COMMON STOCK PURCHASE AGREEMENT
This
Common Stock Purchase Agreement (this “Agreement”) is made as of August 22, 2005
between Callisto Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the investors listed on Exhibit
A
hereto, each of which is herein referred to as an “Investor” and collectively,
the “Investors”.
RECITALS:
WHEREAS,
the Investors desire to purchase from the Company, and the Company desires to
sell to the Investors, up to 1,869,203 shares of the Company’s common stock, par
value $0.0001 per share (the “Common Stock”), upon the terms and subject to the
conditions set forth herein;
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein, the parties hereto agree as follows:
1. PURCHASE
AND SALE OF SHARES.
1.1
Purchase
and Sale of Shares.
Upon the terms and subject to the conditions of this Agreement, at the Closing
(as defined below), the Company agrees to sell to the Investors, and each
Investor agrees to purchase from the Company the number of shares of the
Company’s Common Stock set forth opposite such Investor’s name on Exhibit
A hereto
(the “Shares”) at the per share purchase price of $0.97 (“Purchase Price”).
1.2
Closing.
The closing of the purchase and sale of the Shares (the “Closing”) shall take
place at the offices of the Company at 5:00 p.m., Eastern time on August 22,
2005, or such other location, time or date as the parties shall mutually agree,
but only after the satisfaction or waiver of each of the conditions set forth in
Sections 6 and 7 (the “Closing Date”).
1.3
Deliveries.
At the Closing, the Company shall deliver to each Investor at the address set
forth on such Investor’s signature page hereto, a certificate or certificates,
registered in the name of the applicable Investor, representing the Shares
purchased by such Investor, and each Investor shall deliver to the Company the
aggregate Purchase Price, by wire transfer of immediately available funds to the
following account:
2.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
For
purposes of this Section, all references to “Company” in Sections 2.1, 2.4 (with
the exception of subsection (a) thereof), 2.7, 2.9 through 2.12, and 2.14
through 2.20 shall be deemed to be a reference to the Company and all of its
direct and indirect subsidiaries. The Company hereby represents and warrants to
each Investor that, except as set forth on a Schedule of Exceptions (the
“Company Schedule of Exceptions”) attached hereto as Schedule
A,
which exceptions shall be deemed to be representations and warranties as if made
hereunder:
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2.1
Corporate
Organization.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, and has the requisite
corporate power and authority to own or lease its properties and to carry on its
business as now being conducted. The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the property owned or leased by it or the nature of the business conducted
by it makes such qualification necessary, except to the extent that the failure
to be so qualified or in good standing would not have, individually or in the
aggregate, a Material Adverse Effect. For purposes of this Agreement, “Material
Adverse Effect” shall mean, as to any entity, any material adverse effect on the
business, operations, conditions (financial or otherwise), assets, results of
operations or prospects of that entity individually or of the Company and its
subsidiaries as a whole.
2.2
Capitalization;
Organizational Documents.
(a)
The
authorized capital stock of the Company will consist immediately prior to the
Closing of 75,000,000 shares of Common Stock, of which as of the date hereof,
31,238,893 shares are issued and outstanding, and 20,000,000 shares of preferred
stock of the Company, of which, as of the date hereof, no shares are issued or
outstanding. All of the issued and outstanding shares have been duly and validly
issued and are fully paid and nonassessable and have been issued in accordance
with all applicable federal and state securities laws. No shares of Common Stock
are subject to preemptive rights or any other similar rights or any liens
suffered or permitted by the Company. There are no preemptive rights or rights
of first refusal or similar rights which are binding on the Company permitting
any person to subscribe for or purchase from the Company shares of its capital
stock pursuant to any provision of applicable law, the Certificate of
Incorporation (as defined below) or the Company’s By-laws. There are no
securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Shares. The Company has made available
to each Investor true and correct copies of the Company’s Certificate of
Incorporation, as amended and as in effect on the date hereof (the “Certificate
of Incorporation”), and the Company’s By-laws, as in effect on the date hereof
(the “By-laws”).
(b)
Upon
issuance of the Shares and payment of the Purchase Price therefor in accordance
with the terms of this Agreement, the Shares will be duly authorized, validly
issued, fully paid and nonassessable, and free and clear of any restrictions on
transfer and any taxes, claims, liens, pledges, options, security interests,
purchase rights, preemptive rights, trusts, encumbrances or other rights or
interests of any other person (other than any restrictions under the Securities
Act of 1933, as amended (the “Securities Act”).
2.3
Authorization;
Enforcement.
(a) The Company has the requisite corporate power and authority to enter into
and perform its obligations under this Agreement and to issue, sell and perform
its obligations with respect to the Shares in accordance with the terms hereof,
(b) the execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by the Company’s Board of Directors and its stockholders and no
further consent or authorization is required by the Company, its Board of
Directors or its stockholders, except as disclosed on the Company Schedule of
Exceptions and (c) this Agreement has been duly executed and delivered by the
Company. This Agreement, when executed and delivered by the
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Company,
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and
remedies.
2.4
No
Conflicts.
The execution, delivery and performance of this Agreement by the Company, and
the consummation by the Company of the transactions contemplated hereby, will
not (a) result in a violation of the Certificate of Incorporation or By-laws of
the Company, or (b) violate or conflict with, or result in a breach of, any
provision of, or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any lien on or against any of the properties of the Company, any
note, bond, mortgage, agreement, license, indenture or instrument to which the
Company is a party, or result in a violation of any statute, law, rule,
regulation, writ, injunction, order, judgment or decree applicable to the
Company or by which any property or asset of the Company is bound or affected,
except where such violation, conflict, breach or other consequence would not
have a Material Adverse Effect. Except as specifically contemplated by this
Agreement, the Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental or
regulatory or self-regulatory agency in order for it to execute, deliver or
perform any of its obligations under or contemplated by this Agreement in
accordance with the terms hereof. All consents, authorizations, orders, filings
and registrations that the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date
hereof.
