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EXHIBIT 10.1
PURCHASE AGREEMENT
THIS AGREEMENT is made as of the __ day of September, 1999, by
and among ChromaVision Medical Systems, Inc. (the "Company"), a corporation
organized under the laws of the State of Delaware, with its principal offices at
00000 Xxxxx Xxxxxxx, Xxx Xxxx Xxxxxxxxxx, Xxxxxxxxxx 00000-0000, and the
purchaser whose name and address is set forth on the signature page hereof (the
"Purchaser").
IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company, and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the
terms and conditions of this Agreement, the Company has authorized the sale of
up to 1,775,000 shares (the "Shares") of common stock, par value $0.01 per share
(the "Common Stock"), of the Company.
SECTION 2. Agreement to Sell and Purchase the Shares. At the
Closing (as defined in Section 3), the Company will sell to the Purchaser, and
the Purchaser will buy from the Company, upon the terms and conditions
hereinafter set forth, the number of Shares (at the purchase price) shown below:
Price Per
Number to Be Share In Aggregate
Purchased Dollars Price
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The Company proposes to enter into this same form of purchase
agreement with certain other investors (the "Other Purchasers") and expects to
complete sales of the Shares to them. The Purchaser and the Other Purchasers are
hereinafter sometimes collectively referred to as the "Purchasers," and this
Agreement and the agreements executed by the Other Purchasers are hereinafter
sometimes collectively referred to as the "Agreements." The term "Placement
Agent" shall mean Prudential Vector Healthcare Group.
SECTION 3. Delivery of the Shares at the Closing. The completion
of the purchase and sale of the Shares (the "Closing") shall occur as soon as
practicable following notification by the Securities and Exchange Commission
(the "Commission") to the Company of the Commission's willingness to declare
effective the registration statement to be filed by the Company pursuant to
Section 7.1 hereof (the "Registration Statement") at a place and time (the
"Closing Date") to be agreed upon by the Company and the Placement Agent. In the
absence of any such agreement, the Closing shall be held at the offices of
Stroock & Stroock & Xxxxx LLP,
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counsel to the Placement Agent, in New York, New York at 12:00 p.m. local time
on the fifth business day after the Company delivers written notice to the
Placement Agent of receipt of such notification from the Commission. The Company
will promptly notify the Purchasers by facsimile transmission or otherwise of
the date, place and time of the Closing.
At the Closing, the Company shall deliver to the Purchaser one or
more stock certificates registered in the name of the Purchaser, or in such
nominee name(s) as designated by the Purchaser in writing, representing the
number of Shares set forth in Section 2 above and bearing an appropriate legend
referring to the fact that the Shares were sold in reliance upon the exemption
from registration under the Securities Act of 1933, as amended (the "Securities
Act") provided by Section 4(2) thereof and Rule 506 thereunder. The Company will
promptly substitute one or more replacement certificates without the legend at
such time as the Registration Statement becomes effective. The name(s) in which
the stock certificates are to be registered are set forth in the Stock
Certificate Questionnaire attached hereto as part of Appendix I. The Company's
obligation to complete the purchase and sale of the Shares and deliver such
stock certificate(s) to the Purchaser at the Closing shall be subject to the
following conditions, any one or more of which may be waived by the Company: (a)
receipt by the Company of same-day funds in the full amount of the purchase
price for the Shares being purchased hereunder; (b) completion of the purchases
and sales under the Agreements with all of the Other Purchasers; and (c) the
accuracy of the representations and warranties made by the Purchasers and the
fulfillment of those undertakings of the Purchasers to be fulfilled prior to the
Closing. The Purchaser's obligation to accept delivery of such stock
certificate(s) and to pay for the Shares evidenced thereby shall be subject to
the following conditions: (a) the Commission has notified the Company of the
Commission's willingness to declare the Registration Statement effective on or
prior to the 60th day after the date such Registration Statement was filed by
the Company; and (b) the accuracy in all material respects of the
representations and warranties made by the Company herein and the fulfillment in
all material respects of those undertakings of the Company to be fulfilled prior
to Closing. The Purchaser's obligations hereunder are expressly not conditioned
on the purchase by any or all of the Other Purchasers of the Shares that they
have agreed to purchase from the Company.
