STOCK PURCHASE AGREEMENT
among
DISCOVERY LABORATORIES, INC.,
and
WINDWARD VENTURE PARTTNERS
Purchase of [ ] Shares of
Common Stock and [ ] Warrant of
Discovery Laboratories, Inc.
[ ], 1999
STOCK PURCHASE AGREEMENT (this "Agreement") dated as
of [ ], 1999 (the "Effective Date"), among DISCOVERY LABORATORIES,
INC., a Delaware corporation (the "Company"), and [ ] (the "Investor").
WHEREAS, the Investor have agreed to make an aggregate equity
investment of $[ ] in the Company through the purchase of (a) shares of Common
Stock, par value $.001 per share (the "Common Stock") and (b) warrants (the
"Warrants") to purchase shares of Common Stock, of the Company; and
WHEREAS, the Company has agreed to sell such shares of Common
Stock and Warrants to the Investor.
NOW THEREFORE, in consideration of the premises and the mutual
representations and covenants hereinafter set forth, the parties hereby agree as
follows:
Section 1. Terms of Investment.
1.1 On the date hereof, the Company shall issue and sell to
the Investor, and the Investor shall purchase from the Company, (a) an aggregate
of [ ] shares of Common Stock (the "Shares") at a price of $1.88 per share (the
"Per Share Price") and (b) Warrants to purchase [ ] shares of Common Stock at an
exercise price equal to $2.30 (the "Per Share Exercise Price"), for an aggregate
purchase price of $[ ] (the "Purchase Price"). The Warrants shall be issued in
the form of Exhibit A. The Purchase Price shall be paid by wire transfer of
immediately available funds in United States dollars to the Company,
contemporaneously with the execution and delivery of this Agreement, to an
account previously designated in writing by the Company.
1.2 The Shares and Warrants (collectively sometimes referred
to as the "Securities") being sold in accordance with the terms of this
Agreement for the Purchase Price shall be validly issued, fully paid, and
nonassessable, and shall be free of restrictions on transfer other than under
this Agreement and under applicable state and federal securities laws. The
shares of Common Stock issuable upon exercise of the Warrants, when issued in
accordance with the terms of the Warrants, shall be validly issued, fully paid,
and nonassessable, and shall be free of restrictions on transfer other than
under this Agreement and under applicable state and federal securities laws.
Section 2. Purchase Price Adjustment. (a) If, within 150 days
from the Effective Date the Company shall issue and sell shares of Common Stock
in a private offering at a price per share less than the Per Share Price, (i)
the Investor shall be entitled to receive, for no additional consideration, a
number of additional shares of Common Stock sufficient to reduce the Per Share
Price to the per share purchase price paid by investors in such private offering
and (ii) the Per Share Exercise Price shall be reduced to equal the greater of
(A) 110% of the per share purchase price paid by investors in such private
offering and (B) $2.15.
(b) If, within 150 days from the Effective Date the
Company shall issue and sell, in a private offering, any shares of capital stock
or equity derivatives of the Company (including, without limitation, options,
warrants or convertible securities) (the "Offering Securities"), alone or in
combination with shares of Common Stock, , which Offering Securities are
convertible into, or exercisable for, shares of Common Stock at a conversion
price or exercise price less than the Per Share Price (i) the Investor shall be
entitled to receive, for no additional consideration, a number of additional
shares of Common Stock sufficient to reduce the Per Share Price to the
conversion price or exercise price of the Offering Securities and (ii) the Per
Share Exercise Price shall be reduced to equal the greater of (A) 110% of the
conversion price or exercise price of the Offering Securities and (B) $2.15.
(c) If, within 150 days from the Effective Date, the
Company shall not have either (i) raised at least $2 million through the sale of
Common Stock, other capital stock of the Company and/or equity derivatives of
the Company in addition to the Purchase Price or (ii) entered into any
partnering arrangement with a non-affiliate of the Company having a value
(taking into account, on a dollar-for-dollar basis, all upfront and milestone
payments provided for by the terms of such arrangement as well as any
substantially contemporaneous equity investments or written commitments (whether
or not contingent) to make loans or equity investments) of at least $10 million,
(A) the Investor shall be entitled to receive, for no additional consideration,
a number of additional shares of Common Stock sufficient to reduce the Per Share
Price (such reduction pursuant to this Section 2(c) or 2(d) being referred to as
a "Reset") to the average of the lowest three Closing Prices of the Common Stock
during the 20 trading-day period ending on the last trading day prior to the
expiration of such 150-day period and (B) the Per Share Exercise Price shall be
reduced to $2.15. As used herein, "Closing Price" shall mean the last sale price
of the Common Stock, as reported on NASDAQ, on any trading day or, if there
shall not have been a sale on any trading day, the average between the closing
bid and ask prices reported on NASDAQ for such trading day.
(d) If the average of the Closing Prices for the 20
trading days preceding the date that is 150 days from the Effective Date is less
than the Per Share Price, then (i) the Investor shall be entitled to receive,
for no additional consideration, a number of additional shares of Common Stock
sufficient to reduce the Per Share Price to the average of the lowest three
Closing Prices of the Common Stock during the 20 trading-day period ending on
the last trading day prior to the expiration of such 150-day period and (ii) the
Per Share Exercise Price shall be reduced to $2.15. Notwithstanding the
foregoing, additional shares of Common Stock shall not be required to be issued
pursuant to this Section 2(d) (1) if the Company has raised at least $4 million
(or such lesser amount as is consented to by Aries Domestic Fund, L.P. and/or
The Aries Master Fund, a Cayman Exempted Company ("Aries")) through the sale of
Common Stock, other capital stock of the Company and/or equity derivatives of
the Company in addition to the Purchase Price by the date that is 150 days from
the Effective Date, or (2) to the extent Aries otherwise agrees to waive or
reduce the required issuance, any such consent or agreement by Aries being
binding on all of the Investor signatory hereto.
