Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of
June 19, 2003, among Vion Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and the purchasers identified on the signature pages hereto (each a
"Purchaser" and collectively the "Purchasers"); and
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act (as defined below),
and Rule 506 promulgated thereunder, the Company desires to issue and sell to
the Purchasers, and the Purchasers, severally and not jointly, desire to
purchase from the Company in the aggregate, up to 3,846,150 shares of Common
Stock and Warrants to purchase up to 1,923,075 shares of Common Stock.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:
"Action" shall have the meaning ascribed to such term in
Section 3.1(j).
"Affiliate" means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is
under common control with a Person as such terms are used in and
construed under Rule 144. With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by the
same investment manager as such Purchaser will be deemed to be an
Affiliate of such Purchaser.
"Business Day" means any day except Saturday, Sunday and any
day which shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law
or other governmental action to close.
"Closing" means the closing of the purchase and sale of the
Common Stock and Warrants pursuant to Section 2.1(a).
"Closing Date" means the date of the Closing, which shall be
within one Business Day of the satisfaction of all closing conditions.
"Closing Price" means on any particular date (a) the last
reported closing bid price per share of Common Stock on such date on
the Trading Market (as reported by Bloomberg L.P. at 4:15 PM (New York
time) as the last reported closing bid price for regular session
trading on such day), or (b) if there is no such price on such date,
then the closing bid price on the Trading Market on the date nearest
preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New York
time) as the closing bid price for
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regular session trading on such day), or (c) if the Common Stock is not
then listed or quoted on the Trading Market and if prices for the
Common Stock are then reported in the "pink sheets" published by the
National Quotation Bureau Incorporated (or a similar organization or
agency succeeding to its functions of reporting prices), the most
recent bid price per share of the Common Stock so reported, or (d) if
the shares of Common Stock are not then publicly traded the fair market
value of a share of Common Stock as determined by an appraiser selected
in good faith by the Purchasers of a majority in interest of the Shares
then outstanding.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, $0.01
par value per share, and any securities into which such common stock
may hereafter be reclassified.
"Common Stock Equivalents" means any securities of the Company
or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including without limitation, any debt,
preferred stock, rights, options, warrants or other instrument that is
at any time convertible into or exchangeable for, or otherwise entitles
the holder thereof to receive, Common Stock.
"Company Counsel" means Fulbright & Xxxxxxxx, LLP.
"Disclosure Schedules" means the Disclosure Schedules
concurrently delivered herewith.
"Effective Date" means the date that the Registration
Statement is first declared effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"FW" shall mean Xxxxxxx Xxxxxxxxx LLP with offices at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
"Intellectual Property Rights" shall have the meaning ascribed
to such term in Section 3.1(o).
"Liens" means a lien, charge, security interest, encumbrance,
right of first refusal or other restriction.
"Material Adverse Effect" shall have the meaning ascribed to
such term in Section 3.1(b).
"Material Permits" shall have the meaning ascribed to such
term in Section 3.1(m).
"Per Share Purchase Price" equals $1.30, subject to adjustment
for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that
occur after the date of this Agreement.
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"Person" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
"Registration Statement" means a registration statement
meeting the requirements set forth in the Registration Rights Agreement
and covering the resale by the Purchasers of the Shares and the Warrant
Shares.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company
and each Purchaser, in the form of Exhibit B hereto.
"Rule 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"SEC Reports" shall have the meaning ascribed to such term in
Section 3.1(h).
"Securities" means the Shares, the Warrants and the Warrant
Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock issued to each
Purchaser pursuant to this Agreement.
"Subscription Amount" means, as to each Purchaser and the
Closing, the amounts set forth below such Purchaser's signature block
on the signature page hereto, in United States dollars and in
immediately available funds.
"Subsidiary" shall have the meaning ascribed to such term in
Section 3.1(a).
"Trading Day" means (i) a day on which the Common Stock is
traded on a Trading Market, or (ii) if the Common Stock is not listed
on a Trading Market, a day on which the Common Stock is traded on the
over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not quoted on the OTC Bulletin Board, a
day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding to its functions of reporting
prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
"Trading Market" means the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in
question: the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market or the Nasdaq SmallCap Market.
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"Transaction Documents" means this Agreement, the Registration
Rights Agreement, the Warrant and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
"Warrants" means the Common Stock Purchase Warrants, in the
form of Exhibit C, issuable to the Purchasers at Closing, which
warrants shall be exercisable immediately and have an exercise price
equal to $2.20 and a term of exercise of 5 years.
