SECURITIES PURCHASE AGREEMENT
EXHIBIT 99.1
THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of November 19, 2007, by and among
SGX Pharmaceuticals, Inc., a Delaware corporation with headquarters located at 00000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000 (the “Company”), and each investor identified on the signature pages hereto
(individually, an “Investor” and collectively, the “Investors”).
BACKGROUND
A. The Company and each Investor are executing and delivering this Agreement in reliance upon
the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended
(the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the Securities Act.
B. Each Investor, severally and not jointly, wishes to purchase, and the Company wishes to
sell, upon the terms and conditions stated in this Agreement, (i) that aggregate number of shares
of the common stock, par value $0.001 per share, of the Company (the “Common Stock”), set forth on
such Investor’s signature page to this Agreement (which aggregate amount for all Investors together
shall be 4,943,154 shares of Common Stock and shall collectively be referred to
herein as the “Common Shares”) and (ii) warrants, in substantially the form attached hereto as
Exhibit A (the “Warrants”) to acquire up to that number of additional shares of Common
Stock set forth opposite such Investor’s name in column three (3) on the Schedule of Investors (the
shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants issued to
the Investors, collectively, the “Warrant Shares”).
C. The Common Shares, the Warrants and the Warrant Shares issued or issuable pursuant to this
Agreement are collectively are referred to herein as the “Securities.”
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 the Investors agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the
following terms have the meanings indicated:
“Accredited Investor” has the meaning set forth in Section 3.2(c).
“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 under the Securities Act.
“Agent” has the meaning set forth in Section 3.1(l).
“Agreement” has the meaning set forth in the Preamble.
“Best Efforts” means the reasonable efforts that a prudent person desirous of achieving a
result would use in similar circumstances to achieve such result as expeditiously as practical;
provided, however, that an obligation to use Best Efforts under this Agreement does not require
the Company to dispose of or make any change to its business, expend any material funds or
incur any other material burden or liability.
“Business Day” means any day other than Saturday, Sunday, any day which shall be a federal
legal holiday in the United States or any day on which banking institutions in The State of New
York are authorized or required by law or other governmental action to close.
“Closing” means the closing of the purchase and sale of the Securities pursuant to
Section 2.1.
“Closing Date” means the date and time of the Closing and shall be on such date and time as is
mutually agreed to by the Company and each Investor.
“Closing Price” means, for any date, the closing price per share of the Common Stock for such
date (or, if not a Trading Day, the nearest preceding date that is a Trading Day) on the primary
Eligible Market or exchange or quotation system on which the Common Stock is then listed or quoted.
“Company” has the meaning set forth in the Preamble.
“Company Counsel” means Xxxxxx Godward Kronish LLP, counsel to the Company.
“Common Shares” has the meaning set forth in the Preamble.
“Common Stock” has the meaning set forth in the Preamble.
“Contingent Obligation” has the meaning set forth in Section 3.1(z).
“Convertible Securities” means any stock or securities (other than Options) convertible into
or exercisable or exchangeable for Common Stock.
“Covering Shares” has the meaning set forth in Section 4.1(b).
“Disclosure Materials” has the meaning set forth in Section 3.1(f).
“Effective Date” means the date that the Registration Statement is first declared effective by
the SEC.
“Effectiveness Period” has the meaning set forth in Section 6.1(b).
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“8-K Filing” has the meaning set forth in Section 4.5.
“Eligible Market” means any of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, OTC Bulletin
Board or a non-NASDAQ over-the-counter market such as the “pink sheets.”
“Environmental Laws” has the meaning set forth in Section 3.1(cc).
“Event” has the meaning set forth in Section 6.1(d).
“Event Payments” has the meaning set forth in Section 6.1(d).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Events” has the meaning set forth in Section 6.1(d)(iii).
“Excluded Investors” means Lazard Freres & Co. LLC and its Affiliates.
“Filing Date” means the date that is Thirty (30) days after the Closing Date or, if such
date is not a Business Day, the next date that is a Business Day.
“GAAP” has the meaning set forth in Section 3.1(f).
“Hazardous Materials” has the meaning set forth in Section 3.1(cc).
“Indebtedness” has the meaning set forth in Section 3.1(z).
“Indemnified Party” has the meaning set forth in Section 6.4(c).
“Indemnifying Party” has the meaning set forth in Section 6.4(c).
“Intellectual Property Rights” has the meaning set forth in Section 3.1(s).
“Investor” has the meaning set forth in the Preamble.
“Lien” means any lien, charge, claim, security interest, encumbrance, right of first refusal
or other restriction.
“Losses” means any and all losses, claims, damages, liabilities, settlement costs and
expenses, including, without limitation, reasonable attorneys’ fees.
“Material Adverse Effect” means (i) a material adverse effect on the results of operations,
assets, business or financial condition of the Company or (ii) material and adverse impairment of
the Company’s ability to perform its obligations under this Agreement, provided, that none of the
following alone shall be deemed, in and of itself, to constitute a Material Adverse Effect: (i) a
change in the market price or trading volume of the Common Stock, (ii) changes in general economic
conditions or changes affecting the industry in which the Company operates generally (as
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opposed to
Company-specific changes) so long as such changes do not have a disproportionate effect on the
Company or (iii) the Company’s Common Stock is not listed or quoted on a Trading Market.
“Material Permits” has the meaning set forth in Section 3.1(u).
“Options” means any outstanding rights, warrants or options to subscribe for or purchase
Common Stock or Convertible Securities.
“Person” has the meaning set forth in Section 3.1(z).
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, a partial proceeding, such as a deposition), whether commenced or threatened in
writing.
“Prospectus” means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a prospectus filed
as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the Registration Statement,
and all other amendments and supplements to the Prospectus including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
“Registrable Securities” means the Common Shares and the Warrant Shares issued or issuable
pursuant to the Transaction Documents, together with any securities issued or issuable upon any
stock split, dividend or other distribution, recapitalization or similar event with respect to the
foregoing.
“Registration Statement” means each registration statement required to be filed under
Article VI, including (in each case) the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by reference in
such registration statement.
“Regulation D” has the meaning set forth in the Preamble.
“Required Effectiveness Date” means (i) if the Registration Statement does not become subject
to review by the SEC, the date which is the earliest of (a) ninety (90) days after the Closing Date
or (b) five (5) Trading Days after the Company receives notification from the SEC that the
Registration Statement will not become subject to review, or (ii) if the Registration Statement is
reviewed by the SEC, the date which is the earliest of (a) one hundred and twenty (120) days after
the Closing Date or (b) five (5) Trading Days after the Company receives notification from the SEC
that the SEC has no further comment to the Registration Statement.
“Rule 144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424, respectively,
promulgated by the SEC pursuant to the Securities Act, as such Rules may be amended
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from time to
time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same
effect as such Rule.
“SEC” has the meaning set forth in the Preamble.
“SEC Reports” has the meaning set forth in Section 3.1(f).
“Securities” has the meaning set forth in the Preamble.
“Securities Act” has the meaning set forth in the Preamble.
“Shares” means shares of the Company’s Common Stock.
“Short Sales” has the meaning set forth in Section 3.2(h).
“Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market (other
than the OTC Bulletin Board), or (ii) if the Common Stock is not listed or quoted on a Trading
Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not
listed or quoted on any Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the Pink Sheets LLC (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 whichever of the New York Stock Exchange, the American Stock Exchange,
the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, OTC Bulletin
Board or non-NASDAQ over-the-counter market, such as the “pink sheets” on which the Common Stock is
listed or quoted for trading on the date in question.
“Transaction” has the meaning set forth in Section 3.2(i).
“Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, the
Warrants and the Transfer Agent Instructions.
“Transfer Agent” means Computershare Trust Company, N.A., located at 0000 Xxxxxxx Xxxxxx,
Xxxxxxxx, XX 00000-0000, or any successor transfer agent for the Company.
“Transfer Agent Instructions” means, with respect to the Company, the Irrevocable Transfer
Agent Instructions, in the form of Exhibit E, executed by the Company and delivered to and
acknowledged in writing by the Transfer Agent.
“Warrants” has the meaning set forth in the Preamble.
“Warrant Shares” has the meaning set forth in the Preamble.
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ARTICLE II
PURCHASE AND SALE
PURCHASE AND SALE
2.1 Closing. Subject to the terms and conditions set forth in this Agreement, at the
Closing the Company shall issue and sell to each Investor, and each Investor shall, severally and
not jointly, purchase from the Company, such number of Common Shares and Warrants for the price set
forth on
such Investor’s signature page to this Agreement. The date and time of the Closing shall be
11:00 a.m., New York City Time, on the Closing Date. The Closing shall take place at the offices
of the Company’s Counsel.
2.2 Closing Deliveries.
(a) At the Closing, the Company shall deliver or cause to be delivered to each Investor the
following:
(i) a copy of the Company’s Transfer Agent Instructions acknowledged by the Transfer Agent;
(ii) a Warrant, issued in the name of such Investor, pursuant to which such Investor shall
have the right to acquire such number of Warrant Shares set forth on such Investor’s signature page
to this Agreement;
(iii) a legal opinion of Company Counsel, in the form of Exhibit C, executed by such
counsel and delivered to the Investors;
(iv) a certificate of the Secretary of the Company, dated as of the Closing Date,
(a) certifying the resolutions adopted by the Board of Directors of the Company approving the
transactions contemplated by this Agreement and the other Transaction Documents and the issuance of
the Securities, (b) certifying the current versions of the certificate of incorporation, as amended
and bylaws of the Company and (c) certifying as to the signatures and authority of persons signing
the Transaction Documents and related documents on behalf of the Company; and
(v) a certificate of the Chief Executive Officer or Chief Financial Officer of the Company,
dated as of the Closing Date, certifying to the fulfillment of the conditions specified in
Sections 5.1(a) and (b).
(b) At the Closing, each Investor shall deliver or cause to be delivered to the Company the
purchase price set forth on such Investor’s signature page to this Agreement in United States
dollars and in immediately available funds, by wire transfer to an account designated in writing
to such Investor by the Company for such purpose.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company hereby represents and
warrants to the Investors as follows:
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(a) Organization and Qualification. The Company is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation,
with the requisite legal 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 or articles of incorporation, bylaws or other organizational or charter
documents. The Company is duly qualified to do business and is in good standing as a foreign
corporation or
other entity 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, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.
(b) Authorization; Enforcement. The Company has the requisite corporate authority
to enter into and to consummate the transactions contemplated by each of the Transaction
Documents to which it is a party and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of each of the Transaction Documents to which it is a
party by the Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate 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 of the Transaction Documents to which it is a party has been (or upon
delivery will be) duly executed by the Company and is, or 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 (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by
applicable law.
(c) No Conflicts. The execution, delivery and performance of the Transaction
Documents to which it is a party 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 or articles of incorporation, bylaws or other
organizational or charter documents, (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, except to the extent that such conflict,
default, termination, amendment, acceleration or cancellation right would not reasonably be
expected to have a Material Adverse Effect, 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, assuming the accuracy of the
representations and warranties of the Investors set forth in Section 3.2 hereof, federal
and state securities laws and regulations and the rules and regulations of any self-regulatory
organization to which the Company or its securities are subject, including all applicable
Trading Markets), or by which any property or
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asset of the Company is bound or affected, except
to the extent that such violation would not reasonably be expected to have a Material Adverse
Effect.
(d) The Securities. The Securities (including the Warrant Shares) are duly
authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens and will not be subject to preemptive or similar rights of stockholders (other than those
imposed by the Investors). The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable upon exercise of the Warrants.
(e) Capitalization. The aggregate number of shares and type of all authorized,
issued and outstanding classes of capital stock, options and other securities of the Company
(whether or not presently convertible into or exercisable or exchangeable for shares of capital
stock of the Company), as of November 9, 2007, is set forth in Schedule 3.1(e) hereto.
All outstanding shares of capital stock are duly authorized, validly issued, fully paid and
nonassessable and have been issued in compliance in all material respects with all applicable
securities laws. Except as disclosed in Schedule 3.1(e) hereto, the Company did not
have outstanding at November 9, 2007, any other Options, 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 entered into any agreement giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or securities or
rights convertible or exchangeable into shares of Common Stock. Except as set forth on
Schedule 3.1(e) hereto, and except for customary adjustments as a result of stock
dividends, stock splits, combinations of shares, reorganizations, recapitalizations,
reclassifications or other similar events, 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 issuance 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 Investors) and
will not result in a right of any holder of securities to adjust the exercise, conversion,
exchange or reset price under such securities. To the knowledge of the Company, except as
disclosed in the SEC Reports and any Schedules 13D or 13G filed with the SEC pursuant to Rule
13d-1 of the Exchange Act by reporting persons or in Schedule 3.1(e) hereto, as of the
date hereof, 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.
(f) SEC Reports; Financial Statements. The Company has filed all reports required
to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the 12 months preceding the date hereof 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 and has filed all reports required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof. Such
reports required to be filed by the Company under the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, together with any materials filed by the Company under the
Exchange Act, whether or not any such reports were required, being collectively referred to
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herein as the “SEC Reports” and, together with this Agreement and the Schedules to this
Agreement, the “Disclosure Materials”. As of their respective dates (or, if amended or
superseded by a filing prior to the Closing Date, then on the date of such filing), the SEC
Reports filed by the Company complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated
thereunder, and none of the SEC Reports, when filed (or, if amended or superseded by a filing
prior to the Closing Date, then on the date of such subsequent filing) by the Company, 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 SEC with respect thereto as in effect at the time of filing (or, if
amended or superseded by a filing prior to the Closing Date, then on the date of such subsequent
filing). Such financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified in such financial statements, the notes
thereto and except that unaudited financial statements may not contain all footnotes required by
GAAP or may be condensed or summary statements, and fairly present in all material respects the
financial position of the Company 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, year-end audit adjustments. All material agreements to which the Company is a party or
to which the property or assets of the Company are subject are included as part of or identified
in the SEC Reports, to the extent such agreements are required to be included or identified
pursuant to the rules and regulations of the SEC.
