EXHIBIT 4.1
PURCHASE AGREEMENT
THIS AGREEMENT is made as of the ____ day of December, 2004, by and
between Genitope Corporation (the "Company"), a corporation organized under the
laws of the State of Delaware, with its principal offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and the purchaser whose name and address is set
forth on the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms
and conditions of this Agreement, the Company has authorized the sale of up to
4,000,000 shares (the "Shares") of common stock, par value $0.001 per share (the
"Common Stock"), of the Company.
SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing
(as defined in Section 3), the Company will, subject to the terms and conditions
of this Agreement, sell to the Purchaser and the Purchaser will buy from the
Company, upon the terms and conditions hereinafter set forth, the number of
Shares (at the purchase price) shown below:
Number of Shares Price Per Aggregate
to Be Purchased Share In Dollars Purchase Price
---------------- ---------------- --------------
The Company proposes to enter into substantially this same form of
purchase agreement with certain other investors (the "Other Purchasers") and
expects to complete sales of the shares of Common Stock to them. The Purchaser
and the Other Purchasers are hereinafter sometimes collectively referred to as
the "Purchasers," and this Agreement and the purchase agreements executed by the
Other Purchasers are hereinafter sometimes collectively referred to as the
"Agreements." The term "Placement Agent" shall mean ▇.▇. ▇▇▇▇▇▇▇▇▇ + Co., LLC.
SECTION 3. Delivery of the Shares at the Closing. The completion of
the purchase and sale of the Shares (the "Closing") shall occur as soon as
practicable (and in any event within 3 business days) following notification by
the Securities and Exchange Commission (the "Commission") to the Company of the
Commission's willingness to declare effective the registration statement to be
filed by the Company pursuant to Section 7.1 hereof (the "Registration
Statement") at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ at a time (the "Closing Date") to be agreed upon by
the Company and the Placement Agent.
At the Closing, the Purchaser shall deliver, in immediately
available funds, the full amount of the purchase price for the Shares being
purchased hereunder by wire transfer to an account designated by the Company and
the Company shall deliver to the Purchaser one or more stock certificates
registered in the name of the Purchaser, or in such nominee name(s) as
designated by the Purchaser in writing, representing the number of Shares set
forth in Section 2
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above and bearing an appropriate legend referring to the fact that the Shares
were sold in reliance upon the exemption from registration under the Securities
Act of 1933, as amended (the "Securities Act") provided by Section 4(2) thereof
and Rule 506 thereunder. The Company will promptly substitute one or more
replacement certificates without the legend at such time as the Registration
Statement becomes effective. The name(s) in which the stock certificates are to
be registered are set forth in the Stock Certificate Questionnaire attached
hereto as part of Appendix I.
The Company's obligation to complete the purchase and sale of the
Shares and deliver such stock certificate(s) to the Purchaser at the Closing
shall be subject to the following conditions, any one or more of which may be
waived by the Company: (a) receipt by the Company of same-day funds in the full
amount of the purchase price for the Shares being purchased hereunder; (b)
completion of the purchases and sales under the Agreements with all of the Other
Purchasers; and (c) the accuracy of the representations and warranties made by
the Purchasers and the fulfillment of those undertakings of the Purchasers to be
fulfilled prior to the Closing. The Purchaser's obligation to accept delivery of
such stock certificate(s) and to pay for the Shares evidenced thereby shall be
subject to the following conditions: (a) evidence reasonably satisfactory to the
Purchaser that the Commission has notified the Company of the Commission's
willingness to declare the Registration Statement effective on or prior to the
90th day after the date such Registration Statement was filed by the Company;
and (b) the accuracy in all material respects of the representations and
warranties made by the Company herein and the fulfillment in all material
respects of those undertakings of the Company to be fulfilled prior to Closing.
The Purchaser's obligations hereunder are expressly not conditioned on the
purchase by any or all of the Other Purchasers of the Shares that they have
agreed to purchase from the Company.
SECTION 4. Representations, Warranties and Covenants of the Company.
Except as otherwise disclosed in or contemplated by the Confidential Private
Placement Memorandum dated December 3, 2004, including all exhibits, supplements
and amendments thereto (the "Private Placement Memorandum"), the Company hereby
represents and warrants to, and covenants with, the Purchaser as follows:
4.1 Organization and Qualification. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and the Company is qualified to do business as a
foreign corporation in each jurisdiction in which qualification is required,
except where failure to so qualify would not have a Material Adverse Effect (as
defined herein). The Company has no subsidiaries and does not own any capital
stock or other equity securities in any other entity, except instruments or
interests held by the Company solely for investment.
4.2 Authorized Capital Stock. The Company had the duly authorized
and validly issued outstanding capitalization as set forth under the heading
"Capitalization" in the Private Placement Memorandum as of the date set forth
therein; the issued and outstanding shares of the Company's Common Stock have
been duly authorized and validly issued by the Company and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of any preemptive rights, rights
of first refusal or similar rights, and conform in all material respects to the
description thereof contained in the Private Placement Memorandum. Except as
created by the Agreements or otherwise
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disclosed in or contemplated by the Private Placement Memorandum, the Company
does not have any outstanding options, warrants, rights or other arrangements
requiring the Company at any time to issue any capital stock. No holders of
outstanding shares of capital stock of the Company are entitled to any
preemptive or other rights to subscribe for any of the Shares.
4.3 Issuance, Sale and Delivery of the Shares. The Shares have been
duly authorized and, when issued, delivered and paid for in the manner set forth
in this Agreement, will be validly issued, fully paid and nonassessable, and
will conform in all material respects to the description thereof set forth in
the Private Placement Memorandum. No preemptive rights or other rights to
subscribe for or purchase any shares exist with respect to the issuance and sale
of the Shares by the Company pursuant to this Agreement. No stockholder of the
Company has any right (which has not been waived or has not expired by reason of
lapse of time following notification of the Company's intent to file the
Registration Statement) to require the Company to register the sale of any
shares owned by such stockholder under the Securities Act, in the Registration
Statement. No further approval or authority of the stockholders or the Board of
Directors of the Company will be required for the issuance and sale of the
Shares to be sold by the Company as contemplated herein.
