Exhibit 4.14
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
This Common Stock and Warrant Purchase Agreement (this "AGREEMENT"), dated
April 19, 2004 (the "AGREEMENT DATE"), is between ADVENTRX Pharmaceuticals,
Inc., a Delaware corporation (the "COMPANY"), and Xxxxxxxx X. Xxxxxx (the
"INVESTOR").
1. SUBSCRIPTION.
(A) SHARES OF COMMON STOCK. On the terms and subject to the
conditions set forth in this Agreement, at the Closing (as defined below),
the Company will sell and the Investor will purchase One Hundred Sixty-six
Thousand Six Hundred Sixty-six (166,666) shares of Common Stock, par value
$0.001 per share, of the Company ("COMMON STOCK") at a purchase price of
$1.50 per share (the "SHARE PRICE"). For purposes of this Agreement, the
term "SHARES" refers to the shares of Common Stock purchased by the
Investor pursuant to this Agreement.
(B) WARRANTS In consideration of the Investor's purchase of the
Shares, the Company shall also issue to the Investor (i) a warrant, in the
form of Exhibit A-1 hereto, to purchase Forty-nine Thousand Nine Hundred
Ninety-nine (49,999) shares of Common Stock (an "A-1 WARRANT") and (ii) a
warrant, in the form of Exhibit A-2 hereto, to purchase Thirty-three
Thousand Three Hundred Thirty-three (33,333) shares of Common Stock (an
"A-2 WARRANT"). The A-1 Warrants and A-2 Warrants issuable to the Investor
pursuant to this Agreement are collectively referred to herein as the
"WARRANTS."
2. CLOSING; CONDITIONS TO CLOSING.
(A) CLOSING. The closing of the purchase and sale of the Shares and
the issuance of the Warrants (the "CLOSING") will take place as promptly
as practicable, but no later than five business days after satisfaction or
waiver of all of the conditions set forth in Sections 2(c) and (d) (other
than those conditions which by their terms are not to be satisfied or
waived until the Closing), at the offices of the Company's Counsel (as
defined herein), located at 0 Xxxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX
00000-0000. The date on which the Closing occurs is referred to herein as
the "CLOSING DATE" (it is understood and agreed that the Closing Date
shall be the Agreement Date).
(B) DELIVERY OF PURCHASE PRICE. The Investor shall deliver or cause
to be delivered to the Company by wire transfer of immediately available
funds an amount in cash equal to $250,000 (the "PURCHASE PRICE").
(C) CONDITIONS TO OBLIGATIONS OF THE INVESTOR TO EFFECT THE CLOSING.
The obligations of the Investor 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 Investor:
(I) The Company shall deliver or cause to be delivered to the
Investor the following:
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(1) A copy of the letter to be delivered to the
Company's transfer agent containing irrevocable
instructions to issue a certificate evidencing the
Shares, registered in the name of the Investor (it being
understood and agreed that the original of such letter
shall be delivered to the transfer agent upon the
Company's receipt of the Purchase Price);
(2) The Registration Rights Agreement in the form of
Exhibit B hereto (the "REGISTRATION RIGHTS AGREEMENT")
executed by the Company; and
(3) The Warrants, each registered in the name of the
Investor and executed by the Company.
(D) CONDITIONS TO OBLIGATIONS OF THE COMPANY TO EFFECT THE CLOSING.
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:
(I) The Investor shall have executed and delivered to the
Company this Agreement;
(II) The Investor shall have executed and delivered to the
Company the Registration Rights Agreement;
(III) The Investor shall have executed and delivered to the
Company the Investor Suitability Questionnaire attached hereto
as Exhibit C and the Company shall be reasonably satisfied,
through the responses of the Investor, that the sale of the
Shares and the Warrants shall not require registration thereof
under the Securities Act of 1933, as amended (the "SECURITIES
ACT") or under the blue sky or securities laws of any
jurisdiction; and
(IV) The Investor shall have delivered the Purchase Price to
the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants as of the Agreement Date to the Investor that, except as set forth on
the Disclosure Schedule attached as Schedule 3:
(A) CORPORATE EXISTENCE AND POWER; SUBSIDIARIES. The Company is a
corporation duly incorporated, validly existing and in good standing under
the laws of the state in which it is incorporated, and has all corporate
powers required to carry on its business as now conducted. The Company is
duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so
qualified would not have a Material Adverse Effect. For purposes of this
Agreement, the term "MATERIAL ADVERSE EFFECT" means, with respect to the
Company, a material adverse effect on the Company's condition (financial
or other), business, properties, assets, liabilities (including contingent
liabilities), results of operations or current prospects, taken as a
whole. True and complete copies of the Company's Certificate of
Incorporation, as amended (the "CERTIFICATE"), and Bylaws, as amended (the
"BYLAWS"), as currently in effect and as will be in effect on the Closing
Date, have previously been made available to the Investor. For purposes of
this Agreement, the term "SUBSIDIARY" or "SUBSIDIARIES" means, with
respect to any entity, any corporation or other organization of which
securities or other ownership interests 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 such entity or of
which such entity 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. The Company has no
Subsidiaries.
