SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”)
is
dated as of February
__,
2008,
between
Neuralstem, Inc., a Delaware corporation (the “Company”),
and
the purchaser identified on the signature pages hereto (including its successors
and assigns, the “Purchaser”).
WHEREAS,
the Company has granted Purchaser an Option (as defined herein) to negotiate
a
license for certain technology and/or products currently owned by the Company.
WHEREAS,
as consideration for the Option, the Purchaser has agreed to purchase
$2.5
million
of the
Company’s newly-issued
shares of Common Stock.
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant
to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”),
and Rule 506 promulgated thereunder, the Company desires to issue and sell
to
the Purchaser, and the Purchaser, 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
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 set forth 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 405 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.
“Business
Day”
means
any day except Saturday, Sunday, any day which is a national
legal
holiday in the United States or the
Republic of Korea or any
day
on which banking institutions in the State of New York
or
Seoul
are
authorized or required by law or other governmental action to
close.
“Closing”
means
the closing of the purchase and sale of the Securities pursuant to Section
2.1.
“Closing
Date”
means
the 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 Purchaser’s obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities have been satisfied or waived;
provided that in no event shall the Closing Date be later than February 27,
2008.
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
the common stock of the Company, par value $.01 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed into.
“Common
Stock Equivalents”
means
any securities of the Company or the Subsidiaries 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.
“Disclosure
Schedules”
means
the Disclosure Schedules of the Company delivered concurrently herewith.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“FDA”
shall
mean the United States Food and Drug Administration.
“GAAP”
shall
have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
means:
(a) any liabilities for borrowed money or amounts owed in excess of
$25,000
(other than trade accounts payable incurred in the ordinary course of business);
(b) all guaranties, Liens,
endorsements
and other contingent obligations in respect of Indebtedness of others, whether
or not the same are or should be reflected in the Company’s balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business; and (c) the present value of any lease payments in excess of
$25,000
due under leases required to be capitalized in accordance with GAAP.
“Intellectual
Property Rights”
shall
have the meaning ascribed to such term in Section 3.1(o).
“Knowledge”
(including any derivation thereof such as “known”
or
“knowing”)
of a
Person that is not a natural individual means that any director or officer
of
such Person: (a) has actual knowledge of a particular fact or other matter;
or
(b) could reasonably be expected to discover or otherwise become aware of such
fact or other matter in the course of conducting such due investigation and
inquiry concerning the existence or truth of such fact or other matter as a
reasonably prudent person, in the ordinary and usual course of the performance
of his or her professional responsibilities, would conduct under the same
applicable circumstances.
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“Liens”
means
a
lien, charge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction.
“LRS”
means
the Law Offices of Xxxx Xxxxxxxxx & Associates, APLC.
“Material
Adverse Effect”
shall
have the meaning assigned to such term in Section 3.1(b).
“Material
Permits”
shall
have the meaning ascribed to such term in Section 3.1(m).
“Option”
means
that certain Exclusive Option Agreement of even date with this Agreement
executed by the parties,
in the
form of Exhibit
B
attached
hereto.
“Option
Period”
means
a
period of time as set forth in the Option.
“Per
Share Purchase Price”
shall
equal $[_________].
“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 informal investigation or partial proceeding, such as a
deposition), whether commenced or threatened.
“Product”
shall
mean technology owned by the Company for transplantation into patients for
all
indications for which necessary approval from the FDA.
“Purchaser
Party”
shall
have the meaning ascribed to such term in Section 4.5.
“Registration
Rights Agreement”
means
the Registration Rights Agreement, dated the date hereof, among the Company
and
the Purchaser, in the form of Exhibit
A
attached
hereto.
“Registration
Statement”
means
a
registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale by the Purchaser of the Shares.
“Report”
shall
have the meaning ascribed to such term in Section 3.1(h).
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“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”
means
the most recent reports filed by the Company with the Commission under the
Securities Act and the Exchange Act, including the exhibits thereto and
documents incorporated by reference therein, consisting specifically of: (i)
Form 10-KSB filed on April 2, 2007; (ii) Form SB-2 filed on April 30, 2007;
(iii) Form 10-QSB filed on May 15, 2007; (iv), Form 10-QSB filed on August
14,
2007; (v) Form 10-QSB filed on November 13, 2007; and (vi) Form 8-K/A filed
on
November 8, 2007, all as attached hereto as Exhibit
C.
