Securities Purchase Agreement
Final
Copy
Symbollon
Pharmaceuticals, Inc.
00
Xxxxxx
Xxxxx
Xxxxxxxxxx,
XX 00000
The
undersigned (the “Investors”)
hereby
confirms their agreement with you as follows:
1. This
Securities Purchase Agreement is made as of the date set forth below between
Symbollon Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and
the investors identified on the signature page hereto (each, including its
successors and assigns, an “Investor”
and
collectively the “Investors”).
2. Pursuant
to the Terms and Conditions for Purchase of Securities, attached hereto as
Annex
I
and
incorporated herein by reference as if fully set forth herein (the “Terms
and Conditions”),
the
Company and the Investors agree that each Investor will purchase from the
Company and the Company will issue and sell to each Investor, in a private
placement (the “Offering”)
250,000 shares (the “Shares”)
of
Class A common stock of the Company, $0.001 par value per share (the
“Common
Stock”),
at a
purchase price of $1.00 per Share, and redeemable warrants (the “Warrants”)
in the
form of Exhibit
A
to the
Terms and Conditions to purchase up to a number of shares (the “Warrant
Shares”)
equal
to 100% of the Shares, which shall be exercisable on or after the Initial
Date
of the Warrants (as defined in the Warrants), have a term of exercise equal
to
five (5) years and have a strike price of $1.00 per share, for an aggregate
purchase price of $1,000,000 (the “Purchase
Price”);
and
Unless
otherwise requested by the Investors as indicated in a certificate questionnaire
substantially in the form of Exhibit
B
to the
Terms and Conditions, certificates representing the Shares and Warrants
purchased by the Investors, respectively, will be registered in the Investors’
names and addresses as set forth below.
3. The
Company and the Investors agree to enter into a registration rights agreement
(the “Registration
Rights Agreement”)
in the
form of Exhibit
C
to the
Terms and Conditions, concurrently with the execution of this Securities
Purchase Agreement (the Securities Purchase Agreement and the Registration
Rights Agreement, collectively the “Agreements”).
4. The
Investors represent that, except as set forth below, as of the date hereof
(a)
each has had no position, office or other material relationship within the
past
three years with the Company or its affiliates, (b) each does not
beneficially own (including the right to acquire or vote) any securities
of the
Company, and (c) each has no direct or indirect affiliation or association
with
any National Association of Securities Dealers, Inc. (“NASD”)
member. Exceptions:
(If
no
exceptions, write “none.” If left blank, response will be deemed to be
“none.”)
Please
confirm that the foregoing correctly sets forth the agreement between us
by
signing below.
Dated
as of:
June 2,
2006
Renaissance
US Growth Investment Trust PLC
By:
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx, President
XXXX
Capital Group, Inc.,
Investment
Manager
Address:
c/o
RENN
Capital Group, Inc.
0000
X.
Xxxxxxx Xxxxxxxxxx
Xxxxx
000-XX 00
Xxxxxx,
XX 00000-0000
Attention:
Compliance
AGREED
AND ACCEPTED:
Symbollon
Pharmaceuticals, Inc.
By:
/s/ Xxxx X. Xxxxxxxxx
Xxxx
X.
Xxxxxxxxx
President/CEO
[SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE]
2
Please
confirm that the foregoing correctly sets forth the agreement between us
by
signing below.
Dated
as of:
June 2,
2006
BFS
US
Special Opportunities Trust PLC
By:
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx, President
XXXX
Capital Group, Inc.,
Investment
Adviser
Address:
c/o
RENN
Capital Group, Inc.
0000
X.
Xxxxxxx Xxxxxxxxxx
Xxxxx
000-XX 00
Xxxxxx,
XX 00000-0000
Attention:
Compliance
AGREED
AND ACCEPTED:
Symbollon
Pharmaceuticals, Inc.
By:
/s/ Xxxx X. Xxxxxxxxx
Xxxx
X.
Xxxxxxxxx
President/CEO
[SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE]
2
Please
confirm that the foregoing correctly sets forth the agreement between us
by
signing below.
Dated
as of:
June 2,
2006
Renaissance
Capital Growth & Income Fund III, Inc.
By:
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx, President
Address:
c/o
RENN
Capital Group, Inc.
0000
X.
Xxxxxxx Xxxxxxxxxx
Xxxxx
000-XX 00
Xxxxxx,
XX 00000-0000
Attention:
Compliance
AGREED
AND ACCEPTED:
Symbollon
Pharmaceuticals, Inc.
By:
/s/ Xxxx X. Xxxxxxxxx
Xxxx
X.
Xxxxxxxxx
President/CEO
[SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE]
2
Please
confirm that the foregoing correctly sets forth the agreement between us
by
signing below.
Dated
as of:
June 2,
2006
Premier
XXXX US Emerging Growth Fund Ltd.
By:
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx, President
XXXX
Capital Group, Inc.,
Investment
Adviser
Address:
c/o
RENN
Capital Group, Inc.
0000
X.
Xxxxxxx Xxxxxxxxxx
Xxxxx
000-XX 00
Xxxxxx,
XX 00000-0000
Attention:
Compliance
AGREED
AND ACCEPTED:
Symbollon
Pharmaceuticals, Inc.
By:
/s/ Xxxx X. Xxxxxxxxx
Xxxx
X.
Xxxxxxxxx
President/CEO
[SECURITIES
PURCHASE AGREEMENT SIGNATURE PAGE]
2
Annex
I
Terms
and Conditions for Purchase of Securities
1. Agreement
to Sell and Purchase the Securities. Purchase and Sale.
