SECURITIES PURCHASE AGREEMENT
Exhibit 10.1
This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of March 10, 2010, is by and
among OXiGENE, Inc., a Delaware corporation with offices located at 000 Xxxxxxx Xxxx, Xxxxx 000,
Xxxxx Xxx Xxxxxxxxx, XX 00000 (the “Company”), and the investors listed on the Schedule of Buyers
attached hereto (individually, a “Buyer” and collectively, the “Buyers”).
RECITALS
A. The Company and each Buyer is executing and delivering this Agreement in reliance upon the
exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as
amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.
B. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, (i) the aggregate number of shares of common stock, $0.01 par
value, of the Company (the “Common Stock”) as set forth opposite such Buyer’s name in column (3) on
the Schedule of Buyers (which aggregate amount for all Buyers shall
be [ ] shares of
Common Stock and shall collectively be referred to herein as the “Common Shares”), (ii) a warrant
to initially acquire up to that number of additional shares of Common Stock set forth opposite
such Buyer’s name in column (4) on the Schedule of Buyers, in the form attached hereto as
Exhibit A (the “Series A Warrants”) (as exercised, collectively, the “Series A Warrant
Shares”), (iii) a warrant to initially acquire up to that number of additional shares of Common
Stock set forth opposite such Buyer’s name in column (5) on the Schedule of Buyers, in the form
attached hereto as Exhibit B (the “Series B Warrants”) (as exercised, collectively, the
"Series B Warrant Shares”), (iv) a warrant to initially acquire up to that number of additional
shares of Common Stock set forth opposite such Buyer’s name in column (6) on the Schedule of
Buyers, in the form attached hereto as Exhibit C (the “Series C Warrants”) (as exercised,
collectively, the “Series C Warrant Shares”) and (v) a warrant to initially acquire up to that
number of additional shares of Common Stock set forth opposite such Buyer’s name in column (7) on
the Schedule of Buyers, in the form attached hereto as Exhibit D (the “Series D Warrants”)
(as exercised, collectively, the “Series D Warrant Shares”). The Series A Warrants, the Series B
Warrants, the Series C Warrants and the Series D Warrants are collectively referred to herein as
the “Warrants.” The Series A Warrant Shares, the Series B Warrant Shares, the Series C Warrant
Shares and the Series D Warrant Shares are collectively referred to herein as the “Warrant Shares.”
C. At the Closing, the parties hereto shall execute and deliver a Registration Rights
Agreement, in the form attached hereto as Exhibit E (the “Registration Rights Agreement”),
pursuant to which the Company has agreed to provide certain registration rights with respect to the
Registrable Securities (as defined in the Registration Rights Agreement), under the 1933 Act and
the rules and regulations promulgated thereunder, and applicable state securities laws.
D. The Common Shares, the Warrants and the Warrant Shares are collectively
referred to herein as the “Securities.”
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and each Buyer hereby agree as follows:
1. PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.
(a) Common Shares and Warrants. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and
each Buyer severally, but not jointly, shall purchase from the Company on the Closing Date (as
defined below), such aggregate number of Common Shares as is set forth opposite such Buyer’s name
in column (3) on the Schedule of Buyers along with (i) Series A Warrants to initially acquire up
to that aggregate number of Series A Warrant Shares as is set forth opposite such Buyer’s name in
column (4) on the Schedule of Buyers, (ii) Series B Warrants to initially acquire up to that
aggregate number of Series B Warrant Shares as is set forth opposite such Buyer’s name in column
(5) on the Schedule of Buyers, (iii) Series C Warrants to initially acquire up to that aggregate
number of Series C Warrant Shares as is set forth opposite such Buyer’s name in column (6) on the
Schedule of Buyers. and (iv) Series D Warrants to initially acquire up to that aggregate number of
Series D Warrant Shares as is set forth opposite such Buyer’s name in column (7) on the Schedule of
Buyers.
(b) Closing. The closing (the “Closing”) of the purchase of the Common Shares and the
Warrants by the Buyers shall occur at the offices of Xxxxxxxxx Xxxxxxx, LLP, MetLife Building, 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000. The date and time of the Closing (the “Closing Date”) shall be
10:00 a.m., New York time, on the first (1st) Business Day on which the conditions to
the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such later date as is
mutually agreed to by the Company and each Buyer). As used herein “Business Day” means any day
other than a Saturday, Sunday or other day on which commercial banks in New York, New York are
required by law to remain closed.
(c) Purchase Price(d) . The aggregate purchase price for the Common Shares and the
Warrants to be purchased by each Buyer (the “Purchase Price”) shall be the amount set forth
opposite such Buyer’s name in column (8) on the Schedule of Buyers.
(d) Form of Payment. On the Closing Date, (i) each Buyer shall pay its respective
Purchase Price (less, in the case of any Buyer, the amounts withheld pursuant to Section 4(g)) to
the Company for the Common Shares and the Warrants to be issued and sold to such Buyer at the
Closing, by wire transfer of immediately available funds in accordance with the Company’s written
wire instructions and (ii) the Company shall deliver to each Buyer certificates representing (A)
such aggregate number of Common Shares as is set forth opposite such Buyer’s name in column (3) of
the Schedule of Buyers, (B) a Series A Warrant pursuant to which such Buyer shall have the right to
initially acquire up to such number of Series A Warrant Shares as is set forth opposite such
Buyer’s name in column (4) of the Schedule of Buyers, (C) a Series B Warrant pursuant to which such
Buyer shall have the right to initially acquire up to such number
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of Series B Warrant Shares as is set forth opposite such Buyer’s name in column (5) of the
Schedule of Buyers, (D) a Series C Warrant pursuant to which such Buyer shall have the right to
initially acquire up to such number of Series C Warrant Shares as is set forth opposite such
Buyer’s name in column (6) of the Schedule of Buyer and (E) a Series D Warrant pursuant to which
such Buyer shall have the right to initially acquire up to such number of Series D Warrant Shares
as is set forth opposite such Buyer’s name in column (7) of the Schedule of Buyers, in all cases,
duly executed on behalf of the Company and registered in the name of such Buyer or its designee.
2. BUYER’S REPRESENTATIONS AND WARRANTIES.
Each Buyer, severally and not jointly, represents and warrants to the Company with respect to
only itself that, as of the date hereof and as of the Closing Date:
(a) Organization; Authority. Such Buyer is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization with the requisite
power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder
and thereunder.
(b) No Public Sale or Distribution. Such Buyer is (i) acquiring its Common Shares and
Warrants, and (ii) upon exercise of its Warrants will acquire the Warrant Shares issuable upon
exercise thereof, in each case, for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof in violation of applicable securities
laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however, by
making the representations herein, such Buyer does not agree, or make any representation or
warranty, 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 1933 Act. Such Buyer is acquiring the Securities hereunder in
the ordinary course of its business. Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the Securities in
violation of applicable securities laws.
(c) Accredited Investor Status. Such Buyer is an “accredited investor” as that term
is defined in Rule 501(a) of Regulation D.
(d) Reliance on Exemptions. Such Buyer understands that the Securities 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 Buyer’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine
the availability of such exemptions and the eligibility of such Buyer to acquire the Securities.
(e) Information. Such Buyer 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 Securities which have been requested by such Buyer. Such Buyer and
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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 Buyer or its
advisors, if any, or its representatives shall modify, amend or affect such Buyer’s right to rely
on the Company’s representations and warranties contained herein or any representations and
warranties contained in any other Transaction Document or any other document or instrument executed
and/or delivered in connection with this Agreement or the consummation of the transaction
contemplated hereby. Such Buyer understands that its investment in the Securities involves a high
degree of risk. Such Buyer 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
Securities.
(f) No Governmental Review. Such Buyer 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 Securities or the fairness or suitability of the investment in
the Securities nor have such authorities passed upon or endorsed the merits of the offering of the
Securities.
(g) Transfer or Resale. Such Buyer understands that except as provided in the
Registration Rights Agreement and Section 4(h) hereof: (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall
have delivered to the Company (if requested by the Company) an opinion of counsel to such Buyer, in
a form reasonably acceptable to the Company, to the effect that such Securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such
registration, or (C) such Buyer provides the Company with reasonable assurance that such Securities
can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933
Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made
in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if
Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller
(or the Person (as defined below) through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the 0000 Xxx) may require compliance with some other exemption under
the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the
Company nor any other Person is under any obligation to register the Securities under the 1933 Act
or any state securities laws or to comply with the terms and conditions of any exemption
thereunder.
(h) Validity; Enforcement. This Agreement and the Registration Rights Agreement have
been duly and validly authorized, executed and delivered on behalf of such Buyer and constitute the
legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance
with their respective terms, except as such enforceability may be limited by general principles of
equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies.
(i) No Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the Registration Rights Agreement and the consummation by such Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation of the
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organizational documents of such Buyer 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 agreement, indenture or
instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to
such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.
(j) Residency. Such Buyer is a resident of the jurisdiction specified below its
address on the Schedule of Buyers.
(k) Certain Trading Activities. Such Buyer has not directly or indirectly, nor has
any person acting on behalf of or pursuant to any understanding with such Buyer, engaged in any
transactions in the securities of the Company (including, without limitation, Short Sales involving
the Company’s securities) since the time that such Buyer was first contacted by the Company
regarding the investment in the Company contemplated herein. “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the
1934 Act (“Regulation SHO”) and all types of direct and indirect stock pledges, forward sales
contracts, options, puts, calls, swaps and similar arrangements (including on a total return
basis), and sales and other transactions through non-U.S. broker dealers or foreign regulated
brokers (but shall not be deemed to include the location and/or reservation of borrowable shares of
Common Stock). Such Buyer does not as of the date hereof, and will not immediately following the
Closing, own 10% or more of the Company’s issued and outstanding shares of Common Stock (calculated
based on the assumption that all Equivalents (as defined below) owned by such Buyer, whether or not
presently exercisable or convertible, have been fully exercised or converted (as the case may be)
but taking into account any limitations on exercise or conversion (including “blockers”) contained
therein).
(l) General Solicitation. Such Buyer 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.
(m) Manipulation of Price. Since the time that such Buyer was first contacted by the
Company or its agent regarding the investment in the Company contemplated herein, such Buyer has
not, and, to the knowledge of such Buyer, no Person acting on its behalf has, directly or
indirectly, (i) taken any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases
of, any of the Securities (other than the location and/or reservation of borrowable shares of
Common Stock by any Buyer), or (iii) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of the Company (other than the location and/or
reservation of borrowable shares of Common Stock by any Buyer).
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that, as of the date hereof and as
of the Closing Date:
(a) Organization and Qualification. Each of the Company and each of its Subsidiaries
are entities duly organized and validly existing and in good standing under the laws of the
jurisdiction in which they are formed, and have the requisite power and authorization to own their
properties and to carry on their business as now being conducted and as presently proposed to be
conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity
to do business and is in good standing in every jurisdiction in which its ownership of property or
the nature of the business conducted by it makes such qualification necessary, except to the extent
that the failure to be so qualified or be in good standing would not have a Material Adverse
Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on
(i) the business, properties, assets, liabilities, operations (including results thereof),
condition (financial or otherwise) or prospects of the Company or any Subsidiary, individually or
taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction
Documents or (iii) the authority or ability of the Company or any of its Subsidiaries to perform
any of their respective obligations under any of the Transaction Documents (as defined below). The
Company has no Subsidiaries. “Subsidiaries” means any Person in which the Company, directly or
indirectly, (I) owns at least fifty percent (50% of the outstanding capital stock or holds at least
fifty percent (50%) of the equity or similar interest of such Person or (II) controls or operates
all or any part of the business, operations or administration of such Person, and each of the
foregoing, is individually referred to herein as a “Subsidiary.”
