EXHIBIT 99.4
COMMON STOCK AND WARRANT AGREEMENT
THIS COMMON STOCK AND WARRANT AGREEMENT (the "Agreement") is made as
of January 20, 2000 between ▇▇▇▇▇▇ ▇▇▇▇ PHARMACEUTICALS, INC., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇▇▇ LIMITED, a Belize corporation (the
"Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
that certain Settlement and Mutual Release Agreement of even date herewith among
Purchaser, Edenland, Inc., a Belize corporation ("Edenland"), ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇▇") and the Company (the "Settlement Agreement"), that
certain Technology Assignment Agreement of even date herewith among the
Purchaser, ▇▇▇▇▇▇▇▇▇▇▇ and the Company (the "Assignment Agreement"), the Company
and the Purchaser agree as follows:
1. AUTHORIZATION OF ISSUANCE OF THE SHARES AND THE WARRANT. Subject to the
terms and conditions of this Agreement, the Company has authorized the issuance
of (i) six hundred sixty thousand (660,000) shares of Common Stock of the
Company (the "Shares") and (ii) a Warrant to purchase four hundred thousand
(400,000) shares of the Common Stock of the Company at an exercise price of
twenty-five dollars ($25.00) per share in the form attached hereto as Exhibit A
(the "Warrant"), in consideration for Purchaser's execution and performance of
the Settlement Agreement and the Assignment Agreement. The number of Shares and
the number of shares subject to the Warrant are subject to adjustment in
accordance with Section 8.5 hereof and the terms of the Warrant, respectively.
2. AGREEMENT TO ISSUE AND PURCHASE THE SHARES AND THE WARRANT.
2.1 Issuance of the Shares and the Warrant. At the Closings (as defined
in Section 3), the Company will issue to the Purchaser, and the Purchaser will
purchase from the Company, upon the terms and conditions hereinafter set forth,
the Shares and the Warrant. The consideration for the Shares and the Warrant is
Purchaser's execution and performance of the Settlement Agreement and the
Assignment Agreement. No further payment will be required for the Shares and
the Warrant. The Shares and the shares of the Company's Common Stock issuable
upon exercise of the Warrant (the "Warrant Shares") shall have the rights,
preferences, privileges and restrictions set forth in the Company's Amended and
Restated Certificate of Incorporation, as amended to date (the "Certificate").
3. CLOSINGS. The completion of the purchase and issuance of the Shares and
the Warrant shall occur in a number of closings as set forth below
(individually, a "Closing" and collectively, the "Closings").
3.1 Delivery of Shares and the Warrant at the Initial Closing. Subject to
the provisions of Section 4.1 hereof and any applicable withholding obligations
of the Company, the completion of the purchase and issuance of the first one
hundred thirty-two thousand (132,000) shares of the Shares and the Warrant to be
issued pursuant to this Agreement (the "Initial Closing") shall occur (i) upon
receipt by the Company of (A) a copy of this Agreement together with all
exhibits and schedules hereto, each of which has been executed on Purchaser's
behalf, (B) a copy of the Settlement Agreement which has been executed by all
parties thereto, (C) a copy of the Assignment Agreement which has been executed
by all parties thereto, (D) copies of the documents specified in Section 2.9,
Section 2.10 and the second sentence of
1.
Section 2.8 of the Assignment Agreement (collectively the "Assignment
Documents") and (E) a completed Warrant and Stock Certificate Questionnaire, the
form of which is attached hereto as Exhibit B, or (ii) following the occurrence
of the actions set forth in clause (i) above, on such other date as may be
agreed to by the Company and the Purchaser. At the Initial Closing, the Company
shall deliver to the Purchaser or the Purchaser's representative, in accordance
with the Purchaser's delivery instructions, (A) a copy of this Agreement
together with all exhibits and schedules hereto, each of which has been executed
on behalf of the Company, (B) a copy of the Settlement Agreement which has been
executed on behalf of the Company, (C) a copy of the Assignment Agreement which
has been executed on behalf of the Company, (D) the Warrant which has been
executed by the Company and (E) one or more stock certificates registered in the
name of the Purchaser, or in such nominee name(s) as designated by the
Purchaser, representing one hundred thirty-two thousand (132,000) of the Shares.
