SUBSCRIPTION AGREEMENT
Exhibit 10.27
Gentlemen:
The undersigned (the “Investor”) hereby confirms its agreement with Biodel Inc., a Delaware
corporation (the “Company”), as follows:
1. This Subscription Agreement, including the Terms and Conditions for Purchase of Securities
attached hereto as Annex I (collectively, this “Agreement”) is made as of the date set
forth below between the Company and the Investor.
2. The Company has authorized the sale and issuance to certain investors of up to an aggregate
of 13,888,889 units (the “Units”), with each Unit consisting of (i) one share (each, a “Common
Share,” collectively, the “Common Shares”) of the Company’s common stock, par value $.01 per share
(the “Common Stock”), and (ii) one warrant (each, a “Warrant,” collectively, the “Warrants”) to
purchase 0.65 of a share of Common Stock (and the fractional amount being the “Warrant Ratio”);
provided, however, that, in the event that the Investor (together with any other
investor purchasing Securities (as defined below) in the Offering (as defined below) whose
beneficial ownership of Common Stock would be aggregated with the Investor’s for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the
applicable rules of the Securities and Exchange Commission (the “Commission”)) agrees to purchase
in excess of an aggregate of 3,861,388 Units in the Offering, all Units in excess of that amount
shall consist of one share (each, a “Preferred Share,” collectively, the “Preferred Shares” and,
together with the Common Shares, the “Shares”) of the Company’s Series A Convertible Preferred
Stock, par value $.01 per share (the “Preferred Stock”), and (ii) one Warrant to purchase 0.65 of a
share of Common Stock. Each Warrant shall be in substantially the form attached hereto as
Exhibit A. The Preferred Stock shall have the rights, preferences, privileges and
restrictions set forth in the Certificate of Designation substantially in the form attached hereto
as Exhibit B (the “Certificate of Designation”). Each Unit shall be sold for a purchase
price of $2.16 per Unit (the “Purchase Price”). Units will not be issued or certificated. The
Shares and Warrants are immediately separable and will be issued separately. The shares of Common
Stock issuable upon exercise of the Warrants are referred to herein as the “Warrant Shares” and the
shares of Common Stock issuable upon conversion of the Preferred Shares are referred to herein as
the “Conversion Shares.” The Shares, the Warrants, the Warrant Shares and the Conversion Shares
are referred to herein, collectively, as the “Securities”.
3. The offering and sale of the Securities (the “Offering”) are being made pursuant to
(a) an effective Registration Statement on Form S-3, Registration No. 333-153167 (the “Registration
Statement”) filed by the Company with the Commission, including the prospectus contained therein
(the “Base Prospectus”), (b) if applicable, certain “free writing prospectuses” (as that term is
defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”)), that have been or
will be filed, if required, with the Commission and delivered to the Investor on or prior to the
date hereof (the “Issuer Free Writing Prospectus”), containing certain supplemental information
regarding the Units, the terms of the Offering and the Company, and (c) a Prospectus Supplement
(the “Prospectus Supplement” and, together with the Base Prospectus, the “Prospectus”) containing
certain supplemental information regarding the Securities, the terms of the Offering and the
Company that will be filed with the Commission and delivered to the Investor (or made available to
the Investor by the filing by the Company of an electronic version thereof with the Commission).
4. The Company and the Investor agree that the Offering is being made subject to the Placement
Agency Agreement, dated May 12, 2011 (the “Placement Agency Agreement”), among the Company and
Xxxxxxx Xxxxx & Company, L.L.C. and JMP Securities LLC (the “Placement Agents”). The Company and
the Investor agree that the Investor will purchase from the Company and the Company will issue and
sell to the Investor the Securities set forth below for the aggregate purchase price set forth
below. The Securities shall be purchased pursuant to the Terms and Conditions for Purchase of
Securities attached hereto as Annex I and incorporated herein by this reference as if fully
set forth herein. The Investor acknowledges that the Offering is not being underwritten by any of
the Placement Agents named in the Prospectus Supplement and that there is no minimum offering
amount.