(g) Material Changes; Undisclosed Events, Liabilities or Developments; Solvency.
Since the date of the latest audited financial statements included within the SEC Reports,
except as disclosed in the SEC Reports or in Schedule 3.1(g) hereto, (i) there has been
no event, occurrence or development that, individually or in the aggregate, has had or that
would result in a Material Adverse Effect, (ii) the Company has not incurred any material
liabilities other than (A) trade payables and accrued expenses 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 SEC, (iii) the Company has not altered its method of accounting or changed its
auditors, except as disclosed in its SEC Reports, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders, in their capacities as
such, 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 Affiliate, except pursuant to existing Company stock-based plans. The Company has not taken
any steps to seek protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so.
The Company, as of the date hereof, and after giving effect to the transactions contemplated
hereby to occur at the applicable Closing, reasonably expects to have sufficient cash on hand to
pay all of its currently anticipated expenses for the next 12 months.
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(h) Absence of Litigation. Except as disclosed in the SEC Reports, there is no
action, suit, claim, or Proceeding, or, to the Company’s knowledge, inquiry or investigation,
before or by any court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company, threatened against or affecting the Company that
would reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(i) Compliance. Except as would not, individually or in the aggregate, reasonably
be expected to have or result in a Material Adverse Effect, (i) the Company is not 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 written 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) the Company is not in violation of any order of any court, arbitrator or
governmental body, or (iii) the Company is not and has not been in violation of any statute,
rule or regulation of any governmental authority.
(j) Title to Assets. The Company owns no real property. The Company has good and
marketable title in all tangible 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 that do not,
individually or in the aggregate, have or result in a Material Adverse Effect. Any real
property and facilities held under lease by the Company is held by it under valid, subsisting
and enforceable leases of which the Company is in material compliance.
(k) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any
of its Affiliates, nor any Person acting on its or their behalf, has engaged in any form of
general solicitation or general advertising (within the meaning of Regulation D) in connection
with the offer or sale of the Securities. The Company shall be responsible for the payment of
any placement agent’s fees, financial advisory fees, or brokers’ commission (other than for
persons engaged by any Investor or its investment advisor) relating to or arising out of the
issuance of the Securities pursuant to this Agreement. The Company shall pay, and hold each
Investor harmless against, any liability, loss or expense (including, without limitation,
reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any such claim
for fees arising out of the issuance of the Securities pursuant to this Agreement. The Company
acknowledges that is has engaged Lazard Freres & Co. LLC as its exclusive placement agent (the
“Agent”) in connection with the sale of the Securities. Other than the Agent, the Company has
not engaged any placement agent or other agent in connection with the sale of the Securities.
(l) Private Placement; Investment Company; U.S. Real Property Holding Corporation.
Neither the Company nor any of its Affiliates nor, any Person acting on the Company’s behalf
has, directly or indirectly, at any time within the past six months, made any offer or sale of
any security or solicitation of any offer to buy any security under circumstances that would
(i) eliminate the availability of the exemption from registration under Regulation D under the
Securities Act in connection with the offer and sale by the Company of the Securities as
contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction
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Documents to be integrated with prior offerings by the Company for purposes of any applicable
law, regulation or stockholder approval provisions, including, without limitation, under the
rules and regulations of any Trading Market. Assuming the accuracy of the representations and
warranties of the Investors 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
Investors as contemplated hereby. The sale and issuance of the Securities hereunder does not
contravene the rules and
regulations of any Trading Market on which the Common Stock is listed or quoted. The
Company is not required to be registered as, and is not an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as amended. The Company is not
required to be registered as a United States real property holding corporation within the
meaning of the Foreign Investment in Real Property Tax Act of 1980.
(m) Form S-3 Eligibility. As of the date hereof, the Company is eligible to
register the Common Shares and the Warrant Shares for resale by the Investors using Form S-3
promulgated under the Securities Act.
(n) Listing and Maintenance Requirements. Except as disclosed in the SEC Reports,
the Company has not, in the twelve months preceding the date hereof, received written 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.
(o) Registration Rights. Except as described in Schedule 3.1(o), the Company has
not granted or agreed to grant to any Person any rights (including “piggy-back” registration
rights) to have any securities of the Company registered with the SEC or any other governmental
authority that have not expired or been satisfied or waived.
(p) Application of Takeover Protections. The Company and its Board of Directors
have taken all necessary action, if any, to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s charter documents or the laws of its state
of incorporation that is applicable to any of the Investors as a result of the Investors and the
Company fulfilling their obligations or exercising their rights under the Transaction Documents,
including, without limitation, as a result of the Company’s issuance of the Securities and the
Investors’ ownership of the Securities.
(q) Disclosure. The Company confirms that neither it nor any officers, directors
or Affiliates, has provided any of the Investors (other than Excluded Investors or those certain
investors who signed a confidentiality agreement with the Company) or their agents or counsel
with any information that constitutes material, nonpublic information (other than the existence
and terms of the Transaction Documents and the issuance of Securities, as contemplated by this
Agreement, and any information to be disclosed by the Company via press release pursuant to
Section 4.5 herein). The Company understands and confirms that each of the Investors
(other than Excluded Investors or those certain investors who signed a confidentiality agreement
with the Company) will rely on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided by the Company to the Investors regarding
the Company,
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its business and the transactions contemplated hereby, including the Schedules to
this Agreement furnished by or on behalf of the Company, are true and correct in all material
respects 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. To the knowledge of the Company,
except for the transactions contemplated by this Agreement, as of the date hereof, no event or
circumstance has occurred or
information exists with respect to the Company or its business, properties, operations or
financial condition, which, under applicable law, rule or regulation, requires public disclosure
or announcement by the Company but which has not been so publicly announced or disclosed or will
be disclosed by the Company via press release pursuant to Section 4.5 herein. The
Company acknowledges and agrees that no Investor (other than Excluded Investors) makes or has
made any representations or warranties with respect to the transactions contemplated hereby
other than those set forth in the Transaction Documents.
(r) Acknowledgment Regarding Investors’ Purchase of Securities. The Company
acknowledges that no Investor (other than Excluded Investors) is acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the
transactions contemplated hereby and any advice given by any Investor (other than Excluded
Investors) or any of their respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is merely incidental
to the Investors’ purchase of the Securities. The Company further represents to each Investor
that the Company’s decision to enter into this Agreement has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company and its advisors
and representatives.
(s) Patents and Trademarks. To the knowledge of the Company, except as disclosed
in the SEC Reports, the Company owns, or possesses adequate rights or licenses to use, all
trademarks, trade names, service marks, service xxxx registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and other intellectual property rights (“Intellectual Property Rights”) necessary to
conduct its business as now conducted except where the failure to own or possess such
Intellectual Property Rights would not have a Material Adverse Effect. To the knowledge of the
Company, there is no infringement by the Company of Intellectual Property Rights of others that
would result in a Material Adverse Effect. Except as disclosed in the SEC Reports, there is no
claim, action or proceeding being made or brought, or to the knowledge of the Company, being
threatened, against the Company regarding its Intellectual Property Rights.
(t) 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 and locations in which the Company is engaged.
(u) Regulatory Permits. The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct its respective business as presently conducted and described in the SEC
Reports (“Material Permits”), except where the failure to possess such permits does not,
individually or in the aggregate, have or reasonably be expected to result in a Material Adverse
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Effect, and the Company has not received any written notice of proceedings relating to the
revocation or modification of any Material Permit.
(v) Transactions With Affiliates and Employees. Except as set forth or
incorporated by reference in the Company’s SEC Reports, none of the officers, directors or
employees of the Company is presently a party to any transaction with the Company that would
be required to be reported on Form 10-K by Item 12 thereof pursuant to Regulation S-K Item
404(a) (other than for ordinary course services as employees, officers or directors or
transactions not required to be disclosed as of the date hereof), 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
such officer, director or employee or, to the Company’s knowledge, any corporation, partnership,
trust or other entity in which any such officer, director, or employee has a substantial
interest or is an officer, director, trustee or partner.
(w) Internal Accounting Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(x) Xxxxxxxx-Xxxxx Act. The Company is in compliance in all material respects with
applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 and applicable rules and regulations
promulgated by the SEC thereunder, except where such noncompliance would not have, individually
or in the aggregate, a Material Adverse Effect.
(y) Foreign Corrupt Practices. Neither the Company nor, to the knowledge of the
Company, any director, officer, agent, employee or other Person acting on behalf of the Company
has, in the course of its actions for, or on behalf of, the Company (i) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee or to any foreign or domestic political parties or campaigns
from corporate funds; (iii) violated or is in violation in any material respect of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.
(z) Indebtedness. Except as disclosed in the SEC Reports, the Company (i) has no
outstanding Indebtedness (as defined below), other than Indebtedness incurred after the date of
the information set forth in the SEC Reports that has not resulted in a Material Adverse Effect,
(ii) is not in violation of any term of and is not in default under any contract, agreement or
instrument relating to any Indebtedness, except where such violations and defaults would not
result, individually or in the aggregate, in a Material Adverse Effect, and (iii) is not a party
to
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any contract, agreement or instrument relating to any Indebtedness, the performance of which,
in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect.
For purposes of this Agreement: (x) “Indebtedness” of any Person means, without duplication
(A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as
the deferred purchase price of property or services (other than trade payables entered into in
the ordinary course of business), (C) all reimbursement or payment obligations with respect to
letters
of credit, surety bonds and other similar instruments, (D) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all indebtedness created
or arising under any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with the proceeds of
such indebtedness (even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in connection with
generally accepted accounting principles, consistently applied for the periods covered thereby,
is classified as a capital lease, and (G) all indebtedness referred to in clauses (A) through
(F) above secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest
or other encumbrance upon or in any property or assets (including accounts and contract rights)
owned by any Person, even though the Person which owns such assets or property has not assumed
or become liable for the payment of such indebtedness; and (y) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, a government or any department or agency thereof and any other
legal entity.
(aa) Employee Relations. The Company is not a party to any collective bargaining
agreement, nor does it employ any member of a union. Except as disclosed in the SEC Reports,
during the period covered by the SEC Reports, no executive officer of the Company has notified
the Company that such officer intends to leave the Company or otherwise terminate such officer’s
employment with the Company. To the knowledge of the Company, no executive officer of the
Company is in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant, and to the knowledge of the Company, the
continued employment of each such executive officer does not subject the Company to any
liability with respect to any of the foregoing matters.
(bb) Labor Matters. The Company is in compliance in all material respects with all
federal, state, local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(cc) Environmental Laws. The Company (i) is in compliance in all material respects
with any and all Environmental Laws (as hereinafter defined), (ii) has received all permits,
licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) is in compliance in all material respects with all
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terms
and conditions of any such permit, license or approval where, in each of the foregoing clauses
(i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means all
federal, state, local or foreign laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice
letters, orders, permits, plans or regulations issued, entered, promulgated or approved
thereunder.
(dd) Tax Status. The Company (i) has made or filed all foreign, federal and state
income and all other material tax returns, reports and declarations required by any jurisdiction
to which it is subject, and (ii) has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith.
3.2 Representations and Warranties of the Investors. Each Investor hereby, as to
itself only and for no other Investor, represents and warrants to the Company as follows:
(a) Organization; Authority. Such Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization with the
requisite corporate, partnership or other power and authority to enter into and to consummate
the transactions contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The purchase by such Investor of the Securities hereunder
has been duly authorized by all necessary corporate, partnership or other action on the part of
such Investor. This Agreement has been duly executed and delivered by such Investor and
constitutes the valid and binding obligation of such Investor, enforceable against it in
accordance with its terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
(b) No Public Sale or Distribution. Such Investor is (i) acquiring the Common
Shares and the Warrants and (ii) upon exercise of the Warrants will acquire the Warrant Shares
issuable upon exercise thereof, in the ordinary course of business for its own account and not
with a view towards, or for resale in connection with, the public sale or distribution thereof,
except pursuant to sales registered under the Securities Act or under an exemption from such
registration and in compliance with applicable federal and state securities laws, and such
Investor does not have a present arrangement to effect any distribution of the Securities to or
through any person or entity; provided, however, that by making the
representations herein, such Investor does not agree to hold any of the Securities for any
minimum or other specific term and reserves the right to dispose of the Securities at any time
in accordance with or pursuant to a registration
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statement or an exemption under the Securities
Act in compliance with applicable federal and state securities laws.
(c) Investor Status. At the time such Investor was offered the Securities, it was,
at the date hereof it is, and on the date which it exercises any Warrants it will be an
“accredited investor” as defined in Rule 501(a) under the Securities Act (“Accredited Investor”)
or, as
Investor has disclosed in writing to the Company on Exhibit B-3, a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such Investor is not
a registered broker dealer registered under Section 15(a) of the Exchange Act, or a member of
the NASD, Inc. or an entity engaged in the business of being a broker dealer. Except as
otherwise disclosed in writing to the Company on Exhibit B-2 (attached hereto) on or
prior to the date of this Agreement, such Investor is not affiliated with any broker dealer
registered under Section 15(a) of the Exchange Act, or a member of the NASD, Inc. or an entity
engaged in the business of being a broker dealer.
(d) General Solicitation. Such Investor is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media, broadcast over television or radio,
disseminated over the Internet or presented at any seminar or any other general solicitation or
general advertisement.
(e) Experience of Such Investor. Such Investor, 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 Investor
understands that it must bear the economic risk of this investment in the Securities
indefinitely, and is able to bear such risk and is able to afford a complete loss of such
investment.
