Exhibit 4.4
FORM OF STOCK AND WARRANT PURCHASE AGREEMENT
Xxxxxx-Xxxx Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
The undersigned (the "Investor") hereby confirms its agreement with you as
follows:
1. This Stock Purchase Agreement (the "Agreement") is made as of the date set
forth below between Xxxxxx-Xxxx Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), and the Investor.
2. The Company has authorized the sale and issuance of up to 1.8 million
(1,800,000) shares (the "Shares") of common stock of the Company, $.01 par value
per share (the "Common Stock"), and warrants to purchase an aggregate of up to
one hundred and eighty thousand (180,000) shares of Common Stock (the "Warrants"
and, together with the Shares, the "Securities"), subject to adjustment by the
Company's Board of Directors, to certain investors in a private placement (the
"Offering").
3. The Company and the Investor agree that the Investor will purchase from the
Company and the Company will issue and sell to the Investor (a) __ shares, for a
purchase price of $9.00 per share, or an aggregate purchase price of $__, and
(b) a Warrant to purchase an aggregate of up to __ (__) shares of Common Stock,
at an exercise price of $12.00 per share, each pursuant to the Terms and
Conditions for Purchase of Securities attached hereto as Annex I and
incorporated herein by this reference as if fully set forth herein. Unless
otherwise requested by the Investor, certificates representing the Shares and
the Warrants purchased by the Investor will be registered in the Investor's name
and address as set forth below.
Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.
Dated as of: December 11, 2001
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Investor
By: ________________________________
Print Name: ________________________
Title: _____________________________
Address: ___________________________
------------------------------------
AGREED AND ACCEPTED:
Xxxxxx-Xxxx Pharmaceuticals, Inc.
By:_________________________________
Xxxxxx X. Xxxxxxx
Chief Operating Officer
and Chief Financial Officer
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SECURITIES
1. Authorization and Sale of the Securities. On or prior to the Closing (as
defined in Section 3), subject to the terms and conditions of this Agreement,
the Company shall have authorized (a) the sale and issuance of the Shares, (b)
the sale and issuance of the Warrants in substantially the form attached hereto
as Exhibit A, and (c) the issuance of up to one hundred eighty thousand shares
(180,000) shares of the Company's Common Stock upon exercise of the Warrants
(the "Warrant Shares").
2. Agreement to Sell and Purchase the Securities; Subscription Date.
2.1 At the Closing (as defined in Section 3), the Company will sell to
the Investor, and the Investor will purchase from the Company, upon the terms
and conditions hereinafter set forth, the Securities set forth on the signature
page to which these Terms and Conditions for Purchase of Securities are attached
as Annex I (the "Signature Page") at the purchase price set forth on such
Signature Page.
2.2 The Company may enter into this same form of Stock and Warrant
Purchase Agreement with certain other investors (the "Other Investors") and
complete sales of Securities to them. (The Investor and any Other Investors are
hereinafter sometimes collectively referred to as the "Investors," and this
Agreement and the Stock and Warrant Purchase Agreements executed by the Other
Investors are hereinafter sometimes collectively referred to as the
"Agreements.") The Company will accept executed Agreements from Investors for
the purchase of Securities commencing upon the date on which the Company
provides the Investors with the proposed purchase price per Share and the
proposed exercise price applicable to the Warrants and concluding upon the date
(the "Subscription Date") on which the Company has notified X.X. Xxxxxxxxxx &
Co., Inc. (in its capacity as Placement Agent for the Securities, the "Placement
Agent") in writing that it is no longer accepting Agreements from Investors for
the purchase of Securities.
2.3 Investor acknowledges that the Company intends to pay the
Placement Agent a fee in respect of the sale of Securities to the Investor.
