SECURITIES PURCHASE AGREEMENT
Exhibit
10.1
SECURITIES
PURCHASE AGREEMENT
(the
"Agreement"),
dated
as of November 22 2006, by and among Discovery Laboratories, Inc., a Delaware
corporation, with headquarters located at 0000 Xxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx, XX 00000 (the "Company")
and
Capital Ventures International, a Cayman Islands company (the "Buyer").
WHEREAS:
A. The
Company and the 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. The
Buyer
wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, 4,629,630 shares (the “Common
Shares”)
of the
Common Stock, par value $0.001 per share, of the Company (the "Common
Stock")
(ii) a
warrant to acquire up to 2,314,815 additional shares of Common Stock, in
substantially the form attached hereto as Exhibit
A
(as
exercised, collectively, the "Warrant
Shares").
C. Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in
the
form attached hereto as Exhibit
B
(the
"Registration
Rights Agreement")
pursuant to which the Company has agreed to provide certain registration rights
with respect to the Common Shares, and the Warrant Shares under the 1933 Act
and
the rules and regulations promulgated thereunder, and applicable state
securities laws.
D. The
Common Shares, the Warrant and the Warrant Shares collectively are referred
to
herein as the "Securities".
NOW,
THEREFORE,
the
Company and the Buyer hereby agree as follows:
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1.
|
PURCHASE
AND SALE OF COMMON SHARES AND
WARRANT
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(a) Purchase
of Common Shares and Warrant.
Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 6 and
7
below, the Company shall issue and sell to the Buyer, and the Buyer agrees
to
purchase from the Company on the Closing Date (as defined below), the number
of
Common Shares, along
with the Warrant to acquire up to that number of Warrant Shares as is set forth
above (the "Closing").
The
Closing shall occur on the Closing Date at the offices of Xxxxxxxxx Xxxxxxx
LLP
at 1177 Avenue of the Americas, 00xx Xxxxx, Xxx Xxxx, XX 00000-0000, or at
such
other location as may be mutually agreed upon by the parties
(b) Purchase
Price.
The
purchase price for the Common Shares and related Warrant to be purchased by
the
Buyer at the Closing shall be $10,000,000 (the "Purchase
Price").
(c) Closing
Date.
The
date and time of the Closing (the "Closing
Date")
shall
be 10:00 a.m., New York City Time, on the date hereof (or such other date and
time as is mutually agreed to by the Company and the Buyer).
(d) Form
of Payment.
On the
Closing Date, (i) the Buyer shall pay its respective Purchase Price to the
Company for the Common Shares and Warrant to be issued and sold to the 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 the Buyer (A) one or more stock certificates, free and clear of all
restrictive and other legends (except as expressly provided in Section 2(h)
hereof), evidencing the number of Common Shares the Buyer is purchasing and
(B)
a Warrant pursuant to which the Buyer shall have the right to acquire the number
of Warrant Shares, in all cases duly executed on behalf of the Company and
registered in the name of the Buyer.
2. BUYER'S
REPRESENTATIONS, WARRANTIES AND COVENANTS.
The
Buyer
represents and warrants that:
(a) Organization
and Qualification.
Buyer
is duly organized and validly existing in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate power
and authorization to enter into and perform its obligations under this
Agreement, the Registration Rights Agreement, the Irrevocable Transfer Agent
Instructions (as defined in Section 5), the Warrant and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the "Transaction
Documents").
(b) No
Public Sale or Distribution.
The
Buyer is (i) acquiring the Common Shares and the Warrant and (ii) upon exercise
of the Warrant will acquire the Warrant Shares issuable upon exercise thereof,
in the ordinary course of business for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the 1933 Act
and
the Buyer does not have a present arrangement to effect any distribution of
the
Securities to or through any person or entity; provided,
however,
that by
making the representations herein, the Buyer does not agree to hold any of
the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.
(c) Accredited
Investor Status.
The
Buyer is an "accredited investor" as that term is defined in Rule 501(a) of
Regulation D. Buyer hereby represents that (i) Buyer was contacted regarding
the
sale of the Securities by the Agent (as defined below) or the Company (or an
authorized agent or representative thereof) with whom Buyer had a prior
substantial pre-existing relationship and (ii) no Securities were offered or
sold to it by means of any form of general solicitation or general advertising,
and in connection therewith, Buyer did not: (X) receive or review any
advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio whether
closed circuit, or generally available; or (Y) attend any seminar meeting or
industry investor conference whose attendees were invited by any general
solicitation or general advertising. Buyer is not itself a “broker” or a
“dealer” as defined in the Securities Exchange Act of 1934, as amended (the
"1934
Act")
and is
not an “affiliate” of the Company as defined in Rule 405 promulgated under the
Securities Act.
2
(d) Reliance
on Exemptions.
The
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 the Buyer's compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
the Buyer set forth herein in order to determine the availability of such
exemptions and the eligibility of the Buyer to acquire the
Securities.
(e) Information.
The
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 the Buyer.
The Buyer and its advisors, if any, have been afforded the opportunity to ask
questions of the Company. Neither such inquiries nor any other due diligence
investigations conducted by the Buyer or its advisors, if any, or its
representatives shall modify, amend or affect the Buyer's right to rely on
the
Company's representations and warranties contained herein. The Buyer understands
that its investment in the Securities involves a high degree of risk and is
able
to afford a complete loss of such investment. The 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.
The Buyer has not relied on any information or advice furnished by or on behalf
of the Agent in connection with the transactions contemplated
hereby.
(f) No
Governmental Review.
The
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.
