Exhibit 4.4
THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT WILL
NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR A
PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER
THAN (I) JESUP & ▇▇▇▇▇▇ SECURITIES CORPORATION. ("JESUP & ▇▇▇▇▇▇") OR AN
UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA
FIDE OFFICER OR PARTNER OF JESUP & ▇▇▇▇▇▇ OR OF ANY SUCH UNDERWRITER OR SELECTED
DEALER.
THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF THE CONSUMMATION
BY PHARMAMATRIX ACQUISITION CORPORATION ("COMPANY") OF A MERGER, CAPITAL STOCK
EXCHANGE, ASSET ACQUISITION OR OTHER SIMILAR BUSINESS COMBINATION ("BUSINESS
COMBINATION")(AS DESCRIBED MORE FULLY IN THE COMPANY'S REGISTRATION STATEMENT
(DEFINED HEREIN)) OR _____________, 2006. VOID AFTER 5:00 P.M. NEW YORK CITY
LOCAL TIME, ___________, 2010.
UNIT PURCHASE OPTION
FOR THE PURCHASE OF
426,667 UNITS
OF
PHARMAMATRIX ACQUISITION CORPORATION
1. PURCHASE OPTION.
THIS CERTIFIES THAT, in consideration of $100.00 duly paid by or on
behalf of Jesup & ▇▇▇▇▇▇ ("HOLDER"), as registered owner of this Purchase
Option, to Pharmamatrix Acquisition Corporation ("COMPANY"), Holder is entitled,
at any time or from time to time upon the later of the consummation of a
Business Combination or _________, 2006 ("COMMENCEMENT DATE"), and at or before
5:00 p.m., New York City local time, _____________, 2010 ("EXPIRATION DATE"),
but not thereafter, to subscribe for, purchase and receive, in whole or in part,
up to Four Hundred Twenty-Six Thousand Six Hundred Sixty-Seven (426,667) units
("UNITS") of the Company, each Unit consisting of one share of common stock of
the Company, par value $.0001 per share ("COMMON STOCK"), and two warrants
("WARRANT(S)") expiring four years from the effective date ("Effective Date") of
the registration statement ("REGISTRATION STATEMENT") pursuant to which Units
are offered for sale to the public ("OFFERING"). Each Warrant is the same as the
warrants included in the Units being registered for sale to the public by way of
the Registration Statement ("PUBLIC WARRANTS") except that the Warrants have an
exercise price of $6.25 per share. If the Expiration Date is a day on which
banking institutions are authorized by law to close, then this Purchase Option
may be exercised on the next succeeding day which is not such a day in
accordance with the terms herein. During the period ending on the Expiration
Date, the Company agrees not to take any action that would terminate the
Purchase Option. This
Purchase Option is initially exercisable at $7.50 per Unit so purchased;
provided, however, that upon the occurrence of any of the events specified in
Section 6 hereof, the rights granted by this Purchase Option, including the
exercise price per Unit and the number of Units (and shares of Common Stock and
Warrants) to be received upon such exercise, shall be adjusted as therein
specified. The term "Exercise Price" shall mean the initial exercise price or
the adjusted exercise price, depending on the context.
2. EXERCISE.
2.1 EXERCISE FORM. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Option and payment of the Exercise
Price for the Units being purchased payable in cash or by certified check or
official bank check. If the subscription rights represented hereby shall not be
exercised at or before 5:00 p.m., New York City local time, on the Expiration
Date this Purchase Option shall become and be void without further force or
effect, and all rights represented hereby shall cease and expire.
2.2 LEGEND. Each certificate for the securities purchased under
this Purchase Option shall bear a legend as follows unless such securities have
been registered under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act") or applicable state law. The securities may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act,
or pursuant to an exemption from registration under the Act
and applicable state law."
2.3 CASHLESS EXERCISE.
2.3.1 DETERMINATION OF AMOUNT. In lieu of the payment of the
Exercise Price multiplied by the number of Units for which this Purchase Option
is exercisable and in lieu of being entitled to receive Common Stock and
Warrants in the manner required by Section 2.1, the Holder shall have the right
(but not the obligation) to convert any exercisable but unexercised portion of
this Purchase Option into Units ("CONVERSION RIGHT") as follows: upon exercise
of the Conversion Right, the Company shall deliver to the Holder (without
payment by the Holder of any of the Exercise Price in cash) that number of Units
equal to the quotient obtained by dividing (x) the "Value" (as defined below) of
the portion of the Purchase Option being converted by (y) the Current Market
Value (as defined below). The "Value" of the portion of the Purchase Option
being converted shall equal the remainder derived from subtracting (a) (i) the
Exercise Price multiplied by (ii) the number of Units underlying the portion of
this Purchase Option being converted from (b) the Current Market Value of a Unit
multiplied by the number of Units underlying the portion of the Purchase Option
being converted. As used herein, the term "Current Market Value" per Unit at any
date means the remainder derived from subtracting (x) the exercise price of the
Warrants multiplied by the number of shares of Common Stock issuable upon
exercise of the Warrants underlying one Unit from (y) the Current Market Price
of the Common Stock multiplied by the number of shares of Common Stock
underlying the Warrants and the Common Stock issuable upon exercise of one Unit.
