EXHIBIT 10.1
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SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of April
19, 2005, by and among MacroChem Corporation, a Delaware corporation (the
"Company"), and the purchasers identified on the signature pages hereto (each a
"Purchaser" and collectively the "Purchasers"); and
WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act (as defined below), and Rule
506 promulgated thereunder, the Company desires to issue and sell to the
Purchasers, and the Purchasers, severally and not jointly, desire to purchase
units from the Company representing in the aggregate, up to $500,000 of Common
Stock and Warrants to purchase additional shares of Common Stock equal to 50% of
the number of shares of Common Stock purchased hereunder (the "Offering");
provided, that following the Offering the number of shares of Common Stock,
including the number of shares of Common Stock issuable upon exercise of the
Warrants and any other Common Stock Equivalents, held directly or indirectly by
any Purchaser shall not exceed 19.9% of the total number of shares of Common
Stock or voting power outstanding immediately prior to the Offering.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:
ARTICLE I.
DEFINITIONS
1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:
"ACTION" shall have the meaning ascribed to such term in Section
3.1(j).
"AFFILIATE" means any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule
144. With respect to a Purchaser, any investment fund or managed account
that is managed on a discretionary basis by the same investment manager as
such Purchaser will be deemed to be an Affiliate of such Purchaser.
"BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday or a day on which banking institutions in
the State of New York or the Commonwealth of Massachusetts are authorized
or required by law or other governmental action to close.
"CLOSING" means the closing of the purchase and sale of the Shares and
the Warrants pursuant to Section 2.1.
"CLOSING DATE" means the date hereof, or such later date as the
parties mutually agree.
"CLOSING PRICE" means on any particular date (a) the last reported
closing price per share of Common Stock on such date on the Trading Market
(as reported by Bloomberg L.P. at 4:15 PM (New York time) as the last
reported closing price for regular session trading on such day), or (b) if
there is no such price on such date, then the closing price on the Trading
Market on the date nearest preceding such date (as reported by Bloomberg
L.P. at 4:15 PM (New York time) as the closing price for regular session
trading on such day), or (c) if the Common Stock is not then listed or
quoted on the Trading Market and if prices for the Common Stock are then
reported in the "pink sheets" published by the Pink Sheets LLC (formerly
the National Quotation Bureau Incorporated) (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent
price per share of the Common Stock so reported, or (d) if the shares of
Common Stock are not then publicly traded the fair market value of a share
of Common Stock as determined by an appraiser selected in good faith by the
Purchasers of a majority in interest of the Shares.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock of the Company, $0.01 par value
per share, and any securities into which such common stock may hereafter be
reclassified.
"COMMON STOCK EQUIVALENTS" means any securities of the Company or its
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time
convertible into or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.
"COMPANY COUNSEL" means Ropes & Xxxx LLP.
"DISCLOSURE SCHEDULES" means the Disclosure Schedules attached as
Annex I hereto.
"EFFECTIVE DATE" means the date that the Registration Statement is
first declared effective by the Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"INTELLECTUAL PROPERTY RIGHTS" shall have the meaning ascribed to such
term in Section 3.1(o).
"LIENS" means a lien, charge, security interest, encumbrance, right of
first refusal or other restriction.
"MANAGEMENT PURCHASE AGREEMENT" means the Securities Purchase
Agreement, dated as of the date hereof, by and between the Company and
certain executive officers and/or directors of the Company pursuant to
which the Company shall issue and sell Units, and the executive officers
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and/or directors shall purchase, Units for an aggregate purchase price of
at least $300,000.
"MATERIAL ADVERSE EFFECT" shall have the meaning ascribed to such term
in Section 3.1(b).
"MATERIAL PERMITS" shall have the meaning ascribed to such term in
Section 3.1(m).
"PER UNIT PURCHASE PRICE" equals $0.25.
"PERSON" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
"REGISTRATION STATEMENT" means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering
the resale by the Purchasers of the Shares and the Warrant Shares and the
resale by the purchasers under the Management Purchase Agreement of the
securities issued or issuable thereunder.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, to be dated as of the Closing Date, among the Company, each
Purchaser and each purchaser under the Management Purchase Agreement, in
the form of Exhibit C hereto.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SEC REPORTS" shall have the meaning ascribed to such term in Section
3.1(h).
