EXHIBIT 10.124
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FORM OF STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT
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Interneuron Pharmaceuticals, Inc.
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Ladies & Gentlemen:
The undersigned, _______________________________________ (the "Investor"),
hereby confirms its agreement with you as follows:
1. This Stock Purchase Agreement (the "Agreement") is made effective as of
_____________, 2001 between Interneuron Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and the Investor.
2. The Company has authorized the issuance and sale of up to _____________
shares (the "Shares") of common stock of the Company, $0.001 par value per share
(the "Common Stock"), subject to adjustment by the Company's Board of Directors,
to certain investors in a private placement (the "Offering").
3. The Company and the Investor agree that the Investor will purchase from
the Company and the Company will issue and sell to the Investor
______________________ Shares, for a purchase price of $______ per share, or an
aggregate purchase price of $___________________, pursuant to the Terms and
Conditions for Purchase of Shares attached hereto as Annex I and incorporated
herein by reference as if fully set forth herein. Unless otherwise requested by
the Investor, certificates representing the Shares purchased by the Investor
will be registered in the Investor's name and address as set forth below.
4. The Investor represents that, except as set forth below, (a) it has had
no position, office or other material relationship within the past three years
with the Company or its affiliates, (b) neither it, nor any group of which it is
a member or to which it is related, beneficially owns (including the right to
acquire or vote) any securities of the Company and (c) it has no direct or
indirect affiliation or association with any NASD member. Exceptions:
______________________________________________________________________________
(If no exceptions, write "none." If left blank, response will be deemed
to be "none.")
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
___________________________________________
"INVESTOR"
By:________________________________________
Print Name:________________________________
Title:_____________________________________
Address:___________________________________
Tax ID No.:________________________________
Contact name:______________________________
Telephone:_________________________________
Facsimile:_________________________________
Name in which shares should be registered
(if different):____________________________
AGREED AND ACCEPTED:
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Interneuron Pharmaceuticals, Inc.
___________________________________
By: Xxxxx X. Xxxxxx, M.D.
President and CEO
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. Authorization and Sale of the Shares. Subject to the terms and
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conditions of this Agreement, the Company has authorized the sale of up to
_____________ Shares. The Company reserves the right to increase or decrease
this number.
2. Agreement to Sell and Purchase the Shares; Subscription Date.
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2.1 At the Closing (as defined in Section 3), the Company will sell
to the Investor, and the Investor will purchase from the Company, upon the terms
and conditions hereinafter set forth, the number of Shares set forth on the
signature page hereto at the purchase price set forth on such signature page.
2.2 The Company is entering into this same form of Stock Purchase
Agreement with certain other investors (the "Other Investors") effective as of
the date hereof (the "Subscription Date") and expects to complete sales of
Shares to them. (The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the "Investors," and this Agreement and the Stock
Purchase Agreements executed by the Other Investors are hereinafter sometimes
collectively referred to as the "Agreements.")
3. Delivery of the Shares at Closing. The completion of the purchase and
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sale of the Shares (the "Closing") shall occur (the "Closing Date") on the
business day after the Subscription Date (or upon such earlier date as the
Company and the Investors shall agree), at the offices of the Company's counsel.
At the Closing, the Company shall deliver to the Investor one or more stock
certificates representing the number of Shares set forth on the signature page
hereto, each such certificate to be registered in the name of the Investor or,
if so indicated on the signature page hereto, in the name of a nominee
designated by the Investor. The Company's obligation to issue the Shares to the
Investor shall be subject to the following conditions, any one or more of which
may be waived by the Company: (a) receipt by the Company of a certified or
official bank check or wire transfer of funds in the full amount of the purchase
price for the Shares being purchased hereunder as set forth on the signature
page hereto; (b) completion of the purchases and sales under the Agreements with
the Other Investors such that a minimum of ______________ Shares are sold
pursuant to the Agreements; and (c) the accuracy of the representations and
warranties made by the Investors and the fulfillment of those undertakings of
the Investors to be fulfilled prior to the Closing. The Investor's obligation
to purchase the Shares shall be subject to the following conditions, any one or
more of which may be waived by the Investor: (a) receipt by the Investor or its
authorized agent of one or more stock certificates representing the number of
Shares set forth on the signature page hereto; (b) receipt by the Investor of an
opinion letter, dated as of the Closing Date, from Xxxxx & Xxxxxxxx LLP, counsel
to the Company in form reasonably satisfactory to the Investor; (c) the accuracy
of the representations and warranties made by the Company and the fulfillment of
those undertakings of the Company to be fulfilled prior to the Closing; (d) on
the Closing Date, no legal action, suit or proceeding shall be pending or
threatened which seeks to restrain or prohibit the transactions contemplated by
the Agreements; (e) the Company shall have delivered to the Investors its
certificate, dated the Closing Date, duly executed by its Chief Executive
Officer to the effect set
forth in clause (c) above; (f) the receipt by the Investors of a certificate,
dated the Closing Date, of the Secretary or Assistant Secretary of the Company
certifying (i) the certificate of incorporation and bylaws of the Company as in
effect on the Closing Date, (ii) all resolutions of the board of directors (and
committees thereof) of the Company relating to the Agreements and the
transactions contemplated thereby and (iii) the incumbency of all officers of
the Company executing the Agreements and any other agreement or document
contemplated thereby.
4. Representations, Warranties and Covenants of the Company. Except as
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otherwise described in the Company's SEC Documents (as defined in Section 4.4),
which qualifies the following representations, warranties and covenants in their
entirety, the Company hereby represents and warrants to, and covenants with, the
Investor, as follows:
4.1 Organization. Each of the Company and its Subsidiaries is duly
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organized and validly existing in good standing under the laws of the
jurisdiction of its organization. Each of the Company and its Subsidiaries (as
defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act")) has full power and authority to own, operate and occupy its
properties and to conduct its business as presently conducted and is registered
or qualified to do business and in good standing in each jurisdiction in which
it owns or leases property or transacts business and where the failure to be so
qualified would have a material adverse effect upon the financial condition or
business, operations or assets of the Company and its Subsidiaries, considered
as one enterprise, and no proceeding has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification.