"Warrant Shares" means the shares of Common Stock issuable
upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing. At the Closing, the Purchasers shall purchase, severally
and not jointly, and the Company shall issue and sell, in the aggregate, up to
3,846,150 shares of Common Stock and Warrants to purchase up to 1,923,075 shares
of Common Stock on the Closing Date. Each Purchaser shall purchase from the
Company, and the Company shall issue and sell to each Purchaser, a number of
Shares equal to such Purchaser's Subscription Amount divided by the Per Share
Purchase Price. Upon satisfaction of the conditions set forth in Section 2.2,
the Closing shall occur at the offices of FW, or such other location as the
parties shall mutually agree.
2.2 Closing Conditions.
(a) At the Closing (unless otherwise specified below) the
Company shall deliver or cause to be delivered to each Purchaser the
following:
(i) this Agreement duly executed by the Company;
(ii) within 3 Business Days of the Closing Date, a
certificate evidencing a number of Shares equal to such
Purchaser's Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such Purchaser;
(iii) within 3 Business Days of the Closing Date, a
Warrant, registered in the name of such Purchaser, pursuant to
which such Purchaser shall have the right to acquire up to the
number of shares of Common Stock equal to 50% of the Shares to
be issued to such Purchaser at such Closing;
(iv) the Registration Rights Agreement duly executed
by the Company; and
(v) a legal opinion of Company Counsel, in the form
of Exhibit A attached hereto.
(b) At the Closing, each Purchaser shall deliver or cause to
be delivered to the Company the following:
(i) this Agreement duly executed by such Purchaser;
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(ii) such Purchaser's Subscription Amount as to such
Closing by wire transfer to the account of the Company as
provided to the Purchasers in writing prior to the Closing
Date; and
(iii) the Registration Rights Agreement duly executed
by such Purchaser.
(c) All representations and warranties of the other party
contained herein shall remain true and correct as of the Closing Date.
(d) As of the Closing Date, there shall have been no Material
Adverse Effect with respect to the Company since the date hereof.
(e) From the date hereof to the Closing Date, trading in the
Common Stock shall not have been suspended by the Commission (except
for any suspension of trading of limited duration agreed to by the
Company, which suspension shall be terminated prior to the Closing),
and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg Financial Markets shall not have
been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such service, or
on any Trading Market, nor shall a banking moratorium have been
declared either by the United States or New York State authorities.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth
under the corresponding section of the Disclosure Schedules delivered
concurrently herewith, the Company hereby makes the following representations
and warranties as of the date hereof and as of the Closing Date to each
Purchaser:
(a) Subsidiaries. The Company has no direct or indirect
subsidiaries. Any references to Subsidiaries in the Transaction
Documents shall be disregarded.
(b) Organization and Qualification. Each of the Company and
the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with
the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation of
any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the
case may be, would not have or reasonably be expected to result in (i)
a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the
results of operations, assets, business or financial condition of the
Company
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and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company's ability to perform in any material respect on a
timely basis its obligations under any Transaction Document (any of
(i), (ii) or (iii), a "Material Adverse Effect").
(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been
duly authorized by all necessary action on the part of the Company and
no further action is required by the Company in connection therewith.
Each Transaction Document has been (or upon delivery will have been)
duly executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms
except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) with respect
to the indemnification provisions set forth in the Registration Rights
Agreement, as limited by public policy.
(d) No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated thereby do not and will not
(i) conflict with or violate any provision of the Company's or any
Subsidiary's certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company
or any Subsidiary is bound or affected, or (iii) result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of
the Company or a Subsidiary is bound or affected; except in the case of
each of clauses (ii) and (iii), such as would not have or reasonably be
expected to result in a Material Adverse Effect.
(e) Filings, Consents and Approvals. The Company is not
required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by
the Company of the Transaction Documents, other than (a) the filing
with the Commission of the Registration Statement, the application(s)
to each Trading Market for the listing of the Shares and Warrant Shares
for trading thereon in the time and manner required thereby, Form D and
applicable Blue Sky filings and (b) such as have already been obtained
or such exemptive filings as are required to be made under applicable
securities laws.
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(f) Issuance of the Securities. The Securities are duly
authorized and, when issued and paid for in accordance with the
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens. The Company has reserved
from its duly authorized capital stock the maximum number of shares of
Common Stock issuable pursuant to this Agreement and the Warrants.
(g) Capitalization. The authorized and outstanding
capitalization of the Company is as described in the Company's most
recent periodic report filed with the Commission. The Company has not
issued any capital stock since such filing other than pursuant to the
exercise of employee stock options under the Company's stock option
plans and pursuant to the conversion or exercise of Common Stock
Equivalents outstanding on the date thereof. No Person has any right of
first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the
Transaction Documents. Except as a result of the purchase and sale of
the Securities and except for employee and director stock options under
the Company's stock option plans, there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common
Stock, or securities or rights convertible or exchangeable into shares
of Common Stock. The issue and sale of the Securities will not obligate
the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchasers) and will not result in a right of
any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities.