(f) Access to Information. Such Investor 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 risks of investing in
the Securities; (ii) access to information (other than material non-public information for those
certain investors who did not enter into a confidentiality agreement with the Company) about the
Company and its financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to
obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with
respect to the investment. Such Investor acknowledges that it is not relying upon, and has not
relied upon, any statement, representation or warranty made by any Person, including, without
limitation, the Company and the Agent, except for the statements, representations, and
warranties contained in Section 3.1 of this Agreement. Neither such inquiries nor any other
investigation conducted by or on behalf of such Investor or its representatives or counsel shall
modify, amend or affect such Investor’s right to rely on the truth, accuracy and completeness of
the Disclosure Materials and
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the Company’s representations and warranties contained in the
Transaction Documents. Such Investor acknowledges receipt of copies of the SEC Reports.
(g) No Governmental Review. Such Investor understands that no United States
federal or state agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability of the
investment in the Securities nor have such authorities passed upon or endorsed the merits
of the offering of the Securities.
(h) No Conflicts. The execution, delivery and performance by such Investor of this
Agreement and the consummation by such Investor of the transactions contemplated hereby will not
(i) result in a violation of the organizational documents of such Investor or (ii) conflict
with, or constitute a default (or an event which 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 of, any agreement, indenture or instrument to which such Investor is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Investor, except in the case of clauses
(ii) and (iii) above, for such that are not material and do not otherwise affect the ability of
such Investor to consummate the transactions contemplated hereby.
(i) Prohibited Transactions; Confidentiality. No Investor, directly or indirectly,
and no Person acting on behalf of or pursuant to any understanding with any Investor, has
engaged in any purchases or sales in the securities, including derivatives, of the Company
(including, without limitation, any Short Sales (a “Transaction”) involving any of the Company’s
securities) since the time that such Investor was first contacted by the Company, the Agent or
any other Person regarding an investment in the Company. Such Investor covenants that neither
it nor any Person acting on its behalf or pursuant to any understanding with such Investor will
engage, directly or indirectly, in any Transactions in the securities of the Company (including,
without limitation, any Short Sales or hedging activities involving the Company’s Securities)
prior to the time the transactions contemplated by this Agreement are publicly disclosed. “Short
Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges,
forward sale contracts, options, puts, calls, short sales, swaps, derivatives and similar
arrangements (including on a total return basis), and sales and other transactions through
non-U.S. broker-dealers or foreign regulated brokers.
(j) Restricted Securities. The Investors understand that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they
are being acquired from the Company in a transaction not involving a public offering and that
under such laws and applicable regulations such securities may be resold without registration
under the Securities Act only in certain limited circumstances and subject to compliance with
the Securities Act and other applicable federal and state securities laws.
(k) Legends. It is understood that, except as provided in Section 4.1(b) of
this Agreement, certificates evidencing such Securities will bear the legend set forth in
Section 4.1(b).
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(l) No Legal, Tax or Investment Advice. Such Investor understands that nothing in
this Agreement or any other materials presented by or on behalf of the Company to the Investor
in connection with the purchase of the Securities constitutes legal, tax or investment advice.
Such Investor has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase of the
Securities.
Such Investor understands that the Agent has acted solely as the agent of the Company in
this placement of the Securities, and that the Agent makes no representation or warranty with
regard to the merits of this transaction or as to the accuracy of any information such Investor
may have received in connection therewith. Such Investor acknowledges that he has not relied on
any information or advice furnished by or on behalf of the Agent.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) The Investors covenant that the Securities will only be disposed of pursuant to an
effective registration statement under, and in compliance with the requirements of, the
Securities Act 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, or pursuant to Rule 144(k), the Company may require the transferor 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 under the Securities Act. Notwithstanding the foregoing, 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, except to the extent that the transfer agent requests
such legal opinion, any transfer of Securities by an Investor to an Affiliate of such Investor,
provided that the transferee certifies to the Company that it is an Accredited Investor,
provided that such Affiliate does not request any removal of any existing legends on any
certificate evidencing the Securities and provided that such transferee agrees to be bound by
the provisions of this Agreement, including without limitation, this Section 4.1.
(b) The Investors agree to the imprinting, until no longer required by this
Section 4.1(b), of the following legend on any certificate evidencing any of the
Securities:
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 OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD, PLEDGED OR OTHERWISE TRANSFERRED 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
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OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR
BLUE SKY LAWS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION (OTHER
THAN PURSUANT TO RULE 144(K)), UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH
TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH
A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
Certificates evidencing the Common Shares and the Warrant Shares shall not be required to
contain such legend or any other legend (i) while a registration statement (including the
Registration Statement) covering the resale of the Common Shares and the Warrant Shares is
effective under the Securities Act, (ii) following any sale of such Securities pursuant to Rule 144
if the holder provides the Company with a legal opinion (and the documents upon which the legal
opinion is based) reasonably acceptable to the Company to the effect that the Securities can be
sold under Rule 144, (iii) if the Securities are eligible for sale under Rule 144(k), or (iv) if
the holder provides the Company with a legal opinion (and the documents upon which the legal
opinion is based) reasonably acceptable to the Company to the effect that the legend is not
required under applicable requirements of the Securities Act (including controlling judicial
interpretations and pronouncements issued by the Staff of the SEC).
In reliance on the representations and covenants of each Investor set forth in this Agreement
(including without limitation Section 4.1(d)), the Company shall deliver the written
confirmation in the form attached as Annex III to the Transfer Agent Instructions to the Transfer
Agent on or within Two Trading days following the Effective Date. Pursuant to this Section
4.1(b), the Company will no later than five Trading Days following the delivery by an Investor
to the Company or the Transfer Agent (if delivery is made to the Transfer Agent a copy shall be
contemporaneously delivered to the Company) of (i) a legended certificate representing such
Securities (and, in the case of a requested transfer, endorsed or with stock powers attached,
signatures guaranteed, and otherwise in form necessary to affect transfer), and (ii) an opinion of
counsel to the extent required by Sections 4.1(a), 4.1(b)(ii) or
4.1(b)(iv), deliver or cause to be delivered to such Investor a certificate representing
such Securities that is free from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on
transfer set forth in this Section.
If within five Trading Days after receipt by the Company or its Transfer Agent of a legended
certificate and the other documents as specified in Clauses (i) and (ii) of the paragraph
immediately above, the Company shall fail to cause to be issued and delivered to such Investor a
certificate representing such Securities that is free from all restrictive and other legends, and
if on or after such fifth Trading Day the Investor purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Investor of shares of
Common Stock that
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the Investor anticipated receiving from the Company without any restrictive
legend (the “Covering Shares”), then the Company shall, within five Trading Days after the
Investor’s request, pay cash to the Investor in an amount equal to the excess (if any) of the
Investor’s total purchase price (including brokerage commissions, if any) for the Covering Shares,
over the product of (A) the number of
Covering Shares, times (B) the closing bid price on the date of delivery of such certificate and
the other documents as specified in Clauses (i) and (ii) of the paragraph immediately above.
(c) The Company will not object to and shall permit (except as prohibited by law) an Investor
to pledge or grant a security interest in some or all of the Securities in connection with a bona
fide margin agreement with a registered broker-dealer or grant a security interest in some or all
of the Securities to a financial institution that is an “accredited investor” as defined in Rule
501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
(including without limitation complying with the restrictions on transfer set forth herein and
agreeing to make any sale or transfer of the Shares in compliance with applicable federal and state
securities laws), and if required under the terms of such Investor’s arrangement with such
registered broker-dealer or financial institution, the Company will not object to and shall permit
(except as prohibited by law) such Investor to transfer pledged or secured Securities to the
pledgees or secured parties provided such transfer is made in compliance with applicable federal
and state securities laws. Except as required by law, such a pledge or transfer would not be
subject to approval of the Company, no legal opinion of the pledgee, secured party or pledgor shall
be required in connection therewith (but such legal opinion shall be required in connection with a
subsequent transfer or foreclosure following default by the Purchaser transferee of the pledge and
any such transfer shall be made in accordance with the provisions of this Agreement), and no notice
shall be required of such pledge. Each Investor acknowledges that the Company shall not be
responsible for any pledges relating to, or the grant of any security interest in, any of the
Securities or for any agreement, understanding or arrangement between any Investor and its pledgee
or secured party. At the appropriate Investor’s expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Securities may reasonably request in
connection with a pledge or transfer of the Securities, including, if appropriate, the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list of Selling
Stockholders thereunder to include such pledgee or secured party as a Selling Stockholder therein.
Provided that the Company is in compliance with the terms of this Section 4.1(c), the
Company’s indemnification obligations pursuant to Section 6.4 shall not extend to any
Proceeding or Losses arising out of or related to this Section 4.1(c).
(d) Each Investor acknowledges its responsibilities under the Securities Act and accordingly
will not sell or otherwise transfer the Warrants, Common Shares, the Warrant Shares or any interest
therein without complying with the requirements of the Securities Act, the rules and regulations
thereunder and applicable state securities laws. While the Registration Statement remains
effective, each Investor hereunder hereby agrees to sell the Common Shares and Warrant Shares in
accordance with the plan of distribution contained in the Registration Statement and, if it does
so, agrees to comply therewith and with the related prospectus delivery requirements unless an
exemption therefrom is available. Each Investor agrees, prior to selling any Common Shares and
Warrant Shares pursuant to the Registration Statement, to confirm that the Registration Statement
is effective under the Securities Act. Each Investor, severally and not jointly with the other
Investors,
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agrees that if it is notified by the Company in writing at any time that the
Registration Statement registering the resale of the Common Shares or the Warrant Shares is not
effective or that the prospectus included in such Registration Statement no longer complies with
the requirements of Section 10 of the Securities Act or sales under the Registration Statement are
otherwise suspended in
accordance with Section 6.1(e), the Investor will refrain from selling such Common
Shares and Warrant Shares until such time as the Investor is notified by the Company that such
Registration Statement is effective, such prospectus is compliant with Section 10 of the Exchange
Act or that sales under the Registration Statement are no longer suspended, unless such Investor is
able to, and does, sell such Common Shares or Warrant Shares pursuant to an available exemption
from the registration requirements of Section 5 of the Securities Act. Both the Company and its
Transfer Agent, and their respective directors, officers, employees and agents, may rely on this
subsection (d), and each Investor will indemnify and hold harmless each of such persons from any
breaches or violations of this paragraph.
4.2 Furnishing of Information. Until the date that any Investor owning Common Shares
or Warrant Shares may sell all of them under Rule 144(k) of the Securities Act (or any successor
provision), the Company covenants to use its commercially reasonable efforts 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.
4.3 Integration. The Company shall not, and shall use its commercially reasonable
efforts to ensure that no Affiliate thereof shall, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (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 Investors or that would
be integrated with the offer or sale of the Securities for purposes of the rules and regulations of
any Trading Market.
4.4 Reservation of Securities. The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount
as may be required to fulfill its obligations to issue such Shares under the Transaction Documents.
In the event that at any time the then authorized shares of Common Stock are insufficient for the
Company to satisfy its obligations to issue such Shares under the Transaction Documents, the
Company shall promptly take such actions as may be required to increase the number of authorized
shares.
4.5 Securities Laws Disclosure; Publicity. The Company shall, at or before the later
of (a) the execution and delivery of this Agreement by the Investors to the Company or (b) 9:00
a.m., New York time, on the first Trading Day following execution of this Agreement, issue a press
release disclosing all material terms of the transactions contemplated hereby. On or prior to the
Closing Date, the Company shall file a Current Report on Form 8-K with the SEC (the “8-K Filing”)
describing the terms of the transactions contemplated by the Transaction Documents and including as
exhibits to such Current Report on Form 8-K the Transaction Documents (including the schedules and
the names, and addresses of the Investors and the amount(s) of Securities respectively purchased)
and the form of Warrants, in the form required by the Exchange Act. Except as herein provided, the
Company shall not publicly disclose the name of any Investor, or include the name of any Investor
in any press release without the prior written consent of such Investor (which consent shall not be
unreasonably withheld or delayed), unless otherwise required by law, regulatory authority or
Trading
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Market. The Company shall not, and shall cause each of its officers, directors, employees
and agents not to, provide any Investor with any material nonpublic information regarding the
Company from and after the issuance of the above referenced press release without the express
written consent of such Investor.
4.6 Use of Proceeds. The Company intends to use the net proceeds from the sale of the
Securities for working capital and general corporate purposes. The Company also may use a portion
of the net proceeds, currently intended for general corporate purposes, to acquire or invest in
technologies, products or services that complement its business, although the Company has no
present plans or commitments and is not currently engaged in any material negotiations with respect
to any such acquisition or investment. Pending these uses, the Company intends to invest the net
proceeds from this offering in short-term, interest-bearing, investment-grade securities, or as
otherwise pursuant to the Company’s customary investment policies.
ARTICLE V
CONDITIONS
CONDITIONS
5.1 Conditions Precedent to the Obligations of the Investors. The obligation of each
Investor to acquire Securities at the Closing is subject to the satisfaction or waiver by such
Investor, at or before the Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and warranties of the
Company contained herein shall be true and correct in all material respects as of the date when
made and as of the Closing as though made on and as of such date; and
(b) Performance. The Company and each other Investor shall have performed,
satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by it at or
prior to the Closing.
(c) No Suspensions of Trading in Common Stock; Listing. Trading in the Common Stock
shall not have been suspended by the SEC or any Trading Market (except for any suspensions of
trading of not more than one Trading Day solely to permit dissemination of material information
regarding the Company) at any time since the date of execution of this Agreement, and the Common
Stock shall have been at all times since such date listed for trading on a Trading Market.
(d) Absence of Litigation. No action, suit or proceeding by or before any court or
any governmental body or authority, against the Company or pertaining to the transactions
contemplated by this Agreement or their consummation, shall have been instituted on or before
the Closing Date, which action, suit or proceeding would have a Material Adverse Effect.
5.2 Conditions Precedent to the Obligations of the Company. The obligation of the
Company to sell the Securities at the Closing is subject to the satisfaction or waiver by the
Company, at or before the Closing, of each of the following conditions:
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(a) Representations and Warranties. The representations and warranties of each
Investor contained herein shall be true and correct in all material respects as of the date when
made and as of the Closing Date as though made on and as of such date; and
(b) Performance. The Investors shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Investor at or prior to the
Closing.
