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 27, 2007
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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14282
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 27, 2007, Peregrine Pharmaceuticals, Inc. (the “Company”) entered into
a placement agent agreement (the “Placement Agent Agreement”) with Rodman &
Renshaw, LLC, as exclusive placement agent (the “Placement Agent”) relating to
the proposed offering of shares of the Company’s common stock to one or more
investors. A copy of the Placement Agent Agreement is filed as Exhibit 1.1
to this Current Report and is incorporated herein by reference.
In
addition, on June 28, 2007, the Company and certain investors introduced to
the Company by the Placement Agent together with certain existing investors
in
the Company entered into securities purchase agreements relating to the issuance
and sale of up to an aggregate of approximately 30 million shares (the “Shares”)
of the Company’s common stock, par value $0.001 per share, (the “Common Stock”).
The Shares of common stock will be purchased at the negotiated price of $0.75
per share for gross proceeds to the Company of $22,500,000. The form of
securities purchase agreement in connection with the offering is attached hereto
as Exhibit 4.1 and is incorporated herein by reference. The closing of the
sale
is expected to occur on or before July 3, 2007, subject to satisfaction of
customary closing conditions. The Company expects to receive net proceeds of
$20.9 million after deducting placement agent fees and estimated costs
associated with the offering.
The
Shares were offered under the Company’s previously filed and effective
Registration Statement on Form S-3 (Registration No. 333-139975). The
Company previously filed on January 23, 2007 a base prospectus and will file
a
prospectus supplement relating to the issuance and sale of the Shares with
the
Securities and Exchange Commission.
Item 8.01. Other
Events.
On
June
28, 2007, the Company issued a press release announcing the pricing of the
offering described in Item 1.01 of this Current Report. A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated by reference
herein.
Item
9.01. Financial Statements
and Exhibits.
(d) Exhibits
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Exhibit
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No.
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Description
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1.1
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Placement
Agent Agreement, dated June 27, 2007.
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4.1
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Form
of Securities Purchase Agreement.
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99.1
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Press
Release, dated June 28, 2007.
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SIGNATURES
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.
| PEREGRINE PHARMACEUTICALS, INC. | ||
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| Date: June 28, 2007 | By: | /s/ Paul J. Lytle |
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Paul J. Lytle |
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| Chief Financial Officer | ||
EXHIBIT
INDEX
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Exhibit
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No.
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Description
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1.1
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Placement
Agent Agreement, dated June 27, 2007.
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4.1
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Form
of Securities Purchase Agreement.
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99.1
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Press
Release, dated June 28,
2007.
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EXHIBIT
1.1
June
27,
2007
CONFIDENTIAL
Paul
J.
Lytle, CPA
Chief
Financial Officer
Peregrine
Pharmaceuticals, Inc.
14272
Franklin Avenue,
Tustin,
CA 92780
Dear
Mr.
Lytle:
This
letter (the “Agreement”)
constitutes the agreement between Rodman & Renshaw, LLC (“R&R”
or
the
“Placement
Agent”)
and
Peregrine
Pharmaceuticals, Inc.
(the
“Company”),
that
R&R 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 $0.001 per share (the “Common
Stock”)
and
supersedes all prior oral and written agreements, communications, and
understandings. 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 R&R 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 R&R’s obligations hereunder
are on a reasonable best efforts basis only and that the execution of this
Agreement does not constitute a commitment by R&R to purchase the Securities
and does not ensure the successful placement of the Securities or any portion
thereof or the success of R&R 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 R&R hereunder and provided R&R
only shows this potential Financing to investors pre-approved in writing by
the
Company, the Company agrees to pay to R&R fees set forth below if there is
any financing of equity or debt or other capital raising activity of the Company
(a “Financing”)
during
the term of this Agreement with any investors pre-approved in writing by the
Company and Introduced (as defined below) to the Company by R&R pursuant to
this Agreement:
(A) The
fees
set forth below with respect to the Placement:
a) A
cash
fee payable immediately upon the closing of the Placement equal to 6% of the
aggregate
gross proceeds raised in the Placement from investors Introduced by Rodman
and
equal to 7% of the aggregate gross proceeds raised in the Placement from
investors Introduced through a Selected Dealer.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
2
(B) The
fees
set forth below if there is any financing of equity or debt or other capital
raising activity of the Company (a “Financing”)
within
10 months and two weeks after the expiration or termination of this Agreement
with any investors that were Introduced, as defined below, to the Company by
R&R pursuant to this Agreement:
a) A
cash
fee payable immediately upon the closing of any portion of any Financing and
equal to 6%
of the
aggregate gross proceeds raised in such Financing from such
investors.
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The
Company also agrees to reimburse R&R’s reasonable out-of-pocket
expenses, including legal fees (with supporting invoices/receipts)
up to a
maximum of $25,000. Such reimbursement shall be payable within 30
days
after the Company’s receipt of all supporting invoices/receipts
specifically related to the services for minimum gross proceeds to
the
Company of $16,000,000.
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| (D) |
Rodman
may engage other NASD members in good standing to act as selected
dealers
in connection with the Placement (“Selected Dealers”). Such Selected
Dealers will receive a cash fee of 5% of gross offering proceeds
from
Purchasers identified by any such Selected Dealer (the remaining
2% of
such gross proceeds will remain with Rodman as its lead manager
fee).