3. Delivery of the Shares at Closing. The completion of the purchase and
sale of the Securities (the "Closing") shall occur at a place and time (the
"Closing Date") to be specified by the Company and the Placement Agent, not
later than four (4) complete trading days following the Subscription Date unless
otherwise extended by the Company, and of which the Investors will be notified
in advance by the Placement Agent. At the Closing, (i) the Company shall deliver
to the Investor one or more stock certificates representing the number of Shares
set forth on the signature page hereto, each such certificate to be registered
in the name of the Investor or, if so indicated on the Stock Certificate
Questionnaire attached hereto as Exhibit B, in the name of a nominee designated
by the Investor, and one or more Warrants issued in the name of the Investor,
representing the right to purchase the Warrant Shares at the exercise price set
forth therein, and (ii) the Investor shall deliver immediately available funds
in the amount of the
1.
aggregate purchase price for the Securities by wire transfer to an account
designated by the Placement Agent.
The Company's obligation to issue the Securities to the Investor shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) receipt by the Company of the purchase price for the Securities
being purchased hereunder as set forth on the Signature Page hereto; (b) receipt
by the Company and the Placement Agent of a complete and executed Investor
Questionnaire (as defined in Section 5.1); and (c) the accuracy of the
representations and warranties made by the Investors and the fulfillment of
those undertakings of the Investors to be fulfilled prior to the Closing.
The Investor's obligation to purchase the Securities in conditioned upon
the accuracy of the Company's representations and warranties contained in this
Agreement at the Closing, which condition to closing may be waived by the
Investor. The Investor's obligations are expressly not conditioned on the
purchase by any or all of the Other Investors of the Securities that they have
agreed to purchase from the Company.
4. Representations, Warranties and Covenants of the Company. Except as
otherwise described in the Company's regular reports on Form 10-Q and 10-K, as
filed by the Company with the Securities and Exchange Commission in 2001 (the
"SEC Documents"), in the Company's press releases since September 30, 2001
provided to the Investor (including the documents incorporated by reference
therein, the "Company Information"), which qualifies the following
representations and warranties in their entirety, the Company hereby represents
and warrants to, and covenants with, the Investor, as follows:
4.1 Organization. The Company is duly incorporated and validly
existing in good standing under the laws of the State of Delaware. The Company
has full power and authority to own, operate and occupy its properties and to
conduct its business as presently conducted and is registered or qualified to do
business and in good standing in each jurisdiction in which it owns or leases
property or transacts business and where the failure to be so qualified would
have a material adverse effect upon the business, financial condition,
properties or operations of the Company ("Material Adverse Effect"), and no
proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification.
4.2 Due Authorization. The Company has all requisite power and
authority to execute, deliver and perform its obligations under the Agreements,
and the Agreements have been duly authorized and validly executed and delivered
by the Company and constitute legal, valid and binding agreements of the Company
enforceable against the Company in accordance with their 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 enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
2.
4.3 Non-Contravention. The execution and delivery of the Agreements,
the issuance and sale of the Securities to be sold by the Company under the
Agreements, the issuance of the Warrant Shares, the fulfillment of the terms of
the Agreements and the consummation of the transactions contemplated thereby
will not (A) conflict with or constitute a violation of, or default (with the
passage of time or otherwise) under, (i) any material bond, debenture, note or
other evidence of indebtedness, or any material lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which the Company is a party or by which it or its property is
bound, where such conflict, violation or default is likely to, individually or
in the aggregate, result in a Material Adverse Effect, (ii) the charter, by-laws
or other organizational documents of the Company, or (iii) any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority binding upon the Company or its property,
where such conflict, violation or default is likely to, individually or in the
aggregate, result in a Material Adverse Effect, or (B) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the material properties or assets of the Company or an
acceleration of indebtedness pursuant to any obligation, agreement or condition
contained in any material bond, debenture, note or any other evidence of
indebtedness or any material indenture, mortgage, deed of trust or any other
agreement or instrument to which the Company is a party or by which it is bound
or to which any of the property or assets of the Company is subject. No consent,
approval, authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, or other governmental
body in the United States is required for the execution and delivery of the
Agreements, the valid issuance and sale of the Securities to be sold pursuant to
the Agreements and, upon the exercise of the Warrant on the terms and conditions
set forth therein, the valid issuance of the Warrant Shares, other than such as
have been made or obtained, and except for any securities filings required to be
made under federal or state securities laws.
