Document:

Exhibit 10.3

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT (this “Agreement”),
dated as of April 3, 2008, is by and between Deerfield ED Corporation, a
Delaware corporation (the “Company”) and Deerfield Private Design Fund,
L.P., a Delaware limited partnership (“Subscriber”).

 

Background Statement

 

Subscriber is willing to irrevocably subscribe for and
acquire, and the Company is willing to issue to Subscriber, shares of the
Company’s common stock in accordance with the terms and conditions of this Agreement.

 

Statement of Agreement

 

The parties hereto agree as follows:

 

1.                                       Issuance
and Acquisition of Stock

 

(a)                                  Acquisition of Stock. 
Subject to the terms and conditions of this Agreement, Subscriber agrees
to acquire from the Company for investment, and the Company agrees to issue to
Subscriber, the number of shares of the Company’s common stock (the “Shares”)
for the aggregate purchase price (the “Purchase Price”) and on the dates
(each a “Closing Date”) set forth below:

 

	
  Date

  	
   

  	
  Number of Shares

  	
   

  	
  Purchase Price

  	
   

  
	
  On or before the
  15th Business Day after the execution of this Agreement

  	
   

  	
  1,277

  	
   

  	
  $

  	
  1,276,666.50

  	
   

  
	
  Within 2
  Business Days after August 29, 2008

  	
   

  	
  1,277

  	
   

  	
  $

  	
  1,276,666.50

  	
   

  
	
  Within 2
  Business Days after November 29, 2008

  	
   

  	
  1,277

  	
   

  	
  $

  	
  1,276,666.50

  	
   

  
	
  Within 2
  Business Days after VIVUS publicly issues its earnings report for the 4th
  quarter of its 2008 fiscal year

  	
   

  	
  1,277

  	
   

  	
  $

  	
  1,276,666.50

  	
   

  
	
  Within 2
  Business Days after May 30, 2009

  	
   

  	
  1,277

  	
   

  	
  $

  	
  1,276,666.50

  	
   

  
	
  Within 2
  Business Days after August 29, 2009

  	
   

  	
  1,275

  	
   

  	
  $

  	
  1,276,667.50

  	
   

  
	
  Total

  	
   

  	
  7,660

  	
   

  	
  $

  	
  7,660,000.00

  	
   

  

 

For purposes of this
Agreement, “Business Day” means any day other than Saturday, Sunday or a
day on which banks in the City of New York are authorized or required to be
closed.

 

(b)                                 Closing; Payment; Issuance. 
On each Closing Date, Subscriber
shall deliver to the Company the Purchase Price in immediately available funds,
and the Company shall issue to and register in the name of Subscriber one or
more certificates evidencing the Shares purchased by Subscriber on such Closing
Date.

 

 

(c)                                  Condition
Precedent.  Subscriber shall have no
obligation to acquire the Shares at any time when VIVUS, Inc., a Delaware
corporation (“VIVUS”), is in breach of that certain Funding and Royalty
Agreement between the Company and VIVUS (as amended, the “Funding Agreement”).

 

2.                                       Subscriber’s
Representations, Warranties and Agreements. 
All representations and warranties of Subscriber contained herein are
made as of the date hereof.

 

(a)                                  Investment Intention. 
Subscriber understands that the
Shares have not been registered, and that there is no plan or intention by the
Company to so register the Shares, under the Securities Act of 1933, as
amended (together with applicable rules and regulations promulgated
thereunder, the “Act”), or any other
applicable state or federal securities statutes.  Subscriber represents and warrants that it is
acquiring the Shares solely for its own account for the purpose of investment
and not with a view to or for sale in connection with any distribution
thereof.  Subscriber agrees that it will
not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or
otherwise dispose of any of the Shares (or solicit any offers to buy, purchase,
or otherwise acquire or take a pledge of any of the Shares), except in
compliance with the Act (including without limitation Release No. 5226
limiting the resale to the public of any of the Shares), and the rules and
regulations thereunder.