2
The "Current Market Price" of a share of Common Stock shall mean (i) if the
Common Stock is listed on a national securities exchange or quoted on the Nasdaq
National Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board (or successor
such as the Bulletin Board Exchange), the last sale price of the Common Stock in
the principal trading market for the Common Stock as reported by the exchange,
Nasdaq or the NASD, as the case may be; (ii) if the Common Stock is not listed
on a national securities exchange or quoted on the Nasdaq National Market,
Nasdaq SmallCap Market or the NASD OTC Bulletin Board (or successor such as the
Bulletin Board Exchange), but is traded in the residual over-the-counter market,
the closing bid price for the Common Stock on the last trading day preceding the
date in question for which such quotations are reported by the Pink Sheets, LLC
or similar publisher of such quotations; and (iii) if the fair market value of
the Common Stock cannot be determined pursuant to clause (i) or (ii) above, such
price as the Board of Directors of the Company shall determine, in good faith.
2.3.2 MECHANICS OF CASHLESS EXERCISE. The Cashless Exercise
Right may be exercised by the Holder on any business day on or after the
Commencement Date and not later than the Expiration Date by delivering the
Purchase Option with the duly executed exercise form attached hereto with the
cashless exercise section completed to the Company, exercising the Cashless
Exercise Right and specifying the total number of Units the Holder will purchase
pursuant to such Cashless Exercise Right.
3. TRANSFER.
3.1 GENERAL RESTRICTIONS. The registered Holder of this Purchase
Option, by its acceptance hereof, agrees that it will not sell, transfer,
assign, pledge or hypothecate this Purchase Option for a period of one year
following the Effective Date to anyone other than (i) Jesup & ▇▇▇▇▇▇ or an
underwriter or a selected dealer in connection with the Offering, or (ii) a bona
fide officer or partner of Jesup & ▇▇▇▇▇▇ or of any such underwriter or selected
dealer. On and after the first anniversary of the Effective Date, transfers to
others may be made subject to compliance with or exemptions from applicable
securities laws. In order to make any permitted assignment, the Holder must
deliver to the Company the assignment form attached hereto duly executed and
completed, together with the Purchase Option and payment of all transfer taxes,
if any, payable in connection therewith. The Company shall within five business
days transfer this Purchase Option on the books of the Company and shall execute
and deliver a new Purchase Option or Purchase Options of like tenor to the
appropriate assignee(s) expressly evidencing the right to purchase the aggregate
number of Units purchasable hereunder or such portion of such number as shall be
contemplated by any such assignment.
3.2 RESTRICTIONS IMPOSED BY THE ACT. The securities evidenced by
this Purchase Option shall not be transferred unless and until (i) the Company
has received the opinion of counsel for the Holder that the securities may be
transferred pursuant to an exemption from registration under the Act and
applicable state securities laws, the availability of which is established to
the reasonable satisfaction of the Company (the Company hereby agreeing that the
opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest, LLP shall be deemed satisfactory evidence of
the availability of an exemption), or (ii) a registration statement or a
post-effective amendment to the Registration Statement relating to such
securities has been filed by the Company and declared effective by the
Securities and Exchange Commission (the "COMMISSION") and compliance with
applicable state securities law has been established.
3
4. NEW PURCHASE OPTIONS TO BE ISSUED.
4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions in
Section 3 hereof, this Purchase Option may be exercised or assigned in whole or
in part. In the event of the exercise or assignment hereof in part only, upon
surrender of this Purchase Option for cancellation, together with the duly
executed exercise or assignment form and funds sufficient to pay any Exercise
Price and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of the Holder evidencing the right of the Holder to purchase the number
of Units purchasable hereunder as to which this Purchase Option has not been
exercised or assigned.
4.2 LOST CERTIFICATE. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Option and of reasonably satisfactory indemnification or the posting of
a bond, the Company shall execute and deliver a new Purchase Option of like
tenor and date. Any such new Purchase Option executed and delivered as a result
of such loss, theft, mutilation or destruction shall constitute a substitute
contractual obligation on the part of the Company.
