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Exhibit 10.2
COMMON STOCK PURCHASE AGREEMENT
DATED AS OF JUNE 27, 2000
BY AND BETWEEN
ARIAD PHARMACEUTICALS, INC.
AND
ACQUA WELLINGTON
NORTH AMERICAN EQUITIES FUND, LTD.
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ARTICLE I Definitions..................................................................................1
Section 1.1 Definitions..................................................................................1
ARTICLE II Purchase and Sale of Common Stock............................................................3
Section 2.1 Purchase and Sale of Stock...................................................................3
Section 2.2 The Shares...................................................................................3
Section 2.3 Registration Statement and Prospectus........................................................3
Section 2.4 Purchase Price and Closing...................................................................3
ARTICLE III Representations and Warranties...............................................................3
Section 3.1 Representations and Warranties of the Company................................................3
Section 3.2 Representations, Warranties and Covenants of the Purchaser..................................11
ARTICLE IV Covenants...................................................................................12
Section 4.1 Securities..................................................................................12
Section 4.2 Registration and Listing....................................................................12
Section 4.3 Registration Statement......................................................................13
Section 4.4 Compliance with Laws........................................................................13
Section 4.5 Keeping of Records and Books of Account.....................................................13
Section 4.6 Reporting Requirements......................................................................13
Section 4.7 Other Agreements............................................................................13
Section 4.8 Non-public Information......................................................................14
Section 4.9 No Stop Orders..............................................................................14
Section 4.10 Amendments to the Registration Statement....................................................14
Section 4.11 Prospectus Delivery.........................................................................14
ARTICLE V Conditions to Closing and Draw Downs........................................................15
Section 5.1 Conditions Precedent to the Obligation of the Company to Close this
Agreement and to Sell the Shares...........................................................15
Section 5.2 Conditions Precedent to the Obligation of the Purchaser to Close this Agreement.............16
Section 5.3 Conditions Precedent to the Obligation of the Purchaser to Accept a Draw
Down or Call Option and Purchase the Shares................................................17
Draw Down Terms; Call Option Terms..........................................................18
Section 6.1 Draw Down Terms.............................................................................18
Section 6.2 Call Option Terms...........................................................................20
ARTICLE VII Termination.................................................................................20
Section 7.1 Termination by Mutual Consent...............................................................20
Section 7.2 Other Termination...........................................................................20
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Section 7.3 Effect of Termination.......................................................................20
ARTICLE VIII Indemnification.............................................................................21
Section 8.1 General Indemnity...........................................................................21
Section 8.2 Indemnification Procedures..................................................................22
ARTICLE IX Miscellaneous...............................................................................23
Section 9.1 Fees and Expenses...........................................................................23
Section 9.2 Specific Enforcement, Consent to Jurisdiction...............................................23
Section 9.3 Entire Agreement; Amendment.................................................................24
Section 9.4 Notices.....................................................................................24
Section 9.5 Waivers.....................................................................................25
Section 9.6 Headings....................................................................................25
Section 9.7 Successors and Assigns......................................................................25
Section 9.8 Governing Law...............................................................................25
Section 9.9 Survival....................................................................................25
Section 9.10 Counterparts................................................................................26
Section 9.11 Publicity...................................................................................26
Section 9.12 Severability................................................................................26
Section 9.13 Further Assurances..........................................................................26
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COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of
June 27, 2000 by and between ARIAD Pharmaceuticals, Inc., a Delaware corporation
(the "Company") and Acqua Wellington North American Equities Fund, Ltd., a
company organized under the laws of the Commonwealth of the Bahamas (the
"Purchaser").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
(a) "COMMISSION" shall have the meaning assigned to such term in
Section 2.3 hereof.
(b) "COMMISSION DOCUMENTS" shall have the meaning assigned to such term
in Section 3.1(f) hereof.
(c) "COMMISSION FILINGS" means the Company's Form 10-K for the fiscal
year ended December 31, 1999, its Form 10-Q for the fiscal quarter ended March
31, 2000, its Form 10-Q/A for the fiscal quarter ended March 31, 2000, its Form
8-K dated December 31, 1999, its Form 8-K dated January 14, 2000, its Form 8-K
dated March 27, 2000, its Form 8-K dated June 19, 2000, its Registration
Statement on Form S-3 (No. 333-38664), and all other filings made by the Company
after the date hereof pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(d) "DRAW DOWN" shall have the meaning assigned to such term in Section
6.1(a) hereof.
(e) "DRAW DOWN AMOUNT" means the actual amount of a Draw Down up to
$8,000,000, or such other amount mutually agreed upon by the Purchaser and the
Company.
(f) "DRAW DOWN DISCOUNT PERCENTAGE" means (i) 96.5% if the Threshold
Price is equal to or exceeds $25.00; (ii) 96.0% if the Threshold Price is equal
to or exceeds $16.00 but is less than $25.00; (iii) 95.5% if the Threshold Price
is equal to or exceeds $12.00 but is less than $16.00; (iv) 95.0% if the
Threshold Price is equal to or exceeds $8.00 but is less than $12.00; (v) 94.0%
if the Threshold Price is equal to or exceeds $6.00 but is less than $8.00; and
(vi) such discount price mutually agreed upon by the Purchaser and the Company,
if the Threshold Price is less than $6.00.
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(g) "DRAW DOWN NOTICE" shall have the meaning assigned to such term in
Section 6.1(i) hereof.
(h) "DRAW DOWN PRICING PERIOD" shall mean a period of fifteen (15)
consecutive trading days starting with the first trading day specified in Draw
Down Notice or such other period of consecutive trading days as mutually agreed
upon by the Company and the Purchaser.
(i) "EFFECTIVE DATE" shall mean June 23, 2000.
(j) "MATERIAL ADVERSE EFFECT" shall mean any effect on the business,
results of operations, assets or financial condition of the Company that is
material and adverse to the Company and its subsidiaries, taken as a whole
and/or any condition, circumstance, or situation that would prohibit the Company
from entering into and performing any of its obligations under this Agreement in
any material respect.
(k) "MATERIAL CHANGE IN OWNERSHIP" shall mean that, as of a particular
measurement date, the officers and directors of the Company shall beneficially
own in the aggregate less than 2% of the outstanding Common Stock of the Company
that those officers and directors beneficially own as of the date hereof.
(l) "PROSPECTUS" as used in this Agreement means the prospectus in the
form included in the Registration Statement, as supplemented from time to time
pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the
"Securities Act").
(m) "REGISTRATION STATEMENT" shall mean the registration statement on
Form S-3, Commission File Number 333-38664 under the Securities Act, filed with
the Securities and Exchange Commission for the registration of the Shares, as
such Registration Statement may be amended from time to time.
(n) "SETTLEMENT DATE" shall have the meaning assigned to such term in
Section 6.1(d) hereof.
(o) "SHARES" shall mean the shares of Common Stock of the Company that
may be purchased hereunder.
(p) "THRESHOLD PRICE" is the lowest price at which the Company may set
in the Draw Down Notice to sell Shares during a Draw Down Pricing Period (not
taking into account the Draw Down Discount Percentage during such Draw Down
Pricing Period).
(q) "VWAP" shall mean the daily volume weighted average price (based on
a trading day from 9:30 a.m. to 4:00 p.m. (Boston Time) of the Company on NASDAQ
(or any successor thereto) as reported by Bloomberg Financial LP using the AQR
function.
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ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
SECTION 2.1 PURCHASE AND SALE OF STOCK. Subject to the terms and
conditions of this Agreement, the Company shall issue and sell to the Purchaser
and the Purchaser shall purchase from the Company up to $75,000,000 of the
Company's common stock, $.001 par value per share (the "Common Stock"), based on
Draw Downs in accordance with Section 6.1; provided that the Purchaser may
purchase an amount in excess of $75,000,000 in accordance with the terms of
Section 6.2. In no event shall the amount of Common Stock required to be
purchased by the Purchaser exceed $8,000,000 per Draw Down, provided that
Purchaser may purchase an amount in excess of $8,000,000 in accordance with the
terms of Section 6.2.
SECTION 2.2 THE SHARES. The Company has authorized and has reserved and
covenants to continue to reserve, subject to Section 4.4(b) hereof, free of
preemptive rights and other similar contractual rights of stockholders,
2,800,000 shares of its Common Stock to cover the Shares to be issued in
connection with all Draw Downs.
