EXHIBIT 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”) is dated as of the 21st day
of March 2017, by and between Imprimis Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and each individual or entity named on the Schedule
of Buyers attached hereto (each such individual or entity, individually, a
“Buyer” and all of such individuals or entities, collectively, the “Buyers”).

 

RECITALS

 

A. The Company has authorized the sale and issuance of up to an aggregate of
1,312,000 shares (the “Shares”) of its common stock, par value $0.001 per share
(the “Common Stock”), subject to adjustment by the Company’s Board of Directors,
or a committee thereof, for a purchase price of $2.40 per share.

 

B. The offering and sale of the Shares (the “Offering”) are being made pursuant
to (a) an effective Registration Statement on Form S-3 (including the Prospectus
contained therein (the “Base Prospectus”), File No. 333-198675, the
“Registration Statement”) filed by the Company with the Securities and Exchange
Commission (the “Commission”) and (b) a Prospectus Supplement (the “Prospectus
Supplement” and together with the Base Prospectus, the “Prospectus”) containing
certain supplemental information regarding the Shares and terms of the Offering
that will be filed with the Commission and delivered to the Investor (or made
available to the Investor by the filing by the Company of an electronic version
thereof with the Commission).

 

C. Each Buyer acknowledges that the Offering is not being underwritten by
National Securities Corporation, the placement agent named in the Prospectus
Supplement (the “Placement Agent”), and that there is no minimum offering
amount.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the
parties hereinafter expressed and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
each intending to be legally bound, agree as follows:

 

ARTICLE I

RECITALS, EXHIBITS, SCHEDULES

 

The foregoing recitals are true and correct and, together with the Schedules and
Exhibits referred to hereafter, are hereby incorporated into this Agreement by
this reference.

 

 

 

 

ARTICLE II

DEFINITIONS

 

For purposes of this Agreement, except as otherwise expressly provided or
otherwise defined elsewhere in this Agreement, or unless the context otherwise
requires, the capitalized terms in this Agreement shall have the meanings
assigned to them in this Article as follows:

 

2.1 “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.

 

2.2 “Assets” means all of the properties and assets of the Company and its
Operating Subs, whether real, personal or mixed, tangible or intangible,
wherever located, whether now owned or hereafter acquired.

 

2.3 “Claims” means any Proceedings, Judgments, Obligations, known threats,
losses, damages, deficiencies, settlements, assessments, charges, costs and
expenses of any nature or kind.

 

2.4 “Consent” means any consent, approval, order or authorization of, or any
declaration, filing or registration with, or any application or report to, or
any waiver by, or any other action (whether similar or dissimilar to any of the
foregoing) of, by or with, any Person, which is necessary in order to take a
specified action or actions, in a specified manner and/or to achieve a specific
result.

 

2.5 “Contract” means any written or oral contract, agreement, order or
commitment of any nature whatsoever, including, any sales order, purchase order,
lease, sublease, license agreement, services agreement, loan agreement,
mortgage, security agreement, guarantee, management contract, employment
agreement, consulting agreement, partnership agreement, shareholders agreement,
buy-sell agreement, option, warrant, debenture, subscription, call or put.

 

2.6 “Encumbrance” means any lien, security interest, pledge, mortgage, easement,
leasehold, assessment, tax, covenant, restriction, reservation, conditional
sale, prior assignment, or any other encumbrance, claim, burden or charge of any
nature whatsoever.

 

2.7 “Environmental Requirements” means all Laws and requirements relating to
human, health, safety or protection of the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants, or
Hazardous Materials in the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), or
otherwise relating to the treatment, storage, disposal, transport or handling of
any Hazardous Materials.

 

2.8 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

 

2.9 “GAAP” means generally accepted accounting principles, methods and practices
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants, and statements and
pronouncements of the Financial Accounting Standards Board, the SEC or of such
other Person as may be approved by a significant segment of the U.S. accounting
profession, in each case as of the date or period at issue, and as applied in
the U.S. to U.S. companies.

 

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2.10 “Governmental Authority” means any foreign, federal, state or local
government, or any political subdivision thereof, or any court, agency or other
body, organization, group, stock market or exchange exercising any executive,
legislative, judicial, quasi-judicial, regulatory or administrative function of
government.

 

2.11 “Hazardous Materials” means: (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls (PCB’s);
(ii) any chemicals, materials, substances or wastes which are now or hereafter
become defined as or included in the definition of “hazardous substances,”
“hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,”
“restricted hazardous wastes,” “toxic substances,” “toxic pollutants” or words
of similar import, under any Law; and (iii) any other chemical, material,
substance, or waste, exposure to which is now or hereafter prohibited, limited
or regulated by any Governmental Authority.

 

2.12 “Judgment” means any order, writ, injunction, fine, citation, award,
decree, or any other judgment of any nature whatsoever of any Governmental
Authority.

 

2.13 “Law” means any provision of any law, statute, ordinance, code,
constitution, charter, treaty, rule or regulation of any Governmental Authority
applicable to the Company.

 

2.14 “Leases” means all leases for real or personal property.

 

2.15 “Material Adverse Effect” means with respect to the event, item or question
at issue, that such event, item or question would not have or reasonably be
expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of this Agreement; (ii) a material adverse effect on the
results of operations, Assets, business or condition (financial or otherwise) of
the Company and its subsidiaries, taken as a whole; or (iii) a material adverse
effect on the Company’s or its subsidiaries’ ability to perform, on a timely
basis, its or their respective Obligations under this Agreement.

 

2.16 “Material Contract” means any Contract to which the Company is a party or
by which it is bound which has been filed or is required to have been filed as
an exhibit to the SEC Filings pursuant to Item 601(b)(4) or Item 601(b)(10) of
Regulation S-K promulgated by the SEC.

 

2.17 “Obligation” means any debt, liability or obligation of any nature
whatsoever, whether secured, unsecured, recourse, nonrecourse, liquidated,
unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained,
known, unknown or obligations under executory Contracts.

 

2.18 “Operating Sub” shall have the meaning given in Section 6.1.

 

2.19 “Ordinary Course of Business” means the ordinary course of business
consistent with past custom and practice (including with respect to quantity,
quality and frequency).

