(Exhibit 10)
FORM OF UNIT PURCHASE AGREEMENT
NexMed, Inc.
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxx Xxxxxx 00000
Ladies & Gentlemen:
The undersigned purchaser (the "Purchaser") hereby confirms its agreement
with you as follows:
1. This Unit Purchase Agreement (the "Purchase Agreement") is made by and
between NexMed, Inc., a Nevada corporation (the "Company"), and the Purchaser as
of the date this Purchase Agreement is accepted by the Company below (the
"Effective Date").
2. This Purchase Agreement is one of a series of unit purchase agreements
of the Company relating to the offering (the "Offering") of securities of the
Company. In connection with the Offering, the Company has authorized the
issuance and sale of up to a maximum aggregate number of two million eight
hundred seventy-five thousand (2,875,000) units (the "Units"). Each Unit
consists of two (2) shares of the Company's Common Stock, par value $.001 per
share (the "Common Stock"), and a three (3) year warrant (the "Warrant") to
purchase one (1) share of the Company's Common Stock at an exercise price of two
dollars and twenty-five cents ($2.25), such Warrant to be exercisable six (6)
months after the date of issuance, provided, that, the number of Warrant Shares
(as defined below) shall be reduced to the extent that the Purchaser sells
Common Stock or other securities of the Company during such six-month period and
is redeemable by the Company at a price of $.001 per Warrant upon notice to
record holders if the closing price per share of the Common Stock has been at
least $4.00 for each of the fifteen (15) consecutive trading days during a
period ending on the date of the notice of redemption all as more fully
described in this Purchase Agreement, the Warrant and accompanying documents.
The minimum aggregate number of Units which must be purchased by all investors
in connection with the Offering is one million (1,000,000) Units which shall be
sold at the Initial Closing (as defined below).
3. The Company and the Purchaser agree that the Purchaser will purchase
from the Company, and the Company will sell to the Purchaser $____________ of
Units, at a purchase price per Unit (the "Purchase Price") equal to three
dollars ($3.00) and pursuant to, the Terms and Conditions for Purchase of Units
attached hereto as Annex I and incorporated herein by reference as if fully set
forth herein.
4. The Company makes no representation that this Purchase Agreement will
be accepted by the Company.
5. Purchaser hereby agrees not to engage, directly or indirectly, in any
short sale or third party short sales or hold a "put equivalent position" with
respect to the Common Stock (as defined in Rule 16a-1 of the 0000 Xxx) of the
Company's Common Stock for a twenty (20) day period prior to and for a one
hundred fifty (150) day period following the Closing Date.
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
PURCHASER
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Print Name
By:
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Title:
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Address:
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ACCEPTED as of September ___, 1999
NexMed, Inc.
By:
--------------------------------
Title:
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Annex I
TERMS AND CONDITIONS FOR PURCHASE OF UNITS
1. Authorization and Sale of the Units.
1.1 Authorization of the Units. The Company has authorized the issuance
and sale of up to two million eight hundred seventy-five thousand (2,875,000)
units (the "Units"), each Unit consisting of two (2) shares of the Company's
Common Stock, par value $.001 per share (the "Common Stock") and a warrant to
purchase one (1) share of the Company's Common Stock (the "Warrant") in the form
attached hereto as Exhibit 1.1.
1.2 Sale of Units. Subject to the terms and conditions hereof, the
Purchaser will purchase the number of Units agreed upon by the Purchaser at the
Purchase Price, as set forth in the Unit Purchase Agreement by and between the
Company and the Purchaser (the "Purchase Agreement") . The shares of Common
Stock sold to Purchaser pursuant to the Purchase Agreement are hereinafter
referred to as the "Initial Shares" and the shares of Common Stock arising from
the exercise of the Warrant are hereinafter referred to as the "Warrant Shares."
The Initial Shares, the Warrant and the Warrant Shares are hereinafter
collectively referred to as the "Securities."
2. Closing Date.
2.1 Closing Date. The closing of the purchase and sale of the Units in the
Offering hereunder (the "Closing") shall be held at the offices of Xxxxx Xxxxxxx
Xxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 a.m. New
York time, on September ___, 1999 or at such other time within five (5) business
days thereof as the Company may select. The date of the Closing of the purchase
or sale of Units in connection with the Offering is hereinafter referred to as
the "Closing Date." As of the Closing Date, the Company shall prepare a
certificate or certificates registered in the name of the Purchaser representing
the Initial Shares to be purchased by such Purchaser under the Purchase
Agreement, and the Purchaser shall send to the Company a wire transfer (in
accordance with the instructions set forth on Exhibit 2.1(a) hereto) in the
amount of the purchase price of the Units to be purchased by such Purchaser,
payable to the Company's order. Funds received prior to the Closing Date will
not bear interest.
2.2 Warrant Issuance. The Company will issue a Warrant to purchase one (1)
share of the Company's Common Stock at a per share exercise price of two dollars
and twenty-five cents ($2.25) to each Purchaser for every two (2) shares of the
Company's Common Stock purchased by the Purchaser at the Closing. The Warrant
will be issued as of the Closing and the Company shall deliver the Warrant
Certificate to the Purchaser as promptly as practicable after the Closing Date;
provided, however, that the Purchaser may not exercise the Warrant until six (6)
months after the Closing (the "Warrant Determination Date"). The number of
Warrant Shares will be reduced by any sales of Company securities (including
short sales and sales or
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purchases of derivative securities) by the Purchaser from the Closing Date until
the Warrant Determination Date. The Company may request an affidavit and other
reasonable supporting materials as to the foregoing from any Purchaser prior to
issuance of the Warrant Shares. The Warrant is redeemable by the Company at a
price of $.001 per Warrant upon notice to record holders if the closing price
per share of the Common Stock has been at least $4.00 for each of the fifteen
(15) consecutive trading days during a period ending on the date of the notice
of redemption.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Purchaser as of the Closing Date as follows:
3.1 Organization and Standing. Each of the Company and its subsidiaries
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation with full corporate
power and corporate authority to own, lease and operate its properties and
conduct its businesses as described in the SEC Documents (as defined below);
each of the Company and its subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
ownership or leasing of properties or the conduct of its business as presently
conducted require such qualification, except where the failure to be so
qualified would not have a material adverse effect on the condition (financial
or otherwise), earnings, operations, or business of the Company and its
subsidiaries taken as a whole.