(h) SEC Reports; Financial Statements. The Company has filed
all reports required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) of the
Exchange Act, for the two years preceding the date hereof (or such
shorter period as the Company was required by law to file such
material) (the foregoing materials, including the exhibits thereto,
being collectively referred to herein as the "SEC Reports" and,
together with the Disclosure Schedules to this Agreement, the
"Disclosure Materials") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules
and regulations of the Commission promulgated thereunder, as
applicable, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission
with respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes
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required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as
of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.
(i) Material Changes. Since the date of the most recent
quarterly report on Form 10-Q, except as disclosed in the SEC Reports,
(i) there has been no event, occurrence or development that has had or
that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the
Company's financial statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (iii) the Company has
not altered its method of accounting, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock and (v) the Company has not
issued any equity securities to any officer, director or Affiliate,
except pursuant to existing Company stock option plans. The Company
does not have pending before the Commission any request for
confidential treatment of information.
(j) Litigation. Except as disclosed in the SEC Reports, there
is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an "Action") which (i)
adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or
(ii) could, if there were an unfavorable decision, have or reasonably
be expected to result in a Material Adverse Effect. Neither the Company
nor any Subsidiary, nor, to the knowledge of the Company, any director
or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to
the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or
former director or officer of the Company. The Commission has not
issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company or any Subsidiary under
the Exchange Act or the Securities Act.
(k) Labor Relations. No material labor dispute exists or, to
the knowledge of the Company, is imminent with respect to any of the
employees of the Company which could reasonably be expected to result
in a Material Adverse Effect.
(l) Compliance. Except as disclosed in the SEC Reports,
neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the
Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it
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is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of
any order of any court, arbitrator or governmental body, or (iii) is or
has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws applicable to its business, except in the
case of clauses (i), (ii) and (iii) as would not have or reasonably be
expected to result in a Material Adverse Effect.
(m) Regulatory Permits. The Company and the Subsidiaries
possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as currently conducted
and as described in the SEC Reports, except where the failure to
possess such permits would not have or reasonably be expected to result
in a Material Adverse Effect ("Material Permits"), and neither the
Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.
(n) Title to Assets. The Company and the Subsidiaries have
good and marketable title in fee simple to all real property owned by
them that is material to the business of the Company and the
Subsidiaries, taken as a whole, and good and marketable title in all
personal property owned by them that is material to the business of the
Company and the Subsidiaries, taken as a whole, in each case free and
clear of all Liens, except for Liens as do not materially affect the
value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries and Liens for the payment of federal, state or other
taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the
Company and the Subsidiaries are held by them under valid, subsisting
and enforceable leases with which the Company and the Subsidiaries are
in material compliance.
(o) Patents and Trademarks. To the knowledge of the Company
and each Subsidiary, the Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and
other similar rights that are necessary or material for use in
connection with their respective businesses as described in the SEC
Reports and which the failure to so have could have or reasonably be
expected to result in a Material Adverse Effect (collectively, the
"Intellectual Property Rights"). Neither the Company nor any Subsidiary
has received a written notice that the Intellectual Property Rights
used by the Company or any Subsidiary violates or infringes the rights
of any Person. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable.
(p) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which the Company and the Subsidiaries are engaged.
Neither the Company nor any Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a
significant increase in cost.
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(q) Transactions With Affiliates and Employees. Except as set
forth in the SEC Reports, none of the officers or directors of the
Company and, to the knowledge of the Company, none of the employees of
the Company is presently a party to any transaction with the Company or
any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or
any such employee has a substantial interest or is an officer,
director, trustee or partner, in each case in excess of $60,000 other
than (a) for payment of salary or consulting fees for services
rendered, (b) reimbursement for expenses incurred on behalf of the
Company and (c) for other employee benefits, including stock option
agreements under any stock option plan of the Company.
(r) Internal Accounting Controls. The Company and each of its
subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only
in accordance with management's general or specific authorization, and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the Company and designed such disclosure controls and
procedures to ensure that material information relating to the Company,
including its subsidiaries, is made known to the certifying officers by
others within those entities, particularly during the period in which
the Company's Form 10-K or 10-Q, as the case may be, is being prepared.
The Company's certifying officers have evaluated the effectiveness of
the Company's controls and procedures as of a date within 90 days prior
to the filing date of the Form 10-Q for the quarter ended March 31,
2003 (such date, the "Evaluation Date"). The Company presented in its
Form 10-Q for the quarter ended March 31, 2003 the conclusions of the
certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date.
Since the Evaluation Date, there have been no significant changes in
the Company's internal controls (as such term is defined in Item 307(b)
of Regulation S-K under the Exchange Act) or, to the Company's
knowledge, in other factors that could significantly affect the
Company's internal controls.
