EXHIBIT 10.34
SECURITIES PURCHASE AGREEMENT
dated as of September 24, 2004,
by and among
MYOGEN, INC.
and
ENTITIES LISTED ON APPENDIX A (each a "Purchaser").
Table of Contents
Page
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SECTION 1. PURCHASE AND SALE OF SECURITIES.................................... 1
SECTION 2. THE CLOSING........................................................ 1
2.1. The Closing........................................................ 1
2.2. Conditions to Closing.............................................. 1
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY........... 3
3.1. No Material Misstatement........................................... 3
3.2. Incorporated Documents............................................. 3
3.3. Financial Statements............................................... 4
3.4. No Material Adverse Change......................................... 4
3.5. Books and Records; Internal Controls............................... 4
3.6. Independent Accountants............................................ 5
3.7. Organization; Good Standing........................................ 5
3.8. Legal Proceedings.................................................. 5
3.9. Brokers or Finders................................................. 5
3.10. Licenses and Permits............................................... 5
3.11. Intellectual Property.............................................. 6
3.12. Real and Personal Property......................................... 6
3.13. Material Contracts................................................. 6
3.14. No Violation or Default............................................ 7
3.15. No Conflicts....................................................... 7
3.16. No Consents........................................................ 7
3.17. Due Authorization and Delivery..................................... 7
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3.18. The Securities and the Warrant Shares.............................. 8
3.19. Capitalization..................................................... 8
3.20. Lock-Ups........................................................... 9
3.21. Employees.......................................................... 9
3.22. Related Party Transactions......................................... 9
3.23. Market Stabilization............................................... 9
3.24. Taxes.............................................................. 9
3.25. Compliance; Listing................................................ 9
3.26. Insurance.......................................................... 10
3.27. Environmental Laws................................................. 10
3.28. Investment Company................................................. 10
3.29. Solicitation; Other Issuances of Securities........................ 10
3.30. No Restrictions on Subsidiaries.................................... 11
3.31. No Registration Rights............................................. 11
3.32. Forward-Looking Statements......................................... 11
3.33. Statistical and Market Data........................................ 11
3.34. Compliance in Clinical Trials...................................... 11
3.35. SEC Filing......................................................... 12
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH PURCHASER........ 12
4.1. Organization....................................................... 12
4.2. Authorization, Enforcement, and Validity........................... 12
4.3. Consents and Approvals; No Violation............................... 12
4.4. Investment Experience.............................................. 13
4.5. Investment Intent and Limitation on Dispositions................... 13
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4.6. Information and Risk............................................... 13
4.7. Disclosures to the Company......................................... 13
4.8. Nature of Purchasers............................................... 14
4.9. Ownership.......................................................... 14
4.10. Brokers or Finders................................................. 14
4.11. Acknowledgement.................................................... 14
4.12. No Short Sales..................................................... 14
SECTION 5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES......................... 14
SECTION 6. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT..... 15
6.1. Registration Procedures and Expenses............................... 15
6.2. Restrictions on Transferability.................................... 18
6.3. Termination of Conditions and Obligations.......................... 19
SECTION 7. LEGENDS............................................................ 19
SECTION 8. INDEMNIFICATION.................................................... 20
SECTION 9. NOTICES............................................................ 22
SECTION 10. MISCELLANEOUS...................................................... 23
10.1. Amendments......................................................... 23
10.2. Headings........................................................... 23
10.3. Severability....................................................... 24
10.4. Governing Law and Forum............................................ 24
10.5. Counterparts....................................................... 24
10.6. Entire Agreement................................................... 24
10.7. Independent Nature of Purchasers' Obligations and Rights........... 24
10.8. Expenses........................................................... 24
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Appendix A Schedule of Purchasers
Appendix B Form of Warrant
Appendix C Form of Lock-Up Agreement
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of
the 24th day of September 2004 by and among Myogen, Inc. (the "Company"), a
Delaware corporation, with its principal offices at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and the entities listed on Appendix A (each, a
"Purchaser").
IN CONSIDERATION of the mutual covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Purchasers
hereby agree as follows:
Section 1. Purchase and Sale of Securities.
Subject to the terms and conditions of this Agreement, on the
Closing Date (as defined herein), each Purchaser agrees to purchase severally
and not jointly and the Company agrees to issue and sell to such Purchaser
severally and not jointly (i) that number of whole shares of the Company's
common stock, $0.001 par value, (the "Common Stock") set forth opposite such
Purchaser's name on Appendix A (the "Shares") and (ii) warrants in the form
attached hereto as Appendix B (the "Warrants", together with the Shares, the
"Securities") to purchase shares of Common Stock as set forth opposite such
Purchaser's name on Appendix A, at a purchase price that is equal to $6.525 per
Security, of which $0.025 is allocated as consideration for the Warrants.
Section 2. The Closing.
2.1. The Closing.
(a) The purchase and sale of the Securities upon the terms and
conditions hereof will take place at a closing (the "Closing") to be held at the
offices of ▇▇▇▇▇▇ Godward LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ on the date hereof at such time as shall be agreed upon by the Company
and the Purchasers (the "Closing Date").
(b) The Company shall provide wire transfer instructions for the
payment of the Purchase Price (as defined below) prior to the Closing.
(c) At the Closing, the Company and each Purchaser shall satisfy
all of the conditions set forth in Sections 2.2(b) and (a), respectively.
2.2. Conditions to Closing.
(a) The Company's obligation to complete the purchase and sale of
the Securities and deliver such stock certificate(s) and Warrants to each
Purchaser is subject to:
(i) receipt by the Company of immediately available funds in the
full amount of the purchase price for the Securities being purchased
hereunder as set forth opposite
such Purchaser's name on Appendix A (the "Purchase Price"), in accordance
with the wire transfer instructions delivered by the Company pursuant to
Section 2.1(b); and
(ii) the accuracy in all material respects of the representations
and warranties made by such Purchaser in Section 4 below as of the Closing
Date and the fulfillment in all material respects of those undertakings of
such Purchaser in this Agreement to be fulfilled on or prior to the
Closing Date.
(b) Each Purchaser's obligation to complete the purchase and sale
of the Securities is subject to:
(i) the accuracy in all material respects of the representations
and warranties made by the Company in Section 3 below as of the Closing
Date and the fulfillment in all material respects of those undertakings of
the Company in this Agreement to be fulfilled on or prior to the Closing
Date;
(ii) confirmation that the notification to list the Shares and the
shares of Common Stock underlying the Warrants (the "Warrant Shares") on
the Nasdaq National Market has been filed;
(iii) delivery by the Company to such Purchaser (as defined herein)
of an opinion, dated as of the Closing Date, from ▇▇▇▇▇▇ Godward LLP,
counsel to the Company, in a form reasonably acceptable to the Purchasers;
(iv) delivery by the Company to such Purchaser of an opinion, dated
as of the Closing Date, from Fulbright & ▇▇▇▇▇▇▇▇, intellectual property
counsel to the Company, in a form reasonably acceptable to the Purchasers;
(v) delivery by the Company to such Purchaser of an opinion, dated
as of the Closing Date, from ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, regulatory counsel to the
Company, in a form reasonably acceptable to the Purchasers;
(vi) delivery by the Company to such Purchaser of an opinion, dated
as of the Closing Date, from ▇▇▇▇▇-▇▇▇▇▇▇ v. Danwitz Privat, counsel to
Myogen GmbH, a wholly owned subsidiary of the Company (the "Subsidiary"),
in a form reasonably acceptable to Purchasers;
(vii) delivery by PricewaterhouseCoopers LLP to the Placement Agents
of a letter, in form and substance satisfactory to the Placement Agents,
confirming that PricewaterhouseCoopers LLP are an independent registered
public accounting firm within the meaning of the Securities Act (as
defined herein) and the Exchange Act (as defined herein) and the
applicable rules and regulations thereunder, containing statements and
information of the type ordinarily included in an accountant's "comfort
letters" to placement agents, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletins), with respect to the audited
and unaudited financial statements and certain financial information
contained in the Memorandum and the SEC Documents (each as defined below);
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(viii) the Company's delivery to its transfer agent of irrevocable
instructions to issue to such Purchaser or in such nominee name(s) as
designated by such Purchaser in writing such number of Shares set forth
opposite such Purchaser's name on Appendix A or, if requested by the
Purchaser, one or more certificates representing such Shares;
(ix) except with respect to JPMorgan Partners (SBIC), LLC and
JPMorgan Securities Inc., the "lock-up" agreements, each substantially in
the form of Appendix B hereto, between the Placement Agents and officers,
directors and shareholders owning 5% or more of Common Stock of the
Company relating to sales and certain other dispositions of shares of
Common Stock or certain other securities, delivered to the Placement
Agents on or before the date hereof, being in full force and effect on the
date hereof; and
(x) the aggregate Purchase Price to be paid by the Purchasers for
the Securities at the Closing shall be greater than or equal to
$59,999,985.00.
Section 3. Representations, Warranties and Covenants of the Company.
Except as set forth on the corresponding sections of the Company's
disclosure schedule delivered herewith (the "Schedule of Exceptions"), as
otherwise described in the SEC Documents, or as specifically contemplated by
this Agreement, the Company hereby represents and warrants to, and covenants
with, each Purchaser as of the Closing Date (or such other date specified below)
as follows:
3.1. No Material Misstatement. The Private Placement Memorandum dated
September 20, 2004, relating to the offering of the Securities, including all
exhibits, documents incorporated by reference and annexes thereto, as the same
may be amended or supplemented, (the "Memorandum"), did not, as of its date,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading.
3.2. Incorporated Documents.
(a) The documents incorporated by reference in the Memorandum, at
the time they became effective or were filed with the Securities and Exchange
Commission (the "Commission"), as the case may be, complied in all material
respects with the requirements of the Securities Act of 1933, as amended (the
"Securities Act") or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents, at the time filed with the Commission,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) Since October 29, 2003, the Company has filed all documents
required to be filed by it prior to the date hereof with the Commission pursuant
to the reporting requirements of the Exchange Act (the "SEC Documents").
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3.3. Financial Statements.
(a) The summary financial data included in the Memorandum present
fairly the information shown therein as at the respective dates and for the
respective periods specified and have been presented on a basis consistent with
the consolidated financial statements set forth in the SEC Documents.
(b) As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and published rules and
regulations of the Commission with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except as may be otherwise
indicated in such financial statements or the notes thereto) and fairly present
in all material respects the financial position of the Company and its
Subsidiary as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
3.4. No Material Adverse Change. Since the date of the most recent
financial statements of the Company included in the Memorandum, (i) there has
not been any change in the capital stock or long-term debt of the Company or its
Subsidiary, or any dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company on any class of capital stock, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties, management, financial
position, stockholders' equity, results of operations or prospects of the
Company and its Subsidiary taken as a whole; and (ii) neither the Company nor
its Subsidiary has sustained any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in each case in (i) and (ii) as otherwise disclosed in the Memorandum.
