“
Class B Warrant ” shall have the meaning
specified in Section 2.01.
“
Class C Warrant ” shall have the meaning
specified in Section 2.01.
“
Class D Warrant ” shall have the meaning
specified in Section 2.01.
“ Common
Stock ” shall have the meaning specified in the Preamble
to this Agreement.
“ Company
SEC Reports ” shall have the meaning specified in
Section 4.05.
“
Disclosure Documents ” shall have the meaning
specified in Section 4.24.
“
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as from time to time amended, and the rules and
regulations of the SEC promulgated thereunder.
“ FDA
” shall mean the U.S. Food and Drug
Administration.
“
FFDCA ” shall mean the United States Federal Food,
Drug and Cosmetic Act, as amended from time to time, and all
regulations promulgated thereunder.
“
Governmental Authority ” shall mean any foreign,
United States Federal, state, or local foreign court or
governmental or regulatory agency or authority.
“ Initial
Class A Warrant ” shall have the meaning specified
in Section 2.01.
“ Initial
Closing ” shall have the meaning specified in
Section 2.01.
“ Initial
Closing Date ” shall have the meaning specified in
Section 2.01.
“ Initial
Closing Stock Price ” shall have the meaning specified in
Section 2.01.
“ Initial
Shares ” shall have the meaning specified in
Section 2.01.
“
Intellectual Property ” shall have the meaning
specified in Section 4.12.
“ Law
” shall mean any United States Federal, or state, local or
foreign law, statute, rule, regulation, order, writ, injunction,
judgment or decree of any Governmental Authority.
“ Master
Services Agreement ” shall mean the services agreement
entered into by the Company and Quintiles, Inc., an Affiliate of
Purchaser, dated as of the date of this Agreement.
“
Material Adverse Effect ” shall mean a material
adverse effect on or change in the business, operations,
properties, assets, liabilities, results of operation or financial
condition of the Company.
“
Material Agreements ” shall have the meaning specified
in Section 4.07.
“
Nasdaq ” shall mean the Nasdaq National
Market.
“
Person ” shall mean any individual, partnership,
corporation, limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization, government
or agency or political subdivision thereof, or other
entity.
“ Phase
III Trial ” shall have the meaning specified in
Section 7.11.
“
Preferred Stock ” shall have the meaning specified in
Section 4.03.
“
Prospectus ” shall mean the prospectus in the form
included in the Registration Statement, as supplemented by any
prospectus supplement to the Registration Statement filed with the
SEC pursuant to Rule 424(b).
“
Registration Rights Agreement ” shall have the meaning
specified in Section 4.21.
“
Registration Statement ” shall mean a registration
statement on Form S-3 to be filed under the Securities Act by the
Company after the Initial Closing Date as required by
Section 4.21, as such Registration Statement may be amended
from time to time.
“
Registrable Securities ” shall have the meaning
specified in Section 4.21.
“ SEC
” shall mean the Securities and Exchange
Commission.
“ Second
Closing ” shall have the meaning specified in
Section 2.02.
“ Second
Closing Date ” shall have the meaning specified in
Section 2.02.
“ Second
Closing Stock Price ” shall have the meaning specified in
Section 2.02.
“
Securities ” shall have the meaning specified in
Section 4.04.
“
Securities Act ” means the Securities Act of 1933, as
from time to time amended, and the rules and regulations of the SEC
promulgated thereunder.
“
Shares ” shall mean collectively, the Initial Shares
and the Additional Shares issued at any additional closings, if
any.
“ Third
Closing ” shall have the meaning specified in
Section 2.02.
“ Third
Closing Date ” shall have the meaning specified in
Section 2.02.
“ Third
Closing Stock Price ” shall have the meaning specified in
Section 2.02.
“
Transaction Agreements ” shall mean this Agreement,
the Warrants, the Registration Rights Agreement and the Master
Services Agreement.
“
Transactions ” shall mean the transactions
contemplated by the Transaction Agreements.
“ Warrant
Shares ” shall mean the shares issuable by the Company
upon the exercise of the Warrants.
“
Warrants ” shall mean the Initial Class A
Warrant, the Additional Class A Warrants, the Class B
Warrant, the Class C Warrant and the Class D Warrant
described in Sections 2.01 and 2.02.
