EXHIBIT 99.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of June
13, 2006, among Clinical Data, Inc., a Delaware corporation (the "Company"), and
the purchasers listed on Exhibit A hereto (each, including its successors and
assigns, a "Purchaser" and collectively the "Purchasers").
WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act and the rules and regulations
promulgated thereunder, including Regulation D and/or upon such other exemption
from the registration requirements of the Securities Act as may be available
with respect to any or all of the investments to be made hereunder, the Company
desires to issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, securities of the Company 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 agree
as follows:
ARTICLE I
DEFINITIONS
Section 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 under the
Securities Act. 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.
"Closing" means the closing of the purchase and sale of the Securities
pursuant to Section 2.1.
"Closing Date" means the Trading Day when all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers' obligations to pay the Subscription
Amount and (ii) the Company's obligations to deliver the Securities have been
satisfied or waived.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par value $0.01 per
share, and any other class of securities into which such securities may
hereafter have been reclassified or changed into.
"Common Stock Equivalents" means any securities of the Company 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 exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
"Company Counsel" means XxXxxxxxx Will & Xxxxx LLP.
"Disclosure Schedules" means the Disclosure Schedules of the Company
delivered concurrently herewith.
"Effective Date" means the date that the initial Registration Statement
filed by the Company pursuant to the Registration Rights Agreement is first
declared effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"GAAP" shall have the meaning ascribed to such term in Section 3.1(h).
"Intellectual Property Rights" shall have the meaning ascribed to such
term in Section 3.1(l).
"Legend Removal Date" shall have the meaning ascribed to such term in
Section 4.1(b).
"Liens" means a lien, charge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.
"Market Price" means the closing bid price of the Common Stock as reported
end of day trading on the Nasdaq Stock Market on the date of Closing.
"Material Adverse Effect" shall have the meaning assigned to such term in
Section 3.1(b).
"Per Share Purchase Price" equals the Market Price plus $0.0625 per share
($16.2725) 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.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Purchaser Party" shall have the meaning ascribed to such term in Section
4.7.
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"Registration Rights Agreement" means the Registration Rights Agreement,
dated the date hereof, among the Company and the Purchasers, in the form of
Exhibit B attached hereto.
"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.
"Required Approvals" shall have the meaning ascribed to such term in
Section 3.1(e).
"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" shall have the meaning ascribed to such term in Section 2.1.
"Short Sales" shall include all "short sales" as defined in Rule 200 of
Regulation SHO under the Exchange Act.
"Subscription Amount" means, as to each Purchaser, the aggregate amount to
be paid for Shares and Warrants purchased hereunder as specified next to such
Purchaser's name on Exhibit A of this Agreement and under to the heading
"Subscription Amount," in United States Dollars and in immediately available
funds.
"Subsidiary" means any subsidiary of the Company as set forth on Schedule
3.1(a).
"Trading Day" means a day on which the Common Stock is traded on a Trading
Market.
"Trading Market" means the Nasdaq National Market.
"Transaction Documents" means this Agreement, the Warrants and the
Registration Rights Agreement and any other documents or agreements executed in
connection with the transactions contemplated hereunder.
"Warrants" means collectively the Common Stock purchase warrants, in the
form of Exhibit D delivered to the Purchasers at the Closing in accordance with
Section 2.2(a) hereof, which Warrants shall be exercisable immediately and have
a term of exercise equal to five (5) years.
"Warrant Shares" means the shares of Common Stock issuable upon exercise
of the Warrants.
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ARTICLE II
PURCHASE AND SALE
Section 2.1 Closing. On the Closing Date, upon the terms and subject to
the conditions set forth herein, concurrent with the execution and delivery of
this Agreement by the parties hereto, the Company agrees to sell, and each
Purchaser agrees to purchase in the aggregate, severally and not jointly, an
aggregate of up to 1,229,067 shares of Common Stock (the "Shares") at the Per
Share Purchase Price for an aggregate purchase price of approximately
$20,000,000. Upon the terms and subject to the conditions set forth herein, the
Purchasers shall be issued Warrants to purchase the number of shares of Common
Stock set forth opposite such Purchaser's name on Exhibit A hereto under the
heading, "Warrants." The Warrants shall have an exercise price equal to $19.45
per share. Each Purchaser shall deliver to the Company via wire transfer
immediately available funds equal to their Subscription Amount and the Company
shall deliver to each Purchaser its respective Shares and Warrants as determined
pursuant to Section 2.2(a) and the other items set forth in Section 2.2
deliverable at the Closing. Upon satisfaction of the conditions set forth in
Sections 2.2 and 2.3, the Closing shall occur at the offices of the Company
Counsel, or such other location as the parties shall mutually agree.
Section 2.2 Deliveries.
