SUBSCRIPTION AGREEMENT
Exhibit 10.10
Xxxxxxxxx, XX
00000
Ladies
and Gentlemen:
1. Subscription. The undersigned (the
“Purchaser”), intending to be legally bound, hereby
irrevocably agrees to purchase from Adgero Biopharmaceuticals
Holdings, Inc., a Delaware corporation (the “Company”),
the number of units (the “Units”) set forth on the
signature page hereof at a purchase price of $5.00 per Unit. Each
Unit consists of (i) one share of the Company’s common stock,
par value $0.0001 per share (the “Common Stock”), and
(ii) a warrant (each, a “Warrant” and collectively, the
“Warrants”), to purchase one share of Common Stock at
an exercise price of $5.00 per share, substantially in the form
attached hereto as Exhibit
A, with a minimum investment amount of $10,000, provided a
lower subscription amount may be accepted at the discretion of the
Company and the Placement Agent (as defined below). This
Subscription Agreement (this “Subscription Agreement”)
is one in a series of similar subscription agreements
(collectively, the “Subscription Agreements”) entered
into pursuant to the Offering.
2. The Offering. This subscription is
submitted to you in accordance with and subject to the terms and
conditions described in this agreement, as amended or supplemented
from time to time, including all attachments, schedules and
exhibits thereto (collectively, the “Subscription
Agreement”), relating to the offering (the
“Offering”) by the Company of up to a maximum of
200,000 Units ($1,000,000) (“Maximum Offering Amount”).
In the event the Maximum Offering Amount is sold, the Placement
Agent (as defined below) and the Company shall have the right to
sell up to an additional 200,000 Units ($1,000,000) to cover
over-allotments. Aegis Capital Corp. has been engaged by the
Company as exclusive placement agent in connection with the
Offering (“Aegis” or the “Placement
Agent”).
3. Deliveries and Payment; Escrow of Funds.
Simultaneously with the execution hereof, the Purchaser shall: (a)
deliver to Aegis, in accordance with the Subscription Instructions
attached hereto, (i) one (1) completed and executed signature page
to this Subscription Agreement (page 23), (ii) a completed
Accredited Investor Certification (pages 24-25), (iii) a completed
Investor Profile (page 26) and (iv) Tax Certification for U.S.
Persons or Non-U.S. Persons (page 28); and (b) make a wire transfer
payment to, “Signature Bank, Escrow Agent for Adgero
Biopharmaceuticals Holdings, Inc.” in the full amount of the
purchase price of the Units being subscribed for in the Offering.
Wire transfer instructions are set forth on page 21 hereof under
the heading “To subscribe for Units in the private offering
of Adgero Biopharmaceuticals Holdings, Inc.” Such funds will
be held for the Purchaser's benefit in a non-interest-bearing
escrow account (the “Escrow Account”) until the
earliest to occur of (a) a closing of the sale of Units, (b) the
rejection of such subscription, or (c) the termination of the
Offering by the Company or the Placement Agent. All subscriptions must be submitted,
and will be either accepted or rejected by the Company in whole or
in part, not later than August 31, 2016. Notwithstanding the
foregoing, the termination date of this offering and related date
of submission, acceptance or rejection of subscriptions may be
extended to a date not later than September 9, 2016, upon notice
to, but without consent of, the Purchaser. The Company and the
Placement Agent may continue to offer and sell the Units and
conduct additional closings for the sale of additional Units after
the first closing of the Offering and until the termination of the
Offering.
1
4. Acceptance of Subscription. The
Purchaser understands and agrees that the Company, in its sole
discretion, reserves the right to accept or reject this or any
other subscription for Units, in whole or in part, notwithstanding
prior receipt by the Purchaser of notice of acceptance of this
subscription. In furtherance of the foregoing, the Company shall
have the right to require potential subscribers to supply
additional information and execute additional documents in a
satisfactory manner, which determination shall be at the sole
discretion of the Company, prior to the acceptance of this
Subscription Agreement. The Company shall have no obligation
hereunder until the Company shall execute and deliver to the
Purchaser an executed copy of this Subscription Agreement. If this
subscription is rejected in whole or the Offering of Units is
terminated prior to this subscription being accepted by the
Company, all funds received from the Purchaser will be returned
without interest or offset, and this Subscription Agreement shall
thereafter be of no further force or effect. If this subscription
is rejected in part, the funds for the rejected portion of this
subscription will be returned without interest or offset, and this
Subscription Agreement will continue in full force and effect to
the extent this subscription was accepted.
5. Representations and
Warranties.
The
Purchaser hereby acknowledges, represents, warrants, and agrees as
follows:
(a) None of the shares
of Common Stock or the shares of Common Stock issuable upon
exercise of the Warrants (the “Warrant Shares”) offered
pursuant to this Subscription Agreement are registered under the
Securities Act of 1933, as amended (the “Securities
Act”), or any state securities laws. The Purchaser
understands that the offering and sale of the Units is intended to
be exempt from registration under the Securities Act, by virtue of
Section 4(a)(2) thereof and the provisions of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the
“SEC”) thereunder, based, in part, upon the
representations, warranties and agreements of the Purchaser
contained in this Subscription Agreement;
(b) Prior to the
execution of this Subscription Agreement, the Purchaser and the
Purchaser's attorney, accountant, purchaser representative and/or
tax adviser, if any (collectively, the “Advisers”),
have received all other documents requested by the Purchaser, have
carefully reviewed them and understand the information contained
therein. In addition, the Purchaser and his Advisors, if any, have
reviewed this Subscription Agreement, including the exhibits hereto
consisting of (i) Exhibit
A – Form of Investor Warrant, (ii) Exhibit B - Description of the
Business and Recent Developments of the Company, , (iii)
Exhibit C –
Summary of the Offering, (iv) Exhibit D – Risk Factors,
and (v) Exhibit E
– Management of the Company and (v) – Exhibit F - Unaudited Financial
Statements of the Company.
2
(c) Neither the SEC nor
any state securities commission or other regulatory authority has
approved the Units, the Common Stock, the Warrants or the Warrant
Shares, or passed upon or endorsed the merits of the Offering or
confirmed the accuracy or determined the adequacy of this
Subscription Agreement. This Subscription Agreement has not been
reviewed by any federal, state or other regulatory
authority;
(d) All documents,
records, and books pertaining to the investment in the Units have
been made available for inspection by such Purchaser and its
Advisers, if any;
(e) The Purchaser and
its Advisers, if any, have had a reasonable opportunity to ask
questions of and receive answers from a person or persons acting on
behalf of the Company concerning the offering of the Units and the
business, financial condition and results of operations of the
Company, and all such questions have been answered to the full
satisfaction of the Purchaser and its Advisers, if
any;
(f) In evaluating the
suitability of an investment in the Company, the Purchaser has not
relied upon any representation or information (oral or written)
other than as stated in this Subscription Agreement.
(g) The Purchaser is
unaware of, is in no way relying on, and did not become aware of
the Offering of the Units through or as a result of, any form of
general solicitation or general advertising including, without
limitation, any article, notice, advertisement or other
communication published in any newspaper, magazine or similar media
or broadcast over television, radio or the Internet (including,
without limitation, internet “blogs,” bulletin boards,
discussion groups and social networking sites) in connection with
the Offering and sale of the Units and is not subscribing for the
Units and did not become aware of the Offering of the Units through
or as a result of any seminar or meeting to which the Purchaser was
invited by, or any solicitation of a subscription by, a person not
previously known to the Purchaser in connection with investments in
securities generally;
(h) The Purchaser has
taken no action that would give rise to any claim by any person for
brokerage commissions, finders' fees or the like relating to this
Subscription Agreement or the transactions contemplated hereby
(other than commissions to be paid by the Company to the Placement
Agent or as otherwise described herein);
(i) The Purchaser,
together with its Advisers, if any, has such knowledge and
experience in financial, tax, and business matters, and, in
particular, investments in securities, so as to enable it to
utilize the information made available to it in connection with the
Offering to evaluate the merits and risks of an investment in the
Units and the Company and to make an informed investment decision
with respect thereto;
(j) The Purchaser is
not relying on the Company, the Placement Agent or any of their
respective employees or agents with respect to the legal, tax,
economic and related considerations of an investment in the Units,
and the Purchaser has relied on the advice of, or has consulted
with, only its own Advisers;
3
(k) The Purchaser is
acquiring the Units solely for such Purchaser's own account for
investment purposes only and not with a view to or intent of resale
or distribution thereof, in whole or in part. The Purchaser has no
agreement or arrangement, formal or informal, with any person to
sell or transfer all or any part of the Units, the shares of Common
Stock, the Warrants or the Warrant Shares, and the Purchaser has no
plans to enter into any such agreement or arrangement.
