SECURITIES SUBSCRIPTION AGREEMENT
EXECUTION
VERSION
This
Securities Subscription Agreement (this “Agreement”)
is
dated as of May 31, 2006, among Gentium S.p.A., an Italian joint stock company
(the “Company”),
and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser”
and
collectively the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant
to
Section 4(2) of the Securities Act of 1933, as amended and Rule 506 promulgated
thereunder, the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to subscribe to and purchase
from
the Company, securities of the Company as more fully described in this
Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:
ARTICLE
I
DEFINITIONS
1.1
Definitions.
In
addition to the terms defined elsewhere in this Agreement, for all purposes
of
this Agreement, the following terms have the meanings indicated in this Section
1.1:
“Action”
shall
have the meaning ascribed to such term in Section 3.1(j).
“ADRs”
means
American Depository Receipts issued pursuant to the terms of the Deposit
Agreement.
“Affiliate”
means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person as such
terms are used in and construed under Rule 144 under the Securities Act. With
respect to a Purchaser, any investment fund or managed account that is managed
on a discretionary basis by the same investment manager as such Purchaser will
be deemed to be an Affiliate of such Purchaser.
“Agreement”
shall
have the meaning ascribed to such term in the preamble.
“ADSs”
means
American Depository Shares, each representing one Ordinary Share deposited
with
The Bank of New York pursuant to the Deposit Agreement, issued pursuant to
the
terms of the Deposit Agreement.
“Closing”
means
the closing of the purchase and sale of the Securities pursuant to Section
2.1.
“Closing
Date”
means
the date of the Closing, which shall be a Trading Day.
“Commission”
means
the Securities and Exchange Commission.
“Company”
shall
have the meaning ascribed to such term in the preamble to this
Agreement.
“Company
Italian Counsel”
means
Gianni, Orrigani, Xxxxxx & Partners.
“Company
U.S. Counsel”
means
Xxxxxxx Xxxxxx & Green, P.C.
“Deposit
Agreement”
means
the Deposit Agreement, dated as of June 15, 2005, among the Company, The Bank
of
New York, as depositary, and the owners and beneficial owners of ADRs issued
thereunder.
“Depositary
Counsel”
means
Xxxxx, Xxxxxx & Xxxxxx LLP.
“Disclosure
Schedules”
means
the Disclosure Schedules of the Company delivered concurrently
herewith.
“Discussion
Time”
shall
have the meaning ascribed to such term in Section 3.2(f).
“Effective
Date”
means
the date that the initial Registration Statement filed by the Company pursuant
to the Registration Rights Agreement is first declared effective by the
Commission.
“Escrow
Agreement”
means
the Escrow Agreement in the form of Exhibit D attached hereto.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Exempt
Issuance”
means
the issuance of (a) Ordinary Shares or options to employees, officers, directors
or consultants of the Company pursuant to any share or option plan in existence
on the date hereof or duly adopted by a majority of the non-employee members
of
the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established for such purpose, (b) securities
upon the exercise or exchange of or conversion of any Securities issued
hereunder and/or securities exercisable or exchangeable for or convertible
into
Ordinary Shares issued and outstanding on the date of this Agreement, provided
that such securities have not been amended since the date of this Agreement
to
increase the number of such securities or to decrease the exercise, exchange
or
conversion price of any such securities, except pursuant to antidilution
provisions of such securities, and (c) securities issued pursuant to
acquisitions or strategic transactions, any such issuance shall only be to
a
Person which is, itself or through its subsidiaries, an operating company in
a
business synergistic with the business of the Company and in which the Company
receives benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing
in securities; provided that in no event shall such issuances pursuant to (c)
exceed 50% of the Ordinary Shares outstanding on the date hereof.
2
“GAAP”
shall
have the meaning ascribed to such term in Section 3.1(h).
“Indemnified
Party”
shall
have the meaning ascribed to that term in Section 4.7(c).
“Indemnifying
Party”
shall
have the meaning ascribed to that term in Section 4.7(c).
“Intellectual
Property Rights”
shall
have the meaning ascribed to such term in Section 3.1(o).
“Liens”
means
a
lien, charge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction.
“Material
Adverse Effect”
shall
have the meaning assigned to such term in Section 3.1(b).
“Material
Permits”
shall
have the meaning ascribed to such term in Section 3.1(m).
“Ordinary
Shares”
means
the ordinary shares of the Company, par value €1.00, and any other class of
securities into which such shares may hereafter have been reclassified or
changed.
“Ordinary
Shares Equivalents”
means
any securities of the Company which would entitle the holder thereof to acquire
Ordinary Shares at any time, including, without limitation, any debt, preferred
shares, rights, options, warrants or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles
the
holder thereof to receive, Ordinary Shares.
“Person”
means
an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Purchaser”
and
“Purchasers”
shall
have the meanings ascribed to such term, in the preamble of this
Agreement.
“Purchaser
Party”
shall
have the meaning ascribed to such term in Section 4.7(a).
3
“Registration
Rights Agreement”
means
the Registration Rights Agreement, dated the date hereof, among the Company
and
the Purchasers, in the form of Exhibit A attached hereto.
“Registration
Statement”
means
a
registration statement filed with the Commission meeting the requirements set
forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Shares and the Warrant Shares.
“Required
Approvals”
shall
have the meaning ascribed to such term in Section 3.1(e).
“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“SEC
Reports”
shall
have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means
the Shares, the Warrants and the Warrant Shares.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shares”
means
collectively the ADSs representing the Ordinary Shares issued or issuable to
each Purchaser pursuant to this Agreement; such Shares shall be delivered at
the
Closing.
“Short
Sales”
shall
include all “short sales” as defined in Rule 200 of Regulation SHO under the
Exchange Act.
“Subscription
Amount”
means,
as to each Purchaser, the number of shares purchased hereunder as specified
next
to such Purchaser’s name on Schedule 2.1 to this Agreement and under the heading
“Shares,” multiplied by $11.39.
“ThinkEquity”
means
ThinkEquity Partners, L.L.C., placement agent for the offering.
“Trading
Day”
means
a
day on which the ADSs are traded on a Trading Market; provided, however, that
any day on which banks are not open in the Republic of Italy shall not be a
Trading Day.
“Trading
Market”
means
the following markets or exchanges on which the ADSs are listed or quoted for
trading on the date in question: the Nasdaq Capital Market, the American Stock
Exchange, the New York Stock Exchange and the Nasdaq National
Market.
“Transaction
Documents”
means
this Agreement, the Escrow Agreement, the Warrants and the Registration Rights
Agreement, and any other documents or agreements executed in connection with
the
transactions contemplated hereunder.
4
“Warrants”
means
collectively the ADS purchase warrants, in the form of Exhibit C; such Warrants
shall be delivered to the Purchasers at the Closing and shall be exercisable
beginning 6 months from the Closing Date and have a term of exercise ending
on
April 28, 2011.
“Warrant
Shares”
means
the ADSs representing Ordinary Shares issuable upon exercise of the
Warrants.
ARTICLE
II
PURCHASE
AND SALE
2.1
Closing.
Upon
the terms and subject to the conditions set forth herein, the Company agrees
to
issue and sell, and each Purchaser agrees to subscribe and purchase the Shares
and Warrants set forth next to such Purchaser’s name on Schedule
2.1
on the
Closing Date. Upon satisfaction of the conditions set forth in Sections 2.2
and
2.3, the Closing shall occur at the offices of Xxxxxxx Xxxxxx & Green, P.C.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as the parties
shall mutually agree.
2.2
Deliveries.
(a)
On
the
date hereof, the Company shall deliver or cause to be delivered the
following:
| (i) |
To
the Purchasers, this Agreement duly executed by the
Company;
|
| (ii) |
To
ThinkEquity and the Escrow Agent, the Escrow Agreement duly executed
by
the Company; and
|
| (iii) |
To
the Depositary’s Italian agent, 2S Banca, the Ordinary Shares that will be
represented by the ADSs.
|
(b)
On
the
date hereof, each Purchaser shall deliver the following:
| (i) |
To
the Company, this Agreement duly executed by such
Purchaser;
|
| (ii) |
To
the Company, the Accredited Investor Questionnaire attached hereto
as
Exhibit A, completed and executed by such Purchaser;
and
|
| (iii) |
To
the Escrow Agent, such Purchaser’s Subscription Amount by wire transfer to
the account as specified in the Escrow Agreement; provided,
however,
that no Purchaser shall have any obligation to purchase Securities
to the
extent that after giving effect to such purchase, such Purchaser
would
beneficially own (as calculated in accordance with Section 13(d)
of the
Exchange Act) in excess of 9.9% of the Ordinary Shares outstanding
immediately after giving effect to such purchase.
|
5
(c)
On
the
date hereof, the Escrow Agent shall deliver to the Company and Think Equity
the
Escrow Agreement, duly executed by the Escrow Agent.
