsoever as a stockholder of the Company. Except
for the adjustment to the Stock Purchase Price pursuant to Section 3.2 in the
event of a dividend on the Common Stock payable in shares of Common Stock, no
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder until, and
only to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the Holder to purchase shares of
Warrant Shares, and no mere enumeration herein of the rights or privileges of
the Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a stockholder of the Company whether such liability is
asserted by the Company or by its creditors.
6. Restrictions on Transferability of Securities: Compliance With
Securities Act.
6.1 Restrictions on Transferability. The Warrant and the Warrant
Shares (collectively, the "Securities") shall not be transferable except
upon the conditions specified in the Purchase Agreement, which conditions
are intended to insure compliance with the provisions of the Securities Act
and applicable "blue sky" law.
6.2 Restrictive Legend. Each certificate representing the Securities
or any other securities issued in respect of the Securities upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted by the provisions of the Purchase
Agreement) be stamped or otherwise imprinted with a legend substantially in
the following form (in addition to any legend required under applicable
state securities laws)
In the Case of Warrant and Warrant Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS REGISTERED
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UNDER THE SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE SECURITIES
LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND THE QUALIFICATION
REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED
BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING ANY FUTURE
HOLDERS) IS BOUND BY THE TERMS OF A PURCHASE AGREEMENT BETWEEN THE ORIGINAL
PURCHASER AND THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE
COMPANY).
6.3 Exchange of Warrant. Subject to the terms and conditions hereof,
including the restrictions on transfer in this Section 6 and in the
Purchase Agreement, upon surrender of this Warrant to the Company with a
duly executed Assignment Form in the form attached hereto and funds
sufficient to pay any transfer tax, the Company shall, without charge,
execute and deliver a new Warrant or Warrants of like tenor in the name of
the assignee named in such Assignment Form and this Warrant shall promptly
be canceled. The term "Warrant" as used herein shall be deemed to include
any Warrants issued in exchange for this Warrant.
6.4 Ownership of Warrant. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by
anyone other than the Company) for all purposes and shall not be affected
by any notice to the contrary, until presentation of this Warrant for
registration of transfer as provided in Section 6.3.
7. Modification and Waiver. Except as otherwise provided herein, this
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.
8. Notices. Except as otherwise provided herein, any notice, request or
other document required or permitted to be given or delivered to the holder
hereof or the Company shall be delivered or shall be sent by United States
certified or registered mail, postage prepaid, (or international delivery
service for international deliveries) to Holder at its address as shown on the
books of the Company or to the Company at the address indicated therefor in the
first paragraph of this Warrant.
9. Descriptive Headings and Governing Law. The descriptive headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
governed by and construed in accordance with the internal laws of the State of
New York without regard to its conflicts of laws principles. The
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Holder hereby irrevocably submits to the jurisdiction of any State or United
States Federal court sitting in the State of New York over any action or
proceeding arising out of or relating to this Warrant or any agreement
contemplated hereby, and the Holder hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such State
or Federal court. The Holder further waives any objection to venue in such State
and any objection to an action or proceeding in such State on the basis of a
non-convenient forum. The Holder further agrees that any action or proceeding
brought against the Company shall be brought only in the State or United States
Federal courts sitting in the State of New York. THE HOLDER AGREES TO WAIVE ITS
RIGHTS TO A JURY TRIAL OR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS WARRANT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
10. Lost Warrants or Stock Certificates. The Company represents and
warrants to Holder that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of any Warrant or stock
certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity and, if requested, bond reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
11. Amendment. This Warrant is one of a series of warrants (the "Warrant
Series") to purchase, in the aggregate, up to seven hundred fifty seven thousand
(757,600) and six hundred shares of the Company's Common Stock. This Warrant
maybe amended only with the written approval of the Company and (i) the Holder
of this Warrant or (ii) the holders of a majority of the warrants in the Warrant
Series; provided, however, that any amendment effected pursuant to (ii) above
shall be made in the same manner to all Warrants in the Warrant Series and shall
be binding upon all holders of Warrants in the Warrant Shares.
12. Binding Effect; Benefits. This Warrant shall inure to the benefit of
and shall be binding upon the Company and the Holder and their respective heirs,
legal representatives, successors and permitted assigns. Nothing in this
Warrant, expressed or implied, is intended to or shall confer on any person
other than the Company and the Holder, or their respective heirs, legal
representatives, successors or permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant.
13. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the market price of the Common Stock, which shall be, on any date,
the closing price for the Common Stock or the closing bid if no sales were
reported, as quoted on the exchange or market that is the primary trading market
for the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officers, thereunto duly authorized this _____ day of __________, 2002.
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NexMed, Inc.
