COMMON STOCK PURCHASE AGREEMENT
DATED AS OF FEBRUARY 9, 2001
BY AND BETWEEN
IGEN INTERNATIONAL, INC.
AND
ACQUA WELLINGTON
NORTH AMERICAN EQUITIES FUND, LTD.
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions.................................................1
Section 1.1 Definitions..............................................1
ARTICLE II Purchase and Sale of Common Stock...........................4
Section 2.1 Purchase and Sale of Stock...............................4
Section 2.2 The Shares...............................................4
Section 2.3 Purchase Price and Closing...............................4
ARTICLE III Representations and Warranties..............................4
Section 3.1 Representations and Warranties of the Company............4
Section 3.2 Representations and Warranties of the Purchaser.........11
ARTICLE IV Covenants..................................................13
Section 4.1 Securities Compliance...................................13
Section 4.2 Registration and Listing................................13
Section 4.3 Registration Statement..................................13
Section 4.4 Compliance with Laws....................................13
Section 4.5 Keeping of Records and Books of Account.................14
Section 4.6 Reporting Requirements..................................14
Section 4.7 Non-public Information..................................14
Section 4.8 Effective Registration Statement........................14
Section 4.9 No Stop Orders..........................................14
Section 4.10 Amendments to the Registration Statement................15
Section 4.11 Prospectus Delivery.....................................15
Section 4.12 Other Financing.........................................15
Section 4.13 Notices.................................................16
ARTICLE V Conditions to Closing, Draw Downs and Call Options.........16
Section 5.1 Conditions Precedent to the Issuance of a Draw
Down Notice.............................................16
Section 5.2 Conditions Precedent to the Obligation of the
Purchaser to Close......................................17
Section 5.3 Conditions Precedent to the Obligation of the
Purchaser to Accept a Draw Down Notice and
Purchase the Shares.....................................18
ARTICLE VI Draw Down Terms; Call Option...............................20
Section 6.1 Draw Down Terms.........................................20
Section 6.2 Purchaser's Call Option.................................23
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ARTICLE VII Termination................................................24
Section 7.1 Termination by Mutual Consent...........................24
Section 7.2 Other Termination.......................................24
Section 7.3 Effect of Termination...................................25
ARTICLE VIII Indemnification............................................25
Section 8.1 General Indemnity.......................................25
Section 8.2 Indemnification Procedures..............................26
ARTICLE IX Miscellaneous..............................................27
Section 9.1 Fees and Expenses.......................................27
Section 9.2 Specific Enforcement, Consent to Jurisdiction...........28
Section 9.3 Entire Agreement; Amendment.............................28
Section 9.4 Notices.................................................28
Section 9.5 Waivers.................................................29
Section 9.6 Headings................................................29
Section 9.7 Successors and Assigns..................................30
Section 9.8 Governing Law...........................................30
Section 9.9 Survival................................................30
Section 9.10 Counterparts............................................30
Section 9.11 Publicity...............................................30
Section 9.12 Severability............................................30
Section 9.13 Further Assurances......................................30
-ii-
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "AGREEMENT") is dated as of
February 9, 2001 by and between IGEN International, Inc., a Delaware corporation
(the "COMPANY"), and Acqua Wellington North American Equities Fund, Ltd., a
limited liability company organized under the laws of the Commonwealth of The
Bahamas (the "PURCHASER").
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1 DEFINITIONS.
(a) "ALTERNATE MARKET" shall mean the Nasdaq Small Cap Market, the
American Stock Exchange, the New York Stock Exchange or the OTC Bulletin Board,
whichever is at the time the principal trading exchange or market for the Common
Stock.
(b) "BYLAWS" shall have the meaning assigned to such term in Section
3.1(c) hereof.
(c) "CALL OPTION" shall have the meaning assigned to such term in
Section 6.2(a) hereof.
(d) "CALL OPTION AMOUNT" means the actual amount of proceeds received
by the Company upon the exercise of a Call Option by the Purchaser.
(e) "CHARTER" shall have the meaning assigned to such term in Section
3.1(c) hereof.
(f) "CLOSING" shall have the meaning assigned to such term in Section
2.3 hereof.
(g) "CLOSING DATE" shall have the meaning assigned to such term in
Section 2.3 hereof.
(h) "COMMISSION" shall mean the Securities and Exchange Commission.
(i) "COMMISSION DOCUMENTS" shall mean all reports, schedules, forms,
statements and other documents required to be filed by the Company with the
Commission pursuant to the reporting requirements of the Exchange Act, including
material filed pursuant to Section 13(a) or 15(d) of the Exchange Act, and
including all filings made by the Company after the date hereof pursuant to the
Exchange Act.
(j) "COMMISSION FILINGS" means the Registration Statement and any
other filings made by the Company relating thereto pursuant to the Securities
Act, including all other filings made by the Company after the date hereof
pursuant to the Securities Act.
(k) "COMMON STOCK" shall have the meaning assigned to such term in
Section 2.1 hereof.
(l) "DRAW DOWN" means the exercise by the Company of its right to
request the purchase of shares of Common Stock by the Purchaser.
(m) "DRAW DOWN AMOUNT" means the actual amount of a Draw Down up to
$6,000,000 in any Draw Down Pricing Period or such other amount mutually agreed
upon by the Purchaser and the Company.
(n) "DRAW DOWN DISCOUNT PERCENTAGE" means (i) 94% if the Threshold
Price is equal to or greater than $10.00 but less than $22.00, (ii) 94.5% if the
Threshold Price is equal to or greater than $22.00 but less than $26.00, (iii)
95% if the Threshold Price is equal to or greater than $26.00 but less than
$30.00, and (iv) 95.25% if the Threshold Price is equal to or greater than
$30.00.
(o) "DRAW DOWN EXERCISE DATE" shall mean the date of issuance of a
Draw Down Notice by the Company.
(p) "DRAW DOWN NOTICE" shall have the meaning assigned to such term in
Section 6.1(i) hereof.
(q) "DRAW DOWN PRICING PERIOD" shall mean a period of eighteen (18)
consecutive Trading Days commencing on the first Trading Day designated as the
start date of such draw down pricing period in the Draw Down Notice, or such
other period mutually agreed upon by the Purchaser and the Company.
(r) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
(s) "INVESTMENT PERIOD " shall have the meaning assigned to such term
in Section 7.1 hereof.
(t) "MATERIAL ADVERSE EFFECT" shall mean any effect on the business,
results of operations, prospects, assets or financial condition of the Company
that is material and adverse to the Company and its Subsidiaries and affiliates,
taken as a whole and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company from
entering into and performing any of its obligations under this Agreement in any
material respect; provided, however, that the foregoing shall not include
operating losses of the Company in the amounts contemplated by the Commission
Documents.
(u) "MATERIAL CHANGE IN OWNERSHIP" shall mean that, as of any
particular measurement date, the officers and directors of the Company shall
beneficially own in the aggregate less than 18.5% of the outstanding Common
Stock of the Company, which percentage shall be reduced and proportionately
adjusted to account for any Common Stock issued and outstanding after the date
of this Agreement.
(v) "PERSON" shall mean an individual, a corporation, a partnership,
an association, a limited liability company, a trust or other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
(w) "PRINCIPAL SECURITY HOLDER" shall mean any person (other than
officers, directors and strategic partners of the Company) and any affiliate of
such person who beneficially or of record holds more than 5% of the Company's
Common Stock outstanding on the date hereof on a fully diluted basis.
(x) "PROSPECTUS" shall mean the prospectus in the form included in the
Registration Statement, as supplemented by any Prospectus Supplement
(y) "PROSPECTUS SUPPLEMENT" shall mean any prospectus supplement to
the Registration Statement filed with the Commission pursuant to Rule 424(b).
(z) "REGISTRATION STATEMENT" shall mean the registration statement on
Form S-3, Commission File Number 333-53886 under the Securities Act, filed with
the Commission covering the registration of the Shares, as such Registration
Statement may be amended from time to time.
(aa) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
(bb) "SETTLEMENT DATE" shall have the meaning assigned to such term in
Section 6.1(d) hereof.
(cc) "SHARES" shall mean the shares of Common Stock of the Company
that may be purchased hereunder.
(dd) "SUBSIDIARY" shall mean any corporation or other entity of which
at least a majority of the securities or other ownership interest having
ordinary voting power (absolutely or contingently) for the election of directors
or other persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other Subsidiaries.
(ee) "THRESHOLD PRICE" is the lowest per share price the Company may
set in the Draw Down Notice to sell Shares during a Draw Down Pricing Period
(not taking into account the Draw Down Discount Percentage during such Draw Down
Pricing Period).
(ff) "TRADING DAY" shall mean a day on which the Common Stock is
traded on the Nasdaq National Market or an Alternate Market.
(gg) "TRUNCATED DRAW DOWN ALLOCATION AMOUNT" shall mean the portion of
the Draw Down Amount requested that is allocated to the purchase of the Shares
in accordance with Section 6.1 hereof for each Trading Day in a reduced Draw
Down Pricing Period (as provided in Section 6.1(m) hereof) that (i) the VWAP
equals to or exceeds the Threshold Price, and (ii) the VWAP is below the
Threshold Price and the Purchaser elects to purchase the Common Stock at the
Threshold Price in accordance with clauses (h) and (m) of Section 6.1 hereof.
