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EXHIBIT 10.1
COMMON STOCK PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 6, 2000
BY AND BETWEEN
GERON CORPORATION
AND
ACQUA WELLINGTON NORTH AMERICAN EQUITIES FUND, LTD.
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TABLE OF CONTENTS
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ARTICLE I Definitions........................................................................1
Section 1.1 Definitions.............................................................1
ARTICLE II Purchase and Sale of Common Stock.................................................4
Section 2.1 Purchase and Sale of Stock..............................................4
Section 2.2 The Shares..............................................................4
Section 2.3 Registration Statement and Prospectus...................................4
Section 2.4 Purchase Price and Closing..............................................4
ARTICLE III Representations and Warranties...................................................5
Section 3.1 Representations and Warranties of the Company...........................5
Section 3.2 Representations and Warranties of the Purchaser........................11
ARTICLE IV Covenants........................................................................12
Section 4.1 Securities Compliance..................................................12
Section 4.2 Registration and Listing...............................................13
Section 4.3 Registration Statement.................................................13
Section 4.4 Compliance with Laws...................................................13
Section 4.5 Keeping of Records and Books of Account................................13
Section 4.6 Other Agreements and Other Financings..................................13
Section 4.7 Non-public Information.................................................14
Section 4.8 Stop Orders............................................................14
Section 4.9 Amendments to the Registration Statement...............................14
Section 4.10 Prospectus Delivery....................................................15
Section 4.11 Selling Restrictions; Volume Limitations...............................15
Section 4.12 Notice.................................................................15
ARTICLE V Conditions to Closing, Draw Downs and Call Options................................15
Section 5.1 Conditions Precedent to the Obligation of the Company to Close and to
Issue a Draw Down Notice or Grant a Call Option and Sell
the Shares.............................................................15
Section 5.2 Conditions Precedent to the Obligation of the Purchaser to Close.......17
Section 5.3 Conditions Precedent to the Obligation of the Purchaser to Accept
a Draw Down or Call Option Grant and Purchase the Shares...............17
ARTICLE VI Draw Down Terms; Call Option.....................................................19
Section 6.1 Draw Down Terms........................................................19
Section 6.2 Purchaser's Call Option................................................21
ARTICLE VII Termination.....................................................................22
Section 7.1 Term; Termination by Mutual Consent....................................22
Section 7.2 Company Termination....................................................22
Section 7.3 Other Termination......................................................22
Section 7.4 Effect of Termination..................................................23
ARTICLE VIII Indemnification................................................................23
Section 8.1 General Indemnity......................................................23
Section 8.2 Indemnification Procedures.............................................24
ARTICLE IX Miscellaneous....................................................................25
Section 9.1 Fees and Expenses......................................................25
Section 9.2 Specific Enforcement, Consent to Jurisdiction..........................25
Section 9.3 Entire Agreement; Amendment............................................25
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TABLE OF CONTENTS
(continued)
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Section 9.4 Notices................................................................26
Section 9.5 Waivers................................................................26
Section 9.6 Headings...............................................................27
Section 9.7 Successors and Assigns.................................................27
Section 9.8 Governing Law..........................................................27
Section 9.9 Survival...............................................................27
Section 9.10 Counterparts...........................................................27
Section 9.11 Publicity..............................................................27
Section 9.12 Severability...........................................................27
Section 9.13 Further Assurances.....................................................28
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COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of
September 6, 2000 by and between Geron Corporation, a Delaware corporation (the
"Company") and Acqua Wellington North American Equities Fund, Ltd., a limited
liability company organized under the laws of the Commonwealth of The Bahamas
(the "Purchaser").
NOW, THEREFORE, in consideration of the respective covenants and
promises contained herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
(a) "Acceptable Financing" shall have the meaning assigned to
such term in Section 4.6(b) hereof.
(b) "Articles" shall have the meaning assigned to such term in
Section 3.1(c) hereof.
(c) "Bylaws" shall have the meaning assigned to such term in
Section 3.1(c) hereof.
(d) "Call Option" means the transactions contemplated under
Section 6.2 of this Agreement.
(e) "Call Option Amount" shall mean the actual amount of proceeds
received by the Company by a Call Option under this Agreement.
(f) "Call Option Amount Requested" shall mean the amount of a
Call Option requested by the Company as provided in Section 6.2 hereof.
(g) "Call Option Notice" shall mean a notice sent by the
Purchaser to the Company on the Trading Day the Purchaser elects to exercise a
Call Option, as provided in Section 6.2(e) hereof, and substantially in the form
attached hereto as Exhibit E.
(h) "Call Option Threshold Price" shall have the meaning assigned
to such term in Section 6.1(j) hereof.
(i) "Closing" shall have the meaning assigned to such term in
Section 2.4 hereof.
(j) "Commission" shall mean the Securities and Exchange
Commission or any successor entity.
(k) "Commission Documents" shall mean all reports, schedules,
forms, statements and other documents, including any amendments thereto or
restatements thereof, filed by the
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Company with the Commission pursuant to the reporting requirements of the
Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the
Exchange Act, which have been previously filed by the Company and which shall be
filed by the Company in the future during the Investment Period, including,
without limitation the Form 10-K/A filed by the Company for the year ended
December 31, 1999 (the "1999 Form 10-K/A"), and shall include all information
contained in such filings and all filings incorporated by reference therein.
(l) "Commission Filings" means the Registration Statement on Form
S-3 No. 333-32256, and all other filings made by the Company with the Commission
prior to or after the Effective Date pursuant to the Exchange Act.
(m) "Common Stock" means the Company's common stock, $.001 par
value per share.
(n) "Draw Down" means the transactions contemplated under Section
6.1 of this Agreement.
(o) "Draw Down Amount" means the actual amount of proceeds
received by the Company by a Draw Down under this Agreement.
(p) "Draw Down Amount Requested" shall mean the amount of a Draw
Down requested by the Company in its Draw Down Notice as provided in Section
6.1(j) hereof.
(q) "Draw Down Discount Percentage" shall mean ninety-five
percent (95%) or such other discount percentage as mutually agreed upon in
writing by the Company and the Purchaser.
(r) "Draw Down Exercise Date" shall have the meaning assigned to
such term in Section 6.1(a) hereof.
(s) "Draw Down Notice" shall mean a notice sent by the Company to
exercise a Draw Down as provided in Section 6.1(j) hereof.
(t) "Draw Down Pricing Period" shall mean a period of twenty (20)
consecutive Trading Days starting with the first Trading Day specified in a Draw
Down Notice, or such other period mutually agreed upon by the Purchaser and the
Company.
(u) "Effective Date" shall mean September 6, 2000.
(v) "Environmental Laws" shall have the meaning assigned to such
term in Section 3.1(r) hereof.
(w) "Event Period" shall have the meaning assigned to such term
in Section 7.3 hereof.
(x) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder.
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(y) "GAAP" shall mean generally accepted accounting principles in
the United States of America as applied by the Company.
(z) "Indebtedness" shall have the meaning assigned to such term
in Section 3.1(k) hereof.
(aa) "Investment Period" shall have the meaning assigned to such
term in Section 7.1 hereof.
(bb) "Material Adverse Effect" shall mean any effect on the
business, operations or financial condition of the Company that is material and
adverse to the Company and its subsidiaries, taken as a whole, and/or any
condition, circumstance, or situation that would prohibit or otherwise
materially interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material respect; provided,
however, that continued losses from operations shall not be deemed to be a
Material Adverse Effect.
(cc) "Material Agreements" shall have the meaning assigned to
such term in Section 3.1(s) hereof.
(dd) "Nasdaq" means the NASDAQ National Market or any successor
thereto.
(ee) "Other Financing" shall have the meaning assigned to such
term in Section 4.6(b) hereof.
(ff) "Prospectus" as used in this Agreement means the prospectus
in the form included in the Registration Statement, or, if the prospectus
included in the Registration Statement omits information in reliance on Rule
430A under the Securities Act, and such information is included in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Securities Act, the
term "Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectus filed with the Commission
pursuant to Rule 424(b).
(gg) "Registration Statement" shall mean the registration
statement on Form S-3, Commission File Number 333- 32256 under the Securities
Act, filed with the Securities and Exchange Commission for the registration of
the Shares, as such Registration Statement may be amended from time to time.
(hh) "Section 6.1(m) Notice" shall have the meaning assigned to
such term in Section 6.1(m) hereof.
(ii) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder.
(jj) "Settlement Date" shall have the meaning assigned to such
term in Section 6.1(d) hereof.
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(kk) "Shares" shall mean, collectively, the shares of Common
Stock of the Company issuable to the Purchaser upon exercise of any Draw Down
and those shares of Common Stock issuable to the Purchaser upon exercise of any
Call Option.
(ll) "Threshold Price" is the lowest price at which the Company
may set in the Draw Down Notice to sell Shares during each Draw Down Pricing
Period; provided, however, that at no time shall the Threshold Price be set
below sixteen dollars ($16.00) per share unless the Company and the Purchaser
mutually agree.
(mm) "Trading Day" shall mean a trading day on the Nasdaq.