ARTICLE VI
REGISTRATION RIGHTS
REGISTRATION RIGHTS
6.1 Registration Statement.
(a) As promptly as possible, and in any event on or prior to the Filing Date, the Company
shall prepare and file with the SEC a Registration Statement covering the resale of all
Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415.
The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, in which case such registration
shall be on another appropriate form in accordance with the Securities Act and the Exchange Act)
and shall contain (except if otherwise directed by the Investors or requested by the SEC) the
“Plan of Distribution” in substantially the form attached hereto as Exhibit D.
Notwithstanding anything contained in this Agreement to the contrary, in the event that the SEC
limits the amount of Registrable Securities that may be included and sold by Investors in the
Registration Statement pursuant to Rule 415, or any other basis, the Company may reduce the
number of Registrable Securities included in the Registration Statement on behalf of the
Investors (in case of an exclusion as to a portion of such Registrable Securities, such portion
to be allocated pro rata among such Investors in proportion to the respective numbers of
Registrable Securities requested to be registered by each such Investor over the total amount of
Registrable Securities). The Company will then use its Best Efforts at the first opportunity
that is permitted by the SEC, but in no event later than the later of sixty (60) calendar days
from the date substantially all of the Registrable Securities registered under the Registration
Statement have been sold by the Investors or six (6) months from the date the Registration
Statement was declared effective, to register for resale the Registrable Securities that have
been excluded from being registered. In such event the Company shall give the Investors prompt
notice of the number of the Registrable Securities excluded and the Company will not be liable
for any Event Payments in connection with the excluded Registrable Securities.
(b) The Company shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective by the SEC as promptly as possible after the filing thereof,
but in any event prior to the Required Effectiveness Date, and shall use its commercially
reasonable efforts to keep the Registration Statement continuously effective under the
Securities Act until the earlier of (i) the second anniversary of the Effective Date, or (ii)
the date that all Common Shares and Warrant Shares covered by such Registration Statement have
been sold or can be sold publicly under Rule 144(k) (the “Effectiveness Period”); provided that,
upon notification by the SEC that a Registration Statement will not be reviewed or is no longer
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subject to further review and comments, the Company shall request acceleration of such
Registration Statement within five (5) Trading Days after receipt of such notice and request
that it become effective on 4:00 p.m. New York City time on the Effective Date and file a
prospectus
supplement for any Registration Statement, whether or not required under Rule 424 (or
otherwise), by 9:00 a.m. New York City time the day after the Effective Date.
(c) The Company shall notify the Investors in writing promptly (and in any event within two
Trading Days) after receiving notification from the SEC that the Registration Statement has been
declared effective.
(d) Should an Event (as defined below) occur, then upon the occurrence of such Event, and
on every monthly anniversary thereof until the applicable Event is cured, the Company shall pay
to each Investor an amount in cash, as liquidated damages and not as a penalty, equal to one
percent (1.0%) of (i) the number of Common Shares held by such Investor as of the date of such
Event, multiplied by (ii) the purchase price paid by such Investor for such Common Shares then
held; provided, however, that the total amount of payments pursuant to this
Section 6.1(d) shall not exceed, when aggregated with all such payments paid to all
Investors, ten percent (10%) of the aggregate purchase price of the Securities purchased
pursuant to this Agreement. The payments to which an Investor shall be entitled pursuant to
this Section 6.1(d) are referred to herein as “Event Payments.” Any Event Payments
payable pursuant to the terms hereof shall apply on a pro rated basis for any portion of a month
prior to the cure of an Event. All pro rated calculations made pursuant to this paragraph shall
be based upon the actual number of days in such pro rated month. Notwithstanding the foregoing,
the maximum payment to an Investor associated with all Events in the aggregate shall not exceed
(i) in any 30-day period, an aggregate of 1.0% of the purchase price paid by such Investor for
its Common Shares then held and (ii) 10.0% of the purchase paid by such Investor for its Common
Shares then held. In the event that an Investor assigns any rights under this Section 6.1 in
connection with an assignment or transfer of Securities to a permitted transferee in accordance
with Section 7.7, the maximum aggregate payment to such Investor, together with any such
permitted transferee, associated with all Events in the aggregate shall not exceed the amount
set forth in the preceding sentence with respect to such Investor.
For such purposes, each of the following shall constitute an “Event”:
(i) the Registration Statement is not filed on or prior to the Filing Date;
(ii) the Registration Statement is not declared effective on or prior to the Required
Effectiveness Date; or
(iii) except as provided for in Section 6.1(e) (the “Excluded Events”), after the
Effective Date and during the Effectiveness Period, an Investor is not permitted to sell
Registrable Securities under the Registration Statement (or a subsequent Registration Statement
filed in replacement thereof) for any reason (other than the fault of such Investor) for five (5)
or more Trading Days (whether or not consecutive).
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(e) Notwithstanding anything in this Agreement to the contrary, each Investor acknowledges
that the Company may, by written notice to the Investors, suspend sales under a Registration
Statement after the Effective Date thereof and/or require that the Investors immediately cease
the sale of shares of Common Stock pursuant thereto and/or defer the filing of
any subsequent Registration Statement if the Company is engaged in a material merger,
acquisition or sale or other transaction, or other material events occur, and the Board of
Directors determines in good faith that, as a result of such activity or event, (A) it would be
materially detrimental to the Company to maintain a Registration Statement at such time or
(B) it is in the best interests of the Company to suspend sales under such registration at such
time. Upon receipt of such suspension notice, each Investor shall immediately discontinue any
sales of Registrable Securities pursuant to such registration until such Investor is advised in
writing by the Company that the current Prospectus or amended Prospectus, as applicable, may be
used. Each Investor shall maintain in confidence the receipt of any such notice. In no event,
however, shall this right be exercised to suspend sales beyond the period during which (in the
good faith determination of the Company’s Board of Directors) the failure to require such
suspension would be materially detrimental to the Company. The Company’s rights under this
Section 6(e) may be exercised for a period of no more than 20 Trading Days at a time and
not more than three times in any twelve-month period, without such suspension being considered
as part of an Event Payment determination. Immediately after the end of any suspension period
under this Section 6(e), the Company shall take all necessary actions (including filing
any required supplemental prospectus) to restore the effectiveness of the applicable
Registration Statement and the ability of the Investors to publicly resell their Registrable
Securities pursuant to such effective Registration Statement.
(f) The Company shall not, from the date hereof until the Effective Date, prepare and file
with the SEC a registration statement relating to an offering for its own account or the account
of others under the Securities Act of any of its equity securities, other than any registration
statement or post-effective amendment to a registration statement (or supplement thereto)
relating to the Company’s employee benefit plans registered on Form S-8.
6.2 Registration Procedures. In connection with the Company’s registration
obligations hereunder, the Company shall:
(a) Not less than three Trading Days prior to the filing of the initial Registration
Statement and any numbered pre-effective amendment to the Registration Statement, furnish via
email to those Investors who have supplied the Company with email addresses copies of drafts of
such initial Registration Statement or such pre-effective amendment (for purposes of
clarification, excluding any periodic, current or other filing incorporated by reference into
such Registration Statement or pre-effective amendment), as applicable.
(b) (i) Subject to Section 6.1(e), prepare and file with the SEC such amendments,
including post-effective amendments, to each Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep the Registration Statement continuously
effective, as to the applicable Registrable Securities for the Effectiveness Period and prepare
and file with the SEC such additional Registration Statements in order to register for resale
under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to
be amended or
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supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible
(except to the extent that the Company reasonably requires additional time to respond to
accounting comments), to any comments received from the SEC with respect to the Registration
Statement or any
amendment thereto; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement during the applicable period in accordance with
the intended methods of disposition by the Investors thereof set forth in the Registration
Statement as so amended or in such Prospectus as so supplemented.
(c) Upon the request of any Investor, notify such Investor as promptly as reasonably
possible, of any of the following events: (i) any Registration Statement or any post-effective
amendment is declared effective; (ii) the SEC or any other Federal or state governmental
authority requests any amendment or supplement to any Registration Statement or Prospectus or
requests additional information related thereto; (iii) the SEC issues any stop order suspending
the effectiveness of any Registration Statement or initiates any Proceedings for that purpose;
(iv) the Company receives notice of any suspension of the qualification or exemption from
qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or
threat of any Proceeding for such purpose; or (v) the financial statements included in any
Registration Statement become ineligible for inclusion therein or any Registration Statement or
Prospectus or other document contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(d) Use its commercially reasonable efforts to avoid the issuance of or, if issued, obtain
the withdrawal of (i) any order suspending the effectiveness of any Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, as soon as possible.
(e) If requested by an Investor, provide such Investor without charge, at least one
conformed copy of each Registration Statement and each amendment thereto, including financial
statements and schedules, and all exhibits to the extent requested by such Person (including
those previously furnished or incorporated by reference) promptly after the filing of such
documents with the SEC.
(f) Promptly deliver to each Investor, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or supplement thereto as
such Persons may reasonably request. The Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Investors in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and any amendment or
supplement thereto to the extent permitted by federal and state securities laws and regulations.
(g) (i) Prepare and file with such Trading Market an additional shares listing application
covering all of the Registrable Securities; (ii) take all steps necessary to cause such Common
Shares to be approved for listing on each Trading Market as soon as possible
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thereafter; and
(iii) except as a result of the Excluded Events, during the Effectiveness Period, use
commercially reasonable efforts to maintain the listing of such Common Shares on each such
Trading Market or another Eligible Market.
(h) Prior to any public offering of Registrable Securities, use commercially reasonable
efforts to register or qualify or cooperate with the selling Investors in connection with the
registration or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Investor requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective for so long as required, but
not to exceed the duration of the Effectiveness Period, and to do any and all other acts or
things reasonably necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, however,
that the Company shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(i) Cooperate with the Investors to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the extent permitted by this
Agreement and under law, of all restrictive legends, and to enable such certificates to be in
such denominations and registered in such names as any such Investors may reasonably request.
(j) Upon the occurrence of any event described in Section 6.2(c)(v), as promptly as
reasonably possible, except as permitted by Section 6.1(e) in the event of the suspension of
sales under the Registration Statement, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither the Registration
Statement nor such Prospectus will contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(k) Cooperate with any reasonable due diligence investigation undertaken by the Investors
in connection with the sale of Registrable Securities, including, without limitation, by making
available documents and information; provided that the Company will not deliver or make
available to any Investor material, nonpublic information unless such Investor requests in
advance in writing to receive material, nonpublic information and agrees to keep such
information confidential.
(l) Comply with all rules and regulations of the SEC applicable to the registration of the
Securities.
(m) It shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable Securities of
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the
Investors or to make any Event Payments set forth in Section 6.1(d) to such Investors
that such Investors furnish to the Company the information specified in Exhibits X-0, X-0 and
B-3 hereto and such other information regarding itself, the Registrable Securities and other
shares of Common Stock held by it and the intended method of disposition of the Registrable
Securities
held by it (if different from the Plan of Distribution set forth on Exhibit D
hereto) as shall be reasonably required to effect the registration of such Registrable
Securities and shall complete and execute such documents in connection with such registration as
the Company may reasonably request.
6.3 Registration Expenses. The Company shall pay all fees and expenses incident to
the performance of or compliance with Article VI of this Agreement by the Company, including
without limitation (a) all registration and filing fees and expenses, including without limitation
those related to filings with the SEC, any Trading Market and in connection with applicable state
securities or Blue Sky laws, (b) printing expenses (including without limitation expenses of
printing certificates for Registrable Securities), (c) messenger, telephone and delivery expenses,
(d) fees and disbursements of counsel for the Company, (e) fees and expenses of the placement
agent, Lazard Freres & Co. LLC, and (f) all listing fees to be paid by the Company to the Trading
Market.
6.4 Indemnification
(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Investor, the officers,
directors, partners, members, agents and employees of each of them, each Person who controls any
such Investor (within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, partners, members, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from and against any and
all Losses as incurred, arising out of or relating to (i) any material breach of any
representation or warranty made by the Company in the Transaction Documents or in any other
certificate, instrument or document contemplated hereby or thereby, or (ii) any untrue or
alleged untrue statement of a material fact contained in the Registration Statement, any
Prospectus or any form of Company prospectus or in any amendment or supplement thereto or in any
Company 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 (in the case of any Prospectus or form of prospectus or supplement thereto, in the light
of the circumstances under which they were made) not misleading, except to the extent, but only
to the extent, that (A) such untrue statements, alleged untrue statements, omissions or alleged
omissions are based solely upon information regarding such Investor furnished in writing to the
Company by such Investor for use therein, or to the extent that such information relates to
such Investor or such Investor’s proposed method of distribution of Registrable Securities and
was reviewed and expressly approved by such Investor in writing expressly for use in the
Registration Statement, or (B) with respect to any prospectus, if the untrue statement or
omission of material fact contained in such prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, if such corrected prospectus was timely made
available by the Company to the Investor, and the Investor seeking indemnity hereunder was
advised in writing not to use the incorrect prospectus prior to the use giving rise to Losses.