SECTION 4. Representations, Warranties and Covenants of the
Company. The Company hereby represents and warrants to, and covenants with, the
Purchaser as follows:
4.1. Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and the Company is qualified to do business as a
foreign corporation in each jurisdiction in which qualification is required,
except where failure to so qualify would not have a Material Adverse Effect (as
defined herein) on the Company. The Company has three subsidiaries, ChromaVision
International, Inc., a Delaware corporation, ChromaVision SARL, incorporated in
France and ChromaVision GmbH, incorporated in Germany.
4.2. Authorized Capital Stock. Except as disclosed in or
contemplated by the
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Confidential Private Placement Memorandum dated August __, 1999 prepared by the
Company, including all Exhibits (except Exhibit [K]), supplements and amendments
thereto (the "Private Placement Memorandum"), the Company had authorized and
outstanding capital stock as set forth under the heading "Capitalization" in the
Private Placement Memorandum as of the date set forth therein; the issued and
outstanding shares of the Company's Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities, and conform in all material respects to the description thereof
contained in the Private Placement Memorandum. Except as disclosed in or
contemplated by the Private Placement Memorandum, the Company does not have
outstanding any options 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. The
description of the Company's stock, stock bonus and other stock plans or
arrangements and the options or other rights granted and exercised thereunder,
set forth in the Private Placement Memorandum accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
4.3. 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 duly authorized, validly issued, fully paid and
nonassessable, and will conform in all material respects to the description
thereof set forth in the Private Placement Memorandum. No preemptive rights or
other rights to subscribe for or purchase exist with respect to the issuance and
sale of the Shares by the Company pursuant to this Agreement. No stockholder of
the Company has any right (which has not been waived or has not expired by
reason of lapse of time following notification of the Company's intent to file
the Registration Statement) to require the Company to register the sale of any
shares owned by such stockholder under the Securities Act in the Registration
Statement. No further approval or authority of the stockholders or the Board of
Directors of the Company will be required for the issuance and sale of the
Shares to be sold by the Company as contemplated herein.
4.4. Due Execution, Delivery and Performance of the Agreements.
The Company has full legal right, corporate power and authority to enter into
the Agreements and perform the transactions contemplated hereby. The Agreements
have been duly authorized, executed and delivered by the Company. The making and
performance of the Agreements by the Company and the consummation of the
transactions herein contemplated will not violate any provision of the
organizational documents of the Company and will not result in the creation of
any lien, charge, security interest or encumbrance upon any assets of the
Company pursuant to the terms or provisions of, or will not 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 any agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other instrument
to which the Company or the Subsidiaries are a party or by which the Company or
the Subsidiaries or their respective properties may be bound or affected and in
each case which
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would have a material adverse effect on the condition (financial or otherwise),
properties, business, prospects or results of operations of the Company and its
Subsidiaries taken as a whole (a "Material Adverse Effect") or, to the Company's
knowledge, 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 its Subsidiaries or their
respective properties. No consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or the consummation of
the transactions contemplated by this Agreement, except for compliance with the
Blue Sky laws and federal securities laws applicable to the offering of the
Shares. Upon their execution and delivery, and assuming the valid execution
thereof by the respective Purchasers, the Agreements will constitute valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' 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 agreements of the Company in Section 7.3
hereof may be legally unenforceable.
4.5. Accountants. KPMG LLP have expressed their opinion with
respect to the consolidated financial statements to be incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1998 into the Registration Statement and the Prospectus which forms a part
thereof, are independent accountants as required by the Securities Act and the
rules and regulations promulgated thereunder (the "Rules and Regulations").
4.6. No Defaults. Except as to defaults, violations and breaches
which individually or in the aggregate would not be material to the Company and
its Subsidiaries, taken as a whole, neither the Company nor its Subsidiaries are
in violation or default of any provision of their certificate of incorporation
or bylaws, or other organizational documents, or 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 properties are bound; and
there does not exist any state of fact which, with notice or lapse of time or
both, would constitute an event of default on the part of the Company or the
Subsidiaries as defined in such documents, except such defaults which
individually or in the aggregate would not be material to the Company and its
Subsidiaries, taken as a whole.