(s) Certain Fees. Except for fees payable to Xxxxxx & Xxxxxxx,
Inc. and Xxxxxx Xxxxxx Xxxxxxxx, no brokerage or finder's fees or
commissions are or will be payable by the Company to any broker,
financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section
that may be due in connection with the transactions contemplated by
this Agreement.
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(t) Private Placement. Assuming the accuracy of the Purchasers
representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and
sale of the Securities by the Company to the Purchasers as contemplated
hereby. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.
(u) Investment Company. The Company is not, and is not an
Affiliate of, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(v) Registration Rights. Other than the holders of the
warrants issued under the warrant agreement, by and between the Company
and Xxxxx Xxxxxx Co., Inc., dated October 29, 1999, no Person has any
right to cause the Company to effect the registration under the
Securities Act of any securities of the Company.
(w) Form S-3 Eligibility. The Company is eligible to register
the resale of its Common Stock by the Purchasers under Form S-3
promulgated under the Securities Act.
(x) Listing and Maintenance Requirements. Except as set forth
in the SEC Reports, the Company has not, in the 12 months preceding the
date hereof, received notice from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be,
in compliance with all such listing and maintenance requirements.
(y) Application of Takeover Protections. The Company and its
Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company's
Certificate of Incorporation (or similar charter documents) or the laws
of its state of incorporation that is or could become applicable to the
Purchasers as a result of the Purchasers and the Company fulfilling
their obligations or exercising their rights under the Transaction
Documents, including without limitation the Company's issuance of the
Securities and the Purchasers' ownership of the Securities.
(z) Disclosure. The Company confirms that, neither the Company
nor any other Person acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that
constitutes or might constitute material, non-public information. The
Company understands and confirms that the Purchasers will rely on the
foregoing representations and covenants in effecting transactions in
securities of the Company. All disclosure provided to the Purchasers
regarding the Company, its business and the transactions contemplated
hereby, including the Disclosure Schedules to this Agreement, furnished
by or on behalf of the Company are true and correct and do not contain
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
11
(aa) No Integrated Offering. Neither the Company, nor any of
its affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of the Securities Act or any
applicable shareholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or
automated quotation system on which any of the securities of the
Company are listed or designated.
(bb) Solvency. Based on the financial condition of the Company
as of the Closing Date, (i) the Company's fair saleable value of its
assets exceeds the amount that will be required to be paid on or in
respect of the Company's existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the
Company's assets do not constitute unreasonably small capital to carry
on its business for the current fiscal year as now conducted and as
proposed to be conducted including its capital needs taking into
account the particular capital requirements of the business conducted
by the Company, and projected capital requirements and capital
availability thereof, and including the anticipated proceeds of the
sale of the Securities; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in
respect of its debt when such amounts are required to be paid. The
Company does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of
cash to be payable on or in respect of its debt).
3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:
(a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or
partnership power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to
carry out its obligations thereunder. The execution, delivery and
performance by such Purchaser of the transactions contemplated by this
Agreement has been duly authorized by all necessary corporate or
similar action on the part of such Purchaser. Each Transaction Document
to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof,
will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms.
(b) General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.
12
(c) No Public Sale or Distribution. Such Purchaser is (i)
acquiring the Shares and (ii) upon exercise of the Warrants will
acquire the Warrant Shares, for its own account and not with a view
towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted
under the Securities Act; provided, however, that by making the
representations herein, such Purchaser does not agree to hold any of
the Securities for any minimum or other specific term and reserves the
right to dispose of the Securities at any time in accordance with or
pursuant to a registration statement or an exemption under the
Securities Act. Such Purchaser is acquiring the Securities hereunder in
the ordinary course of its business. Such Purchaser does not have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.
(d) Accredited Investor Status. Such Purchaser is an
"accredited investor" as that term is defined in Rule 501(a) of
Regulation D. Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.
(e) Reliance on Exemptions. Such Purchaser understands that
the Shares and Warrants are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United States
federal and state securities laws and that the Company is relying in
part upon the truth and accuracy of, and such Purchaser's compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of such Purchaser set forth herein in order to determine
the availability of such exemptions and the eligibility of such
Purchaser to acquire the Common Stock and Warrants.
(f) Information. Such Purchaser and its advisors, if any, have
been furnished with all publicly available materials relating to the
business, finances and operations of the Company and such other
publicly available materials relating to the offer and sale of the
Shares and Warrants as have been requested by such Purchaser. Such
Purchaser and its advisors, if any, have been afforded the opportunity
to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by such Purchaser or its
advisors, if any, or its representatives shall modify, amend or affect
such Purchaser's right to rely on the Company's representations and
warranties contained herein. Such Purchaser understands that its
investment in the Shares and Warrants involves a high degree of risk.
