SECURITIES PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (this “Agreement”)
is
dated as of the 24th
day of
January, 2008 (the “Effective
Date”)
by and
between XxxxxxXxxxx Pharmaceuticals, Inc., a Delaware corporation, with its
principal office at 00000 Xxxxxx Xxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
(the “Company”),
and
the several purchasers identified in the attached Exhibit A
(individually, a “Purchaser”
and
collectively, the “Purchasers”).
WHEREAS,
the Company desires to issue and sell to the Purchasers an aggregate of up
to
8,750,000 shares (the “Shares”)
of the
authorized but unissued shares of common stock, $0.01 par value per share,
of
the Company (the “Common
Stock”);
and
(ii) warrants in the form attached as Exhibit B
to
purchase an aggregate of approximately 3,500,000 shares of Common Stock (each,
a
“Warrant,”
and
collectively, the “Warrants”);
and
WHEREAS,
the Purchasers, severally, wish to purchase the Shares and the Warrants on
the
terms and subject to the conditions set forth in this Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
(a) “Affiliate”
of a party means any corporation or other business entity controlled by,
controlling or under common control with such party. For this purpose
“control”
shall mean direct or indirect beneficial ownership of fifty percent (50%)
or more of the voting or income interest in such corporation or other business
entity.
(b) “Agreement”
means
this Securities Purchase Agreement.
(c) “Business
Day”
means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to
close.
(d) “Closing
Dates”
means
the dates of the First Closing and the Additional Closing.
(e) “Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and all of the rules and
regulations promulgated thereunder.
(f) “Registration
Rights Agreement”
shall
mean that certain Registration Rights Agreement, dated as of the date hereof,
among the Company and the Purchasers.
(g) “Operative
Agreements”
shall
mean the Registration Rights Agreement and the Warrants together with this
Agreement.
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(h) “Majority
Purchasers”
shall
mean Purchasers which, at any given time, hold greater than fifty
percent (50%) of the voting power of the outstanding Shares, that have not
been resold pursuant to an effective registration statement under the Securities
Act or Rule 144 under the Securities Act.
(i) “Rules
and Regulations”
shall
mean the rules and regulations of the SEC.
(j) “SEC”
shall
mean the Securities and Exchange Commission.
(k) “SEC
Documents”
shall
have the meaning set forth in Section 3.26 below.
(l) “Securities”
shall
mean the Shares, the Warrants and the Underlying Shares.
(m) “Securities
Act”
shall
mean the Securities Act of 1933, as amended, and all of the rules and
regulations promulgated thereunder.
(n) “Subsidiary”
of any entity means another entity, an amount of the voting securities, other
voting ownership or voting partnership interests of which is sufficient to
elect
at least a majority of its Board of Directors or other governing body (or,
if
there are no such voting interests, 50% or more of the equity interests of
which) is owned directly or indirectly by such first entity.
(o) “Trading
Day”
means(a) if the Common Stock is listed or quoted on the NASDAQ Global Market,
then any day during which securities are generally eligible for trading on
the
NASDAQ Global Market, or (b) if the Common Stock is not then listed or quoted
and traded on the NASDAQ Global Market, then any Business Day.
(p) “Underlying
Shares”
shall
mean the shares of Common Stock issuable upon exercise of the
Warrants.
2. Purchase
and Sale of Securities.
2.1
Purchase
and Sale.
Subject
to and upon the terms and conditions set forth in this Agreement, the Company
agrees to issue and sell to each Purchaser, and each Purchaser, severally,
hereby agrees to purchase from the Company, on the Closing Dates, (i) the number
of shares of Common Stock set forth opposite the name of such Purchaser under
the heading “Number
of Shares to be Purchased”
on
Exhibit A
hereto,
at a purchase price of $2.40 per share and (ii) a Warrant to purchase the
number of Underlying Shares set forth opposite the name of such Purchaser under
the heading “Number
of Shares Underlying the Warrant”
on
Exhibit
A
(which
number of Underlying shares shall equal 0.40 share of Common Stock for every
one
Share purchased by the Purchaser), having an exercise price of $3.00 per
Underlying Share. The total purchase price payable by each Purchaser for the
Securities that such Purchaser is hereby agreeing to purchase is set forth
opposite the name of such Purchaser under the heading “Aggregate
Purchase Price”
on
Exhibit A
hereto.
The aggregate purchase price payable by the Purchasers to the Company for all
of
the Securities shall be up $21,000,000.
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2.2
Closings.
The
first closing of the transactions contemplated under this Agreement (the
“First
Closing”)
shall
take place at the offices of Xxxxx & XxXxxxx LLP,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
counsel
to the Company, on the second business day after the Company shall have given
written notice (the “Closing
Notice”)
to the
Purchasers that all of the conditions precedent set forth in Section 5.1 have
been satisfied in full or at such other location, date and time as may be agreed
upon between the Majority Purchasers and the Company. At the First Closing,
the
Company shall deliver to each Purchaser listed on Exhibit
A
hereto
as participating in the First Closing a single stock certificate and a single
Warrant representing the number of Securities purchased by such Purchaser,
each
to be registered in the name of such Purchaser, or in such nominee’s or
nominees’ name(s) as designated by such Purchaser in writing in the form of the
Investor Questionnaire attached hereto as Appendix I,
against
payment of the purchase price therefor by wire transfer of immediately available
funds to such account or accounts as the Company shall designate in writing.
Upon the completion of the First Closing, an additional closing, which shall
take place within 5 Trading Days of the date hereof (the “Additional
Closing”),
will
become unconditional. Notwithstanding
anything herein to the contrary, an Additional Closing may not occur without
the
prior written consent of each Purchaser and the Placement
Agent.
At the
Additional Closing which shall take place at the offices of Xxxxx & XxXxxxx
LLP,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
counsel
to the Company, the Company shall deliver to the Purchasers, listed on
Exhibit
A
hereto
as participating in the Additional Closing, a single stock certificate and
a
single Warrant representing the number of Securities purchased by such
Purchaser, to be registered in the name of such Purchaser, or in such nominee’s
or nominees’ name(s) as designated by such Purchaser in writing in the form of
the Investor Questionnaire attached hereto as Appendix I,
against
payment of the purchase price therefor by wire transfer of immediately available
funds to such account or accounts as the Company shall designate in writing.
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to each of the Purchasers as
follows:
3.1
Incorporation.
The Company has been duly incorporated and is a validly existing corporation
in
good standing under the laws of Delaware with full power and authority
(corporate and other) to own, lease and operate, as the case may be, its
properties and conduct its business as now conducted; and the Company is duly
qualified to transact business and is in good standing in each jurisdiction
in
which the nature of the business conducted by it, or its ownership or leasing
of
property, or its employment of employees or consultants therein, makes such
qualification necessary, except where the failure to be so qualified or be
in
good standing would
not reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the financial condition, business, properties, or results
of
operations of the Company (“Material
Adverse Effect”).
The Company has not received a written notification that any 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,
and to the Company’s knowledge, 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. The Company is in possession
of and operating in material compliance with all authorizations, licenses,
certificates, consents, orders and permits from state, federal and other
regulatory authorities that are material to the conduct of its business, all
of
which are valid and in full force and effect. The Company is not in violation
of
its charter or bylaws. Except
as disclosed in the SEC Documents
the
Company does not own or control, directly or indirectly, any corporation,
association or other entity. Complete and correct copies of the certificate
of
incorporation (the “Certificate
of Incorporation”)
and bylaws (the “Bylaws”)
of the Company as in effect on the Effective Date have been filed by the Company
with the SEC. The
business described in the SEC Documents is carried on primarily by the Company
and the Company does not have any Subsidiary that constitutes a “Significant
Subsidiary” as such term is defined in Item 1-02(w) of Regulation
S-X.
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3.2
Authority.
The Company has all requisite corporate power and authority to enter into this
Agreement and the other Operative Agreements and to perform the transactions
contemplated hereby and thereby. The Operative Agreements have been duly
authorized, executed and delivered by the Company and are valid and binding
agreements on the part of the Company, enforceable in accordance with their
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles. The performance
of this Agreement and the other Operative Agreements and the consummation of
the
transactions herein and therein contemplated will not result in (A) any
violation of the Certificate of Incorporation or Bylaws of the Company or (B)
a
breach or violation of any of the terms and provisions of, or constitute a
default under any contract, agreement, license, understanding, indenture,
mortgage, deed of trust, loan agreement, joint venture, lease (including without
limitation any sale and leaseback arrangement) or bond, debenture, note or
other
evidence of indebtedness, to which the Company is a party or by or to which
it
or its properties (including without limitation all Company Intellectual
Property (as defined in Section 3.9(b)) are or may be bound or subject
(each, a “Contract”)
or any law, order, ruling, rule, regulation, writ, assessment, injunction,
judgment or decree of any government or governmental court, agency or body,
domestic or foreign, having jurisdiction over the Company or over any of its
respective properties (including without limitation all Company Intellectual
Property) or Contracts (“Government
Entity”)
or by or to which they or such of its properties or Contracts are or may be
bound or subject (each, a “Law”),
except in the case of this clause (B), such defaults or violations which
would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. No consent, approval, authorization or order of or qualification
with any Government Entity is required for the execution and delivery of this
Agreement or the other Operative Agreements and the consummation by the Company
of the transactions herein and therein contemplated, except such consents (i)
that will be obtained prior to the Closing Dates and (ii) as may be required
under the Securities Act, the Exchange Act (if applicable), the Rules and
Regulations, or under state or other securities or blue sky laws or the National
Association of Securities Dealers, Inc. (the “NASD”),
all of which requirements will be satisfied in all material respects at or
prior
to the Closing Dates.