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(b) Indemnification by Investors. Each Investor shall, severally and not jointly,
indemnify and hold harmless the Company and its directors, officers, agents and employees to the
fullest extent permitted by applicable law, from and against all Losses arising solely out of
any untrue statement of a material fact contained in the Registration Statement, any Prospectus,
or any form of prospectus, or in any amendment or supplement thereto, or arising out of or
relating to any omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or supplement
thereto, in the light of the circumstances under which they were made) not misleading, but only
to the extent that (i) such untrue statements or omissions are based solely upon information
regarding such Investor furnished to the Company by such Investor in writing expressly for use
therein, or to the extent that such information relates to such Investor or such Investor’s
proposed method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Investor expressly for use in the Registration Statement (it being
understood that the information provided by the Investor to the Company in Exhibits
X-0, X-0 and B-3 and the Plan of Distribution set forth on Exhibit
D, as the same may be modified by such Investor and other information provided by the
Investor to the Company in or pursuant to the Transaction Documents constitutes information
reviewed and expressly approved by such Investor in writing expressly for use in the
Registration Statement), such Prospectus or such form of prospectus or in any amendment or
supplement thereto. In no event shall the liability of any selling Investor hereunder be
greater in amount than the dollar amount of the net proceeds received by such Investor upon the
sale of the Registrable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the
“Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof; provided, that the
failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of
its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that
it shall be finally determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (iii) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to
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employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and the reasonable fees and expenses of separate
counsel shall be at the expense of the Indemnifying Party). It shall be understood, however, that
the Indemnifying Party shall not, in connection with any one such Proceeding (including separate
Proceedings that have been or will be consolidated before a single judge) be liable for the
fees and expenses of more than one separate firm of attorneys at any time for all Indemnified
Parties, which firm shall be appointed by a majority of the Indemnified Parties. The Indemnifying
Party shall not be liable for any settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding
in respect of which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims that are the subject
matter of such Proceeding.
All reasonable fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party,
as incurred, within 20 Trading Days of written notice thereof to the Indemnifying Party (regardless
of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially determined that such
Indemnified Party is not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Sections 6.4(a) or
(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute
to the amount paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a party as a result of any
Losses shall be deemed to include, subject to the limitations set forth in Section
6.4(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been indemnified for
such fees or expenses if the indemnification provided for in this Section was available to such
party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 6.4(d) were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 6.4(d), no
Investor shall be required to contribute, in the aggregate, any amount in excess of the amount by
which the net proceeds actually
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received by such Investor from the sale of the Registrable
Securities subject to the Proceeding exceed the amount of any damages that such Investor has
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.
6.5 Dispositions. Each Investor agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection with sales of
Registrable Securities pursuant to the Registration Statement and shall sell its Registrable
Securities in accordance with the Plan of Distribution set forth in the Prospectus. Each Investor
further agrees that, upon receipt of a notice from the Company of the occurrence of any event of
the kind described in Sections 6.2(c)(iii), (iv) or (v) or pursuant to a
notice under Section 6.1(e), such Investor will discontinue disposition of such Registrable
Securities under the Registration Statement until such Investor is advised in writing by the
Company that the use of the Prospectus, or amended Prospectus, as applicable, may be resumed. The
Company may provide appropriate stop orders to enforce the provisions of this paragraph. Each
Investor, severally and not jointly with the other Investors, agrees that the removal of the
restrictive legend from certificates representing Securities as set forth in Section 4.1 is
predicated upon the Company’s reliance that the Investor will comply with the provisions of this
subsection. Both the Company and the Transfer Agent, and their respective directors, officers,
employees and agents, may rely on this subsection.
6.6 No Piggyback on Registrations. Neither the Company nor any of its security
holders (other than the Investors in such capacity pursuant hereto and the Excluded Investors) may
include securities of the Company in the Registration Statement other than the Registrable
Securities.
ARTICLE VII
MISCELLANEOUS
MISCELLANEOUS
7.1 Termination. This Agreement may be terminated by the Company or any Investor, by
written notice to the other parties, if the Closing has not been consummated by the third Trading
Day following the date of this Agreement; provided that no such termination will affect the right
of any party to xxx for any breach by the other party (or parties).
7.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to
the contrary, 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. The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and
issuance of the applicable Securities.
7.3 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
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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. At or after the Closing, and without further consideration, the Company will execute
and deliver to the
Investors such further documents as may be reasonably requested in order to give practical
effect to the intention of the parties under the Transaction Documents.
7.4 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 or email at the facsimile number or email address specified in this Section 7
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 or email at the
facsimile number or email address specified in this Section 7 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 deposit with a nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given. The addresses, facsimile
numbers and email addresses for such notices and communications are those set forth on the
signature pages hereof, or such other address or facsimile number as may be designated in writing
hereafter, in the same manner, by any such Person.
7.5 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 each of the
Investors 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. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof
with respect to a matter that relates exclusively to the rights of Investors under
Article VI may be given by Investors holding at least a majority of the Registrable
Securities to which such waiver or consent relates.
7.6 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 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.
7.7 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 the
Investors. Any Investor may assign its rights under this Agreement to any Person to whom such
Investor assigns or transfers any Securities, provided (i) such transferor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the
Company after such assignment, (ii) the Company is furnished with written notice of (x) the name
and address of such transferee or assignee and (y) the Registrable Securities with respect to which
such registration rights are being transferred or assigned, (iii) following such transfer or
assignment, the further disposition of such securities by the transferee or assignee is restricted
under the Securities Act and applicable state
-32-
securities laws, (iv) such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the provisions hereof that
apply to the “Investors” and (v) such transfer shall have been
made in accordance with the applicable requirements of this Agreement and with all laws
applicable thereto.
7.8 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, except that each Indemnified Party
is an intended third party beneficiary of Section 6.4 and (in each case) may enforce the
provisions of such Section directly against the parties with obligations thereunder.
7.9 Governing Law; Venue; Waiver of Jury Trial. THE CORPORATE LAWS OF THE STATE OF
DELAWARE SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. THE COMPANY AND INVESTORS HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE
ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR ANY INVESTOR HEREUNDER, 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 WAIVE, AND AGREE NOT
TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY INVESTOR, ANY CLAIM THAT
IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
VIA REGISTERED OR CERTIFIED MAIL OR 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. THE
COMPANY AND INVESTORS HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.
7.10 Survival. The representations and warranties, agreements and covenants contained
herein shall survive the Closing for a period of one year after the Closing Date.
7.11 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 or email attachment, such signature shall create a valid and
-33-
binding obligation of the party executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile or email-attached signature page were an original
thereof.
7.12 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.
7.13 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 the execution by the holder
thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and
hold harmless the Company for any losses in connection therewith or, if required by the Transfer
Agent, a bond in such form and amount as is reasonably required by the Transfer Agent. 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. If a
replacement certificate or instrument evidencing any Securities is requested due to mutilation
thereof, the Company may require delivery of such mutilated certificate or instrument as a
condition precedent to any issuance of such replacement Securities.
7.14 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the Investors and the Company will be
entitled to seek specific performance under the Transaction Documents.
7.15 Payment Set Aside. To the extent that the Company makes a payment or payments to
any Investor hereunder or any Investor enforces or exercises its rights hereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or
are required to be refunded, repaid or otherwise restored to the Company by a trustee, receiver or
any other person under any law (including, without limitation, any bankruptcy law, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement or setoff had not
occurred.
7.16 Adjustments in Share Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock (or other securities or
rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date
hereof, each reference in any Transaction Document to a number of shares or a price per share shall
be amended to appropriately account for such event.
7.17 Independent Nature of Investors’ Obligations and Rights. The obligations of each
Investor under any Transaction Document are several and not joint with the obligations of any other
Investor, and no Investor shall be responsible in any way for the performance of the obligations of
-34-
any other Investor under any Transaction Documents. The decision of each Investor to purchase
Securities pursuant to this Agreement has been made by such Investor independently of any other
Investor 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
Investor or by any agent or employee of any other Investor, and no Investor or any of its agents or
employees shall have any liability to any other Investor (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 Investor pursuant thereto, shall be deemed
to constitute the Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Document.
Each Investor acknowledges that no other Investor has acted as agent for such Investor in
connection with making its investment hereunder and that no other Investor will be acting as agent
of such Investor in connection with monitoring its investment hereunder. Each Investor 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 Investor to be joined as an additional party in any Proceeding for such
purpose.
[SIGNATURE PAGES TO FOLLOW]
-35-
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.
| SGX PHARMACEUTICALS, INC. | ||||||
| By: | /s/ W. Xxxx Xxxxx | |||||
| Name: | W. Xxxx Xxxxx | |||||
| Title: | Chief Financial Officer | |||||
| Address for Notice: | ||||||
| 00000 Xxxxxxx Xxxxxx | ||||||
| Xxx Xxxxx, XX 00000 | ||||||
| Facsimile No. (000) 000-0000 | ||||||
| Telephone No. (000) 000-0000 | ||||||
| Attn: W. Xxxx Xxxxx, Chief Financial Officer | ||||||
| With a copy to: | ||||||
| Cooley Godward Kronish LLP | ||||||
| 0000 Xxxxxxxx Xxxx | ||||||
| Xxx Xxxxx, XX 00000 | ||||||
| Facsimile: (000) 000-0000 | ||||||
| Telephone: (000) 000-0000 | ||||||
| Attn: Xxxxxxxxx X. Xxxx, Esq. | ||||||
COMPANY SIGNATURE PAGE
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: STICHTING PENSIOENFONDS ABP |
|||||
| By: | /s/ Xxxxxx X. Xxxxx | ||||
| Name: | Xxxxxx X. Xxxxx | ||||
| Title: | Managing Partner | ||||
| Address: | OrbiMed Advisors LLC | ||||
| 000 Xxxxx Xxx, 00xx Xxxxx | |||||
| Xxx Xxxx, XX 00000 | |||||
| Telephone No.: (000) 000-0000 | |||||
| Facsimile No.: (000) 000-0000 | |||||
| Email Address: xxxxxxxx@xxxxxxx.xxx | |||||
| Number of Shares: 670,000 | |||||
| Number of Warrants: 201,000 | |||||
| Aggregate Purchase Price: $3,388,525 | |||||
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
Name of Investor:
| CADUCEUS CAPITAL II, L.P. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Managing Partner | |||
| Address: | OrbiMed Advisors LLC | |||
| 000 Xxxxx Xxx, 00xx Xxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: | (000) 000-0000 | |||
| Facsimile No.: | (000) 000-0000 | |||
| Email Address: | xxxxxxxx@xxxxxxx.xxx | |||
| Number of Shares: | 400,000 | |||
| Number of Warrants: | 120,000 | |||
| Aggregate Purchase Price: | $2,023,000 |
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: CADUCEUS CAPITAL MASTER FUND LIMITED |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Managing Partner | |||
| Address: | OrbiMed Advisors LLC | |||
| 000 Xxxxx Xxx, 00xx Xxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: (000) 000-0000 | ||||
| Facsimile No.: (000) 000-0000 | ||||
| Email Address: xxxxxxxx@xxxxxxx.xxx | ||||
| Number of Shares: 630,000 | ||||
| Number of Warrants: 189,000 | ||||
| Aggregate Purchase Price: $3,186,225 | ||||
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
Name of Investor:
| UBS EUCALYPTUS FUND, L.L.C. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Managing Partner | |||
