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4.10Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same or substantially similar consideration is also offered, mutatis mutandis, on a ratable basis to all of the parties to this Agreement. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise. |
4.11Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale or resale of the Securities. |
4.13Preservation of Corporate Existence. Until the End Date, the Company shall preserve and maintain its corporate existence, rights, privileges and franchises in the jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation in each jurisdiction in which such qualification is necessary in view of its business or operations and where the failure to qualify or remain qualified might reasonably have a Material Adverse Effect upon the financial condition, business or operations of the Company taken as a whole. |
4.14Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an Acquiring Person under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents. |
4.15Reimbursement. If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the Company (except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any current stockholder), solely as a result of such Purchasers acquisition of the Securities under this Agreement, the Company will reimburse such Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and conditions to any Affiliates of the Purchasers who are actually named in such action, proceeding or investigation, and partners, directors, agents, employees and controlling persons (if any), as the case may be, of the Purchasers and any such Affiliate, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, the Purchasers and any such Affiliate and any such Person. The Company also agrees that neither the Purchasers nor any such Affiliates, partners, directors, agents, employees or controlling persons shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company solely as a result of acquiring the Securities under this Agreement. |
4.16Registrations. If at any time until two years after the Closing Date there is not an effective registration statement covering all of the Conversion Shares, Warrant Shares and Incentive Shares and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities, but excluding Forms S-4 or S-8 and similar forms which do not permit such registration, then the Company shall send to each holder of any of the Securities written notice of such determination and, if within fifteen calendar days after receipt of such notice, any such holder shall so request in writing, the Company shall include in such registration statement all or any part of the Conversion Shares, Warrant Shares and Incentive Shares such holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration rights and any cutbacks in accordance with guidance provided by the Securities and Exchange Commission (including, but not limited to, Rule 415). The obligations of the Company under this Section may be waived by any holder of any of the Securities entitled to registration rights under this Section 11.1. The holders whose Conversion Shares, Warrant Shares and Incentive Shares are included or required to be included in such registration statement are granted the same rights, benefits, liquidated or other damages and indemnification granted to other holders of securities included in such registration statement. Notwithstanding anything to the contrary herein, the registration rights granted hereunder to the holders of Securities shall not be applicable for such times as such Conversion Shares, Warrant Shares and Incentive Shares may be sold by the holder thereof without restriction pursuant to Section 144(b)(1) of the 1933 Act. In no event shall the liability of any holder of Securities or permitted successor in connection with any Conversion Shares, Warrant Shares and Incentive Shares included in any such registration statement be greater in amount than the dollar amount of the net proceeds actually received by such Subscriber upon the sale of the Conversion Shares, Warrant Shares and Incentive Shares sold pursuant to such registration or such lesser amount in proportion to all other holders of Securities included in such registration statement. All expenses incurred by the Company in complying with Section 11, including, without limitation, all registration and filing fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or blue sky laws, fees of the NASD, transfer taxes, and fees of transfer agents and registrars, are called Registration Expenses. All underwriting discounts and selling commissions applicable to the sale of registrable securities are called Selling Expenses. The Company will pay all Registration Expenses in connection with the registration statement under Section 11. Selling Expenses in connection with each registration statement under Section 11 shall be borne by the holder and will be apportioned among such holders in proportion to the number of Shares included therein for a holder relative to all the Securities included therein for all selling holders, or as all holders may agree. |
4.17Capital Raise. Within one (1) business day after the closing of a transaction or series of transaction resulting in a capital raise of at least $200,000.00, the Company shall pay to the Purchasers, pro rata to the principal amount of their Notes outstanding at the time of such closing, 25% of the gross proceeds as a payment toward amount due on the Notes. |
4.18Subsequent Equity Sales. From the date hereof until the Notes are no longer outstanding, the Company will not, without the consent of the Purchasers, enter into any Equity Line of Credit or similar agreement nor issue nor agree to issue any common stock at a per share price less than the then in effect Conversion Price, floating or Variable Priced Equity Linked Instruments nor any of the foregoing or equity with price reset rights (subject to adjustment for stock splits, distributions, dividends, recapitalizations and the like) (collectively, the Variable Rate Transaction). For purposes hereof, Equity Line of Credit shall include any transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to put its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula, and Variable Priced Equity Linked Instruments shall include: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Companys Common Stock since date of initial issuance, and (B) any amortizing convertible security which amortizes prior to its maturity date, where the Company is required or has the option to (or any investor in such transaction has the option to require the Company to) make such amortization payments in