PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 25th day of June, 1999, between Neose
Technologies, Inc. (the "Company"), a corporation organized under the laws of
the State of Delaware, with its principal offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and the purchaser whose name and address is set forth on the
signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Purchaser, intending to be legally bound, agree as follows:
SECTION 1. Authorization of Sale of Shares. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of up to
1,500,000 shares of common stock ("Common Stock"), par value $.01 per share
(each a "Share," and together the "Shares"), of the Company.
SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing (as
defined in Section 3), the Company will sell to the Purchaser, and the Purchaser
will buy from the Company, upon the terms and conditions hereinafter set forth,
the number of Shares shown below at the purchase price shown below:
Number of Shares Aggregate
to be Purchased Price Per Share Purchase Price
---------------- --------------- --------------
$9.50 $
The Company is simultaneously entering into a similar form of this purchase
agreement with certain other investors (the "Other Purchasers") and expects to
complete sales of the Shares to them, although it is understood that there is no
minimum number of Shares that are required to be sold by the Company. (The
Purchaser and the Other Purchasers are hereinafter sometimes collectively
referred to as the "Purchasers," and this Agreement and the agreements executed
by the Other Purchasers are hereinafter sometimes collectively referred to as
the "Agreements.")
SECTION 3. Delivery of the Shares at the Closing. The completion of the
purchase and sale of the Shares (the "Closing") shall occur on June 25, 1999 or
such other time as may be agreed upon by the Company and each Purchaser (the
"Closing Date"). At the Closing, the Company shall deliver to the Purchaser one
or more stock certificates for the Shares registered in the name of the
Purchaser, or in such name(s) as designated by the Purchaser, representing the
number of Shares set forth in Section 2 above. The name(s) in which the stock
certificates are to be registered are set forth in the Stock Certificate
Questionnaire attached hereto as part of Appendix I. The Company's obligation to
complete the purchase and sale of the Shares and deliver such stock
certificate(s) to the Purchaser at the Closing shall be subject to the following
conditions, any one or more of which may be waived by the Company in its sole
discretion: (i) receipt by the Company of immediately available funds in the
full amount of the purchase price for the Shares being purchased hereunder; (ii)
completion of the purchases and sales under the Agreements with Other
Purchasers; and (iii) the accuracy of the representations and warranties made by
the Purchasers and the fulfillment of those undertakings of the Purchasers to be
fulfilled prior to the Closing; provided, however, that in the event that
condition (ii) or, with respect to Other Purchasers, condition (iii) is not met,
the Purchaser shall have the right, but not the obligation, to purchase the
Shares which such Other Purchaser (the "Defaulting Purchaser") should have
purchased on the same terms, and if Other Purchasers want to exercise this
right, on a pro rata basis (based on the number of Shares purchased hereunder
and under the other purchase agreements) with any Other Purchasers exercising
the right, and if the Purchaser and/or Other Purchasers exercise this right, the
condition shall be deemed to have been met. The Purchaser's obligation to accept
delivery of such stock certificate(s) and to pay for the Shares evidenced
thereby shall be subject to the accuracy in all material respects of the
representations and warranties made by the Company in the Purchase Agreement and
the fulfillment in all material respects of those undertakings of the Company to
be fulfilled prior to Closing.
SECTION 4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Purchaser as
follows:
4.1. Organization and Qualification. The Company is a corporation duly
organized and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to conduct its business as currently
conducted. The Company is qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the Company conducts business,
except where the failure to do so would not have a material adverse effect on
the business, condition (financial or otherwise) or results of operations of the
Company.
4.2. Authorized and Issued Capital Stock. (a) As of June 10, 1999, the
authorized capital stock of the Company consists of (i) 30,000,000 shares of
Common Stock, of which 9,909,416 shares are outstanding, and (ii) 5,000,000
shares of preferred stock, $.01 par value per share, of which 300,000 shares
have been designated "Series A Junior Preferred Stock" for potential issuance
under the terms of the Amended and Restated Rights Agreement, dated as of
December 3, 1998, between the Company and American Stock Transfer & Trust
Company, as rights agent, and no shares are issued and outstanding as of the
date hereof. All of the outstanding shares of Common Stock were validly issued
and are fully paid and non-assessable shares.