At the
Closing (as defined in Section 2), the Company will sell to the Investors,
and
the Investors will purchase from the Company, upon the terms and subject
to the
conditions set forth herein, and at the Purchase Price, the number of Shares
and
Warrants described in paragraph 2 of the Securities Purchase Agreement attached
hereto (collectively with this Annex I and the other exhibits attached hereto,
this “Agreement”).
2. Initial
Closing.
2.1 The
completion of the purchase and sale of the Shares and Warrants (the
“Closing”)
shall
occur on a date mutually agreed by the Investors and the Company (the“Closing
Date”),
which
date shall not be later than June 9, 2006 (the “Outside
Date”).
At
the Closing, the Company shall deliver to each Investor one or more certificates
representing the number of Shares and Warrants purchased by such Investor,
respectively, set forth in paragraph 2 of the Securities Purchase Agreement,
each such certificate to be registered in the name of an Investor or, if
so
indicated on the Certificate Questionnaire, substantially in the form attached
hereto as Exhibit
B,
in the
name of a nominee designated by such Investor. In exchange for the delivery
of
the certificates representing such Shares and Warrants, the Investors shall
deliver the Purchase Price to the Company by wire transfer of immediately
available funds pursuant to the Company’s written instructions.
2.2 The
Company’s obligation to issue and sell the Shares and Warrants to the Investors
shall be subject to the following conditions, any one or more of which may
be
waived by the Company:
(a)
prior
receipt by the Company of an executed copy of this Agreement;
3
(b)
the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties made by the Investors in this Agreement and
the
fulfillment of the obligations of the Investors to be fulfilled by it under
this
Agreement on or prior to the Closing
in all
material respects;
(c)
the
execution and delivery by the Investors of the Registration Rights Agreement;
(d)
receipt of the Purchase Price; and
(e)
the
absence of any order, writ, injunction, judgment or decree that questions
the
validity of the Agreements or the right of the Company or the Investors to
enter
into the Agreements or to consummate
the
transactions contemplated hereby
and thereby.
2.3 The
Investors’ obligation to purchase the Shares and Warrants shall be subject to
the following conditions, any one or more of which may be waived by the
Investors:
(a)
the
delivery to the Investors of a legal opinion, dated the Closing Date, from
general counsel of the Company, substantially in the form attached hereto
as
Exhibit
E;
(b)
the
accuracy in all material respects of the representations and warranties made
by
the Company in this Agreement on the date hereof and, if different, on the
Closing Date and the fulfillment of the obligations of the Company to be
fulfilled by it under this Agreement on or prior to the Closing in all material
respects;
(c)
the
execution and delivery by the Company of the Registration Rights Agreement,
(d)
the
fulfillment of the obligations of the Company to be fulfilled by it under
this
Agreement on or prior to the Closing;
(e)
the
absence of any order, writ, injunction, judgment or decree that questions
the
validity of the Agreements or the right of the Company or the Investors to
enter
into such Agreements or to consummate the transactions contemplated hereby
and
thereby; and
(f)
the
delivery to the Investors by the Secretary or Assistant Secretary of the
Company
of a certificate stating that the conditions specified in this paragraph
have
been fulfilled.
2.4 In
the
event that the Closing does not occur on or before the Outside Date as a
result
of the Company’s failure to satisfy any of the conditions set forth above (and
such condition has not been waived by the Investor), the Company shall return
any and all funds paid hereunder to the Investors no later than one (1) Business
Day following the Initial Outside Date and the Investors shall have no further
obligations hereunder. For purposes of this Agreement, “Business
Day”
shall
mean any day other than a Saturday, Sunday or other day on which the New
York
Stock Exchange or commercial banks located in Boston, Massachusetts are
permitted or required by law to close.
3. Representations,
Warranties and Covenants of the Company.
Except
as otherwise described in (a) the Company’s Annual Report on Form 10-KSB for the
year ended December 31, 2005 (and any amendments thereto filed at least two
(2)
Business Days prior to the date hereof with the SEC), the Company’s Quarterly
Report on Form 10-QSB for the period ended March 31, 2006 (and any amendments
thereto filed at least two (2) Business Days prior to the date hereof with
the
SEC), the Company’s Proxy Statement for its 2006 Annual Meeting of Shareholders
(and any amendments thereto filed at least two Business Days prior to the
date
hereof) or any of the Company’s Current Reports on Form 8-K filed since March
31, 2006 and at least two (2) Business Days prior to the date hereof
(collectively, the “SEC
Reports”)
or (b)
the disclosure schedules, if any, of the Company delivered concurrently herewith
(the “Disclosure
Schedules”),
the
Company hereby represents and warrants to, and covenants with, the Investors
as
of the date hereof and the Closing Date, as follows:
3.1 Organization.
The
Company is duly incorporated and validly existing in good standing under
the
laws of the State of Delaware. The Company has full power and authority to
own,
operate and occupy its properties and to conduct its business as presently
conducted and is registered or qualified to do business and in good standing
in
each jurisdiction in which it owns or leases property or transacts business
and
where the failure to be so qualified would have a material adverse effect
upon
the Company and its subsidiaries as a whole or the business, financial
condition, prospects, properties, operations or assets of the Company as
a whole
or the Company’s ability to perform its obligations under the Agreements in all
material respects (“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 under
the Securities Act of 1933, as amended (the “Securities
Act”)).
4
3.2 Due
Authorization. The
Company has all requisite power and authority to execute, deliver and perform
its obligations under the Agreements. The execution and delivery of the
Agreements, and the consummation by the Company of the transactions contemplated
hereby, have been duly authorized by all necessary corporate action and no
further action on the part of the Company or the Board or shareholders is
required. The Agreements have been 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 to the extent
(i)
rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, (ii) such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and (iii) such enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3.3 Non-Contravention.