| Address: | OrbiMed Advisors LLC | |||
| 000 Xxxxx Xxx, 00xx Xxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: (000) 000-0000 | ||||
| Facsimile No.: (000) 000-0000 | ||||
| Email Address: xxxxxxxx@xxxxxxx.xxx | ||||
| Number of Shares: 370,000 | ||||
| Number of Warrants: 111,000 | ||||
| Aggregate Purchase Price: $1,871,275 | ||||
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: PW EUCALYPTUS FUND, LTD. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Managing Partner | |||
| Address: | OrbiMed Advisors LLC | |||
| 000 Xxxxx Xxx, 00xx Xxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: (000) 000-0000 | ||||
| Facsimile No.: (000) 000-0000 | ||||
| Email Address: xxxxxxxx@xxxxxxx.xxx | ||||
| Number of Shares: 45,000 | ||||
| Number of Warrants: 13,500 | ||||
| Aggregate Purchase Price: $227,587.50 | ||||
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: SUMMER STREET LIFE SCIENCES HEDGE FUND INVESTORS LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Managing Partner | |||
| Address: | OrbiMed Advisors LLC | |||
| 000 Xxxxx Xxx, 00xx Xxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: (000) 000-0000 | ||||
| Facsimile No.: (000) 000-0000 | ||||
| Email Address: xxxxxxxx@xxxxxxx.xxx | ||||
| Number of Shares: 160,000 | ||||
| Number of Warrants: 48,000 | ||||
| Aggregate Purchase Price: $809,200 | ||||
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
Name of Investor:
| BIOMEDICAL VALUE FUND, L.P. |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Chief Financial Officer | |||
| Address: | 000 Xxxxx Xx., 0xx Xx. | |||
| Xxxxxxxxx, XX 00000 | ||||
| Telephone No.: | (000) 000-0000 | |||
| Facsimile No.: | (000) 000-0000 | |||
| Email Address: | xxxxxxx@xxxxxxxx.xxx | |||
| Number of Shares: | 664,360 | |||
| Number of Warrants: | 199,308 | |||
| Aggregate Purchase Price: | $3,360,000.70 |
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
Name of Investor:
| BIOMEDICAL OFFSHORE VALUE FUND, LP |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Chief Financial Officer | |||
| Address: | 000 Xxxxx Xx., 0xx Xx. | |||
| Xxxxxxxxx, XX 00000 | ||||
| Telephone No.: | (000) 000-0000 | |||
| Facsimile No.: | (000) 000-0000 | |||
| Email Address: | xxxxxxx@xxxxxxxx.xxx | |||
| Number of Shares: | 521,997 | |||
| Number of Warrants: | 156,599 | |||
| Aggregate Purchase Price: | $2,639,999.83 |
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: DAFNA LIFESCIENCE MARKET NEUTRAL LTD. |
||||
| By: | /s/ Xxxxxxx Xxxxxxx, CFA | |||
| Name: | Xxxxxxx Xxxxxxx, CFA | |||
| Title: | CCO of Investment Manager, DAFA Capital Management, LLC, on behalf of DAFNA Life Science Market Neutral Ltd. | |||
| Address: | c/o DAFNA Capital Management, LLC | |||
| 00000 Xxxxxxxx Xxxx., Xxxxx 0000 | ||||
| Xxx Xxxxxxx, XX 00000 | ||||
| Telephone No.: (000) 000-0000 | ||||
| Facsimile No.: (000) 000-0000 | ||||
| Email Address: xxxxxxxx@xxxxxxxxxxxx.xxx | ||||
| Number of Shares: 70,200 | ||||
| Number of Warrants: 21,060 | ||||
| Aggregate Purchase Price: $355,036.50 | ||||
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: DAFNA LIFESCIENCE LTD. |
||||
| By: | /s/ Xxxxxxx Xxxxxxx, CFA | |||
| Name: | Xxxxxxx Xxxxxxx, CFA | |||
| Title: | CCO of Investment Manager, DAFA Capital Management, LLC, on behalf of DAFNA Life Science Ltd. | |||
| Address: | c/o DAFNA Capital Management, LLC | |||
| 00000 Xxxxxxxx Xxxx., Xxxxx 0000 | ||||
| Xxx Xxxxxxx, XX 00000 | ||||
| Telephone No.: (000) 000-0000 | ||||
| Facsimile No.: (000) 000-0000 | ||||
| Email Address: xxxxxxxx@xxxxxxxxxxxx.xxx | ||||
| Number of Shares: 77,200 | ||||
| Number of Warrants: 23,160 | ||||
| Aggregate Purchase Price: $390,439.00 | ||||
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: DAFNA LIFESCIENCE SELECT LTD. |
|||||
| By: | /s/ Xxxxxxx Xxxxxxx, CFA | ||||
| Name: | Xxxxxxx Xxxxxxx, CFA | ||||
| Title: | CCO of Investment Manager, DAFA Capital Management, LLC, on behalf of DAFNA Life Science Select Ltd. |
||||
| Address: | c/o DAFNA Capital
Management, LLC 00000 Xxxxxxxx Xxxx., Xxxxx 000 Xxx Xxxxxxx, XX 00000 |
||||
| Telephone No.: (000) 000-0000 | |||||
| Facsimile No.: (000) 000-0000 | |||||
| Email Address: xxxxxxxx@xxxxxxxxxxxx.xxx | |||||
| Number of Shares: 248,100 | |||||
| Number of Warrants: 74,430 | |||||
| Aggregate Purchase Price: $1,254,765.75 | |||||
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
Name of Investor:
| FIRST EAGLE VALUE IN BIOTECHNOLOGY MASTER FUND, LTD. |
||||
| By: | /s/ Xxx XxXxxx | |||
| Name: | Xxx XxXxxx | |||
| Title: | ||||
| Address: | Natixis Bleichroeder Inc. | |||
| c/o Xxx Xxxxxxxx | ||||
| 0000 Xxxxxx xx xxx Xxxxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: | (000) 000-0000 | |||
| Facsimile No.: | (000) 000-0000 | |||
| Email Address: | xxxxxxx.xxxxxxxx@xxx.xxxxxxx.xxx | |||
| Number of Shares: | 138,408 | |||
| Number of Warrants: | 41,522 | |||
| Aggregate Purchase Price: | $699,998.46 |
Delivery Instructions (if different than above):
c/o:
|
Xxxx Xxx /Xxx Xxxxxxxx | |
Address:
|
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 |
|
Telephone No.:
|
(000) 000-0000 / (000) 000-0000 |
Facsimile No.:
|
n/a | |
Other Special Instructions:
|
n/a |
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
Name of Investor:
| 21 APRIL FUND, L.P. |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | ||||
| Address: | Natixis Bleichroeder Inc. | |||
| c/o Xxx Xxxxxxxx | ||||
| 0000 Xxxxxx xx xxx Xxxxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: | (000) 000-0000 | |||
| Facsimile No.: | (000) 000-0000 | |||
| Email Address: | xxxxxxx.xxxxxxxx@xxx.xxxxxxx.xxx | |||
| Number of Shares: | 23,727 | |||
| Number of Warrants: | 7,118 | |||
| Aggregate Purchase Price: | $119,999.30 |
Delivery Instructions (if different than above):
c/o:
|
Xxxx Xxx /Xxx Xxxxxxxx | |
Address:
|
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 |
|
Telephone No.:
|
(000) 000-0000 / (000) 000-0000 |
Facsimile No.:
|
n/a | |
Other Special Instructions:
|
n/a |
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
Name of Investor:
| 21 APRIL FUND, LTD. |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | ||||
| Address: | Natixis Bleichroeder Inc. | |||
| c/o Xxx Xxxxxxxx | ||||
| 0000 Xxxxxx xx xxx Xxxxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: | (000) 000-0000 | |||
| Facsimile No.: | (000) 000-0000 | |||
| Email Address: | xxxxxxx.xxxxxxxx@xxx.xxxxxxx.xxx | |||
| Number of Shares: | 75,136 | |||
| Number of Warrants: | 22,541 | |||
| Aggregate Purchase Price: | $380,000.32 |
Delivery Instructions (if different than above):
c/o:
|
Xxxx Xxx /Xxx Xxxxxxxx | |
Address:
|
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 |
|
Telephone No.:
|
(000) 000-0000 / (000) 000-0000 |
Facsimile No.:
|
n/a | |
Other Special Instructions:
|
n/a |
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
Name of Investor:
| DEF ASSOCIATES — MMK |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | ||||
| Address: | Natixis Bleichroeder Inc. | |||
| c/o Xxx Xxxxxxxx | ||||
| 0000 Xxxxxx xx xxx Xxxxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: | (000) 000-0000 | |||
| Facsimile No.: | (000) 000-0000 | |||
| Email Address: | xxxxxxx.xxxxxxxx@xxx.xxxxxxx.xxx | |||
| Number of Shares: | 98,864 | |||
| Number of Warrants: | 29,660 | |||
| Aggregate Purchase Price: | $500,004.68 |
Delivery Instructions (if different than above):
c/o:
|
Xxxx Xxx /Xxx Xxxxxxxx | |
Address:
|
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 |
|
Telephone No.:
|
(000) 000-0000 / (000) 000-0000 |
Facsimile No. :
|
n/a | |
Other Special Instructions:
|
n/a |
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
Name of Investor:
| FIRST EAGLE CONTRARIAN VALUE MASTER FUND, LTD. |
||||
| By: | /s/ Xxx XxXxxx | |||
| Name: | Xxx XxXxxx | |||
| Title: | ||||
| Address: | Natixis Bleichroeder Inc. | |||
| c/o Xxx Xxxxxxxx | ||||
| 0000 Xxxxxx xx xxx Xxxxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone No.: | (000) 000-0000 | |||
| Facsimile No.: | (000) 000-0000 | |||
| Email Address: | xxxxxxx.xxxxxxxx@xxx.xxxxxxx.xxx | |||
| Number of Shares: | 29,659 | |||
| Number of Warrants: | 8,897 | |||
| Aggregate Purchase Price: | $150,000.39 |
Delivery Instructions (if different than above):
c/o:
|
Xxxx Xxx /Xxx Xxxxxxxx | |
Address:
|
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 |
|
Telephone No.:
|
(000) 000-0000 / (000) 000-0000 |
Facsimile No. :
|
n/a | |
Other Special Instructions:
|
n/a |
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: FIRST EAGLE VALUE IN BIOTECHNOLOGY FUND, L.P. |
|||||
| By: | /s/ Xxx XxXxxx | ||||
| Name: | Xxx XxXxxx | ||||
| Title: | |||||
| Address: | Natixis Bleichroeder Inc. c/o Xxx Xxxxxxxx 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000 |
||||
| Telephone No.: (000) 000-0000 | |||||
| Facsimile No.: (000) 000-0000 | |||||
| Email Address: xxxxxxx.xxxxxxxx@xxx.xxxxxxx.xxx | |||||
| Number of Shares: 29,658 | |||||
| Number of Warrants: 8,897 | |||||
| Aggregate Purchase Price: $149,995.34 | |||||
Delivery Instructions (if different than above):
c/o:
|
Xxxx Xxx /Xxx Xxxxxxxx | |
Address:
|
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 |
|
Telephone No.:
|
(000) 000-0000 / (000) 000-0000 |
Facsimile No. :
|
n/a | |
Other Special Instructions:
|
n/a |
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: INNOVIS INVESTMENTS |
|||||
| By: | /s/ Hans Xxxxx Xxxxxxxxx | ||||
| Name: | Hans Xxxxx Xxxxxxxxx | ||||
| Title: | General Partner | ||||
| Address: | 0000 Xxxx Xxxxxx, Xxxxx 0000 Xxxxxx, XX 00000 |
||||
| Telephone No.: (000) 000-0000 | |||||
| Facsimile No.: (000) 000-0000 | |||||
| Email Address: xxxxx@x0xx.xxx | |||||
| Number of Shares: 395,452 | |||||
| Number of Warrants: 118,635 | |||||
| Aggregate Purchase Price: $1,999,998.49 | |||||
Delivery Instructions (if different than above):
c/o:
|
Hans Xxxxx Xxxxxxxxx | |
Address:
|
0000 Xx Xxxxxx Xxxxx | |
| Xxxxx Xxxxxxx, XX 00000 | ||
Telephone No.:
|
(000) 000-0000 |
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: CAPITAL VENTURES INTERNATIONAL |
|||||
| By: | Heights Capital Management, Inc., its | ||||
| authorized agent | |||||
| By: | /s/ Xxxxxx Xxxxxxxx | ||||
| Name: | Xxxxxx Xxxxxxxx | ||||
| Title: | Investment Manager | ||||
| Address: | c/o Heights Capital
Management 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000 Xxx Xxxxxxxxx, XX 00000 |
||||
| Telephone No.: (000) 000-0000 | |||||
| Facsimile No.: (000) 000-0000 | |||||
| Email Address: Xxxxxx.Xxxxxxxx@xxx.xxx | |||||
| Number of Shares: 195,393 | |||||
| Number of Warrants: 58,617 | |||||
| Aggregate Purchase Price: $988,200.10 | |||||
Delivery Instructions (if different than above):
c/o: |
||
Address: |
||
Telephone No.: |
||
Facsimile No. : |
||
Other Special Instructions: |
||
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Investor Signature Page
By its execution and delivery of this signature page, the undersigned Investor hereby joins in
and agrees to be bound by the terms and conditions of the Securities Purchase Agreement dated as of
November 19, 2007 (the “Purchase Agreement”) by and among SGX Pharmaceuticals, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase Agreement or counterparts
thereof.
| Name of Investor: CAMBER CAPITAL FUND L.P. |
|||||
| By: | /s/ Xxxxxx X. XxXxxx | ||||
| Name: | Xxxxxx X. XxXxxx | ||||
| Title: | Managing Member; General Partner, Camber Capital Partners LLC | ||||
| Address: | 575 Boylston,
4th
Fl. Xxxxxx, XX 00000 |
||||
| Telephone No.: (000) 000-0000 | |||||
| Facsimile No.: (617) 224 -1769 | |||||
| Email Address: xxxxxxx@xxxxxxxxxxxxx.xxx | |||||
| Number of Shares: 100,000 | |||||
| Number of Warrants: 30,000 | |||||
| Aggregate Purchase Price: $505,750. | |||||
Delivery Instructions (if different than above):
c/o:
|
Xxxx Xxxxx, Xxxxxxx Xxxxx & Co | |
Address:
|
Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx | |
| Xxx Xxxx, XX 00000 | ||
Telephone No.:
|
(000) 000-0000 |
Facsimile No. :
|
n/a | |
Other Special Instructions:
|
n/a |
| Exhibits: | ||||
| A | Form of Warrant | |||
| B | Instruction Sheet for Investors | |||
| C | Opinion of Company Corporate Counsel | |||
| D | Plan of Distribution | |||
| E | Company Transfer Agent Instructions | |||
Facsimile No. : |
||||
Other Special Instructions:
|
||||
Exhibits:
A Form of Warrant
B Instruction Sheet for Investors
C Opinion of Company Corporate Counsel
D Plan of Distribution
E Company Transfer Agent Instructions
-2-
SCHEDULE OF INVESTORS
| Investors | Purchase Price | Common Shares | Warrant Shares | |||||||||
Stichting Pensioenfonds ABP |
$ | 3,388,525.00 | 670,000 | 201,000 | ||||||||
Caduceus Capital Master Fund Limited |
$ | 3,186,225.00 | 630,000 | 189,000 | ||||||||
Caduceus Capital II, L.P. |
$ | 2,023,000.00 | 400,000 | 120,000 | ||||||||
UBS Eucalyptus Fund, L.L.C. |
$ | 1,871,275.00 | 370,000 | 111,000 | ||||||||
PW Eucalyptus Fund, Ltd. |
$ | 227,587.50 | 45,000 | 13,500 | ||||||||
Summer
Street Life Sciences Hedge Fund Investors LLC |
$ | 809,200.00 | 160,000 | 48,000 | ||||||||
Biomedical Value Fund, L.P. |
$ | 3,360,000.70 | 664,360 | 199,308 | ||||||||
Biomedical Offshore Value Fund, L.P. |
$ | 2,639,999.83 | 521,997 | 156,599 | ||||||||
DAFNA LifeScience Market Neutral Ltd. |
$ | 355,036.50 | 70,200 | 21,060 | ||||||||
DAFNA LifeScience Ltd. |
$ | 390,439.00 | 77,200 | 23,160 | ||||||||
DAFNA LifeScience Select Ltd. |
$ | 1,254,765.75 | 248,100 | 74,430 | ||||||||
First Eagle
Value in Biotechnology Master Fund, Ltd. |
$ | 699,998.46 | 138,408 | 41,522 | ||||||||
21 April Fund, L.P. |
$ | 119,999.30 | 23,727 | 7,118 | ||||||||
21 April Fund, Ltd. |
$ | 380,000.32 | 75,136 | 22,541 | ||||||||
DEF Associates — MMK |
$ | 500,004.68 | 98,864 | 29,660 | ||||||||
First Eagle Contrarian Value Master Fund, Ltd. |
$ | 150,000.39 | 29,659 | 8,897 | ||||||||
First Eagle Value in Biotechnology Fund, L.P. |
$ | 149,995.34 | 29,658 | 8,897 | ||||||||
Innovis Investments |
$ | 1,999,998.49 | 395,452 | 118,635 | ||||||||
Capital Ventures International by: Heights Capital Management, Inc. |
$ | 988,200.10 | 195,393 | 58,617 | ||||||||
Camber Capital Fund L.P. |
$ | 505,750.00 | 100,000 | 30,000 | ||||||||
Total: |
$ | 25,000,001.36 | 4,943,154 | 1,482,944 | ||||||||
-3-
Exhibit A
FORM OF WARRANT
-4-
Exhibit B
INSTRUCTION SHEET FOR INVESTOR
(to be read in conjunction with the entire Securities Purchase Agreement)
| A. | Complete the following items in the Securities Purchase Agreement: |
| 1. | Complete and execute the Investor Signature Page. The Agreement must be executed by an individual authorized to bind the Investor. | ||
| 2. | Exhibit B-1 — Stock Certificate Questionnaire: |
| Provide the information requested by the Stock Certificate Questionnaire. |
| 3. | Exhibit B-2 — Registration Statement Questionnaire: |
| Provide the information requested by the Registration Statement Questionnaire. |
| 4. | Exhibit B-3 — Investor Certificate: |
| Provide the information requested by the Investor Certificate. Please indicate whether the Investor is a Qualified Institutional Buyer under Rule 144A(a) under the Securities Act. |
| 5. | Return, via facsimile or .pdf, the signed Securities Purchase Agreement including the properly completed Exhibits B-1 through B-3, to: |
Facsimile: (000)
000-0000
Telephone: (000) 000-0000
Attn: Xxxxxxxxxxx Xxxxxx
Email: xxxxxxx@xxxxxx.xxx
Telephone: (000) 000-0000
Attn: Xxxxxxxxxxx Xxxxxx
Email: xxxxxxx@xxxxxx.xxx
| 6. | After completing instruction number five (5) above, deliver the original signed Securities Purchase Agreement including the properly completed Exhibits B-1 through B-3 to: |
Address:
Attention Xxxxxxxxxxx Xxxxxx
Xxxxxx Godward Kronish LLP
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Xxxxxx Godward Kronish LLP
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
| B. | Instructions regarding the wire transfer of funds for the purchase of the Securities will be telecopied to the Investor by the Company at a later date. |
Exhibit B-1
SGX PHARMACEUTICALS, INC.