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(e) In no event shall the Reset or any issuance of
securities by the Company subject to paragraph (a) or (b) above require the
Company to issue a number of shares of Common Stock to the Investor where such
issuance would require the Company to lower the Per Share Price to a price equal
to or less than $0.86.
Section 3. Closing.
3.1 Closing. (a) The purchase and sale of the Shares shall
take place at the offices of Paramount Capital Asset Management, Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on March 31, 1999 (the "Closing"). At
the Closing, in consideration of, and following confirmation of receipt of, the
Purchase Price, the Company shall deliver to the Investor certificates
representing the Shares.
3.2 Conditions to the Obligations of the Investor at the
Closing. (a) Conditions to the Closing. The obligation of the Investor to
purchase and pay for the Securities at the Closing is subject to the
satisfaction on or prior to the applicable date of Closing (the "Closing Date")
of the following conditions, which may be waived by the Investor:
3.3 Opinion of Counsel to the Company. The Investor shall have
received from Xxxxxxx, Xxxxxxxx & Kotel, A Professional Corporation, counsel for
the Company, its opinion dated such Closing Date in the form of Exhibit B.
3.4 Representations and Warranties. All of the representations
and warranties of the Company contained in this Agreement shall be true and
correct in all material respects at and as of such Closing Date.
3.5 Performance of Covenants. All of the covenants and
agreements of the Company contained in this Agreement required to be performed
on or prior to such Closing Date shall have been performed in a manner
satisfactory in all material respects to Investor.
3.6 Legal Action. No injunction, order, investigation, claim,
action or proceeding before any court or governmental body shall be pending or
threatened wherein an unfavorable judgment, decree or order would restrain,
impair or prevent the carrying out of this Agreement or any of the transactions
contemplated hereby, declare unlawful the transactions contemplated by this
Agreement or cause any such transaction to be rescinded.
3.7 Consents. The Company shall have obtained in writing or
made all consents, waivers, approvals, orders, permits, licenses and
authorizations of, and registrations, declarations, notices to and filings and
applications with, any governmental authority or any other person (including,
without limitation, securityholders and creditors of the Company) required to be
obtained or made in order to enable the Company to observe and comply with all
its obligations under the Agreement and to consummate and perform the
transactions contemplated thereby except any of those the failure of which to be
obtained shall not have a material adverse effect on the Company.
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3.8 Closing Documents. The Company shall have delivered to
Investor the following:
(a) a certificate executed by the President and Chief
Executive Officer of the Company dated as of the Closing Date stating that the
conditions set forth in Sections 3.2 through 3.7 have been satisfied;
(b) a certificate of the Secretary of the Company,
dated such Closing Date, as to the continued and valid existence of the Company,
certifying the attached copy of the Restated Certificate of Incorporation and
the By-laws of the Company, the authorization of the execution, delivery and
performance of the Agreement, and the resolutions adopted by the Board of
Directors of the Company authorizing the actions to be taken by the Company
under the Agreement;
(c) a certificate of the Secretary of State of the
State of Delaware, dated a recent date, to the effect that the Company is in
good standing in the State of Delaware and that all annual reports, if any, have
been filed as required and that all taxes and fees have been paid in connection
therewith;
(d) a certified copy of the Certificate of
Incorporation of the Company as filed with the Secretary of State of the State
of Delaware, including any amendments thereto; and
3.9 Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated by this Agreement
and all documents incident thereto shall be satisfactory in form and substance
to Investor.
3.10 Financial Statements; Absence of Changes. The Company
shall have provided to the Investor (i) the consolidated balance sheets of the
Company and its subsidiaries as of December 31, 1998, and the related unaudited
consolidated statements of operations and cash flows for the 12 month period
then ended and for the period from May 18, 1993 (date of inception) to December
31, 1998 (the "Financial Statements"), all of which will be correct and complete
and will present fairly the financial position of the Company and the results of
its operations and changes in its financial position as of the time and for the
periods then ended, and (ii) a certification, in form and substance satisfactory
to the Investor, of the Vice President, Finance of the Company as to the
Financial Statements to the effect that the Financial Statements have been
prepared in accordance with the books and records of the Company and its
subsidiaries and generally accepted accounting principles applied on a basis
consistent with prior years (except as otherwise specified in such Financial
Statements), and present fairly the financial position of the Company and its
subsidiaries and the results of their operations and changes in their financial
position as of the time and for the periods then ended.
3.11 Schedules. The Company shall have provided to the
Investor all schedules required pursuant to this Agreement.
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Section 4. Conditions to the Obligations of the Company at the
Closing. The obligation of the Company to issue and sell the Shares to the
Investor at the Closing is subject to the satisfaction on or prior to the
applicable Closing Date of the following conditions, any of which may be waived
by the Company:
4.1 Representations and Warranties. The representations and
warranties of Investor contained in this Agreement shall be true and correct in
all material respects at and as of such Closing Date.
4.2 Legal Action. No injunction, order, investigation, claim,
action or proceeding before any court or governmental body shall be pending or
threatened wherein an unfavorable judgment, decree or order would restrain,
impair or prevent the carrying out of this Agreement or any of the transactions
contemplated hereby, declare unlawful the transactions contemplated by this
Agreement or cause any such transaction to be rescinded.
Section 5 Representations and Warranties of the Investor.
The Investor hereby represent and warrant to the Company that:
5.1 The Investor is an "accredited investor" within the
meaning of Regulation D under the Securities Act of 1933 (the "Securities Act").
Each of the Investor has experience in making investments in development stage
biotechnology companies and is acquiring the Securities for its own account and
not with a present view to, or for sale in connection with, any distribution
thereof in violation of the registration requirements of the Securities Exchange
Act of 0000 (xxx "Xxxxxxxx Xxx").