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(B) CORPORATE AUTHORIZATION. The execution, delivery and performance
by the Company of this Agreement, the Registration Rights Agreement, the
Warrants and each of the other documents executed by the Company pursuant
to and in connection with this Agreement (collectively, the "TRANSACTION
Agreements"), and the consummation of the transactions contemplated hereby
and thereby (including, but not limited to, the sale and delivery of the
Shares and the Warrants to the Investor and the subsequent issuance of the
Warrant Shares to the Investor upon exercise of the Warrants) (the
"TRANSACTIONS") have been (and will be, in the case of the issuance of the
Warrant Shares) duly authorized, and no additional corporate or
stockholder action is required for the approval thereof. The shares
issuable upon exercise of the Warrants (the "WARRANT SHARES") have been
duly reserved for issuance by the Company. The Transaction Agreements have
been or, to the extent contemplated hereby or by the Transaction
Agreements, will be duly executed and delivered and constitute the legal,
valid and binding agreement of the Company, enforceable against the
Company in accordance with their terms, except as may be limited by
bankruptcy, reorganization, insolvency, moratorium and similar laws of
general application relating to or affecting the enforcement of rights of
creditors, and except as enforceability of its obligations hereunder are
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(C) NON-CONTRAVENTION The execution, delivery and performance by the
Company of the Transaction Agreements, and the consummation by the Company
of the Transactions do not and will not (a) violate any term of the
Certificate, the Bylaws or any material agreement to which the Company is
a party or by which it is bound; (b) constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to the Company; (c) constitute a default (or
would constitute a default with notice or lapse of time or both) or breach
under or give rise to a right of termination, cancellation or acceleration
or loss of any benefit under any material agreement, contract or other
instrument binding upon the Company or under any material license,
franchise, permit or other similar authorization held by the Company; or
(d) result in the creation or imposition of any Lien (as defined below) on
any asset of the Company. For purposes of this Agreement, the term "LIEN"
means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, claim or encumbrance of any kind in respect of such
asset.
(D) SEC DOCUMENTS. The Company is obligated under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to file reports
pursuant to Sections 13 or 15(d) thereof (all such reports filed or
required to be filed by the Company with the Securities and Exchange
Commission (the "COMMISSION"), including all exhibits thereto or
incorporated therein by reference, and all documents filed by the Company
under the Securities Act, hereinafter called the "SEC DOCUMENTS"). Since
December 31, 2002, the Company has timely filed all SEC Documents required
to be filed under the Exchange Act. All SEC Documents filed on or after
October 31, 2000 (i) were prepared in all material respects in accordance
with the requirements of the Exchange Act and (ii) did not at the time
they were filed (or, if amended or superseded by a filing prior to the
Agreement Date, then on the date of such filing) contain any untrue
statement of a material fact or omit 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. A
correct and complete copy of each of the SEC Documents for any period
ending on or after December 31, 2002 (the "RECENT REPORTS") is currently
available to the Investor at the Commission's main ___________ public
___________ website ___________ at
xxxx://xxx.xxx.xxx/xxx-xxx/xxxxxx-xxxxx?xxxxxxxxxxxxxxxxxxxxxxx&XXXx&
filenum=&State=&SIC=&owner=include&action=getcompany. None of the
information about the Company or any of its Subsidiaries which has been
disclosed to the Investor herein or in the course of discussions and
negotiations with respect hereto which is not disclosed in the Recent
Reports is or was required to be so disclosed.
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(E) FINANCIAL STATEMENTS. Each of the Company's audited consolidated
balance sheet and related consolidated statements of income, cash flows
and changes in stockholders' equity (including the related notes) as of
and for the years ended December 31, 2003 and December 31, 2002, as
contained in the Recent Reports (both of (i) and (ii), collectively, the
"FINANCIAL STATEMENTS") (x) present fairly in all material respects the
financial position of the Company and its Subsidiaries on a consolidated
basis as of the dates thereof and the results of operations, cash flows
and stockholders' equity as of and for each of the periods then ended and
(y) were prepared in accordance with United States generally accepted
accounting principals ("GAAP") applied on a consistent basis throughout
the periods involved, in each case, except as otherwise indicated in the
notes thereto.
(F) COMPLIANCE WITH LAW. The Company is in compliance and has
conducted its business so as to comply with all laws, rules and
regulations, judgments, decrees or orders of any court, administrative
agency, commission, regulatory authority or other governmental authority
or instrumentality, domestic or foreign, applicable to its operations, the
violation of which would cause a Material Adverse Affect. There are no
judgments or orders, injunctions, decrees, stipulations or awards (whether
rendered by a court or administrative agency or by arbitration), including
any such actions relating to affirmative action claims or claims of
discrimination, against the Company or against any of its properties or
businesses.
(G) ABSENCE OF CERTAIN CHANGES. Since December 31, 2003, the Company
has conducted its business only in the ordinary course and there has not
occurred, except as set forth in the Recent Reports or any exhibit thereto
or incorporated by reference therein, any event that could reasonably be
expected to have a Material Adverse Effect on the Company or any of its
Subsidiaries.
