EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement"), dated as of May 3,
2004, between Axonyx, Inc., a Nevada corporation (the "Company"), and each
purchaser identified on the signature pages hereto (each a "Purchaser" and
collectively the "Purchasers"); and
WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act (as defined below), and Rule
506 promulgated thereunder, the Company desires to issue and sell to the
Purchasers, and each Purchaser, severally and not jointly, desires to purchase
from the Company in the aggregate, up to $20,000,000 of the Company's Common
Stock and certain Warrants, as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:
"Action" shall have the meaning ascribed to such term in Section
3.1(j).
"Affiliate" means any Person that, directly or indirectly through
one or more intermediaries, controls or is controlled by or is under
common control with a Person as such terms are used in and construed under
Rule 144. With respect to a Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment
manager as such Purchaser will be deemed to be an Affiliate of such
Purchaser.
"Business Day" means any day except Saturday, Sunday and any day
which shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or
other governmental action to close.
"Closing" means the closing of the purchase and sale of the Common
Stock and Warrants pursuant to Section 2.1(a).
"Closing Date" means the date of the Closing.
"Closing Price" means on any particular date (a) the last reported
closing bid price per share of the Common Stock on such date on the
Trading Market (as reported by Bloomberg L.P. at 4:15 PM (New York time),
or (b) if there is no such price on such date, then the closing bid price
on the Trading Market on the date nearest preceding such date (as reported
by Bloomberg L.P. at 4:15 PM (New York time) for the closing bid price for
regular session trading on such day), or (c) if the Common Stock is not
then
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listed or quoted on the Trading Market and if prices for the Common Stock
are then reported in the "pink sheets" published by the National Quotation
Bureau Incorporated (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) if the shares of Common Stock are not
then publicly traded the fair market value of a share of Common Stock as
determined by an appraiser selected in good faith by the independent
member of the Company's Board of Directors and as to which the Company has
received written approval from Purchasers holding a majority in interest
of the Shares then outstanding.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, $0.001 par
value per share, and any securities into which such common stock may
hereafter be reclassified.
"Common Stock Equivalents" means any securities of the Company or
the Subsidiary which would entitle the holder thereof to acquire at any
time Common Stock, including without limitation, any debt, preferred
stock, rights, options, warrants or other instrument that is at any time
convertible into or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.
"Company Counsel" means Xxxxxxxxxx Xxxxxxxxx & Xxxxxx LLP.
"Effective Date" means the date on which the Registration Statement
is first declared effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Intellectual Property Rights" shall have the meaning ascribed to
such term in Section 3.1(o).
"Lien" means a lien, charge, security interest, encumbrance, right
of first refusal or other restriction.
"Material Adverse Effect" shall have the meaning ascribed to such
term in Section 3.1(b).
"Material Permits" shall have the meaning ascribed to such term in
Section 3.1(m).
"Purchase Price" equals $6.50, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Stock that occur after the date of this
Agreement.
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
"Registrable Securities" shall have the meaning ascribed to such
term in the Registration Rights Agreement.
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"Registration Statement" means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering
the resale by the Purchasers of the Shares and the Warrant Shares.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company and
each Purchaser, in the form of Exhibit A hereto.
"Rule 144," means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SEC Reports" shall have the meaning ascribed to such term in
Section 3.1(h).
"Securities" means the Shares, the Warrants and the Warrant Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock issued to each Purchaser
pursuant to this Agreement.
"Subscription Amount" means, as to each Purchaser and the Closing,
the amounts set forth below such Purchaser's signature block on the
signature page hereto, in United States dollars and in immediately
available funds.
"Subsidiary" shall have the meaning ascribed to such term in Section
3.1(a).
"Trading Day" means (i) a day on which the Common Stock is traded on
a Trading Market, or (ii) if the Common Stock is not listed on a Trading
Market, a day on which the Common Stock is traded on the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common
Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency
succeeding its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii)
and (iii) hereof, then Trading Day shall mean a Business Day.
"Trading Market" means the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question:
the American Stock Exchange, the New York Stock Exchange, the Nasdaq
National Market or the Nasdaq SmallCap Market.