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| (E) |
For
avoidance of doubt, “Introduce” or “Introduced” shall mean any investor
pre-approved in writing by the Company and subsequently contacted
by
R&R or a Selected Dealer in connection with the proposed
Placement.
An
electronic email or facsimile transmission from either the CFO or
CEO of
the Company clearly pre-approving specific investor(s) identified
by
R&R or a Selected Dealer shall be deemed pre-approved in writing by
Company.
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SECTION
2. REGISTRATION
STATEMENT.
The
Company represents and warrants to, and agrees with, the Placement Agent
that:
(A) The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (Registration File No.333-139975 under
the
Securities Act of 1933, as amended (the “Securities Act”), which became
effective on January 23, 2007, 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 will advise 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
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
3
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. For purposes of this Agreement,
“free writing prospectus” has the meaning set forth in Rule 405 under the
Securities Act and the “Time of Sale Prospectus” means the preliminary
prospectus, if any, together with the free writing prospectuses, if any,
used in
connection with the Placement, including any documents incorporated by
reference
therein.
(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, the Time of Sale Prospectus, if any, 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, the Time of Sale Prospectus,
if
any, 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, the Time of Sale Prospectus, if any, 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, the Time of Sale Prospectus, if any, or Prospectus
Supplement, or to be filed as exhibits or schedules to the Registration
Statement, which have not been described or filed as required.
(C) The
Company is eligible to use free writing prospectuses in connection with the
Placement pursuant to Rules 164 and 433 under the Securities Act. Any free
writing prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus
that
the Company has filed, or is required to file, pursuant to Rule 433(d) under
the
Securities Act or that was prepared by or on behalf of or used by the Company
complies or will comply in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder. The Company will not, without the prior consent of the Placement
Agent, prepare, use or refer to, any free writing prospectus.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
4
(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, the Time of Sale Prospectus, if any, 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 Time of Sale Prospectus,
if any, 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.
Except
as set forth under the corresponding section of the Disclosure Schedules which
Disclosure Schedules shall be deemed a part hereof, the Company hereby makes
the
representations and warranties set forth below to the Placement
Agent.
(A) Organization
and Qualification. All of the direct and indirect subsidiaries
(individually, a “Subsidiary”) of the Company are set forth on Schedule
3(A). The Company owns, directly or indirectly, all of the capital stock or
other equity interests of each Subsidiary free and clear of any “Liens”
(which for purposes of this Agreement shall mean a lien, charge, security
interest, encumbrance, right of first refusal, preemptive right 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 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 (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.
(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 duly authorized by all necessary action on the part of the Company
and
no further action is required by the Company, its board of directors or its
stockholders in connection therewith other than in connection with the
“Required Approvals” (as defined in subsection 3(D) below). 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.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
5
(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.
(D) Filings,
Consents and Approvals. 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” (defined as 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, including, without
limitation, any Trading Market) in connection with the execution, delivery
and
performance by the Company of the Transaction Documents, other than such filings
as are required to be made under applicable Federal and state securities laws
(collectively, the “Required Approvals”).
(E) 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 other than restrictions on
transfer provided for in the Transaction Documents. The Company has reserved
from its duly authorized capital stock the maximum number of shares of Common
Stock issuable pursuant to the Transaction Documents. The issuance by the
Company of the Securities has been registered under the Securities Act and
all
of the Securities, following issuance pursuant to the Transaction documents,
will be freely transferable and tradable by the Purchasers without restriction
(other than any restrictions arising solely from an act or omission of a
Purchaser). The Registration Statement is effective and available for the
issuance of the Securities thereunder and the Company has not received any
notice that the Commission has issued or intends to issue a stop-order with
respect to the Registration Statement or that the Commission 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 "Plan of Distribution" section under the Registration Statement permits
the
issuance and sale of the Securities hereunder. Upon receipt of the Securities,
the Purchasers will have good and marketable title to such Securities and the
Securities will be freely tradable without restriction (other than any
restrictions arising solely from an act or omission of a Purchaser) on the
“Trading Market” (which, for purposes of this Agreement shall mean means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the Nasdaq Capital Market).
(F) Capitalization.
The capitalization of the Company is as set forth on Schedule 3(F). 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 plan and pursuant to the conversion or
exercise of securities exercisable, exchangeable or convertible into Common
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
6
Stock
(“Common Stock Equivalents”). 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 set forth
on Schedule 3(F) or as a result of the purchase and sale of the Securities,
there are no outstanding options, warrants, script 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 will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under such securities. All of the outstanding shares of capital stock
of
the Company are 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. No further approval or
authorization of any stockholder, the Board of Directors of the Company or
others will be required for the issuance and sale of the Securities by the
Closing Date. 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.
(G) SEC
Reports; Financial Statements. The Company has complied in all material
respects with requirements to file all reports, schedules, forms, statements
and
other documents required to be filed by it 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 to file such material) (the foregoing materials, including
the
exhibits thereto and documents incorporated by reference therein, 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 and the rules and
regulations of the Commission promulgated thereunder, 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 condensed 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 year-end audit adjustments.