(H) NO UNDISCLOSED LIABILITIES. Except as set forth in the Recent
Reports, and except for liabilities and obligations incurred in the
ordinary course of business since December 31, 2003, as of the Agreement
Date, to the Company's knowledge, (i) the Company does not have any
material liabilities or obligations (absolute, accrued, contingent or
otherwise) which, 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, in
each case, if asserted could result in any such material liabilities or
obligations which are not fully reflected, reserved against or disclosed
in the balance sheet of the Company as at December 31, 2003.
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(I) CAPITALIZATION. The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock of which 53,221,288 shares
are issued and 53,198,123 are outstanding as of the Agreement Date and
1,000,000 shares of preferred stock, par value $0.01 per share, of which
none are issued and outstanding as of the Agreement Date. All issued and
outstanding shares of the Company's capital stock have been duly
authorized and were validly issued, and are fully paid and nonassessable.
No securities issued by the Company from October 31, 2000 to the Agreement
Date were issued in violation of any statutory or common law preemptive
rights. Upon issuance pursuant to the terms of this Agreement or the
Warrants, as the case may be, all Shares and Warrant Shares shall be duly
authorized, validly issued and outstanding, and fully paid and
nonassessable and such shares shall not have been issued in violation of
any statutory or contractual preemptive rights. There are no dividends
which have accrued or been declared but are unpaid on the capital stock of
the Company. All taxes required to be paid by Company in connection with
the issuance and any transfers of the Company's capital stock have been
paid. All permits or authorizations required to be obtained from or
registrations required to be effected with any person or entity in
connection with any and all issuances of securities of the Company from
October 31, 2000 through the Agreement Date have been obtained or
effected, and all securities of the Company have been issued and are held
in accordance with the provisions of all applicable securities or other
laws. A true and complete capitalization table of the Company as of the
Agreement Date is set forth in Schedule 3(i). No shares of capital stock
of the Company are subject to preemptive rights or any other similar
rights of the stockholders of the Company or any liens or encumbrances
imposed through the actions or failure to act of the Company. Except as
disclosed in Schedule 3(i), as of the Agreement Date, (i) there are no
outstanding options, warrants, scrip, rights to subscribe for, puts,
calls, rights of first refusal, agreements, understandings, claims or
other commitments or rights of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for any shares of
capital stock of the Company, or arrangements by which the Company is or
may become bound to issue additional shares of capital stock of the
Company, (ii) there are no agreements or arrangements under which the
Company is obligated to register the sale of any of its securities under
the Securities Act and (iii) there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or
in any agreement providing rights to security holders) that will be
triggered by the issuance of the Shares, Warrants or Warrant Shares
(including the issuance of the Warrant Shares upon exercise of the
Warrants).
(J) GOVERNMENT AUTHORIZATIONS. Except as disclosed in the Recent
Reports, 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 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 is in material compliance with the
terms of all the Governmental Authorizations. The Company has not engaged
in any activity that, to its knowledge, would cause revocation or
suspension of any such Governmental Authorizations. The Company has no
knowledge of any facts which could reasonably be expected to cause the
Company to believe that the Governmental Authorizations will not be
renewed by the appropriate governmental authorities in the ordinary
course. Neither the execution, delivery nor performance of this Agreement
shall adversely affect the status of any of the Governmental
Authorizations.
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(K) BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement, based upon any arrangement
made by or on behalf of the Company, which would make the Company or the
Investor liable for any fees or commissions.
(L) SECURITIES LAWS. Neither the Company nor any agent acting on
behalf of the Company has taken any action which might cause this
Agreement or the Shares or Warrants to violate the Securities Act or the
Exchange Act or any rules or regulations promulgated thereunder, as in
effect on the Closing Date. Assuming that all of the representations and
warranties of the Investor set forth in Section 4 are true and correct,
the offer, sale and issuance of the Shares and Warrants in conformity with
the terms of this Agreement are exempt from the registration requirements
of Section 5 of the Securities Act and from the qualification or
registration requirements of applicable "blue sky" laws.
(M) ISSUANCE OF SHARES. The Shares are duly authorized and, upon
issuance in accordance with the terms of this Agreement will be validly
issued, fully paid, and non-assessable and free from all taxes, liens,
claims and encumbrances with respect to the issue thereof and shall not be
subject to preemptive rights or other similar rights of stockholders of
the Company and will not impose personal liability on the holder thereof.
The Warrant Shares are duly authorized and reserved for issuance, and,
when issued upon exercise of or otherwise pursuant to the Warrants,
respectively, in accordance with the terms thereof, will be validly
issued, fully paid and non-assessable, and free from all taxes, liens,
claims and encumbrances and will not be subject to preemptive rights or
other similar rights of stockholders of the Company and will not impose
personal liability upon the holder thereof.
(N) INTERNAL ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient, in the judgment of the Company's
board of directors, to provide reasonable assurance that (i) transactions
are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles 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.
(O) NO INVESTMENT COMPANY. The Company is not, and upon the issuance
and sale of the Shares and Warrants as contemplated by this Agreement will
not be, an "investment company" required to be registered under the
Investment Company Act of 1940 (an "INVESTMENT COMPANY"). The Company is
not controlled by an Investment Company.