 

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2.20 “Permit” means any license, permit, approval, waiver, order, authorization,
right or privilege of any nature whatsoever, granted, issued, approved or
allowed by any Governmental Authority.

 

2.21 “Person” means any individual, sole proprietorship, joint venture,
partnership, company, corporation, association, cooperation, trust, estate,
Governmental Authority, or any other entity of any nature whatsoever.

 

2.22 “Principal Trading Market” shall mean the Nasdaq Global Select Market, the
Nasdaq Global Market, the Nasdaq Capital Market, the OTC Markets, including the
Bulletin Board and Pink Sheets, the NYSE Euronext or the New York Stock
Exchange, whichever is at the time the principal trading exchange or market for
the Common Stock.

 

2.23 “Proceeding” means any demand, claim, suit, action, litigation,
investigation, audit, study, arbitration, administrative hearing, or any other
proceeding of any nature whatsoever.

 

2.24 “Real Property” means any real estate, land, building, structure,
improvement, fixture or other real property of any nature whatsoever, including,
but not limited to, fee and leasehold interests.

 

2.25 “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

 

2.26 “Tax” means (i) any foreign, federal, state or local income, profits, gross
receipts, franchise, sales, use, occupancy, general property, real property,
personal property, intangible property, transfer, fuel, excise, accumulated
earnings, personal holding company, unemployment compensation, social security,
withholding taxes, payroll taxes, or any other tax of any nature whatsoever,
(ii) any foreign, federal, state or local organization fee, qualification fee,
annual report fee, filing fee, occupation fee, assessment, rent, or any other
fee or charge of any nature whatsoever, or (iii) any deficiency, interest or
penalty imposed with respect to any of the foregoing.

 

2.27 “Tax Return” means any tax return, filing, declaration, information
statement or other form or document required to be filed in connection with or
with respect to any Tax.

 

ARTICLE III

INTERPRETATION

 

In this Agreement, unless the express context otherwise requires: (i) the words
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement; (ii)
references to the words “Article” or “Section” refer to the respective Articles
and Sections of this Agreement, and references to “Exhibit” or “Schedule” refer
to the respective Exhibits and Schedules annexed hereto; (iii) references to a
“party” mean a party to this Agreement and include references to such party’s
permitted successors and permitted assigns; (iv) references to a “third party”
mean a Person not a party to this Agreement; (v) the terms “dollars” and “$”
means U.S. dollars; (vi) wherever the word “include,” “includes” or “including”
is used in this Agreement, it will be deemed to be followed by the words
“without limitation.”

 

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ARTICLE IV

PURCHASE AND SALE

 

4.1 Sale and Issuance of Shares. Subject to the terms and conditions of this
Agreement, each Buyer agrees, severally and not jointly, to purchase, and the
Company agrees to sell and issue to each Buyer, the number of Shares set forth
in the column designated “Number of Shares” opposite such Buyer’s name on the
Schedule of Buyers at a cash purchase price of $2.40 per Share (the “Purchase
Price”). The Company’s agreement with each Buyer is a separate agreement, and
the sale and issuance of the Shares to each Buyer is a separate sale and
issuance.

 

4.2 Closing. At 11:00 a.m., New York City time, on or before March 27, 2017, or
at such other time on such other date as may be agreed upon by the Company and
the Placement Agent (such date of delivery and payment is hereinafter referred
to as the “Closing Date”), at the office of Golenbock Eiseman Assor Bell &
Peskoe LLP, 711 Third Avenue, New York, New York 10017 (or at such other place
as agreed upon by the Placement Agent and the Company), each Buyer shall wire an
amount equal to the Purchase Price multiplied by the number of Shares being
purchased by such Buyer to an account designated by the Company and the Company
shall deliver the Shares to the Buyers, which delivery shall be made through the
facilities of The Depository Trust Company. The Shares shall be registered in
such name or names and shall be in such denominations in accordance with the
instructions delivered by each Buyer to the Company at least one business day
before the Closing Date.

 

ARTICLE V

BUYERS’ REPRESENTATIONS AND WARRANTIES

 

Each Buyer severally represents and warrants to the Company, that:

 

5.1 Investment Purpose. The Buyer is acquiring the Shares for its own account
for investment only and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales
registered or exempted under the Securities Act.

 

5.2 Accredited Investor/Institutional Account Status. The Buyer is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D, as
promulgated under the Securities Act. Furthermore, the Buyer is either (i) a
bank, savings and loan association, insurance company or registered investment
company; (ii) an investment adviser registered either with the Commission under
Section 203 of the Investment Advisers Act or with a state securities commission
(or any agency or office performing like functions); or (iii) any other person
(whether a natural person, corporation, partnership, trust or otherwise) with
total assets of at least $50 million.

 

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5.3 Information. The Buyer and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and other information the Buyer deemed material to making an informed investment
decision regarding its purchase of the Shares, which have been requested by such
Buyer. The Buyer acknowledges that it has received and reviewed a copy of the
Base Prospectus and the SEC Documents. The Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the Company and its
management. The Buyer understands that its investment in the Shares involves a
high degree of risk. Neither such inquiries, nor any other due diligence
investigations conducted by any Buyer or its advisors, if any, or its
representatives, shall modify, amend or affect each Buyer’s right to rely on the
Company’s and Operating Subs’ representations and warranties contained in
Article VI below. The Buyer is in a position regarding the Company, which, based
upon employment, family relationship or economic bargaining power, enabled and
enables such Buyer to obtain information from the Company in order to evaluate
the merits and risks of this investment. The Buyer has sought such accounting,
legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Shares. Without
limiting the foregoing, the Buyer has carefully considered the potential risks
relating to the Company and a purchase of the Shares, and fully understands that
the Shares are a speculative investment that involves a high degree of risk of
loss of the Buyer’s entire investment.

 

5.4 No Governmental Review. The Buyer understands that no United States Federal
or state Governmental Authority has passed on or made any recommendation or
endorsement of the Shares, or the fairness or suitability of the investment in
the Shares, nor have such Governmental Authorities passed upon or endorsed the
merits of the offering of the Shares.

