Exhibit 10.35
MAXIM PHARMACEUTICALS, INC.
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the
"Agreement") is entered into as of November 10, 1999, by and among Maxim
Pharmaceuticals, Inc., a Delaware corporation (the "Company") and each of those
persons and entities, severally and not jointly, whose names are set forth on
the Schedule of Purchasers attached hereto as Exhibit A (which persons and
entities are hereinafter collectively referred to as "Purchasers" and each
individually as a "Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an
aggregate of three hundred thousand (300,000) shares of its Series B Convertible
Preferred Stock (the "Shares");
WHEREAS, Purchasers desire to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to Purchasers
on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION OF SHARES. On or prior to the Closing (as
defined in Section 2 below), the Company shall have authorized (i) the sale and
issuance to Purchasers of the Shares and (ii) the issuance of shares of Common
Stock to be issued upon conversion of the Shares (the "Conversion Shares"). The
Shares shall have the rights, preferences, privileges and restrictions set forth
in the Certificate of Designations in the form attached hereto as Exhibit B (the
"Certificate of Designations").
1.2 SALE AND PURCHASE. Subject to the terms and conditions
hereof, at the Closing (as hereinafter defined) the Company hereby agrees to
issue and sell to each Purchaser, severally and not jointly, and each Purchaser
agrees to purchase from the Company, severally and not jointly, the number of
Shares set forth opposite such Purchaser's name on Exhibit A, at a purchase
price of $89.25 per share, such price per share determined based on the average
of the closing bid price for the five days preceding the Closing Date as
reported on the American Stock Exchange multiplied by the number of shares of
Common Stock into which each Share is initially convertible as set forth in the
Certificate of Designations.
1.
2. CLOSING, DELIVERY AND PAYMENT.
2.1 CLOSING. The closing of the sale and purchase of the
Shares under this Agreement (the "Closing") shall take place at 10:00 a.m. on
the date each of the conditions to closing set forth in Section 5 hereof have
occurred, at the offices of Xxxxxx Godward LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx
0000, Xxx Xxxxx, XX 00000 or at such other time or place as the Company and
Purchasers may mutually agree (such date is hereinafter referred to as the
"Closing Date"). Payment for the Shares and delivery of the stock certificates
representing the Shares shall take place no later than five (5) business days
after the Closing Date (the "Settlement Date") and in accordance with Section
2.2 below.
2.2 DELIVERY AND SETTLEMENT. On the Settlement Date, subject
to the terms and conditions hereof, the Company will deliver to the Purchasers
certificates representing the number of Shares to be purchased at the Closing by
each Purchaser, against payment of the purchase price therefor by check, wire
transfer made payable to the order of the Company, cancellation of indebtedness
or any combination of the foregoing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to each Purchaser as of the
date of this Agreement as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement and to issue and sell the Shares and the Conversion Shares and to
carry out the provisions of this Agreement and the Certificate of Designations
and to carry on its business as presently conducted and as presently proposed to
be conducted. The Company is duly qualified and is authorized to do business and
is in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
do so would not have a material adverse effect on the assets, liabilities,
financial condition, regulatory condition, capital, properties, results of
operations or prospects of the Company or its business (a "Material Adverse
Effect").
3.2 SUBSIDIARIES. The Company owns no equity securities of any
other corporation, limited partnership or similar entity. The Company is not a
participant in any joint venture, partnership or similar arrangement.
3.3 CAPITALIZATION; VOTING RIGHTS. The authorized capital
stock of the Company, immediately prior to the Closing, will consist of
35,000,000 shares of Common Stock, (par value $ .001) per share, 10,205,697
shares of which are issued and outstanding as of the date of this Agreement,
5,000,000 shares of Preferred Stock, (par value $ .001) per share, 300,000 of
which are designated Series A Preferred Stock, 210,047 of which are issued and
outstanding as of the date of this Agreement and 300,000 of which are designated
Series B Preferred Stock, none of which are issued and outstanding as of the
date of this Agreement. All issued and outstanding shares of the Company's
Common Stock (a) have been duly authorized and validly
2.
issued and (b) are fully paid and nonassessable. The rights, preferences,
privileges and restrictions of the Shares are as stated in the Certificate of
Designations; all such rights, preferences, privileges and restrictions are
valid, binding and enforceable against the Company and in accordance with
applicable laws. The Conversion Shares have been duly and validly reserved for
issuance. Other than the 977,310 shares reserved for issuance under the
Company's 1993 Long Term Incentive Plan and outstanding warrants to purchase an
aggregate of 3,293,494 shares of Common Stock and 41,909 shares reserved for
issuance under the Company's 401(k) plan, there are no outstanding options,
warrants, rights (including conversion or preemptive rights and rights of first
refusal), proxy or shareholder agreements, or agreements of any kind authorized
or outstanding for the purchase or acquisition from the Company of any of its
securities or any interest therein. Except as set forth herein, there is no
commitment by the Company to issue shares, subscriptions, warrants, options,
convertible securities, or other such rights or to distribute to holders of any
of its equity securities any evidence of indebtedness or asset. The Company has
no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interest therein or to pay any dividend
(other than dividends payable on the Shares) or to make any other distribution
in respect thereof. When issued in compliance with the provisions of this
Agreement and the Certificate of Designations, the Shares and the Conversion
Shares will be validly issued, fully paid and nonassessable, and will be free of
any liens or encumbrances; provided, however, that the Shares and the Conversion
Shares may be subject to restrictions on transfer under state and/or federal
securities laws as set forth herein or as otherwise required by such laws at the
time a transfer is proposed.
3.4 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action
on the part of the Company, its officers, directors and shareholders necessary
for the authorization of this Agreement, the performance of all obligations of
the Company hereunder at the Closing and the authorization, sale, issuance and
delivery of the Shares pursuant hereto and the Conversion Shares pursuant to the
Certificate of Designations has been taken or will be taken prior to the
Closing. The Agreement when executed and delivered, will be valid and binding
obligations of the Company enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors' rights;
(b) general principles of equity that restrict the availability of equitable
remedies; and (c) to the extent that the enforceability of the indemnification
provisions in Section 6.2 may be limited by applicable laws. The sale of the
Shares and the subsequent conversion of the Shares into Conversion Shares are
not and will not be subject to any preemptive rights or rights of first refusal
that have not been properly waived or complied with.