Such 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 and Warrants.
(g) No Governmental Review. Such Purchaser understands that no
United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or
endorsement of the Shares and Warrants or the fairness or suitability
of the investment in the Shares and Warrants nor have such authorities
passed upon or endorsed the merits of the offering of the Shares and
Warrants.
(h) Experience of Such Purchaser. Such Purchaser, either alone
or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters,
including investing in biotechnology companies, so as to be capable of
evaluating the merits and risks of the prospective investment in the
Shares and
13
Warrants, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in
the Shares and Warrants and, at the present time, is able to afford a
complete loss of such investment.
(i) Tax Liability. Such Purchaser has reviewed with its own
tax advisors the federal, state, local and foreign tax consequences of
this investment and the transactions contemplated by the Transaction
Documents. With respect to such matters, such Purchaser relies solely
on such advisors and not on any statements or representations of the
Company or any of its agents other than the representations and
warranties set forth herein. Such Purchaser understands that it (and
not the Company) shall be responsible for its own tax liability that
may arise as a result of this investment or the transactions
contemplated by this Agreement.
The Company acknowledges and agrees that each Purchaser does not make
or has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in this
Section 3.2.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
The Securities may only be disposed of in compliance with
state and federal securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement,
to the Company, to an Affiliate of a Purchaser or in connection with a
pledge as contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of counsel
selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that
such transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of transfer, any
such transferee shall agree in writing to be bound by the terms of this
Agreement and shall have the rights of a Purchaser under this Agreement
and the Registration Rights Agreement.
(b) The Purchasers agree to the imprinting, so long as is
required by this Section 4.1(b), of a legend on any of the Securities
in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH
14
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER
THE SECURITIES ACT.
The Company acknowledges and agrees that a Purchaser may from
time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of
the Securities to a financial institution that is an "accredited
investor" as defined in Rule 501(a) under the Securities Act and, if
required under the terms of such arrangement, such Purchaser may
transfer pledged or secured Securities to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval of
the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith.
Further, no notice shall be required of such pledge. At the appropriate
Purchaser's expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Securities
may reasonably request in connection with a pledge or transfer of the
Securities, including the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) under the Securities Act or
other applicable provision of the Securities Act to appropriately amend
the list of Selling Stockholders thereunder.
(c) Certificates evidencing the Shares and Warrant Shares
shall not contain any legend (including the legend set forth in Section
4.1(b)), (i) while a registration statement (including the Registration
Statement) covering the resale of such security is effective under the
Securities Act, or (ii) following any sale of such Shares or Warrant
Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares
are eligible for sale under Rule 144(k), or (iv) if such legend is not
required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Staff of the
Commission). The Company shall cause its counsel to issue a legal
opinion to the Company's transfer agent promptly after the Effective
Date if required by the Company's transfer agent to effect the removal
of the legend hereunder. If all or any portion of a Warrant is
exercised at a time when there is an effective registration statement
to cover the resale of the Warrant Shares, such Warrant Shares shall be
issued free of all legends. The Company agrees that following the
Effective Date or at such time as such legend is no longer required
under this Section 4.1(c), it will, no later than three Trading Days
following the delivery by a Purchaser to the Company or the Company's
transfer agent of a certificate representing Shares or Warrant Shares,
as the case may be, issued with a restrictive legend, deliver or cause
to be delivered to such Purchaser a certificate representing such
Securities that is free from all restrictive and other legends. The
Company may not make any notation on its records or give instructions
to any transfer agent of the Company that enlarge the restrictions on
transfer set forth in this Section.
(d) In addition to such Purchaser's other available remedies,
the Company shall pay to a Purchaser, in cash, as liquidated damages
and not as a penalty, for each $1,000 of Shares or Warrant Shares
(based on the Closing Price of the Common Stock on the date such
Securities are submitted to the Company's transfer agent) subject to
Section
15
4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5)
Trading Days after such damages have begun to accrue) for each Trading
Day after such third Trading Day until such certificate is delivered.
Nothing herein shall limit such Purchaser's right to pursue actual
damages for the Company's failure to deliver certificates representing
any Securities as required by the Transaction Documents, and such
Purchaser shall have the right to pursue all remedies available to it
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief.
(e) Each Purchaser, severally and not jointly, agrees that the
removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is predicated upon the
Company's reliance on, and the Purchaser's agreement that, and each
Purchaser hereby agrees that, the Purchaser will not sell any
Securities except pursuant to either the registration requirements of
the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom.
4.2 Furnishing of Information. As long as any Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. Upon the request of any such holder of Securities, the Company
shall deliver to such holder a written certification of a duly authorized
officer as to whether it has complied with the preceding sentence. As long as
any Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell such Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.