By: _________________________
Name:
Title:
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: NexMed, Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise such Warrant for, and to purchase thereunder,
_________________ (__________________) shares of common stock (the "Common
Stock") of NexMed, Inc. (the "Company"), and herewith makes payment in the
amount of $________ therefore. The certificates for such shares should be issued
in the name of, and delivered to, __________________ whose address is
__________________
The undersigned represents, unless the exercise of this Warrant has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
that (i) the undersigned is acquiring such Common Stock for his, her or its own
account for investment and not with a view to or for sale in connection with any
distribution thereof (except for any resale pursuant to a registration statement
under the Securities Act), (ii) the undersigned has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the undersigned's investment in the shares of Common Stock,
(iii) the undersigned has received all of the information the undersigned
requested from the Company and the undersigned considers necessary or
appropriate for deciding whether to purchase the shares, (iv) the undersigned
has the ability to bear the economic risks of the undersigned's prospective
investment and (v) the undersigned is able, without materially impairing his,
her or its financial condition, to hold the shares of Common Stock for an
indefinite period of time and to suffer complete loss on the undersigned's
investment.
The undersigned is an "accredited investor" as defined in Regulation D of
the Securities and Exchange Commission on the date hereof.
DATED: _______________________
-----------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
-----------------------------------
-----------------------------------
(Address)
W-9
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
ASSIGNMENT FORM
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto __________________ (the "Assignee") the
right represented by such Warrant to purchase ___________ Warrant Shares and all
other rights of the Holder with respect thereto under the within Warrant, and
appoints ________________ as Attorney to make such transfer on the books of
NexMed, Inc. maintained for such purpose, with full power of substitution in the
premises.
The undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the Warrant Shares to be issued upon exercise
hereof are being acquired for investment and that the Assignee will not offer,
sell or otherwise dispose of this Warrant or any Warrant Shares to be issued
upon exercise hereof except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws. Further, the Assignee has acknowledged that upon exercise of this Warrant,
the Assignee shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired for investment and not with a view toward distribution or resale.
Dated: ___________________
Signature
-------------------------------
-------------------------------
(Print Name)
-------------------------------
(Street Address)
-------------------------------
(City) (State) (Zip Code)
W-10
EXHIBIT 2.1(a)
WIRE TRANSFER INSTRUCTIONS
Bank Name: First Union National Bank
Bank ABA Number: 000000000
Bank Address: NJ5311
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Tel: 0-000-000-0000; Fax: 0-000-000-0000
Account Name: NEXMED (USA), INC.
(Beneficiary) 000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
Tel: 0-000-000-0000; Fax: 0-000-000-0000
Account Number: 96100-25023 (CAP)
EXHIBIT 4.9
INVESTMENT REPRESENTATION STATEMENT
1. Information Concerning the Company. Purchaser represents and warrants
that Purchaser has been provided with such information concerning the Company
that Purchaser deems necessary and appropriate to enable Purchaser to evaluate
the financial risk inherent in making an investment in the Securities and has
received and read the SEC Documents. Purchaser further acknowledges that
Purchaser has received satisfactory and complete information concerning the
business and financial condition of the Company in response to all inquiries in
respect thereof.
2. Economic Risk and Suitability. Purchaser represents and warrants as
follows:
2.1 Purchaser realizes that Purchaser's purchase of the Securities
involves a high degree of risk and will be a highly speculative investment
and that Purchaser is able, without impairing Purchaser's financial
condition, to hold the Securities for an indefinite period of time and to
suffer a complete loss of Purchaser's investment.
2.2 Purchaser has carefully considered and has, to the extent
Purchaser believes such discussions necessary, discussed with Purchaser's
professional, legal, tax and financial advisors the suitability of an
investment in the Securities for the particular legal, tax and financial
situation of Purchaser and that Purchaser and/or Purchaser's advisors have
determined that the Securities are a suitable investment for Purchaser.
2.3 Purchaser has such knowledge and experience in business and
financial matters as will enable Purchaser to evaluate the merits and risks
of an investment in the Securities and to make an informed investment
decision.
2.4 Purchaser has carefully read this Agreement and the SEC Documents
and the Company has made available to Purchaser or Purchaser's advisors all
information and documents requested by Purchaser relating to investment in
the Securities, and has provided answers to Purchaser's satisfaction to all
of Purchaser's questions concerning the Company and the Securities to be
acquired.
2.5 Purchaser understands that neither the Company nor any of its
officers/directors, has any obligation to register the Securities under any
federal or state securities act or law except as otherwise expressly set
forth in Section 5 of the Purchase Agreement.
2.6 All information that Purchaser has provided concerning himself or
herself, his or her financial position and (each of) his or her
representative(s), if any, is correct and complete as of the date set forth
below, and if there should be any material change in such information,
Purchaser will provide such information to the Company as soon as
practicable thereafter.
2.7 Purchaser understands that the Company is relying on the truth and
accuracy of the declarations, representations, warranties and agreements
made by Purchaser to the Company herein in transferring the Securities to
Purchaser.
2.8 Purchaser confirms that Purchaser has received no general
solicitation or general advertisement and has attended no seminar or
meeting (whose attendees have been invited by any general solicitation or
general advertisement) and has received no advertisement, article, notice
or other communication published in any newspaper, magazine, or similar
media or broadcast or television or radio regarding the Offering of the
Securities.
3. Status of Purchaser. Purchaser represents and warrants that Purchaser is
an "Accredited Investor", as defined in Rule 501 of the Commission because
Purchaser is either:
(a) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his/her purchase,
exceeds $1 million; or
(b) A natural person who had individual income in excess of $200,000
in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level in
the current year.
4. Residency. The undersigned is a bona fide resident of ________________.
---------------------------------
Signature of Purchaser
2