4.4 Capitalization. The capitalization of the Company is described in
the Company's SEC Documents. The Company has not issued any capital stock since
September 30, 2001 other than pursuant to employee benefit plans disclosed in
the Company's SEC Documents. The Securities to be sold pursuant to the
Agreements, and the Warrant Shares issuable upon exercise of the Warrants, have
been duly authorized, and when issued and paid for in accordance with the terms
of the Agreements and the terms of the Warrants, respectively, will be duly and
validly issued, fully paid and nonassessable. The outstanding shares of capital
stock of the Company have been duly and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and were not issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities. Except as set forth in
or contemplated by the Company's SEC Documents, as contemplated by the Company's
engagement of the Placement Agent, or as otherwise described in this Agreement,
there are no outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any unissued shares of capital stock or other equity interest
in the Company, or any contract, commitment, agreement, understanding or
arrangement of any kind to which the Company is a party and relating to the
issuance or sale of any capital stock of the Company, any such convertible or
exchangeable securities or any such rights, warrants or options. Without
limiting the foregoing, no preemptive right, co-sale right, registration right,
right of first refusal or other similar right
3.
exists with respect to the issuance and sale of the Securities or the issuance
of the Warrant Shares. Except as disclosed in the Company's SEC Documents or as
otherwise described in this Agreement, there are no stockholders agreements,
voting agreements or other similar agreements with respect to the Common Stock
to which the Company is a party.
4.5 Legal Proceedings. There is no legal or governmental proceeding
pending or, to the Company's knowledge, overtly threatened against the Company
or of which the business or property of the Company is or would be subject that
is not disclosed in the Company's SEC Documents that is required to be so
disclosed.
4.6 No Violations. The Company is not in violation of its charter,
bylaws or other organizational document, or in violation of any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company, which
violation, individually or in the aggregate, would be reasonably likely to have
a Material Adverse Effect, or is in default (and there exists no condition
which, with the passage of time or otherwise, would constitute a default) in the
performance of any material bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company is a party or by which the Company
is bound or by which the property of the Company is bound, which would,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect.
4.7 Governmental Permits, Etc. With the exception of the matters which
are dealt with separately in Sections 4.1, 4.11, and 4.12, the Company has all
necessary franchises, licenses, certificates and other authorizations from any
foreign, federal, state or local government or governmental agency, department
or body that are currently necessary for the operation of the business of the
Company as currently conducted except where the failure to currently possess
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.8 Financial Statements. The financial statements of the Company and
the related notes contained in the Company's SEC Documents present fairly, in
accordance with generally accepted accounting principles, the financial position
of the Company as of the dates indicated, and the results of its operations and
cash flows for the periods therein specified (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Such financial statements
(including the related notes) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods therein specified, except (i) as disclosed in the Company's SEC
Documents, or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements.
4.9 No Material Adverse Change. Except as disclosed in the Company's
press releases since September 30, 2001, there has not been (i) any obligation,
direct or contingent, that is material to the Company, incurred by the Company,
except obligations incurred in the ordinary course of business, (ii) any
dividend or distribution of any kind declared, paid or made on the capital stock
of the Company, (iii) any loss or damage (whether or not insured) to the
physical property of the Company which has been sustained which, individually
4.
or in the aggregate, has a Material Adverse Effect; or (iv) any other event or
change that, individually or in the aggregate, would have a Material Adverse
Effect.
4.10 NASDAQ Compliance. The Company's Common Stock is registered
pursuant to Section 12(g) of the Exchange Act and, as of the date hereof, is
listed on The Nasdaq National Market (the "Nasdaq Stock Market"), and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the Nasdaq Stock Market.