4.2 Due Authorization. The Company has all requisite power and
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authority to execute, deliver and perform its obligations under the Agreements,
and the Agreements have been duly authorized and validly executed and delivered
by the Company and constitute legal, valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, except as rights
to indemnity and contribution may be limited by state or federal securities laws
or the public policy underlying such laws, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4.3 Non-Contravention. The execution and delivery of the Agreements,
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the issuance and sale of the Shares to be sold by the Company under the
Agreements, the fulfillment of the terms of the Agreements and the consummation
of the transactions contemplated thereby will not (A) conflict with or
constitute a violation of, or default (with or without the giving of notice or
the passage of time or both) under, (i) any material bond, debenture, note or
other evidence of indebtedness, or under any material lease, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which the Company or any Subsidiary is a party or by which it or
any of its Subsidiaries or their respective properties are bound, (ii) the
charter, by-laws or other organizational documents of the Company or any
Subsidiary, or (iii) any law, administrative regulation, ordinance or order of
any court or governmental agency, arbitration panel or authority applicable to
the Company or any Subsidiary or their respective properties, except where such
conflict, violation or default would not have a material adverse effect on the
financial condition or
results of operations of the Company and Subsidiaries taken as one enterprise,
(B) result in the creation or imposition of any lien, encumbrance, claim,
security interest or restriction whatsoever upon any of the material properties
or assets of the Company or any Subsidiary or an acceleration of indebtedness
pursuant to any obligation, agreement or condition contained in any material
bond, debenture, note or any other evidence of indebtedness or any material
indenture, mortgage, deed of trust or any other agreement or instrument to which
the Company or any Subsidiary is a party or by which any of them is bound or to
which any of the property or assets of the Company or any Subsidiary is subject.
No consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, self-
regulatory organization, stock exchange or market, or other governmental body in
the United States is required for the execution and delivery of the Agreements
and the valid issuance and sale of the Shares to be sold pursuant to the
Agreements, other than such as have been made or obtained, and except for any
securities filings required to be made under federal or state securities laws.
4.4 Reporting Status. The Company has filed in a timely manner all
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documents that the Company was required to file under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), during the 12 months preceding the
date of this Agreement. The following documents complied in all material
respects with the SEC's requirements as of their respective filing dates, and
the information contained therein as of the date thereof did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein in light of the
circumstances under where they were made not misleading, except to the extent
that information contained in any such document has been revised or superseded
by a later filed SEC Document (as defined below):
(i) The Company's Annual Report on Form 10-K for the year ended
September 30, 2000, including the exhibits thereto (the "Form 10-
K"); and
(ii) all other documents, including the exhibits thereto, filed by the
Company with the SEC since September 30, 2000 pursuant to the
reporting requirements of the Exchange Act (together with the
Form 10-K, the "SEC Documents").
The SEC Documents, when taken together as a whole, as of the date
hereof, do not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not misleading.
4.5 Capitalization. As of the date hereof, the authorized capital
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stock of the Company consists of 80,000,000 shares of Common Stock and 5,000,000
shares of preferred stock, par value $.001 per share, of the Company (the
"Preferred Stock"). As of November 30, 2001, there were approximately (i)
43,283,016 shares of Common Stock issued and outstanding, (ii) 244,425 shares of
Preferred Stock issued and outstanding which are currently convertible into
622,222 shares of Common Stock, (iii) 10,973,047 shares of Common Stock
reserved for issuance under the Company's Stock Option and Stock Incentive and
Employee Stock Purchase Plans, including 9,765,958 shares issuable upon exercise
of outstanding stock options or restricted stock awards issued by the Company to
current or former employees, consultants and directors of the Company and its
Subsidiaries, (iv) an aggregate of 50,000 shares of Common Stock issuable upon
exercise of
an outstanding option and (v) 705,000 shares issuable upon exercise of warrants
to acquire shares of Common Stock. All outstanding shares of Common Stock are
duly authorized, validly issued, fully paid and nonassessable, free from any
liens or any other encumbrances created by the Company with respect to the
issuance and delivery thereof and not subject to preemptive rights. Other than
as disclosed in the SEC Documents, there are no outstanding rights, options,
warrants, preemptive rights, rights of first refusal agreements, commitments or
similar rights for the purchase or acquisition from the Company of any
securities of the Company. The Shares to be sold pursuant to the Agreements have
been duly authorized, and when issued and paid for in accordance with the terms
of the Agreements will be duly and validly issued, fully paid and nonassessable,
free and clear of all pledges, liens, encumbrances and other restrictions (other
than those arising under federal or state securities laws as a result of the
private placement of the Shares to the Investors). No preemptive right, co-sale
right, right of first refusal or other similar right exists with respect to the
Shares or the issuance and sale thereof. No further approval or authorization of
any stockholder, the Board of Directors of the Company or others is required for
the issuance and sale of the Shares. Except as set forth in the SEC Documents,
no holder of any of the securities of the Company or any of its Subsidiaries has
any rights ("demand," "piggyback" or otherwise) to have such securities
registered by reason of the intention to file, filing or effectiveness of a
Registration Statement (as defined in Section 7.1 hereof).
4.6 Legal Proceedings. There is no material legal or governmental
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proceeding pending or, to the knowledge of the Company, threatened to which the
Company or any Subsidiary or any officer or director of the Company or any
Subsidiary in their capacity as such officer or director is or may be a party or
of which the business or property of the Company or any Subsidiary is subject
that is not disclosed in the SEC Documents. There is no action, suit,
proceeding, inquiry or investigation before or by any court, public board or
body (including, without limitation, the SEC) pending or, to the knowledge of
the Company, threatened against or affecting the Company or any of its
Subsidiaries wherein an unfavorable decision, ruling or finding could adversely
affect the validity or enforceability of, or the authority or ability of the
Company to perform its obligations under the Agreements.