(l) The
Purchaser must bear the substantial economic risks of the
investment in the Units indefinitely because none of the securities
included in the Units may be sold, hypothecated or otherwise
disposed of unless subsequently registered under the Securities Act
and applicable state securities laws or an exemption from such
registration is available. Legends shall be placed on the
securities included in the Units to the effect that they have not
been registered under the Securities Act or applicable state
securities laws and appropriate notations thereof will be made in
the Company's stock books. Stop transfer instructions will be
placed with the transfer agent of the Units. The Company has agreed
that purchasers of the Units will have, with respect to the shares
of Common Stock and the Warrant Shares, the registration rights
described herein. Notwithstanding such registration rights, there
can be no assurance that there will be any market for resale of the
Units, the Common Stock, the Warrants or the Warrant Shares, nor
can there be any assurance that such securities will be freely
transferable at any time in the foreseeable future.
(m) The Purchaser has
adequate means of providing for such Purchaser's current financial
needs and foreseeable contingencies and has no need for liquidity
from its investment in the Units for an indefinite period of
time;
(n) The Purchaser is
aware that an investment in the Units is high risk, involving a
number of very significant risks and has carefully read and
considered the matters set forth under Exhibit C - “Risk
Factors” attached hereto, and, in particular, acknowledges
that the Company has a limited operating history, significant
operating losses since inception, no revenues from operations to
date, limited assets and is engaged in a highly competitive
business;
(o) The Purchaser meets
the requirements of at least one of the suitability standards for
an “accredited investor” as that term is defined in
Regulation D and as set forth on the Accredited Investor
Certification contained herein;
(p) The Purchaser (i)
if a natural person, represents that the Purchaser has reached the
age of 21 and has full power and authority to execute and deliver
this Subscription Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof;
(ii) if a corporation, partnership, or limited liability company or
partnership, or association, joint stock company, trust,
unincorporated organization or other entity, represents that such
entity was not formed for the specific purpose of acquiring the
Units, such entity is duly organized, validly existing and in good
standing under the laws of the state of its organization, the
consummation of the transactions contemplated hereby is authorized
by, and will not result in a violation of state law or its charter
or other organizational documents, such entity has full power and
authority to execute and deliver this Subscription Agreement and
all other related agreements or certificates and to carry out the
provisions hereof and thereof and to purchase and hold the
securities constituting the Units, the execution and delivery of
this Subscription Agreement has been duly authorized by all
necessary action, this Subscription Agreement has been duly
executed and delivered on behalf of such entity and is a legal,
valid and binding obligation of such entity; or (iii) if executing
this Subscription Agreement in a representative or fiduciary
capacity, represents that it has full power and authority to
execute and deliver this Subscription Agreement in such capacity
and on behalf of the subscribing individual, xxxx, partnership,
trust, estate, corporation, or limited liability company or
partnership, or other entity for whom the Purchaser is executing
this Subscription Agreement, and such individual, partnership,
xxxx, trust, estate, corporation, or limited liability company or
partnership, or other entity has full right and power to perform
pursuant to this Subscription Agreement and make an investment in
the Company, and represents that this Subscription Agreement
constitutes a legal, valid and binding obligation of such entity.
The execution and delivery of this Subscription Agreement will not
violate or be in conflict with any order, judgment, injunction,
agreement or controlling document to which the Purchaser is a party
or by which it is bound;
4
(q) The Purchaser and
the Advisers, if any, have had the opportunity to obtain any
additional information, to the extent the Company has have such
information in its possession or could acquire it without
unreasonable effort or expense, necessary to verify the accuracy of
the information contained herein and all documents received or
reviewed in connection with the purchase of the Units and have had
the opportunity to have representatives of the Company provide them
with such additional information regarding the terms and conditions
of this particular investment and the financial condition, results
of operations, business of the Company deemed relevant by the
Purchaser or the Advisers, if any, and all such requested
information, to the extent the Company had such information in its
possession or could acquire it without unreasonable effort or
expense, has been provided to the full satisfaction of the
Purchaser and the Advisers, if any;
(r) Any information
which the Purchaser has heretofore furnished or is furnishing
herewith to the Company or the Placement Agent is complete and
accurate and may be relied upon by the Company and the Placement
Agent in determining the availability of an exemption from
registration under federal and state securities laws in connection
with the offering of securities. The Purchaser further represents
and warrants that it will notify and supply corrective information
to the Company and the Placement Agent immediately upon the
occurrence of any change therein occurring prior to the Company's
issuance of the securities contained in the Units;
(s) The Purchaser has
significant prior investment experience, including investment in
non-listed and non-registered securities. The Purchaser is
knowledgeable about investment considerations in development-stage
companies with limited operating histories. The Purchaser has a
sufficient net worth to sustain a loss of its entire investment in
the Company in the event such a loss should occur. The Purchaser's
overall commitment to investments which are not readily marketable
is not excessive in view of the Purchaser’s net worth and
financial circumstances and the purchase of the Units will not
cause such commitment to become excessive. The investment is a
suitable one for the Purchaser;
(t) The Purchaser is
satisfied that the Purchaser has received adequate information with
respect to all matters which it or the Advisers, if any, consider
material to its decision to make this investment;
5
(u) The Purchaser
acknowledges that any estimates or forward-looking statements or
projections included herein were prepared by the Company in good
faith but that the attainment of any such projections, estimates or
forward-looking statements cannot be guaranteed by the Company and
should not be relied upon;
(v) No oral or written
representations have been made, or oral or written information
furnished, to the Purchaser or the Advisers, if any, in connection
with the Offering which are in any way inconsistent with the
information contained herein;
(w) Within five (5)
days after receipt of a request from the Company or the Placement
Agent, the Purchaser will provide such information and deliver such
documents as may reasonably be necessary to comply with any and all
laws and ordinances to which the Company or the Placement Agent is
subject;
(x) The Purchaser's
substantive relationship with the Placement Agent or subagent
through which the Purchaser is subscribing for Units predates the
Placement Agent's or such subagent's contact with the Purchaser
regarding an investment in the Units;
(y) THE SECURITIES
OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH
LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
SECURITIES HAVE NOT BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS
OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM OR THIS
SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL;
(z) In making an
investment decision investors must rely on their own examination of
the Company and the terms of the Offering, including the merits and
risks involved. The Purchaser should be aware that it will be
required to bear the financial risks of this investment for an
indefinite period of time;
(aa) (For
ERISA plans only) The fiduciary of the ERISA plan (the
“Plan”) represents that such fiduciary has been
informed of and understands the Company’s investment
objectives, policies and strategies, and that the decision to
invest “plan assets” (as such term is defined in ERISA)
in the Company is consistent with the provisions of ERISA that
require diversification of plan assets and impose other fiduciary
responsibilities. The Purchaser fiduciary or Plan (a) is
responsible for the decision to invest in the Company; (b) is
independent of the Company or any of its affiliates; (c) is
qualified to make such investment decision; and (d) in making such
decision, the Purchaser fiduciary or Plan has not relied primarily
on any advice or recommendation of the Company or any of its
affiliates;
6
(bb) The
Purchaser should check the Office of Foreign Assets Control
(“OFAC”) website at <xxxx://xxx.xxxxx.xxx/xxxx>
before making the following representations. The Purchaser
represents that the amounts invested by it in the Company in the
Offering were not and are not directly or indirectly derived from
activities that contravene federal, state or international laws and
regulations, including anti-money laundering laws and regulations.