(d)
On
the
date hereof, ThinkEquity shall deliver to the Company and the Escrow Agent
the
Escrow Agreement, duly executed by ThinkEquity.
(e)
On
the
Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser the following:
| (i) |
a
legal opinion of the Company U.S. Counsel, in the form of Exhibit
B-1
attached hereto;
|
| (ii) |
a
legal opinion of the Company Italian Counsel, in the form of Exhibit
B-2
attached hereto;
|
| (iii) |
a
legal opinion of the Depositary Counsel, in the form of Exhibit
B-3
attached hereto;
|
| (iv) |
a
Warrant registered in the name of such Purchaser to purchase up to
a
number of Warrant Shares set forth next to such Purchaser’s name on
Schedule
2.1;
|
| (v) |
the
Registration Rights Agreement duly executed by the
Company;
|
| (vi) |
a
certificate of the Company’s executive officers confirming the
satisfaction of the conditions contained in Sections 2.3(b)(i), (ii),
(v)
and (vii); and
|
| (vii) |
such
other reasonable documents requested by counsel to the
Purchasers.
|
(f)
On
the
Closing Date, each Purchaser shall deliver or cause to be delivered to the
Company the Registration Rights Agreement and Selling Security Holder
Questionnaire (as defined in the Registration Rights Agreement) duly executed
by
such Purchaser.
(g)
On
the
Closing Date, the Depositary shall deliver ADRs representing the Shares to
the
Escrow Agent.
(h)
On
the
Closing Date, the Escrow Agent shall deliver the following:
| (i) |
To
the Company, each Purchaser’s Subscription Amount by wire transfer to the
account specified in the Escrow Agreement, minus certain deductions
as set
forth in the Escrow Agreement; and
|
| (ii) |
To
each Purchaser, an ADR evidencing a number of Shares set forth next
to
such Purchaser’s name on Schedule
2.1
registered in the name of such
Purchaser.
|
6
2.3
Closing
Conditions.
(a)
The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
| (i) |
the
accuracy in all material respects when made and on the Closing Date
(as if
made on and as of the Closing Date, except to the extent that a
representation and warrant specifically references an earlier date)
of the
representations and warranties of the Purchasers contained
herein;
|
| (ii) |
all
obligations, covenants and agreements of the Purchasers required
to be
performed at or prior to the Closing Date shall have been
performed;
|
| (iii) |
the
delivery by the Purchasers of the items set forth in Section 2.2(b)
and
Section 2.2(f) of this Agreement;
|
| (iv) |
the
delivery by the Escrow Agent of the items set forth in Section 2.2(c)
and
Section 2.2(h) of this Agreement;
|
| (v) |
the
delivery by ThinkEquity of the items set forth in Section 2(d) of
this
Agreement;
|
| (vi) |
the
delivery by the Depositary of the items set forth in Section 2(g)
of this
Agreement;
|
| (vii) |
the
approval of the Company’s board of directors at a meeting attended by its
notary public and board of statutory auditors having been
obtained.
|
(b)
The
respective obligations of each Purchaser hereunder in connection with the
Closing are subject to the following conditions being met:
| (i) |
the
accuracy in all material respects when made and on the Closing Date
(as if
made on and as of the Closing Date, except to the extent that a
representation and warrant specifically references an earlier date)
of the
representations and warranties of the Company contained
herein;
|
| (ii) |
all
obligations, covenants and agreements of the Company required to
be
performed at or prior to the Closing Date shall have been
performed;
|
| (iii) |
the
delivery by the Company of the items set forth in Section 2.2(a)
and
Section 2.2(e) of this Agreement;
|
7
| (iv) |
the
delivery by the Escrow Agent of the items set forth in Section 2.2(c)
and
Section 2.2(h) of this Agreement;
|
| (v) |
there
shall have been no Material Adverse Effect with respect to the Company
since the date hereof;
|
| (vi) |
from
the date hereof to the Closing Date, trading in the ADSs shall not
have
been suspended by the Commission or the Trading Market (except for
any
suspension of trading of limited duration agreed to by the Company,
which
suspension shall be terminated prior to the Closing), and, at any
time
prior to the Closing Date, trading in securities generally as reported
by
Bloomberg Financial Markets shall not have been suspended or limited,
or
minimum prices shall not have been established on securities whose
trades
are reported by such service, or on any Trading Market, nor shall
a
banking moratorium have been declared either by the United States
or New
York State authorities nor shall there have occurred any material
outbreak
or escalation of hostilities or other national or international calamity
of such magnitude in its effect on, or any material adverse change
in, any
financial market which, in each case, in the reasonable judgment
of such
Purchaser, makes it impracticable or inadvisable to purchase the
Shares at
the Closing; and
|
|
(vii)
|
no
statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated, endorsed or threatened
or
is pending by or before any governmental authority of competent
jurisdiction which prohibits or threatens to prohibit the consummation
of
any of the transactions contemplated by the Transaction
Documents.
|
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1
Representations
and Warranties of the Company.
Except
as set forth in the Disclosure Schedules, which Disclosure Schedules shall
be
deemed a part hereof, the Company hereby makes the representations and
warranties set forth below to each Purchaser:
(a)
No
Subsidiaries.
The
Company has no subsidiaries.
(b)
Organization
and Qualification.
The
Company is an entity duly incorporated validly existing and in good standing
under the laws of the Republic of Italy with the requisite power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. The Company is duly qualified to conduct business and
is in
good standing as a foreign corporation or other entity in each jurisdiction
in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in
good
standing, as the case may be, could not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect
on
the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material
Adverse Effect”)
and no
Proceeding has been instituted in any such jurisdiction revoking, limiting
or
curtailing or seeking to revoke, limit or curtail such power and authority
or
qualification.
8
(c)
Authorization;
Enforcement.
The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of each of the Transaction Documents by the Company
and
the consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company, its board of directors or its shareholders
in
connection therewith other than in connection with the Required Approvals.
Each
Transaction Document has been (or upon delivery will have been) duly executed
by
the Company and, when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of
general application affecting enforcement of creditors’ rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
(d)
No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company,
the issuance and sale of the Securities and the consummation by the Company
of
the other transactions contemplated hereby and thereby do not and will not
(i)
violate any provision of the Company’s or articles of association or bylaws, or
(ii) breach or result in a default under, result in the creation of any Lien
upon any of the properties or assets of the Company or give to others any rights
of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding
to
which the Company is a party or by which any property or asset of the Company
is
bound or affected, or (iii) subject to the Required Approvals, violate any
law,
rule, regulation, order, judgment, injunction, decree or other restriction
of
any court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations, and the rules and regulations
of the applicable Trading Market), or by which any property or asset of the
Company is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect.
(e)
Filings,
Consents and Approvals.
The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court
or
other federal, state, local or other governmental authority or other Person
in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) filings required pursuant to Section
4.4
of this Agreement, (ii) the filing with the Commission of the Registration
Statement, (iii) application(s) to each applicable Trading Market for the
listing of the Shares and Warrant Shares for trading thereon in the time and
manner required thereby, and (iv) the filing of Form D with the Commission
and
such filings as are required to be made under applicable state securities laws
(collectively, the “Required
Approvals”).
9
(f)
Issuance
of the Securities.
The
Securities and the Ordinary Shares underlying the Securities are duly authorized
and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens, other than any Liens imposed by the Purchasers and
restrictions on transfer provided for in the Transaction Documents. Upon
Closing, the Company will have reserved from its duly authorized capital shares
the maximum number of Ordinary Shares issuable pursuant to this Agreement and
the Warrants. Upon the issuance by the Depositary of ADRs representing ADSs
that
are Shares and Warrant Shares against the deposit of Ordinary Shares in
accordance with the Deposit Agreement, such ADRs representing such ADSs will
be
duly and validly issued under the Deposit Agreement and the persons in whose
names such ADRs representing such ADSs are registered will be entitled to the
rights of the registered holders of ADRs representing ADSs specified therein
and
in the Deposit Agreement.