5. REGISTRATION RIGHTS.
5.1 DEMAND REGISTRATION.
5.1.1 GRANT OF RIGHT. The Company, upon written demand
("INITIAL DEMAND NOTICE") of the Holder(s) of at least 51% of the Purchase
Options and/or the underlying Units and/or the underlying securities ("MAJORITY
HOLDERS"), agrees to register (the "DEMAND REGISTRATION") under the Act on one
occasion, all or any portion of the Purchase Options requested by the Majority
Holders in the Initial Demand Notice and all of the securities underlying such
Purchase Options, including the Units, Common Stock, the Warrants and the Common
Stock underlying the Warrants (collectively, the "REGISTRABLE SECURITIES"). On
such occasion, the Company will file a registration statement or a
post-effective amendment to the Registration Statement covering the Registrable
Securities within sixty days after receipt of the Initial Demand Notice and use
its best efforts to have such registration statement or post-effective amendment
declared effective as soon as possible thereafter. The demand for registration
may be made at any time during a period of five years beginning on the Effective
Date. The Initial Demand Notice shall specify the number of shares of
Registrable Securities proposed to be sold and the intended method(s) of
distribution thereof. The Company will notify all holders of the Purchase
Options and/or Registrable Securities of the demand within ten days from the
date of the receipt of any such Initial Demand Notice. Each holder of
Registrable Securities who wishes to include all or a portion of such holder's
Registrable Securities in the Demand Registration (each such holder including
shares of Registrable Securities in such registration, a "DEMANDING HOLDER")
shall so notify the Company within fifteen (15) days after the receipt by the
holder of the notice from the Company. Upon any such request, the Demanding
Holders shall be entitled to have their Registrable Securities included in the
Demand Registration, subject to Section 5.1.4.
5.1.2 EFFECTIVE REGISTRATION. A registration will not count as
a Demand Registration until the registration statement filed with the Commission
with respect to such
4
Demand Registration has been declared effective and the Company has complied
with all of its obligations under this Agreement with respect thereto; provided,
however, that if, after such registration statement has been declared effective,
the offering of Registrable Securities pursuant to a Demand Registration is
interfered with by any stop order or injunction of the Commission or any other
governmental agency or court, the registration statement with respect to such
Demand Registration will be deemed not to have been declared effective, unless
and until, (i) such stop order or injunction is removed, rescinded or otherwise
terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter
elect to continue the offering.
5.1.3 UNDERWRITTEN OFFERING. If the Majority Holders so elect
and such holders so advise the Company as part of the Initial Demand Notice, the
offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. In such event, the right of
any holder to include its Registrable Securities in such registration shall be
conditioned upon such holder's participation in such underwriting and the
inclusion of such holder's Registrable Securities in the underwriting to the
extent provided herein. All Demanding Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Majority Holders.
5.1.4 REDUCTION OF OFFERING. If the managing underwriter or
underwriters for a Demand Registration that is to be an underwritten offering
advises the Company and the Demanding Holders in writing that the dollar amount
or number of shares of Registrable Securities which the Demanding Holders desire
to sell, taken together with all other shares of Common Stock or other
securities which the Company desires to sell and the shares of Common Stock, if
any, as to which registration has been requested pursuant to written contractual
piggy-back registration rights held by other stockholders of the Company who
desire to sell, exceeds the maximum dollar amount or maximum number of shares
that can be sold in such offering without adversely affecting the proposed
offering price, the timing, the distribution method, or the probability of
success of such offering (such maximum dollar amount or maximum number of
shares, as applicable, the "MAXIMUM NUMBER OF SHARES"), then the Company shall
include in such registration: (i) first, the Registrable Securities as to which
Demand Registration has been requested by the Demanding Holders (pro rata in
accordance with the number of shares that each such Person has requested be
included in such registration, regardless of the number of shares held by each
such Person (such proportion is referred to herein as "PRO RATA")) that can be
sold without exceeding the Maximum Number of Shares; (ii) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (i), the shares of Common Stock or other securities that the Company
desires to sell that can be sold without exceeding the Maximum Number of Shares;
(iii) third, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (i) and (ii), the shares of Common Stock or
other securities registrable pursuant to the terms of the Registration Rights
Agreement between the Company and the initial investors in the Company, dated as
of ________, 2005 (the "REGISTRATION RIGHTS AGREEMENT" and such registrable
securities, the "INVESTOR SECURITIES") as to which "piggy-back" registration has
been requested by the holders thereof, Pro Rata, that can be sold without
exceeding the Maximum Number of Shares; and (iv) fourth, to the extent that the
Maximum Number of Shares have not been reached under the foregoing clauses (i),
(ii), and (iii), the shares of Common Stock or other securities for the account
of other persons that the
5
Company is obligated to register pursuant to written contractual arrangements
with such persons and that can be sold without exceeding the Maximum Number of
Shares.
5.1.5 WITHDRAWAL. If a majority-in-interest of the Demanding
Holders disapprove of the terms of any underwriting or are not entitled to
include all of their Registrable Securities in any offering, such
majority-in-interest of the Demanding Holders may elect to withdraw from such
offering by giving written notice to the Company and the underwriter or
underwriters of their request to withdraw prior to the effectiveness of the
registration statement filed with the Commission with respect to such Demand
Registration. If the majority-in-interest of the Demanding Holders withdraws
from a proposed offering relating to a Demand Registration, then such
registration shall not count as a Demand Registration provided for in Section
5.1.