STOCK CERTIFICATE QUESTIONNAIRE
| Please provide us with the following information: | ||||
1.
|
The exact name that the Securities are to be registered in (this is the name that will appear on the stock and warrant certificate(s)). You may use a nominee name if appropriate: | |||
2.
|
The relationship between the Investor of the Securities and the Registered Holder listed in response to item 1 above: | |||
3.
|
The mailing address, telephone and telecopy number and email address of the Registered Holder listed in response to item 1 above (also include the name of the appropriate contact person for the Registered Holders): | |||
4.
|
The Tax Identification Number of the Registered Holder listed in response to item 1 above: | |||
Exhibit B-2
SGX PHARMACEUTICALS, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the Registration Statement, please provide us with the following
information regarding the Investor.
1. Please state your organization’s name exactly as it should appear in the Registration
Statement:
Except as set forth below, your organization does not hold any equity securities of the
Company on behalf of another person or entity.
State any exceptions here:
If the Investor is not a natural person, please identify the natural person or persons who
will have voting and investment control over the Securities owned by the Investor and state whether
such person(s) disclaim(s) beneficial ownership of the Securities:
2. Address of your organization:
| Telephone: | ||||||||||
| Fax: | ||||||||||
| Contact Person: | ||||||||||
3. Have you or your organization had any position, office or other material relationship within
the past three years with the Company or its affiliates? (Include any relationships involving you
or any of your affiliates, officers, directors, or principal equity holders (5% or more) that 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.)
Yes No
If yes, please indicate the nature of any such relationship below:
4. Are you the beneficial owner of any other securities of the Company? (Include any equity
securities that you beneficially own or have a right to acquire within 60 days after the date
hereof, and as to which you have sole voting power, shared voting power, sole investment power or
shared investment power.)
Yes No
If yes, please describe the nature and amount of such ownership as of a recent date.
5. Except as set forth below, you wish that all the shares of the Company’s common stock
beneficially owned by you or that you have the right to acquire from the Company be offered for
your account in the Registration Statement.
State any exceptions here:
6. Have you made or are you aware of any arrangements relating to the distribution of the
shares of the Company pursuant to the Registration Statement?
Yes No
If yes, please describe the nature and amount of such arrangements.
-2-
7. NASD Matters
(a) State below whether (i) you or any associate or affiliate of yours are a member of the
NASD, a controlling shareholder of an NASD member, a
person associated with a member, a direct or
indirect affiliate of a member, or an underwriter or related person with respect to the proposed
offering; (ii) you or any associate or affiliate of yours owns any stock or other securities of any
NASD member not purchased in the open market; or (iii) you or any associate or affiliate of yours
has made any outstanding subordinated loans to any NASD member. If you are a general or limited
partnership, a no answer asserts that no such relationship exists for you as well as for each of
your general or limited partners.
| Yes: | No: | |
If “yes,” please identify the NASD member and describe your relationship, including, in the
case of a general or limited partner, the name of the partner:
If you answer “no” to Question 7(a), you need not respond to Question 7(b).
(b) State below whether you or any associate or affiliate of yours has been an underwriter,
or a controlling person or member of any investment banking or brokerage firm which has been or
might be an underwriter for securities of the Corporation or any affiliate thereof including,
but not limited to, the common stock now being registered.
| Yes: | No: | |
If “yes,” please identify the NASD member and describe your relationship, including, in the
case of a general or limited partner, the name of the partner.
8. Are you a broker or a dealer or an affiliate of a broker or a dealer? See the appropriate SEC
definitions of “broker,” “dealer,” and “affiliate” below.
___________ Yes ________________ No
-3-
If yes, please indicate the nature of any such relationship below:
If you are an affiliate of a broker-dealer, please confirm that BOTH of the following are
true:
• You purchased the shares which are covered by the Registration Statement in the
ordinary course of business as an affiliate of a broker-dealer; and
• At the time you acquired the shares or other securities which are covered by
the Registration Statement, you had no agreement or understanding, directly or indirectly,
with any person to distribute such securities.
____ Both are TRUE ___ Either of the above are NOT TRUE
Affiliate. A person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under control with a broker or dealer.
Broker. Any person engaged in the business of effecting transactions in securities for
the account of others.
Dealer. Any person engaged in the business of buying or selling securities for such
person’s own account through a broker or otherwise.
-4-
ACKNOWLEDGEMENT
The undersigned hereby agrees to notify the Company promptly of any changes in the foregoing
information which should be made as a result of any developments, including the passage of time.
The undersigned also agrees to provide the Company and the Company’s counsel any and all such
further information regarding the undersigned promptly upon request in connection with the
preparation, filing, amending, and supplementing of the Registration Statement (or any prospectus
contained therein). The undersigned hereby consents to the use of all such information in the
Registration Statement.
The undersigned understands and acknowledges that the Company will rely on the information set
forth herein for purposes of the preparation and filing of the Registration Statement.
The undersigned understands that the undersigned may be subject to serious civil and criminal
liabilities if the Registration Statement, when it becomes effective, either contains an untrue
statement of a material fact or omits to state a material fact required to be stated in the
Registration Statement or necessary to make the statements in the Registration Statement not
misleading. The undersigned represents and warrants that all information it provides to the
Company and its counsel is currently accurate and complete and will be accurate and complete at the
time the Registration Statement becomes effective and at all times subsequent thereto, and agrees
during the Effectiveness Period and any additional period in which the undersigned is making sales
of Shares under and pursuant to the Registration Statement, and agrees during such periods to
notify the Company immediately of any misstatement of a material fact in the Registration
Statement, and of the omission of any material fact necessary to make the statements contained
therein not misleading.
Dated:
| Name | ||||
| Signature | ||||
| Name and Title of Signatory |
-5-
Exhibit B-3
SGX PHARMACEUTICALS, INC.
CERTIFICATE FOR CORPORATE, PARTNERSHIP, LIMITED LIABILITY COMPANY,
TRUST, FOUNDATION AND JOINT INVESTORS
TRUST, FOUNDATION AND JOINT INVESTORS
If the Investor is a corporation, partnership, limited liability company, trust, pension plan,
foundation, joint Investor (other than a married couple) or other entity, an authorized officer,
partner, or trustee must complete, date and sign this Certificate.
CERTIFICATE
The undersigned certifies that the representations and responses below are true and accurate:
(a) The Investor is a “qualified institutional buyer” as defined in Rule 144A(a) under the
Securities Act. (Please indicate by checking yes or no below)
Yes
No
(b) The Investor has been duly formed and is validly existing and has full power and authority
to invest in the Company. The person signing on behalf of the undersigned has the authority to
execute and deliver the Securities Purchase Agreement on behalf of the Investor and to take other
actions with respect thereto.
(c) Indicate the form of entity of the undersigned:
Limited Partnership
General Partnership
Limited Liability Company
Corporation
Revocable Trust (identify each grantor and indicate under what circumstances the trust is
revocable by the grantor):
(Continue on a separate piece of paper, if necessary.)
Other type of Trust (indicate type of trust and, for trusts other than pension trusts,
name the grantors and beneficiaries):
(Continue on a separate piece of paper, if necessary.)
-6-
Other form of organization (indicate form of organization (
).
(d) Indicate the approximate date the undersigned entity was formed:
.
(e) In order for the Company to offer and sell the Securities in conformance with state and
federal securities laws, the following information must be obtained regarding your investor status.
Please initial each category applicable to you as an investor in the Company.
| ___ | 1. A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; | ||
| ___ | 2. A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; | ||
| ___ | 3. An insurance company as defined in Section 2(13) of the Securities Act; | ||
| ___ | 4. 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; | ||
| ___ | 5. 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; | ||
| ___ | 6. A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; | ||
| ___ | 7. An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors; | ||
| ___ | 8. A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940; | ||
| ___ | 9. Any partnership or corporation or any organization described in Section 501(c)(3) of the Internal Revenue Code or similar business trust, not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000; | ||
| ___ | 10. A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the Exchange Act; |
-7-
| ___ | 11. An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies: |
| (Continue on a separate piece of paper, if necessary.) |
Please set forth in the space provided below the (i) states, if any, in the U.S. in which you
maintained your principal office during the past two years and the dates during which you
maintained your office in each state, (ii) state(s), if any, in which you are incorporated or
otherwise organized and (iii) state(s), if any, in which you pay income taxes.
Dated:
, 2007
Title: |
||
(Signature and title of authorized officer, partner or trustee) |
-8-
Exhibit C
OPINION OF COMPANY COUNSEL
-9-
Exhibit D
PLAN OF DISTRIBUTION
The selling stockholders, which as used herein includes donees, pledgees, transferees or other
successors-in-interest selling shares of common stock or interests in shares of common stock
received after the date of this prospectus from a selling stockholder as a gift, pledge,
partnership distribution or other transfer, may, from time to time, directly or through one or more
underwriters, broker-dealers or agents, sell, transfer or otherwise dispose of any or all of their
shares of common stock or interests in shares of common stock on any stock exchange, market or
trading facility on which the shares are traded, in the over-the-counter market, or in private
transactions. These dispositions may be at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing market prices, at varying prices
determined at the time of sale or at prices otherwise negotiated. The selling stockholders will act
independently of us in making decisions with respect to the timing, manner and size of each sale.
After the registration statement of which this prospectus is a part has been declared effective by
the SEC, the selling stockholders may sell the shares of common stock using one or more, or a
combination of the following methods:
| • | on the NASDAQ Global Market (or any other exchange on which the shares may be listed); | ||
| • | on the over-the-counter market; | ||
| • | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | ||
| • | block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; | ||
| • | purchases by a broker-dealer as principal and resale by the broker or dealer for its account; | ||
| • | an exchange distribution in accordance with the rules of the applicable exchange; | ||
| • | privately negotiated transactions; | ||
| • | short sales; | ||
| • | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | ||
| • | through the distribution of the common stock by any selling stockholders to its partners, members or stockholders; | ||
| • | through one or more underwritten offerings on a firm commitment or best efforts basis; |
| • | broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; | ||
| • | a combination of any such methods of sale; and | ||
| • | any other method permitted pursuant to applicable law. |
Any shares that qualify for sale pursuant to Rule 144 promulgated under the Securities Act may
be sold under Rule 144 rather than pursuant to this prospectus.
The selling stockholders may, from time to time, pledge or grant a security interest in some
or all of the shares of common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of common stock,
from time to time, under this prospectus, or under a supplement to this prospectus under Rule
424(b) or under any applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors-in-interest as selling
stockholders under this prospectus. The selling stockholders also may transfer or donate the shares
of common stock in other circumstances, in which case the transferees, pledgees or other
successors-in-interest will be the selling beneficial owners for purposes of this prospectus. To
the extent required, this prospectus may be amended or supplemented from time to time to describe a
specific plan of distribution.
In connection with distributions of the shares of our common stock or interests therein, the
selling stockholders may enter into hedging transactions with broker-dealers or other financial
institutions, which institutions may, in turn, engage in short sales of shares of our common stock
in the course of hedging the positions they assume with the selling stockholders. The selling
stockholders may also sell the shares of our common stock short and redeliver these shares to close
out the selling stockholders’ short positions provided the selling stockholders have met their
prospectus delivery obligations at the time of the short sale. The selling stockholders may also
loan or pledge shares of our common stock to broker-dealers or other financial institutions that
may in turn sell these shares under this prospectus as supplemented. The selling stockholders may
also enter into option or other transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of shares of our common stock offered by this prospectus, which
shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling stockholders from the sale of the shares of common stock
offered by them will be the purchase price of the shares less discounts or commissions, if any.
Each of the selling stockholders reserves the right to accept and, together with their agents from
time to time, to reject, in whole or in part, any proposed purchase of common stock to be made
directly or through agents. We will not receive any of the proceeds from the sale of the shares by
the selling stockholders.