(g)
Capitalization.
The
capitalization as of the date hereof of the Company is as set forth on Section
3.1(g) of the Disclosure Schedule. The Company has not issued any capital shares
or Ordinary Shares Equivalents (including ADSs) since its most recently filed
periodic report under the Exchange Act, other than pursuant to the exercise
of
employee share options under the Company’s share option plans and pursuant to
the conversion or exercise of outstanding Ordinary Shares Equivalents. No Person
has any right of first refusal, preemptive right, right of participation, or
any
similar right to participate in the transactions contemplated by the Transaction
Documents or otherwise in connection with the issuance and sale of the
Securities. Except as a result of the purchase and sale of the Securities,
there
are no outstanding options, warrants, script rights to subscribe to, calls
or
commitments of any character whatsoever relating to, or securities, rights
or
obligations convertible into or exercisable or exchangeable for, or giving
any
Person any right to subscribe for or acquire, any Ordinary Shares or Ordinary
Shares Equivalents (including ADSs), or contracts, commitments, understandings
or arrangements by which the Company is or may become bound to issue additional
Ordinary Shares (including ADSs) or Ordinary Shares Equivalents. The issuance
and sale of the Securities will not obligate the Company to issue Ordinary
Shares or other securities to any Person (other than the Purchasers) and will
not result in a right of any holder of Company securities or Ordinary Shares
Equivalents to adjust the exercise, conversion, exchange or reset price under
such securities. All of the outstanding shares of capital shares of the Company
are validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities. No further approval or authorization of any
shareholder, the Board of Directors of the Company or others is required for
the
issuance and sale of the Securities. There are no shareholders agreements,
voting agreements or other similar agreements with respect to the Company’s
capital shares to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s shareholders.
10
(h)
SEC
Reports; Financial Statements.
The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required
by
law to file such material) (the foregoing materials filed through the date
hereof, including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the “SEC
Reports”)
on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As
of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in
the
case of unaudited statements, to normal, immaterial, year-end audit
adjustments.
(i)
Material
Changes.
Since
the date of the latest audited financial statements included within the SEC
Reports, except as specifically disclosed in the SEC Reports, (i) there has
been
no event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than trade payables
and
accrued expenses incurred in the ordinary course of business consistent with
past practice, (iii) the Company has not altered its method of accounting,
(iv)
the Company has not declared or made any dividend or distribution of cash or
other property (or its securities) to its shareholders or purchased, redeemed
or
made any agreements to purchase or redeem any shares of its capital shares
and
(v) the Company has not issued any equity securities to or Ordinary Shares
Equivalents to any Person (including to any officer, director or Affiliate),
except pursuant to existing Company share option plans. The Company does not
have pending before the Commission any request for confidential treatment of
information.
(j)
Litigation.
There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting
the
Company or any of its properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”)
which
(i) adversely affects or challenges the legality, validity or enforceability
of
any of the Transaction Documents or the Securities or (ii) could, if there
were
an unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any director or officer thereof is
or
has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the Commission involving
the Company or any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company under the
Exchange Act or the Securities Act.
11
(k)
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 which could reasonably
be
expected to result in a Material Adverse Effect.
(l)
Compliance.
The
Company is not in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company under), nor has the Company received notice
of a claim that it is in default under or that it is in violation of, (i) its
articles of incorporation, articles of association, by-laws, or other
organizational document, (ii) any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or any
of
its properties is bound (whether or not such default or violation has been
waived), (iii) any court, arbitrator or governmental body, or (iv) any statute,
rule or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws applicable to its business except
in
the case of (ii), (iii) or (iv) as could not have a Material Adverse
Effect.
(m)
Regulatory
Permits.
The
Company possesses all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary
to
conduct its business as described in the SEC Reports, except where the failure
to possess such permits could not have or reasonably be expected to result
in a
Material Adverse Effect (“Material
Permits”),
and
the Company has not received any notice of proceedings relating to the
revocation or modification of any Material Permit.
(n)
Title
to Assets.
The
Company has good and marketable title to all real property and assets owned
by
it that is material to the business of the Company and good and marketable
title
in all personal property owned by them that is material to the business of
the
Company, in each case free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
Liens for the payment of federal, state or other taxes, the payment of which
is
neither delinquent nor subject to penalties. Any real property and facilities
held under lease by the Company are held by it under valid, subsisting and
enforceable leases with which the Company is in compliance.
12
(o)
Patents
and Trademarks.
The
Company has, or has rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses, trade
secrets and other similar rights necessary or material for use in connection
with their respective businesses and which the failure to so have could have
a
Material Adverse Effect (collectively, the “Intellectual
Property Rights”).
The
Company has not received a written notice that the Intellectual Property Rights
used by the Company violates or infringes upon the rights of any Person. To
the
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights of others.
(p)
Insurance.
The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
businesses in which the Company is engaged, including, but not limited to,
directors and officers insurance coverage. To the best knowledge of the Company,
such insurance contracts and policies are accurate and complete. The Company
has
no reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.
(q)
Transactions
With Affiliates and Employees.
Except
as set forth in the SEC Reports, none of the Affiliates, employees, officers
or
directors of the Company is presently a party to any transaction with the
Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any Affiliate,
officer, director or such employee or, to the knowledge of the Company, any
entity in which any Affiliate, officer, director, or any such employee has
a
substantial interest or is an officer, director, trustee or partner, in each
case in excess of $60,000 other than (i) for payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf
of the Company and (iii) for other employee benefits, including share option
agreements under any share option plan of the Company.
(r)
Xxxxxxxx-Xxxxx;
Internal Accounting Controls.
The
Company is in material compliance with all provisions of the Xxxxxxxx-Xxxxx
Act
of 2002 which are applicable to it as a foreign private issuer.
(s)
Certain
Fees.
No
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or
on
behalf of other Persons for fees of a type contemplated in this Section that
may
be due in connection with the transactions contemplated by the Transaction
Documents.
(t)
Private
Placement.
Assuming the accuracy of the Purchasers representations and warranties set
forth
in Section 3.2, no registration under the Securities Act is required for the
offer and sale of the Securities by the Company to the Purchasers as
contemplated hereby. The issuance and sale of the Securities hereunder does
not
contravene the rules and regulations of the Trading Market.
13
(u)
Investment
Company.
The
Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(v)
Registration
Rights.
Except
as set forth in the SEC Reports, other than each of the Purchasers, no Person
has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company.
(w)
Listing
and Maintenance Requirements.
The
ADSs are registered pursuant to Section 12(g) of the Exchange Act and listed
on
the Trading Market, and the Company has taken no action designed to, or which
to
its knowledge is likely to have the effect of, terminating the registration
of
the ADSs under the Exchange Act or de-listing or suspending from trading the
ADSs on the Trading Market nor has the Company received any notification that
the Commission is contemplating terminating such registration. The Company
has
not, in the 12 months preceding the date hereof, received notice from any
Trading Market on which the ADSs are or have been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements.
(x)
No
Integrated Offering.
Assuming the accuracy of the Purchasers’ representations and warranties set
forth in Section 3.2, neither the Company, nor any of its affiliates, nor any
Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the Securities
Act or any applicable shareholder approval provisions, including, without
limitation, under the rules and regulations of any Trading Market on which
any
of the securities of the Company are listed or designated.
(y)
Tax
Status.
Except
for matters that would not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect, the Company has filed all
necessary federal, state and foreign income and franchise tax returns and has
paid or accrued all taxes shown as due thereon, and the Company has no knowledge
of a tax deficiency which has been asserted or threatened against the
Company.
(z)
No
General Solicitation.
Neither
the Company nor any person acting on behalf of the Company has offered or sold
any of the Securities by any form of general solicitation or general
advertising. The Company has offered the Securities for sale only to the
Purchasers and certain other “accredited investors” within the meaning of Rule
501 under the Securities Act or “qualified institutional buyers” within the
meaning of Rule 144A under the Securities Act.
14
(aa)
Foreign
Corrupt Practices.
Neither
the Company, nor to the knowledge of the Company, any director, officer,
employee, agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf
of
which the Company is aware) which is in violation of law, or (iv) violated
in
any material respect any provision of the Foreign Corrupt Practices Act of
1977,
as amended.
(bb)
Accountants.