5.1.6 TERMS. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, including the expenses of
any legal counsel selected by the Holders to represent them in connection with
the sale of the Registrable Securities, but the Holders shall pay any and all
underwriting commissions. The Company agrees to use its reasonable best efforts
to qualify or register the Registrable Securities in such States as are
reasonably requested by the Majority Holder(s); provided, however, that in no
event shall the Company be required to register the Registrable Securities in a
State in which such registration would cause (i) the Company to be obligated to
qualify to do business in such State, or would subject the Company to taxation
as a foreign corporation doing business in such jurisdiction or (ii) the
principal stockholders of the Company to be obligated to escrow their shares of
capital stock of the Company. The Company shall cause any registration statement
or post-effective amendment filed pursuant to the demand rights granted under
Section 5.1.1 to remain effective for a period of nine consecutive months from
the effective date of such registration statement or post-effective amendment.
5.2 "PIGGY-BACK" REGISTRATION.
5.2.1 PIGGY-BACK RIGHTS. If at any time during the seven year
period commencing on the Effective Date the Company proposes to file a
registration statement under the Act with respect to an offering of equity
securities, or securities or other obligations exercisable or exchangeable for,
or convertible into, equity securities, by the Company for its own account or
for stockholders of the Company for their account (or by the Company and by
stockholders of the Company including, without limitation, pursuant to Section
5.1), other than a registration statement (i) filed in connection with any
employee stock option or other benefit plan, (ii) for an exchange offer or
offering of securities solely to the Company's existing stockholders, (iii) for
an offering of debt that is convertible into equity securities of the Company or
(iv) for a dividend reinvestment plan, then the Company shall (x) give written
notice of such proposed filing to the holders of Registrable Securities as soon
as practicable but in no event less than ten (10) days before the anticipated
filing date, which notice shall describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the name
of the proposed managing underwriter or underwriters, if any, of the offering,
and (y) offer to the holders of Registrable Securities in such notice the
opportunity to register the sale of such number of shares of Registrable
Securities as such holders may request in writing within five (5) days following
receipt of such notice (a "PIGGY-BACK REGISTRATION"). The Company shall cause
6
such Registrable Securities to be included in such registration and shall use
its best efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in a Piggy-Back Registration on the same terms and conditions as any
similar securities of the Company and to permit the sale or other disposition of
such Registrable Securities in accordance with the intended method(s) of
distribution thereof. All holders of Registrable Securities proposing to
distribute their securities through a Piggy-Back Registration that involves an
underwriter or underwriters shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such Piggy-Back
Registration.
5.2.2 REDUCTION OF OFFERING. If the managing underwriter or
underwriters for a Piggy-Back Registration that is to be an underwritten
offering advises the Company and the holders of Registrable Securities in
writing that the dollar amount or number of shares of Common Stock which the
Company desires to sell, taken together with shares of Common Stock, if any, as
to which registration has been demanded pursuant to written contractual
arrangements with persons other than the holders of Registrable Securities
hereunder, the Registrable Securities as to which registration has been
requested under this Section 5.2, and the shares of Common Stock, if any, as to
which registration has been requested pursuant to the written contractual
piggy-back registration rights of other stockholders of the Company, exceeds the
Maximum Number of Shares, then the Company shall include in any such
registration:
(a) If the registration is undertaken for the
Company's account: (A) first, the shares of Common Stock or other securities
that the Company desires to sell that can be sold without exceeding the Maximum
Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the shares of Common Stock
or other securities, if any, comprised of Registrable Securities and Investor
Securities, as to which registration has been requested pursuant to the
applicable written contractual piggy-back registration rights of such security
holders, Pro Rata, that can be sold without exceeding the Maximum Number of
Shares; and (C) third, to the extent that the Maximum Number of shares has not
been reached under the foregoing clauses (A) and (B), the shares of Common Stock
or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual piggy-back registration
rights with such persons and that can be sold without exceeding the Maximum
Number of Shares;
(b) If the registration is a "demand" registration
undertaken at the demand of holders of Investor Securities, (A) first, the
shares of Common Stock or other securities for the account of the demanding
persons, Pro Rata, that can be sold without exceeding the Maximum Number of
Shares; (B) second, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clause (A), the shares of Common Stock or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Shares; (C) third, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clauses (A) and (B), the
shares of Registrable Securities, Pro Rata, as to which registration has been
requested pursuant to the terms hereof, that can be sold without exceeding the
Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clauses (A), (B) and (C), the
shares of Common Stock or other securities for the account of other persons that
the Company is
7
obligated to register pursuant to written contractual arrangements with such
persons, that can be sold without exceeding the Maximum Number of Shares; and
(c) If the registration is a "demand" registration
undertaken at the demand of persons other than either the holders of Registrable
Securities or of Investor Securities, (A) first, the shares of Common Stock or
other securities for the account of the demanding persons that can be sold
without exceeding the Maximum Number of Shares; (B) second, to the extent that
the Maximum Number of Shares has not been reached under the foregoing clause
(A), the shares of Common Stock or other securities that the Company desires to
sell that can be sold without exceeding the Maximum Number of Shares; (C) third,
to the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A) and (B), collectively the shares of Common Stock or other
securities comprised of Registrable Securities and Investor Securities, Pro
Rata, as to which registration has been requested pursuant to the terms hereof
and of the Registration Rights Agreement, as applicable, that can be sold
without exceeding the Maximum Number of Shares; and (D) fourth, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clauses (A), (B) and (C), the shares of Common Stock or other securities for the
account of other persons that the Company is obligated to register pursuant to
written contractual arrangements with such persons, that can be sold without
exceeding the Maximum Number of Shares.
