Document:

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of August 23, 2011, by and among VIVUS, Inc., a Delaware corporation (the “Company”), and the investors named on Exhibit A hereto (each an “Investor” and collectively the “Investors”).

 

WITNESSETH

 

WHEREAS, the Company has filed with the Securities and Exchange Commission (the “Commission”) a Registration Statement (as defined below) relating to the offer and sale from time to time of the Company’s securities, including shares of its Common Stock, $0.001 value (“Common Stock”);

 

WHEREAS, the Company is offering for sale shares of Common Stock (the “Offered Shares”) to the Investors pursuant to the Registration Statement; and

 

WHEREAS, each Investor, severally and not jointly, desires to purchase from the Company Offered Shares on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the recitals (which are deemed to be a part of this Agreement), mutual covenants, representations, warranties and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Definitions.  As used herein, the following terms have the meanings indicated:

 

“Person” shall mean any individual, partnership, limited liability company, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

 

“Prospectus” shall mean the prospectus forming a part of the Registration Statement and the prospectus supplement relating to the Offered Shares in the form first filed pursuant to Rule 424(b) under the Securities Act, as amended (the “Securities Act”), as further amended or supplemented prior to the execution of this Agreement, and shall include all information and documents incorporated by reference in such prospectus.

 

“Registration Statement” shall mean the registration statement on Form S-3ASR (File No. 333-161948), including a prospectus, relating to the offer and sale of certain of the Company’s Common Stock, which was declared effective by the Commission on September 16, 2009.  References herein to the term “Registration Statement” as of any date shall mean such effective registration statement, as amended or supplemented to such date, including all information and documents incorporated by reference therein.

 

2.                                       Purchase of Common Stock.  Subject and pursuant to the terms and conditions set forth in this Agreement, the Company agrees that it will issue and sell to each Investor and each Investor, severally and not jointly, agrees that it will purchase from the Company, the number of Offered Shares set forth on Schedule I attached hereto (the “Investor Shares”).  The aggregate purchase price for the Investor Shares (the “Aggregate Purchase Price”) and the purchase price per Investor Share is set forth on Schedule I hereto.  The closing of the purchase and sale of the Investor Shares will be on the date and at the time set forth on Schedule I hereto, or such other date or time as the parties may agree upon in writing (the “Closing”).

 

3.                                       Deliveries at Closing.

 

(a)                                  Deliveries by the Investor.  Promptly after receipt of the shares by the Investor’s custodian, each Investor shall deliver to the Company the Aggregate Purchase Price by wire transfer of immediately available funds to an account designated by the Company as set forth on Schedule I hereto, which funds will be delivered to the Company in consideration of the Investor Shares issued at the Closing.

 

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(b)                                 Deliveries by the Company.  Prior to the Closing, the Company shall deliver to each Investor the Investor Shares through The Depository Trust Company DWAC system to the account that the Investor has specified in writing to the Company.

 

4.                                       Representations, Warranties, Covenants and Agreements.

 

(a)                                  Investor Representations, Warranties and Covenants.  Each Investor, severally and not jointly, represents, warrants and agrees as follows:

 

(1)                                  Investor has received copies of the Registration Statement and the Prospectus, including all documents and information incorporated by reference therein and amendments thereto, and understands that no Person has been authorized to give any information or to make any representations that were not contained in the Registration Statement and the Prospectus, and Investor has not relied on any such other information or representations in making a decision to purchase the Investor Shares.  Investor hereby consents to receiving delivery of the Registration Statement and the Prospectus, including all documents and information incorporated by reference therein and any amendments thereto, by electronic mail.

 

(2)                                  Investor acknowledges that it has sole responsibility for its own due diligence investigation and its own investment decision, and that in connection with its investigation of the accuracy of the information contained or incorporated by reference in the Registration Statement and the Prospectus and its investment decision, Investor has not relied on any representation or information not set forth in this Agreement, the Registration Statement or the Prospectus.

 

(3)                                  The execution and delivery of this Agreement by Investor and the performance of this Agreement and the consummation by Investor of the transactions contemplated hereby have been duly authorized by all necessary (corporate, partnership or limited liability in the case of a corporation, partnership or limited liability company) action of Investor, and this Agreement, when duly executed and delivered by Investor, will constitute a valid and legally binding instrument, enforceable in accordance with its terms against Investor, except as enforcement hereof may be limited by the effect of any applicable bankruptcy, insolvency, reorganization or similar laws or court decisions affecting enforcement of creditors’ rights generally and except as enforcement hereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

 

(4)                                  No state, federal or foreign regulatory approvals, permits, licenses or consents are required for Investor to enter into this Agreement or purchase the Investor Shares.