4.11 Reporting Status. Except as disclosed in the Company's SEC
Documents, the Company has filed in a timely manner all documents that the
Company was required to file under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), during the 12 months preceding the date of this
Agreement. The following documents complied in all material respects with the
SEC's requirements as of their respective filing dates, and the information
contained therein as of the date thereof did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
where they were made not misleading:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 2000 (the "10-K");
(b) The Company's Quarterly Reports on Form 10-Q for each of the
quarters ended March 31, 2001, June 30, 2001 and September 30, 2001; and
(c) All other documents, if any, filed by the Company with the
Securities and Exchange Commission since December 31, 2000 pursuant to the
reporting requirements of the Exchange Act.
4.12 Listing. The Company shall comply with all requirements of the
National Association of Securities Dealers, Inc. with respect to the issuance of
the Securities and the Warrant Shares and the listing of the Shares and the
Warrant Shares on the Nasdaq Stock Market.
4.13 No Material Subsidiaries. The Company has no subsidiaries that,
individually or in the aggregate, conduct any material business activities or
have any material assets or liabilities.
5. Representations, Warranties and Covenants of the Investor.
5.1 The Investor represents and warrants to, and covenants with, the
Company that: (i) the Investor is an "accredited investor" as defined in
Regulation D under the Securities Act and the Investor is also knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions with
respect to, investments in shares presenting an investment decision like that
involved in the purchase of the Securities, including investments in securities
issued by the Company and investments in comparable companies, and has
requested, received, reviewed and considered all information it deemed relevant
in making an informed decision to purchase the Securities; (ii) the Investor is
acquiring the Securities in the ordinary course of its
5.
business and for its own account for investment only and with no present
intention of distributing any of such Securities or any arrangement or
understanding with any other persons regarding the distribution of such
Securities; (iii) the Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Securities or the Warrant
Shares except in compliance with the Securities Act, applicable state securities
laws and the respective rules and regulations promulgated thereunder; (iv) the
Investor has answered all questions on the Signature Page hereto and in the
Investor Questionnaire previously provided to the Investor in contemplation of
this Offering (the "Investor Questionnaire") for use in preparation of the
Registration Statement and the answers thereto are true and correct in all
material respects as of the date hereof and will be true and correct in all
material respects as of the Closing Date; (v) the Investor will notify the
Company immediately of any material change in any of such information referred
to in the preceding clause (iv) until such time as the Investor has sold all of
its Securities and the Warrant Shares or until the Company is no longer required
to keep the Registration Statement effective; and (vi) the Investor has, in
connection with its decision to purchase the Securities, relied only upon the
Company Information provided to the Investor by the Company in contemplation of
this Offering and the representations and warranties of the Company contained
herein. Investor understands that neither the Securities nor the Warrant Shares
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or registered or qualified under any state securities law in
reliance on specific exemptions therefrom, which exemptions may depend upon,
among other things, the bona fide nature of the Investor's investment intent as
expressed herein.
5.2 The Investor acknowledges, represents and agrees that no action
has been or will be taken in any jurisdiction outside the United States by the
Company or the Placement Agent that would permit an offering of the Securities
or the Warrant Shares, or possession or distribution of offering materials in
connection with the issue of the Securities or Warrant Shares, in any
jurisdiction outside the United States where action for that purpose is
required. Each Investor outside the United States will comply with all
applicable laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or delivers Securities or the Warrant Shares or has in
its possession or distributes any offering material, in all cases at its own
expense. The Placement Agent has not been authorized to make any representation
or use any information in connection with the issue, placement, purchase and
sale of the Securities.
5.3 The Investor hereby covenants with the Company not to make any
sale of the Securities or the Warrant Shares without complying in all material
respects with the provisions of this Agreement, including Section 7.2 hereof,
and, if applicable, without effectively causing the prospectus delivery
requirement under the Securities Act to be satisfied, and the Investor
acknowledges that the Warrants, the certificates evidencing the Shares and, if
the Warrant Shares are issued, the certificates evidencing the Warrant Shares,
will be imprinted with a legend that prohibits their transfer except in
accordance therewith. The Investor acknowledges that there may occasionally be
times when the Company, based on the advice of its counsel, determines that it
must suspend the use of the prospectus forming a part of the Registration
Statement (as defined in Section 7.1(a) herein) until such time as an amendment
to the Registration Statement has been filed by the Company and declared
effective by the SEC or until the Company has amended or supplemented such
prospectus.
