Exhibit 99.2
SIPEX CORPORATION
as the Company
and
S&F Financial Holdings Inc.,
as the Purchaser
SECURITIES PURCHASE AGREEMENT
Dated as of September 27, 2002
TABLE OF CONTENTS
PAGE
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SECTION 1. PURCHASE AND SALE OF NOTE AND WARRANT................................ 1
SECTION 2. PURCHASER'S REPRESENTATIONS AND WARRANTIES........................... 2
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY............. 5
SECTION 4. COVENANTS............................................................ 12
SECTION 5. REGISTRATION OF THE UNDERLYING SHARES................................ 15
SECTION 6. CONDITIONS TO THE COMPANY'S OBLIGATION TO CLOSE...................... 21
SECTION 7. CONDITIONS TO PURCHASER'S OBLIGATION TO PURCHASE..................... 22
SECTION 8. MISCELLANEOUS........................................................ 24
SCHEDULE
Schedule A................... Wire Instructions
EXHIBITS
Exhibit A.................... Form of Note
Exhibit B.................... Form of Warrant
Exhibit C.................... Form of Purchaser Questionnaire
Exhibit D.................... Form of Deed of Trust
Exhibit E.................... Proforma Policy
Exhibit F.................... Form of Certificate of the Clerk
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of
September 27, 2002, by and among Sipex Corporation, a Massachusetts corporation
(the "Company"), and S&F Financial Holdings Inc. (the "Purchaser"), a Canadian
corporation.
THE PARTIES TO THIS AGREEMENT enter into this Agreement on the basis of
the following facts, intentions and understandings:
A. In accordance with the terms and conditions of this Agreement, the
Company has agreed to issue and sell, and the Purchaser has agreed to purchase
(i) the Company's 5.75% Convertible Secured Note due 2007 in an aggregate amount
equal to $12,000,000 (the "Principal Amount") (such note, in the form attached
hereto as Exhibit A, as the same may be amended, modified or supplemented from
time to time in accordance with the terms thereof, the "Note") that shall be
convertible into shares of the common stock, $0.01 par value per share (the
"Common Stock"), of the Company on the terms set forth in the Note and (ii) the
Warrant (such Warrant, in the form attached hereto as Exhibit B, as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof, the "Warrant"). The shares of Common Stock issuable upon exercise
of the Note are referred to herein collectively as the "Conversion Shares." The
shares of Common Stock issuable upon exercise of the Warrant are referred to
herein as the "Warrant Shares," and the Conversion Shares and the Warrant Shares
are referred to herein as the "Underlying Shares." The Note, the Warrant, and
the Underlying Shares are referred to herein as the "Securities."
B. The Company has agreed to provide the Purchaser with the benefit of
certain registration rights with respect to the Underlying Shares under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act") and applicable state securities laws, on the
terms and subject to the conditions set forth herein. This Agreement, the Note,
and the Warrant and each of the other agreements entered into by the parties
hereto in connection with the transactions contemplated by this Agreement (the
"Transaction") are referred to herein as the "Transaction Documents."
NOW THEREFORE, in consideration of the promises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Purchaser
hereby agree as follows:
SECTION 1. PURCHASE AND SALE OF NOTE AND WARRANT.
(a) Closing of Note and Warrant.
(1) Upon the satisfaction (or written waiver) of the conditions
set forth in Sections 6 and 7 of this Agreement, the Company shall issue and
sell to Purchaser, and Purchaser agrees to purchase from the Company, the Note,
together with the related Warrant (the "Closing"). The Company shall issue to
Purchaser the Note and the Warrant to purchase 900,000 Warrant Shares (subject
to adjustment for stock splits, stock dividends and similar transactions). The
conversion price for the Note shall be $7.50 and the exercise price for the
Warrant shall be $2.9458.
(2) The date and time of the Closing (the "Closing Date") shall
be 12:00 p.m., California time, on September 27, 2002 (or such other date as the
parties may specify), subject to the satisfaction (or waiver) of the conditions
set forth in Sections 6 and 7 of this Agreement. The Closing shall occur on the
Closing Date at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx
Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000.