 

(b)                                 Company Representations, Warranties and Covenants.  The Company hereby represents, warrants and agrees as follows:

 

(1)                                  The Company has been duly incorporated and has a valid existence and the authorization to transact business as a corporation under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except for such jurisdictions wherein the failure to be so qualified and in good standing would not individually or in the aggregate have a material adverse effect on the business, results of operations or financial condition of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”).

 

(2)                                  Each subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with corporate power and authority to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except for such jurisdictions wherein the failure to be so qualified and in good standing would not individually or in the aggregate have a Material Adverse Effect.

 

(3)                                  The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby are within the corporate powers of the Company and have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement, when duly executed and delivered by the parties hereto, will constitute a valid and legally binding instrument of the Company enforceable in accordance with its terms, except as enforcement hereof may be limited by the effect of any applicable bankruptcy, insolvency, reorganization or similar laws or

 

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court decisions affecting enforcement of creditors’ rights generally and except as enforcement hereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

 

(4)                                  The Investor Shares have been duly authorized by the Company, and when issued and delivered by the Company against payment therefor as contemplated by this Agreement, the Investor Shares will be validly issued, fully paid and nonassessable, and will conform to the description of the Common Stock contained in the Prospectus.

 

(5)                                  The execution and delivery of this Agreement do not, and the compliance by the Company with the terms hereof will not, (i) violate the Certificate of Incorporation (as amended to date) of the Company or the By-Laws (as amended to date) of the Company, (ii) result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of their properties or assets are subject, or (iii) result in a violation of, or failure to be in compliance with, any applicable statute or any order, judgment, decree, rule or regulation of any court or governmental, regulatory or self-regulatory agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets, except where such breach, violation, default or the failure to be in compliance would not individually or in the aggregate have a Material Adverse Effect or adversely affect the ability of the Company to issue and sell the Investor Shares; and no consent, approval, authorization, order, registration, filing or qualification of or with any such court or governmental, regulatory or self-regulatory agency or body is required for the valid authorization, execution, delivery and performance by the Company of this Agreement or the issuance of the Investor Shares, except for such consents, approvals, authorizations, registrations, filings or qualifications as may be required under the Securities Act or state securities or “blue sky” laws and have been or will be obtained and which have been or will be made in connection with the listing of the Investor Shares on the Nasdaq Global Select Market.

 

(6)                                  The Company meets the requirements for the use of Form S-3ASR under the Securities Act for the primary issuance of securities.  The Registration Statement has been declared effective by the Commission and at the time it became effective, and as of the date hereof, the Registration Statement complied and complies with Rule 415 under the Securities Act.  No stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened by the Commission.  On the effective date of the Registration Statement, the Registration Statement complied, on the date of the Prospectus, the Prospectus will comply, and at the date of the Closing, the Registration Statement and the Prospectus will comply, in all material respects with the applicable provisions of the Securities Act and the applicable rules and regulations of the Commission thereunder; on the effective date of the Registration Statement, the Registration Statement did not, on the date of the Prospectus, the Prospectus did not, and at the date of the Closing, the Registration Statement and the Prospectus, will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made (with respect to the Prospectus), not misleading; and when filed with the Commission, the documents incorporated by reference in the Registration Statement and the Prospectus, complied or will comply in all material respects with the applicable provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the applicable rules and regulations of the Commission thereunder.  There is no material document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that is not described or filed as required.

 

(7)                                  The consolidated financial statements and financial schedules of the Company included or incorporated by reference in the Registration Statement and the Prospectus comply as to form with the applicable accounting requirements of the Securities Act and have been prepared in conformity with generally accepted accounting principles (except, with respect to the unaudited consolidated financial statements, for the footnotes and subject to customary audit adjustments) applied on a consistent basis, are consistent in all material respects with the books and records of the Company, and accurately present in all material respects the consolidated financial position, results of operations and cash flow of the Company and its subsidiaries as of and for the periods covered thereby.

 

(8)                                  There are no material liabilities of the Company or any subsidiary of the Company of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in such a liability, other than liabilities disclosed in the consolidated financial statements and financial schedules of the Company, and other undisclosed liabilities which, individually or in the aggregate, are not material to the Company and any of its subsidiaries, taken as a whole.

