Exhibit 10.2
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BRIDGE LOAN, STANDBY STOCK PURCHASE
AND DEBT REDUCTION AGREEMENT
THIS BRIDGE LOAN, STANDBY STOCK PURCHASE AND DEBT REDUCTION AGREEMENT (this
"Agreement"), made and entered into as of September 12, 2001, by and among
Gensym Corporation, a Delaware corporation (the "Company"), MinnovEX
Technologies, Inc., an Ontario corporation ("MinnovEX"), Xxxx Xxx and Xxxx Xxxxx
(collectively, the "Ong Purchasers") and Xxxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxx,
Xxxxx X. Xxxxxx, Xxxxxxxx X. Xxxxxxx, Xxxx X. Xxxxx, Xxxxxx X. Xxxxxxxxxxx
(collectively, the "Director Purchasers," and together with MinnovEX and the Ong
Purchasers, the "Standby Purchasers").
W I T N E S S E T H
WHEREAS, the Company proposes to distribute to holders of record of its
common stock (the "Common Stock") and holders of vested options to purchase
Common Stock, of record as of the close of business on such date on which the
Registration Statement (as defined below) becomes effective (the "Record Date"),
transferable rights (the "Rights") to purchase shares of Common Stock with an
aggregate offering price of $3,150,000 (the "Shares") at a price per share equal
to (i) $0.35 or (ii) such other amount as the Board of Directors of the Company
shall in good faith determine and cause to be set forth in the Registration
Statement (the "Subscription Price"), by issuing to such holders subscription
certificates (the "Subscription Certificates") evidencing 1.25 Rights for (i)
each share of Common Stock held as of the Record Date and (ii) each share of
Common Stock underlying the vested portion of options to purchase Common Stock
held as the Record Date (the "Rights Offering");
WHEREAS, the Company proposes to offer to sell the Shares on the basis of
one Share for each Right granted and properly exercised (the "Basic Subscription
Privilege") and in addition, all holders of Rights are entitled, subject to
availability and proration as described in the Registration Statement, to
purchase Shares not purchased by other stockholders under the Basic Subscription
Privilege (the "Oversubscription Privilege");
WHEREAS, the Company expects to mail the Subscription Certificates together
with the Prospectus (as defined below) and related instructions to the record
holders of Common Stock and holders of vested options to purchase Common Stock
as soon as practicable after the Registration Statement becomes effective (the
"Time of Mailing"); and the Rights will expire at 5:00 p.m., New York City time,
on the 20th business day following the Time of Mailing, unless extended by the
Company (as it may be so extended, the "Expiration Date");
WHEREAS, on August 24, 2001, the Company filed with the Securities and
Exchange Commission (the "SEC") a registration statement on Form S-3 (File No.
333-68252) and a related preliminary prospectus for the registration of the
Rights and the Shares under the Securities Act of 1933, as amended (the "1933
Act"); and the Company expects to file such additional amendments thereto and
such amended prospectuses as may hereafter be required (such registration
statement (as amended, if applicable) and the final prospectus relating to the
offering constituting a part thereof (including in each case all documents, if
any, incorporated by reference therein), as from time to time amended or
supplemented pursuant to the 1933 Act, are hereinafter referred to as the
"Registration Statement" and the "Prospectus," respectively);
WHEREAS, the Standby Purchasers have agreed to lend to the Company an
aggregate amount as specified on Schedule 1 hereto, upon the terms and
conditions set forth herein; and
WHEREAS, in order to assure the success of the Rights Offering, the Standby
Purchasers are willing to, and hereby do, agree to serve as standby purchasers
for a specified amount of Common Stock by mean of the exercise of Basic
Subscription Privileges and Oversubscription Privileges by the Standby
Purchasers, and the Company has agreed with the Standby Purchasers to sell such
Common Stock to the Standby Purchasers, upon the terms and conditions set forth
herein.
NOW, THEREFORE, for and in consideration of the premises and covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Bridge Loan and Bridge Notes
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1.1 Authorization. The Company has authorized the issuance and sale to
the Standby Purchasers of secured promissory notes in the form attached hereto
as Exhibit A (each, a "Bridge Note" and collectively, the "Bridge Notes") with
an aggregate principal amount equal to the sum of (i) the aggregate principal
amount set forth under the column entitled "Initial Bridge Closing" on Schedule
1 hereto and (ii) the aggregate principal amount set forth under the column
entitled "Second Bridge Closing" on Schedule 1 hereto (the "Total Principal
Amount"). The Company has authorized a grant of a security interest as set forth
in the security agreement in the form attached hereto as Exhibit B (the
"Security Agreement") to secure the obligations of the Company under the Bridge
Notes.
