[EXHIBIT 10.21]
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as
of August 2, 2004, by and among INYX, Inc., a Nevada corporation (the
"Company") and the entities listed on Schedule 1 attached hereto (each
a "Purchaser" and collectively, the "Purchasers").
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act (as
defined below), and/or Rule 506 promulgated thereunder, the Company
desires to issue and sell to the Purchasers, and the Purchasers
desires to purchase from the Company, that number of (i) shares of
Common Stock, and (ii) Warrants as listed on Schedule 1 hereto
(collectively, the "Offering").
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, and for other good and valuable
consideration the receipt and adequacy of which are hereby
acknowledged, the Company and each Purchaser agrees 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 have the meanings indicated in this Section 1.1:
"Action" shall have the meaning ascribed to such term in
Section 3.1(j).
"Affiliate" means any Person that, directly or indirectly through
one or more intermediaries, controls or is controlled by or is under
common control with a Person as such terms are used in and construed
under Rule 144. With respect to the 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.
"Business Day" means any day except Saturday, Sunday and any day
which shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.
"Closing" means the closing of the purchase and sale of the
Common Stock and the Warrants pursuant to Section 2.1 on August 2,
2004, or such other date as mutually agreed to by the parties.
"Closing Date" means the date of the Closing.
"Closing Price" means on any particular date (a) the last
reported closing bid price per share of Common Stock on such date on
the Trading Market (as reported by Bloomberg L.P. at 4:15 p.m. (New
York time) as the last reported closing bid price for regular session
trading on such day), or (b) if there is no such price on such date,
then the closing bid price on the Trading Market on the date nearest
preceding such date (as reported by Bloomberg L.P. at 4:15 p.m. (New
York time) as the closing bid price for regular session trading on
such day), or (c) if the Common Stock is not then listed or quoted on
the Trading Market and if prices for the Common Stock are then
reported in the "pink sheets" published by the National Quotation
Bureau Incorporated (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported, or (d) if the shares of Common
Stock are not then publicly traded the fair market value of a share of
Common Stock as determined by an appraiser selected jointly by the
Purchasers of a majority in interest of the shares of Common Stock
then outstanding and the Company.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, $0.001 par value
per share, and any securities into which such Common Stock may
hereafter be reclassified.
"Common Stock Equivalents" means any securities of the Company or
the Subsidiaries which would entitle the holder thereof to acquire at
any time Common Stock, including without limitation, any debt,
preferred stock, rights, options, warrants or other instrument that is
at any time convertible into or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock.
"Company Counsel" means Gusrae Kaplan & Bruno, PLLC.
"Effective Date" means the date that the Registration Statement
is first declared effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Intellectual Property Rights" shall have the meaning ascribed to
such term in Section 3.1(o).
"Liens" means a lien, charge, security interest, encumbrance,
right of first refusal or other restriction.
"Material Adverse Effect" shall have the meaning ascribed to such
term in Section 3.1(b).
"Material Permits" shall have the meaning ascribed to such term
in Section 3.1(m).
"Per Share Purchase Price" means $0.81, subject to adjustment for
reverse or forward stock splits, stock dividends, stock combinations
and other similar transactions of the Common Stock that occur after
the date of this Agreement and before the Closing.
"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.
"Registration Statement" means a registration statement meeting
the requirements set forth in the Registration Rights Agreement and
covering the resale by the Purchaser of the Shares and the Warrant
Shares.
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"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company
and the Purchasers, in the form of Exhibit A hereto.
"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" shall have the meaning ascribed to such term in
Section 3.1(h).
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock purchased by the
Purchasers pursuant to this Agreement.
"Subscription Amount" means as to each Purchaser, the amounts set
forth below the Purchaser's signature block on the Signature Page of
this Agreement in United States Dollars and in immediately available
funds.
"Subsidiary" shall have the meaning ascribed to such term in
Section 3.1(a).
"Trading Day" means (i) a day on which the Common Stock is
traded on a Trading Market, or (ii) if the Common Stock is not quoted
on a 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 price); provided, that in the event that the
Common Stock is not listed or quoted as set forth in (i), and
(ii) hereof, then Trading Day shall mean a Business Day.
"Trading Market" means the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in
question: the OTC Bulletin Board, the American Stock Exchange, the New
York Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap
Market.
"Transaction Documents" means this Agreement, the Registration
Rights Agreement and the Warrants, and any and all other documents or
agreements executed in connection with the transactions contemplated
hereunder.
"Transaction Securities" means the Shares, the Warrants and the
Warrant Shares.
