Form of Subscription
Agreement
BMP Sunstone
Corporation
600 W. Germantown Pike
Suite 400
Plymouth Meeting, Pennsylvania 19462
The undersigned
(the “Investor”) hereby confirms and agrees with you as
follows:
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1.
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The
subscription terms set forth herein (this
“Subscription”) are made as of the date set forth below
between BMP Sunstone Corporation, a Delaware corporation (the
“Company”), and the Investor.
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2.
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As
of the Closing (as defined below) and subject to the terms and
conditions hereof, the Company and the Investor agree that the
Investor will purchase from the Company and the Company will issue
and sell to the Investor such principal amount of 12.5%
Subordinated Convertible Notes due July 1, 2011 (the
“Notes”) of the Company as is set forth on the
signature page hereto (the “Signature Page”). The
Investor acknowledges that the offering is not a firm commitment
underwriting and that the Closing will not occur unless the Company
has received Subscriptions for Notes with an aggregate principal
amount for all such Notes of at least $6,000,000.
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3.
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The
completion of the purchase and sale of the Notes shall occur at a
closing (the “Closing”) which, in accordance with
Rule 15c6-1 promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), is expected to
occur on or about March 16, 2009. At the Closing, subject to
the requirements in paragraph 3(c) below, the Company shall cause
The Bank of New York Mellon, the trustee under the Company’s
subordinated indenture (the “Trustee”), to release to
the Investor the principal amount of Notes being purchased by the
Investor and the aggregate purchase price for the Notes being
purchased by the Investor will be delivered by the Escrow Agent to
the Company.
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(a)
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Delivery of Funds. No later than one
(1) business day after the execution of this Agreement by the
Investor and the Company, the Investor shall remit by wire transfer
the amount of funds equal to the aggregate purchase price for the
Notes being purchased by the Investor to the following account (the
“Escrow Account”) designated by the Company and the
Placement Agent pursuant to the terms of that certain Escrow
Agreement (the “Escrow Agreement”) dated as of
October 9, 2008, as amended on March 12, 2009, by and
among the Company, the Placement Agent and the Escrow
Agent”:
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The Bank of New
York
ABA #021-000-018
Beneficiary: GLA-111/565
Cust A/C #208878
Acct Name: BMP SUNSTONE SUBSCRIPTION ESC
ATTN: Odell Romeo/Sharon Chut-Khan
Such funds
shall be held in an escrow account until the Closing and delivered
by the Escrow Agent on behalf of the Investors to the Company upon
the satisfaction, in the sole
judgment of the
Placement Agent, of the Company closing conditions set forth in the
Placement Agreement (as defined below). The Placement Agent shall
have no rights in or to any of the escrowed funds, unless the
Placement Agent and the Escrow Agent are notified in writing by the
Company in connection with the Closing that a portion of the
escrowed funds shall be applied to the Placement Fee (as defined
below). The Company and the Investor agree to indemnify and hold
the Escrow Agent harmless from and against any and all losses,
costs, damages, expenses and claims (including, without limitation,
court costs and reasonable attorneys fees) (“Losses”)
arising under this Section 3 or otherwise with respect to the
funds held in escrow pursuant hereto or arising under the Escrow
Agreement, unless such Losses resulted directly from the willful
misconduct or gross negligence of the Escrow Agent.
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(b)
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Delivery of Notes. At least one
(1) business day prior to the Closing, the Company shall cause
the Trustee to deliver the Notes (the “Certificates”)
issued in the name of the Investor or its nominee. Simultaneously
with the delivery to the Company by the Escrow Agent of the funds
held in escrow pursuant to Section 3(a) above, the Company shall
direct the Trustee to deliver the Notes to the Investor or its
nominee.
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(c)
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Registered Investment Companies. If
the Investor is a registered investment company and is not settling
its purchase of Notes pursuant to Section 3(a) and (b)
above, on or before the Closing Date, the Company shall cause the
Trustee to deliver the Notes purchased by such Investor to the
account and/or at the address designated by such Investor, and upon
receipt by such Investor of such Notes, such Investor shall wire,
in immediately available funds, the Purchase Amount for such Notes
to an account designated by the Company.