PURCHASE AND SALE OF THE SHARES
AND THE WARRANTS
(a) Subject
to the terms and conditions of this Agreement, on the date hereof
(the “Initial Closing Date ”), the Company
agrees to issue and sell to Purchaser, and Purchaser agrees to
purchase from the Company for an aggregate purchase price of Two
Million Dollars ($2,000,000):
(i) a
number of shares of Common Stock (the “ Initial Shares
”) equal to Two Million Dollars ($2,000,000) divided by
$5.5667 (the “ Initial Closing Stock Price ”)
(such price being the average of the closing prices on Nasdaq of
the Common Stock for the 15 trading days prior to the Initial
Closing Date), with any fractional share amount rounded to the
nearest whole share and with 0.5 shares or more rounded
up;
(ii) a
warrant, with an exercise price of 115% of the Initial Closing
Stock Price, in the form attached hereto as Exhibit A
to purchase a number of shares of Common Stock equal to Two Million
Dollars ($2,000,000) divided by the Initial Closing Stock Price
multiplied by thirteen percent (13%) (the “ Initial
Class A Warrant ”), with any fractional share
rounded to the nearest whole share and with 0.5 shares a more
rounded up;
(iii) a
warrant, with an exercise price of 115% of the Initial Closing
Stock Price, to purchase 80,000 shares of Common Stock, subject to
certain vesting provisions, in the form attached hereto as
Exhibit B (the “ Class B Warrant
”);
(iv) a
warrant, with an exercise price of 115% of the Initial Closing
Stock Price, to purchase 80,000 shares of Common Stock, subject to
certain vesting provisions, in the form attached hereto as
Exhibit C (the “ Class C Warrant
”); and
(v) a
warrant, with an exercise price of 115% of the Initial Closing
Stock Price, to purchase 80,000 shares of Common Stock, subject to
certain vesting provisions, in the form attached hereto as
Exhibit D (the “ Class D Warrant
”).
(b) The
purchase and sale of the Initial Shares, the Initial Class A
Warrant, the Class B Warrant, the Class C Warrant and the
Class D Warrant shall take place at a closing (the “
Initial Closing ”) to be held at the offices of Smith,
Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., 2500
Wachovia Capitol Center, Raleigh, NC 27601 at 10:00 a.m.
Eastern Time on the Initial Closing Date, or at such other
location, time and date as may be mutually agreed upon by the
parties. The initial closing shall take place contemporaneously
with the execution and delivery of this Agreement and the other
Transaction Agreements by the parties thereto.
(c) At
the Initial Closing, subject to the terms and conditions contained
in this Agreement, in payment of the full purchase price for the
Initial Shares, the Initial Class A Warrant, the Class B
Warrant, the Class C Warrant and the Class D Warrant,
Purchaser shall provide a wire transfer of immediately available
funds to the Company in an amount equal to Two Million Dollars
($2,000,000) using the wire transfer instructions separately
provided to Purchaser by the Company.
(d)
Delivery of Shares and Warrants at the Initial
Closing . At the Initial Closing, the Company shall deliver
the Initial Class A Warrant, the Class B Warrant, the
Class C Warrant and the Class D Warrant and, as soon as
reasonably practicable after the Initial Closing Date, the Company
shall deliver a stock certificate evidencing the Initial Shares,
all issued in the name of Purchaser and dated as of the Initial
Closing Date.
2.02
Additional Closings .
(a)
Second Closing . Subject to the terms and conditions
of this Agreement (including without limitation the Blocking Events
set forth in Section 2.03 below) and upon the Company’s
written notice to Purchaser of the Company’s intent to sell
and issue additional shares of Common Stock pursuant to this
Agreement on June 30, 2006 (the “ Second Closing
Date ”) as described below, delivered not less than ten
(10) Business Days prior to the Second Closing Date, the
Company agrees to issue and sell to Purchaser, and Purchaser agrees
to purchase from the Company, on the Second Closing Date, for an
aggregate purchase price of One Million Five Hundred Thousand
Dollars ($1,500,000):
(i) a
number of shares of Common Stock equal to One Million Five Hundred
Thousand Dollars ($1,500,000) divided by the average of the closing
prices on the Nasdaq of the Common Stock for the fifteen
(15) trading days prior to the Second Closing Date (the
“ Second Closing Stock Price ”), with any
fractional share amount rounded to the nearest whole share and with
0.5 shares or more rounded up, and
(ii) a
warrant, with an exercise price of 115% of the Second Closing Stock
Price, in the form attached hereto as Exhibit A-1 (the
“ Class A-1 Warrant ”) to purchase a number
of shares of Common Stock equal to One Million Five Hundred
Thousand Dollars ($1,500,000) divided by the Second Closing Stock
Price multiplied by thirteen percent (13%), with any fractional
share amount rounded to the nearest whole share and with 0.5 shares
or more rounded up.