Federal regulations and Executive Orders administered by OFAC
prohibit, among other things, the engagement in transactions with,
and the provision of services to, certain foreign countries,
territories, entities and individuals. The lists of OFAC prohibited
countries, territories, persons and entities can be found on the
OFAC website at <xxxx://xxx.xxxxx.xxx/xxxx>. In addition, the
programs administered by OFAC (the “OFAC Programs”)
prohibit dealing with individuals1 or entities in
certain countries regardless of whether such individuals or
entities appear on the OFAC lists;
(cc) To
the best of the Purchaser’s knowledge, none of: (1) the
Purchaser; (2) any person controlling or controlled by the
Purchaser; (3) if the Purchaser is a privately-held entity, any
person having a beneficial interest in the Purchaser; or (4) any
person for whom the Purchaser is acting as agent or nominee in
connection with this investment is a country, territory, individual
or entity named on an OFAC list, or a person or entity prohibited
under the OFAC Programs. Please be advised that the Company may not
accept any amounts from a prospective investor if such prospective
investor cannot make the representation set forth in the preceding
paragraph. The Purchaser agrees to promptly notify the Company and
the Placement Agent should the Purchaser become aware of any change
in the information set forth in these representations. The
Purchaser understands and acknowledges that, by law, the Company
may be obligated to “freeze the account” of the
Purchaser, either by prohibiting additional subscriptions from the
Purchaser, declining any redemption requests and/or segregating the
assets in the account in compliance with governmental regulations,
and the Placement Agent may also be required to report such action
and to disclose the Purchaser’s identity to OFAC. The
Purchaser further acknowledges that the Company may, by written
notice to the Purchaser, suspend the redemption rights, if any, of
the Purchaser if the Company reasonably deems it necessary to do so
to comply with anti-money laundering regulations applicable to the
Company and the Placement Agent or any of the Company’s other
service providers. These individuals include specially designated
nationals, specially designated narcotics traffickers and other
parties subject to OFAC sanctions and embargo
programs;
(dd) To
the best of the Purchaser’s knowledge, none of: (1) the
Purchaser; (2) any person controlling or controlled by the
Purchaser; (3) if the Purchaser is a privately-held entity, any
person having a beneficial interest in the Purchaser; or (4) any
person for whom the Purchaser is acting as agent or nominee in
connection with this investment is a senior foreign political
figure,2 or any immediate
family3
member or close
associate4 of a senior
foreign political figure, as such terms are defined in the
footnotes below; and
4 A “close associate” of a senior
foreign political figure is a person who is widely and publicly
known to maintain an unusually close relationship with the senior
foreign political figure, and includes a person who is in a
position to conduct substantial domestic and international
financial transactions on behalf of the senior foreign political
figure.
7
(ee) If
the Purchaser is affiliated with a non-U.S. banking institution (a
“Foreign Bank”), or if the Purchaser receives deposits
from, makes payments on behalf of, or handles other financial
transactions related to a Foreign Bank, the Purchaser represents
and warrants to the Company that: (1) the Foreign Bank has a fixed
address, other than solely an electronic address, in a country in
which the Foreign Bank is authorized to conduct banking activities;
(2) the Foreign Bank maintains operating records related to its
banking activities; (3) the Foreign Bank is subject to inspection
by the banking authority that licensed the Foreign Bank to conduct
banking activities; and (4) the Foreign Bank does not provide
banking services to any other Foreign Bank that does not have a
physical presence in any country and that is not a regulated
affiliate.
6. Holdback
Agreements. (a) Subject to paragraph (b) below, from and
after the effective date of a Registration Statement registering
the shares of Common Stock and Warrant Shares for resale (the
“SEC Effective Date”), each Purchaser understands that
(i) it shall not sell, offer, pledge, contract to sell, grant any
option or contract to purchase, purchase any option or contract to
sell, grant any right or warrant to purchase, lend or otherwise
transfer or encumber, directly or indirectly, any Registrable
Securities (as defined in Section 8(a) below), nor shall such
Purchaser enter into any swap, hedging or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of any Registrable Securities (any of the
foregoing under (i), a “Transfer”) until the Release
Date (as defined below); provided, however, that such Purchaser
shall be permitted to Transfer up to 25% of such Purchaser’s
Investor Shares held by it, as the case may be, at any time on or
after the SEC Effective Date, and (ii) following the SEC Effective
Date, it shall be entitled to Transfer up to an additional 25% of
such Purchaser’s Investor Shares beginning at the end of each
successive 90 day period thereafter, such that after the Release
Date, all Registrable Securities held by such Purchaser may be
Transferred. Each Purchaser hereby covenants and agrees that (x) it
shall abide by the restrictions set forth above and (y) the Company
shall be entitled to place “stop transfer” instructions
with the Company’s transfer agent in compliance with the
above restrictions. For purposes of this clause (f), the term
“Release Date” shall mean 270 days from the SEC
Effective Date; provided, that in the event the Company delivers a
notice of redemption to the Purchasers of the Warrants (pursuant to
the terms of such warrants) (the “Redemption Notice”),
the restrictions set forth above shall terminate effective on the
date of delivery of the Redemption Notice.
(b)
Notwithstanding Section 6(a) above, in the event the Closing Price
of the Company’s Common Stock is $15.00 or above (as adjusted
for any stock split, share dividends, share combinations, or the
like) for 20 consecutive Trading Days, all Registrable Securities
shall be released from the holdback agreements of paragraph (a)
above. The “Closing Price”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock
is then listed or quoted on the New York Stock Exchange, the NYSE
MKT, the NASDAQ Global Select Market, the NASDAQ Global Market or
the NASDAQ Capital Market or any other national securities
exchange, the closing price per share of the Common Stock for such
date (or the nearest preceding date) on the primary eligible market
or exchange on which the Common Stock is then listed or quoted; (b)
if prices for the Common Stock are then quoted on the OTC Bulletin
Board or any tier of the OTC Markets, the closing bid price per
share of the Common Stock for such date (or the nearest preceding
date) so quoted; or (c) if prices for the Common Stock are then
reported in the “Pink Sheets” published by the National
Quotation Bureau Incorporated (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
closing bid price per share of the Common Stock so reported.
“Trading Day” means (a) if the Common Stock is listed
or quoted on an Approved Market, then any day during which
securities are generally eligible for trading on the Approved
Market, or (b) if the Common Stock is not then listed or quoted and
traded on an Approved Market, then any business day. Approved
Market” means the Over-the-Counter Bulletin Board, the OTC
Markets, the Nasdaq Stock Market, the New York Stock Exchange or
the NYSE MKT.
8
7. Lockup. If the Purchaser is an affiliate
of the Company or the Placement Agent (together an “Affiliate
Purchaser”), such Affiliate Purchaser acknowledges and agrees
that he will not be entitled to the registration rights provided
below and that he will be required to execute a Lock Up Agreement
on terms to be provided to him.