(nn) "Trading Day Number" shall have the meaning assigned to such
term in Section 6.1(m) hereof
(oo) "Truncated Draw Down Allocation Amount" shall mean the
portion of the Draw Down Amount Requested that is allocated to the purchase of
Shares in accordance with Section 6.1 hereof for each Trading Day in a reduced
Draw Down Pricing Period (as provided in Section 6.1(m) hereof).
(pp) "VWAP" shall mean the daily volume weighted average price
(based on a Trading Day from 9:30 a.m. to 4:00 p.m. (New York time)) of the
Company on the Nasdaq as reported by Bloomberg Financial LP using the AQR
function.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
Section 2.1. Purchase and Sale of Stock. Subject to the terms and
conditions of this Agreement, the Company shall issue and sell to the Purchaser
and the Purchaser shall purchase from the Company during the Investment Period
up to $50,000,000 of Common Stock based on up to twelve (12) Draw Downs during
the Investment Period as provided in Section 6.1 hereof. Subject to the terms
and conditions of this Agreement, the Company in its discretion may also grant
the Purchaser one (1) or more Call Options which may be exercised during any
Draw Down Pricing Period, as provided in Section 6.2 hereof. The aggregate
dollar amount of all Draw Down Amounts and Call Option Amounts pursuant to the
terms and conditions of this Agreement shall not exceed $50,000,000.
Section 2.2. The Shares. The Company has or will have authorized and has
or will have reserved, and covenants to continue to so reserve once reserved,
subject to Section 4.4(b) hereof, free of preemptive rights and other similar
contractual rights of stockholders, a sufficient number of its authorized but
unissued shares of its Common Stock to cover the Shares to be issued in
connection with all Draw Downs and Call Options requested under this Agreement,
in any case prior to the issuance to the Purchaser of such Shares under this
Agreement.
Section 2.3. Registration Statement and Prospectus. The Company has
prepared and filed with the Commission in accordance with the provisions of the
Securities Act, the Registration Statement, including a Prospectus subject to
completion relating to the Shares. The Registration Statement was declared
effective by the Commission on April 28, 2000.
Section 2.4. Purchase Price and Closing. In consideration of and in
express reliance upon the representations, warranties, covenants, terms and
conditions of this Agreement, the Company agrees to
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issue and sell to the Purchaser, and the Purchaser agrees to purchase, that
number of the Shares to be issued in connection with each Draw Down and exercise
of each Call Option in accordance with the terms and conditions of this
Agreement. The closing under this Agreement shall take place at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP, The Chrysler Building, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (the "Closing") at 10:00 a.m. (New York time) on (i) September 6,
2000, or (ii) such other time and place or on such date as the Purchaser and the
Company may agree upon (the "Closing Date"). Each party shall deliver all
documents, instruments and writings required to be delivered by such party
pursuant to this Agreement at or prior to the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to the Purchaser:
(a) Organization, Good Standing and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware and has the requisite corporate power to own, lease and operate
its properties and assets and to conduct its business as it is now being
conducted and as described in the Commission Documents and the Commission
Filings. As of the Effective Date, the Company does not have any subsidiaries
(as defined in Section 3.1(g)) except as set forth in the Commission Documents,
the Commission Filings or on Schedule 3.1(a) attached hereto. The Company and
each such 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 will not
have a Material Adverse Effect.
(b) 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. The execution,
delivery and performance of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, and, except as contemplated by
Sections 2.2 or 4.4(b), 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. This Agreement constitutes, or shall
constitute when executed and delivered, 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 enforcement of, creditor's
rights and remedies or by other equitable principles of general application.
(c) Capitalization. The authorized capital stock of the Company
and the shares thereof issued and outstanding as of the Effective Date are set
forth in the Registration Statement or on Schedule 3.1(c) attached hereto. All
of the outstanding shares of Common Stock have been duly and validly authorized,
and are fully paid and nonassessable. Except as set forth in this Agreement or
as set forth in the Commission Documents, the Commission Filings or on Schedule
3.1(c) attached hereto, as of the Effective Date, no shares of Common Stock are
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entitled to preemptive rights or registration rights and there are no
outstanding options, warrants, scrip, rights to subscribe to, call or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company. Furthermore,
except as set forth in this Agreement, the Commission Documents, the Commission
Filings or on Schedule 3.1(c) attached hereto, as of the Effective Date, there
are 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 shares of
capital stock of the Company. Except as set forth in the Commission Documents,
the Commission Filings or on Schedule 3.1(c) attached hereto, as of the
Effective Date, the Company is not a party to, and it has no knowledge of, any
agreement restricting the voting or transfer of any shares of the capital stock
of the Company. The offer and sale of all capital stock, convertible securities,
rights, warrants, or options of the Company issued prior to the Closing complied
with all applicable federal and state securities laws, and no stockholder has a
right of rescission or damages with respect thereto which, if determined
adversely against the Company, would have a Material Adverse Effect. The Company
has made available to the Purchaser true and correct copies of the Company's
Restated Certificate of Incorporation as amended and in effect on the Effective
Date (the "Articles"), and the Company's Amended and Restated Bylaws as in
effect on the Effective Date (the "Bylaws").
(d) Issuance of Shares. The Shares to be issued under this
Agreement have been or will be (prior to issuance to the Purchaser hereunder)
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 the Purchaser shall be entitled
to all rights accorded to a holder of Common Stock.
(e) No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated herein do not (i) violate any provision of the Company's Articles
or Bylaws, (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
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 is a party, (iii)
create or impose a material lien, charge or encumbrance on any property of the
Company under any material agreement or commitment to which the Company is a
party or by which the Company is bound or by which any of its 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
(including federal and state securities laws and regulations) 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 all cases
other than violations pursuant to clauses (i) and (iv) (to the extent of federal
securities law), for such conflicts, defaults, terminations, amendments,
acceleration, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect. The Company is not required under
federal, state or local 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 issue and sell the Shares to the Purchaser
in accordance with the terms hereof (other than any filings which may be
required to be made by the Company with the Commission or Nasdaq subsequent to
the Closing and any Registration Statement which may be filed
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pursuant hereto); provided, however, that, for purpose of the representation
made in this sentence, the Company is assuming and relying upon the accuracy of
the representations, warranties and agreements of the Purchaser herein.
(f) Commission Documents, Financial Statements. 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, the Commission Filings or on Schedule
3.1(f) attached hereto, as of the Effective Date the Company has timely filed
all Commission Documents or obtained an appropriate extension pertaining
thereto. The Company has made available to the Purchaser true and complete
copies of the Commission Documents filed with the Commission since December 31,
1999 and prior to the Effective Date. The Company has not provided to the
Purchaser 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 date, the 1999 Form 10-K/A complied in all material
respects with the requirements of the Exchange Act and other federal, state and
local laws, rules and regulations applicable to it, and, as of its date, such
1999 Form 10-K/A 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. The financial statements of the Company included in the
Commission Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission or other applicable rules and regulations with respect thereto. Such
financial statements 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, fairly present in all material
respects the financial position of the Company and its subsidiaries as of the
dates thereof and the results of operations and cash flows for the periods then
ended (subject to appropriate amendments or restatements and, in the case of
unaudited statements, subject to normal year-end audit adjustments).
(g) Subsidiaries. The Commission Documents, the Commission
Filings or Schedule 3.1(g) attached hereto set forth each subsidiary of the
Company as of the Effective Date, showing the jurisdiction of its incorporation
or organization and showing the percentage of the Company's ownership of the
outstanding stock or other interests of such subsidiary. For the purposes of
this Agreement, "subsidiary" shall mean any corporation or other entity of which
at least a majority of the securities or other ownership interest having
ordinary voting power (absolutely or contingently) for the election of directors
or other persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other subsidiaries. Except as set
forth in the Commission Documents or the Commission Filings, none of such
subsidiaries is a "significant subsidiary" as defined in Regulation S-X.
(h) No Material Adverse Effect. Since June 30, 2000, the Company
has not experienced or suffered any Material Adverse Effect.
(i) No Undisclosed Liabilities. The Company has no liabilities,
obligations, claims or losses (whether liquidated or unliquidated, secured or
unsecured, absolute, accrued, contingent or otherwise) that would be required to
be disclosed on a balance sheet of the
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Company or any subsidiary (including the notes thereto) in conformity with GAAP
not disclosed in the Commission Documents, other than those incurred in the
ordinary course of the Company's or its subsidiaries respective businesses since
June 30, 2000 and which, individually or in the aggregate, do not or would not
have a Material Adverse Effect.
(j) No Undisclosed Events or Circumstances. No event or
circumstance has occurred or exists with respect to the Company or its
subsidiaries or their respective businesses, properties, prospects, operations
or financial condition, which, under applicable law, rule or regulation,
requires public disclosure or announcement by the Company but which has not been
so publicly announced or disclosed and which, individually or in the aggregate,
do not or would not have a Material Adverse Effect.
