DEBT SECURITIES PURCHASE AGREEMENT
Exhibit
99.7
DEBT
This
Securities Purchase Agreement (this “Agreement”) is dated as of December
4, 2007, between Amarin Corporation plc, a corporation formed under the laws
of
England and Wales (the “Company”), and each purchaser identified on the
signature pages hereto (each, including its successors and assigns, a
“Purchaser” and collectively the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant
to
an effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, securities of the Company as more fully described in this
Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:
ARTICLE
1
DEFINITIONS
Section
1.1 Definitions. In addition to
the terms defined elsewhere in this Agreement, for all purposes of this
Agreement, the following terms have the meanings set forth in this Section
1.1:
“ADSs”
means American Depositary Shares, each representing one Ordinary Share of the
Company, par value GBP 0.05 per share, and each evidenced by an American
Depositary Receipt, issued pursuant to the terms of the Deposit
Agreement.
“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
a
Person as such terms are used in and construed under Rule 405 under the
Securities Act. With respect to a Purchaser, any investment fund or
managed account that is managed on a discretionary basis by the same investment
manager as such Purchaser will be deemed to be an Affiliate of such
Purchaser.
“Base
Prospectus” means the prospectus in the form in which it appears in the
Registration Statement.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or
other
governmental action to close.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section
2.1.
“Closing
Date” has the meaning set forth in Section 2.1(4).
“Commission”
means the Securities and Exchange Commission.
“Common
Stock” means the Ordinary Shares of the Company, par value GBP 0.05 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed into.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
“Company
Counsel” means Xxxxxx Xxxxxx & Xxxxxxx XXX, Xxx Xxxx, XX, and
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP, London,
England.
“Conversion
Shares” means the Shares issuable upon conversion of the
Debentures.
“Debentures”
means the 8% Convertible Debentures due December 6, 2010, issued under the
Indenture and sold pursuant hereto.
“Deposit
Agreement” means the Company’s agreement with National City Nominees Limited
of Citigroup Centre, Canada Square, Xxxxxx Xxxxx, Xxxxxx, X00 0XX, being the
nominee of Citibank, N.A., the Company’s depositary for its ADS program (the
“ADS Depositary”).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers or directors of the Company pursuant to any stock or option
plan duly adopted for such purpose, by a majority of the non-employee members
of
the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon
the exercise or exchange of or conversion of any Securities issued hereunder
and/or other securities exercisable or exchangeable for or convertible into
shares of Common Stock issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of this
Agreement to increase the number of such securities or to decrease the exercise,
exchange or conversion price of such securities, (c) warrants to purchase 10,000
shares of Common Stock issued or to be issued to Xxx Xxxxxxx and shares of
Common Stock upon exercise thereof, (d) shares of Common Stock in connection
with the acquisition by the Company of Ester Neurosciences Ltd., an Israeli
company, pursuant to the definitive agreement relating thereto, and payment
of
related fees, (e) the convertible debt and equity financings concurrently being
offered by the Company as described in the Prospectus Supplement, and (f)
securities issued pursuant to acquisitions or strategic transactions approved
by
a majority of the disinterested directors of the Company, provided that any
such
issuance shall only be to a Person which is, itself or through its subsidiaries,
an operating company in a business synergistic with the business of the Company
and in which the Company receives benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.
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“Indenture”
means the Senior Indenture dated as of December 6, 2007 between the Company,
as
issuer, and Wilmington Trust Company, as trustee, as supplemented by the
supplemental indenture, dated as of December 6, 2007 setting forth the terms
of
the Debentures.
“Material
Adverse Effect” has the meaning set forth in Section 3.1(a).
“Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
“Prospectus”
means the final prospectus filed for the Registration Statement.
“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule
424(b) of the Securities Act that is filed with the Commission and delivered
by
the Company to each Purchaser at the Closing.
“Purchaser
Party” shall have the meaning ascribed to such term in Section
4.8.
“Registration
Statement” means the effective registration statement with Commission file
No. 333-135718 which registers the sale of the Debentures, the Warrants and
the
Shares to the Purchasers.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
“SEC
Reports” means all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required
by
law to file such material).
“Securities”
means the Debentures, the Warrants and the Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“Shares”
means the ADSs to be issued to each Purchaser upon conversion of the Debentures
or upon exercise of the Warrants.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for
Debentures and Warrants purchased hereunder as specified below such Purchaser’s
name on the signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in immediately available
funds.
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“Subsidiary”
means any subsidiary of the Company and shall, where applicable, include any
subsidiary of the Company formed or acquired after the date hereof.
“Time
of Sale Prospectus” means the preliminary prospectus, if any, together with
the free writing prospectuses, if any, used in connection with the sale
contemplated by this Agreement, including any documents incorporated by
reference therein.
“Trading
Day” means a day on which the NASDAQ Capital Market is open for
trading.
“Trading
Market” means the following markets or exchanges on which the Common Stock
is listed or quoted for trading on the date in question: the American Stock
Exchange, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global
Select Market, the New York Stock Exchange or the OTC Bulletin
Board.
“Transaction
Documents” means this Agreement, the Indenture, the Debentures, the Warrants
and any other documents or agreements executed in connection with the purchase
and sale of the Securities to the Purchasers hereunder.
“Warrants”
means, collectively, the Share purchase warrants delivered to the Purchasers
at
the Closing in accordance with Section 2.2(a) hereof, which Warrants shall
be
exercisable immediately and have a term of exercise equal to 5 years, in the
form of Exhibit A attached hereto.
“Warrant
Shares” means the Shares issuable upon exercise of the
Warrants.
