UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): September 9, 2009
ZIOPHARM
Oncology, Inc.
(Exact
Name of Registrant as Specified in Charter)
Delaware
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0-32353
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84-1475672
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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1180
Avenue of the Americas
19th
Floor
New
York, NY
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10036
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(646) 214-0700
(Registrant’s
telephone number, including area code)
Not
applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425).
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12).
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b)).
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c)).
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Item
1.01 Entry into a Material
Definitive Agreement
On
September 9, 2009, ZIOPHARM Oncology, Inc. (ZIOPHARM or the “Company”) entered
into a securities purchase agreement and related documentation with certain
investors pursuant to which it has agreed to sell a total of 2,772,337 units
(the “Units”), each Unit consisting of (i) one share of common stock
(collectively, the “Shares”) and (ii) a warrant (collectively, the
“Warrants”) to purchase one share of common stock at an exercise price of $2.04
per share, for a purchase price of $1.825 per Unit (the “Offering”). The
Warrants will have a five year term and will be exercisable immediately
following the closing of the transaction. Based on the securities purchase
agreement and related documentation, total gross proceeds from the Offering will
be approximately $5.06 million, before deducting selling commissions and
expenses. Upon satisfaction of customary closing conditions, the
closing of the transaction occurred on September 15,
2009.
In
connection with the Offering, the Company entered into a placement agency
agreement with Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw
Capital Group, Inc. (“Rodman”), whereby Rodman agreed to act as a placement
agent in connection with the placement of the Shares and
Warrants. Riverbank Capital Securities, Inc. and Griffin Securities,
Inc. served as sub-placement agents in connection with the
Offering. In consideration for their services, the Company paid
aggregate cash commissions equal to seven percent of the gross cash proceeds
from the Offering, or approximately $0.35 million. The Company also issued
five-year warrants to the Placement Agents to purchase an aggregate of five
percent of the Shares sold in the Offering at an exercise price of $2.04 per
share (the “Placement Warrants”). The Company has also agreed to
reimburse Rodman for up to $50,000 of the out-of-pocket expenses it incurs in
connection with its engagement.
Timothy
McInerney, who serves on the Board of Directors of the Company, is an officer of
Riverbank Capital Securities, Inc. Riverbank Capital Securities, Inc.
may allocate to Mr. McInerney a portion of the compensation that it will receive
for serving as a sub-placement agent. In light of the relationship
between Mr. McInerney and the Placement Agent, Mr. McInerney abstained from
voting as a director on matters related to the selection of the Placement Agents
and the terms of the offering were reviewed and approved by a special financing
committee of which Mr. McInerney was not a member.
Also in
connection with the Offering and pursuant to a registration rights agreement,
the Company has agreed to file a “resale” registration statement (the “Initial
Registration Statement”) covering all of the Shares and the shares issuable upon
exercise of the Warrants and the Placement Warrants (the “Warrant Shares”), up
to the maximum number of shares able to be registered pursuant to applicable
Securities and Exchange Commission (“SEC”) regulations, within 30 days of the
closing of the Offering. If any Shares or Warrant Shares are unable to be
included on the Initial Registration Statement, the Company has agreed to file
subsequent registration statements until all the Shares and Warrant Shares have
been registered. The Company is obligated to maintain the effectiveness of
the “resale” registration statement until all securities therein are sold or are
otherwise can be sold pursuant to Rule 144, without any
restrictions.
The
foregoing description of each of the securities purchase agreement, the
registration rights agreement and the form of Warrant and Placement Warrant is
qualified in its entirety by reference thereto, which are filed as
Exhibits 10.1, 10.2, 4.1 and 4.2 to this Current Report, respectively, and
are incorporated herein by reference. The press release announcing the
Offering is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
Item
3.02
Unregistered Sales of Equity Securities
The
disclosure in Item 1.01 is incorporated herein by reference thereto.
Neither the Shares, Warrants or Placement Agent Warrants to be sold and issued
in the Offering (including the shares of common stock issuable upon exercise of
the Warrants or Placement Agent Warrants), will be registered under the
Securities Act of 1933, as amended (the “Securities Act”) at the time of sale,
and therefore may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements. For
these issuances, the Company is relying on the exemption from federal
registration under Section 4(2) of the Securities Act and/or Rule 506
promulgated thereunder, based on the Company’s belief that the offer and sale of
the Shares, Warrants and Placement Agent Warrants has not and will not involve a
public offering as each investor was “accredited” and no general solicitation
has been involved in the Offering.
Item
9.01
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Financial Statements and
Exhibits
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(d)
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Exhibits
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Exhibit No.
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Description
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4.1
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Form of
Warrant
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4.2
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Form of
Placement Agent Warrant
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10.1
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Securities
Purchase Agreement, between ZIOPHARM and each of the Purchasers identified
therein, dated September 9, 2009
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10.2
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Registration
Rights Agreement, between ZIOPHARM and each of the Holders identified
therein, dated September 9, 2009
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99.1
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Press
Release, dated September 9,
2009
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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ZIOPHARM
Oncology, Inc.
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By:
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/s/
Richard Bagley
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Date:
September 15, 2009
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Name:
Richard Bagley
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Title:
President, Chief Operating Officer and Chief Financial
Officer
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INDEX OF
EXHIBITS
Exhibit No.
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Description
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4.1
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Form of
Warrant
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4.2
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Form of
Placement Agent Warrant
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10.1
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Securities
Purchase Agreement, between ZIOPHARM and each of the Purchasers identified
therein, dated September 9, 2009
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10.2
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Registration
Rights Agreement, between ZIOPHARM and each of the Holders identified
therein, dated September 9, 2009
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99.1
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Press
Release, dated September 9,
2009
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Exhibit
4.1
NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY.
ZIOPHARM
ONCOLOGY, INC.
WARRANT
TO PURCHASE COMMON STOCK
Warrant
No. 2009-[ ]
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Original
Issue Date:
[ ],
2009
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ZIOPHARM
Oncology, Inc., a Delaware corporation (the “Company”), hereby certifies
that, for value received,
[ ] or
its permitted registered assigns (the “Holder”), is entitled to
purchase from the Company up to a total of
[ ]
shares of common stock, $0.001 par value (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such
shares, the “Warrant
Shares”) at an exercise price per share equal to
$[ ]
(as adjusted from time to time as provided in Section 9 herein, the “Exercise Price”), at any time
and from time to time from on or after the date hereof (the “Trigger Date”) and through
and including 5:30 P.M., New York City time, on
[ ],
2014 (the “Expiration
Date”), and subject to the following terms and conditions:
This Warrant (this “Warrant”) is one of a series
of similar warrants issued pursuant to that certain Securities Purchase
Agreement, dated ____________________, 2009, by and among the Company and the
Purchasers identified therein (the “Purchase Agreement”). All
such warrants are referred to herein, collectively, as the “Warrants.”
1. Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Purchase Agreement.
2. Registration of
Warrants. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder (which shall include the initial Holder or, as the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder) from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.
3. Registration of
Transfers. Subject to the restrictions on transfer set forth in Section
4.1 of the Purchase Agreement and compliance with all applicable securities
laws, the Company shall register the transfer of all or any portion of this
Warrant in the Warrant Register, upon (i) surrender of this Warrant, with the
Form of Assignment attached as Schedule 2 hereto
duly completed and signed, to the Company’s transfer agent or to the Company at
its address specified herein and (ii) if the Registration Statement is not
effective, (x) delivery, at the request of the Company, of an opinion of counsel
reasonably satisfactory to the Company to the effect that the transfer of such
portion of this Warrant may be made pursuant to an available exemption from the
registration requirements of the Securities Act and all applicable state
securities or blue sky laws and (y) delivery by the transferee of a written
statement to the Company certifying that the transferee is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and making the
representations and certifications set forth in Section 3.2(b), (c) and (d) of
the Purchase Agreement, to the Company at its address specified in the Purchase
Agreement. Upon any such registration or transfer, a new warrant to purchase
Common Stock in substantially the form of this Warrant (any such new warrant, a
“New Warrant”)
evidencing the portion of this Warrant so transferred shall be issued to the
transferee, and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a Holder
of a Warrant.
4. Exercise and Duration of
Warrants.
(a) All
or any part of this Warrant shall be exercisable by the registered Holder at any
time and from time to time on or after the Trigger Date and through and
including 5:30 P.M. New York City time on the Expiration Date. [Subject to
Section 12 hereof, at] [At] 5:30 P.M., New York City time, on the Expiration
Date, the portion of this Warrant not exercised prior thereto shall be and
become void and of no value and this Warrant shall be terminated and no longer
outstanding;
(b) The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”),
appropriately completed and duly signed, (ii) payment of the Exercise Price in
immediately available funds for the number of Warrant Shares as to which this
Warrant is being exercised, and the date such items are delivered to the Company
(as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The delivery
by (or on behalf of) the Holder of the Exercise Notice and the applicable
Exercise Price as provided above shall constitute the Holder’s certification to
the Company that its representations contained in Section 3.2(b), (c) and (d) of
the Purchase Agreement are true and correct as of the Exercise Date as if remade
in their entirety (or, in the case of any transferee Holder that is not a party
to the Purchase Agreement, such transferee Holder’s certification to the Company
that such representations are true and correct as to such assignee Holder as of
the Exercise Date). The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder. Execution
and delivery of the Exercise Notice shall have the same effect as cancellation
of the original Warrant and issuance of a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares.
5. Delivery of Warrant
Shares.
(a) Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
three Trading Days after the Exercise Date) issue or cause to be issued and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate (provided that, if the Registration
Statement is not effective and the Holder directs the Company to deliver a
certificate for the Warrant Shares in a name other than that of the Holder or an
Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an
opinion of counsel reasonably satisfactory to the Company to the effect that the
issuance of such Warrant Shares in such other name may be made pursuant to an
available exemption from the registration requirements of the Securities Act and
all applicable state securities or blue sky laws), a certificate for the Warrant
Shares issuable upon such exercise, free of restrictive legends, unless a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable pursuant to Rule 144 under the Securities Act
pursuant to transactions in which paragraph (c)(1) of such rule do not apply.
The Holder, or any Person permissibly so designated by the Holder to receive
Warrant Shares, shall be deemed to have become the holder of record of such
Warrant Shares as of the Exercise Date. If the Warrant Shares are to
be issued free of all restrictive legends, the Company shall, upon the written
request of the Holder, use its best efforts to deliver, or cause to be
delivered, Warrant Shares hereunder electronically through The Depository Trust
Company or another established clearing corporation performing similar
functions, if available; provided, that, the Company may, but will not be
required to, change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through such a clearing
corporation.
(b)
If (1) a certificate representing the Warrant Shares is not delivered to the
Holder within three (3) Trading Days of the due exercise of this Warrant by the
Holder and (2) prior to the time such certificate is received by the Holder, the
Holder, or any third party on behalf of the Holder or for the Holder’s account,
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares represented by such
certificate (a “Buy-In”), then the Company
shall pay in cash to the Holder (for costs incurred either directly by such
Holder or on behalf of a third party) the amount by which the total purchase
price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such Holder as a result of
the sale to which such Buy-In relates. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such
loss.
6. Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder or an Affiliate thereof. The
Holder shall be responsible for all other tax liability that may arise as a
result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.
7. Replacement of
Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction (in such case)
and, in each case, a customary and reasonable indemnity (which shall not include
a surety bond), if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation of this
Warrant, then the Holder shall deliver such mutilated Warrant to the Company as
a condition precedent to the Company’s obligation to issue the New
Warrant.
8. Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Company will take all such action as may be necessary to
assure that such shares of Common Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
securities exchange or automated quotation system upon which the Common Shares
may be listed.
9. Certain Adjustments.
The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section
9.
(a)
Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides its outstanding shares of Common Stock into a larger number of
shares, or (iii) combines its outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately before such event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.
(b) Fundamental
Transactions. If, at any time while this Warrant is
outstanding (i) the Company effects any merger or consolidation of
the Company with or into another Person, in which the shareholders of the
Company as of immediately prior to the transaction own less than a majority of
the outstanding stock of the surviving entity, (ii) the Company effects any sale
of all or substantially all of its assets or a majority of its Common Stock is
acquired by a third party, in each case, in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which all or substantially all of
the holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property and would result in the shareholders of the
Company immediately prior to such tender offer or exchange offer owning less
than a majority of the outstanding stock after such tender offer or exchange
offer, or (iv) the Company effects any reclassification of the Common Stock or
any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (other than
as a result of a subdivision or combination of shares of Common Stock covered by
Section 9(a) above) (in any such case, a “Fundamental Transaction”),
then the Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the same amount and kind of securities, cash or property as it
would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant without regard to any limitations on exercise contained herein
(the “Alternate
Consideration”). The Company shall not effect any such
Fundamental Transaction unless prior to or simultaneously with the consummation
thereof, any successor to the Company, surviving entity or the corporation
purchasing or otherwise acquiring such assets or other appropriate corporation
or entity shall assume the obligation to deliver to the Holder, such Alternate
Consideration as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase and/or receive (as the case may be), and the other
obligations under this Warrant. The provisions of this paragraph (c)
shall similarly apply to subsequent transactions analogous to a Fundamental
Transaction.
(c) Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to paragraph (a) of this Section, the number of Warrant Shares that may be
purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the increased or decreased number of Warrant Shares shall
be the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.
(d) Calculations. All
calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of the
Company, and the sale or issuance of any such shares shall be considered an
issue or sale of Common Stock.
(e) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the
Company at its expense will, at the written request of the Holder, compute such
adjustment, in good faith, in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment, including a statement of
the adjusted Exercise Price and adjusted number or type of Warrant Shares or
other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in
detail the facts upon which such adjustment is based. Upon written request, the
Company will deliver a copy of each such certificate to the Holder and to the
Company’s transfer agent.
10. Optional Redemption by
Company. At any time prior to the Expiration Date and provided that the
resale of the Warrant Shares by the Holder is then registered pursuant to an
effective registration statement under the Securities Act or is otherwise exempt
from the registration requirements of the Securities Act, the Company shall have
the option to redeem this Warrant, upon not less than 30 days’ prior written
notice, at a redemption price of $.001 per Warrant Share at any time after the
per share volume weighted average price per share of Common Stock, over 20
consecutive trading days, equals or exceeds 250% of the Exercise Price then in
effect. Such notice shall also state the current Per Share Warrant Price and the
date on which the right to exercise the Warrant will expire unless extended by
the Company. During the 30 day notice period, the Holder shall be
entitled to exercise all or any portion of this Warrant in accordance with the
terms of Section 1. The Company shall deliver to the Holder within
five business days after the expiration of the 30 day notice period the
redemption price for any Warrants outstanding at the expiration of such notice
period.
11. Payment of Exercise
Price. The Holder shall pay the Exercise Price in immediately available
funds; provided,
however, that if, on any Exercise Date the shares issuable upon exercise
of this Warrant are not freely resalable without restriction under the
Securities Act, the Holder may, in its sole discretion, satisfy its obligation
to pay the Exercise Price through a “cashless exercise”, in which event the
Company shall issue to the Holder the number of Warrant Shares determined as
follows:
X = Y
[(A-B)/A]
where:
X = the
number of Warrant Shares to be issued to the Holder.
Y = the
total number of Warrant Shares with respect to which this Warrant is being
exercised.
A = the
average of the Closing Sale Prices of the shares of Common Stock (as reported by
Bloomberg Financial Markets) for the five Trading Days ending on the date
immediately preceding the Exercise Date.
B = the
Exercise Price then in effect for the applicable Warrant Shares at the time of
such exercise.