(a) On the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) a legal opinion of Company Counsel, in the form of
Exhibit C attached hereto;
(iii) a copy of the irrevocable instructions to the Company's
transfer agent instructing the transfer agent to deliver, on an
expedited basis, a certificate evidencing a number of Shares set
forth opposite such Purchaser's name on Exhibit A hereto, registered
in the name of such Purchaser;
(iv) a Warrant registered in the name of such Purchaser to
purchase up to the number of shares of Common Stock set forth
opposite such Purchaser's name on Exhibit A hereto; and
(v) the Registration Rights Agreement duly executed by the
Company.
(b) On the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:
(i) this Agreement duly executed by such Purchaser;
(ii) such Purchaser's Subscription Amount by wire transfer to
the account as specified in writing by the Company; and
(iii) the Registration Rights Agreement duly executed by such
Purchaser.
Section 2.3 Closing Conditions.
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(a) The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met or waived:
(i) the accuracy in all material respects when made and on the
Closing Date of the representations and warranties of the Purchasers
contained herein;
(ii) all obligations, covenants and agreements of the
Purchasers required to be performed at or prior to the Closing Date
shall have been performed; and
(iii) the delivery by the Purchasers of the items set forth in
Section 2.2(b) of this Agreement.
(b) The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions being
met or waived:
(i) the accuracy in all material respects on the Closing Date
of the representations and warranties of the Company contained
herein;
(ii) all obligations, covenants and agreements of the Company
required to be performed at or prior to the Closing Date shall have
been performed; and
(iii) the delivery by the Company of the items set forth in
Section 2.2(a) of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company. Except as set
forth under the corresponding section of the disclosure schedules delivered to
the Purchasers concurrently herewith (the "Disclosure Schedules") which
Disclosure Schedules shall be deemed a part hereof, the Company hereby makes the
representations and warranties set forth below to each Purchaser:
(a) Subsidiaries. All of the direct and indirect subsidiaries of the
Company are set forth on Schedule 3.1(a). The Company owns, directly or
indirectly, all of the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, and all the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are
fully paid, nonassessable and free of preemptive and similar rights to
subscribe for or purchase securities.
(b) Organization and Qualification. The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized and
validly existing 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 any Subsidiary is in
violation or default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational
or charter documents. Each of the Company
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and the Subsidiaries 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, could not 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, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole, or (iii) a material adverse effect on 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") and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail
such power and authority or qualification.
(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of each of the Transaction Documents by the Company
and the consummation by it of the transactions contemplated thereby have
been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, its board of directors
or its stockholders in connection therewith other than in connection with
the Required Approvals. 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 and thereof, 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 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, the issuance and sale of the Shares
and the consummation by the Company of the other transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any
provision of the Company's certificate or articles of incorporation,
bylaws or other organizational or charter documents, 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, result in the creation of any
Lien upon any of the properties or assets of the Company, or give to
others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company debt or
otherwise) or other understanding to which the Company is a party or by
which any property or asset of the Company is bound or affected, or (iii)
subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations), or
by which any property or asset of the Company is bound or affected; except
in the case of each of clauses (ii) and (iii), such as could not
reasonably be expected to result in a Material Adverse Effect.
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(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 (i) filings required pursuant to Section
4.4 of this Agreement, (ii) the filing with the Commission of the
Registration Statement or any other registration provisions provided in
the Registration Rights Agreement, (iii) application(s) to each applicable
Trading Market for the listing of the Shares and Warrant Shares for
trading thereon in the time and manner required thereby, and (iv) the
filing of Form D with the Commission and such other filings, consents and
approvals which may be required to be made under applicable state and
federal securities laws, rules or regulations (collectively, the "Required
Approvals").
(f) Issuance of the Securities. The Securities are duly authorized
and, when issued and paid for in accordance with the terms of the
applicable Transaction Documents, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other
than restrictions on transfer provided for in the Transaction Documents.
The Company has reserved from its duly authorized capital stock the number
of shares of Common Stock issuable pursuant to the Warrants.
(g) Capitalization. The capitalization of the Company is as set
forth in the SEC Reports. Except as disclosed on Schedule 3.1(g), the
Company has not issued any capital stock since its most recently filed
periodic report under the Exchange Act, other than pursuant to the
exercise of employee stock options under the Company's stock option plans
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
disclosed on Schedule 3.1(g) and except as a result of the purchase and
sale of the Securities, there are no outstanding options, warrants, script
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional shares of Common Stock or Common Stock
Equivalents. The issuance and sale of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to any Person
(other than the 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. All of the outstanding shares of
capital stock of the Company are validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities. No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is required
for the issuance and sale of the Securities. Except as disclosed on
Schedule 3.1(g), there are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company's capital stock to
which the Company is a party or, to the knowledge of the Company, between
or among any of the Company's stockholders.