(H) 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 the SEC Reports, (i) there has been no event,
occurrence or development that has had 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 required to
be 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” (defined as 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 144 under the Securities Act), 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 or as set forth
on
Schedule 3(H), no event, liability or development has occurred or exists with
respect to the Company or its Subsidiaries or their respective business,
properties, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed 1 Trading Day prior
to the date that this representation is made.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
6
(I) Litigation.
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 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.
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, and neither the
Company or 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. No executive officer, to the knowledge of the
Company, 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, 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.
(J) Labor
Relations. No material 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.
(K) 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 order of
any
court, arbitrator or governmental body, or (iii) is or has been in violation
of
any statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the environment, except in each case as could
not
have a Material Adverse Effect.
(L) 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 have or 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.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
8
(M) Title
to Assets. Other than certain laboratory equipment financed through GE
Capital as further disclosed in the SEC Reports, the Company and the
Subsidiaries have good and marketable title in fee simple to all real property
owned by them that is material to the business of the Company and the
Subsidiaries 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 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 Liens for the payment of federal, state or other taxes, 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 of which the Company
and the Subsidiaries are in compliance.
(N) Patents
and Trademarks. 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 similar intellectual property rights necessary or material 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”). Neither the Company nor any
Subsidiary has received a notice (written or otherwise) that the Intellectual
Property Rights used by the Company or any Subsidiary violates or infringes
upon
the rights of any Person. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and, to the Company’s knowledge, there is no
existing infringement by another Person of any of the Intellectual Property
Rights of others. 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.
(O) 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 under the
Transaction Documents. To the best knowledge of the Company, such insurance
contracts and policies are accurate and complete. 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.
(P) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, to
the Company’s knowledge, none of the officers, directors or employees of the
Company 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, 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 or partner, other than (i) for payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) for other employee benefits,
including stock option agreements under any stock option plan of the
Company.
(Q) Sarbanes-Oxley.
The Company is in material compliance with all material provisions of the
Sarbanes-Oxley Act of 2002 which are applicable to it as of the date hereof
and
of the closing date of the Placement.
(R) 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 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.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
9
(S) Trading
Market Rules. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.
(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 subject to the Investment Company Act.
(U) Registration
Rights. No Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the
Company.
(V) Listing
and Maintenance Requirements. The Company’s 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. Other than the minimum bid price requirement by Nasdaq,
the
Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all other such listing and maintenance
requirements.
(W) Application
of Takeover Protections. The Company and its 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) Solvency.
Based on the 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 Company’s fair saleable value of its assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business for the current fiscal
year
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, 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 debt 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
set forth as of the dates thereof 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”
shall mean (a) 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), (b) 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 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 (c) 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.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
10
(Y) 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 each Subsidiary has filed all necessary federal, state and foreign
income and franchise tax returns and has paid or accrued all taxes shown as
due
thereon, and the Company has no knowledge of a tax deficiency which has been
asserted or threatened against the Company or any Subsidiary.
(Z) Foreign
Corrupt Practices. Neither the Company, nor to the knowledge of the Company,
any agent or other person acting on behalf of the Company, 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 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.
(AA) Accountants.
The Company’s accountants are set forth on Schedule 3(AA) of the Disclosure
Schedule. To the knowledge of the Company, such accountants, who the Company
expects will express their opinion with respect to the financial statements
to
be included in the Company’s next Annual Report on Form 10-K, are a registered
public accounting firm as required by the Securities Act.
(BB)
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 (other than for the placement
agent’s placement 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.
(CC)
Approvals.
The issuance and listing on the Nasdaq Capital Market of the Shares requires
no
further approvals, including but not limited to, the approval of shareholders.
(DD)
NASD
Affiliations.
There
are no affiliations with any NASD 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.
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.
R&R’s engagement hereunder will be for the period of 15 calendar days. The
engagement may be terminated by either the Company or R&R at any time upon
10 days’ written notice. Notwithstanding anything to the contrary contained
herein, the provisions 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. R&R 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.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
11
SECTION
6. R&R
INFORMATION.
The
Company agrees that any information or advice rendered by R&R 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 R&R’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 R&R 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 R&R 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, which opinion shall include a “10b-5” representation from
such counsel.
(E) Neither
the Company nor any of its Subsidiaries shall have sustained since the date
of
the latest audited 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 reasonable 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, the Time of Sale
Prospectus, if any, and the Prospectus Supplement.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
12
(F) The
Common Stock is registered under the Exchange Act and, as of the Closing Date,
the Shares shall be listed and admitted and authorized for trading on the Nasdaq
Capital Market, and satisfactory evidence of such actions shall have been
provided to the Placement Agent. The Company shall have taken no action designed
to, or likely to have the effect of terminating the registration of the Common
Stock under the Exchange Act or delisting or suspending from trading the Common
Stock from the Nasdaq Capital Market, nor has the Company received any
information suggesting that the Commission or the Nasdaq Capital Market is
contemplating terminating such registration or listing.
(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, (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, (iii) the United States shall have
become engaged in hostilities in which it is not currently engaged, the subject
of an act of terrorism, there shall have been an escalation in hostilities
involving the United States, or there shall have been a declaration of a
national emergency or war by the United States, or (iv) there shall have
occurred any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if the
effect of any such event in clause (iii) or (iv) makes it, in the sole judgment
of the Placement Agent, 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.