5.2 The Investor has the power and authority to execute and
deliver this Agreement and to perform its obligations hereunder, having obtained
all required consents, if any, and this Agreement, when executed and delivered,
will constitute a valid and legally binding obligation of such Investor.
5.3 No finder, broker, agent, financial person or other
intermediary has acted on behalf of any of the Investor in connection with the
offering of the Shares or the consummation of this Agreement or any of the
transactions contemplated hereby.
5.4 The Investor has not directly or indirectly sold or caused
to be sold any shares of Common Stock during the 30 trading days preceding the
Closing Date. As of the Closing Date, the Investos does not directly or
indirectly have, and as of the date of any Reset, each of the Investor will not
directly or indirectly have, a "short" position with respect to the Common
Stock.
5.5 The Investor recognizes that the purchase of the
Securities involves a high degree of risk including, but not limited to, the
following: (a) an investment in the Company is highly speculative, and only an
investor who can afford the loss of their entire investment should consider
investing in the Company and the Securities; (b) an investor may not be able to
liquidate its investment; (c) transferability of the Securities is extremely
limited; and (d) in the event of a disposition, such investor could sustain the
loss of its entire investment.
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5.6 The Investor hereby represents that it has been furnished
by the Company with all information regarding the Company that such Investor has
requested or desired to know, has been afforded the opportunity to ask questions
of and receive answers from duly authorized officers or other representatives of
the Company concerning the terms and conditions of the investment and has
received any additional information that such Investor has requested.
5.7 The Investor has relied solely upon its own judgment in
making the decision to invest in the Company. To the extent necessary, such
Investor has retained, at its own expense, and relied upon appropriate
professional advice regarding the investment, tax and legal merits and
consequences of this Agreement and its purchase of the Securities hereunder.
5.8 The Investor represents that no Securities were offered or
sold to it by means of any form of general solicitation or general advertising,
and in connection therewith such Investor did not (A) receive or review any
advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether
closed circuit, or generally available; or (B) attend any seminar meeting or
industry investor conference whose attendees were invited by any general
solicitation or general advertising.
5.9 The Investor hereby represents that it, either by reason
of such Investor's business or financial experience or the business or financial
experience of such Investor's outside professional advisors (who are
unaffiliated with and who are not compensated by the Company or any affiliate or
selling agent of the Company, directly or indirectly), has the capacity to
protect the Investor's own interests in connection with the transaction
contemplated hereby.
5.10 The Investor has full power and authority (corporate or
partnership, as the case may be, statutory and otherwise) to execute and deliver
this Agreement and to purchase the Securities. The execution and delivery by the
Investor of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate or partnership, as
the case may be, action on the part of such Investor.
5.11 Each Investor is authorized and qualified to become an
investor in the Company and the person signing this Agreement on behalf of such
entity has been duly authorized by such Investor to do so.
5.12 No material consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, remains to be obtained or is otherwise
required to be obtained by the Investor in connection with the authorization,
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, including, without limitation the purchase and sale of the
Securities.
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Section 6. Representations and Warranties of the Company
The Company hereby represents and warrants to the Investor
that:
6.1 Organization, Qualification and Corporate Power. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has full corporate power
and authority to own and hold its properties and to conduct its business; to
execute, deliver and perform this Agreement; and to issue, sell and deliver the
Securities. The Company is duly qualified or licensed to do business in each
jurisdiction in which the failure to be so qualified or licensed would have a
materially adverse effect on the business or financial condition of the Company.
6.2 Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of 20,000,000 shares of Common Stock, par
value $0.001 per share, and 5,000,000 shares of Preferred Stock, par value
$0.001 per share, of which 2,420,282 are designated Series B Convertible
Preferred Stock of the Company (the "Series B Preferred Stock") and 2,039 are
designated Series C Convertible Preferred Stock of the Company (the "Series C
Preferred Stock"). As of the date hereof, (i) 5,855,428 shares of Common Stock
were issued and outstanding, (ii) 1,712,386 shares of Series B Preferred Stock
were issued and outstanding and were convertible into 55,331,095 shares of
Common Stock, (iii) 2,039 shares of Series C Preferred Stock, which are
convertible into shares of Common Stock under certain circumstances based on the
liquidation value of the Series C Preferred Stock and the market price of the
Common Stock, were issued and outstanding, (iv) 2,000 shares of Common Stock
were held in the treasury of the Company, (v) 2,299,212 shares of Common Stock
were reserved for issuance upon exercise of outstanding options issued under (A)
the Company's 1998 Stock Incentive Plan, the Company's 1995 Stock Option Plan
and the Company's 1993 Stock Option Plan (the "Option Plans") and (B) stock
option plans of certain corporate predecessors of the Company, (vi) an aggregate
of 2,297 shares of Common Stock were reserved for issuance under stock options
granted by the Company outside the Option Plans, (vii) an aggregate of 2,045,087
shares of Common Stock were reserved for issuance under outstanding warrants,
(viii) 684,997 shares of Common Stock were reserved for issuance upon conversion
of the 220,026 shares of Series B Preferred Stock issuable upon the exercise of
outstanding warrants, and (ix) 173,333 shares of Common Stock were reserved for
issuance upon exercise of the Company's outstanding unit purchase option
(including warrants issuable upon the exercise of such unit purchase option).
All of the outstanding shares of Common Stock have been duly authorized and
validly issued and are fully paid and nonassessable and free of preemptive
rights. Except as set forth in this Section 6.2 and Section 6.2 of the
Disclosure Schedule, there are no options, warrants or other rights, convertible
debt, agreements, arrangements or commitments of any character obligating the
Company or any of its subsidiaries to issue or sell any shares of capital stock
of or other equity interests in the Company or any of its subsidiaries. The
Company is not obligated to retire, redeem, repurchase or otherwise reacquire
any of its capital stock or other securities.