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(h) SEC Reports; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents 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 and documents incorporated by reference therein, 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 the light
of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in
all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect
at the time of filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved ("GAAP"), except
as may be otherwise specified in such financial statements 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 December 31, 2005, except as
specifically disclosed in the SEC Reports, (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 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. 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, any 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
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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 any Subsidiary, nor, to the knowledge of
the Company, any director or officer thereof, is or has been the subject
of any Action involving a claim of violation of or liability under federal
or state securities laws or a claim of breach of fiduciary duty. 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, nor any stop order or other
order suspending the effectiveness of any registration statement filed by
the Company or any Subsidiary under the Exchange Act or the Securities
Act.
(k) Title to Assets. The Company and the Subsidiaries 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 Subsidiaries and good and
marketable title in all personal property owned by them that is material
to the business of the Company and the Subsidiaries, 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 Subsidiaries
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 Subsidiaries are
held by them under valid, subsisting and enforceable leases.
(l) Patents and Trademarks. The Company and the Subsidiaries have,
or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses
and other similar rights 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 reasonably be expected to have a Material Adverse
Effect (collectively, the "Intellectual Property Rights"). Neither the
Company nor any Subsidiary has received a written notice that the
Intellectual Property Rights used by the Company or any Subsidiary
violates or infringes upon the rights of any Person. To the knowledge of
the Company, all such Intellectual Property Rights are enforceable and
there is no existing infringement by another Person of any of the
Intellectual Property Rights.
(m) Insurance. The Company and the Subsidiaries 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 Subsidiaries are engaged. To the knowledge of
the Company, such insurance contracts and policies are accurate and
complete. Neither the Company nor any 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.
(n) 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
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transaction with the Company or any 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 (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) for other employee benefits, including stock option
agreements under any stock option plan of the Company.
(o) Xxxxxxxx-Xxxxx. The Company is in material compliance with all
provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it as
of the Closing Date.
(p) Certain Fees. No brokerage or finder's fees or commissions are
or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by the Transaction
Documents.
(q) 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.
(r) Investment Company. The Company is not, and is not an Affiliate
of, and immediately after receipt of payment for the Shares, will not be
or be an Affiliate of, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. The Company shall conduct its
business in a manner so that it will not become subject to the Investment
Company Act.
(s) Listing and Maintenance Requirements. The Company's Common Stock
is registered pursuant to Section 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is
likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification
that the Commission is contemplating terminating such registration. The
Company has not, in the 12 months preceding the date hereof, received
notice from any Trading Market on which the Common Stock is 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.
(t) Disclosure. The Company confirms that neither it 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, other
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than information regarding the transactions contemplated by the
Transaction Documents. The Company understands and confirms that the
Purchasers will rely on the foregoing representations and covenants in
effecting transactions in securities of the Company. The Company
acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2
hereof.
(u) No Integrated Offering. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 3.2, to the knowledge
of the Company, 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 which would prevent the Company from
selling the Securities pursuant to Regulation D and Rule 506 thereof under
the Securities Act, or any applicable stockholder approval provisions
under the rules and regulations of any Trading Market on which any of the
securities of the Company are listed or designated.
(v) Form S-3 Eligibility. The Company meets the "registrant
eligibility" requirements set forth in the general instructions to Form
S-3 promulgated under the Securities Act applicable to "resale"
registration on Form S-3.
(w) Tax Status. Except for matters that would not, individually or
in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company and each Subsidiary has filed all necessary
federal, state and foreign income and franchise tax returns and has paid
or accrued all taxes shown as due thereon, and the Company has no
knowledge of a tax deficiency which has been asserted or threatened
against the Company or any Subsidiary.
(x) Foreign Corrupt Practices. Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed
to disclose fully any contribution made by the Company (or made by any
person acting on its behalf of which the Company is aware) which is in
violation of law, or (iv) violated in any material respect any provision
of the Foreign Corrupt Practices Act of 1977, as amended.
(y) Acknowledgment Regarding Purchasers' Purchase of Securities. The
Company acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm's length purchaser with respect to the
Transaction Documents and the transactions contemplated hereby. The
Company further acknowledges that no Purchaser is acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby and any
advice given by any Purchaser or any of their respective representatives
or agents in connection with this Agreement and the transactions
contemplated hereby is merely incidental to the
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Purchasers' purchase of the Securities. The Company further represents to
each Purchaser that the Company's decision to enter into this Agreement
has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(z) Manipulation of Price. The Company has not, and to its knowledge
no one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of any of the Securities, (ii) sold, bid for, purchased, or, paid
any compensation for soliciting purchases of, any of the Securities (other
than for the placement agent's placement of the Securities), or (iii) paid
or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
Section 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 hereunder and thereunder. The execution, delivery and
performance by such Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate or similar
action on the part of such Purchaser and no further consent or
authorization of such Purchaser or its board of directors, stockholders,
or partners, as the case may be, is required. Each Transaction Document to
which it is a party has been duly executed by such Purchaser, and when
delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except (i) as limited
by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
(b) Own Account. 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 and not with a view to or for
distributing or reselling such Securities or any part thereof in violation
of the Securities Act or any applicable state securities law, has no
present intention of distributing any of such Securities in violation of
the Securities Act or any applicable state securities law 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) in violation of the Securities Act or any
applicable state securities law.
