ANTHERA PHARMACEUTICALS, INC. STOCK PURCHASE AGREEMENT

1.1           Authorization of Shares.  The Company has authorized the sale and issuance to Purchaser of the Shares pursuant to the terms of this Agreement.

1.2           Sale and Purchase.  Subject to the terms and conditions hereof, at the Initial Closing (as defined below) the Company hereby agrees to issue and sell to the Purchaser,  and the Purchaser agrees to purchase from the Company, the number of Shares set forth under the heading “Initial Closing Shares” on Exhibit A (the “Initial Closing Shares”) for the price per share set forth on Exhibit A, provided, however, that in all instances the Company’s obligation to sell and the Purchaser’s obligation to purchase, any of the Shares is subject to the condition that after giving effect to such purchase and sale the Purchaser (together with its affiliates and any other individuals, entities or groups with which the Purchaser may be deemed to share “beneficial ownership”) will not at any time be the “beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of more than fifteen percent (15%) of the Company’s issued and outstanding shares of Common Stock (the “Ownership Cap”).

2.1           Initial Closing.  Within 30 days after the Effective Date, the Company shall deliver to the Purchaser a notice (the “Initial Closing Notice”) setting the date of the sale and purchase of the an aggregate of up to $7,000,000 of Shares (the “Initial Closing”), which shall take place remotely via the exchange of documents and signatures at 4:00 p.m. (Pacific Standard Time) on the date which is not less than fifteen days following the date of the Initial Closing Notice, or at such other time or place as the Company and Purchaser may mutually agree (such date is hereinafter referred to as the “Initial Closing Date”), provided, however that in the event that the purchase of all of the Initial Closing Shares would result in the Purchaser exceeding the Ownership Cap, the amount of such excess shall be subtracted from the Initial Closing Shares purchased by the Purchaser on the Initial Closing Date and shall be purchased by the Purchaser, but only to the extent that such purchase would not result in the Purchaser owning more Shares than the Ownership Cap, upon at least 15 days prior written request of the Company on the same terms and at the same price on the date set forth in such written request (the “Subsequent Initial Closing Date”), which date shall be on or before May 31, 2015 (the subsequent sale and issuance of Initial Closing Shares is referred to as a “Subsequent Initial Closing”).  The purchase price per Share to be paid for the Initial Closing Shares shall be calculated as set forth on Exhibit A.  The Subsequent Initial Closing shall take place no more than once, and to the extent that any of the $7,000,000 of Initial Closing Shares have not been purchased pursuant to the terms hereof at the Subsequent Initial Closing, the Purchaser shall have no further obligation to purchase any Initial Closing Shares.  The Purchaser’s rights under the License Agreement or any of the other Related Agreements shall not be adversely affected because all of the Initial Closing Shares have not been purchased.

2.3           Delivery.  At the Initial Closing, Subsequent Initial Closing, if any, each Second Closing and the Third Closing (collectively referred to herein as the “Closings” and each individually as a “Closing”), subject to the terms and conditions hereof, the Company will deliver to Purchaser facsimile copies of one or more stock certificates, evidencing the Shares purchased by the Purchaser at such Closing, registered in the name of the Purchaser (or such nominee or designee as the Purchaser may designate by written notice to the Company at least two (2) Trading Days prior to such Closing), with the original stock certificate delivered within three (3) Trading Days of Closing, against payment of the purchase price therefor by check or wire transfer made payable to the order of the Company, cancellation or conversion of indebtedness at the option of the Purchaser, or any combination of the foregoing.

 

2.4           No Obligation to Purchase Shares.  Notwithstanding anything to the contrary contained in this Agreement or in any of the Related Agreements, the Purchaser shall not be obligated to purchase any Shares at any Closing if as of the date of such Closing: (i) the Company is in material default under, or has materially breached and not cured to the reasonable satisfaction of the Purchaser, any provision of this Agreement or any of the Related Agreements that have been executed and delivered on or prior to the date of such Closing; or (ii) either the License Agreement or the Clinical Supply Agreement (if executed and delivered prior to the date of such Closing) shall have been terminated or is during a cure period for breach which leads to termination.