5.2.3 WITHDRAWAL. Any holder of Registrable Securities may
elect to withdraw such ▇▇▇▇▇▇'s request for inclusion of Registrable Securities
in any Piggy-Back Registration by giving written notice to the Company of such
request to withdraw prior to the effectiveness of the registration statement.
The Company (whether on its own determination or as the result of a withdrawal
by persons making a demand pursuant to written contractual obligations) may
withdraw a registration statement at any time prior to the effectiveness of the
registration statement. Notwithstanding any such withdrawal, the Company shall
pay all expenses incurred by the holders of Registrable Securities in connection
with such Piggy-Back Registration as provided in Section 5.2.4.
5.2.4 TERMS. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, including the expenses of
any legal counsel selected by the Holders to represent them in connection with
the sale of the Registrable Securities but the Holders shall pay any and all
underwriting commissions related to the Registrable Securities. In the event of
such a proposed registration, the Company shall furnish the then Holders of
outstanding Registrable Securities with not less than fifteen days written
notice prior to the proposed date of filing of such registration statement. Such
notice to the Holders shall continue to be given for each applicable
registration statement filed (during the period in which the Purchase Option is
exercisable) by the Company until such time as all of the Registrable Securities
have been registered and sold. The holders of the Registrable Securities shall
exercise the "piggy-back" rights provided for herein by giving written notice,
within ten days of the receipt of the Company's notice of its intention to file
a registration statement. The Company shall cause any registration statement
filed pursuant to the above "piggyback" rights to remain effective for at least
nine months from the date that the Holders of the Registrable Securities are
first given the opportunity to sell all of such securities.
8
5.3 DAMAGES. Should the registration or the effectiveness thereof
required by Sections 5.1 and 5.2 hereof be delayed by the Company or the Company
otherwise fails to comply with such provisions, the Company shall, in addition
to any other equitable or other relief available to the Holder(s), be liable for
any and all incidental, special and consequential damages sustained by the
Holder(s), including, but not limited to, the loss of any profits that might
have been received by the holder upon the sale of shares of Common Stock or
Warrants (and shares of Common Stock underlying the Warrants) underlying this
Purchase Option.
5.4 GENERAL TERMS.
5.4.1 INDEMNIFICATION. The Company shall indemnify the
Holder(s) of the Registrable Securities to be sold pursuant to any registration
statement hereunder and each person, if any, who controls such Holders within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended ("EXCHANGE ACT"), against all loss, claim, damage,
expense or liability (including all reasonable attorneys' fees and other
expenses reasonably incurred in investigating, preparing or defending against
litigation, commenced or threatened, or any claim whatsoever whether arising out
of any action between the underwriter and the Company or between the underwriter
and any third party or otherwise) to which any of them may become subject under
the Act, the Exchange Act or otherwise, arising from such registration statement
but only to the same extent and with the same effect as the provisions pursuant
to which the Company has agreed to indemnify the underwriters contained in
Section 5 of the Underwriting Agreement between the Company, Jesup & ▇▇▇▇▇▇ and
the other underwriters named therein dated the Effective Date. The Holder(s) of
the Registrable Securities to be sold pursuant to such registration statement,
and their successors and assigns, shall severally, and not jointly, indemnify
the Company, its officers and directors and each person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage, expense or liability (including
all reasonable attorneys' fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holders, or their successors
or assigns, in writing, for specific inclusion in such registration statement to
the same extent and with the same effect as the provisions contained in Section
5 of the Underwriting Agreement pursuant to which the underwriters have agreed
to indemnify the Company.
5.4.2 EXERCISE OF PURCHASE OPTIONS. Nothing contained in this
Purchase Option shall be construed as requiring the Holder(s) to exercise their
Purchase Options or Warrants underlying such Purchase Options prior to or after
the initial filing of any registration statement or the effectiveness thereof.
