Exhibit 10.1
 
Execution Copy
 
SUBSCRIPTION AGREEMENT
 

 
AspenBio Pharma, Inc.
1585 South Perry Street
Castle Rock, CO 80104

Gentlemen:

The undersigned (the “Investor”) hereby confirms its agreement with AspenBio
Pharma, Inc., a Colorado corporation (the “Company”), as follows:
 
1.  This Subscription Agreement, including the Terms and Conditions for Purchase
of Units attached hereto as Annex I (collectively, this “Agreement”), is made as
of the date set forth below between the Company and the Investor.
 
2.  The Company has authorized the sale and issuance to certain investors of up
to an aggregate of 2,409,639 units (the “Units”), subject to adjustment by the
Company’s Board of Directors or a committee thereof, with each Unit consisting
of (i) one share (the “Share,” collectively, the “Shares”) of its common stock,
no par value per share (the “Common Stock”), and (ii) one warrant (the
“Warrant,” collectively, the “Warrants”) to purchase .285 shares of Common Stock
(and the fractional amount being the “Warrant Ratio”), in substantially the form
attached hereto as Exhibit B, for a purchase price of $4.15 per Unit (the
“Purchase Price”).  Units will not be issued or certificated.  The Shares and
Warrants are immediately separable and will be issued separately. The shares of
Common Stock issuable upon exercise of the Warrants are referred to herein as
the “Warrant Shares” and, together with the Units, the Shares and the Warrants,
are referred to herein as the “Securities”).
 
3.  The offering and sale of the Units (the “Offering”) are being made pursuant
to (a) an effective Registration Statement on Form S-3, No. 333-159249, as
amended (the “Registration Statement”) filed by the Company with the Securities
and Exchange Commission (the “Commission”), including the Prospectus contained
therein (the “Base Prospectus”), (b) if applicable, certain “free writing
prospectuses” (as that term is defined in Rule 405 under the Securities Act of
1933, as amended (the “Act”)), that have been or will be filed, if required,
with the Commission and delivered to the Investor on or prior to the date hereof
(the “Issuer Free Writing Prospectus”), containing certain supplemental
information regarding the Units, the terms of the Offering and the Company, (c)
a Preliminary Prospectus Supplement (the “Preliminary Prospectus Supplement”),
if any, containing certain supplemental information regarding the Securities,
the terms of the Offering and the Company and (d) a Prospectus Supplement (the
“Prospectus Supplement” and, together with the Base Prospectus, the
“Prospectus”) containing certain supplemental information regarding the Units
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).
 
4.  The Company and the Investor agree that the Investor will purchase from the
Company and the Company will issue and sell to the Investor the Units set forth
below for the aggregate purchase price set forth below.  The Units shall be
purchased pursuant to the Terms and Conditions for Purchase of Units attached
hereto as Annex I and incorporated herein by this reference as if fully set
forth herein.  The Investor acknowledges that the Offering is not being
underwritten by Lazard Capital Markets LLC (“LCM” or the “Placement Agent”) and
that there is no minimum offering amount.
 
 
 
 

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5.  The manner of settlement of the Shares included in the Units purchased by
the Investor shall be as follows
 
Delivery versus payment (“DVP”) through DTC (i.e., on the Closing Date, the
Company shall deliver Shares registered in the Investor’s name and address as
set forth below and released by Corporate Stock Transfer, Inc., the Company’s
“Transfer Agent”, to the Investor through DTC at the Closing directly to the
account(s) at LCM identified by the Investor; upon receipt of such Shares, LCM
shall promptly electronically deliver such Shares to the Investor, and
simultaneously therewith payment shall be made by LCM by wire transfer to the
Company).  NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS
AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:
 
 
(I)
NOTIFY LCM OF THE ACCOUNT OR ACCOUNTS AT LCM TO BE CREDITED WITH THE SHARES
BEING PURCHASED BY SUCH INVESTOR, AND

 
 
(II)
CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT LCM TO BE CREDITED WITH THE SHARES BEING
PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE EQUAL TO THE AGGREGATE PURCHASE
PRICE FOR THE UNITS BEING PURCHASED BY THE INVESTOR.