The name(s) in which the stock certificates are to be issued shall be set forth
in the Stock Certificate Questionnaire attached hereto as Exhibit B, as
completed by Purchaser.
3.2 Delivery of Shares at Subsequent Closings. Subject to the provisions
of Section 4.2 hereof and any applicable withholding obligations of the Company,
the completion of the purchase and issuance of the remaining five hundred
twenty-eight thousand (528,000) shares of the Shares to be issued pursuant to
this Agreement shall occur in four subsequent closings, a closing to occur on
each of the first, second, third and fourth anniversary of the date of this
Agreement (collectively, the "Subsequent Closings" and each individually a
"Subsequent Closing") (i) upon receipt by the Company of a certificate dated as
of the date of the Subsequent Closing, in which the Purchaser and ▇▇▇▇▇▇▇▇▇▇▇
represent and warrant, without qualification, that a Triggering Event (as
defined below) has not occurred ("Compliance Certificate"), or (ii) following
the occurrence of the actions set forth in clause (i) above on such other date
as may be agreed to by the Company and the Purchaser. At each Subsequent
Closing, the Company shall deliver to the Purchaser or the Purchaser's
representative, in accordance with the Purchaser's delivery instructions, one or
more stock certificates registered in the name of the Purchaser, or in such
nominee name(s) as designated by the Purchaser, representing one hundred thirty-
two thousand (132,000) shares of the Shares. The name(s) in which the stock
certificates are to be issued shall be as set forth in the Stock Certificate
Questionnaire delivered by Purchaser to the Company pursuant to Section 3.1,
unless the Company is otherwise instructed in writing by the Purchaser prior to
the issuance thereof.
4. CONDITIONS TO CLOSINGS.
4.1 Conditions to Initial Closing. The Company's obligation to complete
the purchase and issuance of the Warrant and initial one hundred thirty-two
thousand (132,000) shares of the Shares and deliver such stock certificate(s) to
the Purchaser at the Closing shall be subject to the following conditions, one
or more of which may be waived in writing by the Company: (i) the accuracy of
the representations and warranties made by the Purchaser herein as of the
Closing; and (ii) the execution, where appropriate, and delivery by the
Purchaser of the Assignment Documents.
4.2 Conditions to Subsequent Closings. The Company's obligation to
complete the purchase and issuance of the Shares and deliver such stock
certificate(s) to the Purchaser at each Subsequent Closing shall be subject to
the following conditions, any one or more of which may
2.
be waived in writing by the Company: (i) the accuracy of the representations and
warranties made by the Purchaser in Section 6 hereof as of the date of such
Subsequent Closing; (ii) the accuracy of the representations and warranties made
by the Purchaser and ▇▇▇▇▇▇▇▇▇▇▇ in Article V of the Assignment Agreement as of
the date of hereof; (iii) the delivery by Purchaser of an executed Compliance
Certificate; and (iv) the non-occurrence of a Triggering Breach prior to the
Subsequent Closing. For purposes of this Agreement a "Triggering Breach" shall
mean the occurrence of any of the following events following the date of this
Agreement: Purchaser, any of its employees, agents, directors, subsidiaries,
representatives or affiliates, or ▇▇▇▇▇▇▇▇▇▇▇ or any of his family members who
are stockholders of the Company (i) fail to support, and vote all of his, her or
its shares of Common Stock of the Company in favor of, any management or board
of directors proposals subject to a stockholder vote of the Company; (ii)
encourage any of the Company's stockholders or potential stockholders to (a)
vote against any management or board of directors proposal subject to
stockholder vote of the Company, (b) submit a proposal for stockholder approval
not previously approved in writing by the Company's board of directors, or (c)
vote in favor of any proposal subject to stockholder vote of the Company not
supported by the Company's board of directors; (iii) conduct any further
research or development of any kind relating to the Technology (as defined in
the Assignment Agreement); or (iv) make any short sale or maintain any short
position, or establish or maintain a "put equivalent position" (within the
meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended)
with respect to the Company's Common Stock. The actions described in clause (ii)
of the foregoing sentence shall not constitute a Triggering Breach unless the
Company demonstrates to the Purchaser the occurrence of such actions by a
preponderance of the evidence. The actions described in clauses (i) and (ii)
above shall constitute a Triggering Breach only during such time as ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ is either the Chairman or the Chief Executive Officer of the Company,
unless the reason for the his failure to be either the Chairman or the Chief
Executive Officer is due to his death or disability. In the event that a
Triggering Breach occurs, the Purchaser acknowledges and agrees that it will
have no further claim to (i) any additional Shares or (ii) the Technology or the
Patents and Applications (as such terms are defined in the Assignment Agreement.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company
hereby represents and warrants to, and covenants with, the Purchaser as of the
date of this Agreement as follows:
5.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to conduct its
business as currently conducted and is duly qualified as a foreign corporation
and in good standing in all jurisdictions in which the character of the property
owned or leased or the nature of the business transacted by it makes
qualification necessary (except where the failure to be so qualified would not
have a material adverse effect on the business, properties, financial condition
or results or operations of the Company).
