EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
INHIBITEX, INC.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Ladies & Gentlemen:
The undersigned, _________________________________(the "Investor"), hereby
confirms its agreement with you as follows:
1. This Securities Purchase Agreement is made as of August 17, 2005 between
Inhibitex, Inc., a Delaware corporation (the "Company"), and the Investor.
2. The Company has authorized the sale and issuance of up to 5,000,000 shares
(the "Shares") of common stock of the Company, $0.001 par value per share (the
"Common Stock"), to certain investors in a private placement (the "Offering").
3. The Company and the Investor agree that the Investor will purchase from
the Company and the Company will issue and sell to the Investor ___________
Shares for a purchase price of $8.25 per Share, or an aggregate purchase price
of $_______________, pursuant to the Terms and Conditions for Purchase of Shares
attached hereto as Annex I and incorporated herein by reference as if fully set
forth herein (the "Terms and Conditions"). This Securities Purchase Agreement,
together with the Terms and Conditions which are incorporated herein by
reference as if fully set forth herein, may hereinafter be referred to as the
"Agreement". Unless otherwise requested by the Investor, the certificates
representing the Shares purchased by the Investor will be registered in the
Investor's name and address as set forth below.
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose. By executing
this Agreement, the Investor acknowledges that the Company may use the
information in paragraph 4 above and the name and address information below in
preparation of the Registration Statement (as defined in Annex 1). This
Agreement may be executed in separate counterparts, each of which shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.
AGREED AND ACCEPTED:
Inhibitex, Inc. Investor: ______________________________
_________________________________ By: ___________________________________
By: Print Name:
Title: Title:
Address: _______________________________
________________________________________
Tax ID No.: ____________________________
Contact name: __________________________
Telephone: _____________________________
Name in which shares should be registered
(if different):
________________________________________
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. Authorization and Sale of the Shares. Subject to these Terms and
Conditions, the Company has authorized the sale of up to 5,000,000 Shares. The
Company reserves the right to increase or decrease this number.
2. Agreement to Sell and Purchase the Shares; Subscription Date.
2.1 At the Closing (as defined in Section 3), the Company will sell
to the Investor, and the Investor will purchase from the Company, upon the terms
and conditions hereinafter set forth, the number of Shares as set forth in
Section 3 of the Securities Purchase Agreement to which these Terms and
Conditions are attached at the purchase price set forth thereon.
2.2 The Company may enter into the same form of Securities Purchase
Agreement, including these Terms and Conditions, with certain other investors
(the "Other Investors") and expects to complete sales of Shares to them. The
Investor and the Other Investors are hereinafter sometimes collectively referred
to as the "Investors," and the Securities Purchase Agreement to which these
Terms and Conditions are attached and the Securities Purchase Agreements
(including attached Terms and Conditions) executed by the Other Investors are
hereinafter sometimes collectively referred to as the "Agreements." The Company
may accept executed Agreements from Investors for the purchase of Shares
commencing upon the date on which the Company provides the Investors with the
proposed purchase price per Share and concluding upon the date (the
"Subscription Date") on which the Company has notified Lazard Capital Markets
LLC, in its capacity as placement agent for this transaction, in writing that it
is no longer accepting additional Agreements from Investors for the purchase of
Shares. The Company may not enter into any Agreements after the Subscription
Date.
2.3 The obligations of each Investor under any Agreement are several
and not joint with the obligations of any Other Investor, and no Investor shall
be responsible in any way for the performance of the obligations of any other
Investor under any Agreement. Nothing contained herein, and no action taken by
any Investor hereto, shall be deemed to constitute the Investors as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Investors are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated hereby,
provided that such obligations or the transactions contemplated hereby may be
modified, amended or waived in accordance with Section 9 below. Each Investor
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement (provided, that such
rights may be modified, amended or waived in accordance with Section 9 below),
and it shall not be necessary for any Other Investor to be joined as an
additional party in any proceeding for such purpose.
3. Delivery of the Shares at Closing. It is expected that the
completion of the purchase and sale of the Shares (the "Closing") shall occur on
or about August 22, 2005 (the "Closing Date"), at the offices of the Company's
counsel. At the Closing, the Company shall deliver to the Investor one or more
stock certificates representing the number of Shares, in each case as is set
forth in Section 3 of the Securities Purchase Agreement, each such certificate
to be registered in the name of the Investor or, if so indicated on the
signature page of the Securities Purchase Agreement, in the name of a nominee
designated by the Investor.
The Company's obligation to issue the Shares to the Investor shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) receipt by the Company of a certified or official bank check or
wire transfer of funds in the full amount of the purchase price for the Shares
being purchased hereunder as set forth in Section 3 of the Securities Purchase
Agreement; (b) completion of the purchases and sales under the Agreements with
the Other Investors; and (c) the accuracy of the representations and warranties
made by the Investors and the fulfillment of those undertakings of the Investors
to be fulfilled prior to the Closing.
The Investor's obligation to purchase the Shares shall be subject to the
following conditions, any one or more of which may be waived by the Investor:
(a) the representations and warranties of the Company set forth herein shall be
true and correct as of the Closing Date (except for representations and
warranties that speak as of a specific date, which representations and
warranties shall be true and correct as of such date) in all material respects
and the fulfillment in all material respects of those undertakings of the
Company in this Agreement to be fulfilled on or prior to the Closing Date and
(b) the Investor shall have received such documents as such Investor shall
reasonably have requested, including, a standard opinion of the Company's
counsel including as to the matters set forth in Section 4.2 and as to exemption
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), of the sale of the Shares.
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4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Investor, as
follows:
4.1 Organization. The Company is duly organized and validly existing
in good standing under the laws of the State of Delaware. The Company has full
power and authority to own or lease its properties and to conduct its business
as presently conducted and as described in the documents filed by the Company
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "Exchange Act"), since the end of its
most recently completed fiscal year through the date hereof, including, without
limitation, its most recent report on Form 10-K (the "Exchange Act Documents")
and is registered or qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted by it or the location
of the properties owned or leased by it requires such qualification and where
the failure to be so qualified would have a material adverse effect upon the
condition (financial or otherwise), earnings, business or business prospects,
properties or operations of the Company (a "Material Adverse Effect"), and no
proceeding has been instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification. The Company has no subsidiaries (as defined in Rule 405 of the
Securities Act).
4.2 Due Authorization and Valid Issuance. The Company has all
requisite corporate power and authority to execute, deliver and perform its
obligations under the Agreements, and the Agreements have been duly authorized
and validly executed and delivered by the Company and constitute legal, valid
and binding agreements of the Company enforceable against the Company in
accordance with their terms, except as rights to indemnity and contribution may
be limited by state or federal securities laws or the public policy underlying
such laws, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The Shares
being purchased by the Investor hereunder will, upon issuance and payment
therefor pursuant to the terms hereof, be duly authorized, validly issued,
fully-paid and nonassessable.
4.3 Non-Contravention. The execution and delivery of the Agreements,
the issuance and sale of the Shares under the Agreements, the fulfillment of the
terms of the Agreements and the consummation of the transactions contemplated
thereby will not (A) conflict with or constitute a violation of, or default
(with the passage of time or otherwise) under, (i) any bond, debenture, note or
other evidence of indebtedness, lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or instrument to which
the Company is a party or by which it or its properties are bound, (ii) the
charter, by-laws or other organizational documents of the Company, or (iii) any
law, administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company or its
properties, except in the case of clauses (i) and (iii) for any such conflicts,
violations or defaults that are not reasonably likely to have a Material Adverse
Effect or (B) result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the properties or
assets of the Company or an acceleration of indebtedness pursuant to any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or any indenture, mortgage, deed of trust or any
other agreement or instrument to which the Company is a party or by which it is
bound or to which any of the material property or assets of the Company is
subject, except for such liens, encumbrances, claims, security interests or
restrictions upon any of the properties or assets of the Company or
accelerations of indebtedness that are not reasonably likely to have a Material
Adverse Effect. No consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body, administrative
agency, or other governmental body or any other person is required for the
execution and delivery of the Agreements, and the valid issuance and sale of the
Shares to be sold pursuant to the Agreements, other than such as have been made
or obtained, and except for any post-closing securities filings or notifications
required to be made under federal or state securities laws.