(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) The
NASD
shall have raised no objection to the fairness and reasonableness of the terms
and arrangements of this Agreement. In addition, the Company shall, if requested
by the Placement Agent, make or authorize Placement Agent’s counsel to make on
the Company’s behalf, at no cost to Company, an Issuer Filing with the NASDR,
Inc. Corporate Financing Department pursuant to NASD Rule 2710 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.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
13
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.
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 R&R 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
signature page were an original thereof.
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.
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Page
14
Please
confirm that the foregoing correctly sets forth our agreement by signing and
returning to R&R the enclosed copy of this Agreement.
|
Very
truly yours,
RODMAN & RENSHAW,
LLC
|
||
| |
|
|
| By: | /s/ Edward Rubin | |
| Name: Edward Rubin | ||
| Title: President | ||
|
Address
for notice:
1270
Avenue of the Americas, 16th Floor
New
York, NY, 10020
|
|
Accepted
and Agreed to as of
the
date first written above:
PEREGRINE
PHARMACEUTICALS, INC.
By:
/s/
Paul
Lytle
|
|
|
Name: Paul Lytle
Title: CFO
|
|
| Address for notice: |
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Indemnification
Provisions
ADDENDUM
A
INDEMNIFICATION
PROVISIONS
In
connection with the engagement of Rodman & Renshaw, LLC (“R&R”)
by
Peregrine Pharmaceuticals, Inc. (the “Company”)
pursuant to a letter agreement dated June 22, 2007, between the Company and
R&R, 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 R&R 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 R&R’s willful misconduct or gross
negligence in performing the services described
herein.
|
| 2. |
Promptly
after receipt by R&R of notice of any claim or the commencement of any
action or proceeding with respect to which R&R is entitled to
indemnity hereunder, R&R 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 R&R and will pay the fees and
expenses of such counsel. Notwithstanding the preceding sentence,
R&R
will be entitled to employ counsel separate from counsel for the
Company
and from any other party in such action if counsel for R&R reasonably
determines that it would be inappropriate under the applicable rules
of
professional responsibility for the same counsel to represent both
the
Company and R&R. 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 R&R, which will not be
unreasonably withheld.
|
| 3. |
The
Company agrees to notify R&R 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 R&R or
insufficient to hold R&R harmless, then the Company shall contribute
to the amount paid or payable by R&R as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate
to
reflect the relative fault of the Company on the one hand and R&R 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.
|
| 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.
|
Peregrine
Pharmaceuticals, Inc.
June
27,
2007
Indemnification
Provisions
|
RODMAN & RENSHAW,
LLC
|
||
| |
|
|
| By: | /s/ Edward Rubin | |
| Name: Edward Rubin | ||
| Title: President | ||
|
Accepted
and Agreed to as of
the
date first written above:
PEREGRINE
PHARMACEUTICALS, INC.
By:
/s/
Paul
Lytle
|
|
|
Name: Paul Lytle
Title: CFO
|
EXHIBIT
4.1
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”)
is
dated as of June 28, 2007, between Peregrine Pharmaceuticals, 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:
“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. With
respect to a Purchaser, any investment fund or managed account that is managed
on a discretionary basis by the same investment manager as such Purchaser will
be deemed to be an Affiliate of such Purchaser.
“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 Shares pursuant to Section
2.1.
“Closing
Date”
means
the Trading Day when 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 Shares have been satisfied or
waived.
1
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
the common stock of the Company, par value $0.001 per share, and any other
class
of securities into which such securities may hereafter be reclassified or
changed into.
“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, rights, options, warrants 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
Snell & Wilmer L.L.P., with offices located at 600 Anton Boulevard, Suite
1400, Costa Mesa, California 92626.
“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
or
directors 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, (b) shares of Common Stock upon exercise of common
stock purchase warrants outstanding as of the date hereof, (c) securities issued
pursuant to acquisitions or strategic transactions, such as joint ventures
and
research collaborations, approved by a majority of the disinterested directors
of the Company, provided that any such issuance shall only be to a Person which
is, itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
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) stock issued in exchange for bona fide research services
provided to the Company.
“FWS”
means
Feldman Weinstein & Smith LLP with offices located at 420 Lexington Avenue,
Suite 2620, New York, New York 10170-0002.
“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).
2
“Liens”
means
a
lien, charge, 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).
“Participation
Maximum”
shall
have the meaning ascribed to such term in Section 4.10.
“Per
Share Purchase Price”
equals
$0.75, 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.
“Pre-Notice”
shall
have the meaning ascribed to such term in Section 4.10.
“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. 333-139975 which
registers the sale of the 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 from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“SEC
Reports”
shall
have the meaning ascribed to such term in Section 3.1(h).
3
“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 and all types of direct and indirect stock pledges, forward sale contracts,
options, puts, calls, short sales, swaps and similar arrangements (including
on
a total return basis), and sales and other transactions through non-U.S.
broker-dealers or foreign regulated brokers.
“Subscription
Amount”
means,
as to each Purchaser, the aggregate amount to be paid for Shares 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.
“Subsequent
Financing”
shall
have the meaning ascribed to such term in Section 4.10.
“Subsequent
Financing Notice”
shall
have the meaning ascribed to such term in Section 4.10.
