UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported):
June 16, 2006
PEREGRINE
PHARMACEUTICALS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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0-17085
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95-3698422
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(State
of other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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14272
Franklin Avenue, Tustin, California 92780
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(Address
of Principal Executive Offices)
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Registrant’s
telephone number, including area code: (714)
508-6000
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Not
Applicable
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(Former
name or former address, if changed since last
report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2 below):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425).
o
Soliciting
material pursuant to Rule 14A-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry
Into a Material Definitive Agreement.
On
June
16, 2006 (the “Effective Date”), the Registrant entered into a Common Stock
Purchase Agreement (the “Agreement”) with Double U Master Fund LP, an
institutional investor (the “Investor”), pursuant to which the Registrant is
selling, and the Investor is purchasing, 9,285,714 shares of the Registrant’s
common stock in exchange for aggregate proceeds of $13 million. Pursuant to
the
Agreement, the funding of the purchase and sale will occur no later than the
end
of the month (the “Closing Date”). The shares of common stock are being issued
from the Registrant’s shelf registration statement on Form S-3, File No.
333-132872.
No
commissions were paid, nor warrants issued, in connection with the transaction.
After giving effect to this Agreement, the Company will have 188,702,218 shares
of common stock outstanding.
Pursuant
to the terms of the Agreement, the Registrant has agreed not to (i) file another
shelf registration statement pursuant to Rule 415 of the Securities Act of
1933,
as amended, for a period of one hundred eighty days following the Effective
Date, nor (ii) without the prior written consent of the Investor, prior to
January 2, 2007, enter into any subsequent or further offer or sale of
securities (including common stock issued for services provided to the Company,
but excluding common stock issued in strategic licensing transactions where
the
Company is either in-licensing new technologies or out-licensing of
technologies) at a price or possible price below $2.50 per share. In addition,
subject to certain terms, and pursuant to the Agreement, the Registrant has
granted to the Investor a right of first refusal to purchase any new securities
that the Registrant may propose to issue prior to January 2, 2007. All of the
foregoing restrictions shall terminate sooner in the event that the closing
price of the Registrant’s common stock shall equal or exceed $2.50 for a period
of fifteen (15) consecutive trading days at any time commencing thirty (30)
business days following June 16, 2006.
(c)
Exhibits. The following material is filed as an exhibit to this Current
Report on Form 8-K:
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Exhibit
Number
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Description
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99.1
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Press
Release issued June 19, 2006
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99.2
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Common
Stock Purchase Agreement between Registrant and Double U Master Fund
LP
dated June 16, 2006
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Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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PEREGRINE
PHARMACEUTICALS, INC.
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| Date: June 19, 2006 | By: | /s/ Paul Lytle |
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Paul
Lytle
Chief Financial
Officer
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EXHIBIT
INDEX
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Exhibit
Number
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Description
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99.1
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Press
Release issued June 19, 2006
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99.2
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Common
Stock Purchase Agreement between Registrant and Double U Master Fund
LP
dated June 16, 2006
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EXHIBIT
99.1
Press
release issued June 19, 2006
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Investors
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Media
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Betsy
Brod
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Barbara
Lindheim & Stephen Gendel
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The
Brod Group
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GendeLLindheim
BioCom Partners
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(800)
987-8256
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(212)
918-4650
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ir@peregrineinc.com
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Peregrine
Pharmaceuticals Announces $13 Million Equity Financing
Tustin,
CA., June 19, 2006 -- Peregrine Pharmaceuticals, Inc. (Nasdaq: PPHM),
a
biopharmaceutical company with a portfolio of innovative, clinical stage product
candidates for the treatment of cancer and serious viral infections, today
announced that it has signed a definitive agreement for the sale of 9,285,714
shares of common stock to one institutional investor, The Double U Master Fund
LP, in exchange for net proceeds of $13,000,000. Pursuant to the agreement
and
subject to certain conditions, Peregrine Pharmaceuticals has agreed not to
offer
or sell its common stock in any private placements at a price below $2.50 per
share during the remainder of the calendar year.