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3.3
Litigation;
Contracts.
Except as disclosed in the SEC Documents, there are no actions, suits, claims,
investigations or proceedings pending or, to the Company’s knowledge, threatened
to which the Company or, to the Company’s knowledge, to which any of its
respective directors or officers is a party, or of which any of its respective
properties (including without limitation all Company Intellectual Property)
or
any Contract is the subject, at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority or agency which, if adversely decided, would
be reasonably likely to result in a decision, ruling, finding, judgment, decree,
order or settlement having a Material Adverse Effect or to prevent consummation
of the transactions contemplated hereby. There are no Contracts of a character
required to be described or referred to in the SEC Documents, and/or filed
as an
exhibit to, by the Securities Act, the Exchange Act or the Rules and Regulations
which have not been
accurately described
in all material respects in the SEC Documents,
and/or filed as an exhibit to such SEC Documents. Except to the extent disclosed
in the SEC Documents, the Contracts described in the SEC Documents are in full
force and effect and are valid agreements, enforceable by the Company, except
as
the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles, and except where
the enforceability and validity thereof would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. No event
has
occurred, and no circumstances or condition exists, that (with or without notice
or lapse of time) (A) has resulted or is reasonably likely to result in a
breach, default, violation or waiver of any Contract or any provision thereof;
(B) gives or is reasonably likely to give any party to any Contract the right
to
declare a breach, default or violation of or exercise any remedy under such
Contract; (C) gives or is reasonably likely to give any party to any Contract
the right to cancel, terminate, modify or be excused from performance of any
obligations under such Contract; or (D) has resulted or is reasonably likely
to
result in a violation of any Law or in imposition of any fines, penalties,
damages, injunctions, prohibitions or other sanctions, except in the cases
of
clauses (A), (B) and (C) where such breaches, defaults, violations, waivers,
remedies, cancellations, terminations, modifications excuses or impositions
would not reasonably by expected to have, individually or in the aggregate,
a
Material Adverse Effect.
3.4
Capitalization.
All outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and have not been issued
in violation of any
preemptive rights or other rights to subscribe for or purchase securities.
The
authorized capital stock of the Company consists of (i) 225,000,000 shares
of Common Stock, of which approximately 46,748,748 shares are outstanding on
the
date hereof and (ii) 25,000,000 shares of preferred stock, of
which no shares are outstanding on the date hereof. Except for options to
purchase Common Stock, other equity awards issued to employees and consultants
of the Company pursuant to employee benefits plans and the warrants disclosed
in the SEC Documents,
there are no existing options, warrants, calls, preemptive (or similar) rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character obligating the Company to issue, transfer or sell, or cause to be
issued, transferred or sold, any shares of the capital stock of the Company
or
other equity interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity interests, and
there are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of its capital stock or other equity
interests. There are no voting agreements or other similar arrangements with
respect to the Common Stock to which the Company is a party. The description
of
the Company’s stock option plans, employee stock purchase plans or similar
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the SEC Documents accurately and fairly presents, in all material
respects, the information required to be shown with respect to such plans,
arrangements, options and rights.
Except
as described in the SEC Documents or as have been waived, no person or entity
has the right to require the Company to register any securities of the Company
under the Securities Act, whether on a demand basis or in connection with the
registration of securities of the Company for its own account or for the account
of any other person or entity. The issuance and sale of the Securities hereunder
will not obligate the Company to issue shares of Common Stock or other
securities to any other person or entity (other than the Purchasers) and will
not result in the adjustment of the exercise, conversion, exchange or reset
price of any outstanding security.
-5-
3.5
Authorization.
The Securities have been duly authorized for issuance and sale to the Purchasers
pursuant to this Agreement and, when issued and delivered by the Company against
payment therefor in accordance with the terms of this Agreement, will be duly
and validly issued and fully paid and nonassessable, and will be sold free
and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest. The
Underlying Shares have been duly and validly authorized and reserved for
issuance and, upon exercise of the Warrants in accordance with their terms,
including payment of the exercise price therefore, the Underlying Shares will
be
validly issued, fully paid and nonassessable and will be sold free and clear
of
any pledge, lien, security interest, encumbrance, claim or equitable interest.
No
preemptive right, co-sale right, registration right, right of first refusal
or
other similar right of stockholders exists with respect to any of the Securities
or the issuance and sale thereof, other than those that have been expressly
waived prior to the date hereof, those that will have been expressly waived
prior to the Closing Dates, and those that will automatically expire upon or
will not apply to the consummation of the transactions contemplated on the
Closing Dates. No further approval or authorization of any stockholder, the
Board of Directors of the Company or others is required for the issuance and
sale or transfer of the Securities, except as may be required (i)
under
state or other securities or blue sky laws
or
(ii) pursuant to the Registration Rights Agreement.
The Company does not have a stockholder rights plan or other “poison pill”
arrangement and no provision of the Company’s Certificate of Incorporation or
Bylaws that is or could reasonably be expected to become applicable to the
Purchasers as a result of the transactions contemplated hereby.
3.6
Accountants.
PricewaterhouseCoopers LLP, whose report on the financial statements of the
Company is filed with the SEC in the Company’s Annual Report on Form 10-K for
the year ended December 31, 2006, are independent registered public accountants
as required by the Securities Act and the Rules and Regulations. Except as
described in the SEC Documents and as preapproved in accordance with the
requirements set forth in Section 10A of the Exchange Act, to the Company’s
knowledge, PricewaterhouseCoopers LLP has not engaged in any “prohibited
activities” (as defined in Section 10A of the Exchange Act) on behalf of the
Company.
3.7
Financial
Statements.
The financial statements of the Company contained
in the SEC Documents,
together with the related schedules and notes: (i) present fairly, in all
material respects, the financial position of the Company as of the dates
indicated and the results of operations and cash flows of the Company for the
periods specified; (ii) have been prepared in compliance with requirements
of
the Securities Act and the Rules and Regulations and in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis during the periods presented and present fairly, in all
material respects, the information required to be stated therein (provided,
however,
that the statements that are unaudited are subject to normal year-end
adjustments and do not contain certain footnotes required by generally accepted
accounting principles); (iii) comply with the antifraud provisions of the
federal securities laws; and (iv) describe accurately, in all material respects,
the controlling principles used to form the basis for their presentation. There
are no financial statements (historical or pro forma) and/or related schedules
and notes that are required to be included in the SEC Documents that are not
included as required by the Securities Act, the Exchange Act and/or the Rules
and Regulations.
3.8
No
Changes.
Subsequent to December 31, 2006, except as otherwise described in the SEC
Documents, there has not been (i) any change, development or event that would
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect, (ii) any transaction that is material to the Company,
(iii) any obligation, direct or contingent, that is material to the Company,
incurred by the Company, (iv) any change in the capital stock or outstanding
indebtedness of the Company that is material to the Company, (v) any dividend
or
distribution of any kind declared, paid or made on the capital stock of the
Company or (vi) any loss or damage (whether or not insured) to the property
of
the Company that has been sustained or will have been sustained that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
3.9
Property.
(a) Except
as set forth in the SEC Documents: (i) the Company has good and marketable
title
to all properties and assets described in the SEC Documents as owned by it
free
and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest, whether imposed by agreement, contract, understanding,
law,
equity or otherwise, except for Permitted Liens (as defined below) or where
any
failure to have good and marketable title to such properties and assets,
individually or in the aggregate, would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; and (ii) the
Company has valid and enforceable leases, including without limitation any
leases that are the subject of any sale and leaseback arrangement, for all
properties described in the SEC Documents as leased by it, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles. Except as set
forth in the SEC Documents, the Company owns or leases all such properties
as
are necessary to its operations as now conducted or as proposed to be conducted.