(b) Authorization; Enforcement; Validity. The Company has the requisite power and
authority to enter into and perform its obligations under this Agreement and the other Transaction
Documents and to issue the Securities in accordance with the terms hereof and thereof. Each
Subsidiary has the requisite power and authority to enter into and perform its obligations under
the Transaction Documents to which it is a party. The execution and delivery of this Agreement and
the other Transaction Documents by the Company and its Subsidiaries, and the consummation by the
Company and its Subsidiaries (as applicable) of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Common Shares and the issuance of the Warrants
and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the
Warrants) have been duly authorized by the Company’s board of directors and each of its
Subsidiaries’ board of directors or other governing body, as applicable, and (other than the filing
with the SEC of one or more Registration Statements in accordance with the requirements of the
Registration Rights Agreement, a Form D with the SEC, any other filings as may be required by any
state securities agencies, and the Stockholder Approval) no further filing, consent or
authorization is required by the Company, its Subsidiaries, their respective boards of directors or
their stockholders or other governing body. This Agreement has been, and the other Transaction
Documents will be prior to the Closing, duly executed and delivered by the Company or its agent,
and each constitutes the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with its respective terms, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies
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and except as rights to indemnification and to contribution may be limited by federal or state
securities law. Prior to the Closing, the Transaction Documents to which each Subsidiary is a
party will be duly executed and delivered by each such Subsidiary, and shall constitute the legal,
valid and binding obligations of each such Subsidiary, enforceable against each such Subsidiary in
accordance with their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies and except as rights to indemnification and to contribution may be limited by
federal or state securities law. “Transaction Documents” means, collectively, this Agreement, the
Warrants, the Voting Agreement, the Registration Rights Agreement, the Irrevocable Transfer Agent
Instructions (as defined below) and each of the other agreements and instruments entered into or
delivered by any of the parties hereto in connection with the transactions contemplated hereby and
thereby, as may be amended from time to time.
(c) Issuance of Securities. The Common Shares, when issued, will be validly issued,
fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens, charges
and other encumbrances with respect to the issue thereof, with the holders being entitled to all
rights accorded to a holder of Common Stock. The Warrants are duly authorized and upon issuance in
accordance with the terms of the Transaction Documents shall be validly issued, fully paid and
non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof. As of the Closing, the Company shall have reserved
from its duly authorized capital stock not less than 150% of the maximum number of Warrant Shares
issuable upon exercise of the Warrants as of such date (without taking into account any possible
adjustments pursuant to the anti-dilution rights attendant thereto or any limitations on the
exercise of the Warrants set forth therein). Upon exercise in accordance with the Warrants, the
Warrant Shares, when issued, will be validly issued, fully paid and nonassessable and free from all
preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the
issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.
Subject to the accuracy of the representations and warranties of the Buyers in this Agreement, the
offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.
(d) No Conflicts. The execution, delivery and performance of the Transaction Documents
by the Company and its Subsidiaries (as applicable) and the consummation by the Company and its
Subsidiaries (as applicable) of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Common Shares, the Warrants and Warrant Shares and the
reservation for issuance of the Warrant Shares) will not (i) result in a violation of the
Certificate of Incorporation (as defined below) or other organizational documents of the Company or
any of its Subsidiaries, the rights attendant to any capital stock of the Company or any of its
Subsidiaries, or Bylaws (as defined below) of the Company or any of its Subsidiaries, (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 agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including foreign, federal and state securities laws and regulations and the
rules and regulations of the Nasdaq Global Market (the “Principal Market”) and including all
applicable federal laws, rules and regulations) applicable to the Company or
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any of its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected except, in the case of clause (ii) or (iii) above, to the extent
such violations that could not reasonably be expected to have a Material Adverse Effect.
(e) Consents. Other than the Stockholder Approval (as defined below), neither the
Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or
make any filing or registration with (other than the filing with the SEC of one or more
Registration Statements in accordance with the requirements of the Registration Rights Agreement, a
Form D with the SEC and any other filings as may be required by any state securities agencies), any
court, governmental agency or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its respective obligations under or contemplated by
the Transaction Documents, in each case, in accordance with the terms hereof or thereof. Other
than the Stockholder Approval, all consents, authorizations, orders, filings and registrations
which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have
been obtained or effected on or prior to the Closing Date, and neither the Company nor any of its
Subsidiaries are aware of any facts or circumstances which might prevent the Company or any
Subsidiary from obtaining or effecting any of the registration, application or filings contemplated
by the Transaction Documents. The Company is not in violation of the requirements of the Principal
Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting
or suspension of the Common Stock in the foreseeable future.
(f) Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges
and agrees that to its actual knowledge, each Buyer is acting solely in the capacity of an arm’s
length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of its
Subsidiaries, (ii) to its actual knowledge, an “affiliate” (as defined in Rule 144) of the Company
or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the
shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of
1934, as amended (the “1934 Act”)). The Company further acknowledges that no Buyer is acting as a
financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar
capacity) with respect to the Transaction Documents and the transactions contemplated hereby and
thereby, and any advice given by a Buyer or any of its representatives or agents in connection with
the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental
to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the
Company’s and each Subsidiary’s decision to enter into the Transaction Documents to which it is a
party has been based solely on the independent evaluation by the Company, each Subsidiary and their
respective representatives.
(g) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of
its Subsidiaries or affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Securities. The Company shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than
for Persons engaged by any Buyer or its investment advisor) relating to or arising out of the
transactions contemplated hereby. Other than Xxxx Capital Partners, LLC (the “Placement
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Agent”), neither the Company nor any of its Subsidiaries has engaged any placement agent or
other agent in connection with the sale of the Securities.
(h) No Integrated Offering. None of the Company, its Subsidiaries or any of their
affiliates, nor any Person acting on 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
require registration of the issuance of any of the Securities under the 1933 Act, whether through
integration with prior offerings or otherwise, or cause this offering of the Securities to require
approval of stockholders of the Company under any applicable stockholder 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. None of
the Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take any
action or steps that would require registration of the issuance of any of the Securities under the
1933 Act or cause the offering of any of the Securities to be integrated with other offerings.
(i) Dilutive Effect. The Company understands and acknowledges that the number of
Warrant Shares will increase in certain circumstances. The Company further acknowledges that its
obligation to issue the Warrant Shares upon exercise of the Warrants in accordance with this
Agreement and the Warrants is, absolute and unconditional regardless of the dilutive effect that
such issuance may have on the ownership interests of other stockholders of the Company.
(j) Application of Takeover Protections; Rights Agreement. The Company and its board
of directors have taken all necessary action, if any, in order to render inapplicable any control
share acquisition, interested stockholder, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision under the
Certificate of Incorporation, Bylaws or other organizational documents or the laws of the
jurisdiction of its incorporation or otherwise which is or could become applicable to any Buyer as
a result of the transactions contemplated by this Agreement, including, without limitation, the
Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company and
its board of directors have taken all necessary action, if any, in order to render inapplicable any
stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of
shares of Common Stock or a change in control of the Company or any of its Subsidiaries.
(k) SEC Documents; Financial Statements. During the two (2) years prior to the date
hereof, the Company has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all
of the foregoing filed prior to the date hereof and all exhibits included therein and financial
statements, notes and schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”). The Company has delivered true, correct and
complete copies of each of the SEC Documents not available on the XXXXX system requested by the
Buyers or their respective representatives. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
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they were made, not misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto as
in effect as of the time of filing. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, 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 exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial position of the
Company as of the dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the aggregate). No other information provided
by or on behalf of the Company to the Buyers which is not included in the SEC Documents (including,
without limitation, information referred to in Section 2(e) of this Agreement) contains any untrue
statement of a material fact or omits to state any material fact necessary in order to make the
statements therein not misleading, in the light of the circumstance under which they are or were
made.
(l) Absence of Certain Changes. Except as set forth in the SEC Documents, there has
been no material adverse change and no material adverse development in the business, assets,
liabilities, properties, operations (including results thereof), condition (financial or otherwise)
or prospects of the Company or any of its Subsidiaries. Since the date of the Company’s most recent
audited financial statements contained in a Form 10-K, neither the Company nor any of its
Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the
aggregate, outside of the ordinary course of business or (iii) made any material capital
expenditures, individually or in the aggregate. Neither the Company nor any of its Subsidiaries has
taken any steps to seek protection pursuant to any law or statute relating to bankruptcy,
insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any
Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to
initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would
reasonably lead a creditor to do so. The Company and its Subsidiaries, individually and on a
consolidated basis, are not as of the date hereof, and after giving effect to the transactions
contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes
of this Section 3(l), “Insolvent” means, (I) with respect to the Company and its Subsidiaries, on a
consolidated basis, (i) the present fair saleable value of the Company’s and its Subsidiaries’
assets is less than the amount required to pay the Company’s and its Subsidiaries’ total
Indebtedness (as defined below), (ii) the Company and its Subsidiaries are unable to pay their
debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured or (iii) the Company and its Subsidiaries intend to incur or believe that they
will incur debts that would be beyond their ability to pay as such debts mature; and (II) with
respect to the Company and each Subsidiary, individually, (i) the present fair saleable value of
the Company’s or such Subsidiary’s (as the case may be) assets is less than the amount required to
pay its respective total Indebtedness, (ii) the Company or such Subsidiary (as the case may be) is
unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured or (iii) the Company or such Subsidiary (as the
case may be) intends to incur or believes that it will incur debts that would be beyond its
respective ability to pay as such debts mature. Neither the Company nor any of its Subsidiaries has
engaged in any business or in any transaction, and is not about to engage
10
in any business or in any transaction, for which the Company’s or such Subsidiary’s remaining
assets constitute unreasonably small capital.
(m) No Undisclosed Events, Liabilities, Developments or Circumstances. No event,
liability, development or circumstance has occurred or exists, or is reasonably expected to exist
or occur with respect to the Company, any of its Subsidiaries or their respective business,
properties, liabilities, prospects, operations (including results thereof) or condition (financial
or otherwise), that (i) would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-3 filed with the SEC relating to an issuance
and sale by the Company of its Common Stock and which has not been publicly announced, (ii) could
have a Material Adverse Effect or (iii) would reasonably be expected to have a material adverse
effect on any Buyer’s investment hereunder.
(n) Conduct of Business; Regulatory Permits. Neither the Company nor any of its
Subsidiaries is in violation of any term of or in default under its Certificate of Incorporation,
Bylaws, any certificate of designation, preferences or rights of any other outstanding series of
preferred stock of the Company or any of its Subsidiaries or their organizational charter,
certificate of formation or certificate of incorporation or bylaws, respectively. Neither the
Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any
statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and
neither the Company nor any of its Subsidiaries will conduct its business in violation of any of
the foregoing, except in all cases for possible violations which could not, individually or in the
aggregate, have a Material Adverse Effect. Without limiting the generality of the foregoing, the
Company is not in violation of any of the rules, regulations or requirements of the Principal
Market and has no knowledge of any facts or circumstances that could reasonably lead to delisting
or suspension of the Common Stock by the Principal Market in the foreseeable future. Since January
1, 2008, other than as set forth in the SEC Documents, (i) the Common Stock has been listed or
designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been
suspended by the SEC or the Principal Market and (iii) the Company has received no communication,
written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the
Common Stock from the Principal Market. The Company and each of its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate regulatory authorities necessary
to conduct their respective businesses, except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the aggregate, a Material Adverse
Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permit.