(hh) "VWAP" shall mean the daily volume weighted average price (based
on a Trading Day from 9:30 a.m. to 4:00 p.m., eastern time) of the Common Stock
of the Company on the NASDAQ National Market or an Alternate Market as reported
by Bloomberg Financial LP using the AQR function.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
SECTION 2.1 PURCHASE AND SALE OF STOCK. Subject to the terms and
conditions of this Agreement, the Company shall issue and sell to the Purchaser
and the Purchaser shall purchase from the Company up to $60,000,000 of its
Common Stock, $0.001 par value per share (the "COMMON STOCK"), based on Draw
Downs, subject to Section 6.1 hereof, of up to $6,000,000 in any Draw Down
Pricing Period and Call Options, subject to Section 6.2 hereof, of up to the
Draw Down Amount for the applicable Draw Down Pricing Period that the Company
may grant to the Purchaser in the Company's sole discretion.
SECTION 2.2 THE SHARES. The Company has authorized and has reserved
and covenants to continue to reserve, subject to Section 4.4(b) hereof, free of
preemptive rights and other similar contractual rights of stockholders, a
sufficient number of authorized but unissued shares of its Common Stock to cover
the Shares to be issued in connection with all Draw Downs made and Call Options
issued.
SECTION 2.3 PURCHASE AND CLOSING. The Company agrees to issue and sell
to the Purchaser and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchaser agrees to purchase on any applicable Settlement Date that number
of the Shares to be issued in connection with each Draw Down and each Call
Option exercised by the Purchaser. The closing of the execution and delivery of
this Agreement shall occur upon delivery by facsimile of executed signature
pages of this Agreement and all other documents, instruments and writings
required to be delivered pursuant to this Agreement to the offices of Jenkens &
Xxxxxxxxx Xxxxxx Xxxxxx LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000 (the "CLOSING") at 10:00 a.m., eastern time, on (i) February 9,
2001, or (ii) such other time and place or on such date as the Purchaser and the
Company may agree upon (the "CLOSING DATE"). Each party shall deliver all
documents, instruments and writings required to be delivered by such party
pursuant to this Agreement at or prior to the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby makes the following representations and warranties to the Purchaser:
(a) ORGANIZATION, GOOD STANDING AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware and has the requisite corporate power to own, lease and operate
its properties and assets and to conduct its business as it is now being
conducted. The Company and each Subsidiary is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary except for any jurisdiction in which the failure to be
so qualified will not have a Material Adverse Effect.
(b) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and perform this Agreement and to
issue and sell the Shares in accordance with the terms hereof. The execution,
delivery and performance of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, and, except as contemplated by
Section 4.4(b) hereto, no further consent or authorization of the Company or its
Board of Directors or stockholders is required, except for approval by the Board
of Directors of the Company of the applicable Threshold Price for any Draw Down
and/or Call Option. This Agreement has been duly executed and delivered by the
Company. This Agreement constitutes, or shall constitute when executed and
delivered, a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditor's rights and remedies or by
other equitable principles of general application.
(c) CAPITALIZATION. The authorized capital stock of the Company and
the shares thereof issued and outstanding as of December 31, 2000 are set forth
on SCHEDULE 3.1(C) attached hereto. All of the outstanding shares of the Common
Stock have been duly and validly authorized, and are fully paid and
non-assessable. Except as set forth in this Agreement including SCHEDULE 3.1(C),
as of December 31, 2000 no shares of Common Stock are entitled to preemptive
rights and there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company. Furthermore, except as set forth in this Agreement including SCHEDULE
3.1(C), as of December 31, 2000 there are no contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue additional shares of the capital stock of the Company or options,
securities or rights convertible into shares of capital stock of the Company.
Except for customary transfer restrictions contained in agreements entered into
by the Company in order to sell restricted securities or as set forth in
SCHEDULE 3.1(C), as of December 31, 2000, the Company is not a party to any
agreement granting registration rights to any person with respect to any of its
equity or debt securities. The Company is not a party to, and its executive
officers have no knowledge of, any agreement restricting the voting or transfer
of any shares of the capital stock of the Company. The offer and sale of all
capital stock, convertible securities, rights, warrants, or options of the
Company issued prior to the Closing complied with all applicable federal and
state securities laws, or no stockholder has a right of rescission or damages
with respect thereto which would have a Material Adverse Effect. The Company has
furnished or made available to the Purchaser true and correct copies of the
Company's Certificate of Incorporation as in effect on the date hereof (the
"CHARTER"), and the Company's Bylaws as in effect on the date hereof (the
"BYLAWS").
(d) ISSUANCE OF SHARES. The Shares to be issued under this Agreement
have been duly authorized by all necessary corporate action and, when paid for
and issued in accordance with the terms hereof, the Shares shall be validly
issued and outstanding, fully paid and non-assessable, and the Purchaser shall
be entitled to all rights accorded to a holder of Common Stock.
(e) NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated herein do not (i) violate any provision of the Company's Charter or
Bylaws, (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
material agreement, mortgage, deed of trust, indenture, note, bond, license,
lease agreement, instrument or obligation to which the Company is a party, (iii)
create or impose a lien, charge or encumbrance on any property of the Company
under any agreement or any commitment to which the Company is a party or by
which the Company is bound or by which any of its respective properties or
assets are bound, or (iv) result in a violation of any federal, state, local or
foreign statute, rule, regulation, order, judgment or decree (including federal
and state securities laws and regulations) applicable to the Company or any of
its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries are bound or affected, except, in all cases (other than violations
pursuant to clauses (i) and (iv), to the extent of federal securities law), for
such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate, have a Material
Adverse Effect. The Company is not required under federal, state or local law,
rule or regulation to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement, or
issue and sell the Shares in accordance with the terms hereof (other than any
filings which may be required to be made by the Company with the Commission, or
the Nasdaq National Market or Alternate Market or any state blue sky authority
(solely in the event the Common Stock is trading on the Nasdaq Small Cap Market
or the OTC Bulletin Board) subsequent to the Closing); provided that, for
purpose of the representation made in this sentence, the Company is assuming and
relying upon the accuracy of the relevant representations and agreements of the
Purchaser herein.
(f) COMMISSION DOCUMENTS, FINANCIAL STATEMENTS. The Common Stock of
the Company is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and since March 31, 2000, the Company has timely filed all Commission
Documents. The Company has delivered or made available to the Purchaser true and
complete copies of the Commission Documents filed with the Commission since
March 31, 2000 and prior to the Closing Date. The Company has not provided to
the Purchaser any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by the Company but which has not
been so disclosed, other than with respect to the transactions contemplated by
this Agreement. The Form 10-K for the year ended March 31, 2000 complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder (other than with respect to
any document described in such Form 10-K but not filed by the Company as an
Exhibit thereto in the good faith belief that such filing was not required), and
the said Form 10-K did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the Commission Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the Commission or other applicable rules and regulations with respect thereto.
Such financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements), and fairly present in all material respects the financial
position of the Company and its Subsidiaries as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments).
(g) SUBSIDIARIES. The Commission Documents or SCHEDULE 3.1(G) attached
hereto set forth each Subsidiary of the Company as of the date hereof, showing
the jurisdiction of its incorporation or organization and showing the percentage
of each person's ownership of the outstanding stock or other interests of such
Subsidiary. Except as set forth in the Commission Documents or the Commission
Filings, none of such Subsidiaries is a "significant subsidiary" as defined in
Regulation S-X.
(h) NO MATERIAL ADVERSE EFFECT. Since September 30, 2000, the Company
has not experienced or suffered any Material Adverse Effect.
(i) NO UNDISCLOSED LIABILITIES. The Company has no liabilities,
obligations, claims or losses (whether liquidated or unliquidated, secured or
unsecured, absolute, accrued, contingent or otherwise) that would be required to
be disclosed on a balance sheet of the Company or any Subsidiary (including the
notes thereto) in conformity with GAAP not disclosed in the Commission Documents
or the Commission Filings, other than those incurred in the ordinary course of
the Company's or its Subsidiaries respective businesses since September 30, 2000
or which, individually or in the aggregate, do not or would not have a Material
Adverse Effect.
(j) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. No event or circumstance
has occurred or exists with respect to the Company or its Subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.
(k) INDEBTEDNESS. SCHEDULE 3.1(K) sets forth as of December 31, 2000
all outstanding secured and unsecured Indebtedness of the Company, or for which
the Company or any Subsidiary has commitments. For the purposes of this
Agreement, "INDEBTEDNESS" shall mean (a) any liabilities for borrowed money or
amounts owed in excess of $250,000 (other than trade accounts payable incurred
in the ordinary course of business), (b) all guaranties, endorsements and other
contingent obligations in respect of Indebtedness of others, whether or not the
same are or should be reflected in the Company's balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business; and
(c) the present value of any lease payments in excess of $250,000 due under
leases required to be capitalized in accordance with GAAP. Neither the Company
or any Subsidiary is in default with respect to any Indebtedness.