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4.7. Contracts. The contracts described in the Private Placement
Memorandum as being in effect on the date hereof that are material to the
Company, are in full force and effect on the date hereof; and neither the
Company nor its Subsidiaries, nor to the Company's knowledge, is any other party
in breach of or default under any of such contracts which would have a Material
Adverse Effect.
4.8. No Actions. There are no legal or governmental actions,
suits or proceedings pending or, to the Company's knowledge, threatened to which
the Company or its Subsidiaries are or may be a part or of which property owned
or leased by the Company or its Subsidiaries are 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 result in a material adverse change in the condition
(financial or otherwise), properties, business, prospects or results of
operations of the Company and its Subsidiaries, taken as a whole (a "Material
Adverse Change"); and no labor disturbance by the employees of the Company
exists, to the Company's knowledge, or is imminent which might reasonably be
expected to have a Material Adverse Effect. Neither the Company nor its
Subsidiaries are 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.
4.9. Properties. The Company and its Subsidiaries have good and
marketable title to all the properties and assets reflected as owned by them in
the consolidated financial statements included in the Private Placement
Memorandum, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except (i) those, if any, reflected in such consolidated financial
statements (including the notes thereto), or (ii) those which are not material
in amount and do not adversely affect the use made and promised to be made of
such property by the Company or its Subsidiaries. The Company and its
Subsidiaries hold their leased properties under valid and binding leases, with
such exceptions as are not materially significant in relation to their business.
Except as disclosed in the Private Placement Memorandum and except for the
property referred to in Section 4.11, each of the Company and its Subsidiaries
owns or leases all such properties as are necessary to its operations as now
conducted.
4.10. No Material Change. Since June 30, 1999 and except as
specifically contemplated by the Private Placement Memorandum, (i) neither the
Company nor its Subsidiaries have incurred any material liabilities or
obligations, indirect, or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary course of
business or which could reasonably be expected to result in a material reduction
in the future earnings of the Company; (ii) neither the Company nor its
Subsidiaries have sustained any material loss or interference with its
businesses or properties from fire, flood, windstorm, accident or other calamity
not covered by insurance; (iii) neither the Company nor its Subsidiaries have
paid or declared any dividends or other distributions with respect to its
capital stock and the Company and its Subsidiaries are 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
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stock of the Company or its Subsidiaries other than the sale of the Shares
hereunder and shares or options issued pursuant to employee equity incentive
plans or purchase plans approved by the Company's or the Subsidiaries' Board of
Directors, as the case may be, or indebtedness material to the Company or its
Subsidiaries (other than in the ordinary course of business); and (v) there has
not been a Material Adverse Change.
4.11. Intellectual Property. Except as specifically contemplated
by the Private Placement Memorandum, (i) to the Company's knowledge, the Company
has filed for or holds licenses or options for the inventions, patent
applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights and trade secrets necessary for the conduct of the
Company's business as currently conducted and as the Private Placement
Memorandum indicates the Company contemplates conducting (collectively, the
"Intellectual Property"); and (ii) to the Company's knowledge (for each of the
following subsections (a) through (e)): (a) there are no third parties who have
any ownership rights to any Intellectual Property that is owned by, or has been
licensed to the Company for the product indications described in the Private
Placement Memorandum in the case of any business the Company has or intends to
conduct during the year ending September 31, 1999 that would preclude the
Company from conducting its business as currently conducted and as the Private
Placement Memorandum indicates the Company contemplates conducting; (b) there
are currently no sales of any products that would constitute an infringement by
third parties of any Intellectual Property owned, licensed or optioned by the
Company; (c) there is no pending or threatened action, suit, proceeding or claim
by others challenging the rights of the Company in or to any Intellectual
Property owned, licensed or optioned by the Company, other than non-material
claims; (d) there is no pending or threatened action, suit, proceeding or claim
by others challenging the validity or scope of any Intellectual Property owned,
licensed or optioned by the Company, other than non-material claims; and (e)
there is no pending or threatened action, suit, proceeding or claim by others
that the Company infringes or otherwise violate any patent, trademark,
copyright, trade secret or other proprietary right of others, other than
non-material claims.