For
purposes of this Warrant, “Closing Sale Price” means,
for any security as of any date, the last trade price for such security on the
principal securities exchange or trading market for such security, as reported
by Bloomberg Financial Markets, or, if such exchange or trading market begins to
operate on an extended hours basis and does not designate the last trade price,
then the last trade price of such security prior to 4:00:00 p.m., New York Time,
as reported by Bloomberg Financial Markets, or if the foregoing do not apply,
the last trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg Financial
Markets, or, if no last trade price is reported for such security by Bloomberg
Financial Markets, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the "pink
sheets" by Pink Sheets LLC. If the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Sale Price of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such
security, then the Company shall, within two business days submit via facsimile
(a) the disputed determination of the Warrant Exercise Price to an independent,
reputable investment bank selected by the Company and approved by the Holder or
(b) the disputed arithmetic calculation of the Warrant Shares to the Company's
independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the
results no later than ten business days from the time it receives the disputed
determinations or calculations. Such investment bank's or
accountant's determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error. All such determinations
to be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during the applicable calculation
period
For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the Purchase Agreement
(provided that the Commission continues to take the position that such treatment
is proper at the time of such exercise).
[12. Limitations on
Exercise. [BLOCKER PROVISIONS TO BE INCLUDED ONLY IF REQUEST OF THE
HOLDER.] (a) Notwithstanding anything to the contrary contained herein, the
number of Warrant Shares that may be acquired by the Holder upon any exercise of
this Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to ensure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by the Holder and its
Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. Each delivery of an
Exercise Notice by the Holder will constitute a representation by the Holder
that it has evaluated the limitation set forth in this Section and determined
that issuance of the full number of Warrant Shares requested in such Exercise
Notice is permitted under this Section. The Company’s obligation to
issue shares of Common Stock in excess of the limitation referred to in this
Section shall be suspended (and, except as provided below, shall not terminate
or expire notwithstanding any contrary provisions hereof) until such time, if
any, as such shares of Common Stock may be issued in compliance with such
limitation; provided, that, if, as of 5:30 p.m., New York City time, on the
Expiration Date, the Company has not received written notice that the shares of
Common Stock may be issued in compliance with such limitation, the Company’s
obligation to issue such shares shall terminate. This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant. By written
notice to the Company, the Holder may waive the provisions of this Section but
any such waiver will not be effective until the 61st day
after such notice is delivered to the Company, nor will any such waiver effect
any other Holder.
(b) Notwithstanding
anything to the contrary contained herein, the number of Warrant Shares that may
be acquired by the Holder upon any exercise of this Warrant (or otherwise in
respect hereof) shall be limited to the extent necessary to ensure that,
following such exercise (or other issuance), the total number of shares of
Common Stock then beneficially owned by such Holder and its Affiliates and any
other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not
exceed 9.999% of the total number of issued and outstanding shares of Common
Stock (including for such purpose the shares of Common Stock issuable upon such
exercise). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Each delivery of an Exercise Notice hereunder will
constitute a representation by the Holder that it has evaluated the limitation
set forth in this Section and determined that issuance of the full number of
Warrant Shares requested in such Exercise Notice is permitted under this
Section. The Company’s obligation to issue shares of Common Stock in
excess of the limitation referred to in this Section shall be suspended (and,
except as provided below, shall not terminate or expire notwithstanding any
contrary provisions hereof) until such time, if any, as such shares of Common
Stock may be issued in compliance with such limitation; provided, that, if, as
of 5:30 p.m., New York City time, on the Expiration Date, the Company has not
received written notice that the shares of Common Stock may be issued in
compliance with such limitation, the Company’s obligation to issue such shares
shall terminate. This provision shall not restrict the number of
shares of Common Stock which a Holder may receive or beneficially own in order
to determine the amount of securities or other consideration that such Holder
may receive in the event of a Fundamental Transaction as contemplated in Section
9 of this Warrant. This restriction may not be waived.]
13. No Fractional Shares.
No fractional Warrant Shares will be issued in connection with any exercise of
this Warrant. In lieu of any fractional shares which would otherwise
be issuable, [subject to Section 12,] the number of Warrant Shares to be issued
shall be rounded up to the next whole number.
14. Notices. Any and all
notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement prior to 5:30 p.m. (New York City time) on a Trading Day,
(ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service
specifying next business day delivery, or (iv) upon actual receipt by the party
to whom such notice is required to be given, if by hand delivery. The address
and facsimile number of a party for such notices or communications shall be as
set forth in the Purchase Agreement unless changed by such party by two Trading
Days’ prior notice to the other party in accordance with this Section
14.
15. Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.
16. Miscellaneous.
(a) The
Holder, solely in such Person's capacity as a holder of this Warrant, shall not
be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person's capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation,
merger, amalgamation, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to
the Holder of the Warrant Shares which such Person is then entitled to receive
upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 15(a), the Company shall
provide the Holder with copies of the same notices and other information given
to the shareholders of the Company, contemporaneously with the giving thereof to
the shareholders.
(b) Subject
to the restrictions on transfer set forth on the first page hereof and in
Section 4.1 of the Purchase Agreement, and compliance with applicable securities
laws, this Warrant may be assigned by the Holder. This Warrant may not be
assigned by the Company except to a successor in the event of a Fundamental
Transaction. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder, or their successors and
assigns.
(c) GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY 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. 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 MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL
RIGHTS TO A TRIAL BY JURY.
(d) The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(e) In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby, and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
(f) Except
as otherwise set forth herein, prior to exercise of this Warrant, the Holder
hereof shall not, by reason of by being a Holder, be entitled to any rights of a
stockholder with respect to the Warrant Shares.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.
ZIOPHARM
ONCOLOGY, INC
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By:
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Name:
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Title:
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SCHEDULE
1
FORM OF
EXERCISE NOTICE
(To be
executed by the Holder to exercise the right to purchase shares
of Common
Stock under the foregoing Warrant)
To: ZIOPHARM
Oncology, Inc.
(1) The
undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by
ZIOPHARM Oncology, Inc. a Delaware corporation (the
“Company”). Capitalized terms used herein and not otherwise defined
herein have the respective meanings set forth in the Warrant.
(2) The
undersigned hereby exercises its right to purchase __________ Warrant Shares
pursuant to the Warrant.
(3) The
Holder intends that payment of the Exercise Price shall be made as (check
one):
o Cash
Exercise
o “Cashless
Exercise” under Section 11
(4) If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $_______
in immediately available funds to the Company in accordance with the terms of
the Warrant.
(5) Pursuant
to this Exercise Notice, the Company shall deliver to the Holder _____________
Warrant Shares in accordance with the terms of the Warrant.
[(6) [INCLUDE
ONLY IF WARRANT CONTAINS BLOCKER PROVISION AT THE REQUEST OF THE PURCHASER.] [By
its delivery of this Exercise Notice, the undersigned represents and warrants to
the Company that in giving effect to the exercise evidenced hereby, the Holder
will not beneficially own in excess of the number of shares of Common Stock (as
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934) permitted to be owned under Section 12 of this Warrant to which this
notice relates.]
Dated:_______________,
_____
Name of
Holder:
By:
Name:
Title:
(Signature
must conform in all respects to name of
Holder as
specified on the face of the Warrant)
SCHEDULE
2
ZIOPHARM
ONCOLOGY, INC.
FORM OF
ASSIGNMENT
[To be
completed and signed only upon transfer of Warrant]
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
(the “Transferee” the right represented by the within Warrant to purchase
shares of Common Stock of ZIOPHARM Oncology, Inc. (the “Company”) to which the
within Warrant relates and appoints
attorney to transfer said right on the books of the Company with full power of
substitution in the premises. In connection therewith, the undersigned
represents, warrants, covenants and agrees to and with the Company
that:
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(a)
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the
offer and sale of the Warrant contemplated hereby is being made in
compliance with Section 4(1) of the United States Securities Act of 1933,
as amended (the “Securities Act”) or another valid exemption from the
registration requirements of Section 5 of the Securities Act and in
compliance with all applicable securities laws of the states of the United
States;
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(b)
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the
undersigned has not offered to sell the Warrant by any form of general
solicitation or general advertising, including, but not limited to, any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or
radio, and any seminar or meeting whose attendees have been invited by any
general solicitation or general
advertising;
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(c)
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the
undersigned has read the Transferee’s investment letter included herewith,
and to its actual knowledge, the statements made therein are true and
correct; and
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(d)
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the
undersigned understands that the Company may condition the transfer of the
Warrant contemplated hereby upon the delivery to the Company by the
undersigned or the Transferee, as the case may be, of a written opinion of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that such
transfer may be made without registration under the Securities Act and
under applicable securities laws of the states of the United
States.
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Dated:
,
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(Signature
must conform in all respects to name of holder as specified on the face of
the Warrant)
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Address
of Transferee
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Exhibit
4.2
NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY.
ZIOPHARM
ONCOLOGY, INC.
WARRANT
TO PURCHASE COMMON STOCK
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Warrant
No. PA2009-[ ]
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Original
Issue Date:
[ ],
2009
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ZIOPHARM
Oncology, Inc., a Delaware corporation (the “Company”), hereby certifies
that, for value received,
[ ] or
its permitted registered assigns (the “Holder”), is entitled to
purchase from the Company up to a total of
[ ]
shares of common stock, $0.001 par value (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such
shares, the “Warrant
Shares”) at an exercise price per share equal to $2.04 (as adjusted from
time to time as provided in Section 9 herein, the “Exercise Price”), at any time
and from time to time from on or after the date hereof (the “Trigger Date”) and through
and including 5:30 P.M., New York City time, on
[ ],
2014 (the “Expiration
Date”), and subject to the following terms and conditions:
This Warrant (this “Warrant”) is being issued in
connection with a private placement of common stock and warrants to purchase
common stock pursuant to Securities Purchase Agreements dated September 9, 2009,
by and among the Company and the Purchasers identified therein (the “Purchase
Agreements”). This Warrant (this “Warrant”) is one of a series
of similar warrants issued pursuant to that certain Placement Agents’ engagement
letter dated August 7, 2009, by and between the Company and Rodman and Renshaw,
LLC (the “Engagement
Letter”). All such warrants are referred to herein,
collectively, as the “Warrants.”
1. Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Purchase Agreement.
2.
Registration of
Warrants. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder (which shall include the initial Holder or, as the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder) from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.
3. Registration of
Transfers. Subject to the restrictions on transfer set forth in Section
4.1 of the Purchase Agreement and compliance with all applicable securities
laws, the Company shall register the transfer of all or any portion of this
Warrant in the Warrant Register, upon (i) surrender of this Warrant, with the
Form of Assignment attached as Schedule 2 hereto
duly completed and signed, to the Company’s transfer agent or to the Company at
its address specified herein and (ii) if the Registration Statement is not
effective, (x) delivery, at the request of the Company, of an opinion of counsel
reasonably satisfactory to the Company to the effect that the transfer of such
portion of this Warrant may be made pursuant to an available exemption from the
registration requirements of the Securities Act and all applicable state
securities or blue sky laws and (y) delivery by the transferee of a written
statement to the Company certifying that the transferee is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and making the
representations and certifications set forth in Section 3.2(b), (c) and (d) of
the Purchase Agreement, to the Company at its address specified in the Purchase
Agreement. Upon any such registration or transfer, a new warrant to purchase
Common Stock in substantially the form of this Warrant (any such new warrant, a
“New Warrant”)
evidencing the portion of this Warrant so transferred shall be issued to the
transferee, and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a Holder
of a Warrant.
4.
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Exercise and Duration
of Warrants.
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(a) All
or any part of this Warrant shall be exercisable by the registered Holder at any
time and from time to time on or after the Trigger Date and through and
including 5:30 P.M. New York City time on the Expiration Date. At 5:30 P.M., New
York City time, on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value and this
Warrant shall be terminated and no longer outstanding;
(b) The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”),
appropriately completed and duly signed, (ii) payment of the Exercise Price in
immediately available funds for the number of Warrant Shares as to which this
Warrant is being exercised, and the date such items are delivered to the Company
(as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The delivery
by (or on behalf of) the Holder of the Exercise Notice and the applicable
Exercise Price as provided above shall constitute the Holder’s certification to
the Company that its representations contained in Section 3.2(b), (c) and (d) of
the Purchase Agreement are true and correct as of the Exercise Date as if remade
in their entirety (or, in the case of any transferee Holder that is not a party
to the Purchase Agreement, such transferee Holder’s certification to the Company
that such representations are true and correct as to such assignee Holder as of
the Exercise Date). The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder. Execution
and delivery of the Exercise Notice shall have the same effect as cancellation
of the original Warrant and issuance of a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares.
5.
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Delivery of Warrant
Shares.
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(a) Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
three Trading Days after the Exercise Date) issue or cause to be issued and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate (provided that, if the Registration
Statement is not effective and the Holder directs the Company to deliver a
certificate for the Warrant Shares in a name other than that of the Holder or an
Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an
opinion of counsel reasonably satisfactory to the Company to the effect that the
issuance of such Warrant Shares in such other name may be made pursuant to an
available exemption from the registration requirements of the Securities Act and
all applicable state securities or blue sky laws), a certificate for the Warrant
Shares issuable upon such exercise, free of restrictive legends, unless a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable pursuant to Rule 144 under the Securities Act
pursuant to transactions in which paragraph (c)(1) of such rule do not apply.
The Holder, or any Person permissibly so designated by the Holder to receive
Warrant Shares, shall be deemed to have become the holder of record of such
Warrant Shares as of the Exercise Date. If the Warrant Shares are to
be issued free of all restrictive legends, the Company shall, upon the written
request of the Holder, use its best efforts to deliver, or cause to be
delivered, Warrant Shares hereunder electronically through The Depository Trust
Company or another established clearing corporation performing similar
functions, if available; provided, that, the Company may, but will not be
required to, change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through such a clearing
corporation.
(b)
If (1) a certificate representing the Warrant Shares is not delivered to the
Holder within three (3) Trading Days of the due exercise of this Warrant by the
Holder and (2) prior to the time such certificate is received by the Holder, the
Holder, or any third party on behalf of the Holder or for the Holder’s account,
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares represented by such
certificate (a “Buy-In”), then the Company
shall pay in cash to the Holder (for costs incurred either directly by such
Holder or on behalf of a third party) the amount by which the total purchase
price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such Holder as a result of
the sale to which such Buy-In relates. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such
loss.
6.
Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder or an Affiliate thereof. The
Holder shall be responsible for all other tax liability that may arise as a
result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.
7.
Replacement of
Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction (in such case)
and, in each case, a customary and reasonable indemnity (which shall not include
a surety bond), if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation of this
Warrant, then the Holder shall deliver such mutilated Warrant to the Company as
a condition precedent to the Company’s obligation to issue the New
Warrant.
8. Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Company will take all such action as may be necessary to
assure that such shares of Common Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
securities exchange or automated quotation system upon which the Common Shares
may be listed.
9. Certain Adjustments.
The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section
9.
(a)
Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides its outstanding shares of Common Stock into a larger number of
shares, or (iii) combines its outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately before such event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.
(b) Fundamental
Transactions. If, at any time while this Warrant is
outstanding (i) the Company effects any merger or consolidation of
the Company with or into another Person, in which the shareholders of the
Company as of immediately prior to the transaction own less than a majority of
the outstanding stock of the surviving entity, (ii) the Company effects any sale
of all or substantially all of its assets or a majority of its Common Stock is
acquired by a third party, in each case, in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which all or substantially all of
the holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property and would result in the shareholders of the
Company immediately prior to such tender offer or exchange offer owning less
than a majority of the outstanding stock after such tender offer or exchange
offer, or (iv) the Company effects any reclassification of the Common Stock or
any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (other than
as a result of a subdivision or combination of shares of Common Stock covered by
Section 9(a) above) (in any such case, a “Fundamental Transaction”),
then the Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the same amount and kind of securities, cash or property as it
would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant without regard to any limitations on exercise contained herein
(the “Alternate
Consideration”). The Company shall not effect any such
Fundamental Transaction unless prior to or simultaneously with the consummation
thereof, any successor to the Company, surviving entity or the corporation
purchasing or otherwise acquiring such assets or other appropriate corporation
or entity shall assume the obligation to deliver to the Holder, such Alternate
Consideration as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase and/or receive (as the case may be), and the other
obligations under this Warrant. The provisions of this paragraph (c)
shall similarly apply to subsequent transactions analogous to a Fundamental
Transaction.
