Exhibit 10.47
SECURITIES PURCHASE AGREEMENT
THIS AGREEMENT (this "AGREEMENT") is made as of March 29, 2004, by and
between DOV Pharmaceutical, Inc., a Delaware corporation (the "COMPANY"), and
Acqua Wellington Opportunity I Limited (the "PURCHASER").
WHEREAS, the Company has authorized the issuance and sale to the
Purchaser, pursuant to this Agreement, of shares (the "SHARES") of the Company's
Common Stock, par value $0.0001 per share (the "COMMON STOCK"), with the number
of Shares and the purchase price per share to be determined pursuant to Section
1 hereof; and
WHEREAS, the Purchaser desires to purchase the Shares from the Company on
the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants herein contained and other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
SECTION 1. Commitment to Purchase. Upon the basis of the representations
and warranties, but subject to the terms and conditions contained in this
Agreement, the Company agrees to issue and sell to the Purchaser and the
Purchaser agrees to purchase from the Company, at the Closing (as defined
below), 666,667 Shares for an aggregate purchase price of $10,000,005 (the
"PURCHASE PRICE") or a price per share equal to $15.00 per share (the "PRICE PER
SHARE").
SECTION 2. The Closing and Settlement.
(a) Each of the Company and the Purchaser will use its best efforts
to satisfy its respective obligations under Section 6 at a closing (the
"CLOSING") at the offices of Jenkens & Gilchrist Parker Chapin LLP, The Chrysler
Building, 405 Lexington Avenue, New York on March 29, 2004 (the "CLOSING DATE"),
or at such other location or on such other date as the Company and the Purchaser
may mutually agree. The purchase and sale of Shares shall be settled on the
fourth (4th) business day after the Closing Date (the "Settlement Date").
(b) On or prior to the Settlement Date, the Company shall cause the
physical delivery of a certificate representing the Shares (the "Share
Certificate") to the Purchaser. Upon confirmation of the receipt of the Share
Certificate in good form, the Purchaser shall immediately send payment therefor
to the Company's designated account by wire transfer of immediately available
funds equal to the Purchase Price (provided that the Shares are received by the
Purchaser no later than 10:00 a.m. eastern time) or next day available funds if
the Share Certificate is received thereafter.
(c) If on the Settlement Date, the Company fails to deliver the
Shares to be purchased by the Purchaser and such failure continues for seven (7)
days, the Company, if so fails, shall pay, in cash or restricted shares of
Common Stock, at the option of the Purchaser, as liquidated damages and not as a
penalty to the Purchaser an amount equal to two percent (2%) of the Purchase
Price for the initial week and an additional two (2%) for each additional week
thereafter until such failure has been cured, which shall be pro-rated for such
periods less than seven (7) days (the "Periodic Amount"). If the Purchaser fails
to send payment of the Purchase Price on the date the Share Certificate is
received (or fails to send payment by the next business day if the Share
Certificate is received after 10:00am eastern time), and such failure continues
for seven (7) days, the Purchaser, if so fails, shall pay, in cash, as
liquidated damages and not as a penalty, to the Company an amount equal to the
Periodic Amount.
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SECTION 3. Representations and Warranties of the Company. The Company
hereby makes the representations and warranties to the Purchaser contained in
this Section 3. Such representations and warranties are subject to the
qualifications and exceptions set forth in the disclosure schedule delivered to
the Purchaser pursuant to this Agreement (the "DISCLOSURE SCHEDULE"). References
to the knowledge or awareness of the Company shall mean the actual knowledge,
after reasonable inquiry, of the executive officers of the Company.
3.01 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Except as set forth in Section 3.01 of the Disclosure
Schedule, the Company does not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or other
entity. The Company has the power and authority, corporate or otherwise, as
appropriate, to own, lease and operate its properties and to conduct its
business as now conducted and to enter into and perform its obligations under
this Agreement and the registration rights agreement in or substantially in the
form of exhibit A to be entered on the date hereof among the Company and the
Purchaser (the "REGISTRATION RIGHTS AGREEMENT," together with this Agreement,
the "TRANSACTION DOCUMENTS"), and the Company is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not, individually or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), business, properties or results of
operations of the Company (a "MATERIAL ADVERSE EFFECT").
