EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
DATED AS OF OCTOBER 12, 2004
BY AND AMONG
HALOZYME THERAPEUTICS, INC.
AND
THE PURCHASERS LISTED ON EXHIBIT A
TABLE OF CONTENTS
Page
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ARTICLE I Purchase and Sale of Common Stock and Warrants.........................................................1
Section 1.1 Purchase and Sale of Common Stock and Warrants..............................................1
Section 1.2 Purchase Price and Closing..................................................................1
ARTICLE II Representations and Warranties........................................................................2
Section 2.1 Representations and Warranties of the Company...............................................2
Section 2.2 Representations and Warranties of the Purchasers............................................7
ARTICLE III Covenants............................................................................................9
Section 3.1 Securities Compliance.......................................................................9
Section 3.2 Registration and Listing....................................................................9
Section 3.3 Use of Proceeds.............................................................................9
ARTICLE IV Conditions...........................................................................................10
Section 4.1 Conditions Precedent to the Obligation of the Company to Sell the Securities...............10
Section 4.2 Conditions Precedent to the Obligation of the Purchasers to Purchase the
Securities.....................................................................................10
ARTICLE V Certificate Legend....................................................................................12
Section 5.1 Legend.....................................................................................12
ARTICLE VI Miscellaneous........................................................................................13
Section 6.1 Fees and Expenses..........................................................................13
Section 6.2 Specific Performance; Consent to Jurisdiction..............................................13
Section 6.3 Entire Agreement; Amendment................................................................13
Section 6.4 Notices....................................................................................14
Section 6.5 Waivers....................................................................................14
Section 6.6 Headings...................................................................................15
Section 6.7 Successors and Assigns.....................................................................15
Section 6.8 No Third Party Beneficiaries...............................................................15
Section 6.9 Survival...................................................................................15
Section 6.10 Counterparts..............................................................................15
Section 6.11 Publicity.................................................................................15
Section 6.12 Severability..............................................................................15
Section 6.13 Further Assurances........................................................................15
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SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of October
12, 2004, is entered into by and between Halozyme Therapeutics, Inc., a Nevada
corporation (the "Company"), and the purchasers listed on Exhibit A hereto (each
a "Purchaser" and collectively, the "Purchasers"), for the purchase and sale of
shares (the "Shares") of the Company's common stock, par value $.001 per share
(the "Common Stock"), and warrants to purchase shares of Common Stock in
substantially the form attached hereto as Exhibit B (the "Warrants"). Any shares
of Common Stock issuable upon exercise of the Warrants (and such shares when
issued) are herein referred to as the "Warrant Shares." The Shares, the Warrants
and the Warrant Shares are sometimes collectively referred to herein as the
"Securities."
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF COMMON STOCK AND WARRANTS
Section 1.1 Purchase and Sale of Common Stock and Warrants.
(a) Upon the following terms and conditions, the Company shall
issue and sell to the Purchasers, and the Purchasers shall purchase from the
Company, an aggregate of up to 7,925,715 shares of Common Stock at a price per
share of $1.75 (the "Per Share Purchase Price") for an aggregate purchase price
of up to $13,870,001.25 (the "Purchase Price").
(b) Upon the following terms and conditions, the Purchasers shall
be issued Warrants to purchase the number of shares of Common Stock set forth
opposite such Purchaser's name on Exhibit A hereto. The Warrants shall have an
exercise price equal to $2.25 per share.
(c) The Company and the Purchasers are executing and delivering
this Agreement in accordance with and in reliance upon the exemption from
registration afforded by Section 4(2) of the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the "Securities
Act"), including Regulation D ("Regulation D"), and/or upon such other exemption
from the registration requirements of the Securities Act as may be available
with respect to any or all of the investments to be made hereunder.