 

(b)                                 Ability to Bear Risk. 
Subscriber represents and warrants that (i) the financial situation
of the Subscriber is such that it can afford to bear the economic risk of
holding the unregistered Shares for an indefinite period and (ii) it can
afford to suffer the complete loss of its investment in the Shares.

 

(c)                                  Access to Information; Evaluation of
Risks.  Subscriber represents and warrants that (i) it
understands and has taken cognizance of all the risk factors related to its
purchase of the Shares, (ii) it has been granted the opportunity to ask
questions of, and receive satisfactory answers from, representatives of the
Company concerning the terms and conditions of the acquisition of the Shares
and has had the opportunity to obtain and has obtained any additional
information that it deems necessary regarding the acquisition of the Shares, (iii) it
has not relied on any person in connection with its investigation of the
accuracy or sufficiency of such information or its investment decision and (iv) it
has such knowledge and experience in financial and business matters as are
necessary in order to evaluate the merits and risks of an investment in the
Shares.  Subscriber represents and
warrants that it is an “accredited investor,” as that term is defined in
Regulation D under the Act.

 

(d)                                 Enforceability. 
This Agreement has been duly executed and delivered by Subscriber and
constitutes a legal, valid and binding obligation of Subscriber, enforceable
against Subscriber in accordance with its terms except as may be limited by bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors’ rights generally, and the effect of rules of law governing the
availability of equitable remedies.

 

(e)                                  Compliance with Laws and Other
Instruments.  Subscriber represents and warrants that the
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the performance of each obligation hereunder will not
conflict with, or 

 

 

result in any violation of or default under, any agreement or
instrument to which Subscriber is a party or by which Subscriber is bound, or
any judgment, decree, statute, law, order, rule or regulation applicable
to Subscriber.

 

(f)                                    No General Solicitation. 
Subscriber acknowledges that the Shares were not offered to Subscriber
by means of any general solicitation, publicly disseminated advertisement or
sales literature.

 

(g)                                 No Recommendation. 
Subscriber acknowledges that no federal or state agency has made any
finding or determination relating to the fairness for investment in the Shares,
and no federal or state agency has recommended or endorsed the Shares.  Subscriber has relied on Subscriber’s own
legal counsel to the extent Subscriber has deemed necessary as to all legal
matters and questions presented with reference to the issuance of the Shares
subscribed for herein.

 

(h)                                 Legend.  Subscriber acknowledges that a legend
substantially as follows will be placed on the certificates representing the
Shares along with any additional legend required by federal or state law or
required pursuant to any stockholder or similar agreement:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933.  THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933 OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.

 

3.                                       VIVUS.

 

(a)                                  VIVUS as Beneficiary.  The
parties acknowledge that (i) the Company intends to use the funds received
from Subscriber to make certain payments to VIVUS pursuant to the Funding
Agreement, and (ii) VIVUS, so long as it is not in breach of any its
obligations under the Funding Agreement, shall be a third party beneficiary of
the obligation of Subscriber to acquire the Shares pursuant to this Agreement
with full rights of enforcement as if a party to this Agreement.

 

(b)                                 Termination upon Exercise of Put or Call.  The
parties hereto acknowledge that VIVUS has an option to purchase, and Subscriber
has an option to sell to VIVUS, the Shares held by Subscriber.  Upon the closing of any exercise of such
option to purchase or option to sell, Subscriber shall have no further
obligation to acquire, and the Company shall have no further obligation to
issue, the Shares.

 

4.                                       Miscellaneous

 

(a)                                  Binding Effect; Benefits. 
This Agreement shall be binding upon and inure to the benefit of the
parties to this Agreement and their respective successors and permitted
assigns.  Except as provided in Section 3(a),
nothing in this Agreement, express or implied, is intended or shall be
construed to give any person other than the parties to this Agreement or their
respective 

 

 

successors or permitted assigns any legal or equitable right,
remedy or claim under or in respect of any agreement or any provision contained
herein.

 

(b)                                 Waiver. 
No action taken pursuant to this Agreement, including, without
limitation, any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein.  The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any preceding or succeeding breach and no failure by any party to exercise
any right or privilege hereunder shall be deemed a waiver of such party’s
rights or privileges hereunder or shall be deemed a waiver of such party’s
rights to exercise the same at any subsequent time or times hereunder.