(o) Foreign Corrupt Practices. Neither the Company nor any of its Subsidiaries nor,
to the Company’s knowledge, any director, officer, agent, employee or other Person acting on behalf
of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of,
the Company or any of its Subsidiaries (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
11
government official or employee.
(p) Xxxxxxxx-Xxxxx Act. The Company and each Subsidiary is in compliance with all
applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 that are effective as of the date hereof,
and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of
the date hereof.
(q) Transactions With Affiliates. Other than as disclosed in the SEC Documents, none
of the officers, directors or employees of the Company or any of its Subsidiaries is presently a
party to any transaction with the Company or any of its Subsidiaries (other than for ordinary
course services as employees, officers or 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 such officer, director
or employee or, to the knowledge of the Company or any of its Subsidiaries, any corporation,
partnership, trust or other Person in which any such officer, director, or employee has a
substantial interest or is an employee, officer, director, trustee or partner.
(r) Equity Capitalization. As of the date hereof, the authorized capital stock of the
Company consists of (i) 175,000,000 shares of Common Stock, of which, subject to Schedule
3(r), 63,030,805 are issued and outstanding and 7,623,500 shares are reserved for issuance
pursuant to securities (other than the Warrants) exercisable or exchangeable for, or convertible
into, shares of Common Stock and (ii) 15,000,000 shares of Preferred Stock, $0.01 par value, of
which none are outstanding. No shares of Common Stock are held in treasury. All of such
outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and
are fully paid and nonassessable. 28,378,506 shares of the Company’s issued and outstanding Common
Stock on the date hereof are as of the date hereof owned by Persons who are “affiliates” (as
defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers,
directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are
“affiliates” without conceding that any such Persons are “affiliates” for purposes of federal
securities laws) of the Company or any of its Subsidiaries. To the Company’s knowledge, as of the
date hereof, except as set forth in the SEC Documents, no Person owns 10% or more of the Company’s
issued and outstanding shares of Common Stock (calculated based on the assumption that all
Equivalents, whether or not presently exercisable or convertible, have been fully exercised or
converted (as the case may be) taking account of any limitations on exercise or conversion
(including “blockers”) contained therein without conceding that such identified Person is a 10%
stockholder for purposes of federal securities laws). Except as disclosed in the SEC Documents:
(i) none of the Company’s or any Subsidiary’s capital stock is subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the Company or any
Subsidiary; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights convertible into,
or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries, or
contracts, commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any capital stock of the Company or any of its Subsidiaries; (iii) there are no
outstanding debt securities, notes, credit agreements, credit
12
facilities or other agreements, documents or instruments evidencing Indebtedness of the
Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound; (iv) there are no financing statements securing obligations in any amounts filed in
connection with the Company or any of its Subsidiaries; (v) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the 1933 Act (except pursuant to the Registration Rights Agreement); (vi)
there are no outstanding securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (vii) there are no securities
or instruments containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities; (viii) neither the Company nor any Subsidiary has any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and
(ix) neither the Company nor any of its Subsidiaries have any liabilities or obligations required
to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other than
those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses
and which, individually or in the aggregate, do not or could not have a Material Adverse Effect.
The Company has made available to the Buyers true, correct and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of
Incorporation”), the Company’s bylaws, as amended and as in effect on the date hereof (the
“Bylaws”), and the terms of all securities convertible into, or exercisable or exchangeable for,
shares of Common Stock and the material rights of the holders thereof in respect thereto that have
not been disclosed in the SEC Documents.
(s) Indebtedness and Other Contracts. Except as disclosed in the SEC Documents,
neither the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness (as defined
below), (ii) is a party to any contract, agreement or instrument, the violation of which, or
default under which, by the other party(ies) to such contract, agreement or instrument could
reasonably be expected to result in a Material Adverse Effect, (iii) is in violation of any term
of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except
where such violations and defaults would not result, individually or in the aggregate, in a
Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to
any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of
any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations
issued, undertaken or assumed as the deferred purchase price of property or services (including,
without limitation, “capital leases” in accordance with generally accepted accounting principles)
(other than trade payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition of property, assets
or businesses, (E) all indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to any property or
assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to repossession or sale of
such property), (F) all monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied for the periods
13
covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses
(A) through (F) above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations
in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through
(G) above; (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance to the obligee of such liability
that such liability will be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto; and (z) “Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.
(t) Absence of Litigation. Except as disclosed in the SEC Documents, there is no
action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court,
public board, government agency, self-regulatory organization or body pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common
Stock or any of the Company’s or its Subsidiaries’ officers or directors which is outside of the
ordinary course of business or individually or in the aggregate material to the Company or any of
its Subsidiaries. There has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any
current or former director or officer of the Company or any of its Subsidiaries. The SEC has not
issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company under the 1933 Act or the 1934 Act.
(u) Insurance. The Company and each of its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as management
of the Company believes to be prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for, and neither the Company nor any such Subsidiary has any
reason to believe that it will be unable 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 at a cost that would not have a Material Adverse Effect.
(v) Employee Relations. Neither the Company nor any of its Subsidiaries is a party to
any collective bargaining agreement or employs any member of a union. The Company believes that its
and its Subsidiaries’ relations with their respective employees are good. No executive officer (as
defined in Rule 501(f) promulgated under the 0000 Xxx) or other key employee of the Company or any
of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to
leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with the
Company or any such Subsidiary. To the
14
Company’s knowledge, no executive officer or other key employee of the Company or any of its
Subsidiaries is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement, non-competition
agreement, or any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer or other key employee (as the case may be), to the
Company’s knowledge, does not subject the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with
all federal, state, local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages and hours, except
where failure to be in compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(w) Title. The Company and its Subsidiaries have good and marketable title in fee
simple to all real property, and have good and marketable title to all personal property (exclusive
of intellectual property), owned by them which is material to the business of the Company and its
Subsidiaries, in each case, free and clear of all liens, encumbrances and defects except such as do
not materially affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and any of its Subsidiaries. Any real property
and facilities held under lease by the Company or any of its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and buildings by the Company
or any of its Subsidiaries.
(x) Intellectual Property Rights. The Company and its Subsidiaries own or possess
adequate rights or licenses to use all trademarks, trade names, service marks, service xxxx
registrations, service names, patents, patent rights, copyrights, original works, inventions,
licenses, approvals, governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor (“Intellectual Property Rights”) necessary
to conduct their respective businesses as now conducted and as presently proposed to be conducted.
None of the Company’s or its Subsidiaries’ Intellectual Property Rights necessary to conduct their
respective businesses as now conducted and as presently proposed to be conducted have expired,
terminated or been abandoned, or are expected to expire, terminate or be abandoned, within three
years from the date of this Agreement. The Company has no knowledge of any infringement by the
Company or any of its Subsidiaries of Intellectual Property Rights of others. There is no claim,
action or proceeding being made or brought, or to the knowledge of the Company or any of its
Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding their
Intellectual Property Rights except as disclosed in the SEC Documents. The Company is not aware of
any facts or circumstances which might give rise to any of the foregoing infringements or claims,
actions or proceedings. The Company and each of its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their Intellectual Property
Rights.
(y) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with
all Environmental Laws (as defined below), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply
could
15
be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution
or protection of human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including, without limitation, laws
relating to emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into
the environment, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or
approved thereunder.
(z) Subsidiary Rights. The Company or one of its Subsidiaries has the unrestricted
right to vote, and (subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of its Subsidiaries as owned by the Company or such
Subsidiary.
(aa) Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed
all foreign, federal and state income and all other tax returns, reports and declarations required
by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and (iii) has set aside on its
books provision reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply except in each case where the failure
to file, pay or set aside would not have a Material Adverse Effect. There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company and its Subsidiaries know of no basis for any such claim. The Company is not
operated in such a manner as to qualify as a passive foreign investment company, as defined in
Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.
(bb) Internal Accounting and Disclosure Controls. The Company and each of its
Subsidiaries maintains internal control over financial reporting (as such term is defined in Rule
13a-15(f) under the 0000 Xxx) that is effective to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, including 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 generally accepted accounting principles and to maintain asset and liability accountability,
(iii) access to assets or incurrence of liabilities is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable intervals and
appropriate action is taken with respect to any difference. The Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) under the 0000 Xxx) that are
effective in ensuring that information required to be disclosed by the Company in the reports that
it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the SEC, including, without limitation, controls
and procedures designed to ensure that information required to be disclosed by the Company in the
reports that it
16
files or submits under the 1934 Act is accumulated and communicated to the Company’s
management, including its principal executive officer or officers and its principal financial
officer or officers, as appropriate, to allow timely decisions regarding required disclosure. Since
January 1, 2008, neither the Company nor any of its Subsidiaries has received any notice or
correspondence from any accountant relating to any potential material weakness in any part of the
internal controls over financial reporting of the Company or any of its Subsidiaries.
(cc) Off Balance Sheet Arrangements. There is no transaction, arrangement, or other
relationship between the Company or any of its Subsidiaries and an unconsolidated or other off
balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is
not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.
(dd) Investment Company Status. The Company is not, and upon consummation of the sale
of the Securities will not be, an “investment company,” an affiliate of an “investment company,” a
company controlled by an “investment company” or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company” as such terms are defined in the Investment
Company Act of 1940, as amended.
(ee) Acknowledgement Regarding Buyers’ Trading Activity. It is understood and
acknowledged by the Company that, except as set forth in Section 4(t): (i) other than as
contemplated by Section 2(k), following the public disclosure of the transactions contemplated by
the Transaction Documents, in accordance with the terms thereof, none of the Buyers have been asked
by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or
any of its Subsidiaries, to desist from effecting any transactions in or with respect to
(including, without limitation, purchasing or selling, long and/or short) any securities of the
Company, or “derivative” securities based on securities issued by the Company or to hold the
Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions
to which any such Buyer is a party, directly or indirectly, presently may have a “short” position
in the Common Stock which was established prior to such Buyer’s knowledge of the transactions
contemplated by the Transaction Documents; and (iii) each Buyer shall not be deemed to have any
affiliation with or control over any arm’s length counterparty in any “derivative” transaction. The
Company further understands and acknowledges that following the public disclosure of the
transactions contemplated by the Transaction Documents pursuant to the Press Release (as defined
below) one or more Buyers may engage in hedging and/or trading activities at various times during
the period that the Securities are outstanding, including, without limitation, during the periods
that the value and/or number of the Warrant Shares deliverable with respect to the Securities are
being determined and (b) such hedging and/or trading activities, if any, can reduce the value of
the existing stockholders’ equity interest in the Company both at and after the time the hedging
and/or trading activities are being conducted. The Company acknowledges that such aforementioned
hedging and/or trading activities do not constitute a breach of this Agreement or any other
Transaction Document or any of the documents executed in connection herewith or therewith.
(ff) Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and,
to the knowledge of the Company, no Person acting on their behalf has, directly or indirectly, (i)
taken any action designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any
of the
17
Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases
of, any of the Securities (other than the Placement Agent), or (iii) paid or agreed to pay to any
Person any compensation for soliciting another to purchase any other securities of the Company or
any of its Subsidiaries.
(gg) U.S. Real Property Holding Corporation. Neither the Company nor any of its
Subsidiaries is, or has ever been, and so long as any of the Securities are held by any of the
Buyers, shall become, a U.S. real property holding corporation within the meaning of Section 897 of
the Internal Revenue Code of 1986, as amended, and the Company and each Subsidiary shall so certify
upon any Buyer’s request.
(hh) Registration Eligibility. The Company is eligible to register the Registrable
Securities for resale by the Buyers using Form S-3 promulgated under the 1933 Act, subject to any
restrictions that may be imposed by Rule 415 promulgated under the 1933 Act on the use of Form S-3
by the Company for such purpose.