"Transaction Documents" means this Agreement, the Registration
Rights Agreement, the Warrants and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
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"Warrants" means the Common Stock Purchase Warrants, in the form of
Exhibit B, issuable to the Purchasers at the Closing, with a term of
exercise of 5 years and an exercise price equal to $8.50, subject to
adjustment therein.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing. At the Closing, the Purchasers shall purchase, severally and
not jointly, and the Company shall issue and sell, in the aggregate, up to
$20,000,000 of Common Stock, together with the Warrants. Each Purchaser shall
purchase from the Company, and the Company shall issue and sell to each
Purchaser, (a) a number of Shares equal to such Purchaser's Subscription Amount
divided by the Purchase Price and 0.3 Warrant for every Share purchased. Upon
satisfaction of the conditions set forth in Section 2.2, the Closing shall occur
at the offices of Company Counsel, or such other location as the parties shall
mutually agree.
2.2 Closing 2.3 Deliveries.
(a) At the Closing, the Company shall deliver or cause to be
delivered to each Purchaser:
(i) this Agreement duly executed by the Company;
(ii) a certificate evidencing a number of Shares equal to such
Purchaser's Subscription Amount divided by the Purchase Price,
registered in the name of such Purchaser or its designee(s);
(iii) the Registration Rights Agreement duly executed by the
Company;
(iv) a legal opinion of Company Counsel, in the form of
Exhibit C attached hereto; and
(v) a Warrant, registered in the name of such Purchaser,
pursuant to which such Purchaser shall have the right to acquire up
to the number of shares of Common Stock equal to 30% of the Shares
to be issued to such Purchaser at the Closing.
(b) At the Closing, each Purchaser shall deliver or cause to be
delivered to the Company:
(i) this Agreement duly executed by such Purchaser;
(ii) such Purchaser's Subscription Amount by wire transfer of
immediately available funds to the account of the Company; and
(iii) the Registration Rights Agreement duly executed by such
Purchaser.
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2.3 Conditions to Purchasers' Obligations at the Closing. Each Purchaser's
obligation to effect the Closing, including without limitation its obligation to
purchase Shares or Warrants at the Closing, is conditioned upon the fulfillment
(or waiver by such Purchaser in its sole and absolute discretion) of each of the
following events as of the Closing Date:
(a) the representations and warranties of the Company set forth in
this Agreement and in the other Transaction Documents shall be true and
correct in all material respects as of such date as if made on such date
(except that to the extent that any such representation or warranty
relates to a particular date, in which case such representation or
warranty shall be true and correct in all respects as of that particular
date);
(b) as of the Closing Date, there shall have been no Material
Adverse Effect with respect to the Company since the date hereof;
(c) such Purchaser shall have received (or waived its right to
receive) at the Closing the items described in Section 2.2(a) above;
(d) the Closing shall have occurred on or before May 5, 2004; and
(e) from the date hereof to the Closing Date, trading in the Common
Stock shall not have been suspended by the Commission (except for any
suspension of trading of limited duration agreed to by the Company, which
suspension shall be terminated prior to the Closing), and, at any time
prior to Closing Date, trading in securities generally as reported by
Bloomberg Financial Markets shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose trades
are reported by such service, or on any Trading Market, nor shall a
banking moratorium have been declared either by the United States or New
York State authorities, nor shall there have occurred any material
outbreak or escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material adverse
change in, any financial market which, in each case, in the reasonable
judgment of each Purchaser, makes it impracticable or inadvisable to
purchase the Shares at the Closing.
2.4 Conditions to Company's Obligations at the Closing. The Company's
obligation to effect the Closing with each Purchaser is conditioned upon the
fulfillment (or waiver by the Company in its sole and absolute discretion) of
each of the following events as of the Closing Date:
(a) the representations and warranties of such Purchaser set forth
in this Agreement and in the other Transaction Documents shall be true and
correct in all material respects as of such date as if made on such date
(except that to the extent that any such representation or warranty
relates to a particular date, in which case such representation or
warranty shall be true and correct in all respects as of that particular
date); and
(b) the Company shall have received (or waived its right to receive)
at the Closing the items described in Section 2.2(b) above.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties as of the date hereof and as
of the Closing Date to each Purchaser:
(a) Subsidiaries. The Company's sole wholly-owned operating
subsidiary is Axonyx Europe BV (the "Subsidiary"). The Company owns,
directly or indirectly, all of the capital stock of the Subsidiary free
and clear of any lien, charge, security interest, encumbrance, right of
first refusal or other restriction (collectively, "Liens"), and all the
issued and outstanding shares of capital stock of the Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive
and similar rights. The Company acquired in January 2004 and currently
owns a majority of the outstanding common stock of Oxis International,
Inc. ("Oxis"), a reporting company under the Exchange Act. The shares of
common stock of Oxis owned by the Company are free and clear of any Liens.