6.3 Authorization; Enforceability. The Company has full
corporate power and authority to execute, deliver and enter into this Agreement
and to consummate the transactions contemplated hereby. All action on the part
of the Company, its directors, managers, members or stockholders necessary for
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the authorization, execution, delivery and performance of this Agreement by the
Company, the authorization, sale, issuance and delivery of the Securities
contemplated hereby and the performance of the Company's obligations hereunder
has been taken. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies, and to limitations of public policy.
6.4 Financial Statements and SEC Documents. (a) Contained
within the SEC Documents (as defined in Section 6.4(b) are (i) the audited
consolidated balance sheets of the Company and its subsidiaries as of December
31, 1997 and 1996, and the related audited consolidated statements of
operations, stockholders' equity, and cash flows for the years ended December
31, 1997 and 1996, and for the period from May 18, 1993 (date of inception) to
December 31, 1997, together with the related notes thereto (the "Audited
Financial Statements") and (ii) the Financial Statements (as such term is
defined in Section 3.10) (other than the Financial Statements at and as of
December 31, 1998, which have not yet been included in any document filed with
the Securities and Exchange Commission (the "SEC")). All of the Audited
Financial Statements and the Financial Statements are correct and complete, and
have been prepared in accordance with the books and records of the Company and
its subsidiaries and generally accepted accounting principles, applied
consistently with the past practices of the Company and its subsidiaries (except
as otherwise noted in such Audited Financial Statements and Financial
Statements), reflect all liabilities and obligations of the Company and its
subsidiaries, as of their respective dates, and present fairly the financial
position of the Company and its subsidiaries and the results of their operations
as of the time and for the periods indicated therein.
(b) The Company has filed with the SEC all documents required
to be filed with the SEC by the Company since January 1, 1997 except to the
extent such filings are permitted to be deferred under applicable rules and
regulations. All such documents, as the same have since the time of their filing
been amended, are referred to herein as the "SEC Documents". As of their
respective dates, the SEC Documents complied in all respects with the
requirements of the Securities Act and/or the Securities Exchange Act, as the
case may be, and the rules and regulations of the SEC thereunder applicable to
such SEC Documents and none of the SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to be stated therein to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Documents comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC) and fairly present the financial position of the Company
as at the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended.
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6.5 No Material Adverse Changes. Since December 31, 1997,
except as disclosed in the SEC Documents filed subsequent to that date, in
Schedule 6.5 or in the other schedules to this Agreement, there has not at any
time been (a) any material adverse change in the business, financial condition,
operating results, business prospects, employee relations or customer relations
of the Company or its subsidiaries, other declines in working capital,
shareholders' equity and other financial items resulting from the use of cash in
furtherance of the Company's business, or (b) other adverse changes, which in
the aggregate have been materially adverse to the Company or its subsidiaries.
6.6 Absence of Certain Developments. Except as contemplated by
this Agreement, since December 31, 1998, the Company and each of its
subsidiaries have not (a) issued any securities, (b) borrowed any amount or
incurred or become subject to any liabilities (absolute or contingent), other
than liabilities incurred in the ordinary course of business and liabilities
under contracts entered into in the ordinary course of business, all of which
involve less than $100,000, (c) discharged or satisfied any lien, adverse claim
or encumbrance or paid any obligation or liability (absolute or contingent),
other than current liabilities paid in the ordinary course of business; (d)
declared or made any payment or distribution of cash or other property to the
stockholders of the Company with respect to the Common Stock or purchased or
redeemed any shares of Common Stock; (e) mortgaged, pledged or subjected to any
lien, adverse claim, charge or any other encumbrance, any of its properties or
assets, except for liens for taxes not yet due and payable or otherwise in the
ordinary course of business; (f) sold, assigned or transferred any of its
assets, tangible or intangible, except in the ordinary course of business and in
an amount less than $100,000, (g) suffered any extraordinary losses or waived
any rights of material value other than in the ordinary course of business; (h)
made any capital expenditures or commitments therefor other than in the ordinary
course of business; (i) entered into any other transaction other than in the
ordinary course of business in an amount less than $100,000 or entered into any
material transaction, whether or not in the ordinary course of business; (j)
made any charitable contributions or pledges; (k) suffered any damages,
destruction or casualty loss, whether or not covered by insurance, affecting any
of the properties or assets of the Company or its subsidiaries or any other
properties or assets of the Company or its subsidiaries which could have a
material adverse effect on the business or financial condition of the Company or
its subsidiaries; (l) made any change in the nature or operations of the
business of the Company or its subsidiaries; or (m) resolved or entered into any
agreement or understanding with respect to any of the foregoing.
6.7 No Conflict; Governmental Consents. (a) The execution and
delivery by the Company of this Agreement and the consummation of the
transactions contemplated hereby will not result in the material violation of
any law, statute, rule, regulation, order, writ, injunction, judgment or decree
of any court or governmental authority to or by which the Company is bound, or
of any provision of the Restated Certificate of Incorporation or By-Laws of the
Company, and will not conflict with, or result in a material breach or violation
of, any of the terms or provisions of, or constitute (with due notice or lapse
of time or both) a default under, any lease, loan agreement, mortgage, security
9
agreement, trust indenture or other agreement or instrument to which the Company
is a party or by which it is bound or to which any of its material properties or
assets is subject, nor result in the creation or imposition of any lien upon any
of the material properties or assets of the Company.
(b) No material consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, remains to be obtained or is otherwise
required to be obtained by the Company in connection with the authorization,
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, including, without limitation the issue and sale of the
Securities, except such filings as may be required to be made with the SEC, the
National Association of Securities Dealers, Inc. , The NASDAQ Stock Market, Inc.
or any state blue sky or securities regulatory authority.