“Subsidiary”
means
any "significant subsidiary" as defined in Rule 1-02(w) of the Regulation S-X
promulgated by the Commission under the Exchange Act and as set forth on
Schedule
3.1(a),
which
shall, where applicable, include any subsidiary of the Company formed or
acquired after the date hereof.
“Trading
Day”
means
a
day on which the New York Stock Exchange is open for trading.
“Trading
Market”
means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the
New York Stock Exchange or the OTC Bulletin Board.
“Transaction
Documents”
means
this Agreement and any other documents or agreements executed in connection
with
the transactions contemplated hereunder.
“Transfer
Agent”
means
Integrity Stock Transfer, the current transfer agent of the Company, with a
mailing address of 2920 N. Green Valley Parkway, Building 5 - Suite 527 and
a
facsimile number of (702) 796-5650 and any successor transfer agent of the
Company.
4
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 $22,500,000 of Shares.
Each Purchaser shall deliver to the Company, via wire transfer or a certified
check, immediately available funds equal to its Subscription Amount and the
Company shall deliver to each Purchaser its respective Shares, 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
FWS
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 Withdrawal
Agent Commission System (“DWAC”)
Shares
equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase
Price, registered in the name of such Purchaser; and
(iv)
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;
5
(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 on the Closing Date of the representations
and
warranties of the Company contained herein;
(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 (except
for any suspension of trading of limited duration agreed to by the Company,
which suspension shall be terminated prior to the Closing), 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 each Purchaser, makes it impracticable or inadvisable
to
purchase the Shares at the Closing.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company.
Except
as
set forth in the Disclosure Schedules, which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation or otherwise made
herein to the extent of the disclosure contained in the corresponding section
of
the Disclosure Schedules, 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 on
Schedule
3.1(a).
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, then
all other references to the Subsidiaries or any of them in the Transaction
Documents shall be disregarded.
6
(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 (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 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 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 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 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 therewith other than in connection with 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 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.
7
(d) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company,
the issuance and sale of the Shares 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.
(e) Filings,
Consents and Approvals.
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) 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 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 Shares; Registration.
The
Shares 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
Company has prepared and filed the Registration Statement in conformity with
the
requirements of the Securities Act, which became effective on January 23,
2007 (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 SEC
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
8
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 the
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 on Schedule
3.1(g).
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, and the award of shares
of common stock, under the Company’s stock incentive plans, the issuance of
shares of Common Stock to employees pursuant to the Company’s employee stock
purchase plans and pursuant to the conversion or exercise of Common Stock
Equivalents outstanding as of the date of the most recently filed periodic
report under the Exchange Act. 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 set forth
on Schedule
3.1(g)
or as a
result of the purchase and sale of the Shares, 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 Shares will not obligate the Company
to issue shares of Common Stock or other securities to any Person (other than
the Purchasers) 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 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. No further approval or
authorization of any stockholder, the Board of Directors or others is required
for the issuance and sale of the Shares. 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
9
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
incentive plans. The Company does not have pending before the Commission any
request for confidential treatment of information. Except for the issuance
of
the Shares contemplated by this Agreement or as set forth on Schedule
3.1(i),
no
event, liability or development has occurred or exists with respect to the
Company or its Subsidiaries or their respective business, properties, operations
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.
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
10
Documents
or the Shares 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 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
material 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. No executive officer, to the knowledge of the Company,
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 order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the environment, 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.
11
(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 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 Liens for the payment of federal, state or other taxes,
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) Patents
and Trademarks.
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 material 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”).
Neither the Company nor any Subsidiary has received a notice (written or
otherwise) that any of the Intellectual Property Rights used by the Company
or
any Subsidiary violates or infringes upon the rights of any Person. 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 and, to the knowledge of the Company, none of the employees of the
Company 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, 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 or partner, in each case in excess of $60,000
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.
12
(r) Sarbanes-Oxley;
Internal Accounting Controls.
The
Company is in material compliance with all provisions of the Sarbanes-Oxley
Act
of 2002 which are applicable to it 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 has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company 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 Company’s disclosure controls and procedures as of the end
of the period covered by the Company’s 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
Company’s internal control over financial reporting (as such term is defined in
the Exchange Act) that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
(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 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 Shares, 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
subject to the Investment Company Act of 1940, as amended.
13
(u) Registration
Rights.
No
Person has any right to cause the Company to effect the registration under
the
Securities Act of any securities of the Company.
(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 Shares and the Purchasers’ ownership of
the Shares.
(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, to the Company’s knowledge, 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
disclosure furnished by or on behalf of the Company to the Purchasers regarding
the Company, its business 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.
14
(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 Shares 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.
(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 Shares 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 existing debts and other liabilities (including known contingent
liabilities) as they mature, (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, 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 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. Schedule
3.1(z)
sets
forth as of the date thereof 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
(a) 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),
(b) 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 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 (c) 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 each
Subsidiary has filed all necessary federal, state and foreign income and
franchise tax returns and has paid or accrued all taxes shown as due thereon,
and the Company has no knowledge of a tax deficiency which has been asserted
or
threatened against the Company or any Subsidiary.
15
(bb) Foreign
Corrupt Practices.
Neither
the Company, nor to the knowledge of the Company, any agent or other person
acting on behalf of the Company, 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 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 set forth on Schedule
3.1(cc)
of the
Disclosure Schedule. 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 on Form 10-K for the year ending
April 30, 2007.