The
execution and delivery of the Agreements, the issuance and sale of the Shares
and Warrants to be sold by the Company under the Agreements, the fulfillment
of
the terms of the Agreements and the consummation of the other transactions
contemplated thereby will not (A) result in a conflict with, give rise to
any payment 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, or any material 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
the
Company or its properties are bound, (ii) the Articles of Incorporation,
by-laws or other organizational documents of the Company, as amended, or
(iii) any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority binding upon the Company
or its properties or (B) result in the creation or imposition of any lien,
encumbrance, claim, security interest or restriction whatsoever upon any
of the
material properties or assets of the Company or an acceleration of indebtedness
pursuant to any obligation, agreement or condition contained in any material
bond, debenture, note or any other evidence of indebtedness or any material
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 property
or assets of the Company is subject; except in the case of each of A(i),
A(iii)
and B, such as would not reasonably be expected to result in 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 is required for the execution and delivery of the
Agreements by the Company and the valid issuance or sale of the Shares and
Warrants by the Company pursuant to the Agreements, other than such as have
been
made or obtained, and except for any filings required to be made under federal
or state securities laws and exchange listing rules and
requirements.
3.4 Capitalization.
The
authorized and outstanding capital stock of the Company as of the date hereof
is
as described in the SEC Reports, except that the number of shares of Common
Stock outstanding as of the date hereof is 7,951,737. The Shares to be sold
pursuant to the Agreements have been duly authorized, and when issued and
paid
for in accordance with the terms of the Agreements, will be duly and validly
issued, fully paid and nonassessable, subject to no lien, claim or encumbrance
(except
for any such lien, claim or encumbrance created,
directly or indirectly, by the Investors). 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 the registration requirements
of 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 for the outstanding warrants and options described in the SEC Reports,
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 and providing for
the
issuance or sale of any capital stock of the Company, any such convertible
or
exchangeable securities or any such rights, warrants or options. Without
limiting the foregoing, no preemptive right, co-sale right, registration
right,
right of first refusal or other similar right exists with respect to the
issuance and sale of the Shares, except as provided in the Agreements. There
are
no shareholders agreements, voting agreements or other similar agreements
with
respect to the Common Stock to which the Company is a party.
5
3.5 Legal
Proceedings. There
is
no material legal or governmental proceeding pending, or to the knowledge
of the
Company, threatened, to which the Company is a party or of which the business
or
property of the Company is subject that is required to be disclosed and that
is
not so disclosed in the SEC Reports. Neither the Company is subject to any
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other government body.
3.6 No
Violations. The
Company is not in violation of its Certificate of Incorporation, bylaws or
other
organizational documents, as amended, or in violation of any 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, is reasonably likely to have a Material Adverse Effect,
and
the Company is not 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 or any
indenture, mortgage, deed of trust or any other material agreement or instrument
to which the Company is a party or by which the Company or its properties
are
bound, which default is reasonably likely to have a Material Adverse
Effect.
3.7 Governmental
Permits, Etc. 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, except where
the failure to currently possess such franchises, licenses, certificates
and
other authorizations is not reasonably likely to have a Material Adverse
Effect.
3.8 Intellectual
Property.
(a) Except
for matters which are not reasonably likely to have a Material Adverse Effect,
(i) the Company has ownership of, or a license or other legal right to use,
all
patents, copyrights, trade secrets, trademarks, Internet domain names, customer
lists, designs, manufacturing or other processes, computer software, systems,
data compilation, research results or other proprietary rights used in the
business of the Company (collectively, “Intellectual
Property”)
and
(ii) all of the Intellectual Property owned by the Company consisting of
patents, registered trademarks and registered copyrights have been duly
registered in, filed in or issued by the United States Patent and Trademark
Office, the United States Register of Copyrights or the corresponding offices
of
other jurisdictions and have been maintained and renewed in accordance with
all
applicable provisions of law and administrative regulations in the United
States
and/or such other jurisdictions.
(b) Except
for matters which are not reasonably likely to have a Material Adverse Effect
or
as are detailed in the SEC Reports, all material licenses or other material
agreements under which (i) the Company employs rights in Intellectual Property,
or (ii) the Company has granted rights to others in Intellectual Property
owned
or licensed by the Company are in full force and effect, there is no default
by
the Company with respect thereto, and the consummation of the transactions
contemplated by the Agreements will not result in any default, change or
acceleration of any obligations under any such licenses or
agreements.
(c) The
Company believes that it has taken all steps reasonably required in accordance
with sound business practice and business judgment to establish and preserve
the
ownership of all material Intellectual Property owned by the
Company.
6
(d) Except
for matters which are not reasonably likely to have a Material Adverse Effect,
to the knowledge of the Company, (i) the present business, activities and
products of the Company do not infringe any intellectual property of any
other
person; (ii) the Company has not misappropriated or is making unauthorized
use
of any confidential information or trade secrets of any person; and (iii)
the
activities of any of the employees of the Company, acting on behalf of the
Company, do not violate any agreements or arrangements related to confidential
information or trade secrets of third parties.
(e) No
proceedings are pending, or to the knowledge of the Company, threatened,
which
challenge the rights of the Company to the use of Intellectual Property,
except
for matters which are not reasonably likely to have a Material Adverse
Effect.
(f) Except
for matters which are not reasonably likely to have a Material Adverse Effect,
to the knowledge of the Company, no third parties are infringing upon or
misappropriating any Intellectual Property owned by the Company.