2.5
SEC
Documents; Financial Statements.
The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities and Exchange Commission
(the “SEC”) pursuant to the reporting requirements of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) (all of the foregoing, and all
other documents and registration statements heretofore filed by the Company with
the SEC being hereinafter referred to as the “SEC Documents”). The Common Stock
is currently listed on the American Stock Exchange. The Company has delivered or
made available to each Investor true and complete copies of the SEC Documents.
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act, and the Exchange Act and
the rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents, and none of the SEC Documents, at the time they were filed with
the SEC (except those SEC Documents that were subsequently amended), contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except as disclosed in the Company Schedule of Exceptions, as of
their respective dates, the financial statements of the Company and its
subsidiaries included (or incorporated by reference) in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except (a) as may be
otherwise indicated in such financial statements or the
3
notes
thereto, or (b) in the case of unaudited interim statements, to the extent they
may exclude footnotes or may be condensed or summary statements) and fairly
present the financial position of the Company and its subsidiaries as of the
dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments). As of the date hereof, the Company has, on a timely basis,
made all filings required to be made by the Company with the SEC and the Company
is eligible to file a registration statement on Form S-3 with respect to
outstanding shares of its Common Stock to be offered for sale for the account of
any person other than the Company.
2.6
Securities
Law Exemption.
Assuming the truth and accuracy of each Investor’s representations set forth in
this Agreement, the offer, sale and issuance of the Shares as contemplated by
this Agreement are exempt from the registration requirements of the Securities
Act and applicable state securities laws, and neither the Company nor any
authorized agent acting on its behalf has taken or will take any action
hereafter that would cause the loss of such exemption.
2.7
Litigation.
All actions, suits, arbitrations or other proceedings or, to the Company’s
knowledge, investigations pending or threatened against the Company that would
have a Material Adverse Effect on the Company, are disclosed in the SEC
Documents. There is no action, suit, proceeding or, to the Company’s knowledge,
investigation that questions this Agreement or the right of the Company to
execute, deliver and perform under same.
2.8
Use
of Proceeds.
The net proceeds from the sale of the Shares shall be used solely for general
corporate and working capital purposes.
2.9
Intellectual
Property.
The Company owns, or has the contractual right to use, sell or license all
intellectual property necessary or required for the conduct of its business
as presently conducted and as proposed to be conducted, including, without
limitation, all trade secrets, processes, source code, licenses, trademarks,
service marks, trade names, logos, brands, copyrights, patents, franchises,
domain names and permits. The Company has not received any communications
alleging that the Company has violated or, by conducting its business presently
conducted or as proposed to be conducted, violates or will violate any
intellectual property rights of any other person or entity.
2.10 Title
to Property and Assets.
The Company has good and marketable title to or, in the case of leases and
licenses, has valid and subsisting leasehold interests or licenses in, all of
its properties and assets (whether real or personal, tangible or intangible)
free and clear of any liens or other encumbrances, except for liens or other
encumbrances that do not, individually or in the aggregate, have a Material
Adverse Effect. With respect to property leased by the Company, the Company has
a valid leasehold interest in such property pursuant to leases which are in full
force and effect, and the Company is in compliance in all material respects with
the provisions of such leases.
2.11 Compliance
with Laws.
The Company is and has been in compliance with all laws, rules, regulations,
orders, judgments or decrees that are applicable to the Company, the conduct of
its business as presently conducted and as proposed to be conducted, and
the
4
ownership
of its property and assets (including, without limitation, all Environmental
Laws (as defined below) and laws related to occupational safety, health, wage
and hour, and employment discrimination). All required reports and filings with
governmental authorities have been properly made as and when required, except
where the failure to report or file would not, individually or in the aggregate,
have a Material Adverse Effect. “Environmental Laws” means all federal, state,
local and foreign laws, ordinances, treaties, rules, regulations, guidelines and
permit conditions relating to contamination or pollution of the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata) or the protection of human health and worker safety, including, without
limitation, laws and regulations relating to transportation, storage, use,
manufacture, disposal or release of, or exposure of employees or others to,
Hazardous Materials (as defined below) or emissions, discharges, releases or
threatened releases of Hazardous Materials. “Hazardous Materials” means any
substance that has been designated by any governmental entity or by applicable
Environmental Laws to be radioactive, toxic, hazardous or otherwise a danger to
health or the environment, including, without limitation, PCBs, asbestos,
petroleum, urea formaldehyde and all substances listed as hazardous substances
pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, or defined as a hazardous waste pursuant to
the Resource Conservation and Recovery Act of 1976, as amended, and the
regulations promulgated pursuant to Environmental Laws, but excluding office and
janitorial supplies maintained in accordance with Environmental
Laws.
2.12 Licenses
and Permits.
The Company has obtained and maintains all material federal, state, local and
foreign licenses, permits, consents, approvals, registrations, memberships,
authorizations and qualifications required to be maintained in connection with
the operations of the Company as presently conducted and as proposed to be
conducted, the lack of which could have a Material Adverse Effect. The Company
is not in default in any material respect under any of such licenses, permits,
consents, approvals, registrations, memberships, authorizations and
qualifications.
2.13 Related
Entities.
Except for the Subsidiaries set forth on the Company Schedule of Exceptions, the
Company does not presently own or control, directly or indirectly, any interest
in any other subsidiary, corporation, association or other business entity. The
Company is not a party to any joint venture, partnership or similar
arrangement.