3.02 Authorized Capital Stock. Except as set forth in Section 3.02
of the Disclosure Schedule and except for subsequent issuances, if any, pursuant
to this Agreement or pursuant to agreements, employee or director benefit plans
or the exercise of convertible securities referred to in the 2003 Annual Report
(as defined below), the Company has authorized, issued and outstanding capital
stock as set forth in the Company's annual report on Form 10-K for the year
ended 2003, as applicable (the "2003 ANNUAL REPORT"), filed by it on March 15,
2004, with the United States Securities and Exchange Commission (the
"COMMISSION") pursuant to the Securities and Exchange Act of 1934, as amended
(the "EXCHANGE ACT"). The issued and outstanding shares of the Company's Series
B Preferred Stock, par value $1.00 per share and the Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable, were not issued
in violation of or are not otherwise subject to any preemptive or other similar
rights or other rights to subscribe for or purchase securities except for any
such rights as may have been duly waived, and conform in all material respects
to the descriptions thereof contained in the 2003 Annual Report. Except as
disclosed in the 2003 Annual Report, and except for options issued under the
Company's stock option plan other than to executives and board members (i) the
Company does not have outstanding any options or warrants to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any shares of capital stock of any
subsidiary and (ii) there is no commitment, plan or arrangement to issue any
securities or obligations convertible into any shares of capital stock of the
Company or any such options, rights convertible securities or obligations. The
description of the Company's capital stock, stock bonus and other stock plans or
arrangements and the options or other rights granted and exercised thereunder,
contained in the 2003 Annual Report fairly presents in all material respects the
information required to be shown in such Report with respect to such capital
stock, plans, arrangements, options and rights.
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3.03 Issuance, Sale and Delivery of the Shares. The Shares have been
duly authorized and, when issued, delivered and paid for in the manner set forth
in this Agreement, will be validly issued, fully paid and nonassessable. No
preemptive rights or other rights (which have not been waived) to subscribe for
or purchase exist with respect to the issuance and sale of the Shares by the
Company pursuant to this Agreement. Except for rights disclosed in the 2003
Annual Report or in the preamble to the Registration Rights Agreement or as
otherwise set forth in Section 3.03 of the Disclosure Schedule, no stockholder
of the Company other than the Purchaser upon the Closing has any right to
request or require the Company to register the sale of any shares owned by such
stockholder under the United States Securities Act of 1933, as amended (the
"SECURITIES ACT"). Subject to satisfaction of the conditions set forth in
Section 6.02, no further approval or authority of the stockholders or the board
of directors of the Company is required for the issuance and sale of the
Securities to be sold by the Company as contemplated herein.
3.04 Due Execution, Delivery and Performance of this Agreement. The
Company has full legal right, corporate power and authority to enter into this
Agreement and the Registration Rights Agreement and to perform the transactions
contemplated hereby and thereby. Each Transaction Document has been duly
authorized, executed and delivered by the Company. The execution, delivery and
performance of this Agreement and the Registration Rights Agreement by the
Company and the consummation of the transactions contemplated hereby and thereby
will not (i) violate any provision of the organizational documents of the
Company; (ii) result in the creation of any lien, charge, security interest or
encumbrance upon any assets or property of the Company that would have a
Material Adverse Effect; or (iii) conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the passage of
time or both, a default under (A) any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the Company
is a party or by which the Company or any of its assets or properties may be
bound or affected that would have a Material Adverse Effect; or (B) to the
Company's knowledge, and subject to satisfaction of the conditions set forth in
Section 6.02, any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any of its properties that would
have a Material Adverse Effect. No consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other governmental
body is required for the execution, delivery and performance of this Agreement
and the Registration Rights Agreement or the consummation of the transactions
contemplated hereby or thereby, except for compliance with Blue Sky laws and
federal securities laws applicable to the offering and issuance of the Shares
and compliance with the rules and regulations of the securities exchange or
trading market on which the Common Stock is listed. Upon execution and delivery,
and assuming the valid execution of this Agreement and the Registration Rights
Agreement by the Purchaser, each Transaction Document will constitute a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency reorganization, moratorium or similar laws
affecting creditors' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
the indemnification obligations of the Company in Sections 2(a) and 7.02 of this
Agreement and Section 2.4 of the Registration Rights Agreement may be legally
unenforceable
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3.05 Financials. The Company's financial statements for the years
ended December 31, 2003, and 2002, with a report thereon by the independent
certified public accountants of the Company (the "AUDITED FINANCIALS"), included
in the 2003 Annual Report, fairly present in all material respects the financial
position, the results of operations, the statements of cash flows and the
statements of stockholders' equity and the other information purported to be
shown therein of the Company at the respective dates and for the respective
periods to which they apply, and such financial statements have been prepared in
conformity with generally accepted accounting principles of the United States,
consistently applied throughout the periods involved, except as noted therein.
3.06 No Defaults. The Company is not (i) in violation or default of
any provision of its certificate of incorporation, bylaws or other
organizational documents or (ii) in breach of or default with respect to any
provision of any agreement, judgment, decree, order, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which it is
a party or by which it or any of its assets or properties are bound, except, in
each such case, for violations, breaches and defaults that, individually or in
the aggregate, would not have a Material Adverse Effect; and, to the Company's
knowledge, there does not exist any state of fact that, with notice or lapse of
time or both, would constitute a violation, breach or default on the part of the
Company as defined in such documents, except for such violation, breach or
default that, individually or in the aggregate, would not have a Material
Adverse Effect.
