COMMON STOCK PURCHASE AGREEMENT by and among ULURU Inc. and the parties named herein on Schedule 1, as Purchasers December 6, 2006
Exhibit
10.23
________________________________________________________________________
by
and
among
and
the
parties named herein on Schedule
1,
as
Purchasers
December
6, 2006
_____________________________________________________________________________
This
COMMON
STOCK PURCHASE AGREEMENT
(this
"Agreement")
is
dated as of December 6, 2006, by and among ULURU Inc., a Nevada corporation
(the
"Company"),
and
the purchasers identified on Schedule
1
hereto
(each a "Purchaser"
and
collectively the "Purchasers").
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant
to
Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated
thereunder, the Company desires to issue and sell to the Purchasers, and
the
Purchasers, severally and not jointly, desire to purchase from the Company
in
the aggregate, 47,052,628 shares of Common Stock (as defined
below).
NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of
which
are hereby acknowledged, the Company and each Purchaser agree as
follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions.
In
addition to the terms defined elsewhere in this Agreement, for all purposes
of
this Agreement, the following terms have the meanings indicated in this Section
1.1:
"Action"
shall
have the meaning ascribed to such term in Section 3.1(j).
"Affiliate"
means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as
such
terms are used in and construed under Rule 144. With respect to a Purchaser,
any
investment fund or managed account that is managed on a discretionary basis
by
the same investment manager as such Purchaser will be deemed to be an Affiliate
of such Purchaser.
"Agreement"
shall
have the meaning ascribed to such term in the Preamble.
"Business
Day"
means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to
close.
"Closing"
shall
have the meaning ascribed to such term in Section 2.1(a).
"Closing
Date"
shall
have the meaning ascribed to such term in Section 2.1(a).
"Commission"
means
the Securities and Exchange Commission.
"Common
Stock"
means
the common stock of the Company, $0.001 par value per share, and any securities
into which such common stock may hereafter be reclassified.
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"Common
Stock Equivalents"
means
any securities of the Company or the Subsidiaries which would entitle the
holder
thereof to acquire at any time Common Stock, including without limitation,
any
debt, preferred stock, rights, options, warrants or other instrument that
is at
any time convertible into or exchangeable for, or otherwise entitles the
holder
thereof to receive, Common Stock.
"Company"
shall
have the meaning ascribed to such term in the Preamble.
"Effective
Date"
means
the date that the Registration Statement is first declared effective by the
Commission.
"Environmental
Laws"
shall
have the meaning ascribed to such term in Section 3.1(y).
"Escrow
Agent"
means
The Bank of New York.
"Escrow
Agreement"
means
that certain Escrow Agreement, dated as of the date of this Agreement, by
and
among the Company, the Escrow Agent and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Securities Co. L.P.,
in
the form of Exhibit
A
hereto.
"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended.
"FDC
Act"
shall
have the meaning ascribed to such term in Section 3.1(m).
"GAAP"
shall
have the meaning ascribed to such term in Section 3.1(h).
"Governmental
Authorizations"
shall
have the meaning ascribed to such term in Section 3.1(m).
"Hazardous
Substances"
shall
have the meaning ascribed to such term in Section 3.1(y).
"Indemnified
Party"
shall
have the meaning ascribed to such term in Section 5.3.
"Indemnifying
Party"
shall
have the meaning ascribed to such term in Section 5.3.
"Intellectual
Property"
shall
have the meaning ascribed to such term in Section 3.1(o).
"Investor
Rights Agreement"
means
the Investor Rights Agreement, dated as of the date of this Agreement, by
and
among the Company and each of the Purchasers, in the form of Exhibit
B
hereto.
"Lien"
means a
lien, charge, security interest, encumbrance, right of first refusal or other
restriction, except for a lien for current taxes not yet due and payable
and a
minor imperfection of title, if any, not material in nature or amount and
not
materially detracting from the value or impairing the use of the property
subject thereto or impairing the operations or proposed operations of the
Company.
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"Material
Adverse Effect"
shall
have the meaning ascribed to such term in Section 3.1(b).
"Per
Share Purchase Price"
equals
$0.95.
"Person"
means
an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.
"Premises"
shall
have the meaning ascribed to such term in Section 3.1(y).
"Purchaser"
shall
have the meaning ascribed to such term in the Preamble.
"Registration
Statement"
means a
registration statement meeting the requirements set forth in the Investor
Rights
Agreement and covering the resale by the Purchasers of the Shares.
"Rights"
shall
have the meaning ascribed to such term in Section 3.1(o).
"Rule
144"
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect
as such
Rule.
"SEC
Reports"
shall
have the meaning ascribed to such term in Section 3.1(h).
"Securities
Act"
means
the Securities Act of 1933, as amended.
"Shares"
means
the shares of Common Stock issued to each Purchaser pursuant to this Agreement.
"Subscription
Amount"
means,
as to each Purchaser, the amount set forth beside such Purchaser's name on
Schedule
1
hereto,
in United States dollars and in immediately available funds.
"Subsidiary"
means,
with respect to the Company, any corporation or other organization of which
securities or other ownership interest having ordinary voting power to elect
a
majority of the board of directors or other persons performing similar
functions, are directly or indirectly owned by the Company or of which the
Company is a partner or is, directly or indirectly, the beneficial owner
of 50%
or more of any class of equity securities or equivalent profit participation
interests.
"Trading
Day"
means
(i) a day on which the Common Stock is traded on a Trading Market, or (ii)
if
the Common Stock is not listed on a Trading Market, a day on which the Common
Stock is traded on the over-the-counter market, as reported by the OTC Bulletin
Board, or (iii) if the Common Stock is not quoted on the OTC Bulletin Board,
a
day on which the Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted
as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business
Day.
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"Trading
Market"
means
the following markets or exchanges on which the Common Stock is listed or
quoted
for trading on the date in question: the American Stock Exchange, the New
York
Stock Exchange, the Nasdaq Global Market or the Nasdaq Capital
Market.
"Transaction
Documents"
means
this Agreement, the Investor Rights Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.
ARTICLE
II
PURCHASE
AND SALE
2.1 Closing.
(a) The
closing of the transactions contemplated under this Agreement (the "Closing")
will
take place upon the execution of this Agreement by the Company and the
Purchasers immediately following satisfaction or waiver of the conditions
set
forth in Sections 2.2 and 2.3 (other than those conditions which by their
terms
are not to be satisfied or waived until the Closing), at the offices of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (or remotely via exchange
of
documents and signatures) or at such other place or day as may be mutually
acceptable to the Purchasers and the Company. The date on which the Closing
occurs is the "Closing
Date."
(b) At
the
Closing, the Purchasers shall purchase, severally and not jointly, and the
Company shall issue and sell to the Purchasers, in the aggregate,
__________ shares
of
Common Stock on the Closing Date. Each Purchaser shall purchase from the
Company, and the Company shall issue and sell to each Purchaser, a number
of
Shares (rounded down to the nearest whole Share) equal to such Purchaser's
Subscription Amount divided by the Per Share Purchase Price. Except as set
forth
in the following sentence, the Subscription Amount paid by each Purchaser
shall
be placed in escrow pending the Closing pursuant to the Escrow Agreement.
The
Subscription Amount paid by each Purchaser tendering to the Company for
cancellation one or more convertible promissory notes as payment for its
Shares
shall be paid by the tender to the Company of such notes.
2.2 Conditions
to Obligations of Purchasers to Effect the Closing.
The
obligations of each Purchaser to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or
prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, by such Purchaser:
(a) At
the
Closing (unless otherwise specified below) the Company shall deliver or cause
to
be delivered to each Purchaser the following:
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(i) this
Agreement, duly executed by the Company;
(ii) evidence
of delivery to the Company's transfer agent of irrevocable instructions to
issue
a certificate evidencing a number of Shares equal to such Purchaser's
Subscription Amount divided by the Per Share Purchase Price as set forth
on
Schedule
1
hereto,
registered in the name of such Purchaser;
(iii) the
Investor Rights Agreement, duly executed by the Company;
(iv) a
legal
opinion of ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇▇, special
counsel to the Company, in the form of Exhibit
C
hereto;
and
(vi) a
certificate of the Secretary of the Company (the "Secretary's
Certificate"),
attaching a true copy of the Articles of Incorporation and Bylaws of the
Company, each as amended and in effect on the Closing Date, and attaching
true
and complete copies of the resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance of this Agreement and
the
Investor Rights Agreement.
