June 28,
2010
CONFIDENTIAL
Richard
Garr
President
& CEO
Neuralstem
Inc.
9700
Great Seneca Highway
Rockville,
MD 20850
Dear
Richard:
This
letter (the “
Agreement
”)
constitutes the agreement between Noble International Investment, Inc., a
Florida corporation, D/B/A Noble Financial Capital Markets (“
Noble
” or the “
Placement Agent
”) and
Neuralstem Inc., a Delaware corporation (the “
Company
”), that Noble
shall serve as the exclusive placement agent for the Company, on a “reasonable
best efforts” basis, in connection with the proposed placement (the “
Placement
”) of
registered securities (the “
Securities
”) of the
Company, including shares (the “
Shares
”) of the
Company’s common stock, par value $0.01 per share (the “
Common Stock
”), and
warrants to purchase shares of Common Stock. The terms of such Placement and the
Securities shall be mutually agreed upon by the Company and the purchasers
(each, a “
Purchaser
” and
collectively, the “
Purchasers
”) and
nothing herein constitutes that Noble would have the power or authority to bind
the Company or any Purchaser or an obligation for the Company to issue any
Securities or complete the Placement. This Agreement and the documents executed
and delivered by the Company and the Purchasers in connection with the Placement
shall be collectively referred to herein as the “
Transaction
Documents
.” The date of the closing of the Placement shall be
referred to herein as the “
Closing
Date
.” The Company expressly acknowledges and agrees that
Noble’s obligations hereunder are on a reasonable best efforts basis only and
that the execution of this Agreement does not constitute a commitment by Noble
to purchase the Securities and does not ensure the successful placement of the
Securities or any portion thereof or the success of Noble with respect to
securing any other financing on behalf of the Company.
SECTION
1
.
COMPENSATION AND OTHER
FEES
.
As
compensation for the services provided by Noble hereunder, the Company agrees to
pay to Noble:
(A) The
fees set forth below with respect to the Placement:
1. A
cash fee payable immediately upon the closing of the Placement and equal to 7%
of the
aggregate
gross proceeds raised in the Placement.
2. Such
number of warrants (the “
Noble
Warrants
”) to
Noble or its designees at the Closing to purchase shares of Common Stock equal
to 7% of the aggregate number of Shares sold in the Placement. The
Noble Warrants shall have the same terms as the warrants (if any) issued to the
Purchasers in the Placement except that in no event shall
the expiration
date of the Noble Warrants be later than five years from the effective date of
the shelf registration statement referred to in Section 2(A)
below. The Noble Warrants shall not have antidilution protections and
further, the number of Shares underlying the Noble Warrants shall be reduced if
necessary to comply with FINRA rules or regulations.
SECTION
2
.
REGISTRATION
STATEMENT
.
The
Company represents and warrants to, and agrees with, the Placement Agent
that:
Page 2
(A) The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (Registration File No.
333-153387
) under the
Securities Act of 1933, as amended (the “Securities Act”), which became
effective on September 29, 2008, for the registration under the Securities Act
of the Shares. At the time of such filing, the Company met the requirements of
Form S-3 under the Securities Act. Such registration statement meets
the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and
complies with said Rule. The Company will file with the Commission pursuant to
Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules
and Regulations”) of the Commission promulgated thereunder, a supplement to the
form of prospectus included in such registration statement relating to the
placement of the Shares and the plan of distribution thereof and has advised the
Placement Agent of all further information (financial and other) with respect to
the Company required to be set forth therein. Such registration statement,
including the exhibits thereto, as amended at the date of this Agreement, is
hereinafter called the “Registration Statement”; such prospectus in the form in
which it appears in the Registration Statement is hereinafter called the “Base
Prospectus”; and the supplemented form of prospectus, in the form in which it
will be filed with the Commission pursuant to Rule 424(b) (including the Base
Prospectus as so supplemented) is hereinafter called the “Prospectus
Supplement.” Any reference in this Agreement to the Registration Statement, the
Base Prospectus or the Prospectus Supplement shall be deemed to refer to and
include the documents incorporated by reference therein (the “
Incorporated
Documents
”) pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), on or
before the date of this Agreement, or the issue date of the Base Prospectus or
the Prospectus Supplement, as the case may be; and any reference in this
Agreement to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement, the Base Prospectus or the Prospectus Supplement shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the date of this Agreement, or the issue date of the Base Prospectus
or the Prospectus Supplement, as the case may be, deemed to be incorporated
therein by reference. All references in this Agreement to financial statements
and schedules and other information which is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement, the Base
Prospectus or the Prospectus Supplement, as the case may be. No stop
order suspending the effectiveness of the Registration Statement or the use of
the Base Prospectus or the Prospectus Supplement has been issued, and no
proceeding for any such purpose is pending or has been initiated or, to the
Company's knowledge, is threatened by the Commission.
(B) The
Registration Statement (and any further documents to be filed with the
Commission) contains all exhibits and schedules as required by the Securities
Act. Each of the Registration Statement and any post-effective amendment
thereto, at the time it became effective, complied in all material respects with
the Securities Act and the Exchange Act and the applicable Rules and Regulations
and did not and, as amended or supplemented, if applicable, will not, contain
any 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 not
misleading. The Base Prospectus and the Prospectus Supplement, each as of its
respective date, comply in all material respects with the Securities Act and the
Exchange Act and the applicable Rules and Regulations. Each of the Base
Prospectus and the Prospectus Supplement, as amended or supplemented, did not
and will not contain as of the date thereof any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, and none of such
documents, when they were filed with the Commission, contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein (with respect to Incorporated Documents incorporated
by reference in the Base Prospectus or Prospectus Supplement), in light of the
circumstances under which they were made not misleading; and any further
documents so filed and incorporated by reference in the Base Prospectus or
Prospectus Supplement, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the
applicable Rules and Regulations, as applicable, and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. No post-effective amendment to the Registration Statement
reflecting any facts or events arising after the date thereof which represent,
individually or in the aggregate, a fundamental change in the information set
forth therein is required to be filed with the Commission. There are
no documents required to be filed with the Commission in connection with the
transaction contemplated hereby that (x) have not been filed as required
pursuant to the Securities Act or (y) will not be filed within the requisite
time period. There are no contracts or other documents required to be described
in the Base Prospectus or Prospectus Supplement, or to be filed as exhibits or
schedules to the Registration Statement, which have not been described or filed
as required.
Page 3
(C) The
Company is ineligible to use free writing prospectuses in connection with the
Placement pursuant to Rules 164 and 433 under the Securities Act.
(D) The
Company has delivered, or will as promptly as practicable deliver, to the
Placement Agent complete conformed copies of the Registration Statement and of
each consent and certificate of experts, as applicable, filed as a part thereof,
and conformed copies of the Registration Statement (without exhibits), the Base
Prospectus and the Prospectus Supplement, as amended or supplemented, in such
quantities and at such places as the Placement Agent reasonably
requests. Neither the Company nor any of its directors and officers
has distributed and none of them will distribute, prior to the Closing Date, any
offering material in connection with the offering and sale of the Shares other
than the Base Prospectus, the Prospectus Supplement, the Registration Statement,
copies of the documents incorporated by reference therein and any other
materials permitted by the Securities Act.
SECTION
3
.
REPRESENTATIONS AND
WARRANTIES
. The Company hereby makes the representations and
warranties set forth below to the Placement Agent:
|
|
(A)
|
Organization and
Qualification
. All of the active direct and indirect
subsidiaries (individually, a “
Subsidiary
”) of
the Company are set forth on the Incorporated Documents. The
Company owns, directly or indirectly, all of the capital stock or other
equity interests of each United States Subsidiary free and clear of any
“Liens” (which for purposes of this Agreement shall mean a lien, charge,
security interest, encumbrance or other restriction), and all the issued
and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities. The
Company and each of the Subsidiaries is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization (as applicable),
with the requisite power and authority to own and use its properties and
assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in
material violation or default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational
or charter documents. Each of the Company and the Subsidiaries
is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to
result in (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect
on the results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole, or (iii) a material adverse effect on the Company’s ability to
perform in any material respect on a timely basis its obligations under
any Transaction Document (any of (i), (ii) or (iii), a “
Material Adverse
Effect
”) and no “Proceeding” (which for purposes of this Agreement
shall mean any action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding,
such as a deposition), whether commenced or threatened) has been
instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or
qualification.