4.4 Capitalization. The capitalization of the Company as of June 30,
2005 is as set forth in the most recent applicable Exchange Act Documents,
increased as set forth in the next sentence. The Company has not issued any
capital stock since that date other than pursuant to (i) employee benefit plans
disclosed in the Exchange Act Documents, or (ii) outstanding warrants, options
or other securities disclosed in the Exchange Act Documents. The Shares to be
sold pursuant to the Agreements have been duly authorized and, when they are
issued and paid for in accordance with the terms of the Agreements, will be duly
and validly issued, fully paid and nonassessable. The outstanding shares of
capital stock of the Company have been duly and validly issued and are fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws, and were not issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. Except as set forth
in or contemplated by the Exchange Act Documents, and other than options issued
to officers, directors and employees of the Company under its employee benefit
plans, there are no outstanding rights (including, without limitation,
preemptive rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any unissued shares of capital stock or other equity
interest in the Company, or any contract, commitment, agreement, understanding
or arrangement of any kind to which the Company is a party or of which the
Company has knowledge and relating to the issuance or sale of any capital stock
of the Company, any such
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convertible or exchangeable securities or any such rights, warrants or options.
Without limiting the foregoing, no preemptive right, co-sale right, right of
first refusal or other similar right exists with respect to the Shares or the
issuance and sale thereof. No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is required for the
issuance and sale of the Shares. Except as disclosed in the Exchange Act
Documents, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Common Stock to which the Company is a
party or, to the knowledge of the Company, between or among any of the Company's
stockholders. The issuance and sale of the Shares will not result in a right of
any current holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities. Subject to the filing of the
notification with the Nasdaq National Market, the issuance and sale of the
Shares under this Agreement does not contravene the rules and regulations of the
Nasdaq National Market, and, in furtherance of the foregoing sentence, no
approval of the stockholders of the Company thereunder is required for the
Company to issue and deliver to the Investor the maximum number of Shares
contemplated by this Agreement.
4.5 Legal Proceedings; Disagreements with Advisors. There is no
material legal or governmental investigations, actions, suits or proceeding
pending or, to the knowledge of the Company, threatened to which the Company is
or may be a party or of which the business or property of the Company is subject
that is not disclosed in the Exchange Act Documents. There are no material
disagreements presently existing, or reasonably anticipated by the Company to
arise, between the accountants formerly or presently employed by the Company.
4.6 No Violations. The Company is not (i) in violation of its
charter, bylaws, or other organizational document; (ii) in violation of any
federal, state or local law, administrative regulation, ordinance or order of
any court or governmental agency, arbitration panel or authority applicable to
the Company, which violation, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect; or (iii) in default (and
there exists no condition which, with the passage of time or otherwise, would
constitute a default) in the performance of any bond, debenture, note or any
other evidence of indebtedness in any indenture, mortgage, deed of trust or any
other agreement or instrument to which the Company is a party or by which the
Company is bound or by which the properties of the Company are bound, which
would be reasonably likely to have a Material Adverse Effect.
4.7 Governmental Permits, Etc. With the exception of the matters
which are dealt with separately in Sections 4.1, 4.12, 4.13, and 4.14, the
Company has all necessary franchises, licenses, certificates and other
authorizations from any foreign, federal, state or local government or
governmental agency, department, or body that are currently necessary for the
operation of the business of the Company as currently conducted and as described
in the Exchange Act Documents except where the failure to currently possess
would not have a Material Adverse Effect.
4.8 Intellectual Property. Except as specifically disclosed in the
Exchange Act Documents (i) the Company owns or possesses sufficient rights to
use all patents, patent rights, trademarks, copyrights, licenses, inventions,
trade secrets, trade names and know-how (including trade secrets and other
unpatented and/or unpatentable property or confidential information, systems,
processes or procedures) (collectively, "Intellectual Property") described or
referred to in the Exchange Act Documents as owned or possessed by it or that
are necessary for the conduct of its business as now conducted as described in
the Exchange Act Documents except where the failure to currently own or possess
would not have a Material Adverse Effect, (ii) the Company is not infringing,
and has not received any notice of, and has no knowledge of, any asserted
infringement by the Company of any rights of a third party with respect to any
Intellectual Property that, individually or in the aggregate, would have a
Material Adverse Effect and (iii) the Company has not received any notice of,
and has no knowledge of, infringement by a third party with respect to any
Intellectual Property rights of the Company that, individually or in the
aggregate, would have a Material Adverse Effect. Further, except as described in
the Exchange Act Documents or exhibits thereto, or as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect,
no third party, including any academic or governmental organization, possesses
rights to the Intellectual Property which, if exercised, could enable such third
party to develop products competitive with the business of the Company as
currently being conducted.
4.9 Financial Statements; Obligations to Related Parties. (a) The
financial statements of the Company and the related notes contained in the
Exchange Act Documents present fairly, in accordance with generally accepted
accounting principles, the financial position of the Company as of the dates
indicated, and the results of its operations and cash flows for the periods
therein specified consistent with the books and records of the Company except
that the unaudited interim financial statements were or are subject to normal
and recurring year-end adjustments which are not expected to be material in
amount. Such financial statements (including the related notes) have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods therein specified, except as may be
disclosed in the notes to such financial statements, or in the case of unaudited
statements, as may be permitted by the Securities and Exchange Commission (the
"SEC") on Form 10-Q under the Exchange Act and except as disclosed in the
Exchange Act Documents. The other financial information contained in the
Exchange Act Documents has been prepared on a basis consistent with the
financial statements of the Company. As of their respective dates, the financial
statements of the
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Company included in the Exchange Act Documents complied as to form in all
material respects with applicable accounting requirements and published rules
and regulations of the SEC with respect thereto.
(b) Except as set forth in any Exchange Act Documents, there are no
obligations of the Company to officers, directors, stockholders or employees of
the Company other than (i) for payment of salary for services rendered and for
bonus payments; (ii) reimbursements for reasonable expenses incurred on behalf
of the Company; (iii) for other standard employee benefits made generally
available to all employees (including stock option agreements outstanding under
any stock option plan approved by the Board of Directors of the Company); and
(iv) obligations listed in the Company's financial statements.
4.10 No Material Adverse Change. Except as disclosed in the Exchange
Act Documents, since June 30, 2005, there has not been (i) any material adverse
change in the financial condition or earnings of the Company, (ii) any material
adverse event affecting the Company, (iii) any obligation, direct or contingent,
that is material to the Company, incurred by the Company, except obligations
incurred in the ordinary course of business, (iv) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company, or (v)
any loss or damage (whether or not insured) to the physical property of the
Company which has been sustained which has a Material Adverse Effect.
4.11 Disclosure. The representations and warranties of the Company
contained in this Section 4 as of the date hereof and as of the Closing Date, do
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. Except
with respect to the material terms and conditions of the transaction
contemplated by the Agreements, the anticipated use of the proceeds therefrom,
which shall be publicly disclosed by the Company pursuant to Section 16 hereof,
the Company confirms that neither it nor any person acting on its behalf has
provided the Investors with any information that the Company believes
constitutes material, non-public information. The Company understands and
confirms that the Investors will rely on the foregoing representations in
effecting transactions in the securities of the Company.
4.12 NASDAQ Compliance. The Company's Common Stock is registered
pursuant to Section 12(g) of the Exchange Act and is listed on The Nasdaq Stock
Market, Inc. National Market (the "Nasdaq National Market"), and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or de-listing the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the SEC or the National Association of Securities Dealers,
Inc. ("NASD") is contemplating terminating such registration or listing.