The
Company’s accountants are Reconta Ernst & Young S.p.A. To the knowledge of
the Company, such accountants are a registered public accounting firm as
required by the Securities Act.
(cc)
Acknowledgment
Regarding Purchasers’ Subscription to Securities.
The
Company acknowledges and agrees that each of the Purchasers is acting solely
in
the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and that no Purchaser is
(i)
an officer or director of the Company, (ii) an "affiliate" of the Company (as
defined in Rule 144) or (iii) to the knowledge of the Company, a "beneficial
owner" of more than 10% of the Ordinary Shares (as defined for purposes of
Rule
13d-3 of the Securities Exchange Act of 1934, as amended (the "1934
Act")).
The
Company further acknowledges that no Purchaser is acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any advice given by
any
Purchaser or any of their respective representatives or agents in connection
with this Agreement and the transactions contemplated hereby is merely
incidental to the Purchasers’ purchase of the Securities. The Company further
represents to each Purchaser that the Company’s decision to enter into this
Agreement has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its
representatives.
(dd)
Acknowledgement
Regarding Purchasers’ Trading Activity.
Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.12 hereof), it is understood and agreed by
the
Company (i) that none of the Purchasers have been asked to agree, nor has any
Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company (including the ADSs), or “derivative” securities based
on securities issued by the Company or to hold the Securities for any specified
term; (ii) that past or future open market or other transactions by any
Purchaser, including Short Sales, and specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the
closing of this or future private placement transactions, may negatively impact
the market price of the Company’s publicly-traded securities (including the
ADSs); (iii) that any Purchaser, and counter parties in “derivative”
transactions to which any such Purchaser is a party, directly or indirectly,
presently may have a “short” position in the ADSs, and (iv) that each Purchaser
shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The Company further
understands and acknowledges that (a) one or more Purchasers may engage in
hedging activities at various times during the period that the Securities are
outstanding and (b) such hedging activities (if any) could reduce the value
of
the existing shareholders’ equity interests in the Company at and after the time
that the hedging activities are being conducted. The Company acknowledges that
such aforementioned hedging activities do not constitute a breach of any of
the
Transaction Documents.
15
(ee)
Manipulation
of Price.
The
Company has not, and to its knowledge no one acting on its behalf has, (i)
taken, directly or indirectly, any action designed to cause or to result in
the
stabilization or manipulation of the price of any security of the Company
(including the ADSs) to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or, paid any compensation for soliciting
purchases of, any of the Securities (other than for the placement agent’s
placement of the Securities), or (iii) paid or agreed to pay to any person
any
compensation for soliciting another to purchase any other securities of the
Company (including the ADSs).
(ff)
Foreign
Private Issuer.
The
Company qualifies as a “foreign private issuer” as such term is defined in the
Securities Act.
3.2
Representations
and Warranties of the Purchasers.
Each
Purchaser hereby, for itself and for no other Purchaser, represents and warrants
as of the date hereof and as of the Closing Date to the Company as
follows:
(a)
Organization;
Authority.
Such
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right,
corporate or partnership power and authority to enter into and to consummate
the
transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution, delivery and
performance by such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate or similar action on the
part of such Purchaser. Each Transaction Document to which it is a party has
been duly executed by such Purchaser, and when delivered by such Purchaser
in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
(b)
Own
Account.
Such
Purchaser understands that the Securities are “restricted securities” and have
not been registered under the Securities Act or any applicable state securities
law and is acquiring the Securities as principal for its own account and not
with a view to or for distributing or reselling such Securities or any part
thereof in violation of the Securities Act or any applicable state securities
law, has no present intention of distributing any of such Securities in
violation of the Securities Act or any applicable state securities law and
has
no arrangement or understanding with any other persons regarding the
distribution of such Securities (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws) in violation of the Securities Act or any applicable state
securities law. Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business. Such Purchaser does not have any agreement
or
understanding, directly or indirectly, with any Person to distribute any of
the
Securities.
16
(c)
Purchaser
Status.
At the
time such Purchaser was offered the Securities, it was, and at the date hereof
it is, and on each date on which it exercises any Warrants, it will be either:
(i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is
not required to be registered as a broker-dealer under Section 15 of the
Exchange Act.
(d)
Experience
of Such Purchaser.
Such
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters
so as
to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such
investment.
(e)
General
Solicitation.
Such
Purchaser is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in
any
newspaper, magazine or similar media or broadcast over television or radio
or
presented at any seminar or any other general solicitation or general
advertisement.
(f)
Short
Sales and Confidentiality Prior To The Date Hereof.
Other
than the transaction contemplated hereunder, such Purchaser has not directly
or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Purchaser, executed any disposition, including Short
Sales (but not including the location and/or reservation of borrowable Ordinary
Shares represented by the ADSs), in the securities of the Company during the
period commencing from April 1, 2006 until the date hereof (“Discussion
Time”).
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Securities
covered by this Agreement. Other than to other Persons party to this Agreement,
such Purchaser has maintained the confidentiality of all disclosures made to
it
in connection with this transaction (including the existence and terms of this
transaction).
17
The
Company acknowledges and agrees that each Purchaser does not make or has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section
3.2.
ARTICLE
IV
OTHER
AGREEMENTS OF THE PARTIES
4.1
Transfer
Restrictions.
(a)
The
Securities may only be disposed of in compliance with U.S. state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or Rule 144 or to the Company,
the Company and the Depositary may require the transferor thereof to provide
to
the Company and the Depositary an opinion of counsel selected by the transferor
and reasonably acceptable to the Company and the Depositary, the form and
substance of which opinion shall be reasonably satisfactory to the Company
and
the Depositary, to the effect that such transfer does not require registration
of such transferred Securities under the Securities Act. As a condition of
transfer, any such transferee shall agree in writing to be bound by the terms
of
this Agreement and shall have the rights of a Purchaser under this Agreement
and
the Registration Rights Agreement.
(b)
The
Purchasers agree to the imprinting, so long as is required by this Section
4.1,
of a legend on any of the Securities in the following form:
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.
(c)
The
Company agrees that it shall cause the Depositary to remove the restrictive
legend set forth in Section 4.1(b) from ADRs representing the Shares and the
Warrant Shares (i) following any sale of such Shares or Warrant Shares pursuant
to a registration statement (including the Registration Statement) covering
the
resale of such security is effective under the Securities Act, or (ii) following
any sale of such Shares or Warrant Shares pursuant to Rule 144 or (iii) if
such
legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff
of
the Commission), provided that the relevant Purchaser shall have delivered
to
the Company, its transfer agent and its Depositary a certification of the
foregoing and such other documentation as such entities may reasonably
require.
18
4.2
Furnishing
of Information.
As long
as any Purchaser owns Securities, the Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. As long as any Purchaser owns Securities, if
the
Company is not required to file reports pursuant to the Exchange Act, it will
prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchasers to sell
the
Securities under Rule 144. The Company further covenants that it will take
such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell such Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144.
4.3
Integration.
The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the
sale
of the Securities to the Purchasers or that would be integrated with the offer
or sale of the Securities for purposes of the rules and regulations of any
Trading Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is obtained before
the closing of such subsequent transaction.
4.4
Securities
Laws Disclosure; Publicity.
The
Company shall, by 8:30 a.m. Eastern time on the Trading Day following the date
hereof, issue a Current Report on Form 6-K, reasonably acceptable to each
Purchaser disclosing the material terms of the transactions contemplated hereby,
and shall attach the Transaction Documents thereto. The Company and each
Purchaser shall consult with each other in issuing any other press releases
with
respect to the transactions contemplated hereby, and neither the Company nor
any
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld, except if such disclosure is required by law, in
which
case the disclosing party shall promptly provide the other party with prior
notice of such public statement or communication. Notwithstanding the foregoing,
the Company shall not publicly disclose the name of any Purchaser, or include
the name of any Purchaser in any filing with the Commission or any regulatory
agency or Trading Market, without the prior written consent of such Purchaser,
except (i) as required by federal securities law in connection with the
registration statement contemplated by the Registration Rights Agreement and
(ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii).
4.5
Investment
Company Act.
The
Company shall conduct its business in a manner so that it will not become
subject to the Investment Company Act.
19
4.6
Use
of
Proceeds.