4.12. Compliance. Neither the Company nor its Subsidiaries have
been advised, and neither has any 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, including, without
limitation, all applicable local, state and federal environmental laws and
regulations; except where failure to be so in compliance would not have a
Material Adverse Effect.
4.13. Taxes. Each of the Company and its Subsidiaries has filed
all necessary federal, state and foreign income and franchise tax returns and
has paid or accrued all taxes shown as due thereon, and neither the Company nor
its Subsidiaries have knowledge of a tax deficiency which has been or might be
asserted or threatened against it which could have a Material Adverse Effect.
4.14. Transfer Taxes. On the Closing Date, all stock transfer or
other taxes (other
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than income taxes) which are required to be paid in connection with the sale and
transfer of the Shares to be sold to the Purchaser hereunder 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.
4.15. 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.
4.16. Offering Materials. The Company has not distributed and
will not distribute prior to the Closing Date any offering material in
connection with the offering and sale of the Shares other than the Private
Placement Memorandum or any amendment or supplement thereto. The Company has not
in the past nor will it hereafter take any action independent of the Placement
Agent to sell, offer for sale or solicit offers to buy any securities of the
Company which would bring the offer, issuance or sale of the Shares, as
contemplated by this Agreement, within the provisions of Section 5 of the
Securities Act, unless such offer, issuance or sale was or shall be within the
exemptions of Section 4 of the Securities Act.
4.17. 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 theft, damage, destruction, acts of
vandalism and all other risks customarily insured against by similarly situated
companies, all of which insurance is in full force and effect.
4.18. Contributions. At no time since its incorporation has the
Company, directly or indirectly, (i) made any unlawful contribution to any
candidate for public office, or failed to disclose fully 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.
4.19. Additional Information. The Company represents and warrants
that the information contained in the following documents, which the Placement
Agent has furnished to the Purchaser, or will furnish prior to the Closing, is
or will be true and correct in all material respects as of their respective
final dates:
(a) the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998;
(b) the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1999;
(c) the Company's Proxy Statement for the 1999 Annual Meeting
of Stockholders;
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(d) the Registration Statement;
(e) the Private Placement Memorandum, including all addenda
and exhibits thereto (other than the Appendices); and
(f) the Registration Statement on Form 8-A describing the
common stock and the rights to purchase series C preferred
stock in the Registration Statement;
(g) all other documents, if any, filed by the Company with the
Securities and Exchange Commission since June 30, 1999
pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
4.20. Legal Opinions. Prior to the Closing, (a) Xxxxxx, Xxxx &
Xxxxxxxx LLP, counsel to the Company, will deliver its legal opinion to the
Placement Agent substantially in the form of Exhibit A hereto and (b) Fish &
Xxxxxxxxxx P.C., special counsel to the Company, will deliver its legal opinion
to the Placement Agent substantially in the form of Exhibit B hereto, in each
case with such changes therein as such counsel rendering the opinion and the
Placement Agent may agree upon.
4.21. Certificate. At the Closing, the Company will deliver to
Purchaser a certificate executed by the Chairman of the Board or President and
the chief financial or accounting officer of the Company, dated the Closing
Date, in form and substance reasonably satisfactory to the Purchasers, to the
effect that the representations and warranties of the Company set forth in this
Section 4 are true and correct in all material respects as of the date of this
Agreement and as of the Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions herein on its part to be performed
or satisfied on or prior to such Closing Date.
4.22. Year 2000 Compliance. The Company has reviewed its
operations to evaluate the extent to which the business or operations of the
Company will be affected by the Year 2000 Problem (as defined below). As a
result of such review, the Company has not noted any material Year 2000 Problems
which would prevent its products and systems from being capable of correctly
interpreting dates beyond the year 1999. Based on the Company's testing to date,
the Company has no reason to believe that Year 2000 Problems caused by its own
products or internal operations would have a Material Adverse Effect. The "Year
2000 Problem" as used herein means any significant risk that computer hardware
or software used in the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission or other utilization of data or in the
operation of mechanical or electrical systems of any kind will not, in the case
of dates or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to January
1, 2000.