(dd) Acknowledgment
Regarding Purchasers’ Purchase of Shares.
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 Shares. 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 4.12 hereof), it is understood and acknowledged by
the
Company (i) that none of the Purchasers have 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 Shares for any specified term; (ii) that
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) that 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) that 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 (a) one or more Purchasers
may
engage in hedging activities at various times during the period that the Shares
are outstanding, and (b) 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.
16
(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 Shares, (ii) sold, bid for,
purchased, or, paid any compensation for soliciting purchases of, any of the
Shares, 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 Shares.
(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.
17
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:
(a) Organization;
Authority.
Such
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right,
corporate or partnership 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 or similar
action 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) Own
Account.
Such
Purchaser is acquiring the Shares as principal for its own account and not
with
a view to or for distributing or reselling such Shares or any part thereof
in
violation of the Securities Act or any applicable state securities law, has
no
present intention of distributing any of such Shares in violation of the
Securities Act or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other persons to distribute
or
regarding the distribution of such Shares (this representation and warranty
not
limiting such Purchaser’s right to sell the Shares immediately pursuant to the
Registration Statement or otherwise in compliance with applicable federal and
state securities laws) in violation of the Securities Act or any applicable
state securities law. Such Purchaser is acquiring the Shares hereunder in the
ordinary course of its business.
(c) Purchaser
Status.
At the
time such Purchaser was offered the Shares, it was, and at the date hereof
it is
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 Shares, 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 Shares
and, at the present time, is able to afford a complete loss of such
investment.
18
(e) Short
Sales and Confidentiality Prior To The Date Hereof.
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 from
the time
that such Purchaser was first contacted by the Company or any other Person
representing the Company inquiring whether such Purchaser had an interest in
participating in the transactions contemplated hereunder until the date hereof
(“Discussion
Time”).
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 Shares
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).
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Furnishing
of Information.
Until
one year from the Closing Date, 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. Until one year from the Closing Date, if
the
Company is not required to file reports pursuant to the Exchange Act, it will
prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchasers to sell
the
Shares under Rule 144. The Company further covenants that it will take such
further action as any holder of Shares may reasonably request, to the extent
required from time to time to enable such Person to sell such Shares without
registration under the Securities Act within the requirements of the exemption
provided by Rule 144.
4.2 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 Shares 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.
4.3 Securities
Laws Disclosure; Publicity.
The
Company shall, by 8:30 a.m. (New York City time) on the Trading Day immediately
following the date hereof, issue a Current Report on Form 8-K, disclosing the
material terms of the transactions contemplated hereby, and filing the
Transaction Documents as exhibits thereto. The Company and each
19
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 or 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 (i) as required by federal securities law in connection with
the filing of final Transaction Documents (including signature pages thereto)
with the Commission and (ii) 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
(ii).
4.4 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 Shares under the Transaction Documents
or
under any other agreement between the Company and the Purchasers.
4.5 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 executed a written agreement 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.
4.6 Use
of
Proceeds. Except as set forth in the Prospectus Supplement, the Company
shall use the net proceeds from the sale of the Shares hereunder for working
capital purposes and shall not use such proceeds for (a) the satisfaction of
any
portion of the Company’s debt (other than payment of trade payables in the
ordinary course of the Company’s business and prior practices), (b) the
redemption of any Common Stock or Common Stock Equivalents or (c) the settlement
of any outstanding litigation.
4.7 Indemnification
of Purchasers. Subject to the provisions of this Section 4.7, 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,
20
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 a Purchaser
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, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser’s representations,
warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser may have with any such stockholder or any
violations by the Purchaser of state or federal securities laws or any conduct
by such Purchaser 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
such separate 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 (i) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (ii) 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.
4.8 Listing
of
Common Stock. The
Company hereby agrees to use best efforts to maintain the listing of the Common
Stock on a Trading Market, and as soon as reasonably practicable following
the
Closing (but not later than the Closing Date) to list all of the 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 include in such
application all of the Shares, and will take such other action as is necessary
to cause all of the Shares to be listed on such other Trading Market as promptly
as possible. The Company will 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.
21
4.9 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 any of the Transaction Documents
unless the same consideration is also offered to all of the parties to the
Transaction Documents. 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 Shares or otherwise.
4.10
Participation
in Future Financing.
(a) From
the
date hereof until the date that is the 6 month anniversary of the Closing Date,
upon any issuance by the Company or any of its Subsidiaries of Common Stock
or
Common Stock Equivalents for cash consideration (a “Subsequent
Financing”),
each
Purchaser shall have the right to participate in the Subsequent Financing up
to
an amount equal to 100% of the Subsequent Financing (the “Participation
Maximum”)
on the
same terms, conditions and price provided for in the Subsequent Financing,
unless the Subsequent Financing is a registered public offering, in which case
the Company shall offer each Purchaser the right to participate in such public
offering when it is lawful for the Company to do so, but no Purchaser shall
be
entitled to purchase any particular amount of such public
offering.
(b) At
least
5 Trading Days prior to the closing of the Subsequent Financing, the Company
shall deliver to each Purchaser a written notice of its intention to effect
a
Subsequent Financing (“Pre-Notice”),
which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a “Subsequent
Financing Notice”).