3.07 Contracts. The contracts described in the 2003 Annual Report as
being in effect on the date hereof and that are material to the Company are in
full force and effect on the date hereof, and the Company is not, nor to the
Company's knowledge is any other party, in breach of or default under any of
such contracts that would have a Material Adverse Effect.
3.08 No Actions. Except as disclosed in the 2003 Annual Report or in
Section 3.08 of the Disclosure Schedule, there are no legal or governmental
actions, suits or proceedings pending or, to the Company's knowledge, threatened
to which the Company is or may be a party or of which property owned or leased
by the Company is or may be the subject, or related to environmental or
discrimination matters, which actions, suits or proceedings, individually or in
the aggregate, might prevent or might reasonably be expected to materially and
adversely affect the transactions contemplated by this Agreement or that would
have a Material Adverse Effect; and all pending legal or governmental
proceedings if any to which the Company is a party to which any of its
properties or assets are subject that are not described in the 2003 Annual
Report including ordinary routine litigation incidental to the business would
not, considered in the aggregate, have a Material Adverse Effect. Except as
disclosed in the 2003 Annual Report, the Company is not a party to or subject to
the provisions of any material injunction, judgment, decree or order of any
court, regulatory body administrative agency or other governmental body.
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3.09 Labor. No labor dispute with the employees of the Company
exists or, to the knowledge of the Company, is imminent and, to the Company's
knowledge, no labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors exists or is imminent that would,
individually or in the aggregate, have a Material Adverse Effect.
3.10 Properties. The Company has valid title to all its properties
reflected on the balance sheet as of December 31, 2003, included in the 2003
Annual Report and material to its business (except for properties disposed of
since that date in the ordinary course of business), and such properties are not
subject to any lien, mortgage, pledge, charge or encumbrance of any kind, except
(i) those if any reflected therein or (ii) those that are not material in amount
and do not materially and adversely affect the use made and intended to be made
of such property by the Company. The Company holds its leased properties under
valid and binding leases, with such exceptions as are not materially significant
in relation to the business of the Company. Except as disclosed in the 2003
Annual Report, the Company owns or leases all such properties that are necessary
to its operations as now conducted.
3.11 No Material Change. Except as set forth in Section 3.11 of the
Disclosure Schedule, the Company's 2003 Annual Report or as a result of the
transactions contemplated by this Agreement or the Registration Rights
Agreement, since December 31, 2003 (i) the Company has not incurred any
liabilities or obligations, indirect, or contingent, or entered into any verbal
or written agreement or other transaction that was not in the ordinary course of
business or that would have a Material Adverse Effect; (ii) the Company has not
sustained any material loss or interference with its businesses or properties
from fire, flood, windstorm, accident or other calamity not covered by
insurance; (iii) the Company has not paid or declared any dividends or other
distributions with respect to its capital stock and the Company is not in
default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock of the
Company other than shares or options issued pursuant to exercise of outstanding
warrants or employee and director stock option plans approved by the Company's
board of directors or indebtedness material to the Company (other than in the
ordinary course of business); and (v) there has not been a change that would
result in a Material Adverse Effect.
3.12 Intellectual Property. Except as otherwise disclosed in the
2003 Annual Report (i) the Company owns, or has obtained valid licenses or
rights to use, the material inventions, patent applications, patents, trademarks
(both registered and unregistered), trade names, copyrights and trade secrets
necessary for the conduct of the Company's business as currently conducted
(collectively, the "INTELLECTUAL PROPERTY"); (ii) the Company has not received
notice from any third party who has or claims to have any ownership rights to
any Intellectual Property that is owned by or has been licensed to the Company
for the pharmacological indications described in the 2003 Annual Report that
would preclude the Company from conducting its business as currently conducted;
(iii) to the Company's knowledge, there are currently no sales of any products
that would constitute an infringement by third parties of any material
Intellectual Property owned by or licensed to the Company; (iv) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the rights of the Company in or to any material
Intellectual Property owned by licensed to the Company; (v) there is no pending
or, to the Company's knowledge, threatened action, suit, proceeding or claim by
third parties challenging the validity or scope of any material Intellectual
Property owned by or licensed to the Company; and (vi) there is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary right of others that would have a
Material Adverse Effect.
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3.13 Compliance. Except as disclosed in the 2003 Annual Report, the
Company has not been advised, and to its knowledge has no reason to believe,
that it is not conducting its business in compliance with all applicable laws,
rules and regulations of the jurisdictions in which it is conducting business
except where such failure would not, individually or in the aggregate, have a
Material Adverse Effect.