The
Company shall use the net proceeds from the sale of the Securities hereunder
first for working capital purposes in connection with its development of
Defibrotide and then for general working capital purposes and the repurchase
of
rights to Defibrotide from Crinos S.p.A. and not for the satisfaction of any
portion of the Company’s debt (other than payment of trade payables in the
ordinary course of the Company’s business and prior practices and payment of
debt as it comes due), to redeem any Ordinary Shares or Ordinary Shares
Equivalents or to settle any outstanding litigation.
4.7
Indemnification
(a)
Indemnification
of Purchasers.
Subject
to the provisions of this Section 4.7, the Company will indemnify and hold
the
Purchasers and their directors, officers, shareholders, members, partners,
employees and agents (each, a “Purchaser
Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result
of
or relating to any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction
Documents (unless such action is based upon a breach of such Purchaser’s
representations, warranties or covenants under the Transaction Documents or
any
agreements or understandings such Purchaser may have with any shareholder or
any
violations by the Purchaser of state or federal securities laws or any conduct
by such Purchaser which constitutes fraud, gross negligence, willful misconduct
or malfeasance).
(b)
Intentionally
omitted.
(c)
Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to
the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding; (3) the Indemnifying Party shall have failed
promptly to employ counsel reasonably satisfactory to such Indemnified Party
in
any such Proceeding; or (4) the named parties to any such Proceeding (including
any impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall reasonably believe that a material
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects
to
employ separate counsel at the expense of the Indemnifying Party, the reasonable
fees and expenses of one separate counsel shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of
any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party
from
all liability on claims that are the subject matter of such
Proceeding.
20
The
Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined
based
upon the relative faults of the parties.
(d)
Contribution.
If the
indemnification under Section 4.7(a) is unavailable to an Indemnified Party
or
insufficient to hold an Indemnified Party harmless for any Losses, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 4.7(c), any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.7(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 4.7(d), no Purchaser shall be
required to contribute, in the aggregate, any amount in excess of the amount
by
which the proceeds actually received by such Purchaser from the sale of the
Registrable Securities subject to the Proceeding 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, except
in
the case of fraud by such Purchaser.
21
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
4.8
Reservation
of Ordinary Shares.
Upon
the Closing Date, the Company will have reserved, and shall continue to reserve
and keep available at all times, free of all preemptive or preferential rights,
a sufficient number of Ordinary Shares for the purpose of enabling the Company
to issue Warrant Shares pursuant to any exercise of the Warrants.
4.9
Listing
of ADSs.
The
Company hereby agrees to use best efforts to maintain the listing of the ADSs
on
a Trading Market, and as soon as reasonably practicable following the Closing
(but not later than the Effective Date) to list all of the ADSs constituting
the
Shares and Warrant Shares on such Trading Market. The Company further agrees,
if
the Company applies to have the Ordinary Shares or other securities, represented
by ADSs or otherwise, traded on any other Trading Market, it will include in
such application all of the Shares and Warrant Shares, and will take such other
action as is necessary to cause all of the Shares and Warrant Shares to be
listed on such other Trading Market as promptly as possible. The Company will
take all action reasonably necessary to continue the listing and trading of
the
ADSs representing its Ordinary Shares on a Trading Market and will comply in
all
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Trading Market.
4.10
Equal
Treatment of Purchasers.
No
consideration shall be offered or paid to any person to amend or consent to
a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration is also offered to all of the parties to the
Transaction Documents. For clarification purposes, this provision constitutes
a
separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended to treat for the Company the
Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or
voting of Securities or otherwise.
4.11
Subsequent
Equity Sales.
Without
the prior written consent of the Purchasers holding a majority in interest
of
the Shares, from the date hereof until 90 days after the Effective Date, the
Company shall not issue Ordinary Shares or Ordinary Shares Equivalents, except
with respect to an Exempt Issuance; provided, however, the 90 day period set
forth in this Section 4.11 shall be extended for the number of Trading Days
during such period in which (i) trading in the Ordinary Shares or ADSs is
suspended by any Trading Market, or (ii) following the Effective Date, the
Registration Statement is not effective or the prospectus included in the
Registration Statement may not be used by the Purchasers for the resale of
the
Shares and Warrant Shares.
4.12
Short
Sales and Confidentiality After The Date Hereof.
Each
Purchaser severally and not jointly with the other Purchasers covenants that
neither it nor any affiliates acting on its behalf or pursuant to any
understanding with it will execute any Short Sales during the period after
the
Discussion Time and ending at the time that the transactions contemplated by
this Agreement are first publicly announced as described in Section 4.4. Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in Section 4.4, such Purchaser will
maintain, the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this transaction). Each
Purchaser understands and acknowledges, severally and not jointly with any
other
Purchaser, that the Commission currently takes the position that coverage of
short sales of shares of the Ordinary Shares “against the box” prior to the
Effective Date of the Registration Statement with the Securities is a violation
of Section 5 of the Securities Act, as set forth in Item 65, Section 5 under
Section A, of the Manual of Publicly Available Telephone Interpretations, dated
July 1997, compiled by the Office of Chief Counsel, Division of Corporation
Finance. Notwithstanding the foregoing, no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in Short Sales in the
securities of the Company (including the ADSs) after the time that the
transactions contemplated by this Agreement are first publicly announced as
described in Section 4.4. Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
22
ARTICLE
V
MISCELLANEOUS
5.1
Termination.
This
Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations
hereunder only and without any effect whatsoever on the obligations between
the
Company and the other Purchasers, by written notice to the other parties, if
the
Closing has not been consummated on or before June 30, 2006; provided, however,
that no such termination will affect the right of any party to xxx for any
breach by the other party (or parties).
5.2
Fees
and Expenses.
Except
for legal expenses of Dechert LLP, counsel to the Purchasers, of which the
Company will pay an amount not to exceed $75,000, or as otherwise expressly
set
forth in the Transaction Documents to the contrary, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts,
if
any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company
shall pay all transfer agent and fees and expenses of the Depositary, escrow
fees, stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities.
5.3
Entire
Agreement.
The
Transaction Documents, together with the exhibits and schedules thereto, contain
the entire understanding of the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules.
5.4
Notices.
Except
as otherwise expressly specified herein, all notices, requests and other
communications required or permitted hereunder shall be in writing and shall
be
sent by an internationally recognized overnight courier service; by certified
or
registered mail, return receipt requested (or, in the case of a notice sent
to
an address in Italy, by international express mail, return receipt requested);
by facsimile transmission, by e-mail or by hand delivery.
23
if
to the
Company:
Gentium
S.p.A.
Xxxxxx
XX
Xxxxxxxxx 0
00000
Xxxxx Xxxxxxx Xxxx
Xxxxx
Attention:
Xxxxxxxxx
Xxxxxxxxx
Fax: x00-000-000-000
E-mail:
xxxxxxxxxx@xxxxxxx.xx
and,
if
to Purchaser, to the name, address, facsimile number or e-mail address specified
with respect to such person or entity on the signature pages attached
hereto.
Any
party
may designate a different notice address, contact person, telephone number,
facsimile number or e-mail address with respect to such party by providing
a
notice describing such changes to the other party hereto in accordance with
the
provisions of this Section 5.4. Any notice sent by internationally recognized
overnight mail courier service shall be deemed to be delivered to the address
shown on the mailing receipt on the expected date of delivery upon proper
evidence of mailing for purposes of this Section 5.4. Any notice sent by
certified or registered mail, return receipt requested (or, in the case of
a
notice sent to an address in Italy, by international express mail, return
receipt requested), shall be deemed to be delivered three business days after
mailing. Any notice sent by facsimile transmission or by e-mail shall be deemed
delivered as of the open of business on the business day following the date
on
which sent provided that within 48 hours such notice is also sent by certified
or registered mail, return receipt requested or, in case of a notice sent to
an
address in Italy, by international express mail, return receipt requested or
by
an internationally-recognized overnight mail courier service to the appropriate
address specified above. Any notice sent by hand delivery shall be deemed
delivered as of the date of delivery. As used in this Section 5.4, “business
day” means any day other than a day on which banking institutions in the State
of New York are legally closed for business.
5.5
Amendments;
Waivers.
No
provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and each
Purchaser or, in the case of a waiver, by the party against whom enforcement
of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be
a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.
5.6
Headings.
The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
5.7
Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser. Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided such transferee agrees in writing to be bound, with
respect to the transferred Securities, by the provisions hereof that apply
to
the “Purchasers.”
24
5.8
No
Third-Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set
forth
in Section 4.7.
5.9
Governing
Law; Jurisdiction.