|
Page 4
|
|
(B)
|
Authorization;
Enforcement
. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been or
will be duly authorized by all necessary action on the part of the Company
and no further action will be required by the Company, its board of
directors or its stockholders in connection therewith other than in
connection with filings as are required to be made: (i) under applicable
Federal and state securities laws or (ii) in connection with the Company’s
listing of additional securities on its primary Trading Market (the “
Required
Approvals
”). Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof and thereof, will constitute the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally and (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable
remedies.
|
|
|
(C)
|
No
Conflicts
. The execution, delivery and performance of
the Transaction Documents by the Company, the issuance and sale of the
Securities and the consummation by the Company of the other transactions
contemplated hereby and thereby do not and will not (i) conflict with or
violate any provision of the Company’s or any Subsidiary’s certificate or
articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under,
result in the creation of any Lien upon any of the properties or assets of
the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or
other instrument (evidencing a Company or Subsidiary debt or otherwise) or
other understanding to which the Company or any Subsidiary is a party or
by which any property or asset of the Company or any Subsidiary is bound
or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including
federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not
have or reasonably be expected to result in a Material Adverse
Effect.
|
Page 5
|
|
(D)
|
Certain
Fees
. Except as otherwise provided in this Agreement, no
brokerage or finder’s fees or commissions are or will be payable by the
Company to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other individual or corporation,
partnership, trust, incorporated or unincorporated association, joint
venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind, including,
without limitation, the NYSE AMEX (each, a “
Person
”) with
respect to the transactions contemplated by the Transaction
Documents. The Purchasers shall have no obligation with respect
to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction
Documents.
|
|
|
(E)
|
FINRA
Affiliations
. There are no
affiliations with any FINRA member firm among the Company’s officers,
directors or, to the knowledge of the Company, any five percent (5%) or
greater stockholder of the Company, except as set forth in the Base
Prospectus.
|
|
|
(F)
|
Reliance
on Transaction Documents
. Noble shall be
entitled to rely upon any and all representations and warranties of the
Company included in the purchase agreements entered into by the Company
and the Purchasers in connection with the Placement, subject to the
qualifications and limitations
therein.
|
SECTION
4
.
INDEMNIFICATION
.
The
Company agrees to the indemnification and other agreements set forth in the
Indemnification Provisions (the “
Indemnification
”)
attached hereto as Addendum A, the provisions of which are incorporated herein
by reference and shall survive the termination or expiration of this
Agreement.
SECTION
5.
ENGAGEMENT
TERM
. Unless terminated as provided for herein, Noble’s
engagement hereunder will be for the earlier of: (i) a period of 30 days from
the date hereof, or (ii) completion of the Placement.. The engagement may be
terminated by either the Company or Noble at any time upon 10 days’ written
notice. Notwithstanding anything to the contrary contained herein, the
provisions in this Agreement concerning confidentiality, indemnification,
contribution and the Company’s obligations to pay fees and reimburse expenses
contained herein and the Company’s obligations contained in the Indemnification
Provisions will survive any expiration or termination of this
Agreement. Noble agrees not to use any confidential information
concerning the Company provided to them by the Company for any purposes other
than those contemplated under this Agreement.
SECTION
6
.
NOBLE
INFORMATION
. The Company agrees that any information or advice
rendered by Noble in connection with this engagement is for the confidential use
of the Company only in their evaluation of the Placement and, except as
otherwise required by law, the Company will not disclose or otherwise refer to
the advice or information in any manner without Noble’s prior written
consent.
SECTION
7
.
NO FIDUCIARY
RELATIONSHIP
. This Agreement does not create, and shall not be
construed as creating rights enforceable by any person or entity not a party
hereto, except those entitled hereto by virtue of the Indemnification Provisions
hereof. The Company acknowledges and agrees that Noble is not and
shall not be construed as a fiduciary of the Company and shall have no duties or
liabilities to the equity holders or the creditors of the Company or any other
person by virtue of this Agreement or the retention of Noble hereunder, all of
which are hereby expressly waived.
SECTION
8
.
CLOSING
. The
obligations of the Placement Agent and the Purchasers, and the closing of the
sale of the Securities hereunder are subject to the accuracy, when made and on
the Closing Date, of the representations and warranties on the part of the
Company and its Subsidiaries contained herein, to the accuracy of the statements
of the Company and its Subsidiaries made in any certificates pursuant to the
provisions hereof, to the performance by the Company and its Subsidiaries of
their obligations hereunder, and to each of the following additional terms and
conditions:
(A) No
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been initiated or
threatened by the Commission, and any request for additional information on the
part of the Commission (to be included in the Registration Statement, the Base
Prospectus or the Prospectus Supplement or otherwise) shall have been complied
with to the reasonable satisfaction of the Placement Agent. Any
filings required to be made by the Company in shall have been timely filed with
the Commission.
(B) The
Placement Agent shall not have discovered and disclosed to the Company on or
prior to the Closing Date that the Registration Statement, the Base Prospectus
or the Prospectus Supplement or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the Placement
Agent, is material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(C) All
corporate proceedings and other legal matters incident to the authorization,
form, execution, delivery and validity of each of this Agreement, the
Securities, the Registration Statement, the Base Prospectus and the Prospectus
Supplement and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(D) The
Placement Agent shall have received from outside counsel to the Company such
counsel’s written opinion, addressed to the Placement Agent and the Purchasers
dated as of the Closing Date, in form and substance reasonably satisfactory to
the Placement Agent.
(E) Neither
the Company nor any of its Subsidiaries shall have sustained since the date of
the latest financial statements included or incorporated by reference in the
Base Prospectus, any loss or interference with its business from fire,
explosion, flood, terrorist act or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in or contemplated by the Base Prospectus
and (ii) since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its Subsidiaries or any change,
or any development involving a prospective change, in or affecting the business,
general affairs, management, financial position, stockholders’ equity, results
of operations or prospects of the Company and its Subsidiaries, otherwise than
as set forth in or contemplated by the Base Prospectus, the effect of which, in
any such case described in clause (i) or (ii), is, in the judgment of the
Placement Agent, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Securities on the terms
and in the manner contemplated by the Base Prospectus and the Prospectus
Supplement.
(F)
The Common Stock is
registered under the Exchange Act.
(G) Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock
Exchange, the Nasdaq National Market or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
or maximum prices or maximum ranges for prices shall have been established on
any such exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction, or (ii) a
banking moratorium shall have been declared by federal or state authorities or a
material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States.
Page 7
(H) No
action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any governmental agency or body which
would, as of the Closing Date, prevent the issuance or sale of the Securities or
materially and adversely affect or potentially and adversely affect the business
or operations of the Company; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale
of the Securities or materially and adversely affect or potentially and
adversely affect the business or operations of the Company.
(I)
The Company shall
have prepared and filed with the Commission a Current Report on Form 8-K with
respect to the Placement, including as an exhibit thereto this
Agreement.
(J)
The Company shall have
entered into subscription agreements with each of the Purchasers and such
agreements shall be in full force and effect and shall contain representations
and warranties of the Company as agreed between the Company and the
Purchasers.
(K) FINRA
shall have raised no objection to the fairness and reasonableness of the terms
and arrangements of this Agreement. In addition, the Company shall
authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer
Filing with FINRA pursuant to FINRA Rule 5110 with respect to the Registration
Statement and pay all filing fees required in connection therewith.
(L)
Prior to the Closing Date, the
Company shall have furnished to the Placement Agent such further information,
certificates and documents as the Placement Agent may reasonably
request.
All
opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Placement Agent.
SECTION
9
.
GOVERNING
LAW
. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed entirely in such State. This Agreement may not be
assigned by either party without the prior written consent of the other
party. This Agreement shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and permitted assigns.
Any right to trial by jury with respect to any dispute arising under this
Agreement or any transaction or conduct in connection herewith is
waived. Any dispute arising under this Agreement may be brought into
the courts of the State of New York or into the Federal Court located in New
York, New York and, by execution and delivery of this Agreement, the Company
hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of aforesaid courts. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by delivering a copy
thereof via overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. If either party shall
commence an action or proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.
Page 8
SECTION
10
.
ENTIRE
AGREEMENT/MISC
. This Agreement (including the attached
Indemnification Provisions) embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof. If any
provision of this Agreement is determined to be invalid or unenforceable in any
respect, such determination will not affect such provision in any other respect
or any other provision of this Agreement, which will remain in full force and
effect. This Agreement may not be amended or otherwise modified or
waived except by an instrument in writing signed by both Noble and the
Company. The representations, warranties, agreements and covenants
contained herein shall survive the closing of the Placement and delivery and/or
exercise of the Securities, as applicable. This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or a .pdf format file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
.pdf signature page were an original thereof.
Page 9
SECTION
11
.