(P) XXXXXXXX-XXXXX ACT.The Company is in substantial compliance with
the applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the
"XXXXXXXX-XXXXX ACT"), and the rules and regulations promulgated
thereunder, that are effective and intends to comply substantially with
other applicable provisions of the Xxxxxxxx-Xxxxx Act, and the rules and
regulations promulgated thereunder, upon the effectiveness of such
provisions.
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(Q) BENEFICIAL HOLDINGS OF XXXXXXX HILL PARTNERS. Xxxxxxx Xxxx
Partners ("BHP"), a division of Pali Capital, Inc. and the Company's
placement agent with respect to the purchase and sale of the Shares and
the issuance of the Warrants, has advised the Company that certain
employees of BHP and their family members (acting separately and not as a
group) owned approximately 12% of the outstanding shares of Common Stock
as of April 4, 2004.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
represents and warrants to the Company as follows:
(A) EXEMPT TRANSACTION; UNREGISTERED SHARES AND WARRANTS. The
Investor understands that the Shares and Warrants are being offered and
sold in reliance on one or more exemptions from registration provided for
under the Securities Act, and that the Company's reliance upon such
exemptions is predicated, in part, upon the Investor's representations and
warranties set forth in this Agreement. The Investor acknowledges that it
is purchasing the Shares and Warrants without being offered or furnished
any offering literature or prospectus. The Investor understands that
neither the Commission, nor any governmental agency charged with the
administration of the securities laws of any jurisdiction nor any other
governmental agency has passed upon or reviewed the merits or
qualifications of, or recommended or approved the offer and sale of the
Shares and Warrants pursuant to the terms of this Agreement.
(B) INVESTMENT INTENT; ACCREDITATION; AUTHORITY. The Investor is
acquiring the Shares and Warrants for investment for the Investor's own
account, not as nominee or agent, for investment and not with a view to,
or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act; provided, however, that
by making the representations herein, the Investor reserves the right to
dispose of the Shares, Warrants or Warrant Shares at any time in
accordance with this Agreement or the Warrant, as applicable, and in
accordance with or pursuant to a registration statement or an exemption
from registration under the Securities Act. The Investor is an "accredited
investor" within the meaning of the Securities Act. The Investor has the
full right, power, authority and capacity to enter into and perform this
Agreement, the terms of this Agreement constitute valid and binding
obligations of the Investor enforceable in accordance with their terms,
except as the same may be limited by equitable principles and by
bankruptcy, insolvency, moratorium, and other laws of general application
affecting the enforcement of creditors' rights.
(C) KNOWLEDGE AND EXPERIENCE.The Investor (i) has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of the Investor's prospective investment
in the Shares and Warrants; (ii) has the ability to bear the economic
risks of the Investor's prospective investment; (iii) has been furnished
with and has had access to such information as the Investor has considered
necessary to make a determination as to the purchase of the Shares and
Warrants together with such additional information as is necessary to
verify the accuracy of the information supplied; and (iv) has had all
questions which have been asked by the Investor satisfactorily answered by
the Company.
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(D) RESTRICTED SECURITIES. The Investor understands that the Shares
and Warrants are "restricted securities" as such term is defined in Rule
144 of Regulation D promulgated under the Securities Act ("RULE 144") and
must be held indefinitely unless they are subsequently registered or
qualified under applicable state and federal securities laws or an
exemption from such registration or qualification is available. Except as
contemplated by the Registration Rights Agreement, the Investor
understands that it may resell the Shares and Warrant Shares pursuant to
Rule 144 only after the satisfaction of certain requirements, including
the requirement that the Shares and Warrants Shares be held for at least
one year prior to resale.
(E) NO OBLIGATION TO REGISTER. The Investor further acknowledges and
understands that, except as provided in the Registration Rights Agreement,
the Company is under no obligation to register the Shares, Warrants or
Warrant Shares. The Investor understands that the certificate evidencing
the Shares, Warrants and Warrant Shares will be imprinted with a legend
which prohibits the transfer of the Shares, Warrants and Warrant Shares
unless they are registered or such registration is not required in the
opinion of counsel in form and substance satisfactory to the Company.
(F) DOMICILE. The Investor is a resident of the State of New York.
(G) NO NEED FOR LIQUIDITY. The Investor's aggregate holding of
securities that are "restricted securities" or otherwise not readily
marketable is not excessive in view of the Investor's net worth and
financial circumstances and the purchase of the Shares and Warrants will
not cause such commitment to become excessive.
(H) INDEPENDENT ADVICE. The Investor understands that the Company
urges the Investor to seek independent advice from professional advisors
relating to the suitability for the Investor of an investment in the
Company in view of the Investor's overall financial needs and with respect
to legal and tax implications of such an investment.
5. RELIANCE. The Investor understands that the Company may rely on the
representations and warranties in Section 4 in determining whether to permit the
Investor to purchase the Shares and Warrants. If for any reason any
representations and warranties are no longer true and accurate prior to the
Closing Date, the Investor will give the Company prompt written notice of the
inaccuracy. By signing below, the Investor represents that the Investor has read
and confirmed the truth and accuracy of each of the foregoing representations
and warranties.