(b) All
representations and warranties of the Company contained herein shall remain
true
and correct as of the Closing Date as though such representations and warranties
were made on such date (except those representations and warranties that
address
matters only as of a particular date will remain true and correct as of such
date).
(c) As
of the
Closing Date, there shall have been no Material Adverse Effect with respect
to
the Company since the date hereof.
(d) From
the
date hereof to the Closing Date, trading in the Common Stock shall not have
been
suspended by the Commission (except for any suspension of trading of limited
duration agreed to by the Company, which suspension shall be terminated prior
to
the Closing), and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg Financial Markets shall not have been
suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States
or
New York State authorities.
2.3. Conditions
to Obligations of the Company to Effect the Closing.
(a) The
obligations of the Company to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or
prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, by the Company. At the Closing, each Purchaser shall deliver
or
cause to be delivered to the Company the following:
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(i) this
Agreement, duly executed by such Purchaser;
(ii) such
Purchaser's Subscription Amount, by wire transfer of immediately available
funds
as provided in the Escrow Agreement or tender of one or more promissory notes,
as the case may be; and
(iii) the
Investor Rights Agreement, duly executed by such Purchaser.
(b) All
representations and warranties of each of the Purchasers contained herein
shall
remain true and correct as of the Closing Date as though such representations
and warranties were made on such date.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company.
The
Company hereby makes the following representations and warranties as of the
date
hereof and as of the Closing Date to each Purchaser:
(a) Subsidiaries.
Except
for ULURU Delaware Inc., a Delaware corporation, the Company has no direct
or
indirect Subsidiaries.
(b) Organization
and Qualification.
Each of
the Company and the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite corporate power and authority to own and use its properties and
assets
and to carry on its business as currently conducted. Neither the Company
nor any
Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational
or
charter documents. Each of the Company and the Subsidiaries is duly qualified
to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted
or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would
not
have or result in (i) a material adverse effect on the legality, validity
or
enforceability of any Transaction Document, (ii) a material adverse effect
on
the business or financial condition of the Company and the Subsidiaries,
taken
as a whole, or (iii) a material adverse effect on the Company's ability to
perform in any material respect on a timely basis its obligations under any
Transaction Document (any of (i), (ii) or (iii), a "Material
Adverse Effect").
(c) Authorization;
Enforceability.
The
Company has the requisite corporate power and authority to enter into and
to
consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company in connection therewith.
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Each
Transaction Document has been (or upon delivery will have been) duly executed
by
the Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and rules of law governing specific
performance, injunctive relief, or other equitable remedies.
(d) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby
do
not and will not (i) conflict with or violate any provision of the Company's
or
any Subsidiary's certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute
a
default (or an event that with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both)
of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company
or
any Subsidiary is a party or by which any property or asset of the Company
or
any Subsidiary is bound or affected, or (iii) result in a violation of any
law,
rule, regulation, order, judgment, injunction, decree or other restriction
of
any court or governmental authority to which the Company or a Subsidiary
is
subject (including federal and state securities laws and regulations), or
by
which any property or asset of the Company or a Subsidiary is bound or affected,
except, in the cases of clause (ii), where such conflict, default or violation
would not have or result in a Material Adverse Effect or where such conflict,
default or violation has been waived.
(e) Filings,
Consents and Approvals.
The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court
or
other federal, state, local or other governmental authority or other Person
in
connection with the execution, delivery and performance by the Company of
the
Transaction Documents, other than (a) the filing with the Commission of the
Registration Statement, the application(s) to each Trading Market for the
listing of the Shares for trading thereon in the time and manner required
thereby, Form D and applicable Blue Sky filings and (b) such as have already
been obtained or such exemptive filings as are required to be made under
applicable securities laws.
(f) Issuance
of the Shares.
The
Shares are duly authorized and, when issued and paid for in accordance with
the
terms hereof, will be duly and validly issued, fully paid and nonassessable,
free and clear of all Liens.
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(g) Capitalization.
(i) The
authorized and outstanding capitalization of the Company is as described
in the
Company's most recent periodic report filed with the Commission. All shares
of
the Company's issued and outstanding capital stock issued after October 12,
2005
have been duly authorized, are validly issued and outstanding, and are fully
paid and nonassessable. No such shares were issued in violation of any statutory
or common law preemptive rights. There are no dividends on such shares which
have accrued or been declared but are unpaid on the capital stock of the
Company. All taxes required to be paid by the Company in connection with
the
issuance and any transfers of such shares have been paid. All outstanding
securities of the Company issued
after October 12, 2005 have
been
issued in all material respects in accordance with the provisions of all
applicable securities and other laws.
(ii) No
Person
has any right of first refusal, preemptive right, right of participation,
or any
similar right to participate in the transactions contemplated by the Transaction
Documents which has not been waived. Except as a result of the purchase and
sale
of the Shares and except for employee and director stock options under the
Company's equity compensation plans (other than warrants to purchase 1,933,333
and 4,191,667 shares
of
Common Stock owned by Cornell Capital Partners, LLC and Prenox, LLC,
respectively), there are no outstanding options, warrants, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any
Person
any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock,
or
securities or rights convertible or exchangeable into shares of Common Stock.
The issue and sale of the Shares will not obligate the Company to issue shares
of Common Stock or other securities to any Person (other than the Purchasers)
and will not result in a right of any holder of Company securities to adjust
the
exercise, conversion, exchange or reset price under such
securities.
(h) SEC
Reports; Financial Statements; Liabilities.
(i) The
Company has filed all reports required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) of
the
Exchange Act, for the 12 months preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (the foregoing
materials, including the exhibits thereto, being collectively referred to
herein
as the "SEC
Reports").
As of
their respective filing dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act, as the
case
may be, and the rules and regulations of the Commission promulgated thereunder,
as applicable, and none of the SEC Reports, as of their respective filing
dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
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(ii) The
Company's (A) audited financial statements for the fiscal years ended December
31, 2005 and 2004 included in the Company's annual reports on Form 10-KSB
filed
with the Commission and (B) the financial statements included in the Company's
quarterly reports on Form 10-QSB (and any amendments thereto) filed with
the
Commission for the periods ended March 31, 2006, June 30, 2006 and September
30,
2006 comply with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time
of
filing of such reports. Such financial statements have been prepared in
accordance with generally accepted accounting principles in the United States,
applied on a consistent basis during the periods involved ("GAAP"),
except as may be otherwise specified in such financial statements or the
notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, subject to normal year-end audit adjustments.
Such
financial statements fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries, if any, as of
and for
the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal year-end
audit adjustments.
(iii) Except
as
set forth in the SEC Reports, and except for liabilities and obligations
incurred since September 30, 2006 in the ordinary course of business, consistent
with past practice: (i) the Company and its Subsidiaries do not have any
material liabilities or obligations (absolute, accrued, contingent or otherwise)
and (ii) there has not been any aspect of the prior or current conduct of
the
business of the Company or its Subsidiaries which may form the basis for
any
material claim by any third party which if asserted could result in a Material
Adverse Effect.
(i) Material
Changes.