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4.
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The
offering and sale of the Notes are being made pursuant to the
Registration Statement and the Prospectus (as such terms are
defined below). The Investor acknowledges that the Company intends
to enter into subscriptions, which the Company represents will be
in substantially the same form as this Subscription, with certain
other investors and intends to offer and sell (the
“Offering”) Notes with an aggregate offering price of
up to $8,000,000 pursuant to the Registration Statement and
Prospectus. The Company may accept or reject this Subscription or
any one or more other subscriptions with other investors in its
sole discretion.
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5.
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The
Company has filed or shall file with the Securities and Exchange
Commission (the “Commission”) a prospectus (the
“Base Prospectus”) and a final prospectus supplement
(the “Prospectus Supplement” and together with the Base
Prospectus, the “Prospectus”) with respect to the
registration statement (File No. 333-156958) reflecting the
Offering, including all amendments thereto, the exhibits and any
schedules thereto, the documents otherwise deemed to be a part
thereof or included therein by the rules and regulations of the
Commission (the “Rules and Regulations”), and any
registration statement relating to the Offering and filed pursuant
to Rule 462(b) under the Rules and Regulations (collectively, the
“Registration Statement”), in conformity with the
Securities Act of 1933, as amended (the “Securities
Act”), including Rule 424(b) thereunder. The Investor hereby
confirms that it has had full access to the term sheet summarizing
the terms and conditions of the offering (including this form of
Subscription) (the “Free Writing Prospectus”), the Base
Prospectus and the Company’s periodic reports and other
information incorporated by reference therein, and was able to
read, review, download and print such materials.
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6.
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The
Company has entered into a Placement Agency Agreement (the
“Placement Agreement”), dated March 13, 2009 with
Philadelphia Brokerage Corporation (the “Placement
Agent”), which will act as the Company’s Placement
Agent with respect to the Offering and receive a fee (the
“Placement Fee”) in connection with the sale of the
Notes. The Placement Agreement contains the representations and
warranties of the Company set forth in Exhibit I hereto. The
Company acknowledges and agrees that the Investor may rely on the
representations and warranties made by it to the Placement Agent in
Section 2 of the Placement Agreement to the same extent as if
such representations and warranties had been incorporated in full
herein and made directly to the Investor. Capitalized terms used,
but not otherwise defined, herein shall have the meanings ascribed
to such terms in the Placement Agreement.
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7.
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The
obligations of the Company and the Investor to complete the
transactions contemplated by this Subscription shall be subject to
the following:
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(a)
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The
Company’s obligation to issue and sell the Notes to the
Investor shall be subject to: (i) the acceptance by the
Company of this Subscription (as may be indicated by the
Company’s execution of the Signature Page hereto),
(ii) the receipt by the Company of the purchase price for the
Notes being purchased hereunder as set forth on the Signature Page
and (iii) the accuracy of the representations and warranties
made by the Investor and the fulfillment of those undertakings of
the Investor to be fulfilled prior to the Closing Date.
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(b)
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The
Investor’s obligation to purchase the Notes will be subject
(i) the Placement Agent not having terminated the Placement
Agreement pursuant to the terms thereof, (ii) the
representations and warranties set forth in Exhibit I hereto
being true and correct and (iii) the conditions to closing in
the Placement Agreement having been satisfied or waived.
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8.
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The
Company hereby makes the following representations, warranties and
covenants to the Investor:
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(a)
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The
Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by this
Subscription and otherwise to carry out its obligations hereunder.
The execution and delivery of this Subscription by the Company and
the consummation by it of the transactions contemplated hereunder
have been duly authorized by all necessary action on the part of
the Company. This Subscription has been duly executed by the
Company and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except as may be limited by any bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors’ rights generally
or by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law.