1.2 Sale and Purchase of the Bridge Notes. Upon the terms and conditions
contained herein, the Company agrees to sell to each Standby Purchaser, and each
Standby Purchaser agrees to purchase from the Company at the Bridge Closings (as
defined below), Bridge Notes with an aggregate principal amount as is set forth
opposite each Standby Purchaser's name on Schedule 1 hereto, each at a purchase
price equal to the principal amount thereof.
1.3 Bridge Closing. The closing of the sale to and purchase by the
Standby Purchasers of the Bridge Notes shall occur at the principal office of
the Company as follows:
(a) Initial Bridge Closing. On or before September 12, 2001 (or
such other date as shall be agreed upon by the Company and the Standby
Purchasers), the Company shall deliver to each Standby Purchaser or its
representative (the "Initial Bridge Closing"):
(i) a Bridge Note in the principal amount set forth in
the column entitled "Initial Bridge Closing" opposite such Standby
Purchaser's name on Schedule 1, issued in the name of such Standby
Purchaser, against delivery to the Escrow Agent (as
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defined below) of payment, by wire transfer in an amount equal to the
principal amount of such Bridge Note; and
(ii) an execution copy of the Security Agreement, executed
by a duly authorized officer of the Company.
(b) Second Bridge Closing. On or before September 17, 2001 (or
such other date as shall be agreed upon by the Company and the Standby
Purchasers), the Company shall deliver to each Standby Purchaser or its
representative a Bridge Note in the principal amount set forth in the column
entitled "Second Bridge Closing" opposite such Standby Purchaser's name on
Schedule 1, issued in the name of such Standby Purchaser, against delivery to
the Escrow Agent of payment, by wire transfer in the aggregate amount equal to
the principal amount of such Bridge Note (the "Second Bridge Closing" and
together with the Initial Bridge Closing, the "Bridge Closings").
1.4 Escrow of Funds. Payments by the Standby Purchasers for Bridge
Notes at each of the Initial Bridge Closing and the Second Bridge Closing will
be held in escrow by an escrow agent (the "Escrow Agent") pursuant to the terms
of an Escrow Agreement, in the form attached hereto as Exhibit C, until, (A) in
the case of the Initial Bridge Closing, the later of (i) September 12, 2001 and
(ii) the payment by each of the Standby Purchasers is equal to or greater than
the amount set forth in the column entitled "Initial Bridge Closing" opposite
such Standby Purchaser's name and (B) in the case of the Second Bridge Closing,
the later of (i) September 17, 2001 and (ii) the payment by each of the Standby
Purchasers is equal to or greater than the amount set forth in the column
entitled "Second Bridge Closing" opposite such Standby Purchaser's name.
Section 2. Standby Purchase of Shares
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2.1 Standby Purchase Commitments.
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(a) Subject to the terms, conditions and limitations of this
Agreement, each Standby Purchaser hereby agrees to exercise any and all of such
Standby Purchaser's Basic Subscription Privilege and Oversubscription Privilege
to purchase such number of Shares as have an aggregate Subscription Price equal
to the amount set forth in the column entitled "Standby Shares Purchase
Commitment" opposite such Standby Purchaser's name on Schedule 1, subject to
availability and proration as described in the Registration Statement (as
prorated, if applicable, the "Standby Shares"), at the Subscription Price;
provided, however, that each Standby Purchaser's obligation under this Section
3.2 shall be conditioned upon the satisfaction of at least one of the following
conditions:
(i) the Company or its agent shall have received, at or before
the Expiration Date, executed Subscription Certificates or notices of
guaranteed delivery relating thereto for the subscription for such number
of Shares as have an aggregate Subscription Price of at least $600,000
(excluding Subscription Certificates, if any, delivered by Standby
Purchasers pursuant to this Agreement); or
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(ii) the Company shall have entered into a binding agreement
relating to the sale of the Company's NetCure product line for an aggregate
purchase price of at least $1,250,000.