5.2 Due Execution, Delivery and Performance of the Agreements. The
Company's execution, delivery and performance of this Agreement, the Settlement
Agreement, the Warrant and the Assignment Agreement (collectively the
"Transaction Agreements") have been duly authorized by all requisite corporate
action by the Company. Upon execution and delivery, and
3.
assuming the valid execution hereof by the Purchaser, the Transaction Agreements
will constitute valid and binding obligations of the Company, enforceable in
accordance with the terms of such agreements, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreement of the Company in
Section 8.3 hereof may be legally unenforceable. The execution and delivery of
the Transaction Agreements by the Company and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of its certificate of incorporation, by laws or
other charter documents (each as amended through the date hereof) or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument (evidencing a Company debt or otherwise) to which the
Company is a party or by which any property or asset of the Company is bound or
affected, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or government
authority to which the Company is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Company is bound or affected, except in the case of each clauses (ii) and (iii),
as could not, individually or in the aggregate, have or result in a material
adverse effect on the Company.
5.3 Issuance and Delivery of the Shares, the Warrant and the Warrant
Shares. When issued, delivered to Purchaser or Purchaser's custodian bank and
paid for by Purchaser in accordance with the terms and conditions of this
Agreement or the Warrant, the Shares to be sold hereunder, the Warrant and the
Warrant Shares will be validly issued, fully paid and nonassessable and will be
delivered by the Company free and clear of all liens, pledges, claims,
encumbrances, security interests or other restrictions, except for restrictions
on transfer imposed to ensure compliance with the Securities Act of 1933, as
amended (the "Securities Act").
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
The Purchaser represents and warrants to, and covenants with, the Company
as follows:
6.1 Investment Representations. The Purchaser represents and warrants to,
and covenants with, the Company that: (i) the Purchaser, taking into account the
personnel and resources it can practically bring to bear on the purchase of the
Shares, the Warrant and the Warrant Shares (collectively, the "Securities")
contemplated hereby, is knowledgeable, sophisticated and experienced in making,
and is qualified to make, decisions with respect to investments in shares
presenting an investment decision like that involved in the purchase of the
Securities, including investments in securities issued by the Company, and has
reviewed and considered all information it deems relevant in making an informed
decision to purchase the Securities, including all of the publicly available
documents the Company has filed with the Securities and Exchange Commission (the
"Commission") and all of the Company's press releases; (ii) the Purchaser is
acquiring the Shares for its own account for investment only and with no present
intention of distributing any of such Securities under any arrangement or
understanding with any other persons regarding the distribution of such
Securities (without
4.
limiting the rights of the Purchaser pursuant to Section 8 hereof); (iii) the
Purchaser has completed or caused to be completed the Warrant and Stock
Certificate Questionnaire attached hereto as Exhibit B and the information
provided therein by Purchaser is true and correct to the best knowledge of the
Purchaser as of the date hereof; (iv) the Purchaser has, in connection with its
decision to purchase the Securities, relied solely upon the information reviewed
and considered by the Purchaser as described in clause (i) above and the
representations and warranties of the Company contained herein; and (v) the
Purchaser is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act.