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(b)
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The
Company shall make such filings and notices in the manner and time
required by the Commission with respect to the transactions
contemplated hereby. The Company shall not identify the Investor by
name in any press release or public filing, or otherwise publicly
disclose the Investor’s name, without the Investor’s
prior written consent, unless required by law or the rules and
regulations of any self-regulatory organization which the Company
or its securities are subject.
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A-3
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(c)
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The
Company shall reimburse the Investor an amount equal to $15,000 for
costs incurred in the Investor’s supplemental and follow-up
due diligence efforts related to the purchase of the Notes.
Further, the Company shall reimburse the Investor for the first
$15,000 of those legal fees incurred by the Investor solely related
to the purchase of the Notes.
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9.
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The
Investor hereby makes the following representations, warranties and
covenants to the Company:
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(a)
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The
Investor represents that (i) it has had full access to the
Base Prospectus and the Issuer Free Writing Prospectus, as well as
the Company’s periodic reports and other information
incorporated by reference therein, prior to or in connection with
its receipt of this Subscription, (ii) it is knowledgeable,
sophisticated and experienced in making, and is qualified to make,
decisions with respect to investments in securities representing an
investment decision like that involved in the purchase of the
Notes, and (iii) it does not have any agreement or
understanding, directly or indirectly, with any person or entity to
distribute any of the Notes.
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(b)
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The
Investor has the requisite power and authority to enter into this
Subscription and to consummate the transactions contemplated
hereby. The execution and delivery of this Subscription by the
Investor and the consummation by it of the transactions
contemplated hereunder have been duly authorized by all necessary
action on the part of the Investor. This Subscription has been
executed by the Investor and, when delivered in accordance with the
terms hereof, will constitute 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).
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(c)
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The
Investor understands that nothing in this Subscription or any other
materials presented to the Investor in connection with the purchase
and sale of the Notes 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 Notes.
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(d)
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Neither the Investor nor any Person
acting on behalf of, or pursuant to any understanding with or based
upon any information received from, the Investor has, directly or
indirectly, engaged in any transactions in the securities of the
Company (including without limitation, any Short Sales involving
the Company’s securities) since the earlier to occur of
(i) the time that the Investor was first contacted by the
Placement Agent or the Company with respect to the transactions
contemplated hereby and (ii) the date that is the tenth (10th)
trading day prior to the date the Investor executes this
Subscription. “Short Sales” include, without
limitation, all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the
Exchange Act, whether or not against the box, and all types of
direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, “put equivalent
positions” (as defined in Rule 16a-1(h) under the
Exchange Act) and similar arrangements (including on a total return
basis), and sales and other transactions through non-U.S. broker
dealers or foreign regulated brokers. The Investor covenants that
neither it, nor any Person acting on behalf of, or pursuant to any
understanding with or based upon any information received from, the
Investor will
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engage in any
transactions in the securities of the Company (including without
limitation, any Short Sales involving the Company’s
securities) prior to the time that the transactions contemplated by
this Subscription are publicly disclosed.
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(e)
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The
Investor represents that, except as set forth below, (i) it
has had no position, office or other material relationship within
the past three years with the Company or persons known to it to be
affiliates of the Company, (ii) it is not, and it has no
direct or indirect affiliation or association with, any FINRA
member or an Associated Person (as such term is defined under the
FINRA Membership and Registration Rules Section 1011) as
of the date the Investor executes this Subscription, and (iii)
neither it nor any group of investors (as identified in a public
filing made with the Commission) of which it is a member, acquired,
or obtained the right to acquire, 20% or more of the Common Stock
(or securities convertible or exercisable for Common Stock) or the
voting power of the Company on a post-transaction basis.
Exceptions:
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(If
no exceptions, write “none.” If left blank, response
will be deemed to be “none.”)
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(f)
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The
Investor, if outside the United States, will comply with all
applicable laws and regulations in each foreign jurisdiction in
which it purchases, offers, sells or delivers Notes or has in its
possession or distributes any offering material, in all cases at
its own expense.
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10.
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Notwithstanding any investigation
made by any party to this Subscription, all covenants, agreements,
representations and warranties made by the Company and the Investor
herein will survive the execution of this Subscription, the
delivery to the Investor of the Notes being purchased and the
payment therefor.