4.4 Due Execution, Delivery and Performance of the Agreements. The
Company has full legal right, corporate power and authority to enter into this
Agreement and consummate the transactions contemplated hereby. The Agreement has
been duly authorized, executed and delivered by the Company. The execution and
performance of the Agreements by the Company and the consummation of the
transactions herein contemplated will not violate any provision of the
certificate of incorporation or bylaws of the Company and will not result in the
creation of any lien, charge, or encumbrance upon any assets of the Company
pursuant to the terms or provisions of, or will not conflict with, result in the
breach or violation of, or constitute, either by itself or upon notice or the
passage of time or both, a default under any mortgage, deed of trust, lease,
franchise, license, indenture, or other agreement to which the Company or its
properties may be bound and in each case which would have a Material Adverse
Effect or, to the Company's knowledge, any statute or any judgment, decree,
order, rule or regulation applicable to the Company of any court or any
regulatory body, administrative agency or other governmental body having
jurisdiction over the Company or its properties which would have a Material
Adverse Effect. This Agreement, assuming it is a binding agreement of the
Purchaser, constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application relating to or affecting the enforcement of
creditors' rights and the application of equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution,
including but not limited to, the indemnification provisions set forth in
Section 7.3 of this Agreement may be limited by federal or state securities law
or the public policy underlying such laws. For the purposes of this Agreement
the term "Material Adverse Effect" shall mean a material adverse effect on the
financial condition, properties, business, or results of operations of the
Company, except any of the following, either alone or in combination, shall not
be deemed a Material Adverse Effect: (i) effects caused by changes or
circumstances affecting general market conditions in the U.S. economy or which
are generally applicable to the industry in which the Company operates, provided
that such effects do not adversely affect the Company in a disproportionate
manner, (ii) effects resulting from or relating to the announcement or
disclosure
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of the sale of the Shares or other transactions contemplated by this Agreement,
or (iii) effects caused by any event, occurrence or condition resulting from or
relating to the taking of any action in accordance with this Agreement.
4.5 Accountants. PricewaterhouseCoopers LLP, who has expressed its
opinion with respect to the financial statements contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, which is
attached as an exhibit to, and made a part of the Private Placement Memorandum
and incorporated by reference into the Registration Statement and the Prospectus
(as defined in Section 7.3 hereof) which forms a part thereof, were independent
accountants as required by the Securities Act and the rules and regulations
promulgated thereunder (the "Rules and Regulations").
4.6 No Defaults. The Company is not, nor with the giving of notice
or lapse of time or both will it be, in violation or default of any provision of
its certificate of incorporation or bylaws, or in breach of or default with
respect to any provision of any agreement, judgment, decree, order, mortgage,
deed of trust, lease, franchise, license, indenture, or other instrument to
which it is a party or by which it or any of its properties are bound, except
such defaults which individually or in the aggregate would not cause a Material
Adverse Effect.
4.7 Contracts. The material contracts to which the Company is a
party that are filed as exhibits to its Annual Report on Form 10-K for the year
ended December 31, 2003 and any Current Reports on Form 8-K or Quarterly Reports
on Form 10-Q filed subsequent thereto with the Commission by the Company have
been duly and validly authorized, executed and delivered by the Company and
constitute the legal, valid and binding agreements of the Company, enforceable
by and against it in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to enforcement of creditors'
rights generally, and general equitable principles relating to the availability
of remedies, and except as rights to indemnity or contribution may be limited by
federal or state securities laws and the public policy underlying such laws.
4.8 No Actions. Except as disclosed in the Private Placement
Memorandum, there are no legal or governmental actions, suits or proceedings
pending or, to the Company's knowledge, threatened against the Company before or
by any court, regulatory body or administrative agency or any other governmental
agency or body, domestic or foreign, which actions, suits or proceedings,
individually or in the aggregate, might reasonably be expected to have a
Material Adverse Effect; and to the Company' s knowledge, no labor disturbance
by the employees of the Company exists, or, to the Company's knowledge is
imminent, which might reasonably be expected to have a Material Adverse Effect.
The Company is not a party to or subject to the provisions of any injunction,
judgment, decree, or order of any court, regulatory body administrative agency
or other governmental body which might reasonably be expected to have a Material
Adverse Effect.
4.9 Properties. The Company has good and marketable title to all the
properties and assets described as owned by it in the financial statements
included in the Private Placement Memorandum free and clear of all liens,
mortgages, pledges, or encumbrances of any kind except (i) those, if any,
reflected in such financial statements, or (ii) those which are not
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material in amount and do not adversely affect the use made and proposed to be
made of such property by the Company. The Company holds its leased properties
under valid and binding leases, with such exceptions as are not materially
significant in relation to its business. Except as disclosed in the Private
Placement Memorandum, the Company owns or leases all such properties as are
necessary to its operations as now conducted.
4.10 No Material Change. Since September 30, 2004 and except as
described in or specifically contemplated by the Private Placement Memorandum,
(i) the Company has not incurred any material liabilities or obligations, direct
or contingent, or entered into any material transaction which is not in the
ordinary course of business or which could reasonably be expected to result in a
material reduction in the future earnings of the Company; (ii) the Company has
not paid or declared any dividends or other distributions with respect to its
capital stock; (iii) there has not been any material change in the capital stock
of the Company other than the sale of the Shares hereunder and shares or options
issued pursuant to employee equity incentive plans or purchase plans approved by
the Company's Board of Directors, or indebtedness material to the Company (other
than in the ordinary course of business); and (iv) there has not occurred any
event which has caused a Material Adverse Effect.