5. The manner of settlement of the Common Shares purchased by the Investor shall be as
follows:
Delivery by crediting the account of the Investor’s prime broker (as specified by such
Investor on Exhibit C annexed hereto) with the Depository Trust Company (“DTC”) through its
Deposit/Withdrawal At Custodian (“DWAC”) system, whereby the Investor’s prime broker shall
initiate a DWAC transaction on the Closing Date using its DTC participant identification
number, and released by Continental Stock Transfer & Trust Company, the Company’s transfer
agent (the “Transfer Agent”), at the Company’s direction. NO LATER THAN ONE (1) BUSINESS
DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR
SHALL:
| (I) | DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE COMMON SHARES ARE MAINTAINED TO SET UP A DWAC INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE COMMON SHARES, AND |
| (II) | REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SECURITIES BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT: |
[INSERT BANK INFORMATION]
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IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE
PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DWAC IN A TIMELY
MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE SECURITIES OR DOES
NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES AND WARRANTS MAY NOT BE
DELIVERED AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER.
6. The executed Warrants shall be delivered in accordance with the terms thereof.
Certificates for any Preferred Shares purchased by the Investor, registered in the name of the
Investor, shall be delivered to the Investor promptly following the Closing.
7. The Investor represents that, except as set forth below, (a) it has had no position, office
or other material relationship within the past three years with the Company or persons known to it
to be affiliates of the Company, (b) it is not a member of the Financial Industry Regulatory
Authority, Inc. or an Associated Person (as such term is defined under the NASD Membership and
Registration Rules Section 1011) as of the Closing, and (c) neither the Investor nor any group of
Investors (as identified in a public filing made with the Commission) of which the Investor is a
part in connection with the Offering of the Units, acquired, or obtained the right to acquire, 20%
or more of the Common Stock (or securities convertible into or exercisable for Common Stock) or the
voting power of the Company on a post-transaction basis.
Exceptions:
(If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)
8. The Investor represents that it has received (or otherwise had made available to it by the
filing by the Company of an electronic version thereof with the Commission) the Base Prospectus,
dated February 3, 2010, which is a part of the Company’s Registration Statement, the documents
incorporated by reference therein and any Issuer Free Writing Prospectus (collectively, the
“Disclosure Package”), prior to or in connection with the receipt of this Agreement. The Investor
acknowledges that, prior to the delivery of this Agreement to the Company, the Investor will
receive certain additional information regarding the Offering, including pricing information (the
“Offering Information”). Such information may be provided to the Investor by any means permitted
under the Securities Act, including the Prospectus Supplement, a free writing prospectus and oral
communications.
9. No offer by the Investor to buy Securities will be accepted and no part of the Purchase
Price will be delivered to the Company until the Investor has received the Offering Information and
the Company has accepted such offer by countersigning a copy of this Agreement, and any such offer
may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the
Company (or any Placement Agent on behalf of the Company) sending (orally, in writing or by
electronic mail) notice of its acceptance of such offer. An indication of interest will involve no
obligation or commitment of any kind until the Investor has been delivered the Offering Information
and this Agreement is accepted and countersigned by or on behalf of the Company. The Investor
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understands and agrees that the Company, in its sole discretion, reserves the right to accept or
reject this subscription for Securities, in whole or in part.
10. The Company acknowledges that the only material, non-public information relating to the
Company it has provided to the Investor in connection with the Offering prior to the date hereof is
the existence of the Offering. The Company understands and confirms that the Investor will rely on
the foregoing representations in effecting transactions in securities of the Company.
[REMAINDER OF PAGE LEFT BLANK]
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Number of Units Containing Common Shares:
Number of Units Containing Preferred Shares:
Purchase Price Per Unit: $
Aggregate Purchase Price: $
Please confirm that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.
| Dated as of: May 12, 2011 |
||
| INVESTOR | ||
| By: | ||
| Print Name: | ||
| Title: | ||
| Address: |
||
Agreed and Accepted
this 12th day of May, 2011:
this 12th day of May, 2011:
| By: | ||||
| Name: | ||||
| Title: | ||||
Signature Page to Subscription Agreement
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SECURITIES
1. Authorization and Sale of the Securities. Subject to the terms and conditions of this
Agreement, the Company has authorized the sale of the Securities.