8. Piggyback Registration.
(a) Until the earlier
of (i) the date as of which the Purchaser may sell all of the
Registrable Securities owned by Purchaser without restriction
pursuant to Rule 144 (including, without limitation, volume
restrictions) and without the need for current public information
required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or
(ii) the date on which the Purchaser shall have sold all of the
Registrable Securities owned by Purchaser, (the "Registration
Period"), if the Company shall determine to register for sale for
cash any of its Common Stock, for its own account or for the
account of others (a “Piggyback Registration"), other
than (i) a registration relating solely to employee benefit plans
or securities issued or issuable to employees, consultants (to the
extent the securities owned or to be owned by such consultants
could be registered on Form S-8) or any of their Family Members
(including a registration on Form S-8) or (ii) a registration
relating solely to a Securities Act Rule 145 transaction or a
registration on Form S-4 in connection with a merger, acquisition,
divestiture, reorganization or similar event, the Company shall
promptly give to the Purchasers written notice thereof (and in no
event shall such notice be given less than 20 calendar days prior
to the filing of such registration statement), and shall, subject
to Section 8(c), include as a Piggyback Registration all of the
Registrable Securities specified in a written request delivered by
the Purchaser thereof within 10 calendar days after receipt of such
written notice from the Company. However, the Company may, without
the consent of the Purchasers, withdraw such registration statement
prior to its becoming effective if the Company or such other
stockholders have elected to abandon the proposal to register the
securities proposed to be registered thereby. For purposes of this
Section 8, the term "Registrable Securities" means
(x) the shares of Common Stock issued hereunder and the Warrant
Shares and (y) any capital stock of the Company issued or issuable
with respect to the shares of Common Stock, Warrants or Warrant
Shares, including, without limitation, as a result of any stock
split, stock dividend, recapitalization, exchange or similar event
or otherwise, but excluding (i) any Registrable Securities that
have been publicly sold or may be sold immediately without
registration under the Securities Act either pursuant to Rule 144
of the Securities Act or otherwise; (ii) any Registrable Securities
sold by a person in a transaction pursuant to a registration
statement filed under the Securities Act, or (iii) any Registrable
Securities that are at the time subject to an effective
registration statement under the Securities Act.
9
(b) If a Piggyback
Registration is for a registered public offering that is to be made
by an underwriting, the Company shall so advise the Purchasers of
the Registrable Securities eligible for inclusion in such
Registration Statement pursuant to Section 8(a). In that event, the
right of any Purchaser to Piggyback Registration shall be
conditioned upon such Purchaser’s participation in such
underwriting and the inclusion of such Purchaser’s
Registrable Securities in the underwriting to the extent provided
herein. All Purchasers proposing to sell any of their Registrable
Securities through such underwriting shall (together with the
Company and any other stockholders of the Company selling their
securities through such underwriting) enter into an underwriting
agreement in customary form with the underwriter selected for such
underwriting by the Company or the selling stockholders, as
applicable. Notwithstanding any other provision of this Section, if
the underwriter or the Company determines that marketing factors
require a limitation on the number of shares of Common Stock or the
amount of other securities to be underwritten, the underwriter, at
its sole discretion, may exclude some or all Registrable Securities
from such registration and underwriting. The Company shall so
advise all Purchasers (except those Purchasers who failed to timely
elect to include their Registrable Securities through such
underwriting or have indicated to the Company their decision not to
do so), and indicate to each such Purchaser the number of shares of
Registrable Securities that may be included in the registration and
underwriting, if any. The number of shares of Registrable
Securities to be included in such registration and underwriting
shall be allocated among such Purchasers as follows:
(1) If the Piggyback
Registration was initiated by the Company, the number of shares
that may be included in the registration and underwriting shall be
allocated first to the Company and then, subject to obligations and
commitments existing as of the date hereof, to all selling
stockholders, including the Purchasers, who have requested to sell
in the registration on a pro rata basis according to the number of
shares requested to be included therein; or
(2) If the Piggyback
Registration was initiated by the exercise of demand registration
rights by a stockholder or stockholders of the Company (other than
the Purchasers), then the number of shares that may be included in
the registration and underwriting shall be allocated first to such
selling stockholders who exercised such demand and then, subject to
obligations and commitments existing as of the date hereof, to all
other selling stockholders, including the Purchasers, who have
requested to sell in the registration on a pro rata basis according
to the number of shares requested to be included
therein.
No
Registrable Securities excluded from the underwriting by reason of
the underwriter’s marketing limitation shall be included in
such registration. If any Purchaser disapproves of the terms of any
such underwriting, such Purchaser may elect to withdraw such
Purchaser’s Registrable Securities therefrom by delivering a
written notice to the Company and the underwriter. The Registrable
Securities so withdrawn from such underwriting shall also be
withdrawn from such registration; provided, however, that, if by the
withdrawal of such Registrable Securities, a greater number of
Registrable Securities held by other Purchasers may be included in
such registration (up to the maximum of any limitation imposed by
the underwriters), then the Company shall offer to all Purchasers
who have included Registrable Securities in the registration the
right to include additional Registrable Securities pursuant to the
terms and limitations set forth herein in the same proportion used
above in determining the underwriter limitation.
10
(c)
Registration Procedures
for Registrable Securities. The Company will keep each
Purchaser reasonably advised as to the filing and effectiveness of
the Registration Statement. At its expense with respect to the
Registration Statement, the Company will:
(1) prepare and file
with the Commission with respect to the Registrable Securities, a
Registration Statement on Form S-1, or any other form for which the
Company then qualifies or which counsel for the Company shall deem
appropriate and which form shall be available for the sale of the
Registrable Securities in accordance with the intended methods of
distribution thereof, and use its commercially reasonable efforts
to cause such Registration Statement to become effective and shall
remain effective for a period of one year or for such shorter
period ending on the earlier to occur of (i) the date as of which
all of the Purchasers as selling stockholders thereunder may sell
all of the Registrable Securities registered for resale thereon
without restriction pursuant to Rule 144 (or any successor rule
thereto) promulgated under the Securities Act or (ii) the date when
all of the Registrable Securities registered thereunder shall have
been sold (the “Effectiveness
Period”). Thereafter, the Company shall be entitled to
withdraw such Registration Statement and the Purchasers shall have
no further right to offer or sell any of the Registrable Securities
registered for resale thereon pursuant to the respective
Registration Statement (or any prospectus relating
thereto);
(2) if the Registration
Statement is subject to review by the Commission, respond in a
commercially reasonable manner to all comments and diligently
pursue resolution of any comments to the satisfaction of the
Commission;
(3) prepare and file
with the Commission such amendments and supplements to such
Registration Statement as may be necessary to keep such
Registration Statement effective during the Effectiveness
Period;
(4) furnish, without
charge, to each Purchaser of Registrable Securities covered by such
Registration Statement (i) a reasonable number of copies of such
Registration Statement (including any exhibits thereto other than
exhibits incorporated by reference), each amendment and supplement
thereto as such Purchaser may reasonably request, (ii) such number
of copies of the prospectus included in such Registration Statement
(including each preliminary prospectus and any other prospectus
filed under Rule 424 of the Securities Act) as such Purchasers may
reasonably request, in conformity with the requirements of the
Securities Act, and (iii) such other documents as such Purchaser
may require to consummate the disposition of the Registrable
Securities owned by such Purchaser, but only during the
Effectiveness Period;
11
(5) use its
commercially reasonable efforts to register or qualify such
registration under such other applicable securities laws of such
jurisdictions as any Purchaser of Registrable Securities covered by
such Registration Statement reasonably requests and as may be
necessary for the marketability of the Registrable Securities (such
request to be made by the time the applicable Registration
Statement is deemed effective by the Commission) and do any and all
other acts and things necessary to enable such Purchaser to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such Purchaser; provided, that the Company
shall not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to
qualify but for this paragraph, (ii) subject itself to taxation in
any such jurisdiction, or (iii) consent to general service of
process in any such jurisdiction;
(6) notify each holder
of Registrable Securities, the disposition of which requires
delivery of a prospectus relating thereto under the Securities Act,
of the happening of any event (as promptly as practicable after
becoming aware of such event), which comes to the Company’s
attention, that will after the occurrence of such event cause the
prospectus included in such Registration Statement, if not amended
or supplemented, to contain an untrue statement of a material fact
or an omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading
and the Company shall promptly thereafter prepare and furnish to
such holder a supplement or amendment to such prospectus (or
prepare and file appropriate reports under the Securities Exchange
Act of 1934 (the “Exchange Act”) so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, unless
suspension of the use of such prospectus otherwise is authorized
herein or in the event of a Blackout Period, in which case no
supplement or amendment need be furnished (or Exchange Act filing
made) until the termination of such suspension or Blackout Period.