3.14 Environmental Matters. Except as disclosed in the 2003 Annual
Report and except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect (i) the Company is in compliance in
all material respects with all applicable Environmental Laws, (ii) the Company
has all permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance with the requirements of such permits,
authorizations and approvals, (iii) there are no pending or, to the knowledge of
the Company, threatened Environmental Claims against the Company and (iv) under
applicable law, there are no circumstances with respect to any property or
operations of the Company that are reasonably likely to form the basis of an
Environmental Claim against the Company.
For purposes of this Agreement, the following terms shall have the following
meanings: "ENVIRONMENTAL LAW" means any federal, state, local or municipal
statute, law, rule, regulation, ordinance, code, policy or rule of common law
and any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, United States or
foreign, relating to the environment, health, safety or any chemical, material
or substance, exposure to which is prohibited, limited or regulated by any
governmental authority. "ENVIRONMENTAL CLAIMS" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law.
3.15 Taxes. The Company has filed or obtained filing extensions with
respect to all federal, state, local and foreign income and franchise tax
returns material to the Company, and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency that has been or
might be asserted or threatened against it, which would have a Material Adverse
Effect.
3.16 Transfer Taxes. On the Closing Date, all stock transfer or
other taxes (other than income taxes) that are required to be paid in connection
with the sale and transfer of the Shares to be sold to the Purchaser will be, or
will have been, fully paid or provided for by the Company and all laws imposing
such taxes will be or will have been fully complied with.
3.17 Insurance. The Company maintains insurance of the type and in
the amount that the Company reasonably believes is adequate for its business,
including, but not limited to, insurance covering all real and personal property
owned or leased by the Company against risks customarily insured against by
similarly situated companies, all of which insurance is in full force and
effect.
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3.18 Contributions. The Company has not directly or indirectly (i)
made any unlawful contribution to any candidate for public office, or failed to
disclose fully where required by law any contribution in violation of law, or
(ii) made any payment to any federal or state governmental officer or official,
or other person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof.
3.19 Investment Company. The Company is not an "investment company"
or an "affiliated person" of, or "promoter or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.
3.20 Related Party Transactions. No transaction has occurred between
or among the Company and its affiliates, officers or directors or any affiliate
or affiliates of any such officer or director that would have been required to
be described in the 2003 Annual Report when filed that is not so described.
3.21 Books and Records. The books, records and accounts of the
Company accurately and fairly reflect, in all material respects and in
reasonable detail, the transactions in, and dispositions of, the assets of, and
the results of operations of, the Company, all to the extent required by
generally accepted accounting principles of the United States. The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of the Financial Statements in accordance
with generally accepted accounting principles of the United States 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.
3.22 Employee Agreements. To the Company's knowledge, if any
full-time employee identified in the 2003 Annual Report has entered into any
non-competition, non-disclosure, confidentiality or other similar agreement with
any party other than the Company, such employee is neither in violation thereof
nor is expected to be in violation thereof as a result of the business conducted
or expected to be conducted by the Company as described in the 2003 Annual
Report or such person's performance of his or her obligations to the Company,
and the Company has not received written notice that any consultant or
scientific advisor of the Company is in violation of any non-competition,
non-disclosure, confidentiality or similar agreement.
3.23 [Intentionally Omitted]
3.24 Disclosure. Neither this Agreement nor the Disclosure Schedule
nor any other documents, certificates or instruments furnished to the Purchaser
by or on behalf of the Company in connection with the transactions contemplated
by the Agreement contain any untrue statement of a material fact or to the
Company's knowledge omit to state a material fact necessary in order to make the
statements made herein or therein, in the light of circumstances under which
they were made herein or therein, not misleading.
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3.25 No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales or any security or solicited any offers to
buy any security under circumstances that would cause the offering of the Shares
pursuant to this Agreement to be integrated with prior offerings by the Company
for purposes of the Securities Act that would prevent the Company from selling
the Shares pursuant to Regulation D and Rule 506 thereof under the Securities
Act, or any applicable exchange-related stockholder approval provisions, nor
will the Company or any of its affiliates or subsidiaries take any action or
steps that would cause the offering and sale of the Shares to be integrated with
other offerings, such as to deny the Company access to Rule 506 of Regulation D.
The Company does not have any registration statement pending before the
Commission or currently under the Commission's review.
3.26 Sarbanes-Oxley Act. The Company is in substantial compliance
with the applicable provisions or the Sarbanes-Oxley Act of 2002 (the
"Sarbanes-Oxley Act"), and the rules and regulations promulgated thereunder that
are effective.