NOTICES
. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified on
the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a
business day, (b) the next business day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number on
the signature pages attached hereto on a day that is not a business day or later
than 6:30 p.m. (New York City time) on any business day, (c) the business day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications
shall be as set forth on the signature pages hereto.
Please
confirm that the foregoing correctly sets forth our agreement by signing and
returning to Noble the enclosed copy of this Agreement.
|
|
|
|
|
Very
truly yours,
|
|
|
|
|
|
NOBLE
FINANCIAL CAPITAL MARKETS
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
Address for notice:
6501
Congress Avenue
Boca
Raton, Florida 33487
Attention:
Nico P. Pronk
Fax:
(561) 998-5484
|
Accepted
and Agreed to as of
the date
first written above:
NEURALSTEM,
INC.
Address for
notice:
ADDENDUM
A
INDEMNIFICATION
PROVISIONS
In connection with the engagement of
Noble International Investment, Inc., a Florida corporation, D/B/A Noble
Financial Capital Markets (“
Noble
”) by
Neuralstem, Inc., a Delaware corporation (the “
Company
”), pursuant
to a letter agreement dated June 28, 2010, between the Company and Noble, as it
may be amended from time to time in writing (the “
Agreement
”), the
Company hereby agrees as follows:
|
1.
|
To
the extent permitted by law, the Company will indemnify Noble and its
affiliates, stockholders, directors, officers, employees and controlling
persons (within the meaning of Section 15 of the Securities Act of 1933,
as amended, or Section 20 of the Securities Exchange Act of 1934) against
all losses, claims, damages, expenses and liabilities, as the same are
incurred (including the reasonable fees and expenses of counsel), relating
to or arising out of its activities hereunder or pursuant to the
Agreement, except to the extent that any losses, claims, damages, expenses
or liabilities (or actions in respect thereof) are found in a final
judgment (not subject to appeal) by a court of law to have resulted
primarily and directly from Noble’s willful misconduct or gross negligence
in performing the services described
herein.
|
|
2.
|
Promptly
after receipt by Noble of notice of any claim or the commencement of any
action or proceeding with respect to which Noble is entitled to indemnity
hereunder, Noble will notify the Company in writing of such claim or of
the commencement of such action or proceeding, and the Company will assume
the defense of such action or proceeding and will employ counsel
reasonably satisfactory to Noble and will pay the fees and expenses of
such counsel. Notwithstanding the preceding sentence, Noble
will be entitled to employ counsel separate from counsel for the Company
and from any other party in such action if counsel for
Noble reasonably determines that it would be inappropriate
under the applicable rules of professional responsibility for the same
counsel to represent both the Company and Noble. In such event,
the reasonable fees and disbursements of no more than one such separate
counsel will be paid by the Company. The Company will have the
exclusive right to settle the claim or proceeding provided that the
Company will not settle any such claim, action or proceeding without the
prior written consent of Noble, which will not be unreasonably
withheld.
|
|
3.
|
The
Company agrees to notify Noble promptly of the assertion against it or any
other person of any claim or the commencement of any action or proceeding
relating to a transaction contemplated by the
Agreement.
|
|
4.
|
If
for any reason the foregoing indemnity is unavailable to Noble or
insufficient to hold Noble harmless, then the Company shall contribute to
the amount paid or payable by Noble as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect not
only the relative benefits received by the Company on the one hand and
Noble on the other, but also the relative fault of the Company on the one
hand and Noble on the other that resulted in such losses, claims, damages
or liabilities, as well as any relevant equitable
considerations. The amounts paid or payable by a party in
respect of losses, claims, damages and liabilities referred to above shall
be deemed to include any legal or other fees and expenses incurred in
defending any litigation, proceeding or other action or
claim. Notwithstanding the provisions hereof, Noble’s share of
the liability hereunder shall not be in excess of the amount of fees
actually received, or to be received, by Noble under the Agreement
(excluding any amounts received as reimbursement of expenses incurred by
Noble).
|
|
5.
|
These
Indemnification Provisions shall remain in full force and effect whether
or not the transaction contemplated by the Agreement is completed and
shall survive the termination of the Agreement, and shall be in addition
to any liability that the Company might otherwise have to any indemnified
party under the Agreement or
otherwise.
|
|
|
NOBLE
FINANCIAL CAPITAL MARKETS
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
Accepted
and Agreed to as of
the date
first written above:
NEURALSTEM,
INC.
EXHIBIT
A
COMMON
STOCK PURCHASE WARRANT
NEURALSTEM,
INC.
|
Warrant
Shares: _______
|
Initial
Exercise Date: June ___, 2010
|
THIS
COMMON STOCK PURCHASE WARRANT (the “
Warrant
”) certifies
that, for value received, _____________ or its assigns (the “
Holder
”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the “
Initial Exercise
Date
”) and on or prior to the close of business on the three (3) year
anniversary of the Initial Exercise Date (the “
Termination Date
”)
but not thereafter, to subscribe for and purchase from Neuralstem, Inc., a
Delaware corporation (the “
Company
”), up to
______ shares (as subject to adjustment hereunder, the “
Warrant Shares
”) of
Common Stock. The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section
2(b). This Warrant is being issued pursuant to the Company’s
Registration Statement on Form S-3, File No. 333-153387.
Section
1
.
Definitions
. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the “
Purchase Agreement
”),
dated June ___, 2010, among the Company and the purchasers signatory
thereto.
Section
2
.
Exercise
.
a) Exercise
of the purchase rights represented by this Warrant may be made, in whole or in
part, at any time or times on or after the Initial Exercise Date and on or
before the Termination Date by delivery to the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered
Holder at the address of the Holder appearing on the books of the Company) of a
duly executed facsimile copy of the Notice of Exercise Form annexed hereto.
Within three (3) Trading Days following the date of exercise as aforesaid, the
Holder shall deliver the aggregate Exercise Price for the shares specified in
the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a
United States bank unless the cashless exercise procedure specified in Section
2(c) below is specified in the applicable Notice of Exercise. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has purchased all of the
Warrant Shares available hereunder and the Warrant has been exercised in full,
in which case, the Holder shall surrender this Warrant to the Company for
cancellation within three (3) Trading Days of the date the final Notice of
Exercise is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the outstanding number of
Warrant Shares purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of
such purchases. The Company shall deliver any objection to any Notice of
Exercise Form within one (1) Business Day of receipt of such
notice.
The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.
b)
Exercise
Price
. The exercise price per share of the Common Stock under
this Warrant shall be
$3.25
, subject to adjustment
hereunder (the “
Exercise
Price
”).
c)
Cashless Exercise
. If
at the time of exercise hereof there is no effective registration statement
registering, or the prospectus contained therein is not available for the
issuance of the Warrant Shares to the Holder and all of the Warrant Shares are
not then registered for resale by Holder into the market at market prices from
time to time on an effective registration statement for use on a continuous
basis (or the prospectus contained therein is not available for use), then this
Warrant may also be exercised, in whole or in part, at such time by means of a
“cashless exercise” in which the Holder shall be entitled to receive a
certificate for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:
(A) = the
VWAP on the Trading Day immediately preceding the date on which Holder elects to
exercise this Warrant by means of a “cashless exercise,” as set forth in the
applicable Notice of Exercise;
(B) = the
Exercise Price of this Warrant, as adjusted hereunder; and
(X) = the
number of Warrant Shares that would be issuable upon exercise of this Warrant in
accordance with the terms of this Warrant if such exercise were by means of a
cash exercise rather than a cashless exercise.
“
VWAP
” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC
Bulletin Board is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the
OTC Bulletin Board and if prices for the Common Stock are then reported in the
“Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the
Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section
2(c).
d)
Mechanics of
Exercise
.
i.
Delivery of Certificates
Upon Exercise
. Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with The Depository Trust Company through
its Deposit or Withdrawal at Custodian system (“
DWAC
”) if the Company
is then a participant in such system and either (A) there is an effective
registration statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by Holder or (B) this Warrant is being exercised
via cashless exercise, and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise by the date that is three (3)
Trading Days after the latest of (A) the delivery to the Company of the Notice
of Exercise, (B) surrender of this Warrant (if required) and (C) payment of the
aggregate Exercise Price as set forth above (including by cashless exercise, if
permitted) (such date, the “
Warrant Share Delivery
Date
”). The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named therein shall
be deemed to have become a holder of record of such shares for all purposes, as
of the date the Warrant has been exercised, with payment to the Company of the
Exercise Price (or by cashless exercise, if permitted) and all taxes required to
be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the
issuance of such shares, having been paid. If the Company fails for any reason
to deliver to the Holder certificates evidencing the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to
the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
of Warrant Shares subject to such exercise (based on the VWAP of the Common
Stock on the date of the applicable Notice of Exercise), $10 per Trading Day
(increasing to $20 per Trading Day on the fifth Trading Day after such
liquidated damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such certificates are delivered or Holder rescinds
such exercise.
ii.