The
proceeds from this offering will be used to advance the company's lead clinical
programs, including a Phase Ib repeat dose study of bavituximab for the
treatment of hepatitis C virus infection that follows positive safety and
initial efficacy results in a Phase Ia trial; a Phase I study of bavituximab
for
the treatment of solid tumor cancer and a Phase II/III study of Cotara® for the
treatment of brain cancer. The company also intends to use part of the proceeds
to accelerate the clinical progress of these lead drug candidates by adding
additional clinical programs in the U.S. or abroad. In addition, the proceeds
will be used to further fund preclinical programs that are assessing the
potential utility of bavituximab for the treatment of influenza, including
avian
flu, as well as for HIV infection, cytomegalovirus and other lethal
viruses.
The
shares are being sold pursuant to the company's shelf registration statement
on
Form S-3 filed with the Securities and Exchange Commission and declared
effective on April 12, 2006. There were no warrants issued or any commissions
paid in conjunction with the transaction.
Double
U
Master Fund LP is an investor in a variety of PIPE and other private equity
transactions in the U.S. and internationally. In 2005, it was rated among the
top 25 institutional investors in PIPE transactions, ranked by number of
transactions, as published by Sagient Research Systems.
About
Peregrine
Peregrine
Pharmaceuticals, Inc. is a biopharmaceutical company with a portfolio of
innovative product candidates in clinical trials for the treatment of cancer
and
hepatitis C virus (HCV) infection. The company is pursuing three separate
clinical trials in cancer and HCV infection with its lead product candidates
bavituximab (formerly Tarvacin) and Cotara®. The company recently reported that
bavituximab demonstrated good safety and encouraging signs of anti-viral
activity in a Phase I HCV study. Peregrine also has in-house manufacturing
capabilities through its wholly-owned subsidiary Avid Bioservices, Inc.
(www.avidbio.com), which provides development and bio-manufacturing services
for
both Peregrine and outside customers. Additional information about Peregrine
can
be found at www.peregrineinc.com.
Safe
Harbor Statement:
Statements
in this press release which are not purely historical, including statements
regarding Peregrine Pharmaceutical's intentions, hopes, beliefs, expectations,
representations, projections, plans or predictions of the future are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The forward-looking statements involve risks
and
uncertainties including, but not limited to, the risk that bavituximab's safety
profile in a repeat dose trial or in a combination therapy trial will not be
at
the same safety level as was found in the phase 1a trial, the risk that the
results of future trials will not correlate to the results from the phase 1a
trial, and the risk that bavituximab will not be as well tolerated at ascending
doses. It is important to note that the company's actual results could differ
materially from those in any such forward-looking statements. Factors that
could
cause actual results to differ materially include, but are not limited to,
uncertainties associated with completing preclinical and clinical trials for
our
technologies; the early stage of product development; the significant costs
to
develop our products as all of our products are currently in development,
preclinical studies or clinical trials; obtaining additional financing to
support our operations and the development of our products; obtaining regulatory
approval for our technologies; anticipated timing of regulatory filings and
the
potential success in gaining regulatory approval and complying with governmental
regulations applicable to our business. Our business could be affected by a
number of other factors, including the risk factors listed from time to time
in
the Company's SEC reports including, but not limited to, the annual report
on
Form 10-K for the year ended April 30, 2005, and the quarterly report on Form
10-Q for the quarter ended January 31, 2006. The Company cautions investors
not
to place undue reliance on the forward-looking statements contained in this
press release. Peregrine Pharmaceuticals, Inc. disclaims any obligation, and
does not undertake to update or revise any forward-looking statements in this
press release.
Exhibit
99.2
PEREGRINE
PHARMACEUTICALS, INC.
COMMON
STOCK
PURCHASE
AGREEMENT
9,285,714
SHARES OF
COMMON
STOCK
June
16, 2006
COMMON
STOCK PURCHASE AGREEMENT
This
Common Stock Purchase Agreement (this “Agreement”) is made and entered into as
of June 16, 2006 (the “Effective Date”), by and between Peregrine
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Double U
Master Fund LP (the “Investor”).
RECITALS
WHEREAS,
the
Company has filed with the Securities and Exchange Commission (“SEC”) a
Shelf
Registration Statement on Form S-3 No. 333-132872,
which
was declared effective by the SEC on April 12, 2006 (the “Form
S-3”).
WHEREAS,
pursuant
to the Form S-3, the Company may offer to the public from time to time up to
15,000,000 shares of common stock, par value $0.001 per share (the “Common
Stock”).