6.
5.4 The Investor further represents and warrants to, and covenants
with, the Company that (i) the Investor has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the Investors
herein may be legally unenforceable.
5.5 Other than in a transaction exempt from registration under the
Securities Act, the Investor will not, prior to the effectiveness of the
Registration Statement, sell, offer to sell, solicit offers to buy, dispose of,
loan, pledge or grant any right with respect to (collectively, a "Disposition"),
the Common Stock of the Company, nor will Investor engage in any hedging or
other transaction which is designed to or could reasonably be expected to lead
to or result in a Disposition of Common Stock of the Company by the Investor or
any other related or affiliated person or entity. Such prohibited hedging or
other transactions would include, without limitation, effecting any short sale
or having in effect any short position (whether or not such sale or position is
against the box and regardless of when such position was entered into) or any
purchase, sale or grant of any right (including, without limitation, any put or
call option) with respect to the Common Stock of the Company or with respect to
any security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from the Common Stock of
the Company.
5.6 The Investor understands that nothing in this Agreement or any
other materials presented to the Investor in connection with the purchase and
sale of the Securities constitutes legal, tax or investment advice. The Investor
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Securities.
6. Survival of Representations, Warranties and Agreements. Notwithstanding
any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company
and the Investor herein shall survive the execution of this Agreement, the
delivery to the Investor of the Securities being purchased and the payment
therefor, and the issuance of the Warrant Shares.
7. Registration of the Shares and the Warrant Shares; Compliance with the
Securities Act.
7.1 Registration Procedures and Expenses. The Company shall:
(a) subject to receipt of necessary information from the
Investors, prepare and file with the SEC, as soon as practicable, but in no
event later than thirty (30) days after the Closing Date, a registration
statement on Form S-3 (the "Registration Statement") to
7.
enable the resale of the Shares and the Warrant Shares by the Investors from
time to time through the automated quotation system of the Nasdaq Stock Market
or in privately-negotiated transactions; provided, however, that in the event
Form S-3 is not available to the Company at any time after the date of this
Agreement, the Company shall file such other form as may be available if holders
who hold Shares and/or Warrant Shares with an aggregate market value of at least
Five Hundred Thousand Dollars ($500,000) deliver a written request to the
Company that the Company do so, where such market value is determined as of the
date of such written request. Any such registration statement filed pursuant to
the above provision shall be considered a "Registration Statement" for purposes
of this Agreement;
(b) use its reasonable efforts, subject to receipt of necessary
information from the Investors, to cause the Registration Statement to become
effective as soon as practicable;
(c) prepare and file with the SEC such amendments and supplements
to the Registration Statement and the prospectus used in connection therewith as
may be necessary to keep the Registration Statement current and effective for a
period not exceeding, with respect to each Investor's Shares or Warrant Shares,
as the case may be, the earlier of (i) the second anniversary of the Closing
Date, (ii) the date on which the Investor may sell all Shares and Warrant Shares
then held by the Investor without restriction under Rule 144(k) of the
Securities Act or (iii) such time as all Shares purchased by such Investor in
this Offering and all Warrant Shares issued to such Investor have been sold
pursuant to a registration statement;
(d) furnish to the Placement Agent and to the Investor with
respect to the Shares and the Warrant Shares registered under the Registration
Statement such number of copies of the Registration Statement, prospectuses and
preliminary prospectuses in conformity with the requirements of the Securities
Act and such other documents as they may reasonably request, in order to
facilitate the public sale or other disposition of all or any of the Shares
and/or the Warrant Shares by the Investor; provided, however, that the
obligation of the Company to deliver copies of prospectuses or preliminary
prospectuses to the Investor shall be subject to the receipt by the Company of
reasonable assurances from the Investor that the Investor will comply with the
applicable provisions of the Securities Act and of such other securities or blue
sky laws as may be applicable in connection with any use of such prospectuses or
preliminary prospectuses;
(e) bear all expenses in connection with the procedures in
paragraph (a) through (d) of this Section 7.1 and the registration of the Shares
and the Warrant Shares pursuant to the Registration Statement; and
(f) advise the Investors, promptly after it shall receive notice
or obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the initiation
of any proceeding for that purpose; and it will promptly use its commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.