3.9 Financial
Statements. The
financial statements of the Company and the related notes contained in the
SEC
Reports present fairly and accurately in all material respects the financial
position of the Company as of the dates therein indicated, and the results
of
its operations, cash flows and the changes in shareholders’ equity for the
periods therein specified, subject, in the case of unaudited financial
statements for interim periods, to normal year-end audit adjustments. Such
financial statements (including the related notes) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis at the times and throughout the periods therein specified, except that
unaudited financial statements may not contain all footnotes required by
generally accepted accounting principles.
3.10 No
Material Adverse Change.
Except
as disclosed in the SEC Reports, in
any
press releases issued by the Company
at least two (2) Business Days prior to the date of this Agreement,
or
disclosed directly to the Investor by the Company at least two (2) Business
Days
prior to the date of this Agreement, since March 31, 2006, there has not
been
(i) an event, circumstance or change that has had or is reasonably likely
to have a Material Adverse Effect, (ii) any obligation incurred by the Company,
direct or contingent, that is material to the Company, (iii) any dividend
or distribution of any kind declared, paid or made on the capital stock of
the
Company, or (iv) any loss or damage (whether or not insured) to the physical
property of the Company which has had a Material Adverse Effect.
3.11 Listing
Compliance. The
Company’s Common Stock is registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”),
and
is quoted on the Over-the-Counter Bulletin Board (the “OTCBB”), and the Company
has taken no action intended to, or which to its knowledge could have the
effect
of, terminating the registration of the Common Stock under the Exchange Act
or
the quotation of the Common Stock from the OTCBB. The issuance of the Shares
does not require shareholder approval.
3.12 Reporting
Status.
The
Company has timely made all filings required under the Exchange Act during
the
twelve (12) months preceding the date of this Agreement, and all of those
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
respective dates 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. The Company is currently eligible to register the resale
of
Common Stock by the Investors pursuant to a registration statement on Form
SB-2
under the Securities Act (the “Registration
Statement”).
7
3.13 No
Manipulation; Disclosure of Information. The
Company has not taken and will not take any action designed to or that might
reasonably be expected to cause or result in an unlawful manipulation of
the
price of the Common Stock to facilitate the sale or resale of the Securities.
3.14 Accountants.
Xxxxxx,
Xxxxxxxx & Company, Ltd., who expressed their opinion with respect to the
consolidated financial statements contained in the Company’s Annual Report on
Form 10-KSB for the year ended December 31, 2005, have advised the Company
that
they are, and to the knowledge of the Company they are, an independent
registered public accounting firm as required by the Securities Act and the
rules and regulations promulgated thereunder.
3.15 Contracts.
Except
for matters which are not reasonably likely to have a Material Adverse Effect
or
as are detailed in the SEC Reports and those contracts that are substantially
or
fully performed or expired by their terms, the contracts listed as exhibits
to
or described in the SEC Reports that are material to the Company, and all
amendments thereto, 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 under any of such contracts.
3.16 Taxes.
Except
for matters which are not reasonably likely have a Material Adverse Effect,
each
of the Company has filed all necessary federal, state and foreign income
and
franchise tax returns and has paid or accrued all taxes shown as due thereon,
and the Company has no knowledge of a tax deficiency which has been asserted
or
threatened against the Company.
3.17 Transfer
Taxes.
On the
Closing Date, all stock transfer or other taxes (other than income taxes)
which
are required to be paid in connection with the sale and transfer of the Shares
hereunder will be, or will have been, fully paid or provided for by the Company
and the Company will have complied with all laws imposing such
taxes.
3.18 Investment
Company.
The
Company is not an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for an investment company, within the
meaning of the Investment Company Act of 1940, as amended, and will not be
deemed an “investment company” as a result of the transactions contemplated by
this Agreement.
3.19 Insurance.
The
Company maintains insurance of the types and in the amounts that the Company
reasonably believes is adequate for its businesses, including, but not limited
to, insurance covering real and personal property owned or leased by the
Company
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.
3.20 Offering
Prohibitions.
Neither
the Company nor any person acting on its behalf or at its direction has in
the
past or will in the future take any action to sell, offer for sale or solicit
offers to buy any securities of the Company which would bring the offer or
sale
of the Securities as contemplated by this Agreement within the provisions
of
Section 5 of the Securities Act. Assuming the accuracy of the representations
and warranties of the Investors contained in this Agreement, the offer, sale
and
issuance of the Securities will be exempt from the registration requirements
of
the Securities Act and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws.
3.21 Related
Party Transactions. Except
for (i) the transactions described and contemplated by the Agreements; and
(ii)
as disclosed in the SEC Reports, to
the
knowledge of the Company, no transaction
has occurred between or among the Company or any of its affiliates, officers
or
directors or any affiliate or affiliates of any such officer or director
that is
required to be disclosed pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
8
3.22 Books
and Records.
The
books, records and accounts of the Company accurately and fairly reflect,
in
reasonable detail, the transactions in, and dispositions of, the assets of,
and
the operations of, the Company. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance 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.
3.23 Employee
Matters.
With
respect to the Benefit Plans, to the knowledge of the Company, no event has
occurred and no condition or set of circumstances exist, in connection with
which the Company could be subject to any material liability that would have
a
material adverse effect on it or its business under ERISA, the United States
Internal Revenue Code of 1986, as amended, or any other applicable law. The
term
“Benefit
Plan”
means
each “employee benefit plan” (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
including, without limitation, multiemployer plans within the meaning of
Section 3(37) of ERISA), and all stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation, employee loan and all other employee benefit
plans, agreements, programs, policies or other arrangements, whether or not
subject to ERISA, under which (i) any current or former employee, director
or consultant of the Company has any present or future right to benefits
and
which are contributed to, sponsored by or maintained by the Company or any
of
its respective subsidiaries or (ii) the Company has had or has any present
or future liability. The transactions contemplated by this Agreement will
not
result in any severance, change of control or termination pay or termination
benefits or otherwise require the Company to make any cash payments to any
of
its directors, officers, employees or other affiliates.