SECTION 2.3 REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act, the
Registration Statement, including a prospectus subject to completion relating to
the Shares. The Registration Statement was declared effective on the Effective
Date.
SECTION 2.4 PURCHASE PRICE AND CLOSING. In consideration of and in
express reliance upon the representations, warranties, covenants, terms and
conditions of this Agreement, the Company agrees to issue and sell to the
Purchaser and the Purchaser agrees to purchase from the Company, that number of
the Shares to be issued in connection with each Draw Down. The closing of the
execution and delivery of this Agreement (the "Closing") shall take place at the
offices of Xxxxxx Xxxxxx LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000 at 5:00 p.m. Boston Time on (i) June 27, 2000, or (ii) such other
time and place or on such date as the Purchaser and the Company may agree upon
(the "Closing Date"). Each party shall deliver all documents, instruments and
writings required to be delivered by such party pursuant to this Agreement at or
prior to the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby makes the following representations and warranties to the Purchaser:
(a) ORGANIZATION, GOOD STANDING AND POWER. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of
Delaware and has the requisite corporate power to own, lease and operate its
properties and assets and to conduct its business as it is now being conducted.
As of the date hereof, the Company does not have any
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subsidiaries (as defined in Section 3.1(g)) except as set forth in the
Registration Statement and in the Company's most recent Form 10-K, including the
accompanying financial statements (the "Form 10-K"), or in the Company's most
recent Form 10-Q (the "Form 10-Q"), or on SCHEDULE 3.1(g) attached hereto. The
Company and each such subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary except for any jurisdiction in which the failure to be so qualified
will not have a Material Adverse Effect.
(b) AUTHORIZATION; ENFORCEMENT. The Company has the requisite corporate
power and authority to enter into and perform this Agreement and to issue and
sell the Shares in accordance with the terms hereof. The execution, delivery and
performance of this Agreement by the Company and the consummation by it of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action, and, except as contemplated by Section 3.1(e), no
further consent or authorization of the Company or its Board of Directors or
stockholders is required. This Agreement has been duly executed and delivered by
the Company. This Agreement constitutes, or when executed and delivered shall
constitute, 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 applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of creditor's rights and remedies or by
other equitable principles of general application.
(c) CAPITALIZATION. The authorized capital stock of the Company and the
shares thereof issued and outstanding as of June 9, 2000 are set forth on
SCHEDULE 3.1(c) attached hereto. All of the outstanding shares of the Company's
Common Stock have been duly and validly authorized, and are fully paid and
non-assessable. Except as set forth in this Agreement or as set forth in the
Registration Statement, the Commission Documents, the Commission Filings or on
SCHEDULE 3.1(c) attached hereto, as of June 9, 2000, no shares of Common Stock
are entitled to preemptive rights or registration rights and there are no
outstanding options, warrants, scrip, rights to subscribe to, call or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company. Furthermore,
except as set forth in this Agreement, in the Common Stock Purchase Agreement
between the Company and the Purchaser to be entered into on or about the date of
this Agreement (the "Directed Placement Agreement"), the Registration Statement,
the Commission Documents or the Commission Filings, as of the date hereof, there
are no contracts, commitments, understandings, or arrangements by which the
Company is or may become bound to issue additional shares of the capital stock
of the Company or options, securities or rights convertible into shares of
capital stock of the Company. Except for customary transfer restrictions
contained in agreements entered into by the Company in order to sell restricted
securities or as described in the Registration Statement, the Commission
Documents or the Commission Filings, as of the date hereof, the Company is not a
party to any agreement granting registration rights to any person with respect
to any of its equity or debt securities. Except as set forth in the Registration
Statement, the Commission Documents or the Commission Filings, as of the date
hereof, the Company is not a party to, and it has no knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock of the
Company. Except as set forth in the Registration Statement, the Commission
Documents or the Commission Filings, the offer and sale of all capital stock,
convertible securities, rights, warrants, or options of the
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Company issued prior to the Closing complied with all applicable federal
and state securities laws, and no stockholder has a right of rescission or
damages with respect thereto which would have a Material Adverse Effect. The
Company has furnished or made available to the Purchaser true and correct copies
of the Company's Certificate of Incorporation as in effect on the date hereof
(the "Articles"), and the Company's Bylaws as in effect on the date hereof (the
"Bylaws").
(d) ISSUANCE OF SHARES. The Shares have been duly authorized by all
necessary corporate action and, when paid for or issued in accordance with the
terms hereof, the Shares shall be validly issued and outstanding, fully paid and
non-assessable, and the Purchaser shall be entitled to all rights accorded to a
holder of Common Stock.
(e) NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated therein do not (i) violate any provision of the Company's Articles
or Bylaws, (ii) conflict with, 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, any
material agreement, mortgage, deed of trust, indenture, note, bond, license,
lease agreement, instrument or obligation to which the Company is a party, (iii)
create or impose a lien, charge or encumbrance on any property of the Company
under any agreement or any commitment to which the Company is a party or by
which the Company is bound or by which any of its respective properties or
assets are bound, or (iv) result in a violation of any federal, state, local or
foreign statute, rule, regulation, order, judgment or decree (including federal
and state securities laws and regulations) applicable to the Company or any of
its subsidiaries or by which any property or asset of the Company or any of its
subsidiaries are bound or affected, except, in all cases, for such conflicts,
defaults, terminations, amendments, acceleration, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect.
The Company is not required under federal, state or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement, or
issue and sell the Shares in accordance with the terms hereof (other than any
filings which may be required to be made by the Company with the Commission, or
Nasdaq subsequent to the Closing, and, any registration statement which may be
filed pursuant hereto); provided that, for purpose of the representation made in
this sentence, the Company is assuming and relying upon the accuracy of the
relevant representations and agreements of the Purchaser herein.
(f) COMMISSION DOCUMENTS, FINANCIAL STATEMENTS. The Common Stock of the
Company is registered pursuant to Section 12(b) or 12(g) of the Exchange Act
and, except as disclosed in the Registration Statement, or the Commission
Documents or the Commission Filings, as of the date hereof, the Company has
timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Commission pursuant to the reporting
requirements of the Exchange Act, including material filed pursuant to Section
13(a) or 15(d) of the Exchange Act (all of the foregoing including filings
incorporated by reference therein being referred to herein as the "Commission
Documents"). The Company has delivered or made available to the Purchaser true
and complete copies of the Commission Documents filed with the Commission since
December 31, 1999 and prior to the Closing Date. The Company has
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not provided to the Purchaser any information which, according to applicable
law, rule or regulation, should have been disclosed publicly by the
Company but which has not been so disclosed, other than with respect to the
transactions contemplated by this Agreement. The Form 10-K for the year ended
December 31, 1999 complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder and other federal, state and local laws, rules and regulations
applicable to such document, and, as of its date, such Form 10-K did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the Commission
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or summary
statements), and fairly present in all material respects the financial position
of the Company and its subsidiaries as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
(g) SUBSIDIARIES. The Commission Documents or SCHEDULE 3.1(g) attached
hereto set forth each subsidiary of the Company as of the date hereof, showing
the jurisdiction of its incorporation or organization and showing the percentage
of each person's ownership of the outstanding stock or other interests of such
subsidiary. For the purposes of this Agreement, "subsidiary" shall mean any
corporation or other entity of which at least a majority of the securities or
other ownership interest having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by the Company and/or any
of its other subsidiaries. Except as set forth in the Commission Documents or
the Commission Filings, none of such subsidiaries is a "significant subsidiary"
as defined in Regulation S-X.
(h) NO MATERIAL ADVERSE CHANGE. Since December 31, 1999, the Company
has not experienced or suffered any Material Adverse Effect, except continued
losses from operations.
(i) NO UNDISCLOSED LIABILITIES. Except as disclosed in the Commission
Documents or the Commission Filings or SCHEDULE 3.1(i), neither the Company nor
any of its subsidiaries has any liabilities, obligations, claims or losses
(whether liquidated or unliquidated, secured or unsecured, absolute, accrued,
contingent or otherwise) that would be required to be disclosed on a balance
sheet of the Company or any subsidiary (including the notes thereto) in
conformity with GAAP and are not disclosed in the Commission Documents or
Commission Filings, other than those incurred in the ordinary course of the
Company's or its subsidiaries' respective businesses since March 31, 2000 and
which, individually or in the aggregate, do not or would not have a Material
Adverse Effect.