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SECTION 5. Representations, Warranties and Covenants of the
Purchaser. (a) The Purchaser represents and warrants to, and covenants with, the
Company that: (i) the Purchaser is knowledgeable, sophisticated and experienced
in making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the Shares; (ii) the Purchaser is
acquiring the number of Shares set forth in Section 2 above in the ordinary
course of its business and for its own account for investment (as defined for
purposes of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976 and the
regulations thereunder) only and with no present intention of distributing any
of such Shares or any arrangement or understanding with any other persons
regarding the distribution of such Shares within the meaning of Section 2(11) of
the Securities Act of 1933; (iii) the Purchaser will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares except in compliance with the Act and the Rules and Regulations; (iv) the
Purchaser has completed or caused to be completed the Registration Statement
Questionnaire and the Stock Certificate Questionnaire, both attached hereto as
Appendix I, for use in preparation of the Registration Statement, and the
answers thereto are true and correct as of the date hereof and will be true and
correct as of the effective date of the Registration Statement; (v) the
Purchaser has, in connection with its decision to purchase the number of Shares
set forth in Section 2 above, relied solely upon the Private Placement
Memorandum and the documents included therein and the representations and
warranties of the Company contained herein; and (vi) the Purchaser is an
"accredited investor" within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act.
(b) The Purchaser hereby covenants with the Company not to make
any sale of the Shares without satisfying the prospectus delivery requirement
under the Securities Act, and the Purchaser acknowledges and agrees that such
Shares are not transferable on the books of the Company unless the certificate
submitted to the transfer agent evidencing the Shares is accompanied by a
separate officer's certificate: (i) in the form of Appendix II hereto, (ii)
executed by an officer of, or other authorized person designated by, the
Purchaser, and (iii) to the effect that (A) the Shares have been sold in
accordance with the Registration Statement, the Securities Act and the Rules and
Regulations and any applicable state securities or blue sky laws and (B) the
requirement of delivering a current prospectus has been satisfied. The Purchaser
acknowledges that there may occasionally be times when the Company determines
the use of the prospectus forming a part of the Registration Statement should be
suspended until such time as an amendment or supplement to the Registration
Statement or the Prospectus has been filed by the Company and any such amendment
to the Registration Statement is declared effective by the Commission, or until
such time as the Company has filed an appropriate report with the Commission
pursuant to the Exchange Act. The Purchaser hereby covenants that it will not
sell any Shares pursuant to said prospectus during the period commencing at the
time at which the Company gives the Purchaser written notice of the suspension
of the use of said prospectus and
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ending at the time the Company gives the Purchaser written notice that the
Purchaser may thereafter effect sales pursuant to said prospectus. The Purchaser
further covenants to notify the Company promptly of the sale of all of its
Shares.
(c) The Purchaser further represents and warrants to, and
covenants with, the Company that (i) the Purchaser has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) upon the
execution and delivery of this Agreement, this Agreement shall constitute a
valid and binding obligation of the Purchaser enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' 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 agreements of the Purchaser in Section 7.3 hereof may be
legally unenforceable.
SECTION 6. Survival of Representations, Warranties and
Agreements. Notwithstanding any investigation made by any party to this
Agreement or by the Placement Agent, all covenants, agreements, representations
and warranties made by the Company and the Purchaser herein and in the
certificates for the Shares delivered pursuant hereto shall survive the
execution of this Agreement, the delivery to the Purchaser of the Shares being
purchased and the payment therefor.
SECTION 7. Registration of the Shares; Compliance with the
Securities Act.