3.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has made available to each Purchaser a
complete and accurate copy (excluding copies of exhibits) of the Company's (i)
Annual Report of Form 10-K for the year ended September 30, 1998, (ii) Quarterly
Reports on Form 10-Q for the quarters ended December 31, 1998, March 31, 1999
and June 30, 1999, (iii) Proxy Statement on Schedule 14A dated January 13, 1999,
and (iv) Proxy Statement on Schedule 14A dated June 1, 1999, each filed by the
Company with the Securities and Exchange Commission ("SEC") (collectively, the
"Company SEC Documents"). The Company SEC Documents (i) complied with the
requirements of the Securities Act or the Exchange Act, as the case may be, at
and as of
3.
the times they were filed (or, if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing), (ii) were filed in a
timely manner, and (iii) did not at and as of the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
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.
(b) Each of the sets of financial statements (including,
in each case, any related notes thereto) contained in the Company SEC Documents
(collectively, the "Past Financial Statements") including the Company's
unaudited consolidated balance sheet as of June 30, 1999 (the "June Balance
Sheet") (i) complied as to form in all material respects with the published
rules and regulations of the SEC applicable thereto; (ii) was prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered (except as may be indicated in the notes
thereto and, in the case of unaudited interim financial statements, as permitted
by Form 10-Q of the SEC, and except that unaudited financial statements may not
contain footnotes and are subject to year-end audit adjustments which are not
expected to be material in amount) and (iii) fairly presents the financial
position of the Company as at the respective dates thereof and the results of
operations of the Company and cash flows for the periods indicated.
3.6 LIABILITIES. The Company has no material liabilities and,
to the best of its knowledge, knows of no material contingent liabilities not
disclosed in the Past Financial Statements, except current liabilities incurred
in the ordinary course of business subsequent to the June Balance Sheet which
have not been, either in any individual case or in the aggregate, materially
adverse.
3.7 CHANGES. Since the June Balance Sheet, there has not been:
(a) Any change in the assets, liabilities, financial
condition or operations of the Company from that reflected in the Past Financial
Statements, other than changes in the ordinary course of business, none of which
individually or in the aggregate has had or is expected to have a Material
Adverse Effect;
(b) Any resignation or termination of any key officers of
the Company; and the Company, to the best of its knowledge, does not know of the
impending resignation or termination of employment of any such officer;
(c) Any material change in the contingent obligations of
the Company by way of guaranty, endorsement, indemnity, warranty or otherwise;
(d) Any damage, destruction or loss, whether or not
covered by insurance, which has a Material Adverse Effect;
(e) Any waiver by the Company of a valuable right or of a
material debt owed to it;
4.
(f) Any direct or indirect loans made by the Company to
any shareholder, employee, officer or director of the Company, other than
advances made in the ordinary course of business;
(g) Any material change in any compensation arrangement or
agreement with any officer, director or shareholder of the Company;
(h) Any declaration or payment of any dividend or other
distribution of the assets of the Company, except for dividends due on the
Company's Series A Preferred Stock;
(i) Any labor organization activity involving the
Company's employees;
(j) Any debt, obligation or liability (absolute, accrued
or contingent) incurred, assumed or guaranteed by the Company, except those for
immaterial amounts and for current liabilities incurred in the ordinary course
of business;
(k) Any sale, assignment, pledge or transfer of tangible
assets or any patents, trademarks, copyrights, trade secrets or other intangible
assets;
(l) Any change in any material agreement to which the
Company is a party or by which it is bound which has a Material Adverse Effect;
or
(m) Any other event or condition of any character that,
either individually or cumulatively, has a Material Adverse Effect.
3.8 PATENTS AND TRADEMARKS.
(a) To the best of its knowledge, the Company owns or
possesses sufficient rights under all material patents, patent rights,
trademarks, copyrights, licenses, inventions, trade secrets, trade names and
know-how (collectively, "Intellectual Property") described or referred to in the
Company SEC Documents as owned or used by it or that are necessary for the
conduct of its business as now conducted, (ii) the Company has not received any
notice of, or has no knowledge of, any infringement of or conflict with asserted
rights of the Company by others with respect to any Intellectual Property, and
(iii) the Company has not received any notice of, or has no knowledge of, any
infringement of or conflict with asserted rights of a third party with respect
to any Intellectual Property.
(b) In addition to the foregoing, the Company is unaware
of any facts which would preclude the Company from having clear title to the
patents and patent applications referred to or described in the Company SEC
Documents (the "Maxamine Patents"). The Company has complied with the Patent and
Trademark Office ("PTO") duty of candor and good faith in dealing with the PTO,
including the duty to disclose to the PTO all information known to be material
to the patentability of each of such United States patents and patent
applications. To the best of its knowledge, all assignments from each named
inventor to the Company have been executed and recorded with the PTO for each
Maxamine Patent. To the best of its knowledge, the Company has maintained all
rights with respect to the Maxamine Patents. The Company has
5.
no reason to believe that any of the claims of the Maxamine Patents is
unpatentable, unenforceable or invalid. The Company is not aware of any pending
U.S. or foreign patent applications which, if issued, would limit, prohibit or
materially affect the business now conducted or proposed to be conducted by the
Company as described in the Company SEC Document. The Company is not aware of
any facts which would form the basis for a belief that the products or processes
of any third party infringe the claims of any Maxamine Patent.
(c) The Company is unaware of any legal or governmental
proceedings pending relating to the Maxamine Patents, other than PTO review of
pending applications for patents, including appeal proceedings, and, to the best
of its knowledge, no such proceedings are threatened or contemplated by
governmental authorities or others.
(d) The Company is unaware of any contracts or other
documents material to the Company's Maxamine Patents or Intellectual Property
other than those described in the Company SEC Documents.
3.9 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of (i) any term of its Certificate of Incorporation or
Bylaws, each as amended to date, (ii) any provision of any mortgage, indenture,
contract, agreement, instrument or contract to which it is party or by which it
is bound or of any judgment, decree, order, writ, except such violations or
defaults which, alone or in the aggregate, do not have a Material Adverse
Effect, or (iii) to its knowledge, any statute, rule or regulation applicable to
the Company, except such violations or defaults which, alone or in the
aggregate, would not have a Material Adverse Effect. The execution, delivery,
and performance of and compliance with this Agreement and the issuance and sale
of the Shares pursuant hereto and of the Conversion Shares pursuant to the
Certificate of Designations, will not, with or without the passage of time or
giving of notice, result in any such violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.