8.
It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Section 7.1 that the Investor shall furnish to the
Company such information regarding itself, the Shares and the Warrant Shares to
be sold by Investor, and the intended method of disposition of such securities
as shall be reasonably required to effect the registration of the Shares and the
Warrant Shares.
7.2 Transfer of Shares and/or Warrant Shares After Registration;
Suspension.
(a) The Investor agrees that it will not effect any Disposition
of the Shares or the Warrant Shares or its right to purchase the Shares or the
Warrant Shares that would constitute a sale within the meaning of the Securities
Act except (i) as contemplated in the Registration Statement referred to in
Section 7.1 and as described below, or (ii) in a transaction exempt from
registration under the Securities Act, and that it will promptly notify the
Company of any changes in the information set forth in the Registration
Statement regarding the Investor or its plan of distribution.
(b) Subject to paragraph (c) below (if applicable), the Company
shall: (i) if deemed necessary by the Company, prepare and file from time to
time with the SEC a post-effective amendment to the Registration Statement or a
supplement to the related prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that such Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and so that, as
thereafter delivered to purchasers of the Shares and/or the Warrant Shares being
sold thereunder, such prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (ii) provide the Investor copies of any
documents filed pursuant to Section 7.2(b)(i); and (iii) inform each Investor
that the Company has complied with its obligations in Section 7.2(b)(i) (or
that, if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company will notify the
Investor to that effect, will use its reasonable efforts to secure the
effectiveness of such post-effective amendment as promptly as possible and will
promptly notify the Investor pursuant to Section 7.2(b)(i) hereof when the
amendment has become effective).
(c) Subject to paragraph (d) below, in the event: (i) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related prospectus or for additional
information; (ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Shares or the Warrant Shares for sale in any jurisdiction or the initiation of
any proceeding for such purpose; or (iv) of any event or circumstance which
necessitates the making of any changes in the Registration Statement or
prospectus, or any document incorporated or deemed to be incorporated therein by
reference, so that, in the case of
9.
the Registration Statement, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the prospectus, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; then the Company shall
deliver a certificate in writing to the Investor (the "Suspension Notice") to
the effect of the foregoing and, upon receipt of such Suspension Notice, the
Investor will refrain from selling any Shares or Warrant Shares pursuant to the
Registration Statement (a "Suspension") until the Investor's receipt of copies
of a supplemented or amended prospectus prepared and filed by the Company, or
until it is advised in writing by the Company that the current prospectus may be
used, and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such prospectus. In the
event of any Suspension, the Company will use its reasonable efforts to cause
the use of the prospectus so suspended to be resumed as soon as reasonably
practicable after delivery of a Suspension Notice to the Investors.
(d) Notwithstanding the foregoing paragraphs of this Section 7.2,
the Investor shall not be prohibited from selling Shares or Warrant Shares under
the Registration Statement as a result of Suspensions on more than two occasions
of not more than 30 days each in any 12-month period, unless, in the good faith
judgment of the Company's Board of Directors, upon advice of counsel, the sale
of Shares or Warrant Shares under the Registration Statement in reliance on this
paragraph 7.2(d) would be reasonably likely to cause a violation of the
Securities Act or the Exchange Act and result in potential liability to the
Company.
(e) In the event of a sale of Securities or Warrant Shares by the
Investor, the Investor must also deliver to the Company's transfer agent, with a
copy to the Company, a Certificate of Subsequent Sale substantially in the form
attached hereto as Exhibit C, so that the Securities or Warrant Shares may be
properly transferred.