 

Except as set forth on a Schedule of Exceptions delivered by the Company to the Purchaser at least two Trading Days before each Closing (which Schedules of Exceptions shall be acceptable to the Purchaser in its reasonable discretion),  the Company hereby represents and warrants to the Purchaser as of the applicable Closing Date, as set forth below.

3.1           Organization, Good Standing and Qualification.  The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite corporate power and authority to own or lease and use its respective properties and assets and to carry on its respective business as currently conducted and as proposed to be conducted.  Neither the Company nor any of its Subsidiaries is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  The Company and each of its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in a Material Adverse Effect, and no proceeding has been instituted, is pending, or, to the Company’s knowledge, has been threatened in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.  The Company has at all times complied with all provisions of its certificate of incorporation and bylaws in effect at such time, and is not currently in default under, or in violation of, any such provision.

 

3.2           Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the Related Agreements and otherwise to carry out its obligations hereunder and thereunder.  The Company’s execution, delivery and performance of this Agreement and each of the Related Agreements and the consummation by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Shares) have been duly authorized by all necessary corporate action on the part of the Company, and no further corporate action is required by the Company, its Board of Directors or its stockholders in connection therewith.  This Agreement and each of the Related Agreements have been duly executed and delivered by the Company and constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with their respective terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

3.3           No Conflicts.  The execution, delivery and performance by the Company of this Agreement and each of the Related Agreements and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares) do not and will not (i) conflict with or violate any provisions of the Company’s certificate of incorporation or bylaws or otherwise result in a violation of the organizational documents of the Company, (ii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or any of its Subsidiaries or any of their respective assets or properties is subject (including federal and state securities laws and regulations and the rules and regulations, assuming the correctness of the representations and warranties made by the Purchaser herein, of any self-regulatory organization to which the Company or its securities are subject), or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, or (iii) conflict with, result in a breach of, constitute (with or without notice or lapse of time or both) a default under, result in the acceleration of any obligations under, give any party the right to cancel, terminate, modify or accelerate, or require any notice, consent or waiver under, any contract, license, sublicense, lease, sublease, permit, indenture, mortgage, instrument of indebtedness, guaranty, pledge, security interest or other arrangement to which the Company or any of its Subsidiaries is a party or is bound, or to which any of their respective assets are subject, except in the case of clauses (ii) and (iii) such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect or a material adverse effect on the legality, validity or enforceability of this Agreement or any of the Related Agreements or on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement or any of the Related Agreements.

 

3.4           No Litigation.  There is no action, suit or proceeding, or governmental or regulatory inquiry or investigation, pending or, to the knowledge of the Company, any threat thereof or reasonable basis therefor, against the Company or any of its officers or directors, which questions the validity or enforceability of this Agreement or any of the Related Agreements or the right of the Company to enter into or perform its obligations under this Agreement or any of the Related Agreements, or which might reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.  Neither the Company nor any of its Subsidiaries is subject to any outstanding judgment, order or decree.

 

3.5           Filings, Consents and Approvals.  Neither the Company nor any of its Subsidiaries is required to obtain any consent, waiver, approval, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental or regulatory authority or agency, or any holder of outstanding securities of the Company in connection with the execution, delivery and performance by the Company of this Agreement and the Related Agreements (including the offer, issuance and sale of the Shares), other than (i) filings required by applicable state securities laws, (ii) the filing with the Commission of the Registration Statement and the Prospectus under the Securities Act to register the issuance and sale of the Shares by the Company to the Purchaser (iii) the filing of any requisite notices and/or application(s) to the Principal Trading Market for the issuance and sale of the Shares and the listing of the Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby.