 

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(9)                                  Neither the Company nor any of its subsidiaries has sustained since the respective dates of the latest audited financial statements included or incorporated by reference in the Registration Statement and Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as disclosed in or contemplated by the Registration Statement and Prospectus; and, since the respective dates as of which information is given in the Registration Statement and Prospectus, there has not been any material change in the capital stock or long-term debt of the Company or any of its subsidiaries, the Company and its subsidiaries have not incurred any material liabilities or obligations, direct or contingent, nor entered into any material transactions, except for entering into purchase orders in the ordinary course of business, and there has not been any material adverse change in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries considered as a whole, otherwise than as disclosed in or contemplated by the Registration Statement and Prospectus.

 

(10)                            Other than as disclosed in the Prospectus, there are no legal, governmental or regulatory proceedings pending to which the Company or any of its subsidiaries is a party or of which any material property of the Company or any of its subsidiaries is the subject which, taking into account the likelihood of the outcome, the damages or other relief sought and other relevant factors, would individually or in the aggregate reasonably be expected to have a Material Adverse Effect or adversely affect the ability of the Company to issue and sell the Investor Shares; to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental or regulatory authorities or threatened by others.

 

(11)                            The Company and each of its subsidiaries have good and marketable title to all the real property and owns all other properties and assets, reflected as owned in the financial statements included or incorporated by reference in the Registration Statement and the Prospectus, subject to no lien, mortgage, pledge, charge or encumbrance of any kind except those, if any, reflected in such financial statements or which are not material to the Company and its subsidiaries taken as a whole.  The Company and each of its subsidiaries hold their respective leased real and personal properties under valid and binding leases, except where the failure to do so would not reasonably be expected to individually or in the aggregate have a Material Adverse Effect.

 

(12)                            The Company has filed all necessary federal and state income and franchise tax returns and has paid all taxes shown as due thereon or has filed all necessary extensions, and there is no tax deficiency that has been, or to the knowledge of the Company might be, asserted against the Company or any of its properties or assets that would in the aggregate or individually reasonably be expected to have a Material Adverse Affect.

 

(13)                            There are no authorized options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or its subsidiaries other than those accurately described in the Registration Statement and the Prospectus.  There are no holders or beneficial owners of securities of the Company having rights to registration thereof whose securities have not been previously registered or who have not waived such rights with respect to the registration of the Company’s securities on the Registration Statement, except where the failure to obtain such waiver would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

 

(14)                            The Company has not taken and will not take any action that constitutes or is designed to cause or result, or which might reasonably be expected to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Shares.

 

(15)                            Other than as disclosed in the Prospectus, the Company together with its subsidiaries owns and possesses all right, title and interest in and to, or, to the Company’s knowledge, has duly licensed from third parties, all patents, patent rights, trade secrets, inventions, know-how, trademarks, trade names, copyrights, service marks and other proprietary rights (“Intellectual Property”) material to the business of the Company and each of its subsidiaries taken as a whole as currently conducted and as described in the Prospectus.  To the Company’s knowledge and except as would not individually or in the aggregate have a Material Adverse Effect, there is no infringement or other violation by third parties of any of the Intellectual Property of the Company.  Neither the Company nor any of its subsidiaries has received any notice of infringement or misappropriation from any third party that has not been resolved or disposed of and, to the Company’s knowledge, neither the Company nor any of its subsidiaries has infringed or misappropriated the Intellectual Property of any third party, which infringement or misappropriation would individually or in the aggregate have a Material Adverse Effect.  Further, there is no pending or, to the Company’s knowledge and except as would not individually or in the aggregate have a Material Adverse Effect, threatened action, suit, proceeding or claim by governmental authorities or others that the Company is infringing a patent, and there is no pending or, to the Company’s knowledge and except as would not individually or in the aggregate have a Material Adverse Effect, threatened legal or administrative proceeding relating to patents and patent applications of the Company, other than proceedings initiated by the Company before the

 

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United States Patent and Trademark Office and the patent offices of certain foreign jurisdictions which are in the ordinary course of patent prosecution.  To the Company’s knowledge, the patent applications of the Company presently on file disclose patentable subject matter, and the Company is not aware of any inventorship challenges, any interference which has been declared or provoked, or any other material fact that (i) would preclude the issuance of patents with respect to such applications, or (ii) would lead outside patent counsel for the Company to conclude that such patents, when issued, would not be valid and enforceable in accordance with applicable regulations.

 

(16)                            The conduct of the business of the Company and each of its subsidiaries is in compliance in all respects with applicable laws, rules and regulations of governmental and regulatory bodies, except where the failure to be in compliance would not individually or in the aggregate have a Material Adverse Effect.