Since
September 30, 2006, the Company has conducted its business only in the ordinary
course, consistent with past practice, and since such date there has not
occurred:
(i) any
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect;
(ii) any
amendments or changes in the charter documents of the Company and its
Subsidiaries;
(iii) any:
(A)
incurrence, assumption or guarantee by the Company or its Subsidiaries of
any
debt for borrowed money other than (i) equipment leases made in the ordinary
course of business, consistent with past practice and (ii) any such incurrence,
assumption or guarantee with respect to an amount of $25,000 or less that
has
been disclosed in the SEC Reports;
(B)
issuance or sale of any securities convertible into or exchangeable for
securities of the Company other than to directors, employees and consultants
pursuant to existing equity compensation or stock purchase plans of the Company;
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(C)
issuance or sale of options or other rights to acquire from the Company or
its
Subsidiaries, directly or indirectly, securities of the Company or any
securities convertible into or exchangeable for any such securities, other
than
options issued to directors, employees and consultants in the ordinary course
of
business, consistent with past practice;
(D)
issuance or sale of any stock, bond or other corporate security other than
to
directors, employees and consultants pursuant to existing equity compensation
or
stock purchase plans of the Company;
(E)
discharge or satisfaction of any material Lien;
(F)
declaration or making any payment or distribution to stockholders or purchase
or
redemption of any share of its capital stock or other security other than
to
directors, officers and employees of the Company or its Subsidiaries as
compensation for services rendered to the Company or its Subsidiary (as
applicable) or for reimbursement of expenses incurred on behalf of the Company
or its Subsidiary (as applicable);
(G)
sale,
assignment or transfer of any of its intangible assets except in the ordinary
course of business, consistent with past practice, or cancellation of any
debt
or claim except in the ordinary course of business, consistent with past
practice;
(H)
waiver of any right of substantial value whether or not in the ordinary course
of business;
(I)
material change in officer compensation, except in the ordinary course of
business and consistent with past practice; or
(J)
other
commitment (contingent or otherwise) to do any of the foregoing.
(iv) any
creation, sufferance or assumption by the Company or any of its Subsidiaries
of
any Lien on any asset or any making of any loan, advance or capital contribution
to or investment in any Person, in an aggregate amount which exceeds $25,000
outstanding at any time;
(v) any
entry
into, amendment of, relinquishment, termination or non-renewal by the Company
or
its Subsidiaries of any material contract, license, lease, transaction,
commitment or other right or obligation, other than in the ordinary course
of
business, consistent with past practice; or
(vi) any
transfer or grant of a right with respect to the patents, trademarks, trade
names, service marks, trade secrets, copyrights or other intellectual property
rights owned or licensed by the Company or its Subsidiaries, except as among
the
Company and its Subsidiaries.
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(j) Litigation.
There
is no action, suit, inquiry, notice of violation, proceeding or, to the
knowledge of the Company, investigation pending nor, to the knowledge of
the
Company, is any of the above threatened against the Company, any Subsidiary
or
any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an "Action")
which
(i) adversely affects or challenges the legality, validity or enforceability
of
any of the Transaction Documents or the Shares or (ii) could, if there were
an
unfavorable decision, have or result in a Material Adverse Effect. Neither
the
Company nor any Subsidiary, nor, to the knowledge of the Company, any director
or officer thereof, is or has been the subject of any Action involving a
claim
of violation of or liability under federal or state securities laws or a
claim
of breach of fiduciary duty within the past twelve (12) months. To the knowledge
of the Company, there has not been and there is not pending or contemplated,
any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop
order
or other order suspending the effectiveness of any registration statement
filed
by the Company or any Subsidiary under the Exchange Act or the Securities
Act
within the past twelve (12) months
(k) Labor
Relations.
No
material labor dispute exists or, to the knowledge of the Company, is imminent
with respect to any of the employees of the Company which could have or result
in a Material Adverse Effect.
(l) Compliance.
Neither
the Company nor any Subsidiary (i) is in default under or in violation of
(and
no event has occurred that has not been waived that, with notice or lapse
of
time or both, would result in a default by the Company or any Subsidiary
under),
nor has the Company or any Subsidiary received notice of a claim that it
is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or
by
which it or any of its properties is bound, (ii) is in violation of any order
of
any court, arbitrator or governmental body, or (iii) is or has been in violation
of any statute, rule or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws applicable
to its
business, except in the case of clauses (i) and (iii) as would not have or
reasonably be expected to result in a Material Adverse Effect.
(m) Licenses;
Compliance With FDA and Other Regulatory Requirements.
(i) The
Company holds all material authorizations, consents, approvals, franchises,
licenses and permits required under applicable law or regulation for the
operation of the business of the Company and its Subsidiaries as presently
operated (the "Governmental
Authorizations").
All
the Governmental Authorizations have been duly issued or obtained and are
in
full force and effect, and the Company and its Subsidiaries are in material
compliance with the terms of all the Governmental Authorizations. The Company
and its Subsidiaries have not engaged in any activity that, to their knowledge,
would cause revocation or suspension of any such Governmental Authorizations.
Neither the execution, delivery nor performance of this Agreement shall
adversely affect the status of any of the Governmental
Authorizations.
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11
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(ii) Without
limiting the generality of the representations and warranties made in
sub-paragraph (i) above, the Company represents and warrants that (i) the
Company and each of its Subsidiaries is in material compliance with all
applicable provisions of the United States Federal Food, Drug, and Cosmetic
Act
and the rules and regulations promulgated thereunder (the "FDC
Act")
and
equivalent laws, rules and regulations in jurisdictions outside the United
States in which the Company or its Subsidiaries do business, (ii) its products
and those of each of its Subsidiaries that are in the Company's control are
not
adulterated or misbranded and are in lawful distribution, (iii) all of the
products marketed by and within the control of the Company comply in all
material respects with any conditions of approval and the terms of the
application by the Company to the appropriate Regulatory Authorities, (iv)
no
Regulatory Authority has initiated legal action with respect to the
manufacturing of the Company's products, such as seizures or required recalls,
and the Company is in compliance with applicable good manufacturing practice
regulations, (v) its products are labeled and promoted by the Company and
its
representatives in substantial compliance with the applicable terms of the
marketing applications submitted by the Company to the Regulatory Authorities
and the provisions of the FDC Act and foreign equivalents, (vi) all adverse
events that were known to and required to be reported by Company to the
Regulatory Authorities have been reported to the Regulatory Authorities in
a
timely manner, (vii) neither the Company nor any of its Subsidiaries is,
to
their knowledge, employing or utilizing the services of any individual who
has
been debarred under the FDC Act or foreign equivalents, (viii) all stability
studies required to be performed for products distributed by the Company
or any
of its Subsidiaries have been completed or are ongoing in material compliance
with the applicable Regulatory Authority requirements, (ix) any products
exported by the Company or any of its Subsidiaries have been exported in
compliance with the FDC Act and (x) the Company and its Subsidiaries are
in
compliance in all material respects with all applicable provisions of the
Controlled Substances Act. For purposes of this Section 3.1(m), "Regulatory
Authority"
means
any governmental authority in a country or region that regulates the manufacture
or sale of Company's products, including, but not limited to, the United
States
Food and Drug Administration.
(n) Title
to Assets.
The
Company and the Subsidiaries do not own any real property, and have good
and
marketable title to all personal property owned by them that is material
to the
business of the Company and the Subsidiaries, taken as a whole, in each case
free and clear of all Liens, except those, if any, reflected in the Company's
financial statements or incurred in the ordinary course of business consistent
with past practice or which would not cause a Material Adverse Effect. Any
real
property and facilities held under lease by the Company and the Subsidiaries
are
held by them under valid, subsisting and enforceable leases (subject to laws
of
general application relating to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
rules
of law governing specific performance, injunctive relief, or other equitable
remedies) with which the Company and the Subsidiaries are in material
compliance.
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(o) Intellectual
Property.