 

(c)                                  Amendment. 
This Agreement may not be amended, modified or supplemented except by a
written instrument executed by Subscriber and the Company.

 

(d)                                 Assignment. 
Neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by Subscriber without
the prior written consent of the Company.

 

(e)                                  Applicable Law. 
Notwithstanding the principles of conflicts of law of any jurisdiction
that would cause any other law to apply, the interpretation, validity and
performance of the terms of this Agreement shall be governed by the laws of
State of New York except for matters of corporate law, which shall be governed
by the Delaware General Corporation Law.

 

(f)                                    Section and Other Headings. 
The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

 

(g)                                 Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.

 

(h)                                 Survival of Representations and Warranties
and Covenants.
The representations, warranties and
covenants contained in this Agreement shall survive the issuance of the Shares
to Subscriber, and shall remain effective.

 

(i)                                     Indemnification.  Subscriber hereby indemnifies and holds the
Company harmless from damage, claim or loss (including attorneys’ fees)
resulting from any misrepresentation or breach of this Agreement by
Subscriber.  The Company hereby
indemnifies and holds Subscriber harmless from damage, claim or loss (including
attorneys’ fees) resulting from any misrepresentation or breach of this
Agreement by the Company.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Company
and Subscriber have executed this Subscription Agreement as of the day and year
first above written.

 

 

	
   

  	
  Company:

  
	
   

  	
   

  
	
   

  	
  DEERFIELD ED CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeff Kaplan

  
	
   

  	
   

  	
  Name: Jeff Kaplan

  
	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Subscriber:

  
	
   

  	
   

  
	
   

  	
  DEERFIELD
  PRIVATE DESIGN FUND, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Flynn

  
	
   

  	
   

  	
  Name: James Flynn

  
	
   

  	
   

  	
  Title: General PartnerExhibit 10.4

 

SUBSCRIPTION AGREEMENT

 

This SUBSCRIPTION AGREEMENT
(this “Agreement”), dated as of April 3, 2008, is by and between
Deerfield ED Corporation, a Delaware corporation (the “Company”) and
Deerfield Private Design International, L.P., a British Virgin Islands limited
partnership (“Subscriber”).

 

Background Statement

 

Subscriber is willing to irrevocably subscribe for and
acquire, and the Company is willing to issue to Subscriber, shares of the
Company’s common stock in accordance with the terms and conditions of this
Agreement.

 

Statement of Agreement

 

The parties hereto agree as follows:

 

1.                                       Issuance
and Acquisition of Stock

 

(a)                                  Acquisition of Stock. 
Subject to the terms and conditions of this Agreement, Subscriber agrees
to acquire from the Company for investment, and the Company agrees to issue to
Subscriber, the number of shares of the Company’s common stock (the “Shares”)
for the aggregate purchase price (the “Purchase Price”) and on the dates
(each a “Closing Date”) set forth below:

 

	
  Date

  	
   

  	
  Number of Shares

  	
   

  	
  Purchase Price

  	
   

  
	
  On or before the
  15th Business Day after the execution of this Agreement

  	
   

  	
  2,057

  	
   

  	
  $

  	
  2,056,666.50

  	
   

  
	
  Within 2
  Business Days after August 29, 2008

  	
   

  	
  2,057

  	
   

  	
  $

  	
  2,056,666.50

  	
   

  
	
  Within 2
  Business Days after November 29, 2008

  	
   

  	
  2,057

  	
   

  	
  $

  	
  2,056,666.50

  	
   

  
	
  Within 2
  Business Days after VIVUS publicly issues its earnings report for the 4th
  quarter of its 2008 fiscal year

  	
   

  	
  2,057

  	
   

  	
  $

  	
  2,056,666.50

  	
   

  
	
  Within 2
  Business Days after May 30, 2009

  	
   

  	
  2,057

  	
   

  	
  $

  	
  2,056,666.50

  	
   

  
	
  Within 2
  Business Days after August 29, 2009

  	
   

  	
  2,055

  	
   

  	
  $

  	
  2,056,667.50

  	
   

  
	
  Total

  	
   

  	
  12,340

  	
   

  	
  $

  	
  12,340,000.00

  	
   

  

 

For purposes of this
Agreement, “Business Day” means any day other than Saturday, Sunday or a
day on which banks in the City of New York are authorized or required to be
closed.

