Exhibit 10.35
Execution Copy
COMMON STOCK PURCHASE
AGREEMENT
Dated September 25,
2009
by and between
AFFYMAX, INC.
and
AZIMUTH OPPORTUNITY
LTD.
TABLE OF
CONTENTS
|
|
Page
|
|
|
|
|
Article I PURCHASE AND SALE OF COMMON
STOCK
|
1
|
|
Section 1.1
|
Purchase and Sale of Stock
|
1
|
|
Section 1.2
|
Effective Date; Settlement Dates
|
1
|
|
Section 1.3
|
The Shares
|
2
|
|
Section 1.4
|
Current Report; Prospectus Supplement
|
2
|
|
|
|
|
|
Article II FIXED REQUEST TERMS; OPTIONAL
AMOUNT
|
2
|
|
Section 2.1
|
Fixed Request Notice
|
3
|
|
Section 2.2
|
Fixed Requests
|
3
|
|
Section 2.3
|
Share Calculation
|
4
|
|
Section 2.4
|
Limitation of Fixed Requests
|
4
|
|
Section 2.5
|
Reduction of Commitment
|
5
|
|
Section 2.6
|
Below Threshold Price
|
5
|
|
Section 2.7
|
Settlement
|
5
|
|
Section 2.8
|
Reduction of Pricing Period
|
5
|
|
Section 2.9
|
Optional Amount
|
7
|
|
Section 2.10
|
Calculation of Optional Amount Shares
|
7
|
|
Section 2.11
|
Exercise of Optional Amount
|
7
|
|
Section 2.12
|
Aggregate Limit
|
8
|
|
|
|
|
|
Article III REPRESENTATIONS AND WARRANTIES
OF THE INVESTOR
|
9
|
|
Section 3.1
|
Organization and Standing of the
Investor
|
9
|
|
Section 3.2
|
Authorization and Power
|
9
|
|
Section 3.3
|
No Conflicts
|
9
|
|
Section 3.4
|
Information
|
10
|
|
|
|
|
|
Article IV REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
|
10
|
|
Section 4.1
|
Organization, Good Standing and Power
|
10
|
|
Section 4.2
|
Authorization, Enforcement
|
10
|
|
Section 4.3
|
Capitalization
|
11
|
|
Section 4.4
|
Issuance of Shares
|
11
|
|
Section 4.5
|
No Conflicts
|
12
|
|
Section 4.6
|
Commission Documents, Financial
Statements
|
12
|
|
Section 4.7
|
Subsidiaries
|
14
|
|
Section 4.8
|
No Material Adverse Effect
|
14
|
|
Section 4.9
|
Indebtedness
|
14
|
|
Section 4.10
|
Title To Assets
|
14
|
|
Section 4.11
|
Actions Pending
|
14
|
|
Section 4.12
|
Compliance With Law
|
15
|
i
|
Section 4.13
|
Certain Fees
|
15
|
|
Section 4.14
|
Operation of Business
|
16
|
|
Section 4.15
|
Environmental Compliance
|
18
|
|
Section 4.16
|
Material Agreements
|
18
|
|
Section 4.17
|
Transactions With Affiliates
|
19
|
|
Section 4.18
|
Securities Act
|
19
|
|
Section 4.19
|
Employees
|
21
|
|
Section 4.20
|
Use of Proceeds
|
21
|
|
Section 4.21
|
Investment Company Act Status
|
21
|
|
Section 4.22
|
ERISA
|
21
|
|
Section 4.23
|
Taxes
|
22
|
|
Section 4.24
|
Insurance
|
22
|
|
Section 4.25
|
Acknowledgement Regarding Investor’s
Purchase of Shares
|
22
|
|
|
|
|
|
Article V COVENANTS
|
22
|
|
Section 5.1
|
Securities Compliance; FINRA Filing
|
22
|
|
Section 5.2
|
Registration and Listing
|
23
|
|
Section 5.3
|
Compliance with Laws
|
24
|
|
Section 5.4
|
Keeping of Records and Books of Account; Foreign
Corrupt Practices Act
|
24
|
|
Section 5.5
|
Limitations on Holdings and Issuances
|
25
|
|
Section 5.6
|
Other Agreements and Other Financings
|
25
|
|
Section 5.7
|
Stop Orders
|
27
|
|
Section 5.8
|
Amendments to the Registration Statement;
Prospectus Supplements; Free Writing Prospectuses
|
27
|
|
Section 5.9
|
Prospectus Delivery
|
28
|
|
Section 5.10
|
Selling Restrictions
|
29
|
|
Section 5.11
|
Effective Registration Statement
|
30
|
|
Section 5.12
|
Non-Public Information
|
30
|
|
Section 5.13
|
Broker/Dealer
|
30
|
|
Section 5.14
|
Disclosure Schedule
|
30
|
|
|
|
|
|
Article VI OPINION OF COUNSEL
AND CERTIFICATE; CONDITIONS TO THE SALE AND PURCHASE OF THE
SHARES
|
31
|
|
Section 6.1
|
Opinion of Counsel and Certificate
|
31
|
|
Section 6.2
|
Conditions Precedent to the Obligation of the
Company
|
31
|
|
Section 6.3
|
Conditions Precedent to the Obligation of the
Investor
|
32
|
|
|
|
|
|
Article VII TERMINATION
|
35
|
|
Section 7.1
|
Term, Termination by Mutual Consent
|
35
|
|
Section 7.2
|
Other Termination
|
36
|
|
Section 7.3
|
Effect of Termination
|
37
|
|
|
|
|
|
Article VIII INDEMNIFICATION
|
37
|
|
Section 8.1
|
General Indemnity.
|
37
|
|
Section 8.2
|
Indemnification Procedures
|
39
|
ii
|
Article IX MISCELLANEOUS
|
40
|
|
Section 9.1
|
Fees and Expenses.
|
40
|
|
Section 9.2
|
Specific Enforcement, Consent to Jurisdiction,
Waiver of Jury Trial
|
41
|
|
Section 9.3
|
Entire Agreement; Amendment
|
42
|
|
Section 9.4
|
Notices
|
42
|
|
Section 9.5
|
Waivers
|
43
|
|
Section 9.6
|
Headings
|
43
|
|
Section 9.7
|
Successors and Assigns
|
43
|
|
Section 9.8
|
Governing Law
|
43
|
|
Section 9.9
|
Survival
|
43
|
|
Section 9.10
|
Counterparts
|
43
|
|
Section 9.11
|
Publicity
|
44
|
|
Section 9.12
|
Severability
|
44
|
|
Section 9.13
|
Further Assurances
|
44
|
|
|
|
|
|
Annex A.
|
Definitions
|
|
|
|
|
|
iii
COMMON STOCK PURCHASE
AGREEMENT
This COMMON STOCK PURCHASE
AGREEMENT , made and entered into on this 25
th day of September, 2009 (this “
Agreement ”), by and between Azimuth Opportunity Ltd.,
an international business company incorporated under the laws of
the British Virgin Islands (the “ Investor ”),
and Affymax, Inc., a corporation organized and existing under
the laws of the State of Delaware (the “ Company
”). Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in Annex A
hereto.