 

5.5 Authorization, Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer, enforceable in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

 

5.6 General Solicitation. The Buyer is not purchasing the Shares as a result of
any advertisement, article, notice or other communication regarding the Shares
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
solicitation or general advertisement. The Buyer represents that it has a
relationship with the Placement Agent preceding its decision to purchase the
Shares from the Company.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth and disclosed in the Company’s disclosure schedules
(“Disclosure Schedules”) attached to this Agreement and made a part hereof, the
Company and Operating Sub each hereby makes the following representations and
warranties to the Buyers. The Disclosure Schedules shall be arranged in sections
corresponding to the numbered and lettered sections and subsections contained in
this Article VI and certain other sections of this Agreement, and the
disclosures in any section or subsection of the Disclosure Schedules shall
qualify other sections and subsections in this Article VI only to the extent it
is readily apparent from a reading of the disclosure that such disclosure is
applicable to such other sections and subsections.

 

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6.1 Subsidiaries. Except for those subsidiaries set forth in Schedule 6.1 (each
an “Operating Sub”), the Company has no subsidiaries and the Company does not
own, directly or indirectly, any outstanding voting securities of or other
interests in, or have any control over, any other Person. Except as set forth in
Schedule 6.1, the Company wholly-owns each Operating Sub. With respect to each
Operating Sub, all representations and warranties in this Article VI and
elsewhere in this Agreement shall be deemed repeated and re-made from and by
each Operating Sub, as if such representations and warranties were independently
made by each Operating Sub, in this Agreement (but modified as necessary in
order to give effect to the intent of the parties that such representation and
warranty is being made by the Operating Sub, rather than the Company, as
applicable). In addition, each representation and warranty contained in this
Article VI or otherwise set forth in this Agreement shall be deemed to mean and
be construed to include the Company and each of its subsidiaries, as applicable,
regardless of whether each of such representations and warranties in Article VI
specifically refers to the Company’s subsidiaries or not.

 

6.2 Organization. The Company and its subsidiaries are corporations, duly
organized, validly existing and in good standing under the Laws of the
jurisdiction in which they are incorporated. The Company has the full corporate
power and authority and all necessary certificates, licenses, approvals and
Permits to: (i) enter into and execute this Agreement and to perform all of its
obligations hereunder; and (ii) own and operate its Assets and properties and to
conduct and carry on its business as and to the extent now conducted. The
Company is duly qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction where the character of its business or
the ownership or use and operation of its Assets or properties requires such
qualification, except to the extent that failure to so qualify will not result
in a Material Adverse Effect.

 

6.3 Authority and Approval of Agreement; Binding Effect. The execution and
delivery by the Company of this Agreement, and the performance by the Company of
all of its obligations hereunder, including the issuance of the Shares, have
been duly and validly authorized and approved by the Company and its board of
directors pursuant to all applicable Laws and no other corporate action or
Consent on the part of the Company, its board of directors, stockholders or any
other Person is necessary or required by the Company to execute this Agreement,
consummate the transactions contemplated herein, perform all of Company’s
obligations hereunder, or to issue the Shares. This Agreement has been duly and
validly executed by the Company (and the officer executing this Agreement is
duly authorized to act and execute same on behalf of the Company) and constitute
the valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

6.4 Capitalization. Immediately prior to the Closing, the authorized capital
stock of the Company will consist of 90,000,000 shares of Common Stock, of which
18,627,915 shares of Common Stock are issued and outstanding. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable. The Common Stock is currently quoted on the Nasdaq Capital Market
under the trading symbol “IMMY.” The Company has received no notice, either oral
or written, with respect to the continued eligibility of the Common Stock for
quotation on the Principal Trading Market, and the Company has maintained all
requirements on its part for the continuation of such quotation. Except as set
forth on Schedule 6.4, no shares of Common Stock are subject to preemptive
rights or any other similar rights or any Encumbrances suffered or permitted by
the Company. Except as set forth on Schedule 6.4, as of the date hereof: (i)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or Contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries, or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries;
(collectively, “Derivative Securities”); (ii) there are no outstanding debt
securities, notes, credit agreements, credit facilities or other Contracts or
instruments evidencing indebtedness of the Company or any of its subsidiaries,
or by which the Company or any of its subsidiaries is or may become bound; (iii)
there are no outstanding registration statements with respect to the Company or
any of its securities (other than registration statements on Form S-8); (iv)
there are no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of their securities under
the Securities Act (except pursuant to this Agreement); (v) there are no
financing statements securing obligations filed in connection with the Company
or any of its Assets; (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by this Agreement or
any related agreement or the consummation of the transactions described herein
or therein; and (vii) there are no outstanding securities or instruments of the
Company which contain any redemption or similar provisions, and there are no
Contracts by which the Company is or may become bound to redeem a security of
the Company. Except as set forth on Schedule 6.4, 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.

 

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6.5 No Conflicts; Consents and Approvals. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not: (i) constitute a violation of or conflict with any
provision of the Company’s or any Operating Sub’s certificate or articles of
incorporation, bylaws or other organizational or charter documents; (ii)
constitute a violation of, or a default or breach under (either immediately,
upon notice, upon lapse of time, or both), or conflict with, or give to any
other Person any rights of termination, amendment, acceleration or cancellation
of, any provision of any Material Contract; (iii) constitute a violation of, or
a default or breach under (either immediately, upon notice, upon lapse of time,
or both), or conflict with, any Judgment; (iv) assuming the accuracy of the
representations and warranties of the Buyers set forth in Article V above,
constitute a violation of, or conflict with, any Law (including United States
federal and state securities Laws and the rules and regulations of any market or
exchange on which the Common Stock is quoted); or (v) result in the loss or
adverse modification of, or the imposition of any fine, penalty or other
Encumbrance with respect to, any Permit granted or issued to, or otherwise held
by or for the use of, Company or any of Company’s Assets. The Company is not in
violation of its articles of incorporation, bylaws or other organizational or
governing documents and the Company is not in default or breach (and no event
has occurred which with notice or lapse of time or both could put the Company in
default or breach) under, and the Company has not taken any action or failed to
take any action that would give to any other Person any rights of termination,
amendment, acceleration or cancellation of, any Material Contract. Except as
specifically contemplated by this Agreement, the Company is not required to
obtain any Consent of, from, or with any Governmental Authority, or any other
Person, in order for it to execute, deliver or perform any of its obligations
under this Agreement in accordance with the terms hereof, or to issue and sell
the Shares in accordance with the terms hereof. All Consents which the Company
is required to obtain pursuant to the immediately preceding sentence have been
obtained or effected on or prior to the date hereof.