A “Permitted
Lien”
shall mean (i) liens for taxes not yet due, (ii) mechanics liens and similar
liens for labor, materials or supplies incurred in the ordinary course of
business for amounts that are not delinquent and (iii) any liens that
individually or in the aggregate are not material.
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(b) Except
as described in the SEC Documents, to
the Company’s knowledge the Company owns or has valid, binding and enforceable
licenses or other rights to use the patents and patent applications, inventions,
copyrights,
trademarks, service marks, trade names, service names, technology or know-how
(including trade secrets and other unpatented and/or unpatentable proprietary
rights and excluding generally commercially available “off the shelf” software
programs licensed pursuant to shrink wrap or “click and accept” licenses)
necessary to conduct its business in the manner described in the SEC Documents
(collectively, the “Company
Intellectual Property”),
except for any Company Intellectual Property the absence of which, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
The Company Intellectual Property is free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest, whether imposed
by
agreement, contract, understanding, law, equity or otherwise, except for
Permitted Liens or where any failure to have such adequate licenses or other
rights of use to such Intellectual Property, individually or in the aggregate,
would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect
or except as described in the SEC Documents.
The Company is not obligated to pay a royalty, grant a license or provide other
consideration to any third party in connection with the Company Intellectual
Property other than as disclosed in the SEC Documents
or except as could not reasonably be expected to have
a Material Adverse Effect.
Except as disclosed in the SEC Documents or as could
not
reasonably be expected to
have a Material Adverse Effect, (i) the Company has not received any notice
of
infringement or conflict with asserted rights of others with respect to any
Company Intellectual Property, (ii) the conduct of the business of the Company
in the manner described in the SEC Documents does not and will not, to the
knowledge of the Company, infringe, interfere or conflict with any valid issued
patent claim or other intellectual property right of any third party
known
to the Company and
(iii) no third party, including any academic or governmental organization,
possesses rights
to the Company Intellectual Property which, if exercised, would
enable such party to develop products competitive to those of the Company.
Except as disclosed in the SEC Documents,
the Company has not received any notice or has any knowledge of (i) any
potential infringement or misappropriation by others of the Company Intellectual
Property or (ii) any intellectual property of others that potentially
conflicts or interferes with the Company Intellectual Property,
that would reasonably be expected to have, individually or in the aggregate,
a
Material Adverse Effect. To the Company’s knowledge, no claim of any patent or
patent application (assuming the claims of patent applications issue as
currently pending) included in the Company Intellectual Property is
unenforceable or invalid, except for such unenforceability or invalidity that
would
not reasonably be expected to result, individually or in the aggregate, in
a
Material Adverse Effect
or except as described in the SEC Documents.
Each former and current employee and independent contractor of the Company
has
signed and delivered one or more written contracts with the Company pursuant
to
which such employee or independent contractor assigns to the Company all of
his,
her or its rights in and to any inventions, discoveries, improvements, works
of
authorship, know-how or information made, conceived, reduced to practice,
authored or discovered in the course of employment by or performance of services
for the Company and any and all patent rights, copyrights, trademark and other
intellectual property rights therein or thereto.
-7-
3.10
Tax
Returns.
The
Company has timely filed all federal, state and foreign income and franchise
tax
returns required to be filed by the Company on or prior to the date hereof,
and
has paid all taxes shown thereon as due, and there is no tax deficiency that
has
been or, to the Company’s knowledge, might be asserted against the Company that
could reasonably be expected to have a Material Adverse Effect. All tax
liabilities are adequately provided for on the books of the
Company.
3.11
Internal
Controls.
The
Company has established and maintains a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions are executed
in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles in the
United States and to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.12
Audit
Committee.
The Company’s Board of Directors has validly appointed an Audit Committee whose
composition satisfies the requirements of Rule 4350(d)(2) of the Rules of the
NASD (the “NASD
Rules”)
and the Board of Directors and/or the Audit Committee has adopted a charter
that
satisfies the requirements of Rule 4350(d)(1) of the NASD Rules. The Audit
Committee has reviewed the adequacy of its charter within the past 12
months.
3.13
Disclosure
Controls.
The
Company has established and maintains disclosure controls and procedures (as
such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act). Since
the date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls or
in
other factors that could significantly affect internal controls, including
any
corrective actions with regard to significant deficiencies and material
weaknesses. The Company is in compliance in all material respects with all
provisions currently in effect and applicable to the Company of the
Xxxxxxxx-Xxxxx Act of 2002, and all rules and regulations promulgated thereunder
or implementing the provisions thereof.
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3.14
Insurance.
The Company maintains insurance with insurers of recognized financial
responsibility of the types and in the amounts it reasonably believes to be
adequate for its business and consistent with insurance coverage maintained
by
similar companies in similar businesses, including, but not limited to,
insurance covering the acts and omissions of directors and officers, real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect; and 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 at a cost that
would not reasonably be expected to have a Material Adverse Effect.
3.15
Losses.
The Company has not sustained since December 31, 2006 any losses or
interferences with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, other than any losses or interferences
which
could not reasonably be expected to have, individually or in the aggregate,
a
Material Adverse Effect.
3.16
Labor
Disputes.
No
labor dispute with employees of the Company exists or, to the Company’s
knowledge, is imminent which could reasonably be expected to have a Material
Adverse Effect. No collective bargaining agreement exists with any of the
Company’s employees and, to the Company’s knowledge, no such agreement is
imminent.
3.17
NASDAQ
Global Market.
The Common Stock is registered pursuant to Section 12(g) of the Exchange Act
and
is listed on the NASDAQ Global Market, and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration
of
the Common Stock under the Exchange Act or delisting the Common Stock from
the
NASDAQ Global Market. Except as disclosed in the Company’s Form 8-K filed on May
10, 2005, the Company has not received any notification that the SEC or the
NASDAQ Stock Market LLC is contemplating terminating such registration or
listing. The Company has taken all actions necessary to list the Securities
for
quotation on the NASDAQ Global Market. The Company is in compliance with
all corporate governance requirements of the NASDAQ Global Market except for
such non-compliance as would not, individually or in the aggregate, have a
Material Adverse Effect. The Company shall comply with all requirements of
the
NASD
with respect to the issuance of the Shares and the listing of the Shares on
the
NASDAQ Global Market and such other securities exchange or automated quotation
system, as applicable. The sale and issuance of the Securities does not require
stockholder approval, including, without limitation, pursuant to the NASD
Rules.
3.18
Investment
Company. The
Company is not and, after giving effect to the offering and sale of the
Securities, will not be an “investment company,” as such term is defined in the
Investment Company Act of 1940, as amended.
-9-
3.19
Offering
Materials.
Other
than the SEC Documents and the Operative Agreements (collectively, the
“Offering
Materials”),
the
Company has not distributed and, prior to the Closing Dates, will not
distribute, any offering materials in connection with the offering and sale
of
the Securities. The Company has not in the past nor will it hereafter take
any
action to sell, offer for sale or solicit offers to buy any securities of the
Company which would require the offer, issuance or sale of the Shares, as
contemplated by this Agreement, to be registered under Section 5 of the
Securities Act (other than pursuant to the Registration Rights
Agreement).
3.20
No
Manipulation of Stock.
Neither
the Company nor, to its knowledge, any of its affiliates has taken, directly
or
indirectly, any action designed to or which has constituted or which would
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
3.21
ERISA.
The
Company is in compliance in all material respects with all currently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
(“ERISA”),
except where a failure to so comply could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; to the Company’s
knowledge, no unwaivable “reportable event” (as defined in ERISA) has occurred
with respect to any “pension plan” (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect
to
incur any material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the “Code”);
and
each “pension plan” for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in
all
material respects and nothing has occurred, whether by action or by failure
to
act, which would cause the loss of such qualification.
3.22
Environmental.
Except
as set forth in the SEC Documents: (i) the Company is in material compliance
with all rules, laws and regulations relating to the use, treatment, storage
and
disposal of toxic substances and protection of health or the environment
(“Environmental
Laws”)
which
are applicable to its business; (ii) the Company has not received any notice
from any governmental authority or third party of an asserted claim under
Environmental Laws, which claim is required to be disclosed in the SEC
Documents; (iii), to the Company’s knowledge, the Company is not currently
required to make future material capital expenditures to comply with
Environmental Laws; and (iv) to the Company’s knowledge, no property that is
owned, leased or occupied by the Company has been designated a Superfund site
pursuant to the Comprehensive Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et seq.), or otherwise designated as a
contaminated site under applicable state or local law.
3.23
Outstanding
Loans to Officers or Directors.
There
are no outstanding loans, advances (except normal advances for business expenses
in the ordinary course of business) or guarantees of indebtedness by the Company
to or for the benefit of any of the officers or directors of the Company or
any
of the members of the families of any of them.
-10-
3.24
Regulatory
Compliance.