(b) The Company has registered its Common Stock pursuant to Section 12(b)
or 12(g) of the Securities Exchange Act of 1934, as amended (together with the
-2-
rules and regulations promulgated thereunder, the "Exchange Act") and is in full
compliance with all reporting requirements of the Exchange Act, and the Company
has maintained all requirements for the continued listing or quotation of its
Common Stock, and such Common Stock is currently listed or quoted on the Nasdaq
National Market (the "Principal Market").
4.3. Due Execution, Delivery and Performance of the Agreements. The
execution, delivery and performance of the Agreements by the Company (i) have
been duly authorized by all requisite corporate action by the Company, and (ii)
will not violate any law or the Second Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") or the Amended and Restated
Bylaws (the "Bylaws") of the Company, or any provision of any material
indenture, mortgage, agreement, contract or other material instrument to which
the Company is a party or by which the Company or any of its properties or
assets is bound as of the date hereof, or result in a breach of or constitute
(upon notice or lapse of time or both) a default under any such material
indenture, mortgage, agreement, contract or other material instrument or result
in the creation or imposition of any lien, security interest, mortgage, pledge,
charge or other encumbrance, of any material nature whatsoever, upon any
properties or assets of the Company. The Company has no material subsidiaries.
Upon their execution and delivery, and assuming the valid execution thereof by
the respective Purchasers, the Agreements will constitute valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
the indemnification and contribution agreements of the Company in Section 7.4
hereof may be legally unenforceable.
4.4. Issuance, Sale and Delivery of the Shares. When issued and paid for,
the Shares to be sold hereunder by the Company will be validly issued and
outstanding, fully paid and non-assessable. Neither the sale of the Shares
pursuant to, nor the Company's performance of its obligations under, this
Agreement shall (i) result in the creation or imposition of any liens, charges,
claims or other encumbrances upon the Shares or any of the assets of the
Company, or (ii) entitle the holders of the outstanding Common Stock to
preemptive or other rights to subscribe to or acquire Common Stock or other
securities of the Company.
4.5. Exemption from Registration. Assuming the accuracy of the Purchaser's
representations and warranties set forth in Section 5 hereof, the offer,
issuance and sale of the Shares pursuant to this Agreement are and will be
exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act").
4.6. Additional Information. The Company represents and warrants that the
information contained in the following documents, copies of which have been
furnished to the Purchaser, was true and correct in all material respects and
-3-
did not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained therein in light of the
circumstances under which they were made, not misleading as of their respective
dates (the "SEC Documents"):
(i) the Company's 1998 annual report to stockholders;
(ii) the Company's annual report on Form 10-K for the fiscal year
ended December 31, 1998 (without exhibits);
(iii) the Company's quarterly report on Form 10-Q for the three month
period ended March 31, 1999;
(iv) the notice of annual meeting of stockholders and proxy statement
for the Company's 1999 annual meeting of stockholders held
June 15, 1999; and
(v) all other documents, if any, filed by the Company with the
Securities and Exchange Commission (the "Commission") since
March 31, 1999 pursuant to the reporting requirements of the
Exchange Act.
4.7. No Material Change. As of the date hereof, there has been no material
adverse change in the business, condition (financial or otherwise) or results of
operations of the Company since March 31, 1999.
4.8. Legal Opinion. Prior to and as a condition to the Closing, ▇▇▇▇▇▇,
▇▇▇▇▇ & Bockius LLP, counsel to the Company, will deliver its legal opinion to
the Purchasers as to the valid issuance of the Shares.
4.9. Listing of Common Stock. The Company shall cause the Shares to be
listed on the Nasdaq National Market and maintain the listing of the Shares on
each national securities exchange or automated quotation system, if any, upon
which shares of Common Stock are then listed.
SECTION 5. Representations, Warranties and Covenants of the Purchaser.
(a) The Purchaser acknowledges that the Shares have not been registered
under the Securities Act or any state securities law and may not be offered,
sold, pledged or otherwise transferred (i) in the absence of such registration,
(ii) unless the Company receives an opinion of counsel reasonably acceptable to
it that such offer, sale, pledge or transfer is exempt from any registration and
prospectus delivery requirements of the Securities Act and any applicable state
securities laws or (iii) unless sold pursuant to Rule 144 promulgated under the
Securities Act ("Rule 144") in accordance with the terms of such rule. Except as
otherwise permitted by Section 7.3, each certificate for the Shares issued at
-4-
the Closing or upon direct or indirect transfer of or in substitution thereof
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
The Shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or under any applicable state
securities laws and may not be offered, sold, pledged or transferred (i) in
the absence of such registration, (ii) unless the Company receives an
opinion of counsel, in form, substance and scope reasonably acceptable to
the Company, that such offer, sale, pledge or transfer is exempt from any
registration and prospectus delivery requirements of the Securities Act and
such applicable state securities laws or (iii) unless sold pursuant to Rule
144 promulgated under the Securities Act.