12
Such Purchaser is acquiring the Securities hereunder in the ordinary
course of its business. Such Purchaser does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any
of the Securities.
(c) Purchaser Status. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and on each date on
which it exercises any Warrants, it will be either: (i) an "accredited
investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8)
under the Securities Act or (ii) a "qualified institutional buyer" as
defined in Rule 144A(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. Each Purchaser acknowledges that the
Securities were not offered to such Purchaser by means of any form of
general or public solicitation or general advertising, or publicly
disseminated advertisements or sales literature, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media, or broadcast over television or
radio, or (ii) any seminar or meeting to which Purchaser was invited by
any of the foregoing means of communication, or any other general
solicitation or general advertisement.
(f) Short Sales and Confidentiality Prior To The Date Hereof. Other
than the transaction contemplated hereunder, such Purchaser has not
directly or indirectly, nor has any Person acting on behalf of or pursuant
to any understanding with such Purchaser, executed any disposition,
including Short Sales (but not including the location and/or reservation
of borrowable shares of Common Stock), in the securities of the Company
during the period commencing from the time that such Purchaser first
received a term sheet from the Company or any other Person setting forth
the material terms of the transactions contemplated hereunder until the
date hereof ("Discussion Time"). Notwithstanding the ---------------
foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of
such Purchaser's assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser's assets, the representation set
forth above shall only apply with respect to the portion of assets managed
by the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement. Other than to other Persons party to
this Agreement, such Purchaser has maintained the confidentiality of all
disclosures made to it by the Company or its agents and advisors in
connection with this transaction (including the existence and terms of
this transaction).
(g) Rule 144. Each Purchaser understands that the Securities must be
held indefinitely unless such Shares are registered under the Securities
Act or an exemption
13
from registration is available. Each Purchaser acknowledges that such
person is familiar with Rule 144 of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act ("Rule
144"), and that such Purchaser has been advised that Rule 144 permits
resales only under certain circumstances. Each Purchaser understands that
to the extent that Rule 144 is not available, such Purchaser will be
unable to sell any Securities without either registration under the
Securities Act or the existence of another exemption from such
registration requirement.
(h) Certain Fees. The Purchasers have not employed any broker or
finder or incurred any liability for any brokerage or investment banking
fees, commissions, finders' structuring fees, financial advisory fees or
other similar fees in connection with the Transaction Documents.
(i) Independent Investment. The decision of each Purchaser to
purchase Securities pursuant to this Agreement has been made by such
Purchaser independently of any other purchase and independently of any
information, materials, statements or opinions as to the business,
affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company
or of its Subsidiaries which may have made or given by any other Purchaser
or by any agent or employee of any other Purchaser, and no Purchaser or
any of its agents or employees shall have any liability to any Purchaser
(or any other person) relating to or arising from any such information,
materials, statements or opinions. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Nothing contained herein, or in any Transaction Document, and no
action taken by any Purchaser pursuant hereto or 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
Documents. For reasons of administrative convenience only, the Transaction
Documents have been prepared by counsel for one of the Purchasers and such
counsel does not represent all of the Purchasers but only such Purchaser
and the other Purchasers have retained their own individual counsel with
respect to the transactions contemplated hereby.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
Section 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 or Rule 144, to
the Company or to an affiliate of a Purchaser, the Company may require the
transferor thereof to provide to the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the Company, the
form and substance of which opinion shall be reasonably satisfactory to
the Company,
14
to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act. In connection with any
transfer of Securities other than pursuant to an effective registration
statement or Rule 144, 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 this Section 4.1(b), of a legend on any of the Securities in
substantially 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.
(c) Certificates evidencing the Shares and Warrant Shares shall not
contain 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, or (ii) if such
Shares or Warrant Shares are eligible for sale under Rule 144(k), or (iii)
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. If all or any portion of a
Warrant is exercised at a time when there is an effective registration
statement to cover the resale of the Warrant Shares, such Warrant Shares
shall be issued free of the legend set forth in Section 4.1(b). 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 (5) 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, accompanied by detailed written instructions and appropriate and
customary representations (such fifth Trading Day, the "Legend Removal
Date"), deliver or cause to be delivered to the Company's transfer agent
irrevocable instructions instructing the transfer agent to deliver, on an
expedited basis, a certificate representing such shares that is free from
such restrictive legends.