(a) The
Company possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct its business as currently conducted, including without limitation all
such certificates, authorizations and permits required by the United States
Food
and Drug Administration (the “FDA”)
or any other federal, state or foreign agencies or bodies engaged in the
regulation of pharmaceuticals or biohazardous materials, except where the
failure to so possess such certificates, authorizations and permits,
individually or in the aggregate, would not result in a Material Adverse
Effect
or except as disclosed in the SEC Documents.
The Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect.
(b) Except
to the extent disclosed in the SEC
Documents,
the Company has not received any written notices or statements from the FDA,
the
European Medicines Agency (the “EMEA”)
or any other governmental agency, and otherwise has no knowledge or reason
to
believe, that (i) any new drug application or marketing authorization
application for any product or potential product of the Company is or has been
rejected or determined to be non-approvable or conditionally approvable;
and
(ii)
any license, approval, permit or authorization to conduct any clinical trial
of
or market any product or potential product of the Company has been, will be
or
may be suspended
or
revoked, except
in the cases of clauses (i)
and (ii)
where such rejections, determinations, delays, requests, suspensions,
revocations, modifications or limitations could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(c) To
the Company’s knowledge, the preclinical and clinical testing, application for
marketing approval of, manufacture, distribution, promotion and sale of the
products and potential products of the Company is in compliance, in all material
respects, with all laws, rules and regulations applicable to such activities,
including without limitation applicable good laboratory practices, good clinical
practices and good manufacturing practices, except for such non-compliance
as
would not, individually or in the aggregate, have a Material Adverse Effect.
The
descriptions of the results of such tests and trials contained in the SEC
Documents are accurate in all material respects. Except to the extent disclosed
in the SEC Documents, the Company has not received notice of adverse finding,
warning letter or clinical hold notice from the FDA or any non-U.S. counterpart
of any of the foregoing, or any untitled letter or other correspondence or
notice from the FDA or any other governmental authority or agency or any
institutional or ethical review board alleging or asserting noncompliance with
any law, rule or regulation applicable in any jurisdiction, except notices,
letters and correspondence and non-U.S. counterparts thereof alleging or
asserting such noncompliance as would not, individually or in the aggregate,
have a Material Adverse Effect. The Company has not, either voluntarily or
involuntarily, initiated, conducted or issued, or caused to be initiated,
conducted or issued, any recall, field correction, market withdrawal or
replacement, safety alert, warning, “dear doctor” letter, investigator notice,
or other notice or action relating to an alleged or potential lack of safety
or
efficacy of any product or potential product of the Company, or any violation
of
any material applicable law, rule, regulation or any clinical trial or marketing
license, approval, permit or authorization for any product or potential product
of the Company, except such notices or actions as would not, individually or
in
the aggregate, have a Material Adverse Effect.
-11-
3.25
Lock-Up
Agreements.
The Company has caused each person listed on Schedule
I
hereto to furnish to the Placement
Agent (as defined herein),
on or prior to the date of this Agreement, a letter or letters, in form and
substance reasonably
satisfactory
to the Placement
Agent
(the “Lock-up
Agreements”),
pursuant to which such person shall agree not to, directly or indirectly, for
a
period (the “Lock-up
Period”)
commencing on the date of this Agreement and ending on the Effectiveness Date
of
the Initial Registration Statement (as such terms are defined in the
Registration Rights Agreement), offer, sell, pledge, contract to sell, grant
any
option to purchase, grant a security interest in, hypothecate or otherwise
sell
or dispose of (collectively, a “Transfer”)
any shares of Common Stock (including without limitation, shares of Common
Stock
that may be deemed to be beneficially owned by such person in accordance with
the Rules and Regulations and shares of Common Stock that may be issued upon
the
exercise of a stock option or warrant) or any securities convertible into,
derivative of or exchangeable or exercisable for Common Stock (collectively,
“Covered
Securities”),
owned directly by such person or as to which such person has the power of
disposition, in any such case whether owned as of the date of such letter or
acquired thereafter, except for such Transfers that are expressly permitted
by
the Lock-up Agreements. The foregoing restrictions have been expressly agreed
to
preclude the holder of the Covered Securities from engaging in any hedging
or
other transaction, as more fully described in the Lock-up Agreements.
Furthermore, such person has also agreed and consented to the entry of stop
transfer instructions with the Company’s transfer agent against the transfer of
the Covered Securities held by such person except in compliance with this
restriction. The Company hereby represents and warrants that it will not
release, prior to the expiration of the Lock-up Period, any of its officers
from
any Lock-up Agreements currently existing or hereafter effected without the
prior xxxxxx consent of Xxxxxx & Xxxxxxx, LLC.
3.26
SEC
Documents.
The
Company has made available to each Purchaser, a true and complete copy of the
Company’s Annual Report on Form 10-K for the year ended December 31, 2006,
each current report on Form 8-K (except for the information deemed to be
furnished and not filed therewith), and definitive proxy statement, filed by
the
Company with the SEC during the period commencing on January 1, 2007 and ending
on the date hereof. The Company will, promptly upon the filing thereof, also
make available to each Purchaser all Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K and definitive proxy statements filed by the Company with
the SEC during the period commencing on the date hereof and ending on the
Closing Dates (all such materials required to be furnished to each Purchaser
pursuant to this sentence or pursuant to the next preceding sentence of this
Section 3.26 being called, collectively, the “SEC
Documents”).
The
Company has filed in a timely manner all documents that the Company was required
to file under the Exchange Act during the 12 months preceding the date of this
Agreement. As of their respective filing dates, the SEC Documents complied
or,
when filed will comply in all material respects with the requirements of the
Exchange Act or the Securities Act, as applicable, and none of the SEC Documents
contained or, when filed, will contain any untrue statement of a material fact
or omitted or, when filed, will omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading, as of
their respective filing dates, except to the extent corrected by a subsequently
filed SEC Document.
-12-
3.27
Brokers
or Finders.
Except
for Xxxxxx & Xxxxxxx, LLC, the Company has not dealt with any broker or
finder in connection with the transactions contemplated by this Agreement,
and,
except for certain fees and expenses payable by the Company to Xxxxxx &
Xxxxxxx, LLC, the Company has not incurred, and shall not incur, directly or
indirectly, any liability for any brokerage or finders’ fees or agents
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
3.28
No
Integrated Offering.
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 within the prior
six months that would require registration under the Securities Act of the
issuance of the Securities to the Purchasers.
3.29
No
General Solicitation.
Neither
the Company nor, to the knowledge of the Company, any person acting for the
Company, has conducted any “general solicitation” (as such term is defined in
Regulation D) with respect to any of the Securities being offered hereby. The
Company will not distribute any offering material in connection with the sale
of
the Securities prior to the Closing Dates, other than this Agreement, the
Registration Rights Agreement and the SEC Documents.
3.30
Private
Placement.
The offer and sale of the Securities to the Purchasers as contemplated hereby
is
exempt from the registration requirements of the Securities Act.
3.31
S-3
Eligibility.
The Company is eligible to use Form S-3 to register the Registrable Securities
(as such term is defined in the Registration Rights Agreement) for sale by
the
Purchasers as contemplated by the Registration Rights Agreement.
3.32
Disclosures.
Neither the Company nor any person or entity acting on its behalf has provided
the Purchasers or their agents or counsel with any information that constitutes
or might constitute material, non-public information, other than the terms
of
the transactions contemplated hereby, except as has been provided pursuant
to
confidentiality agreements with certain of the Purchasers or as has been
acquired by certain Purchasers in the ordinary course of the performance of
their duties as employees or directors of the Company.
4. Representations
and Warranties of the Purchasers.
Each
Purchaser severally for itself, and not jointly with the other Purchasers,
represents and warrants to the Company as follows:
4.1
Authorization.
All action on the part of such Purchaser and, if applicable, its officers,
directors and shareholders necessary for the authorization, execution, delivery
and performance of the Operative Agreements and the consummation of the
transactions contemplated herein and therein has been taken. When executed
and
delivered, each of the Operative Agreements will constitute the legal, valid
and
binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with its terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors’ rights generally
and by general equitable principles. Such Purchaser has all requisite corporate
power to enter into each of the Operative Agreements and to carry out and
perform its obligations under the terms of the Operative Agreements. Such
Purchaser has the knowledge and experience in financial and business matters
as
to be capable of evaluating the merits and risks of an investment in the
Securities and has the ability to bear the economic risks of an investment
in
the Securities for an indefinite period of time.
4.2
Purchase
Entirely for Own Account.