“Blackout
Period” means, with respect to a registration, a
period, in each case commencing on the day immediately after the
Company notifies the Purchasers that they are required, because of
the occurrence of an event of the kind described in Section 8(c)(6)
hereof, to suspend offers and sales of Registrable Securities
during which the Company, in the good faith judgment of its board
of directors, determines (because of the existence of, or in
anticipation of, any acquisition, financing activity, or other
transaction involving the Company, or the unavailability for
reasons beyond the Company’s control of any required
financial statements, disclosure of information which is in its
best interest not to publicly disclose, or any other event or
condition of similar significance to the Company) that the
registration and distribution of the Registrable Securities to be
covered by such Registration Statement, if any, would be seriously
detrimental to the Company and its stockholders and ending on the
earlier of (1) the date upon which the material non-public
information commencing the Blackout Period is disclosed to the
public or ceases to be material and (2) such time as the Company
notifies the selling stockholders that the Company will no longer
delay such filing of the Registration Statement, recommence taking
steps to make such Registration Statement effective, or allow sales
pursuant to such Registration Statement to resume.;
(7) comply, and
continue to comply during the Effectiveness Period, in all material
respects with the Securities Act and the Exchange Act and with all
applicable rules and regulations of the Commission with respect to
the disposition of all securities covered by such Registration
Statement;
12
(8) as promptly as
practicable after becoming aware of such event, notify each holder
of Registrable Securities being offered or sold pursuant to the
Registration Statement of the issuance by the Commission of any
stop order or other suspension of effectiveness of the Registration
Statement;
(9) use its
commercially reasonable efforts to cause all the Registrable
Securities covered by the Registration Statement to be quoted on
such Approved Market on which securities of the same class or
series issued by the Company are then listed or
traded;
(10) provide
a transfer agent and registrar, which may be a single entity, for
the shares of Common Stock at all times;
(11) if
requested by the Purchasers, cooperate with the Purchasers to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee
pursuant to the Registration Statement, which certificates shall be
free, to the extent permitted by applicable law, of all restrictive
legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Purchasers
may request;
(12) during
the Effectiveness Period, refrain from bidding for or purchasing
any Common Stock or any right to purchase Common Stock or
attempting to induce any person to purchase any such security or
right if such bid, purchase or attempt would in any way limit the
right of the Purchasers to sell Registrable Securities by reason of
the limitations set forth in Regulation M of the Exchange Act;
and
(13) take
all other reasonable actions necessary to expedite and facilitate
the disposition by the Purchasers of the Registrable Securities
pursuant to the Registration Statement.
(d) Expenses.
The Company shall pay all expenses in connection with any
registration obligation provided herein, including, without
limitation, all registration, filing, stock exchange fees, printing
expenses, all fees and expenses of complying with applicable
securities laws, and the fees and disbursements of counsel for the
Company and of its independent accountants; provided, that, in any
registration, each party shall pay for its own underwriting
discounts and commissions and transfer taxes. Except as provided in
this Section, the Company shall not be responsible for the expenses
of any attorney or other advisor employed by a
Purchaser.
(e) Obligations
of the Purchasers.
(1) In connection with
each registration hereunder, each Purchaser shall furnish to the
Company in writing such information with respect to it and the
securities held by it and the proposed distribution by it, as shall
be reasonably requested by the Company in order to assure
compliance with applicable federal and state securities laws as a
condition precedent to including the Purchaser's Registrable
Securities in the Registration Statement. Each Purchaser shall also
promptly notify the Company in writing of any changes in such
information included in the Registration Statement or prospectus as
a result of which there is an untrue statement of material fact or
an omission to state any material fact required or necessary to be
stated therein in order to make the statements contained therein
not misleading in light of the circumstances under which they were
made.
13
(2) In connection with
the filing of the Registration Statement, each Purchaser shall
furnish to the Company in writing such information and affidavits
as the Company reasonably requests for use in connection with such
Registration Statement or prospectus. A form of Selling Stockholder
Questionnaire will be provided to all Purchasers for such purposes
upon receipt of their subscription amount.
(3) In connection with
each registration pursuant to this Section 8, each Purchaser agrees
that it will not effect sales of any Registrable Securities until
notified by the Company of the effectiveness of the Registration
Statement, and thereafter will suspend such sales after receipt of
notice from the Company to suspend sales to permit the Company to
correct or update a Registration Statement or prospectus or upon
receipt by the Company of a threat by the SEC or state securities
commission to undertake a stop order with respect to sales under
the Registration Statement. At the end of any period during which
the Company is obligated to keep a Registration Statement current,
each Purchaser shall discontinue sales of Registrable Securities
pursuant to such Registration Statement upon receipt of notice from
the Company of its intention to remove from registration the
Registrable Securities covered by such Registration Statement which
remains unsold, and each Purchaser shall notify the Company in
writing of the number of shares registered which remain unsold
immediately upon receipt of such notice from the
Company.
(f) Indemnification.
(1) In the event of the
offer and sale of Registrable Securities under the Securities Act,
the Company shall, and hereby does, indemnify and hold harmless, to
the fullest extent permitted by law, each Purchaser, its directors,
officers, partners, each other person who participates as an
underwriter in the offering or sale of such securities, and each
other person, if any, who controls or is under common control with
such Purchaser or any such underwriter within the meaning of
Section 15 of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, and expenses to which the
Purchaser or any such director, officer, partner or underwriter or
controlling person may become subject under the Securities Act, the
Exchange Act, or any other federal or state law, insofar as such
losses, claims, damages, liabilities or expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement of any material
fact contained in any registration statement prepared and filed by
the Company under which Registrable Securities were registered
under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission to state therein a
material fact required to be stated or necessary to make the
statements therein in light of the circumstances in which they were
made not misleading, or any violation or alleged violation of the
Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the
Exchange Act or any state securities law in connection with this
Subscription Agreement; and the Company shall reimburse the
Purchaser, and each such director, officer, partner, underwriter
and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating,
defending or settling any such loss, claim, damage, liability,
action or proceeding; provided, that such indemnity
agreement found in this Section 8(f)(1) shall in no event exceed
the net proceeds received by the Company from the Purchaser; and
provided further,
that the Company shall not be liable in any such case (i) to the
extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement in or omission from such registration
statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the
Purchaser specifically for use in the preparation thereof or (ii)
if the person asserting any such loss, claim, damage, liability (or
action or proceeding in respect thereof) who purchased the
Registrable Securities that are the subject thereof did not receive
a copy of the preliminary prospectus or the final prospectus (or
the final prospectus as amended or supplemented) at or prior to the
written confirmation of the sale of such Registrable Securities to
such person because of the failure of such Purchaser or underwriter
to so provide such preliminary or final prospectus and the untrue
statement or omission of a material fact made in such preliminary
prospectus was corrected in the amended preliminary or final
prospectus (or the final prospectus as amended or supplemented).
Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Purchasers, or any
such director, officer, partner, underwriter or controlling person
and shall survive the transfer of such shares by the
Purchaser.