"Warrant" means the five (5) year common stock purchase warrant
in the form annexed hereto as Exhibit B, issuable to each Purchaser at
Closing, which Warrants are exercisable to purchase one hundred (100%)
percent of the aggregate number of Shares that such Purchaser
purchased pursuant hereto. The Warrants shall have an initial
exercise price equal to the product of (i) one hundred twenty-five
(125%) percent and (ii) the Per Share Purchase Price.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.
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ARTICLE II.
PURCHASE AND SALE
2.1 Closing. On the terms and subject to the conditions set
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forth in this Agreement, at the Closing, the Company shall sell and
issue to the Purchaser and the Purchaser shall purchase from the
Company hereto such number of Shares as shall equal the Purchaser's
Subscription Amount divided by the Per Share Purchase Price. The
Warrants shall be issued without additional consideration. The
aggregate number of Shares and Warrants the Purchaser shall receive is
set forth opposite the Purchaser's name on Schedule 1 hereto. Upon
satisfaction of the conditions set forth in Section 2.2, the Closing
shall occur at the offices of Company counsel, or such other location
as the parties shall mutually agree.
2.2 Closing Conditions.
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(a) Except as provided below or that the parties may
otherwise so agree, at the Closing, the Company shall deliver or cause
to be delivered to the Purchaser:
(i) Within five (5) business days following the
Closing, a restricted stock certificate for such number of
Shares set forth on Schedule 1 hereto purchased by the
Purchaser;
(ii) a Warrant in the name of the Purchaser, duly
executed by the Company, entitling the Purchaser to purchase
such amount of Warrant Shares as set forth on Schedule 1
hereto;
(iii) the Registration Rights Agreement duly executed
by the Company;
(iv) this Agreement duly executed by the Company;
(v) the Executive Vice President of the Company shall
deliver to the Purchasers, at the Closing, a certificate
certifying that (A) representations and warranties of the
Company contained herein are true on and as of the Closing
with the same effect as though such representations and
warranties had been made on and as of the date of such
Closing and (B) the Company has performed and complied with
all agreements, obligations, and conditions contained in
this Agreement that are required to be performed or complied
with by it on or before the Closing; and
(vi) the Company shall deliver to the Purchasers, at
the Closing, a Certificate of the Secretary of the Company
attesting as to: (A) the Restated Certificate of
Incorporation and the by-laws of the Company; (B) the
signatures and titles of the officers of the Company
executing this Agreement or any of the other agreements to
be executed and delivered by the Company at the Closing; and
(C) resolutions of the Board of Directors of the Company,
authorizing and approving all matters in connection with
this Agreement and the transactions contemplated hereby;
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(b) At the Closing, the Purchaser shall deliver or cause
to be delivered to the Company the following:
(i) this Agreement duly executed by the Purchaser;
(ii) the Purchaser's payment for the Shares and
Warrants being purchased by wire transfer; and
(iii) the Registration Rights Agreement duly executed
by the Purchaser.
(c) All representations and warranties of each of the
parties herein shall remain true and correct as of the Closing Date.
(d) As of the Closing Date, there shall have been no
Material Adverse Effect with respect to the Company since the date
hereof.
(e) From the date hereof to the Closing Date: (i) trading
in the Common Stock shall not have been suspended; (ii) trading in
securities generally shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market; and
(iii) there shall have been the banking moratorium declared either by
the United States or New York State authorities.
2.3 Certificates. The Purchaser hereby authorizes and directs
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the Company, upon each Closing, to deliver certificates representing
the Shares and Warrants to be issued to such Purchaser pursuant to
this Agreement to the Purchaser's address indicated in this Agreement.
2.4 Certain Legal Fees. Simultaneously with payment for the
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Shares and Warrants at the Closing, the Company shall pay to the
Purchasers' legal counsel $10,000, representing (i) all fees and
expenses resulting from this Offering, and (ii) an initial retainer
payment of such counsel's legal fees related to a proposed private
placement of the Company's Common Stock and Warrants on a $4,000,000
minimum and a $7,000,000 maximum reasonable basis pursuant to which
Sands Brothers International Ltd. (the "Placement Agent") will act as
placement agent (the "2nd Offering"). The Company's obligation to pay
legal fees to the Placement Agent's and the Purchasers' legal counsel
shall not exceed, in the aggregate, $25,000, including the above
mentioned $10,000 payment, with the remaining $15,000 to be paid at
the initial closing of the 2nd Offering. Nothing contained in this
Section 2.4 shall represent any commitment or representation that the
2nd Offering will be completed.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company
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hereby makes the following representations and warranties as of the
date hereof and as of the Closing Date to the Purchaser:
(a) Subsidiaries. Other than as disclosed in the SEC
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Reports, the Company does not own or control, directly or indirectly,
any interest in any other corporation, association or other business
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entity (a "Subsidiary" and collectively, the "Subsidiaries"). The
Company owns, directly or indirectly, all of the capital stock of each
Subsidiary free and clear of any lien, charge, security interest,
encumbrance, right of first refusal or other restriction
(collectively, "Liens"), and all the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights.