shares of Common Stock which are valued at a price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security (whether or not such payments in stock are subject to certain equity conditions). For purposes of determining the total consideration for a convertible instrument (including a right to purchase equity of the Company) issued, subject to an original issue or similar discount or which principal amount is directly or indirectly increased after issuance, the consideration will be deemed to be the actual net cash amount received by the Company in consideration of the original issuance of such convertible instrument. Until thirty-six (36) months after the Closing Date, the Company will not issue any Common Stock or Common Stock Equivalents to officers, directors, employees, consultants and service providers of the Company except consistent with past practices. For so long as the Notes are outstanding, the Company will not amend the terms of any securities or Common Stock Equivalents or of any agreement outstanding or in effect as of the date of this Agreement or at any time thereafter, pursuant to which same were or may be acquired, if such issuance or the result of such amendment would be at an effective price per share of Common Stock less than the Conversion Price in effect at the time of such amendment. |
4.19Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. |
4.20Securities Laws Disclosure; Publicity. The Company shall, by 9:00 a.m. (New York City time) on the second (2nd) Trading Day immediately following the Closing Date, issue a press release disclosing the material terms of the transactions contemplated hereby, and shall file a Current Report on Form 8-K including the Transaction Documents as exhibits thereto (the Closing Form 8-K mutatis mutandem) within one Business Day of the date hereof. |
4.21Par Value. In the event the Conversion Price of the Notes is reduced below the par value of the common stock, the Company shall within 30 days thereafter, reduce the par value of its common stock so that the Conversion Price shall be greater than the par value of the Common Stock. |
5.1Termination. This Agreement may be terminated by any Purchaser, as to such Purchasers obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before September 31, 2017; provided, however, that such termination will not affect the right of any party to sue for any breach by any other party or parties. |
5.2Fees and Expenses. Except as expressly set forth on Schedule 3.1 (r), each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers. The Company agrees to pay pursuant to the Escrow Agreement legal fees and Escrow Agent fees of G&M, counsel to some of the Purchasers, in the amount of $2,000 (Legal Fees), incurred in connection with the preparation, execution and delivery of the Transaction Documents and Closing. |
5.3Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. |
5.4Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Company to: Greenwood Hall, Inc., 6230 Wilshire Blvd., #136, Los Angeles, California 90048-5126, Attn: William Bradfield, CEO, email: bbradfield@greenwoodhall.com, with a copy by fax only to (which shall not constitute notice): [RC] and (ii) if to the Purchasers, to: the addresses and fax numbers indicated on the signature pages hereto, with an additional copy by fax only to (which shall not constitute notice): Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, Attn: Eliezer Drew, Esq., facsimile: (212) 697-3575. |
5.9Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. |
5.12Severability. If any term, provision, covenant or restriction of any Transaction Document is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. |
5.14Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable costs (including customary indemnity) associated with the issuance of such replacement Securities. |
5.15Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. The Companys obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled. |
5.17Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the Maximum Rate), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchasers election. |
WHEREAS, on the terms and subject to the conditions set forth herein, Purchaser desires to subscribe for and purchase, and the Company desires to sell to Purchaser, (a)that number of shares of common stock, par value $0.0001 per share, of the Company (the Shares) set forth below Purchasers signature hereto and (b)that number of common stock purchase warrants set forth below Purchasers signature hereto, which warrants shall (i)be issued pursuant to a Warrant Agreement in substantially the form of Exhibit A hereto (the Warrant Agreement), (ii) have an exercise price equal to $5.00 per Share, and (iii)shall be first exercisable on the six month anniversary of the issuance date of such warrants (collectively, the Securities), for the purchase price set forth below Purchasers signature hereto (the purchase price to be paid by Purchaser herein referred to as the Purchase Price). |
(a) Purchaser has full right, capacity and power to execute and deliver this Agreement and any other agreements and instruments contemplated hereby to which Purchaser is a party, and to perform his obligations hereunder and thereunder. This Agreement and all other agreements and instruments contemplated hereby to which Purchaser is or will become a party have been (or, when executed, will be) duly executed and delivered by or on behalf of Purchaser and, assuming due execution by other parties, constitute legal, valid and binding agreements, enforceable against Purchaser in accordance with their terms, except as such enforceability may be limited by (i)general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors rights and remedies and (ii)public policy underlying any law, rule or regulation (including any federal or states securities law, rule or regulation) with regards to indemnification, contribution or exculpation. |
(d) Purchaser understands that the offer and sale of the Securities have not been registered under the Securities Act of 1933 as amended (the Securities Act) or any applicable U.S. state or foreign securities laws, and that the Securities are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Purchasers representations as expressed herein. |
(f) Purchaser has had, prior to Purchasers execution of this Agreement, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by this Agreement and Purchasers investment in the Securities and to obtain additional information necessary to verify the accuracy of any information furnished to Purchaser or to which Purchaser had access. Purchaser is satisfied with respect to any of the foregoing matters. |