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(j) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. No event or circumstance
has occurred or exists with respect to the Company or its subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed and which, individually or in the aggregate, do not or would not have
a Material Adverse Effect.
(k) INDEBTEDNESS. The Commission Documents or the Commission Filings
set forth as of March 31, 2000 all material outstanding secured and unsecured
Indebtedness of the Company or any subsidiary, or for which the Company or any
subsidiary has commitments. For the purposes of this Agreement, "Indebtedness"
shall mean (a) any liabilities for borrowed money or amounts owed in excess of
$100,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in
respect of Indebtedness of others, whether or not the same are or should be
reflected in the Company's balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $100,000 due under leases required to
be capitalized in accordance with GAAP. Neither the Company nor any subsidiary
is in default with respect to any Indebtedness.
(l) TITLE TO ASSETS. Each of the Company and the subsidiaries has good
and marketable title to all of its real and personal property reflected in the
Commission Documents, free of any mortgages, pledges, charges, liens, security
interests or other encumbrances, except for those indicated in the Commission
Documents, the Commission Filings or such that could not reasonably be expected
to cause a Material Adverse Effect. All leases of the Company and each of its
subsidiaries are valid and subsisting and in full force and effect in all
material respects.
(m) ACTIONS PENDING. There is no action, suit, claim, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any subsidiary which questions the validity of this Agreement or the
transactions contemplated hereby or any action taken or to be taken pursuant
hereto or thereto. Except as set forth in the Commission Documents or the
Commission Filings, there is no action, suit, claim, investigation or proceeding
pending or, to the knowledge of the Company, threatened, against or involving
the Company, any subsidiary or any of their respective properties or assets and
which, if adversely determined, is reasonably likely to result in a Material
Adverse Effect.
(n) COMPLIANCE WITH LAW. The business of the Company and the
subsidiaries has been and is presently being conducted in accordance with all
applicable federal, state and local governmental laws, rules, regulations and
ordinances, except as set forth in the Commission Documents or the Commission
Filings or such that do not cause a Material Adverse Effect. The Company and
each of its subsidiaries have all franchises, permits, licenses, consents and
other governmental or regulatory authorizations and approvals necessary for the
conduct of its business as now being conducted by it, except for such
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals, the failure to possess which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
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(o) CERTAIN FEES. No brokers, finders or financial advisory fees or
commissions will be payable by the Company or any subsidiary with respect to the
transactions contemplated by this Agreement other than fees or commissions that
may arise from activity of the Company and for which the Company shall be
responsible.
(p) DISCLOSURE. To the best of the Company's knowledge, neither this
Agreement or the Schedules hereto nor any other documents, certificates or
instruments furnished to the Purchaser by or on behalf of the Company or any
subsidiary in connection with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made herein or therein, in the light
of the circumstances under which they were made herein or therein, not
misleading.
(q) OPERATION OF BUSINESS. The Company or one of the subsidiaries owns
or possesses all patents, trademarks, service marks, trade names, copyrights,
licenses and authorizations as set forth in the Commission Documents or the
Commission Filings and all rights with respect to the foregoing, which are
necessary for the conduct of its business as now conducted without any conflict
with the rights of others, except to the extent set forth in the Commission
Documents or that a Material Adverse Effect could not reasonably be expected to
result from such conflict.
(r) ENVIRONMENTAL COMPLIANCE. Except as disclosed in the Commission
Filings, the Company and each of its subsidiaries have obtained all material
approvals, authorization, certificates, consents, licenses, orders and permits
or other similar authorizations of all governmental authorities, or from any
other person, that are required under any Environmental Laws. "Environmental
Laws" shall mean all applicable laws relating to the protection of the
environment including, without limitation, all requirements pertaining to
reporting, licensing, permitting, controlling, investigating or remediating
emissions, discharges, releases or threatened releases of hazardous substances,
chemical substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of hazardous
substances, chemical substances, pollutants, contaminants or toxic substances,
material or wastes, whether solid, liquid or gaseous in nature. Except for such
instances as would not individually or in the aggregate have a Material Adverse
Effect, to the best of the Company's knowledge, there are no past or present
events, conditions, circumstances, incidents, actions or omissions relating to
or in any way affecting the Company or its subsidiaries that violate or could
reasonably be expected to violate any Environmental Law after the Closing or
that could reasonably be expected to give rise to any environmental liability,
or otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing, study or investigation (i) under any Environmental Law, or (ii) based
on or related to the manufacture, processing, distribution, use, treatment,
storage (including without limitation underground storage tanks), disposal,
transport or handling, or the emission, discharge, release or threatened release
of any hazardous substance.
(s) MATERIAL AGREEMENTS. Except as set forth in the Commission
Documents or Commission Filings or SCHEDULE 3.1(s), and except for the Directed
Placement Agreement (if such agreement has been entered into at the time this
Agreement is entered into) which shall be timely filed by the Company, neither
the Company nor any subsidiary is a party to any written or
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oral contract, instrument, agreement, commitment, obligation, plan or
arrangement, a copy of which would be required to be filed with the Commission
as an exhibit to a registration statement on Form S-3 (collectively, "Material
Agreements") if the Company or any subsidiary were registering securities under
the Securities Act immediately prior to the effectiveness of this Agreement. The
Company and each of its subsidiaries has in all material respects performed all
the obligations required to be performed by them to date under the foregoing
agreements, have received no notice of default and, to the best of the Company's
knowledge are not in default under any Material Agreement now in effect, the
result of which could reasonably be expected to cause a Material Adverse Effect.
(t) TRANSACTIONS WITH AFFILIATES. Except as set forth in the Commission
Documents or the Commission Filings, there are no loans, leases, agreements,
contracts, royalty agreements, management contracts or arrangements or other
continuing transactions exceeding $250,000 between (a) the Company, any
subsidiary or any of their respective customers or suppliers on the one hand,
and (b) on the other hand, any officer, employee, consultant or director of the
Company, or any of its subsidiaries, or any person who would be covered by Item
404(a) of Regulation S-K or any corporation or other entity controlled by such
officer, employee, consultant, director or person.
(u) SECURITIES ACT OF 1933. The Company has complied in all material
respects with all applicable federal and state securities laws in connection
with the offer, issuance and sale of the Shares hereunder.
(i) Each Prospectus included as part of the Registration Statement
as originally filed or as part of any amendment or supplement thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the provisions of the Securities Act. The
Commission has not issued any order preventing or suspending the use of any
Prospectus.
(ii) The Company meets the requirements for the use of Form S-3
under the Securities Act. The Registration Statement in the form in which
it became effective and also in such form as it may be when any
post-effective amendment thereto became effective and the Prospectus and
any supplement or amendment thereto when filed with the Commission under
Rule 424(b) under the Securities Act, complied in all material respects
with the provisions of the Securities Act and did not at any such times
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in the light of the circumstances
under which they were made) not misleading, except that this representation
and warranty does not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to the Purchaser furnished to the
Company in writing by or on behalf of the Purchaser expressly for use
therein.
(iii) The Company has not distributed and, prior to the completion
of the sale of the Shares to the Purchaser, will not distribute any
offering material in connection with the offer and sale of the Shares other
than the Registration Statement, the Prospectus or other materials, if any,
permitted by the Securities Act.
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(v) EMPLOYEES. As of the date hereof, neither the Company nor any
subsidiary has any collective bargaining arrangements or agreements covering any
of its employees, except as set forth in the Commission Documents or the
Commission Filings. Each of the Company and its subsidiaries requires its
officers, technical employees and certain consultants to enter into agreements
regarding proprietary information, noncompetition, confidentiality, or other
similar agreements containing restrictive covenants. As of the date hereof,
except as disclosed in the Registration Statement, the Commission Documents, the
Commission Filings or otherwise in writing, no officer, consultant or key
employee of the Company or any subsidiary whose termination, either individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect, has terminated or, to the knowledge of the Company, has any present
intention of terminating his or her employment or engagement with the Company or
any subsidiary.