2. Agreement to Sell and Purchase the Securities; Placement Agents.
2.1 At the Closing (as defined in Section 3.1), the Company will sell to the Investor,
and the Investor will purchase from the Company, upon the terms and conditions set forth herein,
the number of Units set forth on the last page of the Agreement to which these Terms and Conditions
for Purchase of Securities are attached as Annex I (the “Signature Page”) for the aggregate
purchase price therefor set forth on the Signature Page.
2.2 The Company proposes to enter into substantially this same form of Subscription Agreement
with certain other investors (the “Other Investors”) and expects to complete sales of Securities to
them. The Investor and the Other Investors are hereinafter sometimes collectively referred to as
the “Investors,” and this Agreement and the Subscription Agreements executed by the Other Investors
are hereinafter sometimes collectively referred to as the “Agreements.”
2.3 Investor acknowledges that the Company has agreed to pay the Placement Agents a fee (the
“Placement Fee”) in respect of the sale of the Securities to the Investors.
2.4 The Company has entered into the Placement Agency Agreement with the Placement Agents that
contains certain representations, warranties, covenants and agreements of the Company that may be
relied upon by the Investor, which shall be a third-party beneficiary thereof.
3. Closing and Delivery of the Shares, Warrants and Funds.
3.1 Closing. The completion of the purchase and sale of the Securities (the
“Closing”) shall occur at a place and time (the “Closing Date”) to be specified by the Company and
the Placement Agents, and of which the Investor will be notified in advance by the Placement
Agents, in accordance with Rule 15c6-1 promulgated under the Exchange Act. At the Closing, (a) the
Company shall cause the Transfer Agent to deliver to the Investor the number of Common Shares
included in the “Units Containing Common Shares” set forth on the Signature Page registered in the
name of the Investor or, if so indicated on the Investor Questionnaire attached hereto as
Exhibit C, in the name of a nominee designated by the Investor, (b) the Company shall cause
to be delivered to the Investor a certificate evidencing the number of Preferred Shares included in
the “Units Containing Preferred Shares” set forth on the Signature Page, (c) the Company shall
cause to be delivered to the Investor a Warrant to purchase a number of whole Warrant Shares
determined by multiplying the aggregate number of Units set forth on the Signature Page by the
Warrant Ratio and rounding down to the nearest whole number and (c) the aggregate purchase price
for the Securities being purchased by the Investor will be delivered by or on behalf of the
Investor to the Company.
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3.2 Conditions to the Obligations of the Parties.
(a) Conditions to the Company’s Obligations. The Company’s obligation to issue and
sell the Securities to the Investor shall be subject to: (i) the receipt by the Company of the
purchase price for the Securities being purchased hereunder as set forth on the Signature Page and
(ii) the accuracy of the representations and warranties made by the Investor in this Agreement and
the fulfillment of those undertakings of the Investor in this Agreement to be fulfilled prior to
the Closing Date.
(b) Conditions to the Investor’s Obligations. The Investor’s obligation to purchase
the Securities will be subject to the accuracy of the representations and warranties made by the
Company in this Agreement and the fulfillment of those undertakings of the Company to be fulfilled
prior to the Closing Date, including without limitation, those contained in the Placement
Agreement, and to the condition that the Placement Agents shall not have: (i) terminated the
Placement Agreement pursuant to the terms thereof or (ii) determined that the conditions to the
closing in the Placement Agreement have not been satisfied. The Investor’s obligations are
expressly not conditioned on the purchase by any or all of the Other Investors of the Securities
that they have agreed to purchase from the Company. The Investor understands and agrees that, in
the event that the Placement Agents in their sole discretion determine that the conditions to
closing in the Placement Agreement have not been satisfied or if the Placement Agreement may be
terminated for any other reason permitted by the Placement Agency Agreement, then the Placement
Agents may, but shall not be obligated to, terminate such Agreement, which shall have the effect of
terminating this Subscription Agreement pursuant to Section 14 below.