(b) Subject to the satisfaction of the conditions set forth in
Section 2.1(a) above, each Standby Purchaser shall perform such Standby
Purchaser's obligations under this Section 2 through the exercise of its Basic
Subscription Privilege and Oversubscription Privilege by completing the
Subscription Certificate delivered or transferred to such Standby Purchaser in
connection with the Rights Offering and delivering a duly executed Subscription
Certificate to the subscription agent in accordance with the instructions set
forth in the Registration Statement.
2.2 Pro Rata Allocation of Standby Shares. In the event that the number
of Shares validly subscribed for pursuant to the Rights Offering (excluding
Shares, if any, subscribed for pursuant to Subscription Certificates or notices
of guaranteed delivery relating thereto executed by Standby Purchasers) shall
have an aggregate Subscription Price greater than the difference between (i)
$3,150,000 and (ii) the sum of (y) the aggregate principal amount set forth
under the column entitled "Initial Bridge Closing" on Schedule 1 hereto and (z)
the aggregate principal amount set forth under the column entitled "Second
Bridge Closing" on Schedule 1 hereto, then:
(a) Each of the Standby Purchasers agrees that:
(i) the Standby Shares shall be allocated among the Standby
Purchasers pro rata based on the amount set forth in the column entitled
"Standby Shares Purchase Commitment" opposite each Standby Purchaser's name
on Schedule 1; and
(ii) the Company and the subscription agent are hereby
authorized, empowered and instructed to (y) adjust the exercise of the
Basic Subscription Privilege and the Oversubscription Privilege for each
Standby Purchaser and (z) transfer Rights among the Standby Purchasers in a
manner which will make the contribution of Rights by each as nearly equal
as possible to accomplish the pro rata allocation of the Standby Shares
among the Standby Purchasers as set forth above.
(b) Each Standby Purchaser hereby constitutes and appoints the
Company as its true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for such Standby Purchaser and in such Standby
Purchaser's name, place and stead, in any and all capacities, to transfer rights
held by such Standby Purchaser among the Standby Purchasers and, if applicable,
to accept the transfer of the same to such Standby Purchaser, in such amounts
and to the extent required to accomplish the pro rata allocation of the Standby
Shares as set forth above, granting to the Company, as attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as such Standby Purchaser might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent, or its
substitute, may lawfully do or cause to be done by virtue hereof.
(c) The Company agrees:
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(i) to (x) transfer such number of Rights and (y) execute such
Subscription Certificates for and on behalf of the Standby Purchasers, to
accomplish the foregoing pro rata allocation of Standby Shares; and
(ii) to instruct the subscription agent to allocate the Standby
Shares among the Standby Purchasers on such pro rata basis.
2.3 Manner of Payment for Standby Shares.
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(a) Each of the Standby Purchasers and the Company hereby agree
that each Standby Purchaser shall pay for Standby Shares purchased by such
Standby Purchaser upon exercise of its Rights and under this Agreement by
reducing the outstanding Total Principal Amount, and interest payable thereon,
under this Agreement (and reducing the amount owing under the Bridge Notes) by
the total Subscription Price otherwise due upon exercise of those Rights by such
Standby Purchaser, and to pay cash for Standby Shares purchased by such Standby
Purchaser pursuant to the Rights Offering to the extent the aggregate
Subscription Price payable by such Standby Purchaser exceeds the aggregate
principal amount, and interest payable thereon, of the Bridge Notes held by such
Standby Purchaser.
(b) Each of the Standby Purchasers and the Company hereby further
agree that each Director Purchaser shall be entitled to pay for Standby Shares
purchased by such Director Purchaser upon exercise of its Rights and under this
Agreement by reducing current indebtedness owed by the Company to the Director
Purchasers in the amounts set forth on Schedule 1 hereto.
2.4 Standby Closing.
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(a) Determination of Number of Standby Shares to be Purchased. As
soon as practicable following the Expiration Date and promptly following its
determination of the number of Shares validly subscribed for pursuant to the
Rights Offering, the Company shall notify the Standby Purchaser of the number of
Standby Shares to be purchased by each Standby Purchaser pursuant to this
Agreement.
(b) The Standby Closing. Payment of the purchase price for, and
delivery of certificates for, the Standby Shares shall be made at the principal
office of the Company, or at such other place as shall be agreed upon by the
Standby Purchasers and the Company, at 9:00 a.m., New York City time, on the
date of the sale of the Shares to subscribing holders of Rights in the Rights
Offering (such time and date being referred to as the "Standby Closing Time,"
the date of the Standby Closing Time being referred to as the "Standby Closing
Date" and the consummation of the transaction being referred to as the "Standby
Closing").