"SECURITIES" means the Shares, the Warrants and the Warrant Shares.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means an aggregate of up to 3,000,000 shares of Common Stock,
or such other amount that the Company in its sole discretion shall
determine, which are being issued and sold by the Company to the Purchasers
at the Closing.
"SUBSCRIPTION AMOUNT" means, as to each Purchaser and the Closing, the
amounts set forth below such Purchaser's signature block on the signature
page hereto, in United States dollars and in immediately available funds.
"SUBSIDIARY" means any Person in which the Company, directly or
indirectly, owns capital stock or holds an equity or similar interest.
"TRADING DAY" means (i) a day on which the Common Stock is traded on a
Trading Market, or (ii) if the Common Stock is not listed on a Trading
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Market, a day on which the Common Stock is traded on the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock
is not quoted on the OTC Bulletin Board, a day on which the Common Stock is
quoted in the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to
its functions of reporting prices); provided, that in the event that the
Common Stock is not listed or quoted as set forth in (i), (ii) and (iii)
hereof, then Trading Day shall mean a Business Day.
"TRADING MARKET" means the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the
American Stock Exchange, the New York Stock Exchange, the Nasdaq National
Market or the Nasdaq SmallCap Market.
"TRANSACTION DOCUMENTS" means this Agreement, the Registration Rights
Agreement and the Warrant.
"UNIT" means a Share and a Warrant to purchase one-half of a share of
Common Stock.
"WARRANTS" means Common Stock Purchase Warrants, in the form of
Exhibit A, issuable to the Purchasers at Closing, which warrants shall be
exercisable immediately and have an exercise price equal to $0.35 per share
and a term of exercise of five years.
"WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 CLOSING. At the Closing, each Purchaser shall purchase, severally and
not jointly, and the Company shall issue and sell to each Purchaser, such number
of Units set forth opposite such Purchaser's name on Schedule A hereto at the
Per Unit Purchase Price. Upon satisfaction of the conditions set forth in
Section 2.2, the Closing shall occur at the offices of Ropes & Xxxx LLP, Xxx
Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000, or such other location as the parties
shall mutually agree.
2.2 CLOSING CONDITIONS. (a) At the Closing the Company shall deliver or
cause to be delivered to the placement agent's counsel (except as otherwise
provided below):
(i) this Agreement duly executed by the Company;
(ii) one or more stock certificates, registered in the name of
each Purchaser free and clear of all restrictive and other legends
(except as expressly provided in Section 4.1(b) hereof), evidencing
such number of Shares equal to the number of Units set forth opposite
such Purchaser's name on Schedule A hereto, registered in the name of
such Purchaser;
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(iii) a Warrant, registered in the name of such Purchaser,
pursuant to which such Purchaser shall have the right to acquire up to
the number of shares of Common Stock equal to 50% of the number of
Units set forth opposite such Purchaser's name on Schedule A hereto;
(iv) the Registration Rights Agreement duly executed by the
Company;
(v) a legal opinion of Company Counsel, in the form of Exhibit B
attached hereto.
(b) At the Closing each Purchaser shall deliver or cause to be
delivered to the Company the following:
(i) this Agreement duly executed by such Purchaser;
(ii) such Purchaser's Subscription Amount by wire transfer to the
account of the Company;
(iii) the Registration Rights Agreement duly executed by such
Purchaser; and
(iv) the Stock Certificate and Registration Statement
Questionnaires in the form attached hereto as Appendix I duly executed
by such Purchaser.
(c) Each Purchaser's obligation to purchase the Units set forth
opposite such Purchaser's name on Schedule A hereto is subject to the
satisfaction, or waiver by such Purchaser, prior to the Closing of the
following conditions:
(i) certain executive officers and/or directors of the Company
shall have purchased Units for an aggregate purchase price of at least
$300,000.
(ii) All representations and warranties of the Company contained
herein (i) that are not qualified by reference to materiality shall be
true and correct in all material respects on and as of the Closing
Date with the same force and effect as if made on and as of the
Closing Date and (ii) that are qualified by reference to materiality
shall be true and correct in all respects on and as of the Closing
Date with the same force and effect as if made on and as of the
Closing Date, in each case, other than representations and warranties
that expressly speak only as of a specific date or time, which shall
continue to be true and correct as of such specified date or time.