(w) USE OF PROCEEDS. The proceeds from the sale of the Shares will be
used by the Company and its subsidiaries for the purposes set forth in the
Prospectus under "Use of Proceeds".
(x) PUBLIC UTILITY HOLDING COMPANY ACT AND INVESTMENT COMPANY ACT
STATUS. The Company is not a "holding company" or a "public utility company" as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended. The Company is not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
(y) ERISA. No liability to the Pension Benefit Guaranty Corporation has
been incurred with respect to any Plan by the Company or any of its subsidiaries
which is or would have a Material Adverse Effect. The execution and delivery of
this Agreement and the issue and sale of the Shares will not involve any
transaction which is subject to the prohibitions of Section 406 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975 of the
Internal Revenue Code of 1986, as amended, PROVIDED that, if any of the
Purchaser, or any person or entity that owns a beneficial interest in any of the
Purchaser, is an "employee pension benefit plan" (within the meaning of Section
3(2) of ERISA) with respect to which the Company is a "party in interest"
(within the meaning of Section 3(14) of ERISA), the requirements of Sections
407(d)(5) and 408(e) of ERISA, if applicable, are met. As used in this Section
3.1(y), the term "Plan" shall mean an "employee pension benefit plan" (as
defined in Section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any
subsidiary or by any trade or business, whether or not incorporated, which,
together with the Company or any subsidiary, is under common control, as
described in Section 414(b) or (c) of the Code.
(z) ACKNOWLEDGMENT REGARDING PURCHASER'S PURCHASE OF SHARES. The
Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of arm's length purchaser with respect to this Agreement and the
transactions contemplated hereunder. The Company further acknowledges that the
Purchaser is not acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to this Agreement and the transactions
contemplated hereunder and any advice given by the Purchaser or any of its
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representatives or agents in connection with this Agreement and the transactions
contemplated hereunder is merely incidental to the Purchaser's purchase of the
Shares.
SECTION 3.2 REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE PURCHASER.
The Purchaser hereby makes the following representations, warranties and
covenants to the Company:
(a) ORGANIZATION AND STANDING OF THE PURCHASER. The Purchaser is a
limited liability company duly organized, validly existing and in good standing
under the laws of the Commonwealth of The Bahamas.
(b) AUTHORIZATION AND POWER. The Purchaser has the requisite corporate
power and authority to enter into and perform this Agreement and to purchase the
Shares in accordance with the terms hereof. The execution, delivery and
performance of this Agreement by Purchaser and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action, and no further consent or authorization of the Purchaser, its
Board of Directors or stockholders is required. This Agreement constitutes, or
when executed and delivered shall constitute, a valid and binding obligation of
the Purchaser enforceable against the Purchaser in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership, or similar laws relating to, or affecting generally the
enforcement of creditor's rights and remedies or by other equitable principles
of general application.
(c) NO CONFLICTS. The execution, delivery and performance of this
Agreement and the consummation by the Purchaser of the transactions contemplated
hereby and thereby or relating hereto do not and will not (i) result in a
violation of such Purchaser's charter documents or bylaws or (ii) conflict with,
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 any material agreement, mortgage,
deed of trust, indenture, note, bond, license, lease agreement, instrument or
obligation to which the Purchaser is a party, (iii) create or impose or lien,
charge or encumbrance on any property of the Purchaser under any agreement or
any commitment to which the Purchaser is party or by which the Purchaser is on
or by which any of its respective properties or assets are bound or (iv) result
in a violation of any law, rule or regulation, or any order, judgment or decree
of any court or governmental agency applicable to the Purchaser or its
properties, except for such conflicts, defaults and violations as would not,
individually or in the aggregate, prohibit or otherwise interfere with the
ability of the Purchaser to enter into and perform its obligations under this
Agreement in any material respect. The Purchaser is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under this Agreement or to purchase the Shares in accordance
with the terms hereof, PROVIDED that for purposes of the representation made in
this sentence, the Purchaser is assuming and relying upon the accuracy of the
relevant representations and agreements of the Company herein.
(d) INFORMATION. The Purchaser and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Shares which
have been requested by the Purchaser. The
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Purchaser and its advisors, if any, have been afforded the opportunity to
ask questions of the Company. The Purchaser has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Shares. Purchaser understands
that it (and not the Company) shall be responsible for its own tax liabilities
that may arise as a result of this investment or the transactions contemplated
by this Agreement.
(e) SELLING RESTRICTIONS. The Purchaser has the right to sell shares of
the Company's Common Stock equal in number to the number of the Shares to be
purchased pursuant to this Agreement during the Draw Down Pricing Period;
provided however that the Purchaser covenants that prior to and during the term
of this Agreement, the Purchaser, all of its affiliates and every entity managed
by the Purchaser shall forbear from, directly or indirectly, selling any
securities of the Company (including, without limitation, any grant of any
option to purchase or acquire any right to dispose or otherwise dispose for
value, any shares of Common Stock or any securities convertible into, or
exchangeable for, or warrants to purchase, any shares of Common Stock or any
swap, short sale, hedge or other agreement that transfers, in whole or in part,
the economic risk of ownership of the Common Stock) other than, with respect to
any Draw Down Pricing Period, the Shares the Purchaser is obligated to purchase
during such Draw Down Pricing Period.
ARTICLE IV
COVENANTS
The Company covenants with the Purchaser as follows, which covenants
are for the benefit of the Purchaser and its permitted assignees.
SECTION 4.1 SECURITIES. The Company shall notify the Commission and
Nasdaq, if applicable, in accordance with their rules and regulations, of the
transactions contemplated by this Agreement, and shall take all other necessary
action and proceedings as may be required and permitted by applicable law, rule
and regulation, for the legal and valid issuance of the Shares to the Purchaser
or subsequent holders.
SECTION 4.2 REGISTRATION AND LISTING. The Company will take all action
necessary to cause its Common Stock to continue to be registered under Sections
12(b) or 12(g) of the Exchange Act, will comply in all respects with its
reporting and filing obligations under the Exchange Act, and will not take any
action or file any document (whether or not permitted by the Securities Act or
the rules promulgated thereunder) to terminate or suspend such registration or
to terminate or suspend its reporting and filing obligations under the Exchange
Act or Securities Act, except as permitted herein. The Company will take all
action necessary to continue the listing or trading of its Common Stock and the
listing of the Shares purchased by Purchaser hereunder on the NASDAQ or any
relevant market or system, if applicable, and will comply in all respects with
the Company's reporting, filing and other obligations under the bylaws or rules
of the NASD or any relevant market or system.
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SECTION 4.3 REGISTRATION STATEMENT. Before the Purchaser shall be
obligated to accept a Draw Down request from the Company, the Company shall have
caused a sufficient number of shares of Common Stock to be registered to cover
the Shares to be issued in connection with this Agreement.
SECTION 4.4 COMPLIANCE WITH LAWS.
(a) The Company shall comply, and cause each subsidiary to comply, with
all applicable laws, rules, regulations and orders, noncompliance with which
could reasonably be expected to have a Material Adverse Effect.
(b) Unless waived in advance by the Company, the Company will not be
obligated to issue and the Purchaser will not be obligated to purchase any
shares of the Company's Common Stock which would result in the issuance under
this Agreement of Shares representing more than nineteen and nine-tenths percent
(19.9%) of the issued and outstanding shares of the Company's Common Stock on
the date hereof.
SECTION 4.5 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company shall
keep and cause each subsidiary to keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP consistently
applied, reflecting all financial transactions of the Company and its
subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made.
SECTION 4.6 REPORTING REQUIREMENTS. Upon written request, the Company
shall furnish the following to the Purchaser so long as such Purchaser shall be
obligated hereunder to purchase Shares: (a) Quarterly Reports filed with the
Commission on Form 10-Q as soon as available, and in any event within 45 days
after the end of each of the first three fiscal quarters of the Company; and (b)
Annual Reports filed with the Commission on Form 10-K as soon as available, and
in any event within 90 days after the end of each fiscal year of the Company.