3.2 Corporate Power; Authorization. The Company has all requisite legal
and corporate power and has taken all requisite corporate action to execute and
deliver the Purchase Agreement, to sell and issue the Securities and to carry
out and perform all of its obligations hereunder. The Purchase Agreement has
been duly authorized, executed and delivered on behalf of the Company and
constitutes the valid and binding agreement of the Company, enforceable in
accordance with its terms, except (1) as limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally and (iii) rights to indemnification hereunder may be
limited by applicable law.
3.3 Validity of Securities. The Company has full corporate power and
lawful authority to sell the Units on the terms and conditions contemplated
herein, and when so sold against payment therefor as provided herein, the
Initial Shares and, when issued, the Warrants will be validly authorized and
issued, fully paid and nonassessable. The issuance and delivery of each of the
Initial Shares and the Warrants is not subject to preemptive or any similar
rights of the stockholders of the Company or any liens or encumbrances arising
through the Company and when the Warrant Shares are issued in accordance with
the terms of the Warrants, they will be validly issued and outstanding, fully
paid and nonassessable.
3.4 SEC Documents; Financial Statements. The Company's Annual Report on
Forms 10-KSB for the fiscal year ended December 31, 1998, the Company's
Quarterly Reports on Forms 10-QSB for the quarterly period ended March 31, 1999,
the Company's Quarterly Report on Form l0-QSB for the quarterly period ended
June 30, 1999, (the "SEC Documents") as filed
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by the Company with the Securities and Exchange Commission (the "Commission")
have been made available to the Purchaser. The SEC Documents conform in all
material respects to the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as applicable, and the rules, regulations and
instructions of the Commission thereunder. The SEC Documents did not as of their
dates contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances in which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto. Except as may be
indicated in the notes to the Financial Statements, the Financial Statements
have been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present, in all material repeats, the
consolidated financial position of the Company and its subsidiaries at the dates
thereof and the consolidated results of their operations, stockholders' equity
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal, recurring adjustments)
3.5 Subsequent Events. Since June 30, 1999, (i) neither the Company nor
any of its subsidiaries has incurred any liabilities or obligations, contingent
or otherwise, that are material in the aggregate to the Company and its
subsidiaries, taken as a whole, except in the ordinary course of business, and
(ii) there has been no material adverse change in the condition (financial or
otherwise), earnings, operations, business of the Company and its subsidiaries,
taken as a whole, as presently conducted.
3.6 Legal Proceedings. Except as set forth in the SEC Documents, there are
no material legal proceedings or to the knowledge of the Company threatened, to
which the Company or any subsidiary is a party or to which property of the
Company or any subsidiary is subject.
3.7 Government Approval. Subject to compliance with the provisions of
applicable securities laws of state or foreign jurisdictions, no other approval
of any public body (state or federal) is or will, on the Closing Date be
necessary in connection with the offer, issue and sale of the Initial Shares and
the Warrant as contemplated herein.
3.8 No Breach. The consummation of the transactions contemplated in the
Purchase Agreement and the fulfillment of the terms thereof will not result in a
breach of any of the terms or provisions of, or constitute a default under, the
Company's Certificate of Incorporation, the Company's by-laws, or any material
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company is a party or by which it is bound.
3.9 Licenses and Consents. To the knowledge of the Company, each of the
Company and its subsidiaries is in possession of and operating in compliance
with all authorizations, licenses, certificates, consents, orders and permits
from state, federal and other regulatory authorities that are material to the
conduct of its business, all of which are valid and in full force
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and effect, except to the extent that the failure to have or be in compliance
with such would not have a material adverse effect on the Company's business or
results from operations.
3.10 Outstanding Stock. All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable; all issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable.
3.11 Intellectual Property. Except as set forth in the SEC Documents, to
the best of the Company's knowledge, each of the Company and its subsidiaries
owns or possesses adequate rights to use all material patents, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names and
copyrights which are described in the SEC Documents; except as set forth in the
SEC Documents, the Company has not received any notice of, and has no knowledge
of, any infringement of or conflict with asserted rights of the Company by
others with respect to any patent, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names and copyrights which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business of the Company and its subsidiaries, taken as a
whole, as presently conducted; and, except as set forth in the SEC Documents,
the Company has not received any notice of, and has no knowledge of, any
infringement of or conflict with the asserted rights of others with respect to
any patent, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names and copyrights which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
or business of the Company and its subsidiaries, taken as a whole, as presently
conducted.
3.12 Common Stock Registration. The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is quoted on the National Association of
Securities Dealers (the "NASD") Over-the-Counter Bulletin Board and the Company
has taken no action designed to, or, to the Company's knowledge, likely to, have
the effect of terminating the registration of the Common Stock under the
Exchange Act or removing the Common Stock from quotation on the Over-the-Counter
Bulletin Board, nor has the Company received notification that the Commission or
NASD is contemplating terminating such registration or quotation.
3.13 Private Placement. The Company has not taken any action inconsistent
with the treatment of the sale of the Units pursuant to the Purchase Agreement
as a private placement exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act") pursuant to the
provisions of Section 4(2) thereof and Regulation D thereunder. Assuming the
accuracy of the purchasers' representations and warranties in the Purchase
Agreement and the compliance by each purchaser with all of its covenants and
agreements, the offer, sale, and issuance by the Company of the Units to the
purchasers as contemplated herein constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act.
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4. Representations and Warranties of the Purchaser; Access to Information;
Independent Investigation. The Purchaser hereby represents and warrants to the
Company as follows:
4.1 Investment Intent. The Purchaser is purchasing the Units for
investment for its own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the Securities
Act. The Purchaser understands that the Securities have not been registered
under the Securities Act or registered or qualified under any state securities
law in reliance on specific exemptions therefrom, which exemptions may depend
upon, among other things, the bona fide nature of Purchaser's investment intent
as expressed herein.
4.2 Investment Experience. The Purchaser is an "accredited investor"
within the meaning of Rule 501 of the Commission, and was not organized for the
specific purpose of acquiring the Units. The Purchaser is aware of the Company's
business affairs and financial condition and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the
Units. The Purchaser has such business and financial experience as is required
to give it the capacity to protect its own interests in connection with the
purchase of the Securities.
4.3 Authorization. This Purchase Agreement has been duly and validly
authorized, executed and delivered on behalf of the Purchaser and is a valid and
binding agreement of the Purchaser enforceable in accordance with its terms,
subject as to enforceability to general principles of equity and to bankruptcy,
insolvency, moratorium and other similar laws affecting the enforcement of
creditors' rights generally.
4.4 Compliance with Securities Laws and Regulations. All subsequent offers
and sales of the Securities by the Purchaser shall be made pursuant to
registration under the Securities Act and qualification under the applicable
state securities laws or pursuant to exemptions from registration and
qualification.