(ii) Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other
than income or similar taxes) which are required to be paid in connection with the issuance, sale
and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully
paid or provided for by the Company, and all laws imposing such taxes will be or will have been
complied with.
(jj) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries is
subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the
Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor
any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent (5%)
or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or
more of the total equity of a bank or any equity that is subject to the BHCA and to regulation by
the Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises a
controlling influence over the management or policies of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve.
(kk) Public Utility Holding Act. None of the Company nor any of its Subsidiaries is a
“holding company,” or an “affiliate” of a “holding company,” as such terms are defined in the
Public Utility Holding Act of 2005.
(ll) Federal Power Act. None of the Company nor any of its Subsidiaries is subject to
regulation as a “public utility” under the Federal Power Act, as amended.
(mm) FDA; Studies. Since the respective dates as of which information is set forth in
the SEC Documents, (i) all of the descriptions of the Company’s legal and governmental proceedings
and procedures before the United States Food and Drug Administration (the “FDA”) or any other
national, departmental, state or local governmental body exercising comparable authority are true
and correct in all material respects, (ii) except as disclosed in the SEC Documents, the studies,
tests and preclinical and clinical trials conducted by or on behalf of the Company and its
Subsidiaries that are described in the SEC Documents were and, if still pending, are (a) with
respect to the foregoing conducted by employees of the Company or any of
18
its Subsidiaries (“Company Studies”), being conducted in accordance with experimental
protocols, procedures and controls pursuant to, where applicable, accepted professional scientific
standards, in each case in all necessary respects and in all material respects; and (b) with
respect to the foregoing conducted on behalf of the Company or independently by others using the
Company’s or any of its Subsidiaries’ technologies, products or product candidates (“Independent
Studies”), to the Company’s knowledge, after due inquiry, being conducted in accordance with
experimental protocols, procedures and controls pursuant to, where applicable, accepted
professional scientific standards, in each case in all necessary respects and in all material
respects; (iii) the descriptions of the results of the Company Studies, and, to the Company’s
knowledge, after due inquiry, the Independent Studies, contained in the SEC Documents are true and
correct in all material respects; and (iv) except as disclosed in the SEC Documents, neither the
Company nor its Subsidiaries have received any notices or correspondence from the FDA, or any
national, state or local governmental body exercising comparable authority requiring the
termination, suspension or material modification of any of the Company Studies or Independent
Studies.
(nn) No Additional Agreements. The Company does not have any agreement or
understanding with any Buyer with respect to the transactions contemplated by the Transaction
Documents other than as specified in the Transaction Documents.
(oo) Disclosure. The Company confirms that neither it nor any other Person acting on
its behalf has provided any of the Buyers or their agents or counsel with any information that
constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions
contemplated by this Agreement and the other Transaction Documents. The Company understands and
confirms that each of the Buyers will rely on the foregoing representations in effecting
transactions in securities of the Company. All disclosure provided to the Buyers regarding the
Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including
the schedules to this Agreement, furnished by or on behalf of the Company or any of its
Subsidiaries is true and correct and does 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 the
light of the circumstances under which they were made, not misleading. No event or circumstance
has occurred or information exists with respect to the Company or any of its Subsidiaries or its or
their business, properties, liabilities, prospects, operations (including results thereof) or
conditions (financial or otherwise), which, under applicable law, rule or regulation, requires
public disclosure at or before the date hereof or announcement by the Company but which has not
been so publicly disclosed. The Company acknowledges and agrees that no Buyer makes or has made any
representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 2.
4. COVENANTS.
(a) Efforts. Each Buyer shall use its reasonable best efforts to timely satisfy each
of the conditions to be satisfied by it as provided in Section 6 of this Agreement. The Company
shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied by
it as provided in Section 7 of this Agreement.
19
(b) Form D and Blue Sky. The Company agrees to file with the SEC a Form D with
respect to the Securities as required under Regulation D and to provide a copy thereof to each
Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such
action as the Company shall reasonably determine is necessary in order to obtain an exemption for,
or to, qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an
exemption from such qualification), and shall provide evidence of any such action so taken to the
Buyers on or prior to the Closing Date. The Company shall make any filings and reports relating to
the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the
states of the United States following the Closing Date.
(c) Reporting Status. Until the date on which the Buyers shall have sold or
transferred all of the Registrable Securities (the “Reporting Period”), the Company shall use its
reasonable best efforts to timely file all reports required to be filed with the SEC pursuant to
the 1934 Act, the Company shall not terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer
require or otherwise permit such termination, and the Company shall use reasonable best efforts to
maintain its eligibility to register the Registrable Securities for resale by the Buyers on Form
S-3.
(d) Use of Proceeds. The Company shall use the proceeds from the sale of the
Securities for development of its product candidates, the payment of the fees and expenses
described in Section 4(g) below and general corporate purposes , and not for the (i) repayment of
any outstanding Indebtedness of the Company or any of its Subsidiaries or (ii) redemption or
repurchase of any equity securities of the Company or any of its Subsidiaries.
(e) Financial Information. The Company agrees to send the following to each Investor
(as defined in the Registration Rights Agreement) during the Reporting Period, unless the following
are filed with or furnished to the SEC through XXXXX and are available to the public through the
XXXXX system, (i) within one (1) Business Day after the filing thereof with the SEC, a copy of its
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, any interim reports or any
consolidated balance sheets, income statements, stockholders’ equity statements and/or cash flow
statements for any period other than annual that are made publicly available, any Current Reports
on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant
to the 1933 Act, (ii) within two business days of the release thereof, facsimile copies of all
press releases issued by the Company or any of its Subsidiaries and (iii) copies of any notices and
other information made available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the stockholders.
(f) Listing. The Company shall use its reasonable best efforts to promptly secure the
listing or designation for quotation (as the case may be) of all of the Registrable Securities
(other than the Warrants, which are addressed below) upon each national securities exchange and
automated quotation system, if any, upon which the Common Stock is then listed or designated for
quotation (as the case may be) (subject to official notice of issuance) and shall maintain such
listing or designation for quotation (as the case may be) of all Registrable Securities from time
to time issuable under the terms of the Transaction Documents on such national securities exchange
or automated quotation system. The Company shall use its reasonable best efforts to maintain the
20
Common Stock’s listing or authorization for quotation (as the case may be) on the Principal
Market, the NYSE Amex, The New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq
Capital Market (each, an “Eligible Market”). Neither the Company nor any of its Subsidiaries shall
take any action which could be reasonably expected to result in the delisting or suspension of the
Common Stock on an Eligible Market. The Company shall use commercially reasonable efforts to cause
the Series A Warrants to be listed on the OTC Bulletin Board within ninety (90) calendar days after
the Closing Date. The Company shall use commercially reasonable efforts to cause the Series C
Warrants to be listed on the OTC Bulletin Board within ninety (90) calendar days after the date on
which any Series B Warrants have been exercised, in whole or in part, whether pursuant to a
Mandatory Exercise (as defined in the Series B Warrants) or otherwise. The Company shall pay all
fees and expenses in connection with satisfying its obligations under this Section 4(f).
(g) Fees. The Company shall reimburse Xxxxxxxxx Xxxxxxx, LLP (counsel to the lead
investor) for all reasonable, documented costs and expenses incurred by it in connection with
preparing and delivering the Transaction Documents (including, without limitation, all reasonable,
documented legal fees and disbursements in connection therewith, and due diligence in connection
with the transactions contemplated thereby, and all fees and costs arising under Section 4(u)
below), which amount may be withheld by a Buyer (at the request of Xxxxxxxxx Traurig, LLP) from its
Purchase Price at the Closing or paid by the Company upon termination of this Agreement on demand
by Xxxxxxxxx Xxxxxxx, LLP, less $25,000 which was previously advanced to Xxxxxxxxx Traurig, LLP by
the Company, provided, however, that the amount payable by the Company to Xxxxxxxxx Xxxxxxx, LLP
under any and all of the Transaction Documents shall not exceed $50,000 in the aggregate unless
agreed to in writing by the Company. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, transfer agent fees, DTC (as defined below) fees
or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising out of
the transactions contemplated hereby (including, without limitation, any fees payable to the
Placement Agent, who is the Company’s sole placement agent in connection with the transactions
contemplated by this Agreement). The Company shall pay, and hold each Buyer harmless against, any
liability, loss or expense (including, without limitation, reasonable attorneys’ fees and
out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except
as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its
own expenses in connection with the sale of the Securities to the Buyers.
(h) Pledge of Securities. Notwithstanding anything to the contrary contained in
Section 2(g) and subject to Section 4(t), the Company acknowledges and agrees that the Securities
may be pledged by a Buyer in connection with a bona fide margin agreement or other bona fide loan
or financing arrangement that is secured by the Securities. The pledge of Securities shall not be
deemed to be a transfer, sale or assignment of the Securities hereunder except as may otherwise be
required under applicable securities laws, and no Buyer effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any delivery to the
Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to
execute and deliver such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by a Buyer.
21
(i) Disclosure of Transactions and Other Material Information. The Company shall, on
or before 10:00 a.m., New York time, on the first (1st) Business Day after the date of
this Agreement, issue a press release (the “Press Release") reasonably acceptable to the Buyers
disclosing all the material terms of the transactions contemplated by the Transaction Documents. On
or before 10:00 a.m., New York time, on the first (1st) Business Day following the date
of this Agreement, the Company shall file a Current Report on Form 8-K describing all the material
terms of the transactions contemplated by the Transaction Documents in the form required by the
1934 Act and attaching all the material Transaction Documents (including, without limitation, this
Agreement (and all schedules to this Agreement), the form of the Warrants and the form of the
Registration Rights Agreement) (including all attachments, the “8-K Filing”). From and after the
issuance of the 8-K Filing, the Company shall have disclosed all material, non-public information
(if any) delivered to any of the Buyers by the Company or any of its Subsidiaries, or any of their
respective officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. The Company shall not, and the Company shall cause each
of its Subsidiaries and each of its and their respective officers, directors, employees and agents
not to, provide any Buyer with any material, non-public information regarding the Company or any of
its Subsidiaries from and after the issuance of the Press Release without the express prior written
consent of such Buyer. In the event of a material breach of any of the foregoing covenants or any
of the covenants or agreements contained in Section 4(o) by the Company, any of its Subsidiaries,
or any of its or their respective officers, directors, employees and agents (as determined in the
reasonable good faith judgment of such Buyer), in addition to any other remedy provided herein or
in the Transaction Documents, such Buyer shall notify the Company of the need to make a public
disclosure, in the form of a press release, public advertisement or otherwise, of such material,
non-public information (the “Disclosure”). Unless at such time such Buyer does not possess any
material, non-public information provided by the Company, any of its Subsidiaries and/or any of its
and/or their respective officers, directors, employees and/or agents, as determined in good faith
by the Company with the advice of counsel, the Company shall prepare and issue such Disclosure
prior to the opening of trading on the Principal Market on or before 10:00 a.m., New York time on
the Trading Day immediately following the receipt of such notice from the Buyer. No Buyer shall
have any liability to the Company, any of its Subsidiaries, or any of its or their respective
officers, directors, employees, stockholders or agents, for any such disclosure. Subject to the
foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or
any other public statements with respect to the transactions contemplated hereby; provided,
however, the Company shall be entitled, without the prior approval of any Buyer, to make any press
release or other public disclosure with respect to such transactions (i) in substantial conformity
with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) each Buyer shall receive an advanced draft of
any such press release or other public disclosure prior to its release). Without the prior written
consent of the applicable Buyer, the Company shall not (and shall cause each of its Subsidiaries
and affiliates to not) disclose the name of such Buyer in any filing, announcement, release or
otherwise, except as otherwise required by any law, rule or regulation applicable to the Company
after consultation with the Buyer.