(g) Purchaser acknowledges that Purchaser has had the opportunity to seek legal advice from, and has received legal advice from, legal counsel on this Agreement, the transactions contemplated hereby and all documents, materials and information that Purchaser has requested or read relating to an investment in the Securities and confirms that Purchaser is satisfied with respect to any of the foregoing matters. |
(i) Purchaser understands that: (i)the Securities have not been and are not being registered under the Securities Act or any applicable U.S. state or foreign securities laws, and may not be offered for sale, sold, assigned or transferred unless (A)subsequently registered thereunder or (B)an exemption exists permitting such Securities to be sold, assigned or transferred without such registration; (ii)any sale of the Securities made in reliance on Rule 144 promulgated by the Securities and Exchange Commission (Rule 144) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder; and (iii)neither the Company nor any other person is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. |
(k) Purchaser understands that this investment is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, Purchaser understands that Purchasers investment in the Securities involves a high degree of risk of loss of Purchasers investment therein, and that Purchaser may lose the entire amount of Purchasers investment. Purchaser acknowledges that: (i)Purchaser has adequate means of providing for Purchasers current needs and possible personal contingencies and has no need for liquidity in this investment; (ii)Purchasers commitment to investments which are not readily marketable is not disproportionate to Purchasers net worth; and (iii)Purchasers investment in the Securities will not cause Purchasers overall financial commitments to become excessive. |
(c) Upon issuance of the Shares by the Company at the Closing and payment in full by Purchaser as provided above, the Shares will be duly authorized and validly issued and will be fully paid and non-assessable, and upon issuance of any Shares upon exercise of the common stock purchase warrants issued hereunder and payment in full of the exercise price thereof, the Shares issued upon exercise of such warrant will be duly authorized and validly issued and will be fully paid and non-assessable. |
(c) Compliance with Securities Laws. The Company shall be satisfied that the offer and sale of the Securities shall be qualified or exempt from registration or qualification under all applicable federal and state securities laws (including receipt by the Company of all necessary blue sky law permits and qualifications required by any state, if any). |
(a) Representations and Warranties. The representations and warranties made by the Company in Section3 shall be true and correct in all material respects (except to the extent that any of such representations and warranties is already qualified as to materiality in Section3 above, in which case, such representations and warranties shall be true and correct without further qualification) as of the date of this Agreement and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct in all material respects as of such specific date). |
(d) Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state or of any other person that are required in connection with the issuance and sale of the Securities pursuant to this Agreement (and except for such as may be properly filed subsequent to the Closing) under applicable laws, regulations, rules or listing requirements shall be obtained and effective as of the Closing. |
(e) Authorizations. On or prior to the Closing Date, the Company shall take all necessary action, if any, and such actions as reasonably requested by Purchaser, in order to render inapplicable any control share acquisition, business combination, stockholder rights plan or poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation or the laws of the state of its incorporation, other than Section203 of the Delaware General Corporation Law, that is or could become applicable to P:urchaser as a result of the transactions contemplated by this Agreement, including, without limitation, the Companys issuance of the Securities and Purchasers ownership of the Securities. |
(a) Entire Agreement. This Agreement and the Warrant Agreement supersede all other prior oral or written agreements between Purchaser, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the Warrant Agreement contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters. |
(c) Notices. Any notice or other communication provided for herein or given hereunder to a party hereto must be in writing, and shall be deemed to have been given (i)when personally delivered or delivered by email with confirmation of delivery, (ii)one (1) business day after deposit with Federal Express or similar overnight courier service, or (iii)three (3) business days after being mailed by first class mail, return receipt requested. A notice shall be addressed, as follows: |
or to such other address or e-mail address as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed received on the next succeeding business day in the place of receipt. |
(d) Waiver; Amendment; Termination. No provision of this Agreement may be waived except by an instrument in writing executed by the party against whom the waiver is to be effective. No provision of this Agreement may be amended or otherwise modified except by an instrument in writing executed by the parties hereto. This Agreement may be terminated only by an instrument in writing executed by the parties hereto. |
(f) Jurisdiction. In addition, each of the parties hereto (i)consents to submit itself to the personal jurisdiction of the federal and state courts located in San Diego, California in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement; (ii)agrees that he, she or it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from such court; (iii)agrees that he, she or it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the federal or state courts located in San Diego, California; and (iv)to the fullest extent permitted by law, consents to service being made through the notice procedures set forth in Section6(c). Each of the parties hereto hereby agrees that, to the fullest extent permitted by law, service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section6(c) shall be effective service of process for any suit or proceeding in connection with this Agreement or the transactions contemplated hereby. Each of the parties hereto waives any right to a trial by jury in any such suit or proceeding. |