(i) The
Company or a Subsidiary thereof has the right to use or is the sole and
exclusive owner of all right, title and interest in and to all material foreign
and domestic patents, patent rights, trademarks, service marks, trade names,
brands and copyrights (whether or not registered and, if applicable, including
pending applications for registration) owned, used or controlled by the Company
and its Subsidiaries (collectively, the "Rights")
and in
and to each material invention, software, trade secret, technology, product,
composition, formula and method of process used by the Company or its
Subsidiaries (the Rights and such other items, the "Intellectual
Property"),
and,
to the Company's knowledge, has the right to use the same, free and clear
of any
claim or conflict with the rights of others (subject to the provisions of
any
applicable license agreement) except as would not cause a Material Adverse
Effect;
(ii) other
than as set forth in the SEC Reports and except as in the ordinary course
of
business, no royalties or fees (license or otherwise) are payable by the
Company
or its Subsidiaries to any Person by reason of the ownership or use of any
of
the Intellectual Property;
(iii) there
have been no written claims made against the Company or its Subsidiaries
asserting the invalidity, abuse, misuse, or unenforceability of any of the
Intellectual Property, and, to the best of the Company's knowledge, there
are no
reasonable grounds for any such claims which would cause a Material Adverse
Effect;
(iv) neither
the Company nor its Subsidiaries have made any claim of any violation or
infringement by others of its rights in the Intellectual Property, and to
the
best of the Company's knowledge, no reasonable grounds for such claims exist;
and
(v) neither
the Company nor its Subsidiaries have received written notice that it is
in
conflict with or infringing upon the asserted rights of others in connection
with the Intellectual Property which would cause a Material Adverse
Effect.
(p) Insurance.
The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries
are
engaged. All of the insurance policies of the Company and its Subsidiaries
are
in full force and effect and are valid and enforceable in accordance with
their
terms, and the Company and its Subsidiaries have complied with all material
terms and conditions thereof. Neither the Company nor any Subsidiary has
any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from
similar insurers as may be necessary to continue its business without a
significant increase in cost.
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(q) Transactions
With Affiliates and Employees.
Except
as provided in the SEC Reports, none of the officers or directors of the
Company
and, to the knowledge of the Company, none of the employees of the Company
is
presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to
or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or,
to the
knowledge of the Company, any entity in which any officer, director, or any
such
employee has a substantial interest or is an officer, director, trustee or
partner, other than (a) for payment of salary or consulting fees for services
rendered, (b) reimbursement for expenses incurred on behalf of the Company
and
(c) for other employee benefits, including stock option agreements and other
stock awards under any equity compensation plan of the Company.
(r) Internal
Accounting Controls.
The
Company and each of the Subsidiaries maintains a system of internal accounting
controls sufficient in the judgment of the Company's management to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity
with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and
(iv)
the recorded accountability for assets is compared with the existing assets
at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that the Company
is
able to collect the information that it is required to disclose in the reports
it files with the Commission and to process, summarize and disclose this
information in the time periods specified in the Commission's rules. The
Company's certifying officers have evaluated the effectiveness of the Company's
controls and procedures as of September 30, 2006. The Company presented in
its
Form 10-QSB for the quarter ended September 30, 2006 the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of September 30, 2006. Since September
30, 2006, there have been no significant changes in the Company's internal
controls (as such term is defined in Item 307(b) of Regulation S-K under
the
Exchange Act) or, to the Company's knowledge, in other factors that could
significantly affect the Company's internal controls.
(s) Certain
Fees.
Except
for fees payable to each of Blue Alternative Asset Management LLC and ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ Securities Co. L.P. and its designees, no brokerage or finder's fees
or
commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or
other
Person with respect to the transactions contemplated by this Agreement. The
Purchasers shall have no obligation with respect to any fees or with respect
to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement.
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(t) Private
Placement; Integrated Offering.
Assuming the accuracy of the Purchasers representations and warranties set
forth
in Section 3.2, no registration under the Securities Act is required for
the
offer and sale of the Shares by the Company to the Purchasers as contemplated
hereby. The issuance and sale of the Shares hereunder does not contravene
the
rules and regulations of the Trading Market. Neither the Company, nor any
of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers
to
buy any security, under circumstances that would cause this offering of the
Shares to be integrated with prior offerings by the Company for purposes
of the
Securities Act and would as a result require registration under the Securities
Act or trigger any applicable shareholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed
or
designated.
(u) Registration
Rights.
Except
as set forth in the Investor Rights Agreement and with respect to the shares
of
Common Stock issuable upon exercise of warrants held by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Securities Co. L.P., no Person has any right to cause the Company to effect
the
registration under the Securities Act of any securities of the
Company.
(v) Listing
and Maintenance Requirements.
The
Company has not, in the 12 months preceding the date hereof, received notice
from any Trading Market on which the Common Stock is or has been listed or
quoted to the effect that the Company is not in compliance with the listing
or
maintenance requirements of such Trading Market. The Company is, and has
no
reason to believe that it will not in the foreseeable future continue to
be, in
compliance with all such listing and maintenance requirements.
(w) Taxes.
All
tax
returns and tax reports required to be filed with respect to the income,
operations, business or assets of the Company and its Subsidiaries have been
timely filed (or appropriate extensions have been obtained) with the appropriate
governmental agencies in all jurisdictions in which such returns and reports
are
required to be filed, and all of the foregoing as filed are, in all material
respects, correct and complete and, in all material respects, reflect accurately
all liability for taxes of the Company and its Subsidiaries for the periods
to
which such returns relate, and all amounts shown as owing thereon have been
paid. All income, profits, franchise, sales, use, value added, occupancy,
property, excise, payroll, withholding, FICA, FUTA and other taxes (including
interest and penalties), if any, collectible or payable by the Company and
its
Subsidiaries or relating to or chargeable against any of its material assets,
revenues or income or relating to any employee, independent contractor,
creditor, stockholder or other third party through the Closing Date, were
fully
collected and paid by such date if due by such date or provided for by adequate
reserves in the financial statements contained in the SEC Reports as of and
for
the periods ended September 30, 2006 (other than taxes accruing after such
date)
and all similar items due through the Closing Date will have been fully paid
by
that date or provided for by adequate reserves, whether or not any such taxes
were reported or reflected in any tax returns or filings.
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No
taxation authority has sought to audit the records of the Company or any
of its
Subsidiaries for the purpose of verifying or disputing any tax returns, reports
or related information and disclosures provided to such taxation authority,
or
for the Company's or any of its Subsidiaries' alleged failure to provide
any
such tax returns, reports or related information and disclosure. No material
claims or deficiencies have been asserted against or inquiries raised with
the
Company or any of its Subsidiaries with respect to any taxes or other
governmental charges or levies which have not been paid or otherwise satisfied,
including claims that, or inquiries whether, the Company or any of its
Subsidiaries has not filed a tax return that it was required to file, and,
to
the best of the Company's knowledge, there exists no reasonable basis for
the
making of any such claims or inquiries. Neither the Company nor any of its
Subsidiaries has waived any restrictions on assessment or collection of taxes
or
consented to the extension of any statute of limitations relating to
taxation.
(x) Environmental
Matters. None
of
the premises or any properties owned, occupied or leased by the Company or
its
Subsidiaries (the "Premises")
has
been used by the Company or the Subsidiaries or, to the Company's knowledge,
by
any other Person, to manufacture, treat, store, or dispose of any substance
that
has been designated to be a "hazardous substance" under applicable Environmental
Laws (hereinafter defined) ("Hazardous
Substances")
in
violation of any applicable Environmental Laws. To its knowledge, the Company
has not disposed of, discharged, emitted or released any Hazardous Substances
which would require, under applicable Environmental Laws, remediation,
investigation or similar response activity. No Hazardous Substances are present
as a result of the actions of the Company or, to the Company's knowledge,
any
other Person, in, on or under the Premises which would give rise to any
liability or clean-up obligations of the Company under applicable Environmental
Laws. The Company and, to the Company's knowledge, any other Person for whose
conduct it may be responsible pursuant to an agreement or by operation of
law,
are in compliance with all laws, regulations and other federal, state or
local
governmental requirements, and all applicable judgments, orders, writs, notices,
decrees, permits, licenses, approvals, consents or injunctions in effect
on the
date of this Agreement relating to the generation, management, handling,
transportation, treatment, disposal, storage, delivery, discharge, release
or
emission of any Hazardous Substance (the "Environmental
Laws").