The
Buyer understands that except as provided in the Registration Rights Agreement:
(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) the Buyer shall
have delivered to the Company an opinion of counsel, 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) the 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, as amended,
(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 in Section 3(r)) 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 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. Notwithstanding the foregoing, the Securities may be
pledged in connection with a bona fide margin account or other loan secured
by
the Securities and such pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, 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, including, without limitation, this Section
2(g); provided, that in order to make any sale, transfer or assignment of
Securities, the Buyer and its pledgee makes such disposition in accordance
with
or pursuant to a registration statement or an exemption under the 1933
Act.
3
(h) Legends.
The
Buyer understands that the certificates or other instruments representing the
Common Shares and the Warrant and, until such time as the resale of the Common
Shares and the Warrant Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Warrant Shares, except as set forth below, 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 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, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION
IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 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.
(i) Validity;
Enforcement.
This
Agreement and the Registration Rights Agreement have been duly and validly
authorized, executed and delivered on behalf of the Buyer and shall constitute
the legal, valid and binding obligations of the Buyer enforceable against the
Buyer in accordance with their respective terms, except
as
rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, except
as
such enforceability may be limited by general principles of equity,
including as to limitations on the enforcement of the remedy of specific
performance and other equitable remedies (regardless of whether such
enforceability is considered in a proceeding in equity or at law),
or to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' and contracting parties’ rights and remedies. The persons
signing on behalf of Buyer hereby warrant and represent that they have the
authority to execute and deliver this Agreement on behalf of Buyer.
4
(j) No
Conflicts.
The
execution, delivery and performance by the Buyer of this Agreement and the
Registration Rights Agreement and the consummation by the Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of the 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 the 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 the 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 the Buyer to perform its obligations
hereunder.
(k) Residency.
The
Buyer is a resident of the Cayman Islands.
(l)
Illegal Transactions.
The
Buyer has not,
directly or indirectly, and no Person acting on behalf of or pursuant to any
understanding with the Buyer, has engaged in any transactions in the securities
of the Company (including, without limitation, any Short Sales involving any
of
the Company’s securities) since the time that the Buyer was first contacted by
the Company or the Agent regarding the investment in the Company contemplated
by
this Agreement. The Buyer covenants that neither it nor any Person acting on
its
behalf or pursuant to any understanding with the Buyer will engage, directly
or
indirectly, in any transactions in the securities of the Company (including
Short Sales) prior to the time the transactions contemplated by this Agreement
are publicly disclosed. “Short
Sales” include,
without limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect
stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps,
derivatives and similar arrangements (including on a total return basis), and
sales and other transactions through non-U.S. broker-dealers or foreign
regulated brokers.
(m) No
Brokers.
Buyer
represents and warrants that it has not “engaged,” “consented to” or
“authorized” any broker, finder or intermediary to act on its behalf, directly
or indirectly, as a broker, finder or intermediary in connection with the
transactions contemplated by this Agreement. Buyer agrees to indemnify and
hold
harmless the Company from and against all fees, commissions or other payments
owing to any such person or firm acting on behalf of Buyer. Buyer acknowledges
that the Agent is acting as placement agent of the Company in connection with
the Offering and will be compensated by the Company for acting in such
capacity.
(n) Reliance
on Representations.
The
Buyer acknowledges that the Company and its counsel are entitled to rely on
the
representations and warranties made herein and otherwise requested by the
Company for use in preparation of the Registration Statement to be filed by
the
Company pursuant to Registration Rights Agreement. All such information shall
be
true, correct and complete as of the date of this Agreement, the Closing Date
and the filing date for any such Registration Statement. The Buyer will notify
the Company of any change in any such information until such time as the Company
is no longer required to keep the Registration Statement effective.
5
(o) Pre-existing
Registration Rights.
The
Buyer acknowledges that holders of 500,000 shares of the Company’s Common Stock
that have been previously issued by the Company, or are issuable by the Company
upon the exercise of certain warrants, may have certain “piggyback” and or
“demand” registration rights and may elect to exercise such rights in connection
with any registration statement to be filed by the Company pursuant to the
Registration Rights Agreement, and that the exercise of any such rights, and
the
performance by the Company of its obligations in connection therewith shall
not
be a violation of the terms of this Agreement and the Registration Rights
Agreement.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to the Buyer that:
(a) Organization
and Qualification.
Each of
the Company and its "Subsidiaries"
(which
for purposes of this Agreement means any entity (i) in which the Company,
directly or indirectly, owns capital stock or holds an equity or similar
interest and (ii) which has operations and material assets) are corporations
duly organized and validly existing in good standing under the laws of the
jurisdiction in which they are incorporated, and have the requisite corporate
power and authorization to own their properties and to carry on their business
as now being conducted. Each of the Company and its Subsidiaries is duly
qualified as a foreign corporation 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 the business, properties, assets, operations,
results of operations, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries, taken as a whole, or on the transactions
contemplated hereby and the other Transaction Documents by the agreements and
instruments to be entered into in connection herewith or therewith, or on the
authority or ability of the Company to perform its obligations under the
Transaction Documents; provided, however, that changes relating to (i) the
economy in general, (ii) the Company’s industry in general or (iii) the
Company’s working capital and liquidity shall not in itself be deemed to arise
to a Material Adverse Effect. The
Company has no subsidiaries other than its presently inactive subsidiary, Acute
Therapeutics, Inc., which has been inactive from the date of its
inception.
(b) Authorization;
Enforcement; Validity.