(l) TITLE TO ASSETS. Each of the Company and its Subsidiaries has good
and marketable title to all of its real and personal property reflected as owned
in the Commission Documents, free of any mortgages, pledges, charges, liens,
security interests or other encumbrances, except for those indicated in the
Commission Documents or the Commission Filings or such that could not reasonably
be expected to cause a Material Adverse Effect. All capital leases of the
Company and each of its Subsidiaries are valid and subsisting and in full force
and effect in all material respects.
(m) ACTIONS PENDING. There is no action, suit, claim, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company which questions the validity of this Agreement or the transactions
contemplated hereby or any action taken or to be taken pursuant hereto. Except
as disclosed in the Commission Documents or the Commission Filings, there is no
action, suit, claim, investigation or proceeding pending or, to the knowledge of
the Company, threatened, against or involving the Company or any Subsidiary, or
any of their respective properties or assets which, if adversely determined, is
reasonably likely to result in a Material Adverse Effect.
(n) COMPLIANCE WITH LAW. The business of the Company has been and is
presently being conducted in accordance with all applicable federal, state and
local governmental laws, rules, regulations and ordinances, except for such
conduct that does not cause a Material Adverse Effect. Each of the Company and
its Subsidiaries has all franchises, permits, licenses, consents and other
governmental or regulatory authorizations and approvals necessary for the
conduct of its business as now being conducted unless the failure to possess
such franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
(o) CERTAIN FEES. No brokers, finders or financial advisory fees or
commissions will be payable by the Company with respect to the transactions
contemplated by this Agreement.
(p) DISCLOSURE. To the Company's knowledge, neither this Agreement or
the Schedules hereto nor any other documents, certificates or instruments
furnished to the Purchaser by or on behalf of the Company in connection with the
transactions contemplated by this Agreement contain any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements made herein or therein, in the light of the circumstances under which
they were made herein or therein, not misleading.
(q) OPERATION OF BUSINESS. The Company or its Subsidiaries owns or has
a valid right to use all patents, trademarks, service marks, trade names,
copyrights, licenses and authorizations and all rights with respect to the
foregoing, as set forth in the Commission Documents or the Commission Filings,
which are necessary for the conduct of its business as now conducted without any
conflict with the rights of others, except to the extent set forth in the
Commission Documents or the Commission Filings or with respect to which a
Material Adverse Effect could not reasonably be expected to result.
(r) ENVIRONMENTAL COMPLIANCE. Except as disclosed in the Commission
Filings, the Company has obtained all approvals, authorization, certificates,
consents, licenses, orders and permits or other similar authorizations of all
governmental authorities, or from any other person, that are required under any
Environmental Laws except where the failure to do so would not have a Material
Adverse Effect. "ENVIRONMENTAL LAWS" shall mean all applicable laws relating to
the protection of the environment including, without limitation, all
requirements pertaining to reporting, licensing, permitting, controlling,
investigating or remediating emissions, discharges, releases or threatened
releases of hazardous substances, chemical substances, pollutants, contaminants
or toxic substances, materials or wastes, whether solid, liquid or gaseous in
nature, into the air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, materials or wastes, whether solid, liquid or
gaseous in nature. Except for such instances as would not individually or in the
aggregate have a Material Adverse Effect, to the best of the Company's
knowledge, there are no past or present events, conditions, circumstances,
incidents, actions or omissions relating to or in any way affecting the Company
that violate or could reasonably be expected to violate any Environmental Law
after the Closing or that could reasonably be expected to give rise to any
environmental liability, or otherwise form the basis of any claim, action,
demand, suit, proceeding, hearing, study or investigation (i) under any
Environmental Law, or (ii) based on or related to the manufacture, processing,
distribution, use, treatment, storage (including without limitation underground
storage tanks), disposal, transport or handling, or the emission, discharge,
release or threatened release of any hazardous substance.
(s) MATERIAL AGREEMENTS. Except as described in the Commission
Documents or the Commission Filings or this Agreement, the Company is not a
party to any written or oral contract, instrument, agreement, commitment,
obligation, plan or arrangement, a copy of which would be required to be filed
with the Commission as an exhibit to a registration statement on Form S-1 or
applicable form (collectively, "MATERIAL AGREEMENTS") if the Company was
registering securities under the Securities Act. The Company has in all material
respects performed all the obligations required to be performed by it to date
under the foregoing agreements, has received no notice of default and, to the
best of the Company's knowledge is not in default under any Material Agreement
now in effect, the result of which could reasonably be expected to cause a
Material Adverse Effect.
(t) TRANSACTIONS WITH AFFILIATES. Except as disclosed in the
Commission Documents or the Commission Filings, there are no loans, leases,
agreements, contracts, royalty agreements, management contracts or arrangements
or other continuing transactions exceeding $250,000 between (a) the Company, or
any of its customers (excluding agreements related to the purchase or lease of
the Company's products) or suppliers on the one hand, and (b) on the other hand,
any officer, employee, consultant or director of the Company, or any person who
would be covered by Item 404(a) of Regulation S-K or any corporation or other
entity controlled by such officer, employee, consultant, director or person.
(u) SECURITIES ACT OF 1933. The Company has complied in all material
respects with all applicable federal and state securities laws in connection
with the offer, issuance and sale of the Shares hereunder. In addition:
(i) Each Prospectus included as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the provisions of the Securities Act. The Commission has
not issued any order preventing or suspending the use of any Prospectus.
(ii) The Company meets the requirements for the use of Form S-3 under
the Securities Act. The Registration Statement in the form in which it became
effective and also in such form as it may be when any post-effective amendment
thereto became effective and the Prospectus and any supplement or amendment
thereto when filed with the Commission under Rule 424(b) under the Securities
Act, complied in all material respects with the provisions of the Securities Act
and did not at any such times contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in the light of the
circumstances under which they made) not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to the Purchaser furnished to the Company
in writing by or on behalf of the Purchaser expressly for use therein.
(iii) The Company has not distributed and, prior to the completion of
the sale of the Shares to the Purchaser, will not distribute any offering
material in connection with the offering and sale of the Shares other than the
Registration Statement, the Prospectus or other materials, if any, permitted by
the Securities Act.
(v) EMPLOYEES. As of the date hereof, the Company has no collective
bargaining arrangements or agreements covering any of its employees. As of the
date hereof, the Company has no employment contract or any other similar
contract or restrictive covenant, relating to the right of any officer to be
employed or engaged by the Company. Each of the Company and its Subsidiaries
requires its officers, technical employees and certain consultants to enter into
agreements regarding proprietary information and assignment of inventions, or
other similar agreements containing restrictive covenants. As of the date
hereof, since March 31, 2000, no officer of the Company whose termination,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, has terminated or, to the knowledge of the Company
based on notice, has any present intention of terminating his or her employment
or engagement with the Company.
(w) USE OF PROCEEDS. The proceeds from the sale of the Shares will be
used by the Company and its Subsidiaries for the purposes set forth in the
Registration Statement, as amended or supplemented.
(x) PUBLIC UTILITY HOLDING COMPANY ACT AND INVESTMENT COMPANY ACT
STATUS. The Company is not a "holding company" or a "public utility company" as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended. The Company is not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
(y) ERISA. No liability to the Pension Benefit Guaranty Corporation
has been incurred with respect to any Plan (as defined below) by the Company
which is or would have a Material Adverse Effect. The execution and delivery of
this Agreement and the issue and sale of the Shares will not involve any
transaction which is subject to the prohibitions of Section 406 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975 of the
Internal Revenue Code of 1986, as amended (the "CODE"), provided that, if any of
the Purchaser, or any person or entity that owns a beneficial interest in the
Purchaser, is an "employee pension benefit plan" (within the meaning of Section
3(2) of ERISA) with respect to which the Company is a "party in interest"
(within the meaning of Section 3(14) of ERISA), the requirements of Sections
407(d)(5) and 408(e) of ERISA, if applicable, are met. As used in this Section
3.1(y), the term "PLAN" shall mean an "employee pension benefit plan" (as
defined in Section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or by any trade
or business, whether or not incorporated, which, together with the Company, is
under common control, as described in Section 414(b) or (c) of the Code.
(z) ACKNOWLEDGMENT REGARDING PURCHASER'S PURCHASE OF SHARES. The
Company acknowledges and agrees that the Purchaser has not acted on behalf of
the Company in any respect and has been treated by the Company as an arm's
length purchaser with respect to this Agreement and the transactions
contemplated hereunder. The Company further acknowledges that the Purchaser is
not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereunder and any advice given by the Purchaser or any of its representatives or
agents in connection with this Agreement and the transactions contemplated
hereunder is merely incidental to the Purchaser's purchase of the Shares.
SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser hereby makes the following representations and warranties to the
Company:
(a) ORGANIZATION AND STANDING OF THE PURCHASER. The Purchaser is a
limited liability company duly organized, validly existing and in good standing
under the laws of the Commonwealth of The Bahamas.