(b) Organization and Qualification. Each of the Company and the
Subsidiary is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power
and authority to own and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor the Subsidiary is
in violation of any of the provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter
documents. Each of the Company and the Subsidiary is duly qualified to
conduct 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 have or reasonably be expected to result in (i) a material
adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business or financial condition of the Company and the
Subsidiary, taken as a whole, or (iii) adversely impair the Company's
ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a
"Material Adverse Effect").
(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no
further action is required by the Company in connection therewith. Each
Transaction Document has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors'
rights generally and (ii) as
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limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated thereby do not and will not (i) conflict
with or violate any provision of the Company's or the Subsidiary's
certificate or articles of incorporation, bylaws or other organizational
or charter documents, or (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or the Subsidiary is a party or by
which any property or asset of the Company or the Subsidiary is bound or
affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or the Subsidiary is subject
(including federal and state securities laws and regulations), or by which
any property or asset of the Company or the Subsidiary is bound or
affected; except in the case of each of clauses (ii) and (iii), such as
would not have or reasonably be expected to result in a Material Adverse
Effect.
(e) Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the
Transaction Documents, other than (a) the filing with the Commission of
the Registration Statement, the application(s) to each Trading Market for
the listing of the Shares and Warrant Shares for trading thereon in the
time and manner required thereby, and applicable Blue Sky filings, (b)
such as have already been obtained or such exemptive filings as are
required to be made under applicable securities laws, (c) such other
filings as may be required following the Closing Date under the Securities
Act, the Exchange Act and corporate law.
(f) Issuance of the Securities. The Securities are duly authorized
and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable,
free and clear of all Liens. The Company has reserved from its duly
authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to this Agreement and the Warrants.
(g) Capitalization. The capitalization of the Company is as
described in the Company's most recent periodic report filed with the
Commission. The Company has not issued any capital stock since such filing
other than pursuant to the exercise of employee stock options under the
Company's stock option plans, the issuance of shares of Common Stock to
employees pursuant to the Company's employee stock purchase plan and
pursuant to the conversion or exercise of outstanding Common Stock
Equivalents. No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except as a result
of the purchase and sale of the Securities, and
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except as described in the SEC Reports, there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or the
Subsidiary is or may become bound to issue additional shares of Common
Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. Except for certain standard and customary "weighted average"
anti-dilution adjustment provisions in outstanding warrants of the
Company, the issue and sale of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to any Person
(other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or
reset price under such securities.
(h) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for
the two years preceding the date hereof (or such shorter period as the
Company was required by law to file such material) (the foregoing
materials, including the exhibits thereto, being collectively referred to
herein as the "SEC Reports") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. As of their respective dates, the
SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the
periods involved ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and
fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(i) Material Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as disclosed in the SEC
Reports filed at least five (5) Business Days prior to the date hereof,
(i) there has been no event, occurrence or development that has had or
that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) 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 Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or
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distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its
capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company
stock option plans. The Company does not have pending before the
Commission any request for confidential treatment of information.
(j) Litigation. Except as disclosed in the SEC Reports, there is no
action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting the Company, the Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county,
local or foreign) (collectively, an "Action") which (i) adversely affects
or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor the Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not
been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or
any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company or the Subsidiary under
the Exchange Act or the Securities Act.
(k) Labor Relations. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees
of the Company which could reasonably be expected to result in a Material
Adverse Effect.
(l) Compliance. Neither the Company nor the Subsidiary (i) is 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 or the Subsidiary under), nor has the Company or
the Subsidiary received notice of a claim that it is in default under or
that it is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it or any
of its properties is bound (whether or not such default or violation has
been waived), (ii) is in violation of any order of any court, arbitrator
or governmental body, or (iii) is or has been in violation of any statute,
rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its
business, except in the case of clauses (i), (ii) and (iii) as would not
have or reasonably be expected to result in a Material Adverse Effect.
(m) Regulatory Permits. The Company and the Subsidiary possess all
certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to
conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits would not have or
reasonably be expected to result in a Material Adverse Effect ("Material
Permits"), and neither the Company nor the Subsidiary has received any
notice of proceedings relating to the revocation or modification of any
Material Permit.