 
IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR
CONFIRM THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR
SETTLEMENT BY WAY OF DVP IN A TIMELY MANNER.  IF THE INVESTOR DOES NOT DELIVER
THE AGGREGATE PURCHASE PRICE FOR THE UNITS OR DOES NOT MAKE PROPER ARRANGEMENTS
FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES AND WARRANTS MAY NOT BE DELIVERED
AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER.
 
6.           The executed Warrant shall be delivered in accordance with the
terms thereof.
 
7.           The Investor represents that, except as set forth below, (a) it has
had no position, office or other material relationship within the past three
years with the Company or persons known to it to be affiliates of the Company,
(b) it is not a member of the Financial Industry Regulatory Authority, Inc. or
an Associated Person (as such term is defined under the NASD Membership and
Registration Rules Section 1011) as of the Closing, and (c) neither the Investor
nor any group of Investors (as identified in a public filing made with the
Commission) of which the Investor is a part in connection with the Offering of
the Units, acquired, or obtained the right to acquire, 20% or more of the Common
Stock (or securities convertible into or exercisable for Common Stock) or the
voting power of the Company on a post-transaction basis.  Exceptions:

 

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(If no exceptions, write “none.” If left blank, response will be deemed to be
“none.”)
 
 

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8.           The Investor represents that it has received (or otherwise had made
available to it by the filing by the Company of an electronic version thereof
with the Commission) the Base Prospectus, declared effective by the Commission
on June 4, 2009, which is a part of the Company’s Registration Statement and the
documents incorporated by reference therein and any free writing prospectus
(collectively, the “Disclosure Package”), prior to or in connection with the
receipt of this Agreement.  The Investor acknowledges that, prior to the
delivery of this Agreement to the Company, the Investor will receive certain
additional information regarding the Offering, including pricing information
(the “Offering Information”). Such information may be provided to the Investor
by any means permitted under the Act, including the Prospectus Supplement, a
free writing prospectus and oral communications.
 
9.           No offer by the Investor to buy Units will be accepted and no part
of the Purchase Price will be delivered to the Company until the Investor has
received the Offering Information and the Company has accepted such offer by
countersigning a copy of this Agreement, and any such offer may be withdrawn or
revoked, without obligation or commitment of any kind, at any time prior to the
Company (or the Placement Agent on behalf of the Company) sending (orally, in
writing or by electronic mail) notice of its acceptance of such offer.  An
indication of interest will involve no obligation or commitment of any kind
until the Investor has been delivered the Offering Information and this
Agreement is accepted and countersigned by or on behalf of the Company.
 
10.        The Company acknowledges that the only material, non-public
information relating to the Company it has provided to the Investor in
connection with the Offering prior to the date hereof is the existence of the
Offering.
 
 

 
[Signature Page Follows]
 
 

 

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Number of Units:  ___________________________
 
Purchase Price Per Unit:
$ _____________________                                                 
 
Aggregate Purchase Price:
$ ___________________                                     

 
Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.
 

 

  Dated as of:  April __, 2010    
 
 
  INVESTOR
 
 
  By:     Print Name:
 
  Title:
 
  Address:
 
   
 

 

 

Agreed and Accepted
this ___ day of April, 2010:

 
ASPENBIO PHARMA, INC.
 

By:  _______________________________                                                         
Title:
 
 
 

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ANNEX I
 
TERMS AND CONDITIONS FOR PURCHASE OF UNITS
 
1.           Authorization and Sale of the Units.  Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of the Units.
 
2.           Agreement to Sell and Purchase the Units; Placement Agent.
 
2.1           At the Closing (as defined in Section 3.1), the Company will sell
to the Investor, and the Investor will purchase from the Company, upon the terms
and conditions set forth herein, the number of Units set forth on the last page
of the Agreement to which these Terms and Conditions for Purchase of Units are
attached as Annex I (the “Signature Page”) for the aggregate purchase price
therefor set forth on the Signature Page.
 
2.2           The Company proposes to enter into substantially this same form of
Subscription Agreement with certain other investors (the “Other Investors”) and
expects to complete sales of Units to them.  The Investor and the Other
Investors are hereinafter sometimes collectively referred to as the “Investors,”
and this Agreement and the Subscription Agreements executed by the Other
Investors are hereinafter sometimes collectively referred to as the
“Agreements.”

2.3           Investor acknowledges that the Company has agreed to pay Lazard
Capital Markets LLC (“LCM” or the “Placement Agent”) a fee of six and one-half
percent (6.5%) (the “Placement Fee”) in respect of the sale of Units to the
Investor.