(b) The Purchaser represents and warrants to, and covenants with, the
Company that: (i) the Purchaser, taking into account the personnel and resources
it can practically bring to bear on the purchase of the Shares contemplated
hereby, is knowledgeable, sophisticated and experienced in making, and is
qualified to make, decisions with respect to investments in equity securities
presenting an investment decision like that involved in the purchase of the
Shares, including investments in equity securities issued by development-state
biotechnology companies; (ii) the Purchaser or its counsel, accountants or other
investment advisers have requested, received, reviewed and considered all
information deemed relevant by them in making an informed decision to purchase
the Shares, (iii) the Purchaser is acquiring the Shares in the ordinary course
of its business and for its own account for investment only and with no present
intention of distributing any of the Shares, nor is there any arrangement or
understanding with any other persons regarding the distribution of such Shares;
provided however, that such representation and warranty will not limit the
Purchaser's right to sell Shares pursuant to the Registration Statement or
pursuant to an exemption from the Securities Act of 1933, as amended (the
"Securities Act"); (iv) the Purchaser will not, directly or indirectly, offer,
sell (including sell short), pledge, transfer or otherwise dispose of (or
solicit any offers to buy, purchase or otherwise acquire or take a pledge of)
any of the Shares except in compliance with the Securities Act, and the rules
and regulations promulgated thereunder; (v) the Purchaser has completed or
caused to be completed the Registration Statement Questionnaire and the Stock
Certificate Questionnaire, both attached hereto as Appendix I, for use in
preparation of the Registration Statement and the answers thereto are true,
correct and complete in all material respects as of the date hereof and will be
true, correct and complete in all material respects as of the effective date of
the Registration Statement; (vi) the Purchaser has, in connection with its
decision to purchase the number of Shares set forth in Section 2 above, relied
solely upon the SEC Documents, the draft plan of distribution section of the
Registration Statement, and the representations and warranties of the Company
contained herein, as well as any investigation of the Company completed by the
Purchaser or its counsel, accountants or other investment advisers; and (vii)
the Purchaser is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act.
-5-
(c) The Purchaser agrees not to make any sale of the Shares under the
Registration Statement without effectively causing the prospectus delivery
requirement under the Securities Act to be satisfied, and the Purchaser
acknowledges and agrees that such Shares are not transferable on the books of
the Company unless the certificate submitted to the transfer agent evidencing
the Shares is accompanied by a separate officer's certificate: (i) in the form
of Appendix II hereto, (ii) executed by an officer of, or other authorized
person designated by, the Purchaser, and (iii) to the effect that (A) the Shares
have been sold pursuant to and in accordance with the Registration Statement and
(B) the requirement of delivering a current prospectus has been satisfied. The
Purchaser acknowledges that there may occasionally be times when the Company
must suspend the use of the prospectus forming a part of the Registration
Statement until such time as an amendment to the Registration Statement has been
filed by the Company and declared effective by the Commission, or until such
time as the Company has filed an appropriate report with the Commission pursuant
to the Exchange Act. The Purchaser agrees that it will not sell any Shares
during the period commencing at the time at which the Company gives the
Purchaser notice of the suspension of the use of said prospectus and ending at
the time the Company gives the Purchaser notice that the Purchaser may
thereafter effect sales pursuant to said prospectus. The Company shall only be
able to suspend the use of said prospectus for periods aggregating no more than
thirty business days in any twelve month period. The Purchaser further agrees to
notify promptly the Company of the sale of all of its Shares, and to notify
promptly the Company in writing of any material changes in the information set
forth in the Registration Statement relating to the Purchaser or its plan of
distribution.
(d) The Purchaser further represents and warrants to, and covenants with,
the Company that (i) the Purchaser has full right, power, authority and capacity
to enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement, and (ii) upon the execution and delivery of
this Agreement, this Agreement shall constitute a valid and binding obligation
of the Purchaser enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification and
contribution agreements of the Purchaser in Section 7.4 hereof may be legally
unenforceable.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein shall survive the execution of this Agreement, the delivery
to the Purchaser of the Shares being purchased and the payment therefor.