Section 1.2 Purchase Price and Closing. Subject to the terms and
conditions hereof, the Company agrees to issue and sell to the Purchasers and,
in consideration of and in express reliance upon the representations,
warranties, covenants, terms and conditions of this Agreement, the Purchasers,
severally but not jointly, agree to purchase the number of Shares and Warrants,
in each case, set forth opposite their respective names on Exhibit A. The
closing of the purchase and sale of the Shares and Warrants to be acquired by
the Purchasers from the Company under this Agreement shall take place at the
offices of the Company's counsel, Gray Cary Ware & Freidenrich LLP (the
"Closing") at 10:00 a.m., San Diego time (i) on or before October 12, 2004,
provided, that all of the conditions set forth in Article IV hereof and
applicable to the Closing shall have been fulfilled or waived in accordance
herewith, or (ii) at
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such other time and place or on such date as the Purchasers and the Company may
agree upon (the "Closing Date"). Subject to the terms and conditions of this
Agreement, at the Closing the Company shall deliver or cause to be delivered to
each Purchaser (i) a certificate registered in the name of such Purchaser
representing the number of Shares that such Purchaser is purchasing pursuant to
the terms hereof and (ii) a Warrant to purchase such number of shares of Common
Stock as is set forth opposite the name of such Purchaser on Exhibit A. At the
Closing, each Purchaser shall deliver its Purchase Price by wire transfer to an
account designated by the Company.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchasers as follows, as of the
date hereof and the Closing Date:
(a) Organization, Good Standing and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada and has the requisite corporate power to own, lease
and operate its properties and assets and to conduct its business as it is now
being conducted and as described in the documents filed by the Company with the
Securities and Exchange Commission (the "Commission") pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (all of the foregoing including filings incorporated by reference therein
being referred to herein as the "Commission Documents"), since the end of its
most recently completed fiscal year through the date hereof, including, without
limitation, its most recent report on Form 10-Q. Other than wholly owned
subsidiary Halozyme, Inc., a California corporation (the "Subsidiary"), the
Company does not own securities of any kind in any other entity. The Company and
the Subsidiary are qualified to do business as foreign corporations and are in
good standing in every jurisdiction in which the nature of the business
conducted or property owned by them makes such qualification necessary, except
for any jurisdiction(s) (alone or in the aggregate) in which the failure to be
so qualified will not have a Material Adverse Effect. For the purposes of this
Agreement, "Material Adverse Effect" means any effect on the business,
operations, properties or financial condition of the Company and its Subsidiary
that is material and adverse to the Company and its Subsidiary, taken as a
whole, and any condition, circumstance or situation that would prohibit the
Company from entering into and performing any of its obligations hereunder and
under the other Transaction Documents (as defined in Section 2.1(b) below).
(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and perform this Agreement, the
Warrants and that certain Registration Rights Agreement by and among the Company
and the Purchasers, dated as of the date hereof, substantially in the form of
Exhibit C attached hereto (the "Registration Rights Agreement" and, together
with this Agreement and the Warrants, the "Transaction Documents") and to issue
and sell the Securities in accordance with the terms hereof. The execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly and
validly authorized by all necessary
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corporate action, and no further consent or authorization of the Company, its
Board of Directors or stockholders is required. When executed and delivered by
the Company, each of the Transaction Documents shall constitute a 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, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor's rights and remedies or by other equitable principles of general
application.
(c) Capitalization. The authorized capital stock of the Company as
of the date of this Agreement consists of 100,000,000 shares of Common Stock, of
which 39,704,686 were issued and outstanding as of September 30, 2004, and
20,000,000 shares of preferred stock, none of which were issued and outstanding
as of the date of this Agreement. Since September 30, 2004, the Company has not
issued any shares of Common Stock other than (i) upon the exercise of stock
options pursuant to equity incentive plans described in the Commission Documents
or (ii) upon the exercise of warrants described in the Commission Documents. All
of the outstanding shares of Common Stock and any other outstanding security of
the Company have been duly and validly authorized. Except as set forth in this
Agreement or as described in the Commission Documents, (i) there are no shares
of Common Stock or any other security of the Company that are entitled to
preemptive rights or registration rights and (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, call or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company. The Company is not a party to, and it
has no knowledge of, any agreement or understanding restricting the voting or
transfer of any shares of the capital stock of the Company.