(c) Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to paragraph (a) of this Section, the number of Warrant Shares that may be
purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the increased or decreased number of Warrant Shares shall
be the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.
(d) Calculations. All
calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of the
Company, and the sale or issuance of any such shares shall be considered an
issue or sale of Common Stock.
(e) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the
Company at its expense will, at the written request of the Holder, compute such
adjustment, in good faith, in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment, including a statement of
the adjusted Exercise Price and adjusted number or type of Warrant Shares or
other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in
detail the facts upon which such adjustment is based. Upon written request, the
Company will deliver a copy of each such certificate to the Holder and to the
Company’s transfer agent.
10. Intentionally
Omitted.
11. Payment of Exercise
Price. The Holder shall pay the Exercise Price in immediately available
funds, or the Holder may, in its sole discretion, satisfy its obligation to pay
the Exercise Price through a “cashless exercise”, in which event the Company
shall issue to the Holder the number of Warrant Shares determined as
follows:
X = Y
[(A-B)/A]
where:
X = the
number of Warrant Shares to be issued to the Holder.
Y = the
total number of Warrant Shares with respect to which this Warrant is being
exercised.
A = the
average of the Closing Sale Prices of the shares of Common Stock (as reported by
Bloomberg Financial Markets) for the five Trading Days ending on the date
immediately preceding the Exercise Date.
B = the
Exercise Price then in effect for the applicable Warrant Shares at the time of
such exercise.
For
purposes of this Warrant, “Closing Sale Price” means,
for any security as of any date, the last trade price for such security on the
principal securities exchange or trading market for such security, as reported
by Bloomberg Financial Markets, or, if such exchange or trading market begins to
operate on an extended hours basis and does not designate the last trade price,
then the last trade price of such security prior to 4:00:00 p.m., New York Time,
as reported by Bloomberg Financial Markets, or if the foregoing do not apply,
the last trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg Financial
Markets, or, if no last trade price is reported for such security by Bloomberg
Financial Markets, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the "pink
sheets" by Pink Sheets LLC. If the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Sale Price of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such
security, then the Company shall, within two business days submit via facsimile
(a) the disputed determination of the Warrant Exercise Price to an independent,
reputable investment bank selected by the Company and approved by the Holder or
(b) the disputed arithmetic calculation of the Warrant Shares to the Company's
independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the
results no later than ten business days from the time it receives the disputed
determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error. All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period
For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the Purchase Agreement
(provided that the Commission continues to take the position that such treatment
is proper at the time of such exercise).
12. Intentionally
Omitted.
13. No Fractional Shares.
No fractional Warrant Shares will be issued in connection with any exercise of
this Warrant. In lieu of any fractional shares which would otherwise
be issuable, the number of Warrant Shares to be issued shall be rounded up to
the next whole number.
14. Notices. Any and all
notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement prior to 5:30 p.m. (New York City time) on a Trading Day,
(ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service
specifying next business day delivery, or (iv) upon actual receipt by the party
to whom such notice is required to be given, if by hand delivery. The address
and facsimile number of a party for such notices or communications shall be as
set forth in the Purchase Agreement unless changed by such party by two Trading
Days’ prior notice to the other party in accordance with this Section
14.
15. Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.
16. Miscellaneous.
(a) The
Holder, solely in such Person's capacity as a holder of this Warrant, shall not
be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person's capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation,
merger, amalgamation, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to
the Holder of the Warrant Shares which such Person is then entitled to receive
upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 15(a), the Company shall
provide the Holder with copies of the same notices and other information given
to the shareholders of the Company, contemporaneously with the giving thereof to
the shareholders.
(b) Subject
to the restrictions on transfer set forth on the first page hereof and in
Section 4.1 of the Purchase Agreement, and compliance with applicable securities
laws, this Warrant may be assigned by the Holder. This Warrant may not be
assigned by the Company except to a successor in the event of a Fundamental
Transaction. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder, or their successors and
assigns.
(c) GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY 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. 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 MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL
RIGHTS TO A TRIAL BY JURY.
(d) The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(e) In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby, and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
(f) Except
as otherwise set forth herein, prior to exercise of this Warrant, the Holder
hereof shall not, by reason of by being a Holder, be entitled to any rights of a
stockholder with respect to the Warrant Shares.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.
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ZIOPHARM
ONCOLOGY, INC
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By:
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______________________________________ |
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Name:
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Title:
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Exhibit
4.2
SCHEDULE
1
FORM OF
EXERCISE NOTICE
(To be
executed by the Holder to exercise the right to purchase shares
of Common
Stock under the foregoing Warrant)
To: ZIOPHARM
Oncology, Inc.
(1) The
undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by
ZIOPHARM Oncology, Inc. a Delaware corporation (the
“Company”). Capitalized terms used herein and not otherwise defined
herein have the respective meanings set forth in the Warrant.
(2) The
undersigned hereby exercises its right to purchase __________ Warrant Shares
pursuant to the Warrant.
(3) The
Holder intends that payment of the Exercise Price shall be made as (check
one):
o Cash
Exercise
o “Cashless
Exercise” under Section 11
(4) If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $_______
in immediately available funds to the Company in accordance with the terms of
the Warrant.
(5) Pursuant
to this Exercise Notice, the Company shall deliver to the Holder _____________
Warrant Shares in accordance with the terms of the Warrant.
Dated:_______________,
_____
Name of
Holder:
By:_________________________________________
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Name:
_______________________________________
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Title:
_________________________________________
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(Signature
must conform in all respects to name of
Holder as
specified on the face of the Warrant)
SCHEDULE
2
ZIOPHARM
ONCOLOGY, INC.
FORM OF
ASSIGNMENT
[To be
completed and signed only upon transfer of Warrant]
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
(the “Transferee” the right represented by the within Warrant to purchase
shares of Common Stock of ZIOPHARM Oncology, Inc. (the “Company”) to which the
within Warrant relates and appoints
attorney to transfer said right on the books of the Company with full power of
substitution in the premises. In connection therewith, the undersigned
represents, warrants, covenants and agrees to and with the Company
that:
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(a)
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the
offer and sale of the Warrant contemplated hereby is being made in
compliance with Section 4(1) of the United States Securities Act of 1933,
as amended (the “Securities Act”) or another valid exemption from the
registration requirements of Section 5 of the Securities Act and in
compliance with all applicable securities laws of the states of the United
States;
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(b)
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the
undersigned has not offered to sell the Warrant by any form of general
solicitation or general advertising, including, but not limited to, any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or
radio, and any seminar or meeting whose attendees have been invited by any
general solicitation or general
advertising;
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(c)
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the
undersigned has read the Transferee’s investment letter included herewith,
and to its actual knowledge, the statements made therein are true and
correct; and
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(d)
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the
undersigned understands that the Company may condition the transfer of the
Warrant contemplated hereby upon the delivery to the Company by the
undersigned or the Transferee, as the case may be, of a written opinion of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that such
transfer may be made without registration under the Securities Act and
under applicable securities laws of the states of the United
States.
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Dated:
,
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_________________________________________________
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(Signature
must conform in all respects to name of holder as specified on the face of
the Warrant)
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_________________________________________________ |
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Address
of Transferee
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_________________________________________________
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_________________________________________________ |
In
the presence of:
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_______________________________________________
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EXHIBIT
10.1
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of
September 9, 2009, by and among ZIOPHARM Oncology, 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 each Purchaser is executing and delivering this agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule
506 of Regulation D (“Regulation D”) as promulgated
by the United States Securities and Exchange Commission under the Securities
Act.
B. The
Company intends to raise gross proceeds of up to $10,000,000 pursuant to the
issuance and sale of (i) shares of the Common Stock, par value $0.001 per share
(the “Common Stock”),
of the Company (which shares of Common Stock and shall be collectively referred
to herein as the “Shares”), and (ii) and
warrants, in substantially the form attached hereto as Exhibit A (the “Warrants”).
C. Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes
to sell, upon the terms and conditions stated in this Agreement, (i) that
aggregate number of Shares set forth below such Purchaser’s name on the
signature page of this Agreement, and (ii) Warrants to acquire up to that number
of additional shares of Common Stock equal to 100.0% of the number of Shares
purchased by such Purchaser (rounded up to the nearest whole share) (the shares
of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants,
collectively, the “Warrant
Shares”).
D. The
Company has engaged Rodman & Renshaw, LLC, as its placement agent for the
offering of the Shares and the Warrants on a “reasonable efforts” basis, and
Rodman & Renshaw, LLC has in turn engaged Riverbank Capital Securities, Inc.
and Griffin Securities, Inc. to act as sub-agents in connection with such
offering.
E. Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, in the form attached
hereto as Exhibit
B (the “Registration
Rights Agreement”), pursuant to which, among other things, the Company
will agree to provide certain registration rights with respect to the Shares and
the Warrant Shares under the Securities Act 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 the Purchasers 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 or affecting the Company or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency, regulatory authority (federal, state, county, local or
foreign), 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
144. 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.
“Agents’ Representative” means
Rodman & Renshaw, LLC, as representative of the Placement
Agents.
“Business Day” means a day,
other than a Saturday or Sunday, on which banks in New York City are open for
the general transaction of business.
“Buy-In” has the meaning set
forth in Section 4.1(f).
“Closing” means the closing of
the purchase and sale of the Shares 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 such other date as
the parties may agree.
“Commission” means the United
States Securities and Exchange Commission.
“Common Stock” has the meaning
set forth in the Recitals, and also includes any securities into which the
Common Stock may hereafter be reclassified or changed.
“Company Counsel” means Maslon
Edelman Borman & Brand, LLP.
“Company Deliverables” has the
meaning set forth in Section 2.2(a).
“Company’s Knowledge” means
with respect to any statement made to the knowledge of a party, that the
statement is based upon the actual knowledge of the executive officers of such
party 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.
“Disclosure Materials” means
the SEC Reports together with this Agreement and the Schedules to this Agreement
(if any).
“Effective Date” means the
date on which the initial Registration Statement required by Section 2(a) of the
Registration Rights Agreement is first declared effective by the
Commission.
“Environmental Laws” has the
meaning set forth in Section 3.1(l).
“Equity Incentive Plan” means
(i) any equity incentive, stock option or similar plan and (ii) any
other agreement, arrangement, understanding or other document pursuant to which
the Company is obligated to grant or issue Common Stock, including any
securities or instruments convertible into, exchangeable for or otherwise
entitles the holder thereof to receive Common Stock, to current or former
employees in connection with their services to the Company, in each case adopted
or approved by a majority of the non-employee members of the board of directors
of the Company or a majority of the members of a committee of non-employee
directors established.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.
“GAAP” means U.S. generally
accepted accounting principles, as applied by the Company on a consistent basis
during the financial periods involved.
“Intellectual Property” has
the meaning set forth in Section 3.1(r).
“Irrevocable Transfer Agent
Instructions” means, with respect to the Company, the Irrevocable
Transfer Agent Instructions, in the form of Exhibit E, executed
by the Company and delivered to and acknowledged in writing by the Transfer
Agent.
“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 any of (i) a material and adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, prospects, business or financial condition
of the Company and subsidiaries, taken as a whole, or (iii) any material adverse
impairment to the Company's ability to perform in any material respect on a
timely basis its obligations under any Transaction Document.
“Material Permits” has the
meaning set forth in Section 3.1(p).
“New York Courts” means the
state and federal courts sitting in the City of New York, Borough of
Manhattan.
“Outside Date” means five
Trading Days 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 Agents” means
Rodman & Renshaw, LLC, Riverbank Capital Securities, Inc. and Griffin
Securities, Inc.
“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 NASDAQ Capital Market.
“Purchase Price” means the sum
of (i) the most recently reported consolidated closing bid price per share of
the Company’s Common Stock, as listed on the Principal Trading Market,
immediately preceding the execution and delivery of this Agreement, plus (ii)
$0.125.
“Purchaser Deliverables” has
the meaning set forth in Section 2.2(b).
“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).
“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)(vii).
“Securities” mean the Shares,
the Warrants and the Warrant Shares issued pursuant to this
Agreement.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers.
“Subscription Amount” means
with respect to each Purchaser, the aggregate amount to be paid for the Shares
and the related Warrants purchased hereunder as indicated on such Purchaser’s
signature page to this Agreement next to the heading “Purchase Price
(Subscription Amount)”.
“Trading Affiliate” has the
meaning set forth in Section 3.2(g).
“Trading Day” means (i) a day
on which the Common Stock is listed or quoted and may be traded on its primary
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 may be 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 by the National Quotation Bureau
Incorporated (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 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 schedules and exhibits attached hereto, the Warrants, the
Registration Rights Agreement, the Irrevocable Transfer Agent Instructions and
any other documents or agreements executed in connection with the transactions
contemplated hereunder.
“Transfer Agent” means
American Stock Transfer and Trust Company or any successor transfer agent for
the Company.
“Warrants” has the meaning set
forth in the Preamble to this Agreement. The Placement Agents and/or
their designees are also receiving placement agent warrants as compensation for
services rendered in connection with the transactions set forth herein, which
warrants shall also constitute “Warrants” for all purposes
hereunder.
ARTICLE
II.
PURCHASE
AND SALE
2.1 Closing. (a) Subject
to the terms and conditions set forth in this Agreement, at the Closing, the
Company shall issue and sell to each Purchaser, and each Purchaser shall,
severally and not jointly, purchase from the Company, such number of Shares of
Common Stock equal to the quotient resulting from dividing (i) the Subscription
Amount for such Purchaser, as indicated below such Purchaser’s name on the
signature page of this Agreement by (ii) the Purchase Price, rounded down to the
nearest whole Share. In addition, each Purchaser shall receive a Warrant to
purchase a number of Warrant Shares equal to 100.0% of the number of Shares
purchased by such Purchaser, as indicated below such Purchaser’s name on the
signature page of this Agreement, rounded down to the nearest whole Warrant
Share. The Warrants shall have an exercise price equal to 120% of the Purchase
Price and shall be exercisable at any time on or prior to the fifth anniversary
of the date of issuance.
(b) Each
Purchaser must complete and return a duly executed, unaltered copy of this
Agreement (including without limitation the completed Accredited Investor
Questionnaire and the Stock Certificate Questionnaire included as Exhibits C-1 and
C-2 hereto,
respectively) to the Agents’ Representative. The Company and the Agents’
Representative retain complete discretion to accept or reject any subscription
unless and until the Company executes a counterpart to this Agreement that
includes such Purchaser’s signature. Within five Business Days after
the execution and delivery of this Agreement by Purchaser and the Company, each
Purchaser shall deposit the amount of readily available funds equal to such
Purchaser’s Subscription Amount in a segregated escrow account (the “Escrow Account”) with an
escrow agent designated by the Agents’ Representative (the “Escrow Agent”) or, if
directed by the Company and the Agents’ Representative, remit such funds to an
account of the Company, by wire transfer of immediately available funds pursuant
to the instructions to be delivered by the Company and the Agents’
Representative prior to the Closing.
(c) The
Closing shall be held at a date and time designated by the Company and the
Placement Agents prior to 11:59 p.m. prevailing Eastern time on the Outside
Date. The Closing shall occur at the offices of the Agents’
Representative, located at 1251 Avenue of the Americas, 20th Floor,
New York, New York, 10022, or at such other locations or remotely by facsimile
transmission or other electronic means as the parties may mutually agree. If
applicable, upon satisfaction or waiver of all conditions to the Closing, the
Agents’ Representative and the Company shall instruct the Escrow Agent to
release the proceeds held in the Escrow Account to the Company, less fees and
expenses due to the Placement Agents and the Escrow Agent. Interest,
if any, that has accrued with respect to the Subscription Amount while in escrow
shall also be distributed to the Company at the Closing and the Purchaser will
have no right to such interest, even if there is no Closing.