 

(17)                            The Company is not, and does not intend to conduct its business in a manner in which it would become, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

(18)                            All offers and sales of the Company’s capital stock prior to the date hereof were at all relevant times registered pursuant to the Securities Act or exempt from the registration requirements of the Securities Act and were duly registered with or the subject of an available exemption from the registration requirements of the applicable state securities or blue sky laws, except where the failure to do so would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

 

(19)                            The Company will file with the Nasdaq Global Select Market a Notification of Listing of Additional Shares with respect to the Investor Shares required by the rules of the Nasdaq Global Select Market.  The offer and sale of the Offered Shares does not require stockholder approval under Rule 4350 of the Nasdaq Stock Market Rules.

 

(20)                            Neither the Company nor its subsidiaries nor, to the best of the Company’s knowledge, any employee or agent of the Company or its subsidiaries, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character required to be disclosed in the Prospectus.

 

(21)                            There is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement, except as disclosed on Schedule II.

 

(22)                            There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company to, or for the benefit of, any of the officers or directors of the Company.

 

(23)                            To the extent that the Company or any other Person acting on its behalf has provided the Investor or its agents or counsel with any information that the Company believes constitutes material, non-public information, any such material, non-public information will be disclosed to the public by the Company no later than 9:25 am eastern time on August 23, 2011.

 

5.                                       Conditions.  The obligation of each Investor to purchase and acquire the Investor Shares hereunder shall be subject to the condition that all representations and warranties and other statements of the Company shall be true and correct as of and on each of the date of this Agreement and the date of the Closing, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

 

(a)                                  The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Securities Act within the applicable time period prescribed for such filing, no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission, and the Investor shall have received the Prospectus in accordance with the federal securities laws.

 

(b)                                 The Offered Shares shall have been authorized for quotation on the Nasdaq Global Select Market.

 

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6.             Miscellaneous.

 

(a)           Fees and Expenses.  Each of the parties hereto shall be responsible for their own expenses incurred in connection with the transactions contemplated hereby.

 

(b)           Binding Agreement; Assignment.  This Agreement shall be binding upon, and shall inure solely to the benefit of, each of the parties hereto, and each of their respective heirs, executors, administrators, successors and permitted assigns, and no other person shall acquire or have any right under or by virtue of this Agreement.  The Investors may not assign any of these rights or obligations hereunder to any other person or entity without the prior written consent of the Company.

 

(c)           Entire Agreement.  This Agreement, including Exhibit A and Schedules I and II hereto, constitutes the entire understanding between the parties hereto with respect to the subject matter hereof and may be amended only by written execution by each of the parties hereto.  Upon execution by the Company and the Investors, this Agreement shall be binding on each of the parties hereto.

 

(d)           Consent To Jurisdiction.  THIS AGREEMENT SHALL BE ENFORCED, GOVERNED AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PRINCIPLES.

 

(e)           Notices.  All notices, requests, consents and other communication hereunder shall be in writing, shall be mailed by first class registered or certified mail, or nationally recognized overnight express courier postage prepaid, and shall be deemed given when so mailed and shall be delivered as addressed as follows:

 

if to the Company, to:

 

VIVUS, Inc.
 1172 Castro Street
 Mountain View, CA 94040
 Attn: Chief Financial Officer

 

with a copy mailed to:

 

Hogan Lovells US LLP
 525 University Ave 3rd Floor
 Palo Alto, CA 94301
 Attn: Jon Layman, Esq.

 

or to such other Person at such other place as the Company shall designate to the Investors in writing; and if to the Investors, at the addresses as set forth on Exhibit A hereto, or at such other address or addresses as may have been furnished to the Company in writing.

 

(f)            Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one in the same agreement.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

	
 
    	
 
    	
VIVUS, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Timothy E. Morris
    
	
 
    	
 
    	
Name:   Timothy E. Morris
    
	
 
    	
 
    	
Title:   Chief Financial Officer
    

 

 

Accepted and agreed to as of the date
 first above written:

 

 

	
QVT   Fund LP,
   by its general partner, QVT Associates GP LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Keith Manchester
    	
 
    	
By:
    	
/s/   Tracy Fu
    
	
 
    	
Name:   Keith Manchester
    	
 
    	
 
    	
Name:   Tracy Fu
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:
    
	
 
    	
Address:   1177 Avenue of the Americas, 9th Floor,
    	
 
    	
 
    
	
 
    	
New   York, New York 10036
    	
 
    	
 
    

 

Quintessence Fund L.P.

by its general partner, QVT Associates GP LLC

 

 

	
By:
    	
/s/   Keith Manchester
    	
 
    	
By:
    	
/s/   Tracy Fu
    
	
 
    	
Name:   Keith Manchester
    	
 
    	
 
    	