(d) Issuance of Securities. The Shares and the Warrants to be
issued at the Closing (and the Warrant Shares to be issued upon exercise of the
Warrants) have been duly authorized by all necessary corporate action and, when
paid for and issued in accordance with the terms hereof and the Warrants,
respectively, the Shares and the Warrant Shares will be validly issued, fully
paid and nonassessable and free and clear of all liens, encumbrances and rights
of refusal of any kind (other than restrictions on transfer under applicable
securities laws or other such restrictions imposed under the Transaction
Documents) and the holders of the Shares and the Warrant Shares shall be
entitled to all rights accorded to a holder of Common Stock.
(e) No Conflicts; Governmental Approvals. The execution, delivery
and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby do not and
will not (i) violate any provision of the Company's Articles of Incorporation
(the "Articles") or Bylaws (the "Bylaws"), each as amended to date, or the
Subsidiary's comparable charter documents, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation to
which the Company or its Subsidiary is a party or by which the Company or its
Subsidiary's respective properties or assets are bound, or (iii) result in a
violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or its Subsidiary or by which any
property or asset of the Company or its Subsidiary are bound or
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affected, except for such conflicts, defaults, terminations, amendments,
acceleration, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect. Neither the Company nor its
Subsidiary is required under federal, state, foreign or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under the Transaction
Documents or issue and sell the Securities in accordance with the terms hereof
(other than any filings, consents and approvals which may be required to be made
by the Company under applicable state and federal securities laws, rules or
regulations prior to or subsequent to the Closing, or any registration
provisions provided in the Registration Rights Agreement).
(f) Commission Documents, Financial Statements. The Common Stock
of the Company is registered pursuant to Section 12(g) of the Exchange Act.
During the two year period preceding the Closing Date, the Company has timely
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Commission pursuant to the reporting requirements of the
Exchange Act. At the times of their respective filing, the Forms 10-Q for the
fiscal quarters ended March 31, 2004 and June 30, 2004, respectively (the "Forms
10-Q"), and the Form 10-K for the fiscal year ended December 31, 2003 (the "Form
10-K") complied in all material respects with the requirements of the Exchange
Act and the rules and regulations of the Commission promulgated thereunder and
other federal, state and local laws, rules and regulations applicable to such
documents. The Forms 10-Q and Form 10-K did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their respective
dates, the financial statements of the Company included in the Commission
Documents complied in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes thereto
or (ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements), and fairly present
in all material respects the consolidated financial position of the Company as
of 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). Any "off-balance sheet" transactions to which the
Company is a party are reflected in the notes to such financial statements.
(g) No Material Adverse Change. Except as disclosed in the
Commission Documents, since June 30, 2004, neither the Company nor its
Subsidiary has (i) experienced or suffered any Material Adverse Effect, (ii)
incurred any liabilities, obligations, claims or losses (whether liquidated or
unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise)
other than those incurred in the ordinary course of the Company's or its
Subsidiary's respective businesses or (iii) declared, made or paid any dividend
or distribution of any kind on their capital stock.
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(h) No Undisclosed Events or Circumstances. Except as disclosed in
the Commission Documents, since June 30, 2004, except for the consummation of
the transactions contemplated herein, no event or circumstance has occurred or
exists with respect to the Company or its Subsidiary or their respective
businesses, properties, prospects, operations or financial condition, 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.
(i) Intellectual Property. To the knowledge of the Company, the
Company and its Subsidiary own or possess sufficient rights to use all material
patents, patent rights, trademarks, copyrights, licenses, inventions, trade
secrets, trade names and know-how (collectively, "Intellectual Property") owned
or possessed by them or that are necessary for the conduct of their business as
now conducted and described in the Commission Documents except where the failure
to currently own or possess would not have a Material Adverse Effect. To the
knowledge of the Company, the Company and its Subsidiary are not infringing, and
have not received any notice of, and do not have any knowledge of, any asserted
infringement of any valid rights of a third party with respect to any
Intellectual Property that, individually or in the aggregate, would have a
Material Adverse Effect. The Company and its Subsidiary have not received any
notice of, and do not have any knowledge of, infringement by a third party with
respect to any Intellectual Property rights of the Company that, individually or
in the aggregate, would have a Material Adverse Effect.