4.11 Intellectual Property. Except as disclosed in the Private
Placement Memorandum, the Company owns, is licensed or otherwise possesses all
rights to use, all patents, patent rights, inventions, know-how (including trade
secrets and other unpatented or unpatentable or confidential information,
systems, or procedures), trademarks, service marks, trade names, copyrights and
other intellectual property rights (collectively, the "Intellectual Property")
necessary for the conduct of its business as described in the Private Placement
Memorandum. Except as disclosed in the Private Placement Memorandum, to the
Company's knowledge, no claims have been asserted against the Company by any
person with respect to the use of any such Intellectual Property or challenging
or questioning the validity or effectiveness of any such Intellectual Property.
4.12 Compliance. Except as disclosed in the Private Placement
Memorandum, the Company has not been advised, nor does it have any reason to
believe, that it is not conducting its business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is
conducting its business, including, without limitation, all applicable local,
state and federal environmental laws and regulations, except where failure to be
so in compliance would not have a Material Adverse Effect.
4.13 Taxes. The Company has filed all required federal, state and
local income and franchise tax returns and has paid or accrued all taxes shown
as due thereon, and the Company has no knowledge of a tax deficiency which has
been or might be asserted or threatened against it which could have a Material
Adverse Effect. All tax liabilities accrued through the date hereof have been
adequately provided for on the books of the Company.
4.14 Transfer Taxes. On the Closing Date, all stock transfer or
other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares to be sold to the Purchaser
hereunder will be, or will have been, fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been fully complied with.
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4.15 Investment Company. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission promulgated thereunder.
4.16 Offering Materials. The Company has not distributed and will
not distribute prior to the Closing Date any offering material in connection
with the offering and sale of the Shares other than the Private Placement
Memorandum or any amendment or supplement thereto. The Company has not in the
past nor will it hereafter take any action independent of the Placement Agent to
sell, offer for sale or solicit offers to buy any securities of the Company
which would result in the initial sale of the Shares not being exempt from the
registration requirements of Section 5 of the Securities Act.
4.17 Insurance. The Company maintains insurance underwritten by
insurers of recognized financial responsibility of the types and in the amounts
and with such deductibles as is customary for companies in the same or similar
business, all of which insurance is in full force and effect.
4.18 Additional Information. The information contained in the
following documents, which the Placement Agent has furnished to the Purchaser,
or will furnish prior to the Closing, as of the date thereof, did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2003;
(b) the Company's Definitive Proxy Statement for Annual Meeting of
Stockholders held on June 11, 2004;
(c) the Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 2004, June 30, 2004 and September 30, 2004;
(d) the Company's Current Reports on Form 8-K filed with the
Commission on May 5, 2004 and September 22, 2004;
(e) the Private Placement Memorandum, including all addenda and
exhibits thereto, other than the Agreement and appendices and exhibits
hereto; and
(f) all other documents, if any, filed by the Company with the
Commission since December 31, 2003 pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
4.19 Price of Common Stock. The Company has not taken, and will not
take, directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of the Common Stock to
facilitate the sale or resale of the Shares.
4.20 Legal Opinion. As a condition to the Purchaser's obligation to
purchase
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the Shares, ▇▇▇▇▇▇ Godward LLP shall have delivered its legal opinion to the
Placement Agent in a form reasonably satisfactory to the Placement Agent and
counsel to the Placement Agent. Such opinion shall also state that each of the
Purchasers may rely thereon as though it were addressed directly to such
Purchaser.
4.21 Certificate. At the Closing, the Company will deliver to the
Purchasers a certificate executed by the Chairman of the Board or Chief
Executive Officer and the Chief Financial Officer of the Company, dated the
Closing Date, in form and substance reasonably satisfactory to the Purchasers,
to the effect that the representations and warranties of the Company set forth
in this Section 4 are true and correct in all material respects as of the date
of this Agreement and as of the Closing Date, and the Company has in all
material respects complied with all the agreements and satisfied all the
conditions herein on its part to be performed or satisfied on or prior to such
Closing Date.
4.22 Reporting Company; Form S-3. The Company is subject to the
reporting requirements of the Exchange Act and has filed all reports required
thereby. Provided none of the Purchasers is deemed to be an underwriter with
respect to any shares, the Company is eligible to register the Shares for resale
by the Purchaser on a registration statement on Form S-3 under the Securities
Act.
4.23 Use of Proceeds. The Company shall use the proceeds from the
sale of the Shares as described under "Use of Proceeds" in the Private Placement
Memorandum.
4.24 Non-Public Information. The Company has not disclosed to the
Purchaser, whether in the Private Placement Memorandum or otherwise, information
that would constitute material non-public information as of the Closing Date
other than the existence of the transaction contemplated hereby.
4.25 Use of Purchaser Name. Except as otherwise required by
applicable law or regulation, the Company shall not use the Purchaser's name or
the name of any of its affiliates in any advertisement, announcement, press
release or other similar public communication unless it has received the prior
written consent of the Purchaser for the specific use contemplated, which
consent shall not be unreasonably withheld.
4.26 Related Party Transactions. No transaction has occurred between
or among the Company, on the one hand, and its affiliates, officers or
directors, on the other hand, that is required to have been described under
applicable securities laws in its Exchange Act filings and is not so described
in such filings.
4.27 Governmental Permits, Etc. The Company has all franchises,
licenses, certificates and other authorizations from such federal, state or
local government or governmental agency, department or body that are currently
necessary for the operation of the business of the Company as currently
conducted, except where the failure to posses currently such franchises,
licenses, certificates and other authorizations is not reasonably expected to
have a Material Adverse Effect. The Company has not received any notice of
proceedings relating to the revocation or modification of any such permit which,
if the subject of an unfavorable decision, ruling or finding, could reasonably
be expected to have a Material Adverse Effect.
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4.28 Financial Statements. The financial statements of the Company
and the related notes and schedules thereto included in its Exchange Act filings
fairly present the financial position, results of operations, stockholders'
equity and cash flows of the Company at the dates and for the periods specified
therein. Such financial statements and the related notes and schedules thereto
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein) and all adjustments necessary for a fair presentation of results for
such periods have been made; provided, however, that the unaudited financial
statements are subject to normal year-end audit adjustments (which are not
expected to be material) and do not contain all footnotes required under
generally accepted accounting principles.