2.4           The Company has entered into a Placement Agent Agreement, dated
the date hereof (the “Placement Agreement”), with the Placement Agent that
contains certain representations, warranties, covenants and agreements of the
Company that may be relied upon by the Investor, which shall be a third party
beneficiary thereof.  The Company understands and confirms that the Investor
will rely on the such representations and warranties and covenants set forth in
the Placement Agent Agreement and herein in effecting transactions in securities
of the Company.  All of the disclosure furnished by or on behalf of the Company
to the Investor regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Package and the Offering
Information, is true and correct in all material respects 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.

2.5           The Company covenants and agrees to use its best efforts to keep
the Registration Statement effective until the earlier of (x) such time as all
of the Shares and Warrant Shares issued or issuable can be sold by the Investor
or its affiliates immediately without compliance with the registration
requirements of the Act pursuant to Rule 144 under the Act and (y) the date all
of the Shares and Warrant Shares issued or issuable shall have been sold by the
Investor and its affiliates.

3.           Closing and Delivery of the Shares, Warrants and Funds.
 
3.1           Closing.  The completion of the purchase and sale of the Units
(the “Closing”) shall occur at a place and time (the “Closing Date”) to be
specified by the Company and LCM, and of which the Investors will be notified in
advance by LCM, in accordance with Rule 15c6-1 promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).  At the Closing, (a) the
Company shall cause the Transfer Agent to deliver to the Investor the number of
Shares set forth on the Signature Page registered in the name of the Investor
or, if so indicated on the Investor Questionnaire attached hereto as Exhibit A,
in the name of a nominee designated by the Investor, (b) the Company shall cause
to be delivered to the Investor a Warrant to purchase a number of whole Warrant
Shares determined by multiplying the number of Shares set forth on the signature
page by the Warrant Ratio and rounding down to the nearest whole number and (c)
the aggregate purchase price for the Units being purchased by the Investor will
be delivered by or on behalf of the Investor to the Company.
 
 

 

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3.2           Conditions to the Obligations of the Parties.

(a)           Conditions to the Company’s Obligations.  The Company’s obligation
to issue and sell the Units to the Investor shall be subject to: (i) the receipt
by the Company of the purchase price for the Units being purchased hereunder as
set forth on the Signature Page and (ii) the accuracy of the representations and
warranties made by the Investor and the fulfillment of those undertakings of the
Investor to be fulfilled prior to the Closing Date.

(b)           Conditions to the Investor’s Obligations.  The Investor’s
obligation to purchase the Units will be subject to (x) the representations and
warranties made by the Company in the Agreements and the Placement Agreement
shall be true and correct in all material respects (other than such
representations and warranties qualified by materiality or material adverse
effect, which representations and warranties shall be true and correct in all
respects) as of the date hereof and as of the Closing Date and the Company shall
have fulfilled those undertakings of the Company required to be fulfilled prior
to the Closing Date, including without limitation, those contained in the
Placement Agreement, and (y) that the Placement Agent shall not have: (i)
terminated the Placement Agreement pursuant to the terms thereof or (ii)
determined that the conditions to the closing in the Placement Agreement have
not been satisfied.  The Investor’s obligations are expressly not conditioned on
the purchase by any or all of the Other Investors of the Units that they have
agreed to purchase from the Company.  The Investor understands and agrees that,
in the event that LCM in its sole discretion determines that the conditions to
closing in the Placement Agreement have not been satisfied or if the Placement
Agreement may be terminated for any other reason permitted by such Agreement,
then LCM may, but shall not be obligated to, terminate such Agreement, which
shall have the effect of terminating this Subscription Agreement pursuant to
Section 14 below.

3.3           Delivery of Funds.

Delivery Versus Payment through The Depository Trust Company.  If the Investor
elects to settle the Shares purchased by such Investor by delivery versus
payment through DTC, no later than one (1) business day after the execution of
this Agreement by the Investor and the Company, the Investor shall confirm that
the account or accounts at LCM to be credited with the Units being purchased by
the Investor have a minimum balance equal to the aggregate purchase price for
the Units being purchased by the Investor.
 
 
 
 

 

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3.4           Delivery of Shares.