RECITALS
WHEREAS , the parties desire that, upon the terms and
subject to the conditions contained herein, the Company may issue
and sell to the Investor and the Investor shall thereupon purchase
from the Company up to $60,000,000 of newly issued shares of the
Company’s common stock, $0.001 par value (“ Common
Stock ”), subject, in all cases, to the Trading Market
Limit; and
WHEREAS , the offer and sale of the shares of Common
Stock hereunder have been registered by the Company in the
Registration Statement, which has been declared effective by order
of the Commission under the Securities Act;
NOW, THEREFORE
, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF COMMON STOCK
Section 1.1
Purchase and Sale of
Stock . Upon
the terms and subject to the conditions of this Agreement, during
the Investment Period the Company in its discretion may issue and
sell to the Investor up to $60,000,000 (the “ Total
Commitment ”) of duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock (subject in all
cases to the Trading Market Limit, the “ Aggregate
Limit ”), by (i) the delivery to the Investor of not
more than 36 separate Fixed Request Notices (unless the Investor
and the Company mutually agree that a different number of Fixed
Request Notices may be delivered) as provided in Article II
hereof and (ii) the exercise by the Investor of Optional
Amounts, which the Company may in its discretion grant to the
Investor and which may be exercised by the Investor, in whole or in
part, as provided in Article II hereof. The aggregate of
all Fixed Request Amounts and Optional Amount Dollar Amounts shall
not exceed the Aggregate Limit.
Section 1.2
Effective Date; Settlement
Dates . This
Agreement shall become effective and binding upon delivery of
counterpart signature pages of this Agreement executed by each
of the parties hereto, and by delivery of an opinion of counsel and
a certificate of the Company as provided in Section 6.1
hereof, to the offices of Greenberg Traurig, LLP, 200 Park Avenue,
New York, New York 10166, at 4:00 p.m., New York time, on the
Effective Date. In consideration of and in express reliance
upon the representations, warranties and covenants, and otherwise
upon the terms and subject to the conditions, of this Agreement,
from and after the Effective Date and during the Investment Period
(i) the Company shall issue and sell to the
Investor, and the Investor agrees to purchase
from the Company, the Shares in respect of each Fixed Request and
(ii) the Investor may in its discretion elect to purchase
Shares in respect of each Optional Amount. The issuance and
sale of Shares to the Investor pursuant to any Fixed Request or
Optional Amount shall occur on the applicable Settlement Date in
accordance with Sections 2.7 and 2.9 (or on such Trading Day in
accordance with Section 2.8, as applicable), provided in each
case that all of the conditions precedent thereto set forth in
Article VI theretofore shall have been fulfilled or (to the
extent permitted by applicable law) waived.
Section 1.3
The Shares
. The Company has or will have
duly authorized and reserved for issuance, and covenants to
continue to so reserve once reserved for issuance, free of all
preemptive and other similar rights, at all times during the
Investment Period, the requisite aggregate number of authorized but
unissued shares of its Common Stock to timely effect the issuance,
sale and delivery in full to the Investor of all Shares to be
issued in respect of all Fixed Requests and Optional Amounts under
this Agreement, in any case prior to the issuance to the Investor
of such Shares.
Section 1.4
Current Report; Prospectus
Supplement . As
soon as practicable, but in any event not later than 5:30 p.m.
(New York time) on the first Trading Day immediately following the
Effective Date, the Company shall file with the Commission a report
on Form 8-K relating to the transactions contemplated by, and
describing the material terms and conditions of, this Agreement and
disclosing all information relating to the transactions
contemplated hereby required to be disclosed in the Registration
Statement and the Base Prospectus (but which permissibly has been
omitted therefrom in accordance with the Securities Act),
including, without limitation, information required to be disclosed
in the section captioned “Plan of Distribution” in the
Base Prospectus (the “ Current Report ”).
The Current Report shall include a copy of this Agreement as an
exhibit. To the extent applicable, the Current Report shall
be incorporated by reference in the Registration Statement in
accordance with the provisions of Rule 430B under the
Securities Act. The Company heretofore has provided the
Investor a reasonable opportunity to comment on a draft of such
Current Report and has given due consideration to such
comments. The Company shall file a final Base Prospectus
pursuant to Rule 424(b) under the Securities Act on or
prior to the second Trading Day immediately following the Effective
Date. Pursuant to Section 5.9 and subject to the
provisions of Section 5.8, on the first Trading Day
immediately following the last Trading Day of each Pricing Period,
the Company shall file with the Commission a Prospectus Supplement
pursuant to Rule 424(b) under the Securities Act
disclosing the number of Shares to be issued and sold to the
Investor thereunder, the total purchase price therefor and the net
proceeds to be received by the Company therefrom and, to the extent
required by the Securities Act, identifying the Current
Report.
ARTICLE II
FIXED REQUEST TERMS; OPTIONAL AMOUNT
Subject to the satisfaction of the
conditions set forth in this Agreement, the parties agree (unless
otherwise mutually agreed upon by the parties in writing) as
follows:
2
Section 2.1
Fixed Request
Notice . The
Company may, from time to time in its sole discretion, no later
than 9:30 a.m. (New York time) on the first Trading Day of the
Pricing Period, provide to the Investor a Fixed Request notice,
substantially in the form attached hereto as Exhibit A
(the “ Fixed Request Notice ”), which Fixed
Request Notice shall become effective at 9:30 a.m. (New York
time) on the first Trading Day of the Pricing Period specified in
the Fixed Request Notice; provided ; however , that
if the Company delivers the Fixed Request Notice to the Investor
later than 9:30 a.m. (New York time) on a Trading Day, then
the first Trading Day of such Pricing Period shall not be the
Trading Day on which the Investor received such Fixed Request
Notice, but shall be the Trading Day thereafter. The Fixed Request
Notice shall specify the Fixed Amount Requested, establish the
Threshold Price for such Fixed Request, designate the first and
last Trading Day of the Pricing Period and specify the Optional
Amount, if any, that the Company elects to grant to the Investor
during the Pricing Period and the applicable Threshold Price for
such Optional Amount (the “ Optional Amount Threshold
Price ”). The Threshold Price and the Optional Amount
Threshold Price established by the Company in a Fixed Request
Notice may be the same or different, in the Company’s sole
discretion. Upon the terms and subject to the conditions of
this Agreement, the Investor is obligated to accept each Fixed
Request Notice prepared and delivered in accordance with the
provisions of this Agreement.