SECTION 4.7 OTHER AGREEMENTS. The Company is restricted from entering
in any other financing agreement ("Other Financing") during a Draw Down Pricing
Period without the prior written consent of the Purchaser, which consent will
not be unreasonably withheld, conditioned or delayed or without terminating its
agreement with the Purchaser, except that the Company may (i) enter into a loan,
credit or lease facility with a bank or financing institution, (ii) establish an
employee stock option plan or agreement or finance the acquisition of other
companies, equipment, technologies or lines of business, (iii) issue shares of
Common Stock and/or Preferred Stock in connection with the Company's current
option plans (as the same may be amended from time to time), stock purchase
plans, rights plans, currently outstanding warrants or options, or increase the
number of shares available under any such plans (the primary purpose of which is
not to raise equity), and (iv) issue shares of Common Stock and/or Preferred
Stock in connection with the formation and maintenance of strategic
partnerships, alliances or
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joint ventures and the acquisition of products, licenses or other assets
(each a "Permitted Transaction"). If the Purchaser consents to the Company
entering into an Other Financing, the Purchaser shall have the option,
which option shall be exercised no later than the last day of the applicable
Draw Down Pricing Period, to purchase an equivalent number of shares to be
issued in the Other Financing on (y) the then applicable terms of purchase in
this Agreement or (z) the same, absolute terms and conditions contemplated in
the Other Financing. If the Purchaser does not exercise its purchase option in
writing before 5:00 p.m. (Boston Time) on the last day of the applicable Draw
Down Pricing Period, the Company shall have the right to close the Other
Financing on the scheduled closing date with a third party.
SECTION 4.8 NON-PUBLIC INFORMATION. Neither the Company nor any of its
officers or agents shall disclose any material non-public information about the
Company to the Purchaser, and neither the Purchaser nor any of its affiliates,
officers or agents will solicit any material non-public information from the
Company.
SECTION 4.9 NO STOP ORDERS. The Company will advise the Purchaser
promptly and, if requested by the Purchaser, will confirm such advice in
writing: (i) of its receipt of notice of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prospectus or
for additional information; (ii) of its receipt of notice of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the Shares for offering or
sale in any jurisdiction or the initiation of any proceeding for such purpose;
and (iii) of its becoming aware of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
(as then amended or supplemented) in order to state a material fact required by
the Securities Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Securities Act or any other law. If at any time
the Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make commercially reasonable efforts to
obtain the withdrawal of such order at the earliest possible time.
SECTION 4.10 AMENDMENTS TO THE REGISTRATION STATEMENT. The Company will
not (i) file any amendment to the Registration Statement or make any amendment
or supplement to the Prospectus of which the Purchaser shall not previously have
been advised or to which the Purchaser shall reasonably object after being so
advised or (ii) so long as, in the reasonable opinion of counsel for the
Company, a Prospectus is required to be delivered in connection with sales by
any Purchaser or dealer, file any information, documents or reports pursuant to
the Exchange Act without delivering a copy of such information, documents or
reports to the Purchaser promptly following such filing.
SECTION 4.11 PROSPECTUS DELIVERY. Prior to the execution and delivery
of this Agreement, the Company will deliver to the Purchaser, without charge, in
such quantities as reasonably requested by the Purchaser, copies of each form of
Prospectus. As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such
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period as in the opinion of counsel for the Purchasers a prospectus is
required by the Securities Act to be delivered in connection with sales by the
Purchaser, the Company will expeditiously deliver to the Purchaser, without
charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as the Purchaser may reasonably request. The Company consents to the
use of the Prospectus (and of any amendment or supplement thereto) in accordance
with the provisions of the Securities Act and with the securities or Blue Sky
laws of the jurisdictions in which the Shares may be sold by the Purchaser, in
connection with the offering and sale of the Shares and for such period of time
thereafter as the Prospectus is required by the Securities Act to be delivered
in connection with sales of the Shares. If during such period of time any event
shall occur that in the judgment of the Company or in the opinion of counsel for
the Purchaser is required to be set forth in the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the Prospectus to
comply with the Securities Act or any other law, the Company will forthwith
prepare and, subject to the provisions of Section 4.10 above, file with the
Commission an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Purchaser a reasonable number of copies thereof.
ARTICLE V
CONDITIONS TO CLOSING AND DRAW DOWNS
SECTION 5.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO
CLOSE THIS AGREEMENT, TO ISSUE A DRAW DOWN NOTICE AND TO SELL THE SHARES. The
obligation hereunder of the Company to issue and sell the Shares to the
Purchaser is subject to the satisfaction or waiver, at or before the date of
each Draw Down or Call Option request (the "Draw Down Exercise Date"), of each
of the conditions set forth below. These conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion.
(a) ACCURACY OF THE PURCHASER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Purchaser shall be true and correct in all
material respects as of the date when made and as of each Draw Down Exercise
Date as though made at that time, except for representations and warranties that
are expressly made as of a particular date.
(b) EFFECTIVE REGISTRATION STATEMENT. The Registration Statement
registering the offer and sale of the Shares shall have been declared effective
by the Commission and shall have been amended or supplemented, as required, to
disclose the sale of the Shares prior to each Settlement Date, as applicable.
(c) PERFORMANCE BY THE PURCHASER. The Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Purchaser at or prior to each Settlement Date.
(d) NO INJUNCTION. No statute, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or
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governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.
(e) NO SUSPENSION, ETC. Trading in the Company's Common Stock shall not
be suspended by the Commission or the NASD (except for any suspension of trading
of limited duration agreed to by the Company, which suspension shall be
terminated prior to Closing), and, at any time prior to each Draw Down request,
trading in securities generally as reported on NASDAQ shall not have been
suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by American Stock Exchange, or on the New
York Stock Exchange, nor shall a banking moratorium have been declared either by
the United States or New York State authorities, nor shall there have occurred
any material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on, or any
material adverse change in any financial market which, in each case, in the
judgment of the Company, makes it impracticable or inadvisable to issue the
Shares.
(f) INTENTIONALLY OMITTED.
(g) NO PROCEEDINGS OR LITIGATION. No action, suit or proceeding before
any arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company or any subsidiary, or any of the officers, directors or affiliates
of the Company or any subsidiary seeking to restrain, prevent or change the
transactions contemplated by this Agreement, or seeking damages in connection
with such transactions.
SECTION 5.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO
CLOSE THIS AGREEMENT. The obligation hereunder of the Purchaser to enter this
Agreement is subject to the satisfaction or waiver, at or before the Closing, of
each of the conditions set forth below. These conditions are for the Purchaser's
sole benefit and may be waived by the Purchaser at any time in its sole
discretion.
(a) PERFORMANCE BY THE COMPANY. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing.
(b) NO SUSPENSION, ETC. Trading in the Company's Common Stock shall not
be suspended by the Commission or the NASD (except for any suspension of trading
of limited duration agreed to by the Company, which suspension shall be
terminated prior to Closing), and, at any time prior to the Closing, trading in
securities generally as reported on NASDAQ shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by the American Stock Exchange, or on the New York Stock
Exchange, nor shall a banking moratorium have been declared either by the United
States or New York State authorities, nor shall there have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on, or any material adverse
change in any financial market which, in each case, in the judgment of the
Purchaser, makes it impracticable or inadvisable to purchase the Shares.
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(c) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(d) NO PROCEEDINGS OR LITIGATION. No action, suit or proceeding before
any arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company or any subsidiary, or any of the officers, directors or affiliates
of the Company or any subsidiary seeking to restrain, prevent or change the
transactions contemplated by this Agreement, or seeking damages in connection
with such transactions.
(e) OPINION OF COUNSEL, ETC. At the Closing, the Purchaser shall have
received an opinion of counsel to the Company, dated the date of Closing, in the
form of Exhibit A hereto, and such other certificates and documents as the
Purchaser or its counsel shall reasonably require incident to the Closing.
SECTION 5.3 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO
ACCEPT A DRAW DOWN OR CALL OPTION AND PURCHASE THE SHARES. The obligation
hereunder of the Purchaser to accept a Draw Down request or exercise a Call
Option and to acquire and pay for the Shares is subject to the satisfaction or
waiver, at or before each Draw Down Exercise Date, of each of the conditions set
forth below. The conditions are for the Purchaser's sole benefit and may be
waived by the Purchaser at any time in its sole discretion.
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. Each of
the representations and warranties of the Company shall be true and correct in
all material respects as of the date when made and as of the Draw Down Exercise
Date as though made at that time (except for representations and warranties that
speak as of a particular date).