4.29 Listing. The Company shall comply with all requirements of the
Nasdaq National Market with respect to the issuance of the Shares and shall
cause Shares to be quoted on the Nasdaq National Market and listed on any other
exchange on which the Company's shares of common stock are listed on or before
the first date that the Registration Statement is declared effective by the
Commission.
4.30 Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has disclosure controls and procedures
(as defined in Rules 13a-14 and 15d-14 under the Exchange Act) that are designed
to ensure that material information relating to the Company is made known to the
Company's principal executive officer and the Company's principal financial
officer or persons performing similar functions. The Company is otherwise in
compliance in all material respects with all applicable provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated thereunder.
4.31 Brokers' Fees. The Company has not incurred any liability for a
fee, commission, or other compensation on account of the employment of a broker
or finder in connection with the transactions contemplated by this Agreement
other than the fee that will be paid to the Placement Agent.
4.32 ERISA. The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (herein called "ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan"; or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code"); and each
"Pension Plan" for which the Company would have liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in
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all material respects and nothing has occurred, whether by action or by failure
to act, which would cause the loss of such qualification.
4.33 Unlawful Payments. Neither the Company nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provisions of the Foreign Corrupt Practices Act of 1972; or made any bribe,
rebate, payoff, influence, payment, kickback or other unlawful payment.
4.34 Extensions of Credit. Since December 31, 2003, the Company has
not, directly or indirectly extended or maintained credit, arranged for the
extension of credit or renewed an extension of credit in the form of a personal
loan to or for any director or executive officer in violation of Section 13(k)
of the Exchange Act.
SECTION 5. Representations, Warranties and Covenants of the
Purchaser.
(a) The Purchaser represents and warrants to, and covenants with,
the Company that: (i) the Purchaser is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that
involved in the purchase of the Shares, including investments in
securities issued by the Company, has reviewed the Private Placement
Memorandum carefully and has requested, received, reviewed and considered
all information it deems relevant in making an informed decision to
purchase the Shares; (ii) the Purchaser is acquiring the number of Shares
set forth in Section 2 above in the ordinary course of its business and
for its own account for investment only and with no present intention of
distributing any of such Shares or any arrangement or understanding with
any other persons regarding the distribution of such Shares (this
representation and warranty not limiting the Purchaser's right to sell
pursuant to the Registration Statement); (iii) the Purchaser will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a
pledge of) any of the Shares except in compliance with the Securities Act
and the Rules and Regulations and any applicable state securities laws;
(iv) the Purchaser has completed or caused to be completed the
Registration Statement Questionnaire attached hereto as part of Appendix
I, for use in preparation of the Registration Statement, and the answers
thereto are true and correct as of the date hereof and will be true and
correct as of the effective date of the Registration Statement; (v) the
Purchaser has, in connection with its decision to purchase the number of
Shares set forth in Section 2 above, relied solely upon the Private
Placement Memorandum and the documents included therein and the
representations and warranties of the Company contained herein; (vi) the
Purchaser has had an opportunity to discuss this investment with
representatives of the Company and ask questions of them; and (vii) the
Purchaser is an "accredited investor" within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act.
(b) The Purchaser acknowledges and understands that the Shares are
being offered and sold to it in reliance upon specific exemptions from the
registration
9
requirements of the Securities Act, the Rules and Regulations and state
securities laws and that the Company is relying upon the truth and
accuracy of, and the Purchaser's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the
Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the Shares.
(c) For the benefit of the Company, the Purchaser previously agreed
orally with the Placement Agent to keep confidential all information
concerning this private placement. The Purchaser understands that the
information contained in the Private Placement Memorandum is strictly
confidential and proprietary to the Company and has been prepared from the
Company's publicly available documents and other information and is being
submitted to the Purchaser solely for such Purchaser's confidential use.
The Purchaser agrees to use the information contained in the Private
Placement Memorandum for the sole purpose of evaluating a possible
investment in the Shares and the Purchaser hereby acknowledges that it is
prohibited from reproducing or distributing the Private Placement
Memorandum, this Purchase Agreement, or any other offering materials, in
whole or in part, or divulging or discussing any of their contents.
Further, the Purchaser understands that the existence and nature of all
conversations and presentations, if any, regarding the Company and this
offering must be kept strictly confidential. The Purchaser understands
that the federal securities laws impose restrictions on trading based on
information regarding this offering. In addition, the Purchaser hereby
acknowledges that unauthorized disclosure of information regarding this
offering may result in a violation of Regulation FD. This obligation will
terminate upon the filing by the Company of a press release or press
releases describing this offering. The foregoing agreements shall not
apply to any information that is or becomes publicly available through no
fault of the Purchaser, or that the Purchaser is legally required to
disclose; provided, however, that if the Purchaser is requested or ordered
to disclose any such information pursuant to any court or other government
order or any other applicable legal procedure, it shall provide the
Company with prompt notice of any such request or order in time sufficient
to enable the Company to seek an appropriate protective order.
(d) The Purchaser understands that nothing in the Agreement or any
other materials presented to the Purchaser in connection with the purchase
and sale of the Shares constitutes legal, tax or investment advice. The
Purchaser has consulted such legal, tax and investment advisors as it, in
its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Shares.
(e) The Purchaser understands that its investment in the Shares
involves a significant degree of risk including a risk of total loss of
Purchaser's investment, and the Purchaser has full cognizance of and
understands all of the risk factors related to Purchaser's purchase of the
Shares, including, but not limited to, those set forth under the caption
"Risk Factors" in the Private Placement Memorandum. The Purchaser
understands that the market price of the Common Stock has been volatile
and that no representation is being made as to the future value of the
Common Stock. The Purchaser has the knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks
of an investment in the Shares and has the ability to bear the economic
risks of an investment in the Shares.