Delivery of New Warrants
Upon Exercise
. If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be identical with
this Warrant.
iii.
Rescission
Rights
. If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the
Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date,
then the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise
. In
addition to any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to an exercise on or
before the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a “
Buy-In
”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue times (2) the
price at which the sell order giving rise to such purchase obligation was
executed, and (B) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored (in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.
v.
No Fractional Shares or
Scrip
. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole
share.
vi.
Charges, Taxes and
Expenses
. Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder;
provided
,
however
, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.
vii.
Closing of
Books
. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e)
Holder’s Exercise
Limitations
. The Company shall not effect any exercise of this
Warrant, and a Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the applicable Notice of
Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s
Affiliates), would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Common Stock
Equivalents) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its
Affiliates. Except as set forth in the preceding sentence, for purposes of
this Section 2(e), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is not
representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules
required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(e) applies, the determination of
whether this Warrant is exercisable (in relation to other securities owned by
the Holder together with any Affiliates) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of
a Notice of Exercise shall be deemed to be the Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates) and of which portion of this Warrant is
exercisable, in each case subject to the Beneficial Ownership Limitation, and
the Company shall have no obligation to verify or confirm the accuracy of such
determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the
number of outstanding shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a
more recent public announcement by the Company or (C) a more recent written
notice by the Company or the Transfer Agent setting forth the number of shares
of Common Stock outstanding. Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported. The “
Beneficial Ownership
Limitation
” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Holder, upon not
less than 61 days’ prior notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 2(e) shall continue to
apply. Any such increase or decrease will not be effective until the
61
st
day after such notice is delivered to the Company. The provisions of
this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(e) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.
Section
3
.
Certain
Adjustments
.
a)
Stock Dividends and
Splits
. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise makes a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issues by reclassification of shares of the Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event, and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.
b) [RESERVED]
c)
Subsequent Rights
Offerings
. If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to the Holder) entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the VWAP on the record date
mentioned below, then the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights, options or warrants plus the
number of additional shares of Common Stock offered for subscription or
purchase, and of which the numerator shall be the number of shares of the Common
Stock outstanding on the date of issuance of such rights, options or warrants
plus the number of shares which the aggregate offering price of the total number
of shares so offered (assuming receipt by the Company in full of all
consideration payable upon exercise of such rights, options or warrants) would
purchase at such VWAP. Such adjustment shall be made whenever such
rights, options or warrants are issued, and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such rights, options or warrants.
d)
Pro Rata
Distributions
. If the Company, at any time while this Warrant
is outstanding, shall distribute to all holders of Common Stock (and not to the
Holder) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security, then
in each such case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the VWAP determined as of the record
date mentioned above, and of which the numerator shall be such VWAP on such
record date less the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of the Common Stock as determined by the Board of
Directors in good faith. In either case the adjustments shall be
described in a statement provided to the Holder of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one share of Common Stock. Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately after the
record date mentioned above.
e)
Fundamental
Transaction
. If, at any time while this Warrant is outstanding, (i) the
Company, directly or indirectly, in one or more related transactions effects any
merger or consolidation of the Company with or into another Person, (ii) the
Company, directly or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially all of its
assets in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or
property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property, (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock held by the
other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase
agreement or other business combination) (each a “
Fundamental
Transaction
”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration
(the “
Alternate
Consideration
”) receivable as a result of such Fundamental Transaction by
a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to
any limitation in Section 2(e) on the exercise of this Warrant). For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction. Notwithstanding anything to the contrary, in the event
of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule
13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a
Fundamental Transaction involving a person or entity not traded on a national
securities exchange, including, but not limited to, the Nasdaq Global Select
Market, the Nasdaq Global Market, or the Nasdaq Capital Market,] the Company or
any Successor Entity (as defined below) shall, at the Holder’s option,
exercisable at any time concurrently with, or within 30 days after, the
consummation of the Fundamental Transaction, purchase this Warrant from the
Holder by paying to the Holder an amount of cash equal to the Black Scholes
Value of the remaining unexercised portion of this Warrant on the date of the
consummation of such Fundamental Transaction. “
Black Scholes Value
”
means the value of this Warrant based on the Black and Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg, L.P. (“
Bloomberg
”)
determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to the greater of
100% and the 100 day volatility obtained from the HVT function on Bloomberg as
of the Trading Day immediately following the public announcement of the
applicable Fundamental Transaction, (C) the underlying price per share used in
such calculation shall be the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in
such Fundamental Transaction and (D) a remaining option time equal to the time
between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date. The Company shall cause any
successor entity in a Fundamental Transaction in which the Company is not the
survivor (the “
Successor Entity
”) to
assume in writing all of the obligations of the Company under this Warrant and
the other Transaction Documents in accordance with the provisions of this
Section 3(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the
Holder, deliver to the Holder in exchange for this Warrant a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this
Warrant) prior to such Fundamental Transaction, and with an exercise price which
applies the exercise price hereunder to such shares of capital stock (but taking
into account the relative value of the shares of Common Stock pursuant to such
Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for the purpose
of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any
such Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the
Company herein.
f)
Calculations
.
All calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.
g)
Notice to
Holder
.
i.
Adjustment to Exercise
Price
. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a notice
setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement
of the facts requiring such adjustment. Notwithstanding the foregoing, in the
event the Company makes a public filing with the SEC disclosing the adjustment,
notice will be deemed to have been given.
ii.
Notice to Allow Exercise by
Holder
. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice. To the extent that
any notice provided hereunder constitutes, or contains, material, non-public
information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K. The Holder shall remain entitled to exercise this
Warrant during the period commencing on the date of such notice to the effective
date of the event triggering such notice except as may otherwise be expressly
set forth herein.
Section
4
.
Transfer of
Warrant
.
a)
Transferability
. This
Warrant and all rights hereunder (including, without limitation, any
registration rights) are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. The Warrant, if properly
assigned in accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.
b)
New Warrants
. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated
the initial issuance date of this Warrant and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant
thereto.
c)
Warrant Register
. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “
Warrant Register
”),
in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.
Section
5
.
Miscellaneous
.
a)
No Rights as Stockholder
Until Exercise
. This Warrant does not entitle the Holder to
any voting rights, dividends or other rights as a stockholder of the Company
prior to the exercise hereof as set forth in Section 2(d)(i).
b)
Loss, Theft, Destruction or
Mutilation of Warrant
. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.
c)
Saturdays, Sundays,
Holidays, etc
. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then, such action may be taken or such right may be exercised
on the next succeeding Business Day.
d)
Authorized
Shares
.
The
Company covenants that, during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will
take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant and payment for such Warrant Shares in accordance herewith, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with
such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may be,
necessary to enable the Company to perform its obligations under this
Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
e)
Jurisdiction
. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.
f)
Restrictions
. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, and the Holder does not utilize cashless exercise,
will have restrictions upon resale imposed by state and federal securities
laws.
g)
Nonwaiver and
Expenses
. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice the Holder’s rights, powers or
remedies. Without limiting any other provision of this Warrant or the
Purchase Agreement, if the Company willfully and knowingly fails to comply with
any provision of this Warrant, which results in any material damages to the
Holder, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.
h)
Notices
. Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.
i)
Limitation of
Liability
. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the purchase price of any
Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
j)
Remedies
. The
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law
would be adequate.
k)
Successors and
Assigns
. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of any Holder from time to time of
this Warrant and shall be enforceable by the Holder or holder of Warrant
Shares.
l)
Amendment
. This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
m)
Severability
. Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.
n)
Headings
. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.
|
NEURALSTEM,
INC.
|
|
|
|
By:
|
|
|
|
Name:
Title:
|
NOTICE
OF EXERCISE
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
¨
in
lawful money of the United States; or
¨
[if
permitted] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection
2(c).
(3)
Please issue a certificate or certificates representing said Warrant Shares in
the name of the undersigned or in such other name as is specified
below:
The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:
[SIGNATURE
OF HOLDER]
Name of
Investing Entity:
_______________________________________________________________________________
Signature of Authorized Signatory of
Investing Entity
:
________________________________________________________
Name of
Authorized Signatory:
__________________________________________________________________________
Title of
Authorized Signatory:
___________________________________________________________________________
Date:
_______________________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this form
and supply required information.