All
questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents shall be governed by and construed and enforced
in
accordance with the internal laws of the State of New York, without regard
to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively
in
the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect
to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The parties hereby waive all rights to a trial by jury. If
either party shall commence an action or proceeding to enforce any provisions
of
the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding. The Company hereby irrevocably
appoints CT Corporation System, 000xx 00xx Xxxxxx, Xxx Xxxx, XX 00000, as its
agent for the receipt of service of process in the United States. The Company
agrees that any document may be effectively served on it in connection with
any
action, suit or proceeding in the United States by service on such
agent.
5.10
Survival.
The
representations and warranties agreements and covenants contained herein shall
survive the Closing and the delivery of the Shares and Warrant
Shares.
5.11
Execution.
This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original
thereof.
25
5.12
Severability.
If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that is
a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
5.13
Rescission
and Withdrawal Right.
Notwithstanding anything to the contrary contained in (and without limiting
any
similar provisions of) the Transaction Documents, whenever any Purchaser
exercises a right, election, demand or option under a Transaction Document
and
the Company does not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its other
actions and rights.
5.14
Replacement
of Securities.
If any
certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement
Securities.
5.15
Remedies.
In
addition to being entitled to exercise all rights provided herein or granted
by
law, including recovery of damages, each of the Purchasers and the Company
will
be entitled to specific performance under the Transaction Documents. 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.
5.16
Payment
Set Aside.
To the
extent that the Company makes a payment or payments to any Purchaser pursuant
to
any Transaction Document or a Purchaser enforces or exercises its rights
thereunder, and such payment or payments or the proceeds of such enforcement
or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation,
any
bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full
force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
26
5.17
Independent
Nature of Purchasers’ Obligations and Rights.
The
obligations of each Purchaser under any Transaction Document 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 any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
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 the Transaction Documents.
Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out
of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents.
5.18
Construction.
The
parties agree that each of them and/or their respective counsel has reviewed
and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.
(Signature
Pages Follow)
27
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Subscription
Agreement to be duly executed by their respective authorized signatories as
of
the date first indicated above.
|
GENTIUM
S.p.A.
|
Address
for Notice:
|
||
|
By:
|
/s/ Xxxxx Xxxx Xxxxx, M.D.
Name:
Xxxxx Xxxx Xxxxx, M.D.
Title:
Chairperson of the Board of Directors
|
ATTN:
Xx. Xxxxx Xxxxx,
Chief
Executive Officer
Xxxxxx
XX Xxxxxxxxx, 0
00000
Xxxxx Xxxxxxx
Xxxx,
Xxxxx
|
|
|
With
a copy to (which shall not constitute notice):
|
Xxxx
Xxxxxxxx
0000
Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
|
||
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES FOR PURCHASERS FOLLOW]
[PURCHASER
SIGNATURE PAGES TO GNT
IN
WITNESS WHEREOF, the undersigned have caused this Securities Subscription
Agreement to be duly executed by their respective authorized signatories as
of
the date first indicated above.
| Alexandra Global Master Fund Ltd. | |||
| /s/ Xxxxxxx Filiminov | |||
|
Name:
Xxxxxxx Filiminov
Title:
Director
/ Chief Executive Officer
|
| ANIMA S.G.R.p.A. - Rubrica Anima America | |||
| /s/ Xxxxxxxx Xxxxxxxxxx | |||
|
Name:
Xxxxxxxx Xxxxxxxxxx
Title:
Executive
Director
|
| ANIMA S.G.R.p.A. - Rubrica Anima Fondattivo | |||
| /s/ Xxxxxxxx Xxxxxxxxxx | |||
|
Name:
Xxxxxxxx Xxxxxxxxxx
Title:
Executive
Director
|
| ANIMA S.G.R.p.A. - Rubrica Anima Fondo Trading | |||
| /s/ Xxxxxxxx Xxxxxxxxxx | |||
|
Name:
Xxxxxxxx Xxxxxxxxxx
Title:
Executive
Director
|
| Atlas Master Fund, Ltd. | |||
|
/s/
Xxxxx Xxxxxxxxx
|
|||
|
Name: Xxxxx
Xxxxxxxxx
Title:
General
Counsel / Managing Director
|
| BBT Fund, L.P. | |||
|
By:
BBT Genpar, L.P., managing general partner
By:
BBT-FW, Inc., general partner
|
| /s/ Xxxxxxx X. Xxxxxxx | |||
|
Name: Xxxxxxx
X. Xxxxxxx
Title:
Vice
President
|
| BIM Intermobiliare SGR - Fondo Azionario Globale | |||
| /s/ Xxxxx X’Xxxxxxx | |||
|
Name: Xxxxx
X’Xxxxxxx
Title:
Chief
Investment Officer
|
|||
| BIM Intermobiliare SGR - Fondo Azionario Italia | |||
| /s/ Xxxxx X’Xxxxxxx | |||
|
Name: Xxxxx
X’Xxxxxxx
Title:
Chief
Investment Officer
|
|||
| BIM Intermobiliare SGR - Fondo Azionario Small Cap Italia | |||
| /s/ Xxxxx X’Xxxxxxx | |||
|
Name: Xxxxx
X’Xxxxxxx
Title:
Chief
Investment Officer
|
|||
| BIM Intermobiliare SGR - Fondo Bilanciato | |||
| /s/ Xxxxx X’Xxxxxxx | |||
|
Name: Xxxxx
X’Xxxxxxx
Title:
Chief
Investment Officer
|
| Boxer Capital LLC | |||
| /s/ Xxxxxx Xxxxxxxxxxx | |||
|
Name: Xxxxxx
Xxxxxxxxxxx
Title:
Chief
Executive Officer
|
| CAP Fund, L.P. | |||
|
By:
CAP Genpar, L.P., managing general partner
By:
CAP-FW, Inc., general partner
|
|||
| /s/ Xxxxxxx X. Xxxxxxx | |||
|
Name: Xxxxxxx
X. Xxxxxxx
Title:
Vice
President
|
| Caxton Advantage Life Sciences Fund, L.P. | |||
| /s/ Xxxx X. Xxxxxxx | |||
|
Name: Xxxx
X. Xxxxxxx
Title:
Managing
Partner, Advantage Life Sciences
Partners,
LLC - Managing General Partner of
Caxton
Advantage Ventures Partners, L.P.
|
| Generation Capital Associates | |||
| /s/ Xxxxx X. Xxxxxxxx | |||
|
Name: Xxxxx
X. Xxxxxxxx
Title:
Executive
Vice President and General Counsel
|
| Iroquois Master Fund LTD | |||
| /s/ Xxxxxxx Xxxx | |||
|
Name: Xxxxxxx
Xxxx
Title:
Authorized
Signatory
|
| Xxxxxxxx Capital Biotech Fund, LP | |||
| /s/ Quinterol Xxxxxxxx, M.D. | |||
|
Name: Quinterol
Xxxxxxxx, M.D.
Title:
Chief
Executive Officer
|
| Xxxxxxxx Capital Master Fund LTD | |||
| /s/ Quinterol Xxxxxxxx, M.D. | |||
|
Name: Quinterol
Xxxxxxxx, M.D.