4.7 No Violations. Neither the Company nor any Subsidiary is in
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violation of its charter, bylaws, or other organizational document, or in
violation of any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the Company
or any Subsidiary, including the rules, regulations and policies of the U.S.
Securities and Exchange Commission and the Food and Drug Administration of the
U.S. Department of Health and Human Services (the "FDA") and which violation,
individually or in the aggregate, would be reasonably likely to have a material
adverse effect on the business, operations, assets or financial condition of the
Company and its Subsidiaries, considered as one enterprise, or is in default
(and there exists no condition which, with or without the passage of time or
giving of notice or both, would constitute a default) in any material respect in
the performance of any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound or by which the properties of the
Company or any Subsidiary are bound, which would be reasonably likely to have a
material adverse effect upon the business, operations, assets or financial
condition of the Company and its Subsidiaries, considered as one enterprise.
4.8 Governmental Permits, Etc. With the exception of the matters
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which are dealt with separately in Section 4.1, 4.4, 4.13 and 4.14, each of the
Company and its Subsidiaries has all necessary franchises, licenses,
certificates and other authorizations from any foreign, federal, state or local
government or governmental agency, department, or body that are currently
necessary for the operation of the business of the Company and its Subsidiaries
as currently conducted, except where the failure to currently possess could not
reasonably be expected to have a material adverse effect upon the business,
operations, assets or financial condition of the Company and its Subsidiaries,
considered as one enterprise.
4.9 Intellectual Property. Each of the Company and its Subsidiaries
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owns or possesses sufficient rights to use all patents, patent rights,
trademarks, copyrights, licenses, inventions, trade secrets, trade names and
know-how (collectively, "Intellectual Property") that are necessary for the
conduct of its business as now conducted, and as proposed to be conducted in the
SEC Documents, except where the failure to currently own or possess could not
reasonably be expected to have a material adverse effect on the financial
condition or business of the Company and its Subsidiaries considered as one
enterprise. Except as set forth in the SEC Documents, (i) neither the Company
nor any of its Subsidiaries has received any notice of, or has any knowledge of,
any infringement of asserted rights of a third party with respect to any
Intellectual Property that, individually or in the aggregate, would have a
material adverse effect on the financial condition or business, operations or
assets of the Company and its Subsidiaries considered as one enterprise and (ii)
neither the Company nor any of its Subsidiaries has received any notice of any
infringement rights by a third party with respect to any Intellectual Property
that, individually or in the aggregate, would have a material adverse effect
upon the business, operations, assets or financial condition of the Company and
its Subsidiaries, considered as one enterprise.
4.10 Environmental Matters. The Company and its Subsidiaries (i) are
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in compliance in all material respects with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received
all material permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company and
its Subsidiaries, taken as a whole.
4.11 Financial Statements. The financial statements of the Company
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and the related notes thereto included in the SEC Documents present fairly in
all material respects, in accordance with generally accepted accounting
principles, the financial position of the Company and its Subsidiaries as of the
dates indicated, and the results of its operations and cash flows for the
periods therein specified. Such financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods therein
specified, except as set forth in the SEC Documents and subject in the case of
unaudited financial statements, to normal year-end audit adjustments.
4.12 No Material Adverse Change. Except as disclosed in the SEC
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Documents, since September 30, 2001 there has not been (i) any material adverse
change in the financial condition or earnings of the Company and its
Subsidiaries considered as one enterprise nor has any material adverse event
occurred to the Company or its Subsidiaries, (ii) any material adverse event
affecting the Company or any of its Subsidiaries, (iii) any obligation, direct
or contingent, that is material to the Company and its Subsidiaries considered
as one enterprise, incurred by the Company, except obligations incurred in the
ordinary course of business, (iv) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of its
Subsidiaries, or (v) any loss or damage (whether or not insured) to the physical
property of the Company or any of its Subsidiaries which has been sustained
which has a material adverse effect on the condition (financial or otherwise),
earnings, operations or business of the Company and its Subsidiaries considered
as one enterprise. Except as disclosed in the SEC Documents, neither the
Company nor any of its Subsidiaries has (i) sold, assigned, transferred,
abandoned, mortgaged, pledged or subjected to lien any of its material
properties, tangible or intangible, or rights under any material contract,
permit, license, franchise or other agreement or (ii) waived or cancelled any
material indebtedness or other obligations owed to the Company or any such
Subsidiary.
4.13 NASDAQ Listing. The Company's Common Stock is registered
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pursuant to Section 12(g) of the Exchange Act and is listed on The Nasdaq Stock
Market, Inc. National Market (the "Nasdaq National Market"), and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or de-listing the Common
Stock from the Nasdaq National Market, nor to the Company's knowledge is the
National Association of Securities Dealers, Inc. ("NASD") currently
contemplating terminating such listing. The Company and the Common Stock meet
the criteria for continued listing and trading on the Nasdaq National Market.
4.14 Listing of the Shares. The Company shall comply with all
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requirements of the National Association of Securities Dealers, Inc. with
respect to the issuance of the Shares and the listing thereof on the Nasdaq
National Market. In furtherance thereof, the Company shall use its best efforts
to take such actions as may be necessary and as soon as practicable and in no
event later than 20 days after the Closing Date to file with the Nasdaq National
Market an application or other document required by the Nasdaq National Market
and pay all applicable fees for the listing of the Shares with the Nasdaq
National Market and shall provide evidence of such filing to the Investors. The
Company knows of no reason why the Shares will not be eligible for listing on
the Nasdaq National Market.
4.15 No Manipulation of Stock. The Company has not taken and will
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not, in violation of applicable law, take, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares.
4.16 S-3 Status. The Company meets the requirements for filing Form
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S-3 for the registration of the resale of the Shares by the Investors and will
use its best efforts to maintain S-3 status with the SEC during the Registration
Period (as defined in Section 7.1(c)).