Do not
use this form to exercise the warrant.)
FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________,
_______
|
|
Holder’s Signature:
|
|
|
|
|
|
|
|
Holder’s
Address:
|
|
|
|
|
|
|
|
|
|
Signature
Guaranteed: ___________________________________________
NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “
Agreement
”) is dated
as of June 24, 2010, between Neuralstem, Inc., a Delaware corporation (the
“
Company
”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “
Purchaser
” and
collectively the “
Purchasers
”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
an effective registration statement under the Securities Act of 1933, as amended
(the “
Securities
Act
”), the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:
ARTICLE
I.
DEFINITIONS
1.1
Definitions
. In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings set forth in this Section
1.1:
“
Acquiring Person
”
shall have the meaning ascribed to such term in Section 4.5.
“
Action
” shall have
the meaning ascribed to such term in Section 3.1(j).
“
Affiliate
” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as such terms are
used in and construed under Rule 405 under the Securities Act.
“
Board of Directors
”
means the board of directors of the Company.
“
Business Day
” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.
“
Closing
” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.
“
Closing Date
” means
the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities, in each case, have been
satisfied or waived, but in no event later than the third Trading Day following
the date hereof.
“
Commission
” means the
United States Securities and Exchange Commission.
“
Common Stock
” means
the common stock of the Company, par value $0.01 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed.
“
Common Stock
Equivalents
” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, right, option, warrant
or other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
“
Company Counsel
”
means Silvestre Law Group, P.C., with offices located at 31200 Via Colinas,
Suite 200, Westlake Village, California 91362.
“
Disclosure Schedules
”
means the Disclosure Schedules of the Company delivered concurrently
herewith.
“
Evaluation Date
”
shall have the meaning ascribed to such term in Section 3.1(r).
“
Exchange Act
” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“
Exempt Issuance
”
means the issuance of (a) shares of Common Stock or options to employees,
officers, directors or consultants of the Company pursuant to any stock or
option plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose or restricted Common Stock
or Common Stock Equivalents issued to consultants (but not to exceed 250,000
shares of Common Stock or Common Stock Equivalents, in the aggregate), (b)
securities upon the exercise or exchange of or conversion of any Securities
issued hereunder and/or other securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that such securities have not been amended since the
date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities, (c)
securities issued pursuant to acquisitions or strategic transactions approved by
a majority of the disinterested directors of the Company, provided that any such
issuance shall only be to a Person (or to the equityholders of a Person) which
is, itself or through its subsidiaries, an operating company or an owner of an
asset in a business synergistic with the business of the Company and shall
provide to the Company additional benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities and (d) securities issued to Noble
Financial Capital Markets pursuant to that certain agreement between Noble
Financial Capital Markets and the Company.
“
FDA
” shall have the
meaning ascribed to such term in Section 3.1(gg).
“
FDCA
” shall have the
meaning ascribed to such term in Section 3.1(gg).
“
GAAP
” shall have the
meaning ascribed to such term in Section 3.1(h).
“
Indebtedness
” shall
have the meaning ascribed to such term in Section 3.1(z).
“
Intellectual Property
Rights
” shall have the meaning ascribed to such term in Section
3.1(o).
“
Liens
” means a lien,
charge, pledge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.
“
Material Adverse
Effect
” shall have the meaning assigned to such term in Section
3.1(b).
“
Material Permits
”
shall have the meaning ascribed to such term in Section 3.1(m).
“
Per Share Purchase
Price
” equals
$2.80
, subject to adjustment
for reverse and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the date of this
Agreement.
“
Person
” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“
Pharmaceutical
Product
” shall have the meaning ascribed to such term in Section
3.1(gg).
“
Proceeding
” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether
commenced or threatened.
“
Prospectus
” means the
final prospectus filed for the Registration Statement.
“
Prospectus
Supplement
” means the supplement to the Prospectus complying with Rule
424(b) of the Securities Act that is filed with the Commission and delivered by
the Company to each Purchaser at the Closing.
“
Purchaser Party
”
shall have the meaning ascribed to such term in Section 4.8.
“
Registration
Statement
” means the effective registration statement with Commission
file No. 333-153387 which registers the sale of the Shares, the Warrants and the
Warrant Shares to the Purchasers.
“
Required Approvals
”
shall have the meaning ascribed to such term in Section 3.1(e).
“
Rule 144
” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“
Rule 424
” means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“
SEC Reports
” shall
have the meaning ascribed to such term in Section 3.1(h).
“
Securities
” means the
Shares, the Warrants and the Warrant Shares.
“
Securities Act
” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“
Shares
” means the
shares of Common Stock issued or issuable to each Purchaser pursuant to this
Agreement.
“
Short Sales
” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock).
“
Subscription Amount
”
means, as to each Purchaser, the aggregate amount to be paid for Shares and
Warrants purchased hereunder as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
“
Subsidiary
” means any
subsidiary of the Company and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date
hereof.
“
Trading Day
” means a
day on which the principal Trading Market is open for trading.
“
Trading Market
” means
any of the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board (or any successors to any of the
foregoing).
“
Transaction
Documents
” means this Agreement, the Warrants and any other documents or
agreements executed in connection with the transactions contemplated
hereunder.
“
Transfer Agent
” means
American Stock Transfer & Trust Company, the current transfer agent of the
Company, with a mailing address of 59 Maiden Lane, Plaza Level, New York, New
York 10038 and a facsimile number of _______________, and any successor transfer
agent of the Company.
“
Variable Rate
Transaction
” shall have the meaning ascribed to such term in Section
4.12(b).
“
Warrants
” means,
collectively, the Common Stock purchase warrants delivered to the Purchasers at
the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be
exercisable immediately and have a term of exercise equal to 3 years, in the
form of
Exhibit
A
attached hereto.
“
Warrant Shares
” means
the shares of Common Stock issuable upon exercise of the Warrants.
“
WS
” means Weinstein
Smith LLP with offices located at 420 Lexington Avenue, Suite 2620, New York,
New York 10170-0002.
ARTICLE
II.
PURCHASE
AND SALE
2.1
Closing
. On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, up to an aggregate of $10,000,000
of Shares and Warrants. Each Purchaser shall deliver to the Company,
via wire transfer or a certified check of immediately available funds equal to
such Purchaser’s Subscription Amount as set forth on the signature page hereto
executed by such Purchaser and the Company shall deliver to each Purchaser its
respective Shares and a Warrant as determined pursuant to Section 2.2(a), and
the Company and each Purchaser shall deliver the other items set forth in
Section 2.2 deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of WS or such other location as the parties shall mutually
agree.
2.2
Deliveries
.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered
to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
legal opinion of Company Counsel, substantially in the form of
Exhibit B
attached
hereto;
(iii) a
copy of the irrevocable instructions to the Company’s transfer agent instructing
the transfer agent to deliver via The Depository Trust Company Deposit or
Withdrawal at Custodian system (“
DWAC
”) Shares equal
to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price,
registered in the name of such Purchaser;
(iv) a
Warrant registered in the name of such Purchaser to purchase up to a number of
shares of Common Stock equal to
75%
of such Purchaser’s
Shares, with an exercise price equal to
$3.25
, subject to adjustment
therein (such Warrant certificate may be delivered within three Trading Days of
the Closing Date); and
(v) the
Prospectus and Prospectus Supplement (which may be delivered in accordance with
Rule 172 under the Securities Act).
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) such
Purchaser’s Subscription Amount by wire transfer to the account as specified in
writing by the Company.
2.3
Closing
Conditions
.
(a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
(i) the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Purchasers contained herein (unless as of a specific date
therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this
Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein);
(ii) all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof; and
(v) from
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission or the Company’s principal Trading Market, and,
at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have
been declared either by the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the
reasonable judgment of such Purchaser, makes it impracticable or inadvisable to
purchase the Securities at the Closing.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1
Representations and
Warranties of the Company
. Except as set forth in the
Disclosure Schedules, the SEC Reports, the Prospectus or the Prospectus
Supplement, which documents shall be deemed a part hereof and shall qualify any
representation or otherwise made herein to the extent of the disclosure
contained therein, the Company hereby makes the following representations and
warranties to each Purchaser:
(a)
Subsidiaries
. All
of the direct and indirect subsidiaries of the Company are set forth in the SEC
Reports. The Company owns, directly or indirectly, all of the capital
stock or other equity interests of each Subsidiary free and clear of any Liens,
and all of the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities. If the
Company has no subsidiaries, all other references to the Subsidiaries or any of
them in the Transaction Documents shall be disregarded.