ARTICLE
2
PURCHASE
AND SALE
Section
2.1 Purchase and Sale; Procedures. At the
Closing, upon the terms and subject to the conditions set forth herein, the
Company agrees to sell, and the Purchasers, severally and not jointly, agree
to
purchase, up to an aggregate of $2,750,000.00 of Debentures and
Warrants. The purchase and sale of the Securities to each Purchaser
hereunder is expressly conditioned on (a) the public announcement by the Company
that it has entered into a definitive agreement for the acquisition by the
Company of Ester Neurosciences Ltd., an Israeli company, and that it intends
to
call an extraordinary general meeting of shareholders to effect a reverse stock
split for the purpose of bringing the Company into compliance with the
continuing listing requirements of the Nasdaq Capital Market (the
“Announcement”), and (b) such Purchaser’s satisfactory review of the
Prospectus Supplement. Prior to the satisfaction of each of such
conditions, this Agreement shall only constitute an indication of interest
by
the purchaser in the offered securities. The process for funding and
delivery of the Securities to each Purchaser shall be as follows:
(1) no
later than 4:00 PM Eastern Standard Time in the United States (“EST”) on the
date of this Agreement, the Purchaser shall deliver executed signature pages
hereto, and the Company shall deliver legal opinions of Company Counsel,
substantially in the forms of Exhibits B and C attached hereto, in each case
to
a mutually-agreed third party to be held pending release of funds;
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(2) prior
to the end of the calendar day on the date of this Agreement, the Company shall
provide to each Purchaser a copy of the Prospectus Supplement;
(3) the
Company plans to make the Announcement prior to 7:30 AM EST on the business
day
following the date of this Agreement, whereupon the condition in clause (a)
above shall be satisfied;
(4) on
the business day following the date of this Agreement (assuming the condition
in
clause (a) above is satisfied as provided in the preceding clause (3)), (A)
at
7:30 AM EST, the condition in clause (b) above shall be satisfied, unless prior
to that time the Company receives notice in writing from the Purchaser that
the
Purchaser is not satisfied with the Prospectus Supplement, such notice
to be faxed to: 011 3531 6699 028, Attention: Xxx Xxxxx, or e-mailed
to:xxx.xxxxx@xxxxxxxxxx.xxx; (B) simultaneously with the satisfaction
of the condition in clause (b) above as provided in the preceding clause (A),
the signature pages and legal opinion referred to in clause (1) shall be
released to the parties, and (C) no later than 5:00 PM EST, the Purchaser shall
deliver immediately available funds equal to its Subscription Amount by wire
transfer to the following account:
Account
Name: Amarin Corporation
plc
Account
No:
11427458
Sort
Code:
30 - 93 - 05
Swift
Code: XXXXXX00000
IBAN
No:
XX00 XXXX 0000 0000 0000
00
(the
date
on which these events occur, the “Closing Date”); and
(e) on
the business day following the Closing Date (the “Securities Delivery
Date”), subject, as to each Purchaser, to receipt of such Purchaser’s
Subscription Amount by the Company, the Company shall commence issuing the
Securities by (a) executing the Indenture and the Debentures issued and sold
hereunder and ordering the trustee under the Indenture to authenticate the
Debentures issued and sold hereunder, and (b) issuing to the Purchaser a Warrant
registered in the name of such Purchaser to purchase up to a number of shares
of
Common Stock equal to 40% of such Purchaser’s Subscription Amount divided by
$0.48, with an exercise price equal to $0.48, subject to adjustment as provided
therein (such Warrant certificate may be delivered within three Trading Days
of
the Closing Date).
Section
2.2 Closing. The Closing shall occur at the
offices of Xxxxxx Xxxxxx & Xxxxxxx LLP at 00 Xxxx Xxxxxx, XX, XX 00000
or such other location as the parties shall mutually agree.
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Section
2.3 Closing Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
(i) the
accuracy in all material respects on the Closing Date of the representations
and
warranties of the Purchasers contained herein;
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and
(iii) the
delivery by each Purchaser of the items to be delivered by it as set forth
in
Section 2.1 of this Agreement, excluding the delivery of the Debentures, which
occurs on the Securities Delivery Date.
(b) The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects on the Closing Date of the representations
and
warranties of the Company contained herein;
(ii) all
obligations, covenants and agreements of the Company required to be performed
at
or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items to be delivered by it as set forth in
Section 2.1 of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since
the
date hereof; and
(v) from
the date hereof to the Closing Date, trading in the Common Stock shall not
have
been suspended by the Commission or the Company’s principal Trading Market
(except for any suspension of trading of limited duration agreed to by the
Company, which suspension shall be terminated prior to the Closing), and, at
any
time prior to the Closing Date, trading in securities generally as reported
by
Bloomberg L.P. shall not have been suspended or limited, or minimum prices
shall
not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been
declared either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of hostilities or other
national or international calamity of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in the
reasonable judgment of each Purchaser, makes it impracticable or inadvisable
to
purchase the Securities at the Closing.
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ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
Section
3.1 Representations and Warranties of the
Company. The Company makes the following representations and
warranties to each of the Purchasers:
(a) Organization
and Qualification. All of the direct and indirect subsidiaries
(individually, a “Subsidiary”) of the Company are set forth on in the
Company’s annual report on Form 20-F for the fiscal year ended December 31,
2006. The Company owns, directly or indirectly, all of the capital
stock or other equity interests of each Subsidiary free and clear of any “Liens”
(which for purposes of this Agreement shall mean a lien, charge, security
interest, encumbrance, right of first refusal, preemptive right or similar
restriction), and all the issued and outstanding shares of capital stock of
each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities. The Company is duly incorporated and validly existing
under the laws of England and Wales, with the requisite power and authority
to
own and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or articles
of
incorporation, bylaws or other organizational or charter
documents. The Company is duly qualified to conduct business as a
foreign corporation in each United States jurisdiction in which the nature
of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing,
as
the case may be, could not reasonably be expected to have (i) a material adverse
effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets, business,
or financial condition of the Company and the Subsidiaries, taken as a whole,
or
(iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no
“Proceeding” (which for purposes of this Agreement shall mean any action,
claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced
or
threatened) has been instituted in any such jurisdiction revoking, limiting
or
curtailing or seeking to revoke, limit or curtail such power and authority
or
qualification. Each Subsidiary is duly incorporated or otherwise
organized and validly existing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Each Subsidiary is duly qualified to conduct
business as a foreign corporation or other entity in each United States
jurisdiction in which the nature of the business conducted or property owned
by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not reasonably be
expected to have a Material Adverse Effect.
