Document:

ex10-1.htm

 

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of June 28, 2013 by and among Tengion, Inc. a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

A.           The Company and the Purchasers are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D (“Regulation D”) and Regulation S (“Regulation S”), as promulgated by the U.S. Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended;

 

B.           The Purchasers wish to purchase from the Company, and the Company wishes to sell and issue to the Purchasers, upon the terms and conditions stated in this Agreement, (i)  $18,576,000.00 in aggregate principal amount of the Senior Secured Convertible Notes in the form attached hereto as Exhibit A (the “Notes”), which Notes are convertible into 26,921,739 shares of the Company’s Common Stock, par value $0.001 per share (together with any securities into which such shares may be reclassified the “Common Stock”), at a conversion price of $0.69 per share (both the number of shares issuable on conversion and the conversion price are subject to adjustment as provided therein), and (ii) five-year and ten-year warrants to purchase an aggregate of 80,765,220 shares of Common Stock (subject to adjustment as provided therein) at an exercise price of $0.69 per share (subject to adjustment as provided therein) in the form attached hereto as Exhibit B (the “Warrants”);

 

C.           Under the terms of the Securities Purchase Agreement entered into by the Company and the parties identified on the signature pages thereto dated October 2, 2012 (the “2012 SPA”), by executing this Agreement, the Purchasers are exercising their right to purchase Additional Securities in the aggregate principal amount of $18,576,000.00 pursuant to the Call Option, as such capitalized terms are defined in the 2012 SPA; and

 

D.           Contemporaneous with the sale of the Notes and the Warrants, the parties hereto will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, and applicable state securities laws.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser hereby agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1 Definitions.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:

 

 “Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or, to the Company’s Knowledge, threatened in writing against the Company or any of their respective properties or any officer, director or employee of the Company acting in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility.

 

 

  

  

  

 

 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act.  With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

 “Closing” means the closing of the purchase and sale of the Notes and the Warrants pursuant to this Agreement.

 

“Closing Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived, as the case may be, or such other date as the parties may agree.

 

“Commission” has the meaning set forth in the Recitals.

 

“Common Stock” has the meaning set forth in the Recitals, and also includes any other class of securities into which the Common Stock may hereafter be reclassified or changed into.

 

“Common Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock.

 

“Company” has the meaning set forth in the Preamble.

 

“Company Counsel” means Ropes & Gray LLP, with offices located at Prudential Tower, 800 Boylston Street, Boston MA 02199.

 

“Company Deliverables” has the meaning set forth in Section 2.2(a).

 

“Company’s Knowledge” means with respect to any statement made to the Company’s Knowledge, that the statement is based upon the actual knowledge of the executive officers of the Company having responsibility for the matter or matters that are the subject of the statement.

 

“Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Conversion Shares” means the shares of Common Stock issuable upon conversion of the Notes.

 

 

  

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 “Disclosure Materials” has the meaning set forth in Section 3.1(h).

 

“Disclosure Schedules” has the meaning set forth in Section 3.1.

 

“Environmental Laws” has the meaning set forth in Section 3.1(dd).

 

“ERISA” has the meaning set forth in Section 3.1(mm).

 

 “Evaluation Date” has the meaning set forth in Section 3.1(t).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“Facility Agreement” means that certain Facility Agreement of even date herewith by and among the Company and the Investors, in the form attached hereto as Exhibit E.

 

“GAAP” means U.S. generally accepted accounting principles, as applied by the Company.

 

“Intellectual Property Rights” has the meaning set forth in Section 3.1(p).

 

“Interest Shares” means shares of Common Stock issuable (1) in lieu of cash interest on the Notes and (2) the exercise of warrants issued in connection with such non-cash interest payment to avoid exceeding the 9.985% Cap as such term is defined in the Facility Agreement.

 

“Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

 

“Material Adverse Effect” means a material adverse effect on the results of operations, assets, prospects, business or financial condition of the Company except that any of the following, either alone or in combination, shall not be deemed a Material Adverse Effect: (i) effects caused by changes or circumstances affecting general market conditions in the U.S. economy or which are generally applicable to the industry in which the Company operates, provided that such effects are not borne disproportionately by the Company, (ii) effects resulting from or relating to the announcement or disclosure of the sale of the Securities or other transactions contemplated by this Agreement, or (iii) effects caused by any event, occurrence or condition resulting from or relating to the taking of any action in accordance with this Agreement.

 

“Material Contract” means any contract of the Company that has been filed or was required to have been filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“Material Permits” has the meaning set forth in Section 3.1(n).

 

“New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities, excluding in all cases securities or rights issued or sold by the Company in connection with a Strategic Transaction.

 

 “New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan.

 

 

  

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“OFAC” has the meaning set forth in Section 3.1(kk).

 

“Offer Notice” has the meaning set forth in Section 4.9(b).

 

 “Outside Date” means the fifth day following the date of this Agreement.

 

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

“Placement Agent” means Roth Capital Partners LLC.

 

 “Principal Trading Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date, shall be the OTCQB.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Proposal” has the meaning set forth in Section 4.1.

 

“Purchase Price” means nineteen million nine hundred ninety-nine thousand nine hundred ninety-nine dollars eighty-three cents ($19,999,999.83).

 

 “Purchaser” or “Purchasers” has the meaning set forth in the Recitals.

 

“Purchaser Deliverables” has the meaning set forth in Section 2.2(b).

 

“Purchaser Party” has the meaning set forth in Section 4.5.

 

“Registration Rights Agreement” has the meaning set forth in the Recitals.

 

“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement).

 

“Regulation D” has the meaning set forth in the Recitals.

 

“Regulation S” has the meaning set forth in the Recitals.

 

“Required Approvals” has the meaning set forth in Section 3.1(e).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Reports” has the meaning set forth in Section 3.1(h).

 

“Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(v).

 

“Securities” means the Notes, the Warrants, the Conversion Shares, the Interest Shares and the Warrant Shares.

 

 

  

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“Securities Act” has the meaning set forth in the Recitals.

 

“Security Agreement” means the Security Agreement in the form attached hereto as Exhibit F.

 

“Strategic Transaction” means a transaction or relationship in which (1) the Company issues Company securities or rights relating to Company securities to a Person that the Board of Directors of the Company determined in good faith is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company (or a shareholder thereof) and (2) the Company expects to receive benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to a Person whose primary business is investing in securities.

 

“Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

 

“Trading Market” means whichever of the New York Stock Exchange, the NYSE Alternext (formerly the American Stock Exchange), the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

 

“Transaction Documents” means this Agreement, the Notes, the Facility Agreement, the Security Agreement, the Warrants and the Registration Rights Agreement. “Transaction Parties” has the meaning set forth in Section 6.16.

 

“Transfer Agent” means American Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address of 6201 15th Avenue, New York, NY 11219, and a facsimile number of (718) 236-2641, or any successor transfer agent for the Company.

 

“Warrants” has the meaning set forth in the Recitals to this Agreement.

 

“Warrant Shares” means the shares of Common Stock issuable upon the exercise of the Warrants.

 

 

ARTICLE II.

PURCHASE AND SALE

 

2.1 Closing.

 

(a) Purchase and Sale of the Notes and Warrants.  Subject to the terms and conditions of this Agreement, on the Closing Date, each of the Purchasers shall severally, and not jointly, purchase, and the Company shall sell and issue to the Purchasers, the Notes and the Warrants being sold under this Agreement in the respective amounts set forth opposite the Purchasers’ names on the signature pages attached hereto in exchange for the Purchase Price as specified in Section 2.1(b) below.

 

 

  

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(b) Closing.  Upon confirmation that the other conditions to closing specified herein have been satisfied or duly waived by the Purchasers, the Company shall deliver to Ropes & Gray LLP, in trust, the Notes and the Warrants, registered in such name or names as the Purchasers may designate, with instructions that such Notes and Warrants are to be held for release to the Purchasers only upon payment in full of the Purchase Price to the Company by all the Purchasers.  Upon such receipt by Ropes & Gray LLP of the Notes and the Warrants, each Purchaser shall promptly, but no more than one Business Day thereafter, cause a wire transfer in same day funds to be sent to the account of the Company as instructed in writing by the Company, in an amount representing the pro rata portion of the Purchase Price of each Purchaser as set forth on the signature pages to this Agreement, respectively.  On the date (the “Closing Date”) the Company receives the Purchase Price, the Notes and the Warrants shall be released to the Purchasers (the “Closing”).  The Closing of the purchase and sale of the Notes and the Warrants shall take place at the offices of Ropes & Gray LLP, Prudential Tower, 800 Boylston Street, Boston MA, 02199, or at such other location and on such other date as the Company and the Purchasers shall mutually agree.

 

2.2 Closing Deliveries.

 

 (a)           On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser the following (the “Company Deliverables”):

 

(i) this Agreement, duly executed by the Company;

 

(ii) facsimile copies of one or more Notes registered in the name of the Purchaser set forth on the signature pages hereto with the original Notes delivered within three (3) Trading Days of Closing;

 

(iii) facsimile copies of one or more Warrants, executed by the Company and registered in the name of such Purchaser as on the signature pages hereto, pursuant to which such Purchaser shall have the right to acquire such number of Warrant Shares as set forth on the signature page for each Purchaser hereto) with the original Warrants delivered within three (3) Trading Days of Closing;

 

(iv) legal opinion of Company Counsel, dated as of the Closing Date and in the form attached hereto as Exhibit G, executed by such counsel and addressed to the Purchasers;

 

(v) a certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Securities, (b) certifying the current versions of the certificate or articles of incorporation, as amended, and by-laws of the Company and (c) certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company, in the form attached hereto as Exhibit H;

 

(vi) the Compliance Certificate referred to in Section 5.1(i);

 

(vii) a certificate evidencing the formation and good standing of the Company issued by the Secretary of State (or comparable office) of Delaware, as of a date within fifteen (15) Business Days of the Closing Date;

 

(viii) a certificate evidencing the Company’s qualification as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company is qualified to do business as a foreign corporation, as of a date within fifteen (15) Business Days of the Closing Date;

 

 

  

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(ix) a certified copy of the certificate of incorporation, as certified by the Secretary of State (or comparable office) of Delaware, as of a date within fifteen (15) Business Days of the Closing Date; and

 

(x) the Right of First Negotiation Agreement, by and between and duly executed by the Company and Celgene Corporation, with respect to the Company’s Neo-Kidney Augment Program and the Collaboration and Option Agreement, by and among and duly executed by the Company, Celgene Corporation and Celgene European Investment Company LLC, incorporating an option for Celgene European Investment Company LLC to buy the Company’s esophagus program (the “Celgene Strategic Transaction Documents”).

 

(b)           On or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following (the “Purchaser Deliverables”):

 

	
  

	
(1)

	
the Transaction Documents duly executed by such Purchaser; and

 

	
  

	
(2) its Purchase Price for the Notes, in United States dollars and in immediately available funds, in the amount set forth as the “Purchase Price” indicated below such Purchaser’s name on the applicable signature page hereto under the heading “Aggregate Purchase Price” by wire transfer to the Company, as set forth on Exhibit J attached hereto

 

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company.  Except as set forth in the schedules delivered herewith (the “Disclosure Schedules”), which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby represents and warrants as of the date hereof and the Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to each of the Purchasers and to the Placement Agent:

 

(a) Subsidiaries.  The Company has no direct or indirect Subsidiaries.

 

(b) Organization and Qualification.  The Company is an entity duly incorporated, validly existing and in good standing under the laws of the State of Delaware, with the requisite corporate power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted.  The Company is not in violation or default of any of the provisions of its respective certificate of incorporation, bylaws or other organizational or charter documents.  The Company is duly qualified to conduct business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in a Material Adverse Effect, and no Proceeding has been instituted, is pending, or, to the Company’s Knowledge, has been threatened in writing in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

 

  

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(c) Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.  The Company’s execution and delivery of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company, and no further corporate action is required by the Company, its Board of Directors or its stockholders in connection therewith other than in connection with the Required Approvals.   Each of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d) No Conflicts.  The execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby or thereby do not and will not, (i) conflict with or violate any provisions of the Company’s certificate of incorporation, bylaws or otherwise result in a violation of the organizational documents of the Company, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations and the rules and regulations, assuming the correctness of the representations and warranties made by the Purchasers herein, of any self-regulatory organization to which the Company or its securities are subject, including all applicable Trading Markets), or by which any property or asset of the Company is bound or affected, except in the case of clauses (ii) and (iii) such as would not, individually or in the aggregate, have  or  reasonably be expected to result in a Material Adverse Effect.

 

(e) Filings, Consents and Approvals.  Except as set forth in Schedule 3.1(e), the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents (including the issuance of the Securities), other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) the filing of any requisite notices and/or application(s) to the Principal Trading Market for the issuance and sale of the Securities and the listing of the Conversion Shares, Interest Shares and Warrant Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby, (v) the filing with the Commission of a Current Report on Form 8-K disclosing the sale of the Securities and filing of the requisite Transaction Documents and (vi) those that have been made or obtained prior to the date of this Agreement (collectively, the “Required Approvals”).

 

 

  

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(f) Issuance of the Securities.  From and after the Closing Date(i) the Conversion Shares will have been duly and validly authorized and, when issued upon the due conversion of the Notes, will be validly issued, fully paid and nonassessable, and shall be free and clear of all encumbrances and restrictions (other than those created by the Purchasers), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws, and (ii) the Interest Shares will have been duly and validly authorized and, when issued in accordance with the terms of the Notes, will be validly issued, fully paid and nonassessable, and shall be free and clear of all encumbrances and restrictions (other than those created by the Purchasers), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.  The Warrants and the Warrant Shares have been duly and validly authorized and the Warrant Shares when issued upon the due exercise of the Warrants, will be validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Purchasers.  The Company will have reserved a sufficient number of shares of Common Stock for issuance upon the conversion of the Notes, the payment of interest on the Notes and upon exercise of the Warrants, free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Purchasers.  Assuming the accuracy of the representations and warranties of the Purchasers in this Agreement, the Securities will be issued in compliance with all applicable federal and state securities laws.  As of the Closing Date, the Company shall have reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon conversion of the Notes, payment of the Interest Shares and exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth in the Warrants).  The Company shall, from the Closing Date forward, so long as any of the Notes and/or Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued capital stock, solely for the purpose of effecting the conversion of the Notes and exercise of the Warrants, the number of shares of Common Stock issuable upon such conversion and/or exercise (without taking into account any limitations on the conversion of the Notes and/or exercise of the Warrants as set forth therein).

 

(g) Capitalization.  The number of shares and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) is set forth in Schedule 3.1(g) hereto.  The Company has not issued any capital stock since the date of its most recently filed SEC Report other than to reflect stock option and warrant exercises that do not, individually or in the aggregate, have a material affect on the issued and outstanding capital stock, options and other securities. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents that have not been effectively waived as of the Closing Date.  Except as set forth on Schedule 3.1(g) or a result of the purchase and sale of the Notes and Warrants, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  Except as set forth on Schedule 3.1(g), the issuance and sale of the Notes and Warrants will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.  All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.  Except as set forth on Schedule 3.1(g), there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the Company’s Knowledge, between or among any of the Company’s stockholders.