“Securities”
means
the Shares.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Shares”
means
the shares of Common Stock issued or issuable to the Purchaser pursuant to
this
Agreement.
“Short
Sales”
means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock).
“Subscription
Amount”
means
two
million five hundred thousand U.S. dollars (US$2,500,000.00).
“Trading
Day”
means
a
day on which the New York Stock Exchange is open for trading.
“Trading
Market”
means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the
New York Stock Exchange or the OTC Bulletin Board.
“Transaction
Documents”
means
this Agreement, the Option, the Registration Rights Agreement and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.
4
“Transfer
Agent”
means
American Stock Transfer & Trust Company, with a mailing address of 00 Xxxxxx
Xxxx Xxx Xxxx, XX 00000 and a facsimile number of (000) 000 0000, and any
successor transfer agent of the Company.
ARTICLE
II.
PURCHASE
AND SALE
2.1
Closing.
On the Closing Date, upon the terms and subject to the conditions set forth
herein, substantially concurrent with the execution and delivery of this
Agreement by the parties hereto, the Company agrees to sell, and the Purchaser
agrees to purchase, such
number of Shares as shall be determined by the Subscription Amount divided
by
the Per Share Purchase Price.
The
Purchaser shall deliver to the Company, via wire transfer or a certified check,
immediately available funds equal to its Subscription Amount and the Company
shall deliver to the Purchaser the Shares as determined pursuant to Section
2.2(a), and the Company and the Purchaser shall deliver the other items set
forth in Section 2.2(b) deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of LRS, or such other location as the parties shall
mutually agree.
2.2
Deliveries.
(a)
On
or
prior to the Closing Date, the Company shall deliver or cause to be delivered
to
the Purchaser the following:
(i)
this
Agreement duly executed by the Company;
(ii)
the
Option duly executed by the Company;
(iii)
a
certificate evidencing a number of Shares equal to such Purchaser’s Subscription
Amount divided by the Per Share Purchase Price, registered in the name of such
Purchaser; and
(iv)
the
Registration Rights Agreement duly executed by the Company.
(b)
On
or
prior to the Closing Date, Purchaser shall deliver or cause to be delivered
to
the Company (except as noted) the following:
(i)
this
Agreement duly executed by such Purchaser;
(ii)
the
Option duly executed by the Purchaser;
(iii)
the
Purchaser’s Subscription Amount by a certified check or wire transfer to the
Company. Both parties acknowledge that, such wire transfer might occur later
than the Closing Date, which is due to any matter associated with accounting
process and, in such a case, the Purchaser shall notify the Company and use
good
faith effort
for
completion of wire transfer but in no event shall such wire be delayed more
than
3 days after the Closing Date; and
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(iv)
the
Registration Rights Agreement duly executed by such Purchaser.
2.3
Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
(i)
the
accuracy in all material respects on the Closing Date of the representations
and
warranties of the Purchaser contained herein;
(ii)
all
obligations, covenants and agreements of the Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and
(iii)
the
delivery by Purchaser of the items set forth in Section 2.2(b) of this
Agreement.