4.5 Reliance by Company. The Purchaser understands that the Units are
being offered and sold to it. in reliance on specific exemptions from the
registration and qualification requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Purchaser's compliance with the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Purchaser to acquire the Securities.
4.6 No Government Approval. The 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 Units.
4.7 No Legal, Tax or Investment Advice. The Purchaser understands that
nothing in the Purchase Agreement or any other materials presented to the
Purchaser in connection with the purchase and sale of the Units constitutes
legal, tax or investment advice. The Purchaser has
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consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Units.
4.8 Access to Information. The Purchaser acknowledges that it has had the
opportunity to ask questions, to receive answers concerning the terms and
conditions of the Offering from the Company and to obtain any additional
information from the Company that the Company possesses or can acquire without
unreasonable effort or expense regarding the Offering, including, without
limitation, information relating to the engagement of Americal Securities, Inc.
as placement agent for the Offering pursuant to that certain fee engagement
letter agreement, dated August 24, 1999, which sets forth the cash fees,
warrants and other arrangements in connection with the Offering. In addition,
the Purchaser acknowledges that no private placement memorandum or similar
document has been prepared in connection with the Offering and the Company has
not made any representations or warranties other than as specifically set forth
herein.
4.9 Individual Investor. If Purchaser is a natural person, Purchaser makes
the additional representations and warranties set forth on Exhibit 4.9 attached
hereto
4.10 Use of Proceeds. The Purchaser acknowledges and understands that as
set forth in the Form 10-QSB for the six months ended June 30, 1999, the
Company's current burn rate for its general corporate overhead is $250,000 per
month. Additionally, over the next few months the Company has approximately $3
million in notes payable, of which $820,000 is currently in default, which is
due, unless extended or converted, over various periods of time between now and
the end of 1999. In addition to the proceeds of this Offering, the Company
expects to receive two payments, totaling $2 million, in payment of the
promissory notes issued to the Company by Vergemont International Limited in
connection with the sale by the Company of NexMed (Asia) Limited in May 1999
(the "Vergemont Notes"). Assuming timely payment of the Vergemont Notes and the
sale of all of the Units being offered hereunder, the Company expect to have
sufficient resources to fund its overhead, repay its outstanding short term
indebtendess and conduct the U.S. Phrase II clinical study on the Alprox - TD
cream for treating male erectile dysfunction (estimated at $1 million), the U.S.
Phrase II clinical study on the Femprox cream treated female sexual dysfunction
(estimated at $700,000) and the U.S. safety and efficacy study for the Viratrol
herpes treatment device (estimated at $300,000). In the event that less than the
full number of Units being offered are sold or there is a delay in payment of
the Vergemont Notes, it will be necessary for the Company to raise additional
capital before it will be able to commence one or more of the above studies.
4.11 Risk and Suitability. The Purchaser acknowledges and realizes that
Purchaser's purchase of the Securities involves a high degree of risk. In
addition the Purchaser has such knowledge and experience in business and
financial matters, including, without limitation, investment in technology
companies, as will enable Purchaser to evaluate the merits and risks of an
investment in the Securities and to make an informed investment decision. The
Purchaser understands that the Company anticipates, based on currently proposed
plans and assumptions relating to its operations, that the proceeds of this
Offering (and receipt of payment of the Vergemont Notes) will provide sufficient
working capital to meet the Company's needs for the
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next 3 to 12 months (depending on the number of Units sold). In the event that
the Company's plans change or its assumptions change or prove to be inaccurate
(due to unanticipated expenses, delays, problems, difficulties or otherwise),
the Company would be required to seek additional financing sooner than
anticipated. The Company has no current arrangements with respect to, or sources
of, additional financing, and it is not anticipated that existing stockholders
will provide any portion of the Company's future financing requirements. There
can be no assurance that the Company will achieve cash flow from operations
sufficient to satisfy its working capital requirements, or at all, or that
additional financing will be available to the Company on commercially reasonable
terms, or at all.
5. Restrictions on Transfer, Information and Registration Rights.
5.1 Restrictions on Transferability. The Securities shall not be
transferable in the absence of a registration under the Securities Act or an
exemption therefrom, or in the absence of compliance with any term of the
Purchase Agreement. Without limiting the foregoing, (i) the Securities may be
offered, resold, pledged or otherwise transferred only (A) in a transaction
meeting the requirements of Rule 144 of the Commission ("Rule 144"), or in
accordance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company so requests)
or (B) pursuant to an effective registration statement under the Securities Act,
in each case in accordance with the applicable securities laws of any state of
the United States or any other applicable jurisdiction and (ii) Purchaser will
be required to notify any subsequent purchaser of the resale restrictions set
forth above. The Company shall be entitled to give stop transfer instructions to
the transfer agent with respect to the Securities in order to enforce the
foregoing restrictions.
5.2 Restrictive Legends. Each certificate representing any of the
Securities shall bear substantially the following legends (in addition to any
legends required under applicable securities laws).
In the Case of All Securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS REGISTERED
UNDER THE SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE AND THE RIGHTS
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OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER
AND OTHER RESTRICTIONS, AND THE HOLDER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS BOUND BY THE
TERMS OF A UNIT PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER
AND THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY)
5.3 Registration on Form S-3.
5.3.1 Filing of Registration Statement. The Company shall use its
best efforts to secure effectiveness of, as soon as practicable, and shall file
no later than sixty (60) days after the Closing Date (unless such registration
is not permitted under the applicable rules and regulations of the Commission),
a registration statement on Form S-3 (the "Registration Statement") with the
Commission under the Securities Act to register the resale of the Initial Shares
and Warrant Shares (the "Registrable Securities"); provided however, that in the
event the Company fails (due to an action or inaction of the Company) to be
eligible to file a registration statement on Form S-3, the Company shall file a
registration statement on Form S-1 or SB-2, as applicable.
5.3.2 Registration Expenses. The Company shall pay all Registration
Expenses (as defined below) in connection with any registration, qualification
or compliance hereunder, and each holder of Registrable Securities (the
"Holders") shall pay all Selling Expenses (as defined below) and other expenses
that are not Registration Expenses relating to the Registrable Securities resold
by such Holder. "Registration Expenses" shall mean all expenses, except for
Selling Expenses, incurred by the Company in complying with the registration
provisions herein described, including, without limitation, all registration,
qualification and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration. "Selling
Expenses" shall mean all selling commissions, underwriting fees and stock
transfer taxes applicable to the Registrable Securities and all fees and
disbursements of counsel for any Holder.