4.17 Insurance. The Company maintains and will continue to maintain
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insurance against loss or damage by fire or other casualty and such other
insurance, including, but not limited to, product liability insurance, in such
amounts and covering such risks as is reasonably adequate consistent with
industry practice for the conduct of its business and the value of its
properties, all of which insurance is in full force and effect.
4.18 Tax Matters. The Company has filed all material federal, state
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and local income and franchise and other tax returns required to be filed and
has paid or accrued all taxes due in accordance therewith, and no tax deficiency
has been determined adversely to the Company which has had (nor does the Company
have any knowledge of any tax deficiency which, if determined adversely to the
Company, might have) a material adverse effect on the condition (financial or
otherwise), earnings, operations or business of the Company and its Subsidiaries
considered as one enterprise .
4.19 Investment Company. The Company is not an "investment company"
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within the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the SEC thereunder and will not become an investment
company upon the receipt and application of the net proceeds of this offering.
4.20 No Registration. Assuming the accuracy of the representations
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and warranties made by, and compliance with the covenants of, the Investors in
Section 5 hereof, no registration of the Shares under the Securities Act is
required in connection with the offer and sale of the Shares by the Company to
the Investors as contemplated by the Agreements.
4.21 Intentionally Omitted.
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4.22 Form D. The Company agrees to file one or more Forms D with
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respect to the Shares on a timely basis as required under Regulation D under the
Securities Act to claim the exemption provided by Rule 506 of Regulation D and
to, upon request, provide a copy thereof to the Investors and their counsel.
4.23 Certain Future Financings and Related Actions.
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(a) The Company will not sell, offer to sell, solicit offers to
buy or otherwise negotiate in respect of any "security" (as defined in the
Securities Act) that is or could be integrated with the sale of the Shares in a
manner that would require the registration of the Shares under the Securities
Act.
(b) The Company shall not offer, sell, contract to sell or issue
(or engage any person to assist the Company in taking any such action) any
equity securities or securities convertible into, exchangeable for or otherwise
entitling the holder to acquire, any Common Stock at a price below the market
price of the Common Stock during the period from the date of this Agreement to
the effective date of the Registration Statement; provided, however, that
nothing in this Section 4.22(b) shall prohibit the Company from issuing
securities (v) to employees, directors, officers, advisors or consultants of the
Company; (w) upon exercise of conversion, exchange, purchase or similar rights
issued, granted or given by the Company and outstanding as of the date of
this Agreement; (x) pursuant to a public offering underwritten on a firm
commitment basis registered under the Securities Act; (y) for the purpose of
funding the acquisition of securities or assets of any entity in a single
transaction or a series of related transactions; or (z) pursuant to a strategic
partnership or alliance agreement, loan agreement, equipment lease or similar
commercial agreement (including licensing and similar arrangements).
4.24 Use of Proceeds. The Company will use the net proceeds from the
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sale of the Shares for working capital and other general corporate purposes.
5. Representations, Warranties and Covenants of the Investor. The
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Investor hereby represents and warrants to, and covenants with, the Company as
follows:
5.1 (i) The Investor is an "accredited investor" as defined in Regulation D
under the Securities Act and the Investor has the knowledge, sophistication and
experience necessary to make, and is qualified to make decisions with respect
to, investments in shares presenting an investment decision like that involved
in the purchase of the Shares, including investments in securities issued by the
Company and investments in comparable companies, and has requested, received,
reviewed and considered all information it deemed relevant in making an informed
decision to purchase the Shares, including without limitation, the Confidential
Private Placement Memorandum dated December 2001, and all exhibits attached
thereto and incorporated by reference therein (the "Memorandum") and the
Company's Annual Report on Form 10-K for the fiscal year ended September 30,
2001 subsequently delivered to the Investor; (ii) the Investor is acquiring the
number of Shares set forth on the signature page hereto for its own account for
investment only and with no present intention of distributing any of such Shares
in violation of the Securities Act or any arrangement or understanding with any
other persons regarding the distribution of such Shares; (iii) the Investor will
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Shares except in compliance with the Securities Act, applicable
state securities laws and the respective rules and regulations promulgated
thereunder; (iv) the Investor has filled in all requested information on the
signature page hereto for use in preparation of the Registration Statement and
the answers thereto are true and correct as of the date hereof and will be true
and correct as of the Closing Date; (v) the Investor will notify the Company
promptly of any change in any of such information until such time as the
Investor has sold all of its Shares or until the Company is no longer required
to keep the Registration Statement effective; and (vi) the Investor has, in
connection with its decision to purchase the number of Shares set forth on the
signature page hereto, relied only upon the SEC Documents, other publicly
available information and the representations and warranties of the Company
contained herein. The Investor understands that its acquisition of the Shares
has not been registered under the Securities Act or registered or qualified
under any state securities laws in reliance on specific exemptions therefrom,
which exemptions may depend upon, among other things, the truth and accuracy of,
and the Investor's compliance with, the representations, warranties, agreements
and covenants of the Investor set forth in this Agreement and the bona fide
nature of the Investor's investment intent as expressed herein.
5.2 The Investor acknowledges that the Company has represented that
no action has been or will be taken in any jurisdiction outside the United
States by the Company that would permit an offering of the Shares, or possession
or distribution of offering materials in connection
with the issue of the Shares, in any jurisdiction outside the United States
where action for that purpose is required. If the Investor is located or
domiciled outside the United States it agrees to comply with all applicable laws
and regulations in each foreign jurisdiction in which it purchases, offers,
sells or delivers Shares or has in its possession or distributes any offering
material, in all cases at its own expense.