(j) Counterparts; Effectiveness. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Any facsimile or electronic copies hereof or signature hereon shall, for all purposes, be deemed originals. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by the other party hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). |
(k) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby. |
| | | | NumberofShares: | | 1,327,434 Name: | | Terry M. Rich | | | | Title: | | Chief Executive Officer | | | | PurchasePrice: | | $2.26 per share, for an aggregate | | | | | | | | Purchase Price of$3,000,000.84 | | | | | | | | | | NumberofWarrants: | | 1,327,434 | | | | | | | | ---|---|---|---|---|---|---|---|--- | | | | | | | | | | Address: | | |
THIS SECURITIES PURCHASE AGREEMENT (the Agreement) is deemed to be effective as of October17, 2017 (the Effective Date), by and among Neothetics, Inc., a Delaware corporation (the Company), Evofem Biosciences, Inc., a Delaware corporation (Evofem), and Invesco Asset Management Limited (Invesco), acting as agent for and on behalf of its discretionary managed clients indicated on the signature page hereto (the Funds). |
A. Reference is made to that certain Agreement and Plan of Merger and Reorganization (theMerger Agreement), dated as of October17, 2017, by and among the Company, Evofem and Nobelli Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (Merger Sub), pursuant to which, at the Effective Time, Merger Sub will be merged with and into Evofem with Evofem remaining as the surviving entity and as a wholly owned subsidiary of the Company (theMerger). Terms used herein but not otherwise defined will have the meanings set forth in the Merger Agreement. |
B. Invesco desires to cause the Funds to purchase from the Company, and the Company desires to sell to the Funds, 9,672,550 shares of the Companys Common Stock, par value $0.0001 per share (subject to adjustment as provided in Section1.12(b) of the Merger Agreement) (such shares of the Companys Common Stock, the Shares) in exchange for the payment of an aggregate purchase price of Twenty Million United States Dollars (US $20,000,000.00) and on the additional terms and conditions hereinafter set forth. |
C. As a condition of, material inducement to, and consideration for the willingness of Invesco to enter into this Agreement and for the Funds to purchase the Shares, Evofem desires to issue to the Funds immediately prior to the Effective Time, and Invesco desires to cause the Funds to accept from Evofem immediately prior to the Effective Time, a warrant to purchase up to 158,999,371 shares of Evofem Common Stock, par value $0.001 per share (subject to adjustment as provided in Section1.12(b) of the Merger Agreement), in substantially the form attached hereto as Exhibit A (such warrant, the Warrant; such shares of Evofem Common Stock issuable upon exercise of the Warrant in accordance with Section1(b) below, the Warrant Shares). |
b. Issuance and Exercise of the Warrant. Immediately prior to the Effective Time and subject to the terms and conditions of this Agreement, Evofem shall issue the Warrant to the Funds. Immediately following such issuance and immediately prior to the Effective Time, Invesco shall cause the Funds to exercise the Warrant by means of a cashless exercise as set forth therein. |
e. Termination. This Agreement shall automatically terminate upon the earliest of (i)termination of the Merger Agreement in accordance with its terms and (ii)at Invescos written election, the filing of any action, suit or other legal proceeding before a court, in each case, by Evofem, the Company or the other Company Support Agreement Signatories, and in each case, against Invesco, or any of its Affiliates, arising from the Merger Agreement or the transactions contemplated by the Merger Agreement. |
g. Delivery of Shares. At the Closing, the Company shall deliver to Invesco a copy of the irrevocable instructions to Philadelphia Stock Transfer, Inc., the current transfer agent of the Company, with a mailing address of 2320 Haverford Rd., Suite 230, Ardmore, PA 19003 (the Transfer Agent), instructing the Transfer Agent to deliver evidence of a book entry position evidencing the Shares purchased by the Funds hereunder and, pursuant to the Merger Agreement, the Merger Shares, in the names of the Funds or such nominee(s) as designated by Invesco. The Shares, the Warrant, the Warrant Shares and the Merger Shares are referred to herein collectively as the Securities. |
2\. Companys Representations and Warranties. The Company hereby represents and warrants to Invesco as of the Effective Date and as of the Closing as follows, subject to the exceptions as are disclosed prior to the Effective Date in the Companys reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act of 1933, as amended (the Securities Act) and the Exchange Act of 1934, as amended (theExchange Act), including pursuant to Section13(a) or 15(d) thereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the SEC Reports), which SEC Reports as filed prior to the Effective Date shall be deemed a part hereof and shall qualify any representation or warranty otherwise made herein to the extent of the disclosure contained in the SEC Reports as filed prior to the Effective Date: |
a. Organization, Good Standing and Qualification. The Company is a corporation duly organized and validly existing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to own and operate its properties and assets, to execute and deliver this Agreement and sell the Shares, and to carry out the provisions of this Agreement and to carry on its business as presently conducted. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business. |
b. Authorization; Binding Obligations. All corporate action on the part of the Company, its officers, directors and shareholders necessary for the authorization of this Agreement and the sale of the Shares, the performance of all obligations of the Company hereunder at the Closing, and the sale, issuance and delivery of the Shares pursuant hereto has been taken or will be taken prior to the Closing. |
c. No Conflict. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i)violate or result in a breach of or constitute a default under any contract or agreement to which the Company is a party or by which it is bound, (ii)conflict with or result in a breach of or constitute a default under any provision of the certificate of incorporation or bylaws (or other charter documents) of the Company, or (iii)violate or result in a breach of or constitute a default under any judgment, order, decree, rule or regulation of any court or governmental agency to which the Company is subject. |