Name:   Tracy Fu
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:
    
	
 
    	
Address:   1177 Avenue of the Americas, 9th Floor,
    	
 
    	
 
    
	
 
    	
New   York, New York 10036
    	
 
    	
 
    

 

Telephone:

Facsimile:

Email Address:

 

Nominee (name in which Investor Shares are to be registered,
 if different than name of Investor):

 

Address of Nominee:

 

 

Taxpayer ID. Number: N/A

(if acquired in the name of a nominee, the taxpayer ID. number of such nominee)

 

Broker:

Broker Contact Name:

Broker Contact Telephone:

Broker Contact Facsimile:

Broker Contact E-mail Address:

 

DTC account number:

 

 

Accepted and agreed to as of the date
 first above written:

 

 

	
ORBIMED   ADVISORS, LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Sven Borho
    	
 
    	
By:
    	
 
    
	
 
    	
Name:   Sven Borho
    	
 
    	
 
    	
Name:
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:
    
	
 
    	
Address:   767 Third Avenue, 30th Floor
   New York, New York 10017
    	
 
    	
 
    

 

 

Telephone:

Facsimile:

Email Address:

 

Nominee (name in which Investor Shares are to be registered, 
 if different than name of Investor):

 

Address of Nominee:

 

 

Taxpayer ID. Number: N/A

(if acquired in the name of a nominee, the taxpayer ID. number of such nominee)

 

Broker:

Broker Contact Name:

Broker Contact Telephone:

Broker Contact Facsimile:

Broker Contact E-mail Address:

 

DTC account number:

 

 

Accepted and agreed to as of the date
 first above written:

 

 

SUTTONBROOK CAPITAL MANAGEMENT

 

 

	
By:
    	
/s/   Rich Potapchuk
    	
 
    	
By:
    	
 
    
	
 
    	
Name:   Rich Potapchuk
    	
 
    	
 
    	
Name:
    
	
 
    	
Title:
    	
 
    	
 
    	
Title:
    
	
 
    	
Address:   598 Madison Avenue, 6th Floor 
   New York, New York 10022
    	
 
    	
 
    

 

Telephone:

Facsimile:

Email Address:

 

Nominee (name in which Investor Shares are to be registered, 
 if different than name of Investor):

 

Address of Nominee:

 

Taxpayer ID. Number: N/A

(if acquired in the name of a nominee, the taxpayer ID. number of such nominee)

 

Broker:

Broker Contact Name:

Broker Contact Telephone:

Broker Contact Facsimile:

Broker Contact E-mail Address:

 

DTC account number:

 

 

Exhibit A

Investors

 

QVT Fund LP

Quintessence Fund, L.P.

OrbiMed Advisors, LLC

Suttonbrook Capital Management

 

 

SCHEDULE I
 to
  Securities Purchase Agreement

 

Closing: August 24, 2011

 

	
Name of Investor
    	
 
    	
Aggregate Purchase Price
    	
 
    	
Number of Offered Shares
   to be Purchased by Investor
    	
 
    
	
QVT Fund LP
    	
 
    	
$
    	
34,087,501
    	
 
    	
5,125,940
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Quintessence Fund, L.P.
    	
 
    	
$
    	
3,412,500.70
    	
 
    	
513,158
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
OrbiMed Advisors, LLC
    	
 
    	
$
    	
4,987,500
    	
 
    	
750,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Suttonbrook Capital Management
    	
 
    	
$
    	
3,325,000
    	
 
    	
500,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Purchase Price Per Share of Common Stock
    	
 
    	
$
    	
45,812,501.70
    	
 
    	
6,889,098
    	
 
    

 

Date and Time of Closing: August 24, 2011 at 1:00 p.m., Pacific Standard Time

 

WIRE INSTRUCTIONS

 

Aggregate Purchase Price to be wired to:

 

Bank: Wells Fargo Bank, N.A.

Address: 420 Montgomery Street, San Francisco, CA 94104

SWIFT Code: 

ABA Number: 

Account Number: 

Account Name: VIVUS Inc.

 

E-mail confirmations to: Rakesh Chand, chand@vivus.com

 

 

SCHEDULE II
 to
  Securities Purchase Agreement

 

List of Firm Receiving a Fee:

 

	
·
    	
 
    	
Trout   Capital LLC
    
	
 
    	
 
    	
740   Broadway, 9th Floor
    
	
 
    	
 
    	
New   York, NY 10003
    
	
 
    	
 
    	
Phone:    646-378-2900
    
	
 
    	
 
    	
Attn:   Jonathan Fassberg
    
	
 
    	
 
    	
 
    
	
·
    	
 
    	
Amount   of Broker’s Fee = $458,125Exhibit 10.1

 

Specific terms in this Exhibit have been redacted because confidential treatment for those terms has been requested.  The redacted material has been separately filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks [***].