(c) Delivery of Certificates. Certificates for the Standby Shares
purchased by the Standby Purchasers under this Agreement shall be in such
denominations and registered in such names as the Standby Purchasers may specify
on the Subscription Certificate(s) executed by the Standby Purchasers in
connection with its exercise of their Basic Subscription Privilege and
Oversubscription Privilege.
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(d) Manner of Payment for Standby Shares. Each Standby Purchaser
shall at the Standby Closing deliver to the Company (i) the original Bridge
Notes issued to such Standby Purchaser marked "paid in full," plus (ii) an
amount of U.S. Dollars, paid in immediately available funds delivered to the
Company by wire transfer, equal to the excess, if any, of (A) the aggregate
Subscription Price for the total number of Standby Shares to be purchase by such
Standby Purchaser over (B) the aggregate principal amount, and interest payable
thereon, of the Bridge Notes held by such Standby Purchaser. If such procedure
is necessary, the Company shall give written notice to such Standby Purchaser at
least two business days prior to the Standby Closing Time setting forth wiring
instructions for the Company's account. Notwithstanding the foregoing, if,
pursuant to this Agreement, a Standby Purchaser purchases Standby Shares having
an aggregate Subscription Price which is less than the aggregate principal
amount, and interest payable thereon, of the Bridge Notes held by such Standby
Purchaser, such Standby Purchaser shall at the Standby Closing Time, in lieu of
the delivery and payment set forth in the preceding sentence, deliver to the
Company a written statement executed by such Standby Purchaser to the effect
that the aggregate principal amount, and interest payable thereon, of the Bridge
Note held by such Standby Purchaser is thereby reduced by an amount specified
therein, which shall be equal to the aggregate Subscription Price for the total
number of Standby Shares acquired by such Standby Purchaser in the Rights
Offering. Such notice will be attached to and become part of the Bridge Notes
held by such Standby Purchaser.
Section 3. Representations and Warranties
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3.1 The Company. The Company hereby represents and warrants to each
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Standby Purchaser as follows:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority to conduct its business as presently conducted and
as proposed to be conducted by it and to enter into and perform this Agreement,
the Bridge Notes, the Security Agreement and the Escrow Agreement and to carry
out the transactions contemplated thereby.
(b) The execution and delivery by the Company of this Agreement,
the Bridge Notes, the Security Agreement and the Escrow Agreement, and the
consummation by the Company of the transactions set forth in Sections 1 and 2
hereof, have been duly authorized by all necessary corporate action on the part
of the Company.
(c) This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company, and when
executed and delivered by the Company the Bridge Notes, the Security Agreement
and the Escrow Agreement will be duly executed and delivered and will constitute
a valid and binding obligation of the Company, in each case enforceable against
the Company in accordance with its terms, except as the enforceability hereof
may be limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally or general principles of equity.
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(d) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, is required by, or with respect to, the Company in connection with the
execution and delivery of this Agreement, the Bridge Notes, the Security
Agreement and the Escrow Agreement by the Company or the consummation by the
Company of the transactions set forth in Sections 1 and 2 hereof (other than the
filing and effectiveness of the Registration Statement).
(e) The execution and delivery of this Agreement, the Bridge Notes,
the Security Agreement and the Escrow Agreement by the Company and the
consummation of the transactions set forth in Sections 1 and 2 hereof by the
Company do not and will not conflict with, or result in a breach of, any law or
regulation of any governmental authority applicable to the Company or any
material agreement to which the Company is a party.
(f) When issued and paid for in accordance with the provisions of
Section 2 hereof, the Standby Shares sold to each Standby Purchaser pursuant to
Section 2 hereof shall be duly authorized, validly issued, fully paid,
nonassessable, and free of any claims or encumbrances.
3.2 The Standby Purchasers. Each Standby Purchaser hereby represents and
warrants with respect to itself to the Company as follows:
(a) Such Standby Purchaser has all requisite power and authority to
enter into this Agreement and to consummate the transactions set forth in
Sections 1 and 2 hereof.