d. SEC Reports; Financial Statements. The Company has filed all SEC Reports required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material). The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the U.S. Securities and Exchange Commission (the Commission) with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (GAAP), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. |
e. Capitalization. As of the Effective Date, the authorized capital stock of the Company and the issued and outstanding securities of the Company are set forth in Section3.2 of the Merger Agreement. Immediately following the Merger and the consummation of the transactions contemplated herein, (i)the pro forma capitalization of the Company (assuming the Effective Time occurs in December31, 2017 and after giving effect to the issuance of the Shares hereunder, but excluding the effect of the Post-Closing Series D Warrant) shall be as set forth in Exhibit C hereto, and (ii)the pro forma capitalization of the Company (assuming the Effective Time occurs on December31, 2017 and after giving effect to the issuance of the Shares hereunder and the Post-Closing Series D Warrant) shall be as set forth on Exhibit D hereto. |
not the subject of any investigation, inquiry or enforcement proceedings by any governmental, administrative or regulatory body. As of the Effective Date, no such proceedings, investigation or inquiry are pending or, to the Companys knowledge, threatened against the Company, and, to the Companys knowledge, there are no circumstances likely to give rise to any such proceedings. |
g. Intellectual Property. The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with its business and which the failure to so have could have a material adverse effect (collectively, the Intellectual Property Rights). The Company has not received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2)years from the date of this Agreement. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. |
a. Requisite Power and Authority. Invesco has all necessary power and authority under all applicable provisions of law to execute and deliver this Agreement and to carry out its provisions. All action on Invescos part required for the lawful execution and delivery of this Agreement has been or will be taken prior to the Closing. |
b. Account of Funds. The Securities are being acquired for investment for the Funds accounts, and not with a view to, or for resale in connection with, any distribution thereof in the United States, and Invesco has no present intention of selling or distributing any Securities in the United States. Invesco understands that the Securities have not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment as expressed herein. For the avoidance of doubt, this Section3(b) is not intended to restrict the Funds ability to transfer the Securities outside the United States pursuant to Regulation S promulgated under the Securities Act. It is the parties understanding that the provisions of the Securities Act will not ordinarily restrict Invescos ability to transfer the Securities outside the United States pursuant to Regulation S promulgated under the Securities Act. |
c. Access to Data. Invesco has had an opportunity to discuss the Companys and Evofems business, management and financial affairs with the their respective management teams and to obtain any additional information which Invesco has deemed necessary or appropriate for deciding whether or not to purchase the Securities. Invesco acknowledges that no representations or warranties, oral or written, have been made by the Company, Evofem or any agent thereof with respect to the matters set forth herein except as set forth in this Agreement, the Merger Agreement and the Warrant. |
e. Knowledge And Experience. Invesco has such knowledge and experience in financial and business matters, including investments in other start-up companies, that such entity or individual is capable of evaluating the merits and risks of the investment in the Securities and it is able to bear the economic risk of such investment. Invesco is an accredited investor as that term is defined under Regulation D promulgated under the Securities Act, and as set forth on Schedule I attached hereto. Further, Invesco has such knowledge and experience in financial and business matters such that it is capable of utilizing the information made available in connection with the offering of the Securities, of evaluating the merits and risks of an investment in the Securities and of making an informed investment decision with respect to the Securities. Neither Invesco, nor any person or entity with whom Invesco will share beneficial ownership of the Securities, is subject to any of the Bad Actor disqualifications described in Rule 506(d)(1)(i) to (viii)under the Securities Act. |
a. Organization, Good Standing and Qualification. Evofem is a corporation duly organized and validly existing under the laws of the State of Delaware. Evofem has all requisite corporate power and authority to own and operate its properties and assets, to execute and deliver this Agreement, to carry on its business as presently conducted and, upon the requisite approval of Evofems stockholders of the Merger and the transactions contemplated herein, to carry out the provisions of this Agreement. Evofem is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on Evofem or its business. |
b. Authorization; Binding Obligations. All corporate action on the part of Evofem, its officers, directors and stockholders necessary for the authorization of this Agreement, the performance of all obligations of Evofem hereunder, and the sale, issuance and delivery of the Warrant and Warrant Shares pursuant hereto has been taken or will be taken as of immediately prior to the Effective Time. |
c. No Conflict. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i)violate or result in a breach of or constitute a default under any contract or agreement to which Evofem is a party or by which it is bound, (ii)conflict with or result in a breach of or constitute a default under any provision of the certificate of incorporation or bylaws (or other charter documents) of Evofem, or (iii)violate or result in a breach of or constitute a default under any judgment, order, decree, rule or regulation of any court or governmental agency to which Evofem is subject. |
e. Absence of Litigation. As of the Effective Date, neither Evofem nor any of its directors is engaged in any litigation, administrative, mediation or arbitration proceedings or other proceedings or hearings before any statutory or governmental body, department, board or agency and is not the subject of any investigation, inquiry or enforcement proceedings by any governmental, administrative or regulatory body. As of the Effective Date, no such proceedings, investigation or inquiry are pending or, to Evofems knowledge, threatened against Evofem, and, to Evofems knowledge, there are no circumstances likely to give rise to any such proceedings. |