14
(2) As a condition to
including Registrable Securities in any registration statement
filed pursuant to this Section 8, each Purchaser agrees to be bound
by the terms of this Section 8(f) and to indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its
directors and officers, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director or officer or
controlling person may become subject under the Securities Act, the
Exchange Act, or any other federal or state law, to the extent
arising out of or based solely upon: (x) such Purchaser’s
failure to comply with the prospectus delivery requirements of the
Securities Act or (y) any untrue or alleged untrue statement of a
material fact contained in any registration statement, any
prospectus, or any form of prospectus, or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the
statements therein not misleading (i) to the extent, but only to
the extent, that such untrue statement or omission is contained in
any information so furnished in writing by such Purchaser to the
Company specifically for inclusion in the registration statement or
such prospectus or (ii) to the extent that (1) such untrue
statements or omissions are based solely upon information regarding
such Purchaser furnished in writing to the Company by such
Purchaser expressly for use therein, or to the extent that such
information relates to such Purchaser or such Purchaser’s
proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Purchaser
expressly for use in the Registration Statement, such prospectus or
such form of prospectus or in any amendment or supplement thereto
or (2) in the case of an occurrence of an event of the type
specified in Section 8(c)(6) hereof, the use by such Purchaser of
an outdated or defective prospectus after the Company has notified
such Purchaser in writing that the prospectus is outdated or
defective and prior to the receipt by such Purchaser of the advice
contemplated in Section 8(c)(6). In no event shall the liability of
any selling Purchaser hereunder be greater in amount than the
dollar amount of the net proceeds received by such Purchaser upon
the sale of the Registrable Securities giving rise to such
indemnification obligation.
15
(3) Promptly after
receipt by an indemnified party of notice of the commencement of
any action or proceeding involving a claim referred to in this
Section (including any governmental action), such indemnified party
shall, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the indemnifying party
of the commencement of such action; provided, that the failure of
any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this
Section, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any
such action is brought against an indemnified party, unless in the
reasonable judgment of counsel to such indemnified party a conflict
of interest between such indemnified and indemnifying parties may
exist or the indemnified party may have defenses not available to
the indemnifying party in respect of such claim, the indemnifying
party shall be entitled to participate in and to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such
indemnified party’s reasonable judgment a conflict of
interest between such indemnified and indemnifying parties arises
in respect of such claim after the assumption of the defenses
thereof or the indemnifying party fails to defend such claim in a
diligent manner, other than reasonable costs of investigation.
Neither an indemnified nor an indemnifying party shall be liable
for any settlement of any action or proceeding effected without its
consent. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into
any settlement, which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect of such claim or
litigation. Notwithstanding anything to the contrary set forth
herein, and without limiting any of the rights set forth above, in
any event any party shall have the right to retain, at its own
expense, counsel with respect to the defense of a
claim.
(4) If an indemnifying
party does or is not permitted to assume the defense of an action
pursuant to Section 8(f)(3) or in the case of the expense
reimbursement obligation set forth in Sections 8(f)(1) and (2), the
indemnification required by Sections 8(f)(1) and 8(f)(2) shall be
made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills received or
expenses, losses, damages, or liabilities are
incurred.
(5) If the
indemnification provided for in Section 8(f)(1) or 8(f)(2) is held
by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, the indemnifying party, in
lieu of indemnifying such indemnified party hereunder, shall (i)
contribute to the amount paid or payable by such indemnified party
as a result of such loss, liability, claim, damage or expense as is
appropriate to reflect the proportionate relative fault of the
indemnifying party on the one hand and the indemnified party on the
other (determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission
relates to information supplied by the indemnifying party or the
indemnified party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission), or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, not only the proportionate
relative fault of the indemnifying party and the indemnified party,
but also the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other, as well as
any other relevant equitable considerations. No indemnified party
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party who was not guilty of such
fraudulent misrepresentation.
16
(6) Other Indemnification.
Indemnification similar to that specified in this Section (with
appropriate modifications) shall be given by the Company and each
Purchaser of Registrable Securities with respect to any required
registration or other qualification of securities under any federal
or state law or regulation or governmental authority other than the
Securities Act.
9. Indemnification. The Purchaser agrees to
indemnify and hold harmless the Company, the Placement Agent
(including its selected dealers, if any), and their respective
officers, directors, employees, agents, control persons and
affiliates from and against all losses, liabilities, claims,
damages, costs, fees and expenses whatsoever (including, but not
limited to, any and all expenses incurred in investigating,
preparing or defending against any litigation commenced or
threatened) based upon or arising out of any actual or alleged
false acknowledgment, representation or warranty, or
misrepresentation or omission to state a material fact, or breach
by the Purchaser of any covenant or agreement made by the Purchaser
herein or in any other document delivered in connection with this
Subscription Agreement.
10. Irrevocability; Binding Effect. The
Purchaser hereby acknowledges and agrees that the subscription
hereunder is irrevocable by the Purchaser, except as required by
applicable law, and that this Subscription Agreement shall survive
the death or disability of the Purchaser and shall be binding upon
and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives, and permitted
assigns. If the Purchaser is more than one person, the obligations
of the Purchaser hereunder shall be joint and several and the
agreements, representations, warranties, and acknowledgments herein
shall be deemed to be made by and be binding upon each such person
and such person's heirs, executors, administrators, successors,
legal representatives, and permitted assigns.
11. Modification. This Subscription
Agreement shall not be modified or waived except by an instrument
in writing signed by the party against whom any such modification
or waiver is sought. Notwithstanding the foregoing, the Company
may, at any time prior to the time of the closing of the sale of
Units hereunder, modify this Subscription Agreement if necessary to
clarify any provision therein, without first providing notice or
obtaining prior consent of the Subscriber, if, and only if, such
modification is not material in any respect.
12. Notices. Any notice or other
communication required or permitted to be given hereunder shall be
in writing and shall be deemed effectively given: (a) upon personal
delivery to the party notified, (b) when sent by confirmed email or
facsimile if sent during normal business hours of the recipient, or
if not confirmed, then on the next business day, (c) five days
after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one day after deposit
with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. The Company and the
Purchaser hereby consent to the delivery of communications and
notices to such parties at their respective address, email or
facsimile number set forth on the signature page hereto, or to such
other address as such party shall have furnished in writing in
accordance with the provisions of this Section 12.
17
13. Assignability. This Subscription
Agreement and the rights, interests and obligations hereunder are
not transferable or assignable by the Purchaser and the transfer or
assignment of the shares of Common Stock or the Warrants shall be
made only in accordance with all applicable laws.
14. Applicable
Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of New York
applicable to contracts to be wholly-performed within said
State.
15. Arbitration.
The parties agree to submit all controversies to arbitration in
accordance with the provisions set forth below and understand
that:
(a) Arbitration is
final and binding on the parties.
(b) The parties are
waiving their right to seek remedies in court, including the right
to a jury trial.
(c) Pre-arbitration
discovery is generally more limited and different from court
proceedings.
(d) The arbitrator's
award is not required to include factual findings or legal
reasoning and any party's right to appeal or to seek modification
of rulings by arbitrators is strictly limited.
(e) The panel of
arbitrators will typically include a minority of arbitrators who
were or are affiliated with the securities industry.
(f) All
controversies which may arise between the parties concerning this
Subscription Agreement shall be determined by arbitration pursuant
to the rules then pertaining to the Financial Industry Regulatory
Authority (“FINRA”) in New York City, New York.
Judgment on any award of any such arbitration may be entered in the
Supreme Court of the State of New York or in any other court having
jurisdiction of the person or persons against whom such award is
rendered. Any notice of such
arbitration or for the confirmation of any award in any arbitration
shall be sufficient if given in accordance with the provisions of
this Subscription Agreement. The parties agree that the
determination of the arbitrators shall be binding and conclusive
upon them.
16. Blue Sky Qualification. The purchase of
Units under this Subscription Agreement is expressly conditioned
upon the exemption from qualification of the offer and sale of the
Units from applicable federal and state securities laws. The
Company shall not be required to qualify this transaction under the
securities laws of any jurisdiction and, should qualification be
necessary, the Company shall be released from any and all
obligations to maintain its offer, and may rescind any sale
contracted, in the jurisdiction.
18
17. Use of Pronouns. All pronouns and any
variations thereof used herein shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of
the person or persons referred to may require.