WHEREAS,
the
Company desires to sell and issue to the Investor under the Form S-3 the sum
of
9,285,714 shares of Common Stock, all in the manner described
below.
NOW,
THEREFORE,
in
consideration of the covenants, agreements and considerations herein contained,
the Company and Investor agree as follows:
1. PURCHASE
AND SALE OF SHARES
1.1 Purchase
and Sale of Shares.
Subject
to the terms and conditions hereof, the Company hereby sells to the Investor,
and the Investor hereby purchases from the Company, the sum of 9,285,714 shares
of Common Stock (the “Shares”), in consideration for the Investor’s payment on
the Closing Date (as defined below) the Purchase Price (as defined
below).
1.2
Purchase Price.
As full
consideration for the sale of the Shares to Investor, the Investor agrees to
pay
to the Company within ten (10) business days following the Effective Date,
the
purchase price per Share equal to the average of the 30-day trailing Volume
Weighted Average Price of the Company’s Common Stock, as determined by
Bloomberg, for the thirty (30) consecutive trading days prior to the Effective
Date, less ten percent (10%) as calculated to be $1.40 per Share for an
aggregate purchase price of Thirteen Million dollars ($13,000,000) (the
“Purchase Price”).
Within
one (1) business days following the date the proceeds are received by Company,
the Company shall deliver to the Investor or its designee the shares via DWAC
or
a stock certificate representing the Shares. The Shares shall be delivered
free
of restrictive legends and stop transfer instructions.
2. CLOSING
The
Closing of the purchase and sale of the Shares shall occur on the date the
Purchase Price is received by Company, but in no event later than the date
which
is ten (10) business days following the Effective Date (the “Closing Date”). On
the Closing Date, the Investor shall deliver to the Company the Purchase Price
by wire transfer of immediately available funds.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
as
set forth below, the Company makes no representations or warranties of any
nature or kind.
3.1 Organization,
Standing and Power.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has the corporate power
to
own its properties and to carry on its business as now being conducted and
is
duly qualified to do business and is in good standing in each jurisdiction
in
which the failure to be so qualified would have a material adverse effect on
the
business, assets or condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole.
3.2 Capitalization.
The
authorized capital stock of the Company consists of 250,000,000 shares of common
stock, par value $0.001 per share, and 5,000,000 shares of preferred stock,
par
value $0.001 per share, of which, as of June 16, 2006, there were approximately
179,417,000 shares of common stock and nil shares of preferred stock, issued
and
outstanding. The Company is not a party to any voting trust agreements or
understandings with respect to the voting common stock of the Company.
There
are
no preemptive or similar rights to purchase or otherwise acquire shares of
capital stock of the Company pursuant to any provision of law, the Certificate
of Incorporation, the bylaws of the Company or any agreement to which the
Company is a party.
3.3 Authorization.
3.3.1 The
Company has full legal right, power and capacity to enter into, execute, deliver
and perform this Agreement and all attendant documents and instruments
contemplated hereby.
3.3.2 This
Agreement has been duly executed and delivered and constitutes the legal, valid
and binding obligation of the Company and is enforceable with respect to the
Company in accordance with its terms, except as enforcement may be limited
by
bankruptcy, insolvency, priority or other laws or court decisions relating
to or
affecting generally the enforcement of creditors' rights or affecting generally
the availability of equitable remedies.
3.3.3 The
execution and delivery of this Agreement by the Company, and the consummation
of
the transactions contemplated hereby by the Company in accordance with the
terms
hereof shall not conflict with or result in a breach of, violation of, or
default under (or constitute an event that with notice, lapse of time, or both,
would constitute a breach or default under), or result in the termination of,
or
accelerate the performance required by, or result in the creation of any liens
or other encumbrances upon any of the properties or assets of the Company under
any of the terms, conditions or provisions of the Certificate of Incorporation
or Bylaws, any provision of the laws of the State of California or the State
of
Delaware, or any note, bond, mortgage, indenture, deed of trust, license, lease,
credit agreement or other agreement, document, instrument or obligation to
which
the Company is a party or by which any of its assets or properties are bound.
2
3.3.4 Neither
the execution and delivery of this Agreement by the Company, nor the
consummation of the transactions, contemplated hereunder by the Company will
violate or conflict with any judgment, order, decree, statute, rule or
regulation applicable to the Company or its assets or properties.