10
(f) The Purchaser understands that no United States federal or state
agency or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Shares.
(g) The Purchaser understands that, until such time as the
Registration Statement has been declared effective or the Shares may be
sold pursuant to Rule 144 under the Securities Act without any restriction
as to the number of securities as of a particular date that can then be
immediately sold, the Shares will bear a restrictive legend in
substantially the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE
SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM
REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE
REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE
LAWS."
(h) The certificates representing the Shares will be subject to a
stop transfer order with the Company's transfer agent that restricts the
transfer of such shares except upon receipt by the transfer agent of a
written confirmation from the Purchaser to the effect that the Purchaser
has satisfied its prospectus delivery requirements, in the form attached
as Exhibit A hereto.
(i) The Purchaser's principal executive offices are in the
jurisdiction set forth immediately below the Purchaser's name on the
signature pages hereto.
(j) The Purchaser hereby covenants with the Company not to make any
sale of the Shares under the Registration Statement without effectively
causing the prospectus delivery requirement under the Securities Act to be
satisfied, and the Purchaser acknowledges and agrees that such Shares are
not transferable on the books of the Company unless the certificate
submitted to the transfer agent evidencing the Shares is accompanied by a
separate Purchaser's Certificate of Subsequent Sale: (i) in the form of
Appendix II hereto, (ii) executed by an officer of, or other authorized
person designated by, the Purchaser, and (iii) to the effect that (A) the
Shares have been sold in accordance with the Registration Statement, the
Securities Act and any applicable state securities or Blue Sky laws and
(B) the requirement of delivering a current prospectus has been satisfied.
The Purchaser acknowledges that there may occasionally be times when the
11
Company must suspend the use of the prospectus forming a part of the
Registration Statement until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the
Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Exchange Act. The Purchaser
hereby covenants that it will not sell any Shares pursuant to said
prospectus during the period commencing at the time at which the Company
gives the Purchaser written notice of the suspension of the use of said
prospectus and ending at the time the Company gives the Purchaser written
notice that the Purchaser may thereafter effect sales pursuant to said
prospectus. The Purchaser further covenants to notify the Company promptly
of the sale of all of its Shares.
(k) The Purchaser further represents and warrants to, and covenants with,
the Company that (i) the Purchaser has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, (ii) the making and
performance of the Agreement by Purchaser and the consummation of the
transactions herein contemplated will not violate any provision of the
organizational documents of Purchaser or conflict with, result in the
breach or violation of, or constitute, either by itself or upon notice or
the passage of time or both, a default under any material agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or
other instrument to which the Purchaser is a party or, any statute or any
authorization, judgment, decree, order, rule or regulation of any court or
any regulatory body, administrative agency or other governmental body
applicable to Purchaser, (iii) no consent, approval, authorization or
other order of any court, regulatory body, administrative agency or other
governmental body is required on the part of the Purchaser for the
execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement, (iv) upon the execution and
delivery of this Agreement, this Agreement shall constitute a legal, valid
and binding obligation of the Purchaser, enforceable in accordance with
its terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting the enforcement of creditors'
rights and the application of equitable principles relating to the
availability of remedies), and except as rights to indemnity or
contribution (including, but not limited to, the indemnification
provisions set forth in Section 7.3 of this Agreement) may be limited by
federal or state securities law or the public policy underlying such laws
and (v) there is not in effect any order enjoining or restraining the
Purchaser from entering into or engaging in any of the transactions
contemplated by this Agreement. The Company shall use its commercially
reasonable efforts to ensure that the Purchasers shall not be prohibited
from selling Shares under the Registration Statement for more than 60 days
during any twelve-month period.
(l) The Purchaser further represents and warrants to, and covenants
with, the Company that it has not engaged in any short selling of the
Company's securities, or established or increased any "put equivalent
position" as defined in Rule 16(a)-1(h) under the Exchange Act with
respect to the Company's securities, within the past 10 trading days.
SECTION 6. Survival of Agreements; Non-Survival of Company
Representations and Warranties. Notwithstanding any investigation made by any
party to this Agreement or by the Placement Agent, all covenants and agreements
made by the Company and
12
the Purchaser herein and in the certificates for the Shares delivered
pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares being purchased and the payment
therefor. All representations and warranties, made by the Company herein
shall terminate at the Closing.
SECTION 7. Registration of the Shares; Compliance with the
Securities Act.