(b) The execution and delivery by it of this Agreement and the
Escrow Agreement, and the consummation by such Standby Purchaser of the
transactions set forth in Sections 1 and 2 hereof, have been duly authorized by
all necessary action on its part.
(c) This Agreement has been duly executed and delivered by such
Standby Purchaser and constitutes a valid and binding obligation of such Standby
Purchaser, and when executed and delivered by such Standby Purchaser the Escrow
Agreement will be duly executed and delivered and will constitute a valid and
binding obligation of such Standby Purchaser, in each case enforceable against
such Standby Purchaser in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency or other similar
laws affecting creditors' rights generally or general principles of equity.
(d) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, is required by, or with respect to, such Standby Purchaser in
connection with the execution and delivery of this Agreement or the Escrow
Agreement by such Standby Purchaser or the consummation by such Standby
Purchaser of the transactions set forth in Sections 1 and 2 hereof (other than
any filings pursuant to Section 16(a) of, or Regulation 13D under, the
Securities Exchange Act of 1934, as amended).
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(e) The execution and delivery of this Agreement and the Escrow
Agreement by such Standby Purchaser and the consummation by such Standby
Purchaser of the transactions set forth in Sections 1 and 2 hereof do not
conflict with, or result in a breach of, any law or regulation of any
governmental authority applicable to it or, at the time of the Bridge Closings
or Standby Closing, any material agreement to which it is a party.
(f) Such Standby Purchaser is acquiring the Bridge Notes and will
acquire the Standby Shares for its own account, not as a nominee or agent, for
investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same; and, except as contemplated by this Agreement, such Standby Purchaser
has no present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the disposition thereof. Such Standby
Purchaser is an "accredited investor" as defined in Rule 501(a) under the 1933
Act.
(g) Such Standby Purchaser has not been organized, reorganized or
recapitalized specifically for the purpose of investing in the Company.
(h) Such Standby Purchaser understands that the Bridge Notes have
not been registered under the 1933 Act by reason of a specific exemption
therefrom, that the Bridge Notes must be held by such Standby Purchaser
indefinitely, and that such Standby Purchaser must, therefore, bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof is
registered under the 1933 Act or is exempt from such registration.
(i) Such Standby Purchaser has carefully reviewed the
representations concerning the Company contained in this Agreement, has read the
Registration Statement and has made detailed inquiry concerning the Company, its
business and its personnel; the officers of the Company have made available to
such Standby Purchaser any and all written information which it has requested
and have answered to such Standby Purchaser's satisfaction all inquiries made by
it; and such Standby Purchaser has sufficient knowledge and experience in
finance and business that it is capable of evaluating the risks and merits of
its investment in the Company and it is able financially to bear the risks
thereof.
(j) Such Standby Purchaser will have at the times of the Bridge
Closings and the Standby Closing readily available funds in an amount sufficient
to satisfy its monetary obligations, if any, hereunder.
Section 4. Covenants
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4.1 Board Representation.
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(a) Subject to the review and approval of such designee by the
Governance Committee of the Board of Directors, which approval shall not be
unreasonably delayed or withheld, (i) MinnovEx shall have the right, at its
option and in its sole discretion, to designate one person for election to the
Company's Board of Directors (the "MinnovEX Designee") and (ii) the Ong
Purchasers, acting together as a single class, shall have the right, at their
option and
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in their sole discretion, to designate one person for election to the Company's
Board of Directors (the "Ong Designee").
(b) MinnovEX and the Ong Purchasers shall notify the Company in
writing of the MinnovEX Designee and the Ong Designee, respectively, for
election to the Board of Directors at the Standby Closing or at any time within
six months thereafter. At the first meeting of the Governance Committee
following such notice, the Governance Committee shall review and give
consideration to the election of the MinnovEX Designee and the Ong Designee. If
the Governance Committee approves either such designee or both, at the first
meeting of the Board of Directors thereafter, the Company shall enlarge its
Board of Directors by one or two, as the case may be, and elect such designee or
designees to fill the vacancy or vacancies thereby created.
(c) If the Governance Committee does not approve the MinnovEX
Designee and/or the Ong Designee for election to the Board of Directors, the
Company shall give prompt written notice thereof to MinnovEX and/or the Ong
Purchasers, as the case may be, and MinnovEX and/or the Ong Purchasers shall
have the right to designate an alternative person or persons for election to the
Board of Directors, subject to the review and approval of the Governance
Committee as set forth above.