The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement, the Registration Rights Agreement,
the Irrevocable Transfer Agent Instructions (as defined in Section 5), the
Warrant and each of the other agreements entered into by the parties hereto
in
connection with the transactions contemplated by this Agreement (collectively,
the "Transaction
Documents")
and to
issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Common Shares and the Warrant
and the reservation for issuance and the issuance of the Warrant Shares issuable
upon exercise of the Warrant have been duly authorized by the Company's Board
of
Directors and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders. This Agreement and the other
Transaction Documents have been duly executed and delivered by the Company,
and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except
as
rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, except
as
such enforceability may be limited by general principles of equity,
including as to limitations on the enforcement of the remedy of specific
performance and other equitable remedies (regardless of whether such
enforceability is considered in a proceeding in equity or at law),
or to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' and contracting parties’ rights and remedies.
6
(c) Issuance
of Securities.
The
Common Shares and the Warrant are duly authorized and, upon issuance in
accordance with the terms hereof and receipt by the Company of the Purchase
Price therefor, shall be validly issued and free from all taxes, liens and
charges (other
than arising under federal or state securities or “blue sky” laws and
regulations) with
respect to the issue thereof and the Common Shares shall be fully paid and
nonassessable with the holders being entitled to all rights accorded to a holder
of Common Stock. As of the Closing Date, the Company shall have duly authorized
and reserved for issuance a number of shares of Common Stock which equals the
number of Warrant Shares. The Company shall, so long as any portion of the
Warrant is outstanding, take all action necessary to reserve and keep available
out of its authorized and unissued Capital Stock, solely for the purpose of
effecting the exercise of the Warrant, 100% of the number of shares of Common
Stock issuable upon exercise of the Warrant (subject to reduction from time
to
time for Common Stock issued upon exercise of the Warrant). Upon exercise in
accordance with the Warrant, the Warrant Shares will be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof (other
than arising under federal or state securities or “blue sky” laws and
regulations),
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 Buyer contained in
Section 2 of this Agreement, issuance
by the Company of the Securities
contemplated by this Agreement are exempt from the registration requirements
of
the 1933 Act.
(d) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby
and
thereby (including, without limitation, the issuance of the Common Shares and
Warrant and reservation for issuance and issuance of the Warrant Shares) will
not (i) result in a violation of the Certificate of Incorporation (as defined
below) or Bylaws (as defined below) of the Company or any of its Subsidiaries
or
(ii) conflict with, or constitute a default (or an event which with notice
or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any material
agreement, 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 federal and state securities
laws and regulations and the rules and regulations of the Principal Market)
applicable to the Company or 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 clauses (ii) and (ii), above, for such matters
which, either individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
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(e) Consents.
Except
for
the filing of a Notice of Additional Listing with NASDAQ (which the Company
will
file with NASDAQ no later than the Closing Date), registration of the Common
Shares and the Warrant Shares issuable upon exercise of the Warrant under the
Securities Act, the listing of the Common Shares and the Warrant Shares on
the
Nasdaq Global Market and such consents, notifications, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities or “blue sky” laws in connection
with the purchase of the Securities by Buyer,
the
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, 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 obligations under or contemplated by
the
Transaction Documents, in each case in accordance with the terms hereof or
thereof. The Company and its Subsidiaries are unaware of any facts or
circumstances that might prevent the Company from obtaining or effecting any
of
the registration, application or filings pursuant to the preceding sentence.
Except for such matters
that, either individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect, the
Company is not in violation of the listing requirements of the Principal Market
and has no knowledge of any facts that would 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 the Buyer is acting solely in the capacity
of arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that the Buyer is not (i)
an
officer or director of the Company, (ii) an "affiliate" of the Company (as
defined in Rule 144) or (iii) to the Knowledge of the Company (defined below),
a
"beneficial owner" of more than 10% of the 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 the Buyer is not acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby,
and
any advice given by the 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 the Buyer's purchase of the
Securities. The Company further represents to the Buyer that the Company's
decision to enter into the Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives. For the purposes
of this Agreement, the term “Knowledge of the Company” shall mean the knowledge,
after due inquiry, of the President and Chief Executive Officer, the Chief
Financial Officer, the Executive Vice President and General Counsel and any
other Executive Vice Presidents or persons holding comparable positions in
the
Company.
(g) No
General Solicitation; Placement Agent's Fees.
Neither
the Company, nor any of its affiliates, nor, to the Knowledge of the Company,
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 for any placement agent, financial advisor or
broker engaged by the Company or its affiliates or acting on behalf of the
Company relating to or arising out of the transactions contemplated hereby.
The
Company shall pay, and hold the Buyer harmless against, any fees, commissions
or
other payments or related expense (including, without limitation, attorney's
fees and out-of-pocket expenses) arising in connection with any such claim.
The
Company has engaged Jefferies & Co. as placement agent in connection with
the sale of the Securities (the "Agent").
Other
than the Agent, the Company has not engaged any placement agent or other agent
in connection with the sale of the Securities.
8
(h) No
Integrated Offering.
None of
the Company, its Subsidiaries, any of their affiliates, and any Person acting
on
their behalf has taken any action to sell, offer for sale or solicit offers
to
buy any securities of the Company which would require registration of any of
the
Securities under Section 5 of the 1933 Act, unless such offer, issuance or
sale
was or shall be within the exemptions of Section 4 of the 1933 Act. The
Company
has offered securities for sale only to “accredited investors” within the
meaning of Rule 501 under the Securities Act. The Company is not required to
obtain stockholder approval of the transactions contemplated by this Agreement
under the listing or maintenance requirements of the Primary Market. None of
the
Company, its Subsidiaries, their affiliates and any Person acting on their
behalf will take any action or steps that would require registration of any
of
the Securities under the 1933 Act or cause the offering of the Securities to
be
integrated with other offerings, for purposes of the 1933 Act or the
requirements of the Principal Market.