4.13 Reporting Status. The Company has filed in a timely manner all
documents that the Company was required to file under the Exchange Act during
the 12 months preceding the date of this Agreement and is eligible to use Form
S-3 to register the Shares to be offered for the account of the Investors. The
following documents complied in all material respects with the SEC's
requirements as of their respective filing dates, and the information contained
therein as of the date thereof did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein in light of the circumstances under which they
were made not misleading:
(a) the Annual Report on Form 10-K for the fiscal year ended
December 31, 2004, filed by the Company with the SEC on March 28,
2005;
(b) the Quarterly Report on Form 10-Q for the quarter ended March
31, 2005, filed by the Company with the SEC on May 10, 2005;
(c) the Quarterly Report on Form 10-Q for the quarter ended June 30,
2005, filed by the Company with the SEC on August 15, 2005; and
(d) all other documents, if any, filed by the Company with the SEC
during the period from the date of filing the Annual Report on Form
10-K for the fiscal year ended December 31, 2004 which was filed
with the SEC on March 28, 2005 to the date of this Agreement
pursuant to the reporting requirements of the Exchange Act.
4.14 Listing. The Company shall use reasonable commercial efforts to
comply with all requirements of the NASD and SEC with respect to the issuance of
the Shares and the listing of the Shares on the Nasdaq National Market.
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4.15 No Manipulation of Stock. The Company has not taken and will
not, in violation of applicable law, take, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares.
4.16 Company not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the "Investment Company Act"). The Company is not, and immediately
after receipt of payment for the Shares will not be, an "investment company" or
an entity "controlled" by an "investment company" within the meaning of the
Investment Company Act and shall conduct its business in a manner so that it
will not become subject to the Investment Company Act.
4.17 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 corrupt 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.
4.18 Accountants. To the Company's knowledge, Ernst & Young LLP, who
the Company expects will consent to the inclusion (or incorporation by
reference, as the case may be) of its report dated March 24, 2005 with respect
to the financial statements included in the Annual Report on Form 10-K for the
fiscal year ended December 31, 2004 into the Registration Statement (as defined
below) and the prospectus which forms a part thereof, are and, during the
periods covered by their reports, were independent accountants as required by
the Securities Act.
4.19 Contracts. The contracts described in the Exchange Act
Documents that are material to the Company are in full force and effect on the
date hereof, and neither the Company nor, to the Company's knowledge, any other
party to such contracts is in breach of or default, or received a notice of
termination under any of such contracts which would have a Material Adverse
Effect. The Company has filed with the SEC all contracts and agreements required
to be filed by the Exchange Act.
4.20 Taxes. The Company has filed (or has obtained an extension of
time within which to file) all necessary federal, state and foreign income and
franchise tax returns and has paid all taxes shown as due on such tax returns,
except where the failure to so file or the failure to so pay would not have a
Material Adverse Effect. The Company is not aware of any tax deficiency that has
been or might be asserted or threatened against it that would have a Material
Adverse Effect.
4.21 Private Offering. Assuming the correctness of the
representations and warranties of the Investors set forth in Section 5 hereof
and assuming that Lazard Capital Markets LLC has not offered or sold any of the
Shares by any form of general solicitation or advertising, the offer and sale of
Shares hereunder is exempt from registration under the Securities Act. The
Company has not distributed and will not distribute prior to the Closing Date
any offering material in connection with this Offering and sale of the Shares
other than the documents of which this Agreement is a part or the Exchange Act
Documents. The Company has not in the past nor will it hereafter take any action
independent of the placement agent to sell, offer for sale or solicit offers to
buy any securities of the Company which would bring the offer, issuance or sale
of the Shares as contemplated by this Agreement within the provisions of Section
5 of the Securities Act, unless such offer, issuance or sale was or shall be
within the exemptions of Section 4 of the Securities Act. Neither the Company
nor any person acting on behalf of the Company (other than Lazard Capital
Markets LLC) has offered or sold any of the Shares by any form of general
solicitation or general advertising. The Company has offered the Shares for sale
only to the Investors and certain other "accredited investors" within the
meaning of Rule 501 under the Securities Act.
4.22 Disclosure Controls and Procedures. The Company is in material
compliance with all provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are
applicable to it as of the Closing Date. The Company maintains a system of
internal control over financial reporting (as such term is defined in the
Exchange Act) sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company's certifying officers are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in the Exchange Act) for the Company and they have (a) designed such
disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under their supervision, to ensure that material
information
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relating to the Company is made known to the certifying officers by others
within those entities, particularly during the periods in which the Company's
filings under the Exchange Act have been prepared; (b) evaluated the
effectiveness of the Company's disclosure controls and procedures and presented
in the Company's filings under the Exchange Act their conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
periods covered by such filings under the Exchange Act based on such evaluation;
and (c) since the last evaluation date referred to in (b) above, there has been
no change in the Company's internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting (as such term is defined in the
Exchange Act) or, to the Company's knowledge, in other factors that could
significantly affect the Company's internal control over financial reporting.
4.23 Transactions With Affiliates. There are no business
relationships or related-party transactions involving the Company or any other
person required to be described in the Exchange Act Documents that have not been
described as required.
4.24 No Registration Rights. Upon the filing of the Registration
Statement (as defined below), no person will have the right, which right has not
been waived, to require the Company to register any securities for sale under
the Securities Act by reason of the filing of the Registration Statement with
the SEC or the issuance and sale of the Shares.
4.25 Company Acknowledgement of Investor Representation. The Company
acknowledges and agrees that Investor does not make or has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Sections 5 and 16(a) of this
Agreement, or in the Investor Questionnaire.
5. Representations, Warranties and Covenants of the Investor.
5.1 The Investor represents and warrants to, and covenants with, the
Company that: (i) the Investor is an "accredited investor" as defined in
Regulation D under the Securities Act and the Investor is also knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions with
respect to investments in shares presenting an investment decision like that
involved in the purchase of the Shares, including investments in securities
issued by the Company and investments in comparable companies, and has
requested, received, reviewed and considered all information it deemed relevant
in making an informed decision to purchase the Shares; (ii) the Investor is
acquiring the Shares set forth in Section 3 of the Securities Purchase Agreement
in the ordinary course of its business and for its own account for investment
only and with no present intention of distributing any of such Shares (other
than pursuant to the Registration Statement) or any arrangement or understanding
with any other persons regarding the distribution of such Shares; (iii) the
Investor will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Shares except in compliance with the
Securities Act, applicable state securities laws and the respective rules and
regulations promulgated thereunder; (iv) the Investor has answered all questions
on the Investor Questionnaire for use in preparation of the Registration
Statement and the answers thereto are true, correct and complete as of the date
hereof and will be true, correct and complete as of the Closing Date and the
Filing Date; (v) the Investor will notify the Company immediately of any change
in any of such information until such time as the Investor has sold all of its
Shares or until the Company is no longer required to keep the Registration
Statement effective; and (vi) the Investor has, in connection with its decision
to purchase the number of Shares set forth in Section 3 of the Securities
Purchase Agreement relied only upon the Exchange Act Documents and the
representations and warranties of the Company contained herein. The Investor
understands that its acquisition of the Shares has not been registered under the
Securities Act or registered or qualified under any state securities law in
reliance on specific exemptions therefrom, which exemptions may depend upon,
among other things, the bona fide nature of the Investor's investment intent as
expressed herein. Subject to compliance with the Securities Act, applicable
securities laws and the respective rules and regulations promulgated thereunder,
nothing contained herein shall be deemed a representation or warranty by such
Investor to hold the Shares for any period of time.
5.2 The Investor acknowledges, represents and agrees that no action
has been or will be taken in any jurisdiction outside the United States by the
Company that would permit an offering of the Shares or possession or
distribution of offering materials in connection with the issue of the Shares in
any jurisdiction outside the United States where legal action by the Company for
that purpose is required. Each Investor outside the United States will comply
with all applicable laws and regulations in each foreign jurisdiction in which
it purchases, offers, sells or delivers Shares or has in its possession or
distributes any offering material, in all cases at its own expense.