(d) Unless
otherwise agreed to by the Company and any Purchaser, the Company shall deliver,
or cause to be delivered, a certificate or certificates, registered in such name
or names as the Purchasers may designate, representing the Shares and Warrants
purchased by the Purchaser hereunder as soon as practical after the Closing, and
in any event within five Business Days, to the Purchaser’s mailing address
indicated on the Stock Certificate Questionnaire included as Exhibit C-2
hereto.
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) the
Registration Rights Agreement, duly executed by the Company;
(iii) a
Warrant, executed by the Company and registered in the name of such Purchaser as
set forth on the Stock Certificate Questionnaire included as Exhibit C-2 hereto,
pursuant to which such Purchaser shall have the right to acquire such number of
Warrant Shares equal to 100.0% of the number of Shares issuable to such
Purchaser pursuant to Section 2.2(a)(ii), rounded up to the nearest whole share,
on the terms set forth therein;
(iv)
a legal opinion of Company Counsel, in the form attached hereto as Exhibit D, executed
by such counsel and addressed to the Purchasers and the Placement
Agents;
(v)
duly executed Irrevocable Transfer Agent Instructions acknowledged in
writing by the Transfer Agent;
(vi)
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 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 of
incorporation and by-laws of the Company, each as amended to date and (c)
certifying as to the signatures and authority of persons signing the Transaction
Documents and related documents on behalf of the Company;
(vii) the Compliance Certificate referred to
in Section 5.1(h);
(viii)
a certificate evidencing the formation and good standing of the Company in the
State of Delaware issued by the Secretary of State (or comparable office), as of
a date within 10 days of the Closing Date; and
(ix) a
certified copy of the Certificate of Incorporation as certified by the Secretary
of State of the State of Delaware within ten (10) days of the Closing
Date.
(b) On
or prior to the Closing, each Purchaser shall deliver or cause to be delivered
to the Company the following (the “Purchaser
Deliverables”):
(i) this
Agreement, duly executed by such Purchaser;
(ii)
its Subscription Amount, 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 by wire transfer
to an account designated in writing by the Company for such purpose, as set
forth on Exhibit
F attached hereto;
(iii)
the Registration Rights Agreement, duly executed by such
Purchaser;
(iv)
a fully completed and duly executed Selling Stockholder Questionnaire in
the form attached as Annex B to the
Registration Rights Agreement; and
(v)
a fully completed and duly executed Accredited Investor Questionnaire and
Stock Certificate Questionnaire in the forms attached hereto as Exhibits C-1 and
C-2,
respectively.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations and
Warranties of the Company. The Company hereby represents and
warrants to the Purchasers and to the Placement Agents that, except as set forth
in the Schedules delivered herewith:
(a) Subsidiaries. With
the exception of ZIOPHARM Oncology Limited, a private limited company
incorporated in England and Wales, the Company has no direct or indirect
subsidiaries.
(b) Organization and
Qualification. The Company is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite 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 of any of the provisions of its 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 or other entity 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, could not have or reasonably be expected to have, individually or in the
aggregate, resulted in a Material Adverse Effect, and no Action has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.
(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 execution and delivery
of each of the Transaction Documents to which it is a party by the Company and
the consummation by it of the transactions contemplated hereby and thereby
(including, but not limited to, the sale and delivery of the Shares and the
Warrants and the subsequent issuance of the Warrant Shares upon exercise of the
Warrants) 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 shareholders 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 valid and binding obligation of the Company
enforceable against the Company 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. There are no shareholder
agreements, voting agreements, or other similar arrangements 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 shareholders.
(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 (including,
without limitation, the issuance of the Shares and the reservation for issuance
and issuance of the Warrant Shares) do not and will not (i) conflict with or
violate any provision of the Company’s certificate of incorporation, bylaws or
other organizational or charter documents, (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become 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 agreement, credit facility, debt or other instrument (evidencing a Company
debt or otherwise) to which the Company is a party or by which any property or
asset of the Company is bound or affected, 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. 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 Shares and the Warrants and the listing of the
Shares and Warrant Shares for trading or quotation, as the case may be, thereon
in the time and manner required thereby (except as disclosed on Schedule 3.1(e)), (v)
the filings required in accordance with Section 4.7 of this Agreement and (vi)
those that have been made or obtained prior to the date of this Agreement
(collectively, the “Required
Approvals”).
(f) Issuance of the
Securities. The Shares have been duly authorized and, when
issued and paid for in accordance with the terms of the Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights of shareholders. The Warrants have been
duly authorized and, when issued and paid for in accordance with the terms of
the Transaction Documents, will be duly and validly issued, free and clear of
all Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights of shareholders. The Warrant Shares issuable upon
exercise of the Warrants have been duly authorized and, when issued and paid for
in accordance with the terms of the Transaction Documents and the Warrants, will
be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights of shareholders. Assuming the accuracy
of the representations and warranties of the Purchasers in this Agreement, the
Securities will be issued in compliance with applicable federal and state
securities laws. The Company shall, so long as any of the Warrants
are outstanding, take all action reasonably necessary to reserve and keep
available out of its authorized and unissued capital stock, solely for the
purpose of effecting the exercise of the Warrants, 100% of the Warrant Shares
issuable upon exercise of the Warrants.
(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) has been set forth in the SEC Reports and has changed since the
date of such SEC Reports only 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. All of
the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and non-assessable, have been issued in compliance in
all material respects 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 any capital stock of the
Company. Except as specified in the SEC Reports or as contemplated by
the Transaction Documents: (i) no shares of the Company's capital stock are
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company, or
contracts, commitments, understandings or arrangements by which the Company is
or may become bound to issue additional shares of capital stock of the Company
or options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company;
(iii) there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing indebtedness
of the Company or by which the Company is or may become bound; (iv) there are no
financing statements securing obligations in any material amounts, either singly
or in the aggregate, filed in connection with the Company; (v) there are no
agreements or arrangements under which the Company is obligated to register the
sale of any of their securities under the Securities Act (except the
Registration Rights Agreement); (vi) there are no outstanding securities or
instruments of the Company or which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company is or may become bound to redeem a security of
the Company; (vii) except as disclosed on Schedule 3.1(g)
hereto, there are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of the Securities;
(viii) the Company does not have any stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement; and (ix) the
Company has no liabilities or obligations required to be disclosed in the SEC
Reports (as defined herein) but not so disclosed in the SEC Reports, other than
those incurred in the ordinary course of the Company's businesses and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect.
(h) SEC
Reports. 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) on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. As of their respective
dates, or to the extent corrected by a subsequent restatement, the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and all
other reports of the Company filed with the Commission pursuant to the Exchange
Act from January 1, 2009 through the date of this Agreement (including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) complied in all
material respects with the requirements of the Exchange Act, 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.
(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 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, year-end audit
adjustments. All material agreements to which the Company is a party or to which
the property or assets of the Company are subject are included as part of or
specifically identified in the SEC Reports.
(j) 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 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.
(k) Material
Changes. Since the date of the latest audited financial
statements included within the SEC Reports and except as disclosed in a
subsequent SEC Report filed prior to the date of this Agreement, (i) there have
been no events, occurrences or developments that have had or that could
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables, accrued expenses and
other liabilities 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 required to be disclosed in filings
made with the Commission, (iii) the Company has not altered 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 shareholders 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 pursuant to an Equity Incentive Plan or
executive and director corporate arrangements disclosed in the SEC Reports and
(vi) there has not been any material change or amendment to, or any waiver of
any material right under, any contract under which the Company or any of their
assets is bound or subject. Except for the issuance of the Securities
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 Trading Day prior to the date that this
representation is made.
(l) 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 not liable for any off-site
disposal or contamination pursuant to any Environmental Laws, and (iv) is not
subject to any claim relating to any Environmental Laws; which violation,
contamination, liability or claim has had or could reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate; and there is
no pending or, to the Company’s Knowledge, threatened investigation that might
lead to such a claim.
(m) 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 or on Schedule 3.1(m),
would, if there were an unfavorable decision, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse
Effect. The Company, nor, to the Company’s Knowledge, any current
director or officer thereof (in his or her capacity thereof), is or has been
during the five-year period prior to the Closing Date 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, to the Company’s
Knowledge, any current or former director or officer of the Company (in his or
her capacity as such). 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.
(n) 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
could 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, the Company is not a
party to a collective bargaining agreement, and the Company believes that its
relationship with its employees is satisfactory. No executive
officer, to the Company’s Knowledge, is, or is now expected to be, in violation
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, and the continued employment
of each such executive officer does not subject the Company to any liability
with respect to any of the foregoing matters. To the Company’s
Knowledge, 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 could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(o) 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), nor has the Company received
notice of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (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
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 could
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect.
(p) 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 business as described in
the SEC Reports, except where the failure to possess such permits, individually
or in the aggregate, has not and could not 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.
(q) Title to
Assets. Except for property that is specifically the subject
of, and covered by, other representations and warranties as to ownership or
title contained herein, the Company has good and marketable title in fee simple
to all real property owned by it that is material to its business and good and
marketable title in all personal property owned by it that is material to its
business, in each case free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
Liens for the payment of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties. Any real property and
facilities held under lease by the Company are held by it under valid,
subsisting and enforceable leases of which the Company is in material
compliance.
(r) Intellectual
Property. The Company owns, possesses, licenses or has other
rights to use all foreign and domestic patents, patent applications, trade and
service marks, trade and service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, Internet domain names, know-how
and other intellectual property (collectively, the “Intellectual Property”)
necessary for the conduct of its business as now conducted or as proposed to be
conducted. Except as set forth in the SEC Reports and except where
such violations or infringements would not reasonably be expected to result,
either individually or in the aggregate, in a Material Adverse Effect, (a) to
the Company’s Knowledge, there are no rights of third parties to any such
Intellectual Property; (b) to the Company’s Knowledge, there is no infringement
by third parties of any such Intellectual Property; (c) there is no pending or,
to the Company’s Knowledge, threatened Action challenging the Company’s rights
in or to any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such Action; (d) there is no pending
or, to the Company’s Knowledge, threatened Action challenging the validity or
scope of any such Intellectual Property; and (e) there is no pending or, to the
Company’s Knowledge, threatened Action that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any other fact which would form
a reasonable basis for any such Action.
(s) Insurance. The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
businesses and location in which the Company is engaged. The Company
does not have any knowledge that it will be unable to renew its existing
insurance coverage for the Company 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.
(t) Transactions With Affiliates
and Employees. Except as set forth in the SEC Reports or
reported on a Form 3, 4 or 5 filed with the Commission, in either case at least
ten days prior to the date hereof, and except as disclosed on Schedule 3.1(t), none
of the executive officers, directors or employees of the Company is presently a
party to any transaction with the Company (other than for ordinary course
services as employees, officers or directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such executive officer, director or employee
or, to the Company’s Knowledge, any corporation, partnership, trust or other
entity in which any such officer, director, or employee has a substantial
interest or is an officer, director, trustee or partner.
(u) 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 accountability, (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 the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(v) 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 maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
under the Exchange Act) that are effective in ensuring that information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Commission, including, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure.
(w) 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 Agents with
respect to the offer and sale of the Securities. Such Placement Agent
fees and expenses are described on Schedule 3.1(w)
hereto and are being paid by the Company. The Company shall 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.
(x) 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. Other than each of the Purchasers (with
respect to the Shares and the Warrant Shares), 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) No Directed Selling Efforts
or General Solicitation. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has conducted any
“general solicitation” or “general advertising” (as those terms are used in
Regulation D) in connection with the offer or sale of any of the
Securities.
(z)
No Integrated
Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company,
its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, at any time within the past six 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 shareholder 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.
(aa) Listing and Maintenance
Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) 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. Except as specified
in the SEC Reports, the Company has not, in the two years preceding the date
hereof, received written notice from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of such Trading
Market. The Company is, and has no reason to believe that following
the Closing it will not in the foreseeable future continue to be, in compliance
in all material respects with the listing and maintenance requirements for
continued trading of the Common Stock on the Principal Trading
Market.
(bb) Investment
Company The
Company is not required to be registered as, and is not an Affiliate of, and
immediately following the Closing will not be required to register as, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.
(cc) Questionable
Payments. Neither, the Company,
nor, to the Company’s Knowledge, any directors, executive officers, employees,
agents or other Persons acting on behalf of the Company has, in the course of
its actions for, or on behalf of, the Company: (a) directly or indirectly, used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to foreign or domestic political activity; (b) made
any direct or indirect unlawful payments to any foreign or domestic governmental
officials or employees or to any foreign or domestic political parties or
campaigns from corporate funds; (c) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or (d) made
any other unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.
(dd) Application of Takeover
Protections; Rights Agreements. The Company and its 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. The
Company has not adopted a stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of Common Stock or a change in
control of the Company.
(ee) Disclosure. The
Company confirms that neither it nor any of its executive officers or directors
nor any other Person acting on its or their behalf has provided, and it has not
authorized the Placement Agents to provide, any Purchaser with information that
it believes constitutes or could reasonably be expected to constitute 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, all of which will be disclosed by the Company in the Press
Release as contemplated by Section 4.7 hereof. The Company understands and
confirms that the Purchasers will rely on the foregoing representations in
effecting transactions in securities of the Company. All disclosure
provided to the Purchasers regarding the Company, its business and the
transactions contemplated hereby furnished by the Company or authorized by the
Company and furnished by the Placement Agents on behalf of the Company
(including the Company’s representations and warranties set forth in this
Agreement) are true and correct in all material respects and do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. To the Company’s
Knowledge, no event or circumstance has occurred or information exists with
respect to the Company or its business, properties, operations or financial
conditions, which, under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so publicly
announced or disclosed, except for the announcement of this Agreement and
related transactions.
(ff) 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 its Exchange Act
filings and is not so disclosed or that otherwise would be reasonably likely to
have a Material Adverse Effect.
(gg) Consultation with
Auditors. The Company has consulted its independent auditors
concerning the accounting treatment of the transactions contemplated by the
Transaction Documents and in connection therewith has furnished such auditors
complete copies of the Transaction Documents. The Company intends to
account for the net proceeds raised from the financing which is the subject of
this Agreement as equity in its financial statements.
(hh) 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.
(ii) Use of Form
S-3. The Company meets the registration and transaction
requirements for use of Form S-3 for the registration of the Shares and the
Warrant Shares for resale by the Purchasers, subject to applicable limitations
on the amount of securities that may be registered for resale without being
deemed a primary offering by or on behalf of the Company under applicable
guidelines of the Commission.
(jj)
FDA Matters.
The properties, business and operations of the Company have been and are being
conducted in accordance with all applicable laws, rules and regulations of the
U.S. Food and Drug Administration (the “FDA”) including without
limitation under the U.S. Food, Drug and Cosmetic Act, as amended, and the
regulations thereunder (“FDCA”) and other federal or
state 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 reasonably be expected to have 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 or any of its subsidiaries, and none of the Company or any
of its subsidiaries has 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 of the Company’s
product candidates subject to the jurisdiction of the FDA that is manufactured,
packaged, labeled, tested, distributed, sold and/or marketed by the Company or
any of its Subsidiaries (each such product candidate, a “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
or any of its subsidiaries, (iv) enjoins production at any facility of the
Company or any of its subsidiaries, (v) enters or proposes to enter into a
consent decree of permanent injunction with the Company or any of its
subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or
regulations by the Company or any of its subsidiaries, and which, either
individually or in the aggregate, would have or reasonably be expected to have a
Material Adverse Effect. 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.