Such
Purchaser is acquiring the Securities being purchased by it hereunder for its
own account, and not for resale or with a view to distribution thereof in
violation of the Securities Act. Such Purchaser has not entered into an
agreement or understanding with any other party to resell or distribute such
Securities without prejudice, however, to such Purchaser’s right, subject to the
provisions of this Agreement, at all times to sell or otherwise dispose of
all
or any part of such Securities pursuant to an effective registration statement
under the Securities Act or under an exemption from such registration and in
compliance with applicable federal and state securities laws. Nothing contained
herein shall be deemed a representation or warranty by such Purchaser to hold
Securities for any period of time.
4.3
Investor
Status; Etc.
Such
Purchaser certifies and represents to the Company that it is now, and at the
time such Purchaser acquires any of the Securities, such Purchaser will be,
an
“Accredited Investor” as defined in Rule 501 of Regulation D promulgated under
the Securities Act and was not organized for the purpose of acquiring the
Securities. Such Purchaser’s financial condition is such that it is able to bear
the risk of holding the Securities for an indefinite period of time and the
risk
of loss of its entire investment. Such Purchaser has received, reviewed and
considered all information it deems necessary in making an informed decision
to
make an investment in the Securities and has been afforded the opportunity
to
ask questions of and receive answers from the management of the Company
concerning this investment and has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company’s stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company.
-13-
4.4
Shares
Not Registered.
Such
Purchaser understands that the Securities have not been registered under the
Securities Act, by reason of their issuance by the Company in a transaction
exempt from the registration requirements of the Securities Act, and that the
Securities must continue to be held by such Purchaser unless a subsequent
disposition thereof is registered under the Securities Act or is exempt from
such registration. The Purchaser understands that the exemptions from
registration afforded by Rule 144 (the provisions of which are known to it)
promulgated under the Securities Act depend on the satisfaction of various
conditions, and that, if applicable, Rule 144 may afford the basis for sales
only in limited amounts.
4.5
No
Conflict.
The
execution and delivery of the Operative Agreements by such Purchaser and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in any violation of or default by such Purchaser (with
or without notice or lapse of time, or both) under, or give rise to a right
of
termination, cancellation or acceleration of any obligation or to a loss of
a
material benefit under (i) any provision of the organizational documents of
such Purchaser, (ii) any material agreement or instrument, permit,
franchise, or license or (iii) any judgment, order, statute, law, ordinance,
rule or regulations, applicable to such Purchaser or its respective properties
or assets.
4.6
Brokers.
Such
Purchaser has not retained, utilized or been represented by any broker or finder
in connection with the transactions contemplated by this Agreement.
4.7
Consents.
All
consents, approvals, orders and authorizations required on the part of such
Purchaser in connection with the execution, delivery or performance of this
Agreement and the consummation of the transactions contemplated herein have
been
obtained and are effective as of the First Closing.
4.8
Acknowledgments
Regarding Placement Agent.
Each Purchaser acknowledges that Xxxxxx & Xxxxxxx, LLC is acting as
placement agent (the “Placement
Agent”)
for the Securities being offered hereby and will be compensated by the Company
for acting in such capacity. Each Purchaser further acknowledges that in making
its decision to enter into this Agreement and purchase the Securities it has
relied on its own examination of the Company and the terms of, and consequences,
of holding the Securities.
4.9
Information.
Each
Purchaser and its advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company, and materials
relating to the offer and sale of the Securities, if any, that have been
requested by the Purchaser or its advisors, if any. The Purchaser and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company. The Purchaser acknowledges and understands that its investment in
the
Securities involves a significant degree of risk, including the risks reflected
in the SEC Documents.
4.10
No
Public Offering.
Such
Purchaser has not received any information relating to the Securities or the
Company, and is not purchasing the Securities as a result of, any form of
general solicitation or general advertising, including but not limited to,
any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio
or
pursuant to any seminar or meeting whose attendees were invited by any general
solicitation or general advertising.
-14-
4.11
Short
Positions;
Certain Trading Limitations.
Such
Purchaser will not, at any time, use any of the Securities acquired pursuant
to
this Agreement to cover any short position in the Common Stock if doing so
would
be in violation of applicable securities laws. The
Purchaser (i) represents that on and from the time the Purchaser first became
aware of the offering of the Shares until the date and time hereof neither
it
nor anyone acting on its behalf has engaged in and (ii) covenants that for
the
period commencing on the date and
time hereof and ending on the earlier to occur of (A) the Company’s issuance of
a press release disclosing the transactions contemplated hereby and (B) the
Company’s filing of a Current Report on Form 8-K disclosing the transactions
contemplated hereby, neither it nor anyone acting on its behalf will, engage
in
any hedging or other transaction which is designed to or could reasonably be
expected to lead to or result in, or be characterized as, a sale, an offer
to
sell, a solicitation of offers to buy, disposition of, loan, pledge or grant
of
any right with respect to (collectively, a “Disposition”)
the Common Stock of the Company by the Purchaser or any person or entity. Such
prohibited hedging or other transaction would include without limitation
effecting any short sale (whether or not such sale or position is “against the
box”) or any purchase, sale or grant of any right (including without limitation
any put or call option) with respect to the Common Stock of the Company or
with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from the
Common Stock of the Company.
Notwithstanding
the foregoing, nothing set forth above would prohibit the
location and/or reservation of borrowable shares of Common Stock.
4.12
Broker-dealer.
The Purchaser is not a broker-dealer. If the Purchaser is an affiliate of a
broker-dealer, the Purchaser is acquiring the Shares in the ordinary course
of
its business.
4.13
Affiliates.
To the knowledge of the Purchaser, the Purchaser is not
an affiliate of the Company, except as otherwise disclosed such Purchaser’s
Investor Questionnaire.
5. Conditions
Precedent.
5.1
Conditions
to the Obligation of the Purchasers to Consummate the Closings.
The
obligation of each Purchaser to consummate the First Closing and the Additional
Closing and to purchase and pay for the Securities being purchased by it
pursuant to this Agreement is subject to the satisfaction of the following
conditions precedent:
-15-
(a) The
representations and warranties of the Company contained herein shall be true
and
correct on and as of the Closing Dates with the same force and effect as though
made on and as of the Closing Dates.
(b) The
Registration Rights Agreement shall have been executed and delivered by the
Company.
(c) The
Company shall not have been adversely affected in any material way prior to
the
Closing Dates; and the Company shall have performed all obligations and
conditions herein required to be performed or observed by the Company on or
prior to the Closing Dates.
(d) The
Company shall have filed with NASDAQ a true and complete Notification Form:
Listing of Additional Shares covering the Shares and the Underlying
Shares.
(e) No
proceeding challenging this Agreement or the transactions contemplated hereby,
or seeking to prohibit, alter, prevent or materially delay the First Closing
or
the Additional Closing, shall have been instituted before any court, arbitrator
or governmental body, agency or official and shall be pending.
(f) The
purchase of and payment for the Securities by the Purchasers shall not be
prohibited by any law or governmental order or regulation. All necessary
consents, approvals, licenses, permits, orders and authorizations of, or
registrations, declarations and filings with, any governmental or administrative
agency or of any other person with respect to any of the transactions
contemplated hereby shall have been duly obtained or made and shall be in full
force and effect.
(g) The
Company shall have obtained and delivered to the Purchasers the Lock-up
Agreements referred to in Section 3.25 hereof.
(h) A
minimum
of 80% of the funds to be received by the Company shall have been received
as
payment for shares of Common Stock in accordance with this Agreement.
(i) All
instruments and corporate proceedings in connection with the transactions
contemplated by this Agreement to be consummated at the First Closing and the
Additional Closing shall be reasonably satisfactory in form and substance to
such Purchaser, the Purchasers shall have received an opinion of legal counsel
to the Company substantially in the form of Exhibit C
attached
hereto, and such Purchaser shall have received such certificates of the
Company’s officers as such Purchaser may have reasonably requested in connection
with such transactions.
(j) No
stop
order or suspension of trading shall have been imposed by NASDAQ, the SEC or
any
other governmental or regulatory body with respect to public trading in the
Common Stock.
-16-
5.2
Conditions
to the Obligation of the Company to Consummate the Closings.
The
obligation of the Company to consummate the First Closing and the Additional
Closing and to issue and sell to each of the Purchasers the Securities to be
purchased by it at the First Closing and the Additional Closing is subject
to
the satisfaction of the following conditions precedent:
(a) The
representations and warranties contained herein of such Purchaser shall be
true
and correct on and as of the Closing Dates with the same force and effect as
though made on and as of the Closing Dates.
(b) The
Registration Rights Agreement shall have been executed and delivered by each
Purchaser.
(c) The
Purchasers shall have performed all obligations and conditions herein required
to be performed or observed by the Purchasers on or prior to the Closing
Dates.
(d) No
proceeding challenging this Agreement or the transactions contemplated hereby,
or seeking to prohibit, alter, prevent or materially delay the First Closing
or
the Additional Closing, shall have been instituted before any court, arbitrator
or governmental body, agency or official and shall be pending.