f. Intellectual Property. Evofem has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary or required for use in connection with its business and which the failure to so have could have a material adverse effect (collectively, the Evofem Intellectual Property Rights). Evofem has not received a notice (written or otherwise) that any of, the Evofem Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2)years from the date of this Agreement. To Evofems knowledge, all such Evofem Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. |
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A |
b. Any book-entry evidence of the Shares or Merger Shares shall not contain any legend (including the legend set forth in Section5(a) above), (i)while a registration statement covering the resale of such Securities is effective under the Securities Act, (ii)following any sale of such Securities pursuant to Rule 144, (iii)if such Securities are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Securities and without volume or manner-of-sale restrictions, or (iv)if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the effective date of any registration statement if required by the Transfer Agent to effect the removal of the legend hereunder. |
ii. Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby to be consummated at or prior to the Closing and all instruments and documents incidental thereto or required to be delivered prior to or at the Closing will be reasonably satisfactory in form and substance to Invesco. |
iii. Authorization of Issuance. The Companys board of directors shall have authorized the issuance and sale by it to Invesco pursuant to this Agreement of the Shares and Evofems board of directors shall have authorized the issuance of the Warrant and Warrant Shares by it to Invesco pursuant to this Agreement. |
iv. Consents and Approvals. The Company and Evofem shall have obtained any and all consents (including (A)all governmental or regulatory consents, approvals or authorizations and (B)all shareholder approvals, in each case as required in connection with the valid execution and delivery of this Agreement, including under NASDAQ rules and regulations), permits and waivers necessary or appropriate for consummation of the transactions contemplated by this Agreement. |
(A) decreases the amount or changes the form of the Merger Consideration or any other consideration otherwise payable with respect to the Company Options and/or Company Warrants beneficially owned by Invesco, (B)imposes any material restrictions on or additional conditions on the payment of the Merger Consideration or any other consideration otherwise payable with respect to the Company Options and/or Company Warrants beneficially owned by Invesco, (C)imposes any material restrictions or obligations on Invesco, or (D)otherwise amends the Merger Agreement in any material respect (in the case of this clause (D), with Invescos consent not to be unreasonably withheld). |
vii. Representations and Warranties. The representations and warranties of the Company and Evofem contained in this Agreement that are not qualified by materiality or similar qualification shall be true and correct in all material respects on and as of the Closing, except to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, and the representations and warranties of the Company and Evofem contained in this Agreement that are qualified by materiality or similar qualification shall be true and correct in all respects on and as of the Closing, except to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct in all respects as of such earlier date. |
b. The obligations of the Company and Evofem to consummate the transactions contemplated herein at the Closing are subject to the satisfaction on or before the date of the Closing of the following conditions, all or any of which may be waived in writing by the Company and Evofem as to their respective obligations to consummate the transaction so contemplated: |
iii. Representations and Warranties. The representations and warranties of Invesco contained in this Agreement that are not qualified by materiality or similar qualification shall be true and correct in all material respects on and as of the Closing, except to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, and the representations and warranties of Invesco contained in this Agreement that are qualified by materiality or similar qualification shall be true and correct in all respects on and as of the Closing, except to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct in all respects as of such earlier date. |
iv. Merger. With respect to Evofems obligations to issue the Warrant and the Warrant Shares, each of the conditions to the consummation of the Merger set forth in Sections 6.1 and 6.3 of the Merger Agreement, other than those conditions that by their nature or the terms of the Merger Agreement are to be satisfied at the consummation thereof, shall have been satisfied and the Merger to be consummated immediately after the issuance and exercise of the Warrant. With respect to the Companys obligations to issue the Shares, the Merger shall have been consummated such that the Effective Time will have occurred. |
7\. Reliance. Invesco is aware that the Company and Evofem are relying on the accuracy of the representations and warranties set forth in Section3 hereof to establish compliance with Federal and State securities laws. If any such warranties or representations are not true and accurate in any respect as of the Closing, Invesco shall so notify the Company and Evofem in writing immediately and such inaccuracy shall be cause for rescission by the Company at its sole election or by Evofem at its sole election. |