(b)
Organization and
Qualification
. The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation nor
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents. Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “
Material Adverse
Effect
”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.
(c)
Authorization;
Enforcement
. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and each of the other Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery
of this Agreement each of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Board of Directors or the
Company’s stockholders in connection herewith or therewith other than in
connection with the Required Approvals. This Agreement and each other
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
(d)
No
Conflicts
. The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to which it is a
party, the issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.
(e)
Filings, Consents and
Approvals
. Except as set forth on
Schedule 3.1(e)
, The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filings required pursuant to Section
4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus
Supplement, (iii) application(s) to each applicable Trading Market for the
listing of the Shares and Warrant Shares for trading thereon in the time and
manner required thereby and (iv) such filings as are required to be made under
applicable state securities laws (collectively, the “
Required
Approvals
”).
(f)
Issuance of the Securities;
Registration
. The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company. The Warrant Shares, when issued in
accordance with the terms of the Warrants, will be validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company. The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to this
Agreement and the Warrants. The Company has prepared and filed the Registration
Statement in conformity with the requirements of the Securities Act, which
became effective on September 29, 2008 (the “
Effective Date
”),
including the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement. The Registration
Statement is effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued by the Commission and no
proceedings for that purpose have been instituted or, to the knowledge of the
Company, are threatened by the Commission. The Company, if required
by the rules and regulations of the Commission, proposes to file the Prospectus,
with the Commission pursuant to Rule 424(b). At the time the
Registration Statement and any amendments thereto became effective, at the date
of this Agreement and at the Closing Date, the Registration Statement and any
amendments thereto conformed and will conform in all material respects to the
requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Prospectus and any amendments or supplements thereto, at time the Prospectus
or any amendment or supplement thereto was issued and at the Closing Date,
conformed and will conform in all material respects to the requirements of the
Securities Act and did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(g)
Capitalization
. The
capitalization of the Company is as set forth in the SEC Reports. The
Company has not issued any capital stock since its most recently filed periodic
report under the Exchange Act, other than pursuant to the exercise of employee
stock options under the Company’s stock option plans, the issuance of shares of
Common Stock to employees pursuant to the Company’s employee stock purchase
plans and pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the
Exchange Act. Other than as set forth on
Schedule 3.1(g)
, no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as a result of the purchase and sale of
the Securities or as set forth in the SEC Reports, there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or
Common Stock Equivalents. The issuance and sale of the Securities
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers and Noble Financial Capital
Markets or its designees) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or reset price
under any of such securities. All of the outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and
none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. Other than
the Required Approvals, no further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and sale of the
Securities. There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s stockholders.
(h)
SEC Reports; Financial
Statements
. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, together with the Prospectus and the
Prospectus Supplement, being collectively referred to herein as the “
SEC Reports
”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (“
GAAP
”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(i)
Material Changes;
Undisclosed Events, Liabilities or Developments
. Since the
date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in a subsequent SEC Report filed prior to the
date hereof, (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission
any request for confidential treatment of information. Except for the
issuance of the Securities contemplated by this Agreement, no event, liability,
fact, circumstance, occurrence or development has occurred or exists or is
reasonably expected to occur or exist with respect to the Company or its
Subsidiaries or their respective businesses, prospects, properties, operations,
assets or financial condition that would be required to be disclosed by the
Company under applicable securities laws at the time this representation is made
or deemed made that has not been publicly disclosed at least 1 Trading Day prior
to the date that this representation is made.
(j)
Litigation
. Other
than as set forth in the SEC Reports, there is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “
Action
”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor any
current director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and
to the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act.
(k)
Labor
Relations
. No labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company, which
could reasonably be expected to result in a Material Adverse
Effect. None of the Company’s or its Subsidiaries’ employees is a
member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a
party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good. To
the knowledge of the Company, no executive officer of the Company or any
Subsidiary, is, or is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing
matters. The Company and its Subsidiaries are in compliance with all
U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(l)
Compliance
. Neither
the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any judgment, decree or
order of any court, arbitrator or other governmental authority or (iii) is or
has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.
(m)
Regulatory
Permits
. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“
Material Permits
”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.
(n)
Title to
Assets
. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries and (ii) Liens for the
payment of federal, state or other taxes, for which appropriate reserves have
been made therefore in accordance with GAAP and, the payment of which is neither
delinquent nor subject to penalties. Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.
(o)
Intellectual
Property
. The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
required for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse
Effect (collectively, the “
Intellectual Property
Rights
”). None of, and neither the Company nor any Subsidiary
has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to
expire or terminate or be abandoned, within two (2) years from the date of this
Agreement. Neither the Company nor any Subsidiary has received, since
the date of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the
Intellectual Property Rights violate or infringe upon the rights of any Person,
except as could not have or reasonably be expected to not have a Material
Adverse Effect. To the knowledge of the Company, all such
Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property
Rights. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(p)
Insurance
. The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged, including, but not limited to, directors and officers insurance
coverage at least equal to the aggregate Subscription Amount. Neither
the Company nor any Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost.
(q)
Transactions With Affiliates
and Employees
. Except as set forth in the SEC Reports, none of
the officers or directors of the Company or any Subsidiary and, to the knowledge
of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, providing for
the borrowing of money from or lending of money to or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee, stockholder,
member or partner, in each case in excess of $120,000 per the fiscal year other
than for (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) other
employee benefits, including stock option agreements under any stock option plan
of the Company.
(r)
Sarbanes-Oxley; Internal
Accounting Controls
. The Company and the Subsidiaries is in
material compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and
all applicable rules and regulations promulgated by the Commission thereunder
that are effective as of the date hereof and as of the Closing
Date. The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (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 the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
the Subsidiaries and designed such disclosure controls and procedures to ensure
that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and
forms. The Company’s certifying officers have evaluated the
effectiveness of the disclosure controls and procedures of the Company and the
Subsidiaries as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “
Evaluation
Date
”). The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation
Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company and its
Subsidiaries that have materially affected, or is reasonably likely to
materially affect, the internal control over financial reporting of the Company
and its Subsidiaries.
(s)
Certain
Fees
. Except as set forth in the Prospectus Supplement, no
brokerage or finder’s fees or commissions are or will be payable by the Company
or any Subsidiary to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The
Purchasers shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by the Transaction Documents.
(t)
Investment Company
.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that
it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(u)
Registration
Rights
. Other than as set forth in the SEC Reports, no Person
has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any
Subsidiary.
(v)
Listing and Maintenance
Requirements
. The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act nor has
the Company received any notification that the Commission is contemplating
terminating such registration. The Company has not, in the 12 months
preceding the date hereof, received notice from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of such Trading
Market. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.
(w)
Application of Takeover
Protections
. The Company and the Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.
(x)
Disclosure
. Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or
might constitute material, non-public information which is not otherwise
disclosed in the Prospectus Supplement. The Company understands
and confirms that the Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company. All of the
disclosure furnished by or on behalf of the Company to the Purchasers regarding
the Company and its Subsidiaries, their respective businesses and the
transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The press releases disseminated by the Company during the
twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made,
not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.
(y)
No Integrated
Offering
. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
any applicable shareholder approval provisions of any Trading Market on which
any of the securities of the Company are listed or designated such that
shareholder approval would be required in order for the Company to issue the
Securities in compliance with the rules and regulations of the Trading
Market.
(z)
Solvency
. Based
on the consolidated financial condition of the Company as of the Closing Date,
after giving effect to the receipt by the Company of the proceeds from the sale
of the Securities hereunder, (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s current liabilities, (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business as now conducted and as
proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company,
consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its current liabilities when such amounts
are required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its
debt). The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year
from the Closing Date. The SEC Reports sets forth as of the date
hereof all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has
commitments. For the purposes of this Agreement, “
Indebtedness
” means
(x) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s consolidated balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.
(aa)
Tax
Status
. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, and the officers of the Company
or of any Subsidiary know of no basis for any such claim.
(bb)
Foreign Corrupt
Practices
. Neither the Company nor any Subsidiary, nor to the
knowledge of the Company or any Subsidiary, any agent or other person acting on
behalf of the Company or any Subsidiary, has (i) directly or indirectly, used
any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to
any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company or any
Subsidiary (or made by any person acting on its behalf of which the Company is
aware) which is in violation of law, or (iv) violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as
amended.
(cc)
Accountants
. The
Company’s accounting firm is Stegman & Company. To the knowledge
and belief of the Company, such accounting firm (i) is a registered public
accounting firm as required by the Exchange Act and (ii) shall express its
opinion with respect to the financial statements to be included in the Company’s
Annual Report for the fiscal year ending December 31, 2010.