3.3 Delivery of Funds. In connection with the settlement of the Common Shares
purchased by such Investor through DTC’s DWAC delivery system, no later than one (1) business
day after the execution of this Agreement by the Investor and the Company, the Investor shall
remit by wire transfer the amount of funds equal to the aggregate purchase price for the Securities
being purchased by the Investor to the following account designated by the Company:
[INSERT BANK INFORMATION]
3.4 Delivery of Common Shares. In connection with the settlement of the Common Shares
purchased by such Investor through DTC’s DWAC delivery system, no later than one (1) business
day after the execution of this Agreement by the Investor and the Company, the Investor shall
direct the broker-dealer at which the account or accounts to be credited with the Common Shares
being purchased by such Investor are maintained, which broker/dealer shall be a DTC participant, to
set up a DWAC instructing the Transfer Agent to credit such account or accounts with the Common
Shares. Such DWAC instruction shall indicate the settlement date for the deposit of the Common
Shares, which date shall be provided to the Investor by the Placement Agents. At Closing, the
Company shall direct the Transfer Agent to credit the Investor’s account or accounts with the
Common Shares pursuant to the information contained in the DWAC.
4. Representations, Warranties and Covenants of the Investor. The Investor acknowledges,
represents and warrants to, and agrees with, the Company and the Placement Agents that:
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4.1 The Investor (a) is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in securities presenting an investment
decision like that involved in the purchase of the Securities, including investments in securities
issued by the Company and investments in comparable companies, (b) has answered all questions on
the Signature Page and the Investor Questionnaire and the answers thereto are true and correct as
of the date hereof and will be true and correct as of the Closing Date and (c) in connection with
its decision to purchase the Securities set forth on the Signature Page, has received and is
relying only upon the Disclosure Package and the documents incorporated by reference therein and
the Offering Information.
4.2 (a) No action has been or will be taken in any jurisdiction outside the United States by
the Company or the Placement Agents that would permit an offering of the Securities, or possession
or distribution of offering materials in connection with the issue of the Securities in any
jurisdiction outside the United States where action for that purpose is required, (b) if the
Investor is outside the United States, it will comply with all applicable laws and regulations in
each foreign jurisdiction in which it purchases, offers, sells or delivers Securities or has in its
possession or distributes any offering material, in all cases at its own expense and (c) the
Placement Agents are not authorized to make and have not made any representation, disclosure or use
of any information in connection with the issue, placement, purchase and sale of the Securities,
except as set forth or incorporated by reference in the Base Prospectus, any Issuer Free Writing
Prospectus or the Prospectus Supplement.
4.3 (a) The Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and (b) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at
law) and except as to the enforceability of any rights to indemnification or contribution that may
be violative of the public policy underlying any law, rule or regulation (including any federal or
state securities law, rule or regulation).
4.4 The Investor understands that nothing in this Agreement, the Prospectus, the Disclosure
Package, the Offering Information or any other materials presented to the Investor in connection
with the purchase and sale of the Securities constitutes legal, tax or investment advice. The
Investor has consulted such legal, tax and investment advisors and made such investigation as it,
in its sole discretion, has deemed necessary or appropriate in connection with its purchase of
Securities. The Investor also understands that there is no established public trading market for
the Preferred Shares or Warrants being offered in the Offering, and that the Company does not
expect such a market to develop. In addition, the Company does not intend to apply for listing of
the Preferred Shares or the Warrants on any securities exchange. The Investor understands that
without an active market, the liquidity of the Preferred Shares and the Warrants will be limited.
4.5 Since the time at which either Placement Agent first contacted the Investor about the
Offering, the Investor has not disclosed any information regarding the Offering to any third
parties (other than its legal, accounting and other advisors) and has not engaged in any
transactions involving the securities of the Company (including, without limitation, any Short
Sales involving the Company’s securities). The Investor covenants that it will not engage in any transactions involving the
securities of the Company (including Short Sales) prior to the time that the transactions
contemplated by this
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Agreement are publicly disclosed. The Investor agrees that it will not use any of the Securities
acquired pursuant to this Agreement to cover any short position in the Common Stock if doing so
would be in violation of applicable securities laws. For purposes hereof, “Short Sales” include,
without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under
the Exchange Act, whether or not against the box, and all types of direct and indirect stock
pledges, forward sales contracts, options, puts, calls, short sales, swaps, “put equivalent
positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements (including
on a total return basis), and sales and other transactions through non-U.S. broker dealers or
foreign regulated brokers.