6. ADDITIONAL COVENANTS OF THE PARTIES.
(A) INDEMNIFICATION. Each party (an "INDEMNIFYING PARTY") agrees to
indemnify and hold harmless the other party hereto and each of its
directors, officers, members, managers, agents and affiliates (as
applicable) from and against any and all loss, damage or liability due to
or arising out of a breach by such indemnifying party of any
representation, warranty or covenant contained in this Agreement and made
by such indemnifying party. The liability of the Investor to provide
indemnification pursuant to this Section 6 shall be limited in the
aggregate to $250,000.
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(B) PLEDGE OF SECURITIES. The Company acknowledges and agrees that
the Shares, Warrants and Warrant Shares may be pledged by the Investor in
connection with a bona fide margin agreement or other loan or financing
arrangement that is secured by the Shares Warrants or Warrant Shares. The
pledge of the Shares, Warrants or Warrant Shares shall not be deemed to be
a transfer, sale or assignment of the Shares, Warrants or Warrant Shares
hereunder, and the Investor shall not be required to provide the Company
with any notice thereof or otherwise make any delivery to the Company
pursuant to this Agreement or any other Transaction Agreement. The Company
hereby agrees to execute and deliver such documentation as a pledgee of
the Shares, Warrants or Warrant Shares may reasonably request in
connection with a pledge of the thereof to such pledgee by the Investor.
(C) SECURITIES LAWS DISCLOSURE; PUBLICITY. Neither the Company nor
the Investor shall make any press release or other publicity about the
terms of this Agreement or the transactions contemplated hereby without
the prior approval of the other unless otherwise required by law,
regulation or the rules of the Commission. In addition, the Company agrees
that it shall not disclose, and shall not include in any public filing or
other announcement, the name of the Investor, unless expressly agreed to
in writing by the Investor or unless and until such disclosure is, in the
reasonable opinion of counsel to the Company, required by law or
applicable regulation, and then only to the extent of such requirement.
(D) LISTING. The Company shall promptly secure the listing of the
Shares and Warrant Shares (and any Registrable Securities (as defined in
the Registration Rights Agreement) that may from time to time be issued or
issuable) upon each national securities exchange or automated quotation
system or bulletin board, if any, upon which shares of Common Stock are
then listed (subject to official notice of issuance) and, so long as the
Investor owns any of the Registrable Securities (as defined in the
Registration Rights Agreement), shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all Shares
issued pursuant to this Agreement and Warrant Shares issuable upon
exercise of or otherwise pursuant to the Warrants, and any Registrable
Securities (as defined in the Registration Rights Agreement) that may from
time to time be issued or issuable. To the extent that any Common Stock is
so listed, the Company will obtain and, so long as the Investor owns any
of the Registrable Securities (as defined in the Registration Rights
Agreement), maintain the listing and trading of its Common Stock on the
Nasdaq SmallCap, the Nasdaq National Market, the New York Stock Exchange,
or the American Stock Exchange and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or
rules of any exchanges or automated quotation systems on which the Common
Stock is then listed.
7. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(A) LEGEND.The instruments representing the Shares, Warrants and, if
applicable, Warrant Shares shall bear the following legend or similar
legend (as well as any legends required by applicable corporate law and
state and federal securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN
THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
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(B) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed
on a certificate pursuant to this Section 7 shall be removed, and the
Company shall issue a certificate without such legend to the holder of
such Shares, Warrants or Warrant Shares, as applicable, if (i) such Shares
or Warrant Shares are resold pursuant to a registration statement under
the Securities Act, and a prospectus meeting the requirements of Section
11 of the Securities Act is delivered or deemed delivered to the purchaser
of such Shares or Warrant Shares, (ii) if such holder satisfies the
requirements of Rule 144(k) or (iii) if such holder provides the Company
with an opinion of counsel for such holder of the Shares, Warrants or
Warrant Shares, reasonably satisfactory to the Company, to the effect that
a sale, transfer or assignment of such Shares, Warrants or Warrant Shares
may be made without registration.
8. PRICE PROTECTION. If the Company issues or sells any shares of its Common
Stock or Common Stock Equivalents, other than Excluded Shares (as that term is
defined below) ("ADDITIONAL SHARES") at any time after the Closing Date and
prior to June 30, 2004 (the "ADJUSTMENT PERIOD") for a consideration per share
(as to any such issuance, the "DILUTIVE PRICE") (a) less than the Share Price
(as adjusted for stock splits, stock dividends and the like) and (b) if
Additional Shares have been previously issued during the Adjustment Period with
respect to which the Company has fully complied with this Section 8, then also
less than the lowest Dilutive Price (as adjusted for stock splits, stock
dividends and the like) at which such Additional Shares have been previously
issued during the Adjustment Period, then the Company will issue to each
Investor a number of shares, if positive, of Common Stock to such Investor
determined by the following formula:
X = (A * B / C) - (A + D)
Where: X = the number of shares of Common Stock to be issued
to the Investor, rounded to the nearest whole
number;
A = the number of Shares (as adjusted for stock splits,
stock dividends and the like) then held by the
Investor;
B = the Share Price (as adjusted for stock splits,
stock dividends and the like);
C = the applicable Dilutive Price; and
D = the aggregate number of shares of Common Stock (as
adjusted for stock splits, stock dividends and the
like) issued to the Investor pursuant to this Section
8 prior to the date of such determination.