(kk) Stock
Options. With respect to stock options issued pursuant to the
Company’s Equity Incentive Plan(s), (i) each stock option designated by the
Company at the time of grant as an “incentive stock option” under
Section 422 of the Code so qualifies, (ii) except as disclosed in the
SEC Reports, including the financial statements included therein, each grant of
a stock option was duly authorized no later than the date on which the grant of
such stock option was by its terms to be effective (the “Grant Date”) by all necessary
corporate action, including, as applicable, approval by the board of directors
of the Company (or a duly constituted and authorized committee thereof) and any
required stockholder approval by the necessary number of votes or written
consents, (iii) each such grant was made in accordance with the material
terms of an Equity Incentive Plan, the Securities Act and all other applicable
laws and regulatory rules or requirements, and (iv) each such grant was or
has now been properly accounted for in accordance with GAAP in the financial
statements (including the related notes) of the Company and disclosed in the
Company’s filings with the Commission in accordance with the Exchange Act and
all other applicable laws, except, in the cases of clauses (i), (ii),
(iii) and (iv), for any such failure, violation or default that, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
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 Agents as
follows:
(a) Organization;
Authority. If such Purchaser is not a natural person, (i) 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, and (ii) the execution,
delivery 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 of
this Agreement, the Warrant and the Registration Rights Agreement 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) 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 Securities and, upon
exercise of the Warrants, will acquire the Warrant Shares issuable upon exercise
thereof 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 or
Warrant Shares 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, subject to the limitations
set forth herein or in such 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.
(c) Purchaser
Status. At the time such Purchaser was offered the Securities,
it was, and at the date hereof it is, and on each date on which it exercises the
Warrants it will be, an “accredited investor” as defined in Rule 501(a) under
the Securities Act.
(d) General Solicitation.
Such Purchaser is not purchasing the Securities 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. Such Purchaser represents that it has a pre-existing
relationship with one of the Placement Agents or with the Company.
(e) Experience of Such
Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment. Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.
(f) Access to
Information. Such Purchaser acknowledges that it has had the
opportunity to review the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment; and (iii) the opportunity to
obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment. Neither such inquiries nor
any other investigation conducted by or on behalf of such Purchaser or its
representatives or counsel shall modify, amend or affect such Purchaser's right
to rely on the Company's representations and warranties contained in the
Transaction Documents.
(g) Certain Trading
Activities. Other than with respect to the transactions
contemplated herein, since the earlier to occur of (1) the time that such
Purchaser was first contacted by the Company, the Placement Agents or any other
Person regarding the transactions contemplated hereby and (2) the tenth (10th) day
prior to the date of this Agreement, neither the Purchaser nor any Affiliate of
such Purchaser which (x) had knowledge of the transactions contemplated hereby,
(y) has or shares discretion relating to such Purchaser’s investments or trading
or information concerning such Purchaser’s investments, including in respect of
the Securities, and (z) is subject to such Purchaser’s review or input
concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any transactions in the securities of the Company (including, without
limitation, any Short Sales involving the Company’s securities). Notwithstanding
the foregoing, in the case of a Purchaser and/or Trading Affiliate that is,
individually or collectively, a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser's or
Trading Affiliate’s assets and the portfolio managers have no direct knowledge
of the investment decisions made by the portfolio managers managing other
portions of such Purchaser's or Trading Affiliate’s assets, the representation
set forth above shall apply only with respect to the portion of assets managed
by the portfolio manager that have knowledge about the financing transaction
contemplated by this Agreement. Other than to other Persons party to
this Agreement, such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction). Notwithstanding the foregoing, no
Purchaser makes any representation, warranty or covenant hereby that it will not
engage in Short Sales in the securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced as
described in Section 4.7, subject to the restrictions set forth in Section
4.10.
(h) Brokers and
Finders. Other than the Company’s obligations to the Placement
Agents, 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 any Purchaser for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Purchaser.
(i) Limited
Ownership. The purchase by such Purchaser of the Securities
issuable to it at the Closing will not result in such Purchaser (individually or
together with other Person with whom such Purchaser has identified, or will have
identified, itself as part of a “group” in a public filing made with the
Commission involving the Company’s securities) acquiring, or obtaining the right
to acquire, in excess of 19.99% of the outstanding shares of Common Stock or the
voting power of the Company on a post transaction basis that assumes that the
Closing shall have occurred. Such Purchaser does not presently intend to, alone
or together with others, make a public filing with the Commission to disclose
that it has (or that it together with such other Persons have) acquired, or
obtained the right to acquire, as a result of the Closing (when added to any
other securities of the Company that it or they then own or have the right to
acquire), in excess of 19.99% of the outstanding shares of Common Stock or the
voting power of the Company on a post transaction basis that assumes that the
Closing shall have occurred.
(j) 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 Agents have acted solely as the agent
of the Company in this placement of the Securities and such Purchaser has not
relied on the business or legal advice of the Placement Agents or any of their
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.
(k) Reliance on
Exemptions. Such Purchaser understands that the Securities
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities.
(l) 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.
(m) Residency; Foreign
Securities Laws. Unless such Purchaser resides, in the case of
individuals, or is headquartered or formed, in the case of entities, in the
United States, such Purchaser acknowledges that the Company will not issue any
Securities in compliance with the laws of any jurisdiction outside of the United
States and the Company makes no representation or warranty that any Securities
issued outside of the United States have been offered or sold in compliance with
the laws of the jurisdiction into which such Shares were issued. Any
Purchaser not a resident of or formed in the United States warrants to the
Company that no filing is required by the Company with any governmental
authority in such Purchaser’s jurisdiction in connection with the transactions
contemplated hereby. If such Purchaser is domiciled or was formed
outside of the United States, such Purchaser has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with the acquisition of
the Securities or any use of this Agreement, including (i) the legal
requirements within its jurisdiction for the purchase of the Securities,
(ii) any foreign exchange restrictions applicable to such purchase,
(iii) any governmental or other consents that may need to be obtained and
(iv) the income tax and other tax consequences, if any, that may be
relevant to the purchase, holding, redemption, sale or transfer of the
Securities. If such Purchaser is domiciled or was formed outside the
United States, such Purchaser’s acquisition of and payment for, and its
continued ownership of the Securities, will not violate any applicable
securities or other laws of his, her or its jurisdiction.
(n) Acknowledgements Regarding
Placement Agents. Such Purchaser acknowledges that the
Placement Agents are acting as the exclusive placement agents on a “reasonable
efforts” basis for the Securities being offered hereby and will be compensated
by the Company for acting in such capacity. Such Purchaser further
acknowledges that the Placement Agents and their respective directors, officers,
employees, representatives and controlling persons have no responsibility for
making any independent investigation of the SEC Reports and make no
representation or warranty to the Purchaser, express or implied, with respect to
the Company or the Securities, or the accuracy, completeness or adequacy of the
SEC Reports or any other publicly available information, nor shall any of the
foregoing persons be liable for any loss or damages of any kind resulting from
the use of the information contained therein or otherwise supplied to the
Purchaser. In addition, such Purchaser acknowledges that it has not
relied on information provided by any of such persons but has conducted its own
investigation.
The
Company acknowledges and agrees that no Purchaser has made or makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 (a) Compliance with
Laws. Notwithstanding any other provision of this Article IV,
each Purchaser covenants that the securities may be disposed of only pursuant to
an effective registration statement under, and in compliance with the
requirements of, the Securities Act, or pursuant to an available exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable state and federal
securities laws. In connection with any transfer of the Securities
other than (i) pursuant to an effective registration statement, (ii) to the
Company, (iii) to an Affiliate of a Purchaser, (iv) pursuant to Rule 144 (provided that the Purchaser
provides the Company with reasonable assurances (in the form of seller and
broker representation letters or an opinion of counsel, as appropriate,) that
the securities may be sold pursuant to such rule) or Rule 144A, or (v) in
connection with a bona fide pledge as contemplated in Section 4.1(b), except as
otherwise provided herein, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act. As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights
Agreement.
(b) Legends. Certificates
evidencing the Securities shall bear any legend as required by the “blue sky”
laws of any applicable state and a restrictive legend in substantially the
following form, until such time as they are not required under Section
4.1(c):
[NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.
The Company acknowledges and agrees
that a Purchaser may from time to time pledge, and/or grant a security interest
in, some or all of the legended Securities in connection with applicable
securities laws, pursuant to a bona fide margin agreement in compliance with a
bona fide margin loan. Such a pledge would not be subject to approval
or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but
such legal opinion shall be required in connection with a subsequent transfer or
foreclosure following default by the Purchaser's transferee of the
pledge. No notice shall be required of such pledge, but Purchaser’s
transferee shall promptly notify the Company of any such subsequent transfer or
foreclosure. Each Purchaser acknowledges that the Company shall not
be responsible for any pledges relating to, or the grant of any security
interest in, any of the Securities or for any agreement, understanding or
arrangement between any Purchaser and its pledgee or secured
party. At the appropriate Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party
of Shares may reasonably request in connection with a pledge or transfer of the
Shares, including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling
Stockholders thereunder. Each Purchaser acknowledges and agrees that,
except as otherwise provided in Section 4.1(c), any Shares subject to a pledge
or security interest as contemplated by this Section 4.1(b) shall continue to
bear the legend set forth in this Section 4.1(b) and be subject to the
restrictions on transfer set forth in Section 4.1(a).
(c) Removal of
Legends. The legend set forth in Section 4.1(b) above shall be
removed and the Company shall issue a certificate without such legend to the
holder of the Securities upon which it is stamped or issue to such holder by
electronic delivery at the applicable balance account at The Depository Trust
Company (“DTC”), if (i)
such Securities are registered for resale under the Securities Act, (ii) such
Securities are sold or transferred pursuant to Rule 144 (assuming the transferor
is not an Affiliate of the Company) or Rule 144A, or (iii) such Securities are
eligible for sale under Rule 144 without application of the requirements of
paragraph (c)(i) thereof. The Company shall cause its counsel to
issue the legal opinion referred to in the Irrevocable Transfer Agent
Instructions to the Company’s transfer agent on the Effective
Date. Any fees (with respect to the Transfer Agent, counsel to the
Company or otherwise) associated with the issuance of such opinion or the
removal of such legend shall be borne by the Company. If any portion
of the Warrant is exercised at a time when there is an effective registration
statement to cover the resale of the Warrant Shares, or if such Warrant Shares
may be sold under Rule 144 without application of the requirements of paragraph
(c)(i) thereof, then such Warrant Shares shall be issued free of all
legends. Following the Effective Date, or at such earlier time as a
legend is no longer required for certain Securities, the Company will no later
than three (3) Trading Days following the delivery by a Purchaser to the Company
or the Transfer Agent (with notice to the Company) of (i) a legended certificate
representing such Shares or Warrant Shares (endorsed or with stock powers
attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer) or (ii) an Exercise Notice in the manner stated in
the Warrants to effect the exercise of such Warrant in accordance with its terms
and an opinion of counsel to the extent required by Section 4.1(a), deliver or
cause to be delivered to such Purchaser a certificate representing such
Securities that is free from all restrictive and other legends. The
Company may not make any notation on its records or give instructions to the
Transfer Agent that enlarge the restrictions on transfer set forth in this
Section.
(d) Irrevocable Transfer Agent
Instructions. The Company shall issue irrevocable instructions to its
transfer agent, and any subsequent transfer agent, to issue certificates or
credit shares to the applicable balance accounts at DTC, registered in the name
of each Purchaser or its respective nominee(s), for the Shares and the Warrant
Shares in such amounts as specified from time to time by each Purchaser to the
Company in the form of Exhibit E attached
hereto (the “Irrevocable Transfer Agent
Instructions”).
(e) Acknowledgement. Each
Purchaser hereunder acknowledges its primary responsibilities under the
Securities Act and accordingly will not sell any of the Securities or any
interest therein without complying with the requirements of the Securities
Act. While a Registration Statement remains effective, each Purchaser
hereunder may sell the shares in accordance with the plan of distribution
contained in such Registration Statement and if it does so it will comply
therewith and with the related prospectus delivery requirements unless an
exemption therefrom is available provided the Company delivers notice to such
Holder in writing that the conditions set forth in Rule 172 of the Securities
Act are not met and that, accordingly, such Holder is obligated to deliver
prospectuses upon such sales. Each Purchaser, severally and not
jointly with the other Purchasers, agrees that if it is notified by the Company
at any time after the date any legend is removed pursuant to Section 4.1(c) hereof
that no Registration Statement is effective or that the prospectus included in
any such Registration Statement no longer complies with the requirements of
Section 10 of the Securities Act, the Purchaser will refrain from selling such
Shares and Warrant Shares until such time as the Purchaser is notified by the
Company that a Registration Statement is effective or such prospectus is
compliant with Section 10 of the Exchange Act, unless such Purchaser is able to,
and does, sell such Shares or Warrant Shares pursuant to an available exemption
from the registration requirements of Section 5 of the Securities
Act. Each Purchaser, severally and not jointly with the other
Purchasers, agrees to indemnify the Company for any damages or losses resulting
to the Company from the Purchaser’s breach of its covenants set forth in the
preceding sentence.
(f) Buy-In. If
(i) the Company shall fail to deliver or cause to be delivered to a holder
unlegended certificates within three (3) Trading Days of receipt of documents
necessary for the removal of the legends set forth above (the “Deadline Date”), and if (ii)
prior to the time such unlegended certificate is received by such holder, such
holder, or any third party on behalf of such holder or for such holder’s
account, purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by such holder of shares represented
by such certificate (a “Buy-In”), then the Company
shall pay in cash to such holder (for costs incurred either directly by such
holder or on behalf of a third party) the amount by which the total purchase
price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such holder as a result of
the sale to which such Buy-In relates. The holder shall provide the
Company written notice indicating the amounts payable to the holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such
loss.
4.2 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, no less than 100% of the number of shares of Common Stock
issuable upon exercise of the Warrants issued at the Closing (without taking
into account any limitations on exercise of the Warrants set forth in the
Warrants).
4.3 Furnishing of
Information. In order to enable the Purchasers to sell the
Securities under Rule 144 of the Securities Act, until such time as all of the
Shares and Warrant Shares have been either sold or are eligible for sale without
restriction pursuant to Rule 144, the Company shall use its commercially
reasonable efforts to 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. During
such period, if the Company is not required to file reports pursuant to such
laws, 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 Shares and Warrant Shares under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell the Shares and Warrant Shares without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144.
4.4 Reporting
Status. During the one year period from and after the Closing,
the Company shall not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act would otherwise permit such
termination.
4.5 Form D and Blue
Sky. The Company agrees to file a Form D with respect to the
sale of the Shares and Warrants as required under Regulation D and to provide a
copy thereof to the Agents’ Representative promptly after such
filing. 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 at the
Closing pursuant to this Agreement 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 any such action so taken to the
Agents’ Representative on or prior to the Closing Date. The Company
shall make all filings and reports relating to the offer and sale of the
Securities required under applicable securities or “Blue Sky” laws of the states
of the United States following the Closing Date.
4.6 No
Integration. The Company shall not, and shall use its best
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
shareholder approval prior to the closing of such other transaction unless
shareholder approval is obtained before the closing of such subsequent
transaction.
4.7 Securities Laws Disclosure;
Publicity. By 9:00 a.m. (New York City time) on
the Trading Day immediately following the execution of this Agreement, the
Company shall issue a press release (the “Press Release”)
reasonably acceptable to the Agents’ Representative disclosing all material
terms of the transactions contemplated hereby. On or prior to the
fourth (4th) Business Day following the date 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 (including, without limitation, this
Agreement, the form of Warrant and the Registration Rights Agreement)). Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in Section 4.7, 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).