3.4 Valid
Issuance of Common Stock.
3.4.1 The
Shares being purchased by the Investor hereunder, when issued, sold and
delivered in accordance with the terms hereof or thereof, for the consideration
expressed herein or therein, will be duly and validly issued, fully paid and
nonassessble and will be issued in compliance with all applicable federal and
state securities laws.
3.4.2 The
outstanding shares of Common Stock are all duly and validly authorized and
issued, fully paid and nonassessable, and were issued in compliance with all
applicable federal and state securities laws.
3.4.3 The
Company has full power, right and authority to transfer, convey and sell to
the
Investors on the Closing Date the Shares and upon consummation of the
transactions contemplated by this Agreement, each Investor will have acquired
good and marketable title to the Shares purchased by such Investor, free and
clear of claims, liens, restrictions on transfer or voting or
encumbrances.
3.4.4 The
Company has taken the requisite action to cause the Shares to be listed on
the
Nasdaq Capital Market, and has filed all applications under NASD Rule 2710,
if
required.
3.5 Litigation.
Except
as referred to in the SEC Documents, as defined below, the Form S-3, or as
disclosed in Schedule 3.5, there are no claims, suits, actions or proceedings
pending or, to the knowledge of the Company, threatened against, relating to
or
affecting the Company or any of its subsidiaries, before any court, governmental
department, commission, agency, instrumentality or authority, or any arbitrator
that would reasonably be expected, either alone or in the aggregate with all
such claims, actions or proceedings, to have a material adverse effect on the
Company’s business or financial condition or the transactions contemplated
hereunder. Except as referred to in the Company’s SEC Documents, neither the
Company nor any of its subsidiaries is subject to any judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or authority, or any arbitrator which prohibits or
restricts the consummation of the transactions contemplated hereby or would
have
a material adverse effect on the Company’s business or financial condition or
the transactions contemplated hereunder.
3
3.6 SEC
Documents; the Company’s Financial Statements.
The
Company is a reporting company under the Securities Exchange Act of 1934 (the
"Exchange Act"), and files annual and periodic reports (the "SEC Documents")
with the Securities and Exchange Commission (the "SEC"). As of their respective
filing dates, the SEC Documents complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended, applicable
to
the Company and to the knowledge of the Company none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not misleading,
except to the extent corrected by a subsequently filed document with the SEC.
The SEC Documents contain an audited consolidated balance sheet of the Company
as of the end of the last completed fiscal year (the “Balance Sheet”) and the
related audited consolidated statements of income and cash flow for the year
then ended (collectively, the “Financials”). The Financials have been prepared
in accordance with GAAP applied on a basis consistent through the periods
indicated and consistent with each other. The Financials present fairly the
consolidated financial condition and operating results and cash flows of the
Company and its subsidiaries as of the dates and during the periods indicated
therein. Since the date of the Balance Sheet and until the date of this
Agreement, there has not occurred any material adverse change in the business,
assets or condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole, which has not been reflected in the SEC
Documents.
3.7 Form
S-3.
The
Company has delivered to each Investor a copy of the Form S-3. The Company
represents and warrants that the Form S-3 has been declared effective by the
SEC
and is not subject to any stop order. The Company is not aware of any event,
fact or circumstance, which would cause the Form S-3 to contain a material
misstatement or require the filing of an amendment thereto. The Company at
the
time of the initial filing of the Form S-3 met the SEC’s eligibility
requirements for use of a Form S-3 in connection with a primary offering. The
Company agrees to timely file (i) a Form 8-K disclosing the execution of this
Agreement, if and when required, (ii) all periodic reports required to be filed
under the Exchange Act in order to keep the S-3 in effect, and (iii) any
amendments, if necessary, and deliver to the Investor a copy of any such
amendment.
3.8 Disclosure.
Neither
this Agreement, nor any of the schedules, attachments, or certificates attached
to this Agreement or delivered by the Company on the Closing Date, contains
any
untrue statements of material fact or omits a material fact necessary to make
the statements contained herein or therein not misleading. There is no fact
which the Company has not disclosed to the Investor, orally or in writing,
and
of which any of the Company’s directors or officers are aware, which could
reasonably be anticipated to have a material adverse effect, upon the financial
condition, operating results or assets, of the Company. Notwithstanding the
foregoing, certain information provided by the Company to the Investor contained
statements that are forward-looking, which are covered by the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future, and accordingly,
such results may differ materially from those expressed in any forward-looking
statements made by or on behalf of the Company.