 

 

  

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(h) SEC Reports; Disclosure Materials.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”, and the SEC Reports, together with the Disclosure Schedules, being collectively referred to as the “Disclosure Materials”) as are required to comply with the “current public information” requirement of Rule 144(c).  As of their respective filing dates, or to the extent corrected by a subsequent restatement, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The Company has never been an issuer subject to Rule 144(i) under the Securities Act.  Each of the Material Contracts to which the Company is a party or to which the property or assets of the Company are subject has been filed as an exhibit to the SEC Reports.

 

(i) Financial Statements.  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement).  Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, 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.

 

(j) Material Changes.  Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof or as set forth on Schedule 3.1(j), (i) there have been no events, occurrences or developments that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered materially its method of accounting or the manner in which it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock (other than in connection with repurchases of unvested stock issued to employees of the Company), and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except Common Stock issued in the ordinary course as dividends on outstanding preferred stock or issued pursuant to existing Company stock option or stock purchase plans or executive and director compensation arrangements disclosed in the SEC Reports.  Except for the issuance of the Notes and Warrants contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the Company or its business, properties, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.

 

(k) Litigation.  There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) except as specifically disclosed in the SEC Reports, would, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company, nor to the Company’s Knowledge any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the Company’s Knowledge there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act.

 

 

  

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(l) Employment Matters.  No material labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees of the Company which would have or reasonably be expected to result in a Material Adverse Effect.  None of the Company’s employees is a member of a union that relates to such employee’s relationship with the Company, and the Company is not a party to a collective bargaining agreement, and the Company believes that its relationships with its employees are good.  No executive officer of the Company (as defined in Rule 501(f) of the Securities Act) has notified the Company or any that such officer intends to leave the Company in the foreseeable future or otherwise terminate such officer's employment with the Company.  To the Company’s Knowledge, no executive officer, is, or is now expected to be, in violation of any term of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such executive officer does not subject the Company to any liability with respect to any of the foregoing matters.  The Company is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(m) Compliance.  The Company is not (i) in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received written notice of a claim that it is in default under or that it is in violation of, any Material Contract (whether or not such default or violation has been waived), (ii) in violation of any order of any court, arbitrator or governmental body having jurisdiction over the Company or its properties or assets, or (iii) in violation of, or in receipt of written notice that it is in violation of, any statute, rule or regulation of any governmental authority applicable to the Company, except in each case as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(n) Regulatory Permits.  The Company possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its respective business as currently conducted and as described in the SEC Reports, except where the failure to possess such permits, individually or in the aggregate, has not and would not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and the Company has not received any notice of Proceedings relating to the revocation or modification of any such Material Permits.

 

(o) Title to Assets.  The Company has good and marketable title in fee simple to all real property owned by them.  Except for the Liens held by the Persons set forth in Schedule 3.1(o) hereto, the Company has good and marketable title to all tangible personal property owned by it that is material to the business of the Company, in each case free and clear of all Liens, except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company.  Any real property and facilities held under lease by the Company are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company.

 

(p) Intellectual Property.  Except as set forth on Schedule 3.1(p), to the Company’s Knowledge, the Company owns, possesses, licenses or has other rights to use, all patents, patent applications, trade and service marks, trade and service mark applications and registrations, trade names, trade secrets, inventions, copyrights, licenses, technology, know-how and other intellectual property rights and similar rights described in the SEC Reports as necessary or material for use in connection with their respective businesses and which the failure to so have would have or reasonably be expected to result in a Material Adverse Effect (collectively, the “Intellectual Property Rights”).  The Company has not received a written notice that any of the Intellectual Property Rights used by the Company violates or infringes upon the rights of any Person.  There is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by any Person that the Company’s business as now conducted infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of another.  To the Company’s Knowledge, there is no existing infringement by another Person of any of the Intellectual Property Rights that would have or would reasonably be expected to have a Material Adverse Effect.  The Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

 

  

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(q) Insurance.  The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which the Company is engaged, including, but not limited to, directors and officers insurance coverage.  The Company has not received any notice of cancellation of any such insurance, nor, to the Company’s Knowledge, will it be unable to renew their respective existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

(r) Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.

 

(s) Internal Accounting Controls.  The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any differences.

 

(t) Sarbanes-Oxley; Disclosure Controls.  The Company is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date.  The Company has established disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Except as set forth on Schedule 3.1(t), since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

  

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(u) Certain Fees.  No person or entity will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or a Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, other than the Placement Agent with respect to the offer and sale of the Notes and Warrants (which placement agent fees are being paid by the Company) and the payment of certain legal fees as provided in Section 6.1.  The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this paragraph (u) that may be due in connection with the transactions contemplated by the Transaction Documents.  The Company shall indemnify, pay, and hold each Purchaser harmless against, any liability, loss or expense (including, without limitation, attorneys’ fees and out-of-pocket expenses) arising in connection with any such right, interest or claim.

 

(v) Private Placement.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers under the Transaction Documents.  The issuance and sale of the Securities hereunder complies in all material respects with and does not contravene the rules and regulations of the Principal Trading Market.

 

(w) Investment Company.  The Company is not, and immediately after receipt of payment for the Notes and Warrants, will not be an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act of 1940, as amended.

 

(x) Registration Rights.  Other than each of the Purchasers or as set forth in Schedule 3.1(x) hereto, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company other than those securities which are currently registered on an effective registration statement on file with the Commission.

 

(y) Listing and Maintenance Requirements.  The Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  The Company is in compliance with all listing and maintenance requirements of the Principal Trading Market on the date hereof.

 

(z) Application of Takeover Protections; Rights Agreements.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company's charter documents or the laws of its state of incorporation that is or could reasonably be expected to become applicable to any of the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation, the Company's issuance of the Securities and the Purchasers' ownership of the Securities.

 

(aa) Disclosure.  Except pursuant to duly executed confidentiality agreements, the Company confirms that it has not provided, and to the Company’s Knowledge, none of its officers or directors nor any other Person acting on its or their behalf has provided, and it has not authorized the Placement Agent to provide, any Purchaser or its respective agents or counsel with any information that it believes constitutes material, non-public information except insofar as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder may constitute such information.

 

 

  

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(bb) No Integrated Offering.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 and the Facility Agreement none of the Company, nor, to the Company’s Knowledge, any of its Affiliates or any Person acting on its behalf has, directly or indirectly, at any time within the past six (6) months, made any offers or sales of any Company security or solicited any offers to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of any Trading Market on which any of the securities of the Company are listed or designated.

 

(cc) Tax Matters.  The Company (i) has accurately and timely prepared and filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, with respect to which adequate reserves have been set aside on the books of the Company and (iii) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply, except, in the case of clauses (i) and (ii) above, where the failure to so pay or file any such tax, assessment, charge or return would not have or reasonably be expected to result in a Material Adverse Effect.  There are no unpaid taxes in any material amount claimed to be due by the Company by the taxing authority of any jurisdiction.

 

(dd) Environmental Matters.  To the Company’s Knowledge, the Company (i) is not in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) does not own or operate any real property contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is not subject to any claim relating to any Environmental Laws; which violation, contamination, liability or claim has had or would have, individually or in the aggregate, a Material Adverse Effect; and, to the Company’s Knowledge there is no pending investigation or investigation threatened in writing that might lead to such a claim.

 

(ee) No General Solicitation.  Neither the Company nor, to the Company’s Knowledge, any person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising.

 

(ff) Foreign Corrupt Practices.  Neither the Company, nor to the Company’s Knowledge, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any Person acting on its behalf with the Company’s knowledge) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

 

  

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(gg) Off Balance Sheet Arrangements.  There is no transaction, arrangement, or other relationship between the Company and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in SEC Reports and is not so disclosed and would have or reasonably be expected to result in a Material Adverse Effect.

 

(hh) Acknowledgment Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby.  Based on the representations made herein by the Purchasers, and other than with respect to such Purchasers that currently have a representative serving on the Company’s Board of Directors, the Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities.  The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(ii) Regulation M Compliance.  The Company has not, and to the Company’s Knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the securities of the Company or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Notes and Warrants.

 

(jj) PFIC.  The Company is not or and does not intend to become a “passive foreign investment company” within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

 

(kk) OFAC.  Neither the Company nor, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or Person acting on behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any joint venture partner or other Person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.

 

(ll) FDA.  As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have or reasonably be expected to result in a Material Adverse Effect.  There is no pending, completed or, to the Company’s Knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company, and the Company has not received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company, (iv) enjoins production at any facility of the Company, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company, and which, either individually or in the aggregate, would have or reasonably be expected to result in a Material Adverse Effect.  The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.

 

 

  

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(mm) Employee Benefits.  Each employee benefit plan is in compliance with all applicable law, except for such noncompliance that would not be reasonably likely to have a Material Adverse Effect.  The Company does not have any liabilities, contingent or otherwise, including without limitation, liabilities for retiree health, retiree life, severance or retirement benefits, which are not fully reflected, to the extent required by GAAP, on its most recent balance sheet contained in the SEC Reports or fully funded. The term “liabilities” used in the preceding sentence shall be calculated in accordance with reasonable actuarial assumptions.  The Company has not (i) terminated any “employee pension benefit plan” as defined in Section 3(2) of ERISA (as defined below) under circumstances that present a material risk of the Company incurring any liability or obligation that would be reasonably likely to have a Material Adverse Effect, or (ii) incurred or expects to incur any outstanding liability under Title IV of the Employee Retirement Income Security Act of 1974, as amended and all rules and regulations promulgated thereunder (“ERISA”).

 

(nn) No Additional Agreements.  The Company does not have any agreement or understanding with any Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

3.2 Representations and Warranties of the Purchasers.  Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as of the date hereof and as of the Closing Date to the Company and the Placement Agent as follows:

 

(a) Organization; Authority.  Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement by such Purchaser and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser.  Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(b) No Conflicts.  The execution, delivery and performance by such Purchaser of this Agreement and the Registration Rights Agreement and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations hereunder.

 

 

  

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(c) Investment Intent.  Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Notes and Warrants and, (i) upon conversion of the Notes, will acquire the Note Shares issuable upon conversion thereof, and (ii) upon exercise of the Warrants, will acquire the Warrant Shares issuable upon exercise thereof, in each case, as principal for its own account and not with a view to, or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities laws, provided, however, that by making the representations herein, such Purchaser does not agree to hold any of the Securities for any minimum period of time and reserves the right, subject to the provisions of this Agreement and the Registration Rights Agreement, at all times to sell or otherwise dispose of all or any part of such Securities pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws.  Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.  Such Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Securities (or any securities which are derivatives thereof) to or through any person or entity; such Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

 

(d) Brokers and Finders.  No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or such Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Purchaser.

 

(e) Independent Investment Decision.  Such Purchaser has independently evaluated the merits of its decision to purchase Securities pursuant to the Transaction Documents, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business and/or legal counsel in making such decision.  Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes legal, tax or investment advice.  Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities.  Such Purchaser understands that the Placement Agent has acted solely as the agent of the Company in this placement of the Notes and Warrants and such Purchaser has not relied on the business or legal advice of the Placement Agent or any of its agents, counsel or Affiliates in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to such Purchaser in connection with the transactions contemplated by the Transaction Documents.

 

(f) No Governmental Review.  Such Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

 

  

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(g) Regulation M. Such Purchaser is aware that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Common Stock and other activities with respect to the Common Stock by the Purchasers and agrees to comply with such rules.

 

(h) Representations and Warranties under the Facility Agreement.  The representations and warranties set forth in Section 3.3 of the Facility Agreement are incorporated herein by reference and are true and correct with respect to such Purchaser.

 

The Company and each of the Purchasers acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article III and the Transaction Documents.  The Placement Agent shall be permitted to rely upon the representations and warranties of the Purchasers contained in the Transaction Documents as if they were included in this Agreement.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1 Reservation of Common Stock.  The Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance from and after the Closing Date, the number of shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants issued at the Closing (without taking into account any limitations on conversion of the Notes or exercise of the Warrants set forth therein).

 

4.2 Furnishing of Information.  In order to enable the Purchasers that are not affiliates of the Company to sell the Securities under Rule 144, after the expiration of a 6 month period from the Closing, the Company shall timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act and as are necessary to satisfy the provisions of Rule 144(c).  If the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144.

 

4.3 Integration.  The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, 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 will 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 of the Securities to the Purchasers, or that will be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

4.4 Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, including this Agreement, or as expressly required by any applicable securities law, 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 regarding the Company that the Company believes constitutes material non-public information without the express written consent of such Purchaser, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

 

  

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4.5 Indemnification of Purchasers.  Subject to the provisions of this Section 4.5, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Damages”) that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (except to the extent that it has been determined by a final judgment, not subject to appeal, that such Damages have been caused solely by a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance).  Promptly after receipt by any Person (the “Indemnified Person”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to this Section 4.5, such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is actually and materially prejudiced by such failure to notify.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; (ii) the Company shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to such Indemnified Person in such proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified Person, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned.  Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, delayed or conditioned, the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.

 

4.6 Form D; Blue Sky.  The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon the written request of any Purchaser.  The Company, on or before the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale to the Purchasers under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification) and shall provide evidence of such actions promptly upon the written request of any Purchaser.

 

4.7 Reserved.

 

4.8 Reserved.

 

 

  

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4.9 Participation in Future Financings.

 

(a)  Subject to the terms and conditions of this Section 4.9 and applicable securities laws, if on or before the second anniversary of the date of this Agreement, the Company proposes to offer or sell any New Securities the Purchasers may purchase up to 57.1% of the New Securities (the “Purchasers New Securities”) sold by the Company.  Each Purchaser shall be entitled to apportion the amount of New Securities it has the right to purchase under this Section 4.9 among itself and its Affiliates in such proportions as it deems appropriate.

 

(b) The Company shall give notice (the “Offer Notice”) to each Purchaser, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities.  By notification to the Company within twenty (20) days after the Offer Notice is given each Purchaser may elect to purchase or otherwise acquire up to the percentage of the Purchasers New Securities equal to the percentage of Securities purchased by such Purchaser pursuant to this Agreement.  The closing of any sale pursuant to this Section 4.9(b) shall occur within the later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Section 4.9(c).

 

(c) If all of the Purchasers New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Section 4.9(b), the Company may, during the ninety (90) day period following the expiration of the period provided in Section 4.9(b), offer and sell the remaining unsubscribed portion of such Purchasers New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice.  If the Company does not enter into an agreement for the sale of such Purchasers New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Purchasers New Securities shall not be offered unless first reoffered to the Purchasers in accordance with this Section 4.9.

 

(d) The right of first offer in this Section 4.9 shall not be applicable to the issuance of New Securities in an Exempt Issuance (as defined in the Notes and Warrants).

 

4.10 Securities Laws Disclosure; Publicity.  By 9:00 A.M., New York City time, on the Trading Day immediately following the date hereof, the Company shall issue a press release (the “Press Release”) reasonably acceptable to the Placement Agent disclosing all material terms of the transactions contemplated hereby.  On or before 9:00 A.M., New York City time, on the second (2nd) Trading Day immediately following the execution of this Agreement, the Company will file a Current Report on Form 8-K with the Commission describing the terms of the Transaction Documents (and including as exhibits to such Current Report on Form 8-K the material Transaction Documents).  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser or an Affiliate of any Purchaser, or include the name of any Purchaser or an Affiliate of any Purchaser in any press release or filing with the Commission (other than the Registration Statement) or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with (A) any registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Documents (including signature pages thereto) with the Commission and (ii) to the extent such disclosure is required by law, request of the Staff of the Commission or Trading Market regulations, in which case the Company shall provide the Purchasers with prior written notice of such disclosure permitted under this subclause (ii).  With the exception of Purchasers who have entered into confidentiality agreement with the Company, from and after the issuance of the Press Release, no Purchaser shall be in possession of any material, non-public information received from the Company, or any of its officers, directors, employees or agents, that is not disclosed in the Press Release.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are required to be publicly disclosed by the Company as described in this Section 4.10, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction) and will not trade in the Company’s securities.