7.1 Registration Procedures and Expenses. Except for such times as
the Company may be required to suspend the use of a prospectus forming a part of
the Registration Statement, as further described in Section 5(j) hereof, the
Company shall:
(a) as soon as practicable, but in no event later than two
business days after the date that the Agreements are executed
prepare and file with the Commission the Registration
Statement on Form S-3 relating to the resale of the Shares by
the Purchaser from time to time through the automated
quotation system of the Nasdaq National Market or the
facilities of any national securities exchange on which the
Common Stock is then traded or in privately-negotiated
transactions;
(b) use its reasonable best efforts, subject to receipt of
necessary information from the Purchasers, to cause the
Commission to notify the Company of the Commission's
willingness to declare the Registration Statement effective
within 60 days, but not more than 90 days, after the
Registration Statement is filed by the Company;
(c) promptly prepare and file with the Commission such amendments
and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to
keep the Registration Statement effective until the earlier of
(i) two years after the effective date of the Registration
Statement, (ii) such time as all of the Shares have been sold
pursuant to the Registration Statement, (iii) the date on
which the Shares may be resold by the Purchasers without
registration by reason of Rule 144(k) under the Securities Act
or any other rule of similar effect, or (iv) such time as all
shares purchased by such Purchaser under this Agreement have
been sold;
(d) so long as the Registration Statement is effective covering
the resale of Shares owned by the Purchaser, furnish to the
Purchaser with respect to the Shares registered under the
Registration Statement (and to each underwriter, if any, of
such Shares) such number of copies of prospectuses and such
other documents as the Purchaser may reasonably request, in
order to facilitate the public sale or other disposition of
all or any of the Shares by the Purchaser;
(e) use its reasonable efforts to 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
13
business or consent to service of process in any jurisdiction
in which it is not now so qualified or has not so consented;
(f) bear all expenses in connection with the procedures in
paragraphs (a) through (e) of this Section 7.1 and the
registration of the Shares pursuant to the Registration
Statement, other than fees and expenses, if any, of counsel or
other advisers to the Purchaser or the Other Purchasers or
underwriting discounts, brokerage fees and commissions
incurred by the Purchaser or the Other Purchasers, if any, in
connection with the offering of the Shares pursuant to the
Registration Statement;
(g) advise the Purchasers (via email addressed listed in Section
9(b)) on the same date that: (i) the prospectus or any
prospectus supplement or post effective amendment has been
filed, and, with respect to the Registration Statement or any
post effective amendment thereto, when the same has become
effective; (ii) the Company shall receive notice or obtain
knowledge of the issuance of any stop order by the Securities
and Exchange Commission delaying or suspending the
effectiveness of the Registration Statement or of the
initiation of any proceeding for that purpose, or any other
order issued by any state securities commission or other
regulatory authority suspending the qualification or exemption
from qualification of such shares under state securities or
"blue sky" laws; and the Company will use its commercially
reasonable efforts to prevent the issuance of any stop order
or other order; and (iii) the Company shall receive notice or
obtain knowledge of the existence of any fact or the happening
of any event that makes any statement of a material fact in
the Registration Statement, the prospectus, any amendment or
supplement thereto, or any document incorporated by reference
therein untrue, or which results in an omission of a material
fact necessary in order to make the statement contained
therein in light of the circumstances in which it was made not
misleading; and
(h) in order to enable the Purchasers to sell the Shares under
Rule 144 to the Securities Act, for a period of two years from
Closing, use its commercially reasonable efforts to comply
with the requirements of Rule 144, including without
limitation, use its commercially reasonable efforts to comply
with the requirements of Rule 144(c) with respect to public
information about the Company and to timely file all reports
required to be filed by the Company under the Exchange Act.
It shall be a condition precedent to the obligations of the Company
to take any action pursuant to this Section 7.1 that the Purchaser shall furnish
to the Company such information reasonably requested by the Company in writing
regarding the Purchaser and the Shares to be sold by Purchaser.
The Company understands that the Purchaser disclaims being an
underwriter. A questionnaire related to the Registration Statement to be
completed by the Purchaser is attached hereto as Appendix I.
7.2 Transfer of Shares After Registration. The Purchaser agrees that
it will not effect any disposition of the Shares or its right to purchase the
Shares that would constitute a sale within the meaning of the Securities Act or
pursuant to any applicable state securities laws, except as contemplated in the
Registration Statement referred to in Section 7.1, and that it will promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding the Purchaser or its plan of distribution.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Purchaser/Affiliate" shall mean any affiliates of
the Purchaser and any person who controls the Purchaser or any
affiliate of the Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act; and
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or
relating to, and any document incorporated by reference in,
the Registration Statement referred to in Section 7.1 of this
Agreement.
(a) The Company agrees to indemnify and hold harmless the Purchaser
and each Purchaser/Affiliate, against any losses, claims, damages,
liabilities or expenses, joint or several, to which the Purchaser or such
Purchaser/Affiliates may become subject, under the Securities Act, the
Exchange Act, or any other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any litigation,
but only if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including
14
the prospectus, financial statements and schedules, and all other
documents filed as a part thereof, as amended at the time of effectiveness
of the Registration Statement, including any information deemed to be a
part thereof as of the time of effectiveness pursuant to paragraph (b) of
Rule 430A, or pursuant to Rule 434, of the Rules and Regulations, or the
prospectus, in the form first filed with the Commission pursuant to Rule
424(b) of the Regulations, or filed as part of the Registration Statement
at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any subsequent amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state in any
of them a material fact required to be stated therein or necessary to make
the statements in the Registration Statement or any amendment or
supplement thereto not misleading or in the Prospectus or any amendment or
supplement thereto not misleading in the light of the circumstances under
which they were made, or any failure of the Company to perform its
obligations hereunder or under law, and will reimburse each Purchaser and
each such Purchaser/Affiliate for any legal and other expenses as such
expenses are reasonably incurred by such Purchaser or such
Purchaser/Affiliate in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable for amounts
paid in settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, and the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made
in the Registration Statement, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Purchaser
expressly for use therein, or (ii) the failure of such Purchaser to comply
with the covenants and agreements contained in Sections 5(j) or 7.2 hereof
respecting the sale of the Shares, or (iii) the inaccuracy of any
representations made by such Purchaser herein or (iv) any statement or
omission in any Prospectus that is corrected in any subsequent Prospectus
that was delivered to the Purchaser prior to the pertinent sale or sales
by the Purchaser.
(b) Each Purchaser will severally, but not jointly, indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any losses, claims, damages,
liabilities or expenses to which the Company, each of its directors, each
of its officers who signed the Registration Statement or controlling
person may become subject, under the Securities Act, the Exchange Act, or
any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, but only if such
settlement is effected with the written consent of such Purchaser) insofar
as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon (i)
any failure to comply with the covenants and agreements contained in
Sections 5(j) or 7.2 hereof respecting the sale of the Shares or (ii) the
inaccuracy of any representation or warranty made by such Purchaser herein
or (iii) any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission
15
to state therein a material fact required to be stated therein or
necessary to make the statements in the Registration Statement or any
amendment or supplement thereto not misleading or in the Prospectus or any
amendment or supplement thereto not misleading in the light of the
circumstances under which they were made, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, in reliance upon
and in conformity with written information furnished to the Company by the
Purchaser expressly for use therein, and will reimburse the Company, each
of its directors, each of its officers who signed the Registration
Statement or controlling person for any legal and other expense reasonably
incurred by the Company, each of its directors, each of its officers who
signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that each
Purchaser's aggregate liability under this Section 7 shall not exceed the
amount of proceeds received by such Purchaser on the sale of the Shares
pursuant to the Registration Statement.