3.9 No
Consents.
The
execution, delivery and performance by the Company of this Agreement and the
offer, issuance and sale of the Shares require no consent of, action by or
in
respect of, or filing with, any individual or entity, governmental body, agency,
or official other than filings that have been made pursuant to applicable state
securities laws and post-sale filings pursuant to applicable state and federal
securities laws which the Company undertakes to file within the applicable
time
periods.
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3.10
Regulatory
Compliance.
The
Company is not in violation of any applicable law, regulation, judgment, order
or consent decree (of any governmental or non-governmental regulatory or
self-regulatory agency or any organized exchange, including without limitation,
the SEC, any state or local securities or insurance regulatory body, or the
Internal Revenue Service), which violation is likely to have a material adverse
effect on the Company’s business, financial condition, or this
transaction.
3.11 Regulatory
Proceedings, Investigations and Inquiries.
The
Company has not been the subject of any material regulatory proceeding,
examination, investigation or inquiry (known to the Company), including any
pending or threatened regulatory proceeding, investigation or inquiry (known
to
the Company) (including without limitation any by governmental or
non-governmental regulatory or self-regulatory agency or any organized exchange)
relating to the Company.
3.12
Registration
Statement.
The
Company’s Registration Statement on Form S-3 (the "Registration Statement") was
declared effective by the SEC on April 12, 2006. The Registration Statement
is
effective on the date hereof and the Company has not received notice that the
SEC has issued or intends to issue a stop order with respect to such
Registration Statement or that the SEC otherwise has suspended or withdrawn
the
effectiveness of the Registration Statement, either temporarily or permanently,
or intends or has threatened in writing to do so. The Registration Statement
(including the information or documents incorporated by reference therein),
as
of the time it was declared effective, and any amendments or supplements
thereto, each as of the time of filing, did not contain any untrue statement
of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. In addition, the
Company hereby agrees to file with the SEC, as required, no later than two
business days from the Effective Date, either an amendment or a prospectus
supplement in accordance with Rule 424(b)(2) of the Securities Act. The
Registration Statement registers the issuance of the Shares to the Investor
and,
when issued to the Investor, the Shares shall be freely tradeable by the
Investor.
3.13 Compliance
with Nasdaq Continued Listing Requirements.
The
Company is in compliance with applicable Nasdaq Capital Market continued listing
requirements. There are no proceedings pending or, to the Company’s knowledge,
threatened against the Company relating to the continued listing of the Common
Stock on the Nasdaq Capital Market and the Company has not received any
currently effective notice of, nor to the Company’s knowledge is there any basis
for, the delisting of the Common Stock from the Nasdaq Capital
Market.
5
4. REPRESENTATIONS
AND WARRANTIES OF THE INVESTOR
The
Investor hereby represents and warrants to the Company the following:
4.1 Authority.
Investor has full legal right, power and capacity to enter into, execute,
deliver and perform this Agreement and all attendant documents and instruments
contemplated hereby. This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligation of Investor and is
enforceable with respect to Investor in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, priority or other laws
or
court decisions relating to or affecting generally the enforcement of creditors’
rights or affecting generally the availability of equitable
remedies.
4.2 No
Violation of Agreements.
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereunder by Investor will violate or conflict with
any judgment, order, decree, statute, rule or regulation applicable to Investor
or its assets or properties.
4.3 Disclosure
of Information.
Subject
in part to the truth and accuracy of the representations and warranties of
the
Company, the Investor believes that it has received all the information that
it
considers necessary or appropriate for deciding whether to purchase the Shares.
The Investor further represents that it has had an opportunity to review the
SEC
Documents and the Form S-3, and had sufficient opportunity to ask questions
and
receive answers from the Company and its directors and officers regarding the
terms and conditions of the offering of the Shares and the business and
operations of the Company. The foregoing, however, does not limit or modify
the
representations and warranties of the Company in Section 3 of this Agreement
or
the right of the Investor to rely thereon.
4.4
Compliance
with Law;
Any sale
or other transaction by the Investor in securities of the Company shall be
made
in compliance with all applicable laws and regulations.