5.4.3 DOCUMENTS DELIVERED TO HOLDERS. The Company shall
furnish Jesup & ▇▇▇▇▇▇, as representative of the Holders participating in any of
the foregoing offerings, a signed counterpart, addressed to the participating
Holders, of (i) an opinion of counsel to the Company, dated the effective date
of such registration statement (and, if such registration includes an
underwritten public offering, an opinion dated the date of the closing under any
underwriting agreement related thereto), and (ii) a "cold comfort" letter dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, a letter dated the date of the closing
under the underwriting agreement) signed by the independent public
9
accountants who have issued a report on the Company's financial statements
included in such registration statement, in each case covering substantially the
same matters with respect to such registration statement (and the prospectus
included therein) and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities. The Company shall
also deliver promptly to Jesup & ▇▇▇▇▇▇, as representative of the Holders
participating in the offering, the correspondence and memoranda described below
and copies of all correspondence between the Commission and the Company, its
counsel or auditors and all memoranda relating to discussions with the
Commission or its staff with respect to the registration statement and permit
Jesup & ▇▇▇▇▇▇, as representative of the Holders, to do such investigation, upon
reasonable advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as Jesup & ▇▇▇▇▇▇, as representative of the
Holders, shall reasonably request. The Company shall not be required to disclose
any confidential information or other records to Jesup & ▇▇▇▇▇▇, as
representative of the Holders, or to any other person, until and unless such
persons shall have entered into reasonable confidentiality agreements (in form
and substance reasonably satisfactory to the Company), with the Company with
respect thereto.
5.4.4 UNDERWRITING AGREEMENT. The Company shall enter into an
underwriting agreement with the managing underwriter(s), if any, selected by any
Holders whose Registrable Securities are being registered pursuant to this
Section 5, which managing underwriter shall be reasonably acceptable to the
Company. Such agreement shall be reasonably satisfactory in form and substance
to the Company, each Holder and such managing underwriters, and shall contain
such representations, warranties and covenants by the Company and such other
terms as are customarily contained in agreements of that type used by the
managing underwriter. The Holders shall be parties to any underwriting agreement
relating to an underwritten sale of their Registrable Securities and may, at
their option, require that any or all the representations, warranties and
covenants of the Company to or for the benefit of such underwriters shall also
be made to and for the benefit of such Holders. Such Holders shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters except as they may relate to such Holders and their
intended methods of distribution. Such Holders, however, shall agree to such
covenants and indemnification and contribution obligations for selling
stockholders as are customarily contained in agreements of that type used by the
managing underwriter. Further, such Holders shall execute appropriate custody
agreements and otherwise cooperate fully in the preparation of the registration
statement and other documents relating to any offering in which they include
securities pursuant to this Section 5. Each Holder shall also furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as shall be
reasonably required to effect the registration of the Registrable Securities.
5.4.5 RULE 144 SALE. Notwithstanding anything contained in
this Section 5 to the contrary, the Company shall have no obligation pursuant to
Sections 5.1 or 5.2 for the registration of Registrable Securities held by any
Holder (i) where such Holder would then be
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entitled to sell under Rule 144 within any three-month period (or such other
period prescribed under Rule 144 as may be provided by amendment thereof) all of
the Registrable Securities then held by such Holder, and (ii) where the number
of Registrable Securities held by such Holder is within the volume limitations
under paragraph (e) of Rule 144 (calculated as if such Holder were an affiliate
within the meaning of Rule 144).
5.4.6 SUPPLEMENTAL PROSPECTUS. Each Holder agrees, that upon
receipt of any notice from the Company of the happening of any event as a result
of which the prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, such Holder
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until such
▇▇▇▇▇▇'s receipt of the copies of a supplemental or amended prospectus, and, if
so desired by the Company, such Holder shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
such destruction) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
6. ADJUSTMENTS.
6.1 ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. The
Exercise Price and the number of Units underlying the Purchase Option shall be
subject to adjustment from time to time as hereinafter set forth:
6.1.1 STOCK DIVIDENDS - SPLIT-UPS. If after the date hereof,
and subject to the provisions of Section 6.3 below, the number of outstanding
shares of Common Stock is increased by a stock dividend payable in shares of
Common Stock or by a split-up of shares of Common Stock or other similar event,
then, on the effective date thereof, the number of shares of Common Stock
underlying each of the Units purchasable hereunder shall be increased in
proportion to such increase in outstanding shares. In such case, the number of
shares of Common Stock, and the exercise price applicable thereto, underlying
the Warrants underlying each of the Units purchasable hereunder shall be
adjusted in accordance with the terms of the Warrants. For example, if the
Company declares a two-for-one stock dividend and at the time of such dividend
this Purchase Option is for the purchase of one Unit at $6.00 per whole Unit
(each Warrant underlying the Units is exercisable for $5.00 per share), upon
effectiveness of the dividend, this Purchase Option will be adjusted to allow
for the purchase of one Unit at $6.00 per Unit, each Unit entitling the holder
to receive two shares of Common Stock and four Warrants (each Warrant
exercisable for $2.50 per share).
6.1.2 AGGREGATION OF SHARES. If after the date hereof, and
subject to the provisions of Section 6.3, the number of outstanding shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event, then, on the effective date
thereof, the number of shares of Common Stock underlying each of the Units
purchasable hereunder shall be decreased in proportion to such decrease in
outstanding shares. In such case, the number of shares of Common Stock, and the
exercise price applicable
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thereto, underlying the Warrants underlying each of the Units purchasable
hereunder shall be adjusted in accordance with the terms of the Warrants.