 

6.6 Issuance of Shares. The Shares are duly authorized and, upon issuance in
accordance with the terms hereof, shall be duly issued, fully paid and
non-assessable, and free from all Encumbrances with respect to the issue
thereof, and, assuming the accuracy of the representations and warranties of the
Buyers set forth in Article V above, will be issued in compliance with all
applicable United States Federal and state securities Laws.

 

6.7 SEC Documents; Financial Statements. The Common Stock is registered pursuant
to Section 12 of the Exchange Act and the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Commission under the Exchange Act (all of the foregoing filed within the two
(2) years preceding the date hereof or amended after the date hereof and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred to as
the “SEC Documents”). The Company is current with its filing obligations under
the Exchange Act and all SEC Documents have been filed on a timely basis or the
Company has received a valid extension of such time of filing and has filed any
such SEC Document prior to the expiration of any such extension. The Company
represents and warrants that true and complete copies of the SEC Documents are
available on the SEC’s website (www.sec.gov) at no charge to Buyers, and Buyers
acknowledge that each of them may retrieve all SEC Documents from such website
and each Buyer’s access to such SEC Documents through such website shall
constitute delivery of the SEC Documents to Buyers. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Exchange Act, and none of the SEC Documents, at the time they were filed
with the SEC, 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 light of the circumstances under which they were
made, not misleading. None of the statements made in any such SEC Documents is,
or has been, required to be amended or updated under applicable Law (except as
such statements have been amended or updated in subsequent filings prior to the
date hereof, which amendments or updates are also part of the SEC Documents). As
of their respective dates, the financial statements of the Company included in
the SEC Documents (“Financial Statements”) complied in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto (except as such Financial Statements have been
amended or updated in subsequent filings prior to the date hereof, which
amendments or updates are also part of the SEC Documents). All of the Financial
Statements have been prepared in accordance with GAAP, consistently applied,
during the periods involved (except: (i) as may be otherwise indicated in such
Financial Statements or the notes thereto; or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements), and fairly present in all material respects the
consolidated financial position of the Company as of the dates thereof and the
consolidated results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). To the knowledge of the Company and its officers, no other
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC Documents contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstance under which they are or were made, not
misleading.

 

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6.8 Absence of Certain Changes. Since the date the last of the SEC Documents was
filed with the SEC, none of the following have occurred:

 

(a) There has been no event or circumstance of any nature whatsoever that has
resulted in, or could reasonably be expected to result in, a Material Adverse
Effect; or

 

(b) Except for this Agreement, there has been no transaction, event, action,
development, payment, or other matter of any nature whatsoever entered into by
the Company that requires disclosure in an SEC Document which has not been so
disclosed.

 

6.9 Absence of Litigation or Adverse Matters. Except as disclosed in the SEC
Documents: (i) there is no Proceeding before or by any Governmental Authority or
any other Person, pending, or the best of Company’s knowledge, threatened or
contemplated by, against or affecting the Company, its business or Assets; (ii)
there is no outstanding Judgments against or affecting the Company, its business
or Assets; and (iii) the Company is not in breach or violation of any Material
Contract.

 

6.10 Liabilities of the Company. The Company does not have any Obligations of a
nature required by GAAP to be disclosed on a consolidated balance sheet of the
Company, except: (i) as disclosed in the Financial Statements; or (ii) incurred
in the Ordinary Course of Business since the date of the last Financial
Statements filed by the Company with the SEC that have not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

6.11 Title to Assets. The Company has good and marketable title to, or a valid
license or leasehold interest in, all of its Assets which are material to the
business and operations of the Company as presently conducted, free and clear of
all Encumbrances or restrictions on the transfer or use of same, other than
restrictions on transfer or use arising under a license or Lease with respect to
such Assets that, individually or in the aggregate, would not have, or be
reasonably expected to, materially interfere with the purposes for which they
are currently used and for the purposes for which they are proposed to be used.
Except as would not have a Material Adverse Effect, the Company’s Assets are in
good operating condition and repair, ordinary wear and tear excepted, and are
free of any latent or patent defects which might impair their usefulness, and
are suitable for the purposes for which they are currently used and for the
purposes for which they are proposed to be used.

 

6.12 Real Estate.

 

(a) Real Property Ownership. The Company does not own any Real Property.

 

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(b) Real Property Leases. Except pursuant to the Leases described in the SEC
Documents (the “Company Leases”), the Company does not lease any Real Property.
With respect to each of the Company Leases, except as set forth on Schedule
6.12, (i) the Company has been in peaceful possession of the property leased
thereunder and neither the Company nor, to the Company’s knowledge, the landlord
is in default thereunder; (ii) no waiver, indulgence or postponement of any of
the Obligations thereunder has been granted by the Company or landlord
thereunder; and (iii) there exists no event, occurrence, condition or act known
to the Company which, upon notice or lapse of time or both, would be or could
become a default thereunder or which could result in the termination of the
Company Leases, or any of them, or have a Material Adverse Effect on the
business of the Company, its Assets or its operations or financial results. The
Company has not violated nor breached any provision of any such Company Leases,
and all Obligations required to be performed by the Company under any of such
Company Leases have been fully, timely and properly performed. If requested by
any of the Buyers, the Company has delivered to such Buyers true, correct and
complete copies of all Company Leases, including all modifications and
amendments thereto, whether in writing or otherwise. The Company has not
received any written or oral notice to the effect that any of the Company Leases
will not be renewed at the termination of the term of such Company Leases, or
that any of such Company Leases will be renewed only at higher rents.