6.8 Licenses. The Company has sufficient licenses, permits and
other governmental authorizations currently required for the conduct of its
business or ownership of properties and is in all material respects complying
therewith.
6.9 Litigation. There are no pending, or to the Company's
knowledge, threatened legal or governmental proceedings against the Company that
would materially adversely affect the business, property, financial condition or
operations of the Company.
6.10 Investment Company. The Company is not an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations of the SEC thereunder.
Section 7. Registration Rights.
7.1 Upon the next filing by the Company of a registration
statement (the "Registration Statement") with the SEC with respect to the resale
of the shares of Common Stock, the Company shall include (a) all shares of
Common Stock acquired hereunder by the Investor hereunder (b) all shares of
Common Stock issuable upon exercise of the Warrants and (c) any shares of Common
Stock acquired as the result of a Reset or otherwise pursuant to Section 2(a) or
2(b) (the "Registrable Securities"); provided, however, that in any event, the
Company shall file a Registration Statement with the SEC for the resale of the
Registrable Securities no later than the date that is 180 days from the
Effective Date. Upon the filing of the Registration Statement, the Company shall
use its best efforts to cause such registration statement to become effective
within 60 days thereafter. The Company will use its best efforts to effect the
registrations, qualifications or compliances (including, without limitation, the
execution of any required undertaking to file post-effective amendments,
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with applicable securities laws, requirements or
regulations) as may be reasonably requested and as would permit or facilitate
that sale and distribution of all Registrable Securities until all Registrable
Securities held by the Investor have been disposed of pursuant to such
registration statement; provided that the Company shall not be obligated to
maintain the effectiveness of the Registration Statement (or any related
qualifications or compliance) following the first anniversary of the date such
Registration Statement is filed. Other holders of registration rights with
respect to the Common Stock shall be permitted to include their shares of Common
Stock in the Registration Statement provided that, in the event the Investor
elect to retain an underwriter in connection with the distribution contemplated
by the Registration Statement, the inclusion in the Registration Statement of
shares of Common Stock held by other holders of registration rights shall be
conditioned on such other holders disposing of such shares of Common Stock
pursuant to the related underwriting agreement.
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7.2 In connection with any registration statement filed
pursuant to Section 7.1, the following provisions shall apply:
(a) The Investor will promptly provide the Company with such
information as the Company shall reasonably request in order to prepare
such registration statement. In the event that the distribution of the
Common Stock covered by the registration statement shall be effected
pursuant to an underwritten offering, the inclusion in such
registration of the Registrable Securities shall be conditioned on the
Investor' execution and delivery of a customary underwriting agreement
with respect thereto (it being understood that the Investor shall have
sole authority with respect to retaining an underwriter in connection
with any registration effected requested pursuant to Section 7.1).
(b) All expenses in connection with the preparation of such
registration statement (other than underwriting fees, discounts or
commissions and the fees and disbursements of counsel for the Investor)
shall be borne solely by the Company.
(c) Following the effective date of such registration
statement, the Company shall, upon the request of the Investor,
forthwith supply such number of prospectuses (including preliminary
prospectuses and amendments and supplements thereto) meeting the
requirements of the Securities Act or such other securities laws where
the registration statement or prospectus has been filed and such other
documents as are referred to in the registration statement as shall be
requested by the Investor to permit it to make a public distribution of
their Registrable Securities, provided that the Investor furnishes the
Company with such appropriate information relating to the Investor's
intentions in connection therewith as the Company shall reasonably
request in writing.
(d) the Company shall prepare and file such amendments and
supplements to such registration statement as may be necessary to keep
such registration statement effective and to comply with the provisions
of the Securities Act or such other securities laws where the
registration statement has been filed with the respect to the offer and
sale or other disposition of the shares covered by such registration
statement during the period it is required to be maintained.
(e) The Company will as expeditiously as possible:
(i) notify the Investor at any time when a
prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result
of which the prospectus included in such registration
statement contains an untrue statement of a material fact or
11
omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading,
and the Company will prepare a supplement or amendment to such
prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading;
(ii) cause all Registrable Securities
covered by the registration statement to be listed on each
securities exchange on which the Common Stock is then listed,
and, unless the same already exists, provide a transfer agent,
registrar and CUSIP number for all such Registrable Securities
not later than the effective date of the registration
statement;
(iii) enter into such customary agreements
(including an underwriting agreement uncustomary form) and
take all such other actions as the Investor or the
underwriters, if any, of a registration requested pursuant to
Section 7.1 reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(iv) make available for inspection by the
Investor, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney,
accountant or other agent retained by the Investor or any
underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and
properties of the Company as shall be necessary to enable them
to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all
information requested by any such Inspector in connection with
such registration statement, provided that the Company shall
have received appropriate confidentiality undertakings with
respect to such disclosure;
(v) obtain "cold comfort" letters and
updates thereof from the Company's independent public
accountants and an opinion from the Company's counsel in
customary form and covering such matters of the type
customarily covered by "cold comfort" letters and opinions of
counsel, respectively, as the investors shall request in
connection with any registration pursuant to Section 7.1; and
(vi) otherwise comply with all applicable
rules and regulations of the Securities and Exchange
Commission.
(f) The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 7.2
(a)(i), each Investor will forthwith discontinue disposition of its Registrable
Securities pursuant to the registration statement covering such Registrable
12
Securities until such Investor's receipt of the copies of the supplemented or
amended prospectus covering such Registrable Securities current at the time of
receipt of such notice.
(g) Indemnification.