 

 

  

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ARTICLE V.

CONDITIONS PRECEDENT TO CLOSING

 

5.1 Conditions Precedent to the Obligations of the Purchasers to Purchase Securities.  The obligation of each Purchaser to acquire Notes and Warrants at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by such Purchaser (as to itself only):

 

(a) Representations and Warranties.  The representations and warranties of the Company contained herein shall be true and correct in all material respects (except for those representations and warranties which are qualified as to materiality, in which case such representations and warranties shall be true and correct in all respects) as of the date when made and as of the Closing Date, as though made on and as of such date, except for such representations and warranties that speak as of a specific date.

 

(b) Performance.  The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing.

 

(c) No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

(d) Consents.  The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Securities (including all Required Approvals), all of which shall be and remain so long as necessary in full force and effect.

 

(e) Adverse Changes.  Since the date of execution of this Agreement, no event or series of events shall have occurred that has had or would reasonably be expected to have a Material Adverse Effect.

 

(f) [RESERVED]

 

(g) No Suspensions of Trading in Common Stock.  The Common Stock shall not have been suspended, as of the Closing Date, by the Commission or the Principal Trading Market from trading on the Principal Trading Market nor shall suspension by the Commission or the Principal Trading Market have been threatened, as of the Closing Date, either (A) in writing by the Commission or the Principal Trading Market or (B) by falling below the minimum listing maintenance requirements of the Principal Trading Market.

 

(h) Company Deliverables.  The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).

 

(i) Compliance Certificate.  The Company shall have delivered to each Purchaser a certificate, dated as of the Closing Date and signed by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in Sections 5.1(a) and (b) in the form attached hereto as Exhibit I.

 

 

  

21

  

 

 

(j) Termination.  This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.18 herein.

 

5.2 Conditions Precedent to the Obligations of the Company to sell Securities.  The Company's obligation to sell and issue the Notes and Warrants at the Closing to the Purchasers is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

 

(a) Representations and Warranties.  The representations and warranties made by the Purchasers in Section 3.2 hereof shall be true and correct in all material respects (except for those representations and warranties which are qualified as to materiality, in which case such representations and warranties shall be true and correct in all respects) as of the date when made, and as of the Closing Date as though made on and as of such date, except for representations and warranties that speak as of a specific date.

 

(b) Performance.  Such Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing Date.

 

(c) No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

(d) Consents.  The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Securities, all of which shall be and remain so long as necessary in full force and effect.

 

(e) Purchasers Deliverables.  Such Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(b).

 

(f) [RESERVED]

 

(g) Termination.                      This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.18 herein.

 

ARTICLE VI.

MISCELLANEOUS

 

6.1 Fees and Expenses.  The parties hereto shall pay their own costs and expenses in connection herewith, except that the Company shall pay the reasonable fees and expenses of Katten Muchin Rosenman LLP, regardless of whether the transactions contemplated hereby are consummated; it being understood that Katten Muchin Rosenman LLP has only rendered legal advice to certain affiliates of Deerfield Management Company participating in this transaction and not to the Company or any other Purchaser in connection with the transactions contemplated hereby, and that each of the Company and each Purchaser has relied for such matters on the advice of its own respective counsel.  Such expenses shall be paid upon demand.  The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the Securities to the Purchasers.

 

 

  

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6.2 Entire 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 supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.  At or after the Closing, and without further consideration, the Company and the Purchasers will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

 

6.3 Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the facsimile number specified in this Section 6.3 prior to 5:00 P.M., New York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section 6.3 on a day that is not a Trading Day or later than 5:00 P.M., New York City time, on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as follows:

 

	  	
If to the Company:

	
Tengion, Inc.

	  	  	
3929 Westpoint Blvd., Suite G

	  	  	
Winston-Salem, NC 27103

	  	  	
Telephone No.:  (336) 722-5855

	  	  	
Facsimile No.:  (336) 722-2436

	  	  	
Attention:  Brian Davis, Chief Financial Officer and Vice President, Finance

	  	  	
E-mail:  brian.davis@tengion.com

 

	  	
With a copy to:

	
Ropes & Gray LLP

	  	  	
Prudential Tower

	  	  	
800 Boylston Street

	  	  	
Boston, MA 02199-3600

	  	  	
Telephone No.:  (617) 951-7826

	  	  	
Facsimile No.:  (617) 235-0706

	  	  	
Attention:  Marc A. Rubenstein, Esq.

	  	  	
E-mail:  marc.rubenstein@ropesgray.com

	
  

	
If to a Purchaser:

	
To the address set forth under such Purchaser’s name on the signature page hereof; or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

6.4 Amendments; Waivers; No Additional Consideration.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed by the Company and the Purchasers of at least 66 2/3% of the Securities still held by Purchasers (on an as-converted to common stock basis), which shall include at least one of Deerfield Special Situations Fund, L.P. or Deerfield Special Situations International Master Fund, L.P., if either of such entities still holds Securities, RA Capital Healthcare Fund LP, if it still holds Securities, at least one fund managed by QVT Financial LP, if any still holds Securities, and Perceptive Life Sciences Master Fund LTD, if it still holds Securities (collectively, the “Required Purchasers”).  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.  No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all Purchasers who then hold Securities.

 

 

  

23

  

 

 

6.5 Construction.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.  This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

6.6 Successors and Assigns.  The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted assigns.  This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior written consent of the Required Purchasers.  Any Purchaser may assign its rights hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any Securities in compliance with the Transaction Documents and applicable law, provided such transferee shall agree in writing to be bound, with respect to the transferred Securities, by the terms and conditions of this Agreement that apply to the “Purchasers”.

 

6.7 No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except (i) the Placement Agent is an intended third party beneficiary of Article III hereof and (ii) each Purchaser Party is an intended third party beneficiary of Section 4.9.

 

6.8 Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to contracts made and to be performed in such state.  Each party agrees that all 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, employees or agents) shall be commenced exclusively in the New York Courts.  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts 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 Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum.  Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such 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 manner permitted by law.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

 

  

24

  

 

 

6.9 Survival.  Subject to applicable statute of limitations, the representations, warranties, agreements and covenants contained herein shall, unless otherwise limited herein, survive the Closing and the delivery of the Securities.

 

6.10 Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

6.11 Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

6.12 Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

6.13 Replacement 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, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company and the Transfer Agent for any losses in connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent.  If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

 

6.14 Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other than in connection with any action for a temporary restraining order) the defense that a remedy at law would be adequate.

 

6.15 Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

 

 

  

25

  

 

 

6.16 Independent Documents. Each Transaction Document constitutes an independent agreement between the parties thereto (the “Transaction Parties”) and no Transaction Document shall be construed so as to affect the rights of the Transaction Parties to their rights and remedies under another Transaction Document.

 

6.17 Independent Nature of Purchasers' Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document.  The decision of each Purchaser to purchase Securities pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or arising from any such information, materials, statement or opinions.  Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any Purchaser.

 

6.18 Termination.  This Agreement may be terminated and the sale and purchase of the Notes and the Warrants abandoned at any time prior to the Closing by either the Company or any Purchaser (with respect to itself only) upon written notice to the other, if the Closing has not been consummated on or prior to 5:00 P.M., New York City time, on the Outside Date; provided, however, that the right to terminate this Agreement under this Section 6.18 shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time.  Nothing in this Section 6.18 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.  In the event of a termination pursuant to this Section 6.18, the Company shall promptly notify all non-terminating Purchasers.  Upon a termination in accordance with this Section 6.18, the Company and the terminating Purchaser(s) shall not have any further obligation or liability (including arising from such termination) to the other, and no Purchaser will have any liability to any other Purchaser under the Transaction Documents as a result therefrom.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

  

26

  

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

	  	
TENGION, INC.

 

 

By:  /s/ A. Brian Davis

Name:  A. Brian Davis

Title:    Chief Financial Officer and Vice President, Finance

	  	  
	  	  

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

 

	  	
NAME OF PURCHASER:  RA Capital Healthcare Fund, LP

 

 

By: /s/ Peter Kolchinsky

Name:  Peter Kolchinsky

Title:    Manager

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

	  	
NAME OF PURCHASER:  Blackwell Partners LLC

	  	  
	  	  
	  	
By:  /s/ Geoffrey D. Keegan

	  	
Name:  Geoffrey D. Keegan

	  	
Title:    Investment Manager, DUMAC, Inc.

	  	  
	  	
By:  /s/ Jannine Lall

	  	
Name:  Jannine Lall

	  	
Title:    Assistant Treasurer, DUMAC, Inc

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

 

	  	
NAME OF PURCHASER:  Deerfield Special Situations International Master Fund, L.P.

	  	  
	  	  
	  	
By:  /s/ Jonathan Isler

	  	
Name:  Jonathan Isler

	  	
Title:    CFO

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

 

	  	
NAME OF PURCHASER:  Deerfield Special Situations Fund, L.P.

	  	  
	  	  
	  	
By:  /s/ Jonathan Isler

	  	
Name:  Jonathan Isler

	  	
Title:    CFO

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

 

	  	
NAME OF PURCHASER:  Perceptive Life Sciences Master Fund Ltd

	  	  
	  	  
	  	
By:  /s/ James Mannix

	  	
Name:  James Mannix

	  	
Title:    COO

 

[Securities Purchase Agreement Signature Page]

 

 

  

  

  

 

 

	  	
NAME OF PURCHASER:  Quintessence Fund L.P., by its general partner, QVT Associates GP LLC

	  	  
	  	  
	  	
By: /s/ Keith Manchester

	  	
Name:  Keith Manchester

	  	
Title:    Authorized Signatory

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

	  	
NAME OF PURCHASER:  QVT Fund V LP, by its general partner, QVT Associates GP LLC

	  	  
	  	  
	  	
By: /s/ Keith Manchester

	  	
Name:  Keith Manchester

	  	
Title:    Authorized Signatory

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

 

	  	
NAME OF PURCHASER:  QVT Fund IV LP, by its general partner, QVT Associates GP LLC

	  	  
	  	  
	  	
By: /s/ Keith Manchester

	  	
Name:  Keith Manchester

	  	
Title:    Authorized Signatory

 

 

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

	  	
NAME OF PURCHASER:  Sabby Healthcare Volatility Master Fund, Ltd.

	  	  
	  	  
	  	
By: /s/ Robert Grundstein

	  	
Name:  Robert Grundstein

	  	
Title:    COO of Purchaser’s Investment Manager

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

 

	  	
NAME OF PURCHASER:  Sabby Volatility Warrant Master Fund, Ltd.

	  	  
	  	  
	  	
By: /s/ Robert Grundstein

	  	
Name:  Robert Grundstein

	  	
Title:    COO of Purchaser’s Investment Manager

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

	  	
NAME OF PURCHASER:  HEALTHCAP IV LP

	  	
          by HealthCap IV GP SA

	  	  
	  	  
	  	
By: /s/ Peder Fredrikson

	  	
Name:  Peder Fredrikson

	  	
Title:    President

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

	  	
NAME OF PURCHASER:  HEALTHCAP IV Bis LP by HealthCap IV GP SA

	  	  
	  	  
	  	
By: /s/ Peder Fredrikson

	  	
Name:  Peder Fredrikson

	  	
Title:    President

 

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

	  	
NAME OF PURCHASER:  HealthCap IV KB

	  	
          by HealthCap IV  GP AB

	  	  
	  	  
	  	
By: /s/ Staffan Lindstrand

	  	
Name:  Staffan Lindstrand

	  	
Title:    Partner

	  	
By: /s/ Anki Forsberg

	  	
Name:  Anki Forsberg

	  	
Title:    Partner

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

 

 

	  	
NAME OF PURCHASER:  Odlander, Fredrikson & Co AB as a member and on behalf of all members, if any, of OFCO Club IV

	  	  
	  	  
	  	
By: /s/ Staffan Lindstrand

	  	
Name:  Staffan Lindstrand

	  	
Title:    Partner

	  	
By: /s/ Anki Forsberg

	  	
Name:  Anki Forsberg

	  	
Title:    Partner

 

 

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

	  	
NAME OF PURCHASER:  Bay City Capital Fund V, L.P.

	  	  
	  	  
	  	
By: /s/ Carl Goldfischer, MD

	  	
Name:  Carl Goldfischer, MD

	  	
Title:    Manager and Managing Director

 

 

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

	  	
NAME OF PURCHASER:

	  	
Bay City Capital Fund V Co-Investment Fund, L.P.

	  	  
	  	  
	  	
By: /s/ Carl Goldfischer, MD

	  	
Name:  Carl Goldfischer, MD

	  	
Title:    Manager and Managing Director

 

 

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

  

  

  

	  	
NAME OF PURCHASER: Empery Asset Master, Ltd

	  	
By:  Empery Asset Management, LP, its authorized agent

	  	
By:  Empery AM GP, LLC

	  	  
	  	  
	  	
By: /s/ Ryan M. Lane

	  	
Name:  Ryan M. Lane

	  	
Title:    Managing Member

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

	  	
NAME OF PURCHASER: Hartz Capital Investments, LLC

	  	
By:  Empery Asset Management, LP, its authorized agent

	  	
By:  Empery AM GP, LLC

	  	  
	  	  
	  	
By: /s/ Ryan M. Lane

	  	
Name:  Ryan M. Lane

	  	
Title:    Managing Member

 

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

  

  

  

	  	
NAME OF PURCHASER: Capital Ventures International

	  	
By:  Heights Capital Management, Inc.

	  	
 its authorized agent

	  	  
	  	  
	  	
By: /s/ Martin Kobinger

	  	
Name:  Martin Kobinger

	  	
Title:    Investment Manager

	  	  

 

 

 

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

 

 

  

  

  

	  	
NAME OF PURCHASER:  Midsummer Small Cap Master, Ltd.

	  	  
	  	  
	  	
By: /s/ Joshua Thomas

	  	
Name:  Joshua Thomas

	  	
Title:    Authorized Signatory

 

 

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

	  	
NAME OF PURCHASER:  HUDSON BAY MASTER FUND LTD.