5. CONDITIONS
PRECEDENT TO OBLIGATIONS OF THE COMPANY
The
obligations of the Company to consummate this Agreement shall be subject to
the
satisfaction of each of the conditions set forth below, any or all of which
may
be waived by the Company in whole or in part without prior notice; provided,
however, that no such waiver of a condition shall constitute a waiver by the
Company of any other condition or of any of the Company’s rights or remedies, at
law or in equity, if the Investor shall be in default or breach of any of its
representations, warranties or agreements under this Agreement:
5.1 Purchase
Price.
Investor shall deliver the Purchase Price on the date specified in Section
1.2.
5.2 Accuracy
of Representations and Warranties.
The
representations and warranties of the Investor contained in this Agreement
shall
be accurate and complete on and as of the date hereof and the Closing Date
with
the same effect as though such representations and warranties had been made
on
or as of such date.
6
5.3 Performance
of Agreements.
Each
and all of the conditions precedent and agreements of the Investor subject
to
satisfaction on or before the Closing Date pursuant to the terms of this
Agreement shall have been performed or satisfied.
6. CONDITIONS
PRECEDENT TO OBLIGATIONS OF INVESTOR
The
obligations of the Investor to consummate the transactions contemplated by
this
Agreement shall be subject to the satisfaction of each of the conditions set
forth below, any or all of which may be waived by each Investor in whole or
in
part without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by such Investor of any other condition or of any
of
the Investor’s rights or remedies, at law or in equity, if the Company shall be
in default or breach of any of its representations, warranties or agreements
under this Agreement:
6.1 Accuracy
of Representations and Warranties.
The
representations and warranties of the Company contained in this Agreement shall
be accurate and complete on and as of the date hereof and the Closing Date
with
the same effect as though such representations and warranties had been made
on
or as of such date.
6.2 Performance
of Agreements.
Each
and all of the conditions precedent and agreements of the Company subject to
satisfaction on or before the Closing Date pursuant to the terms of this
Agreement shall have been performed or satisfied.
6.3 No
Adverse Events.
Between
the date hereof and the Closing Date, neither the business, assets or condition,
financial or otherwise, of the Company taken as a whole shall have been
materially adversely affected in any manner.
7.
INDEMNIFICATION
7.1
To
the extent permitted by law, the Company will indemnify and hold harmless,
the
Investor, the directors and officers, if any, of the Investor, and each person,
if any, who controls the Investor within the meaning of the Securities Act
or
the Exchange Act (each, an "Indemnified Person"), against any losses, claims,
damages, liabilities or expenses (joint or several) incurred (collectively,
"Claims") to which any of them may become subject under the Securities Act,
the
Exchange Act or otherwise, insofar as such Claims (or actions or proceedings,
whether commenced in respect thereof) arise out of or are based upon: (i) any
untrue statement or untrue statement of a material fact contained in the
Registration Statement or any post-effective amendment thereof or the omission
or omission to state therein a material fact required to be stated therein
or
necessary to make the statements therein not misleading, (ii) any untrue
statement or untrue statement of a material fact contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or omission to
state
therein any material fact necessary to make the statements made therein, in
the
light of the circumstances under which the statements therein were made, not
misleading or (iii) any violation or violation by the Company of the Securities
Act, the Exchange Act, any state securities law or any rule or regulation under
the Securities Act, the Exchange Act or any state securities law (the matters
in
the foregoing clauses (i) through (iii) being collectively referred to as
"Violations"). The Company shall reimburse the Investor, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees
or
other reasonable expenses incurred by them in connection with investigating
or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 7 shall not
(i)
apply to any Claims arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, (ii) be available to the extent
such Claim is based on a failure of the Investor to deliver or cause to be
delivered the prospectus made available by the Company; or (iii) apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld. The Investor will indemnify the Company, its officers,
directors and agents (including legal counsel) (each an "Indemnified Person")
against any claims arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company, by or on behalf of the Investor, expressly for use in connection with
the preparation of the Registration Statement, subject to such limitations
and
conditions set forth in this Section 7. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person or Indemnified Party, and shall survive the sale of the
Shares by the Subscriber.