Title:
Chief
Executive Officer
|
| Meliorbanca Spa | |||
| /s/ Xxxxxx Xxxxx | |||
|
Name: Xxxxxx
Xxxxx
Title:
Director
of Finance
|
| Merlin Biomed Long Term Appreciation, LP | |||
| /s/ Xxxxxx Xxxxxxxxx | |||
|
Name: Xxxxxx
Xxxxxxxxx
Title:
Chief
Financial Officer
|
| Merlin Biomed Offshore Fund | |||
| /s/ Xxxxxx Xxxxxxxxx | |||
|
Name: Xxxxxx
Xxxxxxxxx
Title:
Chief
Financial Officer
|
| Merlin Nexus II, LP | |||
| /s/ Xxxxxx Xxxxxxxxx | |||
|
Name: Xxxxxx
Xxxxxxxxx
Title:
Chief
Financial Officer
|
| Perceptive Life Sciences Master Fund, Ltd. | |||
| /s/ Xxxxxx X. Xxxxxx | |||
|
Name: Xxxxxx
X. Xxxxxx
Title:
Chief
Operating Officer
|
| RAQ, LLC | |||
| /s/ Xxxxxxx X. Xxxxxxxxx, M.D. | |||
|
Name: Xxxxxxx
X. Xxxxxxxxx, M.D.
Title:
Managing
Member
|
| SMALLCAP World Fund, Inc. | |||
| By: Capital Research and Management Company, its investment adviser | |||
| /s/ Xxxxxxx X. Xxxxxx | |||
|
Name: Xxxxxxx
X. Xxxxxx
Title:
Vice
President and Secretary
|
| SRI Fund, L.P. | |||
|
By:
SRI Genpar, L.P., managing general partner
By:
SRI-FW, Inc., general partner
|
|||
| /s/ Xxxxxxx X. Xxxxxxx | |||
|
Name: Xxxxxxx
X. Xxxxxxx
Title:
Vice
President
|
| Xxxxxx-GEPT Partners, LP | |||
| /s/ Xxxxx Xxxxxxx | |||
|
Name: Xxxxx
Xxxxxxx
Title:
Chief
Financial Officer
|
|||
| Xxxxxx Partners, LP | |||
| /s/ Xxxxx Xxxxxxx | |||
|
Name: Xxxxx
Xxxxxxx
Title:
Chief
Financial Officer
|
| Symphonia Sicav Azionario Euro | |||
| /s/ Xxxxx X’Xxxxxxx | |||
|
Name: Xxxxx
X’Xxxxxxx
Title:
Chief
Executive Officer
|
| Valesco Healthcare Master Fund, L.P. | |||
| /s/ I. Xxxxx Xxxxx | |||
|
Name: I.
Xxxxx Xxxxx
Title:
Portfolio
Manager
|
| Visium Balanced Fund, LP | |||
| /s/ Xxxx Xxxxxxxx | |||
|
Name: Xxxx
Xxxxxxxx
Title:
Chief
Communications Officer
|
| Visium Balanced Offshore Fund, Ltd. | |||
| /s/ Xxxx Xxxxxxxx | |||
|
Name: Xxxx
Xxxxxxxx
Title:
Chief
Communications Officer
|
| Visium Long Bias Fund, LP | |||
| /s/ Xxxx Xxxxxxxx | |||
|
Name: Xxxx
Xxxxxxxx
Title:
Chief
Communications Officer
|
| Visium Long Bias Offshore Fund, Ltd. | |||
| /s/ Xxxx Xxxxxxxx | |||
|
Name: Xxxx
Xxxxxxxx
Title:
Chief
Communications Officer
|
Schedule
2.1
Purchasers
and Subscription Amounts
|
Purchaser
|
Shares
|
Warrants
|
Total
|
|||||||
|
Alexandra
Global Master Fund Ltd.
|
100,000
|
20,000
|
120,000
|
|||||||
|
ANIMA
S.G.R.p.A. - Rubrica Anima America
|
10,000
|
2,000
|
12,000
|
|||||||
|
ANIMA
S.G.R.p.A. - Rubrica Anima Fondattivo
|
5,000
|
1,000
|
6,000
|
|||||||
|
ANIMA
S.G.R.p.A. - Rubrica Anima Fondo Trading
|
15,000
|
3,000
|
18,000
|
|||||||
|
Atlas
Master Fund, Ltd.
|
20,169
|
4,034
|
24,203
|
|||||||
|
BBT
Fund, L.P.
|
35,400
|
7,080
|
42,480
|
|||||||
|
BIM
Intermobiliare SGR - Fondo Azionario Globale
|
10,000
|
2,000
|
12,000
|
|||||||
|
BIM
Intermobiliare SGR - Fondo Azionario Italia
|
100,000
|
20,000
|
120,000
|
|||||||
|
BIM
Intermobiliare SGR - Fondo Azionario Small Cap Italia
|
60,000
|
12,000
|
72,000
|
|||||||
|
BIM
Intermobiliare SGR - Fondo Bilanciato
|
10,000
|
2,000
|
12,000
|
|||||||
|
Boxer
Capital LLC
|
159,500
|
31,900
|
191,400
|
|||||||
|
Cap
Fund, L.P.
|
17,400
|
3,480
|
20,880
|
|||||||
|
Caxton
Advantage Life Sciences Fund, L.P.
|
79,700
|
15,940
|
95,640
|
|||||||
|
Generation
Capital Associates
|
20,000
|
4,000
|
24,000
|
|||||||
|
Iroquois
Master Fund LTD
|
24,000
|
4,800
|
28,800
|
|||||||
|
Xxxxxxxx
Capital Biotech Fund LP
|
71,284
|
14,257
|
85,541
|
|||||||
|
Xxxxxxxx
Capital Master Fund LTD
|
162,741
|
32,548
|
195,289
|
|||||||
|
Meliorbanca
Spa
|
20,000
|
4,000
|
24,000
|
|||||||
|
Merlin
BioMed Long Term Appreciation, LP
|
15,000
|
3,000
|
18,000
|
|||||||
|
Merlin
Biomed Offshore Fund
|
25,000
|
5,000
|
30,000
|
|||||||
|
Merlin
Nexus II, LP
|
119,600
|
23,920
|
143,520
|
|||||||
|
Perceptive
Life Sciences Master Fund Ltd.
|
50,000
|
10,000
|
60,000
|
|||||||
|
RAQ,
LLC
|
19,160
|
3,832
|
22,992
|
|||||||
|
SMALLCAP
World Fund, Inc., with the securities issued in the name of Clipperbay
& Co.
|
450,000
|
90,000
|
540,000
|
|||||||
|
SRI
Fund, L.P.
|
7,200
|
1,440
|
8,640
|
|||||||
|
Xxxxxx-GEPT
Partners, LP
|
39,850
|
7,970
|
47,820
|
|||||||
|
Xxxxxx
Partners LP
|
39,850
|
7,970
|
47,820
|
|||||||
|
Symphonia
Sicav Azionario Euro
|
10,000
|
2,000
|
12,000
|
|||||||
|
ThinkEquity
Partners LLC*
|
0
|
77,741
|
77,741
|
|||||||
|
Valesco
Healthcare Master Fund, L.P.
|
28,740
|
5,748
|
34,488
|
|||||||
|
Visium
Balanced Fund, LP
|
56,422
|
11,284
|
67,706
|
|||||||
|
Visium
Balanced Offshore Fund, Ltd.
|
87,926
|
17,585
|
105,511
|
|||||||
|
Visium
Long Bias Fund, LP
|
17,393
|
3,479
|
20,872
|
|||||||
|
Visium
Long Bias Offshore Fund, Ltd.
|
57,190
|
11,438
|
68,628
|
|||||||
|
Total
|
1,943,525
|
466,446
|
2,409,971
|
|||||||
*
As
placement agent, not as a Purchaser.
GENTIUM
S.P.A. DISCLOSURE SCHEDULE
TO
SECURITIES
PURCHASE AGREEMENT
This
Gentium S.p.A. Disclosure Schedule to Securities Purchase Agreement (the
"Disclosure
Schedule")
is
delivered pursuant to Section 3.1 of the Securities Purchase Agreement by
and among Gentium S.p.A., a joint stock company organized under the laws of
Italy (the "Company")
and
each purchaser listed on the signature pages thereof (each a "Purchaser,"
and,
together, the "Purchasers")
dated
the date hereof (the “Agreement”).
The
numbers in the Disclosure Schedule correspond to the Section numbers in the
Agreement; however, any information disclosed herein under any Section number
shall be deemed to be disclosed and incorporated into any other paragraph number
under the Agreement where it is reasonably clear based on the description of
the
matter contained in such section that such disclosure relates to that section.
Any terms defined in the Agreement shall have the same meaning when used in
this
Disclosure Schedule as when used in the Agreement unless the context otherwise
requires. Copies or summaries of agreements, plans, policies and other documents
referred to herein (the “Documents”)
have
been made available to the Purchasers.
Section
3.1(e)
The
Company must obtain the approval of its board of directors, at a meeting
attended by its Italian notary public and board of statutory auditors, of its
capital increase for the ordinary shares underlying the Shares and Warrant
Shares.