(b) EFFECTIVE REGISTRATION STATEMENT. The Registration Statement
registering the Shares shall have been declared effective by the Commission
prior to the Closing Date and shall thereafter be amended or supplemented, as
required, to disclose the sale of the Shares prior to the Closing Date or each
Settlement Date, as applicable.
(c) NO SUSPENSION. Trading in the Company's Common Stock shall not have
been suspended by the Commission or the NASD (except for any suspension of
trading of limited duration agreed to by the Company, which suspension shall be
terminated prior to each Draw Down request), and, at any time prior to such
request, trading in securities generally as reported on NASDAQ shall not have
been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by the American Stock Exchange.
(d) PERFORMANCE BY THE COMPANY. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Draw Down Exercise Date and the
Settlement Date and shall have delivered the Compliance Certificate
substantially in the form attached hereto as Exhibit B.
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(e) MATERIAL ADVERSE EFFECT; MATERIAL CHANGE IN OWNERSHIP. No Material
Adverse Effect and no Material Change in Ownership shall have occurred.
ARTICLE VI
DRAW DOWN TERMS; CALL OPTION TERMS
SECTION 6.1 DRAW DOWN TERMS. Subject to the satisfaction of the
conditions set forth in this Agreement, the parties agree as follows:
(a) The Company, may, in its sole discretion, issue a Draw Down Notice
with respect to up to (i) $8,000,000 if the Threshold Price is equal to or
exceeds $6.00; and (ii) if the Threshold Price is less than $6.00, such other
amount, and under such terms, that are negotiated in good faith and mutually
agreed upon by the Purchaser and the Company (a "DRAW DOWN") during any Draw
Down Pricing Period, each of which Draw Downs the Purchaser will be obligated to
accept. Prior to issuing any Draw Down Notice, the Company shall have Shares
representing at least the Draw Down Amount registered under the Registration
Statement.
(b) The number of Shares to be issued in connection with each Draw Down
shall be equal to the sum of the quotients (for each trading day of the Draw
Down Pricing Period for which the VWAP equals or exceeds the Threshold Price) of
(x) 1/15th (or such other fraction based upon the agreed upon Draw Down Pricing
Period) of the Draw Down Amount divided by (y) the applicable Draw Down Discount
Percentage multiplied by the VWAP for such day.
(c) Only one Draw Down shall be allowed in each Draw Down Pricing
Period.
(d) The number of Shares purchased by the Purchaser with respect to
each Draw Down shall be determined on a daily basis during each Draw Down
Pricing Period and settled on the second business day following the end of each
Draw Down Pricing Period (the "SETTLEMENT DATE").
(e) There shall be a minimum of five (5) trading days (or such other
number of trading days mutually agreed upon by the Purchaser and the Company)
between Draw Downs.
(f) There shall be a maximum of fourteen (14) Draw Downs during the
term of this Agreement.
(g) Each Draw Down will expire on the last trading day of each Draw
Down Pricing Period.
(h) For each trading day during the Draw Down Pricing Period that the
VWAP is at or above the Threshold Price, one-fifteenth (1/15th) (or such other
fraction based upon the agreed upon Draw Down Pricing Period) of the Draw Down
Amount shall be allocated to purchase Shares at a price equal to the product of
(x) the Draw Down Discount Percentage times (y) the VWAP for such day. For each
trading day during the Draw Down Pricing Period that the VWAP is less than the
Threshold Price, the Purchaser may elect in its sole discretion to
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allocate 1/15th (or such other fraction based upon the agreed upon Draw Down
Pricing Period) of the Draw Down Amount to purchase Shares at the end of
such Draw Down Pricing Period at a price equal to the product of (A) the Draw
Down Discount Percentage times (B) the Threshold Price. At no time shall the
Threshold Price be set below $6.00 unless agreed upon by the Company and the
Purchaser. If trading in the Company's Common Stock is suspended for any reason
for more than three (3) hours in any trading day, at the Purchaser's option, the
price of the Common Stock shall be deemed to be below the Threshold Price for
that trading day.
(i) The Company must inform the Purchaser via facsimile transmission as
to the Draw Down Amount the Company wishes to exercise before commencement of
trading on the first trading day of the Draw Down Pricing Period (the "DRAW DOWN
NOTICE"), substantially in the form attached hereto as Exhibit C. In addition to
the Draw Down Amount, the Company shall set the Threshold Price with each Draw
Down Notice, shall designate the first trading day of the Draw Down Pricing
Period, and shall indicate the amount of Call Options (as defined in Section
6.2), if any, that the Company wishes to grant to the Purchaser during the
applicable Draw Down Pricing Period.
(j) On each Settlement Date, the Company shall deliver the Shares
purchased by the Purchaser to the Purchaser or its designees via DWAC, against
payment therefor to the Company's designated account by wire transfer of
immediately available funds provided that the Shares are received by the
Purchaser no later than 1:00 p.m. (Boston Time) or next day available funds if
the Shares are received thereafter.
(k) If during any Draw Down Pricing Period, the Company with the
consent of the Purchaser shall issue any shares of Common Stock (other than
shares of Common Stock issued under this Agreement or in connection with a
Permitted Transaction), the Purchaser may in its sole discretion (i) purchase up
to the same number of shares of Common Stock at the price and on such terms as
the Company issued Shares of Common Stock during such Draw Down Pricing Period,
(ii) purchase up to the Draw Down Amount of shares of Common Stock at the
applicable Draw Down Discount Percentage times the VWAP for such Draw Down
Pricing Period, or (iii) elect not to purchase any Shares during such Draw Down
Pricing Period. The Purchaser shall notify the Company of its election on the
last business day of the Draw Down Pricing Period.
(l) If on the Settlement Date, the Company fails to deliver the Shares
to be purchased by the Purchaser, and such failure continues for ten (10)
trading days, the Company shall pay, in cash or restricted shares of Common
Stock, at the option of the Purchaser, as liquidated damages and not as a
penalty to the Purchaser an amount equal to two percent (2%) of the Draw Down
Amount for the initial thirty (30) days and each additional thirty (30) day
period thereafter until such failure has been cured, which shall be pro rated
for such periods less than thirty (30) days (the "PERIODIC AMOUNT"). Cash
payments to be made pursuant to this clause (l) shall be due and payable
immediately upon demand in immediately available cash funds. Certificates
evidencing the restricted shares of Common Stock shall be delivered immediately
upon demand. The parties agree that the Periodic Amount represents a reasonable
estimate on the part of the parties, as of the date of this Agreement, of the
amount of damages that may be incurred by the Purchaser if the Company fails to
deliver the Shares on the Settlement Date. If the Purchaser elects to receive
shares of Common Stock instead of cash, the Purchaser shall have
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the right to demand registration once within twelve (12) months of the date
of issuance of such shares of Common Stock and piggyback registration
rights if the Company files a separate registration statement.
SECTION 6.2 CALL OPTION TERMS.
(a) During each Draw Down Pricing Period, the Company at its sole
discretion may grant to the Purchaser the right to exercise multiple call
options of not less than $100,000, aggregating up to the Draw Down Amount for
such Draw Down Pricing Period (a "CALL OPTION"). For each trading day during a
Draw Down Pricing Period, the Purchaser may exercise a Call Option by providing
written notice to the Company of the exercise of a Call Option (the "Call Option
Notice").
(b) The number of shares of Common Stock to be issued in connection
with each Call Option shall equal the quotient of (i) the amount of the Call
Option exercised by the Purchaser divided by (ii) the product of the Draw Down
Discount Percentage and the greater of (A) the VWAP for the Common Stock on the
day the Purchaser issues its Call Option Notice and (B) the Threshold Price.
(c) Each Call Option exercised shall be settled on the applicable
Settlement Date.
(d) The Threshold Price designated by the Company in its Draw Down
Notice shall apply to each Call Option.
(e) For each Call Option that the Purchaser exercises pursuant to this
Section 6.2, the Purchaser must issue via facsimile a Call Option Notice to the
Company no later than 8:00 p.m. (Boston Time) on the day such Call Option is
exercised. Any unexercised Call Options with respect to a Draw Down Pricing
Period shall terminate at 8:00 p.m. (Boston Time) on the last day of the
applicable Draw Down Pricing Period.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION BY MUTUAL CONSENT. The term of this Agreement
shall be eighteen (18) months from the Effective Date. This Agreement may be
terminated at any time by mutual consent of the parties.