3.5. Books and Records; Internal Controls. The books, records and
accounts of the Company and its Subsidiary accurately and fairly reflect, in
reasonable detail, the transactions in, and dispositions of, the assets of, and
the results of operations of, the Company and its Subsidiary. The chief
executive officer and the chief financial officer of the Company have made all
certifications required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act") and any related rules and regulations promulgated by the Commission, and
the statements contained in any such certification are complete and correct; the
Company maintains "disclosure controls and procedures" (as defined in Rule
13a-15e and Rule 15d-15e under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to the
Company, including its Subsidiary, is made known to the Company's Chief
Executive Officer and its Chief Financial Officer by others within those
entities; the Company's auditors and the Audit Committee of the Board of
Directors have been advised of: (1) any significant deficiencies in the design
or operation of internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data; and (2) any
fraud, whether or not material, that involves management or other employees who
have a role in the Company's internal controls; any material weaknesses in
internal controls have been identified for the Company's auditors; and since the
date of the most recent evaluation of such disclosure controls and
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procedures, there have been no significant changes in internal controls or in
other factors that could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and weaknesses; the
Company is otherwise in compliance in all material respects with all applicable
effective provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
3.6. Independent Accountants. PricewaterhouseCoopers LLP, whose reports
are included as a part of the Memorandum, are and, during the periods covered by
their reports, were an independent public accounting firm as required by the
Securities Act, and the rules and regulations of the Commission thereunder.
3.7. Organization; Good Standing. The Company and its Subsidiary have
been duly organized and are validly existing and in good standing under the laws
of their respective jurisdictions of organization, are duly qualified to do
business and are in good standing in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority necessary to own
or hold their respective properties and to conduct the businesses in which they
are engaged, except where the failure to be so qualified or have such power or
authority would not, individually or in the aggregate, have a material adverse
effect on the business, properties, financial position, or results of operations
of the Company and its Subsidiary taken as a whole (a "Material Adverse
Effect"). Myogen GmbH is the only subsidiary of the Company.
3.8. Legal Proceedings. Except as set forth in the SEC Documents, there
are no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or its Subsidiary is or may be a party
or to which any property of the Company or its Subsidiary is or may be the
subject that, individually or in the aggregate, if determined adversely to the
Company or its Subsidiary, could reasonably be expected to have a Material
Adverse Effect or materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; no such investigations, actions,
suits or proceedings are to the knowledge of the Company threatened or
contemplated by any governmental or regulatory authority or threatened by
others; and (i) there are no current or pending legal, governmental or
regulatory actions, suits or proceedings that are required under the Exchange
Act to be described in the SEC Documents that are not so described and (ii)
there are no statutes, regulations or contracts or other documents that are
required under the Securities Act to be filed as exhibits to the SEC Documents
or described in the SEC Documents that are not so filed or described.
3.9. Brokers or Finders. No broker, investment banker, financial advisor
or other individual, corporation, general or limited partnership, limited
liability company, firm, joint venture, association, enterprise, joint
securities company, trust, unincorporated organization or other entity (each a
"Person"), other than CIBC World Markets Corp. and Lazard Freres & Co. LLC (the
"Placement Agents"), the fees and expenses of which will be paid by the Company,
is entitled to any broker's, finder's, financial advisor's or other similar fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
3.10. Licenses and Permits. The Company and its Subsidiary possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities or any
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other person or entity that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses as described
in the Memorandum, except where the failure to possess or make the same would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; and except as described in the Memorandum, neither the Company
nor its Subsidiary has received notice of any revocation or modification of any
such license, certificate, permit or authorization.
3.11. Intellectual Property. To best of its knowledge after due inquiry,
the Company and its Subsidiary own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service ▇▇▇▇ registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems, processes or procedures)
(collectively, the "Intellectual Property") necessary for the conduct of their
respective businesses; and the conduct of their respective businesses will not,
to the knowledge of the Company, conflict in any material respect with any such
rights of others, and the Company and its Subsidiary have not received any
notice of any claim of infringement or conflict with any such rights of others.
Neither the Company nor its Subsidiary has received any notice of infringement
of or conflict with, and neither the Company nor its Subsidiary has actual
knowledge of any infringement of or conflict with, asserted rights of others
with respect to its Intellectual Property which could reasonably be expected to
result in a Material Adverse Effect; the discoveries, inventions, products or
processes of the Company and its Subsidiary referred to in the Memorandum do
not, to the knowledge of the Company or its Subsidiary, infringe or conflict
with any right or patent of any third party, or any discovery, invention,
product or process which is the subject of a patent application filed by any
third party. Further, except as described in the Memorandum or the SEC Documents
or exhibits thereto, or as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect, neither the Company nor its
Subsidiary is obligated to pay a royalty, grant a license or provide other
consideration to any third party in connection with its patents, patent rights,
licenses, inventions, trademarks, service marks, trade names, copyrights and
know-how; and no third party, including any academic or governmental
organization, possesses rights to the Intellectual Property which, if exercised,
could enable such third party to develop products competitive with the business
of the Company or its Subsidiary as currently being conducted.
3.12. Real and Personal Property. The Company and its Subsidiary have good
and marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real and personal property that are material to the
respective businesses of the Company and its Subsidiary, in each case free and
clear of all liens, encumbrances, claims and defects and imperfections of title
except those that (i) do not materially interfere with the use made and proposed
to be made of such property by the Company and its Subsidiary or (ii) would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
3.13. Material Contracts. All material documents, contracts or other
agreements required to be filed as exhibits to the SEC Documents pursuant to
Item 601(b)(10) of Securities and Exchange Commission Regulation S-K are
described in the SEC Documents or are included in the exhibits to the SEC
Documents. Each description of such contracts, documents or other agreements in
the SEC Documents is not inconsistent with the terms of the underlying contract,
document or other agreement and, except as set forth in the SEC Documents, is in
full force and effect and is valid and enforceable by and against the Company or
its Subsidiary, as the case may
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be, in accordance with its terms. Neither the Company or its Subsidiary nor, to
the Company's knowledge, any other party thereto is in breach of or default
under any such agreement, which breach or default would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect. The
Company has not received any written notice regarding the termination of any
such agreements.
3.14. No Violation or Default. Neither the Company nor its Subsidiary is
(i) in violation of its charter or by-laws or similar organizational documents;
(ii) to the knowledge of the Company, in default, and, no event has occurred
that, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or its Subsidiary is a party or by which the
Company or its Subsidiary is bound or to which any of the property or assets of
the Company or its Subsidiary is subject; or (iii) to the knowledge of the
Company, in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
3.15. No Conflicts. The execution, delivery and performance by the Company
of this Agreement, the issuance and sale of the Securities, the issuance of the
Warrant Shares and the consummation of the transactions contemplated by this
Agreement will not (i) conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or its Subsidiary pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or its Subsidiary is a party or by which the Company or its Subsidiary
is bound or to which any of the property or assets of the Company or its
Subsidiary is subject, (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of the Company or its
Subsidiary or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority binding upon the Company, except, in the case of clauses
(i) and (iii) above, for any such default or violation that would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
3.16. No Consents. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of this Agreement, the issuance and sale of the Securities, the
issuance of the Warrant Shares and the consummation of the transactions
contemplated by this Agreement, except for the registration of the Shares and
Warrant Shares under the Securities Act pursuant to Section 6 hereof, such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required under applicable state securities laws in connection with the
purchase and distribution of the Securities by the Purchasers, the filing of a
Form D pursuant to Securities and Exchange Commission Regulation D, and any
required filings or notifications regarding the issuance or listing of
additional shares with the Nasdaq National Market.
3.17. Due Authorization and Delivery. All necessary corporate action has
been duly and validly taken by the Company to authorize the execution, delivery
and performance of this
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Agreement, the Warrants, the issuance and sale of the Securities and the
reservation for issuance, and issuance, of the Warrant Shares by the Company.
Each of this Agreement and the Warrants has been duly and validly authorized,
executed and delivered by the Company and, each of this Agreement and the
Warrants constitute and will constitute legal, valid and binding obligations of
the Company enforceable against the Company in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles and except as
rights to indemnity may be limited by state or federal securities laws or public
policy underlying such laws.
3.18. The Securities and the Warrant Shares. The Securities to be issued
and sold by the Company hereunder and the Warrant Shares have been duly
authorized by the Company. The Shares, when issued and delivered and paid for as
provided herein, will be duly and validly issued and will be fully paid and
nonassessable. The Warrant Shares have been duly authorized and reserved for
issuance and, upon exercise of the Warrants in accordance with their terms, the
Warrant Shares will be duly and validly issued and will be fully paid and
nonassessable. The Securities are not inconsistent with the descriptions thereof
in the Memorandum; and the issuance of the Securities and the Warrant Shares are
not subject to any preemptive or similar rights.
3.19. Capitalization. The Company has an authorized capitalization as set
forth in the SEC Documents; all the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable and are not subject to any pre-emptive or similar rights; except
as described in or expressly contemplated by the Memorandum or the SEC
Documents, as of June 30, 2004 there were no outstanding rights (including,
without limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital stock or
other equity interest in the Company or its Subsidiary, or any contract,
commitment, agreement, understanding or arrangement of any kind obligating the
Company to issue any capital stock of the Company or its Subsidiary, any such
convertible or exchangeable securities or any such rights, warrants or options;
since June 30, 2004 there has been no material change in the capital stock of
the Company except for subsequent issuances, if any, pursuant to this Agreement
or pursuant to reservations, agreements or employee benefit plans, including
employee stock or option incentive plans, referred to in the Memorandum or
pursuant to the exercise of convertible securities or options referred to in the
Memorandum; the capital stock of the Company as of June 30, 2004 is not
inconsistent with the description thereof contained in the Memorandum; and all
the outstanding shares of capital stock or other equity interests of the
Subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable (except for directors' qualifying shares and
except as otherwise described in the Memorandum) and are owned directly or
indirectly by the Company, free and clear of any lien, charge, encumbrance,
security interest, restriction on voting or transfer or any other claim of any
third party. The issuance and sale of the Shares will not obligate the Company
to issue shares of Common Stock or other securities to any person and will not
result in a right of any current holder of Company securities to adjust the
exercise, conversion, exchange or reset price under such securities. No further
approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the Shares which has
not already been obtained. Subject to the filing of the notification with the
Nasdaq National Market as contemplated in Section 3.25(b), the issuance and sale
of the Shares
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under this Agreement does not contravene the rules and regulations of the Nasdaq
National Market, and, in furtherance of the foregoing sentence, no approval of
the stockholders of the Company thereunder is required for the Company to issue
and deliver to the Purchasers the maximum number of Shares contemplated by this
Agreement.
3.20. Lock-Ups. During the period beginning on the Closing Date and ending
ninety (90) days following the effective date of the Registration Statement (as
defined in Section 6.1(a)(i) below), the Company will not, without the prior
written consent of the Placement Agents, sell, contract to sell or otherwise
dispose of or issue any securities of the Company, except pursuant to previously
issued options or warrants, any agreements providing for anti-dilution or other
stock purchase or share issuance rights in existence on the date hereof, any
employee benefit or similar plan of the Company in existence on the date hereof
or duly adopted hereafter, or any technology license agreement, strategic
alliance or joint venture in existence on the date hereof or which the Company
may enter into hereafter.
3.21. Employees. Neither the Company nor its Subsidiary is involved in any
labor dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would result in a Material Adverse Effect to the
Company and its Subsidiary taken as a whole. The Company is not aware of any
existing or imminent labor disturbance by the employees of any of its principal
suppliers or contractors which would result in a Material Adverse Effect to the
Company and its Subsidiary taken as a whole.
3.22. Related Party Transactions. Except as described in the SEC
Documents, no transaction has occurred between or among the Company or its
Subsidiary and any of its officers or directors, shareholders or any affiliate
or affiliates of any such officer or director or shareholder that is not
described in the Memorandum.
3.23. Market Stabilization. The Company has not taken, nor will it take,
directly or indirectly, any action designed to stabilize or manipulate of the
price of the Common Stock or any security of the Company to facilitate the sale
or resale of any of the Shares.
3.24. Taxes. The Company and its Subsidiary have paid all federal, state,
local and foreign taxes and filed all tax returns required to be paid or filed
through the date hereof except to the extent that such taxes are being contested
in good faith and any reserves required under GAAP have been made; and except as
otherwise disclosed in the Memorandum, there is, to the knowledge of the
Company, no tax deficiency that has been asserted against the Company or its
Subsidiary or any of their respective properties or assets.
3.25. Compliance; Listing.
(a) The Company is in compliance with the requirements of the
Nasdaq National Market for continued listing of the Common Stock thereon and has
not received any notification that, and has no knowledge that, the Nasdaq
National Market is contemplating terminating such listing nor, to the Company's
knowledge, is there any basis therefor. The transactions contemplated by this
Agreement will not contravene the rules and regulations of the Nasdaq National
Market. The Company will use commercially reasonable efforts to continue the
listing and trading of its Common Stock on the Nasdaq National Market and to
comply in all material
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respects with the Company's reporting, filing and other obligations under the
rules of the Nasdaq National Market.
(b) The Shares and the Warrant Shares have been duly authorized
for listing on the Nasdaq National Market.
3.26. Insurance. The Company and its Subsidiary have insurance covering
their respective material properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in such amounts
and insures against such losses and risks as would customarily be obtained by
other companies similarly situated and in a similar business; and neither the
Company nor its Subsidiary has (i) received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reasonable
belief that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
3.27. Environmental Laws. The Company and its Subsidiary (i) are in
compliance with any and all applicable federal, state, local and foreign laws,
rules, regulations, decisions and orders relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, "Environmental Laws"); (ii) have
received and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except in
any such case for any such failure to comply, or failure to receive required
permits, licenses or approvals, or liability as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
3.28. Investment Company. The Company is not and, after giving effect to
the offering and sale of the Securities and the application of the proceeds
thereof as described in the Memorandum, will not be an "investment company" or
an entity "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder (collectively, "Investment Company Act").
3.29. Solicitation; Other Issuances of Securities. Neither the Company nor
its Subsidiary or any affiliates, nor any Person acting on its or their behalf,
(i) has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of the Securities, (ii) has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under any circumstances that would require registration of the Securities under
the Securities Act or (iii) has issued any shares of Common Stock or shares of
any series of preferred stock or other securities or instruments convertible
into, exchangeable for or otherwise entitling the holder thereof to acquire
shares of Common Stock which would be integrated with the sale of the Securities
to such Purchaser for purposes of the Securities Act or of any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated, nor will the Company or
its Subsidiary or affiliates take any action or steps that would
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require registration of any of the Securities under the Securities Act or cause
the offering of the Securities to be integrated with other offerings. Assuming
the accuracy of the representations and warranties of Purchasers, the offer and
sale of the Securities by the Company to the Purchasers pursuant to this
Agreement will be exempt from the registration requirements of the Securities
Act.
3.30. No Restrictions on Subsidiaries. The Subsidiary of the Company is
not currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on the Subsidiary's capital
stock, from repaying to the Company any loans or advances to the Subsidiary from
the Company or from transferring any of such Subsidiary's properties or assets
to the Company.
3.31. No Registration Rights. No person has the right, which right has not
been waived, to require the Company or its Subsidiary to register any securities
for sale under the Securities Act by reason of the filing of the Registration
Statement with the Commission or the issuance and sale of the Securities.
3.32. Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Memorandum has been made or reaffirmed without what the
Company believes to be a reasonable basis or has been disclosed other than in
good faith.
3.33. Statistical and Market Data. Nothing has come to the attention of
the Company that has caused the Company to believe that the statistical and
market-related data included in the Memorandum is not based on or derived from
sources that are reliable and accurate in all material respects.
3.34. Compliance in Clinical Trials. The clinical trials conducted by or
on behalf of the Company that are described in the Memorandum, or the results of
which are referred to in the Memorandum, if any, are the only clinical trials
currently being conducted by or on behalf of the Company. Nothing has come to
the attention of the Company that has caused the Company to believe that such
studies and tests were and, if still pending, are being, conducted not in
accordance with experimental protocols, procedures and controls pursuant to
accepted professional scientific standards; the descriptions of the results of
such studies, tests and trials contained in the Memorandum, if any, are not
inconsistent with such results in any material respects. Except as described in
the Memorandum, no results of any other studies or tests have come to the
attention of the Company that have caused the Company to believe that such
results call into question the results described in the Memorandum of the
clinical trials. The Company has not received any notices or correspondence from
the FDA or any other governmental agency requiring the termination, suspension
or modification of any clinical trials currently conducted by, or on behalf of,
the Company or in which the Company has participated that are described in the
Memorandum, if any, or the results of which are referred to in the Memorandum.
Nothing has come to the attention of the Company that has caused the Company to
believe that the clinical trials previously conducted by or on behalf of the
Company while conducted by or on behalf of the Company, were not conducted in
accordance with experimental protocols, procedures and controls pursuant
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to accepted professional scientific standards; the descriptions of the results
of such studies, tests and trials contained in the Memorandum, if any, are not
inconsistent with such results.
3.35. SEC Filing. The Company shall use its commercially reasonable
efforts to file with the SEC a current report on Form 8-K under the Exchange Act
describing the transactions contemplated hereby and attaching as exhibits
thereto all material documents relating to the transactions contemplated hereby.
Section 4. Representations, Warranties and Covenants of Each Purchaser.
Each Purchaser for itself and no other Purchaser hereby represents
and warrants to, and covenants with, the Company as of the Closing Date (or such
other date specified below) as follows:
4.1. Organization. Such Purchaser is an entity duly organized and validly
existing in good standing (to the extent such concepts are applicable) under the
laws of its jurisdiction of organization. Such Purchaser has all requisite
corporate power and authority and all necessary governmental approvals to carry
on its business as now being conducted, except as would not result in a Material
Adverse Effect on such Purchaser's ability to consummate the transactions
contemplated by this Agreement.
4.2. Authorization, Enforcement, and Validity. Such Purchaser has the
requisite power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. Such Purchaser has taken all necessary action
to authorize the execution, delivery and performance of this Agreement. 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.
4.3. Consents and Approvals; No Violation. The execution, delivery and
performance of this Agreement by such Purchaser and the consummation by such
Purchaser of the transactions contemplated hereby will not (i) result in a
violation of such Purchaser's organizational documents; (ii) conflict with, or
constitute a default or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or instrument
to which such Purchaser is a party (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, result in a Material Adverse Effect on
such Purchaser's ability to consummate the transactions contemplated by this
Agreement); or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree applicable to such Purchaser or any of its subsidiaries,
except for such violations as would not, individually or in the aggregate,
result in a Material Adverse Effect on such Purchaser's ability to consummate
the transactions contemplated by this Agreement. Such Purchaser is not required
to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by this Agreement, except where the failure to
obtain such consents, authorization or orders or to make such filings or
registrations would not, individually or in the aggregate, result in a Material
Ad-
-12-
verse Effect on such Purchaser's ability to consummate the transactions
contemplated by this Agreement.
4.4. Investment Experience. Such Purchaser is an accredited investor
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act, is knowledgeable, sophisticated and experienced in making, and is qualified
to make, decisions with respect to investments in shares representing an
investment decision like that involved in the purchase of the Securities.
4.5. Investment Intent and Limitation on Dispositions. Such Purchaser is
acquiring Securities for its own account for investment only and has no
intention of selling or distributing any of such Securities or any arrangement
or understanding with any other Persons regarding the sale or distribution of
such Securities except in accordance with the provisions of Section 6 and except
as would not result in a violation of the Securities Act. Such Purchaser will
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Securities except in accordance with the provisions of Section 6
or pursuant to and in accordance with the Securities Act.
4.6. Information and Risk.
(a) Such Purchaser has received and reviewed the Memorandum and
has requested, received, reviewed and considered all other information relevant
in making an informed decision to purchase the Securities. Such Purchaser has
had an opportunity to discuss the Company's business, management and financial
affairs with its management and also had an opportunity to ask questions of
officers of the Company that were answered to such Purchaser's satisfaction.
(b) Such Purchaser recognizes that an investment in the Securities
involves a high degree of risk, including a risk of total loss of such
Purchaser's investment. Such Purchaser is able to bear the economic risk of
holding the Securities for an indefinite period, and has knowledge and
experience in the financial and business matters such that it is capable of
evaluating the risks of the investment in the Securities.
(c) Such Purchaser has, in connection with such Purchaser's
decision to purchase Securities, not relied upon any representations or other
information (whether oral or written) other than as set forth in the
representations and warranties of the Company contained herein, the Memorandum,
the SEC Documents and the other information described in Section 4.6(a), and
such Purchaser has, with respect to all matters relating to this Agreement and
the offer and sale of the Securities, relied solely upon the advice of such
Purchaser's own counsel and has not relied upon or consulted any counsel to the
Placement Agents or counsel to the Company.
4.7. Disclosures to the Company. Such Purchaser understands that the
Company is relying on the statements contained herein to establish an exemption
from registration under federal and state securities laws. Such Purchaser will
promptly notify the Company of any changes in the information set forth in the
Registration Statement regarding such Purchaser.
-13-
4.8. Nature of Purchasers. To the knowledge of such Purchaser, such
Purchaser: (i) is not an affiliate (as such term is defined pursuant to Rule
12b-2 promulgated under the Exchange Act) of any other Purchaser, (ii) is not
constituted as a partnership, association, joint venture or any other type of
joint entity with any other Purchaser, and (iii) is not acting as part of a
group (as such term is defined under Section 13(d) of the Exchange Act) with any
other Purchaser. If at any time after the Closing Date such Purchaser becomes an
affiliate (as defined herein) of any other Purchaser, such Purchaser will
provide prompt written notice to the Company.
4.9. Ownership. Such Purchaser (including any Person controlling,
controlled by, or under common control with such Purchaser, as the term
"control" is defined pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and its implementing regulations (the "HSR Act")) does
not, and upon the consummation of the transactions contemplated by this
Agreement will not, hold voting securities of the Company exceeding an aggregate
fair market value as of the Closing Date of fifty million dollars ($50,000,000),
calculated pursuant to the HSR Act.
4.10. Brokers or Finders. No broker, investment banker, financial advisor
or other Person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Purchaser.
4.11. Acknowledgement. Such Purchaser acknowledges and agrees that the
Company does not make and has not made any representations or warranties with
respect to the transactions contemplated by this Agreement other than those
specifically set forth in Section 3.
4.12. No Short Sales. Between the time such Purchaser learned about the
Offering and the public announcement of the Offering, such Purchaser has not
engaged in any short sales or similar transactions with respect to the Common
stock, nor has such Purchaser, directly or indirectly, caused any Person to
engage in any short sales or similar transactions with respect to the Common
Stock.
Section 5. Survival of Representations and Warranties.
Notwithstanding any investigation made by any party to this
Agreement or by the Placement Agents, all representations and warranties as to
each respective Closing made by the Company and the Purchasers herein shall
survive for a period of one (1) year following the Closing Date.
-14-
Section 6. Registration of the Shares; Compliance with the Securities Act.
6.1. Registration Procedures and Expenses.
(a) Except for such times as the Company may be required to
suspend the use of a prospectus forming a part of the Registration Statement (as
defined below), the Company will, subject to receipt of necessary information
from the Purchasers:
(i) as soon as practicable, but in no event later than forty-five
(45) days following the Closing Date (the "Filing Deadline"), use best
efforts to prepare and file with the Commission a registration statement
on Form S-3 (the "Registration Statement") covering the resale of the
Shares and the Warrant Shares (each of the Shares and Warrant Shares,
together with any shares of capital stock issued or issuable, from time to
time, upon any reclassification, share combination, share subdivision,
stock split, share dividend or similar transaction or event or otherwise
as a distribution on, in exchange for or with respect to any of the
foregoing, in each case held at the relevant time by a Purchaser, the
"Registrable Securities") by each Purchaser;
(ii) use best efforts to cause the Registration Statement, as
amended, to become effective under the Securities Act as soon as
practicable but in any event no later than one hundred five (105) days
after the Closing Date (the "Effectiveness Deadline");
(iii) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith (A) as may be necessary to keep the Registration
Statement continuously effective and in compliance with applicable laws
until the earlier of (i) the second anniversary of the Closing Date, (ii)
such time as all Registrable Securities purchased by the Purchasers have
been sold pursuant to the Registration Statement, or (iii) the date on
which each Purchaser may sell all of the Registrable Securities under Rule
144 of the Securities Act during any 90 day period without volume
limitations and (B) as may be reasonably requested by a Purchaser in order
to incorporate information concerning such Purchaser or such Purchaser's
intended method of distribution;
(iv) so long as the Registration Statement is effective covering
the resale of Registrable Securities owned by the Purchasers, furnish to
each Purchaser with respect to the Registrable Securities registered under
the Registration Statement (and to each underwriter, if any, of such
Registrable Securities) such reasonable number of copies of prospectuses
and such other documents as such Purchaser may reasonably request in order
to facilitate the public sale or other disposition of all or any of the
Registrable Securities by such Purchaser, subject, as applicable, to
confidentiality restrictions reasonably acceptable to the Company;
(v) use commercially reasonable efforts to file documents required
of the Company for normal Blue Sky clearance in states specified in
writing by the Purchasers; provided, however, that the Company shall not
be required to qualify to do business or consent to service of process
generally in any jurisdiction in which the Company is not now so qualified
or has not so consented;
-15-
(vi) bear all expenses in connection with the procedures in
paragraphs (a) through (c) of this Section 6.1 and the registration of the
Registrable Securities pursuant to the Registration Statement, other than
fees and expenses, if any, of counsel or other advisers to the Purchasers
or underwriting discounts, brokerage fees and commissions incurred by the
Purchasers, if any in connection with an underwritten offering of the
Registrable Securities;
(vii) use all commercially reasonable efforts to prevent the
issuance of any stop order or other order suspending the effectiveness of
such Registration Statement and, if such an order is issued, to obtain the
withdrawal thereof at the earliest possible time and to notify each
Purchaser of the issuance of such order and the resolution thereof;
(viii) furnish to each Purchaser, on the date that such Registration
Statement becomes effective, (x) a letter, dated such date, of outside
counsel representing the Company (and reasonably acceptable to such
Purchaser) addressed to such Purchaser, confirming the effectiveness of
such Registration Statement and, to the knowledge of such counsel, the
absence of any stop order, and (y) in the case of an underwriting, (e) an
opinion addressed to such Purchaser, dated such date, of such outside
counsel, in such form and substance as is required to be given to the
underwriters, and (B) a letter addressed to such Purchaser, dated such
date, from the Company's independent certified public accountants, in such
form and substance as is required to be given by the Company's independent
certified public accountants to such underwriters;
(ix) provide to each Purchaser and its representatives, if
requested, the opportunity to conduct a reasonable inquiry of the
Company's financial and other records during normal business hours and
make available its officers, directors and employees for questions
regarding information which such Purchaser may reasonably request in order
to fulfill any due diligence obligation on its part; and
(x) permit counsel for the Purchasers to review the Registration
Statement and all amendments and supplements thereto, and any comments
made by the staff of the Commission and the Company's responses thereto,
within a reasonable period of time prior to the filing thereof with the
Commission (or, in the case of comments made by the staff of the
Commission, within a reasonable period of time following the receipt
thereof by the Company);
provided that, in the case of clauses (ix) and (x) above, the Company shall not
be required to provide, and shall not provide, any Purchaser with material,
non-public information unless such Purchaser agrees to receive such information
and enters into a written confidentiality agreement with the Company in a form
reasonably acceptable to the Company.
(b) The Company shall be permitted to suspend for one or more
periods (provided that the aggregate length of such suspension shall not exceed
sixty business days in any 365 day period) the actions required under Sections
6.1(a)(i) through (iii) to the extent that the Board of Directors of the Company
concludes in good faith and based on the advise of counsel that the disclosure
of information in the prospectus relating to any strategic transaction or any
other event, the disclosure of which would have a Material Adverse Effect, is
necessary.
-16-
(c) With a view to making available to the Purchasers the benefits
of Rule 144 (or its successor rule) and any other rule or regulation of the
Commission that may at any time permit the Purchaser to sell Registrable
Securities to the public without registration, the Company covenants and agrees
to: (i) make and keep public information available, as those terms are
understood and defined in Rule 144, until the earlier of (A) six months after
such date as all of the Purchasers' Registrable Securities may be resold
pursuant to Rule 144(k) or any other rule of similar effect or (B) such date as
all of the Purchasers' Registrable Securities shall have been resold; (ii) file
with the Commission in a timely manner all reports and other documents required
of the Company under the Exchange Act; and (iii) furnish to the Purchaser upon
request, as long as the Purchaser owns any Registrable Securities, (A) a written
statement by the Company that it has complied with the reporting requirements of
the Exchange Act, (B) a copy of the Company's most recent Annual Report on Form
10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be
reasonably requested in order to avail the Purchaser of any rule or regulation
of the Commission that permits the selling of any such Registrable Securities
without registration.
(d) In the event that: (i) the Registration Statement is not filed
on or prior to the Filing Deadline in violation of this Agreement (if the
Company files the Registration Statement without affording counsel for the
Purchasers the opportunity to review and comment on the same as required by
Section 6.1(a)(x), the Company shall not be deemed to have satisfied this clause
(i)); provided, however, that if a Purchaser fails to provide the Company with
any information that is required to be provided in the Registration Statement
with respect to such Purchaser as set forth herein, then the Filing Deadline
shall be extended until two business days following the date of receipt by the
Company of such required information, or (ii) the Company fails to file with the
SEC a request for acceleration in accordance with Rule 461 promulgated under the
Securities Act, within five business days following the date that the Company is
notified (orally or in writing, whichever is earlier) by the SEC that the
Registration Statement will not be "reviewed," or not subject to further review,
or (iii) prior to the date when the Registration Statement is first declared
effective by the SEC, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the SEC in respect of the
Registration Statement within ten business days after the receipt of comments by
or notice from the SEC that such amendment is required in order for the
Registration Statement to be declared effective, or (iv) the Registration
Statement filed hereunder is not declared effective by the SEC on or before the
applicable Effectiveness Deadline, or (v) after the Registration Statement is
first declared effective by the SEC, it ceases for any reason to remain
continuously effective as to all Registrable Securities for which it is required
to be effective or the Purchasers are not permitted to utilize the prospectus
therein to resell such Registrable Securities, other than, in each case, within
the time period(s) permitted by Section 6.1(b)) (any such failure or breach
being referred to as an "Event," and for purposes of clause (i) or (iv) the date
on which such Event occurs, or for purposes of clause (ii) the date on which
such five business day period is exceeded, or for purposes of clauses (iii) the
date which such ten business day period is exceeded, or for purposes of clause
(v) the date on which the Registration Statement is not effective or such
prospectus is not available for use being referred to as "Event Date"), then in
addition to any other rights the Purchasers may have hereunder or under
applicable law: on each monthly anniversary of each such Event Date (if the
applicable Event shall not have been cured by such date) until the applicable
Event is cured, and the next business date after the date on which the Event is
cured, the
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Company shall pay to each Purchaser an amount in cash, as liquidated damages and
not as a penalty, equal to 1% of the aggregate Purchase Price paid by such
Purchaser in cash pursuant to this Agreement for any Registrable Securities then
held by such Purchaser that are covered by the Registration Statement or
prospectus contained therein to which the Event relates, which amount, in the
case of the payment to be made after the date on which the Event is cured, shall
be calculated pro rata based on the number days elapsed since the date of the
Event or the date of the last payment, as applicable. If the Company fails to
pay any liquidated damages pursuant to this Section in full within seven
business days after the date payable, the Company will pay interest thereon at a
rate of 12% per annum (or such lesser maximum amount that is permitted to be
paid by applicable law) to the Purchasers, accruing daily from the date such
liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full.
(e) The Purchasers shall have no right to take any action to
restrain, enjoin or otherwise delay any registration pursuant to Section 6.1
hereof as a result of any controversy that may arise with respect to the
interpretation or implementation of this Agreement.
(f) As a condition to the inclusion of its Registrable Securities
under the Registration Statement, each Purchaser shall furnish to the Company
such information regarding such Purchaser and the distribution proposed by such
Purchaser as the Company may reasonably request in writing, including completing
a Registration Statement Questionnaire in the form provided by the Company, or
as shall be required in connection with any registration referred to in this
Section 6.1.
6.2. Restrictions on Transferability.
(a) Each Purchaser agrees that it will not effect any disposition
of the Securities or the Warrant Shares that would constitute a sale within the
meaning of the Securities Act or pursuant to any applicable state securities or
Blue Sky laws of any state, except (i) as to the Registrable Securities, as
contemplated in the Registration Statement referred to in Section 6.1 above,
(ii) as to the Registrable Securities pursuant to the requirements of Rule 144
(in which case such Purchaser will provide the Company with reasonable evidence
of such Purchaser's compliance therewith) or (iii) pursuant to a written opinion
of legal counsel reasonably satisfactory to the Company and addressed to the
Company to the effect that registration is not required in connection with the
proposed transfer; provided, however, that no opinion of legal counsel shall be
required for a transfer to an affiliate of the Purchaser; whereupon the holder
of such securities shall be entitled to transfer such securities. Each
certificate evidencing the securities transferred as above provided shall bear
the appropriate restrictive legends as may be required by Section 7.
(b) Each 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 or supplement to the
Registration Statement has been filed by the Company and declared effective, or
until such time as the Company has filed an appropriate report with the
Commission pursuant to the Exchange Act. Each Purchaser hereby covenants that
such Purchaser will not sell any Registrable Securities pursuant to said
prospectus during the period commencing at the time at which the Company gives
the Purchasers written notice of the suspension of the use of said prospectus
and ending at the time the Company gives
-18-
the Purchasers written notice that the Purchasers may thereafter effect sales
pursuant to said prospectus. The Company agrees to file such amendment,
supplement or report as soon as practicable following such notice of suspension.
(c) Neither the Securities nor the Warrant Shares shall be
transferable except upon the conditions specified in this Section 6, and in the
case of the Warrants, in the Warrant, which are intended to ensure compliance
with the provisions of the Securities Act. Each Purchaser will cause any
proposed transferee of the Securities or Warrant Shares held by such Purchaser
to agree to take and hold such Securities or Warrant Shares subject to the
provisions and upon the conditions specified in this Section 6 if and to the
extent that such Securities or Warrant Shares continue to be restricted
securities in the hands of the transferee.
(d) Each Purchaser acknowledges and agrees that the Registrable
Securities sold pursuant to the Registration Statement are not transferable on
the books of the Company unless the stock certificate submitted to the transfer
agent evidencing such Registrable Securities is accompanied by a certificate
reasonably satisfactory to the Company to the effect that (i) the Registrable
Securities have been sold in accordance with such Registration Statement and
(ii) the requirement of delivering a current prospectus has been satisfied.
(e) Each Purchaser agrees not to take any action with respect to
any distribution deemed to be made pursuant to such Registration Statement which
would constitute a violation of Regulation M under the Exchange Act or any other
applicable rule, regulation or law.
6.3. Termination of Conditions and Obligations.
(a) The conditions precedent imposed by Section 6.2 above
regarding the transferability of the Shares or Warrant Shares shall cease and
terminate as to any particular number of the Shares or Warrant Shares upon the
date on which the Purchaser may sell within any 90 day period without volume
limitations all such Securities or Warrant Shares then held by the Purchaser
without registration by reason of Rule 144 or any other rule of similar effect.
Section 7. Legends.
(a) Such Purchaser understands and agrees that each certificate or
other document evidencing any of the Securities or Warrant Shares shall be
endorsed with the legend in the form set forth below, and such Purchaser
covenants that such Purchaser will not transfer the shares or the Warrants, as
the case may be, represented by any such certificate without complying with the
restrictions on transfer described in the legend endorsed on such certificate
(unless there is in effect a registration statement under the Securities Act
covering such proposed transfer, such securities have been sold under Rule 144
promulgated under the Securities Act ("Rule 144") or as otherwise permitted by
the provisions of Section 6.2 above) and understands that the Company will
refuse to register a transfer of any Securities or Warrant Shares unless the
conditions specified in the following legend are satisfied:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.
EXCEPT AS SPECIFIED IN THIS
-19-
LEGEND, SUCH SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT UNLESS SOLD
PURSUANT TO RULE 144 OF SUCH ACT OR UNLESS SUCH SALE, PLEDGE,
HYPOTHECATION OR TRANSFER IS OTHERWISE EXEMPT FROM REGISTRATION AND ANY
APPLICABLE STATE SECURITIES LAWS. THE COMPANY MAY REQUEST A WRITTEN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT
THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH SALE OR OTHER
TRANSFER."
(b) Such certificates shall not contain any legend (i) while a
Registration Statement (as defined below) covering the resale of such
Registrable Securities is effective under the Securities Act, (ii) following any
sale of such Registrable Securities pursuant to an effective Registration
Statement or Rule 144, or (iii) if such Registrable Securities are eligible for
sale under Rule 144(k). Following the effective date of the Registration
Statement or at such earlier time as a legend is no longer required for certain
Securities or Warrant Shares, the Company will, no later than three trading days
following the delivery by a Purchaser to the Company or the Company's transfer
agent of a legended certificate representing such securities, deliver or cause
to be delivered to such Purchaser a certificate representing such securities
that is free from all restrictive and other legends.
(c) Such Purchaser covenants that such Purchaser will not transfer
the Registrable Securities represented by any such certificate without complying
with any applicable requirements under the Securities Act to deliver the final
prospectus included in the effective Registration Statement to any offeree of
such Registrable Securities.
Section 8. Indemnification.
(a) For purposes of this Section 8:
(i) the term "Purchaser" shall include the Purchaser and any
affiliate (as such term is defined pursuant to Rule 12b-2 promulgated
under the Exchange Act) of such Purchaser;
(ii) the term "Prospectus" shall mean the prospectus and any
amendment or supplement thereto in the form first filed with the
Commission pursuant to Rule 424(b) promulgated under the Securities Act
or, if no Rule 424(b) filing is required, filed as part of the
Registration Statement at the time of effectiveness, as supplemented or
amended from time to time; and
(iii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to
the Registration Statement.
(b) The Company agrees to indemnify and hold harmless each of the
Purchasers and each Person, if any, who controls any Purchaser within the
meaning of the Securities Act,
-20-
against any losses, claims, damages, liabilities or expenses, joint or several,
to which such Purchasers or such controlling Person may become subject, under
the Securities Act, the Exchange Act, or any other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or Prospectus, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or arise out of or are
based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained in this Agreement, or any failure of the
Company to perform its obligations hereunder, and will reimburse each Purchaser
and each such controlling Person for any legal and other expenses reasonably
incurred as such expenses are reasonably incurred by such Purchaser or such
controlling Person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense arises out
of or is based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Purchaser expressly for use therein, (ii) the
failure of such Purchaser to comply with the covenants and agreements contained
in Section 6 above respecting sale of the Securities and the Warrant Shares,
(iii) the inaccuracy of any representations made by such Purchaser herein or
(iv) any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Purchaser a reasonable time
prior to the pertinent sale or sales by the Purchaser, and provided that the
Purchaser has been notified by the Company that such earlier Prospectus should
no longer be delivered by the Purchaser.
(c) Each Purchaser will severally, and not jointly, indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each Person, if any, who controls the
Company within the meaning of the Securities Act, against any losses, claims,
damages, liabilities or expenses to which the Company, each of its directors,
each of its officers who signed the Registration Statement or controlling Person
may become subject, under the Securities Act, the Exchange Act, or any other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Purchaser) insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon (i) any failure by such Purchaser to comply with
the covenants and agreements contained in Section 6 above respecting the sale of
the Securities and the Warrant Shares, (ii) the inaccuracy of any representation
made by such Purchaser herein or (iii) any untrue or alleged untrue statement of
any material fact contained in the Registration Statement or the Prospectus, or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration Statement
or Prospectus in reliance upon and in conformity with written information
-21-
furnished to the Company by or on behalf of such Purchaser expressly for use
therein, and will reimburse the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling Person for any
legal and other expense reasonably incurred, as such expenses are reasonably
incurred by the Company, each of its directors, each of its officers who signed
the Registration Statement or controlling Person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the aggregate
liability of any Purchaser hereunder shall not exceed the greater of the
Purchase Price paid by such Purchaser to the Company on the Closing Date or the
net amount received by Purchaser for such Purchaser's shares pursuant to any
sale thereof. No Purchaser shall be liable for the indemnification obligations
of any other Purchaser.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 8, promptly notify the indemnifying party
in writing thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
hereunder or otherwise to the extent it is not prejudiced as a result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel, reasonably satisfactory to the indemnifying party,
representing the indemnified parties who are parties to such action) or (ii) the
indemnified party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of action, in each of which cases the reasonable
fees and expenses of counsel shall be at the expense of the indemnifying party.
Section 9. Notices.
(a) All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or
-22-
nationally recognized overnight express courier postage prepaid, and shall be as
addressed as follows:
if to the Company, to:
Myogen, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Godward LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and if to any Purchaser, at its address as set forth in Appendix A hereto, or at
such other address or addresses as may have been previously furnished to the
Company in writing in accordance with this Section 9.
(b) Such notices or other communications shall be deemed delivered
upon receipt, in the case of overnight delivery, personal delivery, facsimile
transmission (as evidenced by the confirmation thereof), or mail, or five days
after being placed in the mail, in the case of delivery by mail.
Section 10. Miscellaneous.
10.1. Amendments. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and each Purchaser to be charged with
enforcement. Any amendment or waiver effected in accordance with this Section
10.1 shall be binding upon each holder of any securities purchased under this
Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities, and the
Company.
10.2. Headings. The headings of the various sections of this Agreement are
for convenience of reference only and shall not be deemed to be part of this
Agreement.
-23-
10.3. Severability. In the event that any provision in this Agreement is
held to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
10.4. Governing Law and Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be fully performed therein. The parties hereto agree to
submit to the exclusive jurisdiction of the federal and state courts of the
State of New York with respect to the interpretation of this Agreement or for
the purposes of any action arising out of or related to this Agreement.
10.5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument. In the event that any
signature is delivered via facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature page were an original hereof.
10.6. Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the matters covered herein, supersede all prior
agreements and understandings with respect to such matters and executed by and
among the Company and any of the Purchasers, and, except as specifically set
forth herein or therein, neither the Company nor the Purchasers make any
representation, warranty, covenant or undertaking with respect to such matters.
10.7. Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. Nothing contained herein and no action taken by
any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group, or are deemed affiliates (as such term is defined under the Exchange
Act) with respect to such obligations or the transactions contemplated by this
Agreement. Each Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
10.8. Expenses. Each party hereto shall pay all costs and expenses
incurred by it in connection with the execution and delivery of this Agreement,
and all the transactions contemplated thereby, including fees of legal counsel.
[Remainder of Page Intentionally Left Blank]
-24-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized representatives as of the day
and year first above written.
MYOGEN, INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President & Chief Executive
Officer
PURCHASER:
▇▇▇▇▇ Biotech Fund I, L.P.
By: ▇▇▇▇▇ Biotech Capital, L.P., (general
partner)
By: ▇▇▇▇▇ Biotech Capital (GP), LLC, (general
partner)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
Title: Managing Member
▇▇▇▇▇/▇▇▇▇▇ Investments, L.P.
By: ▇▇▇▇▇ Biotech Capital, L.P., (general
partner)
By: ▇▇▇▇▇ Biotech Capital (GP), LLC,
(general partner)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
Title: Managing Member
▇▇▇▇▇ Biotech Fund II, L.P.
By: ▇▇▇▇▇ Biotech Capital, L.P., (general
partner)
By: ▇▇▇▇▇ Biotech Capital (GP), LLC,
(general partner)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
Title: Managing Member
▇▇▇▇▇ Bros. Investments, L.P.
By: ▇▇▇▇▇ Bros. Capital, L.P., (general
partner)
By: ▇▇▇▇▇ Bros. Capital (GP), LLC, (general
partner)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
Title: Managing Member
▇▇▇▇▇ Biotech Fund II, (Z) L.P.
By: ▇▇▇▇▇ Biotech Capital II, L.P., (general
partner)
By: ▇▇▇▇▇ Biotech Capital II (GP), LLC,
(general partner)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
Title: Managing Member
▇▇▇▇▇ Bros. Investments II, L.P.
By: ▇▇▇▇▇ Bros. Capital, L.P., (general
partner)
By: ▇▇▇▇▇ Bros. Capital (GP), LLC, (general
partner)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
Title: Managing Member
▇▇▇▇▇ Biotech Fund III, L.P.
By: ▇▇▇▇▇ Biotech Capital III, L.P.,
(general partner)
By: ▇▇▇▇▇ Biotech Capital III (GP), LLC,
(general partner)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
Title: Managing Member
Atlas Equity I, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Address: c/o BAM, LP
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Domain Public Equity Partners, L.P.
By: Domain Public Equity Associates, LLC, its
general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Attorney in Fact
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
H&Q Healthcare Investors
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Treasurer
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Date: 9/24/04
H&Q Life Science Investors
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Treasurer
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Date: 9/24/04
▇▇▇▇▇▇▇▇ Health Sciences Fund of the ▇▇▇▇▇▇▇▇
Sector Funds, Inc.
By: ▇▇▇▇▇▇▇▇ Associates LLC, as sub-advisor
to ▇▇▇▇▇▇▇▇ Health Sciences Fund
By: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Executive Vice President
Address: Gateway Center Three
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Narragansett I, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Title: Managing Member
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Narragansett Offshore, Ltd.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Title: Managing Member
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Oz Mac 13 Ltd.
By: Oz Management, L.L.C., as Investment
Manager
By: /s/ ▇▇▇ ▇. Och
----------------------------------------
Name: ▇▇▇ ▇. Och
Title: Senior Managing Member
Address: ▇▇ ▇▇▇ ▇▇ ▇▇▇.
▇/▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇.▇.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Oz Master Fund, Ltd.
By: Oz Management, L.L.C., as Investment
Manager
By: /s/ ▇▇▇ ▇. Och
----------------------------------------
Name: ▇▇▇ ▇. Och
Title: Senior Managing Member
Address: Oz Master Fund, Ltd.
c/o Oz Management, L.L.C.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fleet Maritime, Inc.
By: Oz Management, L.L.C., as Investment
Manager
By: /s/ ▇▇▇ ▇. Och
----------------------------------------
Name: ▇▇▇ ▇. Och
Title: Senior Managing Member
Address: Fleet Maritime, Inc.
c/o Oz Management, L.L.C.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇. ▇▇▇▇ PRICE ASSOCIATES, INC., in
its capacity as Investment Adviser to
its participating clients listed in
Appendix A
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
Address: ▇. ▇▇▇▇ Price Associates, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Associate Legal Counsel
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
UBS ▇'▇▇▇▇▇▇ LLC F/B/O ▇'▇▇▇▇▇▇
PIPES Corporate Strategies Master Ltd.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Director
Address: UBS ▇'▇▇▇▇▇▇
▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
InterWest Partners VI, LP
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
InterWest Investors VI, LP
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
InterWest Partners VIII, LP
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
InterWest Investors VIII, LP
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
InterWest Investors Q VIII, LP
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
New Enterprise Associates 10, Limited
Partnership
By: NEA Partners 10, Limited Partnership Its
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Title: Administrative General Partner &
Chief Operating Officer
Perseus-▇▇▇▇▇ BioPharmaceutical Fund, LP
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Attorney-in-Fact
Sequel Limited Partnership III
by its General Partner Sequel Venture
Partners III, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Sequel Entrepreneurs' Fund III, L.P.
by its General Partner Sequel Venture
Partners III, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
APPENDIX A
SCHEDULE OF PURCHASERS
AGGREGATE PURCHASE
AGGREGATE PURCHASE NUMBER PRICE PER AGGREGATE
PURCHASER NAME NUMBER PRICE PER OF WARRANT WARRANT PURCHASE
AND ADDRESS OF SHARES SHARE SHARES SHARE PRICE
------------------------------------------------------------------------------------------------
▇. ▇▇▇▇ Price Associates, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
on behalf of:
------------------------------------------------------------------------------------------------
Nominee Name - 100,000 $ 6.50 20,000 $ 0.125 $ 652,500.00
Lobstercrew & Co.
------------------------------------------------------------------------------------------------
Nominee Name - 500 $ 6.50 100 $ 0.125 $ 3,262.50
HorizonBeach & Co.
------------------------------------------------------------------------------------------------
Nominee Name - Mac & 31,600 $ 6.50 6,320 $ 0.125 $ 206,190.00
Co.
------------------------------------------------------------------------------------------------
Nominee Name - Squidrig 12,300 $ 6.50 2,460 $ 0.125 $ 80,257.50
& Co.
------------------------------------------------------------------------------------------------
Nominee Name - Lamppost 14,800 $ 6.50 2,960 $ 0.125 $ 96,570.00
& Co.
------------------------------------------------------------------------------------------------
Nominee Name - Hare & 14,500 $ 6.50 2,900 $ 0.125 $ 94,612.50
Co.
------------------------------------------------------------------------------------------------
Nominee Name - ▇▇▇▇ 1,800 $ 6.50 360 $ 0.125 $ 11,745.00
& Co.
------------------------------------------------------------------------------------------------
Nominee Name - ▇▇▇▇ & 3,800 $ 6.50 760 $ 0.125 $ 24,795.00
Co.
------------------------------------------------------------------------------------------------
Nominee Name - Bridge & 565,000 $ 6.50 113,000 $ 0.125 $ 3,686,625.00
Co.
------------------------------------------------------------------------------------------------
Nominee Name - Hare & 21,980 $ 6.50 4,396 $ 0.125 $ 143,419.50
Co.
------------------------------------------------------------------------------------------------
Domain Public Equity 306,515 $ 6.50 61,303 $ 0.125 $ 2,000,010.38
Partners, L.P.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
H&Q Healthcare Investors 510,880 $ 6.50 102,176 $ 0.125 $ 3,333,492.00
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
H&Q Life Science Investors 255,400 $ 6.50 51,080 $ 0.125 $ 1,666,485.00
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
Atlas Equity I, Ltd. 459,770 $ 6.50 91,954 $ 0.125 $ 2,999,999.25
c/o BAM, L.P.
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
New Enterprise Associates 10, 858,235 $ 6.50 171,647 $ 0.125 $ 5,599,983.38
Limited Partnership
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
InterWest Partners VI, LP 148,595 $ 6.50 29,719 $ 0.125 $ 969,582.38
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
InterWest Investors VI, LP 4,660 $ 6.50 932 $ 0.125 $ 30,406.50
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
InterWest Partners VIII, LP 591,390 $ 6.50 118,278 $ 0.125 $ 3,858,819.75
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
InterWest Investors VIII, LP 4,720 $ 6.50 944 $ 0.125 $ 30,798.00
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
InterWest Investors Q VIII, LP 16,920 $ 6.50 3,384 $ 0.125 $ 110,403.00
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
UBS ▇'▇▇▇▇▇▇ LLC 76,630 $ 6.50 15,326 $ 0.125 $ 500,010.75
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
Narragansett I, LP. 463,959 $ 6.50 92,792 $ 0.125 $ 3,027,332.50
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
Narragansett Offshore, Ltd. 941,976 $ 6.50 188,395 $ 0.125 $ 6,146,393.38
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
Sequel Limited Partnership III 745,565 $ 6.50 149,113 $ 0.125 $ 4,864,811.63
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
Sequel Entrepreneurs' Fund 20,720 $ 6.50 4,144 $ 0.125 $ 135,198.00
III, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
▇▇▇▇▇ Bros. Investments, L.P. 35,800 $ 6.50 7,160 $ 0.125 $ 233,595.00
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
▇▇▇▇▇ Bros. Investments II, 34,850 $ 6.50 6,970 $ 0.125 $ 227,396.25
L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
▇▇▇▇▇/▇▇▇▇▇ Investments, L.P. 42,800 $ 6.50 8,560 $ 0.125 $ 279,270.00
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
▇▇▇▇▇ Biotech Fund I, L.P. 357,400 $ 6.50 71,480 $ 0.125 $ 2,332,035.00
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
▇▇▇▇▇ Biotech Fund II, L.P. 326,700 $ 6.50 65,340 $ 0.125 $ 2,131,717.50
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
▇▇▇▇▇ Biotech Fund II, (Z) 45,100 $ 6.50 9,020 $ 0.125 $ 294,277.50
L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
▇▇▇▇▇ Biotech Fund III, L.P. 307,350 $ 6.50 61,470 $ 0.125 $ 2,005,458.75
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
Perseus-▇▇▇▇▇ 919,540 $ 6.50 183,908 $ 0.125 $ 5,999,998.50
Biopharamaceutical Fund, LP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
COMPOUND & CO. 306,515 $ 6.50 61,303 $ 0.125 $ 2,000,010.38
c/▇ ▇▇▇▇▇▇▇▇ Health Sciences
Fund of the ▇▇▇▇▇▇▇▇ Sector
Funds, Inc.
Gateway Center Three
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------
OZ Mac 13 Ltd. 6,083 $ 6.50 1,217 $ 0.125 $ 39,691.63
c/o OZ Management, L.L.C.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
OZ Master Fund, Ltd. 630,693 $ 6.50 126,138 $ 0.125 $ 4,115,271.75
c/o OZ Management, L.L.C.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
Fleet Maritime, Inc. 10,354 $ 6.50 2,071 $ 0.125 $ 67,559.88
c/o OZ Management, L.L.C.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------------------------------
Total: 9,195,400 -- 1,839,080 -- $59,999,985.00
------------------------------------------------------------------------------------------------
APPENDIX B
FORM OF WARRANT
NEITHER THIS WARRANT NOR THE COMMON STOCK OF MYOGEN, INC. FOR WHICH THIS WARRANT
IS EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND ACCORDINGLY, MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER THE
ACT UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT OR UNLESS SUCH SALE, PLEDGE,
HYPOTHECATION OR TRANSFER IS OTHERWISE EXEMPT FROM REGISTRATION AND ANY
APPLICABLE STATE SECURITIES LAWS. THE ISSUER OF THIS WARRANT MAY REQUEST A
WRITTEN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, TO THE
EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH SALE OR OTHER
TRANSFER.
MYOGEN, INC.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
THIS WARRANT MAY NOT BE EXERCISED
AFTER 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 29, 2009
THIS CERTIFIES THAT, for value received, or registered
assigns (the "Registered Holder") is entitled to, upon the terms and conditions
hereinafter set forth, subscribe for and purchase at the Exercise Price (defined
below) from Myogen, Inc., a Delaware corporation (the "Company"),
fully paid and nonassessable shares (the "Warrant Shares")
of Common Stock, par value $0.001 per share (the "Common Stock"), of the
Company, at the initial exercise price of $7.80 per Warrant Share (the "Exercise
Price") at any time during the period beginning six months and one day after the
date hereof and ending on the Expiration Date (as hereinafter defined)(the
"Exercise Period"), by surrendering this Warrant, with the Form of Election to
Purchase duly executed at the principal office of the Company and by paying in
full the Exercise Price, plus transfer taxes, if any. The term "Warrant" as used
herein shall include this Warrant, and any warrant delivered in substitution or
exchange for this Warrant as provided herein. Payment of the Exercise Price
shall be made (i) in United States currency, by certified check or money order
payable to the order of the Company, or (ii) by "cashless exercise" in
accordance with the provisions below, but only when a registration statement
under the Act for the resale of the shares of Warrant Shares is not then in
effect.
This Warrant has been issued pursuant to a private placement of
Common Stock and warrants.
1. Purchase Agreement and Registration Rights. This Warrant is
issued under and in accordance with the Securities Purchase Agreement dated as
of September 24, 2004, (the "Purchase Agreement") between the Company and the
Registered Holder and is subject to the terms and provisions contained in the
Purchase Agreement. Section 6 of the Purchase Agreement governs the registration
rights of the Warrant Shares.
2. Definitions. Unless otherwise defined herein, the capitalized
terms used herein shall have the meanings assigned to such terms in the Purchase
Agreement.
3. Cashless Exercise. Notwithstanding any provisions herein to
the contrary, if, at any time during the Exercise Period, (i) the Current Market
Price (as defined below) of one share of Common Stock is greater than the
Exercise Price (at the date of calculation as set forth below) and (ii) a
registration statement under the Act for the resale of the Warrant Shares is not
then in effect, the Registered Holder may exercise this Warrant by a cashless
exercise and shall receive the number of shares of Common Stock equal to an
amount (as determined below) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Election to Purchase
in which event the Company shall issue to the Registered Holder a number of
shares of Common Stock computed using the following formula:
X = Y - (A)(Y)
------
B
Where X = the number of shares of Common Stock to be issued to the
Registered Holder.
Y = the number of shares of Common Stock purchasable upon exercise
of all of the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being exercised.
A = the Exercise Price.
B = the Current Market Price of one share of Common Stock.
"Current Market Price" means on any particular date:
(a) if the Common Stock is traded on the Nasdaq SmallCap Market or
the Nasdaq National Market, the average of the closing prices of the Common
Stock of the Company on such market over the five (5) trading days ending
immediately prior to the applicable date of valuation;
(b) if the Common Stock is traded on any registered national stock
exchange but is not traded on the Nasdaq SmallCap Market or the Nasdaq National
Market, the average of the closing prices of the Common Stock of the Company on
such exchange over the five (5) trading days ending immediately prior to the
applicable date of valuation
B-2
(c) if the Common Stock is traded over-the-counter, but not on the
Nasdaq SmallCap Market, the Nasdaq National Market or a registered national
stock exchange, the average of the closing bid prices over the 30-day period
ending immediately prior to the applicable date of valuation; and
(d) if there is no active public market for the Common Stock, the
value thereof, as determined in good faith by the Board of Directors of the
Company, upon due consideration of the proposed determination thereof of the
Registered Holder.
4. [RESERVED]
5. Issuance of Warrant Shares. As soon as practicable after the
date of exercise of this Warrant the Company shall issue, or cause the transfer
agent for the Common Stock, if any, to issue a certificate or certificates for
the number of full Warrant Shares to which the Registered Holder is entitled,
registered in accordance with the instructions set forth in the Form of Election
to Purchase; provided, however, that such certificate or certificates shall be
delivered within no later than three (3) business days after the Company's
receipt of the Purchaser's surrender of this Warrant, including, without
limitation, a properly completed Form of Election To Purchase. All Warrant
Shares shall be validly authorized and issued, fully paid and nonassessable, and
free from all taxes, liens and charges created by the Company in respect of the
issue thereof. Each person in whose name any such certificate for Warrant Shares
is issued shall for all purposes be deemed to have become the holder of record
of the Warrant Shares represented thereby on the date of exercise of this
Warrant resulting in the issuance of such Warrant Shares, irrespective of the
date of issuance or delivery of such certificate for such Warrant Shares.
6. Partial Exercise. If this Warrant is exercised in part only,
the Company shall, upon surrender of this Warrant, execute and deliver, within
10 days of the date of exercise, a new Warrant evidencing the rights of the
Registered Holder, or such other person as shall be designated in the Form of
Election to Purchase, to purchase the balance of the Warrant Shares purchasable
hereunder. In no event shall this Warrant be exercised for a fractional Warrant
Share, and the Company shall distribute no Warrant exercisable for a fractional
Warrant Share. Fractional Warrant shares shall be treated as provided for
herein.
7. Available Authorized Shares. The Company shall at all times
reserve and keep available for issuance upon the exercise of this Warrant a
number of its authorized but unissued shares of Common Stock that will be
sufficient to permit the exercise in full of this Warrant.
8. Adjustments. Subject to the provisions hereof, the Exercise
Price in effect from time to time shall be subject to adjustment, as follows:
(a) In case the Company shall at any time after the date hereof
(i) declare a dividend on the outstanding Common Stock payable in shares of its
capital stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a
B-3
smaller number of shares, or (iv) issue any shares of its capital stock by
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation), then, in each case, the Exercise Price, and the number of Warrant
Shares issuable upon exercise of this Warrant in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination, or reclassification, shall be proportionately adjusted so that the
Registered Holder after such time shall be entitled to receive the aggregate
number and kind of shares which, if such Warrants had been exercised immediately
prior to such time, the Registered Holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) In case the Company shall issue or fix a record date for the
issuance to all holders of Common Stock of rights, options, or warrants to
subscribe for or purchase Common Stock (or securities convertible into or
exchangeable for Common Stock) at a price per share (or having a conversion or
exchange price per share, if a security convertible into or exchangeable for
Common Stock) less than the Current Market Price per share of Common Stock on
such record date, then, in each case, the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding on such record date plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so to be offered (or the aggregate initial conversion or exchange price of the
convertible or exchangeable securities so to be offered) would purchase at such
Current Market Price and the denominator of which shall be the number of shares
of Common Stock outstanding on such record date plus the number of additional
shares of Common Stock so issued or to be offered for subscription or purchase
(or into which the convertible or exchangeable securities so to be offered are
initially convertible or exchangeable). Such adjustment shall become effective
at the close of business on such record date; provided, however, that, to the
extent the shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock) are not delivered, the Exercise Price
shall be readjusted after the expiration of such rights, options, or warrants
(but only with respect to the exercise of this Warrant after such expiration),
to the Exercise Price which would then be in effect had the adjustments made
upon the issuance of such rights, options, or warrants been made upon the basis
of delivery of only the number of shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock) actually issued and
the Exercise Price shall also be adjusted for any subsequent adjustment or other
change to the number of shares of Common Stock issuable upon exercise, exchange
or conversion of such rights, options, warrants or other securities.
Notwithstanding anything to the contrary contained herein, no adjustment shall
be made to the Exercise Price until any condition to the vesting of such rights,
options or warrants shall be fulfilled or satisfied (and then only with respect
to the portion thereof which shall have vested). In case any subscription price
may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the board of directors of the Company, whose determination shall be
conclusive absent manifest error. Shares of
B-4
Common Stock owned by or held for the account of the Company or any
majority-owned subsidiary shall not be deemed outstanding for the purpose of any
such computation. If any event occurs of the type contemplated by the provisions
of this paragraph but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock
rights or other rights with equity features), then the Board shall make an
appropriate adjustment in the Exercise Price so as to equitably protect the
rights of holders of this Warrant.
(c) In case the Company shall distribute to all holders of Common
Stock (including any such distribution made to the stockholders of the Company
in connection with a consolidation or merger in which the Company is the
continuing corporation) evidences of its indebtedness, cash (other than any cash
dividend which, together with any cash dividends paid within the twelve (12)
months prior to the record date for such distribution, does not exceed 5% of the
Current Market Price at the record date for such distribution) or assets (other
than distributions and dividends payable in shares of Common Stock), or rights,
options, or warrants to subscribe for or purchase Common Stock, or securities
convertible into or exchangeable for shares of Common Stock (excluding those
with respect to the issuance of which an adjustment of the Exercise Price is
provided pursuant to the foregoing paragraph), then, in each case, the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to the record date for the determination of stockholders entitled to
receive such distribution by a fraction, the numerator of which shall be the
Current Market Price per share of Common Stock on such record date, less the
fair market value (as determined in good faith by the board of directors of the
Company, whose determination shall be conclusive absent manifest error) of the
portion of the evidences of indebtedness or assets so to be distributed, or of
such rights, options, or warrants or convertible or exchangeable securities, or
the amount of such cash, applicable to one share, and the denominator of which
shall be such Current Market Price per share of Common Stock. Such adjustment
shall become effective on the date of such distribution.
No adjustment in the Exercise Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this Warrant are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Warrant shall be made to the nearest cent or to the nearest one thousandth of a
share, as the case may be.
In any case in which this Warrant shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer, until the occurrence of such event,
issuing to the Registered Holder of, if the Registered Holder has exercised this
Warrant after such record date, the shares of Common Stock, if any, issuable
upon such exercise over and above the shares of Common Stock, if any, issuable
upon such exercise on the basis of the Exercise Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to the exercising
Registered Holder a due ▇▇▇▇ or other appropriate instrument evidencing the
Registered Holder's right to receive such additional shares upon the occurrence
of the event requiring such adjustment.
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Upon each adjustment of the Exercise Price as a result of the
calculations made above this Warrant shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of shares (calculated to
the nearest thousandth) obtained by dividing (A) the product obtained by
multiplying the number of shares purchasable upon exercise of this Warrant prior
to adjustment of the number of shares by the Exercise Price in effect prior to
adjustment of the Exercise Price by (B) the Exercise Price in effect after such
adjustment of the Exercise Price.
In case of any capital reorganization, other than in the cases
referred to above, or the consolidation or merger of the Company with or into
another corporation (other than a merger or consolidation in which the Company
is the continuing corporation and which does not result in any reclassification
of the outstanding shares of Common Stock or the conversion of such outstanding
shares of Common Stock into shares of other stock or other securities or
property), or the sale of the property of the Company as an entirety or
substantially as an entirety (collectively such actions being hereinafter
referred to as "Reorganizations"), the Company shall provide to the Registered
Holder twenty (20) days' (or such shorter period agreed in writing by the
holders of a majority of the shares of Common Stock issuable upon exercise of
this Warrant and all other then outstanding Warrants to Purchase Shares of
Common Stock issued pursuant to the Purchase Agreement) advance written notice
of such Reorganization, and this Warrant shall terminate upon consummation of
such Reorganization unless properly exercised prior to the occurrence of such
Reorganization.
In case of any reclassification or change of the shares of Common
Stock issuable upon exercise of this Warrant, including, without limitation, in
any reorganization (other than a change in par value or from no par value to a
specified par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), the Registered Holder of this Warrant shall have the right thereafter
to receive upon exercise of this Warrant solely the kind and amount of shares of
stock and other securities, property, cash, or any combination thereof
receivable upon such reclassification or change by a Registered Holder of the
number of shares of Common Stock for which this Warrant might have been
exercised immediately prior to such reclassification or change and the term
"Warrant Shares" shall thereafter include, without limitation, such stock and
other securities. Thereafter, appropriate provision shall be as nearly
equivalent as practicable to the adjustments in this Warrant. The above
provisions of this paragraph shall similarly apply to successive
reclassifications and changes of shares of Common Stock.
Whenever the Exercise Price is adjusted as provided in this Warrant,
the Company will promptly obtain a certificate of the chief financial officer of
the Company setting forth the Exercise Price as so adjusted and a brief
statement of the facts accounting for such adjustment. Whenever any adjustment
is made pursuant to this Warrant, the Company shall cause notice of such
adjustment to be mailed to the Registered Holder within fifteen (15) days
thereafter, such notice to include in reasonable detail (i) the events
precipitating the adjustment, (ii) the computation of any adjustments, and (iii)
the Exercise Price, the number of
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shares or the securities or other property purchasable upon exercise of this
Warrant after giving effect to such adjustment.
In no event shall the Exercise Price be adjusted below the par value
per share of the Common Stock.
Irrespective of any adjustments pursuant to this Warrant, any
Warrant theretofore or thereafter issued need not be amended or replaced, but
certificates thereafter issued shall bear an appropriate legend or other notice
of any adjustments.
The Company shall not be required upon the exercise of any Warrant
to issue fractional shares of Common Stock which may result from adjustments in
accordance with this Warrant to the Exercise Price or number of shares of Common
Stock purchasable under each Warrant. If more than one Warrant is exercised at
one time by the same Registered Holder, the number of full shares of Common
Stock which shall be deliverable shall be computed based on the number of shares
deliverable in exchange for the aggregate number of Warrants exercised. With
respect to any fractional Warrant Share called for upon the exercise this
Warrant, the Company shall pay a cash adjustment in respect of such fractional
Warrant Share in an amount equal to the same fraction of the Current Market
Price of a share of Common Stock calculated in accordance with this Warrant.
If any change to the capitalization of the Company should occur with
respect to which a favorable adjustment to the rights and interests of the
Registered Holder should be made, and such adjustment is not otherwise provided
for in this Warrant, such appropriate adjustment should be made as determined in
good faith by the Board of Directors of the Company.
9. Expiration Date. This Warrant may not be exercised after 5:00
P.M., New York City time, on September 29, 2009 (the "Expiration Date") and
shall be void after the Expiration Date.
10. No Rights as Stockholder. This Warrant shall not entitle the
Registered Holder to any of the rights of a stockholder of the Company,
including, without limitation, the right to vote, to receive dividends and other
distributions, to receive any notice of, or to attend, meetings of stockholders
or any other proceedings of the Company.
11. Mutilation, Loss, Theft or Destruction of Warrant. If this
Warrant shall be mutilated, lost, stolen or destroyed, the Company in its
discretion may execute and deliver, in exchange and substitution for and upon
cancellation of this Warrant, or in lieu of or in substitution for a lost,
stolen or destroyed Warrant and upon receipt of an affidavit of the Registered
Holder or other evidence reasonably satisfactory to the Company of the loss,
theft or destruction of such Warrant and an indemnification of loss by the
Registered Holder in favor of the Company, a new Warrant for the number of
Warrant Shares represented by the Warrant so mutilated, lost, stolen or
destroyed but only upon receipt of evidence of such loss, theft or destruction
of such Warrant Certificate, and of the ownership thereof, and indemnity, if
re-
B-7
quested, all reasonably satisfactory to the Company. Applicants for such
substitute Warrant shall also comply with such other reasonable regulations and
pay such other reasonable charges incidental thereto as the Company may
prescribe. Any such new Warrant shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant shall be at any time enforceable by anyone.
12. Representations of Registered Holders.
The Registered Holder agrees not to make any disposition of all or
any part of the Warrant or Common Stock in any event unless and until:
(d) The Company shall have received a letter secured by the
Registered Holder from the Securities and Exchange Commission stating that no
action will be recommended to the Commission with respect to the proposed
disposition;
(e) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with said registration statement; or
(f) The Registered Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a statement
briefly describing the circumstances surrounding the proposed disposition, and
if reasonably requested by the Company, the Registered Holder shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to the
Company, for the Registered Holder to the effect that such disposition will not
require registration of such Warrant or Common Stock under the Act or any
applicable state securities laws; provided that such statement will not be
required if the disposition is permitted under Rule 144 of the Securities Act.
The Registered Holder understands and agrees that all certificates
evidencing the Common Stock to be issued to the Registered Holder may bear a
legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY
STATE AND ACCORDINGLY, MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER THE ACT
UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT OR UNLESS SUCH SALE,
PLEDGE, HYPOTHECATION OR TRANSFER IS OTHERWISE EXEMPT FROM
REGISTRATION AND ANY APPLICABLE STATE SECURITIES LAWS. THE ISSUER OF
THESE SECURITIES MAY REQUEST A WRITTEN OPINION OF COUNSEL,
B-8
REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH SALE OR OTHER
TRANSFER.
13. Split Up, Combination, Exchange or Transfer of Warrant. Prior
to the latest time at which this Warrant may be exercised, subject to any
applicable laws, rules or regulations restricting transferability, this Warrant,
subject to the provisions hereof, may be split up, combined with or exchanged
for other Warrants representing a like aggregate number of Warrant Shares or may
be transferred in whole or in part. Any holder desiring to split up, combine,
exchange or transfer this Warrant shall make such request in writing delivered
to the Company at its principal office and shall surrender this Warrant to be
split up, combined or exchanged at said office with the Form of Assignment. Upon
any such surrender for split up, combination, exchange or transfer, the Company
shall execute and deliver to the person entitled thereto a new Warrant or
Warrants, as the case may be, as so requested in the Form of Assignment. The
Company may require the holder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split up,
combination, exchange or transfer of this Warrant prior to the issuance of any
new Warrant.
If this Warrant is surrendered upon its exercise or for split up,
combination, exchange or transfer, or purchased or otherwise acquired by the
Company, shall be canceled and shall not be reissued by the Company; and, except
as otherwise provided herein in case of the exercise of this Warrant for less
than all of the Warrant Shares or in case of a split up, combination, exchange
or transfer, no Warrant shall be issued hereunder in lieu of such canceled
Warrant. Any Warrant so canceled shall be destroyed by the Company.
By accepting this Warrant, the Registered Holder consents and agrees
with the Company that:
(g) transfer of this Warrant shall be registered on the books of
the Company only if surrendered at the principal office of the Company, duly
endorsed or accompanied by a proper instrument of transfer; and
(h) prior to due presentment for registration of transfer, the
Company may deem and treat the person in whose name this Warrant is registered
as the absolute owner thereof and of the rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Warrant made by
anyone other than the Company) for all purposes whatsoever, and the Company
shall not be affected by any notice to the contrary.
14. Headings. The headings of the various sections of this Warrant
are for convenience of reference only and shall not be deemed to be part of this
Warrant.
15. Governing Law. The laws of the State of New York shall govern
this Warrant.
B-9
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed.
MYOGEN, INC.
By: ______________________________
B-10
FORM OF
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to (check one box only):
[ ] purchase ________ shares of Myogen, Inc. (the "Company") common
stock ("Common Stock") pursuant to the terms of the attached warrant
(the "Warrant"), and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any;
[ ] purchase the number of shares of Common Stock by cashless exercise
pursuant to the terms of the Warrant as shall be issuable upon
cashless exercise of the portion of the Warrant relating to ________
shares, and shall tender payment of all applicable transfer taxes,
if any;
The undersigned represents and warrants to the Company as of the date hereof the
same statements with respect to the shares being acquired upon exercise of this
warrant as are set forth in Section 4 of the Securities Purchase Agreement dated
September 24, 2004, pursuant to which the above-referenced warrant was sold,
regarding the securities purchased thereby.
The undersigned requests that certificates for such shares be issued and
delivered as follows:
ISSUE
TO:__________________________________________
(NAME)
_______________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
_______________________________________________________________________________
(SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER)
DELIVER
TO:__________________________________________
(NAME)
_______________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the attached Warrant is exercised in part only, the undersigned requests that
a new Warrant evidencing the right to purchase the balance of the shares
purchasable under the Warrant be issued and delivered as set forth below.
ISSUE
TO:__________________________________________
(NAME)
_______________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
_______________________________________________________________________________
(SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER)
DELIVER
TO:__________________________________________
(NAME)
_______________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
Dated:___________________
________________________________ _______________________________
(Insert Social Security or (Signature of registered holder)
other identifying number
of holder)
_______________________________
(Signature of registered
holder, if co-owned)
NOTE: Signature must conform in all respects to name of holder as specified on
the face of the Warrant.
FORM OF
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the
Assignee named below all of the rights of the undersigned represented by the
within Warrant, with respect to the number of Warrant Shares set forth below:
Name of Assignee Address No. of Warrant Shares
and does hereby irrevocably constitute and appoint ________________ Attorney to
make such transfer on the books of Myogen, Inc. maintained for that purpose,
with full power of substitution in the premises.
Dated:_____________, 200_.
____________________________________________ _____________________________
(Insert Social Security or other identifying Signature
number of holder)
_____________________________
APPENDIX C
FORM OF LOCK-UP AGREEMENT
, 2004
CIBC WORLD MARKETS CORP.
LAZARD FRERES & CO. LLC
c/o CIBC World Markets Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Myogen, Inc. -
PIPE Offering of Common Stock
Ladies and Gentlemen:
The undersigned [a/an] [ ] of Myogen, Inc., a
Delaware corporation (the "Company"), understands that CIBC World Markets Corp.
and Lazard Freres & Co. LLC (the "Placement Agents" or "you") have entered into
a Placement Agency Agreement (the "Placement Agency Agreement") with the Company
whereby you will act as its exclusive agents in the private placement of common
stock, $0.001 par value, of the Company (the "Common Stock") and accompanying
warrants to a limited number of sophisticated investors (the "Transaction").
In recognition of the benefit that the Transaction will confer upon
the undersigned as [a/an] [ ] of the Company, and for other good
and valuable consideration receipt of which is hereby acknowledged, the
undersigned hereby agrees that, without the prior written consent of both of the
Placement Agents, the undersigned will not, directly or indirectly, from the
date hereof and through the period ending 90 days after the effective date of
the registration statement (the "Registration Statement") required to be filed
with the Securities and Exchange Commission pursuant to the Securities Purchase
Agreement dated September __, 2004 among the Company and the several purchasers
listed on Appendix A attached thereto (the "Securities Purchase Agreement") ,
(1) offer, pledge, announce the intention to sell, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or dispose
of any shares of Common Stock or any securities of the Company which are
substantially similar to the Common Stock, including but not limited to any
securities convertible into or exercisable or exchangeable for, or that
represent the right to receive, Common Stock (including, but not limited to,
Common Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and securities which may be issued upon exercise of a stock option or
warrant) (collectively, the "Company Securities") or (2) enter into any swap,
option, future, forward or other agreement that transfers, in whole or in part,
any of the economic conse-
quences of ownership of the Company Securities, regardless of whether any of the
transactions described in clause (1) or (2) above is to be settled by delivery
of Company Securities, in cash or otherwise. In addition, the undersigned agrees
that, without the prior written consent of both of the Placement Agents, it will
not, from the date hereof and through the period ending 90 days after the
effective date of the Registration Statement, (1) make any demand for, or
exercise any right with respect to, the registration of any Company Securities
or (2) make any demand for, or exercise any preemptive right relating to the
purchase of any Company Securities. Notwithstanding the foregoing, in the event
that the Company has provided written notice to either Placement Agent that it
will not be acting as a Placement Agent in connection with this Transaction (a
"Non-Participating Party"), then the consent of such Non-Participating Party
shall not be required hereunder.
The foregoing paragraph shall not apply to (i) transfers of shares
of Common Stock or options to purchase Common Stock made as a bona fide gift or
gifts, provided that the donee or donees thereof agree to be bound by the
restrictions set forth herein prior to such transfer, (ii) transfers of shares
of Common Stock or options to purchase Common Stock made to any trust for the
direct or indirect benefit of the undersigned or the immediate family of the
undersigned, provided that the trustee of the trust agrees to be bound by the
restrictions set forth herein prior to such transfer, and provided further that
any such transfer shall not involve a disposition for value, (iii) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Transaction and (iv) distributions to
partners, members or shareholders of the undersigned, provided that the
undersigned is a limited partnership, limited liability company or corporation
and the distributees thereof agree in writing to be bound by the restrictions
set forth herein prior to such distribution.
In furtherance of the foregoing, the Company and any duly appointed
transfer agent for the registration or transfer of the securities described
herein are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Agreement.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned recognizes that the Transaction will be of benefit
to the undersigned and will benefit the Company by, among other things, raising
capital for its operations. The undersigned understands that the several
purchasers listed on Appendix A attached to the Securities Purchase Agreement
are entering into the Securities Purchase Agreement and proceeding with the
Transaction in reliance upon this Lock-Up Agreement.
THIS LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
C-2
Very truly yours,
__________________________________
Name:
Title:
C-3