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11.
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This Subscription may not be
modified or amended except pursuant to an instrument in writing
signed by the Company and the Investor and acknowledged by the
Placement Agent.
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12.
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In
case any provision contained in this Subscription should be
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired
thereby.
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13.
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This Subscription will be governed
by, and construed in accordance with, the internal laws of the
Commonwealth of Pennsylvania, without giving effect to the
principles of conflicts of law that would require the application
of the laws of any other jurisdiction.
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14.
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This Subscription may be executed in
one or more counterparts (delivery of which may be by facsimile or
as “pdf” or similar attachments to an electronic
transmission), each of which will constitute an original, but all
of which, when taken together, will constitute but one instrument,
and will become effective when one or more counterparts have been
signed by each party hereto and delivered to the other
parties.
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15.
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The
Investor acknowledges and agrees that such Investor’s receipt
of the Company’s counterpart to this Subscription shall
constitute written confirmation of the Company’s sale of
Notes to such Investor.
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16.
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In
the event that the Placement Agreement is terminated by the
Placement Agent pursuant to the terms thereof, this Subscription
shall terminate without any further action on the part of the
parties hereto.
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A-5
Subscription
for Principal Amount of
12.5% Subordinated Convertible Notes due July 1, 2011: $
Please confirm
that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.
Dated as of:
March ___, 2009
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Name in which
Notes are to be registered:
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Taxpayer
Identification Number:
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Manner of
Settlement: As described in Section 3 of this
Subscription
Agreed and
Accepted this
day of March 2009:
Acknowledged
this
day of March 2009:
PHILADELPHIA
BROKERAGE CORPORATION
The sale of the
Notes purchased hereunder was made pursuant to a registration
statement or in a transaction in which a final prospectus would
have been required to have been delivered in the absence of
Rule 172 promulgated under the Securities Act.
A-6
Exhibit I to Subscription
Agreement
[Representations and Warranties
of Company from Placement Agency Agreement]
Unless
otherwise defined herein, capitalized terms shall have the meanings
assigned to such terms in the Placement Agency Agreement, dated as
of March 13, 2009, between the Company and the Placement
Agent.
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(a)
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Filing and Effectiveness of
Registration Statement . The Company has filed, in
conformity with the requirements of the Securities Act of 1933, as
amended (the “ Securities Act ”), and the
published rules and regulations thereunder (the “
Securities Act Rules and Regulations ”) adopted
by the Securities and Exchange Commission (the “
Commission ”), a registration statement on
Form S-3 (No. 333-156958), relating to the Notes and the
offering thereof from time to time in accordance with
Rule 415(a)(1)(x) of the Securities Act Rules and Regulations,
and such amendments thereof as may have been required to
date.
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(b)
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Registration Statement and
Prospectus; Certain Defined Terms . The Company meets the requirements
for use of Form S-3 under the Securities Act and has complied with
the requirements of Rule 415 with respect to the Registration
Statement (as hereafter defined). The Registration Statement has
heretofore become effective under the Securities Act or, with
respect to any registration statement to be filed to register the
offer and sale of Notes pursuant to Rule 462(b) under the
Securities Act, will be filed with the Commission and become
effective under the Securities Act no later than 10:00 p.m.
New York City time on the date of determination of the public
offering price for the Notes. No stop order preventing or
suspending the effectiveness of the Registration Statement has been
issued by the Commission, and no proceedings for such purpose
pursuant to Section 8A of the Securities Act against the
Company or related to the Offering have been instituted or are
pending or, to the Company’s knowledge, are contemplated or
threatened by the Commission, and any request received by the
Company on the part of the Commission for additional information
has been complied with. As used in this paragraph and elsewhere in
this Agreement:
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(i)
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“ Registration
Statement ” means the registration statement, as
amended at the time of such registration statement’s
effectiveness (the “ Effective Time ”),
including (i) all documents filed as a part thereof or
incorporated or deemed to be incorporated by reference therein,
(ii) any information in the corresponding Base Prospectus or a
prospectus supplement filed with the Commission pursuant to Rule
424(b) under the Securities Act, to the extent such information is
deemed pursuant to Rule 430B (“
Rule 430B ”) or Rule 430C (“
Rule 430C ”) under the Securities Act to
be a part thereof at the Effective Time. If the Company has filed
an abbreviated registration statement to register additional Notes
pursuant to Rule 462(b) under the Securities Act Rules and
Regulations (the “ Rule 462(b) Registration
Statement ”), then any reference herein to the term
“Registration Statement” shall also be deemed to
include such Rule 462(b) Registration Statement.