2.14 Changes.
Except as disclosed on the Company Schedule of Exceptions, since December 31,
2004, the Company has operated its business diligently and in the ordinary
course of business and, to the knowledge of the Company, there has not been, or
the Company has not (as the case may be):
(a)
any
Material Adverse Effect;
(b)
any
damage, destruction or loss, whether or not covered by insurance, which would
have a Material Adverse Effect;
(c)
any
waiver or compromise by the Company of a valuable right or of a material debt
owed it;
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(d)
sold,
encumbered, assigned or transferred any material assets or properties of the
Company, other than in the ordinary course of business;
(e)
incurred
any liability, whether accrued, absolute, contingent or otherwise, and whether
due or to become due, other than (i) in the ordinary course of business or (ii)
liabilities that are not, individually or in the aggregate, material to the
business, operations, condition (financial or otherwise), assets or results of
operations of the Company;
(f)
created,
incurred, assumed or guaranteed any indebtedness or subjected any of its assets
to any lien or encumbrance, except for indebtedness, liens or encumbrances that
are not, individually or in the aggregate, material to the business, operations,
condition (financial or otherwise), assets or results of operations of the
Company;
(g)
directly
or indirectly redeemed, purchased or otherwise acquired any shares of capital
stock of the Company;
(h)
declared,
set aside or paid any dividends or made any other distributions in cash or
property on the Company’s capital stock;
(i)
except
in the ordinary course of business of the Company, materially increased the
compensation payable or to become payable by the Company to any of its officers,
employees or directors or materially increased any bonus, insurance, pension or
other employee benefit plan, payment or arrangement made by the Company for or
with any such officers, employees or directors;
(j)
made
any direct or indirect loan to any stockholder, employee, officer or director of
the Company, other than advances made in the ordinary course of
business;
(k)
changed
any agreement to which the Company is a party which would have a Material
Adverse Effect; or
(l)
entered
into any agreement or commitment to do any of the things described in this
Section 2.14.
2.15
Employee
Benefit Plans.
All “employee benefit plans,” as such term is defined in the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), to which the Company has any
liability or obligation, contingent or otherwise, comply in all material
respects and have been maintained and administered in material compliance with
ERISA, the Internal Revenue Code of 1986, as amended (the “Code”), and all other
statutes, orders and governmental rules and regulations applicable to such
employee benefit plans. To the Company’s knowledge, the Company has not incurred
any liability pursuant to ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans (as defined in ERISA), and no event,
transaction or condition has occurred or exists that could reasonably
be
6
expected
to result in the incurrence of any such liability by the Company, or in the
imposition of any lien on any of the rights, properties or assets of the Company
pursuant to ERISA or to such penalty or excise tax provisions of the Code. The
Company does not maintain or contribute to, and has not maintained or
contributed to, any “multiemployer plan,” as such term is defined in
ERISA.
2.16
Taxes.
The Company has timely filed all tax returns and reports (federal, state and
local) required to be filed and these returns and reports are true and correct
in all material respects. The Company has paid all taxes and other assessments
shown to be due on such returns or reports. Neither the Internal Revenue Service
nor any state or local taxing authority has, during the past three (3) years,
examined or informed the Company it is in the process of examining any such tax
returns and reports. The provision for taxes of the Company as shown on the
financial statements included in the most recent SEC Filing, is adequate for
taxes due or accrued as of the date thereof and since that date the Company has
provided adequate accruals in accordance with generally accepted accounting
principals in its financial statements for any taxes incurred that have not been
paid, whether or not shown as being due on any tax returns. The Company has not
elected, pursuant to the Code, to be treated as a collapsible corporation
pursuant to Section 341(f) of the Code, nor has it made any other elections
pursuant to the Code (other than elections that relate solely to methods of
accounting, depreciation or amortization) that would have a Material Adverse
Effect.
2.17
Insurance.
The Company has in full force and effect fire, casualty and liability insurance
policies sufficient in amount (subject to reasonable deductibles) to allow the
Company to replace any of its properties that might be damaged or destroyed to
the extent and in the manner customary for companies in similar business
similarly situated.
2.18
Employees.
The Company does not have any collective bargaining agreements with any of its
employees. There is no labor union organizing activity pending or, to the
Company’s knowledge, threatened with respect to the Company.
2.19
Material
Contracts.
All contracts, agreements, instruments, leases, licenses, arrangements,
understandings or other documents filed with or required to be filed as exhibits
to the SEC Documents to which the Company therein is a party or by which it may
be bound have been so filed (the “Material Contracts”). The Material Contracts
that have been filed as exhibits are complete and correct copies of the
contracts, agreements, instruments, leases, licenses, arrangement, understanding
or other documents of which they purport to be copies. The Material Contracts
are valid and in full force and effect as to the Company, and, to the Company’s
knowledge, to the other parties thereto. Except as otherwise disclosed herein,
the Company is not in violation of, or default under (and there does not exist
any event or condition which, after notice or lapse of time or both, would
constitute such a default under), the Material Contracts, except to the extent
that such violations or defaults, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. The Company has not
received any notice of cancellation or any written communication threatening
cancellation of any Material Contract by any other party thereto. The Company is
not a party to and is not bound by any contract, agreement or instrument, or
subject to any restriction under the Certificate of
7
Incorporation,
its bylaws or other governing documents that would have a Material Adverse
Effect.
2.20
Suppliers.
No supplier that was material to the Company during the previous twenty-four
(24) months, has terminated, materially reduced or threatened to terminate or
material reduce its provision of products or services to the
Company.
2.21
Brokers
and Finders.
The Company has not employed any broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement that would be
entitled to a broker’s, finder’s or similar fee or commission in connection
herewith and therewith.
2.22
Disclosure.
This Agreement, Schedules and Exhibits hereto and all other documents delivered
to the Investors in connection herewith or therewith at the Closing, do not
contain any untrue statement of a material fact, or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. There are no facts that,
individually or in the aggregate, would have a Material Adverse Effect that have
not been disclosed to each Investor in this Agreement (including the Schedules
and Exhibits hereto), the SEC Documents or any other documents delivered to each
Investor in connection herewith or therewith at the Closing.
3.