SECTION 7. Registration of Shares
7.1. Registration Procedures and Expenses.
-6-
(a) The Company shall as soon as practicable, but in no event later than
30 days after the Closing, prepare and file with the Commission a
registration statement on Form S-3 (or if such form is unavailable to
the Company, on such other form deemed appropriate for the
registration of the Common Stock by the Commission) (the "Registration
Statement") to register the Shares for resale by the Purchasers
("Registrable Securities") in non-underwritten, market transactions,
and shall use its best efforts to cause the Registration Statement to
become effective as soon as practicable thereafter. The Company shall,
within three business days before filing such Registration Statement,
provide a draft to the Purchaser and its counsel for review and
comment.
(b) The Company shall promptly prepare and file with the Commission such
amendments and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to keep
such the Registration Statement effective until the first to occur of
(i) such date when either all of the Registrable Securities have been
sold pursuant thereto or, by reason of Rule 144(k) of the Commission
under the Securities Act or any other rule of similar effect, the
Registrable Securities are no longer required to be registered for the
sale thereof by the Purchasers in ordinary market transactions without
imposition of any volume limitations, or (ii) the second anniversary
of the Closing (the "Registration Period");
(c) The Company shall promptly furnish to the Purchaser such number of
copies of prospectuses and preliminary prospectuses in conformity with
the requirements of the Securities Act as the Purchaser may reasonably
request, in order to facilitate the public sale or other disposition
of all or any of the Registrable Securities by the Purchaser;
(d) The Company shall promptly file documents required of the Company for
normal blue sky clearance for the Registrable Securities in New York,
Pennsylvania and such other states specified in writing by the
Purchaser; provided, however, that the Company shall not be required
to (i) qualify to do business or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so
consented, (ii) subject itself to general taxation in any such
jurisdiction, (iii) provide any undertakings that cause the Company
undue burden or expense or (iv) make any change in its charter or
bylaws;
-7-
(e) The Company shall promptly inform the Purchaser when any stop order
has been issued with respect to the Registration Statement and use its
best efforts to promptly cause such stop order to be withdrawn;
(f) In the event the Purchasers, at their sole expense, engage an
underwriter in connection with the resale of the Shares, the Company
will use commercially reasonable efforts to enter into and perform its
obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offer;
(g) The Company shall notify the Purchasers whose shares are registered on
a Registration Statement at any time when a prospectus relating to any
Registrable Securities covered by such Registration Statement or a
Company Registration Statement is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing and promptly file such amendments and supplements as may be
necessary so that, as thereafter delivered to such Purchasers of such
Registrable Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing and use its
best efforts to cause each such amendment and supplement to become
effective;
(h) In the event the Purchasers, at their sole expense, engage an
underwriter in connection with the resale of the Shares, the Company
will use commercially reasonable efforts to furnish at the reasonable
request of the participating Purchasers on the date that such
Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to Section 7.1 (i) an opinion,
dated such date, of the counsel representing the Company, for purposes
of such registration, in form and substance as is customarily given by
company counsel to the underwriters in an underwritten public offering
addressed to the underwriters, if any, and to such Purchasers, and
(ii) a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily
given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters and to
such Purchasers. In addition, if in connection with a Company
Registration Statement (as defined below) any Puchaser shall be
-8-
required to become a party to an underwriting agreement, the Company
will provide the opinions and letters set forth in clauses (i) and
(ii) of the preceding sentence addressed to such Purchasers; and
(i) The Company shall bear all expenses in connection with the procedures
in this Section 7.1 and the procedures in Section 7.2 and the
registration of the Shares pursuant to the Registration Statement and
the Company Registration Statement (as defined in Section 7.2), other
than fees and expenses, if any, of counsel or other advisers to the
Purchaser or the Other Purchasers and any expenses relating to the
sale of the Registrable Securities by the Purchasers (including
without limitation, broker's commissions, discounts or fees of any
nature and transfer taxes or charges of any nature).
The Company understands that the Purchaser disclaims being an underwriter,
but the Purchaser being deemed an underwriter shall not relieve the Company of
any obligations it has hereunder. A questionnaire related to the Registration
Statement to be completed by the Purchaser is attached as Appendix I to this
Agreement.