(e) The
sale
of the Securities by the Company shall not be prohibited by any law or
governmental order or regulation. All necessary consents, approvals, licenses,
permits, orders and authorizations of, or registrations, declarations and
filings with, any governmental or administrative agency or of any other person
with respect to any of the transactions contemplated hereby shall have been
duly
obtained or made and shall be in full force and effect.
(f) Each
of
the Purchasers shall have executed and delivered to the Company an Investor
Questionnaire, in the form attached hereto as Appendix
I,
pursuant to which each such Purchaser shall provide information necessary to
confirm each such Purchaser’s status as an “accredited investor” (as such term
is defined in Rule 501 promulgated under the Securities Act) and to enable
the
Company to comply with the Registration Rights Agreement.
(g) Each
of
the other Purchasers shall have purchased, in accordance with this Agreement,
the number of shares of Common Stock set forth opposite its name under the
heading “Number
of Shares to be Purchased”
and
the
number of Warrants set forth opposite its name on Exhibit A.
(h) All
instruments and corporate proceedings in connection with the transactions
contemplated by this Agreement to be consummated at the First Closing and the
Additional Closing shall be satisfactory in form and substance to the Company,
and the Company shall have received counterpart originals, or certified or
other
copies of all documents, including without limitation records of corporate
or
other proceedings, which it may have reasonably requested in connection
therewith.
-17-
6. Transfer,
Legends.
6.1
Securities
Law Transfer Restrictions.
(a) Each
Purchaser understands that the Securities have not been registered under the
Securities Act or any state securities laws, and each Purchaser agrees that
it
will not dispose of the Securities unless (a) the resale of the Securities
is registered under the Securities Act, or (b) such registration is not
required under the Securities Act or any applicable state securities law due
to
the applicability of an exemption therefrom. In that connection, such Purchaser
is aware of Rule 144 under the Securities Act and the restrictions imposed
thereby.
(b) Each
Purchaser acknowledges that no action has been or will be taken in any
jurisdiction outside the United States by the Company or the Placement Agent
that would permit an offering of the Securities, or possession or distribution
of offering materials in connection with the issue of Securities, in any
jurisdiction outside of the United States where action for that purpose is
required. Each Purchaser outside the United States will comply with all
applicable laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or delivers Securities or has in its possession or
distributes any offering material, in all cases at its own expense. The
Placement Agent is not authorized to make any representation or use any
information in connection with the issue, placement, purchase and sale of the
Securities.
(c) Each
Purchaser hereby covenants with the Company not to make any sale of the
Securities without complying with the provisions of the Operative Agreements
and
such Purchaser acknowledges that the certificates evidencing the Shares and
each
Warrant will be imprinted with a legend that prohibits their transference except
in accordance therewith. Each Purchaser acknowledges that there may occasionally
be times when the Company, based on the advice of its counsel, determines that
it must suspend a registration statement (a “Registration
Statement”)
registering the Shares and Underlying Shares, until such time as an amendment
to
a Registration Statement has been filed by the Company and declared effective
by
the SEC or until the Company has amended or supplemented such
Prospectus.
6.2
Legends.
(a) Each
certificate requesting any of the Shares shall be endorsed with the legends
set
forth below, and each Purchaser covenants that, except to the extent such
restrictions are waived by the Company, it shall not transfer the shares
represented by any such certificate without complying with the restrictions
on
transfer described in this Agreement and the legends endorsed on such
certificate:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
UNDER SAID ACT AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY OF AN OPINION
OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS
EXEMPT FROM SAID ACT. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.”
-18-
(b) Upon
the
earlier of (i) registration for resale pursuant to the Registration Rights
Agreement or (ii) the date that the Purchasers may resell a Security pursuant
to
Rule 144 without volume or manner restrictions, the Company shall (A) deliver
to
the transfer agent for the Common Stock (the “Transfer
Agent”)
irrevocable instructions that the Transfer Agent shall reissue a certificate
representing shares of Common Stock without legends upon receipt by such
Transfer Agent of the legended certificates for such shares, together with,
if
the sale is being made pursuant to Rule 144, a customary representation by
the
Purchaser that Rule 144 applies to the shares of Common Stock represented
thereby, and (B) cause its counsel to deliver to the Transfer Agent one or
more
blanket opinions to the effect that the removal of such legends in such
circumstances may be effected under the Securities Act. From and after the
earlier of such dates, upon a Purchaser’s written request, the Company shall
promptly, and in any event within 3 business days of receipt of such
certificates, cause certificates evidencing the Purchaser’s Securities to be
replaced with certificates which do not bear such restrictive legends, and
Underlying Shares subsequently issued upon due exercise of the Warrants shall
not bear such restrictive legends provided, if applicable, the Rule 144
certificate is provided. When the Company is required to cause an unlegended
certificate to replace a previously issued legended certificate, if: (1) the
unlegended certificate is not delivered to a Purchaser within three (3) Business
Days of submission by that Purchaser of a legended certificate and supporting
documentation to the Transfer Agent as provided above and (2) prior to the
time
such unlegended certificate is received by the Purchaser, the Purchaser, or
any
third party on behalf of such Purchaser or for the Purchaser’s account,
purchases (in an open market transaction or otherwise) shares of Common Stock
to
deliver in satisfaction of a sale by the Purchaser of shares represented by
such
certificate (a “Buy-In”),
then
the Company shall pay in cash to the Purchaser (for costs incurred either
directly by such Purchaser or on behalf of a third party) the amount by which
the total purchase price paid for Common Stock as a result of the Buy-In
(including brokerage commissions, if any) exceeds the proceeds received by
such
Purchaser as a result of the sale to which such Buy-In relates. The Purchaser
shall provide the Company written notice indicating the amounts payable to
the
Purchaser in respect of the Buy-In. The Company shall pay all transfer agent
fees, stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.
(c) The
Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Securities to the
pledgees or secured parties. Such a pledge or transfer would not be subject
to
approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith. Further,
no
notice shall be required of such pledge. At the appropriate Purchaser’s expense,
the Company will execute and deliver such reasonable documentation as a pledgee
or secured party of Securities may reasonably request in connection with a
pledge or transfer of the Securities, including, if the Securities are subject
to registration pursuant to the Registration Rights Agreement, the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) under
the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Stockholders thereunder.
(d) Notwithstanding
the removal of legends as provided in Section 6.2(b) and subject in all
respects to the requirements of a Purchasers’ custodian, until a Purchaser’s
Shares are sold pursuant to a Registration Statement or Rule 144 (without volume
or manner restrictions) becomes available to the Purchaser, the Purchaser shall
continue to hold such shares in the form of a definitive stock certificate
and
shall not hold the shares in street name or in book-entry form with a securities
depository.
7. Termination;
Liabilities Consequent Thereon.
This
Agreement may be terminated and the transactions contemplated hereunder
abandoned at any time prior to the First Closing only as follows:
(a) by
any
Purchaser (with respect to itself only), upon notice to the Company if the
conditions set forth in Section 5.1 shall not have been satisfied on or prior
to
the fourth Trading Day following the date of this Agreement; or
(b) by
the
Company, upon notice to the Purchasers if the conditions set forth in Section
5.2 shall not have been satisfied on or prior to the fourth Trading Day
following the date of this Agreement; or
(c) at
any
time by mutual agreement of the Company and the Purchasers; or
(d) by
any
Purchaser (with respect to itself only), if there has been any breach of any
representation or warranty or any material breach of any covenant of the Company
contained herein and the same has not been cured within 15 days after notice
thereof (it being understood and agreed by each Purchaser that, in the case
of
any representation or warranty of the Company contained herein which is not
hereinabove qualified by application thereto of a materiality standard, such
representation or warranty will be deemed to have been breached for purposes
of
this Section 7(d) only if such representation or warranty was not true and
correct in all material respects at the time such representation or warranty
was
made by the Company); or
-19-
(e) by
the
Company, if there has been any breach of any representation, warranty or any
material breach of any covenant of any Purchaser contained herein and the same
has not been cured within 15 days after notice thereof (it being understood
and
agreed by the Company that, in the case of any representation and warranty
of
the Purchaser contained herein which is not hereinabove qualified by application
thereto of a materiality standard, such representation or warranty will be
deemed to have been breached for purposes of this Section 7(e) only if such
representation or warranty was not true and correct in all material respects
at
the time such representation or warranty was made by such
Purchaser).
In
the event of termination by the Company or any Purchaser of its obligations
to
effect the First Closing or the Additional Closing pursuant to this Section
7,
written notice thereof shall forthwith be given to the other Purchasers and
the
other Purchasers shall have the right to terminate their obligations to effect
the First Closing or the Additional Closing upon written notice to the Company
and the other Purchasers.