15
Certificates for Securities subject to legend removal hereunder shall be
transmitted by the transfer agent of the Company to the Purchasers by
crediting the account of the Purchaser's prime broker with the Depository
Trust Company System.
(d) Each Purchaser, severally and not jointly with the other
Purchasers, will offer and sell any and all Securities pursuant to all
applicable federal and state securities laws, including pursuant to either
the registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption therefrom,
and agrees that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated
upon the Company's reliance on such Purchaser's representation contained
herein and on such Purchaser's broker's representation provided to the
Company pursuant to Section 4.1(c) hereof.
Section 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. As long as any Purchaser owns Securities, if the Company is not
required to file reports pursuant to the Exchange Act, it will prepare and
furnish to the Purchasers and make publicly available in accordance with Rule
144(c) such information as is required for the Purchasers to sell the Securities
under Rule 144. The Company further covenants that it will take such further
action as any holder of Securities may reasonably request, all to the extent
required from time to time to enable such Person to sell such Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144.
Section 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 aggregated 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 with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market such that it would require stockholder
approval prior to the closing of such other transaction unless stockholder
approval is obtained before the closing of such subsequent transaction.
Section 4.4 Securities Laws Disclosure; Publicity. The Company shall,
prior to 9:00 am (New York time) on the Trading Day following the date hereof,
issue a press release describing all material terms of the transaction
contemplated by this Agreement, and, within one Trading Day following the
Closing Date, file a Current Report on Form 8-K disclosing the transactions
contemplated hereby as required by such form. The Company and each Purchaser
shall consult with each other in issuing any other 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 each Purchaser, with
respect to any press release of the Company, which consent of either party 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
16
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).
Section 4.5 Non-Public Information. The Company covenants and agrees that,
following the disclosure described in the first sentence of Section 4.4 hereof,
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 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.
Section 4.6 Use of Proceeds. Except as set forth on Schedule 4.6 attached
hereto, the Company shall use the net proceeds from the sale of the Securities
hereunder for working capital and general corporate.
Section 4.7 Indemnification. Subject to the provisions of this Section
4.7, the Company will indemnify and hold the Purchasers and their directors,
officers, shareholders, members, 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 breach 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 action instituted against a
Purchaser, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such Purchaser, with respect to any of
the transactions contemplated by the Transaction Documents (unless such action
is based upon a breach of such Purchaser's representations, warranties or
covenants under the Transaction Documents or any agreements or understandings
such Purchaser may have with any such stockholder or any violations by the
Purchaser of state or federal securities laws or any conduct by such Purchaser
which constitutes fraud, gross negligence, willful misconduct or malfeasance).
If any action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing. Any Purchaser Party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i)
the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the Company and the position of such Purchaser
Party. The Company will not be liable to any Purchaser Party under this
Agreement (i) for any settlement by a Purchaser Party effected without the
Company's prior written consent, which shall not be unreasonably withheld or
delayed; or (ii) to the extent, but only to the extent that a loss, claim,
17
damage or liability is attributable to any Purchaser Party's breach of any of
the representations, warranties, covenants or agreements made by the Purchasers
in this Agreement or in the other Transaction Documents.
Section 4.8 Reservation of Common Stock. As of the date hereof, the
Company has reserved and the Company shall continue to reserve and keep
available at all times, 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.
Section 4.9 Listing of Common Stock. The Company hereby agrees to use best
efforts to maintain the listing of the Common Stock on a Trading Market, and as
soon as reasonably practicable following the Closing (but not later than the
earlier of the Effective Date and the first anniversary of the Closing Date) to
list all of the Shares and Warrant Shares on such Trading Market. The Company
further agrees, if the Company applies to have the Common Stock traded on any
other Trading Market, it will include in such application all of the Shares and
Warrant Shares, and will use its best efforts to cause all of the Shares and
Warrant Shares to be listed on such other Trading Market as promptly as
possible. The Company will take all action reasonably necessary to continue the
listing and trading of its Common Stock on a Trading Market and will comply in
all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the Trading Market.
Section 4.10 Confidentiality After The Date Hereof. Each Purchaser,
severally and not jointly with the other Purchasers, covenants that until such
time as the transactions contemplated by this Agreement are publicly disclosed
by the Company as described in the first sentence of Section 4.4, such Purchaser
will maintain, the confidentiality of all disclosures made to it by the Company
or its agents and advisors in connection with this transaction (including the
existence and terms of this transaction).
ARTICLE V
MISCELLANEOUS
Section 5.1 Expenses. The Company shall pay all fees and expenses it
incurs in connection with satisfying its obligations under this Agreement. The
Company shall also reimburse the Purchasers, for the Purchasers' reasonable
out-of-pocket expenses, including, without limitation, fees of one (1) legal
counsel, incurred by them in connection with the consummation of the
transactions contemplated by this Agreement and for which such Purchasers submit
invoices to the Company within thirty (30) days of the Closing Date. To be
eligible for reimbursement, an invoice must be accompanied by an itemized list
and reasonable documentation of all such expenses.