	  	  
	  	  
	  	
By: /s/ George Antonopoulos

	  	
Name:  George Antonopoulos

	  	
Title:    Authorized Signatory

 

 

 

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]

 

  

  

  

	  	
NAME OF PURCHASER:  Opus Point Healthcare Innovations Fund, LP

	  	  
	  	  
	  	
By: /s/ Michael S. Weiss

	  	
Name:  Michael S. Weiss

	  	
Title:    Manager

 

 

 

 

 

 

 

 

 

 

[Securities Purchase Agreement Signature Page]ex10-2.htm

 

Exhibit 10.2

 

 

FACILITY AGREEMENT

 

FACILITY AGREEMENT (this “Agreement”), dated as of June 28, 2013, between Tengion, Inc., a Delaware corporation (the “Borrower”), and the lenders set forth on Schedule 1 attached hereto (the “Lenders” and, together with the Borrower, the “Parties”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower wishes to borrow from the Lenders $18,576,000.00 for the purpose described in Section 2.1; and

 

WHEREAS, the Lenders desire to make loans to the Borrower for such purpose,

 

NOW, THEREFORE, in consideration of the mutual agreements set forth herein, the Parties agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1 General Definitions.  Wherever used in this Agreement, the Exhibits or the Schedules attached hereto, unless the context otherwise requires, the following terms have the following meanings:

 

“2012 Financing” means the convertible debt and warrants issued pursuant to the Facility Agreement, dated as of October 2, 2012 (the “2012 Facility Agreement”), among the Borrower and the lenders from time to time party thereto (the “2012 Lenders”), and the Securities Purchase Agreement, dated as of October 2, 2012, among the Borrower and the lenders party thereto.

 

“Affiliate” means, with respect to any Person, any other Person:

 

(a) that owns, directly or indirectly, in the aggregate more than 10% of the beneficial ownership interest of such Person;

 

(b) that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such Person; or

 

(c) that directly or indirectly is a general partner, controlling shareholder, or managing member of such Person.

 

“Applicable Laws” has the meaning set forth in Section 3.1(p).

 

“Authorization” has the meaning set forth in Section 31(p).

 

“Borrower SEC Reports” means the annual, quarterly and periodic reports filed by the Borrower with the SEC.

 

“Business Day” means a day on which banks are open for business in The City of New York.

 

 

 

  

  

  

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Stock” means the common stock, par value $0.001 per share, of the Borrower.

 

“Default” means any event which, at the giving of notice, lapse of time or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an Event of Default.

 

“Disbursement” has the meaning given to it in Section 2.2.

 

“Dollars” and the “$” sign mean the lawful currency of the United States of America.

 

“Event of Default” has the meaning given to it in Section 5.4.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.

 

“Excluded Taxes” means, with respect to any Lender,  (a) income or franchise Taxes imposed on (or measured by) such recipient’s net income (however denominated) by the United States of America, or by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or incorporated or in which its principal office is located, in the case of a Lender, in which an applicable lending office is located, or as a result of a present or former connection between such recipient and the jurisdiction (or any political subdivision thereof) imposing such Tax (other than a connection arising from such Lender’s having executed, delivered, performed its obligations or received a payment under, received or perfected a security interest under, having been a party to, having enforced or having engaged in any other transaction pursuant to this Agreement or any other Transaction Document), (b) any branch profits Taxes imposed by the United States of America, or (c) any withholding Tax that is imposed by the United States on amounts payable to the Lender under the laws in effect at the time such Lender acquires an interest in the Loan pursuant to this Agreement (or designates a new lending office) or as a direct result of such Lender’s failure or inability to comply with Section 2.5(d), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding Tax pursuant to Section 2.5(a) or is legally unable to comply with Section 2.5(d) as a result of any change in law occurring subsequent to the date such Lender acquires an interest in the Loan pursuant to this Agreement (or designates a new lending office).

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

 

 “Final Payment” means such amount as may be necessary to repay the outstanding principal amount of the Notes and any other amounts owing by the Borrower to the Lenders pursuant to the Transaction Documents.

 

 

  

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“Final Payment Date” means the earlier of (i) the date on which the Borrower repays the Notes (together with any other amounts accrued and unpaid under the Transaction Documents)   and (ii) June 30, 2016.

 

“GAAP” means generally accepted accounting principles consistently applied as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession).

 

“Government Authority” means any government, governmental department, ministry, cabinet, commission, board, bureau, agency, tribunal, regulatory authority, instrumentality, judicial, legislative, fiscal, or administrative body or entity, whether domestic or foreign, federal, state or local, having jurisdiction over the matter or matters and Person or Persons in question, including, without limitation, the SEC.

 

“Indebtedness” means the following, whether direct or contingent:

 

(a) all indebtedness for borrowed money;

 

(b) the deferred purchase price of assets or services (other than trade payables) which in accordance with GAAP would be shown to be a liability (or on the liability side of a balance sheet);

 

(c) all guaranty obligations;

 

(d) the maximum amount of all letters of credit issued or acceptance facilities established for the account of the Borrower and, without duplication, all drafts drawn thereunder (other than letters of credit supporting other indebtedness of Borrower and which are otherwise permitted hereunder);

 

(e) all capitalized lease obligations;

 

(f) all indebtedness of another Person secured by any Lien on any property of the Borrower, whether or not such indebtedness has been assumed or is recourse;

 

(g) all obligations under take-or-pay or similar arrangements or under any interest rate swaps, caps, floors, collars and other interest hedge or protection agreements, treasury locks, equity forward contracts, currency agreements or commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements and any other derivative instruments, in each case, whether the Borrower is liable contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations the Borrower otherwise assures a creditor against loss;

 

(h) indebtedness created or arising under any conditional sale or title retention agreement; and

 

 

 

  

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(i) obligations of the Borrower with respect to withdrawal liability to or on behalf of any “multi employer plan” as defined in Section 4001(a) of ERISA.

 

“Indemnified Person” has the meaning given to it in Section 6.11.

 

“Indemnified Taxes” means all Taxes including Other Taxes, other than Excluded Taxes.

 

“Indemnity” has the meaning given to it in Section 6.11.

 

“Interest Rate” means 10% simple interest per annum.

 

“Interest Payment Date” has the meaning given to it in Section 2.7.

 

“Lien” means any lien, pledge, preferential arrangement, mortgage, security interest, deed of trust, charge, assignment, hypothecation, title retention, privilege or other encumbrance on or with respect to property or interest in property having the practical effect of constituting a security interest, in each case with respect to the payment of any obligation with, or from the proceeds of, any asset or revenue of any kind.

 

“Loan” means the loan made available by the Lenders to the Borrower pursuant to Section 2.2 in the amount of eighteen million five hundred seventy six thousand dollars ($18,576,000.00) or, as the context may require, the principal amount thereof from time to time outstanding.

 

“Loss” has the meaning given to it in Section 6.11.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, condition (financial or otherwise) or assets of the Borrower, (b) the validity or enforceability of any provision of any Transaction Document, (c) the ability of the Borrower to timely perform the Obligations or (d) the rights and remedies of the Lenders under any Transaction Document.

 

“Neo-Kidney Augment” means a product composed of living cells intended to prevent or delay dialysis by increasing renal function in patients with advanced chronic kidney disease.

 

“Net Cash Proceeds” means  with respect to any asset sale, the aggregate cash proceeds received by the Borrower in respect of such asset sale, net of (a) direct costs (including, without limitation, legal, accounting and investment banking fees, and sales commissions) incurred by the Borrower in connection with such asset sale, (b) repayment of all principal, interest and other amounts in respect of any Indebtedness secured by such asset, (c) taxes paid or payable as a result thereof and (d) appropriate amounts to be provided by the recipient of such proceeds as a reserve in accordance with GAAP against any liabilities associated with the assets sold or disposed of in such sale, including, without limitation, liabilities under any indemnification obligation associated with the assets sold or disposed of in such sale; it being understood that “Net Cash Proceeds” shall include, with limitations, any cash received upon the sale or other disposition of any non-cash consideration received by the Borrower in any asset sale and any reserves previously taken against any liabilities associated with any such sale or other disposition immediately upon those reserved being determined to be in excess of such liabilities, but only to the extent of such excess.

 

 

 

  

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“Notes” means the Senior Secured Convertible Notes issued to the Lenders evidencing the Loan in the form attached hereto as Exhibit A.

 

“Note Shares” means the shares of Common Stock issuable on conversion of the Notes.

 

“Obligations” means all obligations (monetary or otherwise) of the Borrower arising under or in connection with the Transaction Documents.

 

“Organizational Documents” means the Certificate of Incorporation and Bylaws, each as amended to date, of the Borrower.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, duties, other similar charges or similar levies, and all liabilities with respect thereto, together with any interest, fees, additions to tax or penalties applicable thereto (including by reason of any delay in payment) arising from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, any Transaction Document.

 

“Permitted Indebtedness” means (i) the Additional Securities which may be issued pursuant to Section 4.8 of the Securities Purchase Agreement and (ii) Indebtedness existing as of the date hereof and set forth on Exhibit B attached hereto.

 

 “Permitted Liens” means:  (i) Liens existing on the date hereof and set forth on Exhibit C attached hereto; (ii) Liens in favor of the Lenders; (iii) statutory Liens created by operation of applicable law; (iv) Liens arising in the ordinary course of business and securing obligations that are not overdue or are being contested in good faith by appropriate proceedings; (v)  Liens for Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings; (vi) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default; (vii) Liens in favor of financial institutions arising in connection with the Borrower’s accounts maintained in the ordinary course of the Borrower’s business held at such institutions to secure standard fees for services charged by, but not Transaction made available by, such institutions,  (viii) purchase money liens;  and (ix) lessor liens.

 

“Person” means and includes any natural person, individual, partnership, joint venture, corporation, trust, limited liability company, limited company, joint stock company, unincorporated organization, government entity or any political subdivision or agency thereof, or any other entity.

 

“Register” has the meaning set forth in Section 1.4.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, by and among the Borrower and the Lenders, as amended from time to time.

 

 

  

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“Required Lenders” means holders of 40% in interest of the Notes, including RA Capital Healthcare Fund L.P., if it is a holder at that time, and at least one of Deerfield Special Situations Fund, L.P. or Deerfield Special Situations International Master Fund, L.P., if either of such entities is a holder at that time.

 

“SEC” means the United States Securities and Exchange Commission.

 

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

 

“Securities Purchase Agreement” means the Securities Purchase Agreement, dated as of the date of this Agreement, among the Borrower and the Lenders.

 

“Security Agreement” means the Security Agreement, dated as of the date of the Disbursement, among the Borrower and the Lenders.

 

“Subsidiary or Subsidiaries” means, as to the Borrower, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Borrower.

 

 “Taxes” means all present or future taxes, levies, imposts, stamp or other duties, fees, assessments, deductions, withholdings, and other charges imposed by any Governmental Authority, and all liabilities with respect thereto, together with any interest, fees, additions to tax or penalties applicable thereto (including by reason of any delay in payment).

 

“Transaction Documents” means this Agreement, the Securities Purchase Agreement, the Notes, the Registration Rights Agreement, the Security Agreement, the Warrants and any other document or instrument delivered in connection with any of the foregoing whether or not specifically mentioned herein or therein.

 

“Warrants” mean the Warrants issuable to the Lenders pursuant to that certain Securities Purchase Agreement, dated the date hereof, among the Borrower and the Lenders signatory thereto.

 

“Warrant Shares” has the meaning ascribed thereto in the Warrants.

 

Section 1.2 Interpretation.  In this Agreement, unless the context otherwise requires, all words and personal pronouns relating thereto shall be read and construed as the number and gender of the party or parties requires and the verb shall be read and construed as agreeing with the required word and pronoun; the division of this Agreement into Articles and Sections and the use of headings and captions is for convenience of reference only and shall not modify or affect the interpretation or construction of this Agreement or any of its provisions; the words “herein,” “hereof,” “hereunder,” “hereinafter” and “hereto” and words of similar import refer to this Agreement as a whole and not to any particular Article or Section hereof; the words “include,” “including,” and derivations thereof shall be deemed to have the phrase “without limitation” attached thereto unless otherwise expressly stated; references to a specified Article, Exhibit, Section or Schedule shall be construed as a reference to that specified Article, Exhibit, Section or Schedule of this Agreement; and any reference to any of the Transaction Documents means such document as the same shall be amended, supplemented or modified and from time to time in effect.

 

 

  

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Section 1.3 Business Day Adjustment.  If the day by which a payment or performance of any covenant, duty or obligation is due to be made is not a Business Day, that payment or performance shall be made by the next succeeding Business Day unless, in the case of any such payment, that next succeeding Business Day falls in a different calendar month, in which case that payment shall be made by the Business Day immediately preceding the day by which such payment is due to be made.

 

Section 1.4 Register.

 

(a) The Borrower shall record on its books and records the amount of the Loan, the interest rate applicable, all payments of principal and interest thereon and the principal balance thereof from time to time outstanding.  Such record shall, absent manifest error, be conclusive evidence of the amount of the Loan made by the Lenders to the Borrower and the interest and payments thereon.

 

(b) The Borrower shall establish and maintain at its address referred to in Section 6.1, (i) a record of ownership (the “Register”) in which the Borrower agrees to register by book entry the interests (including any rights to receive payment of principal and interest hereunder) of each Lender in the Loan and each Note, and any assignment of any such interest, and (ii) accounts in the Register in accordance with its usual practice in which it shall record (1) the names and addresses of the Lenders (and any change thereto pursuant to this Agreement), (2) the amount of the Loan and each Note and each funding of any participation therein, (3) the amount of any principal or interest due and payable or paid, and (4) any other payment received by the Lenders from the Borrower and its application to the Loan and each Note.

 

(c) Notwithstanding anything to the contrary contained in this Agreement, the Loan (including any Notes evidencing the Loan) is a registered obligation, the right, title and interest of the Lenders and their assignees in and to the Loan shall be transferable only upon notation of such transfer in the Register and no assignment thereof or participation therein shall be effective until recorded therein.  This Section 1.4 and Section 6.5 shall be construed so that the Loan is at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and Section 5f.103-1(c) of the United States Treasury Regulations.

 

(d) The Borrower and the Lenders shall treat each Person whose name is recorded in the Register as a Lender (and as the owner of the amounts owing to it under the Loan and/or a Note as reflected in the Register) for all purposes of this Agreement.  Information contained in the Register with respect to any Lender shall be available for access by the Borrower or such Lender at any reasonable time and from time to time upon reasonable prior notice.

 

 

 

  

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ARTICLE 2

 

AGREEMENT FOR THE LOAN

 

Section 2.1 Use of Proceeds.  The proceeds of the Loan will be used for working capital.

 

Section 2.2 Disbursement. Subject to satisfaction of the conditions contained in Article 4, the Loan shall be made (the “Disbursement”) on the date this Agreement is executed (the “Disbursement Date”).  The Lenders shall effect the Disbursement on the Disbursement Date in accordance with their respective allocations set forth on Schedule 1. The Borrower’s wire instructions are attached as Schedule 2.  Each Lender shall retain from its portion of the Loan to the Borrower the percentage set forth on Schedule 1 (the “Escrow Amount”) and shall implement the procedures set forth in the Escrow Agreement dated the date hereof to which the Borrower and the Lenders are parties.

 

Section 2.3 Payment.

 

(a) Subject to the provisions of Section 5.3, the Borrower shall remit the Final Payment to the Lenders on the earlier to occur of (i) the Final Payment Date and (ii)  the date the principal amount of the Notes are declared to be or automatically become due and payable following an Event of Default.  The Borrower shall also prepay the Notes in the amount of any Net Cash Proceeds of the sale by the Borrower or any of its Subsidiaries, directly or indirectly, of any assets, other than the sale of assets in the ordinary course of business and sales (when aggregated with sales made as part of any related transactions) not in excess of $500,000.