6.1.3 REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. In
case of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change covered by Section 6.1.1 or 6.1.2 hereof or
that solely affects the par value of such shares of Common Stock, or in the case
of any merger or consolidation of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Purchase Option shall have the right thereafter
(until the expiration of the right of exercise of this Purchase Option) to
receive upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution
following any such sale or transfer, by a Holder of the number of shares of
Common Stock of the Company obtainable upon exercise of this Purchase Option and
the underlying Warrants immediately prior to such event; and if any
reclassification also results in a change in shares of Common Stock covered by
Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections
6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall
similarly apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.
6.1.4 CHANGES IN FORM OF PURCHASE OPTION. This form of
Purchase Option need not be changed because of any change pursuant to this
Section, and Purchase Options issued after such change may state the same
Exercise Price and the same number of Units as are stated in the Purchase
Options initially issued pursuant to this Agreement. The acceptance by any
Holder of the issuance of new Purchase Options reflecting a required or
permissive change shall not be deemed to waive any rights to an adjustment
occurring after the Commencement Date or the computation thereof.
6.2 SUBSTITUTE PURCHASE OPTION. In case of any consolidation of
the Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger which does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental Purchase Option providing that the holder of each
Purchase Option then outstanding or to be outstanding shall have the right
thereafter (until the stated expiration of such Purchase Option) to receive,
upon exercise of such Purchase Option, the kind and amount of shares of stock
and other securities and property receivable upon such consolidation or merger,
by a holder of the number of shares of Common Stock of the Company for which
such Purchase Option might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental Purchase Option shall
provide for adjustments which shall be identical to the adjustments provided in
Section 6.1. The above provision of this Section shall similarly apply to
successive consolidations or mergers.
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6.3 ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
or Warrants upon the exercise of the Purchase Option, nor shall it be required
to issue scrip or pay cash in lieu of any fractional interests, it being the
intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of Warrants, shares of
Common Stock or other securities, properties or rights.
7. RESERVATION AND LISTING. The Company shall at all times reserve and
keep available out of its authorized shares of Common Stock, solely for the
purpose of issuance upon exercise of the Purchase Options or the Warrants
underlying the Purchase Option, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise thereof.
The Company covenants and agrees that, upon exercise of the Purchase Options and
payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any stockholder.
The Company further covenants and agrees that upon exercise of the Warrants
underlying the Purchase Options and payment of the respective Warrant exercise
price therefor, all shares of Common Stock and other securities issuable upon
such exercise shall be duly and validly issued, fully paid and non-assessable
and not subject to preemptive rights of any stockholder. As long as the Purchase
Options shall be outstanding, the Company shall use its best efforts to cause
all (i) Units and shares of Common Stock issuable upon exercise of the Purchase
Options, (ii) Warrants issuable upon exercise of the Purchase Options and (iii)
shares of Common Stock issuable upon exercise of the Warrants included in the
Units issuable upon exercise of the Purchase Option to be listed (subject to
official notice of issuance) on all securities exchanges (or, if applicable on
the Nasdaq National Market, SmallCap Market, OTC Bulletin Board or any successor
trading market) on which the Units, the Common Stock or the Public Warrants
issued to the public in connection herewith may then be listed and/or quoted.
8. CERTAIN NOTICE REQUIREMENTS.
8.1 HOLDER'S RIGHT TO RECEIVE NOTICE. Nothing herein shall be
construed as conferring upon the Holders the right to vote or consent as a
stockholder for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Purchase Options and their exercise, any of the
events described in Section 8.2 shall occur, then, in one or more of said
events, the Company shall give written notice of such event at least fifteen
days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of the
closing of the transfer books, as the case may be. Notwithstanding the
foregoing, the Company shall deliver to each Holder a copy of each notice given
to the other stockholders of the Company at the same time and in the same manner
that such notice is given to the stockholders.
8.2 EVENTS REQUIRING NOTICE. The Company shall be required to give
the notice described in this Section 8 upon one or more of the following events:
(i) if the Company shall take a record of the holders of its shares of Common
Stock for the purpose of entitling them to
13
receive a dividend or distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the
books of the Company, or (ii) the Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor, or (iii) a dissolution,
liquidation or winding up of the Company (other than in connection with a
consolidation or merger) or a sale of all or substantially all of its property,
assets and business shall be proposed.
8.3 NOTICE OF CHANGE IN EXERCISE PRICE. The Company shall,
promptly after an event requiring a change in the Exercise Price pursuant to
Section 6 hereof, send notice to the Holders of such event and change ("PRICE
NOTICE"). The Price Notice shall describe the event causing the change and the
method of calculating same and shall be certified as being true and accurate by
the Company's President and Chief Financial Officer.