REPRESENTATIONS
AND WARRANTIES OF INVESTOR.
Each
of the Investors, severally and not jointly, hereby represents and warrants to
the Company as to itself and not as to any other Investor, that:
3.1
Organization.
The Investor is a corporation, limited liability company or limited partnership,
as the case may be, duly organized, validly existing and in good standing in the
jurisdiction of its formation. The Investor has all requisite power and
authority to execute, deliver and perform all of its obligations of this
Agreement.
3.2
Authorization;
Enforcement.
(a) The Investor has the requisite power and authority to enter into and perform
its obligations under this Agreement, (b) the execution and delivery of this
Agreement by the Investor and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Investor, and (c) this Agreement has been duly executed and
delivered by the Investor. To the knowledge of the Investor, no other
proceedings on the part of the Investor are necessary to approve and authorize
the execution and delivery of this Agreement. This Agreement, when executed and
delivered, constitutes a valid and binding obligation of the Investor,
enforceable against the Investor in accordance with its terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors’ rights and
remedies.
3.3
No
Conflicts.
The execution, delivery and performance of this Agreement by the Investor, and
the consummation by the Investor of the transactions contemplated hereby will
not (a) result in a violation of the organizational documents of the Investor,
or (b) result in a
8
violation
of any statute, law, rule, regulation, writ, injunction, order, judgment or
decree applicable to the Investor, except where such violation, conflict, breach
or other consequence would not have a Material Adverse Effect. The Investor is
not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental or regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by this Agreement in accordance with the terms
hereof.
3.4
Investment
Representations.
(a)
The
Investor is an “accredited investor”, as defined in Regulation D promulgated
under the Securities Act, and has such knowledge, sophistication and experience
in financial and business matters that the Investor is capable of evaluating the
merits and risks of the investment in the Shares.
(b)
The
Investor (i) has adequate means of providing for its current financial needs and
possible contingencies, and has no need for liquidity of investment in the
Company, (ii) can afford to hold unregistered Shares for an indefinite period of
time and sustain a complete loss of the entire amount of the subscription, and
(iii) has not made an overall commitment to investments which are not readily
marketable that is so disproportionate as to cause such overall commitment to
become excessive.
(c)
The
Investor agrees and understands that the Shares are being offered and sold to
the Investor in reliance upon specific exemptions from the registration
requirements of the Securities Act and the rules and regulations promulgated
thereunder and that, in order to determine the availability of such exemptions
and the eligibility of the Investor to acquire the Shares, the Company is
relying upon the truth and accuracy of the Investor’s representations and
warranties, and compliance with the Investor’s covenants and agreements, set
forth in this Agreement. The Investor further agrees with the Company that (i)
no Shares were offered or sold to the Investor by means of any form of general
solicitation or general advertising, and in connection therewith, the Investor
did not (1) receive or review any advertisement, article, notice or other
communication published in a newspaper or magazine or similar media or broadcast
over television or radio, whether closed circuit or generally available; or (2)
attend any seminar meeting or industry investor conference whose attendees were
invited by any general solicitation or general advertising. The Investor hereby
acknowledges that the offering of the Shares has not been reviewed by the SEC or
any state regulatory authority since the offering of the Shares is intended to
be exempt from the registration requirements of Section 5 of the Securities Act
pursuant to Regulation D promulgated thereunder. The Investor understands that
the Shares have not been registered under the Securities Act and agrees not to
sell or otherwise transfer the Shares unless they are registered under the
Securities Act or unless an exemption from such registration is
available.
(d)
The
Shares are being purchased by the Investor for its own account, for investment
purposes only, not for the account of any other person, or corporation and not
with a view to distribution, assignment or resale to others in whole or in part.
The Investor has no present intention of selling, granting any participation in,
or otherwise distributing the Shares. The Investor does not have any contract,
undertaking, agreement or
9
arrangement
with any person to sell, transfer, pledge, hypothecate, grant any option to
purchase or otherwise dispose of any of the Shares. Nothing herein shall prevent
the distribution of any Shares to any subsidiary, member, partner, stockholder,
affiliate or former member, partner, stockholder or affiliate of the Investor in
compliance with the Securities Act and applicable state “blue sky”
laws.
(e)
The
Investor has had access to the Company’s SEC Documents and other public
filings.
(f)
With
respect to corporate tax and other economic considerations involved in an
investment in the Shares, the Investor is not relying on the Company. The
Investor has carefully considered and has, to the extent the Investor believes
such discussion necessary, discussed with its professional legal, tax,
accounting and financial advisors the suitability of an investment in the Shares
for its particular tax and financial situation and has determined that the
Shares are a suitable investment for the Investor.
(g)
The
Company has made available to the Investor all documents and information that
the Investor has requested relating to an investment in the Shares.
(h)
Subject
to the Company’s disclosures in this Agreement and the SEC Documents, the
Investor recognizes that the Company has generated no revenues to date, is not
expected to have any products commercially available for a number of years, if
at all, and that investment in the Company involves substantial risks, including
loss of the entire amount of such investment and has taken full cognizance of
and understands all of the risk factors relating to the purchase of the
Shares.
(i)
The
Investor has not been formed for the specific purpose of acquiring the
Shares.
4.
COVENANTS.
4.1
Confidentiality.
Each Investor hereby acknowledges that unauthorized disclosure of information
regarding the offering of the Shares pursuant to this Agreement may cause the
Company to violate Regulation FD and each Investor agrees to keep such
information confidential. The Company shall not publicly disclose the name of
any Investor, or include the name of any Investor in any filing with the
Commission or any regulatory agency or trading market, without the prior written
consent of such Investor, except (i) as required by the federal securities laws
and in connection with the registration statement contemplated by this Agreement
and (ii) to the extent such disclosure is required by law or trading market
regulations.
4.2
Restrictions
on Transfer.