(b) Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by
each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been
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duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company, its board of directors or its stockholders
in
connection therewith. Each Transaction Document (except the
Debentures) has been (or upon delivery will have been) duly executed by the
Company and, when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Company; each
Transaction Document shall be enforceable against the Company in accordance
with
its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) rights to indemnity and contribution may be limited by
applicable law or public policy. The Debentures upon delivery will
have been duly executed by the Company and, when authenticated by the trustee
and delivered in accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company, entitled t the benefits of
the
Indenture and enforceable against the Company in accordance with its terms
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and
(iii)
rights to indemnity and contribution may be limited by applicable law or public
policy.
(c) No
Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Securities
and the consummation by the Company of the other transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse
of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt
or
otherwise) or, to our knowledge, other understanding to which the Company or
any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required Approvals
(as
defined in subsection 3(D) below), conflict with or result in a violation of
any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary
is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not
reasonably be expected to result in a Material Adverse Effect.
(d) Filings,
Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other “Person” (defined as an individual or
corporation, partnership, trust, incorporated
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or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or any Trading
Market (as defined in subsection 3(E) below)) in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than
such filings as are required to be made under applicable
securities laws of England and Wales, the Republic of Ireland and
U.S. Federal and state securities laws, or under the rules and regulations
of
the Financial Industry Regulatory Authority (“FINRA”) (collectively, the
“Required Approvals”).
(e) Issuance
of the Shares; Registration. The Shares when issued and paid for
in accordance with the applicable Transaction Documents, will be duly authorized
and validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in
the
Transaction Documents. The Company will reserve from its duly
authorized capital stock the maximum number of shares of Common Stock issuable
pursuant to the Transaction Documents. The issuance by the Company of
the Securities has been registered under the Securities Act and all of the
Securities are freely transferable and tradable by the Purchasers without
restriction (other than any restrictions arising solely from an act or omission
of a Purchaser). The Securities are being issued pursuant to the
Registration Statement and the issuance of the Securities has been registered
by
the Company under the Securities Act. The Registration Statement is
effective and available for the issuance of the Securities thereunder and the
Company has not received any notice that the Commission has issued or intends
to
issue a stop-order with respect to the Registration Statement or that the
Commission otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, or intends or has
threatened in writing to do so. The “Plan of Distribution” section
under the Registration Statement permits the issuance and sale of the Securities
hereunder. Upon receipt of the Securities, the Purchasers will have
good title to such Securities and the Shares into which the Securities are
convertible or exercisable will be listed on the “Trading Market” (which,
for purposes of this Agreement shall mean the Nasdaq Capital
Market).
(f) Capitalization. The
capitalization of the Company is as set forth in the Prospectus
Supplement. The Company has not issued any capital stock since its
most recently filed report under the Exchange Act, other than pursuant to the
exercise of employee stock options under the Company’s stock option plans, the
issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plan and pursuant to the conversion or exercise of
securities exercisable, exchangeable or convertible into Common Stock
(“Common Stock Equivalents”), other than in connection with the
acquisition of Ester Neurosciences Limited (the “Ester Acquisition”), an
Israeli company, and any related fees, pursuant to the Stock Purchase Agreement
dated December 5, 2007 among the Company and the other parties named
therein. Except as disclosed the SEC Reports, the Registration
Statement, the Base Prospectus, the Prospectus Supplement or any Time of Sale
Prospectus, no Person has any right of first refusal, preemptive right, right
of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of the
purchase and sale of the Securities or as described above or in the SEC Reports,
the Registration Statement, the
Base
Prospectus, the Prospectus Supplement or any Time of Sale Prospectus, and except
the Neurostat Pharmaceuticals Inc. and Strategic Pharmaceutical Solutions
Warrants, there are no outstanding options, warrants, script rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or exchangeable for,
or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, or agreements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock
or
Common Stock Equivalents. The issuance and sale of the Securities
will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under such securities. All of
the
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable, have been issued in compliance with all applicable
securities laws, and none of such outstanding shares was issued in violation
of
any preemptive rights or similar rights to subscribe for or purchase
securities. There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among
any
of the Company’s stockholders.
(g) SEC
Reports; Financial Statements. The Company has complied in all
material respects with requirements to file all reports, schedules, forms,
statements and other documents required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the
Company was required by law to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed
any
such SEC Reports prior to the expiration of any such extension. As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the
Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles (“GAAP”)
applied on a consistent basis during the periods involved (the financial
statements are prepared under U.K. GAAP and reconciled to U.S. GAAP), except
as
may be otherwise specified in such financial statements or the notes thereto
and
except that unaudited financial statements may not be reconciled to U.S. GAAP
or
contain all footnotes required by GAAP, and fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries
as of and for the dates thereof and the results of operations and cash flows
for
the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
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(h) Material
Changes; Undisclosed Events, Liabilities or Developments. Since
the date of the latest audited financial statements included within the SEC
Reports, except as specifically disclosed in the SEC Reports, (i) there has
been
no event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent
with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or “Affiliate” (defined as any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by
or
is under common control with a Person, as such terms are used in and construed
under Rule 144 under the Securities Act), except pursuant to existing Company
stock option plans and other than financing by the Company for cash with third
parties in which such officers, directors or Affiliates may have participated
on
terms no more favorable to those given to such third parties. Except
for the issuance of the Securities contemplated by this Agreement, no event,
liability or development has occurred or exists with respect to the Company
or
its Subsidiaries or their respective business, properties, operations or
financial condition, that would be required to be disclosed by the Company
under
applicable securities laws at the time this representation is made that has
not
been publicly disclosed at least 1 Trading Day prior to the date that this
representation is made.