(k) Indebtedness. The Commission Documents or Commission Filings
as of June 30, 2000 set forth 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 $1,000,000 (other than trade accounts payable incurred in the
ordinary course of business), (b) all guaranties, endorsements and other
contingent obligations in respect of Indebtedness of others, 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 $1,000,000 due under
leases required to be capitalized in accordance with GAAP. Neither the Company
nor any subsidiary is in default with respect to any Indebtedness.
(l) Title to Assets. Each of the Company and its subsidiaries has
good and marketable title to all of their respective material real and personal
property reflected in the Commission Documents or the Commission Filings, free
of any mortgages, pledges, charges, liens, security interests or other
encumbrances, except for those indicated in the Commission Documents, the
Commission Filings or on Schedule 3.1(l) attached hereto or those that do not or
would not have a Material Adverse Effect. All said real property leases of the
Company are valid and subsisting and in full force and effect in all material
respects.
(m) 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 Commission
Documents, the Commission Filings or on Schedule 3.1(m) attached hereto, 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 and which, if
determined adversely to the Company or its subsidiary, would have a Material
Adverse Effect.
(n) Compliance with Law. The business of the Company and the
subsidiaries has been and is presently being conducted in all material respects
in accordance with all applicable federal, state and local governmental laws,
rules, regulations and ordinances, except as set forth in the Commission
Documents, the Commission Filings or on Schedule 3.1(n) attached hereto,
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and except as, individually or in the aggregate, do not or would not have a
Material Adverse Effect. The Company and each of its subsidiaries have all
government franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals necessary for the conduct of its
business as now being conducted by it, except where the failure to possess such
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals, individually or in the aggregate, do not or would
not have a Material Adverse Effect.
(o) Certain Fees. No brokers, finders or financial advisory fees
or commissions will be payable by the Company or any subsidiary with respect to
the transactions contemplated by this Agreement.
(p) Disclosure. To the best of the Company's knowledge, neither
this Agreement or the Schedules hereto nor any other documents, certificates or
instruments furnished to the Purchaser by or on behalf of the Company or any
subsidiary in connection with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements made herein or therein, in the
light of the circumstances under which they were made herein or therein, not
misleading.
(q) Operation of Business. The Company or one or more of its
subsidiaries owns, controls or has the right to use all patents, trademarks,
service marks, trade names, copyrights, licenses and authorizations as set forth
in the Commission Documents, the Commission Filings or on Schedule 3.1(q)
attached hereto which are necessary for the conduct of its business as now
conducted and as described in the Commission Documents and Commission Filings.
The Company has not received any notice of conflict with the rights of others,
except to the extent set forth in the Commission Documents or the Commission
Filings or Schedule 3.1(q) attached hereto and except to the extent that any
such conflict would not have a Material Adverse Effect.
(r) Environmental Compliance. The Company and each of its
subsidiaries (i) is in compliance with any and all applicable foreign, federal,
state and local laws and regulations regulating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) has received all
permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (iii) is in compliance with all
terms and conditions of any such permits, licenses or other approvals except
where the failure of any of the foregoing would not result in a Material Adverse
Effect.
(s) Material Agreements. Except as set forth in the Commission
Documents, the Commission Filings or on Schedule 3.1(s) attached hereto, 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
a registration statement on Form S-3 or applicable form (collectively, "Material
Agreements") if the Company or any subsidiary were registering securities under
the Securities Act. The Company and each of its subsidiaries has in all material
respects performed all the obligations required to be performed by them to date
under the Material Agreements, have received no notice of default by the Company
thereunder or have timely cured any default as to which notice has been
received, and, to the best of the Company's
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knowledge, are not in default under any Material Agreement now in effect, the
result of which would have a Material Adverse Effect.
(t) Transactions with Affiliates. Except as set forth in the
Commission Documents, the Commission Filings or on Schedule 3.1(t) attached
hereto, there are no loans, leases, agreements, contracts, royalty agreements,
management contracts or arrangements or other continuing transactions exceeding
$1,000,000 between (a) the Company or any subsidiary, on the one hand, and (b)
on the other hand, any officer, employee or director of the Company, or any of
its subsidiaries, or any person who would be covered by Item 404(a) of
Regulation S-K or any corporation or other entity controlled by such officer,
employee, director or person.
(u) Securities Act. The Company has complied in all material
respects with all applicable federal and state securities laws in connection
with the offer, issuance and sale of the Shares hereunder.
(i) Each Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the provisions of the Securities Act. The
Commission has not issued any order preventing or suspending the use of any
Prospectus.
(ii) The Company meets the requirements for the use of Form
S-3 under the Securities Act. The Registration Statement in the form in which it
became effective and also in such form as it may be amended or supplemented from
time to time, and the Prospectus and any supplement or amendment thereto when
filed with the Commission under Rule 424(b) under the Securities Act, complied
or will comply, as the case may be, in all material respects with the provisions
of the Securities Act and did not at any such times 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 made, not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to the Purchaser furnished to the Company
in writing by or on behalf of the Purchaser expressly for use therein.
(iii) The Company has not distributed and, prior to the
completion of the distribution of the Shares, will not distribute any offering
material in connection with the offering and sale of the Shares other than the
Registration Statement, the Prospectus or other materials, if any, permitted by
the Securities Act.
(v) Employees. As of the Effective Date, neither the Company nor
any subsidiary of the Company has any collective bargaining agreements with any
of its employees, except as set forth in the Commission Documents, the
Commission Filings or on Schedule 3.1(v) attached hereto. As of the Effective
Date, except as disclosed in the Registration Statement, the Commission
Documents, the Commission Filings or Schedule 3.1(v), no officer, consultant or
key employee of the Company or any subsidiary whose termination, either
individually or in the aggregate, would have a Material Adverse Effect, has
terminated or, to the knowledge of the
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Company, has any present intention of terminating his or her employment or
engagement with the Company or any subsidiary.
(w) Use of Proceeds. The proceeds from the sale of the Shares
will be used by the Company and its subsidiaries as set forth in the
Registration Statement.
(x) Public Utility Holding Company Act and Investment Company Act
Status. The Company is not a "holding company" or a "public utility company" as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended. The Company is not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
(y) ERISA. No liability to the Pension Benefit Guaranty
Corporation has been incurred with respect to any Plan by the Company or any of
its subsidiaries which is or would have a Material Adverse Effect. The execution
and delivery of this Agreement and the issue and sale of the Shares will not
involve any transaction which is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Internal Revenue Code of 1986, as amended. As used in this Section
3.1(y), the term "Plan" shall mean an "employee pension benefit plan" (as
defined in Section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any
subsidiary or by any trade or business, whether or not incorporated, which,
together with the Company or any subsidiary, is under common control, as
described in Section 414(b) or (c) of the Code.
(z) Acknowledgment Regarding Purchaser's Purchase of Shares. The
Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm's length purchaser with respect to this Agreement and the
transactions contemplated hereunder. The Company further acknowledges that the
Purchaser is not acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to this Agreement and the transactions
contemplated hereunder and any advice given by the Purchaser or any of its
representatives or agents in connection with this Agreement and the transactions
contemplated hereunder is merely incidental to the Purchaser's purchase of the
Shares.
Section 3.2. Representations and Warranties of the Purchaser. The
Purchaser hereby makes the following representations and warranties to the
Company:
(a) Organization and Standing of the Purchaser. The Purchaser is
a limited liability company duly organized, validly existing and in good
standing under the laws of the Commonwealth of The Bahamas.
(b) Authorization and Power. The Purchaser has the requisite
corporate power and authority to enter into and perform this Agreement and to
purchase the Shares in accordance with the terms hereof. The execution, delivery
and performance of this Agreement by Purchaser 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 Purchaser, its
Board of Directors or stockholders is required. This Agreement has been duly
executed and
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delivered by the Purchaser. This Agreement constitutes, or shall constitute when
executed and delivered, a valid and binding obligation of the Purchaser
enforceable against the Purchaser 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.
(c) No Conflicts. The execution, delivery and performance of this
Agreement and the consummation by the Purchaser of the transactions contemplated
hereby or relating hereto do not and will not (i) result in a violation of such
Purchaser's charter documents or bylaws or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others 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 Purchaser is a party, (iii) create or impose or lien, charge or
encumbrance on any property of the Purchaser under any agreement or any
commitment to which the Purchaser is party or by which the Purchaser is bound or
by which any of its respective properties or assets are bound, or (iv) result in
a violation of any law, rule, or regulation, or any order, judgment or decree of
any court or governmental agency applicable to the Purchaser or its properties,
except for such conflicts, defaults and violations as would not, individually or
in the aggregate, prohibit or otherwise interfere with the ability of the
Purchaser to enter into and perform its obligations under this Agreement in any
material respect. The Purchaser is not required 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 purchase the Shares in accordance with
the terms hereof; provided, however, that for purposes of the representation
made in this sentence, the Purchaser is assuming and relying upon the accuracy
of the representations, warranties and agreements of the Company herein.
(d) Information. The Purchaser and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Shares which have been requested by the Purchaser. The Purchaser and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company. The Purchaser 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 Purchaser 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
COVENANTS
The Company covenants with the Purchaser, and the Purchaser covenants
with the Company, as follows, which covenants of one party are for the benefit
of the other party, during the Investment Period.