3.10 LITIGATION. There is no action, suit, proceeding or
investigation pending or to the Company's knowledge currently threatened against
the Company that questions the validity of this Agreement or the right of the
Company to enter into this Agreement, or to consummate the transactions
contemplated hereby, or which might result, either individually or in the
aggregate, in a Material Adverse Effect, or any change in the current equity
ownership of the Company, nor is the Company aware that there is any basis for
the foregoing. There is no action or suit by the Company pending, threatened or
contemplated against others.
3.11 REGISTRATION RIGHTS. Except for National Securities
Corporation, HealthCap KB and as set forth in (i) Section 6 of the Series A
Convertible Preferred Stock Purchase Agreement, dated as of July 20, 1999, among
the Company and the purchasers of the Company's outstanding Series A Convertible
Preferred Stock (the "Series A Purchase Agreement") and (ii) Section 6 of this
Agreement, the Company is presently not under any obligation, and has not
granted any rights, to register any of the Company's presently outstanding
securities or any of its securities that may hereafter be issued.
6.
3.12 COMPLIANCE WITH LAWS; PERMITS. To its knowledge, the
Company is not in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties, except such violations which, alone or in the aggregate, do not have
a Material Adverse Effect. No governmental orders, permissions, consents,
approvals or authorizations are required to be obtained and no registrations or
declarations are required to be filed in connection with the execution and
delivery of this Agreement and the issuance of the Shares or the Conversion
Shares, except such as has been duly and validly obtained or filed, or with
respect to any filings that must be made after the Closing, as will be filed in
a timely manner. The Company has all franchises, permits, licenses and any
similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could have a Material Adverse Effect and
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as planned to be conducted.
3.13 OFFERING VALID. Assuming the accuracy of the
representations and warranties of the Purchasers contained in Section 4.2
hereof, the offer, sale and issuance of the Shares and the Conversion Shares
will be exempt from the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act") and will have been registered or qualified (or
are exempt from registration and qualification) under the registration, permit
or qualification requirements of all applicable state securities laws.
3.14 OTHER AGREEMENTS. Except as set forth under the Company
SEC Documents, the Company is not a party to or otherwise bound by any written
or oral agreement, instrument, commitment or restriction which individually
could reasonably be expected to have a Material Adverse Effect or any other
written or oral:
(a) agreement with any labor union representing employees
of the Company;
(b) agreement for the future purchase of fixed assets or
for the future purchase of materials, supplies or equipment in excess of its
normal operating requirements;
(c) agreement relating to the borrowing of money or to the
mortgaging or pledging of, or otherwise placing a lien or security interest on,
any asset of the Company;
(d) guaranty of any obligations for borrowed money or
otherwise;
(e) other agreement, instrument, commitment, plan or
arrangement, a copy of which would be required to be filed with the SEC as an
exhibit to a registration statement on Form S-1 if the Company were registering
securities under the Securities Act.
The Company, and to the best of its knowledge, each other party thereto have in
all material respects performed all the obligations required to be performed by
them to date (or each non-performing party has received a valid, enforceable and
irrevocable written waiver with respect to its non-performance), have received
no notice of default and are not in default (with due notice or elapse of time
or both) under any agreement, instrument, commitment or plan or arrangement to
which the Company is a party or by which it or its property may be bound except
such
7.
defaults which, alone or in the aggregate, are not reasonably expected to have a
Material Adverse Effect. The Company has no present expectation or intention of
not performing all its material obligations under each such agreement,
instrument, commitment, plan or arrangement, and the Company has no knowledge of
any breach or anticipated breach by the other party to any agreement,
instrument, commitment, plan or arrangement to which the Company is a party
except for such breaches which, alone or in the aggregate, are not reasonably
expected to have a Material Adverse Effect. The Company is in compliance with
all of the material terms of its Charter and By-Laws, as amended.
3.15 DISCLOSURE. Neither this Agreement, nor any Schedule or
Exhibit to this Agreement, nor any documents furnished or made available to the
Purchasers relating to this Agreement, contains any material misstatement of
fact or omits to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances under which they are
made, not misleading. None of the statements, documents, certificates or other
items prepared or supplied by the Company with respect to the transactions
contemplated hereby contains any material misstatement of fact or omits to state
a material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading. There is no fact
which the Company has not disclosed to the Purchasers and their counsel and of
which the Company is aware which, alone or in the aggregate is reasonably
expected to have a Material Adverse Effect. The financial projections and other
estimates contained in any documents furnished to the Purchasers relating to
this Agreement were prepared by the Company based on the Company's experience in
the industry and on assumptions of fact and opinions as to future events which
the Company believed to be reasonable, but which the Company cannot and does not
assure or guarantee the attainment of in any manner. As of the date hereof, no
facts have come to the attention of the Company which would, in its opinion,
require the Company to materially revise or amplify the assumptions underlying
such projections and other estimates or the conclusions derived therefrom.
3.16 OFFERING OF SHARES. Neither the Company nor any person
authorized or employed by the Company as agent, broker, dealer or otherwise in
connection with the offering or sale of the Shares or any security of the
Company similar to the Shares has offered the Shares or any such similar
security for sale to, or solicited any offer to buy the Shares or any such
similar security from, or otherwise approached or negotiated with respect
thereto with, any person or persons, and neither the Company nor any person
acting on its behalf has taken or will take any other action (including, without
limitation, any offer, issuance or sale of any security of the Company under
circumstances which might require the integration of such security with the
Shares under the Securities Act or the rules and regulations of the SEC
thereunder), in either case so as to subject the offering, issuance or sale of
the Shares to the registration provisions of the Securities Act.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Company as
follows:
4.1 REQUISITE POWER AND AUTHORITY. Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver and to perform its obligations under this Agreement. All action on
Purchaser's part required for the lawful
8.
execution and delivery of this Agreement have been or will be effectively taken
prior to the Closing. Upon their execution and delivery, this Agreement will be
valid and binding obligation of Purchaser, enforceable in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights and (b) general principles of equity that
restrict the availability of equitable remedies.