 

(b)           The Notes shall be deemed prepaid and without  premium, to the extent a Lender satisfies the payment of the Exercise Price (as such term is defined in the Warrants) through a reduction of the principal amount outstanding under such Lender’s Note in accordance with Section 3(a)(i) of the Warrants.

 

(c)           Each prepayment shall be applied first, to accrued and unpaid interest and second, to principal and shall be allocated among the Lenders in accordance with their respective allocations set forth on Schedule 1.

 

Section 2.4 Payments.  Payments of any amounts due to the Lenders under this Agreement shall be made in Dollars in immediately available funds prior to 11:00 a.m. New York City time on such date that any such payment is due, at such bank or places, as the Lenders shall from time to time designate in writing at least 5 Business Days prior to the date such payment is due.  The Borrower shall pay all and any costs (administrative or otherwise) imposed by banks, clearing houses, or any other financial institution, in connection with making any payments under any of the Transaction Documents, except for any costs imposed by the Lenders’ banking institutions.

 

Section 2.5 Taxes, Duties and Fees.

 

(a) Any and all payments hereunder or under any other Transaction Document shall be made, in accordance with this Section 2.5, free and clear of and without deduction for any and all present or future Indemnified Taxes except as required by applicable law.  If Borrower shall be required by law to deduct any Indemnified Taxes from or in respect of any sum payable hereunder or under any other Transaction Document, (i) the sum payable shall be increased by as much as shall be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.5) the Lenders shall receive an amount equal to the sum they would have received had no such deductions been made (any and all such additional amounts payable to Lenders shall hereafter be referred to as the “Additional Amounts”), (ii) Borrower shall make such deductions, and (iii) Borrower shall pay the full amount deducted to the relevant taxing or other authority in accordance with applicable law.  Within thirty (30) days after the date of any payment of such Taxes, Borrower shall furnish to the applicable Lender any original or a certified copy of a receipt evidencing payment thereof or other evidence of such payment reasonably satisfactory to such Lender.

 

 

 

  

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(b) In addition, Borrower agrees to pay, and authorizes Lenders to pay in its name (but without duplication), all Other Taxes, except any such Other Taxes imposed with respect to a voluntary assignment, grant of participation or designation of a new office for receiving payments under a Note other than at Borrower’s request or following a Borrower default.  Within 30 days after the date of any payment of Other Taxes, Borrower shall furnish to Lenders any original or a certified copy of a receipt evidencing payment thereof or other evidence of such payment reasonably satisfactory to Lenders.

 

(c) Borrower shall reimburse and indemnify, within 10 days after receipt of demand therefor, each Lender for all Indemnified Taxes (including all Taxes and Other Taxes, in each case other than Excluded Taxes, imposed by any jurisdiction on amounts payable under this Section 2.5(c)) paid by such Lender, whether or not such Indemnified Taxes were correctly or legally asserted.  A certificate of the applicable Lender(s) setting forth the amounts to be paid thereunder and delivered to Borrower shall be conclusive, binding and final for all purposes, absent manifest error.

 

(d) Each Lender (other than a Foreign Person (as hereinafter defined)) on or before the date hereof shall provide to Borrower a properly completed and executed IRS Form W-9 certifying that such Lender is organized under the laws of the United States; provided, however, that if the Lender is a disregarded entity for U.S. federal income tax purposes it shall provide a properly completed and executed IRS Form W-9 for its owner in the appropriate manner or shall provide the appropriate IRS Form W-8 if its owner is a Foreign Person (as defined below).  Each Lender organized under the laws of a jurisdiction outside the United States (a “Foreign Person”) that is entitled to an exemption from or reduction in U.S. withholding tax shall provide Borrower with a properly completed and executed IRS Form W-8ECI, W-8BEN, W-8IMY or other applicable form (together with any required supporting documentation), or any other applicable certificate or document reasonably requested by the Borrower, and, if such Foreign Person that is relying on the portfolio interest exception of Section 871(h) or Section 881(c) of the Code (or any successor provision thereto), shall also provide the Borrower with a certificate (the “Portfolio Interest Certificate”) representing that such Foreign Person is not a “bank” for purposes of Section 881(c) of the Code (or any successor provision thereto), is not a 10% holder of the Borrower described in Section 871(h)(3)(B) of the Code (or any successor provision thereto), is not a controlled foreign corporation receiving interest from a related person (within the meaning of Sections 881(c)(3)(C) and 864(d)(4) of the Code, or any successor provisions thereto) and is not a conduit entity participating in a conduit Transaction arrangement as defined in Treasury Regulation Section 1.881-3 (or any successor provision thereto).  Each Lender shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and as reasonably requested by the Borrower from time to time and shall promptly notify the Borrower of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

 

 

  

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(e) If a Lender determines in good faith that it has received a refund from a Government Authority relating to Taxes in respect of which the Borrower paid Additional Amounts or made a payment pursuant to Section 2.5(c), such Lender shall promptly pay such refund to the Borrower, net of all out-of-pocket expense (including any Taxes imposed thereon) of such Lender incurred in obtaining such refund, provided that the Borrower, upon the request of such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Lender if such Lender is required to repay such refund to such Governmental Authority.  Nothing in this Section shall require any Lender to disclose any information it deems confidential (including, without limitation, its tax returns) to any Person, including Borrower.

 

(f) If (but only if) a Note is materially modified for U.S. federal income tax purposes after the date hereof and following such material modification, a payment made to a Lender hereunder or under such Note would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), then such Lender shall deliver to the Borrower at the time or times prescribed by law and at such time or times reasonably requested by the Borrower such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower as may be necessary for the Borrower to comply with its obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.5(f), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

Section 2.6 Costs, Expenses and Losses.  If, as a result of any failure by the Borrower to pay any sums due under this Agreement on the due date therefor (after the expiration of any applicable grace periods), the Lenders shall incur costs, expenses and/or losses, by reason of the liquidation or redeployment of deposits from third parties or in connection with obtaining funds to make or maintain the Disbursement, the Borrower shall pay to the Lenders upon request by the Lenders, the amount of such costs, expenses and/or losses within fifteen (15) days after receipt by it of a certificate from the Lenders setting forth in reasonable detail such costs, expenses and/or losses, along with supporting documentation.  For the purposes of the preceding sentence, “costs, expenses and/or losses” shall include, without limitation, any interest paid or payable to carry any unpaid amount and any loss, premium, penalty or expense which may be incurred in obtaining, liquidating or employing deposits of or borrowings from third parties in order to make, maintain or fund the Loan or any portion thereof.

 

Section 2.7 Interest.  The outstanding principal amount of the Notes shall bear interest at the Interest Rate (calculated on the basis of the actual number of days elapsed in each month).   Interest shall be paid quarterly in arrears commencing on October 1, 2013 and on the first Business Day of each January, April, July, and October thereafter (the “Interest Payment Date”).

 

 

 

  

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Section 2.8 Interest on Late Payments.  Without limiting the remedies available to the Lenders under the Transaction Documents or otherwise, to the maximum extent permitted by applicable law, if the Borrower fails to make a required payment of principal or interest with respect to the Loan when due the Borrower shall pay, in respect of such principal and interest at the rate per annum equal to the Interest Rate plus ten percent (10%) for so long as such payment remains outstanding.  Such interest shall be payable on demand.

 

Section 2.9 Payment of Interest in Common Stock.

 

(a) Share Issuance Right. In lieu of making any payment of accrued and unpaid interest in respect of the Notes in cash and subject to the provisions of this Section 2.9, the Borrower may elect to satisfy all or any such payment by the issuance to the Lenders (i) of shares of Freely Tradeable Common Stock (a “Common Share Issuance”) or (ii) if such issuance of Freely Tradeable Common Stock would result in a Lender exceeding the 9.985% Cap described in Section 2.9(e) hereof, warrants to purchase shares of Common Stock (the “Interest Warrants”) in the form attached hereto as Exhibit D (a “Warrant Share Issuance” and together with the Common Share Issuance the “Interest Share Issuances”).  Subject to the provisions of this Section 2.9, the Borrower’s exercise of its share issuance rights under this Section 2.9 shall be deemed to satisfy its obligation to pay any accrued and unpaid interest in respect of which such share issuance right is being exercised as of the Interest Payment Date (as defined below).

 

(b) Exercise of Share Issuance Rights.  Subject to the provisions of this Section 2.9, upon written notice given at least 21 Trading Days prior to the applicable date on which interest would otherwise be due under Section 2.7 hereunder, the Borrower may deliver to the Lenders notice by electronic mail and facsimile (a “Share Issuance Notice”) of its intention to make Interest Share Issuances pursuant to the provisions of this Section 2.9 in payment of interest under the Notes; provided, however, that the Borrower may not deliver a Share Issuance Notice (i) upon and during the continuation of an Event of Default (as defined in Section 5.4), or (ii) unless the Borrower has, at the time of such issuance, complied with the “current public information” requirement of Rule 144(c) under the Securities Act.  Subject to such provisions, a Share Issuance Notice shall be irrevocable and shall specify the aggregate amount of interest under the Notes that the Borrower intends to satisfy by issuing shares of Common Stock to the Lenders on the applicable Interest Payment Date (the “Share Issuance Amount”).

 

For purposes herein, “Freely Tradeable Common Stock” means, with respect to any shares of Common Stock issued pursuant to this Section 2.9 either (a) such shares are registered for issuance or resale under the Securities Act under an effective registration statement filed with the SEC or (b) such shares are eligible for resale by the Lenders that are not affiliates (as defined in Rule 144(a)(1) of the Securities Act) of the Borrower without the need for registration under any applicable federal or state securities laws on or after December 28, 2013; provided that, in the case of (b), the issuance of Freely Tradeable Common Stock is predicated on reliance by the Borrower on the continuing representation by such Lender under this subsection, unless such Lender provides otherwise in writing to the Borrower at least two business days prior to each Interest Payment Date on or after December 28, 2013 (each Interest Payment Date on and after December 28, 2013 a “Rule 144 Interest Payment Date” and together the “Rule 144 Interest Payment Dates”), that on and after each Rule 144 Interest Payment Date (i) such Lender will have acquired the Notes from the Borrower more than six months prior to each Interest Payment Date and (ii) such Lender will not be, and will not have been during the three months preceding such Rule 144 Interest Payment Date, an officer, director, or 10% or greater shareholder of the Borrower or in any other way an “affiliate” of the Borrower (as that term is defined in Rule 144(a)(1)). For the avoidance of doubt, shares that meet the requirements of clause (b) shall be considered Freely Tradeable Common Stock even with respect to such shares that may be issued to affiliates of the Borrower in accordance with Section 2.9 of this Agreement.

 

 

 

  

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(c) Common Share Issuance or Warrant Share Issuance on Interest Payment Date.  If the Borrower has elected to make a Common Share Issuance or Warrant Share Issuance on the applicable Interest Payment Date, the Borrower shall issue to the Lenders a number of shares of Common Stock or Interest Warrant exercisable for a number of shares of Common Stock equal to the quotient of (1) the Share Issuance Amount and (2) the Interest Payment Price in effect on the applicable Interest Payment Date (the “Interest Payment Securities”).

 

(i) Delivery of Freely Tradeable Common Stock for Common Share Issuance.

 

By no later than 10:00 a.m., New York City time, on the Interest Payment Date, the Borrower shall (A) in the event shares without restrictive legends are being issued to the Lenders provided that the Borrower’s transfer agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program and provided that a Lender is eligible to receive shares through DTC, credit the shares underlying the Common Share Issuance, to which the Lender shall be entitled to the Lender’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (B) if the foregoing shall not apply, issue and deliver to the address as specified in advance by a Lender, in book-entry form or in a stock certificate, with book entries or stock certificates representing shares underlying the Common Share Issuance satisfying any interest payments due prior to December 28, 2013 to be accompanied by the applicable restrictive legends, registered in the name of the Lender or its designee, for the Interest Payment Shares to which the Lender shall be entitled.  For purposes herein, “Trading Day” means any day on which the Common Stock is traded for at least two hours on the Current Market.  For purposes herein, “Interest Payment Price” shall mean the lesser of (i) the Volume Weighted Average Price for the Borrower’s Common Stock for the twenty (20) Trading Day period prior to the Interest Payment Date (the “VWAP Period”) or (ii) the closing bid price for the Company’s Common Stock as of the last Trading Day of the VWAP Period on the principal securities exchange, trading market or quotation system (including the OTC Market (as defined below)) on which the Company’s Common Stock is listed, traded or quoted.  For purposes herein, “Volume Weighted Average Price” means the volume weighted average sale price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg Financial Markets or an equivalent, reliable reporting service (“Bloomberg”) mutually acceptable to and hereafter designated by the Required Lenders and the Borrower or, if no volume weighted average sale price is reported for such security, then the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security that are listed in the over the counter market by the Financial Industry Regulatory Authority, Inc. or on the “over the counter” Bulletin Board (or any successor) or in the “pink sheets” (or any successor) by the OTC Markets Group, Inc. (collectively, the “OTC Market”).  If the Volume Weighted Average Price cannot be calculated for such security on such date in the manner provided above, the volume weighted average price shall be the fair market value as mutually determined by the Borrower and the Required Lenders

 

 

 

  

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(ii) Delivery of Warrants for Warrant Share Issuance. By no later than 10:00 a.m., New York City time, on the Interest Payment Date, the Borrower shall have delivered to each Lender the originally executed Interest Warrant(s) the Lender is entitled to.

(d) Borrower Reporting.  The Borrower shall file with the SEC a Current Report on Form 8-K disclosing its delivery of a Share Issuance Notice, no later than 8:35 a.m., New York City time, on the first Trading Day following the date on which the Share Issuance Notice has been sent to the Lenders.

 

(e) Limitations on Share Issuances.  Notwithstanding anything herein to the contrary, no payments of interest on the Notes may be made in shares of Common Stock to the extent that the number of shares so issued, together with the number of other shares of Common Stock beneficially owned by a Lender and its affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Lender for purposes of Section 13(d) of the Exchange Act, including any shares held by any “group” of which the Lender is a member, but exclusive of shares issuable at such time upon exercise or conversion of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitations set forth in this Section 2.9(e), would exceed 9.985% of the total number of shares of Common Stock of the Borrower then issued and outstanding; provided, however, that the 9.985% Cap shall only apply to the extent that the Common Stock is deemed to constitute an “equity security” pursuant to Rule 13d-1(i) promulgated under the Exchange Act and, provided, further, that if the Lender and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Lender’s for purposes of Section 13(d) of the Exchange Act beneficially own on the Interest Payment Date greater than 9.985% of the shares of Common Stock then outstanding, then the 9.985% Cap shall not apply to such Lender unless and until the beneficial ownership of the Lender and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Lender’s for purposes of Section 13(d) of the Exchange Act subsequently decreases to below 9.985%; and

 

(f) Allocation of Shares Underlying Common Share Issuances and Warrants Share Issuances.  All shares of Common Stock and Interest Warrants issuable to the Lenders under Common Share Issuances or Warrant Share Issuances pursuant to this Section 2.9 shall be allocated pro rata among the Notes based on the outstanding principal amount of the Notes, in each case unless the Lenders notify the Borrower in writing of any different allocation ratio.