SECTION 7.2 OTHER TERMINATION. The Purchaser may terminate this
Agreement upon one (1) day's notice (x) if the Company enters an equity
financing facility as set forth in Section 4.7 without the Purchaser's prior
written consent, or (y) if an event resulting in a Material Adverse Effect or a
Material Change of Control in Ownership has occurred.
SECTION 7.3 EFFECT OF TERMINATION. In the event of termination by the
Company or the Purchaser, written notice thereof shall forthwith be given to the
other party and the transactions contemplated by this Agreement shall be
terminated without further action by either
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party. If this Agreement is terminated as provided in Section 7.1 or 7.2
herein, this Agreement shall become void and of no further force and effect,
except as provided in Section 9.9. Nothing in this Section 7.3 shall be deemed
to release the Company or the Purchaser from any liability for any breach under
this Agreement, or to impair the rights of the Company and the Purchaser to
compel specific performance by the other party of its obligations under this
Agreement.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 GENERAL INDEMNITY.
(a) INDEMNIFICATION BY THE COMPANY. The Company will indemnify and hold
harmless the Purchaser and each person, if any, who controls the Purchaser
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act from and against any losses, claims, damages, liabilities and
expenses (including reasonable costs of defense and investigation and all
reasonable attorney's fees) to which the Purchaser and each person, if any, who
controls the Purchaser may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages, liabilities and expenses (or
actions in respect thereof) arise out of or are based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained, or
incorporated by reference, in the Registration Statement or the Prospectus
relating to the shares being sold to the Purchaser, or any amendment or
supplement to it, or (ii) the omission or alleged omission to state in that
Registration Statement or any document incorporated by reference in the
Registration Statement, a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that the
Company shall not be liable under this Section 8.1(a) to the extent that a court
of competent jurisdiction shall have determined by a final judgment that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act, undertaken or omitted to be taken by the Purchaser or such
person through its bad faith or willful misconduct; PROVIDED, however, that the
foregoing indemnity shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by the Purchaser expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and PROVIDED, further, that with respect to the Prospectus, the
foregoing indemnity shall not inure to the benefit of the Purchaser or any such
person from whom the person asserting any loss, claim, damage, liability or
expense purchased Common Stock, if copies of the Prospectus were timely
delivered to the Purchaser pursuant hereto and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Purchaser or
any such person to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Common Stock to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense.
The Company will reimburse the Purchaser and each such controlling
person promptly upon demand for any legal or other costs or expenses reasonably
incurred by it the Purchaser or
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the controlling person in investigating, defending against, or preparing
to defend against any such claim, action, suit or proceeding, except that
the Company will not be liable to the extent a claim or action which
results in a loss, claim, damage, liability or expense arises out of, or is
based upon, an untrue statement, alleged untrue statement, omission or alleged
omission, included in the Registration Statement or any Prospectus in reliance
upon, and in conformity with, written information furnished by the Purchaser to
the Company for inclusion in the Registration Statement or Prospectus.
(b) INDEMNIFICATION BY THE PURCHASER. The Purchaser will indemnify and
hold harmless the Company, each of its directors and officers, and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act from and against any
expenses (including reasonable costs of defense and investigation and all
reasonable attorneys fees) to which the Company, any director or officer of the
Company and each other person, if any, who controls the Company may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages, liabilities and expenses (or actions in respect thereof) arise out of
or are based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus or (ii) the omission or alleged
omission to state in the Registration Statement or any Prospectus a material
fact required to be stated therein or necessary to make the statements therein
not misleading, to the extent, but only to the extent, the untrue statement,
alleged untrue statement, omission or alleged omission was made in reliance
upon, and in conformity with, written information furnished by the Purchaser to
the Company for inclusion in the Registration Statement or Prospectus, and the
Purchaser will reimburse the Company and each such director, officer or
controlling person promptly upon demand for any legal or other costs or expenses
reasonably incurred by the Company or the other person in investigating,
defending against, or preparing to defend against any such claim, action, suit
or proceeding.
SECTION 8.2 INDEMNIFICATION PROCEDURES. Promptly after a person
receives notice of a claim or the commencement of an action for which the person
intends to seek indemnification under paragraph (a) or (b) of Section 8.1, the
person will notify the indemnifying party in writing of the claim or
commencement of the action, suit or proceeding, but failure to notify the
indemnifying party will not relieve the indemnifying party from liability under
paragraph (a) or (b) of Section 8.1, except to the extent it has been materially
prejudiced by the failure to give notice. The indemnifying party will be
entitled to participate in the defense of any claim, action, suit or proceeding
as to which indemnification is being sought, and if the indemnifying party
acknowledges in writing the obligation to indemnify the party against whom the
claim or action is brought, the indemnifying party may (but will not be required
to) assume the defense against the claim, action, suit or proceeding with
counsel satisfactory to it. After an indemnifying party notifies an indemnified
party that the indemnifying party wishes to assume the defense of a claim,
action, suit or proceeding the indemnifying party will not be liable for any
legal or other expenses incurred by the indemnified party in connection with the
defense against the claim, action, suit or proceeding except that if, in the
opinion of counsel to the indemnifying party, one or more of the indemnified
parties should be separately represented in connection with a claim, action,
suit or proceeding the indemnifying party will pay the reasonable fees and
expenses of one separate counsel for the indemnified parties. Each indemnified
party, as a condition to receiving indemnification as provided in Paragraph (a)
or (b) or Section 8.1, will cooperate in all reasonable respects with the
indemnifying party in the defense of any action or
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claim as to which indemnification is sought. No indemnifying party will be
liable for any settlement of any action effected without its prior written
consent. No indemnifying party will, without the prior written consent of the
indemnified party, effect any settlement of a pending or threatened action with
respect to which an indemnified party is, or is informed that it may be, made a
party and for which it would be entitled to indemnification, unless the
settlement includes an unconditional release of the indemnified party from all
liability and claims which are the subject matter of the pending or threatened
action.
If for any reason the indemnification provided for in this Agreement is
not available to, or is not sufficient to hold harmless, an indemnified party in
respect of any loss or liability referred to in paragraph (a) or (b) of Section
8.1, each indemnifying party will, in lieu of indemnifying the indemnified
party, contribute to the amount paid or payable by the indemnified party as a
result of the loss or liability, (i) in the proportion which is appropriate to
reflect the relative benefits received by the indemnifying party on the one hand
and by the indemnified party on the other from the sale of stock which is the
subject of the claim, action, suit or proceeding which resulted in the loss or
liability or (ii) if that allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits of the
sale of stock, but also the relative fault of the indemnifying party and the
indemnified party with respect to the statements or omissions which are the
subject of the claim, action, suit or proceeding that resulted in the loss or
liability, as well as any other relevant equitable considerations.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 FEES AND EXPENSES. Except as set forth in Article VIII, the
Company shall pay (i) all reasonable fees and expenses related to the
transactions contemplated by this Agreement; PROVIDED, that the Company shall
pay, at the Closing, all reasonable attorneys fees and expenses (exclusive of
disbursements and out-of-pocket expenses and reasonably itemized) incurred by
the Purchaser up to $40,000 in connection with the preparation, negotiation,
execution and delivery of this Agreement, (ii) all reasonable fees and expenses
incurred by the Purchaser in connection with any amendments, modifications or
waivers of this Agreement or incurred in connection with the enforcement of this
Agreement, including, without limitation, all reasonable attorneys fees and
expenses, and (iii) all stamp or other similar taxes and duties levied in
connection with issuance of the Shares pursuant hereto.
SECTION 9.2 SPECIFIC ENFORCEMENT, CONSENT TO JURISDICTION.
(a) The Company and the Purchaser acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.
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(b) Each of the Company and the Purchaser (i) hereby irrevocably
submits to the jurisdiction of the United States District Court and other courts
of the United States sitting in the State of New York for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement and (ii)
hereby waives, and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that
the venue of the suit, action or proceeding is improper. Each of the Company and
the Purchaser consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
Section shall affect or limit any right to serve process in any other manner
permitted by law.