4.3 Integration. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Purchasers or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market.
4.4 Limitation on Future Financing. From the date hereof until the
earlier of 120 calendar days after the Closing Date or 15 calendar days after
the Effective Date, the Company shall not effect a financing of its Common Stock
or Common Stock Equivalents (a "Subsequent Financing"). Further, the Company
shall not file any registration statement with respect to any Subsequent
Financing prior to 15 calendar days after the Effective Date. Notwithstanding
anything to the contrary herein, this Section 4.4 shall not apply to the
following: (a) the granting of options to employees, officers and directors of
the Company pursuant to any stock option plan duly adopted by a majority of the
non-employee members of the Board of Directors of the Company or a majority of
the members of a committee of non-employee directors established for such
purpose (and the exercise of such options), or (b) the exercise of any security
issued by the Company in connection with the offer and sale of the Company's
securities pursuant to this Agreement, or (c) the exercise of or conversion of
any convertible securities, options or warrants
16
issued and outstanding on the date hereof, provided such securities have not
been amended since the date hereof, or (d) acquisitions or strategic
investments, the primary purpose of which is not to raise capital.
4.5 Securities Laws Disclosure; Publicity. The Company shall, by 8:30
a.m. Eastern time on the Business Day following the Closing Date, file a Current
Report on Form 8-K, disclosing the transactions contemplated hereby and make
such other filings and notices in the manner and time required by the
Commission. The Company and each Purchaser shall consult with each other in
issuing any press releases with respect to the transactions contemplated hereby,
and neither the Company nor any Purchaser shall issue any such press release or
otherwise make any such public statement without the prior consent of the
Company, with respect to any press release of any Purchaser, or without the
prior consent of each Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or delayed, except if
such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Purchaser, or include the name of any Purchaser in any
filing with the Commission or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except (i) as required by federal
securities law in connection with the registration statement contemplated by the
Registration Rights Agreement and (ii) to the extent such disclosure is required
by law or Trading Market regulations, in which case the Company shall provide
the Purchasers with prior notice of such disclosure permitted under subclause
(i) or (ii).
4.6 Shareholders Rights Plan. No claim will be made or enforced by the
Company or any other Person that any Purchaser is an "Acquiring Person" under
any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between
the Company and the Purchasers.
4.7 Non-Public Information. The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.
4.8 Use of Proceeds. Except as set forth on Schedule 4.8 attached
hereto, the Company shall use the net proceeds from the sale of the Securities
hereunder for working capital purposes and not for the satisfaction of any
portion of the Company's debt (other than payment of trade payables in the
ordinary course of the Company's business and prior practices), to redeem any
Company equity or equity-equivalent securities or to settle any outstanding
litigation.
4.9 [Intentionally Omitted]
4.10 Indemnification of Purchasers. The Company will indemnify and hold
the Purchasers and their Affiliates, directors, officers, shareholders,
partners, employees, controlling persons and agents (each, a "Purchaser Party")
harmless from any and all losses, liabilities,
17
obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys'
fees and costs of investigation that any such Purchaser Party may suffer or
incur as a result of or relating to: (a) any misrepresentation, breach or
inaccuracy, or any allegation by a third party that, if true, would constitute a
breach or inaccuracy, of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction
Documents; or (b) any cause of action, suit or claim brought or made against
such Purchaser Party by any Person and arising solely out of or solely resulting
from the execution, delivery, performance or enforcement of this Agreement or
any of the other Transaction Documents, including without limitation by the
purchase of the Securities, and without causation by any other activity,
obligation, condition or liability pertaining to such Purchaser. The Company
will reimburse such Purchaser for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred. The
Company also agrees that neither the Purchasers nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any
liability to the Company or any Person asserting claims on behalf of or in right
of the Company solely as a result of acquiring the Securities under this
Agreement.
4.11 Reservation of Common Stock. As of the date hereof, the Company
has reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Shares pursuant to this
Agreement and Warrant Shares pursuant to the Warrants.
4.12 Listing of Common Stock. The Company hereby agrees to use
commercially reasonable efforts to maintain the listing of the Common Stock on
the Trading Market, and as soon as reasonably practicable following the Closing
(but not later than the earlier of the Effective Date and the first anniversary
of the Closing Date) to list the applicable Shares and Warrant Shares on the
Trading Market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will include in such
application the Shares and the Warrant Shares, and will take such other action
as is necessary or desirable in the opinion of the Purchasers to cause the
Shares and Warrant Shares to be listed on such other Trading Market as promptly
as possible.