5.3.3 Additional Company Obligations. In the case of any
registration effected by the Company pursuant to these registration provisions,
the Company will use its reasonable efforts to: (i) keep such registration
effective until two years after the Closing Date (or such earlier date as all of
the Registrable Securities have been sold or may be sold under Rule 144); (ii)
prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of the Registrable Securities;
(iii) furnish such reasonable number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the prospectus, as
a Holder from time to time may reasonably request; (iv) cause all such
Registrable Securities registered as described herein to be listed on each
securities exchange and quoted on each quotation service on which similar
securities issued by the Company are then listed or quoted;
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(v) provide a transfer agent and registrar for all Registrable Securities
registered pursuant to the Registration Statement and a CUSIP number for all
such Registrable Securities; (vi) reasonable efforts to comply with all
applicable rules and regulations of the Commission, and (vii) file the documents
required of the Company and otherwise use its best efforts to maintain requisite
blue sky clearance in (A) all jurisdictions in which any of the Registrable
Securities are originally sold and (B) all other states specified in writing by
a Holder as may reasonably be required to sell such Holder's Registrable
Securities, provided as to clause (B), however, that the Company shall not be
required to qualify to do business or consent to service of process in any state
in which it is not now so qualified or has not so consented.
5.3.4 Rule 144. No Holder shall be entitled to sell under the
Registration Statement with respect to a resale of Registrable Securities if
Rule 144 is available with respect to such sale. In addition, each Holder of
Registrable Securities shall furnish to the Company such information regarding
such Holder and the distribution proposed by such Holder as the Company may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance described herein. Such Holder
shall represent that such information is true and complete.
5.3.5 Limitations on Sale. If any Holder shall propose to sell any
Registrable Securities pursuant to the Registration Statement, it shall notify
the Company of its intent to do so at least five (5) full business days prior to
such sale, and the provision of such notice to the Company shall be deemed to
establish an agreement by such Holder to comply with the registration provisions
contained herein. Such notice shall be deemed to constitute a representation
that any information previously supplied by such Holder is accurate as of the
date of such notice.
5.3.5.1 First Year. As to any such proposed sale during the first
year after the Closing Date, the Company may, at any time within three (3)
business days of receipt of notice of such proposed sale, refuse to permit the
Holder to resell any Registrable Securities pursuant to the Registration
Statement; provided, however, that in order to exercise this right, the Company
must deliver a certificate in writing to the Holder to the effect that a delay
in such sale is necessary because, in the good faith judgment of the Company, a
sale pursuant to the Registration Statement would require the public disclosure
of information that would not otherwise be required to be disclosed (which
disclosure would, in the good faith judgment of the Company, have a significant
adverse effect on the Company) or could in other respects constitute a violation
of the federal securities laws. In such an event, the Company shall notify the
Holders promptly after it has determined that such circumstances no longer
exist. The Company shall not under any circumstances be entitled to refuse to
permit the Holder to resell any Registrable Securities more than three (3) times
in such twelve (12) month period, and any individual period during which the
Company refuses to permit the Holder to resell any Registrable Securities shall
not exceed ninety (90) days; provided, however, that if a Holder proposes to
sell less than fifty thousand (50,000) shares of Registrable Securities pursuant
to the Registration Statement, then the Company may refuse to permit the Holder
to resell any Registrable Securities pursuant to the Registration Statement
until such Holder, together with other Holders, have informed the
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Company in good faith that they desire to sell in the aggregate, at least fifty
thousand (50,000) shares of Registrable Securities pursuant to the Registration
Statement.
5.3.5.2 Second, Third, Fourth and Fifth Years. As to any proposal to
sell Registrable Securities pursuant to the Registration Statement received
during the second, third, fourth or fifth years after the Closing Date, the
Company may refuse to permit the Holder to resell such Registrable Securities
pursuant to the Registration Statement, except during the forty-five (45) day
period commencing each year on the date that the Company files its Annual Report
on Form 10-K with the Securities and Exchange Commission; provided, however,
that the Company may require a delay in any such sale during the foregoing
period by up to forty (40) days if it delivers a certificate in writing to the
Holder to the effect that a delay is necessary because, in the good faith
judgment of the Company, a sale pursuant to the Registration Statement would
require the public disclosure of information that would not otherwise be
required to be disclosed (which disclosure would, in the good faith judgment of
the Company, have a significant adverse effect on the Company) or would in other
respects constitute a violation of the federal securities laws. Upon conclusion
of any such forty (40) day delay period persons desiring to sell Registrable
Securities shall have a full forty-five (45) days to do so under the
Registration Statement. The Company shall have no further obligation to keep the
Registration Statement in effect after the second anniversary of the Closing
Date.
5.3.5.3 Mechanics. Each Purchaser hereby covenants and agrees that
it will not sell any Registrable Securities pursuant to the Registration
Statement during the periods the Company refuses to permit the Holder to resell
any Registrable Securities as set forth in this Section 5.3.5. Subject to the
foregoing, when a Holder is entitled to sell and gives notice of its intent to
sell pursuant to the Registration Statement, the Company shall furnish to such
Holder a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchaser(s) of such shares, such prospectus shall not include an untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing.
5.4 Indemnification and Contribution.
5.4.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder from and against any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) to which
such Holder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement of a
material fact contained in the Registration Statement, on the effective date
thereof; provided, however, that the Company shall not be liable in any such
case to the extent that such loss, claim, damages or liability arises out of, or
is based upon (i) an untrue statement or alleged untrue statement made in such
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Holder specifically
for use in preparation of the Registration Statement or (ii)) any untrue
statement in any prospectus that is
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corrected in any subsequent prospectus that was delivered to the Holder prior to
the pertinent sale or sales by the Holder.
5.4.2 Indemnification by Holder. Each Holder, severally and not
jointly, agrees to indemnify and hold harmless the Company from and against any
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) to which the Company may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon an untrue
statement made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such Holder
specifically for use in preparation of the Registration Statement, provided,
however, that no Holder shall be liable in any such case for (i) any untrue
statement included in any Prospectus which statement has been corrected, in
writing, by such Holder and delivered to the Company at least three business
days before the sale from which such loss occurred or (ii) any untrue statement
in any prospectus that is corrected in any subsequent prospectus that was
delivered to the Holder prior to the pertinent sale or sales by the Holder, and
each Holder, severally and not jointly, will, as incurred, reimburse the Company
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim.