Section 4.1. Securities Compliance. The Company shall notify the
Commission and Nasdaq, if applicable, in accordance with their rules and
regulations, of the transactions contemplated by this
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Agreement, and shall take all other necessary action and proceedings as may be
required and permitted by applicable law, rule and regulation, for the legal and
valid issuance of the Shares to the Purchaser.
Section 4.2. Registration and Listing. The Company will take all action
necessary to cause its Common Stock to continue to be registered under Sections
12(b) or 12(g) of the Exchange Act, will comply in all respects with its
reporting and filing obligations under the Exchange Act, and will not take any
action or file any document (whether or not permitted by the Securities Act) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under the Exchange Act or Securities Act, except as
permitted herein. The Company will take all action necessary to continue the
listing or trading of its Common Stock and the listing of the Shares purchased
by Purchaser hereunder on Nasdaq or any relevant market or system, if
applicable, and will comply in all respects with the Company's reporting, filing
and other obligations under the bylaws or rules of the Nasdaq or any relevant
market or system.
Section 4.3. Registration Statement. Before the Purchaser shall be
obligated to accept a Draw Down request from the Company, the Company shall have
caused a sufficient number of shares of Common Stock to be registered to cover
the Shares to be issued in connection with this Agreement.
Section 4.4. Compliance with Laws.
(a) The Company shall comply, and cause each subsidiary to
comply, with all applicable laws, rules, regulations and orders, noncompliance
with which would have a Material Adverse Effect.
(b) In addition to the limitations set forth in Section 4.6
hereof, the Company will not be obligated to issue and the Purchaser will not be
obligated to purchase any shares of the Company's Common Stock which would
result in the issuance under this Agreement of more than nineteen and
nine-tenths percent (19.9%) of the issued and outstanding shares of the
Company's Common Stock.
Section 4.5. Keeping of Records and Books of Account. The Company shall
keep and cause each subsidiary to keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP consistently
applied, reflecting all material financial transactions of the Company and its
subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made.
Section 4.6. Other Agreements and Other Financings.
(a) The Company shall not enter into any agreement in which the
terms of such agreement would restrict or impair the right to perform of the
Company or any subsidiary under this Agreement or the Articles.
(b) The Company shall notify the Purchaser if the Company enters
into any definitive financing agreement with a third party, the principal
purpose of which is to secure equity financing for the Company (an "Other
Financing") during the Investment Period, except that (i) stock options granted
under the Company's stock option plans or stockholder rights plan, (ii) shares
of Common Stock issued under the Company's employee stock purchase plans, (iii)
shares of Common Stock and/or warrants to purchase shares of Common Stock issued
for
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the purposes of licensing agreements and/or collaborative agreements with third
parties, (iv) shares of Common Stock or warrants to purchase shares of Common
Stock issued to third parties in connection with the formation or maintenance of
strategic partnerships, alliances or joint ventures or for the acquisition of
products, licenses, businesses (including divisions thereof) or other assets,
(v) shares of Common Stock or other securities sold by the Company in a firm
commitment underwritten public offering, (vi) the issuance of securities by any
subsidiary of the Company, (vii) issuances of securities which are set forth on
Schedule 4.6(b) attached hereto, (viii) warrants to purchase shares of Common
Stock issued in connection with equipment financings or leasing arrangements and
(ix) shares issued upon conversion of outstanding warrants (each, an "Acceptable
Financing") shall not be Other Financings. If the Company enters into an Other
Financing during a Draw Down Pricing Period, the Purchaser shall have the
options set forth in Section 6.1(l) hereof.
Section 4.7. Non-public Information. Neither the Company nor any of its
officers or agents shall knowingly disclose any material non-public information
about the Company to the Purchaser and neither the Purchaser nor any of its
affiliates, officers or agents will solicit any material non-public information
from the Company. If Purchaser knowingly receives any material non-public
information about the Company from any third party, Purchaser will promptly
inform Company.
Section 4.8. Stop Orders. The Company will advise the Purchaser promptly
and, if requested by the Purchaser, will confirm such advice in writing: (i) of
the Company's receipt of notice of any request by the Commission for amendment
of or a supplement to the Registration Statement, any Prospectus or for
additional information; (ii) of the Company's receipt of notice of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) of the Company becoming aware of the happening of any
event, which makes any statement of a material fact made in the Registration
Statement or the Prospectus (as then amended or supplemented) untrue or which
requires the making of any additions to or changes in the Registration Statement
or the Prospectus (as then amended or supplemented) in order to state a material
fact required by the Securities Act to be stated therein or necessary in order
to make the statements therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply with the
Securities Act or any other law. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, the
Company will make commercially reasonable efforts to obtain the withdrawal of
such order at the earliest possible time.
Section 4.9. Amendments to the Registration Statement. The Company will
not (i) file any amendment to the Registration Statement or make any amendment
or supplement to the Prospectus which relates to the Purchaser or this Agreement
of which the Purchaser shall not previously have been advised or to which the
Purchaser shall reasonably object after being so advised within forty-eight (48)
hours of receipt of such amendment or supplement to the Prospectus or (ii) so
long as, in the reasonable opinion of counsel for the Purchaser, a Prospectus is
required to be delivered in connection with any purchase of Shares by the
Purchaser, file any Prospectus or Prospectus supplement pursuant to the Exchange
Act without delivering a copy of such Prospectus or Prospectus supplement to the
Purchaser, promptly following such filing.
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Section 4.10. Prospectus Delivery. The Company shall file a Prospectus
supplement to the Registration Statement one Trading Day prior to each
Settlement Date and will deliver a Prospectus and Prospectus supplement to the
Purchaser on each Settlement Date. The Company consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the Securities Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares may be sold by the Purchaser, in connection
with the offering and sale of the Shares and for such period of time thereafter
as the Prospectus is required by the Securities Act to be delivered in
connection with sales of the Shares. If during such period of time any event
shall occur that in the judgment of the Company and its counsel or in the
opinion of counsel for the Purchaser is required to be set forth in the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Prospectus to comply with the Securities Act or any other applicable
law or regulation, the Company will forthwith prepare and, subject to Section
4.8 above, file with the Commission an appropriate supplement or amendment to
such Prospectus, and will expeditiously furnish or make available to the
Purchaser a reasonable number of copies thereof.
Section 4.11. Selling Restrictions; Volume Limitations. The Purchaser
covenants that during the Investment Period and for a period of three (3) months
after any termination of this Agreement in accordance with Article VII hereof,
neither the Purchaser, nor any of its affiliates, nor any entity managed by the
Purchaser, will sell any shares of Common Stock of the Company (including,
without limitation, any grant of any option to purchase or acquire any right to
dispose or otherwise dispose for value, any shares of Common Stock or any
securities convertible into, or exchangeable for, or warrants to purchase, any
shares of Common Stock or any swap, short-sale, hedge or other agreement that
transfers, in whole or in part, the economic risk of ownership of the Common
Stock) or be in a short position with respect to shares of Common Stock of the
Company in any account directly or indirectly managed by the Purchaser, or any
affiliates of the Purchaser, or any entity managed by the Purchaser, except that
during the Investment Period the Purchaser shall have the right to sell those
Shares that the Purchaser has purchased or has accumulated for purchase during
each Trading Day of a Draw Down Pricing Period pursuant to the terms and
conditions described in this Agreement or any other similar agreement between
the Company and the Purchaser. In addition, on a daily Trading Day basis, the
Purchaser agrees to restrict the volume of sales of Shares to no more than
thirty percent (30%) of the total trading volume of the Common Stock, as
reported on Bloomberg Financial LP using HP function, for such Trading Day.
Section 4.12. Notice. the Company shall immediately notify the Purchaser
that (i) a Material Adverse Effect has occurred or (ii) the Company has entered
into an Other Financing.
ARTICLE V
CONDITIONS TO CLOSING, DRAW DOWNS AND CALL OPTIONS
Section 5.1. Conditions Precedent to the Obligation of the Company to
Close and to Issue a Draw Down Notice or Grant a Call Option and Sell the
Shares. The obligation hereunder of the Company to enter into this Agreement
and, in its sole discretion, to issue a Draw Down Notice or grant a Call Option
and to issue and sell the Shares to the Purchaser is subject to the satisfaction
or waiver, at or
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before the Closing and, with respect to each Draw Down, at or before each Draw
Down Exercise Date and each Settlement Date of each of the conditions set forth
below. These conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion.
(a) Accuracy of the Purchaser's Representations and Warranties.
Except for representations and warranties that are expressly made as of a
particular date, the representations and warranties of the Purchaser in this
Agreement shall be true and correct in all material respects as of the date when
made and as of each Draw Down Exercise Date and each Settlement Date as though
made at that time.
(b) Registration Statement. The Company shall have a dollar
amount of Shares registered under the Registration Statement which are in an
amount equal to or in excess of the dollar amount worth of Shares issuable
pursuant to such Draw Down Notice or Call Option. The Registration Statement
registering the Shares shall have been declared effective by the Commission and
shall have been amended or supplemented, as required, to disclose the sale of
the Shares prior to the Closing Date or each Settlement Date, as applicable.