Any
termination pursuant to this Section 7 shall be without liability on the part
of
any party, unless such termination is the result of a material breach of this
Agreement by a party to this Agreement in which case such breaching party shall
remain liable for such breach notwithstanding any termination of this
Agreement.
8. Agreements
of the Company.
8.1 Lock-Up.
The Company agrees that
it will not, until 90 days after the effective date of the Registration
Statement (the “Registration
Effective Date”),
offer to sell, solicit offers to purchase or sell any of its capital stock
or
securities convertible into or exchangeable or exercisable for its capital
stock, including without limitation any debt, preferred stock or other
instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for its capital
stock, without the prior written consent of the Majority Purchasers; provided,
however, that the foregoing shall not preclude the Company from issuing a pure
debt instrument or from issuing stock options or Common
Stock issuable upon exercise of outstanding options and warrants, or
pursuant to employee benefit or stock purchase plans. The
Company has not offered to sell, solicited offers to purchase or sold any
securities during the six months preceding the date of this Agreement, and
the
Company will not offer to sell, solicit offers to purchase or sell, any
securities
during the six months following the date of this Agreement, that would be
required to be integrated with the offer and sale of the Securities so as to
require registration of the offer and sale of the Securities under the
Securities Act of 1933, as amended.
8.2 Mergers.
The
Company agrees that it will not, prior to the date that is six (6) months from
the Registration Effective Date, consummate a merger or other consolidation
that
could result in short swing liability under Section 16 of the Securities
Exchange Act of 1934 (“Section 16”) for any Purchaser; provided, however, that
the foregoing shall not preclude the Company from entering into a definitive
agreement with respect to such merger or other business
combination.
-20-
8.3 Non-Public
Information.
Except
with respect to the material terms and conditions of the transactions
contemplated by the Operative Agreements, the Company covenants and agrees
that
neither it nor any other person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use
of
such information. The Company understands and confirms that each Purchaser
shall
be relying on the foregoing covenant in effecting transactions in securities
of
the Company.
8.4. Reservation
of Common Stock.
As of
the date hereof, the Company has reserved and the Company shall continue to
reserve and keep available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the Company to
issue Shares pursuant to this Agreement and Warrant Shares pursuant to any
exercise of the Warrants.
8.5 Listing
of Common Stock.
The
Company hereby agrees to use best efforts to maintain the listing of the Common
Stock on a Trading Market, and as soon as reasonably practicable following
the
Closing (but not later than the earlier of the Effective Date and the first
anniversary of the Closing Date) to list all of the Shares and Warrant Shares
on
such Trading Market. The Company further agrees, if the Company applies to
have
the Common Stock 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
its
Common Stock 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.
8.6 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 Operative Agreements
unless the same consideration is also offered to all of the parties to the
Operative Agreements. 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 for the Company to treat 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.
8.7 Indemnification
of Purchasers.
Subject
to the provisions of this Section 8.7, the Company will indemnify and hold
each
Purchaser and its directors, officers, shareholders, members, partners,
employees and agents (and any other persons with a functionally equivalent
role
of a person holding such titles notwithstanding a lack of such title or any
other title), each person who controls such Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or employees (and
any other persons with a functionally equivalent role of a person holding such
titles notwithstanding a lack of such title or any other title) of such
controlling persons (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 Operative
Documents. If any action shall be brought against any Purchaser Party in respect
of which indemnity may be sought pursuant to this Agreement, such Purchaser
Party shall promptly notify the Company in writing, and the Company shall have
the right to assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have
the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense
and
to employ counsel or (iii) in such action there is, in the reasonable opinion
of
such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party, in which
case
the Company shall be responsible for the reasonable fees and expenses of no
more
than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (i) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (ii) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Operative
Documents.
-21-
9. Miscellaneous
Provisions.
9.1
Public
Statements or Releases.
The Company shall by 8:30 a.m. Eastern time on the business day following the
date hereof, issue
a press release
and file
a Current Report on Form 8-K, copies of each of which shall be provided to
the
Purchasers for review, disclosing the transactions contemplated
hereby and
make
such other filings and notices in the manner and time required by the SEC.
The
Company and each Purchaser shall consult with each other in issuing any press
releases and/or filing any Current Reports on Form 8-K or other such SEC
Documents with respect to the transactions contemplated hereby, and none of
the
parties to this Agreement shall
make, issue, or release any announcement, whether to the public generally,
or to
any of its suppliers or customers, with respect to this Agreement or the
transactions provided for herein, or make any statement or acknowledgment of
the
existence of, or reveal the status of, this Agreement or the transactions
provided for herein, without the prior consent of the other
parties, which shall not be unreasonably withheld or delayed,
provided,
that nothing in this Section 9.1 shall prevent any of
the parties hereto from
making such public announcements as it
may consider
necessary in
order for
it to
satisfy its legal obligations, but to the extent not inconsistent with such
obligations, it shall provide the other parties
with an opportunity to review and comment on any proposed public announcement
before it is made.
9.2
Further
Assurances.
Each
party agrees to cooperate fully with the other party and to execute such further
instruments, documents and agreements and to give such further written
assurances, as may be reasonably requested by the other party to better evidence
and reflect the transactions described herein and contemplated hereby, and
to
carry into effect the intents and purposes of this Agreement.
9.3
Rights
Cumulative.
Each
and all of the various rights, powers and remedies of the parties shall be
considered to be cumulative with and in addition to any other rights, powers
and
remedies which such parties may have at law or in equity in the event of the
breach of any of the terms of this Agreement. The exercise or partial exercise
of any right, power or remedy shall neither constitute the exclusive election
thereof nor the waiver of any other right, power or remedy available to such
party.
9.4
Pronouns.
All
pronouns or any variation thereof shall be deemed to refer to the masculine,
feminine or neuter, singular or plural, as the identity of the person, persons,
entity or entities may require.
9.5
Notices.
Any
notices, reports or other correspondence (hereinafter collectively referred
to
as “correspondence”) required or permitted to be given hereunder shall be in
writing and shall be sent by postage prepaid first class mail, courier or
telecopy or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder, and shall be deemed sufficient
upon
receipt when delivered personally or by courier, overnight delivery service
or
confirmed facsimile, or three (3) business days after being deposited in the
regular mail as certified or registered mail (airmail if sent internationally)
with postage prepaid, if such notice is addressed to the party to be notified
at
such party’s address or facsimile number as set forth below:
(a) All
correspondence to the Company shall be addressed as follows:
|
00000
Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxx
X. Xxxxxx, Ph.D.
President
and Chief Executive Officer
Facsimile: (000)
000-0000
|
||
| with a copy to | ||
|
Xxxxx
& XxXxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx
Attention:
Xxxxxxxxx
X. Xxxxxx, Esq.
Facsimile:
(000)
000-0000
|
-22-
(b) All
correspondence to any Purchaser shall be sent to such Purchaser at the address
set forth in Exhibit A.
(c) Any
entity may change the address to which correspondence to it is to be addressed
by written notification as provided for herein.
9.6
Captions.
The
captions and paragraph headings of this Agreement are solely for the convenience
of reference and shall not affect its interpretation.
9.7
Severability.
Should
any part or provision of this Agreement be held unenforceable or in conflict
with the applicable laws or regulations of any jurisdiction, the invalid or
unenforceable part or provisions shall be replaced with a provision which
accomplishes, to the extent possible, the original business purpose of such
part
or provision in a valid and enforceable manner, and the remainder of this
Agreement shall remain binding upon the parties hereto.
9.8
Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial; Injunctive
Relief.
(a) This
Agreement shall be governed by and construed in accordance with the internal
and
substantive laws of the State of New York and without regard to any conflicts
of
laws concepts which would apply the substantive law of some other
jurisdiction.
(b) Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of
the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding
and
to the laying of venue in such court. Each party hereto irrevocably waives
any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action
or
proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.
(c) Each
of
the parties hereto acknowledges and agrees that damages will not be an adequate
remedy for any material breach or violation of this Agreement if such material
breach or violation would cause immediate and irreparable harm (an “Irreparable
Breach”).
Accordingly, in the event of a threatened or ongoing Irreparable Breach, each
party hereto shall be entitled to seek, equitable relief of a kind appropriate
in light of the nature of the ongoing or threatened Irreparable Breach, which
relief may include, without limitation, specific performance or injunctive
relief; provided,
however,
that if
the party bringing such action is unsuccessful in obtaining the relief sought,
the moving party shall pay the non-moving party’s reasonable costs, including
attorney’s fees, incurred in connection with defending such action. Such
remedies shall not be the parties’ exclusive remedies, but shall be in addition
to all other remedies provided in this Agreement.
-23-
9.9
Amendments.