(b) AUTHORIZATION AND POWER. The Purchaser has the requisite corporate
power and authority to enter into and perform this Agreement and to purchase the
Shares in accordance with the terms hereof. The execution, delivery and
performance of this Agreement by Purchaser and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action, and no further consent or authorization of the Purchaser, its
Board of Directors or stockholders is required. This Agreement has been duly
executed and delivered by the Purchaser. This Agreement constitutes, or shall
constitute when executed and delivered, a valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership, or
similar laws relating to, or affecting generally the enforcement of, creditor's
rights and remedies or by other equitable principles of general application.
(c) NO CONFLICTS. The execution, delivery and performance of this
Agreement and the consummation by the Purchaser of the transactions contemplated
hereby and thereby or relating hereto do not and will not (i) result in a
violation of the Purchaser's charter documents or bylaws or (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any material agreement, mortgage,
deed of trust, indenture, note, bond, license, lease agreement, instrument or
obligation to which the Purchaser is a party, (iii) create or impose a lien,
charge or encumbrance on any property of the Purchaser under any agreement or
any commitment to which the Purchaser is party or by which the Purchaser is or
by which any of its properties or assets are bound or (iv) result in a violation
of any law, rule, or regulation, or any order, judgment or decree of any court
or governmental agency applicable to the Purchaser or its properties, except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, prohibit or otherwise interfere with the ability of the Purchaser to
enter into and perform its obligations under this Agreement in any material
respect. The Purchaser is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under this Agreement or to purchase the Shares in accordance with the terms
hereof, provided that for purposes of the representation made in this sentence,
the Purchaser is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.
(d) INFORMATION. The Purchaser and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Shares which
have been requested by the Purchaser. The Purchaser and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. The
Purchaser has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its
acquisition of the Shares. Purchaser understands that it (and not the Company)
shall be responsible for its own tax liabilities that may arise as a result of
this investment or the transactions contemplated by this Agreement. The
Purchaser has not obtained any material non-public information from the Company.
(e) SELLING RESTRICTION. The Purchaser has the right to sell shares of
the Common Stock during the Investment Period. The Purchaser covenants, however,
that prior to and during the Investment Period, neither the Purchaser nor any of
its affiliates nor any entity managed by affiliates of the Purchaser will ever
sell shares of Common Stock of the Company other than what the Purchaser has
accumulated under the terms of this Agreement or in any accounts directly or
indirectly managed by the Purchaser or any affiliate of the Purchaser or any
entity managed by affiliates of the Purchaser.
(f) COMPLIANCE WITH LAW. The business of the Purchaser has been and is
presently being conducted in accordance with all applicable federal laws, rules
and regulations, except for such conduct that does not cause a material and
adverse effect on the business of the Purchaser. The Purchaser shall comply with
all applicable federal securities laws, rules and regulations in connection with
the sale of the Shares purchased by the Purchaser hereunder.
(g) PURCHASER INFORMATION AND DISTRIBUTION. The Purchaser shall
furnish to the Company information regarding the Purchaser and the distribution
of the Shares as is required by law to be disclosed in the Registration
Statement, the Prospectus and any Prospectus Supplement. The Purchaser shall
sell the Shares purchased hereunder in accordance with the Plan of Distribution
described in the Registration Statement or the Prospectus or any applicable
Prospectus Supplement.
ARTICLE IV
COVENANTS
The Company covenants with the Purchaser as follows, which covenants are
for the benefit of the Purchaser and its permitted assignees, that during the
term of this Agreement:
SECTION 4.1 SECURITIES COMPLIANCE. The Company shall notify the
Commission and the Nasdaq National Market or an Alternate Market, if applicable,
in accordance with their rules and regulations, of the transactions contemplated
by this Agreement, and shall take all other necessary action and proceedings as
may be required and permitted by applicable law, rule and regulation, for the
legal and valid issuance of the Shares to the Purchaser.
SECTION 4.2 REGISTRATION AND LISTING. The Company will take all action
necessary to cause its Common Stock to continue to be registered under Sections
12(b) or 12(g) of the Exchange Act, will comply with its reporting and filing
obligations under the Exchange Act, and will not take any action or file any
document (whether or not permitted by the Securities Act or the rules
promulgated thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under the Exchange Act
or Securities Act, except as permitted herein. The Company will take all action
necessary to continue the listing or trading of its Common Stock and the listing
of the Shares purchased by Purchaser hereunder on the Nasdaq National Market or
an Alternate Market and will comply in all material respects with the Company's
reporting, filing and other obligations under the bylaws or rules of the Nasdaq
National Market or an Alternate Market.
SECTION 4.3 REGISTRATION STATEMENT. Before the Company shall issue a
Draw Down Notice, the Company shall have caused a sufficient number of shares of
Common Stock to be authorized and registered to cover the Shares to be issued in
connection with this Agreement.
SECTION 4.4 COMPLIANCE WITH LAWS.
(a) The Company shall comply with all applicable laws, rules,
regulations and orders, noncompliance with which could have a Material Adverse
Effect.
(b) The Company will not be obligated to issue and the Purchaser will
not be obligated to purchase any shares of the Common Stock which would result
in the issuance under this Agreement of more than (i) fourteen and nine-tenths
percent (14.9%) of the shares of capital stock deemed issued and outstanding
under the Company's Rights Plan, unless the Board of Directors has approved such
issuance, and (ii) nineteen and nine-tenths percent (19.9%) of the issued and
outstanding shares of the Common Stock, unless such issuance has been duly
approved by the shareholders of the Company.
SECTION 4.5 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company shall
keep adequate records and books of account, in which complete entries will be
made in accordance with GAAP reflecting all financial transactions of the
Company and its Subsidiaries.
SECTION 4.6 REPORTING REQUIREMENTS. Upon request, the Company shall
furnish or make available the following to the Purchaser so long as the
Purchaser shall be obligated hereunder to purchase Shares:
(a) Quarterly Reports filed with the Commission on Form 10-Q as soon
as available, and in any event within forty-five (45) days after the end of each
of the first three fiscal quarters of the Company; and
(b) Annual Reports filed with the Commission on Form 10-K as soon as
available, and in any event within ninety (90) days after the end of each fiscal
year of the Company.
SECTION 4.7 NON-PUBLIC INFORMATION. Except as contemplated by Sections
4.9 through 4.13 hereof, neither the Company nor any of its officers or agents
shall disclose any material non-public information about the Company to the
Purchaser and neither the Purchaser nor any of its affiliates, officers or
agents will solicit any material non-public information from the Company.
SECTION 4.8 EFFECTIVE REGISTRATION STATEMENT. The Company will use
commercially reasonable efforts to keep the Registration Statement continuously
effective for the shorter of the time in which all of the Shares have been sold
by the Purchaser or one year after the expiration of the Investment Period.
SECTION 4.9 NO STOP ORDERS. The Company will advise the Purchaser
promptly and, if requested by the Purchaser, will confirm such advice in
writing: (i) of its receipt of notice of any request by the Commission for
amendment of or a supplement to the Registration Statement or any Prospectus or
Prospectus Supplement or for additional information; (ii) of its receipt of
notice of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purpose; and (iii) of its becoming aware
of the happening of any event, which makes any statement of a material fact made
in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Securities Act
or the regulations thereunder to be stated therein or necessary in order to make
the statements therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply with the
Securities Act or any other law. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, the
Company will make all commercially reasonable efforts to obtain the withdrawal
of such order at the earliest possible time.
SECTION 4.10 AMENDMENTS TO THE REGISTRATION STATEMENT. The Company
will not (i) file any amendment to the Registration Statement or make any
amendment or supplement to the Prospectus which relates to the Purchaser, this
Agreement and the transactions contemplated hereby of which the Purchaser shall
not previously have been advised or to which the Purchaser shall reasonably
object after being so advised or (ii) so long as, in the reasonable opinion of
counsel for the Purchaser, a Prospectus is required to be delivered in
connection with any purchase of Shares by the Purchaser, file any information,
documents or reports pursuant to the Exchange Act without delivering a copy of
such information, documents or reports to the Purchaser, promptly following such
filing.
SECTION 4.11 PROSPECTUS DELIVERY. The Company shall file with the
Commission a Prospectus Supplement on the first Trading Day immediately
following the end of each Draw Down Pricing Period, and will deliver to the
Purchaser, without charge, in such quantities as reasonably requested by the
Purchaser, copies of each form of Prospectus and Prospectus Supplement on each
Settlement Date. The Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the
Securities Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares may be sold by the Purchaser, in connection with the offering
and sale of the Shares and for such period of time thereafter as the Prospectus
is required by the Securities Act to be delivered in connection with sales of
the Shares by the Purchaser. If during such period of time any event shall occur
that in the judgment of the Company or in the opinion of counsel for the
Purchaser is required to be set forth in the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the Prospectus to
comply with the Securities Act or any other law, the Company will forthwith
prepare and, subject to the provisions of Section 4.10 above, file with the
Commission an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Purchaser a reasonable number of copies thereof.