4.13 Beneficial Ownership Limitation. Notwithstanding anything herein
to the contrary, in the event that an issuance of Securities to a Purchaser
hereunder would otherwise cause such Purchaser's beneficial ownership of the
Common Stock to exceed 4.999% of the then issued and outstanding shares of
Common Stock of the Company ("Issuance Cap"), then such Purchaser shall notify
the Company that such issuance of Securities will cause its beneficial ownership
to exceed the Issuance Cap and the Company shall not issue any Securities
hereunder to the extent such Securities cause such Purchaser to exceed the
Issuance Cap until the later of (y) a date 75 days from such proposed date of
issuance and (z) a date 75 Trading Days after the Effective Date (or such date
that the Purchaser may dispose of all of the already issued Shares and Warrant
Shares pursuant to Rule 144). The Purchaser shall include in its notification to
the Company the number of Securities to be deferred. The Issuance Cap and the
delayed issuance of Securities shall apply to successive issuances hereunder.
4.14 Short Selling. Each Purchaser understands and acknowledges that
the SEC currently takes the position that coverage of short sales of shares of
the Common Stock "against
18
the box" with the Shares purchased hereunder prior to the Effective Date of the
Registration Statement is a violation of Section 5 of the Securities Act, as set
forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available
Telephone Interpretations, dated July 1997, compiled by the Office of Chief
Counsel, Division of Corporation Finance. Accordingly, each Purchaser hereby
agrees not to use any of the Shares to cover any short sales prior to the
Effective Date.
ARTICLE V.
MISCELLANEOUS
5.1 Fees and Expenses. Each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement, except that the Company
shall pay a document preparation and closing procedures fee of up to $25,000 to
FW, counsel for the placement agent, at closing. The Company shall pay all stamp
and other taxes and duties levied in connection with the sale of the Securities.
5.2 Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
5.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified on the signature pages attached hereto prior to 6:30 p.m. (New York
City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number on the signature pages attached hereto on a day that is not a
Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c)
the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.
5.4 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and each Purchaser or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.
5.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
19
The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rules of strict construction
will be applied against any party.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser. Any Purchaser may assign
any or all of its rights under this Agreement to any Person, provided such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the "Purchasers".
5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Sections 4.9 and 4.10.
5.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
City of New York. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
New York for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by delivering a copy thereof
via overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party hereto (including its
affiliates, agents, officers, directors and employees) hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.
5.9 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and delivery of the Shares.
5.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become
20
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.
5.11 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
5.12 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.
5.13 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
5.14 Payment Set Aside. To the extent that the Company makes a payment
or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall, to the
extent permissible under applicable law, be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
5.15 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a
21
group with respect to such obligations or the transactions contemplated by the
Transaction Document. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Documents. For reasons of administrative convenience only, Purchasers and their
respective counsel have chosen to communicate with the Company through FW. FW
does not represent any of the Purchasers in this transaction but only the
placement agent. The Company has elected to provide all Purchasers with the same
terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Purchasers.
(Signature Page Follows)
22
IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
VION PHARMACEUTICALS, INC. Address for Notice:
-------------------
0 Xxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
By: /s/ Xxxxxx Xxxxxxx Tel: 000-000-0000
------------------ Fax: 000-000-0000
Name: Xxxxxx Xxxxxxx
Title: Vice President, Finance and
Chief Financial Officer
With copy to (which shall not constitute notice):
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
[SIGNATURE PAGE CONTINUES]
23
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
AIG DKR SOUNDSHORE PRIVATE INVESTORS HOLDING FUND LTD.
Address for Notice:
-------------------
AIG DKR Soundshore Funds
0000 Xxxx Xxxx Xx., 0xx Xxxxx
By: /s/ Xxxxxx X. Xxxxxxx Xxxxxxxx, XX 00000
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trading Manager Fax:
Subscription Amount: $100,000
24
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
OTAPE INVESTMENTS LLC Address for Notice:
-------------------
0 Xxxxxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: CFO Fax: 000-000-0000
Subscription Amount: $300,000
-----------------------------
25
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
GRYPHON MASTER FUND, LP Address for Notice:
-------------------
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
By: /s/ Xxxxxx X. Garden
------------------------
Name: Xxxxxx X. Garden
Title: Authorized Agent Fax: 000-000-0000
Subscription Amount: $400,000
26
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
CRANSHIRE CAPITAL L.P.
By: /s/ Xxxxxxxx Xxxxx
------------------
Name: Xxxxxxxx Xxxxx
Title: President, Downsview Capital, Inc.,
its General Partner
Address for Notice:
Attn: Xxxxxxxx Xxxxx
000 Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
Subscription amount: $600,000
27
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
OMICRON MASTER TRUST Address for Notice:
-------------------
By: Omicron Capital L.P., as subadvisor c/o Omicron Capital L.P.