(i) In the event of the registration or qualification of any
Registrable Securities under the Securities Act or any other applicable
securities laws pursuant to the provisions of this Section 7, the
Company agrees to indemnify and hold harmless the Investor and each
underwriter, broker or dealer, if any, of such Registrable Securities,
and each other person, if any, who controls the Investor or any such
underwriter, broker or dealer within the meaning of the Securities Act
or any other applicable securities, from and against any and all
losses, claims, damages or liabilities (or actions in respect thereof),
joint or several, to which the Investor or such underwriter, broker or
dealer within the meaning of the Securities Act or any other applicable
securities, from and against any and all losses, claims, damages or
liabilities (or actions in respect thereof), joint or several, to which
the Investor or such underwriter, broker or dealer or controlling
person may become subject under the Securities Act or any other
applicable securities laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement
under which such Registrable Securities were registered or qualified
under the Securities Act or any other applicable securities laws, any
preliminary prospectus or final prospectus relating to such Registrable
Securities, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of
any rule or regulation under the Securities Act or any other applicable
securities laws applicable to the Company or relating to any action or
inaction required by the Company in connection with any such
registration or qualification and will reimburse The Investor and each
such underwriter, broker or dealer and each such controlling person for
any legal or other expenses reasonably incurred by the Investor or such
underwriter, broker or dealer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action, provided that the Company will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or omission made in such
registration statement, such preliminary prospectus, such final
prospectus or such amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by the
Investor or such underwriter, broker, dealer or controlling person
specifically and expressly for use in the preparation thereof.
(ii) In the event of the registration or
qualification of any Registrable Securities under the Securities Act or
any other applicable securities laws for sale pursuant to the
provisions hereof, the Investor, each underwriter, broker and dealer,
if any, of such Registrable Securities, and each other person, if any,
who controls the Investor or any such underwriter, broker or dealer
within the meaning of the Securities Act, agrees severally, and not
jointly, to indemnify and hold harmless the Company, each person who
controls the Company within the meaning of the Securities Act, and each
13
officer and director of the Company from and against any losses,
claims, damages or liabilities, joint or several, to which the Company,
such controlling person or any such officer or director may become
subject under the Securities Act or any other applicable securities
laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement of any material fact contained in any
registration statement under which such Registrable Securities were
registered or qualified under the Securities Act or any other
applicable securities laws, any preliminary prospectus or final
prospectus relating to such Registrable Securities, or any amendment or
supplement thereto, or arise out of or are based upon an untrue
statement or the omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, which untrue statement or omission was made therein in
reliance upon and unconformity with written information furnished to
the Company by the Investor or such underwriter, broker, dealer or
controlling person specifically for use in connection with the
preparation thereof, and will reimburse the Company, such controlling
person and each such officer or director of any legal or any other
expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or action,
provided, that in no event shall The Investor be liable for any amount
in excess of the sales proceeds of the Registrable Securities sold by
it.
(iii) Promptly after receipt by a person entitled to
indemnification under this Section 7.3(c) (an "indemnified party") of
notice of the commencement of any action or claim relating to any
registration statement as to which indemnity may be sought hereunder,
such indemnified party of its election so to assume the defense
thereof, the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof, other than the reasonable cost of investigation,
provided that no indemnifying party shall enter into any settlement
without the prior written consent of the indemnified party unless such
indemnified party is fully released and discharged from any such
liability. Notwithstanding the foregoing, the indemnified party shall
have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party unless (A) the employment of such counsel shall have
been authorized in writing by the indemnifying party in connection with
the defense of such suit, action, claim or proceeding, (B) the
indemnifying party shall not have employed counsel (reasonably
satisfactory to the indemnified party) to take charge of the defense of
such action, suit, claim or proceeding, or (C) such indemnified party
shall have reasonably concluded, based upon the advice of counsel, that
there may be defenses available to it which are different from or
additional to those available to the indemnifying party which, if the
indemnifying party and the indemnified party were to be represented by
the same counsel, could result in a conflict of interest for such
counsel or materially prejudice the prosecution of the defenses
available to such counsel or materially prejudice the prosecution of
the defenses available to such indemnified party. If any of the event
specified in clauses (A), (B) or (C) of the preceding sentence shall
14
have occurred or shall otherwise be applicable, then the fees and
expenses of one counsel or firm of counsel selected by a majority in
interest of the indemnified parties (and reasonably acceptable to the
indemnifying party) shall be borne by the indemnifying party. If, in
any such case, the indemnified party employs separate counsel, the
indemnifying party shall not have the right to direct the defense of
such action, suit, claim or proceeding on behalf of the indemnified
party and the indemnified party shall assume such defense and/or settle
such action; provided, however, that, an indemnifying party shall not
be liable for the settlement of any action, suit, claim or proceeding
effected without its prior written consent, which consent shall not be
unreasonably withheld.
7.4 (a) . The Investor agrees to comply with such customary
lock-up or black-out restrictions on transfer as may be requested by the Company
or any underwriter in connection with a public offering of the Company's
securities after the Effective Date, provided that in no event shall the
Investor be required to comply with any such lock-up or black-out for a period
in excess of 180 days from the completion of such offering. In the event a
request for filing of the Registration Statement is made prior during such
lock-up or black-out, the Company shall prepare the Registration Statement for
filing but shall not be required to file the Registration Statement prior to the
expiration of such lock-up or black-out. No transfer in violation of this
Agreement shall be made or recorded on the books of the Company and any such
Transfer or purported Transfer shall be void ab initio and of no force or
effect.
(b) The Investor agrees to suspend, upon request of the
Company, any disposition of Registrable Securities pursuant to the Registration
Statement during any period, not to exceed one 90-day period per 12-month
period, if the Board of Directors of the Company determines in good faith that
the disclosure of material undisclosed circumstances or developments with
respect to the Company would be required in such a prospectus and that such
disclosure would interfere with any material financing, acquisition, merger,
reorganization or other transaction involving the Company, would have an adverse
effect on the Company or is otherwise inadvisable, provided that in such event,
the Company shall furnish to the Investor a certificate signed by its chief
executive officer setting forth in reasonable detail the basis for requesting
such suspension.