 

3.6           Issuance of the Shares.  The issuance, sale and delivery of the Shares have been duly authorized by all necessary corporate action (including, without limitation, any stockholder approval required by NASDAQ rule 4350) and all of the Shares have been duly reserved for issuance. The Shares, when issued and paid for in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable and free and clear of all liens, restrictions and encumbrances,  and shall not be subject to preemptive or similar rights.  All issuances and sales of the Shares by the Company to the Purchaser will be made pursuant to an effective Registration Statement in accordance with the Securities Act, and all of the Shares will be duly listed for trading on the Principal Trading Market and freely tradable by the Purchaser without restrictions under the Securities Act or state securities laws from and after the date such Shares are issued and sold by the Company.  The Shares will be issued in compliance with all applicable federal and state securities laws.

 

3.7           Capitalization. The number of shares and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) are as set forth in the Company’s SEC Reports.  The Company has not issued any capital stock since the date of its most recently filed SEC Report other than to reflect (i) stock option and warrant exercises or vesting of restricted stock units that do not, individually or in the aggregate, have a material effect on the issued and outstanding capital stock, options and other securities and (ii) shares issued pursuant to the Company’s Sales Agreement with Cowen and Company, LLC and the Company’s Purchase Agreement with Lincoln Park Capital Fund, LLC.   No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement that have not been effectively waived as of the Initial Closing Date. Except as set forth on Schedule 3.7 or a result of the purchase and sale of the Shares, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.

 

3.8           SEC Reports. None of the SEC Reports, when filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.  Neither this Agreement nor any of the Related Agreements, nor any report, certificate or instrument provided by the Company to the Purchaser or its representatives in connection with any of the transactions contemplated by this Agreement or the Related Agreements, when read together, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated therein or necessary to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading.

 

3.9           Registration Statement and Prospectus.  The Registration Statement and the Prospectus comply with the requirements of the Securities Act.  No stop order suspending the effectiveness of the Registration Statement or the use of any Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending.  Neither the Registration Statement nor any amendment or supplement thereto, at its effective time, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  As of the date hereof and as of each Closing Date, neither the Prospectus nor any amendment or supplement thereto included, or will include, an untrue statement of a material fact or omitted, or will omit, to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

 

 

4.1           Organization; Authority.  Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement and the Related Agreements and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Related Agreements by and the performance by Purchaser of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Purchaser.  This Agreement and the Related Agreements have been duly executed by Purchaser, and when delivered by Purchaser in accordance with the terms hereof and thereof, will constitute the valid and legally binding obligation of Purchaser, enforceable against it in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

4.2           No Conflicts.  The execution, delivery and performance by Purchaser of this Agreement and the Related Agreements and the consummation by Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Purchaser, (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, indenture or instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment  or decree (including federal and state securities laws) applicable to Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations hereunder.

 

4.3           Investment Intent.  Purchaser is acquiring the Shares for its own account and not with a view to, or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities laws.  Purchaser is acquiring the Shares hereunder in the ordinary course of its business. Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Shares (or any securities which are derivatives thereof) to or through any person or entity in violation of the Securities Act or any applicable state securities laws; such Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

 

4.4           Experience of the Purchaser.  Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

 

4.5           Access to Information.  Purchaser acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares, (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.

 

5.1           Conditions to Purchaser’s Obligations at Each Closing.  Purchaser’s obligations to purchase the Shares at each of the Initial Closing, the Subsequent Initial  Closing, each Second Closing and the Third Closing are subject to the satisfaction, at or prior to each such Closing Date, of the following conditions:

5.2           Conditions to Obligations of the Company.  The Company’s obligation to issue and sell the Shares at each Closing is subject to the satisfaction, on or prior to such Closing, of the following conditions:

6.2           “Market Stand-Off” Agreement.  Purchaser hereby agrees that it will not, without the prior written consent of the Company, during the period commencing on the Effective Date and ending on the date which is one hundred eighty (180) days thereafter (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for common stock held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares or other securities, in cash, or otherwise.