5.4.3 Indemnification Procedures. Promptly after receipt by any
indemnified person of a notice of a claim or the beginning of any action in
respect of which indemnity is to be sought against an indemnifying person
pursuant to this Section 5.4, such indemnified person shall notify the
indemnifying person in writing of such claim or of the commencement of such
action, and, subject to the provisions hereinafter stated, in case any such
action shall be brought against an indemnified person and the indemnifying
person shall have been notified thereof, the indemnifying person shall be
entitled to participate therein, and, to the extent that it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to the
indemnified person. After notice from the indemnifying person to such
indemnified person of the indemnifying person's election to assume the defense
thereof, the indemnifying person shall not be liable to such indemnified person
for any legal expenses subsequently incurred by such indemnified person in
connection with the defense thereof; provided, however, that if there exists or
shall exist a conflict of interest that would make it inappropriate in the
reasonable opinion of counsel for the indemnified person for the same counsel to
represent both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that in the case of the immediately preceding proviso the indemnifying
person shall not be responsible for the legal expenses of more than one counsel
for all indemnified persons.
5.4.4 Contribution in Lieu of Indemnity. If the indemnification
provided for in this Section 5.4 is unavailable to or insufficient to hold
harmless an indemnified party under Section 5.4.1 or 5.4.2 above in respect of
any losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as result of such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other
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things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or a Holder on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or Omission. The Company and the Holders agree
that it would not be just and equitable if contribution pursuant to this Section
5.4.4 were determined by pro rata allocation (even if the Holders were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 5.4.4. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this Section 5.4.4 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5.4.4, no Holder shall be required to contribute any
amount in excess of the net amount received by the Holder from the sale of the
Registrable Securities to which such loss relates. No person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' obligations in this
Section 5.4.4 to contribute are several in proportion to their respective sales
of Registrable Securities to which such loss relates and not joint.
5.5 Reports Under the Exchange Act. With a view to make available to the
Purchasers or Holders the benefits of Rule 144 promulgated under the Securities
Act and any other rule or regulation of the SEC that may at any time permit a
Purchaser or Holder to sell Securities to the public without registration or
pursuant to a registration on Form S-3, the Company will covenant and agree to
use reasonable efforts to: (i) make and keep public information available, as
those terms are understood and defined in Rule 144, at all times after the
Closing; (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and (iii) furnish to any Purchaser or Holder, so long as the Purchaser or Holder
owns any Securities forthwith upon request, (A) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (B) a copy of the most recent annual or
quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail any Purchaser or Holder of any rule or
regulation of the SEC that permits the selling of any such Securities without
registration or pursuant to such Form S-3.
6. Miscellaneous.
6.1 Waivers and Amendments. With the written consent of the Company
and the record holders of more than fifty percent (50%) of the Securities (on a
converted-to-Common Stock basis) then outstanding that have not previously been
sold in a public offering, the terms of the Purchase Agreement may be waived or
amended.
6.2 Governing Law. This Purchase Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
regard to its conflicts of laws principles. The Purchaser hereby irrevocably
submits to the jurisdiction of any
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State or United States Federal court sitting in the State of New York over any
action or proceeding arising out of or relating to this Purchase Agreement or
any agreement contemplated hereby, and the Purchaser hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such State or Federal court. The Purchaser further waives any
objection to venue in such State and any objection to an action or proceeding in
such State on the basis of a non-convenient forum. The Purchaser further agrees
that any action or proceeding brought against the Company shall be brought only
in the State or United States Federal courts sitting in the State of New York.
THE PURCHASER AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OR ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS PURCHASE AGREEMENT OR ANY DOCUMENT
OR AGREEMENT CONTEMPLATED HEREBY.
6.3 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by the Company or
the Purchaser and the Closing.
6.4 Successors and Assigns. Subject to Section 5, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto (specifically
including successors in interest to the Securities).
6.5 Entire Agreement. The Purchase Agreement (including all Exhibits
thereto) constitutes the full and entire understanding and agreement between the
parties with regard to the subject hereof.
6.6 Notices, etc. All notices and other communications required or
permitted hereunder shall be effective upon receipt and shall be in writing and
may be delivered in person, by facsimile, or nationally recognized overnight
delivery service, addressed (a) if to the Purchaser, at the address set forth on
the signature page hereof or at such other address as the Purchaser shall have
furnished the Company in writing, or (b) if to the Company, at its address set
forth at the beginning of the Purchase Agreement, or at such other address as
the Company shall have furnished to the Purchaser in writing.
6.7 Severability. If any provision of the Purchase Agreement shall
be judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
6.8 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of the Purchase Agreement are for convenience of reference and
shall not, by themselves, determine the construction of the Purchase Agreement.
6.9 Counterparts. The Purchase Agreement may be executed in any
number of counterparts, each of which be an original, but all of which together
shall constitute one instrument.
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Exhibit 1.1
Warrant No. ____________
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS REGISTERED UNDER THE SECURITIES ACT AND QUALIFIED UNDER
APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS
BOUND BY THE TERMS OF A UNIT PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER
AND THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).
REDEEMABLE WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF NEXMED, INC.
This certifies that _______ (the "Holder"), for value received is entitled
to purchase from NexMed, Inc., a Nevada corporation (the "Company"), ___________
(________) fully paid and nonassessable shares of the Company's Common Stock,
par value $.001 per share (the "Warrant Shares") at a price of two dollars and
twenty-five cents ($2.25) per share (the "Stock Purchase Price") at any time or
from time to time on or after the Commencement Date (as defined below) up to and
including 5:00 p.m. (Eastern time) on the Expiration Date (as defined below),
upon surrender to the Company at its principal office at 000 Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx, Xxx Xxxxxx 00000 (or at such other location as the
Company may advise Holder in writing) of this Warrant properly endorsed with the
Form of Subscription attached hereto duly filled in and signed and upon payment
by cash, cashier's check or wire transfer of immediately available funds of the
aggregate Stock Purchase Price for the number of shares for which this Warrant
is being exercised determined in accordance with the provisions hereof, such
exercise to be conditioned upon the accuracy of all representations and
warranties contained in such Form of Subscription. The Stock Purchase Price and
the number of shares purchasable hereunder are subject to adjustment as provided
in Section 3 of this Warrant. "Commencement Date" means the date which is six
(6) months after (the date of issuance of this Warrant and "Expiration Date"
means the earlier of (i) three (3) years from the date hereof, (ii) the
occurrence of an event, the proposal of which is described in subsection (d) of
Section 3.4 which causes termination of this Warrant under Section 3.4, or (iii)
on the date specified in the Notice of Redemption (as defined
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below) pursuant to Section 7. This Warrant is issued pursuant to the Unit
Purchase Agreement between the Company and Holder dated as of the date hereof
(the "Purchase Agreement").