(j) Additional Registration Statements. Until the Applicable Date (as defined below)
and at any time thereafter while any Registration Statement is not effective or the prospectus
contained therein is not available for use, the Company shall not file a registration statement
22
under the 1933 Act relating to securities that are not the Registrable Securities, provided,
however, that this sentence shall not restrict the Company from filing one or more post-effective
amendments to the Registration Statement on Form S-1 relating to the Kingsbridge Purchase Agreement
(as defined below). “Applicable Date” means the earlier of (i) the first date on which the resale
by the Buyers of all Registrable Securities is covered by one or more effective Registration
Statements (as defined in the Registration Rights Agreement) (and each prospectus contained therein
is available for use on such date) and (ii) the date on which the Buyers of all Registrable
Securities can freely sell such Registrable Securities under Rule 144.
(k) Additional Issuance of Securities. The Company agrees that for the period
commencing on the date hereof and ending on the date immediately following the sixtieth
(60th) calendar day after the Applicable Date (provided that such period shall be
extended by the number of Trading Days during such period and any extension thereof contemplated by
this proviso on which any Registration Statement is not effective or any prospectus contained
therein is not available for use) (the “Restricted Period”), neither the Company nor any of its
Subsidiaries shall directly or indirectly issue, offer, sell, grant any option or right to
purchase, or otherwise dispose of any equity security or any equity-linked or related security
(including, without limitation, any “equity security” (as that term is defined under Rule 405
promulgated under the 1933 Act), any Convertible Securities (as defined below), any debt, any
preferred stock or any purchase rights) (any such issuance, offer, sale, grant, disposition or
announcement (whether occurring during the Restricted Period or at any time thereafter) is referred
to as a “Subsequent Placement”). Notwithstanding the foregoing, this Section 4(k) shall not apply
in respect of the issuance of (A) shares of Common Stock or standard options to purchase Common
Stock to directors, officers or employees of the Company in their capacity as such pursuant to an
Approved Share Plan (as defined below), provided that (1) all such issuances (taking into account
the shares of Common Stock issuable upon exercise of such options) after the date hereof pursuant
to this clause (A) do not, in the aggregate, exceed more than 10% of the Common Stock issued and
outstanding immediately prior to the date hereof and (2) such options are not repriced, none of
such options are amended to increase the number of shares issuable thereunder and none of the terms
or conditions of any such options are otherwise materially changed in any manner that materially
adversely affects any Buyer’s investment hereunder (as determined in good faith by such Buyer); (B)
shares of Common Stock issued upon the conversion or exercise of Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Share Plan that are
covered by clause (A) above) issued prior to the date hereof, provided that the conversion price of
any such Convertible Securities (other than standard options to purchase Common Stock issued
pursuant to an Approved Share Plan that are covered by clause (A) above) is not lowered, none of
such Convertible Securities (other than standard options to purchase Common Stock issued pursuant
to an Approved Share Plan that are covered by clause (A) above) are amended to increase the number
of shares issuable thereunder and none of the terms or conditions of any such Convertible
Securities (other than standard options to purchase Common Stock issued pursuant to an Approved
Share Plan that are covered by clause (A) above) are otherwise materially changed in any manner
that materially adversely affects any Buyer’s investment hereunder (as determined in good faith by
such Buyer); (C) the Warrant Shares (each of the foregoing in clauses (A) through (C), collectively
the “Excluded Securities”). “Approved Share Plan” means any employee benefit plan which has been
approved by the board of directors of the Company prior to or subsequent to the date hereof
pursuant to which shares of Common Stock
23
and standard options to purchase Common Stock may be issued to any employee, officer or
director for services provided to the Company in their capacity as such. “Convertible Securities”
means any capital stock or other security of the Company or any of its Subsidiaries that is at any
time and under any circumstances directly or indirectly convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or
other security of the Company (including, without limitation, Common Stock) or any of its
Subsidiaries.
(l) Reservation of Shares. So long as any Warrants remain outstanding, the Company
shall take reasonable best efforts to at all times have authorized, and reserved for the purpose of
issuance, no less than 150% of the maximum number of shares of Common Stock issuable upon exercise
of all the Warrants as of the date hereof (without regard to any limitations on the exercise of the
Warrants set forth therein), less the number of Warrant Shares represented by any such Warrants
that have been exercised.
(m) Conduct of Business. The business of the Company and its Subsidiaries shall not
be conducted in violation of any law, ordinance or regulation of any governmental entity, except
where such violations would not result, either individually or in the aggregate, in a Material
Adverse Effect.
(n) Variable Rate Transaction. Until sixty (60) calendar days after the Effective
Date, none of the Warrants are outstanding, the Company and each Subsidiary shall be prohibited
from effecting or entering into an agreement to effect any Subsequent Placement involving a
Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company or
any Subsidiary (i) issues or sells any Convertible Securities either (A) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the trading prices of, or
quotations for, the shares of Common Stock at any time after the initial issuance of such
Convertible Securities, or (B) with a conversion, exercise or exchange price that is subject to
being reset at some future date after the initial issuance of such Convertible Securities or upon
the occurrence of specified or contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock, other than pursuant to a customary “weighted
average” anti-dilution provision or (ii) enters into any agreement (including, without limitation,
an equity line of credit) whereby the Company or any Subsidiary may sell securities at a future
determined price (other than standard and customary “preemptive” or “participation” rights). Each
Buyer shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to
preclude any such issuance, which remedy shall be in addition to any right to collect damages.
(o) Participation Right. From the date hereof through the two (2) year anniversary of
the Closing Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly,
effect any Subsequent Placement unless the Company shall have first complied with this Section
4(o). The Company acknowledges and agrees that the right set forth in this Section 4(o) is a right
granted by the Company, separately, to each Buyer.
(i) At least five (5) Trading Days prior to any proposed or intended Subsequent
Placement, the Company or its designated agent shall notify each Buyer of its proposal or
intention to effect a Subsequent Placement (each such notice, a “Pre-
24
Notice”), which Pre-Notice shall not include any information (including, without
limitation, material, non-public information) other than: either (x) (A) a statement that
the Company proposes or intends to effect a Subsequent Placement (which will not identify
the Company by name), (B) a statement informing such Buyer that it is entitled to receive an
Offer Notice (as defined below) with respect to such Subsequent Placement upon its written
request and (C) a statement that the statement in clause (A) above does not constitute
material, non-public information or (y) a statement by the Company or an agent to the
Company asking if such Buyer is willing to receive material, non-public information with
respect to the Company. Upon the written request of a Buyer within three (3) Trading Days
after the Company’s notification to such Buyer of such Pre-Notice, and only upon a written
request by such Buyer, the Company shall promptly, but no later than two (2) Trading Days
after such request is received, deliver to such Buyer an irrevocable written notice (the
“Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of
the securities being offered (the “Offered Securities”) in a Subsequent Placement, which
Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price
and other terms upon which they are to be issued, sold or exchanged, and the number or
amount of the Offered Securities to be issued, sold or exchanged, (y) identify the Persons
(if known) to which or with which the Offered Securities are to be offered, issued, sold or
exchanged and (z) offer to issue and sell to or exchange with such Buyer in accordance with
the terms of the Offer all of the Offered Securities, provided that the number of Offered
Securities which such Buyer shall have the right to subscribe for under this Section 4(o)
shall be such Buyer’s pro rata portion of 30% of the Offered Securities (a) based on such
Buyer’s pro rata portion of the aggregate number of Common Shares purchased hereunder by all
Buyers (the “Basic Amount”), and (b) with respect to each Buyer that elects to purchase its
Basic Amount, any additional portion of the Offered Securities attributable to the Basic
Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the
other Buyers subscribe for less than their Basic Amounts (the “Undersubscription Amount”).
(ii) To accept an Offer, in whole or in part, such Buyer must deliver a written notice
to the Company prior to the end of the third (3rd) Business Day after such
Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of such
Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to
purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Buyer
elects to purchase (in either case, the “Notice of Acceptance”). If the Basic Amounts
subscribed for by all Buyers are less than the total of all of the Basic Amounts, then such
Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription
Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed
for exceed the difference between the total of all the Basic Amounts and the Basic Amounts
subscribed for (the “Available Undersubscription Amount”), such Buyer who has subscribed for
any Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total
Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to
25
rounding by the Company to the extent it deems reasonably necessary. Notwithstanding
the foregoing, if the Company desires to modify or amend the terms and conditions of the
Offer prior to the expiration of the Offer Period, the Company may deliver to each Buyer a
new Offer Notice and the Offer Period shall expire on the fifth (5th) Business
Day after such Buyer’s receipt of such new Offer Notice.
(iii) The Company shall have ten (10) Business Days from the expiration of the Offer
Period above (i) to offer, issue, sell or exchange all or any part of such Offered
Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused
Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”),
but only to the offerees described in the Offer Notice (if so described therein) and only
upon terms and conditions (including, without limitation, unit prices and interest rates)
that are not more favorable to the acquiring Person or Persons or less favorable to the
Company than those set forth in the Offer Notice and (ii) to publicly announce, if required
by applicable securities laws, or if at such time any Buyer possesses any material,
non-public information provided by the Company, any of its Subsidiaries and/or any of its
and/or their respective officers, directors, employees and/or agents, as determined in good
faith by the Company with the advice of counsel, (a) the execution of such Subsequent
Placement Agreement, and (b) either (x) the consummation of the transactions contemplated by
such Subsequent Placement Agreement or (y) the termination of such Subsequent Placement
Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such
Subsequent Placement Agreement and any documents contemplated therein filed as exhibits
thereto.
(iv) In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in Section
4(o)(iii) above), then such Buyer may, at its sole option and in its sole discretion, reduce
the number or amount of the Offered Securities specified in its Notice of Acceptance to an
amount that shall be not less than the number or amount of the Offered Securities that such
Buyer elected to purchase pursuant to Section 4(o)(ii) above multiplied by a fraction, (i)
the numerator of which shall be the number or amount of Offered Securities the Company
actually proposes to issue, sell or exchange (including Offered Securities to be issued or
sold to Buyers pursuant to this Section 4(o) prior to such reduction) and (ii) the
denominator of which shall be the original amount of the Offered Securities. In the event
that any Buyer so elects to reduce the number or amount of Offered Securities specified in
its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced
number or amount of the Offered Securities unless and until such securities have again been
offered to the Buyers in accordance with Section 4(o)(i) above.
(v) Upon the closing of the issuance, sale or exchange of all or less than all of the
Refused Securities, such Buyer shall acquire from the Company, and the Company shall issue
to such Buyer, the number or amount of Offered Securities specified in its Notice of
Acceptance. The purchase by such Buyer of any Offered Securities is subject in all cases to
the preparation, execution and delivery by the Company and such Buyer of a separate purchase
agreement relating to such Offered Securities reasonably satisfactory in
26
form and substance to such Buyer and its counsel.
(vi) Any Offered Securities not acquired by a Buyer or other Persons in accordance with
this Section 4(o) may not be issued, sold or exchanged until they are again offered to such
Buyer under the procedures specified in this Agreement.
(vii) The Company and each Buyer agree that if any Buyer elects to participate in the
Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other
transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any
restrictions on trading as to any securities of the Company that are more restrictive than
provided in the Transaction Documents or be required to consent to any amendment to or
termination of, or grant any waiver or release or the like under or in connection with, any
agreement previously entered into with the Company or any instrument received from the
Company.