Delivery Versus Payment through The Depository Trust Company.  If the Investor
elects to settle the Shares purchased by such Investor by delivery versus
payment through DTC, no later than one (1) business day after the execution of
this Agreement by the Investor and the Company, the Investor shall notify LCM of
the account or accounts at LCM to be credited with the Shares being purchased by
such Investor.  On the Closing Date, the Company shall deliver the Shares to the
Investor through DTC directly to the account(s) at LCM identified by Investor
and simultaneously therewith payment shall be made by LCM by wire transfer to
the Company.

4.           Representations, Warranties and Covenants of the Investor.
 
The Investor acknowledges, represents and warrants to, and agrees with, the
Company and the Placement Agent (as to itself), that:

4.1           The Investor (a) is knowledgeable, sophisticated and experienced
in making, and is qualified to make decisions with respect to, investments in
shares presenting an investment decision like that involved in the purchase of
the Units, including investments in securities issued by the Company and
investments in comparable companies, (b) has answered all questions on the
Signature Page and the Investor Questionnaire and the answers thereto are true
and correct as of the date hereof and will be true and correct as of the Closing
Date and (c) in connection with its decision to purchase the number of Units set
forth on the Signature Page, has received and is relying only upon the
Disclosure Package and the documents incorporated by reference therein and the
Offering Information.

4.2           The Investor acknowledges that (a) No action has been or will be
taken in any jurisdiction outside the United States by the Company or the
Placement Agent that would permit an offering of the Units, or possession or
distribution of offering materials in connection with the issue of the
Securities in any jurisdiction outside the United States where action for that
purpose is required, (b) if the Investor is outside the United States, it will
comply with all applicable laws and regulations in each foreign jurisdiction in
which it purchases, offers, sells or delivers Securities or has in its
possession or distributes any offering material, in all cases at its own expense
and (c) the Placement Agent is not authorized to make and have not made any
representation, disclosure or use of any information in connection with the
issue, placement, purchase and sale of the Units, except as set forth or
incorporated by reference in the Base Prospectus, the Prospectus Supplement or
any free writing prospectus.
 
4.3           (a) The Investor has full right, power, authority and capacity to
enter into this Agreement and to consummate the transactions contemplated hereby
and has taken all necessary action to authorize the execution, delivery and
performance of this Agreement, and (b) this Agreement constitutes a valid and
binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as to the enforceability of any rights to indemnification or
contribution that may be violative of the public policy underlying any law, rule
or regulation (including any federal or state securities law, rule or
regulation).
 
 
 
 
 

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4.4           The Investor understands that nothing in this Agreement, the
Prospectus, the Disclosure Package, the Offering Information or any other
materials presented to the Investor in connection with the purchase and sale of
the Units constitutes legal, tax or investment advice.  The Investor has
consulted such legal, tax and investment advisors and made such investigation as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Units.   The Investor also understands that there is no
established public trading market for the Warrants being offered in the
Offering, and that the Company does not expect such a market to develop.  In
addition, the Company does not intend to apply for listing the Warrants on any
securities exchange.  Without an active market, the liquidity of the Warrants
will be limited.
 
4.5           Since the date on which the Placement Agent first contacted the
Investor about the Offering, the Investor has not disclosed any information
regarding the Offering to any third parties (other than its legal, accounting
and other advisors) and has not engaged in any purchases or sales involving the
securities of the Company (including, without limitation, any Short Sales
involving the Company’s securities).  The Investor covenants that it will not
engage in any purchases or sales in the securities of the Company (including
Short Sales) prior to the time that the transactions contemplated by this
Agreement are publicly disclosed.  The Investor agrees that it will not use any
of the Securities acquired pursuant to this Agreement to cover any short
position in the Common Stock if doing so would be in violation of applicable
securities laws.  For purposes hereof, “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sales contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers (but shall not be deemed to include the location
and/or reservation of borrowable shares of Common Stock).
 
5.           Survival of Representations, Warranties and Agreements; Third Party
Beneficiary.  Notwithstanding any investigation made by any party to this
Agreement or by the Placement Agent, all covenants, agreements, representations
and warranties made by the Company and the Investor herein will survive the
execution of this Agreement, the delivery to the Investor of the Shares and
Warrants being purchased and the payment therefor.  The Placement Agent and
Lazard Fréres & Co. shall be third party beneficiaries with respect to the
representations, warranties and agreements of the Investor in Section 4 hereof.
 