(j) Legal Proceedings. Except as disclosed in the Commission
Documents, there is no action, suit, claim, investigation, arbitration,
alternate dispute resolution proceeding or other proceeding pending or, to the
knowledge of the Company, threatened, against or involving the Company, its
Subsidiary or any of their respective properties or assets, which individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect. There are no outstanding orders, judgments, injunctions, awards or
decrees of any court, arbitrator or governmental or regulatory body against the
Company or its Subsidiary or any officers or directors of the Company or
Subsidiary in their capacities as such, which individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(k) Compliance with Laws; Permits. The business activities of the
Company and its Subsidiary as currently conducted do not violate any laws,
ordinances or regulations of any governmental entity, except for violations
which singularly or in the aggregate do not and will not have a Material Adverse
Effect. The Company and its Subsidiary have all franchises, permits, licenses,
consents and other governmental or regulatory authorizations and approvals
necessary for the conduct of their business as now being conducted by them
unless the failure to possess such franchises, permits, licenses, consents and
other governmental or regulatory authorizations and approvals, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(l) Taxes. To the knowledge of the Company, the Company and its
Subsidiary have accurately prepared and filed all federal, state and other tax
returns required by law to be filed by them, have paid or made provisions for
the payment of all taxes shown to be due and all additional assessments, and
adequate provisions have been and are reflected in the financial statements of
the Company and its Subsidiary for all current taxes and other charges to which
the Company or its Subsidiary is subject and which are not currently due and
payable.
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None of the federal income tax returns of the Company or its Subsidiary have
been audited by the Internal Revenue Service. The Company has no knowledge of
any additional assessments, adjustments or contingent tax liability (whether
federal or state) of any nature whatsoever, whether pending or threatened
against the Company or its Subsidiary for any period, nor of any basis for any
such assessment, adjustment or contingency.
(m) Disclosure; Non-Public Information. Neither this Agreement nor
any other documents, certificates or instruments furnished to the Purchasers by
or on behalf of the Company or its Subsidiary in connection with the
transactions contemplated by this Agreement contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made herein or therein, in the light of the circumstances under which
they were made herein or therein, not misleading. Except with respect to the
material terms and conditions of the transaction contemplated by the Transaction
Documents, which shall be publicly disclosed by the Company pursuant to Section
6.11 hereof, the Company confirms that neither it nor any person acting on its
behalf has provided any Purchaser with any information that the Company believes
constitutes material, non-public information.
(n) Material Agreements. Except for the Transaction Documents
(with respect to clause (i) only), (i) the Company and its Subsidiary have
performed all obligations required to be performed by them to date under any
written or oral contract, instrument, agreement, commitment, obligation, plan or
arrangement, filed or required to be filed with the Commission (the "Material
Agreements"), (ii) neither the Company nor its Subsidiary has received any
notice of default under any Material Agreement and, (iii) to the Company's
knowledge, neither the Company nor its Subsidiary is in default under any
Material Agreement now in effect. All Company securities subject to outstanding
registration rights (including "piggy back" registration rights) are currently
subject to an effective registration statement with the Commission.
(o) Investment Company Act Status. The Company is not, and as a
result of and immediately upon the Closing will not be, an "investment company"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
(p) Insurance. The Company carries insurance covering its
properties and businesses customary for the type and scope of its properties and
business. All such policies are in full force and effect, and are underwritten
by financially sound and reputable insurers. All such policies will remain in
full force and effect and will not in any way be affected by, or terminate or
lapse by, reason of any of the transactions contemplated hereby.
(q) Delisting Notification. The Company's Common Stock is listed
on the OTC Bulletin Board (the "OTCBB"), and the Company has taken no action
designed to, or likely to have the effect of, de-listing the Common Stock from
the OTCBB, nor has the Company received any notification from the OTCBB to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such market.
(r) Internal Accounting Controls. The Company maintains a system
of internal accounting controls sufficient, in the judgment of the Company's
board of directors, to
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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 generally accepted accounting principles 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.
(s) Anti-takeover Provisions. The Company has 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 Articles
of Incorporation, as amended or the laws of Nevada that is or would become
applicable to the Purchasers as a result of the Purchasers acquiring the
Securities.