 

 

 

 

 

  

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(g)  Issuance of Shares Underlying Interest Share Issuances .  It shall be a condition precedent to the delivery of shares of Common Stock or Interest Warrants pursuant to this Section 2.9 that such shares of Common Stock or shares of Common Stock issuable upon exercise of any Interest Warrants shall be duly authorized by all necessary corporate action, when issued in accordance with the terms hereof shall be validly issued and outstanding and fully paid and nonassessable, and, when such shares of Common Stock have been issued to the Lenders, the Lenders shall be entitled to all rights accorded to a holder and beneficial owner of Common Stock.

 

(h) Failure to Deliver Shares or Warrants underlying Interest Share Issuances.  If the Borrower fails on any Interest Payment Date to take all actions within its reasonable control to cause the delivery of the Interest Payment Securities required to be delivered on that date, and such failure is not cured within one (1) Trading Day following such Interest Payment Date (a “Share Delivery Failure”), no interest due under the Notes shall be reduced in respect of such Interest Payment Securities until such Interest Payment Securities are actually issued and, in addition to all other obligations under this Section 2.9, the Borrower shall be obligated to promptly pay to the Lenders, for each day that such Share Delivery Failure occurs, an amount equal to the Failure Amount.  As used herein, the “Failure Amount” shall be an amount equal to 5% of the dollar amount of interest payments due on the applicable Interest Payment Date.

 

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.1 Representations and Warranties of the Borrower.  The Borrower represents and warrants as of the date hereof that except as set forth in the Borrower’s SEC Reports for the year ended December 31, 2012 or the quarterly period ended March 31, 2013:

 

(a) The Borrower is conducting its business in compliance with its Organizational Documents, which are in full force and effect with no defaults outstanding thereunder.

 

(b) No Default or Event of Default (or any other default or event of default, however described) has occurred under any of the Transaction Documents.

 

(c) The Borrower (i) is capable of paying its debts as they fall due, is not unable and has not admitted its inability to pay its debts as they fall due, (ii) is not bankrupt or insolvent and (iii) has not taken action, and no such action has been taken by a third party, for the Borrower’s winding up, dissolution, or liquidation or similar executory or judicial proceeding or for the appointment of a liquidator, custodian, receiver, trustee, administrator or other similar officer for the Borrower or any or all of its assets or revenues.

 

(d) No Lien exists on the Borrower’s assets, except for Permitted Liens.

 

 

 

 

  

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(e) The obligation of the Borrower to make any payment under this Agreement (together with all charges in connection therewith) is absolute and unconditional, and there exists no right of setoff or recoupment, counterclaim, cross-claim or defense of any nature whatsoever to any such payment.

 

(f) No Indebtedness of the Borrower exists other than Permitted Indebtedness.

 

(g) The Borrower is validly existing as a corporation in good standing under the laws of Delaware.  The Borrower has full power and authority to own its properties and conduct its business, and is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business makes such qualification necessary except where the failure to so qualify would not reasonably be expected to have a Material Adverse Effect.

 

(h) There is not pending or, to the knowledge of the Borrower, threatened, any action, suit or other proceeding before any Governmental Authority (a) to which the Borrower is a party or (b) which has as the subject thereof any assets owned by the Borrower.  There are no current or, to the knowledge of the Borrower, pending, legal, governmental or regulatory enforcement actions, suits or other proceedings to which the Borrower or any of its assets is subject.

 

(i) The Transaction Documents have been duly authorized, executed and delivered by the Borrower, and constitute a valid, legal and binding obligation of the Borrower enforceable in accordance with their terms, except as such enforceability may be limited by (i) applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors’ rights generally, and (ii) applicable equitable principles (whether considered in a proceeding at law or in equity).  The execution, delivery and performance of the Transaction Documents by the Borrower and the consummation of the transactions therein contemplated will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than Permitted Liens) upon any assets of the Borrower pursuant to any agreement to which the Borrower is a party or by which the Borrower is bound or to which any of the assets of the Borrower is subject, (B) result in any violation of or conflict with, the provisions of the Organizational Documents or (C) result in the violation of any law or any judgment, order, rule, regulation or decree of any Governmental Authority except, in the case of clauses (A) and (C) above, for any such conflict, violation or breach that would not, individually or in the aggregate, have a Material Adverse Effect.  No consent, approval, authorization or order of, or registration or filing with any Governmental Authority is required for the execution, delivery and performance of any of the Transaction Documents or for the consummation by the Borrower of the transactions contemplated hereby except (x) for such registrations and filings in connection with the issuance of the Notes, the Note Shares, the Warrants and the Warrant Shares pursuant to the Transaction Documents that are necessary to comply with federal and state securities laws, rules and regulations and (y) filings contemplated with the Security Agreement, the Borrower has corporate power and authority to enter into the Transaction Documents and to consummate the transactions contemplated under the Transaction Documents.

 

 

 

 

  

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(j) The Borrower holds, and is operating in compliance in all material respects with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders of any Governmental Authority (collectively, “Necessary Documents”) required for the conduct of its business and all Necessary Documents are valid and in full force and effect; and the Borrower has not received written notice of any revocation or modification of any of the Necessary Documents and the Borrower has no reason to believe that any of the Necessary Documents will not be renewed in the ordinary course, and the Borrower is in compliance in all material respects with all applicable federal, state, local and foreign laws, regulations, orders and decrees applicable to the conduct of its business.

 

(k) The Borrower has good and marketable title to all of its assets free and clear of all Liens except Permitted Liens.  The property held under lease by the Borrower is held under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of the business of the Borrower.

 

(l) The Borrower owns or has the right to use pursuant to a valid and enforceable written license, implied license or other legally enforceable right, all of the Intellectual Property (as defined below)  that is necessary for the conduct of its business as currently conducted (the “IP”).  The IP that is registered with or issued by a Governmental Authority is valid and enforceable; there is no outstanding, pending, or, to the knowledge of the Borrower, threatened action, suit, other proceeding or claim by any third person challenging or contesting the validity, scope, use, ownership, enforceability, or other rights of the Borrower in or to any IP and the Borrower has not received any written notice regarding, any such action, suit, or other proceeding.  To the knowledge of the Borrower, the Borrower has not infringed or misappropriated any material rights of others.  To the knowledge of the Borrower, there is no pending or threatened action, suit, other proceeding or claim by others that the Borrower infringes upon, violates or uses the Intellectual Property rights of others without authorization, and the Borrower has not received any written notice regarding, any such action, suit, other proceeding or claim.  The Borrower is not a party to or bound by any options, licenses, or agreements with respect to IP.  The term “Intellectual Property” as used herein means (i) all patents, patent applications, patent disclosures and inventions (whether patentable or unpatentable and whether or not reduced to practice), (ii) all trademarks, service marks, trade dress, trade names, slogans, logos, and corporate names and Internet domain names, together with all of the goodwill associated with each of the foregoing, (iii) copyrights, copyrightable works, and licenses, (iv) registrations and applications for registration for any of the foregoing, (v) computer software (including but not limited to source code and object code), data, databases, and documentation thereof, (vi) trade secrets and other confidential information, (vii) other intellectual property, and (viii) copies and tangible embodiments of the foregoing (in whatever form and medium).

 

(m) The Borrower is not in violation of the Organizational Documents, or in breach of or otherwise in default, and no event has occurred which, with notice or lapse of time or both, would constitute such breach or other default in the performance of any agreement or condition contained in any agreement under which it may be bound, or to which any of its assets is subject, except for such breaches or defaults as would not have a Material Adverse Effect.

 

 

 

  

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(n) The Borrower has timely filed, including pursuant to all extensions, all federal, state, local and foreign income and franchise tax returns required to be filed (except where the failure to file would not have a Material Adverse Effect) and are not in default in the payment of any material taxes which were payable pursuant to said returns or any assessments with respect thereto.  There is no pending dispute with any taxing authority relating to any of such returns, and the Borrower has no knowledge of any proposed liability for any tax to be imposed upon its properties or assets.

 

(o) The Borrower has not granted rights to develop, manufacture, produce, assemble, distribute, license, market or sell its products to any other Person and is not bound by any agreement that affects the exclusive right of the Borrower to develop, manufacture, produce, assemble, distribute, license, market or sell its products.

 

(p) The Borrower:  (A) is and at all times has complied in all material respects with all statutes, rules and regulations of the U.S. Food and Drug Administration (“FDA”) and of other Governmental Authorities exercising regulatory authority similar to that of the FDA applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by or on behalf of the Borrower (“Applicable Laws”); (B) has not received any warning letter or other correspondence or notice from the FDA or any correspondence or notice from any other Governmental Authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any Applicable Laws (together, the “Authorizations”); (C) possesses and complies in all material respects with  the Authorizations, which are valid and in full force and effect; (D) has not received written notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorization and have no knowledge that any Governmental Authority is considering such action; (E) has filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations, except as would not have a Material Adverse Effect; and (F) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor” letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the Borrower’s knowledge, no third party has initiated, conducted or intends to initiate any such notice or action.

 

(q) The studies, tests and preclinical and clinical trials conducted by or on behalf of the Borrower were and, if still pending, are being conducted in compliance in all material respects with experimental protocols, procedures and controls pursuant to accepted professional scientific standards and all Applicable Laws and Authorizations, including, without limitation, the Federal Food, Drug and Cosmetic Act and the rules and regulations promulgated thereunder; the Borrower is not aware of any studies, tests or trials, the results of which the Borrower believes reasonably call into question any of its studies, tests or trial results and the Borrower has not received any written notices or correspondence from any Governmental Authority requiring the termination, suspension, or material modification of any such studies, tests or preclinical or clinical trials.

 

 

  

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(r) (i) To the knowledge of the Borrower, no “prohibited transaction” as defined under Section 406 of ERISA or Section 4975 of the Code and not exempt under ERISA Section 408 and the regulations and published interpretations thereunder has occurred with respect to any Employee Benefit Plan. At no time within the last seven (7) years has the Borrower or any ERISA Affiliate maintained, sponsored, participated in, contributed to or has or had any liability or obligation in respect of any Employee Benefit Plan subject to Section 302 of ERISA, Title IV of ERISA, or Section 412 of the Code or any “multiemployer plan” as defined in Section 3(37) of ERISA or any multiple employer plan for which the Borrower or any ERISA Affiliate has incurred or could incur liability under Section 4063 or 4064 of ERISA. No Employee Benefit Plan represents any current or future liability for retiree health, life insurance, or other retiree welfare benefits except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or similar state law. Each Employee Benefit Plan is and has been operated in compliance with its terms and all applicable laws, including but not limited to ERISA and the Code, except for such failures to comply that would not have a Material Adverse Effect. No event has occurred (including a “reportable event” as such term is defined in Section 4043 of ERISA) and no condition exists that would subject the Borrower or any ERISA Affiliate to any tax, fine, lien, penalty or liability imposed by ERISA, the Code or other applicable law, except for any such tax, fine, lien, penalty or liability that would not, individually or in the aggregate, have a Material Adverse Effect; (ii) the Borrower does not maintain any Foreign Benefit Plan; (iii) the Borrower does not have any obligations under any collective bargaining agreement. As used in this clause (r), “Employee Benefit Plan” means any material “employee benefit plan” within the meaning of Section 3(3) of ERISA, including, without limitation, all stock purchase, stock option, stock-based severance, employment, change-in-control, medical, disability, fringe benefit, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, under which (A) any current or former employee, director or independent contractor of the Borrower receive present or future right to benefits and which are contributed to, sponsored by or maintained by the Borrower or (B) the Borrower has had or has any present or future obligation or liability; “ERISA” means the Employee Retirement Income Security Act of 1974, as amended; “ERISA Affiliate” means any member of the Borrower’s controlled group as defined in Code Section 414 (b), (c), (m) or (o); and “Foreign Benefit Plan” means any Employee Benefit Plan established, maintained or contributed to outside of the United States of America or which covers any employee working or residing outside of the United States.

 

(s) The financial statements of the Borrower annexed its SEC Reports for the year ended December 31, 2012 and the quarterly period ended March 31, 2013, together with the related notes, fairly present the financial condition of the Borrower as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified in conformity with GAAP consistently applied throughout the periods involved, subject, in the case of unaudited financial statements, to year-end adjustments; and there are no material off-balance sheet arrangements or any other relationships with unconsolidated entities or other persons, that may have a material current or, to the Borrower’s knowledge, material future effect on the Borrower’s financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenue or expenses.

 

 

  

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(t) The Borrower has not declared or paid any dividends or made any distribution of any kind with respect to its capital stock.  Since March 31, 2013, except for changes in the number of outstanding shares of common stock due to the issuance of shares for payment of interest or upon the exercise of outstanding options or warrants, there has not been any change in the Borrower’s capital stock, or any issuance of options, warrants, convertible securities or other rights to purchase such capital stock, of the Borrower or any development which would reasonably be expected to result in a Material Adverse Effect.

 

(u) All of the issued and outstanding shares of capital stock of the Borrower are duly authorized and validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state and foreign securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities; the Notes, the Warrants and the shares of Common Stock issuable upon exercise of the Warrants or conversion of a Note (together, the “New Shares”), have been duly authorized and when issued, delivered and paid for in accordance with the terms of the Warrants or upon conversion of a Note, will have been validly issued and will be fully paid and nonassessable.   Except as disclosed in the Borrower’s SEC Reports, there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of any shares of Common Stock pursuant to the Organizational Documents or any agreement or other instrument to which the Borrower is a party or by which the Borrower is bound.  Except as disclosed in Borrower’s SEC Reports, there are no options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Borrower any shares of capital stock of the Borrower.

 

(v) The Borrower maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(w) The Borrower has no Subsidiaries.

 

Section 3.2 Borrower Acknowledgment.  The Borrower acknowledges that it has made the representations and warranties referred to in Section 3.1 with the intention of persuading the Lenders to enter into the Transaction Documents and that the Lenders have entered into the Transaction Documents on the basis of, and in full reliance on, each of such representations and warranties.  The Borrower represents and warrants to the Lenders that none of such representations and warranties omits any matter the omission of which makes any of such representations and warranties misleading.

 

Section 3.3 Representations and Warranties of the Lenders.  Each Lender represents and warrants to the Borrower as of the date hereof that:

 

(a) It is acquiring the Notes and Warrants and shares of Common Stock issuable upon exercise or conversion thereof solely for its account for investment, not as an agent or nominee, and not with a view to or for resale in connection with any distribution of the Notes or Warrants and shares of Common Stock issuable upon exercise or conversion thereof or any part thereof.

 

 

 

  

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(b) The Notes and Warrants and shares of Common Stock issuable upon exercise or conversion thereof must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption for such registration is available.

 

(c) Neither the Notes and Warrants nor shares of Common Stock issuable upon exercise or conversion thereof may be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met.

 

(d) It will not make any disposition of all or any part of the Notes and Warrants and shares of Common Stock issuable upon exercise or conversion thereof until:

 

(i) The Borrower shall have received a letter secured by such Lender or its counsel from the SEC stating that no action will be recommended to the SEC with respect to such proposed disposition;

 

(ii) There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(iii) Such Lender shall have notified the Borrower of such proposed disposition and, in the case of a sale or transfer in a so-called “4(1) and a half” transaction, shall have furnished counsel for the Borrower with an opinion of counsel, substantially in the form annexed as Exhibit C to the Warrant.  The Borrower agrees that it will not require an opinion of counsel with respect to transactions under Rule 144 or Rule 144A of the Securities Act.