3.27 Other Financing. If the Company enters into an agreement with a
third party other than for a merger or consolidation or sale of all or
substantially all assets before the effectiveness of a registration statement
covering the Shares the principal purpose of which is to secure equity financing
(an "Other Financing"), and if the Other Financing occurs at a price per share
less than the Price Per Share (i) if the Other Financing occurs within 60 days
of the Closing Date, the Company shall issue additional shares to the Purchaser
calculated by dividing the Purchase Price by such lower price and subtracting
the Shares, and (ii) if the Other Financing at a lower price per share occurs
after such 60-day period the Company shall issue additional shares to the
Purchaser based upon the "weighted average" anti-dilution formula set forth in
Exhibit C (in each case, the "Anti-Dilution Shares"). If issued, the
Anti-Dilution Shares shall, at the Purchaser's option, if appropriate, be
registered in a separate registration statement.
SECTION 4. Representations and Warranties of the Purchaser. The Purchaser
hereby makes the representations and warranties to the Company contained in this
Section 4.
4.01. Existence and Power. The Purchaser is an entity duly organized
or formed, validly existing and in good standing under the laws of the
jurisdiction in which it is organized or formed and has all requisite power and
authority to enter into this Agreement and the Registration Rights Agreement and
to perform its obligations hereunder or thereunder.
4.02. Authorization. The Purchaser has the power to execute, deliver
and perform its obligations under this Agreement and the Registration Rights
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance by it of the Transaction Documents. Each Transaction
Document has been duly executed and delivered by the Purchaser and constitutes a
legal, valid and binding agreement of the Purchaser, enforceable against the
Purchaser in accordance with its respective terms, subject to applicable
bankruptcy, insolvency and other similar laws affecting creditors' rights
generally and by equitable principles of general applicability.
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4.03. Governmental Authorization. The execution and delivery by the
Purchaser of this Agreement and the Registration Rights Agreement, and the
performance and consummation of the transactions contemplated hereby and
thereby, require no material action by or in respect of, or material filing
with, any governmental body, agency or official, not otherwise duly taken or
effected.
4.04. Non-Contravention. The execution, delivery and performance of
the this Agreement and the Registration Rights Agreement and the performance and
consummation of the transactions contemplated hereby and thereby, will not
result in any violation under or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a material default
under the Purchaser's organizational documents or any judgment, order, writ,
decree or material contract to which the Purchaser is a party or by which it is
bound.
4.05. Private Placement.
(a) The Purchaser acknowledges that the Shares have not been
registered under the Securities Act, or the securities laws of any state or
other jurisdiction and can only be resold pursuant to an effective Registration
Statement (a "Registration Statement") under the Securities Act or pursuant to
an exemption thereunder.
(b) The Purchaser represents and warrants that it is acquiring
the Shares to be purchased by it pursuant to this Agreement for investment for
the Purchaser's own account and not with a view to the resale or distribution of
the Shares or any interest therein other than in a transaction that is
registered or exempt from registration under the Securities Act and any
applicable state laws.
(c) The Purchaser represents and warrants to the Company that
(i) it is an "accredited investor" as such term is defined in Regulation D under
the Securities Act; (ii) it has previously invested in securities of companies
in the biotechnology sector and has (either alone or together with its advisors)
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the investment in the Shares;
(iii) it has the ability to bear the economic risks of the investment therein;
(iv) it is able, without materially impairing its financial condition, to hold
the Shares for an indefinite period of time and to suffer complete loss of its
investment; (v) it has fully considered the risks of this investment and
stipulates that (1) this investment is suitable only for an investor who is able
to bear the economic consequences of a total loss thereof, (2) the Shares
represent an investment that involves a substantial degree of risk of loss and
(3) there are substantial restrictions on the transferability of the Shares and
that, accordingly, it may not be possible for the Purchaser to liquidate its
investment; and (vi) there has been no representation by the Company as to the
possible future value of the Shares as to any anticipated liquidity events other
than the registration rights contained in the Registration Rights Agreement.
(d) The Purchaser has been given the opportunity to ask
questions of, and receive answers from, the Company regarding the Company, the
terms and conditions of the Shares and related matters, and has been furnished
with or has otherwise had access to the information it deems necessary or
desirable to evaluate the merits and risks of its acquisition of the Shares.
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(e) The Purchaser understands that the Shares are
characterized as "restricted securities" under the Securities Act inasmuch as
they are being acquired from the Company in a transaction not involving a public
offering and that under the Securities Act and applicable regulations, the
Shares may be resold without registration under the Securities Act only in
certain limited circumstances. It is understood that the certificates delivered
in connection with the Closing evidencing the Shares will bear a restrictive
legend.
(f) The Purchaser represents that it understands the tax
consequences of this investment and it has consulted its own legal, accounting,
tax, investment and other advisors with respect to the tax treatment of the
investment contained herein by the Purchaser.