4.2 INVESTMENT REPRESENTATIONS. Purchaser understands that
neither the Shares nor the Conversion Shares have been registered under the
Securities Act. Purchaser also understands that the Shares are being offered and
sold pursuant to an applicable exemption from registration contained in the
Securities Act based in part upon Purchaser's representations contained in the
Agreement. Purchaser hereby represents and warrants as follows:
(a) PURCHASER BEARS ECONOMIC RISK. Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company and
has the capacity to protect its own interests. Purchaser must bear the economic
risk of this investment indefinitely unless the Shares (or the Conversion
Shares) are registered pursuant to the Securities Act, or an exemption from
registration is available. Purchaser understands that, except as set forth in
this Agreement, the Company has no present intention of registering the Shares,
the Conversion Shares or any shares of its Common Stock. Purchaser also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow Purchaser to transfer all or any portion of the Shares
or the Conversion Shares under the circumstances, in the amounts or at the times
Purchaser might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring
the Shares and the Conversion Shares for Purchaser's own account for investment
only, and not with a view towards their distribution.
(c) PURCHASER CAN PROTECT ITS INTEREST. Purchaser
represents that by reason of its, or of its management's, business or financial
experience, Purchaser has the capacity to protect its own interests in
connection with the transactions contemplated in this Agreement, and the Related
Agreements. Further, Purchaser is aware of no publication of any advertisement
in connection with the transactions contemplated in the Agreement.
(d) ACCREDITED INVESTOR. Purchaser represents that it is
an accredited investor within the meaning of Regulation D under the Securities
Act.
(e) COMPANY INFORMATION. Purchaser has received and read
the Company SEC Reports and the Past Financial Statements and has had an
opportunity to discuss the Company's business, management and financial affairs
with directors, officers and management of the Company and has had the
opportunity to review the Company's operations and facilities. Purchaser has
also had the opportunity to ask questions of and receive answers from the
Company and its management regarding the terms and conditions of this
investment.
9.
(f) RULE 144. Purchaser acknowledges and agrees that the
Shares, and, if issued, the Conversion Shares must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act as in effect from
time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.
(g) RESIDENCE. If the Purchaser is an individual, then the
Purchaser resides in the state, province or country identified in the address of
the Purchaser set forth on Exhibit A; if the Purchaser is a partnership,
corporation, limited liability company or other entity, then the office or
offices of the Purchaser in which its investment decision was made is located at
the address or addresses of the Purchaser set forth on Exhibit A.
4.3 ADDITIONAL REGULATION S REPRESENTATIONS. Each Purchaser
who is not a resident of the United States also represents as follows:
(a) Purchaser certifies that he, she or it is neither a
citizen nor a resident of the United States and that his, her or its address set
forth on Schedule A of this Agreement is correct.
(b) No public offer or solicitation of the Shares was made
to such Purchaser and no offer of the Shares was made to such Purchaser while
such purchaser was present in the United States.
(c) At the time any buy order for the Shares was
originated, such Purchaser was located outside the United States and is outside
the United States on the date of the execution and delivery of this Agreement
and will be outside the United States on the Closing Date.
(d) Purchaser is aware that the Shares and the Conversion
Shares have not been registered under the Securities Act and may only be offered
or sold pursuant to registration under the Securities Act or an available
exemption therefrom, and such Purchaser has not, and will not, engage in any
public offering or distribution of the Shares or Conversion Shares or engage in
any hedging transaction with respect thereto, except in accordance with the
registration or exemption provisions of the Securities Act.
(e) Except to the extent the Shares or Conversion Shares
have been registered under the Securities Act, such Purchaser (i) will not,
during the period commencing on the Closing Date and ending one year after the
Closing Date (the "Distribution Compliance Period"), offer or sell or agree to
sell the Shares or Conversion Shares in the United States, to a U.S. Person (as
defined in Regulation S promulgated under the Securities Act ("Regulation S"))
or for the account or benefit of a U.S. Person other than in accordance with
Regulation S, and (ii) will, after the expiration of the Distribution Compliance
Period, offer, sell, pledge or otherwise transfer the Shares or Conversion
Shares only pursuant to registration under the Securities Act or
10.
an available exemption therefrom and, in any case, in accordance with applicable
United States federal and state securities laws.
(f) Purchaser has been advised of, and is familiar with,
has complied, and will comply, with the offering restrictions, and any other
requirements of Regulation S.
(g) The transactions contemplated by this Agreement (i)
have not been pre-arranged by Purchaser with the view to sell or transfer the
Shares or Conversion Shares to another purchaser located in the United Stated
who is a U.S. Person, and (ii) are not part of a plan or scheme by Purchaser to
evade the registration provisions of the Securities Act.
(h) Neither Purchaser nor any of his, her or its
affiliates has entered, has the intention of entering, or will during the
Distribution Compliance Period enter into, with any U.S. Person, any put option,
short position or other similar instrument or position with respect to the
Shares or Conversion Shares or participate in any other attempt designed to
lower the trading prices of the Shares or Conversion Shares.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING. Each
Purchaser's obligation to purchase the Shares at the Closing are subject to the
satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in Section 3
hereof shall be true and correct (except to the extent that the aggregate of all
inaccuracies and breaches thereof would not have a Material Adverse Effect) as
of the Closing Date (except to the extent such representations specifically
relate to an earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date, and in any event subject to
the foregoing materiality qualification) with the same force and effect as if
they had been made as of the Closing Date, and the Company shall have performed
all obligations and conditions herein required to be performed or observed by it
on or prior to the Closing.
(b) LEGAL INVESTMENT. On the Closing Date, the sale and
issuance of the Shares and the proposed issuance of the Conversion Shares shall
be legally permitted by all laws and regulations to which Purchasers and the
Company are subject.
(c) CONSENTS, PERMITS, AND WAIVERS. As of the Closing
Date, the Company shall have obtained any and all consents, permits and waivers
necessary or appropriate for consummation of the transactions contemplated by
the Agreement (except for such as may be properly obtained subsequent to the
Closing).