 

6.3           Prohibition of Short Sales and Hedging Transactions.  Purchaser agrees that beginning on the date of this Agreement and ending on the date of termination of this Agreement, Purchaser and its agents, representatives and affiliates shall not in any manner whatsoever enter into or effect, directly or indirectly, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Company’s Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Company’s Common Stock.  Without limiting the generality of the foregoing, neither the Purchaser nor any of its agents, representatives or affiliates will take, directly or indirectly, any action designed or intended to stabilize or manipulate the price of any security of the Company, or which would reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company.

 

6.4           Governing Law.  This Agreement shall be governed by and construed under the laws of the State of Delaware in all respects as such laws are applied to agreements among Delaware residents entered into and performed entirely within Delaware, without giving effect to conflict of law principles thereof.  The parties agree that any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the state of Delaware.

 

6.5           Survival.  The representations, warranties, covenants and agreements made herein shall survive the closing of the transactions contemplated hereby.  All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument.  The representations, warranties, covenants and obligations of the Company, and the rights and remedies that may be exercised by the Purchaser, shall not be limited or otherwise affected by or as a result of any information furnished to, or any investigation made by or knowledge of, the Purchaser or any of its representatives.

 

6.6           Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon the parties hereto and their respective successors, assigns, heirs, executors and administrators and shall inure to the benefit of and be enforceable by each person who shall be a holder of the Shares from time to time.  Neither party may assign this Agreement without the prior written consent of the other.

 

6.7           Entire Agreement.  This Agreement, the exhibits and schedules hereto, the Related Agreements and the other documents delivered pursuant hereto and thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof and no party shall be liable for or bound to any other in any manner by any oral or written representations, warranties, covenants and agreements except as specifically set forth herein or therein.

 

6.8           Severability.  In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

 

6.9           Amendment and Waiver.  This Agreement may be amended or modified, only upon the written consent of the Company and the Purchaser.

 

6.10         Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement or the Related Agreements, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring.  It is further agreed that any waiver, permit, consent or approval of any kind or character on any party’s part of any breach, default or noncompliance under this Agreement or the Related Agreements or any waiver on such party’s part of any provisions or conditions of the Agreement or the Related Agreements must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement, the Related Agreements, by law, or otherwise afforded to any party, shall be cumulative and not alternative.

 

6.11          Notices.  All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) ten days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) three days after deposit with an internationally recognized overnight courier, specifying three-day delivery, with written verification of receipt.  All communications shall be sent to the Company at the address as set forth on the signature page hereof and to Purchaser at the address set forth on the signature pages attached hereto or at such other address or electronic mail address as the Company or Purchaser may designate by 10 days advance written notice to the other parties hereto.

 

6.12           Expenses.  Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement and the Related Agreements.

 

6.13           Attorneys’ Fees.  In the event that any suit or action is instituted under or in relation to this Agreement or any of the Related Agreements, including without limitation to enforce any provision in this Agreement or any of the Related Agreements, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement or a Related Agreement, as the case may be, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

 

6.14           Titles and Subtitles.  The titles of the sections and subsections of the Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

6.15           Counterparts; Electronic or Facsimile Signatures.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.  This Agreement may be executed and delivered electronically or by facsimile and upon such delivery such electronic or facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

6.16           Broker’s Fees.  Each party hereto represents and warrants that as of the date of this Agreement no agent, broker, investment banker, person or firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker’s or finder’s fee or any other commission directly or indirectly in connection with the transactions contemplated by this Agreement or any of the Related Agreements.  Each party hereto further agrees to indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the representation in this Section 6.16 being untrue.

 

6.17           Pronouns.  All pronouns contained herein, and any variations thereof, shall be deemed to refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties hereto may require.

 

6.18           California Corporate Securities Law.  THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH QUALIFICATION IS UNLAWFUL.  PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION BEING AVAILABLE.