5.3 The Investor hereby covenants with the Company not to make any
sale of the Shares without complying with the provisions of this Agreement,
including Section 7.2 hereof, provided that the Company complies with its
obligations under Section 7.1, without effectively causing the prospectus
delivery requirement under the Securities Act to be satisfied, if applicable,
and the Investor acknowledges that the certificates evidencing the Shares will
be imprinted with a legend that prohibits their transfer except in accordance
therewith. The Investor acknowledges that there may occasionally be times when
the Company, based on the advice of its counsel, determines that, subject to the
limitations of Section 7.2, it must suspend the use of the Prospectus forming a
part of the Registration Statement until such time as an amendment to the
Registration Statement has been filed by the Company and declared effective by
the SEC or until the Company has amended or supplemented such Prospectus.
5.4 The Investor further represents and warrants to, and covenants
with, the Company that (i) the Investor has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and (ii) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification and contribution agreements
of the Investors herein may be legally unenforceable.
5.5 Investor will not, prior to the effectiveness of the Registration
Statement, directly or indirectly, sell, offer to sell, solicit offers to buy,
dispose of, loan, pledge or grant any right with respect to (collectively, a
"Disposition"), the Common Stock of the Company in violation of the Securities
Act, nor will Investor engage in any hedging or other transaction which is
designed to or could reasonably be expected to lead to or result in a
Disposition of Common Stock of the Company by the Investor or any other person
or entity in violation of the Securities Act. Such prohibited hedging or other
transactions would include without limitation effecting any short sale or having
in effect any short position (whether or not such sale or position is against
the box and regardless of when such position was entered into) or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to the Common Stock of the Company or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from the Common Stock of the Company.
The Investor acknowledges that the Shares shall bear a restrictive legend to the
effect that the Shares have not been registered under the Securities Act of
1933, as amended and such Shares may not be sold or transferred in the absence
of an effective registration statement or pursuant to an exemption from
registration.
5.6 The Investor understands that nothing in this Agreement or any
other materials presented to the Investor in connection with the purchase and
sale of the Shares constitutes legal, tax or investment advice. The Investor
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Shares.
5.7 The Investor shall hold in strict confidence all information
concerning this Agreement and the Offering of the Shares until the earlier of
such time as the Company has made a public announcement concerning this
Agreement or the Offering of the Shares.
6. Survival of Representations, Warranties and Agreements.
-------------------------------------------------------
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Shares being purchased and the payment therefor for a
period of two (2) years from the Closing Date.
7. Registration of the Shares; Compliance with the Securities Act.
---------------------------------------------------------------
7.1 Registration Procedures and Expenses. The Company shall:
-------------------------------------
(a) subject to receipt of necessary information from the
Investors, use its best efforts to prepare and file with the SEC, within 15 days
after the Closing Date, a registration statement (the "Registration Statement")
on Form S-3 to enable the resale of the Registrable Shares (as defined below) by
the Investors on a delayed or continuous basis under Rule 415 of the Securities
Act. The Registration Statement may include shares of common stock other than
those held by the Investor and the Other Investors, provided that the inclusion
of those shares would not affect the plan of distribution included in the
Registration Statement. "Registrable Shares" means (a) all shares of Common
Stock purchased in the Offering, (b) Penalty Shares (as defined below), if any,
and (c) any shares of capital stock issued or issuable, from time to time, upon
any reclassification, share combination, share subdivision, stock split, share
dividend, merger, consolidation or similar transaction or event or otherwise as
a distribution on, in exchange for or with respect to any of the foregoing, in
each case held at the relevant time by an Investor;
(b) assuming the required information is not included in its
Annual Report on Form 10-K for the year ended September 30, 2001, use its best
efforts to file its proxy statement for the annual meeting of stockholders
within 30 days of the Closing Date and in any event prior to the effectiveness
of the Registration Statement;
(c) use its best efforts, subject to receipt of necessary
information from the Investors, to cause the Registration Statement to become
effective within 90 days after the Closing Date;
(d) cause to be delivered to Xxxxx & Xxxxxxx, L.L.P., on behalf
of the Investors, a confirmation as of the time the Registration Statement
becomes effective that the Registration Statement does not contain an untrue
statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
(e) use its best efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and the Prospectus used
in connection therewith and take all such other actions as may be necessary to
keep the Registration Statement current and effective for a period (the
"Registration Period") not exceeding, with respect to each Investor's
Registrable Shares, the earlier of (i) the second anniversary of the Closing
Date, (ii) the date on which the Investor may sell all Shares then held by the
Investor without restriction by the volume limitations of Rule 144(e) of the
Securities Act, and (iii) such time as all Registrable Shares held by such
Investor have been sold (A) pursuant to a registration statement, (B) to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, and/or (C) in a transaction exempt from the registration
and prospectus delivery requirements of the Securities Act under Section 4(1)
thereof so that all transfer restrictions and restrictive legends with respect
thereto, if any, are removed upon the consummation of such sale;
(f) promptly furnish to the Investor with respect to the Shares
registered under the Registration Statement such number of copies of the
Registration Statement, Prospectuses and Preliminary Prospectuses in conformity
with the requirements of the Securities Act and such other documents as the
Investor may reasonably request, in order to facilitate the public sale or other
disposition of all or any of the Shares by the Investor;
(g) promptly take such action as may be necessary to qualify, or
obtain, an exemption for the Registrable Shares under such of the state
securities laws of United States jurisdictions as shall be necessary to qualify,
or obtain an exemption for, the sale of the Registrable Shares in states
specified in writing by the Investor; provided, however, that the Company shall
not be required to qualify to do business or consent to service of process in
any jurisdiction in which it is not now so qualified or has not so consented;
(h) bear all expenses in connection with the procedures in
paragraph (a) through (e) of this Section 7.1 and the registration of the Shares
pursuant to the Registration Statement, regardless of whether a Registration
Statement becomes effective, including without limitation: (i) all registration
and filing fees and expenses (including filings made with the NASD); (ii) fees