4.2 Technical Advisory Board.
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(a) The Company shall create and maintain a technical advisory
board for the Company. Members of the advisory board shall not be deemed to be
directors of the Company and shall not be subject to any fiduciary or similar
duties to the Company solely by virtue of such member's membership on the
advisory board (it being understood that directors of the Company may serve as
members of the technical advisory board). Each member of the technical advisory
board shall be required to execute a confidentiality and non-disclosure
agreement with the Company in the form approved by the Board of Directors and
(with respect to such agreement required to be signed by the member of the
technical advisory board appointed by the Purchaser pursuant to Section 6.2(b))
the Purchaser.
(b) MinnovEX shall have the right, at its option and in its sole
discretion, to appoint one member to the technical advisory board. MinnovEX may,
in its discretion, by written notice to the Company, appoint, remove and replace
such member appointed by it to the technical advisory board, with or without
cause at anytime and from time to time.
4.3 Fees. The Company agrees to pay, at the Second Bridge Closing, the
reasonable legal fees and disbursements of Xxxxx, Xxxxxx-Xxxxx & Xxxxxxxxx,
P.C., special counsel for the Standby Purchasers, in connection with the
preparation and negotiation of all of the documents contemplated hereby and the
closing of the Initial Bridge Closing and the Second Bridge Closing. The Company
also agrees to pay, at the Second Bridge Closing, the reasonable professional
fees and disbursements (up to a maximum of $15,000) incurred by legal counsel
and professional advisors to MinnovEX, in connection with the preparation and
negotiation of all of the documents contemplated hereby and the closing of the
Initial Bridge Closing and the Second Bridge Closing.
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4.4 Negotiations Relating to Geographical Rights. The Company and
MinnovEX agree to negotiate in good faith regarding the grant of exclusive
rights to Purchaser to sell and integrate the Company's products in the South
America and Africa (excluding Northern Africa) market regions.
4.5 Further Assurances. Subject to the terms and conditions of this
Agreement, each party hereto will use its best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things reasonably
necessary or reasonably desirable to consummate the transactions contemplated by
this Agreement.
Section 5. Bridge Closing Conditions
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5.1 Conditions to Obligations of Purchaser. The obligations of the
Standby Purchasers to consummate its obligations pursuant to Section 1 hereof
are subject to the satisfaction of each of the following conditions:
(a) The execution and delivery of the Amendment to Gensym Value
Added Resale Agreement, in the form attached hereby to Exhibit D, by and between
the Company and MinnovEX.
(b) The Company shall have filed, or caused to be filed, in all
necessary public offices, the UCC Financing Statements required to be filed to
perfect the Standby Purchasers security interest granted pursuant to the
Security Agreement.
Section 6. Standby Closing Conditions
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6.1 Mutual Conditions. The obligations of the Standby Purchasers, on the
one hand, and the Company, on the other hand, to consummate their respective
obligations pursuant to Section 2 hereof are subject to the satisfaction each of
the following conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 p.m. on October 10, 2001; and at the Expiration Date no stop
order suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act and no proceedings therefor shall have been initiated
or threatened by the Commission.
(b) Each of the representations and warranties of the other parties
hereto contained in this Agreement shall be true and correct in all material
respects, at and as of the Expiration Date, with the same force and effect as if
given on the Expiration Date.
(c) The Rights Offering shall have been completed in conformity
with all of the requirements related thereto provided in the Registration
Statement and the Prospectus and under applicable the rules and regulations of
the SEC under the 1933 Act.
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Section 7. Other Provisions
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7.1 Notices. Any notice required to be given hereunder shall be
sufficient if in writing and sent by facsimile transmission (with transmission
confirmed), by courier service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class postage
prepaid), addressed as follows:
If to the Company, to: Gensym Corporation
00 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
with a copy to: Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X.X. Xxxxx III, Esq.
If to the Standby Purchasers, to: Each Standby Purchaser at the address set
forth on the signature pages hereto.
with a copy to: Xxxxx, Xxxxxx-Xxxxx & Xxxxxxxxx, P.C.
Reservoir Place
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
transmitted, personally delivered or mailed.