5.3 The Investor hereby covenants with the Company not to make any
sale of the Shares without complying with the provisions of this Agreement and
without causing the prospectus delivery requirement under the Securities Act to
be satisfied (whether by delivery of the Prospectus or pursuant to and in
compliance with an exemption from such requirement), and the Investor
acknowledges that the certificates evidencing the Shares will be imprinted with
a legend that prohibits their
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transfer except in accordance therewith. The Investor acknowledges that there
may occasionally be times when the Company determines that it must suspend the
use of the Prospectus forming a part of the Registration Statement, as set forth
in Section 7.2(c).
5.4 The Investor further represents and warrants to, and covenants
with, the Company that (i) the Investor has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally,
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the Investors
herein may be legally unenforceable.
5.5 Between the time the Investor learned about the Offering and the
public announcement of the Offering, the Investor has not engaged in any short
sales or similar transactions with respect to the Common Stock, nor has the
Investor, directly or indirectly, caused any person to engage in any short sales
or similar transactions with respect to the Common Stock. Without limiting the
foregoing, Investor will not use any of the Shares acquired pursuant to this
Agreement to cover any short position in the Common Stock of the Company if
doing so would be in violation of applicable securities laws and will otherwise
comply with federal securities laws in the holding and sale of the Shares.
5.6 The Investor understands that nothing in the Exchange Act
Documents, this Agreement or any other materials presented to the Investor in
connection with the purchase and sale of the Shares constitutes legal, tax or
investment advice. The Investor has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares.
6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Shares being purchased and the payment therefor, provided
that the representations and warranties contained herein shall expire on the
one-year anniversary of the Closing Date.
7. Registration of the Shares; Compliance with the Securities Act.
7.1 Registration Procedures and Other Matters. The Company shall:
(a) subject to receipt of necessary information from the
Investors after prompt request from the Company to the Investors to provide such
information, prepare and file with the SEC, within 15 days after the Closing
Date (the "Filing Date"), a registration statement on Form S-3 (the
"Registration Statement") to enable the resale of the Shares by the Investors
from time to time in compliance with the Securities Act;
(b) subject to receipt of necessary information from the
Investors after prompt request from the Company to the Investors to provide such
information, use its best efforts to cause the Registration Statement to become
effective on or prior to the 45th day after the Closing Date (the "Required
Effective Date"). However, so long as the Company filed the Registration
Statement by the Filing Date, if the Registration Statement receives SEC review,
then the Required Effective Date will be the ninetieth (90th) calendar day after
the Closing Date;
(c) use its best efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement in compliance with
applicable laws, and the prospectus used in connection therewith (the
"Prospectus") as may be necessary to keep the Registration Statement current,
effective and free from any material misstatement or omission to state a
material fact for a period not exceeding, with respect to each Investor's Shares
purchased hereunder, the earlier of (i) the second anniversary of the Closing
Date, (ii) the date on which the Investor may sell all Shares then held by the
Investor without restriction by the volume limitations of Rule 144(e) of the
Securities Act, or (iii) such time as all Shares purchased by such Investor in
this offering have been sold pursuant to a registration statement;
(d) furnish to the Investor with respect to the Shares
registered under the Registration Statement such number of copies of the
Registration Statement, Prospectuses and Preliminary Prospectuses in conformity
with the requirements of the Securities Act and such other documents as the
Investor may reasonably request, in order to facilitate the public sale or other
disposition of all or any of the Shares by the Investor;
-7-
(e) file documents required of the Company for blue sky
clearance in states specified in writing by the Investor and use its
commercially reasonable efforts to maintain such blue sky qualifications during
the period the Company is required to maintain the effectiveness of the
Registration Statement pursuant to Section 7.1(c); provided, however, that the
Company shall not be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or has not so
consented;
(f) bear all expenses in connection with the procedures in
paragraph (a) through (e), (h) and the last paragraph of this Section 7.1 and
the registration of the Shares pursuant to the Registration Statement (other
than underwriting discounts or commissions, brokers' fees and similar selling
expenses and any other fees or expenses incurred by the Investor, including
attorneys' fees);
(g) advise the Investor, promptly after it shall receive
notice or obtain knowledge of the issuance of any stop order by the SEC delaying
or suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its commercially reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if such stop
order should be issued; and
(h) include in the Registration Statement a "Plan of
Distribution" section substantially in the form attached hereto as Exhibit A.
Notwithstanding anything to the contrary herein, the Registration
Statement shall cover only the Shares. In no event at any time before the
Registration Statement becomes effective with respect to the Shares shall the
Company publicly announce or file any other registration statement, other than
registrations on Form S-8, without the prior written consent of a majority in
interest of the Investors.
The Company understands that the Investor disclaims being an underwriter,
but the Investor being deemed an underwriter by the SEC shall not relieve the
Company of any obligations it has hereunder; provided, however that if the
Company receives notification from the SEC that the Investor is deemed an
underwriter, then the period by which the Company is obligated to submit an
acceleration request to the SEC shall be extended to the earlier of (i) the 90th
day after such SEC notification, or (ii) 120 days after the initial filing of
the Registration Statement with the SEC.
Within five business days of the effectiveness date of the Registration
Statement, the Company shall give notice to the Investor of such effectiveness
and use its commercially reasonable efforts to cause its counsel to issue an
appropriate opinion or opinions to the transfer agent substantially to the
effect that the shares are subject to an effective registration statement and
can be reissued free of restrictive legend in accordance with provisions of
Section 7.6.
7.2 Transfer of Shares After Registration; Suspension.
(a) The Investor agrees that it will not effect any
disposition of the Shares or its right to purchase the Shares that would
constitute a sale within the meaning of the Securities Act except as
contemplated in the Registration Statement referred to in Section 7.1 and as
described below or as otherwise permitted by law, and that it will promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding the Investor or its plan of distribution. In
connection with any transfer of Shares other than pursuant to an effective
registration statement, to the Company or to an affiliate of the Investor (who
is an accredited investor and executes a customary representation letter), the
Company may require the transferor thereof to provide to the Company an opinion
of counsel which opinion shall be reasonably satisfactory to the Company, to the
effect that such transfer does not require registration of such transferred
Shares under the Securities Act.
(b) Except in the event that paragraph (c) below applies, the
Company shall (i) if deemed necessary by the Company, prepare and file from time
to time with the SEC a post-effective amendment to the Registration Statement or
a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that such Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and so that, as
thereafter delivered to purchasers of the Shares being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (ii) provide the Investor copies of any documents filed pursuant
to Section 7.2(b)(i) as they reasonably request; and (iii) inform each Investor
that the Company has complied with its obligations in Section 7.2(b)(i) (or
that, if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company will notify the
Investor to that effect, will use its best efforts to secure the effectiveness
of
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such post-effective amendment as promptly as possible and will promptly notify
the Investor pursuant to Section 7.2(b)(i) hereof when the amendment has become
effective).
(c) Subject to paragraph (d) below, in the event (i) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related Prospectus or for additional
information; (ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; or (iv) of any event or circumstance which, upon
the good faith judgment of the Company's Board of Directors based on the advice
of its counsel, necessitates the making of any changes in the Registration
Statement or Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; then the Company shall deliver a certificate in
writing to the Investor (the "Suspension Notice") to the effect of the foregoing
and, upon receipt of such Suspension Notice, the Investor will refrain from
selling any Shares pursuant to the Registration Statement (a "Suspension") until
the Investor's receipt of copies of a supplemented or amended Prospectus
prepared and filed by the Company, or until it is advised in writing by the
Company that the current Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in any such Prospectus. In the event of any Suspension, the Company
will use its best efforts to cause the use of the Prospectus so suspended to be
resumed as soon as reasonably practicable within 20 business days after the
delivery of a Suspension Notice to the Investor.