and expenses of compliance with federal securities and state "blue sky" or
securities laws; (iii) expenses of printing (including printing certificates for
the Registrable Securities and Prospectuses), messenger and delivery services
and telephone; (iv) all application and filing fees in connection with listing
the Registrable Securities on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (v) all fees and
disbursements of counsel of the Company and independent certified public
accountants of the Company; provided, however, that each Investor shall be
responsible for paying the underwriting commissions or brokerage fees, and taxes
of any kind (including, without limitation, transfer taxes) applicable to any
disposition, sale or transfer of such Investor's Registrable Securities and any
fees and expenses of counsel or other advisors to the Investor or Other
Investors. The Company shall, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, rating agency fees and the fees and expenses of any person, including
special experts, retained by the Company;
(i) advise the Investors, within two business days by e-mail, fax
or other type of communication, and, if requested by such person, confirm such
advice in writing: (i) after it shall receive notice or obtain knowledge of the
issuance of any stop order by the SEC delaying or suspending the effectiveness
of the Registration Statement or of the initiation or threat of any proceeding
for that purpose, or any other order issued by any state securities commission
or other regulatory authority suspending the qualification or exemption from
qualification of such Registrable Securities under state securities or "blue
sky" laws; and it will promptly use its best efforts to prevent the issuance of
any stop order or other order or to obtain its withdrawal at the earliest
possible moment if such stop order or other order should be issued; (ii) when
the Prospectus or any Prospectus Supplement or post-effective amendment has been
filed, and, with respect to the Registration Statement or any post-effective
amendment thereto, when the same has become effective; and (iii) after the
Company shall receive notice or obtain knowledge of the existence of any fact or
the happening of any event that makes any statement of a material fact made in
the Registration Statement, the Prospectus, any amendment or supplement thereto,
or any document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC which could affect the sale of the Registrable
Shares;
(k) use its best efforts to cause all Registrable Shares to be
listed on each securities exchange or market, if any, on which equity securities
issued by the Company are then listed; and
(l) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Shares contemplated hereby and to
enable the Investors to sell the Shares under Rule 144.
(m) The Company further agrees that, in the event that the
Registration Statement has not (i) been filed with the SEC within 15 days after
the Closing Date or (ii) been declared effective by the SEC within 90 days after
the Closing Date (each such event referred to in clauses (i) and (ii), a
"Registration Default"), for all or part of each 30-day period (a "Penalty
Period") during which the Registration Default remains uncured, the Company
shall issue or pay, as applicable, to each Investor 1% for each Penalty Period
of the aggregate purchase price paid by the Investor for its Shares, payable in
validly issued, fully paid and nonassessable shares of Common Stock (valued at
the average of the closing price of the Common Stock for the three trading days
ending on the last trading day of such Penalty Period) (the "Penalty Shares") or
cash, or a combination thereof, at the option of the Company; provided, however,
that the maximum aggregate payment of cash, or issuance of Penalty Shares to
each Investor, as the case may be, in respect of a Registration Default shall
not exceed 5% of the aggregate purchase price paid by such Investor for its
Shares and provided further, that if the issuance of Penalty Shares by the
Company would result in the Company being required under NASDAQ rules or other
applicable rules to obtain the approval of the Company's stockholders, then the
Company shall pay cash rather than issue such Penalty Shares to the extent
needed to avoid such stockholder approval. The Company shall deliver
said shares or cash payment to the Investor by the fifth business day after the
end of each such Penalty Period. Notwithstanding anything to the contrary in
Section 7.3 or any other provision of this Agreement, the issuance of the
Penalty Shares or cash as provided in this Section 7.1(k) shall be the
Investor's sole and exclusive remedy in the event of any Registration Default;
provided, however, that if the foregoing remedy is deemed unenforceable by a
court of competent jurisdiction then the Investor shall have all other remedies
available at law or in equity.
7.2 Transfer of Shares; Suspension.
------------------------------
(a) The Investor agrees that it will not effect any Disposition
of the Shares or its right to purchase the Shares that would constitute a sale
within the meaning of the Securities Act except as contemplated in the
Registration Statement referred to in Section 7.1 and as described below or
otherwise in accordance with the Securities Act, and that it will promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding the Investor or its plan of distribution.
(b) Except in the event that paragraph (c) below applies, the
Company shall, at all times during the Registration Period, promptly (i) prepare
and file from time to time with the SEC a post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to purchasers of the Shares being sold
thereunder, such Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; (ii) provide the Investor copies of any documents
filed pursuant to Section 7.2(b)(i); and (iii) inform each Investor that the
Company has complied with its obligations in Section 7.2(b)(i) (or that, if the
Company has filed a post-effective amendment to the Registration Statement which
has not yet been declared effective, the Company will notify the Investor to
that effect, will use its best efforts to secure the effectiveness of such post-
effective amendment as promptly as possible and will promptly notify the
Investor pursuant to Section 7.2(b)(i) hereof when the amendment has become
effective).
(c) Subject to paragraph (d) below, in the event (i) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related Prospectus or for additional
information; (ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; or (iv) of any event or circumstance which
necessitates the making of any changes in the Registration Statement or
Prospectus, or any document incorporated or deemed to be incorporated therein by
reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; then the Company shall deliver a certificate in
writing to the Investor (the "Suspension Notice") to the effect of the foregoing
and, upon receipt of such Suspension Notice, the Investor will refrain from
selling any Registrable Shares pursuant to the Registration Statement (a
"Suspension") until the Investor's receipt of copies of a supplemented or
amended Prospectus prepared and filed by the Company, or until it is advised in
writing by the Company that the current Prospectus may be used, and has received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus. In the event of any
Suspension, the Company will use its best efforts to cause the use of the
Prospectus so suspended to be resumed as soon as reasonably practicable after
the delivery of a Suspension Notice to the Investor. In addition to and without
limiting any other remedies (including, without limitation, at law or at equity)
available to the Investor, the Investor shall be entitled to specific
performance in the event that the Company fails to comply with the provisions of
this Section 7.2(c).