(g) The Purchaser has, in connection with its decision to
purchase the Shares, relied solely upon the 2003 Annual Report and the
representations and warranties of the Company contained herein and in the
Registration Rights Agreement.
4.06 [Intentionally omitted]
4.07 Other Market Transactions. Purchaser has not prior to March 1,
2004, effected or requested to be effected any transaction in Common Stock or
derivatives relating thereto.
SECTION 5. Covenants of the Company and Purchaser.
5.01 Further Assurances. Subject to the terms and conditions of this
Agreement, the Company and the Purchaser agree to use commercially reasonable
efforts to (i) obtain all necessary consents, waivers, authorizations and
approvals necessary or desirable in connection with the execution, delivery and
performance of the Transaction Documents; and (ii) take, or cause to be taken,
all other actions and to do, or cause to be done, all other things reasonably
necessary or desirable under applicable laws to consummate the transactions
contemplated by the Transaction Documents. The Company and the Purchaser agree
to execute and deliver such documents, certificates, agreements and other
writings and to take such other actions as may be reasonably necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by the Transaction Documents.
5.02. Certain Filings. The Company and the Purchaser agree to
cooperate with each other (i) in determining whether any action by or in respect
of, or filing with, any governmental body, agency, official or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by the Transaction Documents; and
(ii) in taking such actions or making any such filings, furnishing information
required in connection therewith and seeking timely to obtain any such actions,
consents, approvals or waivers.
5.03. Public Announcements. Neither party shall make or cause to be
made any press release in respect of this Agreement or the transactions
contemplated hereby without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed, provided that the Company
shall be permitted to make such disclosures as may be required by applicable
laws, rules or regulations or as may be required under any listing agreement
with, or rule or regulation of, any national securities exchange or trading
market, in which case the Company shall use commercially reasonable efforts to
provide a draft of any such press release to the Purchaser within a reasonable
period of time prior to the anticipated release of such press release to enable
it to comment thereon.
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5.04 Disclosure of Material Information. To its knowledge neither
the Company nor any other person acting on its behalf has provided as of the
Closing the Purchaser or its agents or counsel with any information that the
Company believes constitutes material non-public information.
SECTION 6. Closing Deliveries.
6.01. Conditions to the Purchaser's Obligations. The obligation of
the Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the delivery of the fulfillment prior to or at the Closing
of the following conditions:
(a) The representations and warranties of the Company
contained in Section 3 shall be true on and as of the Closing in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
(b) The Company shall have performed and complied in all
material respects 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.
(c) All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
or of any securities exchange or trading market on which the Common Stock is
listed that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall have been duly obtained and effective as
of the Closing and all filings with such authorities or regulatory bodies shall
have been made and accepted, to the extent so required to have been made and
accepted as of the Closing Date.
(d) Subject to Section 2(c), the Company shall have delivered
a stock certificate to the Purchaser representing the Shares being purchased by
the Purchaser under this Agreement.
(e) The Company shall have delivered or made available to the
Purchaser, all in form and substance reasonably acceptable to the Purchaser's
counsel, the following:
(i) a certificate of the Secretary of the Company,
dated the Closing Date, as to the incumbency of each officer executing this
Agreement and the Registration Rights Agreement or any document related thereto;
and
(ii) a certified copy of the resolutions of the
Company's board of directors authorizing the execution, delivery and
consummation of this Agreement and the Registration Rights Agreement and the
transactions contemplated hereby and thereby.
(f) The Company shall have delivered to the Purchaser an
opinion of counsel substantially in the form attached hereto as Exhibit B, which
may be the Company's vice president and general counsel, as to the existence of
the Company and its authority to consummate the transactions contemplated hereby
in form and substance reasonably satisfactory to the Purchaser.
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(g) The Company shall have executed and delivered the
Registration Rights Agreement, substantially in the form attached hereto as
Exhibit A.
6.02. Conditions to the Obligations of the Company. The obligation
of the Company to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment prior to or at the Closing of the following
conditions:
(a) The representations and warranties of the Purchaser
contained in Section 4 above shall be true on and as of the Closing in all
material respects with the same effect as though such representations and
warranties had been made on and as of the Closing.
(b) All authorizations, approvals or permits if any of any
governmental authority or regulatory body of the United States or of any state
or of any securities exchange or trading market on which the Common Stock is
listed that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall have been duly obtained and effective as
of the Closing and all filings with such authorities or regulatory bodies shall
have been made and accepted, to the extent so required to have been made and
accepted as of the Closing Date.
(c) The Purchaser shall have performed and complied in all
material respects 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.
(d) The Purchaser shall have paid to the Company the Purchase
Price as specified in Section 2 upon receipt of the Shares.