SECTION 4.12 OTHER FINANCING. If the Company enters into any other
financing agreement, the primary purpose of which would be to obtain equity
financing for the Company (an "OTHER FINANCING"), during the Investment Period,
the Company shall promptly notify the Purchaser of such Other Financing and the
Purchaser shall have the options set forth in Section 6.1(k) hereof. As used
herein, "OTHER FINANCING" shall not include the Company (i) entering into a
loan, credit or lease facility with a bank or financing institution (including
any equity component thereof), (ii) establishing an employee stock option plan
or agreement, (iii) issuing shares of Common Stock in connection with the
Company's option plans (as the same may be amended from time to time), stock
purchase plans, rights plans, currently outstanding warrants or options (unless
the exercise price of such warrants or options are reset to a price below the
current exercise price), or increase the number of shares available under any
such plans (the primary purpose of which is not to raise equity), (iv) issuing
shares of Common Stock upon conversion of the Company's existing subordinated
convertible debentures and series B convertible preferred stock (unless the
conversion price of such debentures or series B convertible preferred stock are
reset (other than by its stated terms) to a price below the current conversion
price) and (v) issuing shares of Common Stock and/or preferred stock in
connection with the formation and maintenance of strategic partnerships,
alliances or joint ventures and the acquisition of products, licenses or other
assets (each a "PERMITTED TRANSACTION").
SECTION 4.13 NOTICES. The Company shall immediately notify the
Purchaser that (i) a Material Adverse Effect or Material Change in Ownership has
occurred or (ii) the Company has entered into an Other Financing (as defined in
Section 4.12 hereof).
SECTION 4.14 ISSUANCE OF ADDITIONAL SECURITIES. The Company shall not
have any obligation to issue securities to any existing shareholder for any
reason that would entitle such existing shareholder to purchase any securities
on the same terms as that purchased by the Purchaser hereunder.
SECTION 4.15 DISCLOSURE OF DRAW DOWN NOTICE. The Company shall not
disclose any Draw Down Notice or any information contained in any Draw Down
Notice (other than to its legal and accounting advisors) unless such disclosure
is required by applicable law, rule, regulation or court order; provided that
the Company shall notify the Purchaser if such disclosure during the Draw Down
Pricing Period is required by law, rule, regulation or court order.
ARTICLE V
CONDITIONS TO CLOSING, DRAW DOWNS AND CALL OPTIONS
SECTION 5.1 CONDITIONS PRECEDENT TO THE ISSUANCE OF A DRAW DOWN
NOTICE. The issuance by the Company of a Draw Down Notice, and its obligation
thereby to sell the Shares to the Purchaser, is subject to the satisfaction or
waiver, at or before each Draw Down Exercise Date and Settlement Date, as
applicable, of each of the conditions set forth below. These conditions are for
the Company's sole benefit and may be waived by the Company at any time in its
sole discretion.
(a) ACCURACY OF THE PURCHASER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Purchaser in this Agreement shall be true
and correct in all material respects as of the date when made and as of each
Draw Down Exercise Date and Settlement Date, as applicable, as though made at
that time, except for representations and warranties that are expressly made as
of a particular date.
(b) REGISTRATION STATEMENT. The Company shall have Shares registered
under the Registration Statement on the Draw Down Exercise Date and Settlement
Date, as applicable, in an amount equal to or in excess of the number of the
Shares issuable pursuant to such Draw Down Notice or Call Option. The
Registration Statement registering the offer and sale of the Shares shall have
been declared effective by the Commission on or prior to each Draw Down Exercise
Date and Settlement Date, as applicable, and there shall be no stop order
suspending the effectiveness of the Registration Statement.
(c) PERFORMANCE BY THE PURCHASER. The Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Purchaser at or prior to each Draw Down Exercise Date and Settlement
Date, as applicable.
(d) NO INJUNCTION. No statute, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.
(e) NO SUSPENSION, ETC. Trading in the Common Stock shall not have
been suspended by the Commission or the Nasdaq National Market or an Alternate
Market (except for any suspension of trading of limited duration agreed to by
the Company, which suspension shall be terminated prior to such Draw Down
Exercise Date and Settlement Date, as applicable).
(f) NO PROCEEDINGS OR LITIGATION. No action, suit or proceeding before
any arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company, or any of the officers, directors or affiliates of the Company
seeking to restrain, prevent or change the transactions contemplated by this
Agreement, or seeking damages in connection with such transactions.
SECTION 5.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO
Close. The obligation hereunder of the Purchaser to enter this Agreement is
subject to the satisfaction or waiver, at or before the Closing, of each of the
conditions set forth below. These conditions are for the Purchaser's sole
benefit and may be waived by the Purchaser at any time in its sole discretion.
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. Each of
the representations and warranties of the Company shall be true and correct in
all material respects as of the date when made and as of the Closing Date, as
though made at that time, except for representations and warranties that speak
as of a particular date.
(b) PERFORMANCE BY THE COMPANY. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing.
(c) EFFECTIVE REGISTRATION STATEMENT. The Registration Statement
registering the offer and sale of the Shares shall have been declared effective
by the Commission on or prior to the Closing Date and there shall be no stop
order suspending the effectiveness of the Registration Statement.
(d) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(e) NO PROCEEDINGS OR LITIGATION. No action, suit or proceeding before
any arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company, or any of the officers, directors or affiliates of the Company
seeking to restrain, prevent or change the transactions contemplated by this
Agreement, or seeking damages in connection with such transactions.
(f) OPINION OF COUNSEL, ETC. At the Closing, the Purchaser shall have
received an opinion of counsel to the Company, dated the Closing Date, in the
form of Exhibit A hereto, a secretary's certificate, dated the Closing Date, in
the form of Exhibit B hereto, and such other certificates and documents as the
Purchaser or its counsel shall reasonably require incident to the Closing.
SECTION 5.3 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO
ACCEPT A DRAW DOWN NOTICE AND PURCHASE THE SHARES. The obligation hereunder of
the Purchaser to accept a Draw Down Notice and to acquire and pay for the Shares
on any Settlement Date is subject to the satisfaction or waiver, at or before
each Draw Down Exercise Date and each Settlement Date, as applicable, of each of
the conditions set forth below. The conditions are for the Purchaser's sole
benefit and may be waived by the Purchaser at any time in its sole discretion.
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. Each of
the representations and warranties of the Company shall be true and correct in
all material respects as of the date when made and as of the applicable Draw
Down Exercise Date and Settlement Date as though made at that time, except for
representations and warranties that speak as of a particular date.
(b) REGISTRATION STATEMENT. The Company shall have Shares registered
under the Registration Statement on the Draw Down Exercise Date in an amount
equal to or in excess of the number of the Shares issuable pursuant to such Draw
Down Notice or Call Option. The Registration Statement registering the offer and
sale of the Shares shall have been declared effective by the Commission on or
prior to the Draw Down Exercise Date and the Settlement Date and shall have been
supplemented, as required, to disclose the sale of the Shares prior to each
applicable Settlement Date. There shall be no stop order suspending the
effectiveness of the Registration Statement.
(c) NO SUSPENSION, ETC. Trading in the Common Stock shall not have
been suspended by the Commission or the Nasdaq National Market or an Alternate
Market (except for any suspension of trading of limited duration agreed to by
the Company, which suspension shall be terminated prior to each applicable Draw
Down Exercise Date or Settlement Date), and, on or as of the Draw Down Exercise
Date or applicable Settlement Date or during the applicable Draw Down Pricing
Period, trading in securities generally as reported by the Nasdaq National
Market or an Alternate Market shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose trades are
reported by the Nasdaq National Market or an Alternate Market, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities, nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude in its effect on, or any material adverse change in the
financial markets generally, which, in each case, in the judgment of the
Purchaser, makes it impracticable or inadvisable to purchase the Shares. The
Common Stock shall be listed on Nasdaq or an Alternate Market.
(d) PERFORMANCE BY THE COMPANY. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the applicable Draw Down Exercise Date and
the Settlement Date and shall have delivered the Compliance Certificate
substantially in the form attached hereto as Exhibit C.
(e) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(f) NO PROCEEDINGS OR LITIGATION. No action, suit or proceeding before
any arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company, or any of the officers, directors or affiliates of the Company
seeking to restrain, prevent or change the transactions contemplated by this
Agreement, or seeking damages in connection with such transactions.
(g) NO MATERIAL ADVERSE EFFECT; NO MATERIAL CHANGE IN OWNERSHIP. No
Material Adverse Effect or Material Change in Ownership shall have occurred.
(h) BOARD AUTHORIZATION. The Company shall have taken all necessary
corporate action to authorize the issuance of the Shares issuable pursuant to
each Draw Down Notice, including, without limitation, setting the Threshold
Price as set forth therein.
(i) ISSUANCE OF ADDITIONAL SECURITIES. The Company shall not have
issued any securities or granted rights for additional securities to any
Principal Security Holder for any reason other than pursuant to stock splits,
stock reclassifications, stock dividends, stock option plans, underwritten
public offerings, Permitted Offerings (as defined in Section 7.2 hereof) or
Permitted Transactions.