(b) Organization and Qualification. Each of the Company
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and the Subsidiaries 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 corporate power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation of
any of the provisions of its respective certificate or articles of
incorporation, by-laws or other organizational or charter documents.
Each of the Company and the Subsidiaries 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, would not result in (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets,
business or financial condition of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company's
ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii),
a "Material Adverse Effect").
(c) Authorization; Enforcement; Validity. The Company has
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the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations thereunder. The
execution and delivery of each of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated
thereby have been duly authorized by all necessary action on the part
of the Company and no further corporate action is required by the
Company in connection therewith. Each Transaction Document has been
(or upon delivery will have been) duly executed by the Company and,
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 limited by
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors'
rights generally.
(d) No Conflicts. The execution, delivery and performance
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of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated thereby, do not and will
not (i) conflict with or violate any provision of the Company's
Restated Articles of Incorporation or by-laws and any and all
amendments thereto (collectively, the "Internal 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, 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 or Subsidiary debt or otherwise), or other understanding to
which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or
affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court
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or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is
bound or affected.
(e) Filings, Consents and Approvals. The Company is not
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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, other than
the filing with the Commission of the Registration Statement and
applicable Blue Sky filings.
(f) Issuance of the Securities. All of the Transaction
--------------------------
Securities have been duly authorized and, when issued and paid for in
accordance with the Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens and
not subject to any preemptive rights. The Company has reserved from
its duly authorized capital stock such number of shares of Common
Stock so as to permit the issuance of the Shares and the Warrant
Shares.
(g) Capitalization. Other than as disclosed in the SEC
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Reports, (i) there are no outstanding securities of the Company or
any of its Subsidiaries which contain any preemptive, redemption or
similar provisions, nor is any holder of securities of the Company or
any Subsidiary entitled to preemptive or similar rights arising out of
any agreement or understanding with the Company or any Subsidiary by
virtue of any of the Transaction Documents, and there are no
contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem a
security of the Company or any of its Subsidiaries; (ii) the Company
does not have any stock appreciation rights or "phantom stock" plans
or agreements or any similar plan or agreement; and (iii) there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities,
except as a result of the purchase and sale of the Transaction
Securities, or rights or obligations convertible into or exchangeable
for, or giving any Person any right to subscribe for or acquire, any
shares of Common Stock, or contracts, commitments, understandings, or
arrangements by which the Company or any Subsidiary is or may become
bound to issue additional shares of Common Stock, or securities or
rights convertible or exchangeable into shares of Common Stock.
(h) SEC Reports; Financial Statements. The Company has
---------------------------------
filed all reports required to be filed by it under the Securities Act
and the Exchange Act, including pursuant to Section 13(a) or
Section 15(d) of the Exchange Act, for the one (1) year preceding the
date hereof (or such shorter period as the Company was required by law
to file such material) (the foregoing materials, including the
exhibits thereto, being collectively referred to herein as the "SEC
Reports"). As of their respective dates, except to the extent set
forth in the SEC Reports with respect to restatements of the Company's
financial statements, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated
thereunder, as applicable, 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. All material agreements to which the
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Company is a party or to which the property or assets of the Company
are subject have been filed as exhibits to the SEC Reports to the
extent required. 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,
except to the extent set forth in the SEC Reports with respect to
restatements of the Company's financial statements. Such financial
statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved ("GAAP"), except to the extent set forth in the SEC Reports
with respect to restatements of the Company's financial statements,
and 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 and its
consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments. Additionally, since the adoption of the
Sarbanes-Oxley Act of 2002 (the "New Act") and to the extent that the
Company is subject to the New Act, the Company has complied in all
material respects with the laws, rules and regulation under the New
Act.
(i) Material Changes. Since June 30, 2004, other than as
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may be filed on a Current Report on Form 8-K filed by the Company with
the Commission or any other SEC Report, (i) there has been no event,
occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has
not incurred any material liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company's financial statements
pursuant to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting
or the identity of its auditors, (iv) the Company has not declared or
made payment or distribution of any dividend or distribution of cash
or other property to its holders of Common Stock or purchased,
redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant to
existing Company stock option plans.