(c) Promptly after receipt by an indemnified party under this
Section 7.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 7.3, promptly notify the
indemnifying party in writing thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise under the
indemnity agreement contained in this Section 7.3 to the extent it is not
prejudiced as a result of such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends
to seek indemnity from an indemnifying party, the indemnifying party will
be entitled to participate in, and, to the extent that it may wish,
jointly with all other indemnifying parties similarly notified, to assume
the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party, and the
indemnified party, based upon the advice of such indemnified party's
counsel, shall have reasonably concluded that there may be a conflict of
interest between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 7.3
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof unless (i) the indemnified
party shall have employed such counsel in connection with the assumption
of legal defenses in accordance with the proviso to the preceding sentence
(it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, reasonably
satisfactory to such indemnifying party representing the indemnified
parties who are parties to such action, plus local counsel, if
appropriate) or (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a
16
reasonable time after notice of commencement of action, in each of which
cases the reasonable fees and expenses of counsel shall be at the expense
of the indemnifying party. The indemnifying party shall not be liable for
any settlement of any action without its written consent.
(d) If the indemnification provided for in this Section 7.3 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) of this Section 7.3 in respect to any losses,
claims, damages, liabilities or expenses referred to herein, then each
applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any losses, claims,
damages, liabilities or expenses referred to herein (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company
and the Purchaser from the placement of the Common Stock contemplated by
this Agreement or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
the relative fault of the Company and the Purchaser in connection with the
statements or omissions or inaccuracies in the representations and
warranties in this Agreement that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and each Purchaser on the other shall be deemed to be in the same
proportion as the amount paid by such Purchaser to the Company pursuant to
this Agreement for the Shares purchased by such Purchaser that were sold
pursuant to the Registration Statement bears to the difference (the
"Difference") between the amount such Purchaser paid for the Shares that
were sold pursuant to the Registration Statement and the amount received
by such Purchaser from such sale. The relative fault of the Company on the
one hand and each Purchaser on the other shall be determined by reference
to, among other things, whether the untrue or alleged statement of a
material fact or the omission or alleged omission to state a material fact
or the inaccurate or the alleged inaccurate representation and/or warranty
relates to information supplied by the Company or by such Purchaser and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in paragraph (c) of this Section 7.3,
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The
provisions set forth in paragraph (c) of this Section 7.3 with respect to
the notice of the threat or commencement of any threat or action shall
apply if a claim for contribution is to be made under this paragraph (d);
provided, however, that no additional notice shall be required with
respect to any threat or action for which notice has been given under
paragraph (c) for purposes of indemnification. The Company and each
Purchaser agree that it would not be just and equitable if contribution
pursuant to this Section 7.3 were determined solely by pro rata allocation
(even if the Purchaser were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to in this paragraph. Notwithstanding
the provisions of this Section 7.3, no Purchaser shall be required to
contribute any amount in excess of the amount by which the Difference
exceeds the amount of any damages that such Purchaser has otherwise been
17
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Purchasers' obligations to
contribute pursuant to this Section 7.3 are several and not joint.
7.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5(j) or Section 7.2 upon the transferability of the
Shares shall cease and terminate as to any particular number of the Shares upon
the earlier of (i) the passage of two years from the effective date of the
Registration Statement covering such Shares and (ii) at such time as an opinion
of counsel satisfactory in form and substance to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.
7.5 Information Available. The Company, upon the reasonable request
of the Purchaser, shall make available for inspection by each Purchaser, any
underwriter participating in any disposition pursuant to the Registration
Statement and any attorney, accountant or other agent retained by the Purchaser
or any such underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
employees and independent accountants to supply all information reasonably
requested by the Purchaser or any such underwriter, attorney, accountant or
agent in connection with the Registration Statement.
SECTION 8. Broker's Fee. The Purchaser acknowledges that the Company
intends to pay to the Placement Agent a fee in respect of the sale of the Shares
to the Purchaser. Each of the parties hereto hereby represents that, on the
basis of any actions and agreements by it, there are no other brokers or finders
entitled to compensation in connection with the sale of the Shares to the
Purchaser.
SECTION 9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:
(a) if to the Company, to:
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Ph.D.
Genitope Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
18
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Godward LLP
Five Palo Alto Square
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person at such other place as the Company
shall designate to the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth at the end of this
Agreement, or at such other address or addresses as may have been
furnished to the Company in writing.
SECTION 10. Changes. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Purchaser. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each holder of any securities purchased under this
Agreement at the time outstanding, each future holder of all such securities,
and the Company.
SECTION 11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 12. 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.
SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the federal
law of the United States of America.
SECTION 14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties. Facsimile signatures shall be deemed
original signatures.
SECTION 15. Entire Agreement. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters.
Each party expressly represents and warrants that it is not relying on any oral
or written
19
representations, warranties, covenants or agreements outside of this Agreement.
SECTION 16. Fees and Expenses. Except as set forth herein, each of
the Company and the Purchaser shall pay its respective fees and expenses related
to the transactions contemplated by this Agreement.
SECTION 17. Parties. This agreement is made solely for the benefit
of and is binding upon the Purchaser and the Company and to the extent provided
in Section 7.3, any person controlling the Company or the Purchaser, the
officers and directors of the Company, and their respective executors,
administrators, successors and assigns and subject to the provisions of Section
7.3, no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successor and assigns" shall not include any subsequent
purchaser, as such purchaser, of the Shares sold to the Purchaser pursuant to
this Agreement.
20
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.
GENITOPE CORPORATION
By: _____________________________________
Name: ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Ph.D.