(b) Form of Payment. On the Closing Date, (i) Purchaser shall pay the
Company for the Note and the Warrant to be issued and sold to such Purchaser on
such Closing Date, by wire transfer of immediately available funds in accordance
with the Company's written wire instructions attached hereto on Schedule A, and
(ii) the Company shall deliver to Purchaser a properly authenticated Note
representing the principal amount of Note and the corresponding Warrant, duly
executed on behalf of the Company and registered in the name of such Purchaser,
that the Purchaser is purchasing from the Company pursuant to this Agreement.
SECTION 2. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser
represents and warrants to the Company that as of the date hereof and the
Closing Date:
(a) Investment Purpose. Purchaser (i) is acquiring the Note and the
Warrant, (ii) upon conversion of the Note owned by it, will acquire the
Conversion Shares then issuable upon conversion thereof, and (iii) upon exercise
of the Warrant held by it, will acquire the Warrant Shares then issuable upon
exercise thereof for its own account for investment only and not with a view
toward, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales or distributions registered or exempted under
the Securities Act.
(b) Accredited Investor Status. Purchaser is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D under the Securities Act as
of the date of this Agreement.
(c) Reliance on Exemptions. Purchaser understands that the Securities
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of the United States federal and state securities laws
and that the Company is relying in part upon the truth and accuracy of, and
Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of Purchaser set forth herein and in the Note
or Warrant in order to determine the availability of such exemptions and the
eligibility of Purchaser to acquire the Securities.
(d) Information. Purchaser believes it (i) has been furnished with or
believes it has had full access to all of the information that it considers
necessary or appropriate for deciding whether to purchase the Securities, (ii)
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Securities, (iii) can
bear the economic risk of a total loss of its investment in the Securities and
(iv) has such knowledge and experience in business and financial matters so as
to enable it to understand the risks of and form an investment decision with
respect to its investment in the Securities. Neither such inquiries nor any
other due diligence investigations conducted by Purchaser or its advisors, if
any, or its representatives shall limit, modify, amend or affect the Company's
representations and warranties contained in this Agreement and the Purchaser's
right to rely thereon.
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(e) No Governmental Review. Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of an investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
(f) Transfer or Resale. Purchaser understands that, except as provided
in Section 5 herein, none of the Securities have been or will be registered
under the Securities Act or any state securities laws, and the Securities may
not be offered for sale, sold, assigned or transferred without registration
under the Securities Act or an exemption therefrom and that, in the absence of
an effective registration statement under the Securities Act, such Securities
may only be sold under certain circumstances as set forth in the Securities Act.
(g) Legends.
(1) Purchaser understands that, until the end of the holding
period under Rule 144(k) of the Securities Act (or any successor provision), the
Note and Warrant (and all securities issued in exchange therefor or in
substitution thereof, other than Underlying Securities, which shall bear the
legend set forth in Section 2(g)(2) of this Agreement, if applicable) shall bear
a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION THEREFROM.
The legend set forth above shall be removed and the Company shall issue
a new Note or Warrant, as appropriate, of like tenor and aggregate principal
amount or number of shares, as appropriate, and which shall not bear the
restrictive legends required by this Section 2(g)(1), (i) if, in connection with
a sale transaction, such holder provides the Company with an opinion of counsel
reasonably acceptable to the Company to the effect that a public sale,
assignment, pledge or transfer of the Note or Warrant, as appropriate, may be
made without registration under the Securities Act, or (ii) upon expiration of
the two-year holding period under Rule 144(k) of the Securities Act (or any
successor rule). The Company shall not require such opinion of counsel for the
sale of Securities in accordance with Rule 144 of the Securities Act in the
event that the Seller provides such representations that the Company shall
reasonably request confirming compliance with the requirements of Rule 144.
(2) Such Purchaser understands that, until the end of the holding
period under Rule 144(k) of the Securities Act (or any successor provision) with
respect to the Underlying Shares
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issued upon conversion of the Note or exercise of the Warrant, as the case may
be, any stock certificate representing Underlying Shares issued upon conversion
of the Note or exercise of the Warrant shall bear a legend in substantially the
following form unless the Note submitted for conversion or the Warrant submitted
for Cashless Exercises (as defined in the Warrant), as the case may be, do not
bear the legend specified in Section 2(g)(1):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR AN EXEMPTION THEREFROM.
The legend set forth above shall be removed and the Company shall issue
the Underlying Securities without such legend to the holder of the Underlying
Securities upon which it is stamped, (i) if such Underlying Securities have been
resold or transferred pursuant to the registration statement contemplated by
Section 5 herein and the registration statement was effective at the time of
such transfer, (ii) if, in connection with a sale transaction, such holder
provides the Company with an opinion of counsel reasonably acceptable to the
Company to the effect that a public sale, assignment, pledge or transfer of the
Securities may be made without registration under the Securities Act, or (iii)
upon expiration of the two-year period under Rule 144(k) of the Securities Act
(or any successor rule). The Company shall not require such opinion of counsel
for the sale of Securities in accordance with Rule 144 of the Securities Act,
provided that the Seller provides such representations that the Company shall
reasonably request confirming compliance with the requirements of Rule 144.
(3) Purchaser understands that, in the event Rule 144(k) as
promulgated under the Securities Act (or any successor rule) is amended to
change the two-year period under Rule 144(k) (or the corresponding period under
any successor rule), (i) each reference in Sections 2(g)(1) and 2(g)(2) of this
Agreement to "two (2) years", the "two-year period" or "two-year holding period"
shall be deemed for all purposes of this Agreement to be references to such
changed period, and (ii) all corresponding references in the Note and the
Warrant shall be deemed for all purposes to be references to the changed period,
provided that such changes shall not become effective if they are otherwise
prohibited by, or would otherwise cause a violation of, the then-applicable
federal securities laws.
(h) Authorization; Enforcement; Validity. The Transaction Documents have
been duly and validly authorized, executed and delivered on behalf of Purchaser
and are valid and binding agreements of Purchaser enforceable against Purchaser
in accordance with their terms, subject as to enforceability to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of
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applicable creditors' rights and remedies and except as the indemnification
agreements of Purchaser may be legally unenforceable.
(i) Residency. Purchaser is a resident of that country or state
specified in its address on the signature page hereto and executed by it.
(j) Additional Acknowledgement. Purchaser acknowledges that it has
independently evaluated the merits of the transactions contemplated by this
Agreement, the Note and the Warrant, that it has independently determined to
enter into the transactions contemplated hereby and thereby.
With the exception of Section 2(h), the Purchaser's representations and
warranties made in this Section 2 are made solely for the purpose of permitting
the Company to make a determination that the offer and sale of the Note and
Warrant pursuant to this Agreement complies with applicable United States
federal and state securities laws and not for any other purpose. Accordingly,
other than Section 2(h), the Company should not rely on such representations and
warranties for any other purpose.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company hereby represents and warrants to, and covenants with, the Purchaser
that as of the date hereof subject to such exceptions as set forth in a
Disclosure Schedule:
(a) Organization. The Company is duly organized and validly existing in
good standing under the laws of the jurisdiction of its organization. Each of
the Company and its subsidiaries listed on Exhibit 21.1 to its Annual Report on
Form 10-K for the year ended December 31, 2001 (the "Subsidiaries") has full
power and authority to own, operate and occupy its properties and to conduct its
business as presently conducted and as described in the Company's Annual Report
on Form 10-K for the year ended December 31, 2001, including all exhibits,
supplements and amendments thereto, and the Company's Quarterly Reports on Form
10-Q for the quarters ended March 30, 2002 and June 29, 2002, including all
exhibits, supplements and amendments thereto (the "SEC Filings"), and is
registered or qualified to do business and in good standing in each jurisdiction
in which the failure to be so qualified would have a Material Adverse Effect,
and to the Company's knowledge, no proceeding has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification. As used in this Agreement,
"Material Adverse Effect" means any material adverse effect upon (i) the
business, financial condition, results of operations, assets, properties or
operations of the Company and its Subsidiaries, considered as one enterprise, or
(ii) the Company's ability to perform its obligations under this Agreement. No
subsidiary of the Company is a "significant subsidiary" of the Company as such
term is defined in Rule 1-02(w) of Regulation S-X.
(b) Due Authorization and Valid Issuance. The Company has all requisite
power and authority to execute, deliver and perform its obligations under the
Transaction Documents, and the Transaction Documents and the transactions
contemplated thereby have been duly authorized by the Company and its Board of
Directors and no further consent or authorization by the Company, its Board of
Directors or its shareholders is required. The Transaction Documents have been
validly executed and delivered by the Company and constitute legal, valid and
binding agreements of the
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Company enforceable against the Company in accordance with their terms, except
as rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). The Note and Warrant being purchased by the
Purchaser hereunder will, upon issuance pursuant to the terms hereof, be duly
authorized, validly issued, fully paid and nonassessable, and shall be free from
all liens, claims and encumbrances, except encumbrances or restrictions arising
under U.S. federal or state securities laws, with respect to the issuance
thereof, and the Purchaser shall be entitled to all the rights set forth
therein.
(c) Non-Contravention. The execution, delivery and performance of the
Transaction Documents, including without limitation the issuance and sale of the
Note and Warrant to be sold by the Company under the Transaction Documents, the
fulfillment of the terms of the Transaction Documents and the consummation of
the transactions contemplated thereby, will not (A) constitute a violation of,
or default (with the passage of time or otherwise) under (i) any bond,
debenture, note or other evidence of indebtedness, lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which the Company or any Subsidiary is a party or by which it or
any of its Subsidiaries or their respective properties are bound when such
violation, conflict or default, individually, or in the aggregate, would have a
Material Adverse Effect, (ii) the articles of organization, by-laws or other
organizational documents of the Company or any Subsidiary, or (iii) any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company or any
Subsidiary or their respective properties when such violation, conflict or
default would have a Material Adverse Effect, or (B) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the properties or assets of the Company or any Subsidiary
(other than the lien of the Deed of Trust on the property to be subject to the
Deed of Trust) or an acceleration of indebtedness pursuant to any obligation,
agreement or condition contained in any bond, debenture, note or any other
evidence of indebtedness or any indenture, mortgage, deed of trust or any other
agreement or instrument to which the Company or any Subsidiary is a party or by
which any of them is bound or to which any of the property or assets of the
Company or any Subsidiary is subject where such lien or other restriction would
have a Material Adverse Effect. No consent, approval, authorization or other
order of, or registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body in the United States or any
other person is required for the execution, delivery and performance of the
Transaction Documents, including without limitation the valid issuance and sale
of the Securities to be sold pursuant to the Transaction Documents, other than
such as have been made or obtained, and except for any post-closing securities
filings or notifications required to be made under federal or state securities
laws. Assuming the accuracy of the representations made by Purchaser in Section
2 and, with respect to the exercise of the Warrant, the accuracy of the
representations made by Purchaser in the Notice of Exercise attached to the
Warrant, the issuance by the Company of the Note and Warrant is exempt from
registration under the Securities Act and the issuance of the Underlying Shares
upon
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conversion the Note and exercise of the Warrant, will be exempt from
registration under the Securities Act under applicable rules and regulations as
currently in effect.
(d) Capitalization. The Company's authorized capital stock as of
September 13, 2002 consisted of (i) 40,000,000 shares of Common Stock, $0.01 par
value per share, of which 27,955,682 shares are issued and outstanding,
4,433,123 are reserved for issuance under the Company's 1994 Stock Option and
Incentive Plan, 1996 Stock Option and Incentive Plan, 1996 Non-Employee Director
Stock Option Plan, 1997 Incentive Stock Option Plan, Sipex Corporation 1999
Stock Plan, 2000 Non-Qualified Stock Option Plan, 2001 Stock Option Plan, 2002
Nonstatutory Stock Option Plan, and 1996 Employee Stock Purchase Plan ("Employee
Benefit Plans"), 1,885,700 shares are reserved for issuance pursuant to options
outside the Employee Benefit Plans and (ii) 1,000,000 shares of Preferred Stock,
$0.01 par value per share, of which no shares are issued and outstanding. The
Company has not issued any capital stock since that date other than pursuant to
(i) the Employee Benefit Plans, or (ii) upon exercise of outstanding warrants or
options disclosed in the SEC Filings. The Company has no stock option or stock
purchase plans or other equity incentive plans of any kind other than the
Employee Benefit Plans. The Underlying Shares to be sold by the Company pursuant
to the Transaction Documents have been duly authorized, and when issued and paid
for in accordance with the terms of the Transaction Documents, will be duly and
validly issued, fully paid and nonassessable and will be free from all taxes,
liens and charges with respect to the issuance thereof, with the holder thereof
entitled to all rights accorded to holders of Common Stock of the Company,
generally. The outstanding shares of capital stock of the Company have been duly
and validly issued and are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and were not issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities. Except as set forth herein or in the SEC Filings, there are
no (i) outstanding rights (including, without limitation, preemptive rights with
respect to issuances by the Company of any securities, including without
limitation the Securities, of the Company), warrants or options to acquire, or
instruments convertible into or exchangeable for, any unissued shares of capital
stock or other equity interest in the Company or any Subsidiary, (ii) contracts,
commitments, agreements, understandings or arrangements of any kind to which the
Company is a party or of which the Company has knowledge and relating to the
issuance or sale of any capital stock of the Company or any Subsidiary, or of
any such convertible or exchangeable securities or any such rights, warrants or
options, (iii) outstanding securities or instruments of the Company or any
Subsidiary that contain any redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to redeem a security of the Company or any
Subsidiary, (iv) securities or other instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of any of the
Securities under this Agreement, or (v) stock appreciation rights or "phantom
stock" plans or agreements or any similar plan or arrangement. Without limiting
the foregoing, no preemptive right, co-sale right, right of first refusal,
registration right (except as set forth herein), or other similar right exists
with respect to any of the Securities or the issuance and sale thereof. No
further approval or authorization of any stockholder, the Board of Directors of
the Company or others is required for the issuance and sale of the Securities.
The Company owns the entire equity interest in each of its Subsidiaries, free
and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest, other than as described in the SEC Filings. The Company has
no outstanding indebtedness
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for borrowed money and no agreement, other than that certain Amended and
Restated Revolving Credit Loan and Security Agreement (Accounts and Inventory)
dated March 22, 2001 by and between the Company and Comerica Bank - California,
as amended (the "Credit Agreement"), providing for indebtedness for borrowed
money. Except as disclosed in the SEC Filings, there are no shareholder rights
plans, stockholders agreements, voting agreements or other similar agreements
with respect to the Common Stock to which the Company is a party or, to the
knowledge of the Company, between or among any of the Company's stockholders.
(e) Legal Proceedings. There is no material action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company, threatened to which the Company or any Subsidiary is or may be a party
or of which the business, property, Common Stock, officers or directors (in
their capacities as such) of the Company or any Subsidiary is subject that is
not disclosed in the SEC Filings, except where the same would not result, either
individually or in the aggregate, in a Material Adverse Effect.
(f) No Violations. Neither the Company nor any Subsidiary (i) is in
violation of its charter, bylaws, or other organizational document, (ii) is in
violation of any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the Company
or any Subsidiary, which violation, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, or (iii) is in default (and
there exists no condition which, with the passage of time or otherwise, would
constitute a default) in any respect in the performance of any bond, debenture,
note or any other evidence of indebtedness in any indenture, mortgage, deed of
trust or any other agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or by
which the properties of the Company or any Subsidiary are bound, which would be
reasonably likely to have a Material Adverse Effect.
(g) Governmental Permits, Etc. Each of the Company and its Subsidiaries
has all necessary franchises, licenses, certificates and other authorizations
from any foreign, federal, state or local government or governmental agency,
department, or body that are currently necessary for the operation of the
business of the Company and its Subsidiaries as currently conducted and as
described in the SEC Filings except where the failure to currently possess will
not have a Material Adverse Effect.
(h) Intellectual Property. Except as specifically disclosed in the SEC
Filings, (i) each of the Company and its Subsidiaries owns or possesses
sufficient rights to use all patents, patent rights, trademarks, copyrights,
licenses, inventions, mask works, trade secrets, trade names, know-how, moral
rights, confidential and proprietary information, compositions of matter,
formulas, designs and proprietary rights (collectively, "Intellectual Property")
described or referred to in the SEC Filings as owned or possessed by it or that
are necessary for the conduct of its business as now conducted or as described
in the SEC Filings, except where the failure to currently own or possess would
not have a Material Adverse Effect, and (ii) to the Company's knowledge, neither
the Company nor any of its Subsidiaries is infringing, or has received any
notice of or has any knowledge of any asserted
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infringement by the Company or any of its Subsidiaries of, any rights of a third
party with respect to any Intellectual Property that, individually or in the
aggregate, would have a Material Adverse Effect. To the Company's knowledge,
there is no claim, action or proceeding being overtly threatened against, but
which has not been made or brought against, the Company or the Subsidiaries
regarding its Intellectual Property or infringement of other intellectual
property rights which could reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect. To the Company's knowledge, no
third party has any ownership right, title, interest, claim in or lien on any of
the Company's Intellectual Property and the Company has taken, and in the future
the Company will use its reasonable effort to take, all steps reasonably
necessary to preserve its legal rights in, and the secrecy of, all its
Intellectual Property. To the Company's knowledge, there is no material
unauthorized use, infringement or misappropriation of any Intellectual Property
of the Company or any of the Subsidiaries by any third party.
(i) Environmental Matters.
(1) Except as would not reasonably be likely to result in a
material liability to the Company, no underground storage tanks and no amount of
any substance that has been designated by any governmental agency or by
applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including without limitation,
PCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended to date, or defined as a
hazardous waste pursuant to the United States Resource Conservation and Recovery
Act of 1976, as amended to date, and the regulations promulgated pursuant to
said laws, but excluding routine quantities of office and janitorial supplies (a
"Hazardous Material"), are present as a result of the actions of the Company,
or, to the Company's knowledge, as a result of the actions of a third party, in,
on or under any property, including the land and the improvements, ground water
and surface water thereof, that the Company or any of its subsidiaries currently
owns, operates, occupies or leases, or to the Company's knowledge, were present
on any other real property at the time it ceased to be owned, operated, occupied
or leased by the Company as a result of the actions of the Company, or to the
Company's knowledge as a result of the actions of a third party.
(2) Except as would not reasonably be likely to result in a
material liability to the Company (in any individual case or in the aggregate),
neither the Company nor any Subsidiary has transported, stored, used,
manufactured, disposed of or arranged for the disposal of, released or exposed
its employees or others to Hazardous Materials in violation of any federal,
state or local law, rule, regulation, treaty or statute in effect before the
Closing Date related to protection of human health, safety, and the environment,
including natural resources (collectively, "Environmental Laws").
(3) Except as would not reasonably be likely to result in a
material liability to the Company, the Company and the Subsidiaries currently
hold and are in compliance with all approvals, permits, licenses, clearances and
consents required under Environmental Laws for the conduct of the Company's and
the Subsidiaries' businesses as currently being conducted.
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(4) No action, proceeding, revocation proceeding, amendment
procedure, writ, injunction or claim is pending, or to the Company's knowledge,
threatened, alleging that the Company or any of the Subsidiaries are in
violation of or liable under any Environmental Law.
(j) No General Solicitation; No Integration. Neither the Company nor any
other person or entity authorized by the Company to act on its behalf has
engaged in a general solicitation or general advertising (within the meaning of
Regulation D of the Securities Act) of investors with respect to offers or sales
of the Shares, the Notes and the Warrants. The Company has not, directly or
indirectly, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act) which,
to its knowledge, is or will be integrated with the Underlying Shares, the Note
and the Warrant sold pursuant to this Agreement.
(k) Interested Party Transactions. To the knowledge of the Company,
except as set forth in the SEC Filings, no officer or director of the Company or
the Subsidiaries or any "affiliate" or "associate" (as those terms are defined
in Rule 405 promulgated under the 0000 Xxx) of any such person has had, either
directly or indirectly, a material interest in: (i) any person or entity which
purchases from or sells, licenses or furnishes to the Company any goods,
property, technology, intellectual or other property rights or services; or (ii)
any contract or agreement to which the Company is a party or by which it may be
bound or affected.
(l) Credit Agreement. As of the date hereof, there are no amounts
outstanding under the Credit Agreement.
(m) Financial Statements. The financial statements of the Company and
the related notes contained in the SEC Filings (all such financial statements,
the "Financial Statements") present fairly, in accordance with generally
accepted accounting principles, the financial position of the Company and its
Subsidiaries as of the dates indicated, and the results of its operations and
cash flows for the periods therein specified, subject, in the case of unaudited
financial statements for interim periods, to normal year-end audit adjustments.
Such Financial Statements (including the related notes) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods therein specified, except as disclosed in the SEC
Filings. The other financial information contained in the SEC Filings has been
prepared on a basis consistent with the financial statements of the Company. The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles and to maintain assets accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(n) No Material Adverse Change. Since June 29, 2002, the Company has not
experienced or suffered events or conditions which have, in the aggregate,
caused a Material Adverse Effect.
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(o) Disclosure. The information contained in the SEC Filings, excluding
exhibits thereto, including without limitation all information incorporated
therein by reference, as of the date hereof and as of the Closing Date, did not
and shall not 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 light of the circumstances under which they were made, not
misleading.
(p) NASDAQ Compliance. The Company's Common Stock is registered pursuant
to Section 12(g) of the Exchange Act and is listed on The Nasdaq Stock Market,
Inc. National Market (the "Nasdaq National Market"), and the Company has taken
no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or de-listing the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the Securities and Exchange Commission (the "SEC") or the NASD
is contemplating terminating such registration or listing.
(q) Reporting Status. The Company has filed in a timely manner (or
pursuant to applicable extension periods) all documents that the Company was
required to file under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") during the twelve (12) months preceding the date of this
Agreement (the "SEC Documents"). The SEC Documents, as amended, and all other
materials filed with the SEC during such period complied in all material
respects with the SEC's requirements as of their respective filing dates or
amendment dates, and the information contained therein did not 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 light of the
circumstances under which they were made not misleading. As of the date hereof,
the Company meets the requirements for use of Form S-3 for registration of the
resale of the Underlying Shares. The Company is not required to file and will
not be required to file any agreement, note lease, mortgage, deed or other
instrument entered into prior to the date hereof and to which the Company or any
of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries is bound which has not been previously filed as an exhibit to its
reports filed with the SEC under the Exchange Act.
(r) Listing. The Company shall, upon conversion of the Note or exercise
of the Warrant, comply with all requirements of the NASD with respect to the
issuance of the Underlying Shares and the listing thereof on the Nasdaq National
Market.
(s) No Manipulation of Stock. The Company has not taken and will not, in
violation of applicable law, take, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the transactions contemplated hereby
or the sale or resale of the Underlying Shares.