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates: Payment for Shares. This Warrant is
exercisable at the option of Holder at any time or from time to time on or after
the Commencement Date and prior to or on the Expiration Date for all or a
portion of the shares of Warrant Shares which may be purchased hereunder. The
Company agrees that the shares of Warrant Shares purchased under this Warrant
shall be and are deemed to be issued to Holder as the record owner of such
shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares. Subject to the provisions of
Section 2, certificates for the shares of Warrant Shares so purchased, together
with any other securities or property to which Holder is entitled upon such
exercise, shall be delivered to Holder by the Company's transfer agent at the
Company's expense within a reasonable time after this Warrant has been
exercised. Each stock certificate so delivered shall be in such denominations of
Warrant Shares as may be requested by Holder and shall be registered in the name
of Holder or such other name as shall be designated by Holder, subject to the
limitations contained in Section 2. If, upon exercise of this Warrant, fewer
than all of the shares of Warrant Shares evidenced by this Warrant are purchased
prior to the date of expiration of this Warrant, one or more new warrants
substantially in the form of, and on the terms in, this Warrant will be issued
for the remaining number of shares of Warrant Shares not purchased upon exercise
of this Warrant.
2. Shares to be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any stockholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will use its best efforts to at all times have authorized and reserved,
for the purpose of issue or transfer upon exercise of this Warrant, a sufficient
number of shares of authorized but unissued Common Stock. When and as required
to provide for the exercise of the rights represented by this Warrant, the
Company will take all such action as may be necessary to assure that such shares
of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange or automated quotation system upon which the Common Stock may be
listed.
3. Adjustment of Stock Purchase Price; Number of Shares. The Stock
Purchase Price and the number of shares of Warrant Shares purchasable upon the
exercise of this Warrant shall be subject to adjustment from time to time upon
the occurrence of certain events described in this Section 3.
3.1 Adjustment of Purchase Price. In the event that the Company at
any time or from time to time after the issuance of this Warrant shall declare
or pay, without
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consideration, any dividend on the Common Stock payable in Common Stock or in
any right to acquire Common Stock for no consideration, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by stock split, reclassification or otherwise than by
payment of a dividend in Common Stock or in any right to acquire Common Stock),
or in the event the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser number of shares
of Common Stock, then the Stock Purchase Price in effect immediately prior to
such event shall, concurrently with the effectiveness of such event, be
proportionately decreased or increased, as appropriate. In the event that the
Company shall declare or pay, without consideration, any dividend on the Common
Stock payable in any right to acquire Common Stock for no consideration, then
the Company shall be deemed to have made a dividend payable in Common Stock in
an amount of shares equal to the maximum number of shares issuable upon exercise
of such rights to acquire Common Stock. Upon each adjustment of the Stock
Purchase Price pursuant to this Section 3.1, the holder of this Warrant shall
thereafter be entitled to purchase, at the Stock Purchase Price resulting from
such adjustment, the number of shares of Common Stock obtained by multiplying
the Stock Purchase Price in effect immediately prior to such adjustment by the
number of shares of Common Stock purchasable pursuant hereto immediately prior
to such adjustment, and dividing the product thereof by the Stock Purchase Price
resulting from such adjustment.
3.2 Adjustments for Reclassification and Reorganization. If the
Common Stock shall be changed into the same or a different number of shares of
any other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in Section 3.1), the Stock Purchase Price then in effect shall,
concurrently with the effectiveness of such reorganization or reclassification,
be proportionately adjusted so that this Warrant shall represent the right to
purchase, in lieu of the number of shares of Common Stock which this Warrant
would otherwise represent the right to purchase, a number of shares of such
other class or classes of stock equivalent to the number of shares of Common
Stock which this Warrant would have otherwise entitled the holder to purchase
immediately before that change.
3.3 Notice of Adjustment. Upon any adjustment of the Stock Purchase
Price or any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise of this Warrant, the Company shall within five
business days give written notice thereof, by first class mail, postage prepaid
(or by international delivery service, for international addresses), addressed
to the registered holder of this Warrant at the address of such holder as shown
on the books of the Company. The notice shall be signed by the Company's chief
financial officer and shall state the Stock Purchase Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
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3.4 Other Notices. If at any time:
(a) the Company shall propose to declare any cash dividend
upon its Common Stock;
(b) the Company shall propose to declare or make any dividend
or other distribution to the holders of its Common Stock, whether in cash,
property or other securities;
(c) the Company shall propose to effect any reorganization or
reclassification of the capital stock of the Company or any consolidation or
merger of the Company with or into another corporation or any sale, lease or
conveyance of all or substantially all of the property of the Company; or
(d) the Company shall propose to effect a voluntary or
involuntary dissolution, liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by certified or
registered mail, postage prepaid, or international delivery service for
international deliveries, addressed to the holder of this Warrant at the address
of such holder as shown on the books of the Company, (i) at least fifteen (15)
business days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend or distribution
or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding-up, and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding-up, at least fifteen (15) business days' written notice
of, the date when the same shall take place. Any notice given in accordance with
clause (i) above shall also specify, in the case of any such dividend or
distribution, the record date for such dividend or distribution, if after the
Commencement Date. Any notice given in accordance with clause (ii) above shall
also specify the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property, if any,
deliverable upon such reorganization, reclassification, consolidation/merger,
sale, lease, conveyance, dissolution, liquidation or winding-up, as the case may
be and in connection with the occurrence of an event described in clause (d)
above such notice shall specify the anticipated net equity value that will
accrue to Common Stock holders so that the Holder can make an informed decision
whether or not to exercise this Warrant. In the event that the Holder of the
Warrant does not exercise this Warrant prior to the occurrence of an event
described in clause (a) or (b) above, the Holder shall not be entitled to
receive the benefits accruing to existing holders of the Common Stock in such
event. Upon the occurrence of an event described in clause (c), the Holder shall
be entitled thereafter, upon payment of the Stock Purchase Price in effect
immediately prior to such action, to receive upon exercise of this Warrant the
class and number of shares which the Holder would have been entitled to receive
after the occurrence of such event had this Warrant been exercised immediately
prior to such event. In connection with the transactions described in clause
(c), the Company will require each person (other than the Company) that may be
required to deliver any cash, stock, securities or other property upon the
exercise of this Warrant as provided herein to
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assume, by written instrument delivered to, and reasonably satisfactory to, the
Holder of this Warrant (x) the obligations of the Company under this Warrant and
(y) the obligation to deliver to such Holder such cash, stock, securities or
other property as such Holder may be entitled to receive in accordance with the
provisions of this Section 3. Upon the occurrence of an event the proposal of
which is described in clause (d), this Warrant shall terminate. Notwithstanding
any other provision hereof, no Holder shall have the right to obtain an
injunction or restraining order or otherwise interfere with or prevent the
occurrence of any of the actions described in (a) - (d) above.