7.5 Any registration statement filed pursuant to this Section
7.1 may include other securities of the Company, with respect to which
registration rights have been granted, and may include securities of the Company
being sold for the account of the Company, provided that in the event the
related registration is underwritten, the inclusion of the Registrable
Securities sought to be included in such registration by the Investor shall take
priority over the inclusion of such other securities.
Section 8. Covenants of the Company.
8.1 Use of Proceeds. The Company, without the consent of the
Investor, will not use any of the proceeds of the purchase and sale of
Securities hereunder to (a) repay any indebtedness of the Company owed to
officers, directors, employees or principal stockholders of the Company or (b)
redeem, repurchase or otherwise acquire any equity security of the Company.
15
8.2 Expenses of the Offering. The Company shall be responsible
for and shall bear all expenses incurred in connection with the transactions
contemplated hereby, provided that the Company shall not be obligated to
reimburse the Investor for in excess of $2,500 of out-of-pocket expenses
incurred by the Investor.
8.3 Blue Sky. The Company shall use its best efforts to
qualify the Securities for offering and sale under exemptions from qualification
or registration requirements under the securities or "blue sky" laws of such
jurisdictions as the Investor may reasonably request; provided, however, that
the Company will not be obligated to qualify as a dealer in securities in any
jurisdiction in which it is not so qualified, execute a general consent to
service of process or to qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified.
8.4 Form D Filing. The Company shall file five copies of a
Notice of Sale of Securities on Form D with the SEC no later than 15 days after
the Effective Date. The Company shall also comply with any filing requirement
imposed by the laws of New York in connection with the transactions contemplated
hereby.
8.5 No Statements. The Company shall not use the name of the
Investor or any officer, director, employee or shareholder thereof without the
express written consent of such party, except to the extent required to comply
with applicable law. On the Effective Date, the Company shall be entitled to
issue a press release relating to the transactions contemplated by this
Agreement with the consent of the Investor, which consent shall not be
unreasonably withheld.
Section 10. Miscellaneous.
10.1 Any notice or other communication given hereunder shall
be deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested, or delivered by hand against written receipt therefor,
addressed to: Discovery Laboratories, Inc., 000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000 Attn: Xxxxxx X. Xxxxxxxx, Ph.D., Chief Executive Officer,
and to the Investor, or either of them, at ,____________________________________
_______________ Attention:_________________ . Notices shall be deemed to have
been given or delivered on the date of mailing, except notices of change of
address, which shall be deemed to have been given or delivered when received.
10.2 This Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. Notwithstanding the foregoing, the
Investor shall not be permitted to assign their rights pursuant to Article 7 to
any person or entity acquiring less than 50% of the Shares acquired by the
Investor hereunder.
16
10.3 This Agreement sets forth the entire agreement and
understanding among the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings pertaining to
the subject matter hereof. This Agreement may be amended only by mutual written
agreement of the Company and the Investor, and the Company may take any action
herein prohibited or omit to take any action herein required to be performed by
it, and any breach of any covenant, agreement, warranty or representation may be
waived, only if the Company has obtained the written consent or waiver of the
Investor.
10.4 (a) Notwithstanding the place where this Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the laws of the State of New York without regard to that State's conflicts of
law principles. In the event that a judicial proceeding is necessary, the sole
forum for resolving disputes arising out of or relating to this agreement is the
Supreme Court of the State of New York in and for the County of New York or the
Federal Courts for such state and county, and all related appellate courts
(collectively, the "New York Courts"). The parties hereby irrevocably and
unconditionally consent to the jurisdiction of such courts.
(b) Each of the parties hereby irrevocably and unconditionally
consents to venue in the New York Courts, and hereby irrevocably and
unconditionally waives any objection to the laying of venue of any judicial
proceeding in the New York Courts, and agrees not to plead or claim in any such
New York Court that any such judicial proceeding brought in any such court has
been brought in an inconvenient forum.
(c) Each of the parties agree that service of any process,
summons, notice or document by registered or certified mail, postage prepaid, to
its address set forth in Section 10.1 shall be effective service or process for
any suits, actions or other proceedings brought in the New York Courts. The
parties may use any other legally available means for service of process.
(d) Each of the parties waives the right to a trial by jury in
any action under this Agreement or any judicial proceeding arising out of the
transactions contemplated hereby, regardless of which party initiates such
judicial proceeding.
10.5 The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and
effect. If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, such provision shall be interpreted so as to remain
enforceable to the maximum extent permissible consistent with applicable law and
the remaining conditions and provisions or portions thereof shall nevertheless
remain in full force and effect and enforceable to the extent they are valid,
legal and enforceable, and no provisions shall be deemed dependent upon any
other covenant or provision unless so expressed herein.
17
10.6 It is agreed that a waiver by either party of a breach of
any provision of this Agreement shall not operate, or be construed, as a waiver
of any subsequent breach by that same party.
10.7 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Agreement. Any documentary, registration, stamp tax or similar issuance or
transfer taxes due as a result of the conveyance, transfer or sale of the Shares
between any of the Investor (or any of their permitted transferees), on the one
hand, and the Company, on the other hand, pursuant to this Agreement shall be
borne by such Investor (or their respective permitted transferees). Except as
otherwise provided in this Agreement, each party will pay its own expenses
incident to this Agreement.
10.8 This Agreement may be executed in two or more
counterparts each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
10.9 Nothing in this Agreement shall create or be deemed to
create in any person or entity not a party to this Agreement any legal or
equitable right, remedy or claim under this Agreement, and this Agreement shall
be for the sole and exclusive benefit of the parties hereto. The parties hereto
expressly recognize that this Agreement is not intended to create a partnership,
joint venture or other similar arrangement between or among any of such parties
or their respective affiliates.