6.2 Requisite Power and Authority. The Purchaser further represents and
warrants to, and covenants with, the Company that (i) the Purchaser has full
right, power, authority and capacity to enter into the Transaction Agreements
and to consummate the transactions contemplated hereby and thereby and has taken
all necessary action to authorize the execution, delivery and performance of the
Transaction Agreements, and (ii) upon the execution and delivery of the
Transaction Agreements, the Transaction Agreements shall constitute valid and
binding obligations of the Purchaser enforceable in accordance with their terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Purchaser in Section 8.3 hereof and Section 6.1 of the Assignment
Agreement may be legally unenforceable. The execution and delivery of the
Transaction Agreements by the Purchaser and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) conflict with or violate
any provision of its certificate of incorporation, by laws or other charter
documents (each as amended through the date hereof) or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument (evidencing a Purchaser debt or otherwise) to which the Purchaser is
a party or by which any property or asset of the Purchaser is bound or affected,
or (iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or government authority to
which the Purchaser is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Purchaser is bound or
affected, except in the case of each clauses (ii) and (iii), as could not,
individually or in the aggregate, have or result in a material adverse effect on
the Purchaser.
6.3 Rule 144. Purchaser acknowledges and agrees that the Securities
acquired by Purchaser hereunder must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of securities subject to the satisfaction of certain conditions,
including, among other things: the availability of certain current public
information about the Company, the resale occurring not less than one year after
a party has purchased and paid for the security to be sold, the sale being made
through an unsolicited "broker's transaction" or in transactions directly with a
market maker (as said term is defined under the Securities Exchange Act of 1934,
as amended
5.
(the "Exchange Act")) and the number of shares being sold during any three-month
period not exceeding specified limitations.
6.4 Covenants. The Purchaser hereby covenants with the Company as
follows: (i) prior to the effective date of the Registration Statement
referenced in Section 8.1(a) below (the "Effective Date"), the Purchaser shall
not transfer any Securities except in compliance with the Securities Act and the
rules and regulations promulgated thereunder, and any transferee of Securities
prior to the Effective Date shall agree in advance in a writing acceptable to
the Company to be subject to all of the provisions of this Agreement with
respect to the Securities; and (ii) commencing as of the Effective Date, the
Purchaser shall not make any sale of the Securities, if any, without effectively
causing the prospectus delivery requirement under the Securities Act to be
satisfied, and the Purchaser acknowledges and agrees that on and after the
Effective Date, such Securities are not transferable on the books of the Company
unless the certificate submitted to the transfer agent evidencing the Securities
is accompanied by a separate purchaser's certificate: (1) in the form of
Exhibit C hereto, (2) executed by the Purchaser or by an officer of, or other
authorized person designated by, the Purchaser, and (3) to the effect that (A)
the Securities have been sold in accordance with the Registration Statement and
(B) the requirement of delivering a current prospectus has been satisfied. The
Purchaser further covenants to promptly notify the Company of the sale or
transfer of any of its Securities.
7. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Notwithstanding
any investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made by the Company and the Purchaser
herein and in the certificates for the Securities delivered pursuant hereto
shall survive the execution of this Agreement and the delivery to the Purchaser
of the Securities being purchased.
8. REGISTRATION OF THE COMMON STOCK; COMPLIANCE WITH THE SECURITIES ACT.
8.1 Registration Procedures and Expenses. The Company shall:
(a) within 90 days following each Closing, prepare and file with the
Commission a registration statement on Form S-3 (each a "Registration
Statement") in order to register with the Commission the sale of the Warrant
Shares and the Shares issued in such Closing, as applicable (collectively, the
"Registrable Securities"), by the Purchaser from time to time through
underwriters, agents or otherwise, in negotiated or market transactions or
through the automated quotation system of Nasdaq or the facilities of any
national securities exchange on which the Company's Common Stock is then traded
or in privately negotiated transactions or pursuant to such other method or
methods of distribution as Purchaser may require. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 8.1 that the Purchaser shall furnish to the Company such information
regarding itself, the Registrable Securities to be sold by Purchaser, and the
intended method of disposition of such securities as shall be required to effect
the registration of the Registrable Securities. Notwithstanding the foregoing,
the Company shall not be required to file or effect a registration pursuant to
this Section 8.1 if and for so long as any condition specified in Section 8.1(c)
shall exist and the Company shall have notified the Purchaser's thereof in
accordance with such section;
6.