 

It understands and agrees that all certificates evidencing the shares to be issued to the Lenders upon exercise and/or conversion of the Notes and Warrants may bear a legend as set forth in the Notes and Warrants.

 

(e) Such Lender is an “accredited investor” as defined in Regulation D promulgated the Securities Act or is a Regulation S Purchaser as defined in Rule 902 promulgated under the Securities Act.

 

(f) Such Lender is duly organized and validly existing under the laws of the jurisdiction of its formation.

 

(g) Such Lender has full power and authority to make each Loan and to enter into and perform its other obligations under each of the Transaction Documents and carry out the other transactions contemplated thereby.

 

(h) Each Transaction Document to which it is a party has been duly authorized, executed and delivered by such Lender and constitutes its valid and legally binding obligation, enforceable in accordance with its terms, except as such enforceability may be limited by (i) applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors’ rights generally, and (ii) applicable equitable principles (whether considered in a proceeding at law or in equity).

 

 

  

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(i) Such Lender is not purchasing the Notes and Warrants and shares of Common Stock issuable upon exercise or conversion thereof as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.

 

(j) Such Lender (A) has had reasonable opportunity to ask questions of and receive answers from Borrower concerning the Transaction Documents, (B) has been permitted access, to such Lender’s satisfaction, to the Borrower SEC Reports, and (C) understands that the entry into the Transaction Documents and the investment in the securities issued thereunder is subject to risks as stated in the risk factors disclosed in the Borrower SEC Reports and acknowledges that it has had an opportunity to review, and upon review, fully understands such risk factors.

 

ARTICLE 4

 

CONDITIONS OF DISBURSEMENT

 

Section 4.1 Conditions to the Disbursement.  The obligation of the Lenders to make the Disbursement shall be subject to the fulfillment of the following conditions:

 

(a)           The Lenders shall have received executed counterparts of the Transaction Documents from the Borrower, a certificate as to its  Organizational Documents, resolutions and incumbency and an opinion of its counsel reasonably acceptable to the Lenders;

 

(b)           Reserved.

 

(c)           No Default or Event of Default has occurred or would result from the Disbursement.

 

ARTICLE 5

 

PARTICULAR COVENANTS AND EVENTS OF DEFAULT

 

Section 5.1 Affirmative Covenants.  Unless the Lenders shall otherwise agree:

 

(a) The Borrower shall (i) maintain its existence and qualify and remain qualified to do its business as currently conducted, except where the failure to so maintain such qualification would not reasonably be expected to have a Material Adverse Effect, (ii) maintain all approvals necessary for the Transaction Documents to be in effect, and (iii) operate its business with reasonable due diligence, efficiency and in conformity with sound business practices.

 

(b) The Borrower shall comply in all material respects with all applicable laws, rules, regulations and orders of any Government Authority, except where the necessity of compliance therewith is contested in good faith by appropriate proceedings.

 

 

 

  

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(c) The Borrower shall obtain, make and keep in full force and effect all Authorizations from and registrations with Government Authorities that may be required to conduct its business, except where to failure to do so would not have a Material Adverse Effect.

 

(d) The Borrower shall promptly notify the Lenders of the occurrence of (i) any Default or Event of Default, (ii) any claims, litigation, arbitration, mediation or administrative or regulatory proceedings that are instituted or threatened against the Borrower, (iii) the sale directly or indirectly of any assets other than the sale of assets in the ordinary course of business and, (iv) each event which, at the giving of notice, lapse of time, determination of materiality or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an event of default (however described) under any of the Transaction Documents.

 

(e) The Borrower shall comply with the terms of each of the Transaction Documents.

 

(f) (i) If the Borrower is not required to file reports pursuant to Sections 13 or 15(d) of the Exchange Act, the Borrower will provide quarterly financial statements for itself and its Subsidiaries within 45 days after the end of each quarter, and audited annual financial statements within 120 days after the end of each year prepared in accordance with GAAP with a report thereon by the Borrower’s independent certified public accountants; (ii) the Borrower will timely file with the SEC (subject to appropriate extensions made under Rule 12b-25 of the Exchange Act) any annual reports, quarterly reports and other periodic reports required to be filed pursuant to Section 13 or 15(d) of the Exchange Act; and (iii) the Borrower will provide to the Lenders copies of all documents, reports, financial data and other information that the Lenders may reasonably request, and permit the Lenders to visit and inspect any of the properties of the Borrower, and to discuss its affairs, finances with its officers during regular business hours and upon reasonable notice.

 

The Borrower shall cause each of its Subsidiaries to comply with each of the agreements set forth in Section 5.1.

 

Section 5.2 Negative Covenants. Unless the Lenders holding a majority in interest of the Notes shall otherwise agree:

 

(a) The Borrower shall not (i) liquidate or dissolve; (ii) enter into any merger, consolidation or reorganization, unless the Borrower is the surviving corporation or (iii) establish any Subsidiary.

 

(b) The Borrower shall not and shall not permit any Subsidiary to (i) enter  into any partnership, joint venture, syndicate, pool, profit-sharing or royalty agreement or other combination, or engage in any transaction with an Affiliate, whereby its income or profits are, or might be, shared with another Person, (ii) enter into any management contract or similar arrangement whereby a substantial part of its business is managed by another Person, or (iii) distribute, or permit the distribution of, any of its assets, including its intangibles, to any shareholder of the Borrower or an Affiliate of such shareholder.

 

 

 

  

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(c) The Borrower shall not and shall not permit any Subsidiary to: (i) create, incur or suffer any Lien upon any of its assets, now owned or hereafter acquired, except Permitted Liens; or (ii) assign, sell, transfer or otherwise dispose of, any of the Transaction Documents, or the rights and obligations thereunder.

 

(d) The Borrower shall not and shall not permit any Subsidiary to create, incur, assume, guarantee or be remain liable with respect to any Indebtedness, other than Permitted Indebtedness.

 

(e) The Borrower shall not and shall not permit any Subsidiary to acquire any assets (other than assets acquired in the ordinary course of business consistent with past practices), directly or indirectly, in one or more related transaction, for a consideration, in cash or other property (valued at its fair market value) greater than $250,000.

 

No provision of this Agreement or any other Transaction Document shall be construed to prohibit (or otherwise require the consent of the Lenders) (i) the Borrower  from entering into bona fide business development transactions with Persons who are not Affiliates of the Borrower, which transactions may include exclusive licenses of Borrower’s intellectual property to third party strategic partners,  the Borrower granting rights of first negotiation to Celgene Corporation (“Celgene”) and the exercise of such rights by Celgene with respect to any license, sale, assignment, transfer or other disposition of any material portion of intellectual property or other assets related to its Neo-Urinary Conduit Program or Neo-Kidney Augment Program and the Borrower granting Celgene the right to purchase and the purchase by Celgene of the Borrower’s esophagus program, or (ii) the Borrower from selling, leasing or otherwise disposing of its interest in its East Norriton, Pennsylvania facility, at which time the Lenders’ security interest, if any, in any such interest of the Borrower shall automatically terminate and be released without further action.

 

Section 5.3 Major Transaction.  The Borrower shall give the Lenders notice of the consummation of a Major Transaction (as such term is defined in the Notes) at least 30 days prior to such consummation thereof, but, in any event within 5 Business Days following the first to occur of (x) the date of the public announcement of such Major Transaction if such announcement is made before 4:00 p.m., New York City time, or (y) the day  following the public announcement of such Major Transaction if such announcement is made on and after 4:00 p.m., New York City time.  At any time during the period beginning after the Lenders’ receipt of such notice and ending five (5) Trading Days (as defined in Section 2.9) prior to the consummation of such Major Transaction, any Lender, in the exercise of its sole discretion, may deliver a notice to the Borrower (the “Put Notice”), that the portion of the Final Payment owed to such Lender shall be due and payable upon consummation of such Major Transaction.  If a Lender delivers a Put Notice, simultaneously with consummation of such Major Transaction, the Borrower shall make or cause to be made the Final Payment owed to such Lender and upon the Lender’s receipt of such Final Payment, the Obligations with respect to such Lender shall terminate. The Borrower shall not consummate any Major Transaction without complying with the provisions of this Section 5.3.

 

Section 5.4 General Acceleration Provision upon Events of Default.  If one or more of the events specified in this Section 5.4 shall have happened and be continuing beyond the applicable cure period (each, an “Event of Default”), each Lender, by written notice to the Borrower, may declare the principal of, and accrued and unpaid interest on, the Notes held by such Lender or any part of any of them (together with any other amounts accrued or payable under the Transaction Documents) to be, and the same shall thereupon become, immediately due and payable, without any further notice and without any presentment, demand, or protest of any kind, all of which are hereby expressly waived by the Borrower, and take any further action available at law or in equity, including, without limitation, the sale of the Loan and all other rights acquired in connection with the Loan:

 

 

 

  

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(a) The Borrower shall have failed to make payment of principal and interest under the Notes when due.

 

(b) The occurrence of a Conversion Failure or a Registration Failure (as such terms are fined in the Notes).

 

(c) The Borrower shall have failed to comply with the due observance or performance of any covenant contained in any Transaction Document (other than the covenants described in (a) and (b) above) and such failure shall not have been cured by the Borrower within 30 days after receiving written notice of such failure from the Lenders.

 

(d) Any representation or warranty made by the Borrower in any Transaction Document shall have been incorrect, false or misleading in any material respect as of the date it was made.

 

(e) (i)  The Borrower shall generally be unable to pay its debts as such debts become due, or shall admit in writing its inability to pay its debts as they come due or shall make a general assignment for the benefit of creditors; (ii) the Borrower shall declare a moratorium on the payment of its debts; (iii) the commencement by the Borrower of proceedings to be adjudicated bankrupt or insolvent, or the consent by it to the commencement of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization, intervention or other similar relief under any applicable law, or the consent by it to the filing of any such petition or to the appointment of an intervenor, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of all or substantially all of its assets; (iv) the commencement against the Borrower of a proceeding in any court of competent jurisdiction under any bankruptcy or other applicable law (as now or hereafter in effect) seeking its liquidation, winding up, dissolution, reorganization, arrangement, adjustment, or the appointment of an intervenor, receiver, liquidator, assignee, trustee, sequestrator (or other similar official), and any such proceeding shall continue undismissed, or any order, judgment or decree approving or ordering any of the foregoing shall continue unstayed or otherwise in effect, for a period of ninety (90) days; (v) the making by the Borrower of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debt generally as they become due; or (vi) any other event shall have occurred which under any applicable law would have an effect analogous to any of those events listed above in this subsection.

 

(f) One or more judgments against the Borrower or any Subsidiary or attachments against any of their respective property, which in the aggregate exceed $50,000 (not covered by insurance), or which could have a Material Adverse Effect remain(s) unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period of 30 days from the date of entry of such judgment.

 

 

 

  

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(g) Any Authorization held by the Borrower from any Government Authority shall have been suspended, canceled or revoked and such suspension, cancellation or revocation shall not have been cured within 30 days.

 

(h) Any authorization necessary for the execution, delivery or performance of any Transaction Document or for the validity or enforceability of any of the Obligations under any Transaction Document is not given or is withdrawn or ceases to remain in full force or effect.

 

(i) The validity of any Transaction Document shall be contested by the Borrower, or any treaty, law, regulation, communiqué, decree, ordinance or policy of any jurisdiction shall purport to render any material provision of any Transaction Document invalid or unenforceable or shall purport to prevent or materially delay the performance or observance by the Borrower of the Obligations.

 

(j) The Borrower has failed to comply in any material respect with the reporting requirements of the Exchange Act, if applicable.

 

(k) There is a failure to perform in any agreement to which the Borrower or any Subsidiary is a party with a third party or parties resulting in a right by such third party or parties to accelerate the maturity of any Indebtedness for borrowed money in an amount in excess of $50,000.

 

(l) If an Event of Default pursuant to the Warrants (as such term is defined in the Warrants) shall have occurred.

 

Section 5.5 Automatic Acceleration on Dissolution or Bankruptcy.  Notwithstanding any other provisions of this Agreement, if an Event of Default under Section 5.4(e) shall occur, the principal of the Notes (together with any other amounts accrued or payable under this Agreement) shall thereupon become immediately due and payable without any presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower.

 

Section 5.6 Recovery of Amounts Due.  If any amount payable hereunder is not paid as and when due, the Borrower hereby authorizes the Lenders to proceed, to the fullest extent permitted by applicable law, without prior notice, by right of set-off, banker’s lien or counterclaim, against any moneys or other assets of the Borrower to the full extent of all amounts payable to the Lenders.

 

ARTICLE 6

 

MISCELLANEOUS

 

Section 6.1 Notices.  Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile or by electronic mail and shall be effective five (5) days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, or when read by electronic mail (sender shall have received a “read by recipient” confirmation) in each case addressed to a party.  The addresses for such communications shall be:

 

 

 

  

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If to the Borrower:

 

3929 Westpoint Boulevard, Suite G

Winston-Salem, NC 27103

Fax:  (336) 772-2436

Email:  Brian.Davis@tengion.com

Attn:  A. Brian Davis

With copy to:

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA  02199-3600

Fax: (617) 235-0706

Email: marc.rubenstein@ropesgray.com

Attn: Marc A. Rubenstein

If to a Lender:

To the address set forth under such Lender’s name on its signature page to the Securities Purchase Agreement or any assignment.

AND

c/o Deerfield Capital, L.P.

780 Third Avenue, 37th Floor

New York, New York 10017

Fax:  (212) 599-1248

Email:  jflynn@Deerfieldpartners.com

Attn:  James E. Flynn

 

 

 

 

 

  

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With a copy to:

 

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, New York 10022

Fax:              (212) 894-5877

Email:          Mark.Fisher@Kattenlaw.com

Elliot.Press@Kattenlaw.com

Attn:           Mark I. Fisher, Esq.

            Elliot Press, Esq.

 

Section 6.2 Waiver of Notice.  Whenever any notice is required to be given to the Lenders or the Borrower under the any of the Transaction Documents, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

 

Section 6.3 Reimbursement of Legal and Other Expenses.  If any amount owing to the Lenders under any Transaction Document shall be collected through enforcement of this Agreement, any Transaction Document or restructuring of the Loan in the nature of a work-out, settlement, negotiation, or any process of law, or shall be placed in the hands of third Persons for collection, the Borrower shall pay (in addition to all monies then due in respect of the Loan or otherwise payable under any Transaction Document) attorneys’ and other fees and expenses incurred in respect of such collection.

 

Section 6.4 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to contracts made and to be performed in such State.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan.  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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

 

 

 

 

  

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Section 6.5 Successors and Assigns.  This Agreement shall bind and inure to the respective successors and assigns of the Parties, except that Borrower may not assign or otherwise transfer all or any part of its rights under this Agreement or the Obligations without the prior written consent of the Lenders.  Lenders’ ability to transfer its rights and obligations under this Agreement are subject to the compliance with Section 1.4 of this Agreement and restrictions on transfer set forth in Section 6.6 of the Securities Purchase Agreement.