SECTION 9.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the
entire understanding of the parties with respect to the matters covered hereby
and, except as specifically set forth herein, neither the Company nor the
Purchaser makes any representations, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or amended
other than by a written instrument signed by the party against whom enforcement
of any such amendment or waiver is sought.
SECTION 9.4 NOTICES. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery, by telex (with correct answer
back received), telecopy or facsimile at the address or number designated below
(if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
If to the Company: ARIAD Pharmaceuticals, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, M.D.,
Chairman and Chief Executive
Officer
With copies to: Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
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If to the Purchaser: Acqua Wellington North American Equities
Fund, Ltd.
c/o Mees Pierson Fund Services (Bahamas)
Ltd.
Xxxxxxxx Xxxxxxxx Centre
East Bay Street, P. O. Box SS-6238
Nassau, Bahamas
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxxx X.X. Xxxxx Xxxxxx
With copies to: Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Any party hereto may from time to time change its address for notices
by giving at least ten (10) days prior written notice of such changed address to
the other party hereto.
SECTION 9.5 WAIVERS. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provisions, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
SECTION 9.6 HEADINGS. The article, section and subsection headings in
this Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
SECTION 9.7 SUCCESSORS AND ASSIGNS. The Purchaser may not assign this
Agreement to any person without the prior written consent of the Company, which
consent will not be unreasonably withheld. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns. After
Closing, the assignment by a party to this Agreement of any rights hereunder
shall not affect the obligations of such party under this Agreement.
SECTION 9.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to the choice of law provisions.
SECTION 9.9 SURVIVAL. The representations and warranties of the Company
and the Purchaser contained in Article III and the covenants contained in
Article IV shall survive the execution and delivery hereof and the Closing until
the termination of this Agreement, and the agreements and covenants set forth in
Article VIII of this Agreement shall survive the execution and delivery hereof
and the Closing hereunder.
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SECTION 9.10 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart. In the event any signature is
delivered by facsimile transmission, the party using such means of delivery
shall cause four additional executed signature pages to be physically delivered
to the other parties within five days of the execution and delivery hereof.
SECTION 9.11 PUBLICITY. Prior to the Closing, neither the Company nor
the Purchaser shall issue any press release or otherwise make any public
statement or announcement with respect to this Agreement or the transactions
contemplated hereby or the existence of this Agreement. Promptly after the
Closing, each party may issue a press release or otherwise make a public
statement or announcement with respect to this Agreement or the transactions
contemplated hereby or the existence of this Agreement; PROVIDED, that prior to
issuing any such press release, making any such public statement or
announcement, the party wishing to make such release, statement or announcement
obtains the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, in the event
the Company is required by law, based upon an opinion of the Company's counsel,
to issue a press release or otherwise make a public statement or announcement
with respect to this Agreement prior to or after the Closing, the Company shall
consult with the Purchaser on the form and substance of such press release or
other disclosure.
SECTION 9.12 SEVERABILITY. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement, and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.
SECTION 9.13 FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of the Purchaser or the Company, each of the Company
and the Purchaser shall execute and deliver such instrument, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officer as of the date first above
written.
ARIAD PHARMACEUTICALS, INC.
By: /s/ Xxx X. Xxxxxxxx
----------------------------
Name: Xxx X. Xxxxxxxx
Title: Executive Vice President
Chief Financial Officer
ACQUA WELLINGTON NORTH
AMERICAN EQUITIES FUND, LTD.
By: /s/ Xxxxx X Xxxxxx
----------------------------
Name: Xxxxx X Xxxxxx
Title: Secretary
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EXHIBIT A TO THE
COMMON STOCK PURCHASE AGREEMENT
OPINION OF COUNSEL
32
EXHIBIT B
COMPLIANCE CERTIFICATE
In connection with the issuance of shares of common stock of ARIAD
Pharmaceuticals, Inc. (the "Company") pursuant to the Draw Down Notice, dated
___________ delivered by the Company to Acqua Wellington North American Equities
Fund, Ltd. (the "Purchaser") pursuant to Article VI of the Common Stock Purchase
Agreement dated June __, 2000, by and between the Company and Acqua Wellington
North American Equities Fund, Ltd. (the "Agreement"), the undersigned hereby
certifies as follows:
1. The undersigned is the duly elected Chief Executive Officer or Chief
Financial Officer of the Company.
2. The representations and warranties of the Company set forth in
Section 3.1 of the Agreement are true and correct in all material respects as
though made on and as of the date hereof, except for representations and
warranties that speak as of a particular date.
3. The Company has performed in all material respects all covenants and
agreements to be performed by the Company on or prior to the Draw Down Exercise
Date and the Settlement Date related to the Draw Down Notice and has complied in
all material respects with all obligations and conditions contained in Section
5.3 of the Agreement.
The terms used but not otherwise defined herein shall have the meanings
specified in the Agreement.
The undersigned has executed this Certificate this _____ day of
_________, 2000.
By:_________________________________
Name:_______________________________
Title:______________________________
33
EXHIBIT C TO THE COMMON STOCK PURCHASE AGREEMENT
FORM
OF
DRAW DOWN NOTICE
Reference is made to the Common Stock Purchase Agreement dated as of
________, ____ (the "Purchase Agreement ") between ARIAD Pharmaceuticals, Inc.,
a Delaware corporation (the "Company"), and Acqua Wellington North American
Equities Fund, Ltd. Capitalized terms used and not otherwise defined herein
shall have the meanings given such terms in the Purchase Agreement.
In accordance with and pursuant to Section 6.1 of the Purchase
Agreement, the Company hereby issues this Draw Down Notice to exercise a Draw
Down request for the Draw Down Amount indicated below.
Draw Down Amount:______________________________________________
Call Option Amount
(up to 100% of the Draw Down Amount):__________________________
Draw Down Pricing Period start date:___________________________
Draw Down Pricing Period end date:_____________________________
Settlement Date
(2nd business day following the
Draw Down Pricing Period end date):____________________________
Threshold Price:_______________________________________________
Minimum Threshold Price
(unless otherwise mutually agreed upon): $6.00
---------------------
Dated: ___________
________________________________________
By:_____________________________________
Name:
Title:
Address:
Facsimile No.:
Wire Instructions:______________________
Contact Name:___________________________
34
DISCLOSURE SCHEDULES
RELATING TO THE COMMON STOCK
PURCHASE AGREEMENT, DATED AS OF JUNE 27, 2000 BETWEEN
ARIAD PHARMACEUTICALS, INC. AND
ACQUA WELLINGTON NORTH AMERICAN EQUITIES FUND, LTD.
ALL SECTION AND SUBSECTION NUMBERS AND LETTERS RELATE AND COINCIDE TO
SUCH NUMBERS AND LETTERS AS SET FORTH IN THE COMMON STOCK PURCHASE AGREEMENT
(THE "AGREEMENT"). ANY CAPITALIZED TERMS USED HEREIN WITHOUT DEFINITION SHALL
HAVE THE MEANINGS ASCRIBED TO SUCH TERMS IN THE AGREEMENT.
ALL REPRESENTATIONS AND WARRANTIES SET FORTH IN THE AGREEMENT ARE
MODIFIED IN THEIR ENTIRETY BY THESE DISCLOSURE SCHEDULES. THE DISCLOSURES
CONTAINED IN THESE DISCLOSURE SCHEDULES SHALL BE READ IN THEIR ENTIRETY, AND ALL
THE DISCLOSURES SHALL BE READ TOGETHER.
35
SCHEDULE 3.1(c)
CAPITALIZATION
As of June 9, 2000
Authorized Capital Stock: 70,000,000 shares
60,000,000 shares
designated as Common Stock,
$.001 par value per share
("Common Stock") and
10,000,000 shares of series
preferred stock, $.01 par
value per share ("Preferred
Stock"), 500,000 shares of
which have been designated
as Series A Preferred Stock
Common Stock Outstanding: 26,132,109
Preferred Stock Outstanding: 0
Options Outstanding: 3,560,620
36
SCHEDULE 3.1(g)
SUBSIDIARIES
State of Incorporation
Subsidiary or Organization Ownership
---------- ---------------------- ---------
ARIAD Corporation Delaware ARIAD Pharmaceuticals, Inc.- 100%
ARIAD Gene Therapeutics, Inc. Delaware ARIAD Pharmaceuticals, Inc.- 94%