(a)
Each
Investor hereby agrees, severally and not jointly, that, except in accordance
with a registration statement filed pursuant to Section 5.2 of this Agreement,
it will not dispose of any of such Investor’s Shares (other than pursuant to
Rule 144 promulgated under the Securities Act (“Rule 144”) or pursuant to a
registration statement filed with the SEC pursuant to the Securities Act) unless
and until such Investor shall have (A) notified the
10
Company
of the proposed disposition and shall have furnished the Company with a
statement of the circumstances surrounding the proposed disposition and (B) if
requested by the Company, furnished the Company with an opinion of counsel,
reasonably satisfactory in form and substance to the Company and the Company’s
counsel, to the effect that such disposition will not require registration under
the Securities Act. The restrictions on transfer imposed by this Section 4.2
shall cease and terminate as to the Shares held by an Investor when: (x) such
Shares shall have been effectively registered under the Securities Act and sold
by the holder thereof in accordance with such registration, or (y) on delivery
of an opinion of the kind described in the preceding sentence with respect to
such Shares. Each certificate evidencing the Shares shall bear an appropriate
restrictive legend as set forth in Section 4.2(b), except that such legend shall
not be required after a transfer is made in compliance with Rule 144 or pursuant
to a registration statement or if the opinion of counsel referred to above is
issued and provides that such legend is not required in order to establish
compliance with any provisions of the Securities Act. The Company agrees that
pursuant to the prior sentence, it will, no later than five Business Days
(“Business Day” shall mean any day banks are open for business in New York, New
York) following (a) receipt by the Company’s transfer agent of a certificate
representing Shares issued with a restrictive legend, accompanied by a
certification of the Investor in form suitable for processing by the Company
that a prospectus has been delivered (in the case of sale pursuant to
prospectus, a “Prospectus Letter”) or customary supporting documentation,
including legal opinion if required pursuant to Clause (B) above, “Supporting
Documentation”) and (b) receipt by the Company of notice of such delivery to the
transfer agent and Prospectus Letter or Supporting Documentation, as the case
may be (such notice to be sent by facsimile to the attention of the Company’s
president and CEO at the fax number set forth in Section 8.6 hereof) deliver or
cause to be delivered (evidence of deposit for next day delivery with a
nationally recognized overnight delivery service shall be deemed delivery) to
such Investor a certificate representing such Shares that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section. In the event the
Prospectus Letter or Supporting Documentation is not in form suitable for
processing by to the Company, the five Business Days shall toll until the
Company receives a Prospectus Letter or Supporting Documentation that is in form
suitable for processing.
(b)
Notwithstanding
the provisions of Section 4.2(a), no registration statement or opinion of
counsel shall be necessary for a transfer by an Investor of the Securities to a
subsidiary, member, partner, stockholder or affiliate of that Investor, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if such transferee were an Investor hereunder.
(c)
It
is understood that, subject to Sections 4.2(a) and 4.2(b), the certificates
evidencing the Shares will bear the following legends:
(i)
THESE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”) OR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AVAILABLE
11
EXEMPTIONS
FROM SUCH REGISTRATION, PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN
OPINION OF COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY)
CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION.
(ii)
Any
legend required by the laws of any other applicable jurisdiction.
4.3
Securities
Compliance.
The Company shall take all action necessary to comply with any federal or state
securities laws applicable to the transactions contemplated
hereunder.
5.
REGISTRATION
RIGHTS.
5.1
Registrable
Shares.
As used herein the term “Registrable Security” means (a) each of the Shares, and
(b) any Common Stock of the Company issued as (or issuable on the conversion or
exercise of any warrant, right or other security that is issued as) a dividend
or other distribution with respect to, or in exchange for, or in replacement of,
the shares referenced in clause (a) above; provided,
however, that
with respect to any particular Registrable Security held by an Investor, such
security shall cease to be a Registrable Security when, as of the date of
determination, (a) it has been effectively registered under the Securities
Act and disposed of pursuant thereto, or (b) registration under the
Securities Act is no longer required for the immediate public distribution of
any particular Registrable Shares held by that Investor and its affiliates. In
the event of any merger, reorganization, consolidation, recapitalization or
other change in corporate structure affecting the Common Stock, such adjustment
shall be made in the definition of “Registrable Security” as is appropriate in
order to prevent any dilution or enlargement of the rights granted pursuant to
this Section 5.
5.2
Mandatory
Registration.
(a)
On
or before 45 days following the Closing Date, the Company shall prepare and file
with the Commission the Registration Statement covering the resale of all of the
Registrable Shares for an offering to be made on a continuous basis pursuant to
Rule 415 (the “Required Filing Date”). The Registration Statement required
hereunder shall be on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Shares on Form S-3, in which case the
Registration Statement shall be on another appropriate form in accordance
herewith). The Company shall use its commercially reasonable efforts to cause
the Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event not later than
the 120th
day after the Closing Date (the “Effectiveness Date”), and shall use its
commercially reasonable efforts to keep the Registration Statement continuously
effective under the Securities Act until the earlier of the date when all
Registrable Shares covered by the Registration Statement (a) have been sold
pursuant to the Registration Statement or an exemption from the registration
requirements of the Securities Act or (b) may be sold without volume
restrictions pursuant to Rule 144(k) as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the Company’s transfer agent and the affected Investors or (c) the
second
12
anniversary
of the date on which the Registration Statement is declared effective (the
“Effectiveness
Period”)
or such longer time as the Company may determine.
(b)
Notwithstanding
the foregoing, if the Company shall furnish to the Investors a certificate
signed by the Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company it would not be in the
best interest of the Company for such registration statement to be filed, the
Company shall have the right to defer taking such action with respect to such
filing for a period of not more than thirty (30) days after the date of such
certificate; provided,
however,
that the Company shall not defer its obligation in this manner more than once in
any twelve (12) month period.