 

 Amendment to Natural Gas Liquids Exchange Agreement

By and Between

ONEOK HYDROCARBON, L.P.

And

EAGLE ROCK FIELD SERVICES, L.P. (successor to ONEOK TEXAS FIELD SERVICES, L.P.)

Dated:  December 1, 2005

 

THIS AMENDMENT AGREEMENT (the “Amendment”), made and entered into this 18th day of August, 2011 by and between ONEOK HYDROCARBON, L.P. (“Processor”) and EAGLE ROCK FIELD SERVICES, L.P. (“Customer”).

 

WITNESSETH:

 

WHEREAS, Customer and Processor are parties to that certain Natural Gas Liquids Exchange Agreement dated December 1, 2005 (the “Original Agreement”), as amended by that certain Amendment dated March 12, 2008 (the “First Amendment”), as further amended by that certain Amendment dated December 3, 2010 (the “Second Amendment”, together with the Original Agreement and First Amendment, hereinafter collectively referred to as the “Agreement”), which sets forth the terms and conditions for the exchange of NGLs owned or controlled by Customer as defined in the Agreement; and

 

WHEREAS, the parties now desire to amend the Agreement to (i) decrease the maximum allowable volume of NGLs from the West Plants and make a corresponding increase to the maximum allowable volume of NGLs from the East Plants, and (ii) increase the volume of NGLs to be delivered from one of the Dedicated Plants with an increase in the Base Exchange Differential applicable to such increased volume, as provided below.

 

NOW THEREFORE, in consideration of the mutual covenants and benefits provided herein, the parties do agree to amend the Agreement in the following aspects only:

 

1.               Defined Terms. Capitalized terms used but not defined in this Amendment shall have the meanings ascribed to them in the Agreement.

 

2.               Arrington Plant Renamed.  The parties acknowledge that Customer’s Arrington Plant has been renamed the Phoenix Plant.  All references in the Agreement to “Arrington Plant” are hereby replaced with “Phoenix Plant”.

 

3.               Definitions.  The following are hereby added in alphabetical order to Section 1.1 of the Agreement as definitions:

 

‘“Expansion” shall mean the expansion by Processor’s Affiliate, ONEOK NGL Pipeline, L.L.C. (“ONP”), of its pipeline facilities to accommodate the volume of NGLs to be delivered from Customer’s Woodall Plant.’

 

 

Specific terms in this Exhibit have been redacted because confidential treatment for those terms has been requested.  The redacted material has been separately filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks [***].

 

‘“Woodall Plant Construction” shall mean the construction by Customer of that certain new Dedicated Plant located in Hemphill County, Texas.’

 

‘“Woodall Plant Completion Date” shall mean the first Day of the calendar Month following completion of the Woodall Plant Construction with the Woodall Plant being fully operational and producing NGLs for delivery to Processor.  Customer expects the Woodall Plant to be operational and producing NGLs for delivery to Processor on April 1, 2012.’

 

4.               Annual Estimated Production Allocation Election.  Pursuant to Customer exercising its West Plants Volume Reduction option (as defined in the Second Amendment) and with the consent and agreement of Processor notwithstanding any issues regarding the timing of the exercise of such option by Customer, effective as of July 1, 2011, the maximum allowable Estimated Production for the West Plants is hereby reduced by 300 Barrels per Day, from 5,600 Barrels per Day to 5,300 Barrels per Day, and the maximum allowable Estimated Production for the East Plants is hereby increased by 300 Barrels per day, from 8,400 Barrels per Day to 8,700 Barrels per Day, such 300 Barrel per Day increase being allocated to the Phoenix Plant increasing its Estimated Production from 5,400 Barrels per Day to 5,700 Barrels per Day and such 300 Barrels per Day decrease being allocated to the LeFors Plant decreasing its Estimated Production from 2,500 Barrels per Day to 2,200 Barrels per Day.