(t) No General Solicitation. The Company represents and warrants
that the Securities were not offered to any Purchaser by means of any form of
general or public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media, or broadcast over television or radio, or (ii) any seminar or meeting to
which any Purchaser was invited by any of the foregoing means of communications.
The Company does not have any agreement or understanding with any Investor with
respect to the transactions contemplated by the Transaction Documents other than
as specified in the Transaction Documents.
(u) Labor Agreements and Actions. The Company is not bound by or
subject to (none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of the Company.
Section 2.2 Representations and Warranties of the Purchasers. Each
of the Purchasers, severally and not jointly, hereby represents and warrants to
the Company with respect solely to itself and not with respect to any other
Purchaser as follows as of the date hereof and as of the Closing Date:
(a) Organization and Standing of the Purchasers. If the Purchaser
is an entity, such Purchaser is a corporation, limited liability company or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization.
(b) Authorization and Power. Each Purchaser has the requisite
power and authority to enter into and perform the Transaction Documents and to
purchase the Securities being sold to it hereunder. The execution, delivery and
performance of the Transaction Documents by each Purchaser and the consummation
by it of the transactions contemplated hereby have been duly authorized by all
necessary corporate or partnership action, and no further consent or
authorization of such Purchaser or its Board of Directors, stockholders, or
partners, as the case may be, is required. When executed and delivered by the
Purchasers, the other
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Transaction Documents shall constitute valid and binding obligations of each
Purchaser enforceable against such Purchaser in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor's rights and remedies or by other equitable principles of general
application.
(c) No Conflict. The execution, delivery and performance of the
Transaction Documents by the Purchaser and the consummation by the Purchaser of
the transactions contemplated thereby and hereby do not and will not (i) violate
any provision of the Purchaser's charter or organizational documents, (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement,
instrument or obligation to which the Purchaser is a party or by which the
Purchaser's respective properties or assets are bound, or (iii) result in a
violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Purchaser or by which any property or asset of
the Purchaser are bound or affected, except, in all cases, other than violations
pursuant to clauses (i) or (iii) (with respect to federal and state securities
laws) above, for such conflicts, defaults, terminations, amendments,
acceleration, cancellations and violations as would not, individually or in the
aggregate, materially and adversely affect the Purchaser's ability to perform
its obligations under the Transaction Documents.
(d) Acquisition for Investment. Each Purchaser is purchasing the
Securities solely for its own account for the purpose of investment and not with
a view to or for sale in connection with distribution. Each Purchaser does not
have a present intention to sell any of the Securities, nor a present
arrangement (whether or not legally binding) or intention to effect any
distribution of any of the Securities to or through any person or entity;
provided, however, that by making the representations herein, such Purchaser
does not agree to hold the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
Federal and state securities laws applicable to such disposition. Each Purchaser
acknowledges that it (i) has such knowledge and experience in financial and
business matters such that Purchaser is capable of evaluating the merits and
risks of Purchaser's investment in the Company, (ii) is able to bear the
financial risks associated with an investment in the Securities and (iii) has
been given full access to such records of the Company and the Subsidiary and to
the officers of the Company and the Subsidiary as it has deemed necessary or
appropriate to conduct its due diligence investigation.
(e) Rule 144. Each Purchaser understands that the Securities must
be held indefinitely unless such Securities are registered under the Securities
Act or an exemption from registration is available. Each Purchaser acknowledges
that such person is familiar with Rule 144 of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act ("Rule 144"),
and that such Purchaser has been advised that Rule 144 permits resales only
under certain circumstances. Each Purchaser understands that to the extent that
Rule 144 is not available, such Purchaser will be unable to sell any Securities
without either registration under the Securities Act or the existence of another
exemption from such registration requirement.
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(f) General. Each Purchaser understands that the Securities are
being offered and sold in reliance on a transactional exemption from the
registration requirements of federal and state securities laws and the Company
is relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of such Purchaser set forth
herein in order to determine the applicability of such exemptions and the
suitability of such Purchaser to acquire the Securities. Each Purchaser
understands that no United States federal or state agency or any government or
governmental agency has passed upon or made any recommendation or endorsement of
the Securities.