4.8 Listing of
Securities. Promptly following the date hereof, the Company
shall take all necessary action to cause the Shares, the Warrant Shares and the
shares of Common Stock issuable upon exercise of the Placement Agents’ Warrants
to be listed upon the Principal Trading Market, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing. Further, if the Company applies to have its Common Stock or
other securities listed on any other Trading Market, it shall include in such
application the Shares and the Warrant Shares (including the shares of Common
Stock issuable upon exercise of the warrants issued to the Placement Agents) and
will take such other action as is necessary to cause the Shares, and the Warrant
Shares (including the shares of Common Stock issuable upon exercise of the
warrants issued to the Placement Agents) to be listed on such other Trading
Market as promptly as practicable.
4.9 Use of
Proceeds. The Company intends to use the net proceeds from the
sale of the Securities hereunder for working capital and general corporate
purposes.
4.10 Sales and Confidentiality
After the Date Hereof. Such Purchaser shall not, and shall
cause its Trading Affiliates not to, engage, directly or indirectly, in any
transactions in the securities of the Company (including, without limitation,
any Short Sales) during the period from the date hereof until such time as (i)
the transactions contemplated by this Agreement are first publicly announced as
described in Section 4.7 or (ii) this Agreement is terminated in full pursuant
to Section 6.16. Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser's assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser's assets, the
representation set forth above shall apply only with respect to the portion of
assets managed by the portfolio manager that have knowledge about the financing
transaction contemplated by this Agreement. Each Purchaser
understands and acknowledges, severally and not jointly with any other
Purchaser, that the Commission currently takes the position that covering a
short position established prior to effectiveness of a resale registration
statement with shares included in such registration statement would be a
violation of Section 5 of the Securities Act, as set forth in Item 65, Section 5
under Section A, of the Manual of Publicly Available Telephone Interpretations,
dated July 1997, compiled by the Office of Chief Counsel, Division of
Corporation Finance.
4.11 Equal Treatment of
Purchasers. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration is also offered to
all of the parties to the Transaction Documents. For clarification
purposes, this provision constitutes a separate right granted to each Purchaser
by the Company and negotiated separately by each Purchaser, and is intended for
the Company to treat the Purchasers as a class and shall not in any way be
construed as the Purchasers acting in concert or as a group with respect to the
purchase, disposition or voting of Shares or otherwise.
4.12 Indemnification. Subject
to the provisions of this Section 412, 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 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, 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 (unless such action is
based upon 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). If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the
Company in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel, or (iii) in such
action there is, in the reasonable opinion of such separate counsel, a material
conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate
counsel. The Company will not be liable to any Purchaser Party under
this Agreement (i) for any settlement by a Purchaser Party effected without
the Company’s prior written consent, which shall not be unreasonably withheld or
delayed; or (ii) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to (A) any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents,
(B) any violations by the Purchaser of state or federal securities laws or
(C) any conduct by such Purchaser which constitutes fraud, gross
negligence, willful misconduct or malfeasance.
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 Shares 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 that
representations and warranties that are qualified by materiality or Material
Adverse Effect 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 which shall
be true and correct in all material respects as of such 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 or appropriate 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) Adverse
Changes. Since the date of execution of this Agreement, no
event or series of events shall have occurred that has resulted or reasonably
could result in a Material Adverse Effect, nor shall a banking moratorium have
been declared by either the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the
reasonable judgment of each Purchaser, makes it impractical or inadvisable to
purchase the Shares and Warrants at the Closing;
(f) No Suspensions of Trading in
Common Stock; Listing. The Common Stock (i) shall be
designated for quotation or listed on the Principal Market and (ii) shall not
have been suspended, as of the Closing Date, by the Commission or the Principal
Market from trading on the Principal Market nor shall suspension by the
Commission or the Principal Market have been threatened, as of the Closing Date,
either (A) in writing by the Commission or the Principal Market or (B) by
falling below the minimum listing maintenance requirements of the Principal
Market;
(g) Company Deliverables.
The Company shall have delivered the Company Deliverables
in accordance with Section 2.2(a);
(h) 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),
(b), (c), (d) and (f); and
(i) Termination. This
Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.16 herein.
5.2 Conditions Precedent to the
Obligations of the Company to Sell
Securities. The Company's obligation to sell and issue the
Shares and Warrants at the Closing 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
that representations and warranties that are qualified by materiality or
Material Adverse Effect 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
which shall be true and correct in all material respects as of such
date;
(b) Performance. The
Purchasers 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 the Purchasers 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 or appropriate 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. Each Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(b); and
(f) Termination. This
Agreement shall not have been terminated as to such Purchaser in accordance with
Section 6.16 herein.
ARTICLE
VI.
MISCELLANEOUS
6.1 Fees and
Expenses. The Company and the Purchasers shall each pay the
fees and expenses of their respective advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party in connection
with the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all Transfer Agents’ fees, stamp
taxes and other taxes and duties levied in connection with the sale and issuance
of the Securities to the Purchasers.
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 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 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:
ZIOPHARM Oncology, Inc.
1180 Avenue of the
Americas
19th
Floor
New York, New York 10036
Telephone No.: (646)
214-0707
Facsimile No.: (646)
214-0711
Attention: Jonathan Lewis. M.D.,
Ph.D.
With a
copy
to: Maslon
Edelman Borman & Brand, LLP
3300 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
Telephone No.: (612)
672-8200
Facsimile No.: (612)
672-8397
Attention: Alan M. Gilbert,
Esq.
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 or amended except in a written instrument signed, in the case of an
amendment, by the Company and each of the Purchasers or, in the case of a
waiver, by the party against whom enforcement of any such waiver is
sought. 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 any Transaction Document unless the same consideration is also
offered to all Purchasers who then hold Securities.
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
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 this Agreement 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 the Placement Agents are intended third party beneficiaries of
Article III hereof and each Placement Agent may enforce the provisions of such
Sections directly against the parties with obligations thereunder.
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 internal laws of the State of New
York, without regard to the principles of conflicts of law
thereof. Each party agrees that all Actions 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 Action, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such
Action 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 Action 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. If either party shall commence a Action to endorse any
provisions of a Transaction Document, then the prevailing party in such Action
shall be reimbursed by the other party for its reasonable attorney’s fees and
other reasonable costs and expenses incurred with the investigation preparation
and prosecution of such Action.
6.9 Survival. Subject to
applicable statute of limitations, the representations, warranties, agreements
and covenants contained herein shall survive the Closing and the delivery of the
Securities until the one year anniversary of the Closing.
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 reasonably required by the
Transfer Agent. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities. 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 Adjustments in Share Numbers
and Prices. In the event of any stock split, subdivision, dividend or
distribution payable in shares of Common Stock (or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly shares of Common Stock), combination or other similar
recapitalization or event occurring after the date hereof, each reference in any
Transaction Document to a number of shares or a price per share shall be deemed
to be amended to appropriately account for such event.
6.15 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. The Company acknowledges that each of the Purchasers has
been provided with the same Transaction Documents for the purpose of closing a
transaction with multiple Purchasers and not because it was required or
requested to do so by any Purchaser. The Company’s obligations to each Purchaser
under this Agreement are identical to its obligations to each other Purchaser
other than such differences resulting solely from the number of Securities
purchased by such Purchaser, but regardless of whether such obligations are
memorialized herein or in another agreement between the Company and a
Purchaser.
6.16 Termination. This
Agreement may be terminated and the sale and purchase of the Shares 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 6.16 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 6.16 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,
the Company shall promptly notify all non-terminating
Purchasers. Upon a termination in accordance with this Section, 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]
[SIGNATURE
PAGES FOLLOW]
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.
ZIOPHARM
ONCOLOGY, INC.
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By:
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Name:
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Title:
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE
PAGES FOR PURCHASERS FOLLOW]
Purchase Price (Subscription Amount): $
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Number of Shares to be acquired:
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Underlying Shares subject to Warrant:
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(100.0% of the number of Shares to be
acquired)
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Tax ID No.(or Social Security No., if a natural person):
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EXHIBIT
10.2
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of September 9, 2009, by and among ZIOPHARM Oncology, Inc., a
Delaware corporation (the “Company”), and the several
purchasers signatory hereto (each a “Purchaser” and collectively,
the “Purchasers”).
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the
date hereof between the Company and each Purchaser (the “Purchase
Agreement”).
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 the Purchasers agree as
follows:
1.
Definitions. Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have
the respective meanings set forth in this Section 1:
“Advice” shall have the
meaning set forth in Section 6(d).
“Affiliate” means, with
respect to any person, any other person which directly or indirectly controls,
is controlled by, or is under common control with, such person.
“Business Day” means a day,
other than a Saturday or Sunday, on which banks in New York City are open for
the general transaction of business.
“Closing” has the meaning set
forth in the Purchase Agreement.
“Closing Date” has the meaning
set forth in the Purchase Agreement.
“Commission” means the United
States Securities and Exchange Commission.
“Common Stock” means the
common stock of the Company, par value $0.001 per share, and any securities into
which such common stock may hereinafter be reclassified.
“Effective Date” means the
date that the Registration Statement filed pursuant to Section 2(a) is first
declared effective by the Commission.
“Effectiveness Deadline”
means, with respect to the Registration Statement required to be filed to cover
the resale by the Holders of the Registrable Securities, the earlier of: (i) the
90th
calendar day following the Closing Date; provided, that, if the
Commission reviews and has written comments to the filed Registration Statement,
then the Effectiveness Deadline under this clause (i) shall be the 120th
calendar day following the Closing Date, and (ii) the fifth (5th)
Trading Day following the date on which the Company is notified by the
Commission that the Registration Statement will not be reviewed or is no longer
subject to further review and comments and the effectiveness of the Registration
Statement may be accelerated; provided, however, that in
either case if the Effective Deadline falls on a Saturday, Sunday or other day
that the Commission is closed for business, the Effectiveness Deadline shall be
extended to the next business day on which the Commission is open for
business.
“Effectiveness Period” shall
have the meaning set forth in Section 2(b).
“Event” shall have the meaning
set forth in Section 2(c).
“Event Date” shall have the
meaning set forth in Section 2(c).
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Filing Deadline” means, with
respect to the Registration Statement required to be filed pursuant to Section
2(a), the 60th
calendar day following the Closing Date; provided, however, that if
the Filing Deadline falls on a Saturday, Sunday or other day that the Commission
is closed for business, the Filing Deadline shall be extended to the next
business day on which the Commission is open for business.
“Holder” or “Holders” means the holder or
holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified Party” shall have
the meaning set forth in Section 5(c).
“Indemnifying Party” shall
have the meaning set forth in Section 5(c).
“Knowledge” means with respect
to any statement made to the knowledge of a party, that the statement is based
upon the actual knowledge of the executive officers of such party having
responsibility for the matter or matters that are the subject of the
statement.
“Losses” shall have the
meaning set forth in Section 5(a).
“New York Courts” means the
state and federal courts sitting in the City of New York, Borough of
Manhattan.
“Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
“Placement Agents” means
Rodman & Renshaw, LLC, Riverbank Capital Securities, Inc. and Griffin
Securities, Inc., and any permitted assigns.
“Principal Trading Market”
means the Trading Market on which the Common Stock is primarily listed on and
quoted for trading, which, as of the Closing Date, shall be The NASDAQ Capital
Market.
“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.
“Prospectus” means the
prospectus included in a Registration Statement (including, without limitation,
a prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Register,” “registered” and “registration” refer to a
registration made by preparing and filing a Registration Statement or similar
document in compliance with the Securities Act and pursuant to Rule 415, and the
declaration or ordering of effectiveness of such Registration Statement or
document.
“Registrable Securities” means
all of (i) the Shares (ii) the Warrant Shares issued or issuable upon the
exercise of the Warrants, (iii) any additional shares issuable in connection
with any anti-dilution provisions in the Warrants (without giving effect to any
limitations on exercise set forth in the Warrant) and (iv) any securities issued
or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event; provided, that the Holder has
completed and delivered to the Company a Selling Stockholder Questionnaire; and
provided, further, that a Holder’s security shall cease to be Registrable
Securities upon the earliest to occur of the following: (A) sale
pursuant to a Registration Statement or Rule 144 under the Securities Act (in
which case, only such security sold shall cease to be a Registrable Security);
or (B) such security becoming eligible for sale by the Holder pursuant to Rule
144 in a transaction in which the requirements of paragraph (c)(1) thereof do
not apply.
“Registration Statements”
means any one or more registration statements of the Company filed under the
Securities Act that covers the resale of any of the Registrable Securities
pursuant to the provisions of this Agreement (including without limitation the
Initial Registration Statement, the New Registration Statement and any Remainder
Registration Statements), amendments and supplements to such Registration
Statements, including post-effective amendments, all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
Registration Statements.
“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.
“Rule 415” means Rule 415
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.
“Rule 424” means Rule 424
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.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“Selling Stockholder
Questionnaire” means a questionnaire in the form attached as Annex B hereto, or
such other form of questionnaire as may reasonably be adopted by the Company
from time to time.
“Shares” means the shares of
Common Stock issued or issuable to the Purchasers pursuant to the Purchase
Agreement.
“Trading Day” means (i) a day
on which the Common Stock is listed or quoted and may be traded on its primary
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 may be 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 by the National Quotation Bureau
Incorporated (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 American Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or OTC Bulletin Board on which the Common Stock is listed or quoted for trading
on the date in question.
“Transfer Agent” means
American Stock Transfer and Trust Company or any successor transfer agent for
the Company, or a Successor transfer agent to the Company.
“Warrants” means the Warrants
issued pursuant to the Purchase Agreement.
“Warrant Shares” means the
shares of Common Stock issued or issuable upon exercise of the
Warrants.
(a) On
or prior to the 30th
calendar day following the Closing Date, the Company shall prepare and file with
the Commission a Registration Statement covering the resale of all Registrable
Securities not already covered by an existing and effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415
(the “Initial Registration
Statement”); provided,
however, that if the 30th
calendar day following the Closing Date falls on a Saturday, Sunday or other day
that the Commission is closed for business, such deadline shall be extended to
the next business day on which the Commission is open for
business. The Initial Registration Statement shall be on Form S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance with the Securities Act) and shall
contain (except if otherwise required pursuant to written comments received from
the Commission upon a review of such Registration Statement) the “Plan of
Distribution” attached hereto as Annex A. Notwithstanding the
registration obligations set forth in this subsection (a) and subsections (b)
and (c) of this Section 2, in the event the Commission informs the Company that
all of the Registrable Securities cannot, as a result of the application of Rule
415, be registered for resale on a single registration statement, the Company
agrees to promptly (i) inform each of the holders thereof; (ii) permit counsel
of such holders (subject to Section 4, at such holders expense) to review and
participate in discussions regarding the Company’s response to the Commission
regarding the application of 415 to the Registration Statement, (iii) use its
reasonable best efforts to file amendments to the Initial Registration Statement
as required by the Commission and/or (iv) if required by the Commission,
withdraw the Initial Registration Statement and file a new registration
statement (a “New Registration
Statement”), in either case covering the maximum number of Registrable
Securities permitted to be registered by the Commission on Form S-3 or such
other form available to register for resale the Registrable
Securities. In the event the Company amends the Initial Registration
Statement or files a New Registration Statement, as the case may be, under
clauses (i) or (ii) above, the Company will use its reasonable best efforts to
file with the Commission, as promptly as allowed by Commission or staff guidance
provided to the Company or to registrants of securities in general, one or more
Registration Statements on Form S-3 or such other form available to register for
resale those Registrable Securities that were not registered for resale on the
Initial Registration Statement, as amended, or the New Registration Statement
(the “Remainder Registration
Statements”).