(i) 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, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the State of Delaware which is or could become applicable to
the
Buyer as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company's issuance of the Securities and the Buyer's
ownership of the Securities.
(j) SEC
Documents; Financial Statements.
During
the two 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 or prior to the date of the
Closing, and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the "SEC
Documents").
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 they were made, not misleading. The
Company’s Subsidiary is not required to file any reports or other documents with
the SEC. 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. Such financial statements have been prepared
in
accordance with United States 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). With respect to the transactions contemplated by this Agreement,
none of the information referred to in Section 2(d) of this Agreement provided
by or on behalf of the Company to the Buyer which is not included in the SEC
Documents contains any untrue statement of a material fact or omits to state
any
material fact necessary in order to make the statements therein, in the light
of
the circumstance under which they are or were made, not misleading.
9
(k) Absence
of Certain Changes.
Except
as disclosed in the
SEC
Documents and Schedule
3(k),
since
September 30, 2006, there has been no material adverse change and no material
adverse development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company
or
its Subsidiaries. Except as disclosed in the SEC Documents and Schedule
3(k),
since
September 30, 2006, the Company has not (i) declared or paid any dividends,
(ii)
sold any assets, individually or in the aggregate, in excess of $500,000 outside
of the ordinary course of business or (iii) had capital expenditures,
individually or in the aggregate, in excess of $500,000. The Company has not
taken any steps to seek protection pursuant to any bankruptcy law nor does
the
Company have any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings or any actual knowledge of any
fact
which would reasonably lead a creditor to do so.
(l) No
Undisclosed Events, Liabilities, Developments or Circumstances.
Except
for the transactions contemplated by this Agreement, no material event,
liability, development or circumstance has occurred or exists with respect
to
the Company or its Subsidiaries or their respective business, properties,
prospects, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws on a registration
statement on Form S-1 filed with the SEC relating to an issuance and sale by
the
Company of its Common Stock and which has not been publicly
announced.
(m) Conduct
of Business; Regulatory Permits.
Neither
the Company nor its Subsidiaries is in violation of any term of or in default
under the Certificate of Incorporation or Bylaws or their organizational charter
or bylaws, respectively. To the Knowledge of the Company, neither the Company
nor any Subsidiary is in violation of any judgment, decree or order or any
statute, ordinance, rule or regulation applicable to the Company or its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation of any of the foregoing, except for possible
violations which would not, individually or in the aggregate, have a Material
Adverse Effect. Without limiting the generality of the foregoing, to the
Knowledge of the Company, the Company is not in violation in any material
respect of any of the rules, regulations or requirements of the Principal Market
and the Company has no Knowledge of any facts or circumstances that would
reasonably lead to delisting or suspension of the Common Stock by the Principal
Market in the foreseeable future. Since December 31, 2005, (i) the Common Stock
has been designated for quotation or listed on the Principal Market, (ii)
trading in the Common Stock has not been suspended by the SEC or the Principal
Market and (iii) except as disclosed in Schedule
3(m),
the
Company has received no communication, written or oral, from the SEC or the
Principal Market regarding the violation of a Nasdaq Marketplace Rule or the
suspension or delisting of the Common Stock from the Principal Market. The
Company and its Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state or foreign 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, to the
Knowledge of the Company, 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.
10
(n) Foreign
Corrupt Practices.
To the
Knowledge of the Company, neither the Company, nor any of its Subsidiaries,
nor
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 knowingly and intentionally (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 government official or employee.
(o) Xxxxxxxx-Xxxxx
Act.
The
Company is in compliance with all applicable provisions 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, except where such noncompliance would not reasonably be expected
to
have, individually or in the aggregate, a Material Adverse Effect.
(p) Transactions
With Affiliates.
Except
as set forth in the SEC Documents, none of the officers, directors or employees
of the Company 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, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee or partner.
(q) Equity
Capitalization.
As of
November 16, 2006, the authorized capital stock of the Company consists of
180
million shares of Common Stock and 5 million shares of Preferred Stock, of
which
(i) 64,949,901 shares are issued and outstanding, 11,207,822 shares are reserved
for issuance pursuant to the Company's stock option (of which 9,472,786 relate
to outstanding options), 4,210,203 shares are reserved for issuance pursuant
to
securities (other than the aforementioned options and the Warrant) exercisable
or exchangeable for, or convertible into, shares of Common Stock, and 362,972
shares are reserved for issuance pursuant to the Company’s 401(k) Plan. All such
outstanding shares have been validly issued and are fully paid and
nonassessable. Except as disclosed in Schedule
3(q)
or as
described in or contemplated by the SEC Documents: (i) none of the Company's
capital stock is subject to preemptive rights or any other similar rights or
any
liens or encumbrances suffered or permitted by the Company; (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) except for Indebtedness of the
Company incurred in the ordinary course of business of the Company, which in
the
aggregate would not reasonably be expected to have a Material Adverse Effect,
there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing material
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) except for
financing statements related to Indebtedness of the Company described in the
SEC
Documents, there are no financing statements securing obligations in any
material amounts, either singly or in the aggregate, filed in connection with
the Company or any of its Subsidiaries; (v) there are no material 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) the Company does not have any stock appreciation rights
or "phantom stock" plans or agreements or any similar plan or agreement; and
(ix) the Company and its Subsidiaries have no material liabilities or
obligations required to be disclosed in the SEC Documents but 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, would not reasonably be expected to have a Material Adverse
Effect.
11
(r) Indebtedness
and Other Contracts.
Except
as disclosed in or contemplated by the SEC Documents or on Schedule
3(r),
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 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 and a government or any
department or agency thereof.