(g) No General Solicitation. Each Purchaser acknowledges that the
Securities were not offered to such Purchaser by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media, or broadcast over television or radio, or (ii) any seminar or meeting to
which such Purchaser was invited by any of the foregoing means of
communications.
(h) Accredited Investor. Each Purchaser is an "accredited
investor" (as defined in Rule 501 of Regulation D), and such Purchaser has such
experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in the Securities. Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange
Act and such Purchaser is not a broker-dealer or an affiliate of a
broker-dealer. Each Purchaser acknowledges that an investment in the Securities
is speculative and involves a high degree of risk. Each Purchaser has completed
or caused to be completed an Investor Questionnaire Certification, in a form
provided by the Company, certifying as to its status as an "accredited investor"
and understands that the Company is relying upon the truth and accuracy of the
Purchaser set forth therein to determine the suitability of such Purchaser to
acquire the Securities.
(i) Certain Fees. The Purchasers have not employed any broker or
finder or incurred any liability for any brokerage or investment banking fees,
commissions, finders' structuring fees, financial advisory fees or other similar
fees in connection with the Transaction Documents.
(j) Short Sales. Each Purchaser represents, warrants and agrees
that it has not engaged in any short selling of the Company's securities, or
established or increased any "put equivalent position" as defined in Rule
16(a)-1(h) under the Securities Exchange Act of 1934 with respect to the
Company's securities, within the past 10 trading days.
(k) Independent Investment. No Purchaser has agreed to act with
any other Purchaser for the purpose of acquiring, holding, voting or disposing
of the Securities purchased hereunder for purposes of Section 13(d) under the
Exchange Act, and each Purchaser is acting independently with respect to its
investment in the Securities. Nothing contained herein, or in any Transaction
Document, 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 or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents.
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ARTICLE III
COVENANTS
The Company covenants with each Purchaser as follows:
Section 3.1 Securities Compliance. The Company shall notify the
Commission in accordance with its rules and regulations, of the transactions
contemplated by any of the Transaction Documents and shall take all other
necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Securities to
the Purchasers, or their respective subsequent holders.
Section 3.2 Registration and Listing. The Company shall use
commercially reasonable efforts to cause its Common Stock to continue to be
registered under Section 12(g) of the Exchange Act and to continue the listing
or trading of its Common Stock on the OTCBB or any successor market.
Section 3.3 Use of Proceeds. The proceeds from the sale of the
Shares will be used by the Company for working capital and general corporate
purposes.
Section 3.4 Press Release. The Company shall issue a press release
disclosing the material terms of the transactions contemplated hereby (including
the number of Shares and Warrants sold at Closing and the proceeds from such
sales) promptly following Closing.
ARTICLE IV
CONDITIONS
Section 4.1 Conditions Precedent to the Obligation of the Company to
Sell the Securities. The obligation hereunder of the Company to issue and sell
the Securities to the Purchasers at the Closing Date is subject to the
satisfaction or waiver, at or before the Closing of the conditions set forth
below. These conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion.
(a) Accuracy of the Purchasers' Representations and Warranties.
The representations and warranties of each Purchaser shall be true and correct
in all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.
(b) Performance by the Purchasers. Each Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement 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
10
governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement.
(d) Delivery of Purchase Price. The Purchase Price for the Shares
and Warrants shall have been delivered to the Company on the Closing Date.
(e) Delivery of Transaction Documents. The Transaction Documents
shall have been duly executed and delivered by the Purchasers to the Company.
Section 4.2 Conditions Precedent to the Obligation of the Purchasers
to Purchase the Securities. The obligation hereunder of the Purchasers to
purchase the Securities and consummate the transactions contemplated by this
Agreement is subject to the satisfaction or waiver, at or before the Closing
Date, of each of the conditions set forth below. These conditions are for the
Purchasers' sole benefit and may be waived by the Purchasers at any time in
their sole discretion.
(a) Accuracy of the Company's Representations and Warranties. Each
of the representations and warranties of the Company in this Agreement and the
Registration Rights Agreement shall be true and correct in all material respects
as of the Closing Date, except for representations and warranties that speak as
of a particular date, which shall be true and correct in all material respects
as of such date.