8.4 TRANSMITTAL OF NOTICES. All notices, requests, consents and
other communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made when hand delivered, or mailed by express mail or
private courier service: (i) if to the registered Holder of the Purchase Option,
to the address of such Holder as shown on the books of the Company, or (ii) if
to the Company, to the following address or to such other address as the Company
may designate by notice to the Holders:
Pharmamatrix Acquisition Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
9. MISCELLANEOUS.
9.1 AMENDMENTS. The Company and Jesup & ▇▇▇▇▇▇ may from time to
time supplement or amend this Purchase Option without the approval of any of the
Holders in order to cure any ambiguity, to correct or supplement any provision
contained herein that may be defective or inconsistent with any other provisions
herein, or to make any other provisions in regard to matters or questions
arising hereunder that the Company and Jesup & ▇▇▇▇▇▇ may ▇▇▇▇ necessary or
desirable and that the Company and Jesup & ▇▇▇▇▇▇ ▇▇▇▇ shall not adversely
affect the interest of the Holders. All other modifications or amendments shall
require the written consent of and be signed by the party against whom
enforcement of the modification or amendment is sought.
9.2 HEADINGS. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this Purchase
Option.
10. ENTIRE AGREEMENT. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and
14
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.
10.1 BINDING EFFECT. This Purchase Option shall inure solely to the
benefit of and shall be binding upon, the Holder and the Company and their
permitted assignees, respective successors, legal representatives and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Purchase
Option or any provisions herein contained.
10.2 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Purchase
Option shall be governed by and construed and enforced in accordance with the
laws of the State of New York, without giving effect to conflict of laws. The
Company hereby agrees that any action, proceeding or claim against it arising
out of, or relating in any way to this Purchase Option shall be brought and
enforced in the courts of the State of New York or of the United States of
America for the Southern District of New York, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives
any objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum. Any process or summons to be served upon the Company may be
served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in
Section 8 hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the Company in any action, proceeding or claim. The
Company and the Holder agree that the prevailing party(ies) in any such action
shall be entitled to recover from the other party(ies) all of its reasonable
attorneys' fees and expenses relating to such action or proceeding and/or
incurred in connection with the preparation therefor.
10.3 WAIVER, ETC. The failure of the Company or the Holder to at
any time enforce any of the provisions of this Purchase Option shall not be
deemed or construed to be a waiver of any such provision, nor to in any way
affect the validity of this Purchase Option or any provision hereof or the right
of the Company or any Holder to thereafter enforce each and every provision of
this Purchase Option. No waiver of any breach, non-compliance or non-
fulfillment of any of the provisions of this Purchase Option shall be effective
unless set forth in a written instrument executed by the party or parties
against whom or which enforcement of such waiver is sought; and no waiver of any
such breach, non-compliance or non- fulfillment shall be construed or deemed to
be a waiver of any other or subsequent breach or non-compliance.
10.4 EXECUTION IN COUNTERPARTS. This Purchase Option may be
executed in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same agreement, and shall
become effective when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto.
10.5 EXCHANGE AGREEMENT. As a condition of the Holder's receipt and
acceptance of this Purchase Option, ▇▇▇▇▇▇ agrees that, at any time prior to the
complete exercise of this Purchase Option by Holder, if the Company and Jesup &
▇▇▇▇▇▇ enter into an agreement ("EXCHANGE AGREEMENT") pursuant to which they
agree that all outstanding Purchase Options will be exchanged for securities or
cash or a combination of both, then Holder shall agree to such exchange and
become a party to the Exchange Agreement.
15
IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the ____ day of __________, 2005.
PHARMAMATRIX ACQUISITION
CORPORATION
By:_________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
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Form to be used to exercise Purchase Option:
Pharmamatrix Acquisition Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
Date:_________________, 200__
The undersigned hereby elects irrevocably to exercise all or a portion
of the within Purchase Option and to purchase ____ Units of Pharmamatrix
Acquisition Corporation and hereby makes payment of $____________ (at the rate
of $_________ per Unit) in payment of the Exercise Price pursuant thereto.
Please issue the Common Stock and Warrants as to which this Purchase Option is
exercised in accordance with the instructions given below.
or
The undersigned hereby elects irrevocably to convert its right to
purchase _________ Units purchasable under the within Purchase Option by
surrender of the unexercised portion of the attached Purchase Option (with a
"Value" based of $_______ based on a "Market Price" of $_______). Please issue
the securities comprising the Units as to which this Purchase Option is
exercised in accordance with the instructions given below.
________________________________
Signature
________________________________
Signature Guaranteed
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name
(Print in Block Letters)
Address
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN PURCHASE OPTION IN
17
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND
MUST BE GUARANTEED BY A BANK, OTHER THAN A SAVINGS BANK, OR BY A TRUST COMPANY
OR BY A FIRM HAVING MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.
18
Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the
within Purchase Option):
FOR VALUE RECEIVED,______________________________________________ does
hereby sell, assign and transfer unto___________________________________________
the right to purchase __________ Units of Pharmamatrix Acquisition Corporation
("COMPANY") evidenced by the within Purchase Option and does hereby authorize
the Company to transfer such right on the books of the Company.
Dated:___________________, 200_
________________________________
Signature
________________________________
Signature Guaranteed
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A
BANK, OTHER THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING
MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.
19