(c) Performance by the Purchaser. The Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Purchaser at or prior to the Closing.
(d) No Injunction. No statute, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(e) No Suspension, Etc. Trading in the Common Stock shall not
have been suspended by the Commission or the Nasdaq (except for any suspension
of trading of limited duration agreed to by the Company, which suspension shall
be terminated prior to each Draw Down Exercise Date and applicable Settlement
Date), and, at any time prior to the Closing and each Draw Down Exercise Date,
none of the events described in clauses (i), (ii) and (iii) of Section 4.8
hereof shall have occurred, trading in securities generally as reported on
Nasdaq shall not have been suspended or limited, nor shall a banking moratorium
have been declared either by the United States or New York State authorities,
nor shall there have occurred any material outbreak or escalation of hostilities
or other national or international calamity or crisis of such magnitude in its
effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of the Company, makes it impracticable or
inadvisable to issue the Shares.
(f) No Proceedings or Litigation. No action, suit or proceeding
before any arbitrator or any governmental authority shall have been commenced,
and no investigation by any governmental authority shall have been threatened,
against the Company or any subsidiary, or any of the officers, directors or
affiliates of the Company or any subsidiary seeking to restrain, prevent or
change the transactions contemplated by this Agreement, or seeking damages in
connection with such transactions.
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Section 5.2. Conditions Precedent to the Obligation of the Purchaser to
Close. The obligation hereunder of the Purchaser to enter this Agreement is
subject to the satisfaction or waiver, at or before the Closing, of each of the
conditions set forth below. These conditions are for the Purchaser's sole
benefit and may be waived by the Purchaser at any time in its sole discretion.
(a) Accuracy of the Company's Representations and Warranties.
Except for representations and warranties that are expressly made as of a
particular date, the representations and warranties of the Company in this
Agreement shall be true and correct in all material respects as of the date when
made and as of the Closing as though made at that time.
(b) Effective Registration Statement. The Registration Statement
registering the Shares shall have been declared effective by the Commission.
(c) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing.
(d) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(e) No Suspension, Etc. Trading in the Common Stock shall not
have been suspended by the Commission or the Nasdaq (except for any suspension
of trading of limited duration agreed to by the Company, which suspension shall
be terminated prior to Closing), and, at any time prior to the Closing, trading
in securities generally as reported on Nasdaq shall not have been suspended or
limited, nor shall a banking moratorium have been declared either by the United
States or New York State authorities, nor shall there have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on, or any material adverse
change in any financial market which, in each case, in the reasonable judgment
of the Purchaser, makes it impracticable or inadvisable to purchase the Shares.
(f) No Proceedings or Litigation. No action, suit or proceeding
before any arbitrator or any governmental authority shall have been commenced,
and no investigation by any governmental authority shall have been threatened,
against the Company or any subsidiary, or any of the officers, directors or
affiliates of the Company or any subsidiary seeking to restrain, prevent or
change the transactions contemplated by this Agreement, or seeking damages in
connection with such transactions.
(g) Opinion of Counsel and Closing Certificate. At the Closing,
the Purchaser shall have received (i) an opinion of counsel to the Company,
dated the date of Closing, in the form of Exhibit A hereto, and (ii) a closing
certificate from the Company, dated the date of Closing, in the form of Exhibit
B hereto.
Section 5.3. Conditions Precedent to the Obligation of the Purchaser to
Accept a Draw Down or Call Option Grant and Purchase the Shares. The obligation
hereunder of the Purchaser to
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accept a Draw Down and to acquire and pay for the Shares is subject to the
satisfaction or waiver, at or before each Draw Down Exercise Date and each
Settlement Date, of each of the conditions set forth below. The conditions are
for the Purchaser's sole benefit and may be waived by the Purchaser at any time
in its sole discretion.
(a) Accuracy of the Company's Representations and Warranties.
Except for representations and warranties that are expressly made as of a
particular date, each of the representations and warranties of the Company shall
be true and correct in all material respects as of the date when made and as of
each Draw Down Exercise Date and each Settlement Date as though made at that
time.
(b) Registration Statement. The Company shall have a dollar
amount of Shares registered under the Registration Statement which are in an
amount equal to or in excess of the dollar amount worth of Shares issuable
pursuant to such Draw Down Notice or Call Option. The Registration Statement
registering the Shares shall have been declared effective by the Commission and
shall have been amended or supplemented, as required, to disclose the sale of
the Shares prior to each Settlement Date, as applicable.
(c) No Suspension. Trading in the Common Stock shall not have
been suspended by the Commission or the Nasdaq (except for any suspension of
trading of limited duration agreed to by the Company, which suspension shall be
terminated prior to each Draw Down Exercise Date and each Settlement Date), and,
at any time prior to such Draw Down Exercise Date or such Settlement Date,
trading in securities generally as reported on Nasdaq shall not have been
suspended or limited, nor shall a banking moratorium have been declared either
by the United States or New York State authorities, nor shall there have
occurred any material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in the
reasonable judgment of the Purchaser, makes it impracticable or inadvisable to
purchase the Shares. The Common Stock shall not have been delisted from Nasdaq
or any successor market on which it trades.
(d) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to each Draw Down Exercise Date and each
Settlement Date and shall have delivered the Compliance Certificate
substantially in the form attached hereto as Exhibit C.
(e) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(f) No Proceedings or Litigation. No action, suit or proceeding
before any arbitrator or any governmental authority shall have been commenced,
and no investigation by any governmental authority shall have been threatened,
against the Company or any subsidiary, or any of the officers, directors or
affiliates of the Company or any subsidiary seeking to restrain, prevent or
change the transactions contemplated by this Agreement, or seeking damages in
connection with such transactions.
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(g) No Material Adverse Effect. No Material Adverse Effect shall
have occurred.
ARTICLE VI
DRAW DOWN TERMS; CALL OPTION
Section 6.1. Draw Down Terms. Subject to the satisfaction of the
conditions set forth in this Agreement, the parties agree as follows:
(a) The Company may, in its sole discretion, issue a Draw Down
Notice (as defined in Section 6.1(j) hereof) for a specified Draw Down Amount
Requested of up to $8,000,000 or such other amount mutually agreed upon by the
Purchaser and the Company, which Draw Down the Purchaser will be obligated to
accept. The date the Company issues any Draw Down Notice in accordance with this
Section 6.1 shall be a "Draw Down Exercise Date" for purposes of this Agreement.
(b) Subject to Section 6.1(i) below, the number of Shares to be
issued by the Company to the Purchaser in connection with each Draw Down shall
be equal to the sum of the quotients (for each Trading Day of the Draw Down
Pricing Period for which the VWAP equals or exceeds the Threshold Price) of (x)
1/20th (or such other fraction based on the length of the Draw Down Pricing
Period) of the Draw Down Amount divided by (y) the Draw Down Discount Percentage
(or such other percentage mutually agreed upon by the Purchaser and the Company)
multiplied by the VWAP of the Common Stock for such Trading Day.
(c) Only one Draw Down shall be allowed in each Draw Down Pricing
Period. Each Draw Down Pricing Period shall consist of two (2) periods of ten
(10) consecutive Trading Days (each, a "Settlement Period"); provided, however,
that the Company may request in its Draw Down Notice that the Draw Down Pricing
Period consist of only one twenty (20) consecutive Trading Day Settlement
Period, which request the Purchaser shall in good faith consider.
(d) Each Draw Down shall be settled on the second Trading Day
after the end of each Settlement Period (the "Settlement Date").
(e) There shall be a minimum of five (5) Trading Days between the
end of a Draw Down Pricing Period and the commencement of the next Draw Down
Pricing Period, unless otherwise mutually agreed upon between the Purchaser and
the Company.
(f) There shall be a maximum of twelve (12) Draw Downs during the
Investment Period.
(g) At the end of each Draw Down Pricing Period, the Purchaser's
total Draw Down commitment under this Agreement (which equals $50,000,000 as of
the Effective Date) shall be reduced by the total amount of the Draw Down Amount
and the Call Option Amount, if any, for such Draw Down Pricing Period.
(h) Each Draw Down will automatically expire on the last Trading
Day of each Draw Down Pricing Period.
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(i) If the VWAP on a given Trading Day in a Draw Down Pricing
Period is less than the Threshold Price, then the total amount of the Draw Down
Amount Requested for such Draw Down Pricing Period will be reduced by 1/20th (or
such other fraction based on the length of the Draw Down Pricing Period) and no
Shares will be purchased or sold with respect to such Trading Day, except as
provided below. At no time shall the Threshold Price be set below sixteen
dollars ($16.00) unless agreed upon by the Company and the Purchaser. If trading
in the Common Stock is suspended for any reason for more than three (3) hours in
any Trading Day, the price of the Common Stock may, at the Purchaser's option,
be deemed to be below the Threshold Price for that Trading Day. For each Trading
Day during a Draw Down Pricing Period that the VWAP is below the Threshold Price
or is deemed to be below the Threshold Price pursuant to the immediately
preceding sentence, the Purchaser may, at its option, purchase the Common Stock
at the Threshold Price multiplied by the Draw Down Discount Percentage. The
Purchaser will inform the Company via facsimile transmission no later than 8:00
p.m. (New York time) on the last Trading Day of such Draw Down Pricing Period as
to the number of Shares, if any, the Purchaser chooses to purchase under such
circumstances.