(c)
In
the event, the Investor fails to provide the Company with any information that
is required to be provided in the Registration Statement with respect to such
Investor pursuant to Section 5.3(k) within ten (10) days of receiving a request
for such information from the Company, the Company shall send an additional
request to the Investor (the “Additional Request”) and in the event the Investor
fails to respond to the Company within five (5) days of receipt of the
Additional Request, the Company shall be entitled to exclude such Investor’s
Registrable Shares from the Registration Statement.
5.3
Covenants
of the Company With Respect to Registration.
The
Company covenants and agrees as follows:
(a)
Not
less than five business days prior to the filing of the Registration Statement
or any related Prospectus or any amendment or supplement thereto, furnish to the
Investors copies of all such documents proposed to be filed (including documents
incorporated or deemed incorporated by reference to the extent requested by such
person), which documents will be subject to the review of such Investors within
such five business days. The Company shall not file the Registration Statement
or any such Prospectus or any amendments or supplements thereto to which the
holders of a majority of the Registrable Shares shall reasonably object in good
faith based on the advice of counsel and the Company shall make reasonable
efforts to address the objections raised. In the event the holders of a majority
of the Registrable Shares object to any such filing pursuant to the previous
sentence, then the Required Filing Date or Effectiveness Date, as the case may
be, shall be extended by the number of days that elapse between the date the
Company is notified of the objection until the day following the date the
Company has been notified that such objection no longer exists.
(b)
Following
the effective date of the Registration Statement under Section 5.2, the Company
shall, upon the request of the Investors, forthwith supply such reasonable
number of copies of the Registration Statement, preliminary prospectus and
prospectus meeting the requirements of the Securities Act, and other documents
necessary or incidental to the public offering of the Registrable Shares, as
shall be reasonably requested by the Investors to permit the Investors to make a
public distribution of the Registrable Shares registered in connection with the
Registration Statement.
(c)
The
Company shall prepare and file with the SEC such amendments and supplements to
such Registration Statement and the prospectus used in connection with
such
13
Registration
Statement as may be necessary to comply with the Securities Act with respect to
the disposition of all Shares covered by such Registration Statement during the
period of time such Registration Statement remains effective;
(d)
The
Company shall use its commercially reasonable efforts to register and qualify
the Shares covered by such Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Investors; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or
jurisdictions;
(e)
During
the period of time such Registration Statement remains effective, the Company
shall notify each Investor of Registrable Shares covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act or the happening of any event as a result of
which the prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing;
(f)
The
Company shall use its commercially reasonable efforts to cause all such
Registrable Shares registered hereunder to be listed on each securities exchange
on which securities of the same class issued by the Company are then
listed;
(g)
The
Company shall provide a transfer agent and registrar for all Registrable Shares
registered hereunder and a CUSIP number for all such Registrable Shares, in each
case not later than the effective date of such registration; and
(k)
The
obligations of the Company hereunder with respect to the Registrable Shares are
subject to the Investors’ furnishing to the Company such information concerning
the Investors, the Registrable Shares and the terms of the Investors’ offering
of such Registrable Shares as are required to be included in the Registration
Statement by Commission regulations or pursuant to a specific Commission comment
on the Registration Statement.
5.4
Expenses.
All expenses incurred in effecting a registration pursuant to this Agreement
(including, without limitation, all registration, qualification and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses) shall be borne by the Company. All transfer taxes,
underwriting discounts and selling commissions applicable to the sale of the
Registrable Shares shall be borne by the Investors thereof.
5.5
Indemnification.
In the event any Registrable Shares are included in a Registration Statement
under this Section 5:
(a)
To
the extent permitted by law, the Company will indemnify and hold harmless each
Investor, the partners, officers, directors, stockholders, members and managers
of such Investor, each person, if any, who controls such Investor within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions
in
14
respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (each, a “Violation”): (i) any untrue statement or
alleged untrue statement of a material fact contained in such Registration
Statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law; and the Company will pay to
each such Investor, underwriter or controlling person, as incurred, any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however,
that the indemnity agreement contained in this Section 5.5(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld or delayed), nor shall the Company be liable
to any Investor, underwriter or controlling person for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Investor, underwriter or controlling person.
(b)
To
the extent permitted by law, each selling Investor will indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the Registration Statement, each person, if any, who controls the Company within
the meaning of the Securities Act, against any losses, claims, damages, or
liabilities (joint or several) to which any of the foregoing persons may become
subject, under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Investor expressly
for use in connection with such registration; and each such Investor will pay,
as incurred, any legal or other expenses reasonably incurred by any person
indemnified pursuant to this Section 5.5(b), in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that
the indemnity agreement contained in this Section 5.5(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Investor (which
consent shall not be unreasonably withheld or delayed); provided
further that
in no event shall any indemnity under this Section 5.5(b) exceed the net
proceeds from the offering received by such Investor.
(c)
Promptly
after receipt by an indemnified party under this Section 5.5 of notice of the
commencement of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 5.5, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided,
however, that
an indemnified party (together with all other indemnified parties which may be
represented
15
without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time after receipt of notice of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 5.5, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section
5.5.
(d)
If
the indemnification provided for in this Section 5.5 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage, or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations; provided
that in no event shall any contribution by an Investor under this Section 5.5(d)
exceed the net proceeds from the offering received by such Investor. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e)
Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.
(f)
The
obligations of the Company and Investors under this Section 5.5 shall survive
the completion of any offering of Registrable Shares in a registration statement
and the termination of this Agreement.
5.6
Suspension
of Sales.