-10-
For purposes of this Agreement, the term "EXCLUDED SHARES" means: (i) shares of
Common Stock issuable or issued after the Closing Date to officers, employees,
consultants or directors of the Company directly or pursuant to a stock
purchase, stock option, restricted stock or other written compensation plan or
agreement approved by the Board of Directors of the Company (the "BOARD"); (ii)
shares of Common Stock issued or issuable after the Closing Date, primarily for
non-equity financing purposes and as approved by the Board, to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings or similar transactions or to vendors of goods or services
or customers; (iii) shares of Common Stock issuable upon (a) exercise of
warrants, options, notes or other rights to acquire securities of the Company,
in each case, outstanding on the Agreement Date, (b) conversion of shares of the
Company's Preferred Stock, par value $0.01 per share outstanding on the
Agreement Date or (c) exchange of promissory notes issued by the Company
outstanding on the Agreement Date; (iv) capital stock or warrants or options to
purchase capital stock issued in connection with bona fide acquisitions, mergers
or similar transactions, the terms of which are approved by the Board; (v)
shares of Common Stock issued or issuable to licensors of technology of the
Company to pay expenses, royalties or milestone payments for which the Company
is obligated under any licensing or related agreement; (vi) shares of Common
Stock issuable or issued pursuant to stock splits, stock dividends and the like,
or (vii) shares of Common Stock issued or issuable by way of dividend or other
distribution on any shares of Common Stock issued pursuant to clauses (i)- (vi)
above.
If the Company shall issue or sell any warrants or other rights to subscribe for
or purchase any additional shares of Common Stock or any securities convertible
into shares of Common Stock (collectively, "COMMON STOCK EQUIVALENTS") during
the Adjustment Period, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the effective price per share for
which Common Stock is issuable upon the exercise, exchange or conversion of such
Common Stock Equivalents shall be less than (i) the Share Price (as adjusted for
stock splits, stock dividends and the like) and (ii) if Additional Shares have
been previously issued during the Adjustment Period with respect to which the
Company has fully complied with this Section 8, then also less than the lowest
Dilutive Price (as adjusted for stock splits, stock dividends and the like) at
which such Additional Shares have been previously issued during the Adjustment
Period, then the Company shall issue to the Investor that number of shares of
Common Stock that would be issuable pursuant to this Section 8 on the basis that
the maximum number of additional shares of Common Stock issuable pursuant to all
such Common Stock Equivalents shall be deemed to have been issued and
outstanding and the Company shall have received all of the consideration payable
therefor, if any, as of the date of the actual issuance of such Common Stock
Equivalents. No further issuances shall be made under this Section 8 upon the
actual issue of such Common Stock upon the exercise, conversion or exchange of
such Common Stock Equivalents, unless such actual issue is at a per share
consideration lower than the Dilutive Price used for purposes of the initial
adjustment pursuant to this Section 8.
9. PARTICIPATION RIGHTS.
(A) Subject to the terms and conditions specified in this Section 9,
the Company hereby grants to the Investor a right of first offer with
respect to sales by the Company of Additional Shares, which in no event
shall include Excluded Shares, on the same terms and conditions as offered
by the Company to the other purchasers of such Additional Shares. If the
Company proposes to offer any Additional Shares for sale at any time after
June 30, 2004 and before the first anniversary of the Closing Date, the
Company shall make an offering of such Additional Shares to the Investor
in accordance with the following provisions:
-11-
(I) The Company shall deliver a notice (the "ISSUANCE NOTICE")
to the Investor stating (A) its bona fide intention to offer such
Additional Shares, (B) the number of such Additional Shares to be
offered, (C) the price and terms, if any, upon which it proposes to
offer such Additional Shares, and (D) the anticipated closing date
of the sale of such Additional Shares.
(II) By written notification received by the Company, within
five trading days after giving of the Issuance Notice (the "RESPONSE
PERIOD"), the Investor may elect to purchase or obtain, at the price
and on the terms specified in the Issuance Notice, up to $125,000 of
such Additional Shares. Any such purchase shall be completed at the
same closing as that of any third party purchasers or at an
additional closing thereunder.
(III) The Company may, during the 75-day period following the
expiration of the Response Period, offer the remaining unsubscribed
portion of such Additional Shares to any person or persons on
substantially similar terms to those specified in the Issuance
Notice. If the Company does not consummate the sale of such
Additional Shares within such period or if such Additional Shares
are offered on terms not substantially similar to the terms of the
offer specified in the Issuance Notice, the right provided hereunder
shall be deemed to be revived and such Additional Shares shall not
be offered or sold unless first reoffered to the Investor in
accordance herewith.
(B) The participation right set forth in this Section 9 may not be
assigned or transferred, except that such right is assignable by the
Investor to any wholly-owned subsidiary or parent of, or to any
corporation or entity that is, within the meaning of the Securities Act,
controlling, controlled by or under common control with, any such
Investor, provided in any event that such assignee is an "accredited
investor" as such term is defined in Rule 501(a) promulgated under the
Securities Act.
10. MISCELLANEOUS.
(A) GOVERNING LAW.This Agreement, all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the
state of California, without giving effect to principles of choice of law.