(j) As a condition to exercise of any Draw Down, the Company must
provide a notice to the Purchaser of the Company's exercise of any Draw Down via
facsimile transmission before commencement of trading on the first Trading Day
of the Draw Down Pricing Period covered by such notice (the "Draw Down Notice"),
substantially in the form attached hereto as Exhibit D. The Draw Down Notice
shall specify the Draw Down Amount Requested, set the Threshold Price for such
Draw Down and designate the first Trading Day of the Draw Down Pricing Period
and specify the Call Option(s), if any, that the Company wishes to grant to the
Purchaser during the Draw Down Pricing Period and the applicable Threshold Price
for such Call Option (the "Call Option Threshold Price"). Unless the Company and
the Purchaser mutually agree otherwise, at no time shall the Purchaser be
required to purchase more than $8,000,000 of the Common Stock for a given Draw
Down Pricing Period (excluding the Common Stock purchased pursuant to a Call
Option).
(k) On each Settlement Date, the Company shall deliver the Shares
purchased by the Purchaser to the Purchaser or its designees via the Deposit
Withdrawal Agent Commission system ("DWAC"), against payment therefor to the
Company's designated account by wire transfer of immediately available funds,
provided that the Shares are received by the Purchaser no later than 1:00 p.m.
(New York time), or of next day available funds if the Shares are received
thereafter. In certain circumstances and as set forth in Section 9.1(b), a
failure by the Company to deliver such Shares may result in the payment of
liquidated damages by the Company to the Purchaser.
(l) If during any Draw Down Pricing Period the Company shall
enter into an Other Financing (other than shares of Common Stock issued under
this Agreement or in connection with an Acceptable Financing), the Purchaser may
in its sole discretion (i) purchase the Draw Down Amount Requested of shares of
Common Stock and/or Call Option Amount Requested during such Draw Down Pricing
Period on the terms at which the Company issued shares of Common Stock in the
Other Financing during such Draw Down Pricing Period, (ii) purchase the Draw
Down Amount Requested of shares of Common Stock and/or Call Option Amount
Requested during such Draw Down Pricing Period at the applicable Draw Down
Discount Percentage times the VWAP for such Draw Down Pricing Period, or (iii)
elect not to
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purchase any Shares during such Draw Down Pricing Period. The Purchaser shall
notify the Company of its election on the business day preceding the Settlement
Date.
(m) If during any Draw Down Pricing Period the Company elects to
reduce the number of Trading Days in such Draw Down Pricing Period, the Company
will notify the Purchaser before commencement of trading on any Trading Day (a
"Section 6.1(m) Notice") and the last Trading Day of such Draw Down Pricing
Period shall be the Trading Day preceding the receipt of the Section 6.1(m)
Notice; provided, however, that if the Company delivers the Section 6.1(m)
Notice during trading hours on a Trading Day, then the last Trading Day of such
Draw Down Pricing Period shall be the Trading Day on which the Section 6.1(m)
Notice was received by the Purchaser.
The Purchaser will purchase the Truncated Draw Down Allocation Amount
for each of the Trading Days prior to receipt of the Section 6.1(m) Notice, for
an aggregate purchase price determined in accordance with clauses (b) and (i) of
this Section 6.1.
In addition, the Purchaser may, at its option, elect to purchase Shares
in an additional dollar amount equal to the product of the Draw Down Amount
Requested, first multiplied by (x) a fraction, the numerator of which equals one
(1) and the denominator of which equals twenty (20) or such other number of
Trading Days in such Draw Down Pricing Period as the parties may have mutually
agreed upon with respect to such Draw Down Pricing Period (twenty (20) or such
other mutually agreed upon number being referred to herein as the "Trading Day
Number"), and next multiplied by (y) that number that is equal to the Trading
Day Number minus the number of Trading Days in the reduced Draw Down Pricing
Period. The price per share for such additional dollar amount shall equal (i)
the aggregate total of Truncated Draw Down Allocation Amounts during the reduced
Draw Down Pricing Period divided by (ii) the number of Shares to be purchased
during such reduced Draw Down Pricing Period.
Upon receipt of the Section 6.1(m) Notice, the Purchaser may (x) elect
to purchase the Common Stock at the Threshold Price for any Trading Day that the
VWAP was below the Threshold Price during the reduced Draw Down Pricing Period
in accordance with Section 6.1(i) hereof, (y) elect to purchase the Common Stock
in the additional amount as set forth in the preceding paragraph of this Section
6.1(m), and (z) elect to exercise any unexercised Call Options (for a Call
Option Amount not in excess of $1,000,000) by issuing a Call Option Notice to
the Company, in each such case, no later than 10:00 a.m. (New York time) on the
first Trading Day after the end of the reduced Draw Down Pricing Period. The
exercise price of the Call Option shall be based on the VWAP on the last Trading
Day of the reduced Draw Down Pricing Period (in lieu of the VWAP as specified in
clause (A) of Section 6.2(b) hereof) and otherwise determined in accordance with
Section 6.2(b) hereof.
The Settlement Date for the Truncated Draw Down Amount exercised during
a effected Draw Down Pricing Period shall be the second Trading Day after
receipt of the Section 6.1(m) Notice.
Section 6.2. Purchaser's Call Option.
(a) The Company may, in its sole discretion, grant to the
Purchaser the right to exercise one (1) or more Call Options during each Draw
Down Pricing Period for a specified Call Option Amount Requested. The Call
Option Amount Requested shall not exceed
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$50,000,000 minus the sum of all Draw Down Amounts and Call Option Amounts and
the Draw Down Amount Requested in the Draw Down Notice. The Call Option Amount
Requested and the Call Option Threshold Price shall be set forth in the Draw
Down Notice.
(b) The number of shares of Common Stock to be issued in
connection with each Call Option shall equal the (i) the Call Option Amount
divided by (ii) the product of the Draw Down Discount Percentage (or such other
percentage mutually agreed upon by the Purchaser and the Company) and the
greater of (A) the VWAP for the Common Stock on the day the Purchaser issues its
Call Option Notice or (B) the Call Option Threshold Price.
(c) Each Call Option exercised shall be settled on the next
Settlement Date.
(d) The Call Option Threshold Price designated by the Company in
its Draw Down Notice shall apply to each Call Option.
(e) For each Call Option that the Purchaser exercises pursuant to
this Section 6.2, as a condition to such exercise the Purchaser must issue a
Call Option Notice (as defined in Section 1.1(g) hereof) to the Company no later
than 8:00 p.m. (New York time) on the day such Call Option is exercised. If the
Purchaser does not exercise a Call Option by 8:00 p.m. (New York time) on the
last day of the applicable Draw Down Pricing Period, the Purchaser's Call
Options with respect to that Draw Down Pricing Period shall automatically
terminate.
ARTICLE VII
TERMINATION
Section 7.1. Term; Termination by Mutual Consent. The term of this
Agreement shall expire on the earlier of (i) twenty-four (24) consecutive months
from the Effective Date (the "Investment Period"), (ii) the date that all of the
shares registered under the Registration Statement have been issued and sold and
(iii) the date that the Purchaser has purchased in the aggregate $50,000,000
pursuant to all Draw Downs and Call Options. This Agreement may be terminated at
any time by mutual written consent of the parties.
Section 7.2. Company Termination. The Company may terminate this
Agreement effective upon thirty (30) days' written notice; provided, however,
that such termination does not occur during a Draw Down Pricing Period or prior
to a Settlement Date.
Section 7.3. Other Termination. The Company shall inform the Purchaser,
and the Purchaser shall have the right to terminate this Agreement within the
subsequent thirty (30) days (the "Event Period"), if during the Investment
Period (x) the Company, without the Purchaser's prior written consent, enters
into an Other Financing which provides for (i) the issuance of Common Stock or
securities convertible, exercisable or exchangeable into Common Stock at a
conversion price or exercise price discounted in excess of twenty-five (25%) of
the market price of the Common Stock on the Closing Date of such Other Financing
or (ii) a mechanism for the reset of the purchase price of the Common Stock or
for the reset of the conversion price or exercise price of any securities which
may be converted, exercised or exchanged into Common Stock to below the market
price of the Common Stock on the Closing Date of such Other Financing, (y) a
non-curable event resulting in a Material Adverse Effect has occurred or (z) an
event resulting in a Material Adverse Effect has occurred and such event has not
been cured within
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sixty (60) days of its occurrence. In such event, the Purchaser may terminate
this Agreement upon one (1) business day's prior written notice during the Event
Period.