(dd)
Acknowledgment Regarding
Purchasers’ Purchase of Securities
. The Company acknowledges
and agrees that each of the Purchasers is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Securities. The Company further
represents to each Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.
(ee)
Acknowledgement Regarding
Purchaser’s Trading Activity
. Anything in this Agreement or
elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(e) and 4.14 hereof), it is understood and acknowledged by the
Company that: (i) no Purchaser has been asked by the Company to
agree, nor has any Purchaser agreed, to desist from purchasing or selling, long
and/or short, securities of the Company, or “derivative” securities based on
securities issued by the Company or to hold the Securities for any specified
term; (ii) past or future open market or other transactions by any Purchaser,
specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) any Purchaser, and counter-parties in
“derivative” transactions to which any such Purchaser is a party, directly or
indirectly, presently may have a “short” position in the Common Stock, and (iv)
each Purchaser shall not be deemed to have any affiliation with or control over
any arm’s length counter-party in any “derivative” transaction. The
Company further understands and acknowledges that (y) one or more Purchasers may
engage in hedging activities at various times during the period that the
Securities are outstanding, including, without limitation, during the periods
that the value of the Warrant Shares deliverable with respect to Securities are
being determined, and (z) such hedging activities (if any) could reduce the
value of the existing stockholders' equity interests in the Company at and after
the time that the hedging activities are being conducted. The Company
acknowledges that such aforementioned hedging activities do not constitute a
breach of any of the Transaction Documents.
(ff)
Regulation M
Compliance
. The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii),
compensation paid to the Company’s placement agent in connection with the
placement of the Securities.
(gg)
FDA
. As to
each product subject to the jurisdiction of the U.S. Food and Drug
Administration (“
FDA
”) under the
Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder
(“
FDCA
”) that
is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed
by the Company or any of its Subsidiaries (each such product, a “
Pharmaceutical
Product
”), such Pharmaceutical Product is being manufactured, packaged,
labeled, tested, distributed, sold and/or marketed by the Company in compliance
with all applicable requirements under FDCA and similar laws, rules and
regulations relating to registration, investigational use, premarket clearance,
licensure, or application approval, good manufacturing practices, good
laboratory practices, good clinical practices, product listing, quotas,
labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse
Effect. There is no pending, completed or, to the Company's
knowledge, threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or investigation)
against the Company or any of its Subsidiaries, and none of the Company or any
of its Subsidiaries has received any notice, warning letter or other
communication from the FDA or any other governmental entity, which (i) contests
the premarket clearance, licensure, registration, or approval of, the uses of,
the distribution of, the manufacturing or packaging of, the testing of, the sale
of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws
its approval of, requests the recall, suspension, or seizure of, or withdraws or
orders the withdrawal of advertising or sales promotional materials relating to,
any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins production
at any facility of the Company or any of its Subsidiaries, (v) enters or
proposes to enter into a consent decree of permanent injunction with the Company
or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which,
either individually or in the aggregate, would have a Material Adverse
Effect. The properties, business and operations of the Company have
been and are being conducted in all material respects in accordance with all
applicable laws, rules and regulations of the FDA. The Company has not
been informed by the FDA that the FDA will prohibit the marketing, sale, license
or use in the United States of any product proposed to be developed, produced or
marketed by the Company nor has the FDA expressed any concern as to approving or
clearing for marketing any product being developed or proposed to be developed
by the Company.
(hh)
Office of Foreign Assets
Control
. Neither the Company or any Subsidiary nor, to the
Company's knowledge, any director, officer, agent, employee or affiliate of the
Company or any Subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“
OFAC
”).
(ii)
U.S. Real Property Holding
Corporation
. The Company is not and has never been a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon
Purchaser’s request.
(jj)
Bank Holding Company
Act
. Neither the Company nor any of its Subsidiaries or
Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the
“
BHCA
”) and to
regulation by the Board of Governors of the Federal Reserve System (the “
Federal
Reserve
”). Neither the Company nor any of its Subsidiaries or
Affiliates owns or controls, directly or indirectly, five percent (5%) or more
of the outstanding shares of any class of voting securities or twenty-five
percent or more of the total equity of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve. Neither the
Company nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.
(kk)
Money
Laundering
. The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
“
Money Laundering
Laws
”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company or any Subsidiary, threatened.
3.2
Representations and
Warranties of the Purchasers
. Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows (unless as of a specific date
therein):
(a)
Organization;
Authority
. Such Purchaser is either an individual or an entity
duly incorporated or formed, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power and authority
to enter into and to consummate the transactions contemplated by this Agreement
and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and performance by such Purchaser of
the transactions contemplated by this Agreement have been duly authorized by all
necessary corporate, partnership, limited liability company or similar action,
as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except: (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
(b)
Understandings or
Arrangements
. Such Purchaser is acquiring the Securities as
principal for its own account and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the
distribution of such Securities in violation of the Securities Act or any
applicable state securities laws (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws). Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.
(c)
Purchaser
Status
. At the time such Purchaser was offered the Securities,
it was, and as of the date hereof it is, and on each date on which it exercises
any Warrants, it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.
(d)
Experience of Such
Purchaser
. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment. Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.
(e)
Certain Transactions and
Confidentiality
. Other than consummating the transactions
contemplated hereunder, such Purchaser has not, nor has any Person acting on
behalf of or pursuant to any understanding with such Purchaser, directly or
indirectly executed any purchases or sales, including Short Sales, of the
securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any
other Person representing the Company setting forth the material terms of the
transactions contemplated hereunder and ending immediately prior to the
execution hereof. Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement. Other than to
other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or
preclude any actions, with respect to the identification of the availability of,
or securing of, available shares to borrow in order to effect Short Sales or
similar transactions in the future.
The
Company acknowledges and agrees that the representations contained in Section
3.2 shall not modify, amend or affect such Purchaser’s right to rely on the
Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated
hereby.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1
Warrant
Shares
. If all or any portion of a Warrant is exercised at a
time when there is an effective registration statement to cover the issuance or
resale of the Warrant Shares or if the Warrant is exercised via cashless
exercise, the Warrant Shares issued pursuant to any such exercise shall be
issued free of all legends. If at any time following the date hereof
the Registration Statement (or any subsequent registration statement registering
the sale or resale of the Warrant Shares) is not effective or is not otherwise
available for the sale or resale of the Warrant Shares, the Company shall
immediately notify the holders of the Warrants in writing that such registration
statement is not then effective and thereafter shall promptly notify such
holders when the registration statement is effective again and available for the
sale or resale of the Warrant Shares (it being understood and agreed that the
foregoing shall not limit the ability of the Company to issue, or any Purchaser
to sell, any of the Warrant Shares in compliance with applicable federal and
state securities laws). The Company shall use best efforts to keep a
registration statement (including the Registration Statement) registering the
issuance or resale of the Warrant Shares effective during the term of the
Warrants. Upon a cashless exercise of a Warrant, the holding period
for purposes of Rule 144 shall tack back to the original date of issuance of
such Warrant.
4.2
Furnishing of
Information
. Until the earliest of the time that (i) no
Purchaser owns Securities or (ii) the Warrants have expired, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act even if the Company
is not then subject to the reporting requirements of the Exchange
Act.
4.3
Integration
. The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities for
purposes of the rules and regulations of any Trading Market such that it would
require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent
transaction.
4.4
Securities Laws Disclosure;
Publicity
. The Company shall (a) by 9:00 a.m. (New York City
time) on the Trading Day immediately following the date hereof, issue a press
release disclosing the material terms of the transactions contemplated hereby,
and (b) within 4 Trading Days, file a Current Report on Form 8-K, including the
Transaction Documents as exhibits thereto, with the Commission within the time
required by the Exchange Act. From and after the issuance of such
press release, the Company represents to the Purchasers that it shall have
publicly disclosed all material, non-public information delivered to any of the
Purchasers by the Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. The Company and each
Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (a) as
required by federal securities law in connection with the filing of final
Transaction Documents (including signature pages thereto) with the Commission
and (b) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under this clause (b).
4.5
Shareholder Rights
Plan
. No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person, that any Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Securities under the Transaction
Documents or under any other agreement between the Company and the
Purchasers.
4.6
Non-Public
Information
. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Purchaser shall have entered into a written agreement with
the Company regarding the confidentiality and use of such
information. The Company understands and confirms that each Purchaser
shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.
4.7
Use of
Proceeds
. The Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes.