12
(s) Absence
of Litigation.
Except
as described in the SEC Documents, there are no actions, suits, proceedings,
inquiries or investigations 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,
the
Common Stock or any of its Subsidiaries or any of the Company's or the Company's
Subsidiary's officers or directors, whether of a civil or criminal nature or
otherwise, which, individually or in the aggregate, might reasonably be expected
to have a Material Adverse Effect.
(t) 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 Subsidiary has received any notice or obtained any Knowledge of
circumstances indicating that they will not be able to renew their existing
insurance coverage (modified to the extent deemed prudent and customary by
the
management of the Company) 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 is commercially reasonable and not reasonably likely
to
result in a Material Adverse Effect.
(u) Employee
Relations.
The
Company and its Subsidiaries believe that their relations with their employees
are good. No executive officer of the Company (as defined in Rule 501(f) of
the
0000 Xxx) has notified the Company that such officer intends to leave the
Company or otherwise terminate such officer's employment with the Company.
No
executive officer of the Company, to the Knowledge of the Company, 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 restrictive covenant to which the Company
and
such executive are parties, and, to the Knowledge of the Company, the continued
employment of each such executive officer 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 employment and employment
practices, 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.
13
(v) Title.
Except
as described in or contemplated by the SEC Documents, the Company and its
Subsidiaries have good and marketable title to all personal property owned
by
them which is material to their respective business, 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 and 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 and its
Subsidiaries. The Company owns no real property.
(w) Intellectual
Property Rights.
The
Company owns or licenses all the proprietary rights ("Intellectual
Property Rights")
which
are necessary for the business of the Company as now conducted. The Company
does
not have any Knowledge of any infringement by the Company or its Subsidiaries
of
Intellectual Property Rights of others. To the Knowledge of the Company, there
is no claim, action or proceeding being made, brought or threatened against
the
Company or any of its Subsidiaries regarding its Intellectual Property Rights.
The Company has no Knowledge of any facts or circumstances which might give
rise
to any of the foregoing infringements or claims, actions or proceedings. The
Company and its Subsidiaries have taken commercially reasonable measures to
protect the secrecy, confidentiality and value of all of their Intellectual
Property Rights.
(x) Environmental
Laws.
To the
Knowledge of the Company, the Company and its Subsidiaries (i) are in compliance
with any and all Environmental Laws (as hereinafter defined), (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 be reasonably expected to have, individually or in the aggregate,
a
Material Adverse Effect. The term "Environmental
Laws"
means
all federal, state or local 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.
14
(y) Tax
Status.
The
Company and each of its Subsidiaries (i) has made or timely filed all federal
and material state income and other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has 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 any taxes payable for periods subsequent
to the periods to which such returns, reports or declarations apply. To the
Knowledge of the Company, there are no unpaid taxes in any material amount
claimed to be due and payable by the taxing authority of any jurisdiction and
no
factual basis for any such claim.
(z) Internal
Accounting and Disclosure Controls.
The
Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles (GAAP)
and to maintain asset accountability, (iii) access to assets is permitted only
in accordance with management's general or specific authorization and (iv)
the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
difference. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-14 under the 0000 Xxx) that are designed to ensure
that information required to be disclosed by the Company in the reports that
it
files or submits under the 1934 Act (i) is recorded, processed, summarized
and
reported, within the time periods specified in the rules and forms of the SEC,
and (ii) 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.
(aa) Form
S-3 Eligibility.
The
Company is eligible to register the Common Shares and the Warrant Shares for
resale by the Buyer using Form S-3 promulgated under the 1933 Act.
(bb) Off
Balance Sheet Arrangements.
There
is no transaction, arrangement, or other relationship between the Company and
an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its Exchange Act filings and is not so disclosed
and
that would be reasonably likely to have a Material Adverse Effect.
(cc) Manipulation
of Price.
The
Company has not, and, to the Knowledge of the Company, no one acting on its
behalf has, (i) taken, directly or indirectly, 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 Agents' placement of the Securities,
or
(iii) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(dd) 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 sale and transfer
of
the Securities to be sold to the 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.
15
(ee) Disclosure.
The
Company confirms that, with the exception of the transactions contemplated
by
this Agreement, neither it nor, to the Knowledge of the Company, any other
Person acting on its behalf has provided the Buyer or its agents or counsel
with
any information that constitutes material, nonpublic information. The Company
understands and confirms that the Buyer will rely on the foregoing
representations in effecting transactions in securities of the Company. All
disclosure provided by the Company to the Buyer regarding the Company, its
business and the transactions contemplated hereby, including the Schedules
to
this Agreement, furnished by or on behalf of the Company are true and correct
and do not contain any untrue statement of a material fact or omit to state
any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. To the
Knowledge of the Company, no event or circumstance has occurred or information
exists with respect to the Company or any Subsidiary or either of its or their
respective business, properties, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed (assuming for this purpose that the Company's reports filed under
the
Exchange Act of 1934, as amended, are being incorporated into an effective
registration statement filed by the Company under the 1933 Act). The Company
acknowledges and agrees that the Buyer does not make and has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in the Transaction
Documents.
(ff) Acknowledgement
Regarding Buyer's Trading Activity.
Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
but subject to compliance by the Buyer with applicable law, it is understood
and
acknowledged by the Company (i) that the Buyer has not been asked to agree,
nor
has the Buyer agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or "derivative" securities based on securities issued
by the Company or to hold the Securities for any specified term; (ii) that
past
or future open market or other transactions by the Buyer, including, without
limitation, short sales or "derivative" transactions, before or after the
closing of this or future private placement transactions, may negatively impact
the market price of the Company's publicly-traded securities; (iii) that the
Buyer, and counter parties in "derivative" transactions to which the Buyer
is a
party, directly or indirectly, presently may have a "short" position in the
Common Stock, and (iv) that the Buyer shall not be deemed to have any
affiliation with or control over any arm's length counter-party in any
"derivative" transaction. The Company further understands and acknowledges
that
(a) the Buyer may engage in hedging activities at various times during the
period that the Securities are outstanding and (b) such hedging activities
(if
any) could reduce the value of the existing stockholders' equity interests
in
the Company at and after the time that the hedging activities are being
conducted.
(gg) No
Implied Representations.
All of
the Company’s representations and warranties are contained in this Agreement,
and no other representations or warranties by the Company shall be
implied.
16
4. COVENANTS.
(a) Best
Efforts.
Each
party shall use its best efforts timely to satisfy each of the covenants and
the
conditions to be satisfied by it as provided in Sections 5, 6 and 7 of this
Agreement.
(b) Form
D
and Blue Sky.
The
Company agrees to file a Form D with respect to the Securities as required
under
Regulation D and to provide a copy thereof to the Buyer promptly after such
filing. The Company, on or before the Closing Date, shall 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 Buyer 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 Buyer on or prior
to the Closing Date. The Company shall make all 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 only in such jurisdictions
as
Buyer shall reasonably request following the Closing Date.
(c) Reporting
Status.
Until
the date which is the later of the date on which (i) the Investor (as
defined in the Registration Rights Agreement) shall have sold all the Common
Shares and Warrant Shares and
the
Warrant is no longer outstanding or (ii) the Company is no longer obligated
under the Registration Rights Agreement to maintain the registration statement
filed thereunder (the "Reporting
Period"),
the
Company shall timely file all reports required to be filed with the SEC pursuant
to the 1934 Act, and 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 otherwise permit such termination.
(d) Use
of
Proceeds.
The
Company will use substantially all of the proceeds from the sale of the
Securities for purposes set forth in the Registration Statement to be filed
by
the Company pursuant to the Registration Rights Agreement but in no event for
(i) the repayment of any outstanding Indebtedness of the Company or any of
its
Subsidiaries or (ii) the redemption or repurchase of any of its or its
Subsidiaries' equity securities.
(e) Financial
Information.
The
Company agrees to send the following to each Investor during the Reporting
Period (i) unless the following are filed with the SEC through XXXXX and are
available to the public through the XXXXX system, within one (1) Business Day
after the filing thereof with the SEC, a copy of its Annual Reports on Form
10-K, its Quarterly Reports on Form 10-Q, 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, and (ii) to the extent not filed with the SEC
through XXXXX, 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. As used herein,
"Business
Day"
means
any day other than Saturday, Sunday or other day on which the Primary Market
or
commercial banks in The City of New York are authorized or required by law
to
remain closed.
(f) Listing.
The
Company shall promptly secure the listing of all of the Registrable Securities
(as defined in the Registration Rights Agreement) upon each national securities
exchange and automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all Registrable Securities from time to time issuable under the
terms
of the Transaction Documents. The Company shall maintain the Common Stock's
authorization for listing on the Principal Market. Neither the Company nor
any
of its Subsidiaries shall take any action which would be reasonably expected
to
result in the delisting or suspension of the Common Stock on the Principal
Market. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 4(f).
17
(g) Fees.
Subject
to Section 8 below, at the Closing the Company shall pay an expense allowance
to
the Buyer or its designee(s) in an amount equal to $15,000 (reduced by the
amount of any deposit heretofore paid) to cover the costs, fees and expenses
incurred in connection with the preparation, execution and performance of this
Agreement and the transactions contemplated hereunder, which amount shall be
withheld by Buyer from the Purchase Price at the Closing. The Company shall
be
responsible for the payment of any fees or commissions due to any placement
agent, financial advisor, or broker engaged by Buyer relating to or arising
out
of the transactions contemplated hereby, including, without limitation, any
fees
payable to the Agent.
(h) Pledge
of Securities.
The
Company acknowledges and agrees that the Securities may be pledged by an
Investor (as defined in the Registration Rights Agreement) in connection with
a
bona fide margin agreement or other 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, and no Investor
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, including, without limitation,
Section 2(g) of this Agreement; provided that an Investor and its pledgee shall
be required to comply with the provisions of Section 2(g) of this Agreement in
order to effect a sale, transfer or assignment of Securities to such pledgee.
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 an Investor.
(i) Disclosure
of Transactions and Other Material Information.
The
Company shall, on or before 8:30 a.m., New York City Time, no later than
the first Business Day after the date of this Agreement, issue a press release
(the "Press
Release")
disclosing the material terms of the transactions contemplated hereby. The
Company shall provide the Buyer an advance copy of the Press Release and agrees
to consider comments that the Buyer may provide but shall nevertheless be
entitled to make such disclosure as it deems appropriate to meet its disclosure
obligations under the 34 Act. On
or
before 8:30 a.m., New York City Time, no later than the third Business Day
following the Closing Date, the Company shall file a Current Report on Form
8-K
describing the terms of the transactions contemplated by the Transaction
Documents in the form required by the 1934 Act, and attaching the material
Transaction Documents (including, without limitation, this Agreement (without
the schedules), the form of Warrant and the Registration Rights Agreement)
as
exhibits to such filing (including all attachments, the "8-K
Filing").
From
and after the issuance of the Press Release, the Buyer shall not be in
possession of any material, nonpublic information received from the Company,
any
of its Subsidiaries or any of its respective officers, directors, employees
or
agents, that is not disclosed in the Press Release. The Company shall not,
and
shall cause each of its Subsidiaries and each of their respective officers,
directors, employees and agents, not to, provide the Buyer with any material,
nonpublic information regarding the Company or any of its Subsidiaries from
and
after the filing of the Press Release without the express written consent of
the
Buyer pursuant to a Confidentiality and Nondisclosure Agreement.