(b) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date.
(c) No Suspension, Etc. Trading in the Common Stock shall not have
been suspended by the Commission or the OTCBB.
(d) 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 which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(e) No Proceedings or Litigation. No action, suit or proceeding
before any arbitrator or any governmental authority shall have been commenced,
and no investigation by any governmental authority shall have been threatened in
writing against the Company or any Subsidiary, or any of the officers, directors
or affiliates of the Company or any Subsidiary seeking to restrain, prevent or
change the transactions contemplated by this Agreement, or seeking damages in
connection with such transactions.
(f) Opinion of Counsel. The Purchasers shall have received an
opinion of counsel to the Company, dated as of Closing, substantially in the
form of Exhibit D hereto.
(g) Shares and Warrants. At the Closing, the Company shall have
delivered to the Purchasers duly executed certificates representing the Shares
(in such denominations as each
11
Purchaser may request) and certificates representing the Warrants, in each case,
being acquired by the Purchasers at the Closing.
(h) Officer's Certificate. On the Closing Date, the Company shall
have delivered to the Purchasers a certificate signed by an executive officer on
behalf of the Company, dated as of the Closing Date, confirming the accuracy of
the Company's representations, warranties and covenants as of the Closing Date
and confirming the compliance by the Company with the conditions precedent set
forth in paragraphs (a)-(e) of this Section 4.2 as of the Closing Date (provided
that, with respect to the matters in paragraphs (d) and (e) of this Section 4.2,
such confirmation shall be based on the knowledge of the executive officer).
(i) Registration Rights Agreement. As of the Closing Date, the
Company shall have duly executed and delivered the Registration Rights
Agreement.
ARTICLE V
CERTIFICATE LEGEND
Section 5.1 Legend. Each certificate representing the Securities
shall be stamped or otherwise imprinted with a legend substantially in the
following form (in addition to any legend required by applicable state
securities or "blue sky" laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY
SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED.
The Company agrees to reissue certificates representing any of the Shares
and the Warrant Shares, without the legend set forth above if at such time,
prior to making any transfer of any such Shares or Warrant Shares, such holder
thereof shall give written notice to the Company describing the manner and terms
of such transfer and removal as the Company may reasonably request. Such
proposed transfer and removal will not be effected until either (i) the Company
has received an opinion of counsel reasonably satisfactory to the Company, to
the effect that the registration of the Shares or Warrant Shares under the
Securities Act and state securities laws is not required in connection with such
proposed transfer, (ii) a registration statement under the Securities Act
covering such proposed disposition has been filed by the Company with the
Commission and has become effective under the Securities Act, or (iii) the
Company has received other evidence reasonably satisfactory to the Company that
such registration and qualification under the Securities Act and state
securities laws are not required. In the case of any proposed transfer under
this Section 5.1, the Company will use reasonable efforts to comply with any
such applicable state securities or "blue sky" laws, but shall in no
12
event be required, (x) to qualify to do business in any state where it is not
then qualified, (y) to take any action that would subject it to tax or to the
general service of process in any state where it is not then subject, or (z) to
comply with state securities or "blue sky" laws of any state for which
registration by coordination is unavailable to the Company. The restrictions on
transfer contained in this Section 5.1 shall be in addition to, and not by way
of limitation of, any other restrictions on transfer contained in any other
section of this Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Fees and Expenses. Each party shall pay the fees and
expenses of its advisors, 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.
Section 6.2 Specific Performance; Consent to Jurisdiction.
(a) The Company and the Purchasers acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement or the other Transaction Documents were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement or the other Transaction
Documents and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.
(b) The parties agree that this Agreement, and any disputes
arising under this Agreement, will be governed by and construed in accordance
with the laws of the state of New York, without giving effect to any conflict of
laws principles to the contrary. The parties irrevocably consent to personal
jurisdiction in the state and federal courts of the state of California. The
Company and each Purchaser consent to process being served in any such suit,
action or proceeding by mailing a copy thereof 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 in
this Section 6.2 shall affect or limit any right to serve process in any other
manner permitted by law. The Company and the Purchasers hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
the Securities, this Agreement or the Registration Rights Agreement, shall be
entitled to reimbursement for reasonable legal fees from the non-prevailing
party.