(d) FILING OF CERTIFICATE OF DESIGNATIONS. On the
Settlement Date, the Certificate of Designations shall have been filed with the
Secretary of State of the State of Delaware.
(e) RESERVATION OF CONVERSION SHARES. As of the Closing
Date, the Conversion Shares issuable upon conversion of the Shares shall have
been duly authorized and reserved for issuance upon such conversion.
11.
(f) LEGAL OPINION. On the Settlement Date, the Purchasers
shall have received from legal counsel to the Company an opinion addressed to
them, dated as of the Settlement Date, in substantially the form attached hereto
as Exhibit C.
(g) COMPLIANCE CERTIFICATE. The Company shall have
delivered a certificate, executed by the President of the Company, dated the
Settlement Date, stating that the conditions set forth in paragraphs (a), (c),
(d), (e) and (f) have been complied with and that between the date of execution
of this Agreement and the Settlement Date, there has been no material adverse
change affecting the Company or its business which, alone or in the aggregate,
shall have a Material Adverse Effect.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at the Closing is subject to the
satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties made by those Purchasers acquiring Shares in
Section 4 hereof shall be true and correct (except to the extent that the
aggregate of all inaccuracies and breaches thereof would not have a Material
Adverse Effect) at the Closing Date (except to the extent such representations
specifically relate to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date, and in any event
subject to the foregoing materiality qualification), with the same force and
effect as if they had been made on and as of said date.
(b) PERFORMANCE OF OBLIGATIONS. Such Purchasers shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by such Purchasers on or before the Closing.
(c) FILING OF CERTIFICATE OF DESIGNATIONS. On the
Settlement Date, the Certificate of Designations shall have been filed with the
Secretary of State of the State of Delaware.
(d) CONSENTS, PERMITS, AND WAIVERS. As of the Closing
Date, the Company shall have obtained any and all consents, permits and waivers
necessary or appropriate for consummation of the transactions contemplated by
the Agreement (except for such as may be properly obtained subsequent to the
Closing).
6. REGISTRATION.
6.1 REGISTRATION REQUIREMENTS.
(a) The Company shall prepare and file, not later than
thirty (30) days after the Closing Date, a registration statement on Form S-3 or
another available form (the "Registration Statement") with the SEC under the
Securities Act to register the resale of the Conversion Shares by the Purchasers
and thereafter shall use its best efforts to secure effectiveness of the
Registration Statement within ninety (90) days after the Closing Date. In the
event the Company fails to secure effectiveness of the Registration Statement
within ninety (90) days after the Closing Date, the dividend rate on the Series
B Preferred shall be increased to 15% per annum for the period the Registration
Statement remains ineffective, and at such time as the
12.
Registration Statement becomes effective, the dividend rate on the Series B
Preferred shall revert to 12% per annum. In order to have shares included in the
Registration Statement, each Purchaser must complete and deliver to the Company
not later than ten (10) days after the Closing, a Registration Statement
Questionnaire in the form attached hereto as Exhibit D.
(b) The Company shall pay all Registration Expenses (as
defined below) in connection with any registration, qualification or compliance
hereunder, and each Purchaser shall pay all of its respective Selling Expenses
(as defined below) and other expenses that are not Registration Expenses
relating to the Shares resold by such Purchaser. "Registration Expenses" shall
mean all expenses, except for Selling Expenses, incurred by the Company in
complying with the registration provisions herein described, including, without
limitation, all registration, qualification and filing fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, blue sky fees
and expenses and the expense of any special audits incidents to or required by
any such registration. "Selling Expenses" shall mean all selling commissions,
underwriting fees and stock transfer taxes applicable to the Conversion Shares
and all fees and disbursements of counsel for any Purchaser.
(c) In the case of the registration effected by the
Company pursuant to these registration provisions, the Company will use its
reasonable best efforts to: (i) keep such registration effective until the
earlier of (A) such date as all of the Conversion Shares have been resold or (B)
the date on which each Purchaser is entitled to sell all of its Conversion
Shares pursuant to Rule 144(k) promulgated under the Securities Act; (ii)
prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all Conversion Shares covered
by the Registration Statement; (iii) cause the Conversion Shares to be listed on
each securities exchange and quoted on each quotation service on which similar
securities issued by the Company are then listed or quoted; (iv) provide a
transfer agent and registrar for all Conversion Shares registered pursuant to
the Registration Statement and a CUSIP number for all such Conversion Shares;
(v) comply with all applicable rules and regulations of the SEC governing such
registration; and (vi) file the documents required of the Company by, and
otherwise use its reasonable best efforts to maintain requisite blue sky
clearance in, (X) all jurisdictions in which any of the Shares are originally
sold and (Y) all other states specified in writing by a Purchaser; provided,
however, that as to clause (Y), the Company shall not be required to qualify to
do business or consent to service of process in any state in which it is now so
qualified or has not so consented.
(d) The Company shall furnish to each Purchaser upon
request a reasonable number of copies of a supplement to or an amendment of the
prospectus used in connection with the Registration Statement as may be
necessary in order to facilitate the public sale or other disposition of all or
any of the Conversion Shares held by the Purchaser.
(e) With a view to making available to the Purchasers the
benefit of Rule 144 and Form S-3 and any other rule or regulation of the SEC
that may at any time permit a Purchaser to sell shares to the public without
registration, the Company covenants and agrees to use its reasonable best
efforts to: (i) make and keep public information available, as those terms are
understood and defined in Rule 144, until the earlier of (A) the date on which
each Purchaser is entitled to sell all of its Conversion Shares pursuant to Rule
144(k) promulgated under the
13.
Securities Act or (B) such date as all of the Conversion Shares shall have been
resold; (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act; and furnish to any
Purchaser upon request, as long as the Purchaser owns any Shares or Conversion
Shares, (A) a written statement by the Company that it has complied with the
reporting requirement of the Exchange Act, (B) a copy of the most recent annual
or quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail any Purchaser of any rule or regulation
of the SEC that permits the selling of any such Shares or Conversion Shares
without registration or pursuant to such registration statement on Form S-3.