Neither the Company nor, to the Company's knowledge, any other Person for
whose
conduct it may be responsible pursuant to an agreement or by operation of
law
has received any written complaint, notice, order, or citation of any actual,
threatened or alleged noncompliance with any of the Environmental Laws, and
there is no proceeding, suit or investigation pending or, to the Company's
knowledge, threatened against the Company or, to the Company's knowledge,
any
such Person with respect to any violation or alleged violation of the
Environmental Laws, and, to the knowledge of the Company, there is no basis
for
the institution of any such proceeding, suit or investigation.
(y) Financial
Projections.
The
financial projections of the Company, dated November 2006, delivered to the
Purchasers on or prior to the Closing were prepared by Company management
in
good faith, subject to all of the assumptions and factors relied upon by
the
Company in connection with the preparation thereof, and present a reasonable
estimate of the Company's future financial performance.
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(z) Disclosure.
The
Company understands and confirms that the Purchasers will rely on the foregoing
representations and covenants in effecting transactions in securities of
the
Company. All disclosure provided to the Purchasers regarding the Company,
its
business and the transactions contemplated hereby furnished by or on behalf
of
the Company are true and correct and do not contain any untrue statement
of a
material fact or omit to state any material fact necessary in order to make
the
statements made therein, in light of the circumstances under which they were
made, not misleading.
Each
Purchaser acknowledges and agrees that the Company 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 this Section
3.1
or in any Transaction Document.
3.2 Representations
and Warranties of the Purchasers.
Each
Purchaser hereby, for itself and for no other Purchaser, represents and warrants
as of the date hereof and as of the Closing Date to the Company as
follows:
(a) Organization;
Authority; Enforceability.
Such
Purchaser (other than individuals) is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization
with
full power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by such
Purchaser of the transactions contemplated by this Agreement has been duly
authorized by all necessary corporate or similar action on the part of such
Purchaser. Each Transaction Document to which it is a party has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of such Purchaser, enforceable against it in accordance with its terms, subject
to laws of general application relating to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and rules of law governing specific performance, injunctive relief,
or
other equitable remedies.
(b)
General
Solicitation.
Such
Purchaser is not purchasing the Shares as a result of any advertisement,
article, notice or other communication regarding the Shares published in
any
newspaper, magazine or similar media or broadcast over television or radio
or
presented at any seminar or any other general solicitation or general
advertisement.
(c) No
Public Sale or Distribution.
Such
Purchaser is (i) acquiring the Shares for its own account and not with a
view
towards, or for resale in connection with, the public sale or distribution
thereof; provided,
however,
that by
making the representations herein, such Purchaser does not agree to hold
any
Shares for any minimum or other specific term and reserves the right to dispose
of the Shares at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act. Such Purchaser is acquiring
the Shares hereunder in the ordinary course of its business. Such Purchaser
does
not have any agreement or understanding, directly or indirectly, with any
Person
to distribute any of the Shares.
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(d) Accredited
Investor Status.
Such
Purchaser is an "accredited investor" as that term is defined in Rule 501(a)
of
Regulation D.
(e) Residency. Such
Purchaser is a resident of the jurisdiction set forth below such Purchaser's
name on Schedule
1
hereto.
(f) Reliance
on Exemptions.
Such
Purchaser understands that the Shares are being offered and sold to it in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying
in part
upon the truth and accuracy of, and such Purchaser's compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
such Purchaser set forth herein in order to determine the availability of
such
exemptions and the eligibility of such Purchaser to acquire the
Shares.
(g)
Information.
Such
Purchaser and its advisors, if any, have been furnished with all publicly
available materials (or such materials have been made available to such
Purchaser) relating to the business, finances and operations of the Company
and
such other publicly available materials relating to the offer and sale of
the
Shares as have been requested by such Purchaser, including, without limitation,
the Company's Form 10-KSB for the fiscal year ended December 31, 2005 and
Forms 10-QSB (and any amendments thereto) for the periods ended March 31,
2006, June 30, 2006 and September 30, 2006. Such Purchaser acknowledges that
it
has read and understands the risk factors set forth in such Form 10-KSB.
Such
Purchaser and its advisors, if any, have been afforded the opportunity to
ask
questions of the Company. Neither such inquiries nor any other due diligence
investigations conducted by such Purchaser or its advisors, if any, or its
representatives, or the risk factors set forth in the Company's Form 10-KSB
for
the fiscal year ended December 31, 2005, shall modify, amend or affect such
Purchaser's right to rely on the Company's representations and warranties
contained herein. Such Purchaser understands that its investment in the Shares
involves a high degree of risk.
(h)
No
Governmental Review.
Such
Purchaser understands that no United States federal or state agency or any
other
government or governmental agency has passed on or made any recommendation
or
endorsement of the Shares or the fairness or suitability of the investment
in
the Shares, nor have such authorities passed upon or endorsed the merits
of the
offering of the Shares.
(i)
Experience
of Such Purchaser.
Such
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters,
including investing in companies engaged in the business in which the Company
is
engaged, so as to be capable of evaluating the merits and risks of the
prospective investment in the Shares, and has so evaluated the merits and
risks
of such investment. Such Purchaser is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to afford a complete
loss of such investment.
The
Company acknowledges and agrees that each Purchaser does not make or has
not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section
3.2.
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ARTICLE
IV
OTHER
AGREEMENTS OF THE PARTIES
4.1 Transfer
Restrictions.
(a) The
Shares may only be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Shares, other than pursuant to an
effective registration statement, to the Company, to an Affiliate of a Purchaser
(who is an "accredited investor" as defined in Rule 501 under the Securities
Act
and executes a customary representation letter) or in connection with a pledge
as contemplated in Section 4.1(b), the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor and reasonably satisfactory to the Company, the form and substance
of
which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Shares
under the Securities Act,
provided, however,
that in
the case of a transfer pursuant to Rule 144, no opinion shall be required
if the
transferor provides the Company with a customary seller's representation
letter,
and if such sale is not pursuant to subsection (k) of Rule 144, a customary
broker's representation letter and a Form 144.
Any such
transferee that agrees in writing to be bound by the terms of this Agreement
and
the Investor Rights Agreement shall have the rights of a Purchaser under
this
Agreement and the Investor Rights Agreement. Except as required by federal
securities laws and the securities law of any state or other jurisdiction
within
the United States, the Shares may be transferred, in whole or in part, by
any of
the Purchasers at any time. The Company shall reissue certificates evidencing
the Shares upon surrender of certificates evidencing the Shares being
transferred in accordance with this Section 4.1(a).
(b) The
Purchasers agree to the imprinting, so long as is required by this
Section 4.1(b), of a legend on any of the Shares in substantially the
following form:
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"),
AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, SUCH COUNSEL AND THE SUBSTANCE OF SUCH OPINION SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH
A
FINANCIAL INSTITUTION THAT IS AN "ACCREDITED
INVESTOR"
AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.
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The
Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer
or
grant a security interest in some or all of the Shares to a financial
institution that is an "accredited investor" as defined in Rule 501(a) under
the
Securities Act and, if required under the terms of such arrangement, such
Purchaser may transfer pledged or secured Shares to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval of the
Company and no legal opinion of legal counsel of the pledgee, secured party
or
pledgor shall be required in connection therewith; provided,
however,
that
such Purchaser shall provide the Company with such documentation as is
reasonably requested by the Company to ensure that the pledge is pursuant
to a
bona fide margin agreement with a registered broker-dealer or a security
interest in some or all of the Shares to a financial institution that is
an
"accredited investor" as defined in Rule 501(a) under the Securities Act.
The
Company will execute and deliver such documentation as a pledgee or secured
party of Shares may reasonably request in connection with a pledge or transfer
of the Shares, including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of selling
stockholders thereunder.