Section 2.2
Fixed Requests
. From time to time during the
Investment Period, the Company may in its sole discretion deliver
to the Investor a Fixed Request Notice for a specified Fixed Amount
Requested, and the applicable discount price (the “
Discount Price ”) shall be determined, in accordance
with the price and share amount parameters as set forth below or
such other parameters mutually agreed upon by the Investor and the
Company, and upon the terms and subject to the conditions of this
Agreement, the Investor shall purchase from the Company the Shares
subject to such Fixed Request Notice; provided ,
however , that (i) if an ex-dividend date is
established by the Trading Market in respect of the Common Stock on
or between the first Trading Day of the applicable Pricing Period
and the applicable Settlement Date, the Discount Price shall be
reduced by the per share dividend amount and (ii) the Company
may not deliver any single Fixed Request Notice for a Fixed Amount
Requested in excess of the lesser of (a) the amount in the
applicable Fixed Amount Requested column below and (b) 2.5% of
the Market Capitalization:
|
Threshold Price
|
|
Fixed Amount
Requested
|
|
Discount Price
|
|
|
|
|
|
|
|
Equal to or greater than $36.00
|
|
Not to exceed $5,250,000
|
|
96.25% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $34.00 and less than
$36.00
|
|
Not to exceed $5,000,000
|
|
96.20% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $32.00 and less than
$34.00
|
|
Not to exceed $4,750,000
|
|
96.15% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $30.00 and less than
$32.00
|
|
Not to exceed $4,500,000
|
|
96.10% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $28.00 and less than
$30.00
|
|
Not to exceed $4,250,000
|
|
96.05% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $26.00 and less than
$28.00
|
|
Not to exceed $4,000,000
|
|
96.00% of the VWAP
|
3
|
Equal to or greater than $24.00 and less than
$26.00
|
|
Not to exceed $3,750,000
|
|
95.80% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $22.00 and less than
$24.00
|
|
Not to exceed $3,500,000
|
|
95.60% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $20.00 and less than
$22.00
|
|
Not to exceed $3,250,000
|
|
95.40% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $18.00 and less than
$20.00
|
|
Not to exceed $3,000,000
|
|
95.20% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $16.00 and less than
$18.00
|
|
Not to exceed $2,750,000
|
|
95.00% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $14.00 and less than
$16.00
|
|
Not to exceed $2,500,000
|
|
94.75% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $12.00 and less than
$14.00
|
|
Not to exceed $2,250,000
|
|
94.50% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $10.00 and less than
$12.00
|
|
Not to exceed $2,000,000
|
|
94.38% of the VWAP
|
|
|
|
|
|
|
|
Equal to or greater than $8.00 and less than
$10.00
|
|
Not to exceed $1,750,000
|
|
94.25% of the VWAP
|
Anything to the contrary in this
Agreement notwithstanding, at no time shall the Investor be
required to purchase more than $5,250,000 worth of Common Stock in
respect of any Pricing Period (not including Common Stock subject
to any Optional Amount). The date on which the Company
delivers any Fixed Request Notice in accordance with this
Section 2.2 hereinafter shall be referred to as a “
Fixed Request Exercise Date ”.
Section 2.3
Share
Calculation . With
respect to the Trading Days during the applicable Pricing Period
for which the VWAP equals or exceeds the Threshold Price, the
number of Shares to be issued by the Company to the Investor
pursuant to a Fixed Request shall equal the aggregate sum of each
quotient (calculated for each Trading Day during the applicable
Pricing Period for which the VWAP equals or exceeds the Threshold
Price) determined pursuant to the following equation (rounded to
the nearest whole Share):
N = (A x B)/C, where:
N = the number of Shares to be
issued by the Company to the Investor in respect of a Trading Day
during the applicable Pricing Period for which the VWAP equals or
exceeds the Threshold Price,
A = 0.10 (the “
Multiplier ”),
B = the total Fixed Amount
Requested, and
C = the applicable Discount
Price.
Section 2.4
Limitation of Fixed
Requests . The
Company shall not make more than one Fixed Request in each Pricing
Period. Not less than five Trading Days shall elapse between
the end of one Pricing Period and the commencement of any other
Pricing Period during the
4
Investment Period. There shall be
permitted a maximum of 36 Fixed Requests during the Investment
Period. Each Fixed Request automatically shall expire
immediately following the last Trading Day of each Pricing
Period.
Section 2.5
Reduction of
Commitment . On
the last Trading Day of each Pricing Period, the Investor’s
Total Commitment under this Agreement automatically (and without
the need for any amendment to this Agreement) shall be reduced, on
a dollar-for-dollar basis, by the total amount of the Fixed Request
Amount and the Optional Amount Dollar Amount, if any, for such
Pricing Period paid to the Company at the Settlement
Date.
Section 2.6
Below Threshold
Price . If the
VWAP on any Trading Day in a Pricing Period is lower than the
Threshold Price, then for each such Trading Day the Fixed Amount
Requested shall be reduced, on a dollar-for-dollar basis, by an
amount equal to the product of (x) the Multiplier and
(y) the total Fixed Amount Requested, and no Shares shall be
purchased or sold with respect to such Trading Day, except as
provided below. If trading in the Common Stock on NASDAQ (or
any other U.S. national securities exchange on which the Common
Stock is then listed) is suspended for any reason for more than
three hours on any Trading Day, the Investor may at its option deem
the price of the Common Stock to be lower than the Threshold Price
for such Trading Day and, for each such Trading Day, the total
amount of the Fixed Amount Requested shall be reduced as provided
in the immediately preceding sentence, and no Shares shall be
purchased or sold with respect to such Trading Day, except as
provided below. For each Trading Day during a Pricing Period
on which the VWAP is lower (or is deemed to be lower as provided in
the immediately preceding sentence) than the Threshold Price, the
Investor may in its sole discretion elect to purchase such U.S.
dollar amount of Shares equal to the amount by which the Fixed
Amount Requested has been reduced in accordance with this
Section 2.6, at the Threshold Price multiplied by the
applicable percentage determined in accordance with the price and
share amount parameters set forth in Section 2.2. The
Investor shall inform the Company via facsimile transmission not
later than 8:00 p.m. (New York time) on the last Trading Day
of such Pricing Period as to the number of Shares, if any, the
Investor elects to purchase as provided in this
Section 2.6.
Section 2.7
Settlement
. The payment for, against
simultaneous delivery of, Shares in respect of each Fixed Request
shall be settled on the second Trading Day next following the last
Trading Day of each Pricing Period, or on such earlier date as the
parties may mutually agree (the “ Settlement Date
”). On each Settlement Date, the Company shall deliver
the Shares purchased by the Investor to the Investor or its
designees via DTC’s Deposit Withdrawal Agent Commission
(DWAC) system, against simultaneous payment therefor to the
Company’s designated account by wire transfer of immediately
available funds, provided that if the Shares are received by the
Investor later than 1:00 p.m. (New York time), payment
therefor shall be made with next day funds. As set forth in
Section 9.1(ii), a failure by the Company to deliver such
Shares shall result in the payment of liquidated damages by the
Company to the Investor.
Section 2.8
Reduction of Pricing
Period . If
during a Pricing Period the Company elects to reduce the number of
Trading Days in such Pricing Period (and thereby amend its
previously delivered Fixed Request Notice), the Company shall so
notify the Investor before
5
9:00 a.m. (New York time) on any Trading
Day during a Pricing Period (a “ Reduction Notice
”) and the last Trading Day of such Pricing Period shall be
the Trading Day immediately preceding the Trading Day on which the
Investor received such Reduction Notice; provided ,
however , that if the Company delivers the Reduction Notice
later than 9:00 a.m. (New York time) on a Trading Day during a
Pricing Period, then the last Trading Day of such Pricing Period
instead shall be the Trading Day on which the Investor received
such Reduction Notice.
Upon receipt of a Reduction Notice,
the Investor (i) shall purchase the Shares in respect of each
Trading Day in such reduced Pricing Period for which the VWAP
equals or exceeds the Threshold Price in accordance with
Section 2.3 hereof; (ii) may elect to purchase the Shares
in respect of any Trading Day in such reduced Pricing Period for
which the VWAP is (or is deemed to be) lower than the Threshold
Price in accordance with Section 2.6 hereof; and
(iii) may elect to exercise all or any portion of an Optional
Amount on any Trading Day during such reduced Pricing Period in
accordance with Sections 2.10 and 2.11 hereof.
In addition, upon receipt of a
Reduction Notice, the Investor may elect to purchase such U.S.
dollar amount of additional Shares equal to the product determined
pursuant to the following equation:
D = (A/B) x (B – C), where:
D = the U.S. dollar amount of additional Shares
to be purchased,
A = the Fixed Amount Requested,
B = 10 or, for purposes of this
Section 2.8, such lesser number of Trading Days as the parties
may mutually agree to, and
C = the number of Trading Days in the reduced
Pricing Period,
at a per Share price equal to (x) the Fixed
Amount Requested attributable to the reduced Pricing Period divided
by (y) the number of Shares to be purchased during such
reduced Pricing Period pursuant to clauses (i) and
(ii) (as applicable) of the immediately preceding
paragraph.