 

6.13 Material Contracts. An accurate, current and complete copy of each of the
Material Contracts has been furnished to Buyers and/or is readily available as
part of the SEC Documents, and each of the Material Contracts constitutes the
entire agreement of the respective parties thereto relating to the subject
matter thereof. Each of the Material Contracts is in full force and effect and
is a valid and binding Obligation of the parties thereto in accordance with the
terms and conditions thereof. To the knowledge of the Company and its officers,
all Obligations required to be performed under the terms of each of the Material
Contracts by any party thereto have been fully performed by all parties thereto,
and no party to any Material Contracts is in default with respect to any term or
condition thereof, nor has any event occurred which, through the passage of time
or the giving of notice, or both, would constitute a default thereunder or would
cause the acceleration or modification of any Obligation of any party thereto or
the creation of any Encumbrance upon any of the Assets of the Company. Further,
the Company has received no notice, nor does the Company have any knowledge, of
any pending or contemplated termination of any of the Material Contracts and, no
such termination is proposed or has been threatened, whether in writing or
orally.

 

6.14 Compliance with Laws. Except as would not have a Material Adverse Effect,
the Company is and at all times has been in material compliance with all Laws.
The Company has not received any notice that it is in violation of, has
violated, or is under investigation with respect to, or has been threatened to
be charged with, any violation of any Law.

 

6.15 Intellectual Property. The Company owns or possesses adequate and legally
enforceable rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations, trade
secrets and all other intellectual property rights necessary to conduct its
business as now conducted. The Company does not have any knowledge of any
infringement by the Company of trademark, trade name rights, patents, patent
rights, copyrights, inventions, licenses, service names, service marks, service
mark registrations, trade secret or other intellectual property rights of
others, and, to the knowledge of the Company, there is no Claim being made or
brought against, or to the Company’s knowledge, being threatened against, the
Company regarding trademark, trade name, patents, patent rights, invention,
copyright, license, service names, service marks, service mark registrations,
trade secret or other intellectual property infringement; and the Company is
unaware of any facts or circumstances which might give rise to any of the
foregoing.

 

10 

 

 

6.16 Labor and Employment Matters. The Company is not involved in any labor
dispute or, to the knowledge of the Company, is any such dispute threatened. To
the knowledge of the Company and its officers, none of the Company’s employees
is a member of a union and the Company believes that its relations with its
employees are good. To the knowledge of the Company and its officers, the
Company has complied in all material respects with all Laws relating to
employment matters, civil rights and equal employment opportunities.

 

6.17 Employee Benefit Plans. The Company is in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”); no “reportable event” (as defined in
ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the “Code”); and each “pension plan”
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification. To the Company’s knowledge, the Company has
promptly paid and discharged all Obligations arising under ERISA of a character
which if unpaid or unperformed might result in the imposition of an Encumbrance
against any of its Assets or otherwise have a Material Adverse Effect.

 

6.18 Tax Matters. The Company has made and timely filed all Tax Returns required
by any jurisdiction to which it is subject, and each such Tax Return has been
prepared in compliance with all applicable Laws, and all such Tax Returns are
true and accurate in all respects. Except and only to the extent that the
Company has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported Taxes, the Company has timely paid all
Taxes shown or determined to be due on such Tax Returns, except those being
contested in good faith, and the Company has set aside on its books provision
reasonably adequate for the payment of all Taxes for periods subsequent to the
periods to which such Tax Returns apply. There are no unpaid Taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim. The Company
has withheld and paid all Taxes to the appropriate Governmental Authority
required to have been withheld and paid in connection with amounts paid or owing
to any Person. There is no Proceeding or Claim for refund now in progress,
pending or, to the Company’s knowledge, threatened against or with respect to
the Company regarding Taxes.

 

6.19 Insurance. The Company is covered by valid, outstanding and enforceable
policies of insurance which were issued to it by reputable insurers of
recognized financial responsibility, covering its properties, Assets and
businesses against losses and risks normally insured against by other
corporations or entities in the same or similar lines of businesses as the
Company is engaged and in coverage amounts which are prudent and typically and
reasonably carried by such other corporations or entities (the “Insurance
Policies”). Such Insurance Policies are in full force and effect, and all
premiums due thereon have been paid. None of the Insurance Policies will lapse
or terminate as a result of the transactions contemplated by this Agreement. The
Company has complied with the provisions of such Insurance Policies. The Company
has not been refused any insurance coverage sought or applied for and the
Company does not have any reason to believe that it will not be able to renew
its existing Insurance Policies as and when such Insurance Policies expire or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business or operations of
the Company.

 

11 

 

 

6.20 Permits. The Company possesses all Permits necessary to conduct its
business, and the Company has not received any notice of, or is otherwise
involved in any Proceedings relating to, the revocation or modification of any
such Permits. All such Permits are valid and in full force and effect and the
Company is in material compliance with the respective requirements of all such
Permits.

 

6.21 Business Location. The Company has no office or place of business other
than as identified in the SEC Documents and the Company’s principal executive
offices are located in San Diego, California. All books and records of the
Company and other material Assets of the Company are held or located at the
offices and places of business identified in the SEC Documents.

 

6.22 Environmental Laws. The Company is and has at all times been in compliance
in all material respects with any and all applicable Environmental Requirements,
and there are no pending Claims against the Company relating to any
Environmental Requirements, nor to the best knowledge of the Company, is there
any basis for any such Claims.

 

6.23 Illegal Payments. Neither the Company, nor any director, officer, agent,
employee or other Person acting on behalf of the Company has, in the course of
his actions for, or on behalf of, the Company: (i) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.

 

6.24 Related Party Transactions. Except as disclosed in the SEC Documents, and
except for arm’s length transactions pursuant to which the Company makes
payments in the Ordinary Course of Business upon terms no less favorable than
the Company could obtain from third parties, none of the officers, directors or
employees of the Company, nor any stockholders who own, legally or beneficially,
five percent (5%) or more of the issued and outstanding shares of any class of
the Company’s capital stock (each a “Material Shareholder”), is presently a
party to any transaction with the Company (other than for services as employees,
officers and directors), including any Contract 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 Material Shareholder or, to the best knowledge of the Company, any
other Person in which any officer, director, or any such employee or Material
Shareholder has a substantial or material interest in or of which any officer,
director or employee of the Company or Material Shareholder is an officer,
director, trustee or partner. There are no Claims or disputes of any nature or
kind between the Company and any officer, director or employee of the Company or
any Material Shareholder, or, to the Company’s knowledge, between any of them,
relating to the Company and its business.

 

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6.25 Internal Accounting Controls. Except as set forth in the SEC Documents, the
Company and each of its 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.