18. Confidentiality. The Purchaser
acknowledges and agrees that any information or data the Purchaser
has acquired from or about the Company, not otherwise properly in
the public domain, was received in confidence. The Purchaser agrees
not to divulge, communicate or disclose, except as may be required
by law or for the performance of this Subscription Agreement, or
use to the detriment of the Company or for the benefit of any other
person or persons, or misuse in any way, any confidential
information of the Company, including any scientific, technical,
trade or business secrets of the Company and any scientific,
technical, trade or business materials that are treated by the
Company as confidential or proprietary, including, but not limited
to, ideas, discoveries, inventions, developments and improvements
belonging to the Company and confidential information obtained by
or given to the Company about or belonging to third
parties.
19. Miscellaneous.
(a) This Subscription
Agreement constitutes the entire agreement between the Purchaser
and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings,
if any, relating to the subject matter hereof. The terms and
provisions of this Subscription Agreement may be waived, or consent
for the departure therefrom granted, only by a written document
executed by the party entitled to the benefits of such terms or
provisions.
(b) The representations
and warranties of the Company and the Purchaser made in this
Subscription Agreement shall survive the execution and delivery
hereof and delivery of the shares of Common Stock and Warrants
contained in the Units.
(c) Each of the parties
hereto shall pay its own fees and expenses (including the fees of
any attorneys, accountants, appraisers or others engaged by such
party) in connection with this Subscription Agreement and the
transactions contemplated hereby whether or not the transactions
contemplated hereby are consummated.
(d) This Subscription
Agreement may be executed in one or more counterparts each of which
shall be deemed an original, but all of which shall together
constitute one and the same instrument.
(e) Each provision of
this Subscription Agreement shall be considered separable and, if
for any reason any provision or provisions hereof are determined to
be invalid or contrary to applicable law, such invalidity or
illegality shall not impair the operation of or affect the
remaining portions of this Subscription Agreement.
19
(f) Paragraph titles
are for descriptive purposes only and shall not control or alter
the meaning of this Subscription Agreement as set forth in the
text.
(g) The Purchaser
understands and acknowledges that there may be multiple closings
for this Offering.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
20
PRIVATE PLACEMENT OFFERING OF
ADGERO BIOPHARMACEUTICALS HOLDINGS, INC.
SUBSCRIPTION INSTRUCTIONS
To subscribe for Units in the private offering of Adgero
Biopharmaceuticals Holdings,
Inc.:
1. Date
and Fill in the
dollar amount of Units being purchased and Complete and Sign the Signature Page to
the Subscription Agreement (page 23).
2. Initial
the Accredited Investor Certification page attached to the
Subscription Agreement (page 24-25).
3. Complete
and return the Investor Profile (page 26).
4. Complete
and Sign the Tax Certification for U.S. Persons or Non-U.S.
Persons, as applicable (beginning on page 28l).
5.
Fax or e-mail all forms to Xxxxxxx X.
Xxxxxxxx at 000-000-0000/Xxxxxxx@xxxxxxxxxx.xxx and then send
all signed original documents to:
Aegis
Capital Corp.
000
Xxxxxxx Xxxxxx – 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx X. Xxxxxxxx
6. Please
wire funds directly to the escrow account pursuant to the following
instructions (unless other arrangements have been made); checks
cannot be accepted:
Bank
Name: Signature Bank
ABA
Number: 000000000
A/C Name: Signature Bank, as Agent for Adgero
Biopharmaceuticals Holdings,
Inc.
A/C
Number: 1502-650242
FBO:
Investor
Name
SSN/TIN
Address
21
ANTI MONEY LAUNDERING REQUIREMENTS
|
The USA PATRIOT Act
|
What is money laundering?
|
How big is the problem and why is it important?
|
|
The USA
PATRIOT Act is designed to detect, deter, and punish terrorists in
the United States and abroad. The Act imposes new anti-money
laundering requirements on brokerage firms and financial
institutions. Since April 24, 2002 all brokerage firms have been
required to have new, comprehensive anti-money laundering
programs.
To help
you understand these efforts, we want to provide you with some
information about money laundering and the Placement Agent’s
efforts to implement the USA PATRIOT Act.
|
Money
laundering is the process of disguising illegally obtained money so
that the funds appear to come from legitimate sources or
activities. Money laundering occurs in connection with a wide
variety of crimes, including illegal arms sales, drug trafficking,
robbery, fraud, racketeering, and terrorism.
|
The use
of the U.S. financial system by criminals to facilitate terrorism
or other crimes could well taint our financial markets. According
to the U.S. State Department, one recent estimate puts the amount
of worldwide money laundering activity at $1 trillion a
year.
|
|
What each Placement Agent is required to do to help eliminate money
laundering?
|
|
|
Under
new rules required by the USA PATRIOT Act, the Placement
Agent’s anti-money laundering program must designate a
special compliance officer, set up employee training, conduct
independent audits, and establish policies and procedures to detect
and report suspicious transaction and ensure compliance with the
new laws.
|
As part
of the Placement Agent’s required program, it may ask you to
provide various identification documents or other information.
Until you provide the information or documents that the Placement
Agent needs, it may not be able to effect any transactions for
you.
|
22
ADGERO BIOPHARMACEUTICALS HOLDINGS,
INC.
SIGNATURE
PAGE TO THE
SUBSCRIPTION
AGREEMENT
Subscriber
hereby elects to subscribe under the Subscription Agreement for a
total of $_________ of Units at a price of $5.00 per Unit (NOTE: to
be completed by subscriber) and, by execution and delivery hereof
(return one (1) original), Subscriber hereby executes the
Subscription Agreement and agrees to be bound by the terms and
conditions of the Subscription Agreement.
If the
Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as
TENANTS IN COMMON, or as COMMUNITY PROPERTY:
____________________________
______________________________
Print
Name(s) Social
Security Number(s)
___________________________
______________________________
Signature(s)
of
Subscriber(s)
Signature
____________________________
______________________________
Date
Address
If the
Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY,
XXX or TRUST:
____________________________
______________________________
Name
of
Entity
Federal Taxpayer
Identification
Number
By:_________________________
______________________________
Name:
State
of Organization
Title:
____________________________
______________________________
Date
Address
____________________________
______________________________
Fax
Number Email
Address
|
|
AEGIS CAPITAL CORP. | ||
|
|
|
|
|
|
|
By:__________________________ |
|
By:__________________________ |
|
|
Authorized Officer |
|
Authorized Officer |
23
ADGERO BIOPHARMACEUTICALS HOLDINGS,
INC.
ACCREDITED INVESTOR CERTIFICATION
For Individual Investors Only
(all Individual Investors must INITIAL where
appropriate):
Initial _______
I have an
individual net worth, or joint net worth with my spouse, as of the
date hereof in excess of $1 million. For purposes of calculating
net worth under this category, (i) the undersigned’s primary
residence shall not be included as an asset, (ii) indebtedness that is secured by the
undersigned’s primary residence, up to the estimated fair
market value of the primary residence at the time of the sale of
securities, shall not be included as a liability, (iii) to
the extent that the indebtedness that is secured by the primary
residence is in excess of the fair market value of the primary
residence, the excess amount shall be included as a liability, and
(iv) if the amount of outstanding indebtedness that is secured by
the primary residence exceeds the amount outstanding 60 days prior
to the execution of this Subscription Agreement, other than as a
result of the acquisition of the primary residence, the amount of
such excess shall be included as a liability.
Initial _______
I have had an
annual gross income for the past two years of at least $200,000 (or
$300,000 jointly with my spouse) and expect my income (or joint
income, as appropriate) to reach the same level in the current
year.
Initial _______
I am a director or
executive officer of Adgero Biopharmaceuticals Holdings,
Inc.
For
Non-Individual Investors
(all
Non-Individual Investors must INITIAL where
appropriate):
Initial _______
The investor
certifies that it is a partnership, corporation, limited liability
company or business trust that is 100% owned by persons who meet at
least one of the criteria for Individual Investors set forth
above.