(b) The
Company shall use its reasonable commercial efforts to cause each Registration
Statement to be declared effective by the Commission as soon as practicable and,
with respect to the Initial Registration Statement or the New Registration
Statement, as applicable, no later than the Effectiveness Deadline and shall use
its reasonable commercial efforts to keep each Registration Statement
continuously effective under the Securities Act until the earlier of (i) such
time as all of the Registrable Securities covered by such Registration Statement
have been publicly sold by the Holders, (ii) the date that all Registrable
Securities covered by such Registration Statement may be sold pursuant to Rule
144 in transactions in which the requirements of paragraph (c)(1) thereof do not
apply, as determined by counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Transfer Agent and the
affected Holders (the “Effectiveness
Period”). The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading. Each
Registration Statement shall also cover, to the extent allowable under the
Securities Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities. The Company shall promptly notify the Holders via
facsimile or e-mail of the effectiveness of a Registration Statement and shall,
by 9:30 am Eastern Time on the Trading Day after the Effective Date (as defined
in the Purchase Agreement), file a final Prospectus with the Commission pursuant
to Rule 424.
(c) If:
(i) the Initial Registration Statement is not filed on or prior to the Filing
Deadline, (ii) the Initial Registration Statement or the New Registration
Statement, as applicable, is not declared effective by the Commission (or
otherwise does not become effective) on or prior to its Effectiveness Deadline
or (iii) after its Effective Date, such Registration Statement ceases for any
reason (including without limitation by reason of a stop order, or the Company’s
failure to update the Registration Statement), but excluding the inability of
any Holder to sell the Registrable Securities covered thereby due to market
conditions, to remain continuously effective and available to the Holders as to
all Registrable Securities to which it is required to cover at any time prior to
the expiration of the Effectiveness Period for an aggregate of more than 20
consecutive Trading Days or for more than an aggregate of 40 Trading
Days in any 12-month period (which need not be consecutive), (any
such failure or breach in clauses (i), (ii) or (iii) above being referred to as
an “Event,” and, for
purposes of clauses (i) or (ii), the date on which such Event occurs, or for
purposes of clause (iii), the date which such 20 consecutive or 40 Trading Day
period (as applicable) is exceeded, being referred to as the “Event Date”), then in
addition to any other rights available to the Holders: (x) on such Event Date
the Company shall pay to each Holder an amount in cash, as liquidated damages
and not as a penalty, equal to 1.0% of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement for any Registrable Securities then
held by such Holder (which remedy shall not be exclusive of any other remedies
available under this Agreement); and (y) on each monthly anniversary of each
such Event Date thereof (if the applicable Event shall not have been cured by
such date) until the applicable Event is cured, the Company shall pay to each
Holder an amount in cash, as partial liquidated damages and not as a penalty,
equal to 1.0% of the aggregate purchase price paid by such Holder pursuant to
the Purchase Agreement for any Registrable Securities then held by such Holder
(which remedy shall not be exclusive of any other remedies available under this
Agreement). The parties agree that the Company will not be liable for
liquidated damages under this Section 2(c) in respect of the Warrants or the
Warrant Shares. If the Company fails to pay any partial liquidated damages
pursuant to this Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 10% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such partial liquidated damages are due until such
amounts, plus all such interest thereon, are paid in full. The
partial liquidated damages pursuant to the terms hereof shall apply on a daily
pro-rata basis for any portion of a month prior to the cure of an Event, except
in the case of the first Event Date. Notwithstanding the foregoing, the maximum
payment to a Holder associated with all Events in the aggregate shall not exceed
(i) in any 30-day period, an aggregate of 1.0% of the purchase price paid by
such Holder for its Registrable Securities (plus interest accrued thereon, if
applicable) and (ii) 10.0% of the purchase paid by such Holder for its
Registrable Securities
(d) Each
Holder agrees to furnish to the Company a completed and executed Selling
Stockholder Questionnaire. The Company shall not be required to
include the Registrable Securities of a Holder in a Registration Statement and
shall not be required to pay any liquidated or other damages under Section 2(c)
to any Holder who fails to furnish to the Company a fully completed and executed
Selling Stockholder Questionnaire at least two Trading Days prior to the Filing
Deadline, or if sooner, five Trading Days after the Company furnishes copies of
the sections of the Prospectus, as contemplated by Section 3(a).
(e) In
the event that Form S-3 is not available for the registration of the
resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form reasonably
acceptable to the Holders and (ii) undertake to register the Registrable
Securities on Form S-3 as soon as such form is available, provided that the
Company shall maintain the effectiveness of the Registration Statement then in
effect until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the
Commission.
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3.
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Registration
Procedures
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In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Not
less than five Trading Days prior to the filing of a Registration Statement or
any related Prospectus that differs substantively from the Initial Registration
Statement or the Prospectus contained therein, or any amendment or supplement
thereto, (i) furnish to each Holder copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holder, and
(ii) cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to each Holder, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of 67% of the Registrable Securities
shall reasonably object in good faith, provided that the
Company is notified of such objection in writing no later than three Trading
Days after the Holders have been so furnished copies of a Registration Statement
or any related Prospectus or amendments or supplements thereto. During any
periods that the Company is unable to meet its obligations hereunder with
respect to the registration of the Registrable Securities because the Holders of
67% of the Registrable Securities exercise their rights under this section to
object to the filing of a Registration Statement, any liquidated damages that
are accruing, at such time shall be tolled and any Event that may otherwise
occur because of the exercise of such rights or such delay shall be suspended,
until the Holders of 67% of the Registrable Securities no longer object to the
filing of such Registration Statement (provided that such
tolling shall only occur if the Company uses commercially reasonable efforts to
resolve such objection).
(b) (i) Prepare
and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period; (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended to be filed
pursuant to Rule 424; (iii) respond as promptly as reasonably practicable to any
comments received from the Commission with respect to each Registration
Statement or any amendment thereto and, as promptly as reasonably possible,
provide the Holders true and complete copies of all correspondence from and to
the Commission relating to such Registration Statement that pertains to the
Holders as Selling Stockholders but not any comments that would result in the
disclosure to the Holders of material and non-public information concerning the
Company; and (iv) comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Registrable Securities
covered by each Registration Statement.
(c) Notify
the Holders as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than three Trading Days prior to such filing, in the case of
(iii) and (iv) below, not more than one Trading Day after such issuance or
receipt, in the case of (v) below, not less than three Trading Days prior to the
financial statements in any Registration Statement becoming ineligible for
inclusion therein and, in the case of (vi) below, not more than one Trading Day
after the Company obtains Knowledge of such proceeding) and (if requested by any
such Person) confirm such notice in writing no later than one Trading Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a “review” of
such Registration Statement and whenever the Commission comments in writing on
any Registration Statement (in which case the Company shall provide true and
complete copies thereof and all written responses thereto to each of the Holders
that pertain to the Holders as a Selling Stockholder or to the Plan of
Distribution, but not information which the Company believes would constitute
material and non-public information); and (C) with respect to each Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) the receipt by the Company of any request by the Commission or any other
federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information that pertains
to the Holders as Selling Stockholders or the Plan of Distribution; (iii) of the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; (v) of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
(in the case of any Prospectus, form of prospectus or supplement thereto, in
light of the circumstances under which they were made), not misleading; and (vi)
of a pending proceeding against the Company under Section 8A of the Securities
Act in connection with the offering of Registrable Securities.
(d) Use
reasonable commercial efforts to avoid the issuance of, or, if issued, obtain
the withdrawal of (i) any order suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, as soon as practicable.
(e) If
requested by a Holder, furnish to such Holder, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto and all
exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that the Company shall have no
obligation to provide any document pursuant to this clause that is available on
the Commission’s EDGAR system.
(f) Upon
notification by the Commission that a Registration Statement will not be
reviewed or is no longer subject to further review and comments, the Company
shall request acceleration of such Registration Statement within five (5)
Business Days after receipt of such notice.
(g) Prior
to any public offering of Registrable Securities, use its reasonable commercial
efforts to register or qualify or cooperate with the selling Holders in
connection with the registration or qualification (or exemption therefrom) of
such Registrable Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any Holder reasonably
requests in writing, to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period and to do any and
all other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statements; provided,
that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action that would subject the Company to general service of process in any
jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so
subject.
(h) If
requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to the Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement
and under law, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such
Holders may reasonably request. In connection therewith, if required
by the Transfer Agent, the Company shall promptly after the effectiveness of the
Registration Statement cause an opinion of counsel as to the effectiveness of
the Registration Statement to be delivered to and maintained with its Transfer
Agent, together with any other authorizations, certificates and directions
required by the transfer agent, which authorize and direct the Transfer Agent to
issue such Registrable Securities without legend upon sale by the holder of such
shares of Registrable Securities under the Registration Statement.
(i) Following
the occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no effective Registration Statement nor
Prospectus in use thereunder will contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus, form of prospectus
or supplement thereto, in light of the circumstances under which they were
made), not misleading.
(j) (i)
In the time and manner required by the Principal Trading Market, prepare and
file with such Trading Market an additional shares listing application covering
all of the Registrable Securities, (ii) take all steps necessary to cause such
Registrable Securities to be approved for listing on the Principal Trading
Market as soon as possible thereafter, (iii) if requested by any Holder, provide
such Holder evidence of such listing, and (iv) during the Effectiveness Period,
maintain the listing of such Registrable Securities on the Principal Trading
Market.
(k) In
order to enable the Holders to sell Shares or Warrant Shares under Rule 144,
until such time as all of the Shares and Warrant Shares have either been sold or
are eligible for sale without restriction pursuant to Rule 144, the Company
shall use its commercially reasonable efforts to 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
Section 13(a) or 15(d) of the Exchange Act. During such one year period, if the
Company is not required to file reports pursuant to Section 13(a) or 15(d) of
the Exchange Act, it will prepare and furnish to the Holders and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company further
covenants that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Person to
sell Shares and Warrant Shares without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 promulgated under
the Securities Act, including compliance with the provisions of the Purchase
Agreement relating to the transfer of the Shares and Warrant
Shares.
(l) The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such
Holder and any Affiliate thereof and as to any Financial Industry Regulatory
Authority (“FINRA”)
affiliations and of any natural persons who have the power to vote or dispose of
the Common Stock, and the Company has the right to include such information in
any Registration Statement and to otherwise provide such information to the
Commission.
(m) If
requested by a Holder, the Company shall effect a filing with respect to the
public offering contemplated by the Registration Statement (an “Issuer Filing”) with the
FINRA Corporate Financing Department pursuant to FINRA
Rule 5510(b)(10)(A)(i) within five Trading Days of the date of such
request. The Company shall pay the filing fee required by such Issuer
Filing and shall use its commercially reasonable efforts to pursue the Issuer
Filing until the FINRA issues a letter confirming that it does not object to the
terms of the offering contemplated by the Registration Statement. A
copy of the Issuer Filing and all related correspondence with respect thereto
shall be provided to the Placement Agents and, upon request, to any
Holder.
4.
Registration
Expenses. All fees and expenses incident to the Company’s
performance of or compliance with its obligations under this Agreement
(excluding any underwriting discounts and selling commissions and all legal fees
and expenses of legal counsel, accountants and other advisors for any Holder
except as specifically provided below) shall be borne by the Company whether or
not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the securities exchanges on which the Common Stock is
then listed for trading, and (B) in compliance with applicable state securities
or Blue Sky laws), (ii) messenger, telephone and delivery expenses, (iii) fees
and disbursements of counsel for the Company, (iv) Securities Act liability
insurance, if the Company so desires such insurance, and (v) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement. In addition, the
Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder. Further, upon request, the Company shall pay the reasonable fees and
disbursements of one firm or counsel (which firm or counsel shall be experienced
in securities matters and designated by Holders owning a majority of the
Registrable Securities) to act as counsel for the Holders in connection with the
preparation and filing of the Registration Statement; provided, however, that the
amount of fees and disbursements reimbursable pursuant to this Section shall be
limited to $10,000 in the aggregate. In no event shall the Company be
responsible for any broker or similar commissions or any legal fees, accounting
fees, the fees of other advisors or other costs of the Holders.
(a) Indemnification by the
Company. The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Holder, the officers,
directors, agents, partners, members, managers, shareholders, Affiliates and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, partners, members, managers, shareholders, agents
and employees of each such controlling Person, to the fullest extent permitted
by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable costs of
preparation and investigation and reasonable attorneys' fees) and expenses
(collectively, “Losses”), as incurred that
arise out of or are based upon: (i) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, any Prospectus or any
form of Prospectus or in any amendment or supplement thereto (it being
understood that the Holder has approved Annex A hereto for
this purpose) or in any preliminary prospectus if used prior to the effective
date of such Registration Statement or arising out of or relating to any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, or (ii) any violation
or alleged violation by the Company of the Securities Act, Exchange Act or any
state securities law, or any rule or regulation thereunder, in connection with
the performance of its obligations under this Agreement, except to the extent,
but only to the extent, that (A) such untrue statements, alleged untrue
statements, omissions or alleged omissions are based upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and approved by such Holder expressly for use in the Registration
Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto (it being understood that each Holder has approved Annex A hereto for
this purpose) or (B) in the case of an occurrence of an event of the type
specified in Section 3(c)(ii)-(v), the use by a Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by such Holder
of Advice (as defined in Section 6(d) below), but only if and to the extent that
following the receipt of the Advice the misstatement or omission giving rise to
such Loss would have been corrected; provided, however, that the
indemnity agreement contained in this Section 5(a) shall not apply to amounts
paid in settlement of any Losses if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld. Each Holder shall notify the Company promptly of the
institution, threat or assertion of any Proceeding of which the Holder is aware
in connection with the transactions contemplated by this
Agreement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party (as
defined in Section 5(c)) and shall survive the transfer of the Registrable
Securities by the Holders.
(b) Indemnification by
Holders. Each Holder shall, notwithstanding any termination of this
Agreement, severally and not jointly, indemnify and hold harmless the Company,
its directors, officers, agents and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of Prospectus, or in any amendment or
supplement thereto, or arising solely out of or based solely upon any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus, or any
form of Prospectus or supplement thereto, in light of the circumstances under
which they were made) not misleading to the extent, but only to the extent that,
such untrue statements or omissions are based upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such
Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and approved by such Holder expressly for use in the
Registration Statement (it being understood that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement thereto; provided,
however, that the indemnity agreement contained in this Section 5(b)
shall not apply to amounts paid in settlement of any Losses if such settlement
is effected without the prior written consent of the Holder, which consent shall
not be unreasonably withheld. In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all reasonable fees and
expenses incurred in connection with defense thereof; provided, that the failure of
any Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party); provided, that the Indemnifying Party shall not be
liable for the fees and expenses of more than one separate firm of attorneys at
any time for all Indemnified Parties. The Indemnifying Party shall
not be liable for any settlement of any such Proceeding effected without its
written consent, which consent shall not be unreasonably withheld, delayed or
conditioned. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
All fees
and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within twenty Trading Days of written notice
thereof to the Indemnifying Party.
(d) Contribution. If
a claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party
as a result of any Losses shall be deemed to include, subject to the limitations
set forth in Section 5(c), any reasonable attorneys' or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the net proceeds actually received by such Holder from
the sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties and are not in diminution or limitation of the indemnification
provisions under the Purchase Agreement.
(a) Remedies. In
the event of a breach by the Company or by a Holder of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) Entire
Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter, except for, and as provided in the Transaction
Documents.
(c) Compliance. Each
Holder covenants and agrees that it (i) will comply with the prospectus delivery
requirements of the Securities Act as applicable to it (unless an exemption
therefrom is available) in connection with sales of Registrable Securities
pursuant to the Registration Statement provided the Company delivers notice to
such Holder in writing that the conditions set forth in Rule 172 of the
Securities Act are not met and that, accordingly, such Holder is obligated to
deliver prospectus upon such sales, and (ii) shall sell the Registrable
Securities only in accordance with a method of distribution described in the
Registration Statement.
(d) Discontinued
Disposition. Each Holder further agrees by its acquisition of
such Registrable Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Section 3(c)(ii)-(v), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until it is advised in writing (the “Advice”) by the Company that
the use of the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders to enforce
the provisions of this paragraph.