3.24 Rights
Plan.
The
Company is not party to any contract or agreement with respect to, and does
not
maintain any, stockholders rights plan, poison pill or similar agreement,
plan
or arrangement with respect to its Common Stock or any other capital stock
of
the Company.
3.25 Finder’s
Fees.
The
Company has not incurred any placement fees, commissions, brokerage or finder’s
fees in connection with this Agreement, except for the finder’s fees due to the
Number One Corporation.
4. Representations,
Warranties and Covenants of the Investors.
4.1 Investors
Knowledge and Status.
Each
Investor represents and warrants to, and covenants with, the Company that:
(i)
the
Investor was at the time it was offered the Securities, is as of the date
hereof
and of the Closings and will be on each date it exercises any Warrants an
“accredited investor” as defined in Regulation D under the Securities Act, is
knowledgeable, sophisticated and experienced in making, and is qualified
to make
decisions with respect to, investments in securities presenting an investment
decision similar to that involved in the purchase of the Securities, and
has
requested, received, reviewed and considered all information it deemed relevant
in making an informed decision to purchase the Securities and is able to
bear
the economic risk of an investment in the Securities and, at the present
time,
is able to afford a complete loss of such investment;
9
(ii)
the
Investor understands that the Securities are “restricted securities” and have
not been registered under the Securities Act and is acquiring the number
of
Securities set forth in paragraph 2 of the Securities Purchase Agreement
in the
ordinary course of its business and for its own account for investment only,
has
no present intention of distributing any of such Securities and has no
arrangement or understanding with any other persons regarding the distribution
of such Securities (this representation and warranty not limiting the Investor’s
right to sell Securities pursuant to a Registration Statement filed under
the
Registration Rights Agreement or otherwise, or other than with respect to
any
claim arising out of a breach of this representation and warranty, the
Investor’s right to indemnification under Section 3 of the Registration Rights
Agreement);
(iii)
the
Investor will not, directly or indirectly, offer, sell, pledge, transfer
or
otherwise dispose (each a “Disposition”)
of (or
solicit any offers to buy, purchase or otherwise acquire or take a pledge
of)
any of the Securities 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 in paragraph 4 of the Securities Purchase
Agreement and the Investor Questionnaire attached hereto as Exhibit
D
for use
in preparation of the Registration Statement and for determining the
availability of state “Blue Sky” exemptions and the answers thereto are true and
correct as of the date hereof and will be true and correct as of the Closing
Date;
(v)
the
Investor will notify the Company promptly of any change in any of such
information until such time as the Investor has sold all of its Securities
or
until the Company is no longer required to keep the Registration Statement
effective;
(vi)
the
Investor acknowledges that it has reviewed the materials presented to the
Investor in connection with the Offerings and has been afforded (A) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in
the
Securities; (B) access to information about the Company and its respective
financial condition, results of operations, business, properties, management
and
prospects sufficient to enable it to evaluate its investment; and (C) the
opportunity to obtain such additional information that the Company possesses
or
can acquire without unreasonable effort or expense that is necessary to make
an
informed investment decision with respect to the investment; and
(vii)
the
Investor has, in connection with its decision to purchase the number of
Securities set forth in paragraph 2 of the Securities Purchase Agreement,
relied
upon the representations and warranties of the Company contained herein and
the
information contained in the SEC Reports.
The
Investor understands that the issuance of the Securities to the Investor
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 representations made
by the
Investor in this Agreement. No person is authorized by the Company to provide
any representation that is inconsistent with or in addition to those contained
herein or in the SEC Reports, and the Investor acknowledges that it has not
received or relied on any such representations.
4.2 Power
and Authority.
Each
Investor represents and warrants to the Company that (i) the Investor is
an
entity duly organized, validly existing and in good standing under the laws
of
the jurisdiction of its organization with full right, power, authority and
capacity to enter into the Agreements and to consummate the transactions
contemplated thereby and has taken all necessary action to authorize the
execution, delivery and performance of the Agreements, and (ii) the Agreements
constitute valid and binding obligations of the Investor enforceable against
the
Investor in accordance with their terms, except to the extent (1) rights
to
indemnity and contribution may be limited by state or federal securities
laws or
the public policy underlying such laws, (2) such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws
affecting creditors’ and contracting parties’ rights generally and (3) such
enforceability may be subject to general principles of equity (regardless
of
whether such enforceability is considered in a proceeding in equity or at
law).
10
4.3 Short
Position Prior to the Date Hereof.
From the
earlier of (i) thirty (30) days prior to the date hereof and (ii) the date
the
Investors learned of the Offering, neither the Investors nor any affiliate
has
directly or indirectly established or agreed to establish any
hedge, “put equivalent position” (as defined in Rule 16a-1 under the Exchange
Act) or other position
in the Common Stock that is outstanding on the Closing Date and
that
is designed to or could reasonably be expected to lead to or result in a
Disposition by the Investor
or any
other person or entity. For purposes hereof, a “hedge or other position”
includes, without limitation, effecting any short sale or having in effect
any
short position (whether or not such sale or position is against the box and
regardless of when such position was entered into) or any purchase, sale
or
grant of any right (including, without limitation, any put or call option)
with
respect to the Common Stock or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives
any
significant part of its value from the Common Stock.
Each
Investor acknowledges that this representation is made for the benefit of
the
Company.