(f) The Company may suspend the use of the Registration
Statement and refuse to permit the Purchasers to resell any Conversion Shares
pursuant to the Registration Statement for a period not to exceed 20 days in any
twelve month period; PROVIDED, HOWEVER, that in order to exercise this right,
the Company must notify the Purchasers to the effect that such action is
necessary because there then exists material, non-public information relating to
the Company, which, in the reasonable opinion of the board of directors of the
Company would not be appropriate for disclosure during that time. In such an
event, the Company shall use its best efforts to amend the Registration
Statement as necessary and to take all other actions necessary to allow such
sales and shall notify the Purchasers promptly after it has determined that such
sales have become permissible.
6.2 INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Purchaser from and against any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) to which such Purchaser may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, on the effective date
thereof, the omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, any violation by the
Company of any rule or regulation promulgated under the Securities Act, the
Exchange Act or state securities laws applicable to the Company in connection
with such registration, or arise out of any failure by the Company to fulfill
any undertaking included in the Registration Statement, and the Company will, as
incurred, reimburse such Purchaser for any reasonable legal or other expenses
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim; PROVIDED, HOWEVER, that the Company shall not be liable in
any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon (i) an untrue statement made in such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Purchaser specifically for use in
preparation of the Registration Statement, (ii) the failure of such Purchaser to
comply with the covenants and agreements contained in Section 6.3 hereof, or
(iii) any untrue statement in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to the Purchaser prior to the pertinent sale or
sales by the Purchaser.
(b) Each Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company from and against any losses, claims,
damages or liabilities (or
14.
actions or proceedings in respect thereof) to which the Company may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon an untrue statement made in such Registration Statement in
reliance upon and in conformity with written information furnished by such
Purchaser on Exhibit D hereto for use in preparation of the Registration
Statement; PROVIDED, HOWEVER, that no Purchaser shall be liable in any such case
for any untrue statement included in any Prospectus which statement has been
corrected, in writing, by such Purchaser and delivered to the Company before the
sale from which such loss occurred, and each Purchaser, severally and not
jointly, will, as incurred, reimburse the Company for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim; PROVIDED, FURTHER, HOWEVER, that in no
event shall any indemnity under this Section 6.2(b) exceed the net proceeds from
the offering received by the applicable Purchaser or Purchasers from the sale of
the Conversion Shares.
(c) Promptly after receipt by any indemnified person of a
notice of a claim to the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this Section 6.2,
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, and subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and the indemnifying person shall have been notified thereof,
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified person. After notice from the
indemnifying person to such indemnified person of the indemnifying person's
election to assume the defense thereof, the indemnifying person shall not be
liable to such indemnified person for any legal expense subsequently incurred by
such indemnified person in connection with the defense thereof; PROVIDED,
HOWEVER, that if there exists or shall exist a conflict of interest that would
make it inappropriate in the reasonable judgment of the indemnified person for
the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person.
No indemnifying person shall, without the prior written consent of the
indemnified person (which consent shall not be unreasonably withheld), effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification could have
been sought hereunder by such indemnified party.
(d) The obligations of the Company and the Purchasers
under this Section 6.2 shall be in addition to any liability which the Company
and each respective Purchaser may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls the Company or any
Purchaser within the meaning of the Securities Act.
(e) In order to provide for just and equitable
contribution to joint liability in any case in which a claim for indemnification
is made pursuant to this Section 6 but it is judicially determined (by entry of
a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding that this
Section 6 provides for indemnification in such case, the Company and each
Purchaser shall contribute to the
15.
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in proportion to the relative fault of the
Company on the one hand, and the Purchasers, severally, on the other hand;
provided, however, that in any such case, no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity who
was no guilty of such fraudulent misrepresentation and; provided, further, that
in no event shall any contribution under this Section 6.2(e) on the part of any
seller exceed the net proceeds received by such seller from the sale of
Conversion Shares.
6.3 TRANSFER OF CONVERSION SHARES AFTER REGISTRATION. Each
Purchaser hereby covenants with the Company not to make any sale of the
Conversion Shares except either (a) in accordance with the Registration
Statement, in which case the Purchaser covenants to comply with the requirements
of delivering a current prospectus, (b) in accordance with Rule 144, in which
case Purchaser covenants to comply with Rule 144, or (c) subject to such
conditions as the Company shall reasonably impose, in accordance with another
exemption from the registration requirements of the Securities Act. Each
Purchaser also covenants that it will not make any sale of the Conversion Shares
pursuant to the Registration Statement during any period in which the Company
has suspended use of the Registration Statement pursuant to Section 6.1(f) of
this Agreement. Each Purchaser further acknowledges and agrees that such
Conversion Shares are not transferable on the books of the Company unless the
certificate submitted to the Company's transfer agent evidencing such Conversion
Shares is accompanied by such additional certification, documentation or
information as the Company shall reasonably require in order to effect such sale
in accordance with the Registration Statement, Rule 144 or such other exemption
from the registration requirements of the Securities Act.
6.4 ADDITIONAL PURCHASER COVENANTS. Each Purchaser covenants
that it will promptly notify the Company of any changes in the information set
forth in the Registration Statement regarding such Purchaser or such Purchaser's
"Plan of Distribution," including, without limitation, the information contained
in the Registration Statement Questionnaire attached hereto as Exhibit D
relating to such Purchaser. Each Purchaser shall provide the Company in writing
with such change or additional information necessary so that the information set
forth in the Registration Statement regarding such Purchaser will be true and
correct as of the effective date of the Registration Statement and until the
Company is no longer required to keep the Registration Statement effective
pursuant to Section 6.1(c) of this Agreement.
6.5 TERMINATION. All registration rights granted under this
Section 6 shall expire and be of no further force and effect if all Shares or
Conversion Shares held by or issuable to each Purchaser (and its affiliates,
partners, former partners, members and former members) may be sold under Rule
144(k) promulgated under the Securities Act.