7.2 Piggy-back Registration Rights. If at any time during the period
beginning six months from the date hereof and prior to the expiration of the
Registration Period, the Company shall determine to file with the Commission a
registration statement relating to an offering for its own account under the
1933 Act of any of its equity securities (other than on Form S-4 or Form S-8 or
their then equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee benefit plans) (a
"Company Registration Statement"), the Company shall send to each Purchaser that
(together with affiliates thereof) holds at least 200,000 shares written notice
of such determination and, if within fifteen (15) days after the effective date
of such notice, such Purchaser shall so request in writing, the Company shall
include in such Company Registration Statement all or any Registrable Securities
such Purchaser requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Company Registration Statement
because, in such underwriter(s)' judgment, marketing or other factors dictate
such limitation is necessary to facilitate public distribution, then the Company
shall be obligated to include in such Company Registration Statement only such
limited portion of the Registrable Securities, if any, with respect to which
such Purchaser has requested inclusion hereunder as the underwriter shall
permit. Any exclusion of Registrable Securities shall be made pro rata among the
Purchasers seeking to include Registrable Securities in proportion to the number
of Registrable Securities sought to be included by such Purchasers; provided,
however, that any exclusion of Registrable Securities shall be made pro rata
with holders of other securities having the right to include such securities in
-9-
the Company Registration Statement other than holders of securities entitled to
inclusion of their securities in such Company Registration Statement by reason
of demand registration rights. If an offering in connection with which an
Purchaser is entitled to registration under this Section 7.2 is an underwritten
offering, then each Purchaser whose Registrable Securities are included in such
Company Registration Statement shall, unless otherwise agreed by the Company,
offer and sell such Registrable Securities in an underwritten offering using the
same underwriter or underwriters and, subject to the provisions of this
Agreement, on the same terms and conditions as other shares of Common Stock
included in such underwritten offering. All of the obligations of the Purchasers
pursuant to this Agreement shall be applicable to any Company Registration
Statement filed pursuant to this Section 7.2. After the date hereof and prior to
the expiration of the Registration Period, the Company shall not, without the
consent of a majority of the holders of Registrable Securities, grant to any
holder of securities of the Company rights similar to those granted to the
Purchasers pursuant to this Section 7.2 which are not in parity with or junior
to the rights granted to the Purchasers pursuant to this Section 7.2.
7.3. Transfer of Shares. The Purchaser agrees that it will not effect any
disposition of the Shares except as contemplated in the Registration Statement
or Company Registration Statement or as otherwise in compliance with applicable
securities laws.
7.4. Indemnification. For the purpose of this Section 7.4.:
(a) the term "Selling Stockholder" shall include the Purchaser, its
officers, directors, and/or trustees and any affiliate or controlling
person of such Purchaser or any permitted assign hereunder;
(b) the term "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1 or the Company
Registration Statement referred to in Section 7.2; and
(c) the term "untrue statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state
in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling Stockholder
from and against any losses, claims, damages or liabilities to which such
Selling Stockholder may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any breach of
the representations set forth in Section 4 hereof by the Company, or any untrue
statement of a material fact contained in the Registration Statement, or arise
out of any failure by the Company to fulfill any agreement, covenant or
undertaking contained in this Agreement or included in the Registration
Statement, and the Company will reimburse such Selling Stockholder for any
reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim; provided,
however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, (i)
-10-
an untrue statement made in the Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for use in preparation of the Registration
Statement (which shall be deemed to include the information set forth in the
Registration Statement Questionnaire and in the plan of distribution section of
the prospectus), (ii) the failure of such Selling Stockholder to comply with the
covenants and agreements contained herein respecting transfer or sale of the
Shares, or (iii) any statement or omission in any Prospectus that is corrected
in any subsequent Prospectus that was delivered to the Purchaser prior to the
pertinent sale or sales by the Purchaser. The Company shall also not be liable
for amounts paid in settlement of any loss, claim, damage or liability if such
settlement if effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld.