(c) Certificates
evidencing the Shares shall not contain any legend (including the legend
set
forth in Section 4.1(b)), (i) following any sale of such Shares pursuant
to Rule
144, or (ii) if such Shares are eligible for sale under Rule 144(k) (and
the
holder of such Shares has submitted a written request for removal of the
legend
indicating that the holder has complied with the applicable provisions of
Rule
144), or (iii) if such legend is not required under applicable requirements
of
the Securities Act (including judicial interpretations and pronouncements
issued
by the Staff of the Commission) (and the holder of such Shares has submitted
a
written request for removal of the legend indicating that the holder has
complied with the applicable provisions of Rule 144). The Company shall cause
its counsel to issue a legal opinion to the Company's transfer agent promptly
upon the occurrence of any of the events in clauses (i), (ii) or (iii) above
to
effect the removal of the legend hereunder and shall also cause its counsel
to
issue a "blanket" legal opinion to the Company's transfer agent promptly
after
the Effective Date, if required by the Company's transfer agent, to allow
sales
pursuant to an effective Registration Statement. The Company agrees that
at such
time as such legend is no longer required under this Section 4.1(c), it will,
no
later than three Trading Days following the delivery by a Purchaser to the
Company or the Company's transfer agent of a certificate representing Shares
with a restrictive legend, deliver or cause to be delivered to such Purchaser
a
certificate representing such Shares that is free from all restrictive and
other
legends; provided that, if a Purchaser is selling Shares pursuant to Rule
144,
the holder of such Shares has submitted a written request for removal of
the
legend indicating that the holder has complied with the applicable provisions
of
Rule 144. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section.
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(d) Each
Purchaser, severally and not jointly, agrees that the removal of the restrictive
legend from certificates representing Shares as set forth in this Section
4.1 is
predicated upon the Company's reliance on, and such Purchaser's agreement
that,
and each Purchaser hereby agrees that, such Purchaser will not sell any Shares
except pursuant to either the registration requirements of the Securities
Act,
including any applicable prospectus delivery requirements, or an exemption
therefrom.
4.2
Furnishing
of Information.
As
long
as any Purchaser owns Shares, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period)
all
reports required to be filed by the Company after the date hereof pursuant
to
the Exchange Act. As long as any Purchaser owns Shares, if the Company is
not
required to file reports pursuant to the Exchange Act, it will prepare and
furnish to the Purchasers and make publicly available in accordance with
Rule
144(c), such information as is required for the Purchasers to sell the Shares
under Rule 144. The Company further covenants that it will take such further
action as any holder of Shares may reasonably request, all to the extent
required from time to time to enable such Person to sell such Shares without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144.
4.3 Integration.
The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Shares in a manner
that would require the registration under the Securities Act of the sale
of the
Shares to the Purchasers or that would be integrated with the offer or sale
of
the Shares for purposes of the rules and regulations of any Trading Market.
4.4 Form
8-K; Publicity.
The
Company shall, within four Business Days following the date hereof, file
a
Current Report on Form 8-K, disclosing the transactions contemplated hereby
and
make such other filings and notices in the manner and time required by the
Commission. No Purchaser shall issue any press release with respect to the
transactions contemplated hereby or otherwise make any such public statement
without the prior consent of the Company, except if such disclosure is required
by applicable law, rule or regulation, in which case such Purchaser shall
promptly provide the Company with prior notice of such public statement or
communication. The Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing made with the
Commission (other than the Registration Statement and any exhibits to filings
made in respect of the transactions contemplated hereby in accordance with
the
periodic filing and reporting requirements under the Exchange Act) or any
regulatory agency, securities exchange or Trading Market, without the prior
written consent of such Purchaser.
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Notwithstanding
the foregoing, the Company shall be permitted to make any such disclosure
to the
extent such disclosure is required by law or applicable Trading Market
regulations, in which case the Company shall provide such Purchaser with
prior
notice of such disclosure.
4.5 Non-Public
Information.
The
Company covenants and agrees that neither it nor any other Person acting
on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Purchaser shall have executed a written agreement regarding
the confidentiality and use of such information. The Company understands
and
confirms that each Purchaser shall be relying on the foregoing representations
in effecting transactions in securities of the Company.
4.6 Use
of Proceeds.
The
Company covenants and agrees that the proceeds from the sale of the Shares
shall
be used by the Company for repayment of outstanding debt and working capital
and
general corporate purposes; under no circumstances shall any portion of the
proceeds be applied to:
(i) the
payment of dividends or other distributions on any capital stock of the Company;
(ii) the
purchase of debt or equity securities of any Person for cash, including the
Company and its Subsidiaries, except in connection with investment of excess
cash in high quality (A1/P1 or better) money market instruments having
maturities of one year or less;
(iii) any
expenditure not directly related to the business of the Company; or
(iv) the
redemption of any Company equity or equity-equivalent securities other than
$13
million of convertible debt securities outstanding as of the date of this
Agreement.
4.7 Reservation
of Common Stock.
The
Company has reserved a sufficient number of shares of Common Stock for the
purpose of enabling the Company to issue the Shares pursuant to this
Agreement.
4.8 Listing
of Common Stock.
The
Company hereby agrees to use commercially reasonable efforts to maintain
the
listing of the Common Stock on a Trading Market or the OTC Bulletin Board,
and,
if required, as soon as reasonably practicable following the Closing to list
the
applicable Shares on such Trading Market or the OTC Bulletin Board.
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4.10 Securities
Law Compliance.
(a) Securities
Act.
The
Company shall timely prepare and file with the Securities and Exchange
Commission the form of notice of the sale of securities pursuant to the
requirements of Regulation D regarding the sale of the Shares under this
Agreement.
(b) State
Securities Law Compliance.
The
Company shall timely prepare and file such applications, consents to service
of
process (but not including a general consent to service of process) and similar
documents and take such other steps and perform such further acts as shall
be
required by the state securities law requirements of each jurisdiction where
a
Purchaser resides, as indicated on Schedule
1
hereto,
with respect to the sale of the Shares under this Agreement.
ARTICLE
V
INDEMNIFICATION,
TERMINATION AND DAMAGES
5.1 Survival
of Representations.
Except
as
otherwise provided herein, the representations and warranties of the Company
and
the Purchasers contained in or made pursuant to this Agreement shall survive
the
execution and delivery of this Agreement and the Closing Date and shall continue
in full force and effect for a period of three (3) years from the Closing
Date.
The Company's and the Purchasers' warranties and representations shall in
no way
be affected or diminished in any way by any investigation of (or failure
to
investigate) the subject matter thereof made by or on behalf of the Company
or
the Purchasers.
5.2 Indemnification.
The
Company agrees to indemnify and hold harmless the Purchasers, their Affiliates,
each of their officers, directors, employees and agents and their respective
successors and assigns, from and against any losses, damages, or expenses
which
are caused by or arise out of (i) any breach or default in the performance
by
the Company of any covenant or agreement made by the Company in the Transaction
Documents; (ii) any breach of warranty or representation made by the Company
in
the Transaction Documents; and/or (iii) any and all third party actions,
suits,
proceedings, claims, demands, judgments, costs and expenses (including
reasonable legal fees and expenses) incident to any of the
foregoing.
5.3 Indemnity
Procedure.
A
party
or parties hereto agreeing to be responsible for or to indemnify against
any
matter pursuant to this Agreement is referred to herein as the "Indemnifying
Party"
and the
other party or parties claiming indemnity is referred to as the "Indemnified
Party".
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An
Indemnified Party under this Agreement shall, with respect to claims asserted
against such party by any third party, give written notice to the Indemnifying
Party of any liability which might give rise to a claim for indemnity under
this
Agreement within sixty (60) Business Days of the receipt of any written claim
from any such third party, but not later than twenty (20) days prior to the
date
any answer or responsive pleading is due, and with respect to other matters
for
which the Indemnified Party may seek indemnification, give prompt written
notice
to the Indemnifying Party of any liability which might give rise to a claim
for
indemnity; provided,
however,
that
any failure to give such notice will not waive any rights of the Indemnified
Party except to the extent the rights of the Indemnifying Party are materially
prejudiced.