Upon the request of a Purchaser, and only upon a request by such Purchaser,
for
a Subsequent Financing Notice, the Company shall promptly, but no later than
1
Trading Day after such request, deliver a Subsequent Financing Notice to such
Purchaser. The Subsequent Financing Notice shall describe in reasonable
detail the proposed terms of such Subsequent Financing, the amount of proceeds
intended to be raised thereunder and the Person or Persons through or with
whom
such Subsequent Financing is proposed to be effected and shall include a term
sheet or similar document relating thereto as an
attachment.
(c) Any
Purchaser desiring to participate in such Subsequent Financing must provide
written notice to the Company by not later than 5:30 p.m. (New York City time)
on the 5th
Trading
Day after all of the Purchasers have received the Pre-Notice that the Purchaser
is willing to participate in the Subsequent Financing, the amount of the
Purchaser’s participation, and that the Purchaser has such funds ready, willing,
and available for investment on the terms set forth in the Subsequent Financing
Notice. If the Company receives no notice from a Purchaser as of such
5th
Trading
Day, such Purchaser shall be deemed to have notified the Company that it does
not elect to participate.
(d) If
by
5:30 p.m. (New York City time) on the 5th
Trading
Day after all of the Purchasers have received the Pre-Notice, notifications
by
the Purchasers of their willingness to participate in the Subsequent Financing
(or to cause their designees to participate) is, in the aggregate, less than
the
total amount of the Subsequent Financing, then the Company may effect the
remaining portion of such Subsequent Financing on the terms and with the Persons
set forth in the Subsequent Financing Notice.
22
(e) If
by
5:30 p.m. (New York City time) on the 5th
Trading
Day after all of the Purchasers have received the Pre-Notice, the Company
receives responses to a Subsequent Financing Notice from Purchasers seeking
to
purchase more than the aggregate amount of the Participation Maximum, each
such
Purchaser shall have the right to purchase its Pro Rata Portion (as defined
below) of the Participation Maximum. “Pro
Rata Portion”
means
the ratio of (x) the Subscription Amount of Shares purchased on the Closing
Date
by a Purchaser participating under this Section 4.10 and (y) the sum of the
aggregate Subscription Amounts of Shares purchased on the Closing Date by all
Purchasers participating under this Section 4.10.
(f) The
Company must provide the Purchasers with a second Subsequent Financing Notice,
and the Purchasers will again have the right of participation set forth above
in
this Section 4.10, if the Subsequent Financing subject to the initial Subsequent
Financing Notice is not consummated for any reason on the terms set forth in
such Subsequent Financing Notice within 60 Trading Days after the date of the
initial Subsequent Financing Notice.
(g) Notwithstanding
the foregoing, this Section 4.10 shall not apply in respect of (i)
an
Exempt
Issuance or
(ii)
an underwritten public offering of Common Stock.
4.11
Subsequent
Equity Sales.
(a) From
the
date hereof until December 31, 2007, neither the Company nor any Subsidiary
shall issue shares of Common Stock or Common Stock Equivalents without the
prior
written consent of at least 51% in interest of the Purchasers, based upon the
Shares held by each such Purchaser at the time such consent is
required.
(b) Notwithstanding
the foregoing, this Section 4.11 shall not apply in respect of an Exempt
Issuance.
4.12
Short
Sales and Confidentiality After The Date Hereof.
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 Short Sales during the period commencing
at the Discussion Time and ending at the time that the transactions contemplated
by this Agreement are first publicly announced as described in Section
4.3.
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 as described in Section 4.3, 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, no Purchaser makes any representation, warranty or covenant
hereby that it will not engage in Short Sales in the securities of the Company
after the time that the transactions contemplated by this Agreement are first
publicly announced as described in Section 4.3. 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 Shares covered by this
Agreement.
23
4.13
Delivery
of Shares After Closing. The Company shall deliver, or cause to be
delivered, the respective Shares purchased by each Purchaser to such Purchaser
within 3 Trading Days of the Closing Date.
4.14 Capital
Changes. Until the one year anniversary of the Closing Date, the Company
shall not undertake a reverse stock split or reclassification 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 July 3, 2007;
provided, however, that no such termination will affect the right of any party
to sue for any breach by the 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 Shares 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 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 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
2nd
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.
24
5.5 Amendments;
Waivers. No provision of this Agreement may be waived or amended except in a
written instrument signed, in the case of an amendment, by the Company and
the
Purchasers of at least 85% of the Shares still held by the Purchasers 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 Shares, provided such transferee agrees
in
writing to be bound, with respect to the transferred Shares, 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, 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 or proceeding
to enforce any provisions of the Transaction Documents, then the prevailing
party in such action 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.
25
5.10 Survival.
The representations and warranties contained herein shall survive the Closing
and the delivery of the Shares.
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
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 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, the Purchaser shall be required
to
return any shares of Common Stock delivered in connection with any such
rescinded exercise notice.
5.14 Replacement
of Shares. If any certificate or instrument evidencing any Shares 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 Shares.
26
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 agrees 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
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 their review and negotiation of the Transaction
Documents. For reasons of administrative convenience only, Purchasers and their
respective counsel have chosen to communicate with the Company through FWS.