(e) Amendments and
Waivers. This Agreement may be amended only by a writing
signed by all of the parties hereto. The Company may take any action
herein prohibited that pertains to or effects a Purchaser, or omit to perform
any act herein required to be performed by it that pertains to or effects a
Purchaser, only if the Company shall have obtained the written consent to such
amendment, action or omission to act, of such Purchaser. No consideration shall
be offered or paid to any Holder to amend or consent to a waiver or modification
of any provision of this Agreement unless the same consideration also is offered
to all of the Holders. Failure of any party to exercise any right or
remedy under this Agreement or otherwise or delay by a party in exercising such
right or remedy shall not operate as a waiver thereof.
(f) 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 (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section prior to 5:00 p.m. (New York City time) on a Trading Day, (ii) the
next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile or e-mail to the facsimile number or e-mail addressed
specified in this Section on a day that is not a Trading Day or later than 5:00
p.m. (New York City time) on any Trading Day, (iii) the Business Day following
the date of mailing, if sent by nationally recognized overnight courier service
with next day delivery specified, or (iv) 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:
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ZIOPHARM
Oncology, Inc.
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1180
Avenue of the Americas
19th
Floor
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New
York, New York 10036
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Facsimile:
(646) 214-0711
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Attn:
Jonathan Lewis, M.D., Ph.D.
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With
a copy to:
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Maslon
Edelman Borman & Brand, LLP
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3300
Wells Fargo Center
90
South Seventh Street
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Minneapolis,
MN 55402
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Facsimile:
(612) 672-8397
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Attn:
Alan M. Gilbert,
Esq.
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If
to a Purchaser:
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To
the address set forth under such Purchaser's name on the signature pages
hereof.
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If
to any other Person who is then the registered Holder:
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To
the address of such Holder as it appears in the stock transfer books of
the Company or such other address as may be designated in writing
hereafter, in the same manner, by such
Person.
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provided,
that any party may change its address for notices by providing written notice to
the other parties in the manner prescribed by this Section.
(g) Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The Company may not assign
its rights or obligations hereunder without the prior written consent of each
Holder. The rights of the Holders hereunder, including the right to
have the Company register Registrable Securities pursuant to this Agreement, may
be assigned by each Holder to transferees or assignees of all or any portion of
the Registrable Securities, but only if (i) the Holder agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment, (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being transferred or assigned, (iii) at or before the time the Company received
the written notice contemplated by clause (ii) of this sentence, the transferee
or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein and (iv) the transferee is an “accredited investor,”
as that term is defined in Rule 501 of Regulation D.
(h) Execution and
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format file, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
(i) 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 internal laws of the State of New
York, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, employees or agents) will be commenced 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, 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 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 PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. If either party shall
commence a Proceeding to endorse any provisions of this Agreement, then the
prevailing party in such Proceeding shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation preparation and prosecution of such Proceeding.
(j)
Cumulative
Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(k) Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(l) Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(m) Independent Nature of
Purchasers' Obligations and Rights. The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of
any other Purchaser hereunder, and no Purchaser shall be responsible in any way
for the performance of the obligations of any other Purchaser
hereunder. The decision of each Purchaser to purchase Securities
pursuant to the Transaction Documents has been made independently of any other
Purchaser. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or 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 with
respect to such obligations or the transactions contemplated by this
Agreement. 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 protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any Proceeding for such
purpose. The Company acknowledges that each of the Purchasers has
been provided with the same Registration Rights Agreement for the purpose of
closing a transaction with multiple Purchasers and not because it was required
or requested to do so by any Purchaser.
(n) Currency. Unless
otherwise indicated, all dollar amounts referred to in this Agreement are in
United States Dollars. All amounts owing under this Agreement are in
United States Dollars. All amounts denominated in other currencies
shall be converted in the United States dollar equivalent amount in accordance
with the applicable exchange rate in effect on the date of
calculation.
(o) Further
Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES TO FOLLOW]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.
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ZIOPHARM
ONCOLOGY, INC.
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By:
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Name:
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Title:
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES OF HOLDERS TO FOLLOW]
IN WITNESS WHEREOF, the parties have
executed this Registration Rights Agreement as of the date first written
above.
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NAME
OF INVESTING ENTITY
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AUTHORIZED
SIGNATORY
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By:
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Name:
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Title:
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ADDRESS
FOR NOTICE
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c/o:
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Street:
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City/State/Zip:
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Attention:
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Tel:
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Fax:
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Email:
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Annex
A
PLAN
OF DISTRIBUTION
We are
registering the shares of Common Stock issued to the selling shareholders and
issuable upon exercise of the warrants to permit the resale of these shares of
Common Stock by the holders of the shares of Common Stock and warrants from time
to time after the date of this prospectus. We will not receive any of
the proceeds from the sale by the selling shareholders of the shares of Common
Stock. We will bear all fees and expenses incident to our obligation
to register the shares of Common Stock.
The
selling shareholders may sell all or a portion of the shares of Common Stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the
shares of Common Stock are sold through underwriters or broker-dealers, the
selling shareholders will be responsible for underwriting discounts or
commissions or agent's commissions. The shares of Common Stock may be
sold in one or more transactions at fixed prices, at prevailing market prices at
the time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which
may involve crosses or block transactions. The selling shareholders
may use any one or more of the following methods when selling
shares:
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on
any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of
sale;
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·
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in
the over-the-counter market;
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·
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in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
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·
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through
the writing of options, whether such options are listed on an options
exchange or otherwise;
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·
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ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
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·
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block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
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·
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
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·
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an
exchange distribution in accordance with the rules of the applicable
exchange;
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·
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privately
negotiated transactions;
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·
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settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
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·
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broker-dealers
may agree with the selling securityholders to sell a specified number of
such shares at a stipulated price per
share;
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·
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a
combination of any such methods of sale;
and
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·
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any
other method permitted pursuant to applicable
law.
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The
selling shareholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the selling shareholders may arrange for other brokers-dealers to
participate in sales. If the selling shareholders effect such transactions by
selling shares of Common Stock to or through underwriters, broker-dealers or
agents, such underwriters, broker-dealers or agents may receive commissions in
the form of discounts, concessions or commissions from the selling shareholders
or commissions from purchasers of the shares of Common Stock for whom they may
act as agent or to whom they may sell as principal. Such commissions will be in
amounts to be negotiated, but, except as set forth in a supplement to this
Prospectus, in the case of an agency transaction will not be in excess of a
customary brokerage commission in compliance with FINRA Rule 2440; and in the
case of a principal transaction a markup or markdown in compliance with FINRA
IM-2440 or the successor to such FINRA rules.
In
connection with sales of the shares of Common Stock or otherwise, the selling
shareholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the shares of
Common Stock in the course of hedging in positions they assume. The
selling shareholders may also sell shares of Common Stock short and if such
short sale shall take place after the date that this Registration Statement is
declared effective by the Commission, the selling stockholders may deliver
shares of Common Stock covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short
sales. The selling shareholders may also loan or pledge shares of
Common Stock to broker-dealers that in turn may sell such shares. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
selling shareholders may pledge or grant a security interest in some or all of
the warrants or shares of Common Stock owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the shares of Common Stock from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling shareholders to include the pledgee, transferee
or other successors in interest as selling shareholders under this
prospectus. The selling shareholders also may transfer and donate the
shares of Common Stock in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.
The
selling shareholders and any broker-dealer participating in the distribution of
the shares of Common Stock may be deemed to be “underwriters” within the meaning
of the Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker-dealer may be deemed to be underwriting commissions
or discounts under the Securities Act. At the time a particular
offering of the shares of Common Stock is made, a prospectus supplement, if
required, will be distributed which will set forth (i) the name of each such
selling stockholder and of the participating broker-dealer(s), (ii) the number
of shares involved, (iii) the price at which such the shares of Common Stock
were sold, (iv) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, and (vi) other facts material to the
transaction. In no event shall any broker-dealer receive fees,
commission and markups which, in the aggregate, would exceed eight percent (8%).
In addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with
applicable securities law.
Under the
securities laws of some states, the shares of Common Stock may be sold in such
states only through registered or licensed brokers or dealers. In
addition, in some states the shares of Common Stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied
with.
There can
be no assurance that any selling shareholder will sell any or all of the shares
of Common Stock registered pursuant to the shelf registration statement, of
which this prospectus forms a part.
We have
advised each selling stockholder that it may not use shares registered on the
registration statement of which this prospectus is a part to cover short sales
of common stock made prior to the date on which the registration statement shall
have been declared effective by the Securities and Exchange
Commission. If a selling stockholder uses this prospectus for any
sale of shares of our common stock, it will be subject to the prospectus
delivery requirements of the Securities Act. The selling shareholders and any
other person participating in such distribution will be subject to applicable
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, including, without limitation, Regulation M of the
Exchange Act, which may limit the timing of purchases and sales of any of the
shares of Common Stock by the selling shareholders and any other participating
person. Regulation M may also restrict the ability of any person
engaged in the distribution of the shares of Common Stock to engage in
market-making activities with respect to the shares of Common
Stock. All of the foregoing may affect the marketability of the
shares of Common Stock and the ability of any person or entity to engage in
market-making activities with respect to the shares of Common
Stock.
We will
pay all expenses of the registration of the shares of Common Stock pursuant to
the registration rights agreement, including, without limitation, Securities and
Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, that a selling
shareholder will pay all underwriting discounts and selling commissions, if any
and any related legal expenses incurred by it. We will indemnify the
selling shareholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling shareholders will be entitled to contribution. We may be
indemnified by the selling shareholders against civil liabilities, including
liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling shareholder specifically for use in
this prospectus, in accordance with the related registration rights agreements,
or we may be entitled to contribution.
Exhibit
99.1
ZIOPHARM
Announces At Market Private Placement of $5.05 Million
NEW YORK, NY – September 9,
2009 - ZIOPHARM Oncology, Inc. (NASDAQ: ZIOP) announced today that it has
entered into definitive agreements with both existing and new investors to raise
approximately $5.05 million in gross proceeds, before deducting placement agent
fees and estimated offering expenses, in a private placement that was priced “at
market.” Upon closing of the private placement, the Company will
issue units consisting of one share of common stock and a warrant to purchase
one share of common stock, with the purchase price per unit of $1.825. Pursuant
to the agreements governing the private placement, the Company will issue
approximately 2.77 million shares of common stock and warrants to purchase
approximately 2.77 million additional shares of common stock in the
aggregate. The closing of the offering is subject to certain
conditions, and is expected to occur on or around September 15,
2009.
Rodman
& Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc.,
(Nasdaq: RODM - News), acted as the exclusive placement agent for the
transaction, with Riverbank Capital Securities, Inc. and Griffin Securities,
Inc. serving as sub-agents.
The
Company intends to use the proceeds from the financing for working capital and
general corporate purposes, including ongoing clinical development of its three
product candidates, palifosfamide (ZymafosTM or
ZIO-201), darinaparsin (ZinaparTM or
ZIO-101), and indibulin (ZybulinTM or
ZIO-301).
The
securities sold in the private placement have not been registered under the
Securities Act of 1933, as amended, and may not be offered or sold in the United
States absent registration under such act and applicable state securities laws
or an applicable exemption from those registration requirements. The Company has
agreed to file a registration statement covering the resale of the shares issued
in the private placement, including the shares issuable upon exercise of the
warrants. This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there be any sale of
these securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
About
ZIOPHARM Oncology, Inc.:
ZIOPHARM
Oncology is a
biopharmaceutical company engaged in the development and commercialization of a
diverse portfolio of cancer drugs. The Company is currently focused on three
clinical programs.
Palifosfamide
(ZymafosTM or
ZIO-201) references a novel composition (tris formulation) that is the
functional active metabolite of ifosfamide, a standard of care for treating
sarcoma, lymphoma, testicular, and other cancers. Palifosfamide delivers
only the cancer fighting component of ifosfamide. It is expected to overcome the
resistance seen with ifosfamide and cyclophosphamide, two of the most commonly
used alkylating drugs used to treat certain cancers. Palifosfamide does not have
the toxic metabolites of ifosfamide that cause the debilitating side effects of
“fuzzy brain” (encephalopathy) and severe bladder inflammation. Intravenous
palifosfamide is currently in a randomized Phase II trial to treat unresectable
or metastatic soft tissue sarcoma in the front- and second-line setting, a study
expected to establish the basis for a registration trial as early as the first
half of 2010. An oral form of palifosfamide has been developed
preclinically to the investigational new drug application stage.
Indibulin
(ZybulinTM or
ZIO-301) is a
novel, oral tubulin binding agent that targets both mitosis and cancer cell
migration. Indibulin is expected to have several potential benefits,
including oral dosing, application in multi-drug resistant tumors, no neuropathy
and minimal overall toxicity.
In multiple Phase I trials in cancer patients, oral indibulin has been
administered both as a single agent and in combination with favorable activity
and a promising safety profile that does not include the neurotoxicity seen with
all of the other classes of tubulin binding agents. Most recently,
results of oral indibulin in combination with oral capecitabine (Xeloda®) were
presented at this year’s American Society of Clinical Oncology (ASCO) along with
the preclinical findings of a novel dosing schedule conducted under the
direction of Dr. Larry Norton. The Company expects to initiate a
Phase I/II study of oral indibulin in breast cancer patients employing this
dosing schedule established preclinically. Once the maximum tolerated dose is
established in the phase I portion of the trial, Phase II will proceed with an
expanded population.
Darinaparsin
(ZinaparTM or
ZIO-101) is a novel
organic arsenic being developed for the treatment of various hematologic and
solid cancers. Preclinical and clinical studies to date have demonstrated that
darinaparsin is considerably less toxic than inorganic arsenic, particularly
with regard to cardiac toxicity. Phase
I and Phase II testing of the intravenous form of darinaparsin in solid tumors
and hematological cancers has been completed or is nearing completion. The
Company has reported clinical activity and, importantly, a safety profile from
these studies as predicted by preclinical results. Favorable results from the
trial with IV-administered darinaparsin in lymphoma, particularly peripheral
T-cell lymphoma (“PTCL”), were reported at the American Society of Clinical
Oncology (‘ASCO”) in May. Supported by these data, the Company expects to
advance into a registration trial in peripheral T-cell lymphoma as early as the
first half of 2010. Also as reported at ASCO, in ongoing Phase I trials the oral
form is active and well tolerated.
ZIOPHARM’s
operations are located in Boston, MA with an executive office in New York.
Further information about ZIOPHARM may be found at www.ziopharm.com.
ZIOP-G
Forward-Looking
Safe Harbor Statement:
This
press release contains forward-looking statements for ZIOPHARM Oncology, Inc.
that involve risks and uncertainties that could cause the Company's actual
results to differ materially from the anticipated results and expectations
expressed in these forward-looking statements. These statements are based on
current expectations, forecasts and assumptions that are subject to risks and
uncertainties, which could cause actual outcomes and results to differ
materially from these statements. Among other things, there can be no assurance
that any of the Company's development efforts relating to its product candidates
will be successful, or such product candidates will be successfully
commercialized. Other risks that affect forward-looking information contained in
this press release include the possibility of being unable to obtain regulatory
approval of the Company's product candidates, the risk that the results of
clinical trials may not support the Company's claims, risks related to the
Company's ability to protect its intellectual property and its reliance on third
parties to develop its product candidates, risks related to the sufficiency of
existing capital reserves to fund continued operations for a particular amount
of time and uncertainties regarding the Company’s ability to obtain additional
financing to support its operations thereafter. The Company assumes no
obligation to update these forward-looking statements, except as required by
law.
# # #
Contacts:
Tyler
Cook
ZIOPHARM
Oncology, Inc.
(617)
259-1982
tcook@ziopharm.com
or
Dennis
Dobson
International
Investor Relations Inc.
(203)
258-0159
dsdobson@optonline.net