(d) Notwithstanding the foregoing paragraphs of this Section 7.2, the
Investor shall not be prohibited from selling Registrable Shares under the
Registration Statement as a result of Suspensions on more than two occasions
(for two separate suspension events) of not more than 30 days each in any twelve
month period.
(e) Provided that a Suspension is not then in effect, the Investor may
sell Registrable Shares under the Registration Statement, provided that it
arranges for delivery of a current Prospectus to the transferee of such Shares.
Upon receipt of a request therefor, the Company has agreed to provide, at its
own expense, an adequate number of current Prospectuses (including documents
incorporated by reference therein) to the Investor and to supply copies to any
other parties requiring such Prospectuses.
(f) In the event of a sale of Registrable Shares by the Investor under
the Registration Statement, the Investor must also deliver to the Company's
transfer agent, with a copy to the Company, a Certificate of Subsequent Sale
substantially in the form attached hereto as Exhibit A, so that the Registrable
Shares may be properly transferred.
7.3 Indemnification. For the purpose of this Section 7.3:
---------------
(i) the term "Selling Stockholder" shall include the Investor and
any affiliate of such Investor;
(ii) the term "Registration Statement" shall include any final
Prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1; and
(iii) the term "untrue statement" shall include any untrue statement
or alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement or Prospectus a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages, liabilities or
expenses to which such Selling Stockholder may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof) arise out
of, or are based upon (i) any untrue statement of a material fact contained in
the Registration Statement or Prospectus, (ii) any failure by the Company to
fulfill any undertaking included in the Registration Statement, or (iii) any
breach of any representation, warranty or covenant made by the Company in this
Agreement, and the Company will promptly reimburse such Selling Stockholder for
any reasonable legal or other expenses incurred in investigating, defending or
preparing to defend, settling, compromising or paying any such action,
proceeding or claim, provided, however, that the Company shall not be liable in
any such case to the extent that such loss, claim, damage, liability or expense
arises solely out of, or is based solely upon, an untrue statement made in such
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder specifically
for use in preparation of the Registration Statement or the failure of such
Selling Stockholder to comply with its covenants and agreements contained in
Sections 5.3 or 7.2 hereof respecting sale of the Shares or any statement or
omission in any Prospectus that is corrected in any subsequent Prospectus that
was delivered to the Investor at least three business days prior to the
pertinent sale or sales by the Investor. Notwithstanding the foregoing, the
Company shall not be liable to any Selling Stockholder for any consequential
damages, including lost profits, solely with respect to losses, claims, damages,
liabilities or expenses to which such Selling Stockholder may become subject
arising out of, or based upon, any breach of any representation, warranty or
covenant made by the Company in this Agreement.
(b) The Investor agrees (severally and not jointly with any other
Investor) to indemnify and hold harmless the Company (and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act,
each officer of the Company who signs the Registration Statement and each
director of the Company) from and against any losses, claims, damages,
liabilities or expenses to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages, liabilities or expenses (or actions or
proceedings in respect thereof) arise solely out of, or are based solely upon,
(i) any failure to comply with the covenants and agreements contained in Section
5.3 or 7.2 hereof respecting sale of the Shares, or (ii) any untrue statement of
a material fact contained in the Registration Statement if such untrue statement
was made in reliance upon and in conformity with written information furnished
by the Investor specifically for use in preparation of the Registration
Statement (provided, however, that no Investor shall be liable in any such case
for any untrue statement in any Registration Statement or Prospectus if such
statement has been corrected in writing by such Investor and delivered to the
Company at least three business days prior to the pertinent sale or sales by the
Investor), and the Investor will reimburse the Company (or such officer,
director or controlling person), as the case may be, for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend,
settling, compromising or paying any such action, proceeding or claim.
Notwithstanding the foregoing, (x) the Investor's aggregate liability pursuant
to this subsection (b) and subsection (d) shall be limited to the net amount
received by the Investor from the sale of the Shares and (y) the Investor shall
not be liable to the Company for any consequential damages, including lost
profits, solely with respect to losses, claims, damages, liabilities or expenses
to which the Company (or any officer, director or controlling
person as set forth above) may become subject (under the Securities Act or
otherwise), arising out of, or based upon, any failure to comply with the
covenants and agreements contained in Section 5.3 or 7.2 hereof respecting sale
of the Shares.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 7.3 (except to the extent that such
omission materially and adversely affects the indemnifying party's ability to
defend such action) or from any liability otherwise than under this Section 7.3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided further,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate, in the opinion of counsel to the indemnified person, for
the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for the fees
and expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such settlement; provided
that such consent shall not be unreasonably withheld. No indemnifying person
shall, without the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification could have
been sought hereunder by such indemnified person, unless such settlement
includes an unconditional release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and the
Investor on the other in connection with the statements or omissions or other
matters which resulted in such losses, claims, damages, liabilities or expenses
(or actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, in the case of an untrue statement, whether the untrue statement
relates to information supplied by the Company on the one hand or an Investor on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct
or prevent such untrue statement. The Company and the Investors agree that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Investors were treated as
one entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Investor shall be required to contribute
any amount in excess of the net amount received by the Investor from the sale of
the Shares. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Investors' obligations in this subsection to contribute are several in
proportion to their sales of Shares to which such loss relates and not joint.
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 7.3, and are fully informed regarding said
provisions.
7.4 Rule 144. For a period of two years following the date hereof,
---------
the Company agrees with each holder of Registrable Shares to:
(a) comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company;
(b) use its best efforts to 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 (at any time it is subject to such reporting requirements);
and
(c) furnish to any holder of Registrable Shares upon request (i)
a written statement by the Company as to its compliance with the requirements of
said Rule 144(c) and the reporting requirements of the Securities Act and the
Exchange Act (at any time it is subject to such reporting requirements), (ii) a
copy of the most recent annual or quarterly report of the Company, and (iii)
such other publicly-filed reports and documents of the Company as such holder
may reasonably request to avail itself of any similar rule or regulation of the
SEC allowing it to sell any such securities without registration.