Section 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.
18
Section 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 set forth on Exhibit A attached hereto prior to 5:30 p.m.
(Eastern Standard 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 set forth on Exhibit A attached hereto on a day that is
not a Trading Day or later than 5:30 p.m. (Eastern Standard Time) on any Trading
Day, (c) the 2nd 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 Exhibit A attached hereto.
Section 5.4 Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed by the Company and such
Purchasers that hold at least 60% of the Shares and Warrant Shares sold hereby.
No such waiver or amendment shall be effective as to this Agreement unless the
terms of such waiver or amendment shall apply with the same force and effect to
all Purchasers hereunder. 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.
Section 5.5 Headings. 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.
Section 5.6 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Purchaser. 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".
Section 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 4.7.
Section 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 Commonwealth of Massachusetts, 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)
19
shall be commenced exclusively in the state and federal courts sitting in the
Commonwealth of Massachusetts. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the
Commonwealth of Massachusetts for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. The parties hereby waive all
rights to a trial by jury. If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys' fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.
Section 5.9 Survival. The representations and warranties contained herein
shall survive the Closing and the delivery of the Shares and Warrant Shares.
Section 5.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
Section 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.
Section 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.
Section 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
20
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.
Section 5.14 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 Documents. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents.
Section 5.15 Liquidated Damages. The Company's obligations to pay any
partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate
until all unpaid partial liquidated damages and other amounts have been paid
notwithstanding the fact that the instrument or security pursuant to which such
partial liquidated damages or other amounts are due and payable shall have been
canceled.
Section 5.16 Construction. The parties agree that each of them and/or
their respective counsel has reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments hereto.
(Signature Pages Follow)
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.
CLINICAL DATA, INC. Address for Notice:
Xxx Xxxxxxx Xxxxxx, Xxxxx 000
Xx: /s/ Xxxxxx X. Xxxxxx Xxxxxx, XX 00000
-------------------------- (000) 000-0000
Name: Xxxxxx X. Xxxxxx Fax: (000) 000-0000
Title: Executive Vice President,
Chief Legal Officer and
Secretary
With a copy to (which shall not constitute notice):
XxXxxxxxx Will & Xxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx
(000) 000-0000
Fax: (000) 000-0000
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO CLINICAL DATA SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
Name of Purchaser:___________________________________________________________
Signature of Authorized Signatory of Purchaser: _____________________________
Name of Authorized Signatory:________________________________________________
Title of Authorized Signatory:_______________________________________________
Email Address of Purchaser:__________________________________________________
Fax Number of Purchaser:_____________________________________________________
EIN/TIN/SSN of Purchaser (Required for Delivery of Shares):__________________
Address for Notice of Purchaser:
Address for Delivery of Securities for Purchaser (if not same as above):
[SIGNATURE PAGES CONTINUE]
ANNEX A
CLOSING STATEMENT
Pursuant to the attached Securities Purchase Agreement, dated as of the date
hereto, the purchasers shall purchase up to an aggregate of approximately
$20,000,000 of Common Stock and Warrants from Clinical Data, Inc., a Delaware
corporation (the "Company"). All funds will be wired into an account maintained
by the Company. All funds will be disbursed in accordance with this Closing
Statement.
DISBURSEMENT DATE: June 13, 2006
I. PURCHASE PRICE
GROSS PROCEEDS TO BE RECEIVED $ 16,919,868.87
II. DISBURSEMENTS
TOTAL AMOUNT DISBURSED: $ 16,919,868.87
EXHIBIT A
PURCHASER SUBSCRIPTION AMOUNT SHARES WARRANTS
--------- ------------------- ------ --------
EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT C
FORM OF OPINION OF COMPANY COUNSEL
To: To each of the purchasers (the "Purchasers") named in the Securities
Purchase Agreement, dated as of June 13, 2006 (the "Purchase Agreement"),
by and among Clinical Data, Inc., and the Purchasers listed on Exhibit A
thereto.
Ladies and Gentlemen:
We have acted as counsel for Clinical Data, Inc., a Delaware
corporation (the "Company"), in connection with the sale by the Company of
shares (the "Shares") of the Company's Common Stock, par value $0.01 per share
(the "Common Stock"), and the issuance of Warrants to purchase shares of Common
Stock the ("Warrants"), to certain of the Purchasers pursuant to the terms of
the Purchase Agreement. We are rendering this opinion pursuant to Section
2.2(a)(ii) of the Purchase Agreement. Capitalized terms used but not defined
herein have the respective meanings given to them in the Purchase Agreement.