4.4 Short
Sales and Confidentiality After the Date Hereof. Each
Investor covenants that neither it nor any affiliates acting on its behalf
or
pursuant to any understanding with it will execute any short sales during
the
period after the date the Investor learned of the Offering and ending at
the
time that the transactions contemplated by this Agreement has been publicly
disclosed following the Company’s announcement described
in
Section 6.2. Each Investor covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company as
described in 6.2, the Investor will maintain, the confidentiality of all
disclosures made to it in connection with the Offering (including the existence
and terms of the Offering). Each Investor understands and acknowledges that
the
SEC currently takes the position that coverage of short sales of shares of
the
Common Stock “against the box” prior to the effective date of the Registration
Statement with the Securities is a violation of Section 5 of the Securities
Act,
as set forth in Item 65, Section 5 under Section A, of the Manual of Publicly
Available Telephone Interpretations, dated July 1997, compiled by the Office
of
Chief Counsel, Division of Corporation Finance. Notwithstanding the foregoing,
each Investor does not make any representation, warranty or covenant hereby
that
it will not engage in short sales in the securities of the Company after
the
time that the transactions contemplated by this Agreement are first publicly
disclosed as described in Section 6.2.
4.5 No
Investment, Tax or Legal Advice.
Each
Investor understands that nothing in the SEC Reports, this Agreement, or
any
other materials presented to the Investor in connection with the purchase
and
sale of the Securities constitutes legal, tax or investment advice. Each
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 Securities.
4.6 Confidential
Information.
Each
Investor covenants that from the date hereof it will maintain in confidence
all
material non-public information regarding the Company received by the Investor
from the Company, including the receipt and content of any Suspension Notice
(as
defined in the Registration Rights Agreement)) 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) or as otherwise required by law; provided,
however, that before making any disclosure in reliance on this Section 4.6,
the
Investor will 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 commercially reasonable efforts
to ensure that confidential treatment will be accorded any non-public
information so furnished. The parties acknowledge and agree that as of the
date
hereof and as of the Closing Date, the Company has disclosed to the Investors
the material non-public information described in Schedule 4.6 and that such
information is subject to this Section 4.6.
11
4.7 PATRIOT
Act.
Each
Investor represents and warrants to, and covenants with, the Company that:
(i) it
is in compliance with Executive Order 13224 and the regulations administered
by
the U.S. Department of the Treasury (“Treasury”)
Office
of Foreign Assets Control,
(ii) its
parents, subsidiaries, affiliated companies, officers, directors and partners,
and to the Investor’s knowledge, its shareholders, owners, employees, and
agents, are not on the List of Specially Designated Nationals and Blocked
Persons maintained by Treasury and have not been designated by Treasury as
a
financial institution of primary money laundering concern,
(iii) to
the Investor’s knowledge after reasonable investigation, all of the funds to be
used to acquire the Securities are derived from legitimate sources and are
not
the product of illegal activities, and
(iv) the
Investor is in compliance with all other applicable U.S. anti-money laundering
laws and regulations and has implemented, if applicable, an anti-money
laundering compliance program in accordance with the requirements of the
Bank
Secrecy Act, as amended by the USA PATRIOT Act, Pub. L. 107-56.
5. 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 Investors
herein shall survive the execution of this Agreement, the delivery to the
Investors of the Securities being purchased and the payment therefor, and
a
party’s reliance on such representations and warranties shall not be affected by
any investigation made by such party or any information developed thereby.
6. Registration
of Securities; Public Statements.
6.1 In
connection with the purchase and sale of the Securities by the Investors
contemplated hereby, the Company has entered into a Registration Rights
Agreement with the Investors providing for the filing by the Company of a
Registration Statement on Form SB-2 to enable the resale of the Shares and
Warrant Shares by the Investors and their transferees and assigns from time
to
time.
6.2 The
Company agrees to disclose on a Current Report on Form 8-K the existence
of the
Offering and the material terms, thereof, including pricing, within one (1)
Business Day after the respective Closing. The Company will not issue any
public
statement, press release or any other public disclosure listing the Investors
as
one of the purchasers of the Securities without the Investors’ prior written
consent, except as may be required by applicable law or rules of any exchange
on
which the Company’s securities are listed. No Investor shall issue any press
release, or otherwise make any such public statement regarding the Offering
without the prior written consent of the Company, except as may be required
by
applicable law.
12
7. Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing, shall be delivered (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 (B) if from outside the United
States, by International Federal Express (or comparable service) or facsimile,
and shall be deemed given:
(i)
if
delivered by first-class registered or certified mail domestic, upon the
Business Day received,
(ii)
if
delivered by nationally recognized overnight carrier, one (1) Business Day
after
timely delivery to such carrier,
(iii)
if
delivered by International Federal Express (or comparable service), two (2)
Business Days after timely delivery to such carrier, or
(iv)
if
delivered by facsimile, upon electric confirmation of receipt and shall be
addressed as follows, or to such other address or addresses as may have been
furnished in writing by a party to another party pursuant to this paragraph:
(a) if
to the
Company, to:
Symbollon
Pharmaceuticals, Inc.
00
Xxxxxx
Xxxxx
Xxxxxxxxxx,
XX 00000
Attention: President
Telephone: (000)
000-0000
with
a
copy to:
Xxxxxxxx
Xxxxxx Xxxxxx & Xxxxxxx LLP
0000
Xxxxxxxx (00xx
Xxxxx)
Xxx
Xxxx,
XX 00000
Attn: Xxxxxx
Xxxxxx, Esq.
Telephone: (000)
000-0000
(b) if
to the
Investors, at their addresses on the signature page to the Securities Purchase
Agreement.
8. Amendments;
Waiver. This
Agreement may not be modified or amended except pursuant to an instrument
in
writing signed by the Company and the Investors. Any waiver of a provision
of
this Agreement must be in writing and executed by the party against whom
enforcement of such waiver is sought.