 

6.26 Acknowledgment Regarding Buyers’ Purchase of the Shares. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of an
arm’s length purchaser with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that no Buyer is acting as
a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any
advice given by any Buyer or any of its representatives or agents in connection
with this Agreement and the transactions contemplated hereby is merely
incidental to such Buyer’s purchase of the Shares. The Company further
represents to each Buyer that the Company’s decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and
its representatives.

 

6.27 Listing and Maintenance Requirements. The Company’s Common Stock is
registered pursuant to Section 12 of the Exchange Act, and the Company has taken
no action designed to, or which to the best of 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 SEC is
contemplating terminating such registration.

 

6.28 Brokerage Fees. Except for the Placement Agent, there is no Person acting
on behalf of the Company who is entitled to or has any claim for any financial
advisory, brokerage or finder’s fee or commission in connection with the
execution of this Agreement or the consummation of the transactions contemplated
hereby. The Company has agreed to pay the Placement Agent a cash amount equal to
6% of the gross proceeds from the sale of the Shares.

 

6.29 Filing and Effectiveness of Registration Statement. The Company meets the
requirements for the use of Form S-3 and the Registration Statement, including
the Base Prospectus, and such amendments thereto as may have been required to
the date of this Agreement, has been prepared by the Company under the
provisions of the Securities Act and the rules and regulations (collectively
referred to as the “Rules and Regulations”) of the Commission thereunder, has
been filed with the Commission, and has been declared effective by the
Commission, and the Offering of the Shares complies with Rule 415 under the
Securities Act. The Prospectus Supplement to the Base Prospectus relating to the
Shares and the Offering thereof will be filed promptly by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations.

 

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6.30 Compliance with Securities Act Requirements. (i) (A) At the time the
Registration Statement initially became effective (the “Effective Date”), (B) at
the time of each amendment thereto for the purposes of complying with Section
10(a)(3) of the Securities Act (whether by post-effective amendment,
incorporated report or form of prospectus) and (C) on the Closing Date, the
Registration Statement conformed and will conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations and did not
and will not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading; and (ii) (A) on the date hereof, (B) at the
time of filing the Base Prospectus and the Prospectus Supplement and (C) on the
Closing Date, the Prospectus will conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations, and will not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding sentence
does not apply to statements in or omissions from any such document based upon
written information furnished to the Company by the Placement Agent, if any,
specifically for use therein.

 

6.31 Documents Incorporated by Reference. The documents that are incorporated by
reference in the Base Prospectus and the Prospectus Supplement or from which
information is so incorporated by reference, when they became or become
effective or were or are filed with the Commission, as the case may be, complied
or will comply in all material respects with the requirements of the Securities
Act or the Exchange Act, as applicable, and the Rules and Regulations; and any
documents so filed and incorporated by reference subsequent to the Effective
Date shall, when they are filed with the Commission, comply in all material
respects with the requirements of the Securities Act or the Exchange Act, as
applicable, and the Rules and Regulations.

 

ARTICLE VII

COVENANTS

 

7.1 Filing of Prospectuses. The Company has filed or will file the Prospectus
pursuant to and in accordance with Rule 424(b) not later than the third business
day following the earlier of the date it is first used or the date of this
Agreement.

 

7.2 Continued Compliance with Securities Laws. If, at any time when a prospectus
relating to the Shares is (or but for the exemption in Rule 172 under the Act
would be) required to be delivered under the Securities Act in connection with
sales by the Company to any Buyers (the “Prospectus Delivery Period”), any event
occurs as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend the Registration Statement or supplement the Prospectus to comply with the
Securities Act, the Company will promptly notify the Placement Agent of such
event and will promptly prepare and file with the Commission and furnish, at its
own expense, to the Placement Agent an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. During the Prospectus Delivery Period, the Company will file all
documents required to be filed with the Commission pursuant to Sections 13, 14
or 15 of the Exchange Act in the manner and within the time periods required by
the Exchange Act.

 

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7.3 Furnishing of Prospectuses. The Company will furnish to the Placement Agent
copies of the Registration Statement, including all exhibits, the Base
Prospectus and Prospectus Supplement relating to the Shares, in each case as
soon as available and in such quantities as the Placement Agent reasonably
request.

 

7.4 Use of Proceeds. The Company will use the net proceeds received in
connection with the Offering of the Shares in the manner described in the “Use
of Proceeds” section of the Prospectus.

 

7.5 Absence of Manipulation. The Company will not take, directly or indirectly,
any action designed to or that would constitute or that might reasonably be
expected to cause or result in, stabilization or manipulation of the price of
any securities of the Company to facilitate the sale or resale of the Shares.

 

7.6 Compliance with Sarbanes-Oxley Act. The Company will comply in all material
respects with all applicable securities and other laws, rules and regulations,
including, without limitation, the Sarbanes-Oxley Act.

 

ARTICLE VIII

CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL

 

The obligation of the Company hereunder to issue and sell the Shares to a Buyer
at the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion:

 

8.1 The Buyer shall have executed and delivered this Agreement to the Company.

 

8.2 The Buyer shall have paid the Purchase Price to the Company.

 

8.3 The Buyer’s representations and warranties shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date), and the Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the Buyer at or
prior to the applicable Closing Date.

 

8.4 The Company shall have obtained all governmental, regulatory or third party
consents and approvals necessary for the sale of the Shares.

 

15 

 

 

8.5 No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction that prohibits the consummation
of any of the transactions contemplated by this Agreement.

 

8.6 Since the date of execution of this Agreement, no event or series of events
shall have occurred that resulted, or could reasonably be expected to result, in
a Material Adverse Effect.

 

8.7 Trading in the Common Stock shall not have been suspended by the SEC or any
Principal Trading Market (except for any suspensions of trading of not more than
one trading day solely to permit dissemination of material information regarding
the Company) at any time since the date of execution of this Agreement.