(d) The Company's obligation to issue and sell the Units to the
Purchasers pursuant to this Agreement is subject to the satisfaction, or
waiver by the Company, of the following condition:
(i) All representations and warranties of each Purchaser
contained herein (i) that are not qualified by reference to
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materiality shall be true and correct in all material respects on and
as of the Closing Date with the same force and effect as if made on
and as of the Closing Date and (ii) that are qualified by reference to
materiality shall be true and correct in all respects on and as of the
Closing Date with the same force and effect as if made on and as of
the Closing Date, in each case, other than representations and
warranties that expressly speak only as of a specific date or time,
which shall continue to be true and correct as of such specified date
or time.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
under the corresponding section of the Disclosure Schedules delivered
concurrently herewith, the Company hereby makes the following representations
and warranties as of the date hereof and as of the Closing Date to each
Purchaser:
(a) SUBSIDIARIES. The Company has no direct or indirect Subsidiaries.
(b) ORGANIZATION AND QUALIFICATION. The Company is an entity duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware, with the requisite corporate power and authority to own
and use its properties and assets and to carry on its business as currently
conducted. The Company is not in violation of any of the provisions of its
certificate of incorporation or bylaws. The Company is duly qualified to
conduct business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to
be so qualified or in good standing, as the case may be, would not have or
reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, or condition
(financial or otherwise) of the Company, or (iii) adversely impair the
Company's ability to perform fully on a timely basis its obligations under
any Transaction Document (any of (i), (ii) or (iii), a "Material Adverse
Effect").
(c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of each of the Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of
the Company and no further consent or action is required by the Company,
its Board of Directors or its stockholders. Each Transaction Document has
been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity) and except to the extent that rights to indemnification and
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contribution contained in this Agreement may be limited by federal or state
securities laws or public policy relating thereto.
(d) NO CONFLICTS. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby do not and will not (i)
conflict with or violate any provision of the Company's certificate of
incorporation or bylaws, or (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing a Company
debt or otherwise) or other understanding to which the Company is a party
or by which any property or asset of the Company is bound or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental
authority to which the Company is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Company is bound or affected; except in the case of each of clauses (ii)
and (iii), such as would not have or reasonably be expected to result in a
Material Adverse Effect.
(e) FILINGS, CONSENTS AND APPROVALS. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than (a) the filing with the Commission of the
Registration Statement, the application(s) to each Trading Market for the
listing of the Shares and Warrant Shares for trading thereon in the time
and manner required thereby, and applicable Blue Sky filings, (b) such as
have already been obtained or such exemptive filings as are required to be
made under applicable securities laws, (c) such other filings as may be
required following the Closing Date under the Securities Act, the Exchange
Act and corporate law or (d) where the failure to obtain such consent,
waiver, authorization or order, or to give such notice or to make such
filing or registration could not reasonably be expected to have or result
in a Material Adverse Effect.
(f) ISSUANCE OF THE SECURITIES. The Shares and the Warrant Shares are
duly authorized and, when issued and paid for in accordance with the terms
hereof and of the Warrants, will be duly and validly issued, fully paid and
nonassessable, free and clear of all liens, charges, security interests,
encumbrances, rights of first refusal or other restrictions (collectively,
"Liens") and shall not be subject to preemptive rights or similar rights of
stockholders. The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to
this Agreement and the Warrants.
(g) CAPITALIZATION. The number of shares and type of all authorized,
issued and outstanding capital stock and the capitalization of the Company
as of December 31, 2004 is as set forth in Schedule 3.1(g). All outstanding
shares of capital stock are duly authorized, validly issued, fully paid and
nonassessable and have been issued in compliance with all applicable
securities laws. Except as disclosed in Schedule 3.1(g) or the SEC Reports,
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or as contemplated by this Agreement, there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person
any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company
is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common
Stock. Except as set forth on Schedule 3.1(g), 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) and the
issue and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the
Purchasers) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price
under such securities. To the knowledge of the Company, except as
specifically disclosed in Schedule 3.1(g), no Person or group of related
Persons beneficially owns (as determined pursuant to Rule 13d-3 under the
Exchange Act), or has the right to acquire, by agreement with or by
obligation binding upon the Company, beneficial ownership of in excess of
5% of the outstanding Common Stock, ignoring for such purposes any
limitation on the number of shares of Common Stock that may be owned at any
single time.