 

5.               Additional Volume.  Effective September 1, 2011, and applying prospectively thereafter, Estimated Production for the East Plants shall be increased above the current Estimated Production of 8,700 Barrels per Day (as reflected in Section 3 of this Amendment) (the “East Plants Base Estimated Production”), based on and subject to the following terms and conditions:

 

A.           Effective September 1, 2011, and applying prospectively thereafter, the volume of NGLs tendered by Customer from the Phoenix Plant will be increased by 1,100 Barrels per Day (the “Phoenix Additional Volume”), which will increase Estimated Production for the Phoenix Plant from 5,700 Barrels per Day (as reflected in Section 4 of this Amendment) to 6,800 Barrels per Day.  Effective as of the Woodall Plant Completion Date, and applying prospectively thereafter, the volume of NGLs tendered by Customer from the Woodall Plant shall be 7,000 Barrels per Day (the “Woodall Estimated Production”).  The Phoenix Additional Volume together with the Woodall Estimated Production shall hereinafter be collectively referred to as the “Third Amendment Additional Volume”.

 

B.             For each Gallon of Third Amendment Additional Volume delivered to Processor, Customer shall pay Processor a Base Exchange Differential as follows: for the Phoenix Additional Volume, Customer shall pay (i) [***] per Gallon for ethane, and (ii) [***] per Gallon for Propane Plus, and for the Woodall Estimated Production, Customer shall pay (i) [***] per Gallon for ethane, and (ii) [***] per Gallon for Propane Plus, each as adjusted pursuant to Subsection 3.6.B of the Agreement.  Such Base Exchange Differentials (as adjusted) shall be charged Customer by Processor upon receipt of the Third Amendment Additional Volume at the Delivery Points.

 

 

Specific terms in this Exhibit have been redacted because confidential treatment for those terms has been requested.  The redacted material has been separately filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks [***].

 

C.             If at the end of any delivery Month, Customer failed to deliver to Processor ninety percent (90%) of the Phoenix Additional Volume (the “Phoenix Take or Pay Amount”), Customer shall be obligated to pay to Processor [***] per Gallon (the “Phoenix Take or Pay Fee”) for each Gallon of the Phoenix Additional Volume Customer did not deliver up to the Phoenix Take or Pay Amount.  Additionally, if at the end of any delivery Month, Customer failed to deliver to Processor ninety percent (90%) of the Woodall Estimated Production (the “Woodall Take or Pay Amount”), Customer shall be obligated to pay to Processor [***] per Gallon (the “Woodall Take or Pay Fee”) for each Gallon of the Woodall Estimated Production Customer did not deliver up to the Woodall Take or Pay Amount.  Each of the Phoenix Take or Pay Amount and the Woodall Take or Pay Amount shall exclude such portion of the Phoenix Additional Volume and the Woodall Estimated Production, respectively, that is allocable to Days during such delivery Month that (i) Processor was unable to receive NGLs at the applicable Delivery Point, or (ii) Customer, for reasons of Force Majeure, was unable to deliver NGLs to such Delivery Point.  Each of the Phoenix Take or Pay Fee and the Woodall Take or Pay Fee shall be adjusted pursuant to Subsection 3.6.B.(iii) of the Agreement. Notwithstanding anything to the contrary herein, the Woodall Take or Pay Fee only shall apply to delivery Months commencing after the expiration of ninety (90) Days following the Woodall Plant Completion Date.

 

D.            The manner in which the Estimated Production shall be allocated for purposes of (i) Take or Pay obligations, and (ii) determining the Base Exchange Differential (as adjusted) that Customer shall be charged by Processor for NGLs delivered by Customer to Processor, shall be as follows:  (a) the full amount of the Estimated Production shall first go towards the Base Estimated Production (as defined in the Second Amendment), with the Base Exchange Differential being determined under Section 3.6 of the Original Agreement during the Option Term, then Section 3.6 as amended by the Second Amendment thereafter; (b) remaining Estimated Production, if any, shall next go towards the full amount of any incremental increase(s) in volume which resulted from an increase in the then-effective Estimated Production under Sections 3.2.A and 3.2.B of the Agreement (as amended), with the Base Exchange Differential being determined under Section 3.B of the Second Amendment unless the Parties have otherwise agreed that such volume increase(s) will be charged a different exchange differential; (c) remaining Estimated Production, if any, shall next go towards the Additional Volume (as defined in the Second Amendment), with the Base Exchange Differential being determined under Section 3.B of the Second Amendment; (d) remaining Estimated Production, if any, shall next go towards the Phoenix Additional Volume, with the Base Exchange Differential being determined under Section 4.B of this Amendment; and (e) remaining Estimated Production, if any, shall then go towards the Woodall Estimated Production, with the Base Exchange Differential being determined under Section 4.B of this Amendment.

 

 

Specific terms in this Exhibit have been redacted because confidential treatment for those terms has been requested.  The redacted material has been separately filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks [***].

 

E.              Processor agrees that ONP shall endeavor to complete the Expansion by April 1, 2012 absent any unforeseen circumstances beyond the reasonable control of ONP.