9. 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.
10. Entire
Agreement; Severability. This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, negotiations and understandings between the parties,
both oral and written relating to the subject matter hereof. If any provision
contained in this Agreement is determined to 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.
13
11. Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of Delaware, without giving effect to the principles of
conflicts of law.
12. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. No party may assign this Agreement
or
any rights or obligations hereunder without the prior written consent of
the
other; provided, however, that each Investor may assign all or any of its
rights
and obligations hereunder to any affiliate of Investor that is controlled,
directly or indirectly, by Renaissance Capital Group, Inc., and that such
affiliate agrees in writing to be bound to the terms and conditions contained
herein that apply to the Investor.
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.
In the
event that any signature is delivered by fax transmission, such signature
shall
create a valid and binding obligation of the party executing (or on whose
behalf
such signature is executed) with the same force and effect as if such fax
signature page were an original thereof.
*
* *
*
14
Exhibit
A
Symbollon
Pharmaceuticals, Inc.
FORM
OF WARRANT
Exhibit
B
Symbollon
Pharmaceuticals, Inc.
CERTIFICATE
QUESTIONNAIRE
Pursuant
to Section 2 of the Agreement, please provide us with the following
information:
|
1.
|
The
exact name in which your Shares and Warrants are to be registered
(this is
the name that will appear on your stock certificate(s)). You may
use a
nominee name if appropriate:
|
||
|
Shares
|
Warrants
|
||
|
2.
|
If
a nominee name is listed in response to item 1 above, the relationship
between the Investor and such nominee:
|
||
|
Shares
|
Warrants
|
||
|
3.
|
The
mailing address of the registered holder listed in response to
item 1
above:
|
||
|
Shares
|
Warrants
|
||
|
4.
|
The
Social Security Number or Tax Identification Number of the registered
holder listed in the response to item 1 above:
|
||
|
Shares
|
Warrants
|
||
Exhibit
C
Symbollon
Pharmaceuticals, Inc.
FORM
OF REGISTRATION RIGHTS AGREEMENT
Exhibit
D
Symbollon
Pharmaceuticals, Inc.
INVESTOR
QUESTIONNAIRE
(All
information will be treated confidentially)
To:
Symbollon Pharmaceuticals, Inc.,
The
undersigned hereby acknowledges the following:
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 $.001 per share (the “Shares”),
and
common stock purchase warrants (the “Warrants”
and
together with the Shares, the “Securities”)
of
Symbollon Pharmaceuticals, Inc. (the “Company”).
The
Securities are being offered and sold by the Company without registration
under
the Securities Act of 1933, as amended (the “Securities
Act”),
and
the securities laws of certain states, in reliance on the exemptions contained
in Section 4 of the Securities Act and on Regulation D promulgated thereunder
and in reliance on similar exemptions under applicable state laws. The Company
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 Company that the investor will meet the
applicable suitability requirements. The information supplied by the undersigned
will be used in determining whether the undersigned meets such criteria,
and
reliance upon the private offering exemption from registration is based in
part
on the information herein supplied.
This
Questionnaire does not constitute an offer to sell or a solicitation of an
offer
to buy any security. The undersigned’s answers will be kept strictly
confidential. However, by signing this Questionnaire the undersigned will
be
authorizing the Company to provide a completed copy of this Questionnaire
to
such parties as the Company deems appropriate in order to ensure that the
offer
and sale of the Securities will not result in a violation of the Securities
Act
or the securities laws of any state and that the undersigned otherwise satisfies
the suitability standards applicable to purchasers of the Securities. All
potential investors must answer all applicable questions and complete, date
and
sign this Questionnaire. The undersigned shall print or type its responses
and
attach additional sheets of paper if necessary to complete its 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
B. Status
as Accredited Investor
The
undersigned is an “accredited investor” as such term is defined in Regulation D
under the Securities Act, because 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) a
bank as
defined in Section 3(a)(2) of the Securities Act, or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the
Securities 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 Securities
Act; an
investment company registered under the Investment Company Act of 1940 or
a
business development company as defined in Section 2(a)(48) of that act;
a Small
Business Investment Company 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;
_____ (2) a
private
business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940;
_____ (3) an
organization described in Section 501(c)(3) of the Internal Revenue Code
of
1986, 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).
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 a professional
appraiser. 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 depreciation, 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.
C. Representations
The
undersigned hereby represents and warrants to the Company 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 Company, and the undersigned will notify the Company 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 Company,
based on the advice of its counsel, 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 to which this Questionnaire
is
attached) until such time as an amendment to the Registration Statement has
been
filed by the Company and declared effective by the Securities and Exchange
Commission or until the Company has amended or supplemented such Prospectus.
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 has carefully considered the potential risks relating to the
Company
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 described in the Company’s Annual Report on Form
10-KSB for the year ended December 31, 2005.
6. The
following is a list of all states and other jurisdictions in which blue sky
or
similar clearance will be required in connection with the undersigned’s purchase
of the Securities:
___________________________________________
___________________________________________
___________________________________________
The
undersigned agrees to notify the Company in writing of any additional states
or
other jurisdictions in which blue sky or similar clearance will be required
in
connection with the undersigned’s purchase of the Securities.
IN
WITNESS WHEREOF, the undersigned has executed this Questionnaire this _____
day
of __________, 2006, 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)
1
Exhibit
E
FORM
OF LEGAL OPINION
June
[·],
2006
The
Investors in Common Stock of Symbollon Pharmaceuticals, Inc.