7.1. Registration Procedures and Expenses. The Company shall:
(a) as soon as practicable, prepare and file with the
Commission the Registration Statement on Form S-3 relating
to the sale of the Shares by the Purchaser from time to
time through the automated quotation system of the Nasdaq
National Market or the facilities of any national
securities exchange on which the Company's Common Stock is
then traded or in privately-negotiated transactions;
(b) use its reasonable efforts subject to receipt of necessary
information from the Purchasers, to cause the Commission
to notify the Company of the Commission's willingness to
declare the Registration Statement effective within 60
days after the Registration Statement is filed by the
Company;
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(c) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the
prospectus used in connection therewith as may be
necessary to keep the Registration Statement effective
until the earlier of (i) twenty-four months after the
effective date of the Registration Statement or (ii) the
date on which the Shares may be resold by the Purchasers
without registration by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect;
(d) furnish to the Purchaser with respect to the Shares
registered under the Registration Statement (and to each
underwriter, if any, of such Shares) such reasonable
number of copies of prospectuses in order to facilitate
the public sale or other disposition of all or any of the
Shares by the Purchaser; provided, however, that the
obligation of the Company to deliver copies of
prospectuses to the Purchaser shall be subject to the
receipt by the Company of reasonable assurances from the
Purchaser that the Purchaser will comply with the
applicable provisions of the Securities Act and of such
other securities or blue sky laws as may be applicable in
connection with any use of such prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Purchaser;
provided, however, that the Company shall not be required
to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or
has not so consented; and
(f) bear all expenses in connection with the procedures in
paragraphs (a) through (e) of this Section 7.1 and the
registration of the Shares pursuant to the Registration
Statement, other than fees and expenses, if any, of
counsel or other advisers to the Purchaser or the Other
Purchasers or underwriting discounts, brokerage fees and
commissions incurred by the Purchaser or the Other
Purchasers, if any.
7.2. Transfer of Shares After Registration. The Purchaser agrees
that it will not effect any disposition of the Shares or its right to purchase
the Shares that would constitute a sale within the meaning of the Securities
Act, except as contemplated in the Registration Statement referred to in Section
7.1, and that it will promptly notify the Company of any changes in the
information set forth in the Registration Statement regarding the Purchaser or
its Plan of Distribution.
7.3. Indemnification. For the purpose of this Section 7.3:
(i) the term "Purchaser/Affiliate" shall include the Purchaser
and any affiliate of such Purchaser; and
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(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in
or relating to the Registration Statement referred to in
Section 7.1.
(a) The Company agrees to indemnify and hold harmless each of the
Purchasers and each person, if any, who controls any Purchaser within the
meaning of the Securities Act, against any losses, claims, damages, liabilities
or expenses, joint or several, to which such Purchasers or such controlling
person may become subject, under the Securities Act, the Exchange Act, or any
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, including the prospectus, financial statements and schedules, and all
other documents filed as a part thereof, as amended at the time of effectiveness
of the Registration Statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A,
or pursuant to Rule 434, of the Rules and Regulations, or the prospectus, in the
form first filed with the Commission pursuant to Rule 424(b) of the Regulations,
or filed as part of the Registration Statement at the time of effectiveness if
no Rule 424(b) filing is required (the "Prospectus"), or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state in any of them a material fact required to be stated therein
or necessary to make the statements in any of them, in light of the
circumstances under which they were made, not misleading, or arise out of or are
based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained in this Agreement, or any failure of the
Company to perform its obligations hereunder or under law, and will reimburse
each Purchaser and each such controlling person for any legal and other expenses
as such expenses are reasonably incurred by such Purchaser or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage, liability or expense arises out of or is based
upon (i) an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company: by or on behalf of the Purchaser expressly for use
therein, or (ii) the failure of such Purchaser to comply with the covenants and
agreements contained in Sections 5(b) or 7.2 hereof respecting sale of the
Shares, or (iii) the inaccuracy of any representations made by such Purchaser
herein or (iv) any statement or omission in any Prospectus that is corrected in
any subsequent Prospectus that was delivered to the Purchaser prior to the
pertinent sale or sales by the Purchaser.