Section 7.4. Effect of Termination. In the event of termination by the
Company or the Purchaser, written notice thereof shall forthwith be given to the
other party and the transactions contemplated by this Agreement shall be
terminated without further action by either party. If this Agreement is
terminated as provided in Section 7.1, 7.2 or 7.3 herein, this Agreement shall
become void and of no further force and effect, except as provided in Section
9.9 hereof. Nothing in this Section 7.4 shall be deemed to release the Company
or the Purchaser from any liability for any breach under this Agreement, or to
impair the rights of the Company and the Purchaser to compel specific
performance by the other party of its obligations under this Agreement.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 General Indemnity.
(a) Indemnification by the Company. The Company will indemnify
and hold harmless the Purchaser, each of its directors, fund managers and
officers, and each person, if any, who controls the Purchaser within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act from
and against any losses, claims, damages, liabilities and expenses (including
reasonable costs of defense and investigation and all attorneys' fees) to which
the Purchaser, each of its directors, fund managers and officers, and each such
controlling person may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities and expenses (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained, or incorporated by
reference, in the Registration Statement relating to Common Stock being sold to
the Purchaser (including any Prospectus or Prospectus supplement which are a
part of it), or any amendment or supplement to it, or (ii) the omission or
alleged omission to state in that Registration Statement or any document
incorporated by reference in the Registration Statement, a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
The Company will reimburse the Purchaser and each such controlling
person promptly upon demand for any legal or other costs or expenses reasonably
incurred by the Purchaser or such controlling person in investigating, defending
against, or preparing to defend against any such claim, action, suit or
proceeding, except that the Company will not be liable to the extent any loss,
claim, damage, liability or expense arises out of, or is based upon, an untrue
statement, alleged untrue statement, omission or alleged omission, included in
any Prospectus or Prospectus supplement or any amendment or supplement to the
Prospectus or Prospectus supplement in reliance upon, and in conformity with,
written information furnished by the Purchaser to the Company for inclusion in
the Prospectus or Prospectus supplement.
(b) Indemnification by the Purchaser. The Purchaser will
indemnify and hold harmless the Company, each of its directors and officers, and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act from and against any
expenses (including reasonable costs of defense and investigation and all
attorneys fees) to which the Company, each of its directors and officers, and
each controlling person, if any, may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages, liabilities and expenses (or
actions in respect thereof)
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arise out of or are based upon (i) any untrue statement or alleged untrue
statement included in any Prospectus or Prospectus supplement or any amendment
or supplement to the Prospectus or Prospectus supplement, or (ii) the omission
or alleged omission to state in any Prospectus or Prospectus supplement or any
amendment or supplement to it a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, the untrue statement, alleged untrue statement, omission or
alleged omission was made in reliance upon, and in conformity with, written
information furnished by the Purchaser to the Company for inclusion in the
Prospectus or Prospectus supplement or an amendment or supplement to it. The
Purchaser will reimburse the Company and each such director, officer or
controlling person promptly upon demand for any legal or other costs or expenses
reasonably incurred by the Company or the other person in investigating,
defending against, or preparing to defend against any such claim, suit, action
or proceeding.
Section 8.2. Indemnification Procedures. Promptly after a person
receives notice of a claim or the commencement of an action for which the person
intends to seek indemnification under Section 8.1, the person will notify the
indemnifying party in writing of the claim or commencement of the action, suit
or proceeding; provided, however, that failure to notify the indemnifying party
will not relieve the indemnifying party from liability under Section 8.1, except
to the extent it has been materially prejudiced by the failure to give notice.
The indemnifying party will be entitled to participate in the defense of any
claim, action, suit or proceeding as to which indemnification is being sought,
and if the indemnifying party acknowledges in writing the obligation to
indemnify the party against whom the claim or action is brought, the
indemnifying party may (but will not be required to) assume the defense against
the claim, action, suit or proceeding with counsel satisfactory to it. After an
indemnifying party notifies an indemnified party that the indemnifying party
wishes to assume the defense of a claim, action, suit or proceeding, the
indemnifying party will not be liable for any legal or other expenses incurred
by the indemnified party in connection with the defense against the claim,
action, suit or proceeding except that if, in the opinion of counsel to the
indemnifying party, one or more of the indemnified parties should be separately
represented in connection with a claim, action, suit or proceeding, the
indemnifying party will pay the reasonable fees and expenses of one separate
counsel for the indemnified parties. Each indemnified party, as a condition to
receiving indemnification as provided in Section 8.1, will cooperate in all
reasonable respects with the indemnifying party in the defense of any action or
claim as to which indemnification is sought. No indemnifying party will be
liable for any settlement of any action effected without its prior written
consent. No indemnifying party will, without the prior written consent of the
indemnified party, effect any settlement of a pending or threatened action with
respect to which an indemnified party is, or is informed that it may be, made a
party and for which it would be entitled to indemnification, unless the
settlement includes an unconditional release of the indemnified party from all
liability and claims which are the subject matter of the pending or threatened
action.
If for any reason the indemnification provided for in this Agreement is
not available to, or is not sufficient to hold harmless, an indemnified party in
respect of any loss or liability referred to in Section 8.1 as to which it is
entitled to indemnification thereunder, each indemnifying party will, in lieu of
indemnifying the indemnified party, contribute to the amount paid or payable by
the indemnified party as a result of such loss or liability, (i) in the
proportion which is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and by the indemnified party on the other
from the sale of Shares which is the subject of the claim, action, suit or
proceeding which resulted in the loss or liability or (ii) if that allocation is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits of the sale of such Shares, but also the relative
fault of the indemnifying party and the indemnified party with respect to the
statements or omissions which are the subject of the claim, action, suit or
proceeding that resulted in the loss or liability, as well as any other relevant
equitable considerations.
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ARTICLE IX
MISCELLANEOUS
Section 9.1. Fees and Expenses.
(a) Each party shall bear its own fees and expenses related to
the transactions contemplated by this Agreement; provided, however, that the
Company shall pay, at the Closing, all reasonable attorneys' fees and expenses
incurred by the Purchaser up to $30,000 in connection with the preparation,
negotiation, execution and delivery of this Agreement and any amendments,
modifications or waivers of this Agreement. The Company shall pay all stamp or
other similar taxes and duties levied in connection with issuance of the Shares
pursuant hereto.
(b) If the Company issues a Draw Down Notice and fails to deliver
the Shares on the applicable Settlement Date, and such failure continues for ten
(10) Trading Days, the Company shall pay the Purchaser, in cash or restricted
shares of Common Stock, at the option of the Purchaser, as liquidated damages
for such failure and not as a penalty an amount equal to two percent (2%) of the
payment required to be paid by the Purchaser on such Settlement Date (i.e., the
sum of the Draw Down Amount and the Call Option Amount)for the initial thirty
(30) days following such Settlement Date and an additional two percent (2%) for
each additional thirty (30) day period thereafter until the Shares have been
delivered, which amount shall be prorated for such periods less than thirty (30)
days.
Section 9.2. Specific Enforcement, Consent to Jurisdiction.
(a) The Company and the Purchaser acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that either party shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement by the other party and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which either
party may be entitled by law or equity.
(b) Each of the Company and the Purchaser (i) hereby irrevocably
submits to the jurisdiction of the United States District Court and other courts
of the United States sitting in the State of New York for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement, and
(ii) hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. Each of
the Company and the Purchaser consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section shall affect or limit any right to serve process in any other
manner permitted by law.
Section 9.3. Entire Agreement; Amendment. This Agreement represents the
entire agreement of the parties with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by either
party relative to subject matter hereof not expressly set forth
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herein. No provision of this Agreement may be amended other than by a written
instrument signed by both parties hereto.
Section 9.4. Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery, by telex (with correct answer
back received), telecopy or facsimile (with telecopy or facsimile machine
confirmation of delivery received) at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The address for
such communications shall be:
If to the Company: Geron Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
With copies to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
If to the Purchaser: Acqua Wellington North American Equities Fund, Ltd.
c/o Fortis Fund Services (Bahamas) Ltd.
Montage Sterling Centre
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
With copies to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
The Chrysler Building
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Either party hereto may from time to time change its address for notices
by giving at least ten (10) days advance written notice of such changed address
to the other party hereto.
Section 9.5. Waivers. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a
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waiver of any other provisions, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter. No provision of
this Agreement may be waived other than in a written instrument signed by the
party against whom enforcement of such waiver is sought.
Section 9.6. Headings. The article, section and subsection headings in
this Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
Section 9.7. Successors and Assigns. The Purchaser may not assign this
Agreement to any person without the prior consent of the Company, in the
Company's sole discretion. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns. After Closing, the
assignment by a party to this Agreement of any rights hereunder shall not affect
the obligations of such party under this Agreement.
Section 9.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to the choice of law provisions.
Section 9.9. Survival. The representations and warranties of the Company
and the Purchaser contained in Article III and the covenants contained in
Article IV shall survive the execution and delivery hereof and the Closing until
the termination of this Agreement, except with respect to the Selling
Restriction set forth in Section 4.6 hereof which shall survive until three
months after the termination of this Agreement, and the agreements and covenants
set forth in Article VIII of this Agreement shall survive the execution and
delivery hereof and the Closing hereunder.