Section 6.3 Entire Agreement; Amendment. This Agreement and the
Transaction Documents contain the entire understanding and agreement of the
parties with respect to the matters covered hereby and, except as specifically
set forth herein or in the other Transaction Documents, neither the Company nor
any Purchaser make any representation, warranty, covenant or undertaking with
respect to such matters, and they supersede all prior understandings and
agreements with respect to said subject matter, all of which are merged herein.
No provision of this Agreement may be waived or amended other than by a written
13
instrument signed by the Company and the Purchasers holding at least a majority
of all Shares then held by the Purchasers. Any amendment or waiver effected in
accordance with this Section 6.3 shall be binding upon each Purchaser (and their
permitted assigns) and the Company.
Section 6.4 Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon delivery by telecopy or facsimile at the address
or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:
If to the Company: Halozyme Therapeutics, Inc.
11588 Sorrento Valley Road
Suite 17
San Diego, CA 92121
Attention: President and Chief Executive Officer
Tel. No.: (858) 794-8889
Fax No.: (858) 259-2539
with copies (which copies
shall not constitute notice
to the Company) to: Gray Cary Ware & Freidenrich LLP
4365 Executive Drive, Suite 1100
San Diego, California 92121
Attention: Doug Rein
Tel. No.: (858) 677-1400
Fax No.: (858) 677-1401
If to any Purchaser: At the address of such Purchaser set forth on
Exhibit A to this Agreement.
Any party hereto may from time to time change its address for notices by
giving written notice of such changed address to the other party hereto.
Section 6.5 Waivers. No waiver by either party 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 other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
Section 6.6 Headings. The article, section and subsection headings
in this Agreement are for convenience only and shall not constitute a part of
this Agreement for any other purpose and shall not be deemed to limit or affect
any of the provisions hereof.
14
Section 6.7 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
After the Closing, the assignment by a party to this Agreement of any rights
hereunder shall not affect the obligations of such party under this Agreement.
The Purchasers may assign the Securities and their rights under this Agreement
and the other Transaction Documents and any other rights hereto and thereto
subject to the provisions of the Registration Rights Agreement and Section 5.1
hereof.
Section 6.8 No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
Section 6.9 Survival. Notwithstanding any investigation made by any
party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and the Purchasers herein shall survive the
execution of this Agreement as well as the payment and delivery to the
Purchasers of the Securities.
Section 6.10 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, 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.
Section 6.11 Publicity. The Company agrees that it will not
disclose, and will not include in any public announcement, the names of the
Purchasers without the consent of the Purchasers, which consent shall not be
unreasonably withheld or delayed, or unless and until such disclosure is
required by law, rule or applicable regulation, and then only to the extent of
such requirement.
Section 6.12 Severability. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.
Section 6.13 Further Assurances. From and after the date of this
Agreement, upon the request of the Purchasers or the Company, the Company and
each Purchaser shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement, the Warrants
and the Registration Rights Agreement.
15
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized officers
as of the date first above written.
HALOZYME THERAPEUTICS, INC.
By: __________________________________________
Name: Jonathan Lim
Title: President and Chief Executive Officer
COMPANY SIGNATURE PAGE TO
SECURITIES PURCHASE AGREEMENT
PURCHASER:
If Purchaser is an individual:
Name: ______________________________
(exactly as name should appear
on Securities)
Signature:
If Purchaser is an entity:
Name of entity: ____________________
(exactly as name should appear
on Securities)
TOTAL INVESTMENT AMOUNT: ________________ By: ________________________________
Name: ______________________________
Title: _____________________________
PURCHASER SIGNATURE PAGE TO
SECURITIES PURCHASE AGREEMENT
EXHIBIT A
LIST OF PURCHASERS
NAMES AND ADDRESS
OF PURCHASERS NUMBER OF SHARES PURCHASED NUMBER OF WARRANTS
- ------------- -------------------------- ------------------
EXHIBIT B
FORM OF WARRANT
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT D
FORM OF OPINION