(B) JURISDICTION AND VENUE. Any legal action or other legal
proceeding relating to this Agreement or the enforcement of any provision
of this Agreement shall be brought or otherwise commenced in any state or
federal court located in the County of San Diego, California. Each party
to this Agreement: (i) expressly and irrevocably consents and submits to
the jurisdiction of each state and federal court located in the County of
San Diego, California and each appellate court located in the state of
California, in connection with any such legal proceeding; (ii) agrees that
each state and federal court located in the County of San Diego,
California shall be deemed to be a convenient forum; and (iii) agrees not
to assert, by way of motion, as a defense or otherwise, in any such legal
proceeding commenced in any state or federal court located in the County
of San Diego, California any claim that such party is not subject
personally to the jurisdiction of such court, that such legal proceeding
has been brought in an inconvenient forum, that the venue of such
proceeding is improper or that this Agreement or the subject matter of
this Agreement may not be enforced in or by such court.
-12-
(C) ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not expressly
set forth in this Agreement shall affect, or be used to interpret, change
or restrict, the express terms and provisions of this Agreement.
(D) NOTICES. All notices and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person or facsimile transmission (received at
the facsimile machine to which it is transmitted prior to 5:00 p.m., local
time, on a business day in the State of California, for the party to which
it is sent), by courier or express delivery service or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in accordance with
this Section):
if to the Company: ADVENTRX Pharmaceuticals, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
with a copy to (not to Xxxxxxx XxXxxxxxx LLP
constitute notice): 0 Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
if to the Investor: Xxxxxxxx X. Xxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
-13-
(E) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended, waived or departed from only with the written consent of the
Company and the Investor. No such waiver or consent shall be deemed to be
or shall constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar. Each such waiver or
consent shall be effective only in the specific instance and for the
purpose for which it was given, and shall not constitute a continuing
waiver or consent.
(F) SUCCESSORS AND ASSIGNS.This Agreement is personal to each of the
parties and may not be assigned without the written consent of the other
party; provided, however, that the Investor shall be permitted to assign
this Agreement to any person to whom it assigns or transfers securities
issued or issuable pursuant to this Agreement in compliance with
applicable securities laws and this Agreement. Any assignee must be an
"accredited investor" as defined in Rule 501(a) promulgated under the
Securities Act.
(G) SEVERABILITY. In the event that any court of competent
jurisdiction shall determine that any provision, or any portion thereof,
contained in this Agreement shall be unenforceable in any respect, then
such provision shall be deemed limited to the extent that such court deems
it enforceable, and as so limited shall remain in full force and effect.
In the event that such court shall deem any such provision, or portion
thereof, wholly unenforceable, the remaining provisions of this Agreement
shall nevertheless remain in full force and effect.
(H) INTERPRETATION. The parties hereto acknowledge and agree that:
(i) each party and such party's counsel has reviewed the terms and
provisions of this Agreement; (ii) the rule of construction to the effect
that any ambiguities are resolved against the drafting party shall not be
employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to the parties
hereto and not in favor of or against any party, regardless of which party
was generally responsible for the preparation of this Agreement. Whenever
used herein, the singular number shall include the plural, the plural
shall include the singular, the use of any gender shall include all
persons.
(I) HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and
shall in no way modify, or affect the meaning or construction of any of
the terms or provisions hereof.
(J) NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by
a party hereto in exercising any right, power or remedy under this
Agreement, and no course of dealing between the parties hereto, shall
operate as a waiver of any such right, power or remedy of the party. No
single or partial exercise of any right, power or remedy under this
Agreement by a party hereto, nor any abandonment or discontinuance of
steps to enforce any such right, power or remedy, shall preclude such
party from any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. The election of any remedy by a
party hereto shall not constitute a waiver of the right of such party to
pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving
such notice or demand to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the party
giving such notice or demand to any other or further action in any
circumstances without such notice or demand.
-14-
(K) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made by the parties hereto in this Agreement, shall survive
(i) the execution and delivery hereof, (ii) any investigations made by or
on behalf of the parties and (iii) the closing of the transaction
contemplated hereby.
(L) EXPENSES. Except as otherwise provided in any other Transaction
Agreement, the Company and the Investor shall each be responsible for the
payment of and bear their own expenses and legal fees relating to the
preparation and negotiation of the Transaction Agreements and the
consummation of the Transactions.
(M) COUNTERPARTS AND FACSIMILE DELIVERY. This Agreement may be
executed in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. Any
signature page delivered by facsimile or other electronic image
transmission shall be binding to the same extent as an original signature
page, with regard to any agreement subject to the terms hereof or any
amendment thereto. Any party who delivers such a signature page agrees to
later deliver an original counterpart to any party who requests it.
(N) SECURITIES LAW COMPLIANCE.
(I) SECURITIES ACT. The Company shall timely prepare and file
with the Commission the form of notice of the sale of
securities pursuant to the requirements of Regulation D
regarding the sale of the Shares and Warrants under this
Agreement.
(II) STATE SECURITIES LAW COMPLIANCE -- SALE. 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 of New York, with respect to the sale of the Shares
and Warrants under this Agreement.