The
Indemnifying Party shall have the right, at its election, to take over the
defense or settlement of such claim by giving written notice to the Indemnified
Party at least fifteen (15) days prior to the time when an answer or other
responsive pleading or notice with respect thereto is required. If the
Indemnifying Party makes such election, it may conduct the defense of such
claim
through counsel of its choosing (subject to the Indemnified Party's approval
of
such counsel, which approval shall not be unreasonably withheld or delayed),
shall be solely responsible for the expenses of such defense and shall be
bound
by the results of its defense or settlement of the claim. The Indemnifying
Party
shall not settle any such claim without prior notice to and consultation
with
the Indemnified Party, and no such settlement involving any equitable relief
or
which might have an adverse effect on the Indemnified Party may be agreed
to
without the written consent of the Indemnified Party (which consent shall
not be
unreasonably withheld or delayed). So long as the Indemnifying Party is
diligently contesting any such claim in good faith, the Indemnified Party
may
pay or settle such claim only at its own expense and the Indemnifying Party
will
not be responsible for the fees of separate legal counsel to the Indemnified
Party, unless the named parties to any proceeding include both parties or
representation of both parties by the same counsel would be inappropriate
in the
reasonable opinion of counsel to the Indemnified Party, due to conflicts
of
interest or otherwise. If the Indemnifying Party does not make such election,
or
having made such election does not, in the reasonable opinion of the Indemnified
Party proceed diligently to defend such claim, then the Indemnified Party
may
(after written notice to the Indemnifying Party), at the expense of the
Indemnifying Party, elect to take over the defense of and proceed to handle
such
claim in its discretion and the Indemnifying Party shall be bound by any
defense
or settlement that the Indemnified Party may make in good faith with respect
to
such claim. In connection therewith, the Indemnifying Party will fully cooperate
with the Indemnified Party should the Indemnified Party elect to take over
the
defense of any such claim. The parties hereto agree to cooperate in defending
such third party claims and the Indemnified Party shall provide such cooperation
and such access to its books, records and properties (subject to the execution
of appropriate non-disclosure agreements) as the Indemnifying Party shall
reasonably request with respect to any matter for which indemnification is
sought hereunder; and the parties hereto agree to cooperate with each other
in
order to ensure the proper and adequate defense thereof.
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With
regard to claims of third parties for which indemnification is payable
hereunder, such indemnification shall be paid by the Indemnifying Party upon
the
earlier to occur of: (i) the entry of a judgment against the Indemnified
Party
and the expiration of any applicable appeal period, or if earlier, five (5)
days
prior to the date that the judgment creditor has the right to execute the
judgment; (ii) the entry of an unappealable judgment or final appellate decision
against the Indemnified Party; or (iii) a settlement of the claim.
Notwithstanding the foregoing, the reasonable expenses of counsel to the
Indemnified Party shall be reimbursed on a current basis by the Indemnifying
Party. With regard to other claims for which indemnification is payable
hereunder, such indemnification shall be paid promptly by the Indemnifying
Party
upon demand by the Indemnified Party.
ARTICLE
VI
MISCELLANEOUS
6.1 Entire
Agreement.
The
Transaction Documents, together with the exhibits and schedules thereto,
contain
the entire understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral
or
written, with respect to such matters, which the parties hereto acknowledge
have
been merged into such documents, exhibits and schedules.
6.2 Notices.
Any
and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified on the signature
pages attached hereto prior to 5:00 p.m. (New York City time) on a Trading
Day,
(b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number on the
signature pages attached hereto on a day that is not a Trading Day or later
than
5:00 p.m. (New York City time) on any Trading Day, (c) the Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party hereto to whom such notice
is
required to be given. The address for such notices and communications shall
be
as follows:
If
to the
Purchasers, at each Purchaser's address set forth under its name on Schedule
1
attached
hereto, or with respect to the Company, addressed to:
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
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or
to
such other address or addresses or facsimile number or numbers as any such
party
hereto may most recently have designated in writing to the other parties
hereto
by such notice. Copies of notices to the Company shall be sent to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Copies
of
notices to any Purchaser shall be sent to the addresses, if any, listed on
Schedule
1
attached
hereto.
6.3 Amendments;
Waivers.
No
provision of this Agreement may be amended except in a written instrument
signed
by the Company and the Purchasers purchasing at least a majority of the Shares
purchased under this Agreement (subject to proportionate adjustment for any
stock dividend, stock split, combination of shares, reorganization,
recapitalization, reclassification or other similar event affecting the Common
Stock, occurring after the date hereof), provided that (i) any amendment
that
affects the rights hereunder of any Purchaser in an adverse manner different
from the rights of the other Purchasers shall require the prior written consent
of such Purchaser, and (ii) the Company may not pay any consideration to
any
Purchaser in connection with any such amendment unless it contemporaneously
pays
the same amount and type of consideration to all Purchasers. No provision
of
this Agreement may be waived except by the party hereto against whom enforcement
of any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to
be a
continuing waiver in the future or a waiver of any subsequent default or
a
waiver of any other provision, condition or requirement hereof, nor shall
any
delay or omission of any party hereto to exercise any right hereunder in
any
manner impair the exercise of any such right.
6.4 Construction.
The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties hereto to express their mutual intent, and no rules
of
strict construction will be applied against any party hereto.
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6.5 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser. Any Purchaser may assign any or all of its rights
under this Agreement to any Person in accordance with the terms hereof, provided
such transferee agrees in writing to be bound, with respect to the transferred
Shares, by the provisions hereof that apply to the Purchasers.
6.6 No
Third-Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set
forth
in Article V.
6.7 Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents shall be governed by and construed and enforced
in
accordance with the internal laws of the State of New York, without regard
to
the principles of conflicts of law thereof.
6.8
Jurisdiction;
Venue; Service of Process.
This
Agreement shall be subject to the exclusive jurisdiction of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of New York, and if such court does not have proper
jurisdiction, the State Courts of New York County, New York. The parties
hereto
agree that any breach of any term or condition of this Agreement shall be
deemed
to be a breach occurring in the State of New York by virtue of a failure
to
perform an act required to be performed in the State of New York and irrevocably
and expressly agree to submit to the jurisdiction of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of New York, and if such court does not have proper
jurisdiction, the State Courts of New York County, New York, for the purpose
of
resolving any disputes among the parties hereto relating to this Agreement
or
the transactions contemplated hereby. The parties hereto irrevocably waive,
to
the fullest extent permitted by law, any objection which they may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement, or any judgment entered by any court
in
respect hereof brought in New York County, New York, and further irrevocably
waive any claim that any suit, action or proceeding brought in ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of New York, and if such court does not have proper
jurisdiction, the State Courts of New York County, New York, has been brought
in
an inconvenient forum. Each of the parties hereto consents to process being
served in any such suit, action or proceeding, by mailing a copy thereof
to such
party at the address in effect for notices to it under this Agreement and
agrees
that such service shall constitute good and sufficient service of process
and
notice thereof. Nothing in this Section 6.8 shall affect or limit any right
to
serve process in any other manner permitted by law.
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6.9
Execution.
This
Agreement may be executed in counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective
when
counterparts have been signed by each party hereto and delivered to the other
parties hereto, it being understood that the parties hereto need not sign
the
same counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation
of the
party executing (or on whose behalf such signature is executed) with the
same
force and effect as if such facsimile signature page were an original
thereof.
6.10 Severability.
If
any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties hereto will attempt to agree upon a valid and enforceable provision
that
is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.
6.11 Replacement
of Share Certificates.
If
any
certificate or instrument evidencing any Shares is mutilated, lost, stolen
or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction
and
customary and reasonable indemnity, if requested by the Company.
6.12 Remedies.
In
addition to being entitled to exercise all rights provided herein or granted
by
law, including recovery of damages, each of the Purchasers and the Company
will
be entitled to specific performance under the Transaction Documents. The
parties
hereto agree that monetary damages may not be adequate compensation for any
loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance
of
any such obligation the defense that a remedy at law would be
adequate.
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6.13 Payment
Set Aside.
To
the
extent that the Company makes a payment or payments to any Purchaser pursuant
to
any Transaction Document or a Purchaser enforces or exercises its rights
thereunder, and such payment or payments or the proceeds of such enforcement
or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation,
any
bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall, to the extent permissible under
applicable law, be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not
occurred.
6.14 Independent
Nature of Purchasers' Obligations and Rights.