8\. Acknowledgement. Notwithstanding anything that may be expressed or implied in this Agreement or any document or instrument delivered in connection herewith, with respect to Invescos obligations hereunder, each of Evofem and the Company, by its acceptance of the benefits hereof, covenants, agrees and acknowledges that no person other than Invesco has any liability, obligation or commitment of any nature, known or unknown, whether due or to become due, absolute, contingent or otherwise, hereunder, whether based on contract, tort, strict liability or otherwise, and whether by or through attempted piercing of the corporate, limited liability or partnership veil or similar action, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, by or through a claim by or on behalf of Invesco or Evofem against Invesco or any Invesco Affiliate, or otherwise. For purposes of this Agreement, the term Invesco Affiliate means any former, current or future general or limited partner, investment manager or investment advisor, stockholder, holder of any equity, partnership or limited liability company interest, officer, member, manager, director, employee, agent, controlling person, assignee or Affiliate of Invesco of any of the foregoing (it being understood that the term Invesco Affiliate shall not include Invesco or Evofem). For the avoidance of doubt, neither Invesco nor any Invesco Affiliate is a party to, or has any obligations under, the Merger Agreement. |
against any person other than the undersigned under or by reason of this Agreement. The exercise of any right to enforce this Agreement does not in itself give rise to any other rights or remedies, monetary or otherwise. Neither the rights nor the obligations of Invesco, the Company or Evofem under this Agreement may be assigned or delegated, in whole or in part, directly or indirectly, by operation of law or otherwise, without the prior written consent of the Invesco, the Company and Evofem; provided, however, that the obligations of Invesco under this Agreement may be assigned by Invesco to one or more of its Affiliates (including to one or more investment funds that are Affiliates of Invesco or managed by Invesco) that agree to assume Invescos obligations hereunder, provided that Invesco shall remain obligated to perform its obligations hereunder to the extent not performed by such Affiliate(s). |
c. Entire Agreement. This Agreement and the Exhibits and Schedules attached hereto (and, as between the Company and Evofem, the Merger Agreement) constitute the entire agreement and understanding between the parties with respect to the subject matters herein, and supersede and replace any prior agreements and understandings, whether oral or written between and among them with respect to such matters. The provisions of this Agreement may be waived, altered, amended or repealed, in whole or in part, only upon the written consent of the Company and Invesco. |
g. Venue. Any action, arbitration, or proceeding arising directly or indirectly from this Agreement or any other instrument or security referenced herein shall be litigated or arbitrated, as appropriate, in the Court of Chancery of the State of Delaware or, if jurisdiction over the matter is vested exclusively in the federal courts, the United States District Court for the District of Delaware. |
h. Authority; Signatories. The individual executing and delivering this Agreement on behalf of Invesco has been duly authorized and is duly qualified to execute and deliver this Agreement in connection with the Securities and the signature of such individual is binding upon Invesco. Each of the parties acknowledges and agrees that (a)Invesco is acting at all times as agent for and on behalf of the Funds; (b)Invesco shall have no liability to acquire the Shares allocated to the Funds under this Agreement; and (c)Invesco shall have no liability as principal in respect of the Funds obligations under this Agreement, including, but not limited to, the obligation to purchase the Shares from the Company. |
i. Notices. All notices and other communications provided for or permitted hereunder shall be in writing and shall be deemed properly delivered, given and received: (a)if delivered by hand, when delivered; (b)if sent on a Business Day by email before 11:59 p.m. (recipients time), when transmitted; (c)if sent by email on a day other than a Business Day, or if sent by email after 11:59 p.m. (recipients time), on the Business Day following the date when transmitted; (d)if sent by registered, certified or first class mail, the third Business Day after being sent; and (e)if sent by overnight delivery via a national courier service, one Business Day after being sent, in each case to the address set forth on the signature page hereof for Invesco and with respect to the Company and Evofem at their respective principal places of business (or to such other address as such party shall have specified in a written notice given to the other parties hereto). |
Any bank as defined in Section3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section15 of the Exchange Act; any insurance company as defined in Section2(a)(13) of the Securities Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section2(a)(48) of that Securities Act; Small Business Investment Company licensed by the U.S. Small Business Administration under Section301(c) or (d)of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decision made solely by persons that are accredited investors; ---|---|---|--- |
Any natural person who had an individual income in excess of $200,000 during each of the two most recent years or joint income with that persons spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; ---|---|---|--- |
Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment; or ---|---|---|--- |
which may differ from adjusted gross income for income tax purposes. Accordingly, the undersigned should consider whether it should add any or all of the following items to its adjusted gross income for income tax purposes in order to reflect more accurately its actual economic income: any amounts attributable to tax-exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh retirement plan, and alimony payments. |
THIS WARRANT AND THE SECURITIES UNDERLYING THIS WARRANT HAVE NOT BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS PURSUANT TO EXEMPTIONS IN THE VARIOUS JURISDICTIONS WHERE THEY ARE BEING SOLD. |
| | , 20 THIS CERTIFIES THAT, for value received, (the Holder), is entitled to subscribe for and purchase from Evofem Biosciences, Inc., a Delaware corporation, with its principal office at 12400 High Bluff Drive, Suite 600, San Diego, California 92130 (Evofem), the Exercise Shares at the Exercise Price (each subject to adjustment as provided herein) in accordance with provisions set forth herein. |
(b) Exercise Shares shall mean [158,999,371]1 shares of common stock of Evofem, par value $0.001 per share, issuable upon exercise of this Warrant (subject to adjustment as set forth in Section1.12(b) of the Agreement and Plan of Merger, dated as of the date hereof, among Evofem, Neothetics and the other parties thereto (the Merger Agreement)). |