(i) Litigation. Except
as disclosed in the SEC Reports, the Registration Statement, the Base
Prospectus, the Prospectus Supplement or any Time of Sale Prospectus, there
is
no action, suit, inquiry, notice of violation, Proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting
the
Company, any Subsidiary or any of their respective properties before or by
any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, reasonably be expected to result
in a Material Adverse Effect. Neither the Company nor any Subsidiary,
nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. Except as disclosed in
the SEC Reports, the Registration Statement, the Base Prospectus, the Prospectus
Supplement or any Time of Sale Prospectus, there has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company regarding the business, operations,
activities or securities of the Company. The Commission has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act. The Company and its Subsidiaries are in
compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect.
-10-
(j) Labor
Relations. Except as disclosed in the SEC Reports, the
Registration Statement, the Base Prospectus, the Prospectus Supplement or any
Time of Sale Prospectus, no material labor dispute exists or, to the knowledge
of the Company, is imminent with respect to any of the employees of the Company
which could reasonably be expected to have a Material Adverse
Effect.
(k) Compliance. Neither
the Company nor any Subsidiary (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is
in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound, (ii) is in violation of any order
of
any court, arbitrator or governmental body, or (iii) is or has been in violation
of any statute, rule or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws applicable to
its
business and all such laws that affect the environment, except in each case
as
could reasonably be expected to not have a Material Adverse Effect.
(l) Regulatory
Permits. Except as disclosed in the SEC Reports, the Registration
Statement, the Base Prospectus, the Prospectus Supplement or any Time of Sale
Prospectus, the Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local
or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports (“Material Permits”), except where the
failure to possess such permits could not reasonably be expected to have in
a
Material Adverse Effect, and neither the Company nor any Subsidiary has received
any notice of proceedings relating to the revocation or modification of any
Material Permit which revocation or modification could reasonably be expected
to
have a Material Adverse Effect.
(m) Title
to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them that is
material to the business of the Company and the Subsidiaries and good and
marketable title in all personal property owned by them that is material to
the
business of the Company and the Subsidiaries, in each case free and clear of
all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries and Liens for the payment
of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties. Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases of which the Company and the Subsidiaries
are
in compliance, except where such invalidity, failure to subsist,
unenforceability or non-compliance would be deemed immaterial.
(n) Patents
and Trademarks. Except as disclosed in the SEC Reports, the
Registration Statement, the Base Prospectus, the Prospectus Supplement or any
Time of Sale Prospectus or as could not reasonably be expected to have a
Material Adverse Effect, (A) the Company and the Subsidiaries have, or have
rights to use, all patents, patent
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applications,
trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other similar intellectual property rights
necessary or material for use in connection with their respective businesses
as
described in the SEC Reports (collectively, the “Intellectual Property
Rights”); (B) neither the Company nor any Subsidiary has received a written
notice that the Intellectual Property Rights used by the Company or any
Subsidiary violates or infringes upon the rights of any Person; (C) to the
knowledge of the Company, all such Intellectual Property Rights are valid and
there is no existing infringement by another Person of any of the Intellectual
Property Rights; and (D) the Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all
of
their intellectual properties.
(o) Insurance. The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged, including, but not limited to, directors and officers insurance
coverage at least equal to the aggregate subscription amount under the
Transaction Documents. To the knowledge of the Company, such
insurance contracts and policies are accurate and complete. Neither
the Company nor any Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost.
(p) Transactions
With Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a party to
any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has
a
substantial interest or is an officer, director, trustee or partner, other
than
(i) for payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) for
other
employee benefits, including stock option agreements under any stock option
plan
of the Company.
(q) Xxxxxxxx-Xxxxx. To
the Company’s knowledge, after due inquiry, the Company is in material
compliance with all provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are
applicable to it as of the date hereof and of the Closing Date.
(r) Certain
Fees. Except as otherwise provided in this Agreement and except
for fees payable to Xxxxxxxx & Xxxxxxxx LLC, J & E Davy and ProSeed
Capital Holdings CVA pursuant to separate agreements therewith, no brokerage
or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated
by
the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf
of
other Persons for fees of a type contemplated in this Section that may be due
in
connection with the transactions contemplated by the Transaction
Documents.
-12-
(s) Trading
Market Rules. The issuance and sale of the Securities hereunder
does not contravene the rules and regulations of the Trading
Market.
(t) Investment
Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be
an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its
business in a manner so that it will not become subject to the Investment
Company Act.
(u) Registration
Rights. Except as has been disclosed in the SEC Reports, the
Registration Statement, the Base Prospectus, the Prospectus Supplement or any
Time of Sale Prospectus, except in connection with the Ester Acquisition and
related fees, and except the Neurostat Pharmaceuticals Inc. and Strategic
Pharmaceutical Solutions Warrants, no Person has any right to cause the Company
to effect the registration under the Securities Act of any securities of the
Company.
(v) Listing
and Maintenance Requirements. The Company’s Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely
to
have the effect of, terminating the registration of the Common Stock under
the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. Except as has been
disclosed in the SEC Reports, the Registration Statement, the Base Prospectus,
the Prospectus Supplement or any Time of Sale Prospectus, the Company has not,
in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market.