7
7.2
Promptly after receipt by an Indemnified Person under this Section of notice
of
the commencement of any action (including any governmental action), such
Indemnified Person shall, if a Claim in respect thereof is to be made against
any indemnifying party under this Section, deliver to the indemnifying party
a
written notice of the commencement thereof and the indemnifying party shall
have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person, as the case may be; provided,
however,
that an
Indemnified Person shall have the right to retain its own counsel with the
reasonable fees and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person and the indemnifying
party would be inappropriate due to actual or potential differing interests
between such Indemnified Person and any other party represented by such counsel
in such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall
not
relieve such indemnifying party of any liability to the Indemnified Person
under
this Section except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. The indemnification required by this
Section shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7.3
To
the extent any indemnification by an indemnifying party is prohibited or limited
by law, the indemnifying party agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable under
Section 7 to the fullest extent permitted by law.
8.
COVENANTS
AND MISCELLANEOUS.
8.1 Subject
to Section 8.15 below, the Company agrees that for a period of one hundred
and
eighty (180) calendar days following the Effective Date, it shall not file
a
shelf registration statement with the SEC pursuant to Rule 415 of the Securities
Act.
8
8.2 (a)
Subject to Section 8.15 below, during the period from the Closing Date until
January 2, 2007 (the "Restricted Period"), the Company hereby grants to the
Investor the right of first refusal (the "Right of First Refusal") to purchase
the New Securities (as defined below) that the Company may, from time to time
and in one or more transactions, propose to sell and issue.
(b)
The
term
"New Securities" means any offering by the Company of any Common Stock or
securities convertible into Common Stock and shall specifically include common
stock issued for services provided to the Company, but exclude common stock
issued in strategic licensing transactions where the Company is either
in-licensing new technologies or out-licensing of technologies.
(c)
In
the
event that the Company proposes to undertake an issuance of New Common Stock
during the Restricted Period, the Company shall give written notice thereof
(an
"Offering Notice"). The Offering Notice shall specify, in detail, the general
terms and conditions upon which the Company proposes to issue the
same.
(d)
The
Investor shall have the right, for a period (the "Exercise Period") expiring
at
5:00 PM (Eastern Time) on the third (3rd) Trading Day following the date of
the
Offering Notice, to purchase the New Securities for the price and on the general
terms and conditions specified in the Offering Notice. Such exercise shall
be
effected by the Investor giving written notice of such exercise (the "Exercise
Notice") to the Company as hereinafter provided. If the Exercise Notice is
not
received by the Company within the prescribed timeframe, then Company shall
have
the right to consummate the transaction within the following ten (10) Trading
Days. Once the Exercise Notice is received by the Company, Investor agrees
to
complete the transaction within the following ten (10) Trading Days.
Notwithstanding the foregoing, in the event Investor provides Exercise Notice
to
Company and Investor does not close the transaction within the prescribed ten
(10) Trading Days, then the foregoing covenant shall immediately
terminate.
8.3
Expenses,
Commissions and Taxes.
Each
party shall bear and pay its own expenses, including legal, accounting and
other
professional fees, and taxes incurred in connection with the transactions
referred to in this Agreement. The party responsible under applicable law shall
bear and pay in their entirety all other taxes and registration and transfer
fees, if any, payable by reason of the sale and conveyance of the Shares.
8.4
Entire
Agreement; Modifications; Waiver.
This
Agreement, together with the related agreements or certificates referenced
herein, constitutes the final, exclusive and complete understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior understandings and discussions with respect thereto. No variation or
modification of this Agreement and no waiver of any provision or condition
hereof, or granting of any consent contemplated hereby, shall be valid unless
in
writing and signed by the party against whom enforcement of any such variation,
modification, waiver or consent is sought.
9
8.5
Further
Assurances.
The
parties hereto shall use their best efforts, and shall cooperate with one
another, to secure all necessary consents, approvals, authorizations, exemptions
and waivers from third parties as shall be required in order to consummate
the
transactions contemplated hereby, and shall otherwise use their best efforts
to
cause such transactions to be consummated in accordance with the terms and
conditions hereof. At any time or from time to time after the Closing Date,
each
party hereto, shall execute and deliver any further instruments or documents
and
take all such further action as such requesting party may reasonably request
in
order to consummate and document the transactions contemplated
hereby.
8.6
Captions.
The
captions in this Agreement are for convenience only and shall not be considered
a part of or affect the constructing or interpretation of any provision of
this
Agreement.