(h) SEC REPORTS; FINANCIAL STATEMENTS. Except as disclosed on Schedule
3.1(h), the Company has filed all reports required to be filed by it under
the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) of the Exchange Act, for the two years preceding the date
hereof (or such shorter period as the Company was required by law to file
such material) (the foregoing materials, including the exhibits thereto
(together with any materials filed by the Company under the Exchange Act,
whether or not required), being collectively referred to herein as the "SEC
Reports" and, together with the Disclosure Schedules to this Agreement, the
"Disclosure Materials") on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the
periods involved ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and
fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments. All material agreements to which the Company is
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a party or to which the property or assets of the Company are subject are
included as part of or specifically identified in the SEC Reports.
(i) MATERIAL CHANGES. Since the date of the latest audited financial
statements included within the SEC Reports, except as disclosed in the SEC
Reports or on Schedule 3.1(i), (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in
a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) liabilities incurred
in the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in filings made
with the Commission, (iii) the Company has not altered its method of
accounting or the identity of its auditors, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock and (v) the Company has not
issued any equity securities to any officer, director or consultant, except
pursuant to existing Company stock option plans. The Company does not have
pending before the Commission any request for confidential treatment of
information.
(j) LITIGATION. Except as disclosed in the SEC Reports, there is no
action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against the Company
or any of its properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county,
local or foreign) (collectively, an "Action") which (i) adversely affects
or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company, nor, to the knowledge of the
Company, any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal or
state securities laws or a claim of breach of fiduciary duty. There has not
been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or,
to the knowledge of the Company, any current or former director or officer
of the Company.
(k) LABOR RELATIONS. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees
of the Company which could reasonably be expected to result in a Material
Adverse Effect.
(l) COMPLIANCE. Except as disclosed in the SEC Reports, the Company is
not (i) in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would
result in a default by the Company under), nor has the Company received
notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties
is bound (whether or not such default or violation has been waived), (ii)
in violation of any order of any court, arbitrator or governmental body, or
(iii) in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and
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local laws applicable to its business, except in the case of clauses (i),
(ii) or (iii) as would not have or reasonably be expected to result in a
Material Adverse Effect.
(m) REGULATORY PERMITS. The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local
or foreign regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports, except where the failure to
possess such permits would not have or reasonably be expected to result in
a Material Adverse Effect ("Material Permits"), and the Company has not
received any notice of proceedings relating to the revocation or
modification of any Material Permit.
(n) TITLE TO ASSETS. Except as disclosed on Schedule 3.1(n), the
Company has good and marketable title in fee simple to all real property
owned by it that is material to the business of the Company and good and
marketable title in all personal property owned by it that is material to
the business of the Company, in each case free and clear of all Liens,
except for Liens as do not materially affect the value of such property and
do not materially interfere with the use made and proposed to be made of
such property by the Company and Liens for the payment of federal, state or
other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the Company
are held by it under valid, subsisting and enforceable leases with which
the Company is in material compliance.
(o) PATENTS AND TRADEMARKS. The Company has, or has rights to use, all
patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights that are
necessary or material for use in connection with its business as described
in the SEC Reports and which the failure to so have could have or
reasonably be expected to result in a Material Adverse Effect
(collectively, the "Intellectual Property Rights"). Since December 31,
2004, the Company has not received a written notice that the Intellectual
Property Rights used by the Company violates or infringes the rights of any
Person. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights.
(p) INSURANCE. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
as are prudent and customary in the businesses in which the Company is
engaged.
(q) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as set forth in
the SEC Reports, none of the officers or directors of the Company and, to
the knowledge of the Company, none of the employees of the Company is
presently a party to any transaction with the Company (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to
or by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
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(r) CERTAIN FEES. Except for the fees described on Schedule 3.1(r),
all of which are payable to registered broker-dealers, no brokerage or
finder's fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf
of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by this Agreement.