C equals 275,375,361 shares of common stock of Evofem (subject to adjustment as provided in Section1.12(b) of the Merger Agreement). ---|---|---|--- 3\. COVENANTS OF EVOFEM. Evofem covenants and agrees that all Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. Evofem further covenants and agrees that Evofem will at all times following the date hereof and prior to the Effective Time, have authorized and reserved, free from preemptive rights, a sufficient number of shares of the series of equity securities comprising the Exercise Shares to provide for the exercise of the rights represented by this Warrant. If at any time following the date hereof and prior to the Effective Time the number of authorized but unissued shares of such series of Evofems equity securities shall not be sufficient to permit exercise of this Warrant, Evofem will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of such series of Evofems equity securities to such number of shares as shall be sufficient for such purposes. |
4.1 Acquisition of Warrant for Personal Account. The Holder represents and warrants that it is acquiring the Warrant and the Exercise Shares solely for its account for investment and not with a view to or for sale or distribution of said Warrant or Exercise Shares or any part thereof. The Holder also represents that the entire legal and beneficial interests of the Warrant and Exercise Shares the Holder is acquiring is being acquired for, and will be held for, its account only. |
(a) The Holder understands that the Warrant and the Exercise Shares have not been registered under the Securities Act on the basis that no distribution or public offering of the stock of Evofem is to be effected. Each instrument evidencing the Exercise Shares which Holder may hereunder and any other securities issued upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event (unless no longer required in the opinion of the counsel for or Evofem) shall be imprinted with a legend substantially in the following form: |
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS PURSUANT TO EXEMPTIONS IN THE VARIOUS JURISDICTIONS WHERE THEY ARE BEING SOLD. |
(b) Any book-entry evidence of the Exercise Shares shall not contain any legend (including the legend set forth in Section4.2(a) above), (i) while a registration statement covering the resale of such security is effective under the Securities Act, (ii)following any sale of such Exercise Shares pursuant to Rule 144, (iii) if such Exercise Shares are eligible for sale under Rule 144, without the requirement for Evofem to be in compliance with the current public information required under Rule 144 as to such Exercise Shares and without volume or manner-of-sale restrictions, or (iv)if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). |
5\. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF EXERCISE SHARES. In the event of changes in the series of equity securities of Evofem comprising the Exercise Shares by reason of stock dividends, splits, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, or the like, the number and class of Exercise Shares available under the Warrant in the aggregate and the Exercise Price shall be correspondingly adjusted to give the Holder of the Warrant, on exercise for the same Aggregate Exercise Price, the total number, class, and kind of shares as the Holder would have owned had the Warrant been exercised prior to the event and had the Holder continued to hold such shares until after the event requiring adjustment. For purposes of this Section5, the Aggregate Exercise Price shall mean the aggregate Exercise Price payable in connection with the exercise in full of this Warrant. The form of this Warrant need not be changed because of any adjustment in the number of Exercise Shares subject to this Warrant. When any such adjustment is required to be made, Evofem shall promptly notify the Holder of such event and of the number of shares of Evofems common stock or other securities or property thereafter purchasable upon exercise of this Warrant and any resulting changes to the Exercise Price. |
6\. FRACTIONAL SHARES. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including fractions) to be issued upon exercise of this Warrant shall be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would |
8\. TRANSFER OF WARRANT. Subject to applicable laws, the restriction on transfer set forth on the first page of this Warrant, this Warrant and all rights hereunder are transferable by the Holder but solely to an affiliate or fund managed by Holder in person or by duly authorized attorney, upon delivery of the form of assignment attached hereto to any transferee designated by Holder. The transferee shall sign an investment letter in form and substance satisfactory to Evofem. |
10\. NOTICES, ETC. All notices and other communications provided for or permitted hereunder shall be in writing and shall be deemed properly delivered, given and received: (a)if delivered by hand, when delivered; (b)if sent on a Business Day by email before 11:59 p.m. (recipients time), when transmitted; (c)if sent by email on a day other than a Business Day, or if sent by email after 11:59 p.m. (recipients time), on the Business Day following the date when transmitted; (d)if sent by registered, certified or first class mail, the third Business Day after being sent; and (e)if sent by overnight delivery via a national courier service, one Business Day after being sent, in each case to the address set forth on the signature page hereof for Invesco and with respect to the Company and Evofem at their respective principal places of business (or to such other address as such party shall have specified in a written notice given to the other parties hereto). |
NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant. |
Reference is hereby made to (1)that certain Securities Purchase Agreement (theSecurities Purchase Agreement), dated as of October17, 2017, by and among Neothetics, Inc., a Delaware corporation (theCompany), Evofem Biosciences, Inc., a Delaware corporation (Evofem), and Invesco Asset Management Limited, acting as agent for and on behalf of certain of its discretionary managed clients (Invesco), and (2)that certain Agreement and Plan of Merger and Reorganization (theMerger Agreement), by and among the Company, Evofem, and Nobelli Merger Sub, Inc., a Delaware corporation. Terms not otherwise defined, will have the meanings set forth in the Securities Purchase Agreement. |
1.1Purchase and Sale of Securities. At the Closing, the Company will issue and sell to each Purchaser, and each Purchaser will, severally and not jointly, purchase from the Company, the number of shares of Common Stock (the Shares) set forth opposite such Purchasers name on Exhibit A hereto. The purchase price for each Share shall be $20.00 (the Purchase Price). |