18
(j) Reservation
of Shares.
The
Company shall at all times have authorized, and reserved for the purpose of
issuance, from and after the Closing Date, the number of shares of Common Stock
issuable upon exercise of the Warrant being issued at the Closing (reduced
from
time to time by the number of shares of Common Stock that shall have been
previously exercised under the Warrant) in conformity with
Section 3(c).
(k) Conduct
of Business.
The
Company shall use commercially reasonable efforts to conduct its business to
avoid violations of any law, ordinance or regulation of any governmental entity,
except where such violations would not, either individually or in the aggregate,
be reasonably expected to result in a Material Adverse Effect.
(l) Additional
Issuances of Securities.
(i)For
purposes of this Section 4(m), the following definitions shall
apply.
"Convertible
Securities"
means
any stock or securities (other than Options) convertible into or exercisable
or
exchangeable for shares of Common
Stock.
"Options"
means
any rights, warrants or options to subscribe for or purchase shares of
Common
Stock or
Convertible Securities.
"Common
Stock Equivalents"
means,
collectively, Options and Convertible Securities.
(ii)From
the
date hereof until the date that is the later of (A) seventy-five (75) days
from
the Closing Date and (b) the Effective Date (as defined in the Registration
Rights Agreement) (the "Trigger
Date"),
other
than in respect of the shares described on Schedule 4(m), the Company will
not,
directly or indirectly, file any registration statement with the SEC other
than
the Registration statement (as defined in the Registration Rights Agreement).
From the date hereof until the Trigger Date, the Company will not, other than
with respect to the transactions described on Schedule 4(m), directly or
indirectly, offer, sell, grant any option to purchase, or otherwise dispose
of
(or announce any offer, sale, grant or any option to purchase or other
disposition of) any of its or its Subsidiaries' equity or equity equivalent
securities, including without limitation any debt, preferred stock or other
instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock or Common Stock Equivalents (any such offer, sale, grant,
disposition or announcement being referred to as a "Subsequent
Placement").
19
5. TRANSFER
RESTRICTIONS; TRANSFER AGENT INSTRUCTIONS.
(a) Transfer
Restrictions.
The
legend set forth in Section 2(h) shall be removed and the Company shall issue
a
certificate without such legend or any other legend to the holder of the
applicable Securities upon which the legend is stamped, if (i) such Securities
are registered for resale under the 1933 Act, (ii) in connection with a sale,
assignment or other transfer, such holder provides the Company with an opinion
of counsel, in a generally acceptable form, to the effect that such sale,
assignment or transfer of such Securities may be made without registration
under
the applicable requirements of the 1933 Act, or (iii) such holder provides
the
Company with reasonable assurance (in form acceptable to the Company) that
such
Securities can be sold, assigned or transferred pursuant to Rule
144.
The
Company shall use commercially reasonable efforts to cause Company Counsel
(as
defined below) to issue the legal opinion included in the Irrevocable Transfer
Agent Instructions to the Company’s transfer agent within five business days of
the Effective Date. Following the Effective Date or at such earlier time as
a
legend is no longer required for certain Securities, the Company will no later
than five Business Days following the delivery by the Buyer to the Company
or
the Company’s transfer agent of a legended certificate representing such
Securities, instruct its transfer agent to deliver to the Buyer a certificate
representing such Securities that is free from all restrictive and other
legends. The Company shall pay all transfer agent and related fees in connection
with such issuance and provided
that the Transfer Agent is participating in The Depository Trust Company
("DTC")
Fast
Automated Securities Transfer Program, upon the request of the Buyer, deliver
such shares to the Buyer's or its designee's balance account with DTC through
its Deposit Withdrawal Agent Commission system. Following
the Effective Date and upon the delivery to the Buyer of any certificate
representing Securities that is free from all restrictive and other legends,
the
Buyer agrees that any sale of such Securities shall be made pursuant to the
Registration Statement and in accordance with the plan of distribution described
therein or pursuant to an available exemption from the registration requirements
of the 0000 Xxx. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in Section 2(h).
(b) Transfer
Agent Instructions.
The
Company shall issue irrevocable instructions to its transfer agent, and any
subsequent transfer agent, to issue certificates or credit shares to the
applicable balance accounts at DTC, registered in the name of the Buyer or
its
respective nominee(s), for the Warrant Shares in
such
amounts as specified from time to time by the Buyer to the Company upon exercise
of the Warrant (and payment in full for the Warrant Shares) in the form of
Exhibit
C
attached
hereto (the "Irrevocable
Transfer Agent Instructions").
The
Company represents and warrants that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 5, 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 and to the extent provided in this Agreement and the other Transaction
Documents.
(c) Breach.
The
Company acknowledges that a breach by it of its obligations under this Section
5
will cause irreparable harm to the Buyer. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 5
will
be inadequate and agrees, in the event of a breach or threatened breach by
the
Company of the provisions of this Section 5, that the Buyer shall be entitled,
in addition to all other available remedies, to 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.
20
6. CONDITIONS
TO THE COMPANY'S OBLIGATION TO SELL.
The
obligation of the Company hereunder to issue and sell the Common Shares and
the
related Warrant to the 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 the Buyer with prior
written notice thereof:
(a)
The
Buyer shall have executed each of the Transaction Documents to which it is
a
party and delivered the same to the Company.