(d) Notwithstanding the foregoing paragraphs of this Section
7.2, the Investor shall not be prohibited from selling Shares under the
Registration Statement as a result of Suspensions on more than two occasions of
not more than 30 days each in any twelve month period, unless, in the good faith
judgment of the Company's Board of Directors based on the advice of its counsel,
the sale of Shares under the Registration Statement in reliance on this
paragraph 7.2(d) would be reasonably likely to cause a violation of the
Securities Act or the Exchange Act and result in liability to the Company.
(e) Provided that a Suspension is not then in effect, the
Investor may sell Shares under the Registration Statement, provided that it
arranges for delivery of a current Prospectus to the transferee of such Shares.
Upon receipt of a request therefor, the Company has agreed to provide an
adequate number of current Prospectuses to the Investor and to supply copies to
any other parties requiring such Prospectuses pursuant to the Securities Act.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" means the Investor and any
affiliate of such Investor;
(ii) the term "Registration Statement" shall include the Prospectus
in the form first filed with the SEC pursuant to Rule 424(b) of the Securities
Act or filed as part of the Registration Statement at the time of effectiveness
if no Rule 424(b) filing is required, and any exhibit, supplement or amendment
included in or relating to the Registration Statement referred to in Section
7.1; and
(iii) the term "untrue statement" for purposes of Section 7.3(d)
hereof shall include any untrue statement or alleged untrue statement, or any
omission or alleged omission to state in the Registration Statement a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless each
Selling Stockholder from and against any losses, claims, damages or liabilities
to which such Selling Stockholder may become subject (under the Securities Act
or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon (i) any
breach of the representations or warranties of the Company contained herein or
failure to comply with the covenants and agreements of the Company contained
herein, (ii) any untrue statement of a material fact contained in the
Registration Statement as amended at the time of effectiveness or any omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any failure by the Company to
fulfill any undertaking included in the Registration Statement as amended at the
time of effectiveness, and the Company will reimburse such Selling Stockholder
for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action,
-9-
proceeding or claim, or preparing to defend any such action, proceeding or
claim, provided, however, that the Company shall not be liable in any such case
to the extent that such loss, claim, damage or liability arises out of, or is
based upon, an untrue statement made in such Registration Statement or any
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Selling
Stockholder specifically for use in preparation of the Registration Statement,
or the failure of such Selling Stockholder to comply with its covenants and
agreements contained in Section 7.2 hereof respecting sale of the Shares or any
statement or omission in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to the Selling Stockholder prior to the pertinent
sale or sales by the Selling Stockholder. The Company shall reimburse each
Selling Stockholder for the amounts provided for herein on demand as such
expenses are incurred as reasonably documented by the Selling Stockholder.
(b) The Investor agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, (i) any failure to comply with the covenants and agreements
contained in Section 7.2 hereof respecting sale of the Shares, (ii) any untrue
statement of a material fact contained in the Registration Statement or any
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading if such untrue statement or omission was
made in reliance upon and in conformity with written information furnished by or
on behalf of the Investor specifically for use in preparation of the
Registration Statement, and the Investor will reimburse the Company (or such
officer, director or controlling person), as the case may be, for any legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim, or (iii) any breach of the
representations and warranties of the Investor contained in Section 5 of this
Agreement; provided that Investor's obligation to indemnify the Company shall be
limited to the net amount received by the Investor from the sale of the Shares.
(c) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this Section 7.3,
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, but the omission to so notify the
indemnifying person will not relieve it from any liability which it may have to
any indemnified person under this Section 7.3 (except to the extent that such
omission materially and adversely affects the indemnifying person's ability to
defend such action) or from any liability otherwise than under this Section 7.3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified person promptly after receiving the aforesaid
notice from such indemnified person, shall be entitled to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified person. After
notice from the indemnifying person to such indemnified person of its election
to assume the defense thereof, such indemnifying person shall not be liable to
such indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such settlement; provided
that such consent shall not be unreasonably withheld. No indemnifying person
shall, without the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification could have
been sought hereunder by such indemnified person, unless such settlement
includes an unconditional release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying person shall contribute to the amount paid or payable by
such indemnified person as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Investor,
as well as any other Selling Stockholders under such registration statement on
the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or an Investor or other Selling
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Stockholder on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement. The
Company and the Investor agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Investor and other Selling Stockholders were treated as
one entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified person as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), the Investor shall not be required to
contribute any amount in excess of the amount by which the net amount received
by the Investor from the sale of the Shares to which such loss relates exceeds
the amount of any damages which such Investor has otherwise been required to pay
by reason of such untrue statement. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Investor's obligations in this subsection to
contribute shall be in proportion to its sale of Shares to which such loss
relates and shall not be joint with any other Selling Shareholders.
(e) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 7.3, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 7.3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act and the Exchange
Act. The parties are advised that federal or state public policy as interpreted
by the courts in certain jurisdictions may be contrary to certain of the
provisions of this Section 7.3, and the parties hereto hereby expressly waive
and relinquish any right or ability to assert such public policy as a defense to
a claim under this Section 7.3 and further agree not to attempt to assert any
such defense.
7.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of the
Shares shall cease and terminate as to any particular number of the Shares when
such shares shall have been effectively registered under the Securities Act and
sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such shares or at
such time as an opinion of counsel reasonably satisfactory to the Company shall
have been rendered to the effect that such conditions are not necessary in order
to comply with the Securities Act.
7.5 Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the Company will
furnish to the Investor:
(a) as soon as practicable after it is available, one copy of
(i) its Annual Report to Stockholders (which Annual Report shall contain
financial statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants), (ii) its Annual
Report on Form 10-K and (iii) its Quarterly Reports on Form 10-Q (the foregoing,
in each case, excluding exhibits);
(b) upon the reasonable request of the Investor, all exhibits
excluded by the parenthetical to subparagraph (a) of this Section 7.5 as filed
with the SEC and all other information that is made available to shareholders;
and
(c) upon the reasonable request of the Investor, an adequate
number of copies of the Prospectuses to supply to any other party requiring such
Prospectuses.
7.6 Legend; Restrictions on Transfer. (a) The certificate or
certificates for the Shares (and any securities issued in respect of or exchange
for the Shares) shall be subject to a legend or legends restricting transfer
under the Securities Act and referring to restrictions on transfer herein, such
legend to be substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES")
HAVE BEEN ISSUED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"),
SECTION 10-5-9(13) OF THE OFFICIAL CODE OF GEORGIA ANNOTATED (THE
"GEORGIA CODE"), AND APPROPRIATE EXEMPTIONS FROM REGISTRATION UNDER
THE SECURITIES LAWS OF OTHER APPLICABLE JURISDICTIONS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED OTHER
THAN PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION
THEREFROM UNDER THE 1933 ACT, THE GEORGIA CODE AND THE APPLICABLE
SECURITIES LAWS OF ANY
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OTHER JURISDICTION. THE ISSUER SHALL BE ENTITLED TO REQUIRE AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT WITH RESPECT TO
COMPLIANCE OF THE PROPOSED SALE OR TRANSFER WITH THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT OR EXEMPTION THEREFROM.
The Investor expressly agrees that any sale by the Investor of Shares
pursuant to the Registration Statement shall be sold in a manner described under
the caption "Plan of Distribution" in such Registration Statement and the
Investor will deliver a copy of the Prospectus contained in the Registration
Statement to the purchaser or purchasers, directly or through the Investor's
broker, in connection with such sale, in each case in compliance with the
requirements of the Securities Act and Exchange Act applicable to such sale. The
Investor further agrees that the Shares shall only be sold while the
Registration Statement is effective, unless another exemption from registration
is available. On the basis of compliance by the Investor with the foregoing
covenants, upon effectiveness of the Registration Statement, the Company shall
as soon as practicable (but not later than five business days after surrender of
the legended certificates to the Company and notice of such surrender has been
provided pursuant to Section 8(b) below) cause certificates evidencing the
Shares previously issued to be replaced with certificates which do not bear the
restrictive legends specified above in this Section 7.6, and all Shares
subsequently issued shall not bear the restrictive legend specified above in
this Section 7.6; provided that the Investor shall notify the Company promptly
upon completion of the sale of all of its Shares. The Investor acknowledges that
the removal of the restrictive legends from certificates representing Shares as
provided in this Section 7.6 is predicated upon the Company's reliance on the
Investor's compliance with its covenants in this Section 7.6.