(j) Litigation. There is no action, suit, inquiry, notice
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of violation, proceeding or investigation pending or, to the knowledge
of the Company, currently threatened against or affecting the Company,
any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency and/or
regulatory authority (federal, state, county, local or foreign),
(collectively, an "Action") which does and/or could (i) adversely
affects or challenges the legality, validity or enforceability of any
of the Transaction Documents and/or the Transaction Securities or to
consummate the transactions contemplated hereby or thereby or
(ii) could, if there were an unfavorable decision, have or reasonably
be expected to result in, either individually or in the aggregate, a
Material Adverse Effect. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act. The foregoing includes, without limitation,
actions, pending or threatened (or any basis therefor known to the
Company), involving the prior employment of any of the Company's
employees, their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior
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employers. The Company is not a party or subject to the provisions of
any order, writ, injunction, judgment, or decree of any court or
government agency or instrumentality.
(k) Labor Relations. No material labor dispute exists or,
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to the knowledge of the Company, is imminent with respect to any of
the employees of the Company which could reasonably be expected to
result in a Material Adverse Effect.
(l) Compliance. Neither the Company nor any Subsidiary
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(i) is 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 or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it
is in default under or that it is in violation of, any indenture,
mortgage, decree, lease, license, 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) is in violation of any order of any
court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state
and local laws applicable to its business, except in the case of
clauses (i), (ii) and (iii) as would not result in a Material Adverse
Effect. Neither the Company nor any of the Subsidiaries has received
any written notice of any violation of or noncompliance with, any
federal, state, local or foreign laws, ordinances, regulations and
orders (including, without limitation, those relating to environmental
protection, occupational safety and health, federal securities laws,
equal employment opportunity, consumer protection, credit reporting,
"truth-in-lending", and warranties and trade practices) applicable to
its business or to the business of any Subsidiary, the violation of,
or noncompliance with, which would have a materially adverse effect on
either the Company's business or operations, or that of any
Subsidiary, and the Company knows of no facts or set of circumstances
which would give rise to such a notice. The execution, delivery, and
performance of the Transaction Documents and the consummation of the
transactions contemplated thereby will not result in any such
violation or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any such
provision, instrument, judgment, order, writ, decree or contract, or
an event which results in the creation of any lien, charge, or
encumbrance upon any assets of the Company or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, authorization, or approval applicable to the Company,
its business or operations, or any of its assets or properties, except
as would not reasonably be expected to have a Material Adverse Effect.
(m) Regulatory Permits. The Company and the Subsidiaries
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possess all licenses, certificates, authorizations and permits issued
by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses, except
where the failure to possess such permits would not have or reasonably
be expected to result in a Material Adverse Effect ("Material
Permits"), and believes it can obtain, without undue burden or
expense, any similar authority for the conduct of its business as
planned to be conducted, and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
(n) Title to Property and Assets. The Company owns its
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property and assets free and clear of all mortgages, liens, loans,
pledges, security interests, claims, equitable interests, charges, and
encumbrances, except such encumbrances and liens which arise in the
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ordinary course of business and do not materially impair the Company's
ownership or use of such property or assets. With respect to the
property and assets it leases, the Company is in compliance with such
leases and, to its knowledge, holds a valid leasehold interest free of
any liens, claims, or encumbrances.
(o) Intellectual Property Rights. The Company and its
----------------------------
Subsidiaries own, or possess adequate rights or licenses to use all
trademarks, trade names, service marks, service mark registrations,
service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct their respective businesses as now
conducted, the lack of which could reasonably be expected to have a
Material Adverse Effect. The Company and its Subsidiaries do not have
any knowledge of any infringement by the Company or its Subsidiaries
of trademarks, trade name rights, patents, patent rights, copyrights,
inventions, licenses, service names, service marks, service mark
registrations, trade secrets or other similar rights of others, or of
any such development of similar or identical trade secrets or
technical information by others and no claim, action or proceeding has
been made or brought against, or to the Company's knowledge, has been
threatened against, the Company or its Subsidiaries regarding
trademarks, trade name rights, patents, patent rights, inventions,
copyrights, licenses, service names, service marks, service mark
registrations, trade secrets or other infringement, except where such
infringement, claim, action or proceeding would not reasonably be
expected to have either individually or in the aggregate a Material
Adverse Effect. The Company is not aware that any of its employees,
officers, or consultants are obligated under any contract (including
licenses, covenants, or commitments of any nature) or other agreement,
or subject to any judgment, decree, or order of any court or
administrative agency, that would interfere with the use of such
employee's, officer's, or consultant's commercially reasonable efforts
to promote the interests of the Company or that would conflict with
the Company's business as conducted. Neither the execution nor
delivery of the Transaction Documents, nor the carrying on of the
Company's business by the employees of the Company, nor the conduct of
the Company's business, will, to the Company's knowledge, conflict
with or result in a breach of the terms, conditions, or provisions of,
or constitute a default under, any contract, covenant, or instrument
under which any of such employees, officers or consultants are now
obligated.