 

6.               Article III.  Effective as of the Woodall Plant Completion Date, and applying prospectively thereafter, Article III of the Agreement is hereby amended as follows:

 

A.                                   Section 3.1.A is hereby deleted in its entirety and replaced with the following:

 

“Section 3.1  Dedicated Plants.

 

A.                                   Subject to the provisions herein, Customer shall deliver to Processor all of the NGLs that Customer or its Affiliates Own or Control from the Cargray, Kingsmill/Gray, and Lefors plants (hereinafter the “West Plants”) (subject to Customer’s right under the Original Agreement to fractionate and market Propane at the Cargray plant) and the Phoenix, Canadian, Red Deer  and Woodall plants (hereinafter the “East Plants”) (the East Plants together with the West Plants hereinafter collectively the “Dedicated Plants”), such volume of NGLs from the Dedicated Plants estimated to be the following (the “Estimated Production”).

 

	
 
    	
 
    	
Dedicated Plants
    
	
 
    	
 
    	
West Plants
    	
 
    	
East Plants
    
	
 
    	
 
    	
Cargray
    	
 
    	
Phoenix
    
	
 
    	
 
    	
Kingsmill/Gray
    	
 
    	
Canadian
    
	
 
    	
 
    	
Lefors
    	
 
    	
Red   Deer
    
	
 
    	
 
    	
 
    	
 
    	
Woodall
    
	
Estimated   Production
    	
 
    	
5,300   BPD
    	
 
    	
16,800   BPD”
    

 

B.             Section 3.2.A is hereby deleted in its entirety and replaced with the following:

 

“Section 3.2.  Deliveries, Receipts.

 

A.           Subject to the following provisions, Processor shall accept the NGLs from Customer tendered hereunder during the term of this Agreement.  Although it is the intention of both parties to this Agreement for Processor to receive and Customer to deliver the entire production of NGLs from the Dedicated Plants, notwithstanding anything herein however, Processor shall not be required to accept NGLs in excess of the Estimated Production of 5,300 Barrels per Day from the West Plants, with the Cargray Plant limited to 3,500 Barrels per Day, the Lefors Plant limited to 2,200 Barrels per Day and the Kingsmill/Gray Plant limited to 2,500 Barrels per Day, and 16,800 Barrels per Day from the East Plants, with the Phoenix Plant limited to 6,800 Barrels per Day, the Canadian Plant limited to 5,400 Barrels Per Day, the Red Deer Plant limited to 2,000

 

 

Specific terms in this Exhibit have been redacted because confidential treatment for those terms has been requested.  The redacted material has been separately filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks [***].

 

Barrels per Day and the Woodall Plant limited to 7,000 Barrels per Day, not to exceed 22,100 Barrels per Day from the West Plants and East Plants combined, if such excess volumes are not economical for Processor to accept and fractionate, in Processor’s sole discretion, and Processor provides written notice of such determination to Customer.  If Customer provides notice to Processor of its desire to amend this Agreement to adjust the Estimated Production during the term of this Agreement, Processor shall not unreasonably refuse such request.  If Processor refuses to so amend this Agreement, then upon thirty (30) days notice to Processor, Customer shall have the right to terminate this Agreement with respect to only the volume of NGLs actually produced from the Dedicated Plants which is in excess of the then-effective Estimated Production.”

 

7.               Stinnet Plant Removed.  The parties agree that effective as of September 1, 2011, the Stinnet Plant is hereby removed from and no longer considered a Dedicated Plant under the Agreement.

 

8.               Ratification.  Processor and Customer each hereby ratifies, reaffirms and adopts the Agreement, as amended hereby, and agrees that the terms and conditions of the Agreement, as amended hereby, shall remain in full force and effect.

 

IN WITNESS WHEREOF, the parties have executed this Amendment in duplicate originals this 18th day of August, 2011.

 

 

	
PROCESSOR:
    	
ONEOK   HYDROCARBON, L.P.
    
	
 
    	
 
    
	
 
    	
By: 
    	
ONEOK   Hydrocarbon GP, L.L.C., 
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sheridan Swords
    
	
 
    	
Name:   
    	
Sheridan   Swords
    
	
 
    	
Title:   
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CUSTOMER:
    	
EAGLE   ROCK FIELD SERVICES, L.P.
    
	
 
    	
 
    
	
 
    	
By: 
    	
Eagle   Rock Pipeline G.P., LLC,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Joseph A. Mills
    
	
 
    	
Name:
    	
Joseph   A. Mills
    
	
 
    	
Title:
    	
CEO

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