(w) Application
of Takeover Protections. The Company and its Board of Directors
have taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti takeover provision
under the Company’s Certificate of Incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable
to
the Purchasers as a result of the Purchasers and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the
Securities and the Purchasers’ ownership of the Securities.
(x) Solvency. As
described in the Company’s press release (dated November 30) setting out the
Company’s third quarter financial results, at September 30, 2007 the Company had
cash of $20.7 million. Based on current business activities, the
Company forecasts having sufficient cash to fund the group’s operating
activities into September 2008. Based on the financial condition of
the Company as of the Closing Date after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the
Company’s fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company’s existing debts and other
liabilities (including known contingent liabilities but excluding contingent
liabilities relating to
-13-
completed
acquisitions including the acquisition of Laxdale Limited, Ester Neurosciences
Limited, the rights to an oral formulation of apomorphine and the rights to
a
nanocrystal nasal formulation of lorazepam) as they mature and (ii) the current
cash flow of the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or
in
respect of its debt when such amounts are required to be paid. The
Company does not intend to incur debts beyond its ability to pay such debts
as
they mature (taking into account the timing and amounts of cash to be payable
on
or in respect of its debt). The Company has no knowledge of any facts
or circumstances which lead it to believe that it will file for reorganization
or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date. The SEC Reports set forth as
of the dates thereof all outstanding secured and unsecured Indebtedness of
the
Company or any Subsidiary, or for which the Company or any Subsidiary has
commitments. For the purposes of this Agreement,
“Indebtedness” shall mean (a) any liabilities for borrowed money or
amounts owed in excess of $50,000 (other than trade accounts payable incurred
in
the ordinary course of business), (b) all guaranties, endorsements and other
contingent obligations in respect of Indebtedness of others, whether or not
the
same are or should be reflected in the Company’s balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business; and
(c) the present value of any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance with GAAP. Neither
the Company nor any Subsidiary is in default with respect to any
Indebtedness.
(y) Tax
Status. Except for matters that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, the
Company and each Subsidiary has filed all material, applicable income and
franchise tax returns and has paid or accrued all taxes shown as due thereon
(and other than those being contested in good faith and for which adequate
reserves have been provided), and the Company has no knowledge of a tax
deficiency which has been asserted or threatened against the Company or any
Subsidiary.
(z) Foreign
Corrupt Practices. Neither the Company, nor to the knowledge of
the Company, any agent or other person acting on behalf of the Company, has
(i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf
of
which the Company is aware) which is in violation of law, or (iv) violated
in
any material respect any provision of the Foreign Corrupt Practices Act of
1977,
as amended.
(aa) Accountants. The
Company’s accountants are PricewaterhouseCoopers LLP. To the
knowledge of the Company, such accountants, who the Company expects will express
their opinion with respect to the financial statements to be included in the
Company’s next Annual Report on Form 20-F, are a registered public accounting
firm as required by the Securities Act.
-14-
(bb) Regulation
M Compliance. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of
any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to
pay
to any person any compensation for soliciting another to purchase any other
securities of the Company.
(cc) Approvals. The
issuance and listing on the Nasdaq Capital Market of the Shares requires no
further approvals, including but not limited to, the approval of
shareholders.
(dd) FINRA
Affiliations. There are no affiliations with any Financial
Industry Regulatory Authority (“FINRA”) member firm among the Company’s
officers, directors or, to the knowledge of the Company, any five percent (5%)
or greater stockholder of the Company.
(ee) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of
the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any advice given by
any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers’ purchase of the Securities. The
Company further represents to each Purchaser that the Company’s decision to
enter into this Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions contemplated hereby
by
the Company and its representatives.
(ff) Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(e) and 4.13 hereof), it is understood and acknowledged by the
Company (i) that none of the Purchasers have been asked by the Company to agree,
nor has any Purchaser agreed, to desist from purchasing or selling, long and/or
short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term; (ii)
that past or future open market or other transactions by any Purchaser,
specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) that any Purchaser, and counter-parties
in “derivative” transactions to which any such Purchaser is a party, directly or
indirectly, presently may have a “short” position in the Common Stock, (iv) that
each Purchaser shall not be deemed to have any affiliation with or control
over
any arm’s length counter-party in any “derivative” transaction, (v) that one or
more Purchasers may engage in hedging activities at various times during
the
-15-
period
that the Securities are outstanding, including, without limitation, during
the
periods that the value of the Shares deliverable with respect to Securities
are
being determined, (vi) that such hedging activities (if any) could reduce the
value of the existing stockholders' equity interests in the Company at and
after
the time that the hedging activities are being conducted, and (vii) that such
aforementioned hedging activities do not constitute a breach of any of the
Transaction Documents.
Section
3.2 Representations and Warranties of the
Purchasers. Each Purchaser, for itself and for no other
Purchaser, hereby represents and warrants as of the date hereof and as of the
Closing Date to the Company as follows:
(a) Organization;
Authority. Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority
to
enter into and to consummate the transactions contemplated by this Agreement
and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement and performance by such Purchaser of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or similar action on the part of such
Purchaser. Each Transaction Document to which it is a party has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
(b) Own
Account. Such Purchaser is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling
such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any
of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings
with
any other persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting such Purchaser’s right to sell
the Securities immediately pursuant to the Registration Statement or otherwise
in compliance with applicable federal and state securities laws) in violation
of
the Securities Act or any applicable state securities law. Such
Purchaser is acquiring the Securities hereunder in the ordinary course of its
business.
(c) Purchaser
Status. At the time such Purchaser was offered the Securities, it
was, and at the date hereof it is, and on each date on which it exercises any
Warrants, it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii)
a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.