8.7
Section
References.
Unless
otherwise noted, all section references herein are to sections of this
Agreement.
8.8
Counterparts.
This
Agreement may be executed in any number of counterparts, including
electronically transmitted counterparts, each of which when so executed shall
constitute an original copy hereof, but all of which together shall constitute
one agreement.
8.9
Successors
and Assigns.
Neither
party shall have the right to assign this Agreement.
8.10
Parties
in Interest.
Nothing
in this Agreement, whether express or implied, is intended to confer any rights
or remedies under or by reason of this Agreement on any persons other than
the
parties to it and their respective successors and assigns, nor is anything
in
this Agreement intended to relieve or discharge the obligation or liability
of
any third persons to any party to this Agreement, nor shall any provision give
any third persons any right of subrogation or action over against any party
to
this Agreement.
10
8.11
Notices.
All
notices, requests, demands and other communications hereunder (“Notices”) shall
be in writing and shall be deemed to have been duly given if delivered by hand
or by registered or certified mail or upon fax notice with confirmation of
receipt, as follows:
| If to Investor: |
c/o
DOUBLE
U MASTER FUND L. P.
|
Harbour
House
Waterfront
Drive
P.O.
Box
972
Road
Town,
Tortola
British
Virgin Islands
Attention:
Carl Jacobsohn
Telephone:
(284)
494-4770
Facsimile:
(284)
494-4771
| with copy to: |
Krieger
& Prager LLP
|
39
Broadway, Suite 920
New
York,
NY 10006
Attention:
Samuel Krieger
Telephone:
(212) 363-2900
Facsimile:
(212) 363-2999
| If to the Company: |
Peregrine
Pharmaceutical, Inc.
|
14272
Franklin Avenue, Suite 100
Tustin,
California 92780
Attn.:
Steve King
Facsimile:
(714) 838-5817
| with copy to: |
Snell
& Wilmer LLP
|
Mr.
Mark
Ziebell
600
Anton
Blvd, Suite 1400
Costa
Mesa, CA 92626
Telephone:
(714) 427-7000
Facsimile:
(714) 427-7799
or
to
such other address as any party may have furnished to the others in writing
in
accordance herewith, except that notices of change of address shall only be
effective upon receipt. All Notices shall be deemed received on the date of
delivery or, if mailed, on the date appearing on the return receipt
therefor.
8.12
Law
Governing.
This
Agreement shall be governed by, and construed and enforced in accordance with
the laws of the State of California, without regard to its choice-of-laws or
conflicts-of-law rules.
8.13 Survival.
The
representations and warranties contained in this Agreement shall
survive the Closing Date indefinitely.
11
8.14
Subject
to Section 8.15 below, the Company covenants and agrees that during the period
(the “New Transaction Period”) from the Effective Date and continuing
through and including the Final Lock-up Date (as defined below), it will not,
without the prior written consent of the Investor in each instance, enter into
any subsequent or further offer or sale of Common Stock or securities
convertible into and/or other rights exercisable for the issuance of Common
Stock (including common stock issued for services provided to the Company,
but
excluding common stock issued in strategic licensing transactions where the
Company is either in-licensing new technologies or out-licensing of
technologies) at a price or possible price below $2.50 (collectively, “New
Common Stock”) to or with any third party (any such offer or sale of New Common
Stock, a “New Transaction”). The term “Final Lock-up Date” means January 2,
2007.
8.15
In
the
event that the closing price of the Company’s common stock shall equal or exceed
$2.50 for a period of fifteen (15) consecutive trading days (the “Target Price
Period”) at any time commencing 30 Business Days following the Effective
Date and prior to the stated ending dates in Sections 8.1, 8.2 and 8.14 above,
then the covenants, prohibitions, limitations and/or restrictions contained
in
such Sections shall automatically terminate upon the day
immediately following the conclusion of the Target Price Period, and the
provisions shall no longer be of any force and effect.
12
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed, all as of date
first above written.
“The
Company”
Peregrine
Pharmaceuticals, Inc.,
a
Delaware corporation
By:
/s/
Paul Lytle
Name:
Paul
Lytle
Title:
CFO
“Investor”
DOUBLE
U
MASTER FUND LP
By:
/s/
Authorized Signer
Name: Navigator
Management Ltd.
Title:
Authorized
Signer
13