(p) Certain Fees. The Company has not entered into
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agreement to pay any brokerage or finder's fees or commissions to any
person including, but not limited to, any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by this
Agreement, other than with Sands Brothers International Ltd. for the
2nd Offering.
(q) Private Placement. Assuming the accuracy of the
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Purchasers representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and
sale of the Transaction Securities by the Company to the Purchaser as
contemplated hereby.
(r) Investment Company. The Company is not, and is not an
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Affiliate of, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
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(s) No General Solicitation. Neither the Company, its
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Subsidiaries, any of their affiliates nor any person acting on their
behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities
Act) in connection with the offer or sale of the Shares and the
Warrants.
(t) No Integrated Offering. Neither the Company, its
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Subsidiaries, any of their affiliates nor any person acting on their
behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under
circumstances that would require registration of any of the Securities
under the Securities Act or cause the Offering to be integrated with
prior offerings by the Company for purposes of the Securities Act or
any applicable stockholder approval provisions, including without
limitation, under the rules and regulations of any exchange or
automated quotation system on which any of the securities of the
Company are listed or designated. None of the Company, its
Subsidiaries, their affiliates and any person acting on their behalf
will take any action or steps referred to in the preceding sentence
that would require registration of any of the Transaction Securities
under the Securities Act or cause the Offering to be integrated with
other offerings.
(u) Tax Status. The Company and each of its Subsidiaries
----------
has made or filed all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to
which it is subject, except when the failure to do so would not have a
Material Adverse Effect, and 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
otherwise due and payable, except those being contested in good faith
and has set aside on its books reserves in accordance with GAAP
reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim. The
Company has not executed a waiver with respect to the statute of
limitations relating to the assessment or collection of any foreign,
federal, statue or local tax. To the Company's knowledge, none of the
Company's tax returns is presently being audited by any taxing
authority.
(v) No Conflict of Interest. Except as disclosed in SEC
-----------------------
Reports, and approximately $800,000 which has been loaned to the
Company since March 2004 by certain executive officers and directors
of the Company, which funds will not be repaid until no earlier than
December 31, 2004, (i) the Company is not indebted in excess of
$20,000, directly or indirectly, to any of its employees, officers or
directors or to their respective spouses or children, in any amount
whatsoever other than in connection with accrued but unpaid salary
payments, expenses or advances of expenses incurred in the ordinary
course of business or relocation expenses of employees, officers and
directors, nor is the Company contemplating such indebtedness as of
the date of this Agreement, (ii) to the Company's knowledge, none of
said employees, officers or directors, or any member of their
immediate families, is directly or indirectly indebted to the Company
(other than in connection with purchases of the Company's stock) or
have any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the
Company has a business relationship or any firm or corporation which
competes with the Company, nor is the Company contemplating such
indebtedness as of the date of this Agreement, except that employees,
officers, directors and/or shareholders of the Company may own stock
in publicly traded companies (not in excess of 1% of the outstanding
-11-
capital stock thereof) which may directly compete with the Company and
(iii) to the Company's knowledge, no employee, shareholder, officer or
director, or any member of their immediate families, is, directly or
indirectly, interested in any material contract with the Company, nor
does any such person own, directly or indirectly, in whole or in part,
any material tangible or intangible property that the Company uses or
contemplates using in the conduct of its business. The Company is not
a guarantor or indemnitor of any indebtedness of any other Person.
(w) Insurance. The Company has in full force and effect
---------
fire and casualty insurance policies, with extended coverage,
sufficient in amount (subject to reasonable deductibles) to allow it
to replace any of its properties that might be damaged or destroyed,
and the Company has insurance against other hazards, risks, and
liabilities to persons and property to the extent and in the manner
customary for companies in similar businesses similarly situated.
(x) Foreign Assets Control Legislation. Neither the sale
----------------------------------
of the Common Stock or the Warrant by the Company hereunder nor its
use of the proceeds thereof will violate the Trading with the Enemy
Act, as amended, or any of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V,
as amended) or any enabling legislation or executive order relating
thereto. Without limiting the foregoing, neither the Company nor any
of its Subsidiaries (a) is a person whose property or interests in
property are blocked pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.
Reg. 49079 (2001)) or (b) engages in any dealings or transactions, or
be otherwise associated, with any such person. The Company and its
Subsidiaries are in compliance with the USA Patriot Act of 2001
(signed into law October 26, 2001).