 

(b)                                 Closing; Payment; Issuance. 
On each Closing Date, Subscriber
shall deliver to the Company the Purchase Price in immediately available funds,
and the Company shall issue to and 

 

1

 

register in the name of Subscriber one
or more certificates evidencing the Shares purchased by Subscriber on such
Closing Date.

 

(c)                                  Condition
Precedent.  Subscriber shall have no
obligation to acquire the Shares at any time when VIVUS, Inc., a Delaware
corporation (“VIVUS”), is in breach of that certain Funding and Royalty
Agreement between the Company and VIVUS (as amended, the “Funding Agreement”).

 

2.                                       Subscriber’s
Representations, Warranties and Agreements. 
All representations and warranties of Subscriber contained herein are
made as of the date hereof.

 

(a)                                  Investment Intention. 
Subscriber understands that the
Shares have not been registered, and that there is no plan or intention by the
Company to so register the Shares, under the Securities Act of 1933, as amended
(together with applicable rules and regulations promulgated thereunder,
the “Act”), or any other applicable
state or federal securities statutes.  Subscriber represents and warrants that it is
acquiring the Shares solely for its own account for the purpose of investment
and not with a view to or for sale in connection with any distribution
thereof.  Subscriber agrees that it will
not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or
otherwise dispose of any of the Shares (or solicit any offers to buy, purchase,
or otherwise acquire or take a pledge of any of the Shares), except in
compliance with the Act (including without limitation Release No. 5226
limiting the resale to the public of any of the Shares), and the rules and
regulations thereunder.

 

(b)                                 Ability to Bear Risk. 
Subscriber represents and warrants that (i) the financial situation
of the Subscriber is such that it can afford to bear the economic risk of
holding the unregistered Shares for an indefinite period and (ii) it can
afford to suffer the complete loss of its investment in the Shares.

 

(c)                                  Access to Information; Evaluation of
Risks.  Subscriber represents and warrants that (i) it
understands and has taken cognizance of all the risk factors related to its
purchase of the Shares, (ii) it has been granted the opportunity to ask
questions of, and receive satisfactory answers from, representatives of the
Company concerning the terms and conditions of the acquisition of the Shares
and has had the opportunity to obtain and has obtained any additional
information that it deems necessary regarding the acquisition of the Shares, (iii) it
has not relied on any person in connection with its investigation of the
accuracy or sufficiency of such information or its investment decision and (iv) it
has such knowledge and experience in financial and business matters as are
necessary in order to evaluate the merits and risks of an investment in the
Shares.  Subscriber represents and
warrants that it is an “accredited investor,” as that term is defined in
Regulation D under the Act.

 

(d)                                 Enforceability. 
This Agreement has been duly executed and delivered by Subscriber and
constitutes a legal, valid and binding obligation of Subscriber, enforceable
against Subscriber in accordance with its terms except as may be limited by bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the enforcement of
creditors’ rights generally, and the effect of rules of law governing the
availability of equitable remedies.

 

2

 

(e)                                  Compliance with Laws and Other
Instruments.  Subscriber represents and warrants that the
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the performance of each obligation hereunder will not
conflict with, or result in any violation of or default under, any agreement or
instrument to which Subscriber is a party or by which Subscriber is bound, or
any judgment, decree, statute, law, order, rule or regulation applicable
to Subscriber.

 

(f)                                    No General Solicitation. 
Subscriber acknowledges that the Shares were not offered to Subscriber
by means of any general solicitation, publicly disseminated advertisement or
sales literature.