(e) The Purchaser shall have executed and delivered the
Registration Rights Agreement in the delivered by the Company pursuant to
Section 6.01(g).
(f) The Purchaser shall have delivered to the Company such
closing documents as shall be reasonably requested by the Company in form and
substance reasonably acceptable to the Company's counsel.
SECTION 7. Survival of Representations and Warranties; Indemnification;
Exclusive Remedy.
7.01. Survival of Representations and Warranties. The
representations and warranties provided for in this Agreement shall survive for
a period of one (1) year from the Closing Date (the "SURVIVAL PERIOD") provided
that any representation or warranty in respect of which indemnity may be sought
under this Agreement shall survive the time at which it would otherwise
terminate if notice of the inaccuracy or breach thereof shall have been given to
the party against whom such indemnity may be sought prior to such termination
and provided further that such survival shall be solely with respect to such
inaccuracy or breach claimed.
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7.02. Indemnification. (a) The Company shall indemnify and hold
harmless the Purchaser, its affiliates and their respective officers, directors,
employees and agents from and against any and all direct monetary costs,
expenses, damages, liabilities or losses (including, without limitation,
reasonable counsel's fees and other reasonable out-of-pocket costs incident to
any third party suit, action or proceeding (but excluding special,
consequential, punitive or like damages) (collectively, "DAMAGES") to the extent
caused by (i) the breach of any representation or warranty made by the Company
in this Agreement or (ii) the breach by the Company of any covenant or agreement
to be performed by it hereunder.
(b) The Purchaser shall indemnify and hold harmless the
Company, its affiliates and their respective officers, directors, employees and
agents from and against any and all Damages to the extent caused by (i) the
breach of any representation or warranty made by the Purchaser in this Agreement
or (ii) any breach by the Purchaser of any covenant or agreement to be performed
by it hereunder.
(c) The obligations of the Company, on the one hand, and the
Purchaser, on the other hand, to provide any such indemnification under this
Section 7.02 shall expire in accordance with the Survival Period.
(d) Neither the Company nor the Purchaser shall be obligated
to provide any such indemnification to the other under this Section 7.02 in
respect of any Damages unless the total of all such Damages shall exceed
$100,000 in the aggregate, whereupon the full amount of such Damages shall be
recoverable by an Indemnified Party (as defined below) in accordance with the
terms hereof and the maximum amount payable by the Company to the Purchaser for
any such Damage shall not exceed the purchase price received by the Company from
the Purchaser in respect of the Shares.
(e) Any Person providing indemnification pursuant to the
provisions of this Section 7.02 is hereinafter referred to as an "INDEMNIFYING
PARTY" and any Person entitled to be indemnified pursuant to the provisions of
this Section 7.02 is hereinafter referred to as an "INDEMNIFIED PARTY."
7.03. Procedures for Third Party Claims. In the case of any claim
for indemnification arising from a claim of a third party (a "THIRD PARTY
CLAIM"), the Indemnified Party shall give prompt written notice to the
Indemnifying Party of any claim or demand that the Indemnified Party has
knowledge and as to which it may request indemnification hereunder. The
Indemnifying Party shall have the right to defend and to direct the defense
against any such Third Party Claim, in its name or in the name of the
Indemnified Party, as the case may be, at the expense of the Indemnifying Party,
and with counsel selected by the Indemnifying Party unless (i) such Third Party
Claim seeks an order, injunction or other equitable relief against the
Indemnified Party or (ii) the Indemnified Party reasonably concludes that (x)
there is a conflict of interest between the Indemnified Party and the
Indemnifying Party in the conduct of the defense of such Third Party Claim or
(y) the Indemnified Party has one or more defenses not available to the
Indemnifying Party. Notwithstanding anything in this Agreement to the contrary,
the Indemnified Party shall, at the expense of the Indemnifying Party, cooperate
with the Indemnifying Party, and keep the Indemnifying Party fully informed in
the defense of such Third Party Claim. The Indemnified Party shall have the
right to participate in the defense of any Third Party Claim with counsel
employed at its own expense provided that, in the case of any Third Party Claim
described in clause (i) or (ii) of the second preceding sentence or as to which
the Indemnifying Party has not employed counsel to assume the defense of such
Third Party Claim, the reasonable fees and disbursements of such counsel shall
be at the expense of the Indemnifying Party. The Indemnifying Party shall have
no indemnification obligations with respect to any Third Party Claim that is
settled by the Indemnified Party without the prior written consent of the
Indemnifying Party.
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SECTION 8. Miscellaneous.