(s) PRIVATE PLACEMENT. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the
Securities by the Company to the Purchasers as contemplated hereby. Except
for the filing of a notice of listing of additional shares with the Trading
Market, the issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market. Neither the
Company nor, to the knowledge of the Company, any Person acting on the
Company's behalf has sold or offered to sell or solicited any offer to buy
the Securities by means of any form of general solicitation or advertising.
(t) INVESTMENT COMPANY. The Company is not, and is not an Affiliate
of, an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
(u) REGISTRATION RIGHTS. Except as disclosed on Schedule 3.1(u), no
Person has any right to cause the Company to effect the registration under
the Securities Act of any securities of the Company.
(v) LISTING AND MAINTENANCE REQUIREMENTS. Except as disclosed in the
SEC Reports, the Company has not, in the two years preceding the date
hereof, received notice from any Trading Market on which the Common Stock
is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading
Market.
(w) DISCLOSURE. The Company confirms that neither the Company nor any
other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that constitutes or might
constitute material, non-public information. The Company understands and
confirms that the Purchasers will rely on the foregoing representations and
covenants in effecting transactions in securities of the Company. All
disclosure provided to the Purchasers regarding the Company, its business
and the transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, furnished by or on behalf of the Company are
true and correct and do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
(x) NO INTEGRATED OFFERING. Except as listed on Schedule 3.1(x),
neither the Company, nor any of its affiliates, nor any Person acting on
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its or their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the
Securities Act or any applicable shareholder approval provisions,
including, without limitation, under the rules and regulations of any
exchange or automated quotation system on which any of the securities of
the Company are listed or designated.
(y) ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF COMPANY
SECURITIES. The Company acknowledges and agrees that each of the Purchasers
is acting solely in the capacity of an arm's length purchaser with respect
to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or
fiduciary of the Company or any other Purchaser (or in any similar
capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and any advice given by any Purchaser or
any of their respective representatives or agents in connection with the
Transaction Document and the transactions contemplated hereby and thereby
is merely incidental to such Purchaser's purchase of the Securities. The
Company further represents to each Purchaser that the Company's decision to
enter into the Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the
Company and its representatives.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:
(a) ORGANIZATION; AUTHORITY. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by such
Purchaser of the transactions contemplated by this Agreement, including the
purchase of the Securities, has been duly authorized by all necessary
corporate or similar action on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser,
and when delivered by such Purchaser in accordance with the terms hereof,
will constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except to the extent
that enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding
at law or in equity) and except to the extent that rights to
indemnification and contribution contained in this Agreement may be limited
by federal or state securities laws or public policy relating thereto.
(b) INVESTMENT INTENT. Such Purchaser is acquiring the Securities as
principal for its own account for investment purposes only and not with a
view to or for distributing or reselling such Securities or any part
thereof, without prejudice, however, to such Purchaser's right, subject to
12
the provisions of this Agreement, at all times to sell or otherwise dispose
of all or any part of such Securities pursuant to an effective registration
statement under the Securities Act or under an exemption from such
registration and in compliance with applicable federal and state securities
laws. Nothing contained herein shall be deemed a representation or warranty
by such Purchaser to hold Securities for any period of time. Such Purchaser
is acquiring the Securities hereunder in the ordinary course of its
business. Such Purchaser does not have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the
Securities.
(c) PURCHASER STATUS. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and as of the Closing
Date and at each exercise date under its respective Warrant it will be, an
"accredited investor" as defined in Rule 501(a) under the Securities Act.
(d) EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and currently is able to afford a complete loss of such
investment.
(e) RELATIONSHIP WITH THE COMPANY. Except as set forth on Schedule
3.2(e), (i) such Purchaser is not the beneficial owner of any securities of
the Company (other than the Securities) and (ii) neither such Purchaser nor
any of its affiliates, directors or principal equity holders (5% or more)
has held any position or office or has had any other material relationship
with the Company (or its predecessors or affiliates) during the past three
years.