The Investor may also elect to
exercise any portion of the applicable Optional Amount which was
unexercised during the reduced Pricing Period by issuing an
Optional Amount Notice to the Company not later than
10:00 a.m. (New York time) on the first Trading Day next
following the last Trading Day of the reduced Pricing Period. The
number of Shares to be issued upon exercise of such Optional Amount
shall be calculated pursuant to the equation set forth in
Section 2.10 hereof, except that “C” shall equal
the greater of (i) the VWAP for the Common Stock on the last
Trading Day of the reduced Pricing Period or (ii) the Optional
Amount Threshold Price.
6
The payment for, against
simultaneous delivery of, Shares to be purchased and sold in
accordance with this Section 2.8 shall be settled on the
second Trading Day next following the Trading Day on which the
Investor receives a Reduction Notice.
Section 2.9
Optional Amount
. With respect to any Pricing
Period, the Company may in its sole discretion grant to the
Investor the right to exercise, from time to time during the
Pricing Period (but not more than once on any Trading Day), all or
any portion of an Optional Amount. The maximum Optional
Amount Dollar Amount and the Optional Amount Threshold Price shall
be set forth in the Fixed Request Notice. If an ex-dividend
date is established by the Trading Market in respect of the Common
Stock on or between the first Trading Day of the applicable Pricing
Period and the applicable Settlement Date, the applicable exercise
price in respect of the Optional Amount shall be reduced by the per
share dividend amount. Each daily Optional Amount exercise
shall be aggregated during the Pricing Period and settled on the
next Settlement Date. The Optional Amount Threshold Price
designated by the Company in its Fixed Request Notice shall apply
to each Optional Amount exercised during the applicable Pricing
Period.
Section 2.10
Calculation of Optional Amount
Shares . The
number of shares of Common Stock to be issued in connection with
the exercise of an Optional Amount shall be the quotient determined
pursuant to the following equation (rounded to the nearest whole
Share):
O = A/(B x C), where:
O = the number of shares of Common
Stock to be issued in connection with such Optional Amount
exercise,
A = the Optional Amount Dollar
Amount with respect to which the Investor has delivered an Optional
Amount Notice,
B = the applicable percentage
determined in accordance with the price and shares amount
parameters set forth in Section 2.2 (with the Optional Amount
Threshold Price serving as the Threshold Price for such purposes),
and
C = the greater of (i) the VWAP
for the Common Stock on the day the Investor delivers the Optional
Amount Notice or (ii) the Optional Amount Threshold
Price.
Section 2.11
Exercise of Optional
Amount . If
granted by the Company to the Investor with respect to a Pricing
Period, all or any portion of the Optional Amount may be exercised
by the Investor on any Trading Day during the Pricing Period,
subject to the limitations set forth in Section 2.9. As
a condition to each exercise of an Optional Amount pursuant to this
Section 2.11, the Investor shall issue an Optional Amount
Notice to the Company no later than 8:00 p.m. (New York time)
on the day of such Optional Amount exercise. If the Investor
does not exercise an Optional Amount in full by 8:00 p.m. (New
York time) on the last Trading Day of the applicable Pricing
Period, such unexercised portion of the Investor’s Optional
Amount with respect to that Pricing Period automatically shall
lapse and terminate.
7
Section 2.12
Aggregate Limit
. Notwithstanding anything to
the contrary contained in this Agreement, in no event may the
Company issue a Fixed Request Notice or grant an Optional Amount to
the extent that the sale of Shares pursuant thereto and pursuant to
all prior Fixed Request Notices and Optional Amounts issued
hereunder, and as liquidated damages pursuant to
Section 9.1(ii), would cause the Company to sell or the
Investor to purchase Shares which in the aggregate are in excess of
the Aggregate Limit. If the Company issues a Fixed Request
Notice or Optional Amount that otherwise would permit the Investor
to purchase shares of Common Stock which would cause the aggregate
purchases by Investor hereunder to exceed the Aggregate Limit, such
Fixed Request Notice or Optional Amount shall be void ab
initio to the extent of the amount by which the dollar value of
shares or number of shares, as the case may be, of Common Stock
otherwise issuable pursuant to such Fixed Request Notice or
Optional Amount together with the dollar value of shares or number
of shares, as the case may be, of all other Common Stock purchased
by the Investor pursuant hereto, or issued as liquidated damages
pursuant to Section 9.1(ii), would exceed the Aggregate
Limit. The Company hereby represents, warrants and covenants
that neither it nor any of its Subsidiaries (i) has effected
any transaction or series of transactions, (ii) is a party to
any pending transaction or series of transactions or
(iii) shall enter into any contract, agreement,
agreement-in-principle, arrangement or understanding with respect
to, or shall effect, any Other Financing which, in any of such
cases, may be aggregated with the transactions contemplated by this
Agreement for purposes of determining whether approval of the
Company’s stockholders is required under any bylaw, listed
securities maintenance standards or other rules of the Trading
Market; provided , however , that the Company shall
be permitted to take any action referred to in clause
(iii) above if (a) the Company has timely provided the
Investor with an Integration Notice as provided in
Section 5.6(ii) hereof and (b) unless the Investor
has previously terminated this Agreement pursuant to
Section 7.2, the Company obtains the requisite stockholder
approval prior to the closing of such Other Financing.
At the Company’s sole
discretion, and effective automatically upon delivery of notice by
the Company to the Investor, this Agreement may be amended by the
Company from time to time to reduce the Aggregate Limit by a
specified dollar amount and/or number of shares of Common Stock as
shall be determined by the Company in its sole discretion;
provided , however , that any such amendment of this
Agreement (and any such purported amendment) shall be void and of
no force and effect if the effect thereof would restrict,
materially delay, conflict with or impair the ability or right of
the Company to perform its obligations under this Agreement,
including, without limitation, the obligation of the Company to
deliver Shares to the Investor in respect of a Fixed Request or
Optional Amount on the applicable Settlement Date. In the
event the Company shall have elected to reduce the Aggregate Limit
as provided in the immediately preceding sentence, at the
Company’s sole discretion, and effective automatically upon
delivery of notice by the Company to the Investor, the Company may
subsequently amend this Agreement to increase the Aggregate Limit
up to $60,000,000; provided , however , that in no
event shall the Company be entitled to issue Fixed Requests and
grant Optional Amounts during the remainder of the Investment
Period for an aggregate amount greater than the amount obtained by
subtracting (x) the aggregate of all Fixed Request Amounts and
Optional Amount Dollar Amounts (including any amounts paid as
liquidated damages pursuant to
Section 9.1(ii)
8
hereunder) covered by all Fixed Requests and
Optional Amounts theretofore issued or granted by the Company in
respect of which a settlement has occurred pursuant to
Section 2.7 from (y) $60,000,000, subject in all cases to
the Trading Market Limit.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor hereby makes the
following representations and warranties to the Company:
Section 3.1
Organization and Standing of
the Investor .
The Investor is an international business company duly organized,
validly existing and in good standing under the laws of the British
Virgin Islands.
Section 3.2
Authorization and
Power . The
Investor has the requisite corporate power and authority to enter
into and perform its obligations under this Agreement and to
purchase the Shares in accordance with the terms hereof. The
execution, delivery and performance of this Agreement by the
Investor and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action, and no further consent or authorization of the
Investor, its Board of Directors or stockholders is required.