 

Section 6.6 Entire Agreement.  The Transaction Documents contain the entire understanding of the Parties with respect to the matters covered thereby and supersede any and all other written and oral communications, negotiations, commitments and writings with respect thereto.  The provisions of this Agreement may be waived, modified, supplemented or amended only by an instrument in writing signed by an authorized officer of the Borrower and Lenders holding, in the aggregate, at least 66 2/3% of the principal amount of the Notes then outstanding; provided that the provisions of this Agreement cannot be waived, modified, supplemented or amended in any way that (i) treats any Lender disproportionately without such Lender’s written consent; (ii) subjects any Lender to any monetary obligation or material obligation, imposes any liability on any Lender (including without limitation by imposing any joint and several liability) or causes any Lender to be required to make any payment without the written consent of such Lender (other than customary and reasonable costs in proportion to the amount of Notes incurred in connection with enforcing rights under this Agreement or the Security Agreement), or (iii) waives, modifies, supplements, or amends this Section 6.6 or Sections 6.11 or 6.14 of this Agreement (or the definition of Required Lenders) without the written consent of each Lender.   No Lender shall have any liability pursuant to this Agreement or otherwise by virtue of failing to or refusing to agree to grant any waiver, modification, supplement or amendment hereunder.  In the event that a Lender does not join in any action to enforce rights under this Agreement or the Security Agreement as a result of the proviso in the second sentence of this Section 6.6, then such Lender shall waive the right to receive any benefit of such action and shall execute any documents or take any actions to effect such waiver.

 

Section 6.7 Severability.  If any provision of this Agreement shall be invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.  The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision.

 

Section 6.8 Counterparts.  This Agreement may be executed in several counterparts, and by each Party on separate counterparts, each of which and any photocopies, facsimile copies or other electronic transmission (including by PDF) thereof shall be deemed an original, but all of which together shall constitute one and the same agreement.

 

Section 6.9 Survival.

 

(a) This Agreement and all agreements, representations and warranties made in the Transaction Documents, and in any document, certificate or statement delivered pursuant thereto or in connection therewith shall be considered to have been relied upon by the other Parties and shall survive the execution and delivery of this Agreement and the making of the Loan hereunder regardless of any investigation made by any such other Party or on its behalf, and shall continue in force until all amounts payable under the Transaction Documents shall have been fully paid in accordance with the provisions thereof, and the Lenders shall not be deemed to have waived, by reason of making the Loan, any Event of Default that may arise by reason of such representation or warranty proving to have been false or misleading, notwithstanding that the Lenders may have had notice or knowledge of any such Event of Default or may have had notice or knowledge that such representation or warranty was false or misleading at the time the Disbursement was made.

 

 

 

 

  

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(b) The obligations of the Borrower under Section 2.5 and the obligations of the Borrower and the Lenders under this Article 6 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loan, or the termination of this Agreement or any provision hereof.

 

Section 6.10 Waiver.  Neither the failure of, nor any delay on the part of, any Party in exercising any right, power or privilege hereunder, or under any agreement, document or instrument mentioned herein, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder, or under any agreement, document or instrument mentioned herein, preclude other or further exercise thereof or the exercise of any other right, power or privilege; nor shall any waiver of any right, power, privilege or default hereunder, or under any agreement, document or instrument mentioned herein, constitute a waiver of any other right, power, privilege or default or constitute a waiver of any default of the same or of any other term or provision.  No course of dealing and no delay in exercising, or omission to exercise, any right, power or remedy accruing to the Lenders upon any default under this Agreement, or any other agreement shall impair any such right, power or remedy or be construed to be a waiver thereof or an acquiescence therein; nor shall the action of the Lenders in respect of any such default, or any acquiescence by it therein, affect or impair any right, power or remedy of the Lenders in respect of any other default.  All rights and remedies herein provided are cumulative and not exclusive of any rights or remedies otherwise provided by law.

 

Section 6.11 Indemnity.

 

(a) The Borrower, shall, at all times, indemnify and hold harmless (the “Indemnity”) each of the Lenders and each Lender’s directors, partners, officers, employees, agents, counsel and advisors (each, a “Lender Indemnified Person”) from any losses, claims (including the cost of defending against such claims), damages, liabilities, penalties, or other expenses ( each a “Loss”) which a Lender Indemnified Person may incur or to which a Lender Indemnified Person may become subject to the extent such Loss arises out of a breach of any representation, warranty or covenant of the Borrower in any of the Transaction Documents, or the extension of credit hereunder or the Loan or the use or intended use of the Loan.  Each Lender shall, severally and not jointly, indemnify and hold harmless the Borrower and each of its directors, partners, officers, employees, agents, counsel and advisors (each, a “Borrower Indemnified Person”; an “Indemnified Person” shall mean any Lender Indemnified Person or Borrower Indemnified Person) from any Losses which a Borrower Indemnified Person may incur or to which a Borrower Indemnified Person may become subject to the extent such Losses arises out of a breach of any representation, warranty or covenant of such Lender in any of the Transaction Documents.  In no event shall any Lender be liable under this provision (or under any other provision in this Agreement or any other Transaction Document) for any breach of any representation, warranty or covenant of any other Lender.  The Indemnity shall not apply with respect to any Indemnified Person to the extent that a court or arbitral tribunal with jurisdiction over the subject matter of the Loss, such Indemnified Person and over the Lenders or the Borrower, as applicable, determines (after such Indemnified Person that had an adequate opportunity to defend its interests), that such Loss resulted from the gross negligence or willful misconduct of such Indemnified Person, which determination results in a final, non-appealable judgment or decision of a court or tribunal of competent jurisdiction.  The Indemnity is independent of and in addition to any other agreement of any Party under any Transaction Document to pay any amount to the Lenders or the Borrower, as applicable, and any exclusion of any obligation to pay any amount under this subsection shall not affect the requirement to pay such amount under any other section hereof or under any other agreement.  The indemnity obligation of each Lender pursuant to this Section 6.11 shall be several and not joint, and, notwithstanding anything herein to the contrary, the aggregate liability of any Lender under this Section 6.11 (together with any liability under any other indemnity provision in any of the other Transaction Documents) shall not exceed an amount equal to the principal amount of the Notes initially purchased by such Lender under the Securities Purchase Agreement.

 

 

 

  

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(b) Promptly after receipt by an Indemnified Person under this Section 6.11 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a Loss in respect thereof is to be made against the Borrower under this Section 6.11, deliver to the Borrower a written notice of the commencement thereof, and the Borrower shall have the right to participate in, and, to the extent the Borrower so desires, to assume control of the defense thereof with counsel mutually satisfactory to the Borrower and the Indemnified Person, as the case may be.

 

(c) An Indemnified Person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the Borrower, if, in the reasonable opinion of counsel for the Lenders, the representation by such counsel of the Indemnified Person and the Borrower would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding. The Borrower shall pay for only one separate legal counsel for the Indemnified Persons, and such legal counsel shall be selected by the Lenders. The failure to deliver written notice to the Borrower within a reasonable time of the commencement of any such action shall not relieve the Borrower of any liability to the Indemnified Person under this Section 6.11, except to the extent that the Borrower is actually prejudiced in its ability to defend such action. The indemnification required by this Section 6.11 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.

 

(d) Without prejudice to the survival of any other agreement of any of the Parties hereunder, the agreements and the obligations of the Parties contained in this Section 6.11 shall survive the termination of each other provision hereof and the payment of all amounts payable to the Lenders hereunder.  Notwithstanding anything to the contrary herein, this Section 6.11 shall not apply to any Loss relating to Taxes other than any Loss relating to Taxes arising from any non-Tax claim.

 

 

 

 

 

 

  

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Section 6.12 No Usury.  The Transaction Documents are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration or otherwise, shall the amount paid or agreed to be paid to the Lenders for the Loan exceed the maximum amount permissible under applicable law.  If from any circumstance whatsoever fulfillment of any provision hereof, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstance the Lenders shall ever receive anything which might be deemed interest under applicable law, that would exceed the highest lawful rate, such amount that would be deemed excessive interest shall be applied to the reduction of the principal amount owing on account of the Loan, or if such deemed excessive interest exceeds the unpaid balance of principal of the Loan, such deemed excess shall be refunded to the Borrower.  All sums paid or agreed to be paid to the Lenders for the Loan shall, to the extent permitted by applicable law, be deemed to be amortized, prorated, allocated and spread throughout the full term of the Loan until payment in full so that the deemed rate of interest on account of the Loan is uniform throughout the term thereof.  The terms and provisions of this Section shall control and supersede every other provision of this Agreement and the Notes.

 

Section 6.13 Further Assurances.  From time to time, the Borrower shall perform any and all acts and execute and deliver to the Lenders such additional documents as may be necessary or as requested by the Lenders to carry out the purposes of any Transaction Document or any or to preserve and protect the Lenders’ rights as contemplated therein.

 

Section 6.14 Action by the Lenders.  Except with respect to Sections 5.3 and 5.4 (and without limiting the rights any individual Lender may have under this Agreement or the Security Agreement), the Required Lenders may exercise remedies available to any Lender or the Lenders under this Agreement or the Security Agreement, and take other actions permitted to be taken by any Lender or the Lenders under this Agreement or the Security Agreement  on behalf of such Lender or Lenders; provided that the Required Lenders cannot (i) waive, supplement, modify or amend this Agreement or the Security Agreement pursuant to this Section 6.14, (ii) subject any Lender to any monetary obligation or material obligation, impose any liability on any Lender (including without limitation any joint and several liability) or cause any Lender to make any payment without such Lender’s written consent (other than customary and reasonable costs in proportion to the amount of Notes held incurred in connection with enforcing rights under this Agreement or the Facility Agreement) , or (iii) take any action pursuant to this Section 6.14 that disproportionately treats any Lender or results in any disproportionate liability (or any joint and several liability) for any Lender without such Lender’s written consent.  The Required Lenders shall provide notice to each Lender if they take any action pursuant to this Section 6.14.  In the event that a Lender does not join in any action by the Required Lenders to enforce rights under this Agreement or the Security Agreement, then such Lender shall waive the right to receive any benefit of such action and shall execute any documents or take any actions reasonably required to effect such waiver.

 

Section 6.15 Independent Transaction Documents.  Each Transaction Document constitutes an independent agreement between the parties thereto (the “Transaction Parties”) and no Transaction Document shall be construed so as to affect the rights of the Transaction Parties to their rights and remedies under another Transaction Document.

 

 

 

 

 

 

  

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[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

32

  

IN WITNESS WHEREOF, the Lenders and the Borrower have caused this Agreement to be duly executed as of the date first written above.

 

	
BORROWER:

 

TENGION, INC.

 

 

By:  /s/ A. Brian Davis

Name:  A. Brian Davis

Title:    Chief Financial Officer and Vice President, Finance

	  
	  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

	
LENDERS:

 

 

By: /s/ Peter Kolchinsky

Name:  Peter Kolchinsky

Title:    Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

  

  

  

 

LENDERS:

By:  /s/ Geoffrey D. Keegan

Name:  Geoffrey D. Keegan

Title:    Investment Manager, DUMAC, Inc.

 

By:  /s/ Jannine Lall

Name:  Jannine Lall

Title:    Assistant Treasurer, DUMAC, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

 

 

LENDERS:

DEERFIELD SPECIAL SITUATIONS FUND, L.P.

By:  Deerfield Mgmt, L.P., General Partner

By:  J.E. Flynn Capital LLC, General Partner

By:  /s/ James E. Flynn

Name:  James E. Flynn

Title:    President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

 

 

DEERFIELD SPECIAL SITUATIONS

INTERNATIONAL MASTER FUND, L.P.

By:  Deerfield Mgmt, L.P., General Partner

By:  J.E. Flynn Capital LLC, General Partner

By:  /s/ James E. Flynn

Name:  James E. Flynn

Title:    President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

LENDERS:

PERCEPTIVE LIFE SCIENCES MASTER FUND LTD

By: /s/ James Mannix

Name:  James Mannix

Title:    COO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

LENDERS:  Quintessence Fund L.P., by its general

partner, QVT Associates GP LLC

By: /s/ Keith Manchester

Name:  Keith Manchester

Title:    Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

 

LENDERS:  QVT Fund V LP, by its general partner,

QVT Associates GP LLC

By: /s/ Keith Manchester

Name:  Keith Manchester

Title:    Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

  

  

  

 

 

 

LENDERS:  QVT Fund IV LP, by its general partner,

QVT Associates GP LLC

By: /s/ Keith Manchester

Name:  Keith Manchester

Title:    Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

LENDERS:  Sabby Healthcare Volatility Master Fund, Ltd.

By: /s/ Robert Grundstein

Name:  Robert Grundstein

Title:    COO of Lender’s Investment Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

 

LENDERS:  Sabby Volatility Warrant Master Fund, Ltd.

By: /s/ Robert Grundstein

Name:  Robert Grundstein

Title:    COO of Lender’s Investment Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

 

  

  

  

 

 

 

 

LENDERS:

HEALTHCAP IV LP by HealthCap IV GP SA

By: /s/ Peder Fredrikson

Name:  Peder Fredrikson

Title:    President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

LENDERS:

HEALTHCAP IV Bis LP by HealthCap IV GP SA

By: /s/ Peder Fredrikson

Name:  Peder Fredrikson

Title:    President

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

LENDERS:

HealthCap IV KB

by HealthCap IV  GP AB

By: /s/ Staffan Lindstrand

Name:  Staffan Lindstrand

Title:    Partner

 

By: /s/ Anki Forsberg

Name:  Anki Forsberg

Title:    Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

 

  

  

  

 

LENDERS:

Odlander, Fredrikson & Co AB as a member

and on behalf of all members, if any, of

OFCO Club IV

By: /s/ Staffan Lindstrand

Name:  Staffan Lindstrand

Title:    Partner

 

By: /s/ Anki Forsberg

Name:  Anki Forsberg

Title:    Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

 

 

LENDERS:

By: /s/ Carl Goldfischer, MD

Name:  Carl Goldfischer, MD

Title:    Manager and Managing Director

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

LENDERS:

By: /s/ Carl Goldfischer, MD

Name:  Carl Goldfischer, MD

Title:    Manager and Managing Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

LENDERS:  Empery Asset Master, Ltd

By:  Empery Asset Management, LP, its authorized agent

By:  Empery AM GP, LLC

By: /s/ Ryan M. Lane

Name:  Ryan M. Lane

Title:    Managing Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

 

LENDERS:  Hartz Capital Investments, LLC

By:  Empery Asset Management, LP, its authorized agent

By:  Empery AM GP, LLC

By: /s/ Ryan M. Lane

Name:  Ryan M. Lane

Title:    Managing Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

 

  

  

  

 

 

 

 

LENDERS:  Capital Ventures International

By:  Heights Capital Management, Inc.

 its authorized agent

By: /s/ Martin Kobinger

Name:  Martin Kobinger

Title:    Investment Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

 

 

LENDERS:  Midsummer Small Cap Master, Ltd.

By: /s/ Joshua Thomas

Name:  Joshua Thomas

Title:    Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

LENDERS:

HUDSON BAY MASTER FUND LTD.

By: /s/ George Antonopoulos

Name:  George Antonopoulos

Title:    Authorized Signatory

 

 

 

 

 

 

 

 

[Facility Agreement Signature Page]

 

 

  

  

  

 

 

 

 

LENDERS:

Opus Point Healthcare Innovations Fund, LP

By: /s/ Michael S. Weiss

Name:  Michael S. Weiss

Title:    Manager

 

[Facility Agreement Signature Page]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00219-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00219-of-00352.parquet"}]]