4.8
Indemnification of
Purchasers
. Subject to the provisions of this Section
4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“
Purchaser
Party
”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with
any such stockholder or any violations by such Purchaser Party of state or
federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance). If any
action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party. Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
counsel, a material conflict on any material issue between the position of the
Company and the position of such Purchaser Party, in which case the Company
shall be responsible for the reasonable fees and expenses of no more than one
such separate counsel. The Company will not be liable to any
Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction Documents.
The indemnification required by this Section 4.8 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or
similar right of any Purchaser Party against the Company or others, and (y) any
liabilities the Company may be subject to pursuant to law.
4.9
Reservation of Common
Stock
. As of the date hereof, the Company has reserved and the Company
shall continue to reserve and keep available at all times, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Shares pursuant to this Agreement and Warrant
Shares pursuant to any exercise of the Warrants.
4.10
L
isting of Common
Stock
. The Company hereby agrees to use best efforts to maintain the
listing or quotation of the Common Stock on the Trading Market on which it
is currently listed, and concurrently with the Closing, the Company shall apply
to list or quote all of the Shares and Warrant Shares on such Trading Market and
promptly secure the listing of all of the Shares and Warrant Shares on such
Trading Market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will then include in such
application all of the Shares and Warrant Shares, and will take such other
action as is necessary to cause all of the Shares and Warrant Shares to be
listed or quoted on such other Trading Market as promptly as
possible. The Company will then take all action reasonably necessary
to continue the listing and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market.
4.11 [RESERVED]
4.12
Subsequent Equity
Sales
.
(a) From
the date hereof until 75 days after the Closing Date, neither the Company nor
any Subsidiary shall issue, enter into any agreement to issue or announce the
issuance or proposed issuance of any shares of Common Stock or Common Stock
Equivalents.
(b) From
the date hereof until the earlier of (i) such time as no Purchaser holds any of
the Warrants and (ii) one year from the date hereof, the Company shall be
prohibited from effecting or entering into an agreement to effect any issuance
by the Company or any of its Subsidiaries of Common Stock or Common Stock
Equivalents for cash consideration (or a combination of units hereof) involving
a Variable Rate Transaction. “
Variable Rate
Transaction
” means a transaction in which the Company (i) issues or sells
any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common
Stock either (A) at a conversion price, exercise price or exchange rate or other
price that is based upon and/or varies with the trading prices of or quotations
for the shares of Common Stock at any time after the initial issuance of such
debt or equity securities, or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the
market for the Common Stock or (ii) enters into any agreement, including, but
not limited to, an equity line of credit, whereby the Company may sell
securities at a future determined price. Any Purchaser shall be
entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect
damages.
(c) Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt
Issuance, except that no Variable Rate Transaction shall be an Exempt
Issuance.
4.13
Equal Treatment of
Purchasers
. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of this
Agreement unless the same consideration is also offered to all of the parties to
this Agreement. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.
4.14
Certain Transactions and
Confidentiality
. Each Purchaser, severally and not jointly with the
other Purchasers, covenants that neither it nor any Affiliate acting on its
behalf or pursuant to any understanding with it will execute any purchases or
sales, including Short Sales of any of the Company’s securities during the
period commencing with the execution of this Agreement and ending at such time
that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section
4.4. Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company pursuant to the initial press
release as described in Section 4.4, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Disclosure Schedules. Notwithstanding the
foregoing and notwithstanding anything contained in this Agreement to the
contrary, the Company expressly acknowledges and agrees that (i) no Purchaser
makes any representation, warranty or covenant hereby that it will not engage in
effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4, (ii) no
Purchaser shall be restricted or prohibited from effecting any transactions in
any securities of the Company in accordance with applicable securities laws from
and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality to the
Company or its Subsidiaries after the issuance of the initial press release as
described in Section 4.4. Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
4.15
Capital
Changes
. Until the one year anniversary of the Closing Date,
the Company shall not undertake a reverse stock split of the Common Stock
without the prior written consent of the Purchasers holding a majority in
interest of the Shares.
ARTICLE
V.
MISCELLANEOUS
5.1
Termination
.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations
between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before June 30, 2010;
provided
,
however
, that no such
termination will affect the right of any party to sue for any breach by any
other party (or parties).
5.2
Fees and
Expenses
. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchasers.
5.3
Entire
Agreement
. The Transaction Documents, together with the
exhibits and schedules thereto, the Prospectus and the Prospectus Supplement,
contain the entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.
5.4
Notices
. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto at or prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second (2
nd
)
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.
5.5
Amendments;
Waivers
. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least 67% in
interest of the Shares based on the initial Subscription Amounts hereunder or,
in the case of a waiver, by the party against whom enforcement of any such
waived provision is sought. No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right.
5.6
Headings
. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
5.7
Successors and
Assigns
. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser (other
than by merger). Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”
5.8
No Third-Party
Beneficiaries
. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.8.
5.9
Governing
Law
. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law. If
either party shall commence an action, suit or proceeding to enforce any
provisions of the Transaction Documents, then, in addition to the obligations of
the Company under Section 4.8, the prevailing party in such action, suit or
proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
5.10
Survival
. The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities.
5.11
Execution
. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to each
other party, it being understood that the parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
5.12
Severability
. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
5.13
Rescission and Withdrawal
Right
. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights;
provided
,
however
, that in the
case of a rescission of an exercise of a Warrant, the applicable Purchaser shall
be required to return any shares of Common Stock subject to any such rescinded
exercise notice concurrently with the return to such Purchaser of the aggregate
exercise price paid to the Company for such shares and the restoration of such
Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant
(including, issuance of a replacement warrant certificate evidencing such
restored right).
5.14
Replacement of
Securities
. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction. The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.
5.15
Remedies
. In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.
5.16
Payment Set
Aside
. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
5.17
Independent Nature of
Purchasers’ Obligations and Rights
. The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to
independently protect and enforce its rights including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. Each Purchaser
has been represented by its own separate legal counsel in its review and
negotiation of the Transaction Documents. For reasons of
administrative convenience only, each Purchaser and its respective counsel have
chosen to communicate with the Company through WS. WS does not
represent any of the Purchasers and only represents Noble Financial Capital
Markets, the placement agent. The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of
the Company and not because it was required or requested to do so by any of the
Purchasers. It is expressly understood and agreed that each provision
contained in this Agreement and in each other Transaction Document is between
the Company and a Purchaser, solely, and not between the Company and the
Purchasers collectively and not between and among the Purchasers.
5.18
Liquidated
Damages
. The Company’s obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been
canceled.
5.19
Sat
urdays, Sundays, Holidays,
etc.
If the last or appointed day for the taking of any action
or the expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be exercised on
the next succeeding Business Day.
5.20
Construction
. The
parties agree that each of them and/or their respective counsel have reviewed
and had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in any
Transaction Document shall be subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.
5.21
WAIVER OF
JURY TRIAL
.
IN ANY
ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
IN WITNESS WHEREOF, the parties hereto
have caused this Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
|
NEURALSTEM,
INC.
|
|
Address for Notice:
|
|
|
|
|
|
By:
|
|
|
9700
Great Seneca Highway
|
|
|
Name:
Title:
|
|
Rockville,
Maryland 20850
Fax:
|
|
With
a copy to (which shall not constitute notice):
|
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO CUR SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
Name of
Purchaser:
________________________________________________________________
Signature of Authorized Signatory of
Purchaser
: _________________________________________
Name of
Authorized Signatory:
_______________________________________________________
Title of
Authorized Signatory:
________________________________________________________
Email
Address of Authorized
Signatory:_________________________________________________
Facsimile
Number of Authorized Signatory:
__________________________________________________
Address
for Notice to Purchaser:
Address
for Delivery of Securities to Purchaser (if not same as address for
notice):
Subscription
Amount: $_________________
Shares:
_________________
Warrant
Shares: __________________
EIN
Number:
[PROVIDE
THIS UNDER SEPARATE COVER]
o
Notwithstanding
anything contained in this Agreement to the contrary, by checking this box (i)
the obligations of the above-signed to purchase the securities set forth in this
Agreement to be purchased from the Company by the above-signed, and the
obligations of the Company to sell such securities to the above-signed, shall be
unconditional and all conditions to Closing shall be disregarded, (ii) the
Closing shall occur on the third (3
rd
)
Trading Day following the date of this Agreement and (iii) any condition to
Closing contemplated by this Agreement (but prior to being disregarded by clause
(i) above) that required delivery by the Company or the above-signed of any
agreement, instrument, certificate or the like or purchase price (as applicable)
shall no longer be a condition and shall instead be an unconditional obligation
of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or purchase price (as applicable) to such
other party on the Closing Date.
[SIGNATURE
PAGES CONTINUE]