Initial _______
The investor
certifies that it is a partnership, corporation, limited liability
company or any organization described
in Section 501(c)(3) of the Internal Revenue Code,
Massachusetts or similar business trust that has total
assets of at least $5 million and was not formed for the purpose of
investing the Company.
Initial _______
The investor
certifies that it is an employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, whose investment decision is
made by a plan fiduciary (as defined in ERISA §3(21)) that is
a bank, savings and loan association, insurance company or
registered investment adviser.
Initial _______
The investor
certifies that it is an employee benefit plan whose total assets
exceed $5,000,000 as of the date of this Subscription
Agreement.
Initial _______
The undersigned
certifies that it is a self-directed employee benefit plan whose
investment decisions are made solely by persons who meet either of
the criteria for Individual Investors.
Initial _______
The investor
certifies that it is a U.S. bank, U.S. savings and loan association
or other similar U.S. institution acting in its individual or
fiduciary capacity.
24
Initial _______
The undersigned
certifies that it is a broker-dealer registered pursuant to
§15 of the Securities Exchange Act of 1934.
Initial _______
The investor
certifies that it is an organization described in §501(c)(3)
of the Internal Revenue Code with total assets exceeding $5,000,000
and not formed for the specific purpose of investing in the
Company.
Initial _______
The investor
certifies that it is a trust with total assets of at least
$5,000,000, not formed for the specific purpose of investing in the
Company, and whose purchase is directed by a person with such
knowledge and experience in financial and business matters that he
is capable of evaluating the merits and risks of the prospective
investment.
Initial _______
The investor
certifies that it is a plan established and maintained by a state
or its political subdivisions, or any agency or instrumentality
thereof, for the benefit of its employees, and which has total
assets in excess of $5,000,000.
Initial _______
The investor
certifies that it is an insurance company as defined in §2(13)
of the Securities Act, or a registered investment
company.
Initial _______
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.
Initial _______
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.
Initial _______
A
private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of
1940.
25
ADGERO BIOPHARMACEUTICALS HOLDINGS, INC.
Investor Profile (Must be completed by
Investor)
Section A - Personal Investor Information
For
All Purchasers
Certificate
Title:
______________________________________________________________________________
Individual(s)
executing this subscription:
__________________________________________________________
Social
Security Number(s) for all signatories / Entity Federal I.D.
Number: _______________________________
Date(s)
of Birth: ______________
Marital
Status: ______________
Years
Investment Experience: ______________
Aegis
Capital Account Executive or Outside Broker/Dealer:
______________
Check
if you are a FINRA member or affiliate of a FINRA member firm:
____
Check
Investment Objective(s) (See definitions on following page):
____Preservation of Capital ____Income
____Capital
Appreciation ____Trading Profits ____Speculation ____Other (please
specify)
The
source of funds for this investment is my personal or my entity's
assets _____Yes _____No
For Purchasers as Individual or as Joint Tenants, Tenants in
Common, and Community Property
Annual
Income(s):
___________________
Liquid
Net Worth(s): _________________
Net
Worth(s) (excluding value of primary residence):
________________
Select
Tax Bracket(s): ____ 15% or below ____ 25% - 27.5% ____ Over
27.5%
For All Purchasers, by the Primary Contact
Home
Street Address:
______________________________________________________________________
Home
City, State & Zip Code:
_______________________________________________________________
Home
Phone: ___________________ Home Fax: _________________Home Email:
____________________
Employer:
___________________________________
Type of
Business: _____________________________
Employer Street
Address:
___________________________________________________________________
Employer City,
State & Zip Code:
____________________________________________________________
Bus.
Phone: _____________________Bus. Fax: ___________________Bus.
Email: ____________________
For
All Purchasers
If you
are a United
States citizen, please list the number and jurisdiction of
issuance of any other government-issued document evidencing
residence and bearing a photograph or similar safeguard (such as a
driver’s license or passport), and provide a photocopy of
each of the documents you have listed.
If you
are NOT
a United States
citizen, for each jurisdiction of which you are a citizen or
in which you work or reside, please list (i) your passport number
and country of issuance or (ii) alien identification card number
AND (iii) number
and country of issuance of any other government-issued document
evidencing nationality or residence and bearing a photograph or
similar safeguard, and provide a photocopy of each of these
documents you have listed. These photocopies must be certified by a
lawyer as to authenticity.
Government-Issued
Identification Document Number(s) and
Jurisdiction(s):___________________________
Please provide a legible photocopy of your Identification
Document(s) along with your subscription
Section B – Securities Delivery Instructions
____
Please deliver securities to the Employer Address listed in Section
A.
____
Please deliver securities to the Home Address listed in Section
A.
____
Please deliver securities to the following address:
_____________________________________________
Section C –Wire Transfer Instructions
____ I
will wire funds from my outside account according to the
“Subscription Instructions” Page.
____ I
will wire funds from my Aegis Capital Account.
____The
funds for this investment are rolled over, tax deferred from
__________ within the allowed 60 day window.
_________________________
______________________
Investor
Signature Date
_________________________
______________________
Investor
Signatureescr
Date
26
Investment Objectives: The typical
investment listed with each objective are only some examples of the
kinds of investments that have historically been consistent with
the listed objectives. However, neither Adgero Biopharmaceuticals
Holdings, Inc. nor Aegis Capital Corp. can assure that any
investment will achieve your intended objective. You must make your
own investment decisions and determine for yourself if the
investments you select are appropriate and consistent with your
investment objectives.
Neither
Adgero Biopharmaceuticals Holdings, Inc. nor Aegis Capital Corp.
assumes responsibility to you for determining if the investments
you selected are suitable for you.
Preservation of Capital: An investment objective of
Preservation of Capital
indicates you seek to maintain the principal value of your
investments and are interested in investments that have
historically demonstrated a very low degree of risk of loss of
principal value. Some examples of typical investments might include
money market funds and high quality, short-term fixed income
products.
Income: An investment objective of Income indicates you seek to generate
income from investments and are interested in investments that have
historically demonstrated a low degree of risk of loss of principal
value. Some examples of typical investments might include high
quality, short and medium-term fixed income products, short-term
bond funds and covered call options.
Capital Appreciation: An investment objective of
Capital Appreciation
indicates you seek to grow the principal value of your investments
over time and are willing to invest in securities that have
historically demonstrated a moderate to above average degree of
risk of loss of principal value to pursue this objective. Some
examples of typical investments might include common stocks, lower
quality, medium-term fixed income products, equity mutual funds and
index funds.
Trading Profits: An investment objective of Trading Profits indicates you seek to
take advantage of short-term trading opportunities, which may
involve establishing and liquidating positions quickly. Some
examples of typical investments might include short-term purchases
and sales of volatile or low priced common stocks, put or call
options, spreads, straddles and/or combinations on equities or
indexes. This is a high-risk strategy.
Speculation: An investment objective of Speculation indicates you seek a
significant increase in the principal value of your investments and
are willing to accept a corresponding greater degree of risk by
investing in securities that have historically demonstrated a high
degree of risk of loss of principal value to pursue this objective.
Some examples of typical investments might include lower quality,
long-term fixed income products, initial public offerings, volatile
or low priced common stocks, the purchase or sale of put or call
options, spreads, straddles and/or combinations on equities or
indexes, and the use of short-term or day trading
strategies.
Other: Please specify.
27
EXHIBIT
A
FORM OF
INVESTOR WARRANT
28
EXHIBIT
B
BUSINESS
OF THE COMPANY
29
EXHIBIT
C
SUMMARY
OF THE OFFERING
30
EXHIBIT
D
RISK
FACTORS
31
EXHIBIT
E
MANAGEMENT
OF THE COMPANY
32
EXHIBIT
F
UNAUDITED
FINANCIAL STATEMENTS
33