(f) MAXIMUM OWNERSHIP. Immediately following the purchase of Units
pursuant to this Agreement, such Purchaser will not beneficially own,
directly or indirectly, shares of Common Stock, including shares of Common
Stock issuable upon exercise or conversion of the Warrants and any other
Common Stock Equivalents, in an amount in excess of 19.9% of the total
number of shares of Common Stock or voting power outstanding immediately
prior to the issuance of the Securities in this offering.
(g) ACCESS TO INFORMATION. Such Purchaser acknowledges that it has
reviewed the Disclosure Materials and has been afforded (i) 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 the risks of investing in
the Securities; (ii) access to information about the Company and the
Company's financial conditions, results of operation, business, properties,
management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information
which 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 to verify the accuracy and completeness of
the information contained in the Disclosure Materials. Neither such
inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect
13
such Purchaser's right to rely on the truth, accuracy and completeness of
the Disclosure Materials and the Company's representations and warranties
contained in the Transaction Documents.
(h) GENERAL SOLICITATION. Such Purchaser is not purchasing the
Securities as a result of or subsequent to any advertisement, article,
notice or other communication regarding such Securities published in any
newspaper, magazine or similar media or broadcast over television or radio
or presented at any seminar or any other general solicitation or general
advertisement.
(i) RELIANCE. Such Purchaser understands and acknowledges that (i) the
Securities are being offered and sold to it without registration under the
Securities Act in a private placement that is exempt from the registration
requirements of the Securities Act and (ii) the availability of such
exemption, depends in part on, and the Company will rely upon the accuracy
and truthfulness of, the foregoing representations and warranties and such
Purchaser hereby consents to such reliance.
The Company acknowledges and agrees that each Purchaser does not make or
has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 TRANSFER RESTRICTIONS.
(a) The Securities may only be disposed of pursuant to an effective
registration statement under the Securities Act, to the Company or pursuant
to an available exemption from the registration requirements of the
Securities Act, and in compliance with any applicable state securities
laws. In connection with any transfer of Securities other than pursuant to
an effective registration statement or to the Company, the Company may
require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under
the Securities Act. The Company hereby consents to and agrees to register
on the books of the Company and with its transfer agent, without any such
legal opinion (unless otherwise required by its transfer agent), any
transfer of Securities by a Purchaser to an Affiliate of such Purchaser,
provided that the transferee agrees to be bound by all of the applicable
provisions of the Transaction Documents, including the representations of
the Purchaser, and certifies to the Company that it is an "accredited
investor" as defined in Rule 501(a) under the Securities Act.
(b) The Purchasers agree to the imprinting, so long as is required by
this Section 4.1(b), of a legend on any of the Securities in the following
form:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
14
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
(c) Certificates evidencing Shares and Warrant Shares otherwise
transferable under Section 4.1(a) except as set forth in the last sentence
of Section 4.1(a), shall not be transferable on the books of the Company by
a Purchaser unless the certificate evidencing those Securities, when
submitted to the transfer agent, is accompanied by a separate Certificate
of Subsequent Sale executed by an officer of, or other person duly
authorized by, the Purchaser in the form of Appendix II attached hereto.
Promptly upon receipt of such Certificate of Subsequent Sale, certificates
evidencing Shares and Warrant Shares bearing a restrictive legend
(including the legend set forth in Section 4.1(b)) may be exchanged by the
transfer agent for share certificates not bearing such legend. If requested
by the transfer agent after the date on which the registration statement
has been declared effective, the Company shall promptly issue, or cause its
counsel to issue, a legal opinion to the transfer agent to the effect that
the Registration Statement has become effective and that accordingly
un-legended certificates can be issued. If all or any portion of a Warrant
is exercised at a time when there is an effective registration statement to
cover the resale of the Warrant Shares, such Warrant Shares shall be issued
free of all legends.
(d) Each Purchaser severally and not jointly agrees that the removal
of the restrictive legend from certificates representing Securities as set
forth in this Section 4.1 is predicated upon the Company's reliance that
the Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus
delivery requirements, or an exemption therefrom.
4.2 FURNISHING OF INFORMATION. As long as any Purchaser owns Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act. Upon the request
of any such holder of Securities, the Company shall deliver to such holder a
written certification of a duly authorized officer as to whether it has complied
with the preceding sentence. As long as any Purchaser owns Securities, if the
Company is not required to file reports pursuant to the Exchange Act, it will
prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchasers to sell the
Securities under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell such Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144.