(b) use reasonable efforts, subject to the receipt of necessary information
from the Purchaser, to cause each Registration Statement to become effective as
soon as commercially practicable following the filing thereof with the
Commission;
(c) prepare and file with the Commission such amendments and supplements to
each Registration Statement and the prospectus used in connection therewith and
take such other actions as may be necessary to keep such Registration Statement
continually effective and not misleading until the earliest of (A) the first
anniversary date of the applicable Closing, or (B) such date as all of the
Registrable Securities registered under such Registration Statement held by the
Purchaser have been resold. Notwithstanding the foregoing, Purchaser
acknowledges that there may occasionally be times when the Company, in the good
faith judgment of its Chief Executive Officer or its Board of Directors,
determines it must suspend Purchaser's ability to sell Shares or Warrant Shares
pursuant to a Registration Statement until such time as an amendment to such
Registration Statement has been filed by the Company and declared effective by
the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (a "Suspension"). The Purchaser agrees that, upon receipt of any notice
from the Company of a Suspension, the Purchaser will not sell any Shares or
Warrant Shares pursuant to the Registration Statement until the Purchaser is
advised in writing by the Company that the use of the applicable prospectus may
be resumed; provided, that such limitation on selling shares of Common Stock
also applies to the executive officers and directors of the Company;
(d) furnish to the Purchaser with respect to the Registrable Securities
registered under a Registration Statement such number of copies of prospectuses
and preliminary prospectuses in conformity with the requirements of the
Securities Act, in order to facilitate the public sale or other disposition of
all or any of the Registrable Securities by the Purchaser; provided, however,
that the obligation of the Company to deliver copies of prospectuses or
preliminary prospectuses to the Purchaser shall be subject to the receipt by the
Company of reasonable assurances from the Purchaser that the Purchaser will
comply with the applicable provisions of the Securities Act and of such other
securities or blue sky laws as may be applicable in connection with any use of
such prospectuses or preliminary prospectuses;
(e) file documents required of the Company for normal blue sky clearance in
states specified in writing by the Purchaser; provided, however, that the
Company shall not be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or has not so
consented; and
(f) bear all expenses incurred by the Company in connection with the
procedures in paragraphs (a) through (e) of this Section 8.1 and the
registration of the Registrable Securities pursuant to each Registration
Statement.
8.2 Notification of Changes. The Purchaser agrees that it will promptly
notify the Company of any changes in the material information set forth in each
Registration Statement regarding the Purchaser or its plan of distribution with
respect to the Registrable Securities, as applicable.
7.
8.3 Indemnification.
(a) the term "Selling Stockholder" shall mean the Purchaser and, if the
Purchaser is an institution, the Purchaser's directors or trustees, officers and
employees and each person who controls the Purchaser within the meaning of the
Securities Act;
(b) the term "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statements referred to in Section 8.1; and
(c) the term "untrue statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission, to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling Stockholder
from and against any losses, claims, damages or liabilities to which such
Selling Stockholder may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement contained in a Registration Statement on the Effective Date thereof,
or arise out of any failure by the Company to fulfill any undertaking herein or
included in a Registration Statement, and the Company will reimburse such
Selling Stockholder for any reasonable legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim; provided, however, that the Company shall not be liable in
any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon, an untrue statement made in such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Selling Stockholder specifically for use
in preparation of a Registration Statement, or the failure of such Selling
Stockholder to comply with the covenants and agreements contained in Section 5
or 8.2 hereof respecting sale of the Registrable Securities or any statement or
omission in any prospectus that is corrected in any subsequent prospectus that
was delivered to the Purchaser prior to the pertinent sale or sales by the
Purchaser.
The Purchaser agrees to indemnify and hold harmless the Company (and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs a Registration Statement
and each director of the Company) from and against any losses, claims, damages
or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 6 or 8.2 hereof
respecting sale of the Registrable Securities, or any untrue statement contained
in a Registration Statement on the Effective Date if such untrue statement was
made in reliance upon and in conformity with written information furnished by or
on behalf of the Purchaser specifically for use in preparation of a Registration
Statement, and the Purchaser will reimburse the Company (or such officer,
director or controlling person, as the case may be) for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim. In no event shall the liability of the
8.