(viii) Notwithstanding anything to the contrary in this Section 4(o) and unless
otherwise agreed to by such Buyer, the Company shall either confirm in writing to such Buyer
that the transaction with respect to the Subsequent Placement has been abandoned or shall
publicly disclose its intention to issue the Offered Securities, in either case, in such a
manner such that such Buyer will not be in possession of any material, non-public
information, by the fifth (5th) Business Day following delivery of the Offer
Notice. If by such fifth (5th) Business Day, no public disclosure regarding a
transaction with respect to the Offered Securities has been made, and no notice regarding
the abandonment of such transaction has been provided to such Buyer, such transaction shall
be deemed to have been abandoned and such Buyer shall not be deemed to be in possession of
any material, non-public information with respect to the Company or any of its Subsidiaries.
Should the Company decide to pursue such transaction with respect to the Offered Securities,
the Company shall provide such Buyer with another Offer Notice and such Buyer will again
have the right of participation set forth in this Section 4(o). The Company shall not be
permitted to deliver more than one Offer Notice to such Buyer in any thirty (30) day period,
except as expressly contemplated by the last sentence of Section 4(o)(ii).
(ix) The restrictions contained in this Section 4(o) shall not apply in connection with
the issuance of (i) any Excluded Securities, (ii) the issuance to Kingsbridge Capital
Limited (“Kingsbridge”) of up to 5,073,435 shares of Common Stock at a price per share of no
less than the lowest price per share that is contemplated by the terms of that certain
Common Stock Purchase Agreement, dated February 19, 2008, as amended prior to the date
hereof, by and between the Company and Kingsbridge, as in effect as of the date hereof (the
“Kingsbridge Purchase Agreement”), (iii) shares of Common Stock issued pursuant to a bona
fide firm commitment underwritten “at-the-market offering” as defined in Rule 415(a)(4)
under the 1933 Act with a nationally recognized underwriter which generates gross proceeds
to the Company of less than $5,000,000 or (iv) shares of Common Stock issued to license
partners and/or developers in connection with development agreements and/or licensing
agreements, as applicable, provided, that (A) the primary purpose of such issuance is not to
raise capital as determined in good faith by the Buyers, (B) the purchaser or acquirer of
27
the securities in such issuance solely consists of either (x) the actual participants
in such development agreement and/or licensing agreement, as applicable, or (y) the
stockholders, partners or members of the foregoing Persons, (C) the number or amount of
securities issued to such Person by the Company shall not be disproportionate to such
Person’s actual participation in such development agreement and/or licensing agreement, as
applicable and (D) the securities issued or issuable in such Subsequent Placement shall not
exceed 10% of the Company’s outstanding shares of Common Stock immediately prior to the
execution of such development agreements and/or licensing agreements if either (I) such
Subsequent Placement includes a Dilutive Issuance (as defined in the Series A Warrant) or
(II) the Closing Bid Price (as defined in the Series A Warrant) of the Common Stock
immediately prior to the execution of such development agreements and/or licensing
agreements is greater than the New Issuance Price (as defined in the Series A Warrant) of
any of the securities issued or issuable in such Subsequent Placement. The Company shall not
circumvent the provisions of this Section 4(o) by providing terms or conditions to one Buyer
that are not provided to all.
(p) Dilutive Issuances. For so long as any Warrants remain outstanding, the Company
shall not, in any manner, enter into or effect any Dilutive Issuance (as defined in the Warrants)
if the effect of such Dilutive Issuance is to cause the Company to be required to issue upon
exercise of any Warrant any shares of Common Stock in excess of that number of shares of Common
Stock which the Company may issue upon exercise of the Warrants without breaching the Company’s
obligations under the rules or regulations of the Principal Market. At any time prior to the
Stockholder Approval Date (as defined below), the Company shall not consummate any Subsequent
Placement at a price per share of Common Stock (as determined in accordance with Section 2(b) of
the Warrants) below the higher of (x) the Purchase Price per share of Common Stock hereunder (as
adjusted for stock splits, recapitalizations and similar events) and (y) the Exercise Price (as
defined in the Series A Warrants) at such time, other than (x) shares of Common Stock issued
pursuant to a bona fide firm commitment underwritten “at-the-market offering” as defined in Rule
415(a)(4) under the 1933 Act with a nationally recognized underwriter, which generates gross
proceeds to the Company in excess of $5,000,000, (y) shares of Common Stock issued to Kingsbridge
pursuant to the Kingsbridge Purchase Agreement, or (z) Excluded Securities.
(q) Passive Foreign Investment Company. The Company shall conduct its business in
such a manner as will ensure that the Company will not be deemed to constitute a passive foreign
investment company within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as
amended.
(r) Restriction on Redemption and Cash Dividends. So long as any Warrants are
outstanding, the Company shall not, directly or indirectly, redeem, or declare or pay any cash
dividend or distribution on, any securities of the Company without the prior express written
consent of the Buyers.
(s) Corporate Existence. So long as any Buyer owns any Warrants, the Company shall not
be party to any Fundamental Transaction (as defined in the Warrants) unless the Company is in
compliance with the applicable provisions governing Fundamental Transactions set forth in the
Warrants.
28
(t) Trading in Common Stock. Each Buyer hereby agrees, severally and not jointly, not
to engage in any Short Sales (other than any sale by any Buyer of Common Stock beneficially owned
by such Buyer prior to or during the Market Price Measuring Period (as defined in the Series D
Warrants)) or transactions involving “derivative” securities of the Company during the Market Price
Measuring Period. Further, each Buyer hereby agrees, severally and not jointly, not to sell
securities of the Company in an amount, in the aggregate, during any Trading Day in the Market
Price Measuring Period, exceeding the greater of (i) $125,000 and (ii) 15% of the average daily
dollar trading volume on the Principal Market measured at the time of each sale of securities
during such Trading Day. Notwithstanding the foregoing, for avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to the
identification of the availability of, or securing of, available shares to borrow in order to
effect Short Sales or similar transactions after the Market Price Measuring Period.
(u) Stockholder Approval. The Company shall provide each stockholder entitled to vote
at either (x) the next annual meeting of stockholders of the Company or (y) a special meeting of
stockholders of the Company (the “Stockholder Meeting”), which shall be promptly called and held
not later than May 30, 2010 (or in the event that such proxy statement is subject to a full review
by the SEC, July 15, 2010) (the “Stockholder Meeting Deadline”), a proxy statement, substantially
in a form which shall have been previously reviewed by Xxxxxxxxx Xxxxxxx LLP, at the expense of the
Company but in any event such expense not to exceed $10,000 without the prior written approval of
the Company; soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for
approval of resolutions (“Stockholder Resolutions”) providing for the Company’s issuance of all of
the Securities as described in the Transaction Documents in accordance with applicable law and the
rules and regulations of the Principal Market (such affirmative approval being referred to herein
as the “Stockholder Approval”, and the date such Stockholder Approval is obtained, the “Stockholder
Approval Date”), and the Company shall use its reasonable best efforts to solicit its stockholders’
approval of such resolutions and to cause the Board of Directors of the Company to recommend to the
stockholders that they approve such resolutions. The Company shall be obligated to seek to obtain
the Stockholder Approval by the Stockholder Meeting Deadline. If, despite the Company’s reasonable
best efforts the Stockholder Approval is not obtained on or prior to the Stockholder Meeting
Deadline, the Company shall cause an additional Stockholder Meeting to be held once in each of the
three subsequent calendar quarters thereafter until such Stockholder Approval is obtained. If,
despite the Company’s reasonable best efforts the Stockholder Approval is not obtained after such
subsequent stockholder meetings, the Company shall cause an additional Stockholder Meeting to be
held semi-annually thereafter until such Stockholder Approval is obtained.
(v) No Waiver of Voting Agreement. The Company shall not amend, waive or modify any
provision of the Voting Agreement (as defined below).
(w) Closing Documents. On or prior to fourteen (14) calendar days after the Closing
Date, the Company agrees to deliver, or cause to be delivered, to each Buyer and Xxxxxxxxx Traurig,
LLP executed copies of the Transaction Documents, Securities and other document required to be
delivered to any party pursuant to Section 7 hereof.
29
5. REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.
(a) Register. The Company shall maintain at its principal executive offices (or such
other office or agency of the Company as it may designate by notice to each holder of Securities),
a register for the Warrants in which the Company shall record the name and address of the Person in
whose name the Warrants have been issued (including the name and address of each transferee, to the
extent it is appropriately notified of transfers) and the number of Warrant Shares issuable upon
exercise of the Warrants held by such Person. The Company shall keep the register open and
available at all times during normal business hours for inspection of any Buyer or its legal
representatives so long as Buyer continues to hold any Warrants.
(b) Transfer Agent Instructions. The Company shall issue irrevocable instructions to
its transfer agent and any subsequent transfer agent in a form acceptable to each of the Buyers
(the “Irrevocable Transfer Agent Instructions”) to issue certificates or credit shares to the
applicable balance accounts at The Depository Trust Company (“DTC”), registered in the name of each
Buyer or its respective nominee(s), for the Warrant Shares in such amounts as specified from time
to time by each Buyer to the Company upon the exercise of the Warrants (as the case may be). The
Company represents and warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to
Section 2(g) hereof, will be given by the Company to its transfer agent with respect to the
Securities, and that the Securities shall otherwise be freely transferable on the books and records
of the Company, as applicable, to the extent provided in this Agreement and the other Transaction
Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with
Section 2(g), the Company shall permit the transfer and shall promptly instruct its transfer agent
to issue one or more certificates or credit shares to the applicable balance accounts at DTC in
such name and in such denominations as specified by such Buyer to effect such sale, transfer or
assignment. In the event that such sale, assignment or transfer involves Warrant Shares sold,
assigned or transferred pursuant to an effective registration statement or in compliance with Rule
144 (assuming the transferor is not an affiliate of the Company), the transfer agent shall issue
such shares to such Buyer, assignee or transferee (as the case may be) without any restrictive
legend in accordance with Section 5(d) below. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this
Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to seek
an order and/or injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other security being
required. The Company shall cause its counsel to issue the legal opinion referred to in the
Irrevocable Transfer Agent Instructions to the Company’s transfer agent promptly following each
Effective Date (as defined in the Registration Rights Agreement). Any fees (with respect to the
transfer agent, counsel to the Company or otherwise) associated with the issuance of such opinion
or the removal of any legends on any of the Securities shall be borne by the Company.
(c) Legends. Each Buyer understands that the Securities have been issued (or will be
issued in the case of the Warrant Shares) pursuant to an exemption from registration or
qualification under the 1933 Act and applicable state securities laws, and except as set forth
30
below, the Securities shall bear any legend as required by the “blue sky” laws of any state
and a restrictive legend in substantially the following form (and a stop-transfer order may be
placed against transfer of such stock certificates):
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE
BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF
REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
(d) Removal of Legends. Certificates evidencing Securities shall not be required to
contain the legend set forth in Section 5(c) above or any other legend (i) while a registration
statement (including a Registration Statement) covering the resale of such Securities is effective
under the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming the
transferor is not an affiliate of the Company), (iii) if such Securities are eligible to be sold,
assigned or transferred under Rule 144 (provided that a Buyer provides the Company with reasonable
assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which
shall not include an opinion of counsel), (iv) in connection with a sale, assignment or other
transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion
of counsel to such Buyer, in a generally acceptable form, to the effect that such sale, assignment
or transfer of the Securities may be made without registration under the applicable requirements of
the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933 Act
(including, without limitation, controlling judicial interpretations and pronouncements issued by
the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later than
two (2) Trading Days following the delivery by a Buyer to the Company or the transfer agent (with
notice to the Company) of a legended certificate representing such Securities (endorsed or with
stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer, if applicable), together with any other deliveries from such Buyer as
may be required above in this Section 5(d), as directed by such Buyer, either: (A) provided that
the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program
and such Securities are Common Shares or Warrant Shares, credit the aggregate number of shares of
Common Stock to which such Buyer shall be entitled to such Buyer’s or its designee’s balance
account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s
transfer agent is not
31
participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via
reputable overnight courier) to such Buyer, a certificate representing such Securities that is free
from all restrictive and other legends, registered in the name of such Buyer or its designee (the
date by which such credit is so required to be made to the balance account of such Buyer’s or such
Buyer’s nominee with DTC or such certificate is required to be delivered to such Buyer pursuant to
the foregoing is referred to herein as the “Required Delivery Date”).