3.2 Representations and Warranties of the Purchasers. Each
------------------------------------------------
Purchaser hereby represents and warrants as of the date hereof and as
of the Closing Date to the Company, acknowledging that the Company is
relying upon the accuracy and completeness of the representations and
warranties set forth herein to, among other things, ensure that
registration under Section 5 of the Securities Act is not required in
connection with the sale of the Securities hereby, as follows:
(a) Organization; Authority. The Purchaser is an entity
-----------------------
duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization with full right, corporate or
limited liability company power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations thereunder. The execution,
delivery and performance by such Purchaser of the transactions
contemplated by this Agreement has been duly authorized by all
necessary corporate or similar action on the part of such Purchaser.
Each Transaction Document to which it is a party has been duly
executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it
in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights
generally and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies.
-12-
(b) Investment Intent. The Purchaser understands that the
-----------------
Transaction Securities are "restricted securities" and have not been
registered under the Securities Act or any applicable state securities
law and is acquiring the Transaction Securities as principal for its
own account for investment purposes only and not with a view to or for
distributing or reselling such Transaction Securities or any part
thereof, has no present intention of distributing any of such
Transaction Securities and has no arrangement or understanding with
any other persons regarding the distribution of such Transaction
Securities (this representation and warranty not limiting such
Purchaser's right to sell the Transaction Securities pursuant to the
Registration Statement or otherwise in compliance with applicable
federal and state securities laws). The Purchaser is acquiring the
Transaction Securities hereunder in the ordinary course of its
business. The Purchaser does not have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the
Transaction Securities.
(c) Purchaser Status. At the time the Purchaser was
----------------
offered the Shares and Warrants, it was, and at the date hereof it is
an "accredited investor" as defined in Rule 501(a) under the
Securities Act. Such Purchaser is not, and is not required to be,
registered as a broker-dealer under Section 15 of the Exchange Act. In
making an investment decision as to whether to purchase the Shares and
Warrants offered hereby, each Purchaser has relied solely upon the SEC
Reports and the representation and warranties of the Company contained
herein. Each Purchaser has had the opportunity to ask questions of,
and receive answers from, representatives of the Company concerning
the Company and the officers and all such questions have been asked
and answered by the Company to the satisfaction of the Purchaser.
(d) Experience of Such Purchaser. Each 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 Transaction 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 Transaction Securities and,
at the present time, is able to afford a complete loss of such
investment.
(e) General Solicitation. The Purchaser is not purchasing
--------------------
the Shares and Warrants 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 solicitation
or general advertisement.
(f) No Shorting. The Purchaser hereby represents and
-----------
warrants that the Purchaser, directly and/or indirectly, has not had
and/or maintained, currently have, and/or in the future will not make
or maintain a "short" position in the Company's securities or maintain
a position in the Company's securities.
(g) No Conflicts. Neither the execution and delivery of
------------
this Agreement and/or any Transaction Document, nor the consummation
of the Transactions contemplated hereby, will violate any
constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Purchaser is subject or any
provision of its organizational documents or other similar governing
instruments.
-13-
(h) No Advice. The Purchaser understands that nothing in
---------
this Agreement or any other materials presented to the Purchaser in
connection with the purchase and sale of the Transaction Securities
constitutes legal, tax or investment advice. The 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 Transaction Securities.
(i) No Litigation, Etc. There is no action, suit,
------------------
proceeding, judgment, claim or investigation pending or, to the
knowledge of the Purchaser, threatened against the Purchaser which
could reasonably be expected in any manner to challenge or seek to
prevent, enjoin, alter or materially delay any of the transactions
contemplated by the Transaction Documents.
(j) Approvals. The execution, delivery and performance by
---------
the Purchaser of this Agreement and the Transaction Documents to which
it is a party, and the consummation of the transactions set forth
herein require no material action by or in respect of, or material
filing with, any governmental body, agency, official or authority, by
the Purchaser other than: (i) the filing by the Purchaser with the SEC
of such reports under the Exchange Act as may be required in
connection with this Agreement, the Transaction Documents and the
transactions contemplated hereby; and (ii) any filings required by the
securities or "Blue Sky" laws of the various states.
(k) No Fees. The Purchaser has no obligation, agreement
-------
and/or understanding with respect to the payment of any fees or any
claims made by or on behalf of other Persons for fees or compensation
related to this Agreement and the Offering, except to the extent the
Purchaser made an agreement to make any such payment.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
---------------------
(a) The Transaction Securities may only be disposed of in
compliance with state and federal securities laws. In connection with
any transfer of Transaction Securities other than pursuant to an
effective registration statement, or in connection with a pledge, as
contemplated in Section 4.1(b) hereof, the Company may require the
transferor thereof to provide to the Company an opinion of counsel
selected by the transferor, 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
Transaction 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) The Purchasers agree to the imprinting, so long as is
required by this Section 4.1(b), of a legend on any of the Transaction
Securities in the following form:
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
-14-
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
AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY.
