COMMON STOCK AND WARRANT PURCHASE AGREEMENT
This Common Stock and Warrant Purchase Agreement (this "AGREEMENT"), dated as of
April 5, 2004 (the "AGREEMENT DATE"), is among ADVENTRX Pharmaceuticals, Inc., a
Delaware corporation (the "COMPANY"), and each of the persons and entities
listed on Schedule 1 hereto (each, an "INVESTOR").
1. SUBSCRIPTION.
(a) SHARES OF COMMON STOCK. On the terms and subject to the conditions set
forth in this Agreement, at the Closing (as defined below), the Company will
sell and each Investor will purchase the number of shares of Common Stock, par
value $0.001 per share, of the Company ("COMMON STOCK") set forth opposite such
Investor's name on Schedule 1 hereto at a purchase price of $1.50 per share (the
"SHARE PRICE"). For purposes of this Agreement, the term "SHARES" refers to the
shares of Common Stock purchased by the Investors pursuant to this Agreement.
(b) WARRANTS. In consideration of each Investor's purchase of shares of
Common Stock pursuant to this Agreement, the Company shall also issue to each
Investor (i) a warrant, in the form of Exhibit A-1 hereto, to purchase a number
of shares of Common Stock equal to the product of (x) 30% and (y) the number of
Shares purchased by such Investor (an "A-1 WARRANT") and (ii) a warrant, in the
form of Exhibit A-2 hereto, to purchase a number of shares of Common Stock equal
to the product of (x) 20% and (y) the number of Shares purchased by such
Investor (an "A-2 WARRANT"). The A-1 Warrants and A-2 Warrants issuable to the
Investors pursuant to this Agreement are collectively referred to herein as the
"WARRANTS."
2. CLOSING; CONDITIONS TO CLOSING.
(a) CLOSING. The closing of the purchase and sale of the Shares and the
issuance of the Warrants (the "CLOSING") will take place as promptly as
practicable, but no later than five business days after satisfaction or waiver
of all of the conditions set forth in Sections 2(c) and (d) (other than those
conditions which by their terms are not to be satisfied or waived until the
Closing), at the offices of Xxxxxx and Xxxx LLP ("XXXXXX"), 000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000. The date on which the Closing occurs is referred to
herein as the "CLOSING DATE."
(b) DELIVERY OF PURCHASE PRICE. Each Investor shall deliver or cause to be
delivered by wire transfer of immediately available funds an amount in cash
equal to the aggregate Share Price payable by such Investor at the Closing to
Xxxxxx, counsel to SDS Management, LLC, an affiliate of an Investor ("SDS"), to
be held and distributed by Xxxxxx pursuant to terms of the Closing Escrow
Agreement in the form of Exhibit B hereto (the "ESCROW AGREEMENT").
(c) CONDITIONS TO OBLIGATIONS OF INVESTORS TO EFFECT THE CLOSING. The
obligations of an Investor to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing, of each of the following conditions, any of which may be waived,
in writing, by an Investor:
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(i) The Company shall deliver or cause to be delivered to each of
the Investors the following:
(1) Evidence of delivery to the Company's transfer agent of
irrevocable instructions to issue certificates evidencing the aggregate
number of Shares to be purchased by such Investor registered in the name
of such Investor, in such denominations as is indicated on Schedule 1 for
such Investor;
(2) The Registration Rights Agreement in the form of Exhibit C
hereto (the "REGISTRATION RIGHTS AGREEMENT") executed by the Company;
(3) One or more Warrants, each registered in the name of such
Investor, in such denominations as is indicated on Schedule 1 for such
Investor executed by the Company;
(4) A legal opinion of Xxxxxxx XxXxxxxxx LLP ("COMPANY'S COUNSEL"),
counsel to the Company, in the form attached hereto as Exhibit D.
(5) A wire transfer representing SDS's reasonable, documented legal
fees and other expenses as described in Section 10(l) hereof.
(6) A certificate signed by an officer of the Company either (i)
evidencing that the Company has applied to each U.S. securities exchange,
interdealer quotation system and other trading market where its Common
Stock is currently listed or qualified for trading or quotation for the
listing or qualification of the Shares and the Warrant Shares for trading
or quotation thereon or (ii) certifying that no such application is
necessary for the listing of such shares.
(7) The Escrow Agreement executed by the Company.
(d) CONDITIONS TO OBLIGATIONS OF THE COMPANY TO EFFECT THE CLOSING. The
obligations of the Company to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, by the Company:
(i) Each Investor shall have executed and delivered to the Company
this Agreement;
(ii) Each Investor shall have executed and delivered to the Company
the Registration Rights Agreement;
(iii) Each Investor shall have executed and delivered to the Company the
Investor Suitability Questionnaire attached hereto as Exhibit E and the
Company shall be reasonably satisfied, through the responses of each
Investor, that the sale of the Shares and the Warrants shall not require
registration thereof under the Securities Act of 1933, as amended (the
"SECURITIES ACT") or under the blue sky or securities laws of any
jurisdiction;
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(iv) Each Investor shall have deposited in escrow with Xxxxxx pursuant
to the Escrow Agreement an amount equal to the aggregate Share Price for
the Shares and Warrants purchased by such Investor by wire transfer or by
such other form of payment as may be mutually agreed upon by the Company
and such Investor;
(v) Xxxxxx shall have executed and delivered to the Company the
Escrow Agreement; and
(vi) Xxxxxxx Hill Partners (a division of Pali Capital Inc.) (the
"PLACEMENT AGENT") shall have delivered a certificate, executed by a
managing director of the Placement Agent, dated as of the Closing,
certifying the amounts deposited in escrow with Xxxxxx pursuant to the
Escrow Agreement and the names of the Investors that have deposited such
amounts in escrow with Xxxxxx.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants as of the Agreement Date to the Investors that, except as set
forth on the Disclosure Schedule attached as Schedule 3:
(a) CORPORATE EXISTENCE AND POWER; SUBSIDIARIES. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state in which it is incorporated, and has all corporate powers
required to carry on its business as now conducted. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not have a
Material Adverse Effect. For purposes of this Agreement, the term "MATERIAL
ADVERSE EFFECT" means, with respect to the Company, a material adverse effect on
the Company's condition (financial or other), business, properties, assets,
liabilities (including contingent liabilities), results of operations or current
prospects, taken as a whole. True and complete copies of the Company's
Certificate of Incorporation, as amended (the "CERTIFICATE"), and Bylaws, as
amended (the "BYLAWS"), as currently in effect and as will be in effect on the
Closing Date, have previously been made available to the Investors. For purposes
of this Agreement, the term "SUBSIDIARY" or "SUBSIDIARIES" means, with respect
to any entity, any corporation or other organization of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are
directly or indirectly owned by such entity or of which such entity is a partner
or is, directly or indirectly, the beneficial owner of 50% or more of any class
of equity securities or equivalent profit participation interests. The Company
has no Subsidiaries.
(b) CORPORATE AUTHORIZATION. The execution, delivery and performance by
the Company of this Agreement, the Registration Rights Agreement, the Warrants,
the Escrow Agreement and each of the other documents executed by the Company
pursuant to and in connection with this Agreement (collectively, the
"TRANSACTION AGREEMENTS"), and the consummation of the transactions contemplated
hereby and thereby (including, but not limited to, the sale and delivery of the
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Shares and the Warrants and the subsequent issuance of the Warrant Shares upon
exercise of the Warrants) (the "TRANSACTIONS") have been duly authorized, and no
additional corporate or stockholder action is required for the approval thereof.