7. RIGHTS OF FIRST REFUSAL
7.1 SUBSEQUENT OFFERINGS. Each Purchaser shall have a right of
first refusal to purchase its PRO RATA share of all Equity Securities, as
defined below, that the Company may, from time to time, propose to sell and
issue after the date of this Agreement, other than the Equity Securities
excluded by Section 7.4 hereof. Each Purchaser's PRO RATA share is equal to the
16.
ratio of (a) the number of shares of the Common Stock issuable upon conversion
of the Shares (and excluding those shares of Common Stock already issued upon
conversion of the Shares and any other Common Stock acquired by a Purchaser
other than under this Agreement) which such Purchaser is deemed to be a holder
immediately prior to the issuance of such Equity Securities to (b) the total
number of shares of the Company's outstanding Common Stock (including all shares
of Common Stock issued or issuable upon conversion of the Shares or upon the
exercise of any outstanding warrants or options) immediately prior to the
issuance of the Equity Securities. The term "Equity Securities" shall mean (i)
any Common Stock, Preferred Stock or other security convertible, with or without
consideration, into any Common Stock or Preferred Stock (including any option to
purchase such a convertible security), (ii) any security carrying any warrant or
right to subscribe to or purchase any Common Stock or Preferred Stock or (iii)
any such warrant or right.
7.2 Exercise of Rights. If the Company proposes to issue any
Equity Securities, it shall give each Purchaser written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Purchaser shall have fifteen
(15) days from the giving of such notice to agree to purchase its PRO RATA share
of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to any Purchaser who would cause the Company to be in violation of
applicable federal securities laws by virtue of such offer or sale.
7.3 Issuance of Equity Securities to Other Persons. If the
Purchasers do not exercise in full the rights of first refusal, the Company
shall have ninety (90) days thereafter to sell the Equity Securities in respect
of which the Purchaser's rights were not exercised, at a price and upon general
terms and conditions materially no more favorable to the purchasers thereof than
specified in the Company's notice to the Purchaser's pursuant to Section 7.2
hereof. If the Company has not sold such Equity Securities within ninety (90)
days of the notice provided pursuant to Section 7.2, the Company shall not
thereafter issue or sell any Equity Securities, without first offering such
securities to the Purchaser's in the manner provided above.
7.4 Excluded Securities. The rights of first refusal
established by this Section 8 shall have no application to any of the following
Equity Securities:
(a) any shares of Common Stock (and/or options, warrants
or other Common Stock purchase rights and shares of Common Stock issued upon the
exercise or conversion thereof) issued or to be issued to employees, officers or
directors of, or consultants or advisors to the Company or any subsidiary of the
Company, pursuant to its 1993 Long Term Incentive Plan;
(b) stock issued pursuant to any rights or agreements
(including options or warrants) outstanding as of the date of this Agreement;
(c) any Equity Securities issued pursuant to any
acquisition by the Company;
17.
(d) shares of Common Stock issued in connection with any
stock split, stock dividend or recapitalization by the Company;
(e) shares of Common Stock issued upon conversion of the
Shares and/or the outstanding shares of the Company's Series A Convertible
Preferred Stock;
(f) any Equity Securities issued pursuant to any equipment
leasing arrangement, or debt financing from a bank or similar financial
institution;
(g) shares of the Company's Common Stock or Preferred
Stock issued in connection with any licensing arrangement entered into by the
Company, including strategic transactions involving the Company and other
entities, such as joint ventures, manufacturing, marketing or distribution
arrangements or technology transfer or development arrangements.
7.5 Termination of Rights of First Refusal. The rights of
first refusal established by this Section 4 shall terminate as to each Purchaser
at such time as all such Purchaser's Series B Preferred has been converted into
Common Stock
8. MISCELLANEOUS.
8.1 DIVIDEND GROSS-UP PAYMENT. The Company shall pay any and
all United States withholding tax on foreign persons imposed in connection with
dividends paid or payable on the Shares (including any United States withholding
tax imposed on such additional payments), and the amount of dividends otherwise
payable to a holder of Shares with respect to which the Company makes such a
payment shall not be reduced. The intention of this provision is that each
Purchaser who is a foreign person shall receive dividend payments from the
Company with respect to the Shares, net of United States withholding taxes,
equal to the dividend provided in the Certificate of Designations.
8.2 USE OF PROCEEDS. The Company shall use the proceeds from
the sale of the Shares to further current clinical trials, for other activities
associated with the commercialization of its product candidates and for general
corporate purposes.
8.3 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and performed entirely in
California.
8.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.
8.5 ENTIRE AGREEMENT. This Agreement, the Exhibits and
Schedules hereto and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.
18.
8.6 SEVERABILITY. In case any provision of the Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
8.7 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or modified only upon
the written consent of the Company and holders of at least fifty percent (50%)
of the Shares (treated as if converted and including any Conversion Shares into
which the Shares have been converted that have not been sold by such holder).
(b) The obligations of the Company and the rights of the
holders of the Shares and the Conversion Shares under this Agreement may be
waived only with the written consent of the holders of at least fifty percent
(50%) of the Shares (treated as if converted and including any Conversion Shares
into which the Shares have been converted that have not been sold by such
holder).
8.8 NOTICES. All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified; (b) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient, if not, then on the next
business day; (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the Company at the address as set forth on the signature page hereof and
to Purchaser at the address set forth on Exhibit A attached hereto or at such
other address as the Company or Purchaser may designate by ten (10) days advance
written notice to the other parties hereto.
8.9 EXPENSES. Each party shall pay all costs and expenses that
it incurs with respect to the negotiation, execution, delivery and performance
of this Agreement; provided, however, that the Company shall reimburse the
reasonable fees of and expenses of one special counsel for the Purchasers, not
to exceed $15,000.
8.10 ATTORNEYS' FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
8.11 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
8.12 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
19.
8.13 PRONOUNS. All pronouns contained herein, and any
variations thereof, shall be deemed to refer to the masculine, feminine or
neutral, singular or plural, as to the identity of the parties hereto may
require.
8.14 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE
COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION
BEING AVAILABLE.
20.
IN WITNESS WHEREOF, the parties hereto have executed the SERIES B
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY: PURCHASER:
MAXIM PHARMACEUTICALS, INC. ---------------------------
[PRINT NAME OF PURCHASER]
By: /s/ XXXXX X. XXXXXXXXX By:
-------------------------------- ------------------------
Xxxxx X. Xxxxxxxxx, President
Title:
---------------------
KEY HOLDERS:
/s/ XXXXX X. XXXXXXXXX
-----------------------------------
Xxxxx X. Xxxxxxxxx
/s/ XXXX X. XXXXXX
-----------------------------------
Xxxx X. Xxxxxx
/s/ XXXX X. XXXXXXX
-----------------------------------
Xxxx X. Xxxxxxx
MAXIM PHARMACEUTICALS, INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
MAXIM PHARMACEUTICALS, INC.