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(n) Title to Assets. The Company and the Subsidiary have good and
marketable title in fee simple to all real property owned by them that is
material to the business of the Company and the Subsidiary and good and
marketable title in all personal property owned by them that is material
to the business of the Company and the Subsidiary, in each case free and
clear of all Liens, except for Liens as do not materially affect the value
of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and the Subsidiary and
Liens for the payment of federal, state or other taxes, the payment of
which is neither delinquent nor subject to penalties. Any real property
and facilities held under lease by the Company and the Subsidiary are held
by them under valid, subsisting and enforceable leases of which the
Company and the Subsidiary are in compliance.
(o) Patents and Trademarks. To the knowledge of the Company and the
Subsidiary, the Company and the Subsidiary have, or have rights to use,
all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses and other similar rights
that are necessary or material for use in connection with their respective
businesses as described in the SEC Reports and which the failure to so
have could have or reasonably be expected to result in a Material Adverse
Effect (collectively, the "Intellectual Property Rights"). Neither the
Company nor the Subsidiary has received a written notice that the
Intellectual Property Rights used by the Company or the Subsidiary
violates or infringes upon the rights of any Person. To the knowledge of
the Company, all such Intellectual Property Rights are enforceable.
(p) Insurance. The Company and the Subsidiary are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses
in which the Company and the Subsidiary are engaged. Neither the Company
nor the Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost.
(q) Transactions With Affiliates and Employees. Except as set forth
in the SEC Reports, none of the officers or directors of the Company and,
to the knowledge of the Company, none of the employees of the Company is
presently a party to any transaction with the Company or the Subsidiary
(other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to
or from, or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of
$60,000 other than (a) for payment of salary or consulting fees for
services rendered, (b) reimbursement for expenses incurred on behalf of
the Company and (c) for other employee benefits, including stock option
agreements under any stock option plan of the Company.
(r) Internal Accounting Controls. Each of the Company and the
Subsidiary maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or
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specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP 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. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the Company and designed such disclosures controls and
procedures to ensure that material information relating to the Company,
including its subsidiaries, is made known to the certifying officers by
others within those entities, particularly during the period in which the
Company's Form 10-K or 10-Q, as the case may be, is being prepared. The
Company's certifying officers have evaluated the effectiveness of the
Company's controls and procedures as of the date prior to the filing date
of the Form 10-K for the year ended December 31, 2003 (such date, the
"Evaluation Date"). The Company presented in its most recently filed Form
10-K or Form 10-Q the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no significant changes in the Company's internal controls (as
such term is defined in Item 307(b) of Regulation S-K under the Exchange
Act) or, to the Company's knowledge, in other factors that could
significantly affect the Company's internal controls.
(s) Private Placement. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the
Securities by the Company to the Purchasers as contemplated hereby. The
issuance and sale of the Securities hereunder does not contravene the
rules and regulations of the Trading Market.
(t) Investment Company. The Company is not, and is not an Affiliate
of, an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
(u) Registration Rights. No Person other than the Purchasers or the
placement agent of the Securities has any right to cause the Company to
include in the Registration Statement contemplated by the Registration
Rights Agreement any other securities of the Company.
(v) Listing and Maintenance Requirements. The Company has not, in
the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is, and has
no reason to believe that it will not in the foreseeable future continue
to be, in compliance with all such listing and maintenance requirements.
(w) Application of Takeover Protections. The Company and its Board
of Directors have taken all necessary action, if any, in order 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 Certificate of
Incorporation (or similar charter documents) or the laws of its state of
11
incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation the Company's issuance of the Securities and the Purchasers'
ownership of the Securities.
(x) Disclosure. The Company confirms that, neither the Company nor
any other Person acting on its behalf has provided any of the Purchasers
or their agents or counsel with any information that constitutes or might
constitute material, non-public information. The Company understands and
confirms that the Purchasers will rely on the foregoing representations
and covenants in effecting transactions in securities of the Company. All
disclosure provided to the Purchasers regarding the Company, its business
and the transactions contemplated hereby furnished by or on behalf of the
Company are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under
which they were made, not misleading.
(y) No Integrated Offering. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the
Company for purposes of the Securities Act or any applicable shareholder
approval provisions, including, without limitation, under the rules and
regulations of any Trading Market.