-2-
The selling stockholders may engage brokers and dealers, and any brokers or dealers may
arrange for other brokers or dealers to participate in effecting sales of the shares. These
brokers, dealers or underwriters may act as principals, or as an agent of a selling stockholder.
Broker-dealers
may agree with a selling stockholder to sell a specified number of the shares at a stipulated
price per security. If the broker-dealer is unable to sell shares acting as agent for a selling
stockholder, it may purchase as principal any unsold shares at the stipulated price. Broker-dealers
who acquire shares as principals may thereafter resell the shares from time to time in transactions
in any stock exchange on which the shares are then listed, at prices and on terms then prevailing
at the time of sale, at prices related to the then-current market price or at prices set in
negotiated transactions. Broker-dealers may use block transactions and sales to and through
broker-dealers, including transactions of the nature described above.
To the extent required under the Securities Act, the aggregate amount of selling stockholders’
shares being offered and the terms of the offering, the names of any agents, brokers, dealers or
underwriters and any applicable commission with respect to a particular offer will be set forth in
an accompanying prospectus supplement or a post-effective amendment to the registration statement
that includes this prospectus. Any underwriters, dealers, brokers or agents participating in the
distribution of the shares may receive compensation in the form of underwriting discounts,
concessions, commissions or fees from a selling stockholder or purchasers of selling stockholders’
shares, for whom they may act (which compensation as to a particular broker-dealer might be in
excess of customary commissions).
To the extent that any selling stockholder or any underwriter, broker-dealer or agent that
participates in the sale of the shares of common stock or interests therein by a selling
stockholder is deemed to be an “underwriter” within the meaning of Section 2(11) of the Securities
Act, any discount, commission, concession or profit earned on any resale of the shares may be
underwriting discounts and commissions under the Securities Act. To our knowledge, none of the
selling stockholder writers is an “underwriter” with respect to the shares being offered hereby;
however, in the event that any selling stockholder is deemed to be an “underwriter” within the
meaning of Section 2(11) of the Securities Act, the selling stockholder will be subject to the
prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any
broker-dealer that participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act. To our knowledge and based
upon information we received from the selling stockholders, each selling stockholder that is
affiliated with a broker-dealer acquired the shares of common stock being registered hereunder in
the ordinary course of business, and, at the time such selling stockholder acquired the shares
being registered hereunder, such selling stockholder did not have any agreement or understanding,
directly or indirectly, with any person to distribute such shares. To our knowledge, none of the
selling stockholders received any shares as underwriting compensation.
We will bear all of the costs, expenses and fees in connection with the registration of the
shares of common stock, other than any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of shares, which will be borne by the selling
stockholder selling such shares of common stock. We have agreed to indemnify the selling
stockholders against certain
-3-
liabilities, including liabilities under the Securities Act and state
securities laws, relating to the registration of the shares offered by this prospectus.
In order to comply with the securities laws of some states, if applicable, the shares of
common stock may be sold in these jurisdictions only through registered or licensed brokers or
dealers. In
some states the shares may not be sold unless they have been registered or qualified for sale
or an exemption from registration or qualification requirements is available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules of Regulation M
under the Exchange Act may apply to sales of shares of our common stock in the market and to the
activities of the selling stockholders and their affiliates. These rules may limit the timing of
purchases and sales of the shares by such selling stockholders. Regulation M may also restrict the
ability of any person engaged in the distribution of the shares of common stock to engage in
market-making activities with respect to the shares of common stock. All of the foregoing may
affect the marketability of the shares of common stock and the ability of any person or entity to
engage in market-making activities with respect to the shares of common stock.
There can be no assurance that any selling stockholder will sell any or all of the shares of
common stock registered pursuant to the registration statement, of which this prospectus forms a
part.
-4-
Exhibit E
COMPANY TRANSFER AGENT INSTRUCTIONS
Computershare Trust Company, N.A.
1700 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xttention: Xxxxxxx Xxxxx, Account Representative
1700 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xttention: Xxxxxxx Xxxxx, Account Representative
Ladies and Gentlemen:
Reference is made to that certain Securities Purchase Agreement, dated as of November 19, 2007
(the “Agreement”), by and among SGX Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the investors named on the Schedule of Investors attached thereto (collectively, the
“Holders”), pursuant to which the Company is issuing to the Holders shares (the “Common Shares”) of
Common Stock of the Company, par value $0.001 per share (the “Common Stock”), and Warrants (the
“Warrants”), which are exercisable into shares of Common Stock.
In connection with the consummation of the transactions contemplated by the Agreement, this
letter shall serve as our irrevocable authorization and direction to you:
(i) to
issue an aggregate of 4,943,154 shares of our Common Stock in the names and
denominations set forth on Annex I attached hereto. The certificates should bear the legend set
forth below and “stop transfer” instructions should be placed against their subsequent transfer.
Kindly deliver the certificates to the respective delivery addresses set forth on Annex I via hand
delivery or overnight courier. We confirm that these shares will be validly issued, fully paid and
non-assessable upon issuance.
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 OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD, PLEDGED OR OTHERWISE TRANSFERRED 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 AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR
BLUE SKY LAWS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION (OTHER
THAN PURSUANT TO RULE 144(K)), UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE
REGISTRATION UNDER THE
SECURITIES ACT AND SUCH OTHER APPLICABLE STATE SECURITIES
LAWS. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT
OR OTHER LOAN SECURED BY SUCH SECURITIES.
(ii) to issue (provided that you are the transfer agent of the Company at such time)
certificates for shares of Common Stock upon transfer or resale of the Common Shares and receipt by
you of certificate(s) for the Common Shares so transferred or sold (duly endorsed or accompanied by
stock powers duly endorsed, in each case with signatures guaranteed and otherwise in form eligible
for transfer); and
(iii) to issue (provided that you are the transfer agent of the Company at such time) shares
of Common Stock upon the exercise of the Warrants (the “Warrant Shares”) to or upon the order of a
Holder from time to time upon delivery to you of a properly completed and duly executed Exercise
Notice, in the form attached hereto as Annex II, which has been acknowledged by the Company
as indicated by the signature of a duly authorized officer of the Company thereon.
You acknowledge and agree that so long as you have previously received (a) written
confirmation from the Company that either (i) a registration statement covering resales of the
Common Shares and the Warrant Shares has been declared effective by the Securities and Exchange
Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), or
(ii) the Common Shares and the Warrant Shares are eligible for sale in conformity with Rule 144(k)
under the Securities Act (“Rule 144”) and (b) if applicable, a copy of such registration statement,
then, unless otherwise required by law, within three (3) business days of your receipt of
certificates representing the Common Shares and the Warrant Shares, you shall issue the
certificates representing the Common Shares and the Warrant Shares to the Holders or their
transferees, as the case may be, registered in the names of such Holders or transferees, as the
case may be, and such certificates shall not bear any legend restricting transfer of the Common
Shares and the Warrant Shares thereby and should not be subject to any stop-transfer restriction;
provided, however, that if such Common Shares or Warrant Shares are not registered for resale under
the Securities Act or able to be sold under Rule 144, then the certificates for such Common Shares
or Warrant Shares shall bear the restrictive legend set forth under paragraph (i) above. Any
certificates tendered for transfer shall be endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect transfer.
A form of written confirmation from the Company that a registration statement covering resales
of the Common Shares and the Warrant Shares has been declared effective by the SEC under the
Securities Act is attached hereto as Annex III. In addition, the Company will cause its
counsel to provide a letter confirming the matters set forth in the first two paragraphs of the
letter attached hereto as Annex III.
Please be advised that the Holders are relying upon this letter as an inducement to enter into
the Agreement and, accordingly, each Holder is a third party beneficiary to these instructions.
Please also be advised that the Company is relying on the representations and covenants of each
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Holder set forth in the Agreement, including without limitation that each
such Holder will not sell or transfer the Warrant, the Common Shares, or the Warrant Shares without complying with the
provisions of the Agreement, the Securities Act, the rules and regulations promulgated thereunder
(including without limitation, without effectively causing the prospectus delivery requirement
under the Securities Act to be satisfied, as applicable) and applicable state securities laws
Please execute this letter in the space indicated to acknowledge your agreement to act in
accordance with these instructions. Should you have any questions concerning this matter, please
contact our counsel, Cooley Godward Kronish LLP, Attention: J. Xxxxxxx Xxxxxxxxxxx, Esq., or
Xxxxxxxxx X. Xxxx, Esq. , at (000) 000-0000.
| Very truly yours, SGX PHARMACEUTICALS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| THE FOREGOING INSTRUCTIONS ARE | ||||||
| ACKNOWLEDGED AND AGREED TO | ||||||
| this __ day of November, 2007 | ||||||
| Computershare Trust Company, N.A. | ||||||
By: |
||||||
| Name: | ||||||
| Title: | ||||||
Enclosures
-3-
ANNEX I
SCHEDULE OF INVESTORS
ANNEX II
FORM OF EXERCISE NOTICE
(To be executed by the Holder to exercise the right to purchase shares of Common Stock under the
foregoing Warrant)
To: SGX Pharmaceuticals, Inc.
The undersigned is the Holder of Warrant No. (the
“Warrant”) issued by SGX Pharmaceuticals,
Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise
defined have the respective meanings set forth in the Warrant.
(1) The Warrant is currently exercisable to purchase a total of
Warrant Shares.
(2) The undersigned Holder hereby exercises its right to purchase
Warrant
Shares pursuant to the Warrant.
(3) The Holder intends that payment of the Exercise Price shall be made as (check one):
___ “Cash Exercise” under Section 10
___ “Cashless Exercise” under Section 10
(4) If the holder has elected a Cash Exercise, the holder shall pay the sum of
$
to the Company in accordance with the terms of the Warrant.
(5) Pursuant to this exercise, the Company shall deliver to the holder
Warrant
Shares in accordance with the terms of the Warrant.
(6) Following this exercise, the Warrant shall be exercisable to purchase a total of
Warrant Shares.
| Dated: , ___ | Name of Holder: | |||||
| (Print) | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| (Signature must conform in all respects to name of holder as specified on the face of the Warrant) | ||||||
-2-
ACKNOWLEDGED AND AGREED TO
this ___day of , 200_
this ___day of , 200_
| SGX PHARMACEUTICALS, INC. | ||||
By: |
||||
| Title: | ||||
-3-
ANNEX III
FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT
Computershare Trust Company, N.A.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Account Representative
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Account Representative
| Re: | SGX PHARMACEUTICALS, INC. | |
| Ladies and Gentlemen: | ||
As you know, SGX Pharmaceuticals, Inc., a Delaware corporation (the “Company”), entered into
that certain Securities Purchase Agreement, dated as of November 19, 2007 (the “Securities Purchase
Agreement”), by and among the Company and the Investors named therein (collectively, the
“Investors”) pursuant to which the Company issued to the Investors shares of Common Stock of the
Company, par value $0.001 per share (the “Common Shares”) and Warrants (the “Warrants”), which are
exercisable into shares of Common Stock (the “Warrant Shares”). Pursuant to the Securities
Purchase Agreement, the Company agreed to register the resale of the Common Shares and the Warrant
Shares (collectively, the “Registrable Securities”) under the Securities Act of 1933, as amended
(the “Securities Act”). In connection with the Company’s obligations under the Securities Purchase
Agreement, on , 2007, the Company filed a Registration Statement on Form S-3
(File No. 333- ) (the “Registration Statement”) with the Securities and Exchange
Commission (the “Commission”) relating to the Registrable Securities which names each of the
Purchasers as a selling shareholder thereunder.
In connection with the foregoing, we advise you that a member of the SEC’s staff has advised
us by telephone that the SEC has entered an order declaring the Registration Statement effective
under the Securities Act at [
] [a.m.][p.m.] on
, 2007, and we
have no knowledge, that any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the Commission and the
Registrable Securities are available for resale under the Securities Act pursuant to the
Registration Statement.
Each Purchaser has agreed, pursuant to the Securities Purchase Agreement, that it will not
sell any of the Registrable Securities of the Company under the Registration Statement without
complying with the provisions of the Agreement, the Securities Act, the rules and regulations
promulgated thereunder (including without limitation, without effectively causing the prospectus
delivery requirement under the Securities Act to be satisfied) and applicable state securities
laws.
In reliance upon such representations, this letter shall serve as our standing notice to you
that you are hereby authorized and instructed to remove any and all restrictive legends from the
Common Shares and the Warrant Shares so long as the Investors certify they will comply with the
plan of distribution description in connection with sales or transfers of the Common Shares and the
Warrant
-4-
Shares set forth in the Registration Statement and with the prospectus delivery requirements
of the Securities Act, to the extent such delivery requirement are applicable. You need not require
further letters from us to effect any future legend-free issuance or reissuance of shares of the
Common Shares and the Warrant Shares to the Investors or the transferees of the Investors, as the
case may be, as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated
November , 2007.
| Very truly yours, SGX PHARMACEUTICALS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
-5-
Schedule 3.1(e)
CAPITALIZATION
As of November 9, 2007, the Company had 15,531,340 shares of Common Stock issued and outstanding.
As of November 9, 2007, the Company had outstanding options to purchase 2,218,505 shares of Common
Stock under its equity incentive plans and 81,251 shares of Common Stock reserved for issuance
pursuant to outstanding restricted stock unit awards.
As of November 9, 2007, the Company had outstanding warrants to purchase 199,066 shares of its
Common Stock.
Schedule 3.1(o)
REGISTRATION RIGHTS
The Company has granted registration rights under its Amended and Restated Investor Rights
Agreement dated April 21, 2005, as amended, between the Company and certain of its stockholders.
The holders of the requisite percentage of Registrable Securities (as defined in such agreement)
have waived their piggyback and other registration rights with respect to the filing of the
Registration Statement and have agreed not to exercise any registration rights under such agreement
until the Registration Statement is declared effective by the SEC.