Section
3.1(f)
Under
Italian law, holders of outstanding ordinary shares and convertible debentures
are entitled to subscribe for issuance of ordinary shares or convertible
debentures in proportion to their holdings at the time that the shareholders
authorize a capital increase for those issuances, unless those issuances are
for
non-cash considerations. Under the Company’s bylaws, the preemptive rights may
be excluded or limited by the board of directors of the Company in connection
with a particular capital increase if such exclusion or limitation is in the
interest of the Company. Therefore, the ordinary shares of the Company
underlying Shares and the Warrant Shares are subject to these statutory
preemptive rights. The board of directors of the Company has excluded preemptive
rights for the issuance of the ordinary shares underlying the Shares and the
Warrant Shares. However, under Italian law, (A) any shareholder of the Company
who did not vote in favor of the resolution adopted by the extraordinary
shareholders’ meeting of the Company dated April 28, 2006, or attend such
meeting, providing for the amendment to the bylaws of the Company in order
to,
inter alia, grant the Board of Directors, pursuant to Article 2443 of the
Italian Civil Code, with the power to increase the capital of the Company,
in
compliance with the terms and conditions set forth by such resolution, may
challenge the resolution during the 90 (ninety) days following the registration
of the resolution with the competent Register of Enterprises; (B) the resolution
of the Board of Directors’ meeting of the Company dated May 31, 2006, providing
for the capital increase of the Company, through the issuance of the Shares
and
the Warrant Shares, may be challenged by the Board of Statutory Auditors, any
member of the Board of Directors who did not vote in favor of such resolution,
and any shareholder of the Company who was prejudiced thereby during the 90
(ninety) days following the adoption of such resolution; and (C) in particular,
pursuant to Article 2379-ter of the Italian Civil Code, in the event of the
lack
of call of the relevant meetings, the absence of the minutes of the relevant
minutes, the impossibility of the subject of the resolutions and/or if the
subject of the resolutions is not licit, (i) the resolutions adopted by the
extraordinary shareholders’ meeting of the Company dated April 28, 2006, may be
challenged by any individual or entity having a legitimate interest thereof
during the 3 (three) years following the registration of the resolution with
the
competent Register of Enterprises, and (ii) the resolution of the Board of
Directors’ meeting of the Company dated May 31, 2006, may be challenged by any
individual or entity having a legitimate interest thereof during the 180 (one
hundred and eighty) days following the registration of the resolution with
the
competent Register of Enterprises.
Section
3.1(g)
Capitalization
The
Company’s capitalization as of the date hereof is as set forth in the following
table.
|
Outstanding
Shares
|
Warrants
|
Options
|
||||||
|
9,722,488
|
1,256,158
|
1,042,000
|
||||||
Preemptive
Rights
The
ordinary shares underlying the Shares and the Warrant Shares are subject to
certain statutory preemptive rights that belong to the Company’s shareholders
under Italian law as described in Section 3.1(f) of this Disclosure
Schedule.
Voting
Agreements and Shareholder Agreements
In
connection with a purchase by Sigma Tau Finanziaria S.p.A. of 800,000 ordinary
shares from FinSirton S.p.A. in April 2005, FinSirton S.p.A. agreed that, if
the
per share price in a sale by the Company’s shareholders of all of its ordinary
shares is less than $5.00 per share, FinSirton S.p.A. will transfer to Sigma
Tau
Finanziaria S.p.A. an additional number of ordinary shares equal to (x) $3.2
million divided by the product determined by multiplying (i) 0.8 by
(ii) the per share sale price less (y) 800,000 ordinary
shares.
In
connection with the Company’s October 2005 private placement, FinSirton S.p.A.
agreed to vote its ordinary shares in the Company in favor of electing one
nominee to the Company’s board of directors selected by Biomedical Value Fund,
L.P. and Biomedical Offshore Value Fund, Ltd. for so long as those entities
collectively own ADSs representing 5% of our outstanding ordinary shares. Xxxxx
Xxxxx is the nominee of those entities.
Section
3.1(n)
The
Company owns a manufacturing facility near Como, Italy which, as of December
31,
2005, is subject to three mortgages securing repayment of an aggregate of
approximately €2.255 million of debt owed to Banca Nazionale del
Lavoro.
The
Company has also deposited €550,000 in cash into escrow to secure repayment of
the debt owed to Banca Nazionale del Lavoro.
On
July 9, 2004, the Company obtained a loan in the approximate amount of
€487,000 from Cassa di Risparmio di Parma e Piacenza. The loan was obtained
pursuant to Law No. 1329 of 28 November 1965 (Xxxxx Xxxxxxxx), a law
that facilitates the purchase and the lease of new production equipment. The
loan is secured by a lien on the Company's related equipment and machinery.
On
August 4, 2004, the Company obtained an additional loan in the amount of
€388,000 from Cassa di Risparmio di Parma e Piacenza under the same terms and
conditions. Interest is payable quarterly at the rate of 2.1%. The principal
is
payable in quarterly installments of €19,000 and €24,000, respectively. The
principal is scheduled to be paid in full by June 2008 and June 2009,
respectively.
The
Company applied to a national banking institution, Intesa-Mediocredito, for
a
medium/long-term financing facility of up to €1 million to finance the Company’s
purchase and installation of two reactors in our manufacturing facility. In
February 2006, Intesa-Mediocredito notified the Company that it would grant
the
financing facility, and in April 2006, Intesa-Mediocredito granted the financing
facility. The financing facility has a five-year term and bears interest at
the
three-month Euribor rate plus 1.7%. It is secured by Banca Intesa securities
in
the aggregate amount of €525 thousand that the Company purchased and which
expire on May 10, 2011. The Company makes installment payments on the financing
facility of €131 thousand every six months until its final maturity in April
2011.
Section
3.1(s)
The
Company is obligated to pay compensation to ThinkEquity Partners L.L.C. and
Xxxxxx & Xxxxxxx (the “Placement
Agents”)
and
I-Bankers Securities Incorporated for serving as a placement agent for this
offering pursuant to that certain letter agreement by and between the Company
and the Placement Agents dated as of April 18, 2006.
The
Company is obligated to pay $75,000 to Junowitz & Co. for financial advisory
services pursuant to a letter agreement between the Company and Junowitz &
Co. dated March 6, 2006.
EXHIBIT
A
ACCREDITED
INVESTOR QUESTIONNAIRE
In
connection with the proposed purchase by the undersigned of American Depositary
Shares (“ADSs”) representing ordinary shares of Gentium S.p.A. and warrants to
purchase ADSs, the undersigned hereby certifies that it is an “accredited
investor” (an “Accredited
Investor”)
as defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended (the “Act”),
with which definition the undersigned is familiar. The undersigned has checked
all
of
the following definitions of an Accredited Investor which apply to
it:
o
(i) A
natural
person whose individual net worth, or joint net worth with that person’s spouse,
at the time of purchase exceeds $1,000,000.
o
(ii) A
natural
person who had an individual income in excess of $200,000 in each of 2004 and
2005 or joint income with that person’s spouse in excess of $300,000 in each of
those two years and has a reasonable expectation of reaching the same income
level in 2006.
o (iii) A
natural
person who is a director or executive officer of the Company.
o
(iv) An
organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, or a corporation, Massachusetts or similar business trust,
or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
o
(v) A
“Private Business Development Company” as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
o
(vi) A
“Bank”
as defined in Section 3(a)(2) of the Act, or any savings and loan association
or
other institution as defined in Section 3(a)(5)(A) of the Act, whether acting
in
its individual or fiduciary capacity.
o
(vii) A
broker
or dealer registered pursuant to Section 15 of the Securities Exchange Act
of
1934, as amended.
o
(viii) An
“Insurance Company” as defined in Section 2(13) of the Act.
o
(ix) An
investment company registered under the Investment Company Act of 1940, as
amended or any “Business Development Company” as defined in Section 2(a)(48) of
such act.
o
(x) A
“Small
Business Investment Company” licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of 1958.
o
(xi) A
plan
established and maintained by a state, or its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions for the
benefit of its employees, if such plan has total assets in excess of $5,000,000.
o
(xii) An
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, if (1) the investment decision is made by a “Plan
Fiduciary” as defined in Section 3(21) of such act (such as a bank, savings and
loan association, insurance company or registered investment advisor), (2)
such
plan has total assets in excess of $5,000,000 or (3) a self-directed plan,
with
investment decisions made solely by persons that are Accredited
Investors.
o
(xiii) A
trust,
with total assets in excess of $5,000,000, not formed for the specific purpose
of acquiring the securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D of
the
Act.
o
(xiv) Any
entity in which all of the equity owners are Accredited Investors.
| Name of Investor |
| Signature of investor or authorized signatory |
| Name of authorized signatory, if applicable |
| Title of authorized signatory, if applicable |
| Date |