(a)
With
respect to the Registration Statement filed pursuant to Section 5.2, subject to
the payment of any liquidated damages which may accrue pursuant to Section
5.2(b)(iv), the Company may suspend sales of Registrable Shares under such
Registration Statement for a period of not more than ninety (90) days in any
twelve (12) month period with respect to such Registration Statement if, at any
time the Company is engaged in confidential negotiations or other confidential
business activities, the disclosure of which would be required if such sales
were not suspended and the Board of Directors of the Company determines in good
faith that such suspension would be in the Company’s best interest at
such
16
time;
provided,
that the Company shall not be permitted to suspend such sales for more than
ninety (90) days in any twelve (12) month period. In order to suspend sales
pursuant to this Section 5.6(a), the Company shall promptly (but in any event
within five (5) business days), upon determining to seek such suspension,
deliver to each holder of Registrable Shares a certificate signed by an
executive officer of the Company stating that the Company is suspending such
filing pursuant to this Section 5.6(a). Each holder of Registrable Shares hereby
agrees to keep confidential any information disclosed to it in any such
certificate (including the fact that a certificate was delivered).
(b)
If
the Company suspends such Registration Statement pursuant to Section 5.6(a)
above, the Company shall, as promptly as practicable following the termination
of the circumstances which entitled the Company to do so but in no event more
than fifteen (15) days thereafter, take such actions as may be necessary to file
or reinstate the effectiveness of such Registration Statement and/or give
written notice to the selling Investors authorizing them to resume sales
pursuant to such Registration Statement. If, as a result thereof, the prospectus
included in such Registration Statement has been amended to comply with the
requirements of the Securities Act, the Company shall enclose such revised
prospectus with the notice to the selling Investors given pursuant to this
Section 5.6(b), and the selling Investors shall make no offers or sales of
Shares pursuant to such Registration Statement other than by means of such
revised prospectus.
5.7
Transfer
or Assignment of Registration Rights.
The rights to cause the Company to register Registrable Shares granted to an
Investor by the Company under this Section 5 may be transferred or assigned by
an Investor to a transferee or assignee of such Registrable Shares that (i) is a
subsidiary, parent, current or former partner, current or former limited
partner, current or former member, current or former manager or stockholder of
an Investor, (ii) is an entity controlling, controlled by or under common
control, or under common investment management, with an Investor, including
without limitation a corporation, partnership or limited liability company that
is a direct or indirect parent or subsidiary of the Investor, or (iii) is a
transferee or assignee of not less than 50,000 shares of Registrable Shares (as
presently constituted and subject to subsequent adjustments for stock splits,
stock dividends, reverse stock splits and the like), provided
that
the Company is given written notice at the time of or within a reasonable time
after said transfer or assignment, stating the name and address of said
transferee or assignee and identifying the Shares with respect to which such
registration rights are being transferred or assigned, and provided
further that
the transferee or assignee of such rights assumes the obligations of such
Investor under this Section 5.
5.8
Reports
Under Exchange Act.
With a view to making available to the Investors the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
that may at any time permit an Investor to sell Shares of the Company to the
public without registration, the Company agrees to:
(a)
Make
and keep public information available, as those terms are used in SEC Rule 144,
at all times;
17
(b)
File
with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act;
(c)
Furnish
to any Investor, so long as the Investor owns any Registrable Shares, forthwith
on request, (i) a written statement by the Company that it has complied with the
reporting requirements of SEC Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing any Investor of any rule
or regulation of the SEC that permits the selling of any such securities without
registration; and
(d)
Undertake
any additional actions reasonably necessary to maintain the availability of the
use of Rule 144.
5.9
Delay
of Registration.
No Investor shall have any right to obtain or seek an injunction restraining or
otherwise delaying any registration as the result of any controversy that might
arise with respect to the interpretation or implementation of this Section
5.
6.
CONDITIONS
TO INVESTOR OBLIGATIONS AT CLOSING.
The
obligations of the Investors to purchase the Shares at the Closing are subject
to the fulfillment on or prior to the Closing of each of the following
conditions:
6.1
Representations
and Warranties.
The representations and warranties of the Company contained in Section 2 shall
be true in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
the Closing Date, except that any representations and warranties stated as being
true and correct as of a date other than the date hereof shall be true and
correct as of such other date.
6.2
Performance.
The Company shall have performed and complied with all agreements, obligations
and conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.
6.3
Qualifications.
All authorizations, approvals, or permits, if any, of any governmental authority
or regulatory body of the United States or of any state of the United States
that are required in connection with the lawful issuance and sale of the Shares
to the Investors pursuant to this Agreement shall have been duly obtained and
shall be effective on and as of the Closing.
6.4
Proceedings
and Documents.
All corporate and other proceedings undertaken in connection with the
transactions contemplated at the Closing and all documents incident thereto
shall be reasonably satisfactory in form and substance to each Investor, and
they shall have received all such counterpart original and certified or other
copies of such documents as they may reasonably request.
6.5
Absence
of Litigation.
No proceeding challenging this Agreement or the transactions contemplated hereby
or thereby, or seeking to prohibit, alter, prevent or delay the
18
Closing,
shall have been instituted against the Company before any court, arbitrator or
governmental body, agency or official and shall be pending.
6.6
Compliance
Certificate.
The Company shall deliver to the Investors at the Closing, relating to the
Investors’ purchase of Shares, a certificate signed by the Chief Executive
Officer of the Company stating that the Company has complied with or satisfied
each of the conditions to the Investors’ obligation to consummate the Closing
set forth in Sections 6.1 through 6.5, unless waived in writing by the
Investors.
6.7
Legal
Prohibition.
The purchase of the Shares by the Investors shall not be prohibited by any law
or governmental order or regulation.
7.
CONDITIONS
TO THE COMPANY’S OBLIGATIONS AT CLOSING.
The
obligations of the Company under Section 1 of this Agreement are subject to the
fulfillment on or before the Closing of each of the following
conditions:
7.1
Representations
and Warranties.
The representations and warranties of each Investor contained in Section 3 shall
be true in all respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of the
Closing Date, except that any representations and warranties stated as being
true and correct as of a date other than the date hereof shall be true and
correct as of such other date.