(e) Buy-In. If the Company fails to so properly deliver such unlegended certificates
or so properly credit the balance account of such Buyer’s or such Buyer’s nominee with DTC by the
Required Delivery Date, and if on or after the Required Delivery Date such Buyer purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by such Buyer of shares of Common Stock that such Buyer anticipated receiving from the Company
without any restrictive legend, then, in addition to all other remedies available to such Buyer,
the Company shall, within three (3) Trading Days after such Buyer’s request and in such Buyer’s
sole discretion, either (i) pay cash to such Buyer in an amount equal to such Buyer’s total
purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate
or credit such Buyer’s balance account shall terminate and such shares shall be cancelled, or (ii)
promptly honor its obligation to deliver to such Buyer a certificate or certificates or credit such
Buyer’s DTC account representing such number of shares of Common Stock that would have been issued
if the Company timely complied with its obligations hereunder and pay cash to such Buyer in an
amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Shares or Warrant Shares (as the case may be) that the Company was required to
deliver to such Buyer by the Required Delivery Date times (B) the Closing Sale Price (as defined in
the Warrants) of the Common Stock on the Trading Day immediately preceding the Required Delivery
Date.
6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
(a) The obligation of the Company hereunder to issue and sell the Common Shares and the
related Warrants to each Buyer at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole discretion by
providing each Buyer with prior written notice thereof:
(i) Such Buyer shall have executed each of the other Transaction Documents to which it
is a party and delivered the same to the Company.
(ii) Such Buyer and each other Buyer shall have delivered to the Company the Purchase
Price (less, in the case of any Buyer, the amounts withheld pursuant to Section 4(g)) for
the Common Shares and the related Warrants being purchased by such Buyer at the Closing by
wire transfer of immediately available funds pursuant to the wire instructions provided by
the Company.
(iii) The representations and warranties of such Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though originally
made at that time (except for representations and warranties that speak as of a
32
specific date, which shall be true and correct as of such date), and such Buyer shall
have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied or complied
with by such Buyer at or prior to the Closing Date.
7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.
(a) The obligation of each Buyer hereunder to purchase its Common Shares and its related
Warrants at the Closing is subject to the satisfaction, at or before the Closing Date, of each of
the following conditions, provided that these conditions are for each Buyer’s sole benefit and may
be waived by such Buyer at any time in its sole discretion by providing the Company with prior
written notice thereof:
(i) The Company and each Subsidiary (as the case may be) shall have duly executed and
delivered to such Buyer each of the Transaction Documents to which it is a party and the
Company shall have duly executed and delivered to such Buyer the Common Shares in such
aggregate number of Common Shares as is set forth across from such Buyer’s name in column
(3) of the Schedule of Buyers and the related Series A Warrants, Series B Warrants, Series C
Warrants and Series D Warrants (initially for such aggregate number of shares of Warrant
Shares as is set forth across from such Buyer’s name in columns (4), (5), (6) and (7) of the
Schedule of Buyers, respectively) being purchased by such Buyer at the Closing pursuant to
this Agreement.
(ii) Such Buyer shall have received the opinion of Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C., the Company’s counsel, dated as of the Closing Date, in the form acceptable
to such Buyer.
(iii) The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer
Agent Instructions, in the form acceptable to such Buyer, which instructions shall have been
delivered to and acknowledged in writing by the Company’s transfer agent.
(iv) The Company shall have delivered to such Buyer a certificate evidencing the
formation and good standing of the Company and each of its Subsidiaries in each such
entity’s jurisdiction of formation issued by the Secretary of State (or comparable office)
of such jurisdiction of formation as of a date within ten (10) days of the Closing Date.
(v) The Company shall have delivered to such Buyer a certificate evidencing the
Company’s and each Subsidiary’s qualification as a foreign corporation and good standing
issued by the Secretary of State (or comparable office) of each jurisdiction in which the
Company and each Subsidiary conducts business and is required to so qualify, as of a date
within ten (10) days of the Closing Date.
(vi) The Company shall have delivered to such Buyer a certified copy of the Certificate
of Incorporation as certified by the Delaware Secretary of State within ten (10) days of the
Closing Date.
33
(vii) Each Subsidiary shall have delivered to such Buyer a certified copy of its
certificate of incorporation as certified by the Secretary of State (or comparable office)
of such Subsidiary’s jurisdiction of incorporation within ten (10) days of the Closing Date.
(viii) The Company shall have delivered to such Buyer a certificate, in the form
acceptable to such Buyer, duly executed by the Secretary of the Company and dated as of the
Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the
Company’s board of directors, in a form reasonably acceptable to such Buyer, (ii) the
Certificate of Incorporation of the Company and (iii) the Bylaws of the Company, each as in
effect at the Closing.
(ix) Each and every representation and warranty of the Company shall be true and
correct in all material respects as of the date when made and as of the Closing Date as
though originally made at that time (except for representations and warranties that speak as
of a specific date, which shall be true and correct as of such date) and the Company shall
have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with by the
Company at or prior to the Closing Date. Such Buyer shall have received a certificate, duly
executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by such Buyer
in the form acceptable to such Buyer.
(x) The Company shall have delivered to such Buyer a letter from the Company’s transfer
agent certifying the number of shares of Common Stock outstanding on the Closing Date
immediately prior to the Closing.
(xi) The Common Stock (I) shall be designated for quotation or listed on the Principal
Market and (II) shall not have been suspended, as of the Closing Date, by the SEC or the
Principal Market from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the Closing Date, either (A) in writing by the
SEC or the Principal Market or (B) by falling below the minimum maintenance requirements of
the Principal Market, except for the Stockholder Approval as contemplated by Section 4(u).
(xii) The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Securities, including without
limitation, those required by the Principal Market, except for the Stockholder Approval.
(xiii) 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 that prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.
(xiv) Since the date of execution of this Agreement, no event or series of events shall
have occurred that reasonably would have or result in a Material Adverse Effect.
(xv) The Company shall have obtained approval of the Principal Market to list
34
or designate for quotation (as the case may be) the Common Shares and the Warrant
Shares.
(xvi) The Company shall have duly executed and delivered to such Buyer the voting
agreement in the form of Exhibit F hereof (the “Voting Agreement”), by and between
the Company and Symphony Capital LLC (the “Principal Stockholder”) and the Principal
Stockholder shall have duly executed and delivered to such Buyer the Voting Agreement.
(xvii) Such Buyer shall have received a letter on the letterhead of the Company, duly
executed by the Chief Executive Officer of the Company, setting forth the wire instructions
of the Company.
(xviii) The Company and its Subsidiaries shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request.
8. TERMINATION.
In the event that the Closing shall not have occurred with respect to a Buyer within five (5)
days of the date hereof, then such Buyer shall have the right to terminate its obligations under
this Agreement with respect to itself at any time on or after the close of business on such date
without liability of such Buyer to any other party; provided, however, (i) the right to terminate
this Agreement under this Section 8 shall not be available to such Buyer if the failure of the
transactions contemplated by this Agreement to have been consummated by such date is the result of
such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the
Common Shares and the Warrants shall be applicable only to such Buyer providing such written
notice, provided further that no such termination shall affect any obligation of the Company under
this Agreement to reimburse such Buyer for the expenses described in Section 4(g) above. Nothing
contained in this Section 8 shall be deemed to release any party from any liability for any breach
by such party of the terms and provisions of this Agreement or the other Transaction Documents or
to impair the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents.
9. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein, 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,
35
action or proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address for such 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 HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party. In the
event that any signature is delivered by facsimile transmission or by an e-mail which contains a
portable document format (.pdf) file of an executed signature page, such signature page 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 signature page were an original thereof.
(c) Headings; Gender. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement. Unless the context
clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without
limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this
entire Agreement instead of just the provision in which they are found.
(d) Severability. If any provision of this Agreement is prohibited by law or otherwise
determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that
would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of
such provision shall not affect the validity of the remaining provisions of this Agreement so long
as this Agreement as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical realization of the benefits
that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid
provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).
(e) Entire Agreement; Amendments. This Agreement, the other Transaction Documents and
the schedules and exhibits attached hereto and thereto and the instruments referenced herein and
therein supersede all other prior oral or written agreements between the Buyers, the Company, its
Subsidiaries, their affiliates and Persons acting on their behalf solely with respect to the
matters contained herein and therein, and this Agreement, the other Transaction Documents, the
schedules and exhibits attached hereto and thereto and the
36
instruments referenced herein and therein contain the entire understanding of the parties
solely with respect to the matters covered herein and therein; provided, however, nothing contained
in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any
effect on any agreements any Buyer has entered into with the Company or any of its Subsidiaries
prior to the date hereof with respect to any prior investment made by such Buyer in the Company or
(ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its
Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in any agreement
entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries
and any Buyer and all such agreements shall continue in full force and effect. Except as
specifically set forth herein or therein, neither the Company nor any Buyer makes any
representation, warranty, covenant or undertaking with respect to such matters. For clarification
purposes, the Recitals are part of this Agreement. No provision of this Agreement may be amended or
waived other than by an instrument in writing signed by the Company and the holders of a majority
of the Registrable Securities (excluding any Registrable Securities held by the Company or any of
its Subsidiaries) issued or issuable hereunder or pursuant to the Warrants, and any amendment or
to, or waiver of any provision of, this Agreement made in conformity with the provisions of this
Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that
any party may give a waiver in writing as to itself. No such amendment or waiver (unless given
pursuant to the foregoing proviso in the case of a waiver) shall be effective to the extent that it
applies to less than all of the holders of the Warrants then outstanding. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of any provision of
any of the Transaction Documents unless the same consideration also is offered to all of the
parties to the Transaction Documents or all holders of the Warrants. The Company has not, directly
or indirectly, made any agreements with any Buyers relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in the Transaction
Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this
Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any
financing to the Company, any Subsidiary or otherwise.
(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit with an overnight
courier service with next day delivery specified, in each case, properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications shall be:
If to the Company:
OXiGENE, Inc.
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
37
With a copy (for informational purposes only) to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
If to the Transfer Agent:
American Stock Transfer & Trust Company, LLC
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers, with copies
to such Buyer’s representatives as set forth on the Schedule of Buyers,
with a copy (for informational purposes only) to:
Xxxxxxxxx Traurig, LLP
MetLife Building
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
MetLife Building
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
or to such other address and/or facsimile number and/or to the attention of such other Person as
the recipient party has specified by written notice given to each other party five (5) days prior
to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or electronically generated
by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including any purchasers of any
of the Securities. The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of holders of a majority of the Registrable Securities
(excluding any Registrable Securities held by the Company or any of its Subsidiaries) issued or
issuable hereunder or pursuant to the Warrants, including, without limitation, by way of a
38
Fundamental Transaction (as defined in the Warrants) (unless the Company is in compliance with
the applicable provisions governing Fundamental Transactions set forth in the Warrants). A Buyer
may assign some or all of its rights hereunder in connection with any transfer of any of its
Securities without the consent of the Company, in which event such assignee shall be deemed to be a
Buyer hereunder with respect to such assigned rights.