(z) Solvency. Based on the financial condition of the Company as of
the Closing Date, (i) the Company's fair saleable value of its assets
exceeds the amount that will be required to be paid on or in respect of
the Company's existing debts and other liabilities (including known
contingent liabilities) as they mature; (ii) the Company's assets do not
constitute unreasonably small capital to carry on its business for the
current fiscal year as now conducted and as proposed to be conducted
including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected
capital requirements and capital availability thereof; and (iii) the
current cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its debt when such amounts are required to be
paid. The Company does not intend to incur debts beyond its ability to pay
such debts as they mature (taking into account the timing and amounts of
cash to be payable on or in respect of its debt).
3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:
(a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by such
12
Purchaser of the transactions contemplated by this Agreement has been duly
authorized by all necessary corporate action on the part of such
Purchaser. Each Transaction Document to which it is party has been duly
executed by such Purchaser, and when delivered by such Purchaser in
accordance with terms hereof, will constitute the valid and legally
binding obligation of such Purchaser, enforceable against it in accordance
with its terms.
(b) Investment Intent. Such Purchaser understands that the
Securities are "restricted securities" and have not been registered under
the Securities Act or any applicable state securities law and is acquiring
the Securities as principal for its own account for investment purposes
only and not with a view to or for distributing or reselling such
Securities or any part thereof, has no present intention of distributing
any of such Securities and has no arrangement or understanding with any
other persons regarding the distribution of such Securities (this
representation and warranty not limiting such Purchaser's right to sell
the Securities pursuant to the Registration Statement or otherwise in
compliance with applicable federal and state securities laws). Such
Purchaser is acquiring the Securities hereunder in the ordinary course of
its business. Such Purchaser does not have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the
Securities.
(c) Purchaser Status. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is an "accredited investor"
as defined in Rule 501(a) under the Securities Act. Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the
Exchange Act.
(d) Experience of such Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of
such investment.
(e) General Solicitation. Such Purchaser 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 or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.
(f) Registration Required. Such Purchaser hereby covenants with the
Company not to make any sale of the Shares and the Warrant without
complying with the provisions hereof and of the Registration Rights
Agreement, and without effectively causing the prospectus delivery
requirement under the Securities Act to be satisfied (unless such
Purchaser is selling such Shares or Warrant Shares in a transaction not
subject to the prospectus delivery requirement), and such Purchaser
acknowledges that the certificates evidencing the Shares and Warrant
Shares will be imprinted with a legend that prohibits their transfer
except in accordance therewith.
(g) No Tax or Legal Advice. Such Purchaser understands that nothing
in this Agreement, any other Transaction Document or any other materials
presented to such
13
Purchaser in connection with the purchase and sale of the Securities
constitutes legal, tax or investment advice. Such Purchaser has consulted
such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its purchase of
Securities.
The Company acknowledges and agrees that each Purchaser does not make or
has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) The Securities may only be disposed of in compliance with state
and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement, to the
Company, to an Affiliate of a Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not
require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights
Agreement.
(b) The Purchasers agree to the imprinting, so long as is required
by Section 4.1(c), of a legend on any of the Securities in the following
form:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 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.
The Company acknowledges and agrees that a Purchaser may from time
to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant
14
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, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Securities to
the pledgees or secured parties. Such a pledge or transfer would not be
subject to approval of the Company and no legal opinion of legal counsel
of the pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At the
appropriate Purchaser'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 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.
(c) Certificates evidencing the Shares and Warrant Shares shall not
contain any legend (including the legend set forth in Section 4.1(b)), (i)
while a registration statement (including the Registration Statement)
covering the resale of such security is effective under the Securities Act
(provided, however, that a Purchaser's prospectus delivery requirements
under the Securities Act and as set forth in Section 3.2(f) will remain
applicable), or (ii) following any sale of such Shares or Warrant Shares
pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are
eligible for sale under Rule 144(k), or (iv) if such legend is not
required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Staff of the
Commission). The Company shall cause its counsel to issue a legal opinion
to the Company's transfer agent promptly after the Effective Date if
required by the Company's transfer agent to effect the removal of the
legend hereunder. The Company agrees that following the Effective Date or
at such time as such legend is no longer required under this Section
4.1(c), it will, no later than five Trading Days following the delivery by
a Purchaser to the Company or the Company's transfer agent of a
certificate representing Shares or Warrant Shares, as the case may be,
issued with a restrictive legend, deliver or cause to be delivered to such
Purchaser 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 any transfer agent of the Company that
enlarge the restrictions on transfer set forth in this Section or in
Section 3.2(f).