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE
----
1. Agreement To Sell And Purchase..........................................................................1
1.1 Authorization of Shares........................................................................1
1.2 Sale and Purchase..............................................................................1
2. Closing, Delivery And Payment...........................................................................2
2.1 Closing........................................................................................2
2.2 Delivery and Settlement........................................................................2
3. Representations And Warranties Of The Company...........................................................2
3.1 Organization, Good Standing and Qualification..................................................2
3.2 Subsidiaries...................................................................................2
3.3 Capitalization; Voting Rights..................................................................2
3.4 Authorization; Binding Obligations.............................................................3
3.5 SEC Filings; Financial Statements..............................................................3
3.6 Liabilities....................................................................................4
3.7 Changes........................................................................................4
3.8 Patents and Trademarks.........................................................................5
3.9 Compliance with Other Instruments..............................................................6
3.10 Litigation.....................................................................................6
3.11 Registration Rights............................................................................7
3.12 Compliance with Laws; Permits..................................................................7
3.13 Offering Valid.................................................................................7
3.14 Other Agreements...............................................................................7
3.15 Disclosure.....................................................................................8
3.16 Offering of Shares.............................................................................8
4. Representations And Warranties Of The Purchasers........................................................9
4.1 Requisite Power and Authority..................................................................9
4.2 Investment Representations.....................................................................9
4.3 Additional Regulation S Representations.......................................................10
5. Conditions To Closing..................................................................................11
5.1 Conditions to Purchasers' Obligations at the Closing..........................................11
5.2 Conditions to Obligations of the Company......................................................12
6. Registration...........................................................................................13
6.1 Registration Requirements.....................................................................13
6.2 Indemnification...............................................................................15
6.3 Transfer of Conversion Shares After Registration..............................................16
6.4 Additional Purchaser Covenants................................................................17
6.5 Termination...................................................................................17
7. Rights of First Refusal................................................................................17
8. Miscellaneous..........................................................................................19
8.1 Dividend Gross-Up Payment.....................................................................19
8.2 Use of Proceeds...............................................................................19
8.3 Governing Law.................................................................................19
8.4 Successors and Assigns........................................................................19
i.
PAGE
----
8.5 Entire Agreement..............................................................................19
8.6 Severability..................................................................................19
8.7 Amendment and Waiver..........................................................................19
8.8 Notices.......................................................................................20
8.9 Expenses......................................................................................20
8.10 Attorneys' Fees...............................................................................20
8.11 Titles and Subtitles..........................................................................20
8.12 Counterparts..................................................................................20
8.13 Pronouns......................................................................................20
8.14 California Corporate Securities Law...........................................................20
ii.
LIST OF EXHIBITS
Schedule of Purchasers Exhibit A
Certificate of Designations Exhibit B
Form of Legal Opinion Exhibit C
Registration Statement Questionnaire Exhibit D
1.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF PURCHASERS
SHARES OF COMMON STOCK INTO
SHARES OF WHICH THE SERIES B PREFERRED AGGREGATE
SERIES B IS CONVERTIBLE (AT THE INITIAL PURCHASE
NAME AND ADDRESS PREFERRED CONVERSION PRICE) PRICE
-------------------------------------------------- -------------- -------------------------------- ------------------
DVG Deutsche 33,613 336,130 $2,999,960.25
Vermogensbildungsgesellschaft mbH
Wechsler & Co., Inc. 3,361 33,610 $299,969.25
000 Xxxxx Xxxxxxx Xxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
DWS Investment GmbH 100,000 1,000,000 $8,925,000.00
Xxxxxxxxxxxx X0-000
00000 Xxxxxxxxx XX Xxxx
Xxxxxxx
Xxxxx Family Revocable Trust 952 9,520 $84,966.00
0000 Xxxx Xx., Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxx Enterprises 560 5,600 $49,980.00
0000 Xxxxxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
Xxxxxxx Xxxxxxxx 1,120 11,200 $99,960.00
000 Xxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Forsakringsbolaget SPP Omsesidigt 11,535 115,350 $1,029,498.75
Xxxxxxxxxxxxxx 000
00000 Xxxxxxxxx
Xxxxxx
Aries Master Fund 23,388 233,880 $2,087,379.00
x/x Xxxxxxxxx Xxxxxxx Xxxxx Management, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Aries Domestic Fund, L.P. 9,486 94,860 $846,625.50
x/x Xxxxxxxxx Xxxxxxx Xxxxx Management, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
1.
Aries Domestic Fund II, L.P. 739 7,390 $65,955.75
x/x Xxxxxxxxx Xxxxxxx Xxxxx Management, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Winchester Global Trust Company Limited 18,655 186,550 $1,664,958.75
as Trustee for Caduceus Capital Trust
Coduceus Capital Trust
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Caduceus Capital II L.P. 9,356 93,560 $835,023.00
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Clarion Capital Corporation 3,361 33,610 $299,969.25
0000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Xx. Xxxxxx X. Xxxxxxxx 2,240 22,400 $199,920.00
0 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxxx & Xxxxxx Xxxxx Family Trust 1,120 11,200 $99,960.00
0000 Xxxxxxxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
SEB Lakemedel-och Biolekuilefond 9,524 95,240 $850,017.00
Xx. X0
XX-000 00 Xxxxxxxxx
SEB Lux (F) Lakemedel-och Biolekuilefond 1,680 16,800 $149,940.00
SEB - Xxxxxxx Xxxx
X.X. Xxx 000
X-0000
Xxxxxxxxxxxxxxxxxxxxxxxxxx Xxxxxxx (publ) 22,409 224,090 $2,000,003.25
Index Special Situation Fund, Ltd. 3,361 33,610 $299,969.25
MeesPierson Fund Services (Bahamas) Limited
Xxxxxxxx Xxxxxxxx Xxxxxx, Xxxx Xxx Xxxxxx
X.X. Xxx XX-0000, Nassau, Bahamas
Merced Partners, LP 11,204 112,040 $999,957.00
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
-------------- -------------------------------- -----------------
TOTAL: 267,664 2,676,640 $23,889,012.00
============== ================================ =================
` 2.