3.5 Adjustment of Number of Warrant Shares. The number of Warrant
Shares purchasable hereunder shall be reduced on a one-for-one basis by the
number of shares of Common Stock (or Common Stock equivalents) sold directly or
indirectly, including, without limitation, any short sale, third party short
sales or holdings of a "put equivalent position" (as defined in Rule 16a-1 of
the 1934 Act), of the Company's Common Stock by the Holder from the date hereof
until the Commencement Date. Upon request by the Company, the Holder shall
provide the Company with an affidavit and other reasonable supporting materials
as to the foregoing prior to issuance of the Warrant Shares.
4. Issue Tax. The issuance of certificates for the Warrant Shares upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.
5. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder in
respect of meetings of stockholders for the election of directors of the Company
or any other matters or any rights whatsoever as a stockholder of the Company.
Except for the adjustment to the Stock Purchase Price pursuant to Section 3.2 in
the event of a dividend on the Common Stock payable in shares of Common Stock,
no dividends or interest shall be payable or accrued in respect of this Warrant
or the interest represented hereby or the shares purchasable hereunder until,
and only to the extent that, this Warrant shall have been exercised. No
provisions hereof, in the absence of affirmative action by the Holder to
purchase shares of Warrant Shares, and no mere enumeration herein of the rights
or privileges of the Holder hereof, shall give rise to any liability of such
Holder for the Stock Purchase Price or as a stockholder of the Company whether
such liability is asserted by the Company or by its creditors.
6. Restrictions on Transferability of Securities: Compliance With
Securities Act.
6.1 Restrictions on Transferability. The Warrant and the Warrant
Shares (collectively, the "Securities") shall not be transferable except upon
the conditions specified in the Purchase Agreement, which conditions are
intended to insure compliance with the provisions of the Securities Act and
applicable "blue sky" law.
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6.2 Restrictive Legend. Each certificate representing the Securities
or any other securities issued in respect of the Securities upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar event,
shall (unless otherwise permitted by the provisions of the Purchase Agreement)
be stamped or otherwise imprinted with a legend substantially in the following
form (in addition to any legend required under applicable state securities laws)
In the Case of Warrant and Warrant Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER THE
SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR
UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND THE QUALIFICATION
REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND
THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING
ANY FUTURE HOLDERS) IS BOUND BY THE TERMS OF A UNIT PURCHASE AGREEMENT
BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY (COPIES OF WHICH MAY BE
OBTAINED FROM THE COMPANY).
6.3 Exchange of Warrant. Subject to the terms and conditions hereof,
including the restrictions on transfer in this Section 6 and in the Purchase
Agreement, upon surrender of this Warrant to the Company with a duly executed
Assignment Form in the form attached hereto and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant or Warrants of like tenor in the name of the assignee named in such
Assignment Form and this Warrant shall promptly be canceled. The term "Warrant"
as used herein shall be deemed to include any Warrants issued in exchange for
this Warrant.
6.4 Ownership of Warrant. The Company may deem and treat the person
in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in Section 6.3.
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7. Redemption. This Warrant may be redeemed at the option of the Company
at a redemption price of $.001, as adjusted pursuant to Section 3 (the
"Redemption Price"), per Warrant at any time after the date hereof provided that
(i) the closing bid price of the Common Stock as reported by the National
Association of Securities Dealers Automated Quotation ("Nasdaq") if the Common
Stock is then traded on the over-the-counter market or the Nasdaq Small Cap
market, or (ii) the closing sale price, if the Common Stock is then traded on
Nasdaq/NMS or a national securities exchange, provided that such exchange or
market is the primary trading market for the Company, shall have equaled or
exceeded $4.00 per share (subject to adjustment in the event of any stock splits
or other events as described in Section 3.1 or 3.2 above) for each of fifteen
(15) consecutive trading days during a period ending within five (5) days prior
to Redemption Notice Date (as defined below), provided, that any time after the
Redemption Notice Date (as defined below) and prior to the Redemption Date (as
defined below) the Holder may exercise this Warrant, provided, further, in the
event that the Redemption Notice Date is prior to six (6) months after the date
hereof, the Commencement Date shall be deemed to be the Redemption Notice Date
and notwithstanding anything herein or in the Purchase Agreement to the
contrary, after such date the Holder may exercise this Warrant at any time prior
to the Redemption Date. The Company shall provide written notice of redemption
which shall specify the Redemption Date (the "Notice of Redemption") to the
Holder not later than five (5) days after the election of the Company to redeem
this Warrant pursuant to this Section 7. On and after the date fixed for
redemption (the "Redemption Date") which shall be no less than thirty (30) days
after the date that the Notice of Redemption is sent to the Holder (the
"Redemption Notice Date") the Holder shall have no rights with respect to this
Warrant except to receive the Redemption Price upon surrender of this Warrant
Certificate.
8. Modification and Waiver. Except as otherwise provided herein, this
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.
9. Notices. Except as otherwise provided `herein, any notice, request or
other document required or permitted to be given or delivered to the holder
hereof or the Company shall be delivered or shall be sent by United States
certified or registered mail, postage prepaid, (or international delivery
service for international deliveries) to Holder at its address as shown on the
books of the Company or to the Company at the address indicated therefor in the
first paragraph of this Warrant.
10. Descriptive Headings and Governing Law. The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
governed by and construed in accordance with the internal laws of the State of
New York without regard to its conflicts of laws principles. The Holder hereby
irrevocably submits to the jurisdiction of any State or United States Federal
court sitting in the State of New York over any action or proceeding arising out
of or relating to this Warrant or any agreement contemplated hereby, and the
Holder hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such State or Federal court. The
Holder further waives any objection to venue in such State and any objection to
an action or proceeding in such State on the basis of a non-convenient forum.
The Holder
W-7
further agrees that any action or proceeding brought against the Company shall
be brought only in the State or United States Federal courts sitting in the
State of New York. THE HOLDER AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OR ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS WARRANT OR ANY
DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
11. Lost Warrants or Stock Certificates. The Company represents and
warrants to Holder that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of any Warrant or stock
certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity and, if requested, bond reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
12. Amendment. This Warrant is one of a series of warrants (the "Warrant
Series") to purchase, in the aggregate, up to two million eight hundred
seventy-five thousand (2,875,000) shares of the Company's Common Stock. This
Warrant maybe amended only with the written approval of the Company and (i) the
Holder of this Warrant or (ii) the holders of a majority of the warrants in the
Warrant Series; provided, however, that any amendment effected pursuant to (ii)
above shall be made in the same manner to all warrants in the Warrant Series.