(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees
referred to in Section 9(k).
(i) Survival. The representations, warranties, agreements and covenants shall survive
the Closing. Each Buyer shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.
(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
(k) Indemnification. In consideration of each Buyer’s execution and delivery of the
Transaction Documents and acquiring the Securities thereunder and in addition to all of the
Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each holder of any Securities and all of their
stockholders, partners, members, officers, directors, employees and direct or indirect investors
and any of the foregoing Persons’ agents or other representatives (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively,
the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective
of whether any such Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the Company or any Subsidiary
in any of the Transaction Documents, (b) any breach of any covenant, agreement or obligation of the
Company or any Subsidiary contained in any of the Transaction Documents or (c) any cause of action,
suit or claim brought or made against such Indemnitee by a third party (including for these
purposes a derivative action brought on behalf of the Company or any Subsidiary) and arising out of
or resulting from (i) the execution, delivery, performance or enforcement of any of the Transaction
Documents, (ii) any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure properly made
pursuant to Section 4(i) or (iv) the status of such Buyer or holder of the Securities as an
investor in the Company pursuant to the transactions contemplated by the Transaction Documents. To
the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth
herein, the mechanics and
39
procedures with respect to the rights and obligations under this Section 9(k) shall be the
same as those set forth in Section 6 of the Registration Rights Agreement.
(l) Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of strict construction
will be applied against any party.
(m) Remedies. Each Buyer and each holder of any Securities shall have all rights and
remedies set forth in the Transaction Documents and all rights and remedies which such holders have
been granted at any time under any other agreement or contract and all of the rights which such
holders have under any law. Any Person having any rights under any provision of this Agreement
shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law. Furthermore, the Company recognizes that in the event that it or any
Subsidiary fails to perform, observe, or discharge any or all of its or such Subsidiary’s (as the
case may be) obligations under the Transaction Documents, any remedy at law may prove to be
inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to
seek specific performance and/or temporary, preliminary and permanent injunctive or other equitable
relief from any court of competent jurisdiction in any such case without the necessity of proving
actual damages and without posting a bond or other security.
(n) Withdrawal Right. Notwithstanding anything to the contrary contained in (and
without limiting any similar provisions of) the Transaction Documents, whenever any Buyer exercises
a right, election, demand or option under a Transaction Document and the Company or any Subsidiary
does not timely perform its related obligations within the periods therein provided, then such
Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to the
Company or such Subsidiary (as the case may be), any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights
(o) Payment Set Aside; Currency(p) . To the extent that the Company makes a payment or
payments to any Buyer hereunder or pursuant to any of the other Transaction Documents or any of the
Buyers enforce or exercise their rights hereunder or 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, foreign, 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 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. Until the Warrants and all warrants issued pursuant to the terms thereof are no longer
outstanding, the Company shall not effect any stock combination, reverse stock split or other
similar transaction (or make any public announcement with respect to any of the foregoing) without
the prior written consent of each of the Buyers, such consent not to be unreasonably withheld;
provided, however, that such consent shall not be necessary if the Board of Directors of
the Company deems a reverse stock split to be necessary in order for the Company to maintain
compliance with the continued listing requirements of the Principal
40
Market. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement
and the other Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts
owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All
amounts denominated in other currencies (if any) shall be converted in the U.S. Dollar equivalent
amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in
relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement,
the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of
calculation.
(q) Independent Nature of Buyers’ Obligations and Rights. The obligations of each
Buyer under the Transaction Documents are several and not joint with the obligations of any other
Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any
other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as, and the Company acknowledges that the Buyers do not so constitute, a
partnership, an association, a joint venture or any other kind of group or entity, or create a
presumption that the Buyers are in any way acting in concert or as a group or entity with respect
to such obligations or the transactions contemplated by the Transaction Documents or any matters,
and the Company acknowledges that the Buyers are not acting in concert or as a group, and the
Company shall not assert any such claim, with respect to such obligations or the transactions
contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities
pursuant to the Transaction Documents has been made by such Buyer independently of any other Buyer.
Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with
such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such
Buyer in connection with monitoring such Buyer’s investment in the Securities or enforcing its
rights under the Transaction Documents. The Company and each Buyer confirms that each Buyer has
independently participated with the Company and its Subsidiaries in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall
be entitled to independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Buyer to be joined as an additional party in any proceeding for such
purpose. The use of a single agreement to effectuate the purchase and sale of the Securities
contemplated hereby was solely in the control of the Company, not the action or decision of any
Buyer, and was done solely for the convenience of the Company and its Subsidiaries and not because
it was required or requested to do so by any Buyer. It is expressly understood and agreed that
each provision contained in this Agreement and in each other Transaction Document is between the
Company, each Subsidiary and a Buyer, solely, and not between the Company, its Subsidiaries and the
Buyers collectively and not between and among the Buyers.
| (r) | Judgment Currency. |
(i) If for the purpose of obtaining or enforcing judgment against the Company in any
court in any jurisdiction it becomes necessary to convert into any other currency (such
other currency being hereinafter in this Section 9(r) referred to as the “Judgment
Currency”) an amount due in U.S. Dollars under this Agreement or any other Transaction
Document, the conversion shall be made at the Exchange Rate prevailing on
41
the Trading Day immediately preceding: (1) the date of actual payment of the amount
due, in the case of any proceeding in the courts of New York or in the courts of any other
jurisdiction that will give effect to such conversion being made on such date or (2) the
date on which the foreign court determines, in the case of any proceeding in the courts of
any other jurisdiction (the date as of which such conversion is made pursuant to this
Section 9(r)(i) being hereinafter referred to as the “Judgment Conversion Date”).
(ii) If in the case of any proceeding in the court of any jurisdiction referred to in
Section 9(r)(i) above, there is a change in the Exchange Rate prevailing between the
Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in
the Judgment Currency, when converted at the Exchange Rate prevailing on the date of
payment, will produce the amount of U.S. Dollars which could have been purchased with the
amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange
Rate prevailing on the Judgment Conversion Date.
(iii) Any amount due from the Company under this provision shall be due as a separate
debt and shall not be affected by judgment being obtained for any other amounts due under or
in respect of this Agreement or any other Transaction Document.
[signature pages follow]
42
IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Agreement to be duly executed as of the date first written above.
| COMPANY: OXIGENE, INC. |
||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxxx | |||
| Title: | Chief Executive Officer | |||
IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Agreement to be duly executed as of the date first written above.
| BUYERS: CAPITAL VENTURES INTERNATIONAL |
|||||
| By: | Heights Capital Managerment its Authorized Agent |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | ||||
| Name: Xxxxxx Xxxxxxxx | |||||
| Title: Investment Manager | |||||
IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Agreement to be duly executed as of the date first written above.
| XXXXXX BAY FUND, LP |
||||
| By: | /s/ Xxxx Xxxx | |||
| Name: | Xxxx Xxxx | |||
| Title: | Authorized Signatory | |||
IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Agreement to be duly executed as of the date first written above.
| XXXXXX BAY OVERSEAS FUND, LTD. |
||||
| By: | /s/ Xxxx Xxxx | |||
| Name: | Xxxx Xxxx | |||
| Title: | Authorized Signatory | |||
IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Agreement to be duly executed as of the date first written above.
| RAMIUS ENTERPRISE MASTER FUND LTD. |
||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | Authorized Signatory | |||
IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to
this Agreement to be duly executed as of the date first written above.
| RAMIUS NAVIGATION MASTER FUND LTD. |
||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | Authorized Signatory | |||
SCHEDULE OF BUYERS
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | ||||||||||||||||||||||
| Number of | Number of | Number of | Number of | |||||||||||||||||||||||||||
| Number of | Series A | Series B | Series C | Series D | Legal Representative's | |||||||||||||||||||||||||
| Common | Warrant | Warrant | Warrant | Warrant | Address and Facsimile | |||||||||||||||||||||||||
| Buyer | Address and Facsimile Number | Shares | Shares | Shares | Shares | Shares* | Purchase Price | Number | ||||||||||||||||||||||
| Capital Ventures | c/o Heights Capital Management |
2,192,982 | 2,192,982 | 2,192,982 | 2,192,982 | 22,807,009 | $ | 2,500,000.00 | N/A | |||||||||||||||||||||
| International | 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx,
Investment Manager
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Residence: Cayman Islands |
|||||||||||||||||||||||||||||
| Xxxxxx Bay Fund, LP | 000 Xxxxxxxx, 00xx Xxxxx |
899,122 | 899,122 | 899,122 | 899,122 | 9,350,874 | $ | 1,025,000.00 | X/X | |||||||||||||||||||||
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Residence: United States
E-mail: |
||||||||||||||||||||||||||||||
xxxxxxxxxxx@xxxxxxxxxxxxxxxx.xxx |
||||||||||||||||||||||||||||||
| Xxxxxx Bay Overseas | c/o Walkers SPV Limited |
1,293,859 | 1,293,859 | 1,293,859 | 1,293,859 | 13,456,136 | $ | 1,475,000.00 | N/A | |||||||||||||||||||||
| Fund, Ltd. | Xxxxxx House
P.O. Box 908GT
Xxxx Street
Xxxxxx Town, Grand Cayman
Cayman Islands |
|||||||||||||||||||||||||||||
with a copy to: |
||||||||||||||||||||||||||||||
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Residence: Cayman Islands |
||||||||||||||||||||||||||||||
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | ||||||||||||||||||||||
| Number of | Number of | Number of | Number of | |||||||||||||||||||||||||||
| Number of | Series A | Series B | Series C | Series D | Legal Representative’s | |||||||||||||||||||||||||
| Common | Warrant | Warrant | Warrant | Warrant | Address and Facsimile | |||||||||||||||||||||||||
| Buyer | Address and Facsimile Number | Shares | Shares | Shares | Shares | Shares | Purchase Price | Number | ||||||||||||||||||||||
E-mail: |
||||||||||||||||||||||||||||||
investments@hudsonbay
xxxxxxx.xxx |
||||||||||||||||||||||||||||||
| Ramius Navigation | c/o Ramius LLC |
1,096,491 | 1,096,491 | 1,096,491 | 1,096,491 | 11,403,505 | $ | 1,025,000.00 | N/A | |||||||||||||||||||||
| Master Fund LTD | 000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Xxxx Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(000) 000-0000
Residence: Cayman Islands |
|||||||||||||||||||||||||||||
| Ramius Enterprise | c/o Ramius LLC |
1,096,491 | 1,096,491 | 1,096,491 | 1,096,491 | 11,403,505 | $ | 1,025,000.00 | N/A | |||||||||||||||||||||
| Master Fund LTD | 000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Xxxx Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(000) 000-0000
Residence: Cayman Islands |
|||||||||||||||||||||||||||||
| * | Represents number of shares issuable under Series D Warrants assuming a Market Price, as defined in the Series D Warrants, of $0.10. |
Schedule 3(r)
83,000 shares of the Company’s Common Stock represent shares that were issued pursuant to options
granted to former employees of the Company in Sweden. The exercise price of such options was
payable by the issuance of a note from the optionees for the exercise price, and the underlying
shares were intended to be restricted until the note for the exercise price was paid by the
optionees. The Company issued certificates for such shares to the optionees at the time of
exercise of the options, which coincided with the time the optionees signed notes for the exercise
price rather than when they paid off the notes. Because the options remained out of the money, the
optionees never paid the notes for the exercise price of such options. Such shares remain
outstanding.