The Purchaser agrees to indemnify and hold harmless the Company (and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs the Registration Statement
and each director of the Company) from and against any losses, claims, damages
or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any breach of
the representations set forth in Section 5 hereof by the Purchaser, or any
failure by the Purchaser to comply with the covenants and agreements contained
herein transfer or sale of the Shares, or any untrue statement of a material
fact contained in the Registration Statement if such untrue statement was made
in reliance upon and in conformity with written information furnished by or on
behalf of the Purchaser specifically for use in the Registration Statement. The
Purchaser will reimburse the Company (or such officer, director or controlling
person), as the case may be, for any legal or other expenses reasonably incurred
in investigating, defending or preparing to defend any such action, proceeding
or claim. The Purchaser agrees that the information regarding the Purchaser or
its officers, directors and affiliates and their intended plan of distribution
of the Shares set forth in the Registration Statement questionnaire, the form of
which is attached as Appendix 1, or included from time to time in the
Registration Statement (including without limitation the plan of distribution
section of the Registration Statement) shall be deemed to be written information
furnished to the Company by or on behalf of the Purchaser specifically for use
in preparation of the Registration Statement. The foregoing indemnification
shall be limited in amount as to each purchaser to the Aggregate Purchase Price
paid by such purchaser hereunder.
Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 7.4, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action; provided, however, that any failure by an
indemnified person to notify an indemnifying person shall not relieve the
indemnifying person from its obligations hereunder except to the extent that the
indemnifying person is prejudiced thereby. Subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified person
and such indemnifying person shall have been notified thereof, such indemnifying
person shall be entitled to participate therein, and, to the extent it shall
-11-
wish, to assume and control the defense thereof, with counsel reasonably
satisfactory to such indemnified person. After notice from the indemnifying
person to such indemnified person of its election to assume the defense thereof,
such indemnifying person shall not be liable to such indemnified person for any
legal expenses subsequently incurred by such indemnified person in connection
with the defense thereof; provided, however, that if there exists a conflict of
interest that would make it inappropriate, in the opinion of counsel to the
indemnifying person, for the same counsel to represent both the indemnified
person and such indemnifying person or any affiliate or associate thereof, the
indemnified person shall be entitled to retain its own counsel at the expense of
such indemnifying person; provided further, however, that no indemnifying person
shall be responsible for the fees and expenses of more than one separate counsel
for all indemnified parties hereunder and under the other Agreements.
If the indemnification provided for in this Section 7.4 from the
indemnifying person would be applicable by its terms but is otherwise
unavailable, as determined by a court of applicable jurisdiction, to an
indemnified person hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then the indemnifying person, in
lieu of indemnifying such indemnified person, shall contribute to the amount
paid or payable by such indemnified person as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the indemnifying person and indemnified persons in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying person and indemnified persons shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact, has been
made by, or relates to information supplied by, such indemnifying person or
indemnified persons, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in this Section 7.4, any reasonable legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7.4, no Purchaser shall be
required to contribute any amount in excess of the dollar amount of the proceeds
received by such Purchaser upon the sale of the Shares, giving rise to such
-12-
contribution obligation. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
7.5. Termination of Conditions and Obligations. The conditions imposed by
Section 5 or this Section 7 upon the transferability of the Shares shall cease
and terminate as to any particular number of the Shares when such Shares shall
have been effectively registered under the Securities Act and sold or otherwise
disposed of in accordance with the intended method of disposition set forth in
the Registration Statement, or at such time as an opinion of counsel
satisfactory to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.
7.6. Continued Availability of Information. So long as the Registration
Statement is effective covering the resale of Shares owned by the Purchaser, the
Company will furnish to the Purchaser:
(a) as soon as practicable after available (but in the case of the
Company's Annual Report to Stockholders, within 120 days after the end
of each fiscal year of the Company), one copy of (i) its Annual Report
to Stockholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting
principles by a firm of certified public accountants), (ii) if not
included in substance in the Annual Report to Stockholders, its Annual
Report on Form 10-K, (iii) any quarterly reports to stockholders, and
if not included in substance in its quarterly reports to stockholders,
its quarterly reports on Form 10-Q, and (iv) a full copy of the
Registration Statement (the foregoing, in each case, excluding
exhibits);
(b) upon the reasonable request of the Purchaser, all exhibits excluded by
the parenthetical to subparagraph (a)(iv) of this Section 7.6 and all
other information that is made available to shareholders; and
(c) upon the reasonable request of the Purchaser, an adequate number of
copies of the prospectuses to supply to any other party requiring such
prospectuses;
and the Company, upon the reasonable request of the Purchaser, will meet with
the Purchaser or a representative thereof at the Company's headquarters to
discuss all information relevant for disclosure in the Registration Statement
and will otherwise cooperate with any Purchaser conducting an investigation for
the purpose of reducing or eliminating such Purchaser's exposure to liability
under the Securities Act, including the reasonable production at the Company's
headquarters of non-confidential information (and, upon execution of a
confidentiality agreement satisfactory to the Company, confidential
information).