13. Binding Effect; Benefits. This Warrant shall inure to the benefit of
and shall be binding upon the Company and the Holder and their respective heirs,
legal representatives, successors and assigns. Nothing in this Warrant,
expressed or implied, is intended to or shall confer on any person other than
the Company and the Holder, or their respective heirs, legal representatives,
successors or assigns, any rights, remedies, obligations or liabilities under or
by reason of this Warrant.
14. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the Holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the market price of the Common Stock, which shall be, on any date,
the closing price for the Common Stock or the closing bid if no sales were
reported, as quoted on the exchange or market that is the primary trading market
for the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officers, thereunto duly authorized this _____ day of September, 1999.
NexMed, Inc.
By:
-------------------------------------
Name:
Title:
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: NexMed, Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise such Warrant for, and to purchase thereunder,
_________________ (__________________) shares of common stock (the "Common
Stock") of NexMed, Inc. (the "Company"), and herewith makes payment in the
amount of $________ therefore. The certificates for such shares should be issued
in the name of, and delivered to, __________________ whose address is
__________________
The undersigned represents, unless the exercise of this Warrant has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
that (i) the undersigned is acquiring such Common Stock for his, her or its own
account for investment and not with a view to or for sale in connection with any
distribution thereof (except for any resale pursuant to a registration statement
under the Securities Act), (ii) the undersigned has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the undersigned's investment in the shares of Common Stock,
(iii) the undersigned has received all of the information the undersigned
requested from the Company and the undersigned considers necessary or
appropriate for deciding whether to purchase the shares, (iv) the undersigned
has the ability to bear the economic risks of the undersigned's prospective
investment and (v) the undersigned is able, without materially impairing his,
her or its financial condition, to hold the shares of Common Stock for an
indefinite period of time and to suffer complete loss on the undersigned's
investment.
The undersigned is an "accredited investor" as defined in Regulation D of
the Securities and Exchange Commission on the date hereof.
DATED:
-----------------------
----------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
----------------------------------------
----------------------------------------
(Address)
W-9
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
ASSIGNMENT FORM
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto __________________ (the
"Assignee") the right represented by such Warrant to purchase ___________
Warrant Shares and all other rights of the Holder with respect thereto under the
within Warrant, and appoints ________________ as Attorney to make such transfer
on the books of NexMed, Inc. maintained for such purpose, with full power of
substitution in the premises.
The undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the Warrant Shares to be issued upon exercise
hereof are being acquired for investment and that the Assignee will not offer,
sell or otherwise dispose of this Warrant or any Warrant Shares to be issued
upon exercise hereof except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws. Further, the Assignee has acknowledged that upon exercise of this Warrant,
the Assignee shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired for investment and not with a view toward distribution or resale.
Dated:
-----------------------
Signature
-------------------------------
----------------------------------------
(Print Name)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
W-10
Exhibit 2.1(a)
WIRE TRANSFER INSTRUCTIONS
Bank Name: Chase Manhattan Bank
Address & Telephone Number: 0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
(000) 000-0000
Bank ABA Number: 000-0000-00
Account Name (Beneficiary): Prudential Securities
Account Number: 066296390
For Further Credit to: NexMed, Inc.
A/C: THB-961574-33
For information on the wire transfer instructions, please contact:
Xx. Xxxxx XxXxxxxx
Senior Vice President
Prudential Securities
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
T: 000-000-0000
F: 000-000-0000
Exhibit 4.9
INVESTMENT REPRESENTATION STATEMENT
1. Information Concerning the Company. Purchaser represents and warrants
that Purchaser has been provided with such information concerning the Company
that Purchaser deems necessary and appropriate to enable Purchaser to evaluate
the financial risk inherent in making an investment in the Securities. Purchaser
further acknowledges that Purchaser has received satisfactory and complete
information concerning the business and financial condition of the Company in
response to all inquiries in respect thereof.
2. Economic Risk and Suitability. Purchaser represents and warrants as
follows:
2.1 Purchaser realizes that Purchaser's purchase of the Securities
involves a high degree of risk and will be a highly speculative investment and
that Purchaser is able, without impairing Purchaser's financial condition, to
hold the Securities for an indefinite period of time and to suffer a complete
loss of Purchaser's investment.
2.2 Purchaser has carefully considered and has, to the extent
Purchaser believes such discussions necessary, discussed with Purchaser's
professional, legal, tax and financial advisors the suitability of an investment
in the Securities for the particular legal, tax and financial situation of
Purchaser and that Purchaser and/or Purchaser's advisors have determined that
the Securities are a suitable investment for Purchaser.
2.3 Purchaser has such knowledge and experience in business and
financial matters as will enable Purchaser to evaluate the merits and risks of
an investment in the Securities and to make an informed investment decision.
2.4 Purchaser has carefully read this Agreement and the Company has
made available to Purchaser or Purchaser's advisors all information and
documents requested by Purchaser relating to investment in the Securities, and
has provided answers to Purchaser's satisfaction to all of Purchaser's questions
concerning the Company and the Securities to be acquired.
2.5 Purchaser understands that neither the Company nor any of its
officers/directors, has any obligation to register the Securities under any
federal or state securities act or law except as otherwise expressly set forth
in Section 5 of the Purchase Agreement.
2.6 All information that Purchaser has provided concerning himself
or herself, his or her financial position and (each of) his or her
representative(s), if any, is correct and complete as of the date set forth
below, and if there should be any material change in such information, Purchaser
will provide such information to the Company as soon as practicable thereafter.
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2.7 Purchaser understands that the Company is relying on the truth
and accuracy of the declarations, representations, warranties and agreements
made by Purchaser to the Company herein in transferring the Securities to
Purchaser.
2.8 Purchaser confirms that Purchaser has received no general
solicitation or general advertisement and has attended no seminar or meeting
(whose attendees have been invited by any general solicitation or general
advertisement) and has received no advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media or
broadcast or television or radio regarding the Offering of the Securities.
3. Status of Purchaser. Purchaser represents and warrants that Purchaser
is an "Accredited Investor", as defined in Rule 501 of the Commission because
Purchaser is either:
(a) A natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his/her
purchase, exceeds $1 million; or
(b) A natural person who had individual income in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching the
same income level in the current year.
4. Residency. The undersigned is a bona fide resident of_________________.
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