 

ARTICLE IX

CONDITIONS PRECEDENT TO A BUYER’S OBLIGATIONS TO PURCHASE

 

The obligation of a Buyer hereunder to purchase the Shares at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions (in addition to any other conditions precedent elsewhere in
this Agreement), provided that these conditions are for the Buyer’s sole benefit
and may be waived by the Buyer at any time in its sole discretion:

 

9.1 The Company shall have executed and delivered this Agreement to the
Placement Agent.

 

9.2 The Company shall have delivered to Buyer the number of Shares that such
Buyer is purchasing.

 

9.3 The representations and warranties of the Company and each of the Operating
Subs shall be true and correct in all material respects (except to the extent
that any of such representations and warranties are already qualified as to
materiality in Article VI above, in which case, such representations and
warranties shall be true and correct in all respects without further
qualification) as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date) and the Company and each of the Operating Subs shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company and the Operating Subs at or prior to the
Closing Date. The Placement Agent shall have received a certificate, executed by
the Chief Executive Officer or Chief Financial Officer of the Company, dated as
of the Closing Date, to the foregoing effect.

 

9.4 The Company shall have delivered to the Placement Agent a certificate
evidencing the formation and good standing of the Company and each Operating Sub
in its jurisdiction of formation issued by the Secretary of State (or comparable
office) of such jurisdiction of formation as of a date within ten (10) days of
the Closing Date.

 

9.5 The Company shall have delivered to the Placement Agent a certificate or
other reasonably acceptable evidence evidencing the Company’s qualification as a
foreign corporation and good standing issued by the Secretary of State (or
comparable office) of each jurisdiction in which the Company conducts business
and is required to so qualify, as of a date within twenty (20) days of the
Closing Date.

 

16 

 

 

9.6 The Company shall have delivered to the Placement Agent a certificate, in
the form acceptable to the Placement Agent, executed by the Secretary of the
Company dated as of the Closing Date, as to (i) the resolutions consistent with
Section 6.3 as adopted by the Company’s board of directors, and (ii) the
Certificate of Incorporation and the Bylaws of the Company, each in effect at
the Closing.

 

9.7 The Company shall have delivered to the Placement Agent an opinion of
counsel to the Company, as of the Closing Date, in a form satisfactory to the
Placement Agent and its counsel.

 

9.8 No event shall have occurred which could reasonably be expected to have a
Material Adverse Effect.

 

ARTICLE X

MATTERS RELATING TO THE BUYERS

 

10.1 Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under this Agreement are several and not joint with the obligations
of any other Buyer, and no Buyer shall be responsible in any way for the
performance of the obligations of any other Buyer under this Agreement. The
decision of each Buyer to purchase the Shares pursuant to this Agreement has
been made by each such Buyer independently of any other Buyer and independently
of any information, materials, statements or opinions as to the business,
affairs, operations, assets, properties, liabilities, results of operations,
condition (financial or otherwise) or prospects of the Company or of its
subsidiaries, if any, which may have been made or given by any other Buyer or
any of their respective officers, directors, principals, employees, agents,
counsel or representatives (collectively, including the Buyer in question, the
“Buyer Representatives”). No Buyer Representative shall have any liability to
any other Buyer or the Company relating to or arising from any such information,
materials, statements or opinions, if any. Each Buyer acknowledges that no other
Buyer has acted as agent for such Buyer in connection with making its investment
hereunder and that no Buyer will be acting as agent of such other Buyer in
connection with monitoring its investment in the Shares or enforcing its rights
under this Agreement. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement, and it shall not be necessary for any other Buyer to be joined
as an additional party in any Proceeding for such purpose. The Company and each
of the Buyers acknowledge that, for reasons of administrative convenience the
Company has elected to provide each of the Buyers with the same Agreement for
the purpose of closing a transaction with multiple Buyers and not because it was
required or requested to do so by any Buyer. In furtherance of the foregoing,
and not in limitation thereof, the Company and the Buyers acknowledge that
nothing contained in this Agreement, and no action taken by any Buyer pursuant
thereto, shall be deemed to constitute any two or more Buyers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Buyers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by this Agreement.

 

17 

 

 

10.2 Equal Treatment of Buyers. No consideration shall be offered or paid to any
Buyer to amend or consent to a waiver or modification of any provision of any of
this Agreement, unless the same consideration is also offered to all of the
other Buyers parties to this Agreement.

 

ARTICLE XI

TERMINATION

 

11.1 Termination. This Agreement may be terminated prior to Closing (i) by
written agreement of a Buyer (as to itself but no other Buyer) and the Company
or (ii) by either the Company or a Buyer (as to itself but no other Buyer) upon
written notice to the other, if the Closing shall not have taken place by March
31, 2017; provided, that the right to terminate this Agreement under this
Section 11.1 shall not be available to any party whose failure to comply with
its obligations under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such time.

 

11.2 Consequences of Termination. No termination of this Agreement shall release
any party from any liability for breach by such party of the terms and
provisions of this Agreement.

 

ARTICLE XII

MISCELLANEOUS

 

12.1 Notices. All notices of request, demand and other communications hereunder
shall be addressed to the parties as follows:

 

If to the Company: Imprimis Pharmaceuticals, Inc.   12264 El Camino Real, Suite
350   San Diego, California 92130   Attention: Mark L. Baum   Email:
mark@imprimispharma.com   Facsimile: (858) 345-1743     With a copy to:
Golenbock Eiseman Assor Bell & Peskoe LLP   711 Third Avenue   New York, New
York 10017   Attention: Andrew D. Hudders   Email: ahudders@golenbock.com  
Facsimile: (212) 818-8881     If to the Buyers: To each Buyer based on the
information set forth in the Schedule of Buyers attached hereto

 

unless the address is changed by the party by like notice given to the other
parties. Notice shall be in writing and shall be deemed delivered: (i) if mailed
by certified mail, return receipt requested, postage prepaid and properly
addressed to the address below, then three (3) business days after deposit of
same in a regularly maintained U.S. Mail receptacle; or (ii) if mailed by
Federal Express, UPS or other nationally recognized overnight courier service,
next business morning delivery, then one (1) business day after deposit of same
in a regularly maintained receptacle of such overnight courier; or (iii) if hand
delivered, then upon hand delivery thereof to the address indicated on or prior
to 5:00 p.m., New York time, on a business day. Any notice hand delivered after
5:00 p.m., New York time, shall be deemed delivered on the following business
day. Notwithstanding the foregoing, notice, consents, waivers or other
communications referred to in this Agreement may be sent by facsimile, e-mail,
or other method of delivery, but shall be deemed to have been delivered only
when the sending party has confirmed (by reply e-mail or some other form of
written confirmation from the receiving party) that the notice has been received
by the other party.