This Agreement has been duly executed and delivered by the
Investor. This Agreement constitutes a valid and binding
obligation of the Investor enforceable against it in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership, or similar laws
relating to, or affecting generally the enforcement of,
creditor’s rights and remedies or by other equitable
principles of general application.
Section 3.3
No Conflicts
. The execution, delivery and
performance by the Investor of this Agreement and the consummation
by the Investor of the transactions contemplated herein do not and
shall not (i) result in a violation of such Investor’s
charter documents, bylaws or other applicable organizational
instruments, (ii) conflict with, constitute a default (or an
event which, with notice or lapse of time or both, would become a
default) under, or give rise to any rights of termination,
amendment, acceleration or cancellation of, any material agreement,
mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the Investor is a
party or is bound, (iii) create or impose any lien, charge or
encumbrance on any property of the Investor under any agreement or
any commitment to which the Investor is party or under which the
Investor is bound or under which any of its properties or assets
are bound, or (iv) result in a violation of any federal,
state, local or foreign statute, rule, or regulation, or any order,
judgment or decree of any court or governmental agency applicable
to the Investor or by which any of its properties or assets are
bound or affected, except, in the case of clauses (ii),
(iii) and (iv), for such conflicts, defaults, terminations,
amendments, acceleration, cancellations and violations as would
not, individually or in the aggregate, prohibit or otherwise
interfere with the ability of the Investor to enter into and
perform its obligations under this Agreement in any material
respect. The Investor is not required under federal, state,
local or foreign law, rule or regulation to obtain any
consent, authorization or order of, or make any filing or
registration
9
with, any court or governmental agency in order
for it to execute, deliver or perform any of its obligations under
this Agreement or to purchase the Shares in accordance with the
terms hereof.
Section 3.4
Information
. All materials relating to
the business, financial condition, management and operations of the
Company and materials relating to the offer and sale of the Shares
which have been requested by the Investor have been furnished or
otherwise made available to the Investor or its advisors (subject
to Section 5.12 of this Agreement). The Investor and its
advisors have been afforded the opportunity to ask questions of
representatives of the Company. The Investor has sought such
accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its
acquisition of the Shares. The Investor understands that it
(and not the Company) shall be responsible for its own tax
liabilities that may arise as a result of this investment or the
transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the
disclosure schedule delivered by the Company to the Investor (which
is hereby incorporated by reference in, and constitutes an integral
part of, this Agreement) (the “ Disclosure Schedule
”), the Company hereby makes the following representations
and warranties to the Investor:
Section 4.1
Organization, Good Standing
and Power . The
Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the
requisite corporate power and authority to own, lease and operate
its properties and assets and to conduct its business as it is now
being conducted. The Company and each Subsidiary is duly
qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification
necessary, except for any jurisdiction in which the failure to be
so qualified would not have a Material Adverse Effect.
Section 4.2
Authorization,
Enforcement .
The Company has the requisite corporate power and authority to
enter into and perform this Agreement and to issue and sell the
Shares in accordance with the terms hereof. Except for
approvals of the Company’s Board of Directors or a committee
thereof as may be required in connection with any issuance and sale
of Shares to the Investor hereunder (which approvals shall be
obtained prior to the delivery of any Fixed Request Notice), the
execution, delivery and performance by the Company of this
Agreement and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action and no further consent or authorization
of the Company or its Board of Directors or stockholders is
required. This Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or
affecting generally the
10
enforcement of, creditor’s rights and
remedies or by other equitable principles of general
application.
Section 4.3
Capitalization . The authorized capital stock of the
Company and the shares thereof issued and outstanding are as set
forth in the Commission Documents as of the dates reflected
therein. All of the outstanding shares of Common Stock have
been duly authorized and validly issued, and are fully paid and
nonassessable. Except as set forth in the Commission
Documents, as of the Effective Date, no shares of Common Stock were
entitled to preemptive rights or registration rights and there were
no outstanding options, warrants, scrip, rights to subscribe to,
call or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, any
shares of capital stock of the Company, other than those issued or
granted in the ordinary course of business pursuant to the
Company’s equity incentive plans. Except as set forth
in the Commission Documents, there were no contracts, commitments,
understandings, or arrangements by which the Company is or may
become bound to issue additional shares of the capital stock of the
Company or options, securities or rights convertible into or
exchangeable for any shares of capital stock of the Company, other
than those issued or granted in the ordinary course of business
pursuant to the Company’s equity incentive plans.
Except for customary transfer restrictions contained in agreements
entered into by the Company to sell restricted securities or as set
forth in the Commission Documents, as of the Effective Date, the
Company was not a party to, and it had no knowledge of, any
agreement restricting the voting or transfer of any shares of the
capital stock of the Company. Except as set forth in the
Commission Documents, the offer and sale of all capital stock,
convertible or exchangeable securities, rights, warrants or options
of the Company issued prior to the Effective Date complied with all
applicable federal and state securities laws, and no stockholder
has any right of rescission or damages or any “put” or
similar right with respect thereto that would have a Material
Adverse Effect. The Company has furnished or made available
to the Investor via the Commission’s Electronic Data
Gathering, Analysis and Retrieval System (“ EDGAR
”) true and correct copies of the Company’s Certificate
of Incorporation as in effect on the Effective Date (the “
Charter ”), and the Company’s Bylaws as in
effect on the Effective Date (the “ Bylaws ”),
and true and correct copies (redacted as appropriate) of all
executed resolutions of the Company’s Board of Directors (and
committees thereof) relating to the capital stock of the Company
(and transactions in respect thereof) since December 31, 2006
(except with respect to issuances of shares of capital stock of the
Company to directors, consultants, or employees of the
Company as fees or compensation that were duly approved by the
Company’s Board of Directors or a committee thereof or other
subcommittee established and authorized by the Board to issue
shares or other equity securities under the Company’s equity
incentive plans).
Section 4.4
Issuance of Shares . The Shares to be issued under this
Agreement have been or will be duly authorized by all necessary
corporate action and, when paid for or issued in accordance with
the terms hereof, the Shares shall be validly issued and
outstanding, fully paid and nonassessable, and, when the Shares
have been issued to the Investor, the Investor shall be entitled to
all rights accorded to a holder and beneficial owner of Common
Stock.
11
Section 4.5
No Conflicts . The execution, delivery and performance
by the Company of this Agreement and the consummation by the
Company of the transactions contemplated herein do not and shall
not (i) result in a violation of any provision of the
Company’s Charter or Bylaws, (ii) conflict with,
constitute a default (or an event which, with notice or lapse of
time or both, would become a default) under, or give rise to any
rights of termination, amendment, acceleration or cancellation of,
any material agreement, mortgage, deed of trust, indenture, note,
bond, license, lease agreement, instrument or obligation to which
the Company or any of its Significant Subsidiaries is a party or is
bound (including, without limitation, any listing agreement with
the Trading Market), (iii) create or impose a lien, charge or
encumbrance on any property of the Company or any of its
Significant Subsidiaries under any agreement or any commitment to
which the Company or any of its Significant Subsidiaries is a party
or under which the Company or any of its Significant Subsidiaries
is bound or under which any of their respective properties or
assets are bound, or (iv) result in a violation of any
federal, state, local or foreign statute, rule, regulation, order,
judgment or decree applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or
any of its Subsidiaries are bound or affected, except, in the case
of clauses (ii), (iii) and (iv), for such conflicts, defaults,
terminations, amendments, acceleration, cancellations, liens,
charges, encumbrances and violations as would not, individually or
in the aggregate, have a Material Adverse Effect. The Company
is not required under federal, state, local or foreign law,
rule or regulation to obtain any consent, authorization or
order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform
any of its obligations under this Agreement, or to issue and sell
the Shares to the Investor in accordance with the terms hereof
(other than any filings which may be required to be made by the
Company with the Commission, the Financial Industry Regulatory
Authority (the “ FINRA ”) or the Trading Market
subsequent to the Effective Date, including but not limited to a
Prospectus Supplement under Sections 1.4 and 5.9 of this Agreement,
the FINRA Filing under Section 5.1 of this Agreement and any
registration statement, prospectus or prospectus supplement which
has been or may be filed pursuant to this Agreement).