7.7 Liquidated Damages. The Company and Investor agree that Investor
will suffer damages if the Company fails to fulfill its obligations pursuant to
Section 7.1 and 7.2 hereof and that it would not be possible to ascertain the
extent of such damages with precision. Accordingly, the Company hereby agrees to
pay liquidated damages ("Liquidated Damages") to Investor under the following
circumstances: (a) if the Registration Statement is not filed by the Company on
or prior to 15 days after the Closing Date (such an event, a "Filing Default");
(b) if the Registration Statement is not declared effective by the SEC on or
prior to 45 days or, subject to the filing of the Registration Statement by the
Filing Date, 90 days in the event that the Registration Statement receives SEC
review, after the Closing Date (such an event, an "Effectiveness Default"); or
(c) if the Registration Statement (after its effectiveness date) ceases to be
effective and available to the Investor for any continuous period that exceeds
30 days or for one or more periods that exceed in the aggregate 60 days in any
12-month period (such an event, a "Suspension Default" and together with a
Filing Default and an Effectiveness Default, a "Registration Default"). In the
event of a Registration Default, the Company shall as Liquidated Damages pay to
the Investor, for each 30-day period of a Registration Default, an amount in
cash equal to 1% of the aggregate purchase price paid by the Investor pursuant
to this Agreement; provided that in no event shall the aggregate amount of cash
to be paid as Liquidated Damages pursuant to this Section 7.7 exceed 10% of the
aggregate purchase price paid by the Investor. The Company shall pay the
Liquidated Damages as follows: (i) in connection with a Filing Default, on the
16th day after the Closing Date, and each 30th day thereafter until the
Registration Statement is filed with the SEC; (ii) in connection with an
Effectiveness Default, on the 46th day after the Closing Date (or, in the event
that the Registration Statement receives SEC review, the 91st day), and each
30th day thereafter until the Registration Statement is declared effective by
the SEC; or (iii) in connection with a Suspension Default, on either (x) the
31st consecutive day of any Suspension or (y) the 61st day (in the aggregate) of
any Suspensions in any 12-month period, and each 30th day thereafter until the
Suspension is terminated in accordance with Section 7.2. Notwithstanding the
foregoing, all periods shall be tolled during delays directly caused by the
action or inaction of any Investor, and the Company shall have no liability to
any Investor in respect of any such delay. The Liquidated Damages payable herein
shall apply on a pro rata basis for any portion of a 30-day period of a
Registration Default.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within the United States
by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile or electronic mail,
or (B) if delivered from outside the United States, by International Federal
Express (or other recognized international express courier) or facsimile, and
shall be deemed given (i) if delivered by first-class registered or certified
mail, three business days after so mailed, (ii) if delivered by nationally
recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express (or other recognized international
express courier), two business days after so mailed, or (iv) if delivered by
facsimile or electronic mail, upon electronic confirmation of receipt and shall
be delivered as addressed as follows:
(a) if to the Company, to:
Inhibitex, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Phone: (000) 000-0000
-12-
Fax: (000) 000-0000
Email: xxxxxx@xxxxxxxxx.xxx
(b) with a copy to:
Dechert LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxx
Email: xxxxx.xxxxxxxxx@xxxxxxx.xxx
(c) if to the Investor, at its address on the signature page
hereto, or at such other address or addresses as may have been
furnished to the Company in writing.
Notwithstanding anything in this Agreement to the contrary, (a) the Company may
deliver any documents, information or notices required to be delivered to an
Investor under this Agreement by email, in any recognized electronic format,
including Portable Document Format (PDF) or Microsoft Word document format, and
(b) with respect to any documents, exhibits, filings, furnishings or other
submissions (other than any Registration Statement, Prospectus, or Preliminary
Prospectus pursuant to Section 7 of this Agreement) publicly available on the
SEC's XXXXX system (each, an "XXXXX Filing"), such XXXXX Filing shall be deemed
furnished by the Company to such Investor, in each case as of the date first
publicly available on the XXXXX system.
9. Changes. This Agreement may be modified, amended or waived only
pursuant to a written instrument signed by the Company and (a) Investors holding
a majority of the Shares issued and sold in the Offering, provided that such
modification, amendment or waiver is made with respect to all Agreements and
does not adversely affect the Investor without adversely affecting all Investors
in a similar manner; or (b) the Investor.
10. Headings. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
11. Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
principles of conflicts of law.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior understandings or agreements
concerning the purchase and sale of the Shares and the resale registration of
the Shares.
15. Rule 144. For three years from the Closing Date, the Company
covenants that it will timely file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder (or, if the Company is not required to file such reports, it
will, upon the request of any Investor holding Shares purchased hereunder made
after the first anniversary of the Closing Date, make publicly available such
information as necessary to permit sales pursuant to Rule 144 under the
Securities Act), and it will take such further action as any such Investor may
reasonably request, all to the extent required from time to time to enable such
Investor to sell such Shares without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of the
Investor, the Company will deliver to such holder a written statement as to
whether it has complied with such information and requirements.
16. Confidential Information.
-13-
(a) The Investor represents to the Company that, at all times during
the Company's offering of the Shares, the Investor has maintained in confidence
all non-public information regarding the Company received by the Investor from
the Company or its agents, including without limitation, the existence of the
transactions contemplated therein, and covenants that it will continue to
maintain in confidence such information until such information (a) becomes
generally publicly available other than through a violation of this provision by
the Investor or its agents or (b) is required to be disclosed in legal
proceedings (such as by deposition, interrogatory, request for documents,
subpoena, civil investigation demand, filing with any governmental authority or
similar process), provided, however, that before making any use or disclosure in
reliance on this subparagraph (b) the Investor shall give the Company at least
fifteen (15) days prior written notice (or such shorter period as required by
law) specifying the circumstances giving rise thereto and will furnish only that
portion of the non-public information which is legally required and will
exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded any non-public information so furnished.
(b) The Company shall on the Closing Date, or on the following
business day of the Closing Date, issue a press release disclosing the material
terms of the transactions contemplated hereby (including at least the number of
Shares sold and proceeds therefrom). The Company shall not publicly disclose the
name of Investor, or include the name of Investor in any filing with the SEC or
any regulatory agency or the Nasdaq National Market (other than the filing of
the Agreements with the SEC pursuant to the Exchange Act or the filing of the
Registration Statement in accordance with the provisions of Section 7 of this
Agreement), without the prior written consent of Investor, except to the extent
such disclosure is required by law or Nasdaq regulations.
17. 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.
18. Expenses. The parties shall pay their own legal and other expenses
in connection with the preparation, negotiation and execution of the Agreements
and the consummation of the transactions contemplated herein.
-14-
INVESTORS
Abingworth Bioequities Master Fund Limited
Xxxxx Bros. Investments, XX
Xxxxx Bros. Investments II, XX
Xxxxx Biotech Fund I, XX
Xxxxx Biotech Fund II, XX
Xxxxx Biotech Fund II (Z), XX
Xxxxx Biotech Fund III, XX
Xxxxx Biotech Fund III (Z), LP
14159, LP
Atlas Master Fund Ltd.
Deerfield International Limited
Deerfield Partners, LP
Fidelity Advisor Series VII
Fidelity Advisor Biotechnology Fund
Fidelity Select: Biotechnology Portfolio
Fidelity Select: Pharmaceuticals Portfolio
GLG North American Equity Fund
GLG North American Opportunity Fund
Xxxx Xxxxxxx Health Science Fund
Xxxxxxxx Health Sciences Fund
Xxxxxxxx Pacific Select Fund - Health Sciences Portfolio
S.R. Capital Partners, XX
X.X. Capital Partners Offshore
LBI Group, Inc.
Shopkorn Associates LLC
X. Xxxx Price Health Sciences Fund Inc.
X. Xxxx Price Health Sciences Portfolio Inc.
TD Mutual Funds - TD Health Sciences Fund
VALIC Company I - Health Sciences Fund
Xxxx Xxxxxxx Trust - Health Sciences Trust
TA IDEX - X. Xxxx Price Health Sciences
Raytheon Company Combined DB/DC Master Trust - Health Sciences
X. Xxxx Price New Horizons Fund Inc.
UBS X'Xxxxxx PIPES Corporate Strategies Master Ltd.
-1-
INHIBITEX, INC.
INVESTOR QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
To: Inhibitex, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
This Investor Questionnaire ("Questionnaire") must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, par value $0.001 per share, of Inhibitex, Inc. (the "Securities").
The Securities are being offered and sold by Inhibitex, Inc. (the "Corporation")
without registration under the Securities Act of 1933, as amended (the "Act"),
and the securities laws of certain states, in reliance on the exemptions
contained in Section 4(2) of the Act and on Regulation D promulgated thereunder
and in reliance on similar exemptions under applicable state laws. The
Corporation must determine that a potential investor meets certain suitability
requirements before offering or selling Securities to such investor. The purpose
of this Questionnaire is to assure the Corporation that each investor will meet
the applicable suitability requirements. The information supplied by you will be
used in determining whether you meet such criteria, and reliance upon the
private offering exemption from registration is based in part on the information
herein supplied. The information provided herein may be used by the Company in
connection with the filing of a Registration Statement for the resale of the
Securities.
This Questionnaire does not constitute an offer to sell or a solicitation
of an offer to buy any security. Your answers will be kept strictly
confidential. However, by signing this Questionnaire you will be authorizing the
Corporation to provide a completed copy of this Questionnaire to such parties as
the Corporation deems appropriate in order to ensure that the offer and sale of
the Securities will not result in a violation of the Act or the securities laws
of any state and that you otherwise satisfy the suitability standards applicable
to purchasers of the Securities. All potential investors must answer all
applicable questions and complete, date and sign this Questionnaire. Please
print or type your responses and attach additional sheets of paper if necessary
to complete your answers to any item.
A. BACKGROUND INFORMATION
Name: __________________________________________________________________________
Business Address:_______________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number: (___) ________________________________________________________
Residence Address: _____________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number: (___) ________________________________________________________
If an individual:
Age: _______ Citizenship: __________ Where registered to vote: __________
If a corporation, partnership, limited liability company, trust or other entity:
Type of entity: _________________________________________________________
State of formation: ___________________ Date of formation: ____________
Social Security or Taxpayer Identification No. _________________________________
Send all correspondence to (check one): ____ Residence Address ____ Business
Address
-1-
Email address of contact person: ___________________________
Current ownership of securities of the Corporation:
__________ shares of common stock, par value $0.001 per share (the "Common
Stock") options or warrants to purchase __________ shares of Common Stock
Please identify the number of shares that you or your organization will
beneficially own immediately after Closing, identifying the Securities purchased
by your or your organization pursuant to the Securities Purchase Agreement to
which this Questionnaire is attached (the "Securities Purchase Agreement") and
those shares purchased by your or your organization through other transactions:
Securities purchased pursuant to the Securities Purchase Agreement: ______
Shares purchased by your or your organization through other transactions:
_______________
Total: ________________
BENEFICIAL OWNERSHIP INFORMATION: PLEASE DESCRIBE THE BENEFICIAL OWNERSHIP OF
THE SHARES OWNED BY YOU OR YOUR ORGANIZATION. IF THE INVESTOR IS A PARTNERSHIP,
LIMITED LIABILITY COMPANY OR SIMILAR ENTITY, PLEASE IDENTIFY THE INDIVIDUAL OR
INDIVIDUALS WITH ULTIMATE VOTING AND DISPOSITIVE POWER OVER SUCH SHARES,
TYPICALLY THE INVESTMENT MANAGER OR INVESTMENT ADVISOR WITH PRIMARY
RESPONSIBILITY FOR THIS INVESTMENT. THIS INFORMATION IS AVAILABLE FROM YOUR
COMPLIANCE OFFICER OR GENERAL COUNSEL. THE COMPANY WILL NOT BE ABLE TO REGISTER
YOUR SECURITIES WITHOUT THIS IMPORTANT INFORMATION.
EXCEPTION: THIS INFORMATION NEED NOT BE PROVIDED IF THE INVESTOR IS A PUBLICLY
TRADED COMPANY.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its affiliates?
[ ] Yes [ ] No
If yes, please indicate the nature of any such relationships below:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
If you, any of your associates, or any member of your immediate family had or
will have any direct or indirect material interest in any transaction or series
of transactions to which the Company or any of its subsidiaries was a party at
any time since January 1, 2001, or in any currently proposed transactions or
series of transactions in which the company or any of its subsidiaries will be a
party, in which the amount involved exceeds $60,000, please specify (a) the
names of the parties to the transaction(s) and their relationship to you, (b)
the nature of the interest in the transaction, (c) the amount involved in the
transaction, and (d) the amount of the interest in the transaction. If the
answer is "none", please so state.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Are you (i) an NASD Member (see definition), (ii) a Controlling (see definition)
shareholder of an NASD Member, (iii) a Person Associated with a Member of the
NASD (see definition), or (iv) an Underwriter or a Related Person (see
definition) with respect to
-2-
the proposed offering; or (b) do you own any shares or other securities of any
NASD Member not purchased in the open market; or (c) have you made any
outstanding subordinated loans to any NASD Member? IN RESPONDING TO THIS
QUESTION, INDICATE WHETHER OR NOT YOU ARE A BROKER DEALER OR IF YOU ARE
AFFILIATED WITH A BROKER DEALER, AND IF SO, STATE THE NATURE OF YOUR
AFFILIATION.
[ ] Yes [ ] No
If "yes," please describe below
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
NASD Member. The term "NASD MEMBER" means either any broker or dealer admitted
to membership in the National Association of Securities Dealers, Inc. ("NASD").
(NASD Manual, By-laws Article I, Definitions)
Control. The term "CONTROL" (including the terms "CONTROLLING," "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH") means the possession, direct or indirect, of
the power, either individually or with others, to direct or cause the direction
of the management and policies of a person, whether through the ownership of
voting securities, by contract, or otherwise. (Rule 405 under the Securities Act
of 1933, as amended)
Person Associated with a member of the NASD. The term "PERSON ASSOCIATED WITH A
MEMBER OF THE NASD" means every sole proprietor, partner, officer, director,
branch manager or executive representative of any NASD Member, or any natural
person occupying a similar status or performing similar functions, or any
natural person engaged in the investment banking or securities business who is
directly or indirectly controlling or controlled by a NASD Member, whether or
not such person is registered or exempt from registration with the NASD pursuant
to its bylaws. (NASD Manual, By-laws Article I, Definitions)
Underwriter or a Related Person. The term "UNDERWRITER OR A RELATED PERSON"
means, with respect to a proposed offering, underwriters, underwriters' counsel,
financial consultants and advisors, finders, members of the selling or
distribution group, and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)
B. STATUS AS ACCREDITED INVESTOR
The undersigned is an "accredited investor" as such term is defined in
Regulation D under the Act, as at the time of the sale of the Securities the
undersigned falls within one or more of the following categories (Please initial
one or more, as applicable):(1)
____ (1) a bank as defined in Section 3(a)(2) of the Act, or a savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Act whether acting in its individual or fiduciary capacity; a broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in Section 2(13) of the Act; an investment company
registered under the Investment Corporation Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act; a Small Business
Investment Corporation licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan
established and maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions for the benefit of
its employees, if such plan has total assets in excess of $5,000,000; an
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with the investment decisions made solely by persons that
are accredited investors;
-------------------
(1) As used in this Questionnaire, the term "net worth" means the excess
of total assets over total liabilities. In computing net worth for the purpose
of subsection (4), the principal residence of the investor must be valued at
cost, including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, the investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depiction,
contributions to an XXX or XXXXX retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
-3-
____ (2) a private business development company as defined in Section
202(a)(22) of the Investment Adviser Act of 1940;
____ (3) an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of acquiring the
Securities offered, with total assets in excess of $5,000,000;
____ (4) a natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase of the
Securities exceeds $1,000,000;
____ (5) a natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
____ (6) a trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D; and
____ (7) an entity in which all of the equity owners are accredited
investors (as defined above) (If the answer is yes, all shareholders, partners
or other equity owners must complete an Individual Questionnaire).
C. REPRESENTATIONS
The undersigned hereby represents and warrants to the Corporation as
follows:
1. Any purchase of the Securities would be solely for the account of the
undersigned and not for the account of any other person or with a view to
any resale, fractionalization, division, or distribution thereof.
2. The information contained herein is complete and accurate and may be
relied upon by the Corporation, and the undersigned will notify the
Corporation immediately of any material change in any of such information
occurring prior to the closing, if any, with respect to the purchase of
Securities by the undersigned or any co-purchaser.
3. There are no suits, pending litigation, or claims against the undersigned
that could materially affect the net worth of the undersigned as reported
in this Questionnaire.
4. The undersigned acknowledges that there may occasionally be times when the
Corporation determines that it must suspend the use of the Prospectus
forming a part of the Registration Statement (as such terms are defined in
the Securities Purchase Agreement), as set forth in Section 7.2(c) of the
Securities Purchase Agreement. The undersigned is aware that, in such
event, the Securities will not be subject to ready liquidation, and that
any Securities purchased by the undersigned would have to be held during
such suspension. The overall commitment of the undersigned to investments
which are not readily marketable is not excessive in view of the
undersigned's net worth and financial circumstances, and any purchase of
the Securities will not cause such commitment to become excessive. The
undersigned is able to bear the economic risk of an investment in the
Securities.
5. The undersigned is aware of its obligations under applicable federal and
state securities laws with respect to use and disclosure of non-public
information regarding the Company.
6. The undersigned has carefully considered the potential risks relating to
the Corporation and a purchase of the Securities, and fully understands
that the Securities are speculative investments which involve a high
degree of risk of loss of the undersigned's entire investment. Among
others, the undersigned has carefully considered each of the risks
identified in the Exchange Act Documents.
7. The undersigned understands that the Securities that it is acquiring are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired in a transaction not involving a
public offering, and that under such laws and applicable regulations such
securities may be resold without registration under the Act, only in
certain limited circumstances. In this connection, the undersigned
represents that it is familiar with SEC Rule 144, as presently in effect,
and understands the resale limitations imposed thereby and by the Act.
-4-
8. It us understood that the certificates evidencing the Securities shall
bear a legend, reading substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE
BEEN ISSUED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933 (THE "1933 ACT"), SECTION 10-5-9(13) OF THE
OFFICIAL CODE OF GEORGIA ANNOTATED (THE "GEORGIA CODE"), AND APPROPRIATE
EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES LAWS OF OTHER APPLICABLE
JURISDICTIONS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
TRANSFERRED OTHER THAN PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
AN EXEMPTION THEREFROM UNDER THE 1933 ACT, THE GEORGIA CODE AND THE
APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE ISSUER SHALL BE
ENTITLED TO REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
WITH RESPECT TO COMPLIANCE OF THE PROPOSED SALE OR TRANSFER WITH THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT OR EXEMPTION THEREFROM.
9. It is understood that the Company anticipates filing the Registration
Statement within 15 days of the Closing Date. If at any time any of the
information set forth in the undersigned's responses to this Questionnaire
has changed due to passage of time, or any development occurs which
requires a change in any of the answers, or has for any other reason
become incorrect, the undersigned agrees to immediately furnish to the
individual to whom a copy of this Questionnaire is to be sent, as
indicated and at the address shown on the first page hereof, any necessary
or appropriate correcting information. Otherwise, the Company is to
understand that the above information continues to be, to the best of the
undersigned's knowledge, information and belief, complete and correct.
10. It is understood that the information furnished herein will be used by the
Company in the preparation of its Registration Statement on Form S-3.
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire
this _____ day of August, 2005, and declares under oath that it is
truthful and correct.
_____________________________________________
Print Name
By: _________________________________________
Signature
Title: ______________________________________
(required for any purchaser that is a
corporation, partnership, trust or other
entity)
-5-
[COMPANY LETTERHEAD]
_________, 2005
Re: Inhibitex, Inc.; Registration Statement on Form S-3
Dear Selling Shareholder:
Enclosed please find five (5) copies of a prospectus dated ______________,
2005 (the "Prospectus") for your use in reselling your shares of common stock,
$0.001 par value (the "Shares"), of Inhibitex, Inc. (the "Company"), under the
Company's Registration Statement on Form S-3 (Registration No. 333- ) (the
"Registration Statement"), which has been declared effective by the Securities
and Exchange Commission. AS A SELLING SHAREHOLDER UNDER THE REGISTRATION
STATEMENT, YOU HAVE AN OBLIGATION TO DELIVER A COPY OF THE PROSPECTUS TO EACH
PURCHASER OF YOUR SHARES, EITHER DIRECTLY OR THROUGH THE BROKER-DEALER WHO
EXECUTES THE SALE OF YOUR SHARES.
The Company is obligated to notify you in the event that it suspends
trading under the Registration Statement in accordance with the terms of the
Securities Purchase Agreement between the Company and you. During the period
that the Registration Statement remains effective and trading thereunder has not
been suspended, you will be permitted to sell your Shares that are included in
the Prospectus under the Registration Statement.
Please note that you are under no obligation to sell your Shares during
the registration period. However, if you do decide to sell, you must comply with
the requirements described in this letter or otherwise applicable to such sale.
Your failure to do so may result in liability under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended. Please remember
that all sales of your Shares must be carried out in the manner set forth under
the caption "Plan of Distribution" in the Prospectus if you sell under the
Registration Statement. The Company may require an opinion of counsel reasonably
satisfactory to the Company if you choose another method of sale. YOU SHOULD
CONSULT WITH YOUR OWN LEGAL ADVISOR(S) ON AN ONGOING BASIS TO ENSURE YOUR
COMPLIANCE WITH THE RELEVANT SECURITIES LAWS AND REGULATIONS.
IN ORDER TO MAINTAIN THE ACCURACY OF THE PROSPECTUS, YOU MUST NOTIFY THE
UNDERSIGNED UPON THE SALE, GIFT, OR OTHER TRANSFER OF ANY SHARES BY YOU,
INCLUDING THE NUMBER OF SHARES BEING TRANSFERRED, AND IN THE EVENT OF ANY OTHER
CHANGE IN THE INFORMATION REGARDING YOU WHICH IS CONTAINED IN THE PROSPECTUS.
FOR EXAMPLE, YOU MUST NOTIFY THE UNDERSIGNED IF YOU ENTER INTO ANY ARRANGEMENT
WITH A BROKER-DEALER FOR THE SALE OF SHARES THROUGH A BLOCK TRADE, SPECIAL
OFFERING, EXCHANGE DISTRIBUTION OR SECONDARY DISTRIBUTION OR A PURCHASE BY A
BROKER-DEALER. DEPENDING ON THE CIRCUMSTANCES, SUCH TRANSACTIONS MAY REQUIRE THE
FILING OF A SUPPLEMENT TO THE PROSPECTUS IN ORDER TO UPDATE THE INFORMATION SET
FORTH UNDER THE CAPTION "PLAN OF DISTRIBUTION" IN THE PROSPECTUS.
Should you need any additional copies of the Prospectus, or if you have
any questions concerning the foregoing, please write to me at Inhibitex, Inc.,
0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000. Thank you.
Sincerely,
Chief Financial Officer
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