(b)
The
Buyer shall have delivered to the Company the Purchase Price, less the amounts
withheld pursuant to Section 4(g), for the Common Shares and the related Warrant
being purchased by the Buyer at the Closing by wire transfer of immediately
available funds pursuant to the wire instructions provided by the
Company.
(c) The
representations and warranties of the Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as
of a
specific date), and the 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 the Buyer at
or
prior to the Closing Date.
7. CONDITIONS
TO BUYER'S OBLIGATION TO PURCHASE.
The
obligation of the Buyer to purchase the Common Shares and the related Warrant
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
Buyer's sole benefit and may be waived by the Buyer at any time in its sole
discretion by providing the Company with prior written notice
thereof:
(a) The
Company shall have executed and delivered to the Buyer (i) each of the
Transaction Documents and (ii) the Common Shares (in such amounts as the Buyer
shall request) and
the
related Warrant (in such amounts as the Buyer shall request) being purchased
by
the Buyer at the Closing pursuant to this Agreement.
(b) The
Company shall have delivered to the Buyer a copy of the Irrevocable Transfer
Agent Instructions, in the form of Exhibit
C
attached
hereto, which instructions shall have been delivered to and acknowledged in
writing by the Company's transfer agent.
(c)
The
Common Stock (I) shall be 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
listing maintenance requirements of the Principal Market.
21
(d) The
Company shall have delivered to the Buyer a certificate, 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 the Buyer, (ii) the Certificate
of
Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the
form attached hereto as Exhibit
E.
(e)
The
representations and warranties of the Company shall be true and correct as
of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date)
and
the Company shall have performed, satisfied and complied in all respects with
the covenants, agreements and conditions required by the Transaction Documents
to be performed, satisfied or complied with by the Company at or prior to the
Closing Date. The Buyer shall have received a certificate, 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 the Buyer
in the form attached hereto as Exhibit
F.
(f) The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the sale of the Common Shares and the
Warrant.
(g) The
Company shall have delivered to the Buyer such other documents relating to
the
transactions contemplated by this Agreement as the Buyer or its counsel may
reasonably request.
8. TERMINATION.
In
the
event that the Closing shall not have occurred with respect to a Buyer on or
before five (5) days from the date hereof due to the Company's or the Buyer's
failure to satisfy the conditions set forth in Sections 6 and 7 above (and
the
nonbreaching party's failure to waive such unsatisfied condition(s)), the
nonbreaching party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on such date without
liability of any party to any other party.
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, 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, 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.
22
(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;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if
the
signature were an original, not a facsimile signature.
(c) Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(d) Severability.
If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(e) Entire
Agreement; Amendments.
This
Agreement supersedes all other prior oral or written agreements between the
Buyer, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision
of
this Agreement may be amended other than by an instrument in writing signed
by
the Company and the Buyer. No provision hereof may be waived other than by
an
instrument in writing signed by the party against whom enforcement is sought.
No
such amendment shall be effective to the extent that it applies to less than
all
of the holders of the Common Shares then outstanding.
(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 Business Day after deposit with an overnight courier service,
in
each case properly addressed to the party to receive the same. The addresses
and
facsimile numbers for such communications shall be:
23
If
to the
Company:
Discovery
Laboratories, Inc.
0000
Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxx
X.
Xxxxxx, CFO
with
a
copy to (which shall not constitute notice):
Xxxxxxxxx
Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000-0000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attn:
Xxx
X. Xxxxx
If
to the
Transfer Agent:
Continental
Stock Transfer & Trust Company
Attn.:
Xxxx Xxxxxxxxx
00
Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx
Xxxx,
XX 00000
Telephone:
(000)
000-0000
Facsimile:
(000)
000-0000
If
to the
Buyer:
Capital
Ventures International
c/o
Heights Capital Management, Inc.
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxxxx, XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxx
Xxxxxxxx
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.
24
(g) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns.
(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, except that the Agent may
rely upon the representations and warranties contained in Sections 2 and 3
hereof.
(i) Survival.
Unless
this Agreement is terminated under Section 8, the representations and warranties
of the Company and the Buyer contained in Sections 2 and 3, the agreements
and
covenants set forth in Sections 4, 5 and 9 shall survive the Closing and the
delivery and exercise of Securities, as applicable.
(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 the 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 the Buyer, any affiliate of Buyer and
each
of their respective partners, members, officers, directors, employees and
investors and any of the foregoing Persons' accounting and legal representatives
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 in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, or (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents
or
any certificate, instrument or document contemplated hereby or thereby 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
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) No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
25
(m) Remedies.
The
Buyer shall have all rights and remedies set forth in the Transaction Documents
and all rights and remedies 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 to recover damages by reason of any breach
of
any provision of this Agreement and to exercise all other rights granted by
law.
(n) Payment
Set Aside.
To the
extent that the Company makes a payment or payments to the Buyer hereunder
or
pursuant to any of the other Transaction Documents or the Buyer enforces or
exercises its 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, 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.
[Signature
Page Follows]
26
IN
WITNESS WHEREOF,
the
Buyer and the Company have caused its respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
| COMPANY: | ||
| DISCOVERY LABORATORIES, INC. | ||
| |
|
|
| By: |
/s/
Xxxx Xxxxxx
|
|
|
Name: Xxxx Xxxxxx Title: Executive Vice President & CFO |
||
IN
WITNESS WHEREOF,
the
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
| BUYER: | ||
| CAPITAL VENTURES INTERNATIONAL | ||
| BY: Heights Capital Management, Inc., its authorized signatory | ||
| |
|
|
| By: |
/s/
Xxxxxx Xxxxxxxx
|
|
|
Name: Xxxxxx Xxxxxxxx Title: Investment Manager |
||