Section 4.6
Commission Documents, Financial Statements
. (a) The Common Stock
is registered pursuant to Section 12(b) or 12(g) of
the Exchange Act and, except as disclosed in the Commission
Documents, as of the Effective Date the Company had timely filed
(giving effect to permissible extensions in accordance with
Rule 12b-25 under the Exchange Act) all Commission
Documents. The Company has delivered or made available to the
Investor via EDGAR or otherwise true and complete copies of the
Commission Documents filed with the Commission prior to the
Effective Date (including, without limitation, the 2008
Form 10-K) and has delivered or made available to the Investor
via EDGAR or otherwise true and complete copies of all of the
Commission Documents heretofore incorporated by reference in the
Registration Statement and the Prospectus. The Company has
not provided to the Investor any information which, according to
applicable law, rule or regulation, should have been disclosed
publicly by the Company but which has not been so disclosed, other
than with respect to the transactions contemplated by this
Agreement. As of its filing date, each Commission Document
filed with the Commission and incorporated by reference in the
Registration Statement and the Prospectus (including, without
limitation, the 2008 Form 10-K) complied in all material
respects
12
with the requirements of the Securities Act or
the Exchange Act, as applicable, and other federal, state and local
laws, rules and regulations applicable to it, and, as of its
filing date (or, if amended or superseded by a filing prior to the
Effective Date, on the date of such amended or superseded filing),
such Commission Document did not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. Each Commission Document to be filed with the
Commission after the Effective Date and incorporated by reference
in the Registration Statement, the Prospectus and any Prospectus
Supplement required to be filed pursuant to Sections 1.4 and 5.9
hereof during the Investment Period (including, without limitation,
the Current Report), when such document becomes effective or is
filed with the Commission, as the case may be, shall comply in all
material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, and other federal, state and local
laws, rules and regulations applicable to it, and shall not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b)
The financial statements, together with the related notes and
schedules, of the Company included in the Commission Documents
comply as to form in all material respects with all applicable
accounting requirements and the published rules and
regulations of the Commission and all other applicable
rules and regulations with respect thereto as may be subject
to any applicable out of period adjustments disclosed in the
Commission Documents. Such financial statements, together
with the related notes and schedules, have been prepared in
accordance with GAAP applied on a consistent basis during the
periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto or (ii) in the
case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements and are
subject to normal year-end audit adjustments), and fairly present
in all material respects the financial condition of the Company and
its consolidated Subsidiaries as of the dates thereof and the
results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end
audit adjustments).
(c)
The Company has timely filed with the Commission and made available
to the Investor via EDGAR or otherwise all certifications and
statements required by (x) Rule 13a-14 or
Rule 15d-14 under the Exchange Act or (y) 18 U.S.C.
Section 1350 (Section 906 of the Sarbanes-Oxley Act of
2002 (“ SOXA ”)) with respect to all relevant
Commission Documents. The Company is in compliance in all
material respects with the provisions of SOXA applicable to it as
of the date hereof. The Company maintains disclosure controls
and procedures required by Rule 13a-15 or Rule 15d-15
under the Exchange Act; such controls and procedures are effective
to ensure that all material information concerning the Company and
its Subsidiaries is made known on a timely basis to the individuals
responsible for the timely and accurate preparation of the
Company’s Commission filings and other public disclosure
documents. As used in this Section 4.6(c), the term
“file” shall be broadly construed to include any manner
in which a document or information is furnished, supplied or
otherwise made available to the Commission.
13
(d)
Ernst & Young LLP and PricewaterhouseCoopers LLP, who each
have expressed their opinions on the audited financial statements
and related schedules included or incorporated by reference in the
Registration Statement and the Base Prospectus are, with respect to
the Company, independent public accountants as required by the
Securities Act and is an independent registered public accounting
firm within the meaning of SOXA as required by the rules of
the Public Company Accounting Oversight Board.
Section 4.7
Subsidiaries . The 2008 Form 10-K sets forth each
Subsidiary of the Company as of the Effective Date, showing its
jurisdiction of incorporation or organization and the percentage of
the Company’s ownership of the outstanding capital stock or
other ownership interests of such Subsidiary, and the Company does
not have any other Subsidiaries as of the Effective
Date.
Section 4.8
No Material Adverse Effect . Since December 31,
2008, the Company has not experienced or suffered any Material
Adverse Effect, and there exists no current state of facts,
condition or event which would have a Material Adverse Effect,
except (i) as disclosed in any Commission Documents filed since
December 31, 2008 or (ii) continued losses from
operations.
Section
4.9
Indebtedness . The Company’s Quarterly Report on
Form 10-Q for its fiscal quarter ended June 30, 2009 sets
forth, as of June 30, 2009, all outstanding secured and
unsecured Indebtedness of the Company or any Subsidiary, or for
which the Company or any Subsidiary has commitments through such
date. For the purposes of this Agreement, “
Indebtedness ” shall mean (a) any liabilities for
borrowed money or amounts owed in excess of $10,000,000 (other than
trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements, indemnities and
other contingent obligations in respect of Indebtedness of others
in excess of $10,000,000, whether or not the same are or should be
reflected in the Company’s balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in
the ordinary course of business; and (c) the present value of
any lease payments in excess of $10,000,000 due under leases
required to be capitalized in accordance with GAAP. There is
no existing or continuing default or event of default in respect of
any Indebtedness of the Company or any of its
Subsidiaries.
Section
4.10 Title To
Assets . Each
of the Company and its Subsidiaries has good and marketable title
to all of their respective real and personal property reflected in
the Commission Documents, free of mortgages, pledges, charges,
liens, security interests or other encumbrances, except for those
indicated in the Commission Documents or those that would not have
a Material Adverse Effect. To the Company’s knowledge,
all real property leases of the Company are valid and subsisting
and in full force and effect in all material respects.
Section
4.11 Actions
Pending . There
is no action, suit, claim, investigation or proceeding pending, or
to the knowledge of the Company threatened, against the Company or
any Subsidiary which questions the validity of this Agreement or
the transactions contemplated hereby or any action taken or to be
taken pursuant hereto or thereto. Except as set forth in
the
14
Commission Documents, there is no action, suit,
claim, investigation or proceeding pending, or to the knowledge of
the Company threatened, against or involving the Company, any
Subsidiary or any of their respective properties or assets, or
involving any officers or directors of the Company or any of its
Subsidiaries, including, without limitation, any securities class
action lawsuit or stockholder derivative lawsuit, in each case
which, if determined adversely to the Company, its Subsidiary or
any officer or director of the Company or its Subsidiaries, would
have a Material Adverse Effect. With respect to each of those
certain claims, disputes, investigations, arbitrations, actions or
proceedings under the caption “Item 1. Legal
Proceedings” in Part II of the Company’s Quarterly
Report on Form 10-Q for its fiscal quarter ended June 30,
2009, there has been no event or change required to be disclosed in
a filing under the Exchange Act that has not been so
disclosed.