In rendering this opinion, we have examined or relied on copies of
the following, which are all dated as of June 13, 2006, unless otherwise
indicated:
(i) the Purchase Agreement and the Disclosure Schedules (the
"Disclosure Schedules") referenced therein;
(ii) the Registration Rights Agreement, among the Company and the
Purchasers;
(iii) the Common Stock Purchase Warrant, among the Company and each
Purchaser;
(iv) the Certificate of Incorporation, as amended, of the Company,
filed with the Secretary of State of the State of Delaware (the "Charter");
(v) the Company's Amended and Restated By-laws, as certified to us
by the Secretary of the Company (the "By-Laws");
(vi) a certificate of the Secretary of the Company, certifying as to
true and correct copies of (A) the Charter, (B) the By-Laws and (C) resolutions
adopted by the Board of Directors of the Company;
(vii) a certificate of the Chief Legal Officer of the Company
certifying the capitalization of the Company (the "CLO Certificate"); and
(viii) (1) a certificate of the Secretary of State of the State of
Delaware, dated as of June __, 2006 and (2) a certificate of the Secretary of
the Commonwealth of the Commonwealth of Massachusetts, dated as of June __,
2006, each attesting as to the continued existence and good standing of the
Company in such States (each a "Good Standing Certificate").
The documents described in clauses (i) through (iii) shall be
referred to herein, collectively, as the "Transaction Documents".
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. We have assumed the accuracy,
completeness and genuineness of the certificates of public officials. As to any
facts material to this opinion, we have relied upon statements and
representations of the Company and its officers and other representatives and of
public officials, including the representations and warranties contained in the
Transaction Documents, and have not undertaken any independent investigation of
such facts (including, without limitation, conducting any review, search or
investigation of any public files or records or dockets) and no inference as to
our knowledge concerning such facts should be drawn from the fact that such
statements and representations have been relied upon by us in connection with
the preparation and delivery of this opinion.
Whenever our opinion with respect to the existence or absence of
facts is indicated to be based on our knowledge or awareness, we are referring
solely to the actual knowledge of the particular XxXxxxxxx Will & Xxxxx LLP
attorneys who have represented the Company in connection with the Transaction
Documents or in connection with the matters that are the subject of the opinion
in question.
References to (i) the term "Governmental Authority" means the
Secretary of State of the State of Delaware or any federal executive,
legislative, judicial, administrative or regulatory body; and (ii) the term
"Governmental Approval" means any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any Governmental
Authority pursuant to Applicable Laws (as hereinafter defined).
We are admitted to the Bar in the Commonwealth of Massachusetts. We
express no opinion as to the laws of any jurisdiction other than the internal
substantive laws of the Commonwealth of Massachusetts, the General Corporation
Law of State of Delaware ("GCL") and the federal laws of the United States of
America as in effect on the date hereof (other than the federal law of patents),
which, in our experience, are normally applicable to transactions of the type
contemplated by the Transaction Documents ("Applicable Laws"). While we are not
licensed to practice law in the State of Delaware, we have reviewed applicable
provisions of the GCL as we have deemed appropriate in connection with the
opinions expressed herein. Except as described, we have neither examined nor do
we express any opinion with respect to the other laws of the State of Delaware
or the laws of any other jurisdiction. We express no opinion as to the
ordinances, statutes, administrative decisions, orders, rules and regulations of
any municipality, county or other political subdivision of any state (as opposed
to the laws of the state itself).
Our opinions are also subject to the following assumptions and
qualifications:
(a) the Transaction Documents constitute the legal, valid and
binding obligation of each party to the Transaction Documents (other than the
Company) enforceable against such parties (other than the Company) in accordance
with their terms;
(b) we express no opinion as to the effect on the opinions herein
stated of (i) the compliance or non-compliance of any party (other than the
Company) to the Transaction Documents with any state, federal or other laws or
regulations applicable to it or (ii) the legal or regulatory status or the
nature of the business of such other parties;
(c) representations and warranties as to factual matters made by the
Company and you, as contained in the Transaction Documents, or in documents
delivered in connection therewith, are true and correct;
(d) you have received all documents that you were required to
receive under the Transaction Documents; and
(e) in rendering our opinion in paragraph 2 regarding
capitalization, our opinion is based solely on the CLO Certificate.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. The Company is a corporation and is validly existing and in
corporate good standing under the laws of the State of Delaware and has the
requisite corporate authority to enter into and perform its obligations under
the Purchase Agreement and to carry out the transactions contemplated thereby.
The Company is qualified to do business and is in good standing in the
Commonwealth of Massachusetts, as of the date of the Good Standing Certificate
for such state.
2. Based solely upon our review of the CLO Certificate, the total
number of shares of capital stock of all classes which the Company has authority
to issue is 15,500,00 shares, consisting of 14,000,000 shares of Common Stock,
$0.01 par value per share, of which 8,530,599 shares are issued and outstanding,
and 1,500,000 shares of Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), of which 484,070 shares have been designated Series A
Preferred Stock 234,070 of which are issued and outstanding.