4.3 INTEGRATION. The Company shall not, and shall use its best efforts to
ensure that no Affiliate thereof shall, after the date hereof, sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any security
15
(as defined in Section 2 of the Securities Act) that would be integrated with
the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities to the
Purchasers.
4.4 SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall by 9:00 a.m.,
New York City Time, on the Trading Day following the Closing Date, issue a press
release reasonably acceptable to the placement agent's counsel disclosing all
material terms of the transactions contemplated by the Transaction Documents.
The Company and the placement agent's counsel shall consult with each other in
issuing any press releases with respect to the transactions contemplated hereby,
and no Purchaser shall issue any such press release or otherwise make any such
public statement without the prior consent of the Company, which consent shall
not be unreasonably withheld, except if such disclosure is required by law, in
which case the disclosing party shall promptly provide the other party with
prior notice of such public statement or communication.
4.5 SHAREHOLDERS RIGHTS PLAN. No claim will be made or enforced by the
Company that any Purchaser is, solely as a result of purchasing Securities
pursuant to this Agreement, an "Acquiring Person" under any shareholders rights
plan or similar plan or arrangement in effect or hereafter adopted by the
Company, or that any Purchaser could be deemed to trigger the provisions of any
such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents.
4.6 NON-PUBLIC INFORMATION. The Company covenants and agrees that neither
it nor any director or officer of the Company will provide any Purchaser or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall have
executed a written agreement regarding the confidentiality and use of such
information. The Company understands and confirms that each Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.
4.7 USE OF PROCEEDS. Except as set forth on Schedule 4.7 attached hereto,
the Company shall use the net proceeds from the sale of the Securities hereunder
for working capital purposes and not for the satisfaction of any portion of the
Company's debt (other than payment of trade payables in the ordinary course of
the Company's business and prior practices), to redeem any Company equity or
equity-equivalent securities or to settle any outstanding litigation.
4.8 RESERVATION OF COMMON STOCK. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times a sufficient number of shares of Common Stock for the purpose of enabling
the Company to issue Warrant Shares pursuant to the Warrants.
4.9 LISTING OF COMMON STOCK. The Company hereby agrees to use commercially
reasonable efforts to maintain the listing of the Common Stock on a Trading
Market, and as soon as reasonably practicable following the Closing (but not
later than the Effective Date) to list the applicable Shares and Warrant Shares
on such Trading Market. The Company further agrees, if the Company applies to
have the Common Stock traded on any other Trading Market, it will include in
such application the Shares and Warrant Shares, and will take such other action
16
as is necessary or desirable in the reasonable opinion of the Purchasers to
cause the Shares and Warrant Shares to be listed on such other Trading Market as
promptly as possible. The Company will take all action reasonably necessary to
continue the listing and trading of its Common Stock on a Trading Market and
will comply in all material respects with the Company's reporting, filing and
other obligations under the bylaws or rules of such Trading Market.
ARTICLE V.
MISCELLANEOUS
5.1 FEES AND EXPENSES. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement, except that the Company shall pay
JMP Securities LLC, the placement agent for this transaction, the fees set forth
on Schedule 3.1(r). The Company shall pay all stamp and other taxes and duties
levied in connection with the sale of the Securities.
5.2 ENTIRE AGREEMENT. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
5.3 NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified on the signature pages attached hereto prior to 6:30 p.m. (New York
City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number on the signature pages attached hereto on a day that is not a
Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c)
the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.
5.4 AMENDMENTS; WAIVERS. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and the Purchasers holding a majority of the Shares then outstanding
or, in the case of a waiver, by the party against whom enforcement of any such
waiver is sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.
5.5 CONSTRUCTION. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
17
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
5.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser. No Purchaser may assign any
or all of its rights under this Agreement to any Person except in connection
with a transfer of Securities permitted under Section 4.1(a), and then only if
such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the "Purchasers".
5.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
5.8 GOVERNING LAW. The corporate law of the State of Delaware shall govern
all issues concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in The
City of New York, Borough of Manhattan. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by delivering a copy thereof via overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Each party hereto (including its affiliates, agents, officers, directors and
employees) hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any
provisions of a Transaction Document, then the prevailing party in such action
or proceeding shall be reimbursed by the other party for its attorneys fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
18
5.9 SURVIVAL. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and delivery and/or exercise of the
Securities, as applicable, for a period of three years.