4.2 Furnishing of Information. As long as any Purchaser owns Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act. Upon the request
of any such holder of Securities, the Company shall deliver to such holder a
written certification of a duly authorized officer as to whether it has complied
with the preceding sentence. As long as any Purchaser owns Securities, if the
Company is not required to file reports pursuant to such laws, it will prepare
and furnish to each such Purchaser and make publicly available in accordance
with Rule 144(c) such information as is required for a Purchaser to sell the
Securities under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell such Securities
publicly without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144.
15
4.3 Integration. The Company shall not 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 Purchasers 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 Securities Laws Disclosure; Publicity. The Company shall, by 8:30 a.m.
Eastern time on the Business Day following the date of this Agreement, issue a
press release or file a Current Report on Form 8-K, in each case reasonably
acceptable to the placement agent of the Securities disclosing the transactions
contemplated hereby and make such other filings and notices in the manner and
time required by the Commission. The Company and the placement agent of the
Securities shall consult with each other in issuing any press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of the placement agent of
the Securities, with respect to any press release of the Company, which consent
shall not unreasonably be withheld, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
the registration statement contemplated by the Registration Rights Agreement and
(ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii).
4.5 Shareholders Rights Plan. No claim will be made or enforced by the
Company or any other Person that any Purchaser is an "Acquiring Person" under
any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between
the Company and the Purchasers.
4.6 Non-Public Information. The Company covenants and agrees that neither
it nor any other Person acting on its behalf will provide any Purchaser or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall have
agreed in writing to receive such information and shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the Company.
4.7 Use of Proceeds. Except as set forth on Schedule 4.7 attached hereto,
the Company shall use the net proceeds from the sale of the Securities hereunder
for working capital purposes and to broaden the Company's technology portfolio
by means of acquiring or licensing additional, new technologies or by means of
merger or acquisition, and not for the satisfaction of any portion of the
Company's debt (other than payment of trade payables in the ordinary course
16
of the Company's business and prior practices), to redeem any Company equity or
equity-equivalent securities or to settle any outstanding litigation.
4.8 Indemnification of Purchasers. The Company will indemnify and hold
each Purchaser and its directors, officers, shareholders, partners, employees
and agents (each, a "Purchaser Party") harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys' fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of or relating to: (a) any misrepresentation, breach
or inaccuracy, or any allegation by a third party that, if true, would
constitute a material breach or inaccuracy, of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents; or (b) any cause of action, suit or claim
brought or made against such Purchaser Party and arising solely out of or solely
resulting from the execution, delivery, performance or enforcement of this
Agreement or any of the other Transaction Documents and without causation by any
other activity, obligation, condition or liability pertaining to such Purchaser.
The Company will reimburse such Purchaser for its reasonable legal and other
expenses (including the cost of any investigation, preparation and travel in
connection therewith) incurred in connection therewith, as such expenses are
incurred.
4.9 Indemnification of the Company. Each Purchaser, severally and not
jointly with the other Purchasers, will indemnify and hold the Company and their
directors, officers, shareholders, partners, employees and agents (each, a
"Company Party") harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation that any such Company Party may suffer or incur as a
result of or relating to any material breach or inaccuracy of any of the
representations, warranties, covenants or agreements made by such Purchaser in
this Agreement or in the other Transaction Documents. Each such Purchaser will
reimburse the Company for its reasonable legal and other expenses (including the
cost of any investigation, preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are incurred.
4.10 Reservation of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Shares pursuant to this
Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.11 Listing of Common Stock. The Company hereby agrees to use
commercially reasonably efforts to maintain the listing of the Common Stock on
the Trading Market, and as soon as reasonably practicable following the Closing
(but not later than the earlier of the Effective Date and the first anniversary
of the Closing Date) to list the applicable Shares and Warrant Shares on the
Trading Market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will include in such
application the Shares and the Warrant Shares, and will take such other action
as is necessary or desirable in the opinion of the Investors to cause the Shares
and Warrant Shares to be listed on such other Trading Market as promptly as
possible. The Company will take all action reasonably necessary to continue the
listing and trading of its Common Stock on a Trading Market and will comply in
17
all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the Trading Market.