This
Agreement may not be amended or modified except pursuant to an instrument in
writing signed by the Company and the Majority Purchasers; notwithstanding
the
foregoing, Section 8.2 hereof cannot be amended or waived without the consent
of
any purchaser that could incur short swing liability under Section
16.
9.10
Waiver.
No
waiver of any term, provision or condition of this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or be
construed as, a further or continuing waiver of any such term, provision or
condition or as a waiver of any other term, provision or condition of this
Agreement.
9.11 Expenses.
Each
party will bear its own costs and expenses in connection with this
Agreement.
9.12Assignment.
The
rights and obligations of the parties hereto shall inure to the benefit of
and
shall be binding upon the authorized successors and permitted assigns of each
party. No party may assign its rights or obligations under this Agreement or
designate another person (i) to perform all or part of its obligations
under this Agreement or (ii) to have all or part of its rights and benefits
under this Agreement, in each case without the prior written consent of the
other party, provided,
however,
that a
Purchaser may assign its rights and delegate its duties hereunder in whole
or in
part to an Affiliate or to a third party acquiring some or all of its Securities
in a transaction complying with applicable securities laws without the prior
written consent of the Company or the other Investors; provided,
that
no such
assignment shall affect the obligations of such Purchaser hereunder. In the
event of any assignment in accordance with the terms of this Agreement, the
assignee shall specifically assume and be bound by the provisions of the
Agreement by executing and agreeing to an assumption agreement reasonably
acceptable to the other party.
9.13
Survival.
The respective representations and warranties given by the parties hereto shall
survive the Closing Dates and the consummation of the transactions contemplated
herein.
9.14
Counterpart.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall constitute one
instrument.
-24-
9.15
Entire
Agreement.
This
Agreement and the Registration Rights Agreement constitute the entire agreement
between the parties hereto respecting the subject matter hereof and supersede
all prior agreements, negotiations, understandings, representations and
statements respecting the subject matter hereof, whether written or oral. No
modification, alteration, waiver or change in any of the terms of this Agreement
shall be valid or binding upon the parties hereto unless made in writing and
duly executed by the Company and the Majority Purchasers.
9.16
Independent
Nature of Purchasers’ Obligations and Rights.
The
obligations of each Purchaser under any Operative Agreement are several and
not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Operative Agreement. Nothing contained herein or in any
other Operative Agreement, and no action taken by any Purchaser pursuant hereto
or 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
Operative Agreements and the Company acknowledges that the Purchasers are not
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Operative Agreements. Each Purchaser confirms
that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. 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 any other Operative Agreement, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose.
9.17
Equal
Treatment of Purchasers.
No consideration shall be offered or paid to any Purchaser to amend or consent
to a waiver or modification of any provision of any of the Operative Agreements
unless the same consideration is also offered to all of the parties to the
Operative Agreements. 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 for the Company to treat 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.
9.18
Costs
of Enforcement.
In the
event that legal proceedings are commenced by any party to this Agreement
against another party to this Agreement in connection with this Agreement or
the
other Operative Agreements, the party or parties which do not prevail in such
proceedings shall severally, but not jointly, pay their pro rata share of the
reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses
incurred by the prevailing party in such proceedings.
[Signature
Page to Follow]
-25-
IN
WITNESS WHEREOF, the parties hereto have executed this Securities Purchase
Agreement as of the day and year first above written.
| XXXXXXXXXXX PHARMACEUTICALS, INC. | ||
| |
|
|
| By: | ||
|
Name: Xxxxxx X. Xxxxxx, Ph.D. |
||
| Title: President and Chief Executive Officer | ||
THE
PURCHASER’S SIGNATURE TO THE INVESTOR QUESTIONNAIRE DATED OF EVEN DATE HEREWITH
SHALL CONSTITUTE THE PURCHASER’S SIGNATURE TO THIS SECURITIES PURCHASE
AGREEMENT.
Signature
Page to Securities Purchase Agreement
Exhibit
A
SCHEDULE
OF PURCHASERS
|
Purchaser
Name and Address
|
Number
of Shares to be Purchased
|
Number
of Warrants to be Purchased
|
Aggregate
Purchase Price
|
Closing
Date
|
Exhibit
B
FORM
OF WARRANT
Exhibit
C
LEGAL
OPINION
[Note:
Opinion will be subject to customary assumptions and
qualifications]
1. The
Company is a corporation validly existing and in good standing under the laws
of
the State of Delaware, with the corporate power and authority necessary to
own
and lease its properties and to conduct its business as described in the SEC
Documents. The Company is qualified to do business as a foreign corporation
in
the State of Maryland.
2. The
Company has the requisite corporate power and authority to execute, deliver
and
perform its obligations under the Operative Agreements and to issue and deliver
the Securities. The Company has taken all necessary corporate action to
authorize its execution, delivery and performance of each of the Operative
Agreements and the issuance and delivery of the Securities.
3. Each
of
the Operative Agreements has been duly executed and delivered by the Company
and
constitutes a legal, valid and binding obligation of the Company and is
enforceable against the Company in accordance with its terms except as limited
by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or similar laws of general application now or hereafter in effect affecting
the
rights and remedies of creditors; (b) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in equity);
(c) the effect of judicial decisions which have held that certain provisions
are
unenforceable when their enforcement would violate the implied covenant of
good
faith and fair dealing, or would be commercially unreasonable, or where their
breach is not material; or (d) the discretion of the court before which any
proceeding therefor may be brought, and except as the right to indemnification
or contribution set forth in the Operative Agreements may be limited by public
policy or applicable securities laws.
4. The
execution, delivery and performance of the Operative Documents and the issuance
and sale of the Shares and Warrants by the Company pursuant to the terms of
the
Purchase Agreement on the date hereof have been duly authorized all required
corporate action on the part of the Company and its stockholders. When issued
and delivered in accordance with the terms of the Purchase Agreement against
payment of the purchase price therefor, the Shares will be validly issued,
full
paid and nonassessable. The Underlying Shares have been duly authorized and
reserved for issuance by the Company and, when issued in accordance with the
terms of the respective Warrants, will be validly issued, fully paid and
nonassessable.
5. The
execution, deliver and performance of the Operative Agreements do not, and
the
issuance and sale of the Shares and Warrants on the date hereof as contemplated
by the Purchase Agreement will not, (a) conflict with or violate the Company’s
Sixth Restated Certificate of Incorporation, as amended, or its Amended and
Restated Bylaws, (b) conflict with or violate any judgment, order or decree
of
any court or governmental authority which to our knowledge is applicable to
the
Company or any of its properties, (c) result in a material violation, or
conflict with, any U.S. federal or New York State statute, rule or regulation,
or any provision of the Delaware General Corporation Law, in any case known
to
us to be applicable to the Company or its properties or (d) result in a
material default by the Company under any of the contracts or agreements filed
as exhibits to the SEC Documents.
6. No
consent, approval or authorization of or designation, declaration or filing
with, any U.S. federal or New York State governmental authority, or any
governmental authority, pursuant to the Delaware General Corporation Law, on
the
part of the Company is required in connection with the valid execution, delivery
and performance of the Operative Agreements, or the offer, sale or issuance
of
the Shares or the Warrants, other than (a) such as have been made or obtained;
(b) compliance with the Blue Sky laws or federal securities laws applicable
to
the offering of the Shares, the Warrants and the Underlying Shares; and (c)
the
filing of a Registration Statement in accordance with the requirements of the
Registration Rights Agreement.
7. Assuming
(i) the accuracy and completeness of the representations and warranties of
each
of the Investors set forth in the Purchase Agreement and (ii) that neither
the
Company nor any other person (including, without limitation, any placement
agent
for the transactions contemplated by the Purchase Agreement) has engaged in
any
activity that would be deemed a “general solicitation” under the provisions of
Regulation D under the Securities Act, the offer, issuance and sale of the
Securities being purchased by the Purchasers at the Closing and the Additional
Closing on the terms and conditions contemplated by the Purchase Agreement
constitute transactions exempt from the registration requirements of Section
5
of the Securities Act (it being understood that we need express no opinion
as to
any subsequent resales of the Securities by the Purchasers).
-2-
Schedule
I
SCHEDULE
OF LOCK-UP AGREEMENTS
Xxxxxx
X.
Xxxxxx, Ph.D., President and Chief Executive Officer
Xxxxxx
X.
Low, CPA, Vice President, Finance and Chief Financial Officer
Xxxx
X.
Xxxxxxxx, Ph.D., Vice President, Pharmaceutical Research
Xxxxxx
X.
Xxxxxx, Xx., Ph.D., Vice President, Analysis and Pharmaceutical
Quality
Xxxxxx
X.
Xxxxxxx, Vice President, Pharmaceutical Development Operations
HealthCare
Ventures group
Appendix
I
FORM
OF INVESTOR QUESTIONNAIRE