(b) Each Purchaser will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act, against any losses,
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13
claims, damages, liabilities or expenses to which the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Purchaser) insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon (i) any failure to comply
with the covenants and agreements contained in Sections 5(b) or 7.2 hereof
respecting the sale of the Shares or (ii) the inaccuracy of any representation
made by such Purchaser herein or (iii) any untrue or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Purchaser expressly for use therein, and will
reimburse the Company, each of its directors, each of its officers who signed
the Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
(c) Promptly after receipt by an indemnified party under this
Section 7.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 7.3 promptly notify the indemnifying party
in writing thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 7.3 or to the extent it is not prejudiced as a result of such failure.
In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and
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14
approval by the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 7.3 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed such
counsel in connection with the assumption of legal defenses in accordance with
the proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by such indemnifying party in the case of paragraph
(a), representing all of the indemnified parties who are parties to such action)
or (ii) the indemnified party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of action, in each of which cases
the reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) If the indemnification provided for in this Section 7.3 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) of this Section 7.3 in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Purchaser from the placement of Common Stock or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but the relative fault of the
Company and the Purchaser in connection with the statements or omissions or
inaccuracies in the representations and warranties in this Agreement which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective relative benefits
received by the Company on the one hand and each Purchaser on the other shall be
deemed to be in the same proportion as the amount paid by such Purchaser to the
Company pursuant to this Agreement for the Shares purchased by such Purchaser
that were sold pursuant to the Registration Statement bears to the difference
(the "Difference") between the amount such Purchaser paid for the Shares that
were sold pursuant to the Registration Statement and the amount received by such
Purchaser from such sale. The relative fault of such Selling Stockholders and
each Purchaser shall be determined by reference to, among other things, whether
the untrue or alleged statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Company or
by such Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in paragraph (c) of this Section 7.3, any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
paragraph (c) of this Section 7.3 with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for contribution is
to be made under this paragraph (d); provided, however, that no additional
notice shall be required with respect to any threat or action for which notice
has
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15
been given under paragraph (c) for purposes of indemnification. The Company and
each Purchaser agree that it would not be just and equitable if contribution
pursuant to this Section 7.3 were determined solely by pro rata allocation (even
if the Purchaser were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
7.3, no Purchaser shall be required to contribute any amount in excess of the
amount by which the Difference exceeds the amount of any damages that such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Purchasers' obligations to contribute pursuant
to this Section 7.3 are several and not joint.
7.4. Termination of Conditions and Obligations. The restrictions
imposed by Section 5 or this Section 7 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Shares upon the
passage of twenty-four months from the effective date of the Registration
Statement covering such Shares or at such time as an opinion of counsel
satisfactory in form and substance to the Company shall have been rendered to
the effect that such conditions are not necessary in order to comply with the
Securities Act.
7.5. Information Available. So long as the Registration Statement
is effective covering the resale of Shares owned by the Purchaser, the Company
will furnish to the Purchaser:
(a) as soon as practicable after available (but in the case of
the Company's Annual Report to Stockholders, within 120
days after the end of each fiscal year of the Company),
one copy of (i) its Annual Report to Stockholders (which
Annual Report shall contain financial statements audited
in accordance with generally accepted accounting
principles by a national firm of certified public
accountants), (ii) if not included in substance in the
Annual Report to Stockholders, its Annual Report on Form
10-K, (iii) if not included in substance in its Quarterly
Reports to Shareholders, its quarterly reports on Form
10-Q, and (iv) a full copy of the particular Registration
Statement covering the Shares (the foregoing, in each
case, excluding exhibits);
(b) upon the reasonable request of the Purchaser, a reasonable
number of copies of the prospectuses to supply to any
other party requiring such prospectuses;
and the Company, upon the reasonable request of the Purchaser, will meet with
the Purchaser or a representative thereof at the Company's headquarters to
discuss information relevant for disclosure in the Registration Statement
covering the Shares subject to appropriate
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16
confidentiality limitations.
SECTION 8. Broker's Fee. The Purchaser acknowledges that the
Company intends to pay to the Placement Agent a fee in respect of the sale of
the Shares to the Purchaser. Each of the parties hereto hereby represents that,
on the basis of any actions and agreements by it, there are no other brokers or
finders entitled to compensation in connection with the sale of the Shares to
the Purchaser.