(b)
The
obligations of the Purchaser hereunder in connection with the Closing are
subject to the following conditions being met:
(i)
the
accuracy in all material respects on the Closing Date of the representations
and
warranties of the Company contained herein;
provided that
for the
purpose of determining the ‘material’ accuracy of the representations and
warranties of the Company under this Section 2.3(b)(i), should a concerned
representation and warranty itself contain any ‘materiality’ or similar
qualifications, such qualifications shall be disregarded, so that only the
‘materiality’ qualification set forth in this Section 2.3(b)(i) will
apply;
(ii)
all
obligations, covenants and agreements of the Company required to be performed
at
or prior to the Closing Date shall have been performed;
(iii)
the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;
(iv) this
Agreement and the other Transaction Documents, and the transactions contemplated
hereby and thereby, shall have been duly approved by the board of directors
or
other pertinent body or officer of the Purchaser;
(v) the
sale,
issuance and purchase of the Securities, on the Closing Date, shall be legally
permitted by all laws and regulations to which the Company is subject. No
proceeding, litigation, arbitration, investigation, shall be pending or
threatened and no judgment, decision, decree, order, injunction or award shall
be outstanding, seeking to delay, restrain, make illegal or alter the
transactions contemplated by any Transaction Document;
6
(vi) each
of
the Purchaser and the Company shall have obtained any and all approvals,
consents, permits and waivers, including those by or from governmental
authorities, necessary or appropriate for consummation of the transactions
contemplated by this Agreement;
(vii)
there
shall have been no Material Adverse Effect with respect to the Company since
the
date hereof; and
(viii)
from
the
date hereof to the Closing Date, trading in the Common Stock shall not have
been
suspended by the Commission or the Company’s principal Trading Market (except
for any suspension of trading of limited duration agreed to by the Company,
which suspension shall be terminated prior to the Closing), and, at any time
prior to the Closing Date, trading in securities generally as reported by
Bloomberg L.P. shall not have been suspended or limited, or minimum prices
shall
not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been
declared either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of hostilities or other
national or international calamity of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in the
reasonable judgment of each Purchaser, makes it impracticable or inadvisable
to
purchase the Securities at the Closing.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1
Representations
and Warranties of the Company. Except as
set
forth in the Disclosure Schedules
and the
SEC Reports where specifically referenced,
which
Disclosure Schedules and SEC Reports, if specifically referenced, shall be
deemed a part hereof and shall qualify any representation or warranty otherwise
made herein to the extent of the disclosure contained in the corresponding
section of the Disclosure Schedules
or the
SEC Reports, if specifically referenced, would contradict any representation
or
warranty contained herein, the Company makes, as of the date hereof and as
of
the Closing Date, the following representations and warranties to the Purchaser.
For purposes of this Article 3, any statement, facts, representations, or
admissions contained in the SEC Reports, if specifically referenced, will be
deemed to be included in the Disclosure Schedule and all such information will
be deemed to be fully disclosed and furnished to the Purchaser.
(a) Subsidiaries.
The
Company has no subsidiaries.
7
(b) Organization
and Qualification.
The
Company is
an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the State
of
Delaware,
with
the requisite power and authority to own and use its properties and assets
and
to carry on its business as currently conducted. The
Company is
not
in
violation or default of any of the provisions of its certificate
or articles of incorporation, bylaws or other organizational or charter
documents. The
Company is
duly
qualified to 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 have or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company,
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 hereby and 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 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.
8
(d) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company,
the issuance and sale of the Securities 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 have or reasonably be expected to result in a Material Adverse
Effect.
(e)
Filings,
Consents and Approvals.
The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court
or
other federal, state, local or other governmental authority or other Person
in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) filings required pursuant to Section
4.2
of this
Agreement, (ii) the filing with the Commission of the Registration Statement,
(iii) application(s) to each applicable Trading Market for the listing of the
Securities for trading thereon in the time and manner required thereby and
(iv)
the filing of Form D with the Commission and such filings as are required to
be
made under applicable state securities laws (collectively, the “Required
Approvals”).
(f)
Issuance
of the Securities.
The
Securities are duly authorized and, when issued and paid for in accordance
with
the applicable Transaction Documents, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens other
than restrictions on transfer provided for in the Transaction
Documents.
The sale
of the Securities hereunder is not and will not be subject to any preemptive
rights or rights of first refusal that have not been properly waived or complied
with.
(g)
Capitalization.
The
Company’s capitalization is as set forth on the Disclosure Schedule.
9
(h)
SEC
Filings; Financial Statements.
The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company 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 or regulation to file such material) (the foregoing materials, including
the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “Reports”)
on a
timely basis or has received a valid extension of such time of filing and has
filed any such Reports prior to the expiration of any such extension. As of
their respective dates, the Reports complied in all material respects with
the
requirements of the Securities Act and the Exchange Act, as applicable, and
none
of the 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 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 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.
Specifically, but not by way of limitation, the balance sheet of such financial
statements discloses all of the Company’s material debts, liabilities and
obligations of any nature, whether due or to become due, as of their respective
dates (including, without limitation, absolute liabilities, accrued liabilities,
and contingent liabilities) to the extent such debts, liabilities and
obligations are required to be disclosed in accordance with GAAP.
(i)
Material
Changes; Undisclosed Events, or Developments.
Since
the date of the latest audited financial statements included within the
Reports,
except
as specifically disclosed in the SEC Report filed prior to the date
hereof
or in
Schedule 3.1(i) hereof, (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not altered its method of accounting,
(iii)
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 (iv) the Company
has
not issued any Common
Stock Equivalents
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.