ARTICLE V.
MISCELLANEOUS
5.1 Fees and Expenses. Except as otherwise set forth in this Agreement,
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 stamp and other taxes and duties
levied in connection with the sale of the Securities.
5.2 Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
5.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set forth on the
signature pages attached hereto.
5.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, (i) in the case of an amendment,
by the Company, on the one hand, and by those Purchasers (or their transferees)
then holding at least two-thirds (2/3) of the aggregate amount of Registrable
Securities issued or issuable under the Transaction Documents and not yet sold
under the Registration Statement or under Rule 144, on the other hand and (ii)
in the case of a waiver, by the party against whom enforcement thereof 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 either party
to exercise any right hereunder in any manner impair the exercise of any such
right.
5.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
5.6 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign
18
this Agreement or any rights or obligations hereunder without obtaining the
prior written consent of those Purchasers (or their transferees) then holding at
least two-thirds (2/3) of the aggregate amount of Registrable Securities issued
or issuable and not yet sold under the Registration Statement or under Rule 144,
other than in accordance with a sale of substantially all or substantially of
its assets or a merger approved by the stockholders of the Company, in which
case such consent shall not be required. Any Purchaser may assign any or all of
its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions hereof that
apply to the "Purchasers", including without limitation, the representations and
warranties as to such transferee's status as an "accredited investor" under the
Securities Act.
5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.8.
5.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
City of New York. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
New York for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of the any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by 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.
Each party hereto (including its affiliates, agents, officers, directors and
employees) hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
5.9 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and delivery of the Shares and
Warrant Shares.
5.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any
19
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.
5.11 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
5.12 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.
5.13 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
5.14 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, 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, 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.
5.15 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser 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
20
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. Each
Purchaser has been represented by its own separate legal counsel in their review
and negotiation of the Transaction Documents. For reasons of administrative
convenience only, each Purchaser and its counsel have chosen to communicate with
the Company through Xxxxx & Stachenfeld LLP. ("D&S"), counsel for one of the
Purchasers. D&S does not represent any other Purchaser in this transaction. The
Company has elected to provide each Purchaser with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by any Purchaser.
(Signature Page Follows)
21
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.
AXONYX, INC. Address for Notice:
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
By: /s/ S. Xxxxx Xxxxx Attn: S. Xxxxx Xxxxx, CFO
------------------------------- Tel: (000) 000-0000
Name: S. Xxxxx Xxxxx Fax: (000) 000-0000
Title: Chief Financial Officer
With copy to (which shall not constitute notice):
Xxxxxxxxxx Xxxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
[PURCHASERS' COUNTERPART SIGNATURE PAGES FOLLOW]
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
Provident Premier Master Fund
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Attorney-in-Fact
Shares of Common Stock: 300,000
Warrants: 90,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 1,950,000
Address for Notice:
c/o Gemini Investment Strategies, LLC
Attn: Xxxxxx Xxxxxxx
00 Xxxxxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
Tax ID No. (if applicable)___________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
Satellite Strategic Finance Associates, LLC
By: Satellite Asset Management, L.P., its Manager
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Operating Officer and Principal
Shares of Common Stock: 1,076,923
Warrants: 323,077
Aggregate Purchase Price @ $6.50 per Share and 0.3Warrant: $ 7,000,000
Address for Notice:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tax ID No. (if applicable)_________________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
UBS X'Xxxxxx LLC F/B/O
X'Xxxxxx PIPES Corporate Strategies Master Ltd.
By: /s/ Xxxxxxx Xxxxxx
----------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Director
Shares of Common Stock: 310,000
Warrants: 93,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 2,015,000.00
Address for Notice:
Tax ID No. (if applicable)___________________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
SF Capital Partners, Ltd.