(b)
Third Closing . Subject to the terms and conditions
of this Agreement (including without limitation the Blocking Events
set forth in Section 2.03 below) and upon the Company’s
written notice to Purchaser of the Company’s intent to sell
and issue additional shares of Common Stock pursuant to this
Agreement on September 29, 2006 (the “ Third Closing
Date ”) as described below, delivered not less than ten
(10) Business Days prior to the Third Closing Date, the
Company agrees to issue and sell to Purchaser, and Purchaser agrees
to purchase from the Company, on the Third Closing Date, for an
aggregate purchase price of One Million Five Hundred Thousand
Dollars ($1,500,000):
(i) a
number of shares of Common Stock equal to One Million Five Hundred
Thousand Dollars ($1,500,000) divided by the average of the closing
prices on the Nasdaq of the Common Stock for the fifteen
(15) trading days prior to the Third Closing Date (the “
Third Closing Stock Price ”), with any fractional
share amount rounded to the nearest whole share and with 0.5 shares
or more rounded up (such shares, together with the shares described
in Section 2.02(a)(i), the “ Additional Shares
”), and
(ii) a
warrant, with an exercise price of 115% of the Third Closing Stock
Price, in the form attached hereto as Exhibit A-1 (the
“ Class A-2 Warrant ” and together with the
Class A-1 Warrant, the “ Additional Class A
Warrants ”) to purchase a number of shares of Common
Stock equal to One Million Five Hundred Thousand Dollars
($1,500,000) divided by the Third Closing Stock Price multiplied by
thirteen percent (13%), with any fractional share amount rounded to
the nearest whole share and with 0.5 shares or more rounded
up.
(c) Each
of the Second Closing and Third Closing described in this
Section 2.02 shall take place at a closing to be held at the
offices of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P., 2500 Wachovia Capitol Center, Raleigh, NC 27601
at 10:00 a.m. Eastern Time on the Second Closing Date or Third
Closing Date as applicable, or at such other location, time and
date as may be mutually agreed upon by the parties. At the Second
Closing or Third Closing as the case may be, (i) the Company
shall deliver (A) the Additional Class A Warrant required
to be delivered at such closing, issued in the name of Purchaser
and dated as of such closing date, and (B) a copy of the
Company’s instruction letter transmitted to its stock
transfer agent directing such transfer agent to issue to Purchaser
the stock certificate for the Additional Shares required to be
delivered at such closing, issued in the name of Purchaser and
dated as of such closing date; and (ii) Purchaser shall
provide a wire transfer of immediately available funds, in an
amount equal to the aggregate purchase price to be paid for the
Additional Shares and Additional Class A Warrant being
purchased at such closing, to the account designated by the Company
under Section 2.01(c) or other account specified by the
Company.
(d) As
soon as reasonably practicable after the Second Closing Date or
Third Closing Date as applicable, the Company shall deliver a stock
certificate evidencing the Additional Shares purchased at the
Second Closing and Third Closing as the case may be, issued in the
name of Purchaser and dated as of the applicable closing
date.
(e) Any
Additional Shares sold pursuant to this Section 2.02 shall be
deemed “ Shares ” for all purposes under this
Agreement.
2.03
Blocking Events . Purchaser shall not be obligated to
purchase any Additional Shares from the Company pursuant to this
Agreement unless and until the Registration Statement shall have
been declared effective, and thereafter shall not be obligated to
purchase any Additional Shares from the Company pursuant to this
Agreement when there shall have occurred any one or more of the
following events:
(a) The
withdrawal or suspension of the effectiveness of the Registration
Statement;
(b) The
failure to have the number of shares of Common Stock proposed to be
issued in the relevant additional closing covered by the
Registration Statement;
(c) The
failure of the Common Stock issuable under this Agreement to be
validly listed on Nasdaq;
(d) The
failure to continue to have the Common Stock registered under
Sections 12(b) or 12(g) of the Exchange Act;
(e) The
receipt of a notification that the SEC or the National Association
of Securities Dealers, Inc. is contemplating terminating the
Company’s registration or listing, respectively;
(f) The
suspension of trading of the Common Stock by the SEC, Nasdaq or the
National Association of Securities Dealers, Inc.