(c) Subject to compliance with all laws, rules and
regulations including, but not limited to, the Securities Act and the
Exchange Act, certificates evidencing the Shares and Warrant Shares
shall not contain any legend (including the legend set forth in
Section 4.1(b)), (i) following any sale of the Shares or Warrant
Shares pursuant to an effective registration statement (including the
Registration Statement) covering the resale of such security, or
(ii) following any sale of the Shares or Warrant Shares pursuant to
Rule 144, or (iii) if such Shares or Warrant Shares are eligible for
sale under Rule 144(k) and appropriate documentation is provided
satisfactory to legal counsel to the Company. The Company agrees that
at such time as such legend is no longer required under and pursuant
to this Section 4.1(c), it will, no later than three (3) Trading Days
following the delivery by a Purchaser to the Company or the Company's
transfer agent of a certificate representing Shares and/or Warrant
Shares, as the case may be, issued with a restrictive legend, 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 any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section.
(d) The Purchaser agrees that the removal of the
restrictive legend from certificates representing the Shares and the
Warrant Shares as set forth in this Section 4.1 is predicated upon the
Company's reliance that the Purchaser will sell any Transaction
Securities pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom.
4.2 Furnishing of Information. Until two (2) years from the
-------------------------
Closing Date, the Company covenants and agrees 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.
4.3 Integration. The Company shall not sell, offer for sale or
-----------
solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of any of the Transaction Securities
in a manner that would require the registration under the Securities
Act of the sale of the Transaction Securities to the Purchasers or
that would be integrated with the offer or sale of the Transaction
Securities for purposes of the rules and regulations of any Trading
Market.
-15-
4.4 Securities Laws Disclosure. The Company shall, by the end
--------------------------
of the business on the third (3rd) Business Day following the Closing,
issue a press release or file a Current Report on Form 8-K, disclosing
the transactions contemplated hereby and make such other filings and
notices in the manner and time required by the Commission.
4.5 Use of Proceeds. The Company covenants and agrees that all
---------------
of the net proceeds that it receives from the sale of the Shares and
Warrants pursuant to this Agreement, although distributed, allocated
and expended by the Company in its sole discretion, shall be used for
general working capital and corporate purposes.
4.6 Form D and Blue Sky. The Company shall file a Form D with
-------------------
respect to the Transaction Securities as required under Regulation D
under the Securities Act and, upon written request, provide a copy
thereof to each Purchaser and the Placement Agent promptly after such
filing. The Company shall, on or before the Closing, take such action
as the Company shall reasonably determine is necessary in order to
obtain an exemption for or to qualify any Transaction Securities for
sale to the Purchasers pursuant to this Agreement under applicable
securities or "Blue Sky" laws of the states of the United States, and
shall provide evidence of any such action so taken to the Purchaser on
or prior to the Closing. 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.
4.7 Reservation of Common Stock. As of the date hereof, the
---------------------------
Company has reserved and the Company shall continue to reserve and
keep available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the
Company to issue the Shares and the Warrant Shares.
4.8 Listing of Common Stock. The Company hereby agrees to
-----------------------
maintain the listing of the Common Stock on its current Trading
Market. The Company further agrees, if the Company applies to have
the Common Stock traded on any other Trading Market, it will include
in such application the Shares and Warrant Shares.
ARTICLE V.
MISCELLANEOUS
5.1 Fees and Expenses. Except as otherwise set forth in this
-----------------
Agreement, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement.
5.2 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 and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.
5.3 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 (a) the next
-16-
Business Day, if sent by U.S. nationally recognized overnight courier
service, or (b) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and
communications to the Company shall be as set forth below and for each
Purchaser shall be as set forth on the signature pages attached
hereto.
If to the Company:
INYX, Inc.
825 Third Avenue
New York, New York 10022
Attention: Dr. Jack Kachkar
Telephone: 212-838-1111
With a copy to:
Gusrae Kaplan & Bruno, PLLC
120 Wall Street
New York, New York 10005
Attention: Lawrence G. Nusbaum, Esq.
Telephone: 212-269-1400
5.4 Amendments; Waivers. 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 Purchaser 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.
5.5 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.
5.6 Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any
rights or obligations hereunder without the prior written consent of
each Purchaser. Any Purchaser, however, may assign any or all of its
Transaction Securities and/or rights under this Agreement to any
Person, provided such transferee agrees in writing to be bound, with
respect to the transferred Transaction Securities and otherwise, by
the provisions hereof that apply to the "Purchasers."
5.7 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.