FWS
does not represent all of the Purchasers but only Rodman & Renshaw, LLC, the
placement agent for the transaction. 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 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.
27
5.19 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.
5.20 Construction.
The parties agree that each of them and/or their respective counsel has 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 hereto.
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)
28
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.
|
PEREGRINE
PHARMACEUTICALS, INC.
|
Address
for Notice:
|
|
By:__________________________________________
|
Fax:
|
|
Name:
Title:
|
|
|
With
a copy to (which shall not constitute notice):
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
29
[PURCHASER
SIGNATURE PAGES TO PPHM 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
Purchaser:_______________________________________________________________________________________________________________
Fax
Number of Purchaser:
_________________________________________________________________________________________________________________
Address
for Notice of Purchaser:
Address
for Delivery of Securities for Purchaser (if not same as address for
notice):
DTC#
Account#
Subscription
Amount: $_________________
Shares:
_________________
EIN
Number: [PROVIDE
THIS UNDER SEPARATE COVER]
[SIGNATURE
PAGES CONTINUE]
30
Schedule
3(a)
Listing
of Subsidiaries
During
January 2002, the Company announced the formation of Avid Bioservices, Inc.,
a
wholly owned subsidiary of Peregrine Pharmaceuticals, Inc.
On
April
24, 1997, the Company acquired its wholly owned subsidiary, Vascular Targeting
Technologies, Inc. (formerly known as Peregrine Pharmaceuticals,
Inc.).
31
Schedule
3.1(g)
Capitalization
Table
The
capitalization of the Company includes the following as of April 30,
2007:
|
Common
shares issued and outstanding
|
196,112,201
|
|||
|
Common
shares reserved for issuance under stock option plans
|
11,537,946
|
|||
|
Common
shares available for future grant under option plans
|
4,651,409
|
|||
|
Common
shares issuable upon exercise of outstanding warrants
|
422,865
|
|||
|
Total
|
212,724,421
|
|||
32
Schedule
3.1(z)
Indebtedness
The
Company has financed certain laboratory equipment under note payable agreements
with General Electric Capital Corporation. As of April 30, 2007, the aggregate
note payable balance due to General Electric Capital Corporation is $498,000.
33
Schedule
3.1(cc)
Accountants
The
Company’s appointed independent registered public accounting firm is Ernst &
Young LLP.
34
EXHIBIT
99.1
PRESS
RELEASE
|
Contacts:
GendeLLindheim
BioCom Partners
Investors
(800)
987-8256
|
Media
info@peregrineinc.com
Barbara
Lindheim
(212)
918-4650
|
Peregrine Pharmaceuticals Announces Registered Direct Offering of $22.5 Million in Common Stock
TUSTIN,
Calif., June 28, 2007—
Peregrine Pharmaceuticals, Inc. (Nasdaq: PPHM), a clinical stage
biopharmaceutical company developing monoclonal antibodies for the treatment
of
cancer and hepatitis C virus (HCV) infection, today announced that it has
obtained commitments from several institutional investors to purchase
approximately $22.5 million in shares of its common stock in a registered direct
offering.
Under
the
terms of the transaction, Peregrine will receive approximately $22.5 million
in
gross proceeds in exchange for up to 30,000,000 shares of its common stock.
Net
proceeds following the payment of sales commissions and other expenses of the
offering are expected to be approximately $20.9 million. Rodman & Renshaw,
LLC acted as the exclusive placement agent in connection with this transaction.
The offering is expected to close on or about July 3, 2007, subject to the
satisfaction of certain closing conditions.
Peregrine
intends to use the net proceeds to fund its research and development programs
and related costs, primarily for conducting clinical trials of bavituximab
for
the treatment of cancer and hepatitis C virus infection. The company plans
to
initiate several Phase II studies evaluating bavituximab in combination with
chemotherapy for the treatment of solid cancers, to conduct clinical studies
evaluating bavituximab for the treatment of chronic HCV infection, including
in
patients co-infected with HCV and HIV, and to complete an ongoing Phase II
study
of Cotara® for the treatment of glioblastoma multiforme. The company also
intends to use the proceeds to further strengthen its product and business
development infrastructure, and for other general corporate purposes.
A
shelf
registration statement relating to the common stock to be issued in the offering
has been filed with the Securities and Exchange Commission and became effective
as of January 23, 2007. A prospectus supplement related to the offering will
be
filed with the Securities and Exchange Commission. Copies of the prospectus
supplement and accompanying base prospectus may be obtained directly from Rodman
& Renshaw, LLC, 1270 Avenue of the Americas, 28th Floor, New York, NY 10020,
Fax: 212-430-1711. This announcement is neither an offer to sell nor a
solicitation of an offer to buy any of our common stock. No offer, solicitation
or sale will be made in any jurisdiction in which such offer, solicitation
or
sale is unlawful.
About
Peregrine Pharmaceuticals
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 programs in cancer and HCV infection in the U.S. and India with its
lead product candidates bavituximab and Cotara®. 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 Pharmaceuticals'
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 the Company will not use the proceeds from the offering for the
intended purpose and that the proceeds that the Company receives from the
offering will not be sufficient for the Company to accomplish its intended
goals. 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, 2006 and the quarterly report on Form
10-Q for the quarter ended January 31, 2007. 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