Section 9.10. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart. In the event any signature is
delivered by facsimile transmission, the party using such means of delivery
shall cause four additional executed signature pages to be physically delivered
to the other parties within five days of the execution and delivery hereof.
Section 9.11. Publicity. Prior to the Closing, neither the Company nor
the Purchaser shall issue any press release or otherwise make any public
statement or announcement with respect to this Agreement or the transactions
contemplated hereby or the existence of this Agreement without the prior written
consent of the other party to such disclosure, except that if the Company is
required by law, based upon an opinion of the Company's counsel, to issue a
press release or otherwise make a public statement or announcement with respect
to this Agreement prior to the Closing, the Company may do so and shall consult
with the Purchaser in advance on the form and substance of such press release.
After the Closing, the Company may issue a press release or otherwise make a
public statement or announcement with respect to this Agreement or the
transactions contemplated hereby or the existence of this Agreement; provided,
however, that prior to issuing any such press release, making any such public
statement or announcement, the Company shall consult with the Purchaser on the
form and substance of such press release or other disclosure. If no comment is
provided by Purchaser promptly (and in any event within forty-eight (48) hours
after such consultation), such press release, public statement or announcement
shall be deemed acceptable to Purchaser.
Section 9.12. Severability. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other
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provision or part of a provision of this Agreement, and this Agreement shall be
reformed and construed as if such invalid or illegal or unenforceable provision,
or part of such provision, had never been contained herein, so that such
provisions would be valid, legal and enforceable to the maximum extent possible.
Section 9.13 Further Assurances. From and after the date of this
Agreement, upon the request of the Purchaser or the Company, each of the Company
and the Purchaser shall execute and deliver such instrument, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Common Stock
Purchase Agreement to be duly executed by their respective authorized officer as
of the date first above written.
GERON CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
ACQUA WELLINGTON NORTH AMERICAN
EQUITIES FUND, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
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EXHIBIT B TO THE
COMMON STOCK PURCHASE AGREEMENT
CLOSING CERTIFICATE OF THE COMPANY
CLOSING CERTIFICATE
September 6, 2000
The undersigned, __________________, ________________ of Geron
Corporation, a Delaware corporation (the "Company"), delivers this certificate
in connection with the Common Stock Purchase Agreement, dated as of September 6,
2000 (the "Purchase Agreement"), by and among the Company and Acqua Wellington
North American Equities Fund, Ltd. (the "Purchaser"), and hereby certifies on
the date hereof, that (capitalized terms used herein without definition have the
meanings assigned to them in the Purchase Agreement):
1. Attached hereto as EXHIBIT A is a true, complete and correct copy of
the Restated Certificate of Incorporation, as amended, of the Company as filed
with the Secretary of State of the State of Delaware. The Restated Certificate
of Incorporation, as amended, of the Company has not been further amended or
restated, and no document with respect to any amendment to the Restated
Certificate of Incorporation, as amended, of the Company has been filed in the
office of the Secretary of State of the State of Delaware since the date shown
on the face of the state certification relating to the Company's Restated
Certificate of Incorporation, as amended, which is in full force and effect on
the date hereof, and no action has been taken by the Company in contemplation of
any such amendment or the dissolution, merger or consolidation of the Company.
2. Attached hereto as EXHIBIT B is a true and complete copy of the
Amended and Restated By-laws of the Company, as amended and restated through,
and as in full force and effect on, the date hereof, and no proposal for any
amendment, repeal or other modification to the Amended and Restated By-laws of
the Company has taken or is currently pending before the Board of Directors or
stockholders of the Company.
3. The Board of Directors of the Company has approved the transactions
contemplated by the Agreement; said approval has not been amended, rescinded or
modified and remains in full force and effect as of the date hereof.
4. Each person who, as an officer of the Company, or as attorney-in-fact
of an officer of the Company, signed (i) the Agreement, (ii) the Registration
Statement and (iii) any other document delivered prior hereto or on the date
hereof in connection with the transactions contemplated by the Agreement, was
duly elected, qualified and acting as such officer or duly appointed and acting
as such attorney-in-fact, and the signature of each such person appearing on any
such document is his genuine signature.
5. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ is entitled to rely on this certificate in
connection with the opinions that such firm is rendering pursuant to Sections
5.2(g) of the Purchase Agreement.
6. The actions, resolutions and other records of the Company relating to
all of the proceedings of the Stockholders of the Company, the Board of
Directors of the Company and any committees thereof made available to the
Purchasers and their counsel are the true, correct and complete copies thereof,
with respect to all proceedings of said Stockholders, Board of Directors and
committees thereof. Such records and other documents of the Company made
available to the Purchasers and their
34
counsel were true and complete in all respects. There have been no material
changes, additions or alterations in said records and other documents that have
not been disclosed to the Purchasers.
IN WITNESS WHEREOF, I have signed my name as of the date first above
written.
________________________________________
By:
I, __________________, Chief Executive Officer of Geron Corporation, do
hereby certify that ______________________ is the duly elected, qualified and
acting Secretary of the above mentioned company, and that the signature set
forth above is her true and genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name as of the date first
above written.
By: ____________________________________
Name:
Title: Chief Executive Officer
35
EXHIBIT C
TO THE COMMON STOCK PURCHASE AGREEMENT
COMPLIANCE CERTIFICATE
In connection with the issuance of shares of common stock of
Geron Corporation, a Delaware corporation (the "Company") pursuant to the Draw
Down Notice, dated ___________ delivered by the Company to Acqua Wellington
North American Equities Fund, Ltd. (the "Purchaser") pursuant to Article VI of
the Common Stock Purchase Agreement dated September 6, 2000, by and between the
Company and Acqua Wellington North American Equities Fund, Ltd. (the
"Agreement"), the undersigned hereby certifies as follows:
1. The undersigned is the duly elected Chief Financial Officer of the
Company.
2. Except as set forth in the attached Schedule, the representations and
warranties of the Company set forth in Section 3.1 of the Agreement are true and
correct in all material respects as of the date when made and as of the date
hereof, except for representations and warranties that speak as of a particular
date.
3. The Company has performed in all material respects all covenants and
agreements to be performed by the Company on or prior to the Draw Down Exercise
Date and the Settlement Date related to the Draw Down Notice and has complied in
all material respects with all obligations and conditions contained in Section
5.3 of the Agreement.
Capitalized terms used but not otherwise defined herein shall
have the meanings assigned to them in the Agreement.
The undersigned has executed this Certificate this _____ day of
_________, 2000.
By:_____________________________________
Name:___________________________________
Title:__________________________________
36
EXHIBIT D
TO THE COMMON STOCK PURCHASE AGREEMENT
FORM OF DRAW DOWN NOTICE
Reference is made to the Common Stock Purchase Agreement dated as of
September 6, 2000, (the "Purchase Agreement") between Geron Corporation, a
Delaware corporation (the "Company"), and Acqua Wellington North American
Equities Fund, Ltd. Capitalized terms used and not otherwise defined herein
shall have the meanings given such terms in the Purchase Agreement.
In accordance with and pursuant to Section 6.1 of the Purchase
Agreement, the Company hereby issues this Draw Down Notice to exercise a Draw
Down request for the Draw Down Amount indicated below.
Draw Down Amount:
----------------------------------------------
Draw Down Pricing Period start date:
---------------------------
Draw Down Pricing Period end date:
-----------------------------
Settlement Date:
-----------------------------------------------
Draw Down Threshold Price:
-------------------------------------
Minimum Threshold Price: $16.00
---------------------------------------
Call Option Amount:
--------------------------------------------
Call Option Threshold Price:
-----------------------------------
Dollar Amount and/or Number of Shares
of Common Stock Currently Unissued
under the Registration Statement:
------------------------------
Dated:
---------------
------------------------------------
By:
---------------------------------
Name:
Title:
Address:
Facsimile No.:
Wire Instructions:
------------------
Contact Name:
----------------
Receipt Acknowledged:
Acqua Wellington North American Equities Fund, Ltd.
By:
-----------------------
Name:
Title:
37
EXHIBIT E
TO THE COMMON STOCK PURCHASE AGREEMENT
FORM OF CALL OPTION NOTICE
To: ______________
Fax #:
Reference is made to the Common Stock Purchase Agreement dated as of
________, 2000 (the "Purchase Agreement") between Geron Corporation, a Delaware
corporation (the "Company"), and Acqua Wellington North American Equities Fund,
Ltd. Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement.
In accordance with and pursuant to Section 6.2 of the Purchase
Agreement, the Purchaser hereby issues this Call Option Notice to exercise a
Call Option for the Call Option Amount indicated below.
Call Option Amount Exercised:______________________
Number of Shares to be purchased:__________________
VWAP on the date hereof:___________________________
Draw Down Discount Percentage:_____________________
Settlement Date:___________________________________
Call Option Threshold Price:_______________________
Minimum Threshold Price:___________________________
Dated:_______________
Acqua Wellington North American Equities Fund, Ltd.
By: _______________________________________________
Name:
Title: