_____________________________________________________
PALATIN TECHNOLOGIES, INC.
PURCHASE AGREEMENT
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TABLE OF CONTENTS
Page
1. PURCHASE AND SALE OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Issue of Securities . . . . . . . . . . . . . . . . . . . . . . . . .2
2. CLOSING DATE; DELIVERY. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.2 Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF THE PURCHASER. . . . 4
3.1 Legal Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
3.2 Due Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
3.3 Investment Representations. . . . . . . . . . . . . . . . . . . . . .5
3.4 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . .9
4. COVENANTS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . .10
4.1 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5. UNDERSTANDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
6. DEFAULTING PROSPECTIVE PURCHASERS . . . . . . . . . . . . . . . . . . . . .14
7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
7.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.3 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 15
7.4 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.5 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.6 Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . . . . 16
7.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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7.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.9 Titles and Subtitles. . . . . . . . . . . . . . . . . . . . . . . . 16
7.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.11 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8. ESCROW AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
9. EXECUTION OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . .20
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PALATIN TECHNOLOGIES, INC.
PURCHASE AGREEMENT
This Purchase Agreement (the "Agreement" or "Purchase Agreement") is
made as of ____________, 2001 by and between Palatin Technologies, Inc., a
Delaware corporation (the "Company"), with its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, and each of the purchasers who
are signatories hereto and any other purchasers who are made a party to this
Agreement pursuant to Section 1 (individually, a "Purchaser" and collectively,
the "Purchasers").
RECITALS
The Company is hereby offering (the "Offering") a minimum of $5,000,000
and a maximum of $20,000,000 (a) shares (the "Shares") of the Company's Common
Stock, $.01 par value per share (the "Common Stock"), and (b) warrants (the
"Warrants") entitling the Purchaser to purchase one (1) share of Common Stock
for every four (4) shares of Common Stock purchased under this Agreement. The
Shares and the Warrants offered in the Offering shall sometimes collectively be
referred to herein as the "Securities." The Securities will be sold by the
Company to Purchasers pursuant to Regulation D ("Regulation D") and/or
Regulation S ("Regulation S") promulgated under the Securities Act of 1933, as
amended (the "Act").
The purchase price of the Shares to be offered in the Offering (the
"Offering Price") will be the sum of (i) the amount equal to the average
reported closing sales prices for the Common Stock on the American Stock
Exchange (symbol "PTN") for the five (5) business days immediately prior to the
Initial Closing Date (as defined below) and any subsequent Closing Dates (as
defined below), as the case may be, and (ii) $0.03125, which reflects the value
assigned to the warrants. Every four (4) shares of Common Stock purchased in the
Offering will entitle the Purchaser to a Warrant to purchase one (1) share of
Common Stock at an exercise price per share equal to 120% of the Offering Price,
subject to certain adjustments.
AGREEMENT
In consideration of the Company's agreement to sell the Securities to
the undersigned upon the terms and conditions contained herein, each Purchaser
(severally and not jointly) agrees and represents as follows:
1. PURCHASE AND SALE OF SECURITIES.
1.1 ISSUE OF SECURITIES.
(a) The Company has authorized the issuance and sale of a minimum of
$5,000,000 and a maximum of $20,000,000 of Securities pursuant to the
provisions of this Agreement.
(b) Subject to the terms and conditions set forth herein, the Company
hereby agrees to issue and sell to each Purchaser the aggregate amount of
Shares and Warrants
set forth below the Purchaser's signature on the subscription page bearing
such Purchaser's name. The Shares shall be sold at the Offering Price.
(c) Subject to the terms and conditions set forth herein, each
Purchaser hereby agrees to purchase the amount of Shares and Warrants as
determined on the subscription page bearing such Purchaser's name (each a
"Subscription"). Each Purchaser shall severally, and not jointly, be liable
only for the purchase of the amount of Shares and Warrants that appears on
the subscription page hereof that relates to such Purchaser.
(d) The Company's agreement with each Purchaser is a separate
agreement and the sale of the Securities to each Purchaser is a separate
sale.
2. CLOSING DATE; DELIVERY.
2.1 CLOSING. The Company expects to hold an initial closing of the
Offering (the "Initial Closing") at any time after subscriptions for a minimum
of $5,000,000 of Securities have been accepted, which is expected to occur on or
about October 31, 2001. The final closing of the Offering (the "Final Closing
Date") shall occur as soon as practicable on the date on which Subscriptions for
the maximum of $20,000,000 of Securities have been accepted by the Company but
no later than December 15, 2001, unless extended by the Company for an
additional period not exceeding 60 days, without notice to the Purchaser. The
Company may hold additional interim closings after the Initial Closing. Any such
interim closing together with the Initial Closing are each hereinafter referred
to as an "Interim Closing" and shall occur on one or more dates each hereinafter
referred to as an "Interim Closing Date," and each, together with the Final
Closing Date, are hereinafter referred to as a "Closing Date."
2.2 DELIVERY. On each Closing Date, subject to the terms and conditions
hereof, the Company shall deliver to each Purchaser (i) stock certificates,
registered in the name of the Purchaser, representing the Shares to be purchased
by the Purchaser from the Company, and (ii) warrant certificates, registered in
the name of the Purchaser, representing the Warrants purchased by the Purchaser,
each dated as of the relevant Closing Date, against payment of the purchase
price therefor (the "Payment") by wire transfer or previously cleared check,
unless other means of payment shall have been agreed upon by the Purchaser and
the Company. The undersigned understands that payments by check as provided in
this Paragraph 2.2 shall be delivered to ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇ P.C., as the escrow agent and, thereafter, such payment will be deposited
as soon as practicable in an escrow account for the undersigned's benefit. The
wire transfer shall be made to ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇, P.C.,
as escrow agent in accordance with the wire transfer instructions attached as
Exhibit A hereto. The Payment will be made on or prior to the relevant Closing
Date. The Payment (or, in the case of the rejection of a portion of the
undersigned's subscription, the part of the Payment relating to such rejected
portion) will be returned promptly, without interest or deduction, if the
undersigned's subscription is rejected in whole or in part. Any Payment made by
the Purchaser prior to the Initial Closing and/or any subsequent Closing is
based on an estimated price per share of Common Stock of $3.00. The Purchaser
agrees to remit to the Company on the Initial Closing and/or any Interim Closing
the balance of the Payment if the Offering Price is greater than $3.00 per
share. The Company agrees to promptly remit to the Purchaser any excess Payment
made by such Purchaser if the Offering Price is less than $3.00 per share. Each
party
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hereto shall deliver or cause to be delivered at or prior to the Closing
Date an executed copy of the Registration Rights Agreement between the Company
and the Purchaser and the Company shall deliver to each Purchaser a
fully-executed copy of the Agreement.
3. REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF THE PURCHASER.
Each Purchaser hereby represents and warrants to, and agrees with, the
Company as follows:
3.1 Legal Power . If this Agreement is executed and delivered on behalf of
a partnership, corporation, limited liability company, trust or estate: (i) such
partnership, corporation, limited liability company, trust or estate has the
full legal right and power and all authority and approval required (a) to
execute and delivery, or authorize execution and deliver of, this Agreement and
all other instruments (including, without limitation, the Registration Rights
Agreement among the Purchasers and the Company (the "Registration Rights
Agreement") executed and delivered by or on behalf of such partnership,
corporation, limited liability company, trust or estate in connection with the
purchase of its Securities, (b) to delegate authority pursuant to a power of
attorney and (c) to purchase and hold such Securities; (ii) the signature of the
party signing on behalf of such partnership, corporation, limited liability
company, trust or estate is binding upon such partnership, corporation, trust or
estate; and (iii) such partnership, corporation, limited liability company or
trust has not been formed for the specific purpose of acquiring such Securities,
unless each beneficial owner of such entity is qualified as an accredited
investor within the meaning of Rule 501(a) of Regulation D and has submitted
information substantiating such individual qualification.
3.2 DUE EXECUTION. Each of this Agreement and the Registration Rights
Agreement (collectively, the "Operative Documents") has been duly authorized, if
Purchaser is a corporation, partnership, limited liability company, trust or
fiduciary, executed and delivered by Purchaser and, upon due execution and
delivery by the Company, the Operative Documents will be valid and binding
agreements of Purchaser, enforceable against Purchaser in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws relating to or affecting creditors' rights and subject to
general equity principles.
3.3 INVESTMENT REPRESENTATIONS.
3.3.1 Purchaser is acquiring the Securities for its own account, not
as nominee or agent, for investment and not with a view to or for resale in
connection with any distribution or public offering thereof within the
meaning of the Act, except pursuant to an effective registration statement
under the Act. Alternatively, if Purchaser is a non-United States resident,
such purchaser represents that it (a) is acquiring the Securities solely
for its own account, and not on behalf of a U.S. resident, for investment
purposes and not with a view to distribution or resale, and (b) will not
sell, hypothecate, pledge or otherwise dispose of any interest in the
Securities, in the United States, its territories and possessions or any
area subject to its jurisdiction, or to any partnership or other entity
created or organized therein, unless such Securities have been either
registered under the Act or are exempt from the registration
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requirements of the Act; in the opinion o the Company's counsel, and unless
such Purchaser has complied with any applicable restrictions on transfer in
this Agreement.
3.3.2 Purchaser understands that (i) the Securities have not been
registered under the Act by reason of a specific exemption therefrom,
and may not be transferred or resold except pursuant to an effective
registration statement or exemption from registration and (ii) each
certificate or other document representing the Securities will be
endorsed with legends in substantially the following form:
A) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
B) Any legend required to be placed thereon by applicable
federal or state securities laws;
and (iii) the Company will instruct any transfer agent not to register
the transfer of any of the Securities unless the conditions specified
in the foregoing legend are satisfied.
3.3.3 The Purchaser is familiar with and understands the terms of
the Offering, including the rights to which the Purchaser is entitled
under the Registration Rights Agreement and Form of Warrant
Certificate attached hereto. The Purchaser has been furnished with and
has carefully read the Company's Current Reports on Form 8-K dated
June 5, 2001, June 1, 2001, May 2, 2001 and September 21, 2000 (the
"8-Ks"), the Company's Quarterly Reports on Form 10-QSB for the
Quarters ended March 31, 2001, December 31, 2000 and September 30,
2000 (the "10-Qs"), and the Company's Annual Report on Form 10-KSB for
the year ended June 30, 2001 (the "10-K"). In evaluating the
suitability of an investment in the Company, the Purchaser has not
relied upon any representation or other information (whether oral or
written) from the Company, or any agent, employee or affiliate of the
Company other than as set forth in the 10-K, 10-Qs and 8-Ks and the
results of Purchaser's own independent investigation. With respect to
individual or partnership tax and other economic considerations
involved in this investment, the Purchaser has carefully considered
and has, to the extent the Purchaser believes such discussion
necessary, discussed with the Purchaser's professional legal, tax,
accounting and financial advisers the suitability of an investment in
the Securities for the Purchaser's particular tax and financial
situation and has determined that the Securities being subscribed for
by the Purchaser are a suitable investment for the Purchaser.
3.3.4 The Purchaser acknowledges that (i) the Purchaser has had
the right to request copies of any documents, records and books
pertaining to this investment and (ii)
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such documents, records, and books pertaining to this investment which
the Purchaser requested have been made available for inspection by the
Purchaser, the Purchaser's representative, attorney, accountant or
adviser(s) (the "Purchaser's advisers").
3.3.5 The Purchaser and/or the Purchaser's adviser(s) has/have
had a reasonable opportunity to ask questions of and receive answers
from a person or persons acting on behalf of the Company concerning
the Offering and all such questions have been answered to the full
satisfaction of the Purchaser.
3.3.6 The Purchaser is not subscribing for Securities as a result
of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or
meeting.
3.3.7 Purchaser is an "accredited investor" as such term is
defined in Rule 501 under the Act and as indicated by the Purchaser's
responses to the Confidential Purchaser Questionnaire.
3.3.8 Purchaser is a resident of, and all communications
regarding Purchaser's purchase of the Securities were sent to
Purchaser, in the state and country of Purchaser's residence shown on
the subscription page attached hereto.
3.3.9 If the Purchaser is a natural person, the Purchaser has
reached the age of majority in the state or other jurisdiction in
which the Purchaser resides, has adequate means of providing for the
Purchaser's current financial needs and contingencies, is able to bear
the substantial economic risks of an investment in the Securities for
an indefinite period of time, has no need for liquidity in such
investment and, at the present time, could afford a complete loss of
such investment.
3.3.10 The Purchaser or the Purchaser's representative, as the
case may be, has such knowledge and experience in financial, tax and
business matters so as to enable the Purchaser to utilize the
information made available to the Purchaser in connection with the
Offering to evaluate the merits and risks of an investment in the
Securities and to make an informed investment decision with respect
thereto.
3.3.11 The Purchaser recognizes that an investment in the
Securities involves substantial risks, including loss of the entire
amount of such investment. Further, the Purchaser has carefully read
and considered the matters set forth under the caption "Important
Factors Affecting Our Business" in the 10-K, and has taken full
cognizance of and understands all of the risks related to the purchase
of the Securities.
3.4 REMEDIES. The Purchaser acknowledges and agrees that it shall not
be entitled to seek any remedies with respect to the Offering from any
party other than the Company.
3.5 INDEMNIFICATION. The Purchaser shall indemnify and hold harmless
the Company and each officer, director or control person of the Company,
who is or may be a party or is or may be threatened to be made a party to
any threatened, pending or completed action,
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suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or
state facts made or alleged to have been made by the Purchaser to the
Company, or omitted or alleged to have been omitted by the Purchaser,
concerning the Purchaser or the Purchaser's authority to invest or
financial position in connection with the Offering, including, without
limitation, any such misrepresentation, misstatement or omission contained
in any investor qualification questionnaire or any other document submitted
by the Purchaser, against losses, liabilities and expenses for which the
Company, or any officer, director or control person of the Company has not
otherwise been reimbursed (including attorneys' fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by the
Company, or such officer, director or control person in connection with
such action, suit or proceeding.
4. COVENANTS OF THE COMPANY.
4.1 INFORMATION.
So long as the Company is subject to the periodic reporting requirements of
the Exchange Act, the Company shall deliver to each holder of Securities all
annual, quarterly or other reports to the extent such reports are furnished to
the Company's public security holders. In the event that the Company is not so
subject, until the fifth anniversary of the relevant Closing Date the Company
shall promptly furnish to each holder of Securities (i) as soon as available,
and in any event within 90 days after the end of each fiscal year of the
Company, a consolidated balance sheet of the Company and its consolidated
subsidiaries, if any, as of the end of such fiscal year and the related
consolidated statements of income, stockholders' equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all prepared in accordance with generally accepted
accounting principles and reported on by independent certified public
accountants of recognized national standing; and (ii) as soon as available, and
in any event within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, a consolidated balance sheet of the
Company and its consolidated subsidiaries, if any, as of the end of such quarter
and the related consolidated statements of income and stockholder's equity
(together with any other quarterly financial statements being prepared by the
Company at such time), setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of the
Company's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation and consistency by the chief
financial or accounting officer of the Company.
5. UNDERSTANDINGS.
The Purchaser understands, acknowledges and agrees with the Company as
follows:
5.1 This Subscription may be rejected, in whole or in part, by the Company,
in the sole and absolute discretion of the Company, at any time before any
Closing Date notwithstanding prior receipt by the Purchaser of notice of
acceptance of the Purchaser's Subscription.
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5.2 Except as otherwise set forth herein, the Purchaser hereby acknowledges
and agrees that the Subscription hereunder is irrevocable by the Purchaser,
that, except as required by law, the Purchaser is not entitled to cancel,
terminate or revoke this Agreement or any agreements of the Purchaser hereunder
and that this Agreement and such other agreements shall survive the death or
disability of the Purchaser and shall be binding upon and inure to the benefit
of the parties and their heirs, executors, administrators, successors, legal
representatives and permitted assigns. If the Purchaser is more than one person,
the obligations of the Purchaser hereunder shall be joint and several and the
agreements, representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person and his/her
heirs, executors, administrators, successors, legal representatives and
permitted assigns.
5.3 No federal or state agency has made any finding or determination as to
the accuracy or adequacy of this Agreement or the Registration Rights Agreement
or as to the fairness of the terms of this Offering for investment nor any
recommendation or endorsement of the Securities.
5.4 The Offering is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) of the Securities Act and the
provisions of Regulation D thereunder, and/or the provisions of Regulation S
which is in part dependent upon the truth, completeness and accuracy of the
statements made by the Purchaser.
5.5 There can be no assurance that the Purchaser will be able to sell or
dispose of the Securities. It is understood that in order not to jeopardize the
Offering's exempt status under Section 4(2) of the Securities Act and Regulation
D, as well as Regulation S, any transferee may, at a minimum, be required to
fulfill the investor suitability requirements thereunder.
5.6 [domestic] Paramount Capital, Inc. (the "Placement Agent") is acting as
a finder in connection with this Offering [solely in the United States] and will
receive a fee equal to 7% of the aggregate cash value of the amount of equity
investment raised by the Company through the introduction by the Placement Agent
to qualified individuals or institutions and (ii) warrants to purchase shares of
Common Stock equal to 5% of the shares of Common Stock sold as part of such
equity investment, with such warrants having an exercise price equal to 120% of
the Offering price per common share.
5.6 [foreign] Privateq Advisors AG (the "Placement Agent") is acting as a
finder in connection with this Offering [solely in Europe] and will receive (i)
a fee equal to 7% of the aggregate cash value of the amount of equity investment
raised by the Company through the introduction by the Placement Agent to
qualified individuals or institutions and (ii) warrants to purchase shares of
Common Stock equal to 10% of the shares of Common Stock sold as part of such
equity investment, with such warrants having an exercise price equal to 120% of
the Offering price per common share.
5.7 The Purchaser acknowledges that the information contained in this
Agreement and the Registration Rights Agreement or otherwise made available to
the Purchaser is confidential and non-public and agrees that all such
information shall be kept in confidence by the Purchaser and neither used by the
Purchaser for the Purchaser's personal benefit (other than in connection with
this Subscription) nor disclosed to any third party for any reason,
notwithstanding that a Purchaser's Subscription may not be accepted by the
Company; provided, however, that this obligation shall not apply to any such
information that (i) is part of the public knowledge or literature and readily
accessible at the date hereof, (ii) becomes part of the public knowledge or
literature and readily accessible by publication (except as a result of a breach
of
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this provision) or (iii) is received from third parties (except third parties
who disclose such information in violation of any confidentiality agreements or
obligations, including, without limitation, any subscription or other similar
agreement entered into with the Company).
5.8 The representations, warranties and agreements of the Purchaser
contained herein and in any other writing delivered in connection with the
transactions contemplated hereby shall be true and correct in all respects on
and as of the relevant Closing Date of the sale of the Securities as if made on
and as of such date and shall survive the execution and delivery of this
Agreement and the purchase of the Securities.
5.9 IN MAKING AN INVESTMENT DECISION, PURCHASERS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
PURCHASE AGREEMENT OR OTHER WRITINGS DELIVERED IN CONNECTION WITH THE SALE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
5.10 THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED, RESOLD OR OTHERWISE DISPOSED OF EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. PURCHASERS SHOULD BE AWARE
THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
5.11 If the Purchaser is a Registered Representative of an NASD member
firm, the Purchaser must give such firm the notice required by the NASD's Rules
of Fair Practice, receipt of which must be acknowledged by such firm on the
signature page hereof.
6. DEFAULTING PROSPECTIVE PURCHASERS.
(a) If, on the relevant Closing Date, a prospective Purchaser defaults in
the performance of its obligations under this Agreement, a non-defaulting
prospective Purchaser may make arrangements for the purchase of the Securities
that would have been purchased by such defaulting prospective Purchaser by other
persons satisfactory to the Company and the non-defaulting prospective
Purchasers, but if no such arrangements are made within 36 hours after such
default, this Agreement shall terminate without liability on the part of the
non-defaulting prospective Purchasers or the Company except that prospective
Purchasers will continue to be liable for the payment of expenses to the extent
set forth in Section 7.8 and except that the provisions of Section 3.5 shall not
terminate and shall remain in effect.
(b) Nothing contained herein shall relieve a defaulting prospective
Purchaser of any liability it may have for damages caused by its default. If
other Purchasers agree to purchase the Securities of a defaulting prospective
Purchaser, either the non-defaulting
8
prospective Purchaser or the Company may postpone a Closing Date for up to seven
(7) full business days in order to effect any changes that in the reasonable
opinion of counsel for the Company or counsel for the Placement Agent may be
necessary in any document or arrangement, and the Company agrees to prepare and
distribute promptly any amendment that effects any such changes.
7. MISCELLANEOUS.
7.1 GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of New York without regard to any otherwise applicable
principles of conflicts of laws.
7.2 SURVIVAL. The representations and warranties made by the parties in
this Agreement shall survive the consummation of the transactions herein
contemplated until the expiration of the statute of limitations with respect to
claims arising under Section 10(b) of the Securities Exchange Act of 1934, as
amended, with respect to the purchase of Securities hereunder.
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
7.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, constitute
the full and entire understanding and agreement among the parties with regard to
the subjects hereof and no party shall be liable or bound to any other party in
any manner by any representations, warranties, covenants or agreements except as
specifically set forth herein or therein. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto and
their respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
7.5 SEVERABILITY. In the event that any provision of this Agreement shall
be invalid, illegal or unenforceable, it shall, to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. To the extent permitted by law, the parties hereto waive the
benefit of any provision of law that renders any provision of this Agreement
invalid or unenforceable in any respect.
7.6 AMENDMENT AND WAIVER. Except as otherwise provided herein, 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, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of the Company and the Purchaser.
7.7 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
personal delivery, on the first business day following mailing by overnight
courier, or on the fifth day following
9
mailing by registered or certified mail, return receipt requested, postage
prepaid, addressed to the Company and the Purchaser at the respective addresses
included herein.
7.8 FEES AND EXPENSES. Except as otherwise provided herein, the Company
and the Purchasers shall bear their own expenses and legal fees incurred on its
behalf with respect to this Agreement and the transactions contemplated hereby.
7.9 TITLES AND SUBTITLES. The titles of the paragraphs and subparagraphs
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
7.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
7.11 NO WAIVER. No waiver by any party to this Agreement of any one or
more defaults by any other party or parties in the performance of any of the
provisions hereof shall operate or be construed as a waiver of any future
default or defaults, whether of a like or different nature. Except as expressly
provided herein, no failure or delay on the part of any party in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.
8. ESCROW AGENT. To induce ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇, P.C. to
serve as the escrow agent and to act in such capacity hereunder, it is agreed by
the parties hereto that:
(a) The escrow agent shall not be under any duty to give the property held
by it hereunder (the "Escrowed Property") any greater degree of care than it
gives its own similar property.
(b) This Section 8 of this Agreement expressly sets forth all the duties of
the escrow agent with respect to any and all matters pertinent hereto. No
implied duties or obligations shall be read into this Agreement against the
escrow agent. The escrow agent shall not be bound by the provisions of any
agreement among the other parties hereto except this Section 8 of this
Agreement.
(c) The escrow agent shall not be liable, except for its own gross
negligence or willful misconduct and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully asserted
against the escrow agent, the other parties hereto shall jointly and severally
indemnify and hold harmless the escrow agent from and against any and all
losses, liabilities, claims, actions, damages and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, arising out of or in
connection with this Agreement.
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(d) The escrow agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. The escrow agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any person purporting
to give receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so.
(e) The escrow agent may act pursuant to the advice of counsel with respect
to any matter relating to this Agreement and shall not be liable for any action
taken or omitted in accordance with such advice.
(f) The escrow agent does not have any interest in the Escrowed Property
deposited hereunder but is serving as escrow holder only and having only
possession thereof. The other parties shall, on a joint and several basis, pay
or reimburse the escrow agent upon request for any and all expenses, if any,
incurred by the escrow agent in connection with this Agreement and transfer
taxes or other taxes relating to the Escrowed Property incurred in connection
herewith and shall indemnify and hold harmless the escrow agent from any amounts
that it is obligated to pay in the way of such expenses and taxes. This
subparagraph and subparagraph (c) shall survive notwithstanding any termination
of this Agreement or the resignation of the escrow agent.
(g) The escrow agent makes no representation as to the validity, value,
genuineness or the collectability of any security or other document or
instrument held by or delivered to it.
(h) The escrow agent may at any time resign as such by delivering the
Escrowed Property to any successor escrow agent jointly designated by the other
parties hereto in writing, or to any court of competent jurisdiction, whereupon
the escrow agent shall be discharged of and from any and all further obligations
arising in connection with this Agreement. The resignation of the escrow agent
will take effect on the earlier of (a) the appointment of a successor (including
a court of competent jurisdiction) or (b) the day which is 30 days after the
date of delivery of its written notice of resignation to the other parties
hereto. If at that time the escrow agent has not received a designation of a
successor escrow agent, the escrow agent's sole responsibility after that time
shall be to safekeep the Escrowed Property until receipt of a designation of
successor escrow agent or a joint written disposition instruction by the other
parties hereto or a final order of a court of competent jurisdiction.
(i) In the event of any disagreement between the other parties hereto
resulting in adverse claims or demands being made in connection with the
Escrowed Property, or in the event that the escrow agent in good faith is in
doubt as to what action it should take hereunder, the escrow agent shall be
entitled to retain the Escrowed Property until the escrow agent shall have
received (i) a final non-appealable order of a court of competent jurisdiction
directing delivery of the Escrowed Property or (ii) a written agreement executed
by the other parties hereto directing delivery of the Escrowed Property, in
which event the escrow agent shall disburse the Escrowed Property in accordance
with such order or agreement. Any court order
11
shall be accompanied by a legal opinion by counsel for the presenting party
satisfactory to the escrow agent to the effect that said opinion is final and
non-appealable.
(j) Notwithstanding anything to the contrary contained herein, the escrow
agent's duties and obligations hereunder shall terminate upon the release and
distribution of the Escrowed Property in accordance with the terms of this
Agreement.
(k) Each of the Company and the Purchaser understands and agrees that,
notwithstanding its duties as escrow agent hereunder, the escrow agent is the
attorney for the Company, and, accordingly, neither any services as escrow agent
hereunder nor any provisions hereof, either express or implied, shall restrict
or inhibit the escrow agent in any way from representing the Company or its
affiliates in any action, dispute, controversy, arbitration, suit or negotiation
arising under this Agreement or under any other agreement or in any manner or
context whatsoever, whether or not directly or indirectly involving the Company
or its affiliates. Notwithstanding anything to the contrary contained herein, if
at any time a law firm representing either Company or Purchasers serves or is
serving as escrow agent, then with respect to such law firm's capacity as escrow
agent, such counsel shall not for these purposes serve as the agent for either
of the parties, but shall be a fiduciary of both parties.
9. EXECUTION OF AGREEMENT.
THE PURCHASER ACKNOWLEDGES THAT THE PURCHASER HAS SIGNED THIS AGREEMENT ON
THE PURCHASER'S OWN BEHALF, AND NOT BY POWER OF ATTORNEY.
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IN WITNESS WHEREOF, the parties have executed this Purchase Agreement as of
the day and year first written above.
By: _____________________________________
Name of Purchaser(s):
Address:
_____________________________________
Social Security or Taxpayer
Identification Number of Purchaser(s)
_____________________________________
Number of Shares Purchased
_____________________________________
Number of Warrants Purchased
*$________________________________
U.S. Dollar Amount Invested
Date: ____________, 2001
* If Purchaser is a Registered Representative with a NASD member firm, have
the following acknowledgment signed by the appropriate party:
The undersigned NASD member firm acknowledges receipt of the notice
required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
By: _____________________________________
Name of NASD Member Firm:
By: _____________________________________
Authorized Officer:
* Estimated based on $___ per share of Common Stock. Adjustments will be made
in the Payment if the Offering Price, as defined in the Purchase Agreement,
is different than the estimated $___ price per share. The Purchaser agrees
to remit to the Company on the applicable Closing the balance of the
Payment if the Offering Price is greater than $___ per share. The Company
agrees to promptly remit to the Purchaser any excess Payment made by the
Purchaser if the Offering Price is less than $___ per share.
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Subscription Accepted:
PALATIN TECHNOLOGIES, INC.
By: _____________________________________
▇▇▇▇ ▇▇▇▇▇, Ph.D.
Chief Executive Officer
Date: __________, 2001
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EXHIBIT A
WIRE TRANSFER INSTRUCTIONS
Wire transfers should be made to ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
PC, as Escrow Agent, Fleet Bank of Massachusetts, N.A., ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
ABA#▇▇▇▇▇▇▇▇▇, Account Name: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ PC Firm
Account, Account Number 5838-6095, Reference: Palatin Technologies
A-1