By: /s/ Xxxxx Xxxxxxxx
----------------------
Name: Xxxxx Xxxxxxxx
Title:Authorized Signatory
Shares of Common Stock: 300,000
Warrants: 90,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 1,950,000
Address for Notice:
000 X. Xxxx Xxxxx
Xx. Xxxxxxx, XX 00000
Tax ID No. (if applicable)______________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
Longview Equity Fund, LP
By: /s/ Xxxxx Xxxxxxx
-----------------------
Name: Xxxxx Xxxxxxx
Title: Investment Manager
Shares of Common Stock: 174,591
Warrants: 52,379
Aggregate Purchase Price @ $6.50 per Share and 0.3Warrant: $ 1,134,841.50
Address for Notice:
x/x Xxxxxxx Xxxxx Cap Management
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Tax ID No. (if applicable)___________________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
Longview Fund, LP
By: Viking Asset Management, LLC, its General Partner
By: /s/ S. Xxxxxxx Xxxxxxx
--------------------------
Name: S. Xxxxxxx Xxxxxxx
Title: CFO
Shares of Common Stock: 30,000
Warrants: 9,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 195,000
Address for Notice:
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Tax ID No. (if applicable)__________________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
Longview International Equity Fund, LP
By: /s/ Xxxxx Xxxxxxx
---------------------
Name: Xxxxx Xxxxxxx
Title: Investment Manager
Shares of Common Stock: 23,100
Warrants: 6,930
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 150,150
Address for Notice:
x/x Xxxxxxx Xxxxx Cap Management
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Tax ID No. (if applicable)____________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
Longview Special Finance Inc.
By: /s/ Francois Morax
----------------------
Name: Francois Morax
Title: Director
Shares of Common Stock: 153,809
Warrants: 46,142
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 999,758.50
Address for Notice:
Trident Xxxxxxxx
P.O. Box 146
Road Town Tordola
British Virgin Islands
Tax ID No. (if applicable)______________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
/s/ Heinz Hofliger
--------------------------
Heinz Hofliger
Shares of Common Stock: 100,000
Warrants: 30,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 650,000
Address for Notice:
Tax ID No. (if applicable)_______________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
Deephaven Small Cap Growth Fund LLC
By: /s/ Xxxxx Xxxxxxxxx
-----------------------
Name: Xxxxx Xxxxxxxxx
Title: Director Private Placements
Shares of Common Stock: 538,500
Warrants: 161,550
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 3,500,250
Address for Notice:
Tax ID No. (if applicable)________________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
Elektroprododuktions Maschinen AG
By: /s/ Xxxx Xxxxxxxx
-----------------------------
Name: Xxxx Xxxxxxxx
Title: Sole Director
Shares of Common Stock: 16,000
Warrants: 4,800
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 104,000
Address for Notice:
c/o Interglobe Finance SA
General Xxxxxx-Xxxx 00
XX-0000 Xxxxxx
Tax ID No. (if applicable)_______________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
/s/ Xxxx Xxxxxxxx
---------------------------
Xxxx Xxxxxxxx
Shares of Common Stock: 3,000
Warrants: 900
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 19,500
Address for Notice:
Tax ID No. (if applicable)______________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
/s/ Xxxx Xxxxxxxx
------------------------------------
Xxxx Xxxxxxxx Attorney-in-Fact for Gudron Eiz
Shares of Common Stock: 3,000
Warrants: 900
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 19,500
Address for Notice:
c/o Interglobe Finance SA
General Xxxxxx-Xxxx 00
XX-0000 Xxxxxx
Tax ID No. (if applicable)___________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
EPM Holding AG
By: /s/ Xxxx Xxxxxxxx
---------------------
Name: Xxxx Xxxxxxxx
Title: Sole Director
Shares of Common Stock: 22,000
Warrants: 0000
Xxxxxxxxx Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 143,000
Address for Notice:
c/o Interglobe Finance SA
General Xxxxxx-Xxxx 00
XX-0000 Xxxxxx
Tax ID No. (if applicable)_______________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
/s/ Xxxxxx Xxxxxx
------------------------------
Xx. Xxxxxx Xxxxxx
Shares of Common Stock: 10,000
Warrants: 3,000
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 65,000
Address for Notice:
c/o Interglobe Finance SA
General Xxxxxx-Xxxx 00
XX-0000 Xxxxxx
Tax ID No. (if applicable)__________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PURCHASER:
Berkin Business SA
By: /s/ X. Xxxxx
---------------------------
Name: X. Xxxxx
Title: Attorney-at-Fact
Shares of Common Stock: 16,000
Warrants: 4,800
Aggregate Purchase Price @ $6.50 per Share and 0.3 Warrant: $ 104,000
Address for Notice:
c/o Interglobe Finance SA
General Xxxxxx-Xxxx 00
XX-0000 Xxxxxx
Tax ID No. (if applicable)__________________