Section
4.12 Compliance
With Law . The
business of the Company and the Subsidiaries has been and is
presently being conducted in compliance with all applicable
federal, state, local and foreign governmental laws, rules,
regulations and ordinances, except as set forth in the Commission
Documents and except for such non-compliance which, individually or
in the aggregate, would not have a Material Adverse
Effect.
Section
4.13 Certain
Fees . Except
for the placement fee payable by the Company to Reedland Capital
Partners, an Institutional Division of Financial West Group, Member
FINRA/SIPC (“ Reedland ”), which shall be set
forth in a separate engagement letter between the Company and
Reedland (a true and complete fully executed copy of which has
heretofore been provided to the Investor), no brokers, finders or
financial advisory fees or commissions shall be payable by the
Company or any Subsidiary (or any of their respective affiliates)
with respect to the transactions contemplated by this Agreement.
Except as set forth in this Section 4.13 or as disclosed in
Section 4.13 of the Disclosure Schedule or in the Registration
Statement, the Prospectus or the Current Report, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company,
the Investor or the Broker-Dealer for a brokerage commission,
finder’s fee or other like payment in connection with the
transactions contemplated by this Agreement or, to the
Company’s knowledge, any arrangements, agreements,
understandings, payments or issuance with respect to the Company or
any of its officers, directors, stockholders, partners, employees,
Subsidiaries or affiliates that may affect the FINRA’s
determination of the amount of compensation to be received by any
FINRA member (including, without limitation, those FINRA members
set forth on Schedule 4.13 of the Disclosure Schedule) or person
associated with any FINRA member in connection with the
transactions contemplated by this Agreement. Except as set
forth in this Section 4.13 or as disclosed in
Section 4.13 of the Disclosure Schedule or in the Registration
Statement, the Prospectus or the Current Report, no “items of
value” (within the meaning of Rule 2710 of the NASD
Conduct Rules) have been received, and no arrangements have been
entered into for the future receipt of any items of value, from the
Company or any of its officers, directors, stockholders, partners,
employees, Subsidiaries or affiliates by any FINRA member
(including, without limitation, those FINRA members set forth on
Schedule 4.13 of the Disclosure Schedule) or person associated with
any FINRA member, during the period commencing 180 days immediately
preceding the Effective Date and ending on the date this
15
Agreement is terminated in accordance with
Article VII, that may affect the FINRA’s determination
of the amount of compensation to be received by any FINRA member or
person associated with any FINRA member in connection with the
transactions contemplated by this Agreement.
Section
4.14 Operation
of Business .
(a) The Company or one or more of its Subsidiaries possesses
such permits, licenses, approvals, consents and other
authorizations (including licenses, accreditation and other similar
documentation or approvals of any local health departments)
(collectively, “ Governmental Licenses ”) issued
by the appropriate federal, state, local or foreign regulatory
agencies or bodies, including, without limitation, the United
States Food and Drug Administration (“ FDA ”),
necessary to conduct the business now operated by it, except where
the failure to possess such Governmental Licenses, individually or
in the aggregate, would not have a Material Adverse Effect or as
otherwise disclosed in the Commission Documents. The Company
and its Subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses and all applicable FDA
rules and regulations, guidelines and policies, and all
applicable rules and regulations, guidelines and policies of
any governmental authority exercising authority comparable to that
of the FDA (including any non-governmental authority whose approval
or authorization is required under foreign law comparable to that
administered by the FDA), except where the failure to so comply,
individually or in the aggregate, would not have a Material Adverse
Effect or as otherwise disclosed in the Commission
Documents.. All of the Governmental Licenses are valid and in
full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect, individually or in the aggregate,
would not have a Material Adverse Effect or as otherwise disclosed
in the Commission Documents.. As to each product that is
subject to FDA regulation or similar legal provisions in any
foreign jurisdiction that is developed, manufactured, tested,
packaged, labeled, marketed, sold, distributed and/or
commercialized by the Company or any of its Subsidiaries, each such
product is being developed, manufactured, tested, packaged,
labeled, marketed, sold, distributed and/or commercialized in
compliance with all applicable requirements of the FDA (and any
non-governmental authority whose approval or authorization is
required under foreign law comparable to that administered by the
FDA), including, but not limited to, those relating to
investigational use, investigational device exemption, premarket
notification, premarket approval, good clinical practices, good
manufacturing practices, record keeping, filing of reports, and
patient privacy and medical record security, except where such
non-compliance, individually or in the aggregate, would not have a
Material Adverse Effect or as otherwise disclosed in the Commission
Documents.. As to each product or product candidate of the
Company or any of its Subsidiaries subject to FDA regulation or
similar legal provision in any foreign jurisdiction, all
manufacturing facilities of the Company and its Subsidiaries are
operated in compliance with the FDA’s Quality System
Regulation requirements at 21 C.F.R. Part 820, as applicable,
except where such non-compliance, individually or in the aggregate,
would not have a Material Adverse Effect. Except as set forth
in the Commission Documents or the Registration Statement, neither
the Company nor any of its Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses or relating to a potential violation of,
failure to comply with, or request to produce additional
information under, any FDA rules
16
and regulations, guidelines or policies which,
if the subject of any unfavorable decision, ruling or finding,
individually or in the aggregate, would have a Material Adverse
Effect. Except as set forth in the Commission Documents or
the Registration Statement, neither the Company nor any of its
Subsidiaries has received any correspondence, notice or request
from the FDA, including, without limitation, notice that any one or
more products or product candidates of the Company or any of its
Subsidiaries failed to receive approval from the FDA for use for
any one or more indications. This Section 4.14 does not
relate to environmental matters, such items being the subject of
Section 4.15.
(b)
The Company or one or more of its Subsidiaries owns or possesses
adequate rights to use patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks,
trade names, trade dress, logos, copyrights and other intellectual
property, including, without limitation, all of the intellectual
property described in the Commission Documents as being owned or
licensed by the Company (collectively, “ Intellectual
Property ”), necessary to carry on the business now
operated by it, except where the failure to own, license or have
such rights would not, individually or in the aggregate, have a
Material Adverse Effect. Except as set forth in the
Commission Documents, there are no actions, suits or judicial
proceedings pending, or to the Company’s knowledge
threatened, relating to patents or proprietary information to which
the Company or any of its Subsidiaries is a party or of which any
property of the Company or any of its Subsidiaries is subject, and
neither the Company nor any of its Subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which could render any
Intellectual Property invalid or inadequate to protect the interest
of the Company and its Subsidiaries therein, and which infringement
or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, individually or in the
aggregate, would have a Material Adverse Effect.
(c)
To the Company’s knowledge, all pre-clinical and clinical
trials conducted, supervised or monitored by, or on behalf of, the
Company or any of its Subsidiaries have been conducted in
compliance with all applicable federal, state, local and foreign
laws, and the regulations and requirements of any applicable
governmental entity, including, but not limited to, FDA good
clinical practice and good laboratory practice requirements (or the
foreign equivalent requirements) except as set forth in the
Commission Documents or as would not likely result in a Material
Adverse Effect. Except as set forth in the Commission Documents or
as would not likely result in a Material Adverse Effect, neither
the Company nor any of its Subsidiaries has received any notices or
correspondence from the FDA or any other governmental agency
requiring the termination, suspension, delay or modification of any
pre-clinical or clinical trials conducted by, or on behalf of, the
Company or any of its Subsidiaries or in which the Company or any
of its Subsidiaries has participated that are described in the
Registration Statement or the Commission Documents, if any, or the
results of which are referred to in the Registration Statement or
the Commission Documents. To the Company’s knowledge, all
pre-clinical and clinical trials previously conducted by, or on
behalf of, the Company or any
17
of its Subsidiaries while conducted by or on
behalf of the Company or any of its Subsidiaries, were conducted in
compliance with all applicable federal, state, local and foreign
laws, and the regulations and requirements of any applicable
governmental entity, including, but not limited to, FDA good
clinical practice and good laboratory practice requirements (or the
foreign equivalent requirements) except as set forth in the
Commission Documents or as would not likely result in a Material
Adverse Effect .