-17-
5.8 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of New
York without regard to the conflicts of laws principles thereof. The
parties hereto hereby irrevocably agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this
Agreement, shall be brought solely in a federal or state court located
in the City, County and State of New York. By its execution hereof,
the parties hereby covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City,
County and State of New York and agree that any process in any such
action may be served upon any of them personally, or by certified mail
or registered mail upon them or their agent, return receipt requested,
with the same full force and effect as if personally served upon them
in New York City. The parties hereto waive any claim that any such
jurisdiction is not a convenient forum for any such suit or proceeding
and any defense or lack of in personam jurisdiction with respect
thereto. In the event of any such action or proceeding, the party
prevailing therein shall be entitled to payment from the other party
hereto of its reasonable counsel fees and disbursements.
5.9 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, 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.
5.10 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.
5.11 Replacement of Transaction Securities. If any certificate
-------------------------------------
or instrument evidencing any Transaction 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 of such loss, theft or destruction and customary and
reasonable indemnity, if requested. 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 Transaction Securities.
5.12 Indemnification.
---------------
(a) The Company shall indemnify and hold harmless each
Purchaser, the officers, directors, agents and employees of each of
them, each Person who controls any such Purchaser (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, 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 attorneys' fees) and
expenses (including the cost (including without limitation, reasonable
attorneys' fees) and expenses relating to an Indemnified Party's (as
-18-
defined below) actions to enforce the provisions of this Section 5.12)
(collectively, "Losses"), as incurred, to the extent arising out of or
relating to (i) any material misrepresentation or breach of any
representation or warranty made by the Company in the Transaction
Documents, or, (ii) any material breach of any covenant, agreement or
obligation of the Company contained in the Transaction Documents, or
(iii) any cause of action, suit or claim brought or made against such
Indemnified Party and arising out of or resulting from the execution,
delivery, performance or enforcement of the Transaction Documents
executed pursuant hereto by any of the Indemnified Parties. If the
indemnification provided for in this Section 5.12 is held by a court
of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any Losses, then the Indemnifying Party (as defined
below), in lieu of indemnifying such Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified
Party as a result of Losses in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand
and of the Indemnified Party on the other in connection with the
actions or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The Company shall notify the
Purchaser promptly of the institution, threat or assertion of any
proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Each Purchaser, jointly and not severally, shall
indemnify and hold harmless the Company and each of its officers,
directors, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the officers, directors, agents and employees
of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, as incurred, to
the extent arising out of or relating to (i) any material
misrepresentation or material breach of any representation or warranty
made by the Purchaser in the Transaction Documents, or, (ii) any
material breach of any covenant, agreement or obligation of the
Purchaser contained in the Transaction Documents or (iii) any cause of
action, suit or claim brought or made against such Indemnified Party
and arising out of or resulting from the execution, delivery,
performance or enforcement of the Transaction Documents executed
pursuant hereto by any of the Indemnified Parties. If the
indemnification provided for in this Section 5.12 is held by a court
of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any Losses, then the Indemnifying Party (as defined
below), in lieu of indemnifying such Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified
Party as a result of Losses in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand
and of the Indemnified Party on the other in connection with the
actions or omissions that resulted in such Losses as well as any other
relevant equitable considerations. Each Purchaser, as case may be,
shall notify the Company promptly of the institution, threat or
assertion of any proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement. The
maximum aggregate liability of each Purchaser for indemnity payments
hereunder shall not exceed such Purchaser's pro-rata amount of the
purchase price for the Shares and Warrants.
(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 other party (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 fees and
-19-
expenses incurred in connection with defense thereof; provided,
however, 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 such failure shall have materially and 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 the reasonable fees
and expenses of one separate counsel for all Indemnified Parties in
any matters related on a factual basis shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for
any settlement of any such proceeding affected without its written
consent, which consent shall not be unreasonably withheld. 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.
(Remainder of Page Intentionally Left Blank)
-20-
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.
INYX, INC.
By:_____________________________
Name:
Title:
-21-
PURCHASER'S SIGNATURE PAGE
_______________________________
By:____________________________
Name:
Title:
_______________________________
Address
_______________________________
Facsimile Number
Subscription Amount: $
-22-
INDEX OF EXHIBITS AND SCHEDULES
-------------------------------
EXHIBITS
--------
Exhibit A - Form of Registration Rights Agreement
- ---------
Exhibit B - Form of Warrant
- ---------
SCHEDULES
---------
Schedule 1 - Securities Purchased
- ----------
EXHIBIT A
---------
FORM OF REGISTRATION RIGHTS AGREEMENT
-------------------------------------
EXHIBIT B
---------
FORM OF WARRANT
---------------
SCHEDULE 1
----------
AMOUNT OF SHARES AND WARRANT SHARES PURCHASED
---------------------------------------------
_____________________________________________________________________
Name and Address Shares Warrant Shares
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