Title: Chief Executive Officer
Print or Type:
Name of Purchaser
(Individual or Institution):
_________________________________________
Name of Individual representing
Purchaser (if an Institution):
_________________________________________
Title of Individual representing
Purchaser (if an Institution):
Signature by: _________________________________________
Individual Purchaser or Individual
representing Purchaser:
_________________________________________
Address: ______________________________
Telephone: ______________________________
Facsimile: ______________________________
21
EXHIBIT A
[LETTER TO TRANSFER AGENT --
DELIVERABLE TO ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ AT CLOSING]
___________ __, 2004
[Transfer Agent]
[Address]
[Address]
Attention:
Re: Genitope Corporation ( the "Company") PIPE Transaction
Dear Ladies and Gentlemen:
___________________, a purchaser in the Genitope Corporation PIPE
transaction, understands that, the shares of common stock were offered and sold
in reliance upon specific exemptions from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and that the Company
is relying on the truth and accuracy of, and compliance by each purchaser with,
the representations, warranties, agreements, acknowledgements and understandings
made by the purchaser pursuant to Section 5 of that certain Purchase Agreement,
dated on or about December __, 2004 (the "Purchase Agreement") as executed by
the Company and the purchaser.
In connection therewith, we hereby covenant with the Company not to
make any sale of the shares without complying in all material respects with the
provisions of the Purchase Agreement and without effectively causing the
prospectus delivery requirement under the Securities Act to be satisfied. We
agree with the Company that the shares will be transferable only upon the
delivery to the transfer agent of the Purchaser's Certificate of Subsequent Sale
pursuant to the Registration Statement (included as an appendix to the Purchase
Agreement). We acknowledge receipt of the shares, free of restrictive legend, in
recognition of the fact that a registration statement relating to their resale
by us from time to time has been declared effective, subject to these
limitations on transferability. We further understand that you will be relying
on our representations and covenants made in the Purchase Agreement and in this
letter.
Sincerely,
By:_______________________
Name:
Title:
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Purchase Agreement which follows)
A. Complete the following items on BOTH Purchase Agreements:
1. Page [21] - Signature:
(i) Name of Purchaser (Individual or Institution)
(ii) Name of Individual representing Purchaser (if an Institution)
(iii) Title of Individual representing Purchaser (if an Institution)
(iv) Signature of Individual Purchaser or Individual representing
Purchaser
2. Appendix I - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire and Registration Statement Questionnaire.
3. Return BOTH properly completed and signed Purchase Agreements
including the properly completed Appendix I to:
▇.▇. ▇▇▇▇▇▇▇▇▇ + Co., LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
B. Instructions regarding the transfer of funds for the purchase of Shares will
be sent by facsimile to the Purchaser by the Placement Agent at a later date.
C. Upon the resale of the Shares by the Purchasers after the Registration
Statement covering the Shares is effective, as described in the Purchase
Agreement, the Purchaser:
(i) must deliver a current prospectus of the Company to the buyer
(prospectuses must be obtained from the Company at the
Purchaser's request); and
(ii) must send a letter in the form of Appendix II to the Company
so that the Shares may be properly transferred.
Appendix I
GENITOPE CORPORATION
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be
registered in (this is the name that will
appear on your stock certificate(s)). You
may use a nominee name if appropriate: _______________________
2. The relationship between the Purchaser of
the Shares and the Registered Holder
listed in response to item 1 above: _______________________
3. The mailing address of the Registered
Holder listed in response to item 1
above: _______________________
_______________________
_______________________
_______________________
4. The Social Security Number or Tax
Identification Number of the Registered
Holder listed in response to item 1
above: _______________________
Appendix I
GENITOPE CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the Registration
Statement, please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the number of shares that you or your organization will
own immediately after Closing, including those Shares purchased by you or your
organization pursuant to this Purchase Agreement and those shares purchased by
you or your organization through other transactions, and provide the number of
shares that you have or your organization has the right to acquire within 60
days of the Closing:
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
4. Are you (i) an NASD Member (see definition), (ii) a Controlling (see
definition) shareholder of an NASD Member, (iii) a Person Associated with a
Member of the NASD (see definition), or (iv) an Underwriter or a Related Person
(see definition) with respect to the proposed offering; or (b) do you own any
shares or other securities of any NASD Member not purchased in the open market;
or (c) have you made any outstanding subordinated loans to any NASD Member?
Answer: _____ Yes _____ No
If "yes," please describe below
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
NASD Member. The term "NASD member" means either any broker or
dealer admitted to membership in the National Association of Securities Dealers,
Inc. ("NASD"). (NASD Manual, By-laws Article I, Definitions)
Control. The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power, either individually or with others, to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise. (Rule 405 under the
Securities Act of 1933, as amended)
Person Associated with a member of the NASD. The term "person
associated with a member of the NASD" means every sole proprietor, partner,
officer, director, branch manager or executive representative of any NASD
Member, or any natural person occupying a similar status or performing similar
functions, or any natural person engaged in the investment banking or securities
business who is directly or indirectly controlling or controlled by a NASD
Member, whether or not such person is registered or exempt from registration
with the NASD pursuant to its bylaws. (NASD Manual, By-laws Article I,
Definitions)
Underwriter or a Related Person. The term "underwriter or a related
person" means, with respect to a proposed offering, underwriters, underwriters'
counsel, financial consultants and advisors, finders, members of the selling or
distribution group, and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)
APPENDIX II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of or other person duly authorized by]
________________________________________________________________________________
[fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of the shares
evidenced by the attached certificate, and as such, sold such shares on [date]
in accordance with Registration
Statement number ______________________________________________________________
[fill in the number of or otherwise identify Registration
Statement]
and the requirement of delivering a current prospectus by the Company has been
complied with in connection with such sale.
Print or Type:
Name of Purchaser
(Individual or
Institution): ___________________________________
Name of Individual
representing
Purchaser (if an
Institution) ___________________________________
Title of Individual
representing
Purchaser (if an
Institution): ___________________________________
Signature by:
Individual Purchaser
or Individual repre-
senting Purchaser: ___________________________________