6.           Notices.  All notices, requests, consents and other communications
hereunder will be in writing, will be mailed (a) if within the domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile or (b) if delivered
from outside the United States, by International Federal Express or facsimile,
and (c) will be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if delivered
by nationally recognized overnight carrier, one business day after so mailed,
(iii) if delivered by International Federal Express, two business days after so
mailed and (iv) if delivered by facsimile, upon electronic confirmation of
receipt and will be delivered and addressed as follows:
 
 
 
 
 

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(a)      
if to the Company, to:

 
AspenBio Pharma, Inc.
1585 South Perry Street
Castle Rock, CO 80104
Attention:  Jeff McGonegal, Chief Financial Officer
Facsimile:  303-798-8332

with copies to:
 
Ballard Spahr LLP
1735 Market street, 51st Floor
Philadelphia, PA 19103
Attention:  Mary J. Mullany, Esq.
Facsimile:  215-665-8500
 
(b)      
if to the Investor, at its address on the Signature Page hereto, or at such
other address or addresses as may have been furnished to the Company in writing.

 
7.           Changes.  This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor.
 
8.           Headings.  The headings of the various sections of this Agreement
have been inserted for convenience of reference only and will not be deemed to
be part of this Agreement.
 
9.           Severability.  In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein will
not in any way be affected or impaired thereby.
 
10.         Governing Law.  This Agreement will be governed by, and construed in
accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law that would require the application
of the laws of any other jurisdiction.
 
11.         Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which, when
taken together, will constitute but one instrument, and will become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.  The Company and the Investor acknowledge and
agree that the Company shall deliver its counterpart to the Investor along with
the Prospectus Supplement (or the filing by the Company of an electronic version
thereof with the Commission).
 
12.         Confirmation of Sale.  The Investor acknowledges and agrees that
such Investor’s receipt of the Company’s signed counterpart to this Agreement,
together with the Prospectus Supplement (or the filing by the Company of an
electronic version thereof with the Commission), shall constitute written
confirmation of the Company’s sale of Units to such Investor.
 
 
 
 

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13.           Press Release.  The Company and the Investor agree that the
Company shall, prior to the opening of the financial markets in New York City on
the business day immediately after the date hereof, (a) issue a press release
announcing the Offering and disclosing all material information regarding the
Offering and (b) file a Current Report on Form 8-K with the Securities and
Exchange Commission including a form of this Agreement and a form of Warrant as
exhibits thereto.  Notwithstanding the foregoing, the Company shall not publicly
disclose the name of the Investor or any affiliate or investment adviser of the
Investor, or include the name of the Investor or any affiliate or investment
adviser of any Investor in any press release or filing with the Securities and
Exchange Commission or any regulatory agency or trading market, without the
prior written consent of such Investor, except (i) as required by federal
securities law and (ii) to the extent such disclosure is required by law or
trading market regulations, in which case the Company shall provide the Investor
with prior written notice of such disclosure permitted under this sub-clause
(ii).  From and after the issuance of the press release described above, the
Investor shall not be in possession of any material, non-public information
received from the Company or any of its officers, directors or employees.
 
14.           Termination.  In the event that the Placement Agreement is
terminated by the Placement Agent pursuant to the terms thereof, this Agreement
shall terminate without any further action on the part of the parties hereto.
 
 
 
 
 
 
 
 
 

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Exhibit A
 
ASPENBIO PHARMA, INC.
 
INVESTOR QUESTIONNAIRE
 
Pursuant to Section 3 of Annex I to the Agreement, please provide us with the
following information:
 
 

1.
The exact name that your Shares and Warrants are to be registered in. You may
use a nominee name if appropriate:
            2.
The relationship between the Investor and the registered holder listed in
response to item 1 above:
            3. The mailing address of the registered holder listed in response
to item 1 above:             4. The Social Security Number or Tax Identification
Number of the registered holder listed in the response to item 1 above:        
    5. Name of DTC Participant (broker-dealer at which the account or accounts
to be credited with the Shares are maintained):             6. DTC Participant
Number:             7. Name of Account at DTC Participant being credited with
the Shares:             8. Account Number at DTC Participant being credited with
the Shares:            

 

 

 

 
 
 

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