(j) DISCLOSURE OF DRAW DOWN NOTICE. The Company shall not have
disclosed any Draw Down Notice or any information contained in any Draw Down
Notice (other than to its legal and accounting advisors).
ARTICLE VI
DRAW DOWN TERMS; CALL OPTION
SECTION 6.1 DRAW DOWN TERMS. Subject to the satisfaction of the
conditions set forth in this Agreement, the parties agree as follows:
(a) The Company, may, in its sole discretion, issue a Draw Down Notice
at any time after February 20, 2001 with respect to a Draw Down during each Draw
Down Pricing Period of up to (i) $2,000,000 if the Threshold Price is equal to
or greater than $10.00 and less than $14.00, (ii) $3,000,000 if the Threshold
Price is equal to or greater than $14.00 and less than $18.00, (iii) $3,500,000
if the Threshold Price is equal to or greater than $18.00 and less than $22.00,
(iv) $4,000,000 if the Threshold Price is equal to or greater than $22.00 and
less than $26.00, (v) $5,000,000 if the Threshold Price is equal to or greater
than $26.00 and less than $30.00, and (vi) $6,000,000 if the Threshold Price is
equal to or greater than $30.00; provided, HOWEVER, that the Company may, in its
sole discretion, issue a Draw Down Notice with respect to any Draw Down Amount
at any Threshold Price or any Draw Down Discount Percentage pursuant to terms
mutually agreed upon by the Purchaser and the Company, which Draw Down the
Purchaser will be obligated to accept. Prior to issuing any Draw Down Notice,
the Company shall have sufficient Shares registered under the Registration
Statement to cover any applicable Draw Down and Call Option.
(b) The number of Shares to be issued in connection with each Draw
Down shall be equal to the sum of the quotients (for each Trading Day of the
Draw Down Pricing Period for which the VWAP equals or exceeds the Threshold
Price) of (x) 1/18th (or such other fraction the denominator of which equals the
number of Trading Days during the Draw Down Pricing Period) of the Draw Down
Amount divided by (y) the applicable Draw Down Discount Percentage multiplied by
the VWAP of the Common Stock for such Trading Day.
(c) Only one Draw Down shall be allowed in each Draw Down Pricing
Period.
(d) The number of Shares purchased by the Purchaser with respect to
each Draw Down shall be determined on a daily basis during each Draw Down
Pricing Period and settled on the second Trading Day following the end of each
Draw Down Pricing Period (the "SETTLEMENT DATE").
(e) There shall be a minimum of five (5) Trading Days between Draw
Downs, unless otherwise mutually agreed upon between the Purchaser and the
Company.
(f) There shall be a maximum of twenty-four (24) Draw Downs during the
term of this Agreement.
(g) Each Draw Down will expire on the end of the last Trading Day of
each Draw Down Pricing Period.
(h) If the VWAP on a given Trading Day is less than the Threshold
Price, then the total amount of the Draw Down for the relevant Draw Down Pricing
Period will be reduced by 1/18th (or such other fraction the denominator of
which equals the number of Trading Days during the Draw Down Pricing Period). At
no time shall the Threshold Price be set below $10.00, unless mutually agreed
upon by the Company and the Purchaser. If trading in the Common Stock is
suspended for any reason for more than three (3) hours in any Trading Day, at
the Purchaser's option, the price of the Common Stock shall be deemed to be
below the Threshold Price for that Trading Day and the Draw Down for the
relevant Draw Down Pricing Period shall be reduced by 1/18th (or such other
fraction the denominator of which equals the number of Trading Days during the
Draw Down Pricing Period). Notwithstanding anything in the foregoing to the
contrary, for each Trading Day during the Draw Down Pricing Period that the VWAP
is less than the Threshold Price or is deemed to be below the Threshold Price
pursuant to the immediately preceding sentence, the Purchaser may elect in its
sole discretion to purchase Shares at a price equal to the Threshold Price
multiplied by the Draw Down Discount Percentage at the end of such Draw Down
Pricing Period. The Purchaser will inform the Company via facsimile transmission
no later than 8:00 p.m. (eastern time) on the last Trading Day of such Draw Down
Pricing Period as to the number of Shares, if any, the Purchaser chooses to
purchase under such circumstances set forth in this Section 6.1(h).
(i) The Company must inform the Purchaser via facsimile transmission
before 9:30 a.m. (eastern time) on the first Trading Day of the Draw Down
Pricing Period in substantially the form attached hereto as Exhibit D (the "DRAW
DOWN NOTICE") of the Draw Down Amount the Company wishes to exercise. In
addition to the Draw Down Amount, the Company shall set the Threshold Price with
each Draw Down Notice and shall designate the first Trading Day of the Draw Down
Pricing Period. Notwithstanding anything in the foregoing to the contrary, if
the Company wishes the Draw Down Exercise Date to be the first day of the Draw
Down Pricing Period, the Draw Down Notice must be delivered to the Purchaser and
receipt of such Draw Down Notice confirmed by the Purchaser prior to 9:30 a.m.
(eastern time) on the date of such Draw Down Exercise Date.
(j) On each Settlement Date, the Company shall deliver the Shares
purchased by the Purchaser to the Purchaser or to The Depositary Trust Company
("DTC") on the Purchaser's behalf via the Deposit Withdrawal Agent Commission
system ("DWAC"), and upon receipt of the Shares, the Purchaser shall cause
payment therefor to be made to the account designated by the Company by wire
transfer of immediately available funds provided that the Shares are received no
later than 1:00 p.m., eastern time, or next day available funds if the Shares
are received thereafter.
(k) If during any Draw Down Pricing Period the Company shall enter
into an Other Financing (other than shares of Common Stock issued under this
Agreement or pursuant to a Permitted Transaction), the Purchaser may in its sole
discretion (i) purchase the Draw Down Amount of shares of Common Stock and/or
exercise Call Options granted during such Draw Down Pricing Period on the terms
at which the Company issued shares of Common Stock in the Other Financing during
such Draw Down Pricing Period, net of any third party's discount and fees, (ii)
purchase the Draw Down Amount of shares of Common Stock and/or exercise Call
Options granted during such Draw Down Pricing Period at the applicable Draw Down
Discount Percentage times the VWAP for such Draw Down Pricing Period, or (iii)
elect not to purchase any Shares during such Draw Down Pricing Period. The
Purchaser shall notify the Company of its election on the last Trading Day of
the Draw Down Pricing Period.
(l) If on the Settlement Date, the Company is obligated to deliver the
Shares to be purchased by the Purchaser and fails to deliver the Shares, and
such failure continues for ten (10) Trading Days, the Company shall pay, in cash
or restricted shares of Common Stock, at the option of the Purchaser, as
liquidated damages and not as a penalty to the Purchaser an amount equal to two
percent (2%) of the Draw Down Amount for the initial thirty (30) days and each
additional thirty (30) day period thereafter until such failure has been cured,
which shall be pro rated for such periods less than thirty (30) days (the
"PERIODIC AMOUNT"). Cash payments to be made pursuant to this clause (1) shall
be due and payable immediately upon demand in immediately available cash funds.
Certificates evidencing the restricted shares of Common Stock shall be delivered
immediately upon demand. The parties agree that the Periodic Amount represents a
reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of damages that may be incurred by the Purchaser if the
Company fails to deliver the Shares on the Settlement Date. If the Purchaser
elects to receive shares of Common Stock instead of cash, the Purchaser shall
have the right to demand registration once within twelve (12) months of the date
of issuance of such shares of Common Stock and piggyback registration rights if
the Company files a separate registration statement.
(m) If during any Draw Down Pricing Period the Company reasonably
believes an event may occur which, would result in or may require the suspension
of the effectiveness of the Registration Statement prior to the applicable
Settlement Date, including, without limitation, entering into an extraordinary
transaction in which the Company is not the surviving entity, the Company shall
notify the Purchaser before 9:30 a.m. (eastern time) on any Trading Day (a
"SECTION 6.1(M) NOTICE") and reduce the number of Trading Days in such Draw Down
Pricing Period (a "TRUNCATED PRICING PERIOD"). If the Company delivers the
Section 6.1(m) Notice (i) before 9:30 a.m. (eastern time) on a Trading Day, the
last Trading Day of such Truncated Pricing Period shall be the Trading Day
preceding the receipt of the Section 6.1(m) Notice, or (ii) after 9:30 a.m.
(eastern time) on a Trading Day, then the last Trading Day of such Truncated
Pricing Period shall be the Trading Day on which the Section 6.1(m) Notice was
received by the Purchaser.
The Purchaser will purchase the Truncated Draw Down Allocation Amount
for each of the Trading Days in a Truncated Pricing Period for an aggregate
purchase price determined in accordance with Section 6.1(b) and Section 6.1(h).
In addition, the Purchaser may, at its option, elect to purchase
Shares in an additional dollar amount equal to the product of the Draw Down
Amount requested in the applicable Draw Down Notice, first multiplied by (x) a
fraction, the numerator of which equals one (1) and the denominator of which
equals eighteen (18) or such other number of Trading Days in such Draw Down
Pricing Period as the parties may have mutually agreed upon with respect to such
Draw Down Pricing Period (such number of days being referred to herein as the
"TRADING DAY NUMBER"), and next multiplied by (y) that number that is equal to
the Trading Day Number minus the number of Trading Days in the Truncated Pricing
Period. The price per share for such additional dollar amount shall equal (i)
the aggregate total of Truncated Draw Down Allocation Amounts during the
Truncated Pricing Period divided by (ii) the number of Shares to be purchased
during such Truncated Pricing Period.
Upon receipt of the Section 6.1(m) Notice, the Purchaser may (x) elect
to purchase Common Stock at the Threshold Price for any Trading Day that the
VWAP was below the Threshold Price during the Truncated Pricing Period in
accordance with Section 6.1(h) hereof, (y) elect to purchase Common Stock in the
additional amount as set forth in the preceding paragraph of this Section
6.1(m), and (z) elect to exercise any unexercised Call Options by issuing a Call
Option Notice to the Company, in each such case, no later than 10:00 a.m.
(eastern time) on the first Trading Day after the end of the Truncated Pricing
Period. The exercise price of the Call Option shall be equal to the applicable
Draw Down Discount Percentage multiplied by the VWAP on the last Trading Day of
the Truncated Pricing Period (in lieu of the VWAP as specified in clause (A) of
Section 6.2(b) hereof) and otherwise determined in accordance with Section
6.2(b) hereof.
(n) The Settlement Date for any Truncated Pricing Period shall be the
second Trading Day after the last Trading Day in the applicable Truncated
Pricing Period.
SECTION 6.2 PURCHASER'S CALL OPTION.
(a) During each Draw Down Pricing Period, the Company at its sole
discretion may grant to the Purchaser the right to exercise multiple call
options of up to the applicable Draw Down Amount (a "CALL OPTION"). The amount
of the Call Option shall be set forth in the Draw Down Notice. For each Trading
Day during a Draw Down Pricing Period, the Purchaser may exercise a Call Option
by providing notice to the Company of the exercise of a Call Option (the "CALL
OPTION NOTICE"), substantially in the form attached hereto as Exhibit E.
(b) The number of shares of Common Stock to be issued in connection
with each Call Option shall equal the quotient of (i) the Call Option Amount and
(ii) the product of the applicable Draw Down Discount Percentage and the greater
of (A) the VWAP for the Common Stock on the day the Purchaser issues its Call
Option Notice and (B) the Threshold Price.
(c) Each Call Option exercised shall be settled on the applicable
Settlement Date.
(d) The Threshold Price designated by the Company in its Draw Down
Notice shall apply to each Call Option.
(e) For each Call Option that the Purchaser exercises pursuant to this
Section 6.2, the Purchaser must issue via facsimile a Call Option Notice to the
Company no later than 8:00 p.m. (eastern time) on the day such Call Option is
exercised. If the Purchaser does not exercise a Call Option by 8:00 p.m.
(eastern time) on the last Trading Day of the applicable Draw Down Pricing
Period, the Purchaser's Call Options with respect to that Draw Down Pricing
Period shall terminate.
(f) During the first Draw Down Pricing Period, the Purchaser will
exercise Call Options granted by the Company for an aggregate amount equal to at
least the product of (i) $3,000,000 multiplied by (ii) the fraction, the
numerator of which is the total Draw Down Amount purchased during the Draw Down
Pricing Period and the denominator of which is the Draw Down Amount requested.
During the second Draw Down Pricing Period, the Purchaser will exercise Call
Options granted by the Company for an aggregate amount equal to at least the
product of (i) $2,000,000 multiplied by (ii) the fraction, the numerator of
which is the total Draw Down Amount purchased during the Draw Down Pricing
Period and the denominator of which is the Draw Down Amount requested.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION BY MUTUAL CONSENT. The term of this Agreement
shall be the earliest to occur of (i) twenty-eight (28) months from the date of
execution of this Agreement (the "INVESTMENT PERIOD"), (ii) the date that all of
the shares of Common Stock registered under the Registration Statement have been
issued and sold, or (iii) the date the Purchaser has purchased in the aggregate
$60,000,000 pursuant to all Draw Downs issued and Call Options granted and
exercised. Either party may terminate this Agreement if the Company enters into
an extraordinary transaction in which the Company is not the surviving entity so
long as such termination does not occur during a Draw Down Pricing Period or
prior to the Settlement Date of any Draw Down Pricing Period and, such
termination shall be without liability for damages by either party. This
Agreement may be terminated at any time by mutual consent of the parties. Either
party may terminate this Agreement for a material breach by the other party so
long as notice of such termination is delivered to the other party in accordance
with Section 9.4 hereof; provided that the breaching party shall have five (5)
business days to cure such breach, unless the party terminating this Agreement
has been prejudiced by such breach which prejudice is not subject to cure, then
the termination of this Agreement shall be effective upon receipt of the notice
of termination.
SECTION 7.2 OTHER TERMINATION. The Company shall inform the Purchaser,
and the Purchaser shall have the right to terminate this Agreement within the
subsequent thirty (30) days (the "EVENT PERIOD"), if (w) the Company enters into
an Other Financing including, without limitation, an equity line of credit
transaction, without the prior consent of the Purchaser, which consent will not
be unreasonably delayed, conditioned or withheld, which provides for (i) the
issuance of Common Stock or securities convertible, exercisable or exchangeable
into Common Stock at a discount to the then current market price of the Common
Stock (except for restricted Common Stock or securities convertible into Common
Stock where the discount to the then current market price results from a pricing
formula for the transaction that is based on a premium to the market price in a
forward looking period from the offering date, provided that the Company
notifies the Purchaser on the offering date (a "Permitted Offering")), (ii) a
mechanism for the reset of the purchase price of the Common Stock to below the
then current market price of the Common Stock, or (iii) the issuance of Common
Stock with warrants, which have an exercise price such that together with the
price of the Common Stock would result in the issuance of shares of Common Stock
at a per share price below the then current market price of the Common Stock,
(x) an event resulting in a Material Adverse Effect or Material Change in
Ownership has occurred, (y) the Company shall have issued any securities or
granted rights for additional securities to any Principal Security Holder for
any reason other than pursuant to stock splits, stock reclassifications, stock
dividends, stock option plans, underwritten public offerings, Permitted
Offerings or Permitted Transactions, or (z) the Company fails to comply with
Section 4.14 hereof. The Purchaser may terminate this Agreement upon one (1)
day's notice during the Event Period.
SECTION 7.3 EFFECT OF TERMINATION. In the event of termination by the
Company or the Purchaser, written notice thereof shall forthwith be given to the
other party and the transactions contemplated by this Agreement shall be
terminated without further action by either party. If this Agreement is
terminated as provided in Section 7.1 or 7.2 herein, this Agreement shall become
of no further force and effect, except as provided in Section 9.9 hereof.
Nothing in this Section 7.3 shall be deemed to release the Company or the
Purchaser from any liability for any breach under this Agreement, or to impair
the rights of the Company and the Purchaser to compel specific performance by
the other party of its obligations under this Agreement.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 GENERAL INDEMNITY.
(a) INDEMNIFICATION BY THE COMPANY. The Company will indemnify and
hold harmless the Purchaser, each of its directors, fund managers and officers,
and each person, if any, who controls the Purchaser within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act from and
against any losses, claims, damages, liabilities and expenses (including
reasonable costs of defense and investigation and all reasonable attorneys'
fees) to which the Purchaser, each of its directors, fund managers and officers,
and each person, if any, who controls the Purchaser may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities and expenses (or actions in respect thereof) arise out of or are
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained, or incorporated by reference, in the Registration Statement
relating to Common Stock being sold to the Purchaser (including any Prospectus
Supplement filed in connection with the transactions contemplated hereunder
which are a part of it), or any amendment or supplement to it, or (ii) the
omission or alleged omission to state in that Registration Statement or any
document incorporated by reference in the Registration Statement, a material
fact required to be stated therein or necessary to make the statements therein
not misleading, PROVIDED that the Company shall not be liable under this Section
8.1(a) to the extent that a court of competent jurisdiction shall have
determined by a final judgment (with no appeals available) that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act, undertaken or omitted to be taken by the Purchaser or such
person through its bad faith or willful misconduct; PROVIDED, however, that the
foregoing indemnity shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by the Purchaser expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and PROVIDED, further, that with respect to the Prospectus, the
foregoing indemnity shall not inure to the benefit of the Purchaser or any such
person from whom the person asserting any loss, claim, damage, liability or
expense purchased Common Stock, if copies of the Prospectus were timely
delivered to the Purchaser pursuant hereto and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Purchaser or
any such person to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Common Stock to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense.
The Company will reimburse the Purchaser and each such controlling
person promptly upon demand for any legal or other costs or expenses reasonably
incurred by the Purchaser or any controlling person in investigating, defending
against, or preparing to defend against any such claim, action, suit or
proceeding, except that the Company will not be liable to the extent a claim or
action which results in a loss, claim, damage, liability or expense arises out
of, or is based upon, an untrue statement, alleged untrue statement, omission or
alleged omission, included in any Registration Statement, Prospectus or
Prospectus Supplement or any amendment or supplement to the thereto in reliance
upon, and in conformity with, written information furnished by the Purchaser to
the Company for inclusion in the Registration Statement, Prospectus or
Prospectus Supplement.
(b) INDEMNIFICATION BY THE PURCHASER. The Purchaser will indemnify and
hold harmless the Company, each of its directors and officers, and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act from and against any losses,
claims, damages, liabilities and expenses (including reasonable costs of defense
and investigation and all attorneys' fees) to which the Company and each
director, officer and person, if any, who controls the Company may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages, liabilities and expenses (or actions in respect thereof) arise out of
or are based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any Prospectus or
Prospectus Supplement or any amendment or supplement to it or (ii) the omission
or alleged omission to state in the Registration Statement or any Prospectus or
Prospectus Supplement or any amendment or supplement to it a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, the untrue statement, alleged
untrue statement, omission or alleged omission was made in reliance upon, and in
conformity with, written information furnished by the Purchaser to the Company
for inclusion in the Registration Statement, the Prospectus or Prospectus
Supplement or an amendment or supplement thereto, and the Purchaser will
reimburse the Company and each such director, officer or controlling person
promptly upon demand for any legal or other costs or expenses reasonably
incurred by the Company or the other person in investigating, defending against,
or preparing to defend against any such claim, action, suit or proceeding.
SECTION 8.2 INDEMNIFICATION PROCEDURES. Promptly after a person
receives notice of a claim or the commencement of an action for which the person
intends to seek indemnification under paragraph (a) or (b) of Section 8.1, the
person will notify the indemnifying party in writing of the claim or
commencement of the action, suit or proceeding, but failure to notify the
indemnifying party will not relieve the indemnifying party from liability under
paragraph (a) or (b) of Section 8.1, except to the extent such indemnifying
party has been materially prejudiced by the failure to give notice. The
indemnifying party will be entitled to participate in the defense of any claim,
action, suit or proceeding as to which indemnification is being sought, and the
indemnifying party may (but will not be required to) assume the defense against
the claim, action, suit or proceeding with counsel satisfactory to it. After an
indemnifying party notifies an indemnified party that the indemnifying party
wishes to assume the defense of a claim, action, suit or proceeding the
indemnifying party will not be liable for any legal or other expenses incurred
by the indemnified party in connection with the defense against the claim,
action, suit or proceeding except that if, in the opinion of counsel to the
indemnifying party, one or more of the indemnified parties should be separately
represented in connection with a claim, action, suit or proceeding the
indemnifying party will pay the reasonable fees and expenses of one separate
counsel for the indemnified parties. Each indemnified party, as a condition to
receiving indemnification as provided in Paragraph (a) or (b) of Section 8.1,
will cooperate in all reasonable respects with the indemnifying party in the
defense of any action or claim as to which indemnification is sought. No
indemnifying party will be liable for any settlement of any action effected
without its prior written consent. No indemnifying party will, without the prior
written consent of the indemnified party, effect any settlement of a pending or
threatened action with respect to which an indemnified party is, or is informed
that it may be, made a party and for which it would be entitled to
indemnification, unless the settlement includes an unconditional release of the
indemnified party from all liability and claims which are the subject matter of
the pending or threatened action.
If for any reason the indemnification provided for in this Agreement is
not available to, or is not sufficient to hold harmless, an indemnified party in
respect of any loss or liability referred to in paragraph (a) or (b) of Section
8.1, each indemnifying party will, in lieu of indemnifying the indemnified
party, contribute to the amount paid or payable by the indemnified party as a
result of the loss or liability, (i) in the proportion which is appropriate to
reflect the relative benefits received by the indemnifying party on the one hand
and by the indemnified party on the other from the sale of stock which is the
subject of the claim, action, suit or proceeding which resulted in the loss or
liability or (ii) if that allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits of the
sale of stock, but also the relative fault of the indemnifying party and the
indemnified party with respect to the statements or omissions which are the
subject of the claim, action, suit or proceeding that resulted in the loss or
liability, as well as any other relevant equitable considerations.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 FEES AND EXPENSES. The Company shall pay all reasonable
fees and expenses related to the transactions contemplated by this Agreement;
provided, that the Company shall pay, at the Closing, all reasonable attorneys
fees and expenses (exclusive of disbursements and out-of-pocket expenses)
incurred by the Purchaser of up to $40,000 in connection with the preparation,
negotiation, execution and delivery of this Agreement. In addition, the Company
shall pay all reasonable fees and expenses incurred by the Purchaser in
connection with any amendments, modifications or waivers of this Agreement or
incurred in connection with the enforcement of this Agreement, including,
without limitation, all reasonable attorneys' fees and expenses.
SECTION 9.2 SPECIFIC ENFORCEMENT, CONSENT TO JURISDICTION.
(a) The Company and the Purchaser acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.
(b) Each of the Company and the Purchaser (i) hereby irrevocably
submits to the jurisdiction of the United States District Court and other courts
of the United States sitting in the State of New York for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement and (ii)
hereby waives, and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that
the venue of the suit, action or proceeding is improper. Each of the Company and
the Purchaser consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
Section shall affect or limit any right to serve process in any other manner
permitted by law.
SECTION 9.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the
entire understanding of the parties with respect to the matters covered hereby
and, except as specifically set forth herein, neither the Company nor the
Purchaser makes any representation, warranty, covenant or undertaking with
respect to such matters. The parties hereto may not amend this Agreement or any
rights or obligations hereunder without the prior written consent of the Company
and each Purchaser to be affected by the amendment.
SECTION 9.4 NOTICES. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery, by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. Any notice to be given hereunder of a material
breach of this Agreement shall be delivered by facsimile and overnight courier
and shall be effective upon the later to be received. The addresses for such
communications shall be:
If to the Company: IGEN International, Inc.
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
With copies to: Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, III
If to the Purchaser: Acqua Wellington North American
Equities Fund, Ltd.
c/o Fortis Fund Services (Bahamas) Ltd.
Xxxxxxxx Xxxxxxxx Centre
East Bay Street, P. O. Box SS-6238
Nassau, Bahamas
Tel. No: (000) 000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxxx X.X. Xxxxx Xxxxxx
With copies to: Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel. No: (000) 000-0000
Fax No: (000)000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Any party hereto may from time to time change its address for notices
by giving at least ten days written notice of such changed address to the other
party hereto.
SECTION 9.5 WAIVERS. No provision of this Agreement may be waived
other than by a written instrument signed by the party against whom enforcement
of any such waiver is sought. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
SECTION 9.6 HEADINGS. The article, section and subsection headings in
this Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
SECTION 9.7 SUCCESSORS AND ASSIGNS. The Purchaser may not assign this
Agreement to any person without the prior consent of the Company; provided,
however, that the Purchaser may assign this Agreement to any fund which is an
affiliate of the Purchaser and is managed or advised by the same manager or
advisor of the Purchaser. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. After
Closing, the assignment by a party to this Agreement of any rights hereunder
shall not affect the obligations of such party under this Agreement.
SECTION 9.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to the choice of law provisions.
SECTION 9.9 SURVIVAL. The representations and warranties of the
Company and the Purchaser contained in Article III and the covenants contained
in Article IV shall survive the execution and delivery hereof until the
termination of this Agreement, and the agreements and covenants set forth in
Article VIII of this Agreement shall survive the execution and delivery hereof
and the Closing hereunder.
SECTION 9.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each party and delivered to the other parties hereto, it being understood that
all parties need not sign the same counterpart. In the event any signature is
delivered by facsimile transmission, the party using such means of delivery
shall cause four additional executed signature pages to be physically delivered
to the other parties within five days of the execution and delivery hereof.
SECTION 9.11 PUBLICITY. The Company shall not issue any press release
or otherwise make any public statement or announcement with respect to this
Agreement or the transactions contemplated hereby or the existence of this
Agreement without the prior written consent of the Purchaser. In the event the
Company is required by law or regulation to issue a press release or otherwise
make a public statement or announcement with respect to this Agreement or the
transaction contemplated hereby prior to or after the Closing, the Company shall
consult with the Purchaser on the form and substance of such press release or
other disclosure to which the Purchaser shall respond in a timely fashion.
SECTION 9.12 SEVERABILITY. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement, and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.
SECTION 9.13 FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of the Purchaser or the Company, each of the Company
and the Purchaser shall execute and deliver such instruments, documents and
other writings as may be reasonably necessary or desirable to confirm and carry
out and to effectuate fully the intent and purposes of this Agreement.
[END OF PAGE]
+
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officer as of the date first
above written.
IGEN INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Chairman and Chief Executive Officer
ACQUA WELLINGTON NORTH AMERICAN
EQUITIES FUND, LTD.
By: /s/ Xxxxxxx X.X. Xxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx X.X. Xxxxx Xxxxxx
Title: Director