(g) The
failure to file with the SEC any form, report or document required
to be filed by it under the Exchange Act since the date of this
Agreement;
(h) The
commencement as a debtor of a voluntary bankruptcy case or
proceeding; the consent to the entry of an order for relief against
it in an involuntary bankruptcy case or proceeding; the
commencement of any bankruptcy case against it; the consent to the
appointment of a receiver of the Company or for all or
substantially all of its property; the general assignment for the
benefit of the Company’s creditors; the filing of a petition
in bankruptcy or answer or consent seeking reorganization or
relief; or the consent to the filing of such a petition or the
appointment of or taking possession by a receiver;
(i) The
entry into a definitive agreement with respect to or the
consummation of or the occurrence of any of the following:
(a) any “person” or “group” (as such
terms are defined in Section 13(d) and Section 14(d) of the
Exchange Act) becomes the “beneficial owner” (as
determined in accordance with Rule 13d-3 under the Exchange
Act), directly or indirectly, of shares of voting securities of the
Company representing 50% or more of the total voting power of all
outstanding voting securities of the Company; (b) the sale,
lease, license, exchange or other transfer (in one or a series of
transactions) of all or substantially all of the assets of the
Company, or all or substantially all of the assets relating to
TP508; or (c) any merger, consolidation, share exchange,
business combination or similar transaction in which the Company is
not the surviving entity or in which the holders of the outstanding
shares of stock of the Company immediately
prior to such
transaction hold, immediately after such transaction, less that 51%
of the total voting power of the outstanding securities of the
surviving or resulting entity in such transaction;
(j) The
valid termination of the Master Services Agreement arising from a
default by the Company under such Master Services
Agreement;
(k) The
entry of a temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal or regulatory restraint or prohibition
preventing the consummation of an additional closing;
(l) The
enactment, issuance, promulgation, enforcement or entry by a
governmental entity of any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary,
preliminary or permanent) which has the effect of making an
issuance of Additional Shares illegal or otherwise prohibiting
consummation of the issuance of Additional Shares; or
(m) The
occurrence of an event that has a Material Adverse Effect on the
Company.
The Company
shall provide notice of the occurrence of any of the events
described in this Section 2.03 to Purchaser promptly (and in any
case within three (3) Business Days following the occurrence
of said event).
3.01
Conditions to Purchaser’s Obligations at
Closing . The obligation of Purchaser to purchase and pay
for the Initial Shares, the Initial Class A Warrant, the
Class B Warrant, the Class C Warrant and the Class D
Warrant at the Initial Closing is subject to each of the following
conditions precedent:
(a)
Opinion of Counsel . Quarles & Brady Streich Lang
LLP, counsel to the Company, shall have delivered a legal opinion
to Purchaser, in the form acceptable to the parties, regarding the
Transaction Agreements and the Transactions;
(b)
Board Resolutions . Purchaser shall have received at
the Initial Closing copies of the resolutions of the Board of
Directors of the Company authorizing the execution, delivery and
performance of the Transaction Agreements by the Company and the
consummation of the Transactions, certified by an appropriate
officer of the Company;
(c)
Officer’s Certificate . Purchaser shall have
received at the Initial Closing a certificate, executed by the
appropriate officer of the Company and dated as of the Initial
Closing Date, together with and certifying (i) the names of
the officers of the Company authorized to sign the Transaction
Agreements together with the true signatures of such officers;
(ii) a copy of the certificate of incorporation of the
Company, as amended and in effect as of the Initial Closing Date;
(iii) a copy of the bylaws of the Company, as amended and in
effect as of
the Initial
Closing Date; (iv) that the representations and warranties
contained in Article IV hereof are true and correct as of the
Initial Closing Date; and (v) the Company has complied with
all the agreements and satisfied all the conditions herein on its
part to be performed or satisfied on or prior to the Initial
Closing Date;
(d)
Good Standing Certificate . Purchasers shall have
received from the Company a Good Standing Certificate from the
Delaware Secretary of State with respect to the Company.
(e)
Transaction Agreements . Purchaser shall have
received the Transaction Agreements, duly executed by an authorized
officer of the Company; and
(f)
Instruction Letter . The Company shall have
transmitted an instruction letter to its stock transfer agent
directing it to issue to Purchaser the stock certificate for the
Initial Shares, and Purchaser shall have received a copy of such
letter.