5. Survival of Representations, Warranties and Agreements; Third-Party Beneficiaries.
Notwithstanding any investigation made by any party to this Agreement or by the Placement Agents,
all covenants, agreements, representations and warranties made by the Company and the Investor
herein will survive the execution of this Agreement, the delivery to the Investor of the Securities
being purchased and the payment therefor. The Placement Agents shall be third-party beneficiaries
with respect to the representations, warranties and agreements of the Investor in Section 4
hereof.
6. Notices. All notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International Federal Express or
facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed and (iv) if delivered by facsimile, upon electronic
confirmation of receipt and will be delivered and addressed as follows:
| (a) | if to the Company, to: |
Biodel Inc.
000 Xxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Faciimile: (000) 000-0000
000 Xxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Faciimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
| (b) | if to the Investor, at its address on the Signature Page hereto, or at such other address or addresses as may have been furnished to the Company in writing. |
7. Changes. This Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.
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8. Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this Agreement.
9. Severability. In case any provision contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein will not in any way be affected or impaired thereby.
10. Governing Law. This Agreement will be governed by, and construed in accordance with, the
internal laws of the State of New York, without giving effect to the principles of conflicts of law
that would require the application of the laws of any other jurisdiction.
11. Counterparts. This Agreement may be executed in two or more counterparts, each of which
will constitute an original, but all of which, when taken together, will constitute but one
instrument, and will become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties. The Company and the Investor acknowledge and agree that
the Company shall deliver its counterpart to the Investor along with the Prospectus Supplement (or
the filing by the Company of an electronic version thereof with the Commission). Delivery of an
executed counterpart by facsimile or portable document format (pdf) shall be effective as delivery
of a manually executed counterpart thereof.
12. Confirmation of Sale. The Investor acknowledges and agrees that such Investor’s receipt
of the Company’s signed counterpart to this Agreement, together with the Prospectus Supplement (or
the filing by the Company of an electronic version thereof with the Commission), shall constitute
written confirmation of the Company’s sale of Securities to such Investor.
13. Press Release. The Company and the Investor agree that the Company shall, prior to the
opening of the financial markets in New York City on the business day immediately after the date
hereof, (a) issue a press release announcing the Offering and disclosing all material information
regarding the Offering and (b) file a Current Report on Form 8-K with the Commission including a
form of this Agreement, a form of Certificate of Designation and a form of Warrant as exhibits
thereto.
14. Termination. In the event that the Placement Agreement is terminated by the Placement
Agents pursuant to the terms thereof, this Agreement shall terminate without any further action on
the part of the parties hereto.
15. Fees and Expenses. 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.
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Exhibit A
FORM OF WARRANT
Exhibit B
FORM OF CERTIFICATE OF DESIGNATION
Exhibit C
INVESTOR QUESTIONNAIRE
Pursuant to Section 3 of Annex I to the Agreement, please provide us with the
following information:
1.
|
The exact name that your Shares and Warrants are to be registered in. You may use a nominee name if appropriate: | |||||
2.
|
The relationship between the Investor and the registered holder listed in response to item 1 above: | |||||
3.
|
The mailing address of the registered holder listed in response to item 1 above: | Street Address | ||||
| City, State, ZIP | ||||||
| Tel: | ||||||
4.
|
Social Security Number or Tax Identification Number: | |||||
5.
|
DTC Participant: | Broker Name: | ||||
| (broker-dealer at which the account or accounts to be credited with the Common Shares are maintained) | DTC Participant Number: | |||||
| Account Name: | ||||||
| Account Number: | ||||||
| Contact to initiate DWAC: | ||||||
| Telephone #: | ||||||
| E-mail: | ||||||
6.
|
Address for delivery of your physical certificates representing your Warrants (and Preferred Shares, if applicable), if you would like them sent to a third party and not the address above: | Contact Person / Window | ||||
| Company: | ||||||
| Street Address | ||||||
| City, State, ZIP | ||||||
| Tel: | ||||||
| Account Number (if applicable): |
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