7.3 Indemnification.
(a) For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" shall include the Investor
and any affiliate, officer, director, employee or control person (as defined by
Section 15 of the Securities Act) of such Investor;
(ii) the term "Registration Statement" shall include any
final prospectus, exhibit, supplement or amendment included in or relating to
the Registration Statement referred to in Section 7.1; and
(iii) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any omission or alleged omission to
state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
10.
(b) The Company agrees to indemnify and hold harmless each
Selling Stockholder from and against any losses, claims, damages or liabilities
to which such Selling Stockholder may become subject (under the Securities Act
or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon (i) any
untrue statement of a material fact contained in the Registration Statement, or
(ii) any failure by the Company to fulfill any undertaking included in the
Registration Statement, and the Company will reimburse such Selling Stockholder
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim; provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based upon, an untrue
statement made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Selling Stockholder specifically for use in preparation of the Registration
Statement or any statement or omission in any prospectus that is corrected in
any subsequent prospectus that was delivered to the Investor prior to the
pertinent sale or sales by the Investor.
(c) The Investor agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon any untrue statement of a material fact contained in the Registration
Statement if such untrue statement was made in reliance upon and in conformity
with written information furnished by or on behalf of the Investor specifically
for use in preparation of the Registration Statement, and the Investor will
reimburse the Company (or such officer, director or controlling person), as the
case may be, for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim.
(d) Promptly after receipt by any indemnified person of a notice
of a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 7.3 (except to the extent that such
omission materially and adversely affects the indemnifying party's ability to
defend such action) or from any liability otherwise than under this Section 7.3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists
11.
or shall exist a conflict of interest that would make it inappropriate, in the
reasonable opinion of counsel to the indemnified person, for the same counsel to
represent both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such settlement. No
indemnifying person shall, without the prior written consent of the indemnified
person, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified person is or could have been a party and
indemnification could have been sought hereunder by such indemnified person,
unless such settlement includes an unconditional release of such indemnified
person from all liability on claims that are the subject matter of such
proceeding.
(e) If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Investors
on the other in connection with the statements or omissions or other matters
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, in the
case of an untrue statement, whether the untrue statement relates to information
supplied by the Company on the one hand or an Investor on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement. The Company and the Investors agree
that it would not be just and equitable if contribution pursuant to this
subsection (e) were determined by pro rata allocation (even if the Investors
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (e), no Investor
shall be required to contribute any amount in excess of the amount by which the
gross amount received by the Investor from the sale of the Shares and/or Warrant
Shares to which such loss relates exceeds the amount of any damages which such
Investor has otherwise been required to pay by reason of such untrue statement.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Investors'
obligations in this subsection to contribute are several in proportion to their
sales of Shares and/or Warrant Shares to which such loss relates and not joint.
(f) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations
12.
regarding the provisions hereof including, without limitation, the provisions of
this Section 7.3, and are fully informed regarding said provisions. They further
acknowledge that the provisions of this Section 7.3 fairly allocate the risks in
light of the ability of the parties to investigate the Company and its business
in order to assure that adequate disclosure is made in the Registration
Statement as required by the Act and the Exchange Act. The parties are advised
that federal or state public policy as interpreted by the courts in certain
jurisdictions may be contrary to certain of the provisions of this Section 7.3,
and the parties hereto hereby expressly waive and relinquish any right or
ability to assert such public policy as a defense to a claim under this Section
7.3 and further agree not to attempt to assert any such defense.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if delivered
from outside the United States, by International Federal Express or facsimile,
and shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if delivered
by nationally recognized overnight carrier, one (1) business day after so
mailed, (iii) if delivered by International Federal Express, two (2) business
days after so mailed, (iv) if delivered by facsimile, upon electric confirmation
of receipt and shall be delivered as addressed as follows:
(a) if to the Company, to:
Xxxxxx-Xxxx Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx,
Chief Operating Officer and Chief Financial Officer
and
Xxxx Xxxxxxx,
Vice President and General Counsel
Phone: (000) 000-0000
Telecopy: (000) 000-0000
(b) with a copy mailed to:
Cooley Godward LLP
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Phone: (000) 000-0000
Telecopy: (000) 000-0000
(c) if to the Investor, at its address on the Signature Page hereto,
or at such other address or addresses as may have been furnished to the Company
in writing.