-16-
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits
and
risks of the prospective investment in the Securities, and has so evaluated
the
merits and risks of such investment. Such Purchaser is able to bear
the economic risk of an investment in the Securities and, at the present time,
is able to afford a complete loss of such investment.
(e) Short
Sales and Confidentiality Prior to the Date Hereof. Other than
consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with
such Purchaser, directly or indirectly executed any purchases or sales,
including Short Sales, of the securities of the Company during the period
commencing from the time that such Purchaser first received a term sheet
(written or oral) from the Company or any other Person representing the Company
setting forth the material terms of the transactions contemplated hereunder
(“Discussion Time”). Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser's assets and
the
portfolio managers have no direct knowledge of the investment decisions made
by
the portfolio managers managing other portions of such Purchaser's assets,
the
representation set forth above shall only apply with respect to the portion
of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement. Other than to
other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).
ARTICLE
4
OTHER
AGREEMENTS OF THE PARTIES
Section
4.1 Shares. If all or any portion of a
Debenture is converted or a Warrant is exercised at a time when there is an
effective registration statement to cover the issuance or resale of the Shares,
the Shares issued pursuant to any such conversion or exercise shall be issued
free of all legends. If at any time following the date hereof the
Registration Statement (or any subsequent registration statement registering
the
Shares) is not effective or is not otherwise available for the sale or resale
of
the Shares, the Company shall immediately notify the holders of the Debentures
and/or Warrants, as the case may be, in writing that such registration statement
is not then effective and thereafter shall promptly notify such holders when
the
registration statement is effective again and available for the sale or resale
of the Shares. The Company shall use best efforts to keep a
registration statement (including the Registration Statement) registering the
issuance or resale of the Conversion Shares and the Warrant Shares effective
during the term of the Debentures and the Warrants, respectively.
Section
4.2 Furnishing of Information. Until the
earliest of the time that (i) no Purchaser owns Securities (based solely on
a
review of the transfer agent’s list of registered holders of Common Stock, a
list of non-objecting beneficial holders, the registrar’s registry for the
Debentures and the Company’s registry for the Warrants), (ii) the Debentures
have matured or (iii) the Warrants have expired, the Company covenants to timely
file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act even if the Company is not then
subject
-17-
to
the
reporting requirements of the Exchange Act. As long as any Purchaser
owns Securities, if the Company is not required to file reports pursuant to
the
Exchange Act, it will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) such information as is required for
the
Purchasers to sell the Securities under Rule 144. The Company further
covenants that, if at any time following the date hereof the Registration
Statement (or any subsequent registration statement registering the Shares)
is
not effective or is not otherwise available for the sale or resale of the
Shares, it will take such further action as any Purchaser may reasonably
request, to the extent required from time to time, to enable such Purchaser
to
sell such Shares without registration under the Securities Act within the
requirements of the exemption provided by Rule 144.
Section
4.3 Integration. The Company shall not
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in Section 2 of the Securities Act) that would
be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market such that it would require shareholder
approval prior to the closing of such other transaction unless shareholder
approval is obtained before the closing of such subsequent
transaction.
Section
4.4 Securities Laws Disclosure;
Publicity. The Company shall, by 8:30 a.m. (New York City time)
on the Trading Day immediately following the Closing Date, issue a Current
Report on Form 6-K, disclosing the material terms of the purchase and sale
of
the Securities pursuant to this Agreement, and filing the Transaction Documents
as exhibits thereto. Notwithstanding the foregoing, the Company shall
not publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with the filing of final
Transaction Documents (including signature pages thereto) with the Commission
and (ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under this clause (ii).
Section
4.5 Shareholder Rights Plan. No claim will be
made or enforced by the Company or, with the consent of the Company, any other
Person, that any Purchaser is an “Acquiring Person” under any control share
acquisition, business combination, poison pill (including any distribution
under
a rights agreement) or similar anti-takeover plan or arrangement in effect
or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between
the Company and the Purchasers.
Section
4.6 Non-Public Information. Except with respect to
the material terms and conditions of the transactions contemplated by the
Transaction Documents, 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.
-18-
Section
4.7 Use of Proceeds. Except as set forth on
Schedule 4.7 attached hereto, the Company shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes and shall not
use
such proceeds for (a) the satisfaction of any portion of the Company’s debt
(other than payment of trade payables in the ordinary course of the Company’s
business and prior practices), (b) the redemption of any Common Stock or Common
Stock Equivalents or (c) the settlement of any outstanding
litigation.
Section
4.8 Indemnification of
Purchasers. Subject to the provisions of this Section 4.8, to the
extent permitted by law, the Company will indemnify and hold each Purchaser
and
its directors, officers, shareholders, members, partners, agents and 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), 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, members, partners agents 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 (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in
this
Agreement or in the other Transaction Documents or (b) any action instituted
against a Purchaser in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser may have with
any
such stockholder or any violations by the Purchaser of state or federal
securities laws or any conduct by such Purchaser which constitutes fraud, gross
negligence, willful misconduct or malfeasance). 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 Transaction
Documents.
-19-
Section
4.9 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
Conversion Shares pursuant to any conversion of the Debentures and Warrant
Shares pursuant to any exercise of the Warrants.
Section
4.10 Listing of Common Stock. The
Company hereby agrees to use all commercially reasonable efforts to maintain
the
listing of the Common Stock on a Trading Market, and as soon as reasonably
practicable following the Closing to list all of the 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 will take such other action as is necessary
to cause all of the Shares to be listed on such other Trading Market as promptly
as possible. The Company will use all commercially reasonable efforts
to continue the listing and trading of its Common Stock on a Trading
Market.
Section
4.11 Equal Treatment of Purchasers. No
consideration shall be offered or paid to any Person to amend or consent to
a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration is also offered to all of the parties to the
Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended 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.