Ladies
and Gentlemen:
I
have
acted as general counsel for Symbollon Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), in connection with the offer and sale by the
Company of (i) [·]
shares
(“Shares”) of common stock, par value $0.001 per share (the “Common Stock”), and
(ii) a warrant (“Warrant”) to purchase up to [·]
additional shares (“Warrant Shares”) of Common Stock from the Company, in each
case pursuant to the Securities Purchase Agreement by the Company and you,
as
Investor, dated as of June [·],
2006
(the “Purchase Agreement”). The Shares, the Warrant and the Warrant Shares are
referred to herein as the “Securities.” This opinion is being delivered to you
pursuant to Article 2 of the Purchase Agreement. Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed thereto
in the
Purchase Agreement.
As
a
basis for the opinions hereinafter expressed, I have reviewed the following
documents:
(i) an
executed copy of the Purchase Agreement;
(ii) an
executed copy of the Registration Rights Agreement;
| (iii) |
executed
copies of the Warrant (the Purchase Agreement, the Registration
Rights
Agreement and the Warrant, collectively the “Transaction Documents”); and
|
| (iv) |
such
other documents that I have deemed necessary and appropriate in
order to
deliver the opinions contained herein, including copies of the
Company's
Certificate of Incorporation and By-Laws certified by the Secretary
of the
State of Delaware, and the corporate secretary of the Company,
respectively.
|
I
have
made such other investigations as I have considered necessary or appropriate
for
the purpose of this opinion.
The
opinions expressed herein are limited to the Delaware General Corporation
Law
and laws of the Commonwealth of Massachusetts and the federal laws of the
United
States of America.
As
to
questions of fact material to our opinion, I have relied, without independent
verification, on the representations and warranties contained in the Transaction
Documents and on certificates of officers of the Company and public
officials.
Insofar
as the opinions expressed herein are indicated to be based on my knowledge
or on
matters known to me, such opinion is based upon my actual knowledge, and
is
intended to signify that during the course of my representation, no information
has come to my attention, which would cause me to believe that any matters
so
qualified are not true and correct in all material respects.
Based
on
the foregoing, I am of the opinion that:
1. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, with the corporate power
to
conduct its business as presently conducted. The Company has the corporate
power
to execute, deliver and perform the Transaction Documents including, without
limitation, the issuance and sale of the Shares and Warrant Shares.
2. Each
of
the Transaction Documents has been duly authorized by all requisite corporate
action, executed and delivered by the Company. Assuming due and effective
authorization, execution and delivery by the Investor, each of the Transaction
Documents constitutes the valid and binding agreement of the Company enforceable
in accordance with its terms.
3. The
Shares and Warrant Shares have been duly authorized and, upon issuance, delivery
and payment therefor as described in the Purchase Agreement and Warrant,
will be
validly issued, fully paid and nonassessable.
4. The
execution, delivery and performance of the Transaction Documents and the
issuance and sale of the Securities in accordance with the Transaction Documents
will not: (a) violate or conflict with, or result in a breach of or default
under, the Articles of
Incorporation
or
by-laws of the Company, (b) violate or conflict with, or constitute a default
under any material agreement or instrument (limited, with your consent, to
agreements filed with the Securities and Exchange Commission (the “SEC”) under
the Exchange Act and applicable rules and regulations) to which the Company
is a
party, or (c) violate any law of
the
United States or the Commonwealth of Massachusetts, any rule or regulation
of
any governmental authority or regulatory body of the United States or the
Commonwealth of Massachusetts, the Delaware General Corporation Law or any
judgment, order or decree known to me and applicable
to the Company
of any
court, governmental authority or arbitrator.
5. To
my
knowledge, no consent, approval, authorization or order of, and no notice
to or
filing with, any governmental agency or body or any court is required to
be
obtained or made by the Company for the issue and sale of the Shares pursuant
to
the Agreement, except such as have been obtained or made and such as may
be
required under the federal securities laws or the Blue Sky laws of the various
states.
6. Assuming
the representations made by each Investor and the Company set forth in the
Agreement and the exhibits thereto are true and correct, the offer, sale,
issuance and delivery of the Shares and Warrant to the Investors, in the
manner
contemplated by the Agreement, is exempt from the registration requirements
of
the Securities Act.
7. I
know of
no pending
or overtly threatened lawsuit or claim against the Company which is required
to
be described in
the
reports
filed by the
Company
with
the
SEC
under
the Exchange Act
and
applicable rules and regulations thereunder that is not so described as
required.
The
opinions expressed herein shall be interpreted in accordance with the Legal
Opinion Principles issued by the Committee on Legal Opinions of the American
Bar
Association’s Business Law Section as published in 53 Business Lawyer 831 (May
1998).
The
opinions expressed herein are qualified to the extent that (i) the
enforceability of any right or remedy may be subject to or affected by any
bankruptcy, liquidation, arrangement, avoidance, reorganization, insolvency,
fraudulent conveyance, moratorium, homestead or other similar laws relating
to
or affecting the rights of creditors generally, whether the issue of
enforceability is considered in a proceeding in equity or at law; (ii) the
remedy of injunctive relief, specific performance and any other equitable
remedies may be unavailable in any jurisdiction or may be withheld as a matter
of judicial discretion; (iii) public policy considerations, which, in each
case,
may result in the possible unenforceability of certain remedial provisions
of
the documents or rights to indemnification thereunder and (iv) the
enforceability of any right or remedy may be subject to general principles
of
equity including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether enforceability is considered
in a proceeding in equity or in law) and to the discretion of the court before
which proceedings thereof may be brought.
The
opinions expressed herein are being furnished to you solely for your benefit
in
connection with the transactions described above and may not be circulated,
quoted or referred to, or relied upon by any other person without our prior
written consent.
Very
truly yours,
Xxxx
X.
Xxxxxxxxx,
General
Counsel