13.
9. Changes. This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and the Investor.
10. Headings. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
11. Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California, without giving
effect to the principles of conflicts of law.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
14. Confidential Disclosure Agreement. Notwithstanding any provision of
this Agreement to the contrary, any confidential disclosure agreement previously
executed by the Company and the Investor in connection with the transactions
contemplated by this Agreement shall remain in full force and effect in
accordance with its terms following the execution of this Agreement and the
consummation of the transactions contemplated hereby.
14.
Exhibit A
XXXXXX-XXXX PHARMACEUTICALS, INC.
FORM OF WARRANT
A-1.
Exhibit B
XXXXXX-XXXX PHARMACEUTICALS, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Securities are to be _______________ registered in
(this is the name that will appear on your stock certificate(s) and your
Warrant(s)). You may use a nominee name if appropriate:
2. The relationship between the Investor and the _______________
registered holder listed in response to item 1 above:
3. The mailing address of the registered holder listed in _______________
response to item 1 above:
4. The Social Security Number or Tax Identification Number _______________ of
the registered holder listed in the response to item 1 above:
B-1.
Exhibit C
XXXXXX-XXXX PHARMACEUTICALS, INC.
CERTIFICATE OF SUBSEQUENT SALE
American Stock Transfer & Trust
RE: Sale of Shares and/or Warrant Shares of Common Stock of Xxxxxx-Xxxx
Pharmaceuticals, Inc. (the "Company") pursuant to the Company's
prospectus dated _______________, 2001 (the "prospectus")
Dear Sir/Madam:
The undersigned hereby certifies, in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Stockholders in the
prospectus, that the undersigned has sold the Shares and/or Warrant Shares
pursuant to the prospectus and in a manner described under the caption "Plan of
Distribution" in the prospectus and that such sale complies with all applicable
securities laws, including, without limitation, the prospectus delivery
requirements of the Securities Act of 1933, as amended.
Selling Stockholder (the beneficial owner):_______________________________
Record Holder (e.g., if held in name of nominee):_________________________
Restricted Stock Certificate No.(s):______________________________________
Number of Shares Sold:____________________________________________________
Number of Warrants Shares Sold:___________________________________________
Date of Sale:_____________________________________________________________
In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Very truly yours,
By:_________________________________________
Print Name:_________________________________
Title:______________________________________
Dated:______________________________________
cc: Legal Department
Xxxxxx-Xxxx Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
C-1.
SCHEDULE 1
The Company has entered into Stock and Warrant Purchase Agreements with each of
the investors set forth below. Such agreements are identical to the Form of
Stock and Warrant Purchase Agreement to which this Schedule 1 is attached,
except as to the parties thereto, the number of shares purchased by each
investor, the aggregate purchase price for the shares and the number of shares
issuable pursuant to warrants.
NUMBER OF
SHARES
AGGREGATE ISSUABLE
NUMBER OF PURCHASE PURSUANT TO
INVESTOR NAME SHARES PRICE ($) WARRANTS
Vertical Ventures Investments LLC 500,000 4,500,000 50,000
Rochdale Investment Management, LLC 55,555 499,995 5,556
Xxxxxxx Square Partners, L.P. 75,000 675,000 7,500
ANDA Partnership 75,000 675,000 7,500
BlackRock Funds, Micro-Cap Equity 366,667 3,300,003 36,667
Portfolio
BlackRock Funds, Global Science and 100,000 900,000 10,000
Technology Portfolio
The Xxxxx Foundation 27,778 250,002 2,778
Clarion Capital Corporation 40,000 360,000 4,000
Clarion Partners, L.P. 20,000 180,000 2,000
Clarion Offshore Fund Ltd. 20,000 180,000 2,000