SECTION 9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:
(a) if to the Company, to:
ChromaVision Medical Systems, Inc.
00000 Xxxxx Xxxxxxx
Xxx Xxxx Xxxxxxxxxx, Xxxxxxxxxx
Attn: Xxxxx X. X'Xxxxx
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxx Xxxxxxx, Esq.
or to such other person at such other place as the Company
shall designate to the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth at the
end of this Agreement, or at such other address or
addresses as may have been furnished to the Company in
writing.
SECTION 10. Changes. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company and
the Purchaser.
SECTION 11. Headings. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.
SECTION 12. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
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17
SECTION 13. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York and the
federal law of the United States of America.
SECTION 14. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.
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.
CHROMAVISION MEDICAL SYSTEMS, INC.
By
-----------------------------------------------
Print or Type:
Name of Purchaser
(Individual or Institution):
-----------------------------------------------
Name of Individual representing
Purchaser (if an Institution):
-----------------------------------------------
Title of Individual representing
Purchaser (if an Institution):
-----------------------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
-----------------------------------------------
Address:
---------------------------
Telephone:
---------------------------
Telecopier:
---------------------------
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18
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Purchase Agreement which follows)
A. Complete the following items on BOTH Purchase Agreements:
1. Page 14 - Signature:
(i) Name of Purchaser (Individual or Institution)
(ii) Name of Individual representing Purchaser (if an Institution)
(iii) Title of Individual representing Purchaser (if an Institution)
(iv) Signature of Individual Purchaser or Individual representing
Purchaser
2. Appendix I - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire.
Appendix I - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
3. Return BOTH properly completed and signed Purchase Agreements
including the properly completed Appendix I to:
Prudential Vector Healthcare Group
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Deutsch
B. Instructions regarding the transfer of funds for the purchase of Shares
will be sent by facsimile to the Purchaser by the Placement Agent at a
later date.
C. Upon the resale of the Shares by the Purchasers after the Registration
Statement covering the Shares is effective, as described in the Purchase
Agreement, the Purchaser:
(i) must deliver a current prospectus of the Company to the
buyer (prospectuses must be obtained from the Company at
the Purchaser's
19
request); and
(ii) must send a letter in the form of Appendix II to the
Company so that the Shares may be properly transferred.
20
Appendix I
(one of two)
CHROMAVISION MEDICAL SYSTEMS, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares
are to be registered in (this is
the name that will appear on
your stock certificate(s)). You
may use a nominee name if
appropriate:
-----------------------
2. The relationship between the
Purchaser of the Shares and the
Registered Holder listed in
response to item 1 above:
3. The mailing address of the
Registered Holder listed in
response to item 1 above:
-----------------------
-----------------------
-----------------------
-----------------------
4. The Social Security Number or
Tax Identification Number of the
Registered Holder listed in
response to item 1 above:
-----------------------
21
Appendix I
(two of two)
CHROMAVISION MEDICAL SYSTEMS, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the
Registration Statement, please state your or your organization's name exactly as
it should appear in the Registration Statement:
2. Please provide the number of shares that you or your
organization will own immediately after Closing, including those Shares
purchased by you or your organization pursuant to this Purchase Agreement and
those shares purchased by you or your organization through other transactions:
3. Have you or your organization had any position, office or
other material relationship within the past three years with the Company or its
affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships
below:
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22
APPENDIX II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly author-
ized by] _____________________________________________________________
[fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of the shares
evidenced by the attached certificate, and as such, sold such shares
on __________________________ in accordance with
[date]
Registration Statement number _____________________________________
[fill in the number of or otherwise
________________________________ and the requirement of delivering a
identify Registration Statement]
current prospectus by the Company has been complied with in connection with such
sale.
Print or Type:
Name of Purchaser
(Individual or
Institution): ______________________
Name of Individual
representing
Purchaser (if an
Institution) ______________________
Title of Individual
representing
23
Purchaser (if an
Institution): ______________________
Signature by:
Individual Purchaser
or Individual repre-
senting Purchaser: ______________________