Section
4.12 Subsequent Equity Sales.
(a) From
the date hereof until 45 days after the Closing Date, neither the Company nor
any Subsidiary shall issue shares of Common Stock or Common Stock Equivalents;
provided, however, the 45 day period set forth in this Section
4.12 shall be extended for the number of Trading Days during such period in
which (i) trading in the Common Stock is suspended by any Trading Market, or
(ii) the Registration Statement is not effective or the prospectus included
in
the Registration Statement may not be used by the Purchasers for the resale
of
the Shares.
(b) From
the date hereof until such time as no Purchaser holds any of the Securities
(based solely on a review of the transfer agent’s list of registered holders of
Common Stock, a list of non-objecting beneficial holders, the registrar’s
registry of the Debentures and the Company’s registry for the Warrants), the
Company shall be prohibited from effecting or entering into an agreement to
effect any Subsequent Financing involving a Variable Rate
Transaction. “Variable Rate Transaction” means a transaction
in which the Company issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock at a conversion, exercise or exchange
rate or other price that is based upon and/or varies with the trading prices
of
or quotations for the shares of Common Stock at any time after the initial
issuance of such debt or equity securities. The Purchasers shall be
entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect
damages.
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(c) Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt
Issuance, except that no Variable Rate Transaction shall be an Exempt
Issuance.
Section
4.13 Short Sales and Confidentiality After the Date
Hereof. Each Purchaser, severally and not jointly with the other
Purchasers, covenants that neither it nor any Affiliate acting on its behalf
or
pursuant to any understanding with it will execute any Short Sales during the
period commencing at the Discussion Time and ending at the time that the
conditions in Sections 2.1(a) and 2.1(b) are deemed satisfied as provided in
Sections 2.1(3) and 2.1(4) (the “Time of Satisfaction”). Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such Time of Satisfaction, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Disclosure Schedules. Notwithstanding the
foregoing, no Purchaser makes any representation, warranty or covenant hereby
that it will not engage in Short Sales in the securities of the Company after
the Time of Satisfaction. Notwithstanding the foregoing, in the case
of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the
portfolio managers have no direct knowledge of the investment decisions made
by
the portfolio managers managing other portions of such Purchaser’s assets, the
covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
Section
4.14 Delivery of Securities After
Closing. The Company shall deliver, or cause to be delivered, the
respective Securities purchased by each Purchaser to such Purchaser within
3
Trading Days of the Closing Date.
Section
4.15 Participation Right. So long as a
Purchaser is a registered holder of Debentures, such Purchaser shall have a
right of participation in any future equity or debt financing by the Company
for
cash (other than any issuance of ADSs or Ordinary Shares upon exercise of
options issued or to be issued pursuant to the Company’s stock option plans,
upon exercise of any existing (outstanding or approved) warrants or other
existing (outstanding or approved) securities exercisable for ADSs or Ordinary
Shares or pursuant to the Company’s Equity Credit Agreement with Brittany
Capital Management Ltd. dated June 1, 2007) on terms equal to those of other
investors in such future financings. The Company shall provide
written notice to each such Purchaser providing in reasonable detail the terms
of any such proposed future financing a reasonable period of time prior to
the
completion thereof and, unless a Purchaser provides the Company notice in
writing within 3 days of the receipt of the notice from the Company that it
wishes to participate in such financing, such Purchaser’s right with respect to
such proposed future financing shall be deemed waived.
ARTICLE
5
MISCELLANEOUS
Section
5.1 Termination. This Agreement may be terminated
by any Purchaser, as to such Purchaser’s obligations hereunder only and without
any effect whatsoever on the obligations between the Company and the other
Purchasers, by written notice to the other parties, if the Closing has not
been
consummated on or before December 15, 2007; provided, however,
that no such termination will affect the right of any party to xxx for any
breach by the other party (or parties).
-21-
Section
5.2 Fees and Expenses. Except as
expressly set forth in the Transaction Documents to the contrary, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to
the
negotiation, preparation, execution, delivery and performance of this
Agreement. The Per Unit Purchase Price includes costs of issuance,
such as all Transfer Agent fees, stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the
Purchasers.
Section
5.3 Entire Agreement. The Transaction
Documents, together with the exhibits and schedules thereto, the Prospectus
and
the Prospectus Supplement, contain the entire understanding of the parties
with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
Section
5.4 Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest
of
(a) the date of transmission, if such notice or communication is delivered
via
facsimile at the facsimile number set forth on the signature pages attached
hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or communication
is
delivered via facsimile at the facsimile number set forth on the signature
pages
attached hereto on a day that is not a Trading Day or later than 5:30 p.m.
(New
York City time) on any Trading Day, (c) the 2nd Trading Day following the date
of mailing, if sent by U.S. nationally recognized overnight courier service,
or
(d) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto.
Section
5.5 Amendments; Waivers. No provision of this
Agreement may be waived or amended except in a written instrument signed, in
the
case of an amendment, by the Company and the Purchasers of at least 85% of
the
Debentures still held by the Purchasers or, in the case of a waiver, by the
party against whom enforcement of any such waived provision is
sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair
the
exercise of any such right.
Section
5.6 Headings. The headings herein are
for convenience only, do not constitute a part of this Agreement and shall
not
be deemed to limit or affect any of the provisions hereof.
Section
5.7 Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and their
successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser (other than by merger). Any Purchaser may
assign any or all of its rights under this Agreement to any Person to whom
such
Purchaser assigns or transfers any Securities, provided such transferee agrees
in writing to be bound, with respect to the transferred Securities, by the
provisions of the Transaction Documents that apply to the
“Purchasers.”
Section
5.8 No Third-Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set
forth
in Section 4.8.