7.2 Binding Effect. This Agreement shall inure to the benefit of and be
binding upon each Standby Purchaser and the Company and their respective
successors, and no other person shall acquire or have any right under or by
virtue of this Agreement. No party may assign any of its rights or obligations
hereunder to any other person or entity without the prior written consent of the
other party. The obligations of each of the Standby Purchasers under this
Agreement shall be several and not joint, and no Standby Purchaser shall have
any obligation or liability to the Company or any other party hereto for or in
respect of the representations, warranties or the performance or non performance
of any obligation hereunder by any other Standby Purchaser.
7.3 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Massachusetts without regard
to conflicts of law principles.
7.4 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and part of one
instrument, and a signature hereto sent by facsimile transmission shall be as
binding as delivery of a manually executed counterpart hereof.
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7.5 Entire Agreement. This Agreement shall constitute the entire
agreement between the parties hereto, and shall supersede any prior oral or
written term sheets or other agreements or understandings concerning the subject
matter hereof.
7.6 Affiliate Status. The parties acknowledge that the Director
Purchasers are a affiliates of the Company for purposes of the 1933 Act, and
that the ability of the Director Purchasers to resell the Standby Shares
purchased by them may be limited by applicable provisions of Rule 144 or other
limitations in effect from time to time under the 1933 Act. The Company shall be
entitled to imprint on or attach to certificates for Shares delivered to the
Director Purchasers the Company's customary legend to the effect that the holder
thereof is an affiliate subject to such limitations.
[Remainder of Page Left Intentionally Blank]
-12-
IN WITNESS WHEREOF, and intending to be legally bound, each of the parties
hereto has executed this Agreement as of and on the date first above written.
THE COMPANY:
GENSYM CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
MINNOVEX:
MINNOVEX TECHNOLOGIES, INC.
Address:
By: /s/ Xxxxx Xxxxxx
--------------------
Name: Xxxxx Xxxxxx
Title: President
THE ONG PURCHASERS
Address:
/s/ Xxxx X. Xxx
------------------------
Xxxx X. Xxx
Address: /s/ Xxxx Xxxxx
------------------------
Xxxx Xxxxx
(Continued on Next Page)
SIGNATURE PAGES
TO
BRIDGE LOAN, STANDBY STOCK PURCHASE AND DEBT REDUCTION AGREEMENT
-13-
THE DIRECTOR PURCHASERS
Address: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Address: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Address: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Xxxxxx X. Xxxxxxxxx
Address: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Xxxxxxxx X. Xxxxxxx
Address: /s/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx
Address: /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------
Xxxxxx X. Xxxxxxxxxxx
SIGNATURE PAGES
TO
BRIDGE LOAN, STANDBY STOCK PURCHASE AND DEBT REDUCTION AGREEMENT
-14-
SCHEDULE 1
----------
INITIAL BRIDGE SECOND BRIDGE STANDBY SHARES
NAME CLOSING CLOSING PURCHASE COMMITMENT
----------------------------------------- -------------- ------------- -------------------
MinnovEX Technologies, Inc. $166,666.66 $166,666.66 $ 500,000.00
Xxxx X. Xxx 108,333.33 108,333.33 325,000.00
Xxxx Xxxxx 58,333.34 58,333.34 175,000.00
Xxxxxx X. Xxxxxxxxx 66,666.67 66,666.67 200,000.00*
Xxxxxx X. Xxxxx 12,500.00 12,500.00 66,000.00*
Xxxxx X. Xxxxxx 15,000.00 15,000.00 44,000.00*
Xxxxxxxx X. Xxxxxxx 50,000.00 50,000.00 150,000.00*
Xxxx X. Xxxxx 20,000.00 20,000.00 54,000.00*
Xxxxxx X. Xxxxxxxxxxx 17,500.00 17,500.00 50,000.00*
TOTAL: $515,000.00 $515,000.00 $1,564,000.00
_____________
* An aggregate of $106,000.00 of the "Standby Shares Purchase Commitment" of
the Director Purchasers is to be paid by the cancellation of current
indebtedness owed to the Director Purchasers. The amount the "Standby Shares
Purchase Commitment" to be satisfied for each Director Purchaser by the
cancellation of current indebtedness is as follows:
Xxxxxx X. Xxxxxxxxx: $ 9,000
Xxxxxx X. Xxxxx: 41,000
Xxxxx X. Xxxxxx 14,000
Xxxxxxxx X. Xxxxxxx 13,500
Xxxx X. Xxxxx 14,000
Xxxxxx X. Xxxxxxxxxxx 13,500
-15-