8.01. Notices. All notices, requests and other communications to a
party hereunder shall be in writing (including telecopier or similar writing)
and shall be given to the party at its address or telecopier number as set forth
below, or such other address or telecopier number as such party may hereinafter
specify for the purpose of giving notice hereunder to the party giving such
notice. Each such notice, request or other communication shall be effective (i)
if given by telecopier, when such telecopier is transmitted to the telecopier
number specified pursuant to this Section 8.01 and the appropriate confirmation
is received or (ii) if given by mail, 72 hours after such communication is
deposited in the mails, certified mail, return receipt requested, postage
prepaid, addressed as aforesaid or (iii) if given by any other means, when
delivered at the address as follows:
If to the Company, to:
DOV Pharmaceutical, Inc.
Continental Plaza
433 Hackensack Avenue
Hackensack NJ 07601
Attention: General Counsel
Telecopier: (201) 968-0986
With a copy to:
Goodwin Procter LLP
599 Lexington Avenue
New York, New York 10022
Attention: Joseph R. Siegelbaum, Esq.
Telecopier: (212) 355-3333
If to the Purchaser, to:
Acqua Wellington Opportunity I Limited
Shirlaw House
87 Shirley Street
Nassau, Bahamas
Attention: Michael Taylor
With a copy to:
Jenkins & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York
Attention: Christopher S. Auguste
Telecopier: (212) 704-6288
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8.02. Amendments and Waivers.
(a) Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Purchaser. Any amendment or waiver so effected
shall be binding upon each holder of the Shares at the time outstanding, each
future holder of the Shares and the Company.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
8.03. Expenses; Documentary Taxes. Except as expressly set forth in
this Agreement or in the Registration Rights Agreement, the Company and the
Purchaser shall each pay its own costs and expenses in connection with the
transactions contemplated hereby or thereby. Notwithstanding the foregoing, the
Company shall pay the fees based upon activity invoices and expenses of legal
counsel to the Purchaser in an amount not to exceed $35,000.
8.04. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns provided that no party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the consent of the other party except that, with respect to the Company, no such
consent shall be required from the Purchaser in connection with any transfers by
the Company in connection with its merger or consolidation or its sale of all or
substantially all the assets of the Company.
8.05. Governing Law. This Agreement and all matters arising directly
or indirectly hereunder shall be governed by, and construed in accordance with,
the laws of the State of New York without regard to the conflicts of laws
principles thereof.
8.06. Consent to Jurisdiction. Any suit, action or proceeding
relating to or arising out of this Agreement or the transactions contemplated
hereby, shall be brought in the United States District Court for the Southern
District of New York, so long as one of such courts shall have subject matter
jurisdiction over such suit, action or proceeding, and that any cause of action
arising out of this Agreement directly or indirectly shall be deemed to have
arisen from a transaction of business in the State of New York, and each of the
parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding that
is brought in any such court has been brought in an inconvenient forum. Process
in any such suit, action or proceeding may be served on any party anywhere in
the world, whether within or outside the jurisdiction of any such court. Without
limiting the foregoing, each party agrees that service of process on such party
as provided by notice pursuant to Section 8.01 shall be deemed effective service
of process on such party.
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8.07. WAIVER OF JURY TRIAL. THE COMPANY AND THE PURCHASER EACH
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE TRANSACTION
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
8.08 Legend on Securities. The following legend shall be typed on
each certificate evidencing the Shares issued hereunder held at any time by the
Purchaser:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES OR BLUE
SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH
RESPECT TO SUCHSECURITIES THAT IS EFFECTIVE UNDER THE ACT OR (2)
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT
RELATING TO THE DISPOSITION OF SECURITIES AND (3) IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES AND BLUE SKY LAWS.
8.09. Counterparts; Facsimile Signatures. This Agreement may be
executed in counterparts, each of which shall be deemed an original agreement,
but all of which together shall constitute one and the same instrument.
Execution and delivery of this Agreement by facsimile transmission shall
constitute execution and delivery of this Agreement for all purposes, with the
same force and effect as execution and delivery of an original manually signed
copy hereof.
8.10. Entire Agreement. This Agreement together with the Registration
Rights Agreement and all schedules, exhibits or annexes attached to either of
the foregoing constitutes the entire agreement and understanding between the
parties hereto and supersedes any and all prior agreements and understandings,
written or oral, relating to the subject matter of the Transaction Documents.
8.11. Headings. The headings in this Agreement are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
8.12. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law that renders any provisions hereof prohibited or
unenforceable in any respect.
8.13. Construction. This Agreement shall not be construed or
interpreted with any presumption against any party hereto by reason of its
causing this Agreement to be drafted.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.
DOV PHARMACEUTICAL, INC.
By: /s/ Robert Horton
-------------------------------------
Name: J. R. Horton
Title: Vice President and
General Counsel
ACQUA WELLINGTON OPPORTUNITY I LIMITED
By: /s/ Michael Taylor
-------------------------------------
Name: Michael Taylor
Title: Director