7.5 Termination of Conditions and Obligations. The conditions
------------------------------------------
precedent imposed by Section 5 or this Section 7 upon Dispositions of the
Registrable Shares by the Investor shall cease and terminate as to any
particular number of the Registrable Shares and the restrictive legend shall be
removed when such Registrable Shares shall have been effectively registered
under the Securities Act and sold or otherwise disposed of in accordance with
the intended method of disposition set forth in the Registration Statement
covering such Registrable Shares or at such time as an opinion of counsel
reasonably satisfactory to the Company shall have been rendered to the effect
that such conditions are not necessary in order to comply with the Securities
Act (provided
that such opinion shall not be required if the Company shall be furnished with
written documentation reasonably satisfactory to it that such Registrable Shares
are being transferred in a customary transaction exempt from registration under
Rule 144 under the Securities Act).
8. Notices. All notices, requests, consents and other communications
--------
hereunder shall be in writing, shall be mailed (A) if within domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if delivered
from outside the United States, by International Federal Express or facsimile,
and shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if delivered
by nationally recognized overnight carrier, one business day after so mailed,
(iii) if delivered by International Federal Express, two business days after so
mailed, and (iv) if delivered by facsimile, upon electric confirmation of
receipt and shall be delivered as addressed as follows:
(a) if to the Company, to:
Interneuron Pharmaceuticals, Inc.
One Ledgemont Center
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Attn: President and CEO
Phone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Phone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Investor, at its address on the signature page hereto,
or at such other address or addresses as may have been furnished
to the Company in writing,
with a copy to:
Xxxxx & Xxxxxxx, L.L.P.
000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx
Phone: (000) 000-0000
Telecopy: (000) 000-0000
9. Changes. This Agreement may not be modified or amended except pursuant
--------
to an instrument in writing signed by the Company and the Investor.
10. Headings. The headings of the various sections of this Agreement have
---------
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
11. Severability. In case any provision contained in this Agreement
-------------
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12. Governing Law. This Agreement shall be governed by, and construed in
--------------
accordance with, the internal laws of the Commonwealth of Massachusetts, without
giving effect to the principles of conflicts of law.
13. Entire Agreement. This Agreement constitutes the entire agreement
-----------------
between the parties hereto pertaining to the subject matter hereof, and any and
all other written or oral agreements relating to such subject matter are
expressly cancelled.
14. Finders Fees. Except for commissions payable to Xxxx Xxxxx Xxxx
-------------
Xxxxxx, Incorporated by the Company, neither the Company nor the Investor nor
any affiliate thereof has incurred any obligation which will result in the
obligation of the other party to pay any finder's fee or commission in
connection with this transaction.
15. Counterparts. This Agreement may be executed in two or more
-------------
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
16. Successors and Assigns. This Agreement shall inure to the benefit of
-----------------------
and be binding upon the successors and permitted assigns of the Company and the
Investors, including without limitation and without the need for an express
assignment, affiliates of the Investors. With respect to transfers that are not
made pursuant to the Registration Statement, the rights and obligations of an
Investor under this Agreement shall be automatically assigned by such Investor
to any transferee of all or any portion of such Investor's Registrable Shares
who is a Permitted Transferee (as defined below); provided, however, that within
two business days prior to the transfer, (i) the Company is provided notice of
the transfer including the name and address of the transferee and the number of
Registrable Shares transferred; and (ii) that such transferee agrees in writing
to be bound by the terms of this Agreement. (For purposes of this "Agreement, a
"Permitted Transferee" shall mean any Person who (a) is an "accredited
investor," as that term is defined in Rule 501(a) of Regulation D under the
Securities Act and (b) is a transferee of at least 20,000 Registrable Shares as
permitted under the securities laws of the United States). Upon any transfer
permitted by this Section 16, the Company shall be obligated to such transferee
to perform all of its covenants under this Agreement as if such transferee were
an Investor.
17. Expenses. Each of the Company and the Investors shall bear its own
---------
expenses in connection with the preparation and negotiation of the Agreement.
Exhibit A
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CERTIFICATE OF SUBSEQUENT SALE
------------------------------
[Transfer Agent
Address
Address
Attention: ________________]
RE: Sale of Shares of Common Stock of Interneuron Pharmaceuticals,
Inc. (the "Company") pursuant to the Company's Registration
Statement on Form S-3 dated _____________ (the "Registration
Statement")
Ladies and Gentlemen:
The undersigned hereby certifies, in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Stockholders in the
Registration Statement, that the undersigned has sold the shares pursuant to the
Registration Statement and in a manner described under the caption "Plan of
Distribution" in the Registration Statement and that such sale complies with all
applicable securities laws, including, without limitation, the Registration
Statement delivery requirements of the Securities Act of 1933, as amended.
Selling Stockholder (the beneficial owner):____________________________________
Record Holder (e.g., if held in name of nominee):______________________________
Restricted Stock Certificate No.(s):___________________________________________
Number of Shares Sold:_________________________________________________________
Date of Sale:__________________________________________________________________
In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Very truly yours,
Dated:___________________________ By:________________________________
Print Name:________________________
Title:_____________________________
cc: President and CEO
Interneuron Pharmaceuticals, Inc.
One Ledgemont Center
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
SCHEDULE A
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List of Investors
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1. Perceptive Life Sciences Master Fund, LTD
2. Xxxxxx Xxxxxxx
3. Ascend Partners, L.P.
4. Ascend Partners Sapient, L.P.
5. Ascend Offshore Fund, LTD
6. Xxx Xxxx Dreyfus & Cie
7. Xxxxx Capital Partners
8. Xxxxx Entrepreneurial Fund, L.P.
9. Xxxxx Life Sciences, L.P.
10. Crestwood Capital Partners II, L.P.
11. Crestwood Capital Partners, L.P.
12. Bridgewood Capital Partners L.P.
13. Crestwood Capital International, Ltd