By: Omicron Capital Inc., its general partner 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxx
By: /s/ Xxxxxxx Xxxxxx Fax: (000) 000-0000
------------------
Xxxxxxx Xxxxxx, President
Subscription Amount: $500,000
-----------------------------
28
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
CAPITAL VENTURES INTERNATIONAL
By HEIGHTS CAPITAL MANGEMENT, its authorized agent
By: /s/ Xxxxxx Xxxxxxxx
-------------------
Xxxxxx Xxxxxxxx
Investment Manager
Address for Notice:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000
Subscription Amount: $500,000
-----------------------------
29
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
ALPHA CAPITAL AG Address for Notice:
-------------------
Xxxxxxxxxxx 00
Furstentum 9490
By: /s/ Xxxxxx Xxxxxxxx Vaduz, Liechtenstein
------------------- Fax: 000-000 000 0000
Name: Xxxxxx Xxxxxxxx Attn: Director
Title: Director
Subscription Amount: $700,000
-----------------------------
30
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
PALISADES MASTER FUND L.P. Address for Notice:
By: PEF Advisors, LLC, -------------------
Its authorized agent C/o PEF Advisors, LLC
By: /s/ Xxxx X. Xxxxxxx, Xx. 200 XXxxxxx Court East
------------------------ Suite 550
Name: Xxxx X. Xxxxxxx, Xx. Xxxxxxx, Xxxxxxx 00000
Title: General Partner Attn: Fund Manager
Fax: 000-000-0000
Subscription Amount: $300,000
-----------------------------
31
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
CRESCENT INTERNATIONAL LTD. Address for Notice:
-------------------
c/o GreenLight (Switzerland) SA
00, Xxxxxx Xxxxx-Xxxxx
XX 0000 Xxxxxxxx, Geneva
By: /s/ Xxx Xxxx/Maxi Brezzi Switzerland
------------------------ Attention: Xxx Xxxx / Maxi Brezzi
Name: Xxx Xxxx/Maxi Brezzi Tel.: + 00 00 000 0000 /
Title: Authorized Signatories x00 00 000 0000
Fax : x00 00 000 0000
Subscription Amount: $800,000
-----------------------------
32
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
THE TAIL WIND FUND LIMITED
By: Tail Wind Advisory & Management Ltd.
By: /s/ Xxxxx Xxxxx
---------------
Xxxxx Xxxxx, Chief Executive Officer
Address for Notice:
Xxxxx Xxxxx, Esq.
Chief Executive Officer
Tail Wind Advisory & Management Ltd.
0xx Xxxxx, Xx. 0 Xxxxxx Xxxxxx
Xxxxxx, XX0X 0XX, XX
Fax: x00 00 0000 0000
Please copy all correspondence to:
Xxxxx X. Xxxxxxx, P.C.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Tel: x000-000-0000 Fax: 000-000-0000
Please send the common shares a.s.a.p. directly to:
Xxxxxx Xxxxx & Co.
Attn: Xx. X. Xxxxxxxx
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: x000-000-0000 Fax: x000-000-0000
Please send the warrants to:
The Tail Wind Fund, Ltd.
The Bank of Nova Scotia (Bahamas) Ltd.
Attn: Xxxxxx Xxxxx,
Xxxxxxxxxx Xxxxx, 000 Xxxx Xxx Xx.,
PO Box SS 5539, Nassau, Bahamas
Tel: 000-000-0000 Fax: 000-000-0000
Subscription Amount: $250,000
-----------------------------
33
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
Address for Notice: SPECTRA CAPITAL MANAGEMENT
-------------------
000 Xxxxxxxx, Xxxxx 0000 By: /s/ Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 ------------------
Name: Xxxxxxx Xxxxxx
Title: President of the General Partner
Tax ID: 000000000
Subscription Amount: $150,000
-----------------------------
34
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
Address for Notice: TRUK OPPORTUNITY FUND
-------------------
00 Xxxxxxxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxx
Suite 2000 -------------------
Xxx Xxxx, XX 00000 Name: Xxxxxxx X. Xxxx
Title: Principal, Atoll Asset Management, LLC
Managing Member of Truk Opportunity Fund, LLC
Subscription Amount: $100,000
-----------------------------
Address for Notice: XXXXX INVESTMENTS
-------------------
000 X. 00xx Xx., Xxxxx 0000 By: /s/ Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000 -----------------
Attn: Cedarbrook Partners Name: Xxxxxxx Xxxxx
Title: Director
Subscription Amount: $200,000
-----------------------------
Address for Notice: BARUCHA LTD.
-------------------
000 X. 00xx Xx., Xxxxx 0000 By: /s/ Xxxx Xxxxxxxx
Xxx Xxxx, XX 00000 ------------------
Attn: Cedarbrook Partners Name: Xxxx Xxxxxxxx
Title: Owner
Subscription Amount: $100,000
-----------------------------
35