3.02
Conditions to Company’s Obligations at Initial
Closing . The obligation of the Company to issue and sell
the Initial Shares and Warrants being purchased at the Initial
Closing is subject to each of the following conditions
precedent:
(a)
Transaction Agreements . The Company shall have
received the Transaction Agreements, duly executed by an authorized
officer of Purchaser or its Affiliates, as the case may
be;
(b)
Payment . Purchaser shall have delivered Two Million
Dollars ($2,000,000) in immediately available funds to
Company’s specified account in accordance with
Section 2.01(c); and
(c)
Officer’s Certificate . The Company shall have
received at the Initial Closing a certificate, executed by the
appropriate officer of Purchaser and dated as of the Initial
Closing Date, certifying (i) the names of the officers of
Purchaser authorized to sign the Transaction Agreements on behalf
of Purchaser together with the true signatures of such officers;
and (ii) that Purchaser has taken all actions necessary to
authorize and approve Purchaser’s execution and delivery of
the Transaction Agreements and the consummation by Purchaser of its
obligations thereunder.
REPRESENTATIONS AND WARRANTIES OF
COMPANY
The Company
represents and warrants to Purchaser and its Affiliates as
follows:
4.01
Corporate Status . The Company is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware, and the Company is qualified to do business
as a foreign corporation in each jurisdiction in which
qualification is required, except where failure to so qualify have
not had and could not reasonably be expected to
have a Material
Adverse Effect. The Company has all necessary corporate power and
authority to carry on its business as now conducted.
4.02
Authority and Consents . The Company has all
necessary corporate power and authority to execute and deliver the
Transaction Agreements and to consummate the Transactions. The
execution and delivery of the Transaction Agreements and
consummation of the Transactions have been duly authorized by all
necessary corporate action on the part of the Company and no other
corporate proceedings on the part of the Company are necessary to
authorize the Transaction Agreements or to consummate the
Transactions. No further approval or authority of the board of
directors or stockholders of the Company will be required for the
issuance and sale of the Securities to be sold by the Company as
contemplated herein. Each of the Transaction Agreements has been
duly and validly executed and delivered by the Company and
constitutes a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
Except for (a) applicable filings, if any, with the SEC
pursuant to the Exchange Act and the Securities Act,
(b) filings with Nasdaq in connection with the listing of the
Shares and the Warrant Shares, and (c) filings, if any, under
state securities or “blue sky” laws, no consent from,
authorization or order of, notice to, or filing or registration
with, any Governmental Authority or any other Person is required to
be obtained or made by the Company for the execution, delivery and
performance of the Transaction Agreements or the consummation of
the Transactions. Neither the execution, delivery and performance
of the Transaction Agreements by the Company nor the consummation
by the Company of the Transactions will (i) conflict with or
result in any breach of any provision of the certificate of
incorporation or bylaws of the Company; (ii) violate any Law
applicable to the Company or the Transactions; or (iii) result
in the creation of any lien, charge, security interest or
encumbrance upon any assets of the Company pursuant to the terms or
provisions of, or will not conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the
passage of time or both, a default under any agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit or
other instrument to which the Company is a party or by which the
Company or its properties may be bound, except in the case of
clauses (ii) and (iii) for such violation, lien, charge,
security interest, default or encumbrance which, individually or in
the aggregate, have not had and could not reasonably be expected to
have a Material Adverse Effect.
4.03
Authorized Capital Stock .
(a) The
authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, of which 38,994,742 shares were issued and
38,744,742 outstanding as of the close of business on
February 22, 2006 and 2,000,000 shares of preferred stock, of
which no shares were issued and outstanding as of the close of
business on the date hereof (the “Preferred Stock”). As
of the date hereof, 2,555,000 shares of Common Stock were reserved
for issuance and issuable or otherwise deliverable, including in
connection with the exercise of outstanding stock options or
warrants.
(b) Except
as set forth on Schedule 4.03(b) , as of the Initial
Closing Date, there are no outstanding subscriptions, options,
warrants, rights, calls, contracts, demands, commitments,
conversion rights or other agreements or arrangements of any
character or nature whatever under which the Company is or may be
obligated (x) to issue or sell shares of its
Common Stock or
Preferred Stock, or (y) to register shares of its Common Stock
or Preferred Stock. No holder of any security of the Company is
entitled to any preemptive, subscription or similar rights to
purchase any securities (including the Shares or Warrants) of the
Company, except as set forth on Schedule 4.03(b)
.
(c) The
Company has reserved an adequate number of authorized but unissued
shares of Common Stock for issuance upon exercise of the Warrants
and such shares shall remain so reserved (subject to reduction from
time to time for Common Stock issued upon the exercise of the
Warrants), as long as the Warrants are exercisable.
4.04
Issuance, Sale and Delivery of the Securities . The
Shares, the Warrants and the Warrant Shares, when issued and paid
for pursuant to the terms of this Agreement or the exercise
p