Except
as disclosed in the SEC Reports or contained in Schedule 3.1(i) hereto, the
Company has no indebtedness for borrowed money that the Company has directly
or
indirectly created, incurred, assumed, or guaranteed, or with respect to which
the Company has otherwise become directly or indirectly liable. The Company
has
no material liability and, to its Knowledge, knows of no material contingent
liability not disclosed to the Purchaser, except current liabilities
incurred
in the
ordinary course of business
which have not been, either individually or in the aggregate, materially adverse
to the assets, financial condition or operations of the Company.
10
(j)
Litigation.
Except
as disclosed in the Disclosure Schedule 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 or any of its
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”)
which
(i) adversely affects or challenges the legality, validity or enforceability
of
any of the Transaction Documents or the Securities or (ii) could, if there
were
an unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor
any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws
or a
claim of breach of fiduciary duty. There has not been, and to the Knowledge
of
the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer
of
the Company. The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
under
the
Exchange Act or the Securities Act.
(k)
Labor
Relations.
No
material labor dispute exists or, to the Knowledge of the Company, is imminent
with respect to any of the employees of the Company which could reasonably
be
expected to result in a Material Adverse Effect. None of the Company’s
employees
is a member of a union that relates to such employee’s relationship with the
Company and the Company is
not
a party
to a collective bargaining agreement, and the Company believes
that
its
relationships with its
employees are good. No executive officer is,
or,
to the
Knowledge of the Company, is
now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each
such
executive officer does not subject the Company to
any
liability with respect to any of the foregoing matters. The Company is
in
compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect.
(l)
Compliance.
The
Company (i)
is
not
in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default
by
the Company under),
nor has the received notice of a claim that it is in default under or that
it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties
is
bound (whether or not such default or violation has been waived), (ii) is
not
in
violation of any order of any court, arbitrator or governmental body, or (iii)
is not
and
has
not
been in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws
applicable to its business and all such laws that affect the environment, except
in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.
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(m)
Regulatory
Permits.
The
Company possesses
all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material
Permits”),
and
the
Company has
not
received
any notice of proceedings relating to the revocation or modification of any
Material Permit.
(n)
Title
to Assets.
The
Company has
good and
marketable title in all personal property owned by them that is material to
the
business of the Company, 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 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 are
held
by them under valid, subsisting and enforceable leases with which the Company
is
in
compliance.
(o)
Patents
and Trademarks.
To the
Company’s Knowledge, the Company has,
or
has
rights
to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses
and
other intellectual property rights and similar rights necessary or material
for
use in connection with its
businesses as described
in the Reports (collectively, the “Intellectual
Property Rights”),
without any known infringement of the rights of others and which failure to
so
have could have a Material Adverse Effect.
Except
for the Option and except as disclosed in Disclosure Schedules, there are no
outstanding options, licenses or agreements of any kind relating to the
Intellectual Property Rights that are the subject of the Option, nor is the
Company bound by or a party to any options, licenses or agreements of any kind
with respect to the patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights of any other
Person which relate to any Intellectual Property Rights that are the subject
of
the Option. The Company has not
received a notice (written or otherwise) that any of the Intellectual Property
Rights used by the Company 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
or
threatened infringement
by another Person of any of the Intellectual Property Rights other than as
contained in the Disclosure Schedule. Except as disclosed in the Disclosure
Schedules, there are no proceedings, including interference, re-examination,
reissue, opposition, nullity, or cancellation proceedings pending that relate
to
any of the Intellectual Property Rights that are the subject of the Option,
and
the Company is not aware of any information indicating that such proceedings
are
threatened or contemplated by any governmental authority or any other Person.
The Company has
taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their intellectual properties, except where failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
12
(p)
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 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.
(q)
Contracts.
To the
Company’s Knowledge, all agreements, contracts and undertakings to which the
Company is a party or by which any of its assets may be bound are in full force
and effect and binding upon the parties thereto, and neither the Company nor
any
other party thereto is in material breach of or default thereunder, and no
condition exists that with or without the giving of notice or lapse of time,
or
both, would constitute a material breach or default thereunder. The Company
is
not a party to or bound by any contract, agreement, arrangement or understanding
that by its terms would, after consummation of the transactions contemplated
hereunder, purport to obligate, restrict or otherwise bind the Company with
regard to exclusivity, non-competition or other similar covenant or agreement,
or restrict the ability of the Company to engage freely in its business as
it
sees fit.
(r)
Offering
Valid.
Assuming the accuracy of the representations and warranties of the Purchaser
contained in Section 3.2 hereof, the offer, sale and issuance of the Securities
will be exempt from the registration requirements of 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. Neither the Company nor any agent on
its
behalf has solicited or will solicit any offers to sell or has offered to sell
or will offer to sell all or any part of the Securities to any
person
or persons so as to bring the sale of such Securities by the Company within
the
registration provisions of the Securities Act or any state securities
laws.
(s)
Full
Disclosure.
To the
Knowledge of the Company, (i) neither this Agreement nor any other written
document, certificate, instrument or statement furnished or made available
to
the Purchaser by or on behalf of the Company in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits
to
state a material fact necessary in order to make the statements contained herein
and therein not misleading, and (ii) there are no facts which materially
adversely affect the business, assets, liabilities, financial condition,
prospects or operations of the Company that have not been set forth in this
Agreement or in the other documents, certificates, instruments or statements
furnished to the Purchaser by or on behalf of the Company.
(t)
Reliance
by Purchaser.
The
Company understands that the representations, warranties, covenants and
acknowledgements set forth in this Section 3.1 constitute a material inducement
to the Purchaser to execute and deliver the Transaction Documents.
13
3.2
Representations
and Warranties of the Purchaser.
The
Purchaser hereby represents and warrants as of the date hereof and as of the
Closing Date to the Company as follows:
(a)
Organization;
Authority.
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 and delivery of
the
Transaction Documents and performance by such Purchaser of the transactions
contemplated by the Transaction Documents have been duly authorized by all
necessary corporate or similar action on the part of such Purchaser. Each
Transaction Document to which it is a party has been duly executed by Purchaser,
and when delivered by Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of the 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.
The
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 direct or indirect arrangement or understandings with any other Persons
to
distribute or 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.
(c)
Purchaser
Status.
Purchaser is 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.
The
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.
The 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.
14
(e)
Short
Sales and Confidentiality Prior To The Date Hereof.
Other
than consummating the transactions contemplated hereunder, the Purchaser has
not, nor has any Person acting on behalf of or pursuant to any understanding
with such Purchaser, directly or indirectly executed any purchases or sales,
including Short Sales, of the securities of the Company during the period
commencing from the time that the Purchaser and Company first discussed the
terms of the Option or any other Person representing the Company setting forth
the material terms of the transactions contemplated hereunder until the date
hereof (“Discussion
Time”).
Other
than to other Persons party to this Agreement, such Purchaser has maintained
the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1
Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to an effective Registration Statement 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, to the effect that such
transfer does not require registration of such transferred Securities under
the
Securities Act. As a condition of transfer, any such transferee shall agree
in
writing to be bound by the terms of this Agreement and shall have the rights
of
a Purchaser under this Agreement and the Registration Rights
Agreement.
(b)
The
Purchaser agrees to the imprinting, so long as is required by this Section
4.1,
of a legend on any of the Securities in the following form:
THIS
SECURITY HAS 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. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
15
The
restrictions set forth in this Section 4.1 shall terminate upon the effective
date of the Registration Statement filed under the Securities Act or the
registration of the Shares under the Exchange Act.
4.2
Securities
Laws Disclosure; Publicity. The Company shall issue a Current Report on Form
8-K, disclosing the material terms of the transactions contemplated hereby,
and
filing the Transaction Documents as exhibits thereto within the required period
of time following the Closing. The Company and the Purchaser shall consult
with
each other in issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor the 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 the Purchaser,
or
without the prior consent of the Purchaser, with respect to any press release
of
the Company, which consent shall not unreasonably be withheld or delayed, 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.
4.3
Limitation
on Ownership & Representation.
(a) While
the
Option
remains
effective and outstanding
(or in
the event the parties enter into a licensing agreement as contemplated in the
Option, for
the
duration of any
such
licensing agreement),
the
Purchaser shall not: (i) seek to secure board representation; (ii) enter into
any voting agreement or grant a proxy to any third party with respect to any
Common Stock owned by the Purchaser; or (iii) acquire any of the Company’s
Common Stock or Common Stock Equivalents
to the
extent that any such acquisition would trigger the filing under
Section
13(d) of the Exchange Act.
For
purposes of this Section 4.3, (A) beneficial ownership, the manner of
calculation of the percentage, and the definition of
Common
Stock Equivalents
shall
all
be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder,
and
(B)
in
determining the number of outstanding shares of Common Stock, the
parties
may rely on the number of outstanding shares of Common Stock as reflected in
(x)
the Company’s most recent Form 10-QSB or Form 10-KSB, as the case may be, (y) a
more recent public announcement by the Company or (z) any other notice by the
Company or the Company’s Transfer Agent setting forth the number of shares of
Common Stock outstanding. Upon the written or oral request of the Purchaser,
the
Company shall within two Trading Days confirm orally and in writing to the
Purchaser the number of shares of Common Stock and the Common Stock Equivalents
then outstanding,
and if
requested by the Purchaser, the percentage that would result from the
Purchaser’s additional acquisition, calculated pursuant to Section 13(d) of the
Exchange Act,
it
being acknowledged by the Purchaser that if
the
Company provides calculation of the percentage, the
Company is not representing to the
Purchaser that such calculation is in compliance with Section 13(d) of the
Exchange Act and the
Purchaser is solely responsible for any schedules required to be filed in
accordance therewith.
16
(b) In
the
event Purchaser breaches any of the covenants and agreements contained in
Section 4.3(a), Purchaser acknowledges that monetary remedies would not be
sufficient and acknowledges that any such violation or threatened violation
will
cause irreparable injury to the other party and that, in addition to any other
remedies that may be available, in law, in equity or otherwise, the Company
shall be entitled to the following
remedies, cumulatively: (i) the obtaining
of injunctive relief against the threatened breach or the continuation of any
such breach, without the necessity of proving actual damages and
(ii)
a determination by the Company, in its sole discretion, that any votes cast
by
the Purchaser, Affiliates acting on its behalf, or assigns with regard to the
Common Stock then owned, are improper, void and of no force or effect, which
determination will be binding on the Purchaser.
4.4
Use
of
Proceeds. The Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes.
4.5
Indemnification
of Purchaser. Subject to the provisions of this Section 4.5, the Company
will indemnify and hold Purchaser and its directors, officers, shareholders,
members, partners, employees and agents (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding
a
lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, shareholders, agents, members,
partners or employees (and any other Persons with a functionally equivalent
role
of a Person holding such titles notwithstanding a lack of such title or any
other title) of such controlling Persons (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 any
such
Purchaser
Party
in any
capacity, 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 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 reasonably
acceptable to the Purchaser Party. 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, in which case the
Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. The Company will not be liable to Purchaser
Party under this Agreement (i) for any settlement by 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, damage or liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction
Documents.
17
4.6
Short
Sales and Confidentiality After The Date Hereof. The Purchaser covenants
that neither it nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any Short Sales during the period commencing
at the Discussion Time and ending at the expiration of the Option Period or
in
the event a licensing agreement is reached between the parties, at the
termination of the licensing period.
4.7
Delivery
of Securities After Closing. The Company shall deliver, or cause to be
delivered, the Securities purchased by the Purchaser within 15 Trading Days
of
the Closing Date.
4.8
Financial
Reports. The Company shall furnish to the Purchaser the following financial
statements prepared in accordance with GAAP, consistently applied: (i) within
sixty (60) days after the end of each calendar quarter, the Company’s unaudited
or if available, audited balance sheet and statements of income and cash flows
for the quarter just ended; and (ii) as soon as possible after the end of each
fiscal year of the Company and not later than one hundred twenty (120) days
after the end of each fiscal year, the Company’s unaudited or if available,
audited balance sheet as of the end of its fiscal year and the related
statements of income and cash flows for the fiscal year.
4.9
Inspection
Rights. The Purchaser shall have the right to visit and inspect any of the
properties of the Company, and to discuss the affairs, finances, accounts and
capitalization of the Company with its officers, and to review such information
as is reasonably requested all at such reasonable times and as often as may
be
reasonably requested; provided, however, that the Company shall not be obligated
under this Section 4.9 with respect to a competitor of the Company. In
the
event Purchaser avails itself of its inspection rights as contained herein,
Purchaser acknowledges that it may come privy to material inside information
and
accordingly, agrees to purchase or sell any of the Company’s securities until
such information is publicly disclosed.
18
4.10
Notice
of Stockholder Meeting or Resolutions. The Company shall provide written
notice to the Purchaser of any proposed meeting, resolution or consent of the
stockholders, setting forth the agenda in reasonable detail together with other
appropriate documents to inform the Purchaser adequately of matters to be
discussed and resolved, which notice shall be given no later than two (2) weeks
in advance of the date of such meeting, resolution or consent.
ARTICLE
V.
MISCELLANEOUS
5.1
Fees
and Expenses. Except as expressly set forth in the Transaction Documents to
the contrary, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery
and
performance of this Agreement. The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the delivery
of
any Securities to the Purchaser.
5.2
Entire
Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
5.3
Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth
on
the signature pages attached hereto prior to 5:30 p.m. (New York City time)
on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
set
forth on the signature pages attached hereto on a day that is not a Trading
Day
or later than 5:30 p.m. (New York City 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 the signature pages attached hereto.
5.4
Amendments;
Waivers. No provision of this Agreement may be waived or amended except in a
written instrument signed by the Company and the Purchaser or, in the case
of a
waiver, by the party against whom enforcement of any such waived provision
is
sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in
the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party
to
exercise any right hereunder in any manner impair the exercise of any such
right.
19
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.
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 (other than by merger). 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 of the Transaction Documents that apply to the
“Purchaser.”
5.7
No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is
not
for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.8.
5.8
Governing
Law. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware,
without regard to the principles of conflicts of law thereof. Each party agrees
that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the state
of
Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in the state of Delaware 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 is an inconvenient venue for
such
proceeding. Each party agrees
that any
service
of process
in any
such suit, action or proceeding shall
be
made in strict accordance with the Convention on the Service Abroad of Judicial
and Extrajudicial Documents in Civil or Commercial Matters, as the same is
effective for the jurisdiction of the Company and the Purchaser,
respectively.
Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law. 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 reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
20
5.9
Survival.
The representations and warranties contained herein shall survive the Closing
and the delivery of the Shares.
5.10
Execution.
This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, 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 or “.pdf” signature page were an original thereof.
5.11
Severability.
If any term, provision, covenant or restriction of this Agreement is held by
a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
5.12
Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction
Documents, whenever Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then the Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to
the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.
5.13
Replacement
of Securities. If any certificate or instrument evidencing the 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 (in the
case of mutilation), 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. The applicant for a new certificate
or instrument under such circumstances shall also pay any reasonable third-party
costs (including customary indemnity) associated with the issuance of such
replacement Securities.
5.14
Remedies.
In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, the Purchaser and the Company will be
entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agrees to waive and not to assert in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
21
5.15
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.
5.16
Waiver
of Jury Trial. In any action, suit or proceeding in any jurisdiction brought
by any party against any other party, the parties each knowingly and
intentionally, to the greatest extent permitted by applicable law, hereby
absolutely, unconditionally, irrevocably and expressly waives forever trial
by
jury.
(Signature
Pages Follow)
22
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.
|
|
Address
for Notice:
0000
Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx,
Xxxxxxxx 00000
|
|
By:__________________________________________
Name:
Title:
|
Attn:
e-mail:
Tel:
Fax:
|
|
With
a copy to (which shall not constitute notice):
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
23
[PURCHASER
SIGNATURE PAGES TO NRLS 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: CJ CheilJedang Corporation____
Signature
of Authorized Signatory of Purchaser:
__________________________________
Name
of
Authorized Signatory: _Jin Xxx Xxx
_____________________________________
Title
of
Authorized Signatory: _Chief Executive Officer
_________________________
Email
Address of Purchaser:_
xxx0000@XX.xxx
(attn: Xxxxxx-Xxx Xxx, Stem Cell Business Team, Pharma BU)_______
Fax
Number of Purchaser:
_x00-0-0000-0000_____________________________________________
Address
for Notice of Purchaser:
Attn:
Xxxxxx-Xxx Xxx, Stem Cell Business Team,
CJ
CheilJedang Corporation
KCCI
Building 45, 4-ga, Namdaemun-ro, Jung-gu, Xxxxx, 000-000 Xxxxx
Address
for Delivery of Securities for Purchaser (if not same as above):
Subscription
Amount:
$:
Shares:
#:
EIN
Number:
[SIGNATURE
PAGES CONTINUE]
24