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(ii)
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“ Base
Prospectus ” means the Base Prospectus included in
the Registration Statement at the Effective Time.
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(iii)
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“ Final Prospectus
Supplement ” means the final prospectus supplement,
relating to the Notes, filed by the Company with the Commission
pursuant to Rule 424(b) under the Securities Act on or before the
second business day after the date hereof (or such earlier time as
may be required under the Securities Act) for use in connection
with the offering and sale of the Notes that discloses the public
offering price and other final terms of the Notes.
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(iv)
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“ Prospectus
” means the Final Prospectus Supplement together with the
Base Prospectus attached to or used with the Final Prospectus
Supplement.
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(v)
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“ Time of Sale
” with respect to any Investor, means the time of receipt and
acceptance (evidenced by execution by the Company) of an executed
Subscription Agreement (as defined below) from such
Investor.
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(vi)
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“ General Disclosure
Package ” means the Base Prospectus, each
“free-writing prospectus” (as defined pursuant to
Rule 405 under the Securities Act) listed on Schedule II
hereto and the pricing and other information as set forth on
Exhibit C hereto (the “ Pricing
Information ”), all considered together.
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(c)
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Compliance with Securities Act
Requirements . The Registration Statement
complied when it became effective, complies as of the date hereof
and, as amended or supplemented, at the Time of Sale and at all
times during which a prospectus is required by the Securities Act
to be delivered (whether physically or through compliance with
Rule 172 under the Securities Act or any similar rule) in
connection with any sale of Notes (the “ Prospectus
Delivery Period ”), will comply, in all material
respects, with the requirements of the Securities Act and the
Securities Act Rules and Regulations; the Registration Statement
did not, as of the Effective Time, 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, provided, that the Company makes no representations or
warranty in this paragraph with respect to statements in or
omissions from the Registration Statement in reliance upon, and in
conformity with, written information furnished to the Company by or
on behalf of the Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to
the Placement Agent’s Information (as defined in
Section 8).
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(d)
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Contents of Prospectus
. Each of the General
Disclosure Package, if any, and the Prospectus will comply, as of
the date that it is filed with the Commission, the date of its
delivery to Investors, the Time of Sale and at all times during the
Prospectus Delivery Period, in all material respects, with the
requirements of the Securities Act (in the case of the Prospectus,
including, without limitation, Section 10(a) of the Securities
Act); at no time during the period that begins on the earlier of
the date of the General Disclosure Package, if any, and the date
the Prospectus is filed with the Commission and ends at the later
of the Time of Sale and the end of the Prospectus Delivery Period
did or will any General Disclosure Package or the Prospectus, as
then amended or supplemented, include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, provided that the
Company makes no representation or warranty with respect to the
Placement Agent’s Information.
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(e)
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Incorporated Documents
. Each of the documents
incorporated or deemed to be incorporated by reference in the
Registration Statement, at the time such document was filed with
the Commission or at the time such document became effective, as
applicable,
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complied, in
all material respects, with the requirements of the Securities
Exchange Act of 1934, as amended (the “ Exchange
Act ”), and did not include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
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(f)
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General Disclosure
Package . The
General Disclosure Package as of the Time of Sale did not, and as
of the Closing Date will not, contain any untrue statement of a
material fact or omit to state any 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; provided, that the Company makes no representations or
warranty in this paragraph with respect to the Placement
Agent’s Information. No statement of material fact included
in the Prospectus has been omitted from the General Dis
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