(III) STATE SECURITIES LAW COMPLIANCE --RESALE. Beginning no
later than June 30, 2004 and continuing until (i) the Investor
has sold all of its Registrable Securities under a
Registration Statement or (ii) the Common Stock becomes a
"covered security" under Section 18(b)(1)(A) of the Securities
Act, the Company shall maintain within either Xxxxx'x
Industrial Manual or Standard and Poor's Standard Corporation
Descriptions (or any successors to these manuals which are
similarly qualified as "recognized securities manuals" under
state Blue Sky laws) an updated listing containing (i) the
names of the officers and directors of the Company, (ii) a
balance sheet of the Company as of a date that is at no time
older than eighteen months and (iii) a profit and loss
statement of the Company for either the preceding fiscal year
or the most recent year of operations. Capitalized terms used
in this Section 10(n)(iii), but not otherwise defined in this
Agreement, shall have the meanings assigned in the
Registration Rights Agreement.
-15-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ADVENTRX PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------
Title: Chief Operating Officer
--------------------------------
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------------
XXXXXXXX X. XXXXXX
SIGNATURE PAGE TO THE COMMON STOCK AND WARRANT PURCHASE AGREEMENT
SCHEDULE 3
DISCLOSURE SCHEDULE
EXHIBIT A-1
Form of A-1 Common Stock Purchase Warrant
EXHIBIT A-2
Form of A-2 Common Stock Purchase Warrant
EXHIBIT B
Form of Registration Rights Agreement
EXHIBIT C
INVESTOR SUITABILITY QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
A. PERSONAL INFORMATION
Name:
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(Exact name as it should appear on stock certificate.)
Residence Address:
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Home Telephone Number:
------------------------------------------------
Fax Telephone Number:
------------------------------------------------
Email Address:
------------------------------------------------
Social Security Number:
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B. DELIVERY INFORMATION (Applicable only if different than residence.)
Name of Institution or Destination:
--------------------------------------
Contact Name:
------------------------------------------------------------
Delivery Address:
--------------------------------------------------------
Account Reference (if applicable):
---------------------------------------
Contact Telephone Number:
------------------------------------------------
Contact Fax Telephone Number:
--------------------------------------------
Contact Email Address:
---------------------------------------------------
C. EMPLOYMENT INFORMATION
Occupation:
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Number of Years:
------------------------------------------------------
Present Employer:
-----------------------------------------------------
Position/Title:
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Business Address:
-----------------------------------------------------
Business Telephone:
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D. RESIDENT INFORMATION
Set forth in the space provided below the state(s)/country(ies) in which
you have maintained your principal residence during the past three years
and the date during which you resided in each state/country.
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Are you registered to vote in, or do you have a driver's license issued
by, or do you maintain a residence in any other state? If yes, in which
state(s)?
Yes _____ No _____
E. INCOME
Do you reasonably expect either your own income from all sources during
the current year to exceed $200,000 or the joint income of you and your
spouse (if married) from all sources during the current year to exceed
$300,000?
Yes _____ No _____
If not, please specify the amount:
What percentage of your income as shown above is anticipated to be derived
form sources other than salary?
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Was either your yearly income from all sources during each of the last two
years in excess of $200,000 or was the joint income of you and your spouse
(if married) from all sources during each of such years in excess of
$300,000?
Yes _____ No _____
If no, please specify the amount for:
Last Year:
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Year Before Last:
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F. NET WORTH
Will your net worth* as of the date you purchase securities of the
Company, together with the net worth of your spouse, be in excess of
$1,000,000?
Yes _____ No _____
If not, please specify amount:
* As used in this questionnaire the term "net worth" means the amount by
which total assets exceed total liabilities. In computing net worth for
purposes of this Item 5, you should value your principal residence at
cost, including cost of improvements, or at that value recently appraised
by an institutional lender making a secured loan or otherwise by a
certified appraiser, net of encumbrances.
G. EDUCATION
Please describe your educational background and degrees obtained, if any.
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H. AFFILIATION
If you have any pre-existing personal or business relationship with the
Company or any of its officers, directors or controlling persons, please
describe the nature and duration of such relationship.
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I. BUSINESS AND FINANCIAL EXPERIENCE
Please describe in reasonable detail the nature and extent of your
business, financial and investment experience which you believe give you
the capacity to evaluate the merits and risks of the proposed investment
and the capacity to protect your interests.
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Are you purchasing the securities offered for your own account and for
investment purposes only?
Yes _____ No _____
If no, please state for whom you are investing and/or the reason for
investing.
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The above information has been requested by the Company and will be used
solely to confirm that the Company is complying with certain securities
regulations. In furnishing the above information, the undersigned acknowledges
that the Company will be relying thereon in assessing the requirements of the
Securities Act of 1933, as amended, and other applicable securities laws.
The information contained in this questionnaire is true and complete, and
the undersigned understands that the Company and its counsel will rely on such
information for the purpose of complying with all applicable securities laws, as
discussed above. The undersigned agrees to notify the Company promptly of any
change in the foregoing information which may occur prior to any purchase by the
undersigned of stock from the Company.
------------------------------
XXXXXXXX X. XXXXXX
Date:
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