3. The Shares and the shares of Common Stock issuable upon
conversion of the Warrants (the "Warrant Shares") have been duly authorized and
reserved for issuance by all necessary corporate action on the
part of the Company; and the Shares and the Warrant Shares, when issued, sold
and delivered against payment therefor in accordance with the provisions of the
Purchase Agreement and the exercise of the Warrants, as the case may be, will be
validly issued, fully paid and nonassessable.
4. The execution, delivery and performance by the Company of the
Transaction Documents have been duly authorized by all necessary corporate
action and the Transaction Documents have been duly executed and delivered by
the Company. The Transaction Documents constitute the valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms. The execution and deliver of the Transaction Documents
by the Company and the offer, sale and issuance of the Shares and the Warrants
thereunder will not (a) conflict with, or result in a breach of, any of the
terms, conditions or provisions of, or constitute a default under, or result in
the imposition of any lien or encumbrance upon any asset or property of the
Company pursuant to, the Charter or By-Laws,
which conflict, breach or default would have a material adverse effect on the
business, assets or financial condition of the Company, or (b) constitute a
violation by the Company of any applicable federal laws or the GCL.
5. All corporate proceedings required by law to be taken by the
Board of Directors and the stockholders of the Company on or prior to the date
of the Closing in connection with the offer, issuance and sale of the Shares and
the Warrants have been duly and validly taken.
6. No Governmental Approval is required on the part of the Company
in connection with the execution and delivery of, or the performance of its
obligations under, the Transaction Documents, including, the offer, issue, sale
and delivery of the Shares and the Warrants, other than filings which may be
required to be made after the Closing under applicable federal or state
securities laws or such filings as have been made prior to the date hereof.
7. Subject to the accuracy of the representations of the Purchasers
in the Transaction Documents, and assuming there was no general solicitation
made in seeking purchasers of the capital stock sold by the Company pursuant to
the Purchase Agreement, the offer, issuance and sale of the capital stock of the
Company to the Purchasers under the Transaction Documents constitute
transactions exempt from registration under the Securities Act of 1933, as
amended.
We hereby confirm to you, pursuant to your request, that, to our
knowledge, except as set forth in the Disclosures Schedules, there is no action,
suit or proceeding, or governmental inquiry or investigation, pending or
threatened in writing against the Company before any court or administrative
agency that questions the validity of the Transaction Documents or the Company's
rights to enter into such agreements. In this regard, we note that we have not
made any investigation of any governmental records or court documents or taken
any other similar action.
In addition to any assumptions, qualifications and other matters set
forth elsewhere herein, the opinions set forth above are subject to the
following:
(a) For the purposes of this opinion, we have assumed, with
your consent, that the Transaction Documents constitute the entire agreement
among the parties thereto with respect to the subject matter thereof;
(b) Our opinions expressed herein are subject to the effect of
any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, or similar laws affecting creditors' rights generally;
(c) Our opinions expressed herein are subject to the effect of
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing (regardless of whether
considered in a proceeding in equity or at law). A court may refuse to enforce a
covenant if and to the extent that it deems such covenant to be violative of
applicable public policy, including, for example, provisions indemnifying a
party against liability for its own wrongful or negligent acts;
(d) In rendering our opinion in the first sentence of
paragraph 1 regarding good standing, our opinion is based solely on the Good
Standing Certificate of Delaware. In rendering our opinion in the second
sentence of paragraph 1, our opinion is based solely on the Good Standing
Certificate for the Commonwealth of Massachusetts; and
(e) For purposes of Section 144 of the GCL, we have assumed
that (i) the material facts as to any relationship or interest of each director
and officer of the Company in the transactions contemplated by the Transaction
Documents have been disclosed or are known to the Board of Directors of the
Company or a committee thereof and that the Board of Directors or such committee
who approved the transactions contemplated by the Transaction Documents did so
in good faith, and (ii) the transactions contemplated by the Transaction
Documents are fair as to the Company as of the time the Transaction Documents
were authorized, approved or ratified by the Board of Directors of the Company
or a committee thereof.
This opinion is limited to the matters expressly set forth herein and no
opinion is implied or may be inferred beyond the matters expressly so stated.
This opinion is given as of the date hereof and we do not undertake any
liability or responsibility to inform you of any change in circumstances
occurring, or additional information becoming available to us, after the date
hereof which might alter the opinions contained herein. This opinion is
furnished to you solely in connection with the transactions described above and
may not be relied upon by you for any other purpose or by any other person in
any manner or for any purpose.
Very truly yours,
XXXXXXXXX WILL & XXXXX LLP
EXHIBIT D
FORM OF WARRANT