Section
4.15
Environmental Compliance . Except as disclosed in the Commission
Documents, the Company and each of its Subsidiaries have obtained
all material approvals, authorization, certificates, consents,
licenses, orders and permits or other similar authorizations of all
governmental authorities, or from any other person, that are
required under any Environmental Laws, except for any approvals,
authorization, certificates, consents, licenses, orders and permits
or other similar authorizations the failure of which to obtain does
not or would not have a Material Adverse Effect. “
Environmental Laws ” shall mean all applicable laws
relating to the protection of the environment including, without
limitation, all requirements pertaining to reporting, licensing,
permitting, controlling, investigating or remediating emissions,
discharges, releases or threatened releases of hazardous
substances, chemical substances, pollutants, contaminants or toxic
substances, materials or wastes, whether solid, liquid or gaseous
in nature, into the air, surface water, groundwater or land, or
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of hazardous
substances, chemical substances, pollutants, contaminants or toxic
substances, material or wastes, whether solid, liquid or gaseous in
nature. Except for such instances as would not, individually
or in the aggregate, have a Material Adverse Effect, to the
Company’s knowledge, there are no past or present events,
conditions, circumstances, incidents, actions or omissions relating
to or in any way affecting the Company or its Subsidiaries that
violate or would reasonably be expected to violate any
Environmental Law after the Effective Date or that would reasonably
be expected to give rise to any environmental liability, or
otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study or investigation (i) under any
Environmental Law, or (ii) based on or related to the
manufacture, processing, distribution, use, treatment, storage
(including without limitation underground storage tanks), disposal,
transport or handling, or the emission, discharge, release or
threatened release of any hazardous substance.
Section
4.16 Material
Agreements .
Except as set forth in the Commission Documents, neither the
Company nor any Subsidiary of the Company is a party to any written
or oral contract, instrument, agreement commitment, obligation,
plan or arrangement, a copy of which would be required to be filed
with the Commission as an exhibit to an annual report on
Form 10-K (collectively, “ Material Agreements
”). Except as set forth in the Commission Documents, the
Company and each of its Subsidiaries have performed in all material
respects all the obligations required to be performed by them under
the Material Agreements, have received no notice of default or an
event of default by the Company or any of its Subsidiaries
thereunder and are not aware of any basis for the assertion
thereof, and neither the Company or any of its Subsidiaries nor, to
the knowledge of the Company, any other contracting party thereto
are in default under any Material Agreement now in effect, the
result of which would have a Material Adverse Effect. Except as set
forth in the Commission Documents, each of the Material
18
Agreements is in full force and effect, and
constitutes a legal, valid and binding obligation enforceable in
accordance with its terms against the Company and/or any of its
Subsidiaries and, to the knowledge of the Company, each other
contracting party thereto, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation, conservatorship, receivership or similar
laws relating to, or affecting generally the enforcement of,
creditor’s rights and remedies or by other equitable
principles of general application.
Section
4.17
Transactions With Affiliates . Except as set forth in the Commission
Documents, there are no loans, leases, agreements, contracts,
royalty agreements, management contracts, service arrangements or
other continuing transactions exceeding $120,000 between
(a) the Company or any Subsidiary, on the one hand, and
(b) any person or entity who would be covered by Item
404(a) of Regulation S-K, on the other hand. Except as
disclosed in the Commission Documents, there are no outstanding
amounts payable to or receivable from, or advances by the Company
or any of its Subsidiaries to, and neither the Company nor any of
its Subsidiaries is otherwise a creditor of or debtor to, any
beneficial owner of more than 5% of the outstanding shares of
Common Stock, or any director, employee or affiliate of the Company
or any of its Subsidiaries, other than (i) reimbursement for
reasonable expenses incurred on behalf of the Company or any of its
Subsidiaries or (ii) as part of the normal and customary terms
of such persons’ employment or service as a director with the
Company or any of its Subsidiaries.
Section
4.18 Securities
Act . The
Company has complied with all applicable federal and state
securities laws in connection with the offer, issuance and sale of
the Shares hereunder.
(i)
The Company has prepared and filed with the Commission in
accordance with the provisions of the Securities Act the
Registration Statement, including a base prospectus relating to the
Shares. The Registration Statement was declared effective by
order of the Commission on May 2, 2008. As of the date
hereof, no stop order suspending the effectiveness of the
Registration Statement has been issued by the Commission or is
continuing in effect under the Securities Act and no proceedings
therefor are pending before or, to the Company’s knowledge,
threatened by the Commission. No order preventing or
suspending the use of the Prospectus or any Permitted Free Writing
Prospectus has been issued by the Commission.
(ii)
The Company satisfies all of the requirements for the use of
Form S-3 under the Securities Act for the offering and sale of
the Securities contemplated by this Agreement and the Warrants
(without reliance on General Instruction I.B.6. of Form S-3).
The Commission has not notified the Company of any objection to the
use of the form of the Registration Statement pursuant to
Rule 401(g)(1) under the Securities Act. The Registration
Statement complied in all material respects on the date on which it
was declared effective by the Commission, and will comply in all
material respects at each deemed effective date with respect to the
Investor pursuant to Rule 430B(f)(2) of the Securities
Act, with the requirements of the Securities Act, and the
Registration Statement (including the documents incorporated by
reference therein) did not on the date it was declared effective by
the Commission, and shall not at each deemed effective date with
respect to the Investor pursuant to Rule 430B(f)(2) of
the Securities Act, contain an untrue statement of a material fact
or omit to state a material fact
19
required to be stated therein or necessary to
make the statements therein not misleading; provided that
this representation and warranty does not apply to statements in or
omissions from the Registration Statement made in reliance upon and
in conformity with information relating to the Investor furnished
to the Company in writing by or on behalf of the Investor expressly
for use therein. The Registration Statement, as of the Effective
Date, meets the requirements set forth in
Rule 415(a)(1)(x) under the Securities Act. The Base
Prospectus complied in all material respects on its date and on the
Effective Date, and will comply in all material respects on each
applicable Fixed Request Exercise Date and, when taken together
with the applicable Prospectus Supplement and any applicable
Permitted Free Writing Prospectus, on each applicable Settlement
Date, with the requirements of the Securities Act and did not on
its date and on the Effective Date and shall not on each applicable
Fixed Request Exercise Date and, when taken together with the
applicable Prospectus Supplement and any applicable Permitted Free
Writing Prospectus, on each applicable Settlement Date 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 the light of the circumstances under which
they were made, not misleading; provided that this
representation and warranty does not apply to statements in or
omissions from the Base Prospectus made in reliance upon and in
conformity with information relating to the Investor furnished to
the Company in writing by or on behalf of the Investor expressly
for use therein.
(iii)
Each Prospectus Supplement required to be filed pursuant to
Sections 1.4 and 5.9 hereof, when taken together with the Base
Prospectus and any applicable Permitted Free Writing Prospectus, on
its date and on the applicable Settlement Date, shall comply in all
material respects with the provisions of the Securities Act and
shall not on its date and on the applicable Settlement Date 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 there