5.10 EXECUTION. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
5.11 SEVERABILITY. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
5.12 RESCISSION AND WITHDRAWAL RIGHT. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.
5.13 REPLACEMENT OF SECURITIES. If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.
5.14 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
5.15 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. The decision of each Purchaser to
19
purchase Securities pursuant to this Agreement has been made by such Purchaser
independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company which may have been made or given by any
other Purchaser or by any agent or employee of any other Purchaser, and no
Purchaser or any of its agents or employees shall have any liability to any
other Purchaser (or any other person) relating to or arising from any such
information, materials, statements or opinions. Nothing contained herein or in
any Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser acknowledges that no other Purchaser has acted as agent for such
Purchaser in connection with making its investment hereunder and that no other
Purchaser will be acting as agent of such Purchaser in connection with
monitoring its investment hereunder. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. The Company has elected to
provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to do so
by the Purchasers.
(Signature Page Follows)
20
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
MACROCHEM CORPORATION Address for Notice:
------------------
000 Xxxxxxxx Xxxxxx
By: /s/ Xxxxxx X. XxXxxxxx Xxxxxxxxx, XX 00000
---------------------------------------- Tel: (000) 000-0000
Name: Xxxxxx X. XxXxxxxx Fax: (000) 000-0000
Title: President and C.E.O. Attn: Xxxxx X. Xxxxxx, Esq.
With copy to (which shall not constitute notice):
Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
[SIGNATURE PAGE CONTINUES]
21
[PURCHASER'S SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
NOB HILL CAPITAL PARTNERS L.P. Address for Notice:
-------------------
By: /s/ Xxxxxxx X. Xxxxxx Tel:
--------------------- Fax:
Name: Xxxxxxx X. Xxxxxx E-mail:
Title: GP Attn:
Subscription Amount: $125,000
Tax I.D. #:
--------------------------------
22
[PURCHASER'S SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
IROQUOIS MASTER FUND LTD. Address for Notice:
------------------
By: /s/ Xxxxxx Xxxxxxxxx Tel:
-------------------- Fax:
Name: Xxxxxx Xxxxxxxxx E-mail:
Title: Authorized Signatory Attn:
Subscription Amount: $100,000
Tax I.D. #:
--------------------------------
23
[PURCHASER'S SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
XXXXX XXXXXX Address for Notice:
------------------
By: /s/ Xxxxx Xxxxxx Tel:
------------------ Fax:
Name: Xxxxx Xxxxxx E-mail:
Attn:
Subscription Amount: $75,000
Tax I.D. #:
--------------------------------
24
[PURCHASER'S SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
ENABLE GROWTH PARTNERS LP Address for Notice:
------------------
By: /s/ Xxxxxxx X'Xxxx Tel:
------------------ Fax:
Name: Xxxxxxx X'Xxxx E-mail:
Title: Principal Attn:
Subscription Amount: $175,000.00
Tax I.D. #:
--------------------------------
25
[PURCHASER'S SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
ENABLE OPPORTUNITY PARTNERS LP Address for Notice:
------------------
By: /s/ Xxxxxxx X'Xxxx Tel:
------------------ Fax:
Name: Xxxxxxx X'Xxxx E-mail:
Title: Principal Attn:
Subscription Amount: $25,000.00
Tax I.D. #:
--------------------------------
26
SCHEDULE A
----------
Name of Purchaser Number of Units Aggregate Number of Warrants
Included in Units Purchased
------------------------------- --------------- ----------------------------
Nob Hill Capital Partners L.P. 500,000 250,000
------------------------------- --------------- ----------------------------
Iroquois Master Fund Ltd. 400,000 200,000
------------------------------- --------------- ----------------------------
Xxxxx Xxxxxx 300,000 150,000
------------------------------- --------------- ----------------------------
Enable Growth Partners LP 700,000 350,000
------------------------------- --------------- ----------------------------
Enable Opportunity Partners LP 100,000 50,000
------------------------------- --------------- ----------------------------
27