-13-
7.7 Reports under Exchange Act. With a view to making available to the
Purchasers the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the Commission that may at any time permit a
Purchaser to sell Registrable Securities to the public without registration, and
with a view to making it possible for any such Purchaser to register the
Registrable Securities pursuant to a registration on Form S-3, the Company
agrees to:
(a) make and keep available public information, as understood and defined
in Rule 144, at all times;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Exchange act; and
(c) furnish to a Purchaser owning any Registrable Securities upon
reasonable request (i) a written statement by the Company that is has
complied with the reporting requirements of Rule 144, the Securities
Act and the Exchange act, or that it qualifies as a registrant whose
Registrable Securities may be resold pursuant to Form S-3 (at any time
after it so qualified, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be
reasonably required in availing any Purchaser of Registrable
Securities of any rule or regulation of the Commission which permits
the selling of any such Registrable Securities without registration or
pursuant to such form.
SECTION 8. Broker's Fees. Each of the parties hereto hereby represents
that, on the basis of any actions and agreements by it, there are no brokers or
finders entitled to compensation in connection with the sale of the Shares to
the Purchaser, except for the Company's obligations to Paramount Capital,
Incorporated which has acted as finder for the Company.
SECTION 9. Cooperation with Resale Efforts. Subject to applicable law,
after the Registration Statement pursuant to Section 7.1 is declared effective
by the Commission, to the extent reasonably requested by a Purchaser that
(together with affiliates thereof) holds at least 200,000 Shares, the Company
will, at its own expense, assist such Purchaser with the resale of the Shares
during the Registration Period, including, without limitation, the preparation
of reasonably appropriate promotional materials and the reasonable participation
of executive officers of the Company in "road shows" and other selling efforts.
-14-
SECTION 10. Expenses. At the Closing, each party hereto shall bear its own
expenses; provided, however, that the Company shall pay the fees, expenses and
disbursements of counsel to MHR Fund Management LLC ("MHR") up to an aggregate
maximum of $15,000.
SECTION 11. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be sent by a nationally
recognized overnight express courier postage prepaid, and shall be deemed given
one day after being so sent and shall be delivered as addressed as follows:
(a) if to the Company, to:
Neose Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Chairman and Chief
Executive Officer
with a copy so mailed to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
or to such other person at such other place as the
Company shall designate to the Purchaser in
writing; and
(b) if to the Purchaser, at its address as set forth at
the end of this Agreement, or at such other address
or addresses as may have been furnished to the
Company in writing.
SECTION 12. Entire Agreement; Changes. This Agreement sets forth the entire
agreement of the parties and may not be modified or amended except pursuant to
an instrument in writing signed by the Company and the Purchaser.
SECTION 13. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 14. Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
-15-
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
SECTION 15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA
WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS.
SECTION 16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
SECTION 17. Assignment. Prior to the Registration Statement being declared
effective by the Commission, the Purchaser (or any permitted assignee) may
assign its rights under this Agreement to any subsequent holder of any or all of
the Shares who has purchased at least 50,000 Shares from such Purchaser (or
permitted assignee), provided that the Company shall have the right to require
any such holder of any or all of the Shares to execute a counterpart of this
Agreement and agree to be bound by the provisions of this Agreement as a
condition to such holder's claim to any rights hereunder.
SECTION 18. Publicity.
(a) Without the prior consent of the other party, neither party shall
originate any written, oral or electronic publicity, news release or other
public announcement or document (including without limitation any filing made
with the Commission) relating to this Agreement or the existence of any
arrangement between the parties, except where such publicity, news release or
other public announcement or document is required by law, provided that, in such
event, the Company will provide the Purchaser with a draft of such legally
required publicity, news release or other public announcement or document and
consult with the Purchaser in connection therewith prior to its release.