7.2
Performance.
Each Investor shall have performed and complied with all agreements, obligations
and conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.
7.3
Qualifications.
All authorizations, approvals, or permits, if any, of any governmental authority
or regulatory body of the United States or of any state of the United States
that are required in connection with the lawful issuance and sale of the Shares
to the Investors pursuant to this Agreement shall have been duly obtained and
shall be effective on and as of the Closing.
7.4
Proceedings
and Documents.
All corporate and other proceedings undertaken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to the Company and its
counsel, and they shall have received all such counterpart original and
certified or other copies of such documents as they may reasonably
request.
8.
MISCELLANEOUS.
8.1
Survival
of Warranties.
The warranties, representations, agreements, covenants and undertakings of the
Company or the Investors contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing and shall
in no way be affected by any investigation of the subject matter thereof made by
or on behalf of the Investors or the Company.
19
8.2
Incorporation
by Reference.
All Exhibits and Schedules appended to this Agreement are herein incorporated by
reference and made a part hereof.
8.3
Successor
and Assignees.
All terms, covenants, agreements, representations, warranties and undertakings
in this Agreement made by and on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including transferees of any Shares) whether so expressed or not,
subject to Section 5.7.
8.4
Amendments
and Waivers.
Neither this Agreement nor any provision hereof shall be waived, modified,
changed, discharged, terminated, revoked or canceled except by an instrument in
writing signed by the party against whom any change, discharge or termination is
sought. Failure of either party to exercise any right or remedy under this
Agreement or any other agreement between the Company and the Investors, or
otherwise, or delay by the Company or the Investors in exercising such right or
remedy, will not operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
8.5
Governing
Law.
This Agreement shall be deemed a contract made under the laws of the State of
New York, without giving effect to the conflicts of law principles
thereof.
8.6
Notices.
All notices, requests, consents, demands, notice or other communication required
or permitted under this Agreement shall be in writing and shall be deemed duly
given and received when delivered personally or transmitted by facsimile, or one
business day after being deposited for next-day delivery with a nationally
recognized overnight delivery service, or three days after being deposited as
first class mail with the United States Postal Services, all charges or postage
prepaid, and properly addressed:
to
the Company at:
Callisto
Pharmaceuticals, Inc.
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, Xxx Xxxx 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attention:
Chief Executive Officer
with
a copy (which shall not constitute notice) to:
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Fax:
(000) 000-0000
Attention:
Xxxxxxx X. Xxxxxxx
20
or
to the Investors at the address set forth opposite each Investor’s name on
Exhibit A hereto
or
such other address as may be furnished in writing by a party
hereto.
8.7
Counterparts.
This Agreement may be executed in counterparts, all of which together shall
constitute one and the same instrument.
8.8
Effect
of Headings.
The section and paragraph headings herein are included for convenience only and
shall not affect the construction hereof.
8.9
Entire
Agreement.
This Agreement and the Exhibits and Schedules hereto and thereto constitute the
entire agreement among the Company and the Investors with respect to the subject
matter hereof. There are no representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement supersedes all prior agreements
between the parties with respect to the Shares purchased hereunder and the
subject matter hereof.
8.10
Publicity.
Neither party shall originate any publicity, news release or other public
announcement, written or oral, whether relating to the performance under this
Agreement or the existence of any arrangement between the parties, without the
prior written consent of the other party (which consent shall not be
unreasonably withheld or delayed), except where such publicity, news release or
other public announcement is required by law or by Section 4.1; provided
that, in such event, each such party shall (a) promptly consult the other party
in connection with any such publicity, news release or other public announcement
prior to its release; (b) promptly provide the other party a copy thereof; and
(c) use commercially reasonable efforts to ensure that such portions of such
information as may reasonably be designated by the other party are accorded
confidential treatment by the applicable governmental entity.
8.11
Severability.
If any provision of this Agreement is held by a court of competent jurisdiction
to be unenforceable under applicable law, such provision shall be replaced with
a provision that accomplishes, to the extent possible, the original business
purpose of such provision in a valid and enforceable manner, and the balance of
the Agreement shall be interpreted as if such provision were so modified and
shall be enforceable in accordance with its terms.
8.12
Interpretation.
This Agreement shall be construed according to its fair language. The 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 this Agreement.
8.13 No
Strict Construction.
The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rules of strict construction
will be applied against any party.
8.14 Independent
Nature of Investors’ Obligations and Rights.
The
obligations of each Investor under this Agreement are several and not joint with
the obligations of any other
21
Investor,
and no Investor shall be responsible in any way for the performance of the
obligations of any other Investor under this Agreement. The decision of each
Investor to purchase Shares pursuant to this Agreement has been made by such
Investor independently of any other Investor and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made or
given by any other Investor or by any agent or employee of any other Investor,
and no Investor or any of its agents or employees shall have any liability to
any other Investor (or any other person) relating to or arising from any such
information, materials, statements or opinions. Nothing contained herein, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement. Each Investor acknowledges that no other
Investor has acted as agent for such Investor in connection with making its
investment hereunder and that no other Investor will be acting as agent of such
Investor in connection with monitoring its investment hereunder. Each Investor
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company has elected to provide all Investors
with the same terms and form of this Agreement for the convenience of the
Company and not because it was required or requested to do so by the
Investors.
22
IN
WITNESS WHEREOF, this Agreement has been executed as of the date first above
written, by the duly authorized representatives of the parties
hereto.
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CALLISTO
PHARMACEUTICALS, INC. | ||
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| By: | ||
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| Name: | ||
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| Title: | ||
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INVESTOR | ||
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| By: | ||
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23
Schedule
A
COMPANY
SCHEDULE OF EXCEPTIONS
Exhibit
A
|
Investor
Name and
Notice
Address |
Cash
Investment Amount |
Number
of Shares |