 

(g)                                 No Recommendation. 
Subscriber acknowledges that no federal or state agency has made any
finding or determination relating to the fairness for investment in the Shares,
and no federal or state agency has recommended or endorsed the Shares.  Subscriber has relied on Subscriber’s own
legal counsel to the extent Subscriber has deemed necessary as to all legal
matters and questions presented with reference to the issuance of the Shares
subscribed for herein.

 

(h)                                 Legend.  Subscriber acknowledges that a legend
substantially as follows will be placed on the certificates representing the
Shares along with any additional legend required by federal or state law or
required pursuant to any stockholder or similar agreement:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933.  THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933 OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.

 

3.                                       VIVUS.

 

(a)                                  VIVUS as Beneficiary.  The
parties acknowledge that (i) the Company intends to use the funds received
from Subscriber to make certain payments to VIVUS pursuant to the Funding
Agreement, and (ii) VIVUS, so long as it is not in breach of any its
obligations under the Funding Agreement, shall be a third party beneficiary of
the obligation of Subscriber to acquire the Shares pursuant to this Agreement
with full rights of enforcement as if a party to this Agreement.

 

(b)                                 Termination upon Exercise of Put or Call.  The
parties hereto acknowledge that VIVUS has an option to purchase, and Subscriber
has an option to sell to VIVUS, the Shares held by Subscriber.  Upon the closing of any exercise of such
option to purchase or option to sell, Subscriber shall have no further
obligation to acquire, and the Company shall have no further obligation to
issue, the Shares.

 

3

 

4.                                       Miscellaneous

 

(a)                                  Binding Effect; Benefits. 
This Agreement shall be binding upon and inure to the benefit of the
parties to this Agreement and their respective successors and permitted
assigns.  Except as provided in Section 3(a), nothing in this Agreement, express or
implied, is intended or shall be construed to give any person other than the
parties to this Agreement or their respective successors or permitted assigns
any legal or equitable right, remedy or claim under or in respect of any
agreement or any provision contained herein.

 

(b)                                 Waiver. 
No action taken pursuant to this Agreement, including, without
limitation, any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein.  The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any preceding or succeeding breach and no failure by any party to exercise
any right or privilege hereunder shall be deemed a waiver of such party’s
rights or privileges hereunder or shall be deemed a waiver of such party’s
rights to exercise the same at any subsequent time or times hereunder.

 

(c)                                  Amendment. 
This Agreement may not be amended, modified or supplemented except by a
written instrument executed by Subscriber and the Company.

 

(d)                                 Assignment. 
Neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by Subscriber without
the prior written consent of the Company.

 

(e)                                  Applicable Law. 
Notwithstanding the principles of conflicts of law of any jurisdiction
that would cause any other law to apply, the interpretation, validity and
performance of the terms of this Agreement shall be governed by the laws of
State of New York except for matters of corporate law, which shall be governed
by the Delaware General Corporation Law.

 

(f)                                    Section and Other Headings. 
The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

 

(g)                                 Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.

 

(h)                                 Survival of Representations and
Warranties and Covenants. The
representations, warranties and covenants contained in this Agreement shall
survive the issuance of the Shares to Subscriber, and shall remain effective.

 

(i)                                     Indemnification.  Subscriber hereby indemnifies and holds the
Company harmless from damage, claim or loss (including attorneys’ fees)
resulting from any misrepresentation or breach of this Agreement by
Subscriber.  The Company hereby
indemnifies and holds Subscriber harmless from damage, claim or loss (including
attorneys’ fees) resulting from any misrepresentation or breach of this
Agreement by the Company.

 

[Signature Page Follows]

 

4

 

IN WITNESS WHEREOF, the Company
and Subscriber have executed this Subscription Agreement as of the day and year
first above written.

 

 

	
   

  	
  Company:

  
	
   

  	
   

  
	
   

  	
  DEERFIELD ED CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeff Kaplan

  
	
   

  	
   

  	
  Name: Jeff Kaplan

  
	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Subscriber:

  
	
   

  	
   

  
	
   

  	
  DEERFIELD
  PRIVATE DESIGN INTERNATIONAL, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Flynn

  
	
   

  	
   

  	
  Name: James Flynn

  
	
   

  	
   

  	
  Title: General Partner

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