(b) Without limiting the generality of the foregoing, without the prior
consent of the other party, the Company shall not originate any written, oral or
electronic publicity, news release or other public announcement or document
(including without limitation any filing made with the Commission) mentioning
the name of Purchaser or any of its affiliates, or any of their respective
principals, partners, employees, investors, stockholders or members, except to
the extent required by law, provided that, in such event, the Company will
provide the Purchaser with a draft of such legally required publicity, news
release or other public announcement or document and consult with the Purchaser
in connection therewith prior to its release.
(c) This Section shall survive the termination or expiration of this
Agreement.
-16-
SECTION 19. Board Representation. The Company shall use its best efforts to
cause its Board of Directors to appoint the nominee of MHR to the Board of
Directors and to nominate such nominee for the Board of Directors at each of the
Company's stockholders' meetings in which directors are elected for so long as
MHR and its affiliates own at least 200,000 shares of Common Stock.
-17-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
NEOSE TECHNOLOGIES, INC.
By
-------------------------------------
P. ▇▇▇▇▇▇▇▇ ▇▇▇▇
President and Chief Financial Officer
Print or Type:
Name of Purchaser
(individual or institution):
----------------------------------------
Name of individual
representing Purchaser
(if an institution):
----------------------------------------
Title of individual representing
Purchaser (if an institution):
----------------------------------------
Signature by:
Individual Purchaser or
individual representing
Purchaser:
----------------------------------------
Address:
--------------------------------
Telephone:
------------------------------
Fax:
------------------------------------
E-Mail:
---------------------------------
-18-
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Purchase Agreement which follows)
A. Complete the following items on BOTH Purchase Agreements:
1. Page 13 - Signature:
(i) Name of Purchaser (individual or institution)
(ii) Name of individual representing Purchaser (if an
institution)
(iii) Title of individual representing Purchaser (if an
institution)
(iv) Signature of individual Purchaser or individual
representing Purchaser
2. Appendix I - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire.
Appendix I - Registration Statement Questionnaire:
Provide the information requested by the Registration
Statement Questionnaire.
3. Return BOTH properly completed and signed Purchase Agreements
including the properly completed Appendix I to:
Neose Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: A. ▇▇▇▇▇ ▇▇▇▇▇
B. Instructions regarding the transfer of funds for the purchase of Shares
will be sent to the Purchaser at a later date.
C. Upon the resale of the Shares by the Purchaser after the Registration
Statement covering the Shares is effective, as described in the
Purchase Agreement, the Purchaser:
(i) must deliver a current prospectus of the Company to
the buyer (prospectuses must be obtained from the
Company at the Purchaser's request); and
(ii) must send a letter in the form of Appendix II to the
Company to permit the Shares to transfer.
Appendix I
(one of two)
NEOSE TECHNOLOGIES, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Please provide us with the following information:
1. The exact name that your Shares are to be registered
in (this is the name that will appear on your stock
certificate(s)). You may use a nominee name if
appropriate: ______________________
2. The relationship between the Purchaser of
the Shares and the registered holder listed
in response to item 1 above: ______________________
3. The mailing address of the registered holder
listed in response to item 1 above: ______________________
______________________
4. The social security number or tax identification
number of the registered holder listed in
response to item 1 above: ______________________
Appendix I
(two of two)
NEOSE TECHNOLOGIES, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Stockholder" section of the Registration
Statement, please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the number of shares that you or your organization will
own beneficially or of record immediately after Closing, including those Shares
purchased by you or your organization pursuant to this Purchase Agreement and
those shares purchased by you or your organization through other transactions
(indicating whether you have sole or shared voting or dispositive power over
such shares as determined under applicable rules of the Securities and Exchange
Commission):
3. Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its affiliates, or
with Paramount Capital, Inc., other than as disclosed in the Company's proxy
statements for its 1997 or 1998 annual meeting of stockholders?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
APPENDIX II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly authorized by]
___________________________________________________ [fill in official name of
individual or institution] hereby certifies that he/she [said institution] is
the Purchaser of the shares evidenced by the attached certificate, and as such,
sold such shares on _____________ [date] pursuant to and in accordance with
registration statement number ____________________ [fill in the number of or
otherwise identify registration statement] and the requirement of delivering a
current prospectus by the Company has been complied with in connection with
such sale.
Print or Type:
Name of Purchaser
(individual or
institution): ______________________
Name of individual
representing
Purchaser (if an
institution) ______________________
Title of individual
representing
Purchaser (if an
institution): ______________________
Signature by:
Individual purchaser
or individual repre-
senting purchaser: ______________________