The shares issuable upon exercise of the Warrants (the "WARRANT SHARES") have
been duly reserved for issuance by the Company. The Transaction Agreements have
been or, to the extent contemplated hereby or by the Transaction Agreements,
will be duly executed and delivered and constitute the legal, valid and binding
agreement of the Company, enforceable against the Company in accordance with
their terms, except as may be limited by bankruptcy, reorganization, insolvency,
moratorium and similar laws of general application relating to or affecting the
enforcement of rights of creditors, and except as enforceability of its
obligations hereunder are subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(c) NON-CONTRAVENTION. The execution, delivery and performance by the
Company of the Transaction Agreements, and the consummation by the Company of
the Transactions do not and will not (a) violate any term of the Certificate and
Bylaws or any material agreement to which the Company is a party or by which it
is bound; (b) constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to the Company;
(c) constitute a default (or would constitute a default with notice or lapse of
time or both) or breach under or give rise to a right of termination,
cancellation or acceleration or loss of any benefit under any material
agreement, contract or other instrument binding upon the Company or under any
material license, franchise, permit or other similar authorization held by the
Company; or (d) result in the creation or imposition of any Lien (as defined
below) on any asset of the Company. For purposes of this Agreement, the term
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, claim or encumbrance of any kind in respect of such asset.
(d) SEC DOCUMENTS. The Company is obligated under the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), to file reports pursuant to
Sections 13 or 15(d) thereof (all such reports filed or required to be filed by
the Company with the Securities and Exchange Commission (the "COMMISSION"),
including all exhibits thereto or incorporated therein by reference, and all
documents filed by the Company under the Securities Act, hereinafter called the
"SEC DOCUMENTS"). Since December 31, 2002, the Company has timely filed all SEC
Documents required to be filed under the Exchange Act. All SEC Documents filed
on or after October 31, 2000 (i) were prepared in all material respects in
accordance with the requirements of the Exchange Act and (ii) did not at the
time they were filed (or, if amended or superseded by a filing prior to the
Agreement Date, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. A correct and complete
copy of each of the SEC Documents for any period ending on or after December 31,
2002 (the "RECENT REPORTS") are currently available to each Investor at the
Commission's main public website at
xxxx://xxx.xxx.xxx/xxx-xxx/xxxxxx-xxxxx?xxxxxxxxxxxxxxxxxxxxxxx&XXXx&
filenum=&State=&SIC=&owner=include&action=getcompany. None of the information
about the Company or any of its Subsidiaries which has been disclosed to the
Investors herein or in the course of discussions and negotiations with respect
hereto which is not disclosed in the Recent Reports is or was required to be so
disclosed.
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(e) FINANCIAL STATEMENTS. Each of the Company's audited consolidated
balance sheet and related consolidated statements of income, cash flows and
changes in stockholders' equity (including the related notes) as of and for the
years ended December 31, 2003 and December 31, 2002, as contained in the Recent
Reports (both of (i) and (ii), collectively, the "FINANCIAL STATEMENTS") (x)
present fairly in all material respects the financial position of the Company
and its Subsidiaries on a consolidated basis as of the dates thereof and the
results of operations, cash flows and stockholders' equity as of and for each of
the periods then ended and (y) were prepared in accordance with United States
generally accepted accounting principals ("GAAP") applied on a consistent basis
throughout the periods involved, in each case, except as otherwise indicated in
the notes thereto.
(f) COMPLIANCE WITH LAW. The Company is in compliance and has conducted
its business so as to comply with all laws, rules and regulations, judgments,
decrees or orders of any court, administrative agency, commission, regulatory
authority or other governmental authority or instrumentality, domestic or
foreign, applicable to its operations, the violation of which would cause a
Material Adverse Affect. There are no judgments or orders, injunctions, decrees,
stipulations or awards (whether rendered by a court or administrative agency or
by arbitration), including any such actions relating to affirmative action
claims or claims of discrimination, against the Company or against any of its
properties or businesses.
(g) ABSENCE OF CERTAIN CHANGES. Since December 31, 2003, the Company has
conducted its business only in the ordinary course and there has not occurred,
except as set forth in the Recent Reports or any exhibit thereto or incorporated
by reference therein, any event the could reasonably be expected to have a
Material Adverse Effect on the Company or any of its Subsidiaries.
(h) NO UNDISCLOSED LIABILITIES. Except as set forth in the Recent Reports,
and except for liabilities and obligations incurred in the ordinary course of
business since December 31, 2003, as of the Agreement Date, to the Company's
knowledge, (i) the Company does not have any material liabilities or obligations
(absolute, accrued, contingent or otherwise) which, and (ii) there has not been
any aspect of the prior or current conduct of the business of the Company or its
Subsidiaries which may form the basis for any material claim by any third party
which, if asserted could result in any such material liabilities or obligations
which, are not fully reflected, reserved against or disclosed in the balance
sheet of the Company as at December 31, 2003.
(i) CAPITALIZATION. The authorized capital stock of the Company consists
of 100,000,000 shares of Common Stock of which 42,833,830 shares are issued and
42,810,665 are outstanding as of the Agreement Date and 1,000,000 shares of
preferred stock, par value $0.01 per share, of which none are issued and
outstanding as of the Agreement Date. All issued and outstanding shares of the
Company's capital stock have been duly authorized and were validly issued, and
are fully paid and nonassessable. No securities issued by the Company from
October 31, 2000 to the date hereof were issued in violation of any statutory or
common law preemptive rights. Upon issuance pursuant to the terms of this
Agreement, all Shares and Warrant Shares shall be duly authorized, validly
issued and outstanding, and fully paid and nonassessable and such shares shall
not have been issued in violation of any statutory or contractual preemptive
rights. There are no dividends which have accrued or been declared but are
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unpaid on the capital stock of the Company. All taxes required to be paid by
Company in connection with the issuance and any transfers of the Company's
capital stock have been paid. All permits or authorizations required to be
obtained from or registrations required to be effected with any person or entity
in connection with any and all issuances of securities of the Company from
October 31, 2000 to the Agreement Date have been obtained or effected, and all
securities of the Company have been issued and are held in accordance with the
provisions of all applicable securities or other laws. A true and complete
capitalization table of the Company as of the Agreement Date is set forth in
Schedule 3(i). No shares of capital stock of the Company are subject to
preemptive rights or any other similar rights of the stockholders of the Company
or any liens or encumbrances imposed through the actions or failure to act of
the Company. Except as disclosed in Schedule 3(i), as of the effective date of
this Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe for, puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character whatsoever relating to,
or securities or rights convertible into or exchangeable for any shares of
capital stock of the Company, or arrangements by which the Company is or may
become bound to issue additional shares of capital stock of the Company, (ii)
there are no agreements or arrangements under which the Company is obligated to
register the sale of any of its or their securities under the 1933 Act and (iii)
there are no anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing rights to security
holders) that will be triggered by the issuance of the Shares, Warrants or
Warrant Shares (including the issuance of the Warrant Shares upon exercise of
the Warrants).
(j) GOVERNMENT AUTHORIZATIONS. Except as disclosed in the Recent Reports,
the Company holds all material authorizations, consents, approvals, franchises,
licenses and permits required under applicable law or regulation for the
operation of the business of the Company as presently operated (the
"GOVERNMENTAL AUTHORIZATIONS"). All the Governmental Authorizations have been
duly issued or obtained and are in full force and effect, and the Company is in
material compliance with the terms of all the Governmental Authorizations. The
Company has not engaged in any activity that, to its knowledge, would cause
revocation or suspension of any such Governmental Authorizations. The Company
has no knowledge of any facts which could reasonably be expected to cause the
Company to believe that the Governmental Authorizations will not be renewed by
the appropriate governmental authorities in the ordinary course. Neither the
execution, delivery nor performance of this Agreement shall adversely affect the
status of any of the Governmental Authorizations.
(k) BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement, based upon any arrangement made by
or on behalf of the Company, which would make the Company or any Investor liable
for any fees or commissions.
(l) SECURITIES LAWS. Neither the Company nor any agent acting on behalf of
the Company has taken any action which might cause this Agreement or the Shares
or Warrants to violate the Securities Act or the Exchange Act or any rules or
regulations promulgated thereunder, as in effect on the Closing Date. Assuming
that all of the representations and warranties of the Investors set forth in
Section 4 are true and correct, the offer, sale and issuance of the Shares and
Warrants in conformity with the terms of this Agreement are exempt from the
registration requirements of Section 5 of the Securities Act and from the
qualification or registration requirements of applicable "blue sky" laws.
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(m) ISSUANCE OF SHARES. The Shares are duly authorized and, upon issuance
in accordance with the terms of this Agreement will be validly issued, fully
paid, and non-assessable and free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of stockholders of the Company and will not impose
personal liability on the holder thereof. The Warrant Shares are duly authorized
and reserved for issuance, and, when issued upon exercise of or otherwise
pursuant to the Warrants, respectively, in accordance with the terms thereof,
will be validly issued, fully paid and non-assessable, and free from all taxes,
liens, claims and encumbrances and will not be subject to preemptive rights or
other similar rights of stockholders of the Company and will not impose personal
liability upon the holder thereof.
(n) INTERNAL ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient, in the judgment of the Company's board
of directors, 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 generally accepted accounting principles 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.
(o) NO INVESTMENT COMPANY. The Company is not, and upon the issuance and
sale of the Shares and Warrants as contemplated by this Agreement will not be,
an "investment company" required to be registered under the Investment Company
Act of 1940 (an "INVESTMENT COMPANY"). The Company is not controlled by an
Investment Company.
(p) XXXXXXXX-XXXXX ACT. The Company is in substantial compliance with the
applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the "XXXXXXXX-XXXXX
ACT"), and the rules and regulations promulgated thereunder, that are effective
and intends to comply substantially with other applicable provisions of the
Xxxxxxxx-Xxxxx Act, and the rules and regulations promulgated thereunder, upon
the effectiveness of such provisions.
(q) BENEFICIAL HOLDINGS OF XXXXXXX HILL PARTNERS. Xxxxxxx Xxxx Partners
("BHP"), a division of Pali Capital, Inc. and the Company's placement agent with
respect to the purchase and sale of the Shares and the issuance of the Warrants,
has advised the Company that certain employees of BHP and their family members
(acting separately and not as a group) own approximately 12% of the outstanding
shares of Common Stock as of the Agreement Date and without giving effect to the
purchase and sale of the Shares.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. Each Investor, for
itself only, hereby severally and not jointly, represents and warrants to the
Company as follows:
(a) EXEMPT TRANSACTION; UNREGISTERED SHARES AND WARRANTS. The Investor
understands that the Shares and Warrants are being offered and sold in reliance
on one or more exemptions from registration provided for under the Securities
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Act, and that the Company's reliance upon such exemptions is predicated, in
part, upon the Investor's representations and warranties set forth in this
Agreement. The Investor acknowledges that it is purchasing the Shares and
Warrants without being offered or furnished any offering literature or
prospectus. The Investor understands that neither the Commission, nor any
governmental agency charged with the administration of the securities laws of
any jurisdiction nor any other governmental agency has passed upon or reviewed
the merits or qualifications of, or recommended or approved the offer and sale
of the Shares and Warrants pursuant to the terms of this Agreement.
(b) INVESTMENT INTENT; ACCREDITATION; AUTHORITY. The Investor is acquiring
the Shares and Warrants for investment for the Investor's own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act; provided, however, that by making the representations
herein, the Investor reserves the right to dispose of the Shares, Warrants or
Warrant Shares at any time in accordance with this Agreement or the Warrant, as
applicable, and in accordance with or pursuant to a registration statement or an
exemption under the Securities Act. The Investor is an "accredited investor"
within the meaning of the Securities Act. The Investor has the full right,
power, authority and capacity to enter into and perform this Agreement, the
terms of this Agreement constitute valid and binding obligations of the Investor
enforceable in accordance with their terms, except as the same may be limited by
equitable principles and by bankruptcy, insolvency, moratorium, and other laws
of general application affecting the enforcement of creditors' rights.
(c) KNOWLEDGE AND EXPERIENCE. The Investor (i) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the Investor's prospective investment in the Shares and
Warrants; (ii) has the ability to bear the economic risks of the Investor's
prospective investment; (iii) has been furnished with and has had access to such
information as the Investor has considered necessary to make a determination as
to the purchase of the Shares and Warrants together with such additional
information as is necessary to verify the accuracy of the information supplied;
and (iv) has had all questions which have been asked by the Investor
satisfactorily answered by the Company.
(d) RESTRICTED SECURITIES. The Investor understands that the Shares and
Warrants are "restricted securities" as such term is defined in Rule 144 of
Regulation D promulgated under the Securities Act ("RULE 144") and must be held
indefinitely unless they are subsequently registered or qualified under
applicable state and federal securities laws or an exemption from such
registration or qualification is available. The Investor understands that he,
she or it may resell the Shares and Warrant Shares pursuant to Rule 144 only
after the satisfaction of certain requirements, including the requirement that
the Shares and Warrants Shares be held for at least one year prior to resale.
(e) NO OBLIGATION TO REGISTER. The Investor further acknowledges and
understands that, except as provided in the Registration Rights Agreement, the
Company is under no obligation to register the Shares, Warrants or Warrant
Shares. The Investor understands that the certificate evidencing the Shares,
Warrants and Warrant Shares will be imprinted with a legend which prohibits the
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transfer of the Shares, Warrants and Warrant Shares unless they are registered
or such registration is not required in the opinion of counsel in form and
substance satisfactory to the Company.
(f) FOREIGN INVESTOR REPRESENTATION. If the Investor is not a "U.S.
person" (as such term is defined in Rule 902(k) of Regulation S promulgated
under the Securities Act), such Investor hereby represents that it has satisfied
itself as to the full observance of the laws of its jurisdiction in connection
with any invitation to subscribe for the Shares and Warrants or any use of this
Agreement, including (i) the legal requirements within its jurisdiction for the
purchase of the Shares and Warrants, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that may
need to be obtained, and (iv) the income tax and other tax consequences, if any,
that may be relevant to the purchase, holding, redemption, sale or transfer of
the Shares and Warrants. Such Investor's subscription and payment for, and its
continued beneficial ownership of the Shares and Warrants, will not violate any
applicable securities or other laws of its jurisdiction.
(g) DOMICILE. The Investor is a bona fide resident and domiciliary (not a
temporary or transient resident) of the state indicated on Schedule 1 hereto and
he, she or it has no present intention of becoming a resident of any other state
or jurisdiction.
(h) NO NEED FOR LIQUIDITY. The Investor's aggregate holding of securities
that are "restricted securities" or otherwise not readily marketable is not
excessive in view of the Investor's net worth and financial circumstances and
the purchase of the Shares and Warrants will not cause such commitment to become
excessive.
(i) INDEPENDENT ADVICE. The Investor understands that the Company urges
the Investor to seek independent advice from professional advisors relating to
the suitability for the Investor of an investment in the Company in view of the
Investor's overall financial needs and with respect to legal and tax
implications of such an investment.
5. RELIANCE. The Investor understands that the Company may rely on the
representations and warranties in Section 4 in determining whether to permit the
Investor to purchase the Shares and Warrants. If for any reason any
representations and warranties are no longer true and accurate prior to the
Closing Date, the Investor will give the Company prompt written notice of the
inaccuracy. By signing below, the Investor represents that the Investor has read
and confirmed the truth and accuracy of each of the foregoing representations
and warranties.
6. ADDITIONAL COVENANTS OF THE PARTIES.
(a) INDEMNIFICATION. Each party agrees to indemnify and hold harmless the
other parties hereto and each of its directors, officers, agents and affiliates
(as applicable) from and against any and all loss, damage or liability due to or
arising out of a breach of any representation, warranty or covenant of contained
in this Agreement and made by the indemnifying party, provided however, that
this Section 6 shall not be construed to require any Investor (i) to so
indemnify and hold harmless any other Investor or (ii) to so indemnify and hold
harmless the Company for any such breach by any other Investor. The liability of
any Investor to provide indemnification pursuant to this Section 6 shall be
limited to the amount such Investor paid to the Company for the purchase of such
Investor's Shares and Warrants.
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(b) PLEDGE OF SECURITIES. The Company acknowledges and agrees that the
Shares, Warrants and Warrant Shares may be pledged by an Investor in connection
with a bona fide margin agreement or other loan or financing arrangement that is
secured by the Shares Warrants or Warrant Shares. The pledge of the Shares,
Warrants or Warrant Shares shall not be deemed to be a transfer, sale or
assignment of the Shares, Warrants or Warrant Shares hereunder, and no Investor
effecting a pledge of Shares, Warrants or Warrant Shares shall be required to
provide the Company with any notice thereof or otherwise make any delivery to
the Company pursuant to this Agreement or any other Transaction Agreement. The
Company hereby agrees to execute and deliver such documentation as a pledgee of
the Shares, Warrants or Warrant Shares may reasonably request in connection with
a pledge of the thereof to such pledgee by an Investor.
(c) SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall (i) on or
promptly after the Closing Date, issue a press release acceptable to SDS
disclosing the transactions contemplated hereby, and (ii) promptly after the
Closing Date, file with the Commission a Report on Form 8-K disclosing the
transactions contemplated hereby. Except as provided in the preceding sentence,
neither the Company nor the Investors shall make any press release or other
publicity about the terms of this Agreement or the transactions contemplated
hereby without the prior approval of the other unless otherwise required by law,
regulation or the rules of the Commission. In addition, the Company agrees that
it shall not disclose, and shall not include in any public filing or other
announcement, the name of any Investor, unless expressly agreed to in writing by
such Investor or unless and until such disclosure is, in the reasonable opinion
of counsel to the Company, required by law or applicable regulation, and then
only to the extent of such requirement.
(d) LISTING. The Company shall promptly secure the listing of the Shares
and Warrant Shares (and any Registrable Securities (as defined in the
Registration Rights Agreement) that may from time to time be issued or issuable)
upon each national securities exchange or automated quotation system or bulletin
board, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance) and, so long as any of the Investors owns any of
the Registrable Securities (as defined in the Registration Rights Agreement),
shall maintain, so long as any other shares of Common Stock shall be so listed,
such listing of all Shares issued pursuant to this Agreement and Warrant Shares
issuable upon exercise of or otherwise pursuant to the Warrants, and any
Registrable Securities (as defined in the Registration Rights Agreement) that
may from time to time be issued or issuable. To the extent that any Common Stock
is so listed, the Company will obtain and, so long as the Investor owns any of
the Registrable Securities (as defined in the Registration Rights Agreement),
maintain the listing and trading of its Common Stock on the Nasdaq SmallCap, the
Nasdaq National Market, the New York Stock Exchange, or the American Stock
Exchange and will comply in all respects with the Company's reporting, filing
and other obligations under the bylaws or rules of any exchanges or automated
quotation systems on which the Common Stock is then listed.
10
7. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGEND. The instruments representing the Shares, Warrants and, if
applicable, Warrant Shares shall bear the following legend or similar legend (as
well as any legends required by applicable state and federal corporate and
securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 7 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Shares or Warrant
Shares if (i) such Shares or Warrant Shares are resold pursuant to a
registration statement under the Securities Act, and a prospectus meeting the
requirements of Section 11 of the Securities Act is delivered or deemed
delivered to the purchaser of such Shares or Warrant Shares, (ii) if such holder
satisfies the requirements of Rule 144(k) or (iii) if such holder provides the
Company with an opinion of counsel for such holder of the Shares or Warrant
Shares, reasonably satisfactory to the Company, to the effect that a sale,
transfer or assignment of such Shares or Warrant Shares may be made without
registration.
8. PRICE PROTECTION. If the Company issues or sells any shares of its Common
Stock or Common Stock Equivalents, other than Excluded Shares (as that term is
defined below) ("ADDITIONAL SHARES") at any time after the Closing Date and
prior to June 30, 2004 (the "ADJUSTMENT PERIOD") for a consideration per share
(the "DILUTIVE PRICE") (a) less than the Share Price (as adjusted for stock
splits, stock dividends and the like) and (b) if Additional Shares have been
previously issued during the Adjustment Period with respect to which the Company
has fully complied with this Section 8, then also less than the lowest Dilutive
Price (as adjusted for stock splits, stock dividends and the like) at which such
Additional Shares have been previously issued during the Adjustment Period, then
the Company will issue to each Investor a number of shares, if positive, of
Common Stock to such Investor determined by the following formula:
X = (A * B / C) - (A + D)
Where: X = the number of shares of Common Stock to be issued to
the Investor, rounded to the nearest whole number;
A = the number of Shares (as adjusted for stock splits,
stock dividends and the like) then held by such
Investor;
11
B = the Share Price (as adjusted for stock splits, stock
dividends and the like);
C = the applicable Dilutive Price; and
D = the aggregate number of shares of Common Stock (as
adjusted for stock splits, stock dividends and the
like) issued to the Investor pursuant to this
Section 8 prior to the date of such determination.
For purposes of this Agreement, the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date to officers, employees,
consultants or directors of the Company directly or pursuant to a stock
purchase, stock option, restricted stock or other written compensation plan or
agreement approved by the Board of Directors of the Company (the "BOARD"); (ii)
shares of Common Stock issued or issuable after the Closing Date, primarily for
non-equity financing purposes and as approved by the Board, to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services
or customers; (iii) shares of Common Stock issuable upon (a) exercise of
warrants, options, notes or other rights to acquire securities of the Company,
in each case, outstanding on the date of this Agreement, (b) conversion of
shares of the Company's Preferred Stock, par value $0.01 per share outstanding
on the date of this Agreement or (c) exchange of promissory notes issued by the
Company outstanding on the date of this Agreement; (iv) capital stock or
warrants or options to purchase capital stock issued in connection with bona
fide acquisitions, mergers or similar transactions, the terms of which are
approved by the Board; (v) shares of Common Stock issued or issuable to
licensors of technology of the Company to pay expenses, royalties or milestone
payments for which the Company is obligated under any licensing or related
agreement; (vi) shares of Common Stock issuable or issued pursuant to stock
splits, stock dividends and the like, or (vii) shares of Common Stock issued or
issuable by way of dividend or other distribution on Excluded Shares.
If the Company shall issue or sell any warrants or other rights to subscribe for
or purchase any additional shares of Common Stock or any securities convertible
into shares of Common Stock (collectively, "COMMON STOCK EQUIVALENTS") during
the Adjustment Period, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the effective price per share for
which Common Stock is issuable upon the exercise, exchange or conversion of such
Common Stock Equivalents shall be less than (i) the Share Price (as adjusted for
stock splits, stock dividends and the like) and (ii) if Additional Shares have
been previously issued during the Adjustment Period with respect to which the
Company has fully complied with this Section 8, then also less than the lowest
Dilutive Price (as adjusted for stock splits, stock dividends and the like) at
which such Additional Shares have been previously issued during the Adjustment
Period, then the Company shall issue to the Investor that number of shares of
Common Stock that would be issuable pursuant to this Section 8 on the basis that
the maximum number of additional shares of Common Stock issuable pursuant to all
such Common Stock Equivalents shall be deemed to have been issued and
outstanding and the Company shall have received all of the consideration payable
therefor, if any, as of the date of the actual issuance of such Common Stock
Equivalents. No further issuances shall be made under this Section 8 upon the
actual issue of such Common Stock upon the exercise, conversion or exchange of
such Common Stock Equivalents, unless such actual issue is at a per share
consideration lower than the Dilutive Price used for purposes of the initial
adjustment pursuant to this Section 8.
12
9. PARTICIPATION RIGHTS.
(a) Subject to the terms and conditions specified in this Section 9, the
Company hereby grants to each Investor a right of first offer with respect to
sales by the Company of Additional Shares, which in no event shall include
Excluded Shares, on the same terms and conditions as offered by the Company to
the other purchasers of such Additional Shares. If the Company proposes to offer
any Additional Shares for sale at any time after June 30, 2004 and before the
first anniversary of the Closing Date, the Company shall make an offering of
such Additional Shares to each Investor in accordance with the following
provisions:
(i) The Company shall deliver a notice (the "ISSUANCE NOTICE") to each
Investor stating (A) its bona fide intention to offer such Additional
Shares, (B) the number of such Additional Shares to be offered, (C)
the price and terms, if any, upon which it proposes to offer such
Additional Shares, and (D) the anticipated closing date of the sale of
such Additional Shares.
(ii) By written notification received by the Company, within five
trading days after giving of the Issuance Notice (the "RESPONSE
PERIOD"), any Investor may elect to purchase or obtain, at the price
and on the terms specified in the Issuance Notice, up to its Pro Rata
Amount (as defined below) of such Additional Shares. The "PRO RATA
AMOUNT" for any given Investor shall equal that portion of the
Additional Securities the price of which is equal to 50% of the
aggregate purchase price that such Investor paid to the Company upon
the Closing under this Agreement, and in such event the Company shall
be obligated to sell such number of Additional Securities to each such
Investor, even if the aggregate Pro Rata Amount for all such Investors
exceeds the aggregate amount of Additional Securities that the Company
had initially proposed to offer. Any such purchase shall be completed
at the same closing as that of any third party purchasers or at an
additional closing thereunder.
(iii) The Company may, during the 75-day period following the
expiration of the Response Period, offer the remaining unsubscribed
portion of such Additional Shares to any person or persons on
substantially similar terms to those specified in the Issuance Notice.
If the Company does not consummate the sale of such Additional Shares
within such period or if such Additional Shares are offered on terms
not substantially similar to the terms of the offer specified in the
Issuance Notice, the right provided hereunder shall be deemed to be
revived and such Additional Shares shall not be offered or sold unless
first reoffered to the Investors in accordance herewith.
(b) The participation right set forth in this Section 9 may not be
assigned or transferred, except that such right is assignable by each Investor
to any wholly-owned subsidiary or parent of, or to any corporation or entity
that is, within the meaning of the Securities Act, controlling, controlled by or
under common control with, any such Investor, provided in any event that such
assignee is an "accredited investor" as such term is defined in Rule 501(a)
promulgated under the Securities Act.
13
10. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement, all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the state of
California, without giving effect to principles of choice of law.
(b) JURISDICTION AND VENUE. Any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
shall be brought or otherwise commenced in any state or federal court located in
the County of San Diego, California. Each party to this Agreement: (i) expressly
and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the County of San Diego, California and each appellate
court located in the state of California, in connection with any such legal
proceeding; (ii) agrees that each state and federal court located in the County
of San Diego, California shall be deemed to be a convenient forum; and (iii)
agrees not to assert, by way of motion, as a defense or otherwise, in any such
legal proceeding commenced in any state or federal court located in the County
of San Diego, California any claim that such party is not subject personally to
the jurisdiction of such court, that such legal proceeding has been brought in
an inconvenient forum, that the venue of such proceeding is improper or that
this Agreement or the subject matter of this Agreement may not be enforced in or
by such court.
(c) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
(d) NOTICES. All notices and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person or facsimile transmission (received at the
facsimile machine to which it is transmitted prior to 5:00 p.m., local time, on
a business day in the State of California, for the party to which it is sent),
by courier or express delivery service or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section):
if to the Company: ADVENTRX Pharmaceuticals, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
14
with a copy to (not to constitute notice): Xxxxxxx XxXxxxxxx LLP
0 Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
if to the Investor: To the address set forth in Schedule 1 hereto.
(e) AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended,
waived or departed from only with the written consent of the Company and the
holders of a majority of the Shares then held by Investors. Any amendment or
waiver effected in accordance with this Section 10(e) shall be binding upon each
party to this Agreement, whether or not such party has signed such amendment or
waiver. No such waiver or consent shall be deemed to be or shall constitute a
waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent. No such
amendment shall be effective to the extent that it applies to less than all of
the Investors or their Shares, Warrants and Warrant Shares then outstanding. No
consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of this Agreement, the Registration
Rights Agreement or the Warrants unless the same consideration also is offered
to all the parties to this Agreement or the Registration Rights Agreement or
holders of the Warrants, as the case may be. The Company shall give prompt
written notice to an Investor of any amendment hereof or waiver hereunder that
was effected without the Investor's written consent.
(f) SUCCESSORS AND ASSIGNS. This Agreement is personal to each of the
parties and may not be assigned without the written consent of the other
parties; provided, however, that any of the Investors shall be permitted to
assign this Agreement to any person to whom it assigns or transfers securities
issued or issuable pursuant to this Agreement in compliance with applicable
securities laws and this Agreement. Any assignee must be an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act.
(g) SEVERABILITY. In the event that any court of competent jurisdiction
shall determine that any provision, or any portion thereof, contained in this
Agreement shall be unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it enforceable, and as so
limited shall remain in full force and effect. In the event that such court
shall deem any such provision, or portion thereof, wholly unenforceable, the
remaining provisions of this Agreement shall nevertheless remain in full force
and effect.
(h) INTERPRETATION. The parties hereto acknowledge and agree that: (i)
each party and such party's counsel has reviewed the terms and provisions of
this Agreement; (ii) the rule of construction to the effect that any ambiguities
are resolved against the drafting party shall not be employed in the
interpretation of this Agreement; and (iii) the terms and provisions of this
Agreement shall be construed fairly as to the parties hereto and not in favor of
or against any party, regardless of which party was generally responsible for
15
the preparation of this Agreement. Whenever used herein, the singular number
shall include the plural, the plural shall include the singular, the use of any
gender shall include all persons.
(i) HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify, or affect the meaning or construction of any of the terms or
provisions hereof.
(j) NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a
party hereto in exercising any right, power or remedy under this Agreement, and
no course of dealing between the parties hereto, shall operate as a waiver of
any such right, power or remedy of the party. No single or partial exercise of
any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
(k) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the parties hereto in this Agreement, shall survive (i) the
execution and delivery hereof, (ii) any investigations made by or on behalf of
the parties and (iii) the closing of the transaction contemplated hereby.
(l) EXPENSES. Except as otherwise provided in any other Transaction
Agreement, the Company and each Investor shall each be responsible for the
payment of and bear their own expenses and legal fees relating to the
preparation and negotiation of the Transaction Agreements and the consummation
of the Transactions, provided, however, that in the event of the successful
consummation of the transactions contemplated by this Agreement, the Company
shall pay the reasonable legal fees and other third-party expenses, up to
$45,000, of SDS incurred with respect to the preparation and negotiation of the
Transaction Agreements and the consummation of the transactions hereunder.
(m) COUNTERPARTS AND FACSIMILE DELIVERY. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature page
delivered by facsimile or other electronic image transmission shall be binding
to the same extent as an original signature page, with regard to any agreement
subject to the terms hereof or any amendment thereto. Any party who delivers
such a signature page agrees to later deliver an original counterpart to any
party who requests it.
(n) SECURITIES LAW COMPLIANCE.
(i) SECURITIES ACT. The Company shall timely prepare and file with the
Commission the form of notice of the sale of securities pursuant to
16
the requirements of Regulation D regarding the sale of the Shares and
Warrants under this Agreement.
(ii) STATE SECURITIES LAW COMPLIANCE -- SALE. The Company shall timely
prepare and file such applications, consents to service of process
(but not including a general consent to service of process) and
similar documents and take such other steps and perform such further
acts as shall be required by the state securities law requirements of
each jurisdiction where an Investor resides, as indicated on Schedule
1, with respect to the sale of the Shares and Warrants under this
Agreement.
(iii) STATE SECURITIES LAW COMPLIANCE --RESALE. Beginning no later
than June 30, 2004 and continuing until (i) the purchasers have sold
all of their Registrable Securities under a Registration Statement
pursuant to Section 8 or (ii) the Common Stock becomes a "covered
security" under Section 18(b)(1)(A) of the Securities Act, the Company
shall maintain within either Xxxxx'x Industrial Manual or Standard and
Poor's Standard Corporation Descriptions (or any successors to these
manuals which are similarly qualified as "recognized securities
manuals" under state Blue Sky laws) an updated listing containing (i)
the names of the officers and directors of the Company, (ii) a balance
sheet of the Company as of a date that is at no time older than
eighteen months and (iii) a profit and loss statement of the Company
for either the preceding fiscal year or the most recent year of
operations. Capitalized terms used in this Section 10(n)(iii), but not
otherwise defined in this Agreement, shall have the meanings assigned
in the Registration Rights Agreement.
(o) INDEPENDENT NATURE OF INVESTORS' OBLIGATIONS AND RIGHTS. The
obligations of each Investor under the Transaction Agreements 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 such agreement. Nothing contained in any Transaction
Agreement, and no action taken by any Investor pursuant thereto, 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. Each Investor shall be entitled to independently protect and
enforce its rights, including without limitation, the rights arising out of the
Transaction Agreements, and it shall not be necessary for any other Investor to
be joined as an additional party in any proceeding for such purpose. Each
Investor represents that it has been represented by its own separate legal
counsel in its review and negotiation of the Transaction Agreements. For reasons
of administrative convenience only, the Investors acknowledge and agree that
they and their respective counsel have chosen to communicate with the Company
and its counsel through Xxxxxx, but neither Xxxxxx nor the Company's counsel
represent any of the Investors in this transaction, except that Xxxxxx
represents SDS.
[Signature page follows.]
17
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ADVENTRX PHARMACEUTICALS, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------------------
Name: Xxxxxxxx X. Xxxxx
-------------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------------
[Investor signature pages follow.]
OMNIBUS SIGNATURE PAGE
ADVENTRX PHARMACEUTICALS, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Common Stock and Warrant
Purchase Agreement (the "AGREEMENT") to which this signature page is attached,
which, together with all counterparts of the Agreement and signature pages of
the other parties named in the Agreement, shall constitute one and the same
document in accordance with the terms of the Agreement.
Print Name: [see Schedule I attached hereto]
----------------------------------------------
By:
------------------------------------------------------
Name:
----------------------------------------------------
Title:
---------------------------------------------------
Address:
-------------------------------------------------
Telephone:
-----------------------------------------------
Facsimile:
-----------------------------------------------
SSN/EIN#:
------------------------------------------------
Number of Shares of Common Stock
Purchased
-----------------------------------------------
Number of A-1 Warrants Purchased
-------------------------
Number of A-2 Warrants Purchased
-------------------------
Aggregate Purchase Price
--------------------------------
SCHEDULE 1
Adventrx Pharmaceuticals, Inc.
Common Stock and Warrant Purchase Agreement
Investors and Shares of Common Stock and Warrants
[Each of the persons listed below are parties to this Common Stock and Warrant Purchase Agreement]
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
NUMBER OF NUMBER OF NUMBER OF
COMMON A-1 WARRANTS A-2 WARRANTS
INVESTOR NAME INVESTMENT SHARES @ $2.00 @ $2.50
AMOUNT (@ $1.50) (30%) (20%) DOMICILE
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Alpha Capital AG $500,000 333,333 99,999 66,666 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Anasazi Partners III LLC $175,000 116,666 34,999 23,333 MA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Anasazi Partners III Offshore Fund Ltd. $175,000 116,666 34,999 23,333 MA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxx X. Xxxxxx $25,500 17,000 5,100 3,400 NJ
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Bank Xxx. Xxxxxxxxx jr. & Cie (Switzerland) $7,500 5,000 1,500 1,000 Switzerland
Limited
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
BayStar Capital II, L.P. $300,000 200,000 60,000 40,000 CT
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Bristol Investment Fund, Ltd. $400,000 266,666 79,999 53,333 CA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
BSI New BioMedical Frontier (SICAV) $150,000 100,000 30,000 20,000 Switzerland
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
BSI SA $149,250 99,500 29,850 19,900 Switzerland
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Capital Ventures International $1,000,000 666,666 199,999 133,333 CA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Castle Creek Healthcare Partners LLC $500,001 333,334 100,000 66,666 IL
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Centrum Bank AG $45,000 30,000 9,000 6,000 Liechtenstein
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxxxxxxx X. Xxxxx $150,000 100,000 30,000 20,000 MA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Clariden Investments Ltd. $40,500 27,000 8,100 5,400 Switzerland
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Crescent International Ltd $270,000 180,000 54,000 36,000 Switzerland
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Crestview Capital Master, LLC $1,000,000 666,666 199,999 133,333 IL
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
E Xxxx Xxxxx $150,000 100,000 30,000 20,000 TX
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Enable Growth Partners $300,000 200,000 60,000 40,000 CA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Gamma Opportunity Capital Partners, LP $400,000 266,666 79,999 53,333 FL
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxx Xxxxxxx, MD $90,000 60,000 18,000 12,000 PA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Greenwich Growth Fund Limited $100,000 66,666 19,999 13,333 Ontario, Canada
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxx Xxxxxx $30,000 20,000 6,000 4,000 Switzerland
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
JIBS Equities $200,000 133,333 39,999 26,666 PA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxxx Xxxxx $500,000 333,333 99,999 66,666 NJ
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Laddcap Value Partners LP $150,000 100,000 30,000 20,000 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
LB (Swiss) Privatbank AG $37,500 25,000 7,500 5,000 Switzerland
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxxxxxx Investment Foundation $51,000 34,000 10,200 6,800 NC
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Longview Fund, LP $250,000 166,666 49,999 33,333 CA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxxx Xxxx $50,000 33,333 9,999 6,666 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
North Sound Legacy Fund LLC $18,000 12,000 3,600 2,400 CT
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
North Sound Legacy Institutional Fund LLC $198,000 132,000 39,600 26,400 CT
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
North Sound Legacy International Ltd $384,000 256,000 76,800 51,200 CT
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
OTAPE Investments LLC $100,000 66,666 19,999 13,333 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxx Xxxxxxxx $202,500 135,000 40,500 27,000 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxx Xxxxxxx $75,000 50,000 15,000 10,000 NJ
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Platinum Long Term Growth $100,000 66,666 19,999 13,333 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
ProMed Offshore Fund, Ltd. $109,500 73,000 21,900 14,600 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
ProMed Partners II, L.P. $146,700 97,800 29,340 19,560 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
ProMed Partners, L.P. $676,500 451,000 135,300 90,200 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
RHP Master Fund, Ltd. $300,000 200,000 60,000 40,000 PA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxxx Xxxxx $37,500 25,000 7,500 5,000 NJ
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxxx Xxxx/Short Trading Ltd. $750,000 500,000 150,000 100,000 IL
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
NUMBER OF NUMBER OF NUMBER OF
COMMON A-1 WARRANTS A-2 WARRANTS
INVESTOR NAME INVESTMENT SHARES @ $2.00 @ $2.50
AMOUNT (@ $1.50) (30%) (20%) DOMICILE
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxx X. and Xxxxxx X. Xxxxxxxx JTWROS $30,000 20,000 6,000 4,000 CA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxx X. Xxxxxxxx, MD, Inc. Combination $390,000 260,000 78,000 52,000 CA
Retirement Trust U/T/A 11/30/82
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxx Xxxxxx $15,000 10,000 3,000 2,000 PA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxx Xxxxxxx $37,500 25,000 7,500 5,000 Switzerland
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Saad Investments Company Limited $225,000 150,000 45,000 30,000 Switzerland
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxxxx & Co Bank AG $675,000 450,000 135,000 90,000 Switzerland
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
SDS Capital Group SPC, Ltd. $999,999 666,666 199,999 133,333 CT
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxx X. Xxxxx $105,000 70,000 21,000 14,000 NJ
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
SF Capital Partners Ltd. $750,000 500,000 150,000 100,000 WI
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxxxxxxx XX $350,000 233,333 69,999 46,666 Ontario,
Canada
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Sunrise Overseas, Ltd. $249,000 166,000 49,800 33,200 CT
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
TCMP3 Partners $150,000 100,000 30,000 20,000 NJ
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxx Xxxxx $60,000 40,000 12,000 8,000 MA
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Whalehaven Fund Limited $125,000 83,333 24,999 16,666 Ontario, Canada
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xxxxxxx X. Xxxxxx $51,000 34,000 10,200 6,800 NJ
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xmark Fund, L.P. $247,500 165,000 49,500 33,000 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
Xmark Fund, LTD $247,500 165,000 49,500 33,000 NY
---------------------------------------------- ---------------- ------------- --------------- ---------------- -----------------
TOTALS: $15,001,450 10,000,958 3,000,273 2,000,185
=========== ========== ========= =========
Notices to any Investor pursuant to the Agreement shall be sent to the address
in the records of the Company for such Investor.
-------------------------------------------------------------------------------------------------------------------------
Shares of Common Stock Common Stock
Name, Address and Fax Copies of Common Stock Underlying Underlying
Number of Investor Notices to Purchased A-1 Warrants A-2 Warrants Purchase Price
-------------------------------------------------------------------------------------------------------------------------
$
-------------------------------------------------------------------------------------------------------------------------
SCHEDULE 3
DISCLOSURE SCHEDULE
EXHIBIT A-1
Form of A-1 Common Stock Purchase Warrant
EXHIBIT A-2
Form of A-2 Common Stock Purchase Warrant
EXHIBIT B
Form of Closing Escrow Agreement
EXHIBIT C
Form of Registration Rights Agreement
EXHIBIT D
Form of Opinion of Company's Counsel
EXHIBIT E
INVESTOR SUITABILITY QUESTIONNAIRE
ADVENTRX PHARMACEUTICALS, INC. (THE "COMPANY")
I. INDIVIDUAL INVESTORS ONLY
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
A. PERSONAL INFORMATION
Name:
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(Exact name as it should appear on stock certificate.)
Residence Address:
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Home Telephone Number:
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Fax Telephone Number: _________________________________________________
Email Address:
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Social Security Number:
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B. DELIVERY INFORMATION (Applicable only if different than residence.)
Name of Institution or Destination:
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Contact Name:
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Delivery Address:
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Account Reference (if applicable):
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Contact Telephone Number:
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Contact Fax Telephone Number:
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Contact Email Address:
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C. EMPLOYMENT INFORMATION
Occupation:
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Number of Years:
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Present Employer:
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Position/Title:
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Business Address:
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Business Telephone:
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D. RESIDENT INFORMATION
Set forth in the space provided below the state(s)/country(ies) in
which you have maintained your principal residence during the past
three years and the date during which you resided in each
state/country.
Are you registered to vote in, or do you have a driver's license issued
by, or do you maintain a residence in any other state? If yes, in which
state(s)?
Yes _____ No _____
E. INCOME
Do you reasonably expect either your own income from all sources during
the current year to exceed $200,000 or the joint income of you and your
spouse (if married) from all sources during the current year to exceed
$300,000?
Yes _____ No _____
If not, please specify the amount:
What percentage of your income as shown above is anticipated to be
derived form sources other than salary?
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Was either your yearly income from all sources during each of the last
two years in excess of $200,000 or was the joint income of you and your
spouse (if married) from all sources during each of such years in
excess of $300,000?
Yes _____ No _____
If no, please specify the amount for:
Last Year:
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Year Before Last:
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F. NET WORTH
Will your net worth* as of the date you purchase securities of the
Company, together with the net worth of your spouse, be in excess of
$1,000,000?
Yes _____ No _____
If not, please specify amount:
* As used in this questionnaire the term "net worth" means the amount
by which total assets exceed total liabilities. In computing net worth
for purposes of this Item 5, you should value your principal residence
at cost, including cost of improvements, or at that value recently
appraised by an institutional lender making a secured loan or otherwise
by a certified appraiser, net of encumbrances.
G. EDUCATION
Please describe your educational background and degrees obtained, if
any.
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H. AFFILIATION
If you have any pre-existing personal or business relationship with the
Company or any of its officers, directors or controlling persons,
please describe the nature and duration of such relationship.
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I. BUSINESS AND FINANCIAL EXPERIENCE
Please describe in reasonable detail the nature and extent of your
business, financial and investment experience which you believe give
you the capacity to evaluate the merits and risks of the proposed
investment and the capacity to protect your interests.
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Are you purchasing the securities offered for your own account and for
investment purposes only?
Yes _____ No _____
If no, please state for whom you are investing and/or the
reason for investing.
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DATE:_________________________
INDIVIDUAL INVESTOR:
By:
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(signature)
Name: __________________
(please print)
II. ENTITY INVESTORS ONLY
A. ENTITY NAME AND CONTACT INFORMATION
Name:
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(Exact name as it should appear on stock certificate.)
Name of Institution or Destination: __________________________________
(Include if different from
stock certificate.)
Address:
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Account Reference (if applicable): ____________________________________
Tax Identification Number (if applicable):
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Contact Name:
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Contact Telephone Number:
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Contact Fax Number: ___________________________________________________
Contact Email Address:
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B. GENERAL INFORMATION
Under the laws of what jurisdiction was the Investor formed?
Was the Investor formed for the purpose of investing in the securities
being offered?
Yes _____ No _____
Set forth in the space provided below the (i) state(s), if any, in the
United States in which you maintained your principal office during the
past two years and the dates during which you maintained your office in
each state, (ii) the state(s), if any, in which you are incorporated or
otherwise organized, and (iii) the state(s), if any, in which you still
pay income taxes:
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C. ACCREDITED INVESTOR INFORMATION
(i) Is the Investor a national bank or a banking institution organized
under the laws of any state or any territory of the United States or
the District of Columbia?
Yes _____ No _____
(ii) Is the Investor a savings and loan association, building and loan
association, cooperative bank, homestead association, or similar
institution, which is supervised and examined by any state or federal
authority having supervision over such institution?
Yes _____ No _____
(iii) Is the Investor a broker or dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934?
Yes _____ No _____
(iv) Is the Investor a company (i) whose primary and predominant
business is underwriting insurance and subject to the supervision by a
regulatory agency under the laws of any state or territory, or (ii)
registered as an investment company under the Investment Company Act of
1940, or (iii) a Small Business Investment Company licensed by the U.S.
Small Business Administration?
Yes _____ No _____
(v) Is the Investor a "business development company" within the meaning
of the Investment Company Act of 1940 or the Investment Advisers Act of
1940?
Yes _____ No _____
(vi) Is the Investor an employee benefit plan under the Employee
Retirement Income Security Act of 1974 (a "PLAN") with assets in excess
of $5,000,000?
Yes _____ No _____
(a) If the Investor is such a Plan, but if the Plan's total
assets do not exceed $5,000,000, are investment decisions for
the Plan made by a bank, savings and loan association,
insurance company or registered investment adviser acting as
fiduciary? (If yes, please specify the name of the fiduciary.)
Yes _____ No _____
Name of Fiduciary:
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(b) If the Investor is a self-directed Plan, but if the Plan's
total assets do not exceed $5,000,000, are investment
decisions made solely by (1) a person or entity that can
answer "yes" to one or more questions under paragraphs (i) -
(ix) of this Item C; (2) persons whose net worth, or joint net
worth with their spouses, exceeds $1,000,000; (3) persons
whose income without regard to that of their spouses exceeded
$200,000, or whose joint income with their spouses exceeded
$300,000, in each of the last two years and who reasonably
expect such person income to exceed $200,000 or such joint
income to exceed $300,000 this year; or (4) persons who are
brokers or dealers registered pursuant to Section 15 of the
Securities Exchange Act of 1934? (If yes, please specify the
applicable subpart of this question or Item.)
Yes _____ No _____
Subpart or Item: ___________
(vii) Is the Investor (A)(1) a tax exempt organization which is
qualified under Section 501(c)(3) of the Internal Revenue Code of 1986
as amended, or (2) a corporation, or (3) a Massachusetts or similar
business trust, or (4) a partnership, not formed for the specific
purpose of acquiring the securities offered, and (B) which has assets
in excess of $5,000,000?
Yes _____ No _____
(viii) Is the Investor 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 person who has such
knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective
investment?
Yes _____ No _____
If yes, please attach a memorandum describing such person's
educational background, professional memberships or licenses,
current employment, principal business and professional
activities during the last five years, and experience as an
investor in securities. Include any additional information
evidencing that such person has sufficient knowledge and
experience in financial matters that such person would be
capable of evaluating the merits and risks of investing in the
securities being offered.
(ix) Is the Investor an entity in which all of the equity owners are
persons who are either (1) entities described in paragraphs (i) through
(viii) above; (2) persons whose net worth, or joint net worth with
their spouses, exceeds $1,000,000; (3) persons whose income without
regard to that of their spouses exceeded $200,000, or whose joint
income with their spouses exceeded $300,000, in each of the last two
years and who reasonably expect such person income to exceed $200,000
or such joint income to exceed $300,000 this year; or (4) persons who
are brokers or dealers registered pursuant to Section 15 of the
Securities Exchange Act of 1934?
Yes _____ No _____
If an equity owner is an entity described in paragraph (vi)
under this Item C, please provide the information required by
such paragraph.
The above information has been requested by the Company and will be used
solely to confirm that the Company is complying with certain securities
regulations. In furnishing the above information, the undersigned acknowledges
that the Company will be relying thereon in assessing the requirements of the
Securities Act of 1933, as amended, and other applicable securities laws.
The information contained in this questionnaire is true and complete,
and the undersigned understands that the Company and its counsel will rely on
such information for the purpose of complying with all applicable securities
laws, as discussed above. The undersigned agrees to notify the Company promptly
of any change in the foregoing information which may occur prior to any purchase
by the undersigned of stock from the Company.
Date:
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ENTITY INVESTOR:
By:
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(signature)
Name:
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(please print)
Title:
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(please print)