The
obligations of each Purchaser under any Transaction Document are several
and not
joint with the obligations of any other Purchaser, and no Purchaser shall
be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in
any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to
such
obligations or the transactions contemplated by the Transaction Documents.
Each
Purchaser shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of the Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined
as
an additional party in any proceeding for such purpose.
6.15 Waiver
of Trial by Jury.
THE
PARTIES HERETO IRREVOCABLY WAIVE TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6.16 Further
Assurances.
Each
party hereto agrees to cooperate fully with the other parties hereto and
to
execute such further instruments, documents and agreements and to give such
further written assurances as may be reasonably requested by any other party
hereto to better evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of
this
Agreement, and further agrees to take promptly, or cause to be taken, all
actions, and to do promptly, or cause to be done, all things necessary, proper
or advisable under applicable law to consummate and make effective the
transactions contemplated hereby, to obtain all necessary waivers, consents
and
approvals, to effect all necessary registrations and filings, and to remove
any
injunctions or other impediments or delays, legal or otherwise, in order
to
consummate and make effective the transactions contemplated by this Agreement
for the purpose of securing to the parties hereto the benefits contemplated
by
this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
COMPANY:
By:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇
Title:
President & Chief Executive Officer
PURCHASERS:
[Purchasers'
signatures appear on following pages]
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29
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PURCHASERS:
BRENCOURT
ADVISORS LLC
By:_/s/
▇▇▇▇▇▇▇ ▇▇▇▇ ________________________
Name:
▇▇▇▇▇▇▇ ▇▇▇▇
Title:
CFO
▇▇▇▇▇▇▇
PRIVATE EQUITY PARTNERS I, LLC
By:
▇▇▇▇▇▇▇
INVESTMENT COMPANY, LLC
General
Partner
By:_/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ _____________
Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Executive Vice President
▇▇▇▇▇▇▇
SMALL CAP PARTNERS, LP
By:
▇▇▇▇▇▇▇
INVESTMENT COMPANY, LLC
General
Partner
By:_/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ _____________
Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Executive Vice President
▇▇▇▇▇▇▇
SMALL CAP INTERNATIONAL, LP
By:
▇▇▇▇▇▇▇
INVESTMENT COMPANY, LLC
General
Partner
By:_/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ _____________
Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Executive Vice President
CORNELL
CAPITAL PARTNERS, LP
By:
Yorkville Advisors, LLC, its General Partner
By:_/s/
▇▇▇▇ ▇▇▇▇▇▇ ________________________
Name:
▇▇▇▇ ▇▇▇▇▇▇
Title:
Portfolio Manager
INVUS
PUBLIC EQUITIES L.P.
By:_/s/
Khalil Barrage ________________________
Name:
Khalil Barrage
Title:
Vice President
▇▇▇▇
PIRANHA MASTER FUND, LTD.
By:
▇▇▇▇
Partners LLC, its investment advisor
By:_/s/
▇▇▇▇ ▇▇▇▇▇▇▇ ________________________
Name:
▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Partner
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ & PARTNERS I, LP
By:_/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ________________________
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Senior Managing Member of OSS Advisors LLC, General Partner
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ & PARTNERS II, LP
By:_/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ________________________
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Senior Managing Member of OSS Advisors LLC, General Partner
OSS
OVERSEAS LTD
By:_/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ________________________
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Senior Managing Member of ▇▇▇▇▇▇▇ Brothers LLC, General Partner
of
OSS
Capital Management LP Investment Manager
PEQUOT
HEALTHCARE FUND, L.P.
By:
PEQUOT
CAPITAL MANAGEMENT, INC
Investment
Manager
By:_/s/
▇▇▇▇▇▇ Fishbone ________________________
Name:
▇▇▇▇▇▇ Fishbone
Title:
CFO
PEQUOT
HEALTHCARE OFFSHORE FUND, INC.
By:
PEQUOT
CAPITAL MANAGEMENT, INC
Investment
Manager
By:_/s/
▇▇▇▇▇▇ Fishbone ________________________
Name:
▇▇▇▇▇▇ Fishbone
Title:
CFO
PEQUOT
DIVERSIFIED MASTER FUND, LTD
By:
PEQUOT
CAPITAL MANAGEMENT, INC
Investment
Manager
By:_/s/
▇▇▇▇▇▇ Fishbone ________________________
Name:
▇▇▇▇▇▇ Fishbone
Title:
CFO
PEQUOT
HEALTHCARE INSTITUTIONAL FUND, L.P.
By:
PEQUOT
CAPITAL MANAGEMENT, INC
Investment
Manager
By:_/s/
▇▇▇▇▇▇ Fishbone ________________________
Name:
▇▇▇▇▇▇ Fishbone
Title:
CFO
PREMIUM
SERIES PCC LIMITED -CELL 32
By:_/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ________________________
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Attorney in Fact
PRENOX,
LLC
By:
Prentice Capital Management, LP, as Manager
By:__/s/
▇▇▇▇▇▇▇ Hoffman________________________
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
General Counsel
WITCHES
ROCK PORTFOLIO LTD
By:
Tudor
Investment Corporation, Investment Advisor
By:_/s/
▇▇▇▇▇▇▇ ▇. Waldman________________________
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Managing Director
THE
TUDOR BVI GLOBAL PORTFOLIO LTD.
By:
Tudor
Investment Corporation, Trading Advisor
By:_/s/
▇▇▇▇▇▇▇ ▇. Waldman________________________
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Managing Director
TUDOR
PROPRIETARY TRADING, L.L.C.
By:_/s/
▇▇▇▇▇▇▇ ▇. Waldman________________________
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Managing Director
-
30
-
Schedule
1
Purchasers
and Shares
|
Name,
Address and Facsimile Number
of
Purchaser
|
Shares
|
Subscription
Amount
|
|
Brencourt
Advisors LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
|
7,894,736
|
$7,499,999.20
|
|
▇▇▇▇▇▇▇
Private Equity Partners I, LLC
▇▇▇▇▇▇▇
Small Cap International, ▇.▇.
▇▇▇▇▇▇▇
Small Cap Partners, L.P.
c/o
Chilton Investment Company, LLC
▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
|
526,316
1,357,797
1,273,782
|
$500,000.20
$1,289,907.15
$1,210,092.90
|
|
Cornell
Capital Partners, LP
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
|
1,263,157
|
$1,200,000.00
|
|
Invus
Public Equities L.P.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
|
1,052,631
|
$999,999.55
|
|
▇▇▇▇
Piranha Master Fund, Ltd.
c/o
▇▇▇▇ Partners LLC
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
General Counsel
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
|
7,368,421
|
$6,999,999.95
|
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ & Partners I, LP
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ & Partners II, LP
OSS
Overseas LTD
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile:
212-756-8701
|
414,782
4,533,603
5,577,930
|
$394,042.90
$4,306,922.85
$5,299,033.50
|
|
Pequot
Healthcare Fund, L.P.
Pequot
Healthcare Offshore Fund, Inc.
Pequot
Diversified Master Fund, Ltd.
Pequot
Healthcare Institutional Fund, L.P.
Premium
Series PCC Limited -- Cell 32
c/o
Pequot Capital Management, Inc.
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
|
3,243,625
2,502,587
447,315
601,698
573,196
|
$3,081,443.75
$2,377,457.65
$424,949.25
$571,613.10
$544,536.20
|
|
Prenox,
LLC
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
|
5,263,157
|
$5,000,000.00
|
|
Witches
Rock Portfolio Ltd.
The
Tudor BVI Global Portfolio Ltd.
Tudor
Proprietary Trading, L.L.C.
c/o
Tudor Investment Corporation
▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
|
2,529,022
408,768
220,105
|
$2,402,570.90
$388,329.60
$209,099.75
|
|
Total:
|
47,052,628
|
$44,699,998.40
|
-
31
-
Exhibit
A
Escrow
Agreement
-
32
-
Exhibit
B
Investor
Rights Agreement
-
33
-
Exhibit
C
Legal
Opinion
-
34
-