10.10 No press release or other public disclosure relating to
the transactions contemplated by this Agreement shall be issued or made by or on
behalf of any party hereto without prior consultation with the other party,
except as required by applicable law, court process or stock exchange rules, and
except that the parties may issue press releases and make other public
disclosure consistent with the general terms of the transactions contemplated by
this Agreement. In addition, the parties shall agree on the content of the
initial press release regarding such transactions.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the date first above written.
DISCOVERY LABORATORIES, INC.
By:__________________________
Name:
Title:
[ ]
By:__________________________
Name:
Title:
18
EXHIBIT B
[ ], 1999
To___________________:
Discovery Laboratories, Inc.
Dear Sirs:
We have acted as counsel to Discovery Laboratories, Inc., a
Delaware corporation, (the "Company") in connection with its offering, issuance
and sale of 345,744 shares of Common Stock, par value $.001 per share (the
"Common Stock"), of the Company, and warrants (the "Warrants") to purchase
345,744 shares of Common Stock (collectively, the "Securities"). The Securities
are being issued and sold on the date hereof by the Company pursuant to the
Stock and Warrant Purchase Agreement (the "Purchase Agreement") between the
Company and the purchasers (the "Purchasers") that are named on Exhibit A at a
closing held on the date hereof. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement.
We have examined certain documents delivered in connection
with the offering, sale and purchase of the Units by the Purchasers, including,
without limitation, (i) the Purchase Agreement and (ii) the Warrants
(collectively, the "Offering Documents"). We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of certificates
of public officials and corporate records, instruments and documents of or
affecting the Company, as well as certificates of officers or representatives of
the Company. We have also reviewed such questions of law and made such other
inquiries, as we have deemed necessary or appropriate for the purpose of
rendering this opinion.
In rendering our opinion, we have relied, as to matters of
fact, upon the representations and warranties of the Company and the Purchasers
which are set forth in the Offering Documents, and upon certificates and other
instruments of the Company, the representations and warranties made by the
Purchasers in the Purchase Agreement, the Warrants and, where applicable, the
certificates of officers or representatives of the Company; which we have
assumed to be true and correct without independent investigation or
verification. Additionally, without any independent investigation or
verification, we have assumed (i) the genuineness of all signatures other than
persons signing on behalf of the Company, (ii) the authenticity of all documents
submitted to us as originals and the conformity with the original documents of
19
all documents submitted to us as certified, conformed or photostatic copies,
(iii) the authority of all persons signing any document other than persons
signing on behalf of the Company, and (iv) that all future offers, sales and
issuances which may be integrated pursuant to Rule 502 of the Securities Act of
1933 (the "Act") with the offer, sale and issuance of the Securities meet all of
the terms and conditions of Regulation D of the Act. We also call your attention
to the fact that we have not made any independent inquiries of the Purchasers
and the Company except as set forth in such documents, certificates or other
instruments.
Based upon the foregoing, and subject to the limitations,
qualifications, assumptions and exceptions set forth herein, we are of opinion
that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to
execute, deliver and perform the Offering Documents. The Company has taken all
corporate action necessary to authorize the execution, delivery and performance
of the Offering Documents, provided that the Warrants have been approved on
terms providing for their redemption, at the option of the Company, in the event
the Common Stock trades at a price in excess of 250% of the Per Share Exercise
Price. We hereby undertake to supplement this opinion to confirm terms providing
for their redemption, at the option of the Company, in the event the Common
Stock trades at a price in excess of 300% of the Per Share Exercise Price upon
ratification of such terms by the Company's board of directors.
3. Each of the Offering Documents constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other laws relating to
creditors' rights generally or by equitable principles (whether considered in an
action at law or in equity).
4. The execution and delivery of each of the Offering
Documents by the Company and the consummation of the transactions contemplated
thereby by the Company does not violate any provision of the Restated
Certificate of Incorporation or By-Laws of the Company.
5. The Common Stock issued pursuant to and in accordance with
the Purchase Agreement has been duly authorized for issuance by the Company and,
has been validly issued, and is fully paid and non-assessable. The Warrants
issued pursuant to and in accordance with the Purchase Agreement have been duly
authorized for issuance by the Company and have been validly issued.
6. The Common Stock reserved for issuance upon exercise of the
Warrants has been duly authorized and reserved for future issuance by the
Company and, upon issuance in accordance with the terms of the Warrants will be
validly issued, fully paid and non-assessable. The Common Stock reserved for
issuance upon any adjustment of the Per Share Price (as defined in the Purchase
Agreement) pursuant to Section 2 of the Purchase Agreement has been duly
authorized and reserved for future issuance by the Company and, upon issuance in
accordance with the terms of the Warrants will be validly issued, fully paid and
non-assessable.
20
7. The offer, sale and issuance of the Securities, and the
issuance of Common Stock upon exercise of the Warrants, in each case under the
circumstances contemplated by the Offering Documents, under existing law
constitute transactions exempt from the registration provisions of the Act. We
express no opinion as to when or under what circumstances the Securities or the
Common Stock issuable upon exercise of the Warrants may be re-offered or
re-sold.
We express no opinion on any provisions of any Offering
Document relating to indemnification or waivers to the extent that such
indemnification or waivers may be held to be unenforceable because they are in
violation of public policy.
Members of this Firm are admitted to practice law only in the
State of New York and do not purport to be experts on, and are not expressing
any opinion with respect to, any laws other than the laws of the State of New
York, the Federal securities laws of the United States of America and the
General Corporation Law of the State of Delaware. We assume no obligation to
supplement this opinion if any applicable laws change after the date hereof or
if we become aware of any facts that might change the opinions expressed herein
after the date hereof.
This opinion is being furnished solely for the benefit of the
Purchasers and may not be relied on by or furnished to any other person, or
used, circulated, quoted or otherwise referred to for any other purpose, without
the express prior written consent of this Firm.
Very truly yours,
21