-22-
Section
5.9 Governing Law. All questions
concerning the construction, validity, enforcement and interpretation of the
Transaction Documents shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard
to
the principles of conflicts of law thereof. Each party agrees that
all legal proceedings concerning the interpretations, enforcement and defense
of
the transactions contemplated by this Agreement and any other Transaction
Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the
state
and federal courts sitting in the City of New York, borough of Manhattan for
the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect
to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for
such
proceeding. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address
in
effect for notices to it under this Agreement and agrees that such service
shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law. If
either party shall commence an action or proceeding to enforce any provisions
of
the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
Section
5.10 Survival. The representations and
warranties contained herein shall survive the Closing and the delivery of the
Debentures and the Warrants.
Section
5.11 Execution. This Agreement may be
executed in two or more counterparts, all of which when taken together shall
be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party,
it
being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing
(or
on whose behalf such signature is executed) with the same force and effect
as if
such facsimile or “.pdf” signature page were an original thereof.
Section
5.12 Severability. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
-23-
Section
5.13 Rescission and Withdrawal
Right. Notwithstanding anything to the contrary contained in (and
without limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to
the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights; provided, however, in the case
of a
rescission of an exercise of a Warrant, the Purchaser shall be required to
return any shares of Common Stock delivered in connection with any such
rescinded exercise notice.
Section
5.14 Replacement of Securities. If any
certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof (in the case of mutilation),
or
in lieu of and substitution therefor, a new certificate or instrument, but
only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction. The applicant for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs (including customary indemnity) associated with the issuance of such
replacement Securities.
Section
5.15 Remedies. In addition to being entitled
to exercise all rights provided herein or granted by law, including recovery
of
damages, each of the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of obligations contained in the Transaction Documents
and
hereby agrees to waive and not to assert in any action for specific performance
of any such obligation the defense that a remedy at law would be
adequate.
Section
5.16 Payment Set Aside. To the extent that
the Company makes a payment or payments to any Purchaser pursuant to any
Transaction Document or a Purchaser enforces or exercises its rights thereunder,
and such payment or payments or the proceeds of such enforcement or exercise
or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be
refunded, repaid or otherwise restored to the Company, a trustee, receiver
or
any other person under any law (including, without limitation, any bankruptcy
law, state or federal law, common law or equitable cause of action), then to
the
extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred.
Section
5.17 Independent Nature of Purchasers’ Obligations and
Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser,
and no Purchaser shall be responsible in any way for the performance or
non-performance of the obligations of any other Purchaser under any Transaction
Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Purchaser pursuant thereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are
in
any way acting in concert or as a group with respect to such obligations or
the
transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to
-24-
independently
protect and enforce its rights, including without limitation, the rights arising
out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other Purchaser to be joined as an additional party
in
any proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in their review and negotiation of the
Transaction Documents. The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience
of
the Company and not because it was required or requested to do so by the
Purchasers.
Section
5.18 Liquidated Damages. The Company’s
obligations to pay any partial liquidated damages or other amounts owing under
the Transaction Documents is a continuing obligation of the Company and shall
not terminate until all unpaid partial liquidated damages and other amounts
have
been paid notwithstanding the fact that the instrument or security pursuant
to
which such partial liquidated damages or other amounts are due and payable
shall
have been canceled.
Section
5.19 Saturdays, Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then such action
may be taken or such right may be exercised on the next succeeding Business
Day.
Section
5.20 Construction. The parties agree that each of
them and/or their respective counsel has reviewed and had an opportunity to
revise the Transaction Documents and, therefore, the normal rule of construction
to the effect that any ambiguities are to be resolved against the drafting
party
shall not be employed in the interpretation of the Transaction Documents or
any
amendments hereto.
Section
5.21 Waiver of Jury Trial. In any action, suit or
proceeding in any jurisdiction brought by any party against any other party,
the
parties each knowingly and intentionally, to the greatest extent permitted
by
applicable law, hereby absolutely, unconditionally, irrevocably and expressly
waives forever trial by jury.
(Signature
Pages Follow)
-25-
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as
of
the date first indicated above.
|
AMARIN
CORPORATION PLC
|
Address
for Notice:
|
||
|
By:
|
______________________________________________________ |
Fax:
|
|
|
Name:
|
|||
|
Title:
|
|||
With
a
copy to (which shall not constitute notice):
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
-26-
[PURCHASER
SIGNATURE PAGES TO AMRN SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
|
Name
of
Purchaser: ________________________________________________________________
|
|
Signature
of Authorized Signatory of
Purchaser:__________________________________________
|
|
Name
of Authorized
Signatory:________________________________________________________
|
|
Title
of Authorized
Signatory:_________________________________________________________
|
|
Email
Address of
Purchaser:__________________________________________________________
|
|
Fax
Number of
Purchaser:____________________________________________________________
|
|
Address
for Notice of
Purchaser:______________________________________________________
|
|
Address
for Delivery of Securities for Purchaser (if not same as address
for
notice):
|
|
Subscription
Amount: $_________________________________________
|
|
Shares:______________________________________________________
|
|
Warrant
Shares:_______________________________________________
|
|
EIN
Number: [PROVIDE THIS UNDER SEPARATE
COVER]
|
|
Name
of
Purchaser:_____________________________________________
|
-27-
DTC
Account Details:
|
Name
of DTC Participant:
|
| ________________________________________________ |
|
(your
broker or custodian bank)
|
|
Address
of DTC Participant:
|
| ________________________________________________ |
|
(address
of your broker or custodian bank)
|
| ________________________________________________ |
| ________________________________________________ |
|
DTC
Participant Account Number:
|
| _________________________________________________ |
|
Client
Account (“Account Holder”) number at DTC
Participant:
|
| _________________________________________________ |
|
Address
of Account Holder:
|
| _________________________________________________ |
| _________________________________________________ |
| _________________________________________________ |
-28-