Purchaser hereunder be greater in amount than the dollar amount of the gross
proceeds received by the Purchaser upon the sale of Registrable Securities
giving rise to such indemnification obligation.
Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 8.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate, in the opinion of counsel
to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel for all indemnified parties.
If the indemnification provided for in this Section 8.3 is held by a court
of competent jurisdiction to be unavailable to an indemnified party with respect
to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the act or omission that resulted in such loss, claim, damage
or liability, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by a court of law by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, however, that (i) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any party who was not guilty of such fraudulent
misrepresentation, and (ii) contribution (together with any indemnification or
other obligations under this Agreement) by any seller of Shares or the Warrant
Shares shall be limited in amount to the amount of gross proceeds received by
such seller from the sale of such Shares or the Warrant Shares.
The obligations of the Company and Purchaser under this Section 8.3 shall
survive completion of any offering of Registrable Securities in a Registration
Statement and the termination of this Agreement. No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof
9.
the giving by the claimant or plaintiff to such indemnified party of a release
from all liability in respect to such claim or litigation.
8.4 Termination of Conditions and Obligations. Notwithstanding anything
stated herein to the contrary, the conditions precedent imposed by Section 6 or
this Section 8 upon the transferability of the Shares or the Warrant Shares
shall cease and terminate as to any particular number of the Shares or Warrant
Shares, when such Shares or Warrant Shares shall have been effectively
registered under the Securities Act and sold or otherwise disposed of in
accordance with the intended method of disposition set forth in the Registration
Statement covering such or at such time as an opinion of counsel satisfactory to
the Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
Purchaser's right to have the Company register the Registrable Securities
pursuant to this Agreement shall not be assignable by Purchaser to any
transferee of all or any portion of the Registrable Securities, unless such
transferee (i) is an affiliate of the Purchaser and (ii) prior to such transfer
taking place, agrees with the Company in writing to be bound by the terms of
this Agreement.
8.5 Adjustments to Stock. If, from time to time, before the fourth and
final Subsequent Closing, there is any change affecting the Company's
outstanding Common Stock as a class that is effected without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating, dividend, combination of shares, change in corporation
structure or other transaction not involving the receipt of consideration by the
Company), then in addition to the Shares not yet issued in a Subsequent Closing
(the "Unissued Shares"), the Purchaser shall be entitled to receive (when such
Unissued Shares are issued at the corresponding Subsequent Closing) any and all
new, substituted or additional securities or other property to which Purchaser
would have been entitled to receive by reason of Purchaser's ownership of the
Unissued Shares. Such additional securities shall be included in the word
"Shares" for purposes of the registration rights contained in Section 8 of this
Agreement. Conversely, if, from time to time, before the fourth and final
Subsequent Closing, the outstanding shares of Common Stock of the Company are
combined into a smaller number of shares (for example, through a reverse stock
split), the number of Unissued Shares shall be proportionately reduced.
9. LEGEND. Each certificate representing Shares or Warrant Shares shall
(unless otherwise permitted by the provisions of the Agreement) be stamped or
otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws or as
provided elsewhere in this Agreement):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL OR BASED ON OTHER
WRITTEN EVIDENCE IN THE FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
IN COMPLIANCE THEREWITH."
10.
10. CHANGE IN CONTROL. In the event of (a) a sale of substantially all of the
assets of the Company; (b) a merger or consolidation in which the Company is not
the surviving corporation (other than a merger or consolidation in which
shareholders immediately before the merger or consolidation have, immediately
after the merger or consolidation, greater stock voting power); (c) a reverse
merger in which the Company is the surviving corporation but the shares of the
Company's common stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise (other than a reverse merger in which stockholders
immediately before the merger have, immediately after the merger, greater stock
voting power); or (d) any transaction or series of related transactions in which
in excess of 50% of the Company's voting power is transferred, then, so long as
a Triggering Breach has not occurred, immediately prior to the closing or
consummation of any such event, the Company shall issue to the Purchaser any
Shares that have not already been issued to the Purchaser under this Agreement.
11. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be sent by facsimile or mailed by first
class registered or certified airmail, or nationally recognized overnight
express courier postage prepaid, and shall be deemed given when so sent by
facsimile or mailed and shall be delivered as follows:
(a) if to the Company, to:
▇▇▇▇▇▇-▇▇▇▇ Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy so mailed to:
▇▇▇▇▇▇ Godward LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and
(b) if to the Purchaser, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
11.
with a copy so mailed to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇
or at such other address or addresses as may have been furnished to the Company
in writing.
12. CHANGES. Neither this Agreement nor any provision hereof may be changed,
waived, discharged, terminated, modified or amended except pursuant to an
instrument in writing signed by the Company and the Purchaser.
13. HEADINGS. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
14. SEVERABILITY. In case any provision contained in this Agreement should 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.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to contracts
entered into and performed entirely in California by California residents,
without regard to conflicts of law principles.
16. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument.
17. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
this Agreement and the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
each of the parties hereto.
18. FURTHER ACTIONS. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in transactions of this nature in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
19. ENTIRE AGREEMENT. This Agreement and other documents delivered pursuant
hereto, including the exhibits, constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
20. PAYMENT OF FEES AND EXPENSES. Except as expressly set forth herein, each
of the Company and the Purchaser shall bear its own expenses and legal fees
incurred on its behalf with respect to this Agreement and the transactions
contemplated hereby.
12.
21. ARBITRATION. To ensure rapid and economical resolution of any disputes
which may arise under this Agreement, the Purchaser and the Company agree that
any and all disputes or controversies of any nature whatsoever, arising from or
regarding the interpretation, performance, enforcement or breach of this
Agreement, shall be resolved by confidential, final and binding arbitration
(rather than trial by jury or court or resolution in some other forum) to the
fullest extent permitted by law. Any arbitration proceeding pursuant to this
Agreement shall be conducted by the American Arbitration Association ("AAA") in
San Diego, under the then existing AAA commercial arbitration rules. If for any
reason all or part of this arbitration provision is held to be invalid, illegal,
or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not effect
any other portion of this arbitration provision or any other jurisdiction, but
this provision will be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable part or parts of this provision had
never been contained herein, consistent with the general intent of the parties
to this Agreement insofar as possible. In no event shall the remedy for any
breach hereunder result in the ownership by ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ or any of
their affiliates in the Technology or the Patents and Applications (as such
terms are defined in the Assignment Agreement).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
13.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
▇▇▇▇▇▇ ▇▇▇▇ PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
PURCHASER
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: MD / Edenland Inc.
LIST OF ATTACHMENTS:
EXHIBIT A - WARRANT
EXHIBIT B - STOCK CERTIFICATE QUESTIONNAIRE
EXHIBIT C - PURCHASER'S CERTIFICATE
14.
EXHIBIT A
WARRANT
15.
EXHIBIT B
▇▇▇▇▇▇-▇▇▇▇ PHARMACEUTICALS, INC.
WARRANT AND STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Common Stock and Warrant Agreement, please
provide us with the following information:
1. The exact name that your Warrant and Shares are to
be registered in (this is the name that will appear on ----------------
your stock certificate(s)). You may use a nominee name
if appropriate:
2. The relationship between the Purchaser of the
Warrant and the Shares and the Registered Holder ----------------
listed in response to item 1 above:
3. The mailing address of the Registered Holder listed ----------------
in response to item 1 above:
4. The Social Security Number or Tax Identification
Number of the Registered Holder listed in the response ----------------
to item 1 above:
16.
EXHIBIT C
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, an officer of, or other person duly authorized by
________________________________ hereby certificates that he/she [said
institution] is the Purchaser of the shares evidenced by the attached
certificate, and as such, sold such shares on ____________________________ in
accordance with registration statement number
__________________________________________________ and the requirement of
delivering a current prospectus has been complied with in connection with such
sale.
Print or Type:
Name of Purchaser (Individual or Institution): ____________________________
Name of Individual representing Purchaser
(if an Institution) ____________________________
Title of Individual representing Purchaser
(if an Institution) ____________________________
Signature by:
Individual Purchaser or Individual
Representing Purchaser: _____________________________
17.