 

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12.2 Entire Agreement. This Agreement, including the Schedules attached hereto
and the documents delivered pursuant hereto set forth all the promises,
covenants, agreements, conditions and understandings between the parties hereto
with respect to the subject matter hereof and thereof, and supersede all prior
and contemporaneous agreements, understandings, inducements or conditions,
expressed or implied, oral or written, except as contained herein; provided,
however, except as explicitly stated herein, nothing contained in this Agreement
shall (or shall be deemed to) (i) have any effect on any agreements any Buyer
has entered into with, or any instruments any Buyer has received from, the
Company prior to the date hereof with respect to any prior investment made by
such Buyer in the Company or (ii) waive, alter, modify or amend in any respect
any obligations of the Company, or any rights of or benefits to any Buyer or any
other Person, in any agreement entered into prior to the date hereof between or
among the Company and any Buyer, or any instruments any Buyer received from the
Company prior to the date hereof, and all such agreements and instruments shall
continue in full force and effect..

 

12.3 Successors and Assigns. This Agreement, and any and all rights, duties and
obligations hereunder, shall not be assigned, transferred, delegated or
sublicensed by the Company without the prior written consent of each Buyer.
Subject to the foregoing and except as otherwise provided herein, the provisions
of this Agreement shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.

 

12.4 Binding Effect. This Agreement shall be binding upon the parties hereto,
their respective successors and permitted assigns.

 

12.5 Amendment. Except as specifically set forth herein, neither the Company nor
any Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. For clarification purposes, the Recitals are part of
this Agreement. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Required Buyers. Any
amendment to any provision of this Agreement made in conformity with the
provisions of this Section 12.5 shall be binding on all Buyers, provided that no
such amendment shall be effective to the extent that it imposes any obligation
or liability on any Buyer without such Buyer’s prior written consent (which may
be granted or withheld in such Buyer’s sole discretion). No waiver shall be
effective unless it is in writing and signed by an authorized representative of
the waiving party, provided that the Required Buyers may waive any provision of
this Agreement, and any waiver of any provision of this Agreement made in
conformity with the provisions of this Section 12.5 shall be binding on all
Buyers, provided that no such waiver shall be effective to the extent that it
imposes any obligation or liability on any Buyer without such Buyer’s prior
written consent (which may be granted or withheld in such Buyer’s sole
discretion). 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 this Agreement
unless the same consideration also is offered to all of the parties to this
Agreement. The Company has not, directly or indirectly, made any agreements with
any Buyers relating to the terms or conditions of the transactions contemplated
by this Agreement except as set forth in this Agreement. Without limiting the
foregoing, the Company confirms that, except as set forth in this Agreement, no
Buyer has made any commitment or promise or has any other obligation to provide
any financing to the Company or otherwise. As a material inducement for each
Buyer to enter into this Agreement, the Company expressly acknowledges and
agrees that no due diligence or other investigation or inquiry conducted by a
Buyer, any Buyer Representative shall affect such Buyer’s right to rely on, or
shall modify or qualify in any manner or be an exception to any of, the
Company’s representations and warranties contained in this Agreement. “Required
Buyers” means Buyers holding a majority of the Shares sold pursuant to this
Agreement.

 

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12.6 Gender and Use of Singular and Plural. All pronouns shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the party or parties or their personal representatives, successors and assigns
may require.

 

12.7 Execution. This Agreement may be executed in one or more counterparts, all
of which taken together shall be deemed and considered one and the same
Agreement, and same shall become effective when counterparts have been signed by
each party and each party has delivered its signed counterpart to the other
party. A digital reproduction, portable document format (“.pdf”) or other
reproduction of this Agreement may be executed by one or more parties hereto and
delivered by such party by electronic signature (including signature via
DocuSign or similar services), electronic mail or any similar electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen. Such execution and delivery shall be considered valid,
binding and effective for all purposes.

 

12.8 Headings. The article and section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of the Agreement.

 

12.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement 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 (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 State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and Federal
courts sitting in the State of New York, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, 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
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. Each party hereby
irrevocably waives any right it may have, and agrees not to request, a jury
trial for the adjudication of any dispute hereunder or in connection with or
arising out of this Agreement or any transaction contemplated hereby. If either
party shall commence an action or proceeding to enforce any provisions of this
Agreement, 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.

 

20 

 

 

12.10 Further Assurances. The parties hereto will execute and deliver such
further instruments and do such further acts and things as may be reasonably
required to carry out the intent and purposes of this Agreement.

 

12.11 Survival. The representations and warranties contained herein shall
survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties and covenants hereunder.

 

12.12 Joint Preparation. The preparation of this Agreement has been a joint
effort of the parties and the resulting documents shall not, solely as a matter
of judicial construction, be construed more severely against one of the parties
than the other.

 

12.13 Severability. If any one of the provisions contained in this Agreement,
for any reason, shall be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, and this Agreement shall remain in full force and
effect and be construed as if the invalid, illegal or unenforceable provision
had never been contained herein.

 

12.14 No Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other Person.

 

12.15 WAIVER OF JURY TRIAL. THE BUYERS AND THE COMPANY, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES, IRREVOCABLY, THE RIGHT TO TRIAL BY JURY WITH RESPECT
TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER AGREEMENT EXECUTED OR CONTEMPLATED TO BE
EXECUTED IN CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT OR COURSE
OF DEALING IN WHICH THE BUYERS AND THE COMPANY ARE ADVERSE PARTIES. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE BUYERS TO PURCHASE THE SHARES.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

21 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year set forth above.

 

  “COMPANY”   IMPRIMIS PHARMACEUTICALS, INC.,   a Delaware corporation        
By: /s/ Mark L. Baum     Mark L. Baum,     Chief Executive Officer        
BUYERS:   See Signature pages for each Buyer attached

 

 

Company Signature Page to Securities Purchase Agreement

 

 

 

SCHEDULE OF BUYERS

 

Buyer   Purchase Price ($)   Number of Shares                              
TOTAL