(t) Company not an "Investment Company". The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended
(the "Investment Company Act"). The Company is not, and immediately after
receipt of payment for the Shares will not be, an "investment company" or an
entity "controlled" by an "investment company" within the meaning of the
Investment Company Act and shall conduct its business in a manner so that it
will not become subject to the Investment Company Act.
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(u) Brokers or Finders. The Company has not incurred, and shall not
incur, directly or indirectly, any liability for any brokerage or finders' fees
or agents' commissions or any similar charges in connection with this Agreement
or any transaction contemplated hereby.
(v) Deed of Trust. Except for the recording of a Notice of Intent to
Preserve Security Interest pursuant to California Civil Code Sections
880.310-880.370, after the Deed of Trust (as defined in Section 6(a) hereof) has
been recorded in the Official Records of Santa Xxxxx County, California, it will
not be necessary to re-record, re-register or re-file the Deed of Trust in order
to maintain the priority of the liens and security interests created thereby.
There will be no mortgage taxes or filing fees payable upon the recording and
filing of such documents except (i) normal recording and filing fees payable to
the County Recorder of Santa Xxxxx County, California in connection therewith,
(ii) transfer taxes assessed in connection with any transfer of the Property (as
defined in the Deed of Trust) or interest therein, and (iii) any fee or charge
payable to any entity whose services may have been used to assist in such
recordation and filing.
(w) Canadian Representations. The Company further represents and
warrants to the Purchaser that, as at the date of issuance of the Note and
Warrant:
(1) the Company is not a "reporting issuer" (or the equivalent)
in any Canadian provincial or territorial jurisdiction;
(2) to the best of the Company's knowledge, after reasonable
inquiry, after giving effect to the issuance of the Note and Warrant and any
other securities that are to be issued at the same time as or as part of the
same distribution as the Note and Warrant, and assuming the conversion thereof
for shares of Common Stock, residents of Canada:
(a) do not own directly or indirectly more than 10 percent
of the outstanding shares of Common Stock; and
(b) do not represent in number more than 10 percent of the
total number of owners directly or indirectly of shares of Common Stock.
SECTION 4.COVENANTS.
(a) Reasonable Efforts. The parties shall use all reasonable efforts to
timely satisfy each of the conditions described in Sections 6 and 7 of this
Agreement.
(b) Consents. The Company will use all reasonable efforts to obtain all
consents, approvals, authorizations or other orders of, or registration,
qualification or filing with, any regulatory body, administrative agency or
other governmental body in the United States or any other person that is
required for the execution, delivery and performance of the Transaction
Documents, including without limitation the valid issuance and sale of the
Securities to be sold pursuant to the Transaction Documents.
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(c) Form D; Blue Sky Laws. The Company shall file a Form D with respect
to the Securities as required under Regulation D and provide a copy thereof to
the Purchaser promptly after such filing. The Company shall take such action at
its own cost and expense, as the Company shall reasonably determine is necessary
to qualify the Securities for sale to the Purchaser pursuant to this Agreement
under applicable securities or "blue sky" laws of the states of the United
States or obtain exemption therefrom, and shall provide evidence of any such
action so taken to each Purchaser.
(d) Reservation of Shares. The Company shall take all action necessary
to at all times have authorized and reserved for the purpose of issuance, no
less than 100% of the number of shares of Common Stock needed to provide for the
issuance of the Underlying Shares.
(e) Certain Reports and Other Information. Concurrently with the
distribution to holders of the Common Stock (or holders of any other equity
securities of the Company) so long as the Note or Warrant remains outstanding,
the Company will provide to the Purchaser copies of all reports, notices, and
other information as the Company shall make available generally to the holders
of its equity securities.
(f) Reporting Status. Until the later of (i) the date as of which the
Purchaser may sell all of the Underlying Shares without restriction pursuant to
Rule 144(k) promulgated under the 1933 Act (or successor thereto) and (ii) the
last date on which the Note or the Warrant remains outstanding (the "Reporting
Period"), the Company shall file all reports required to be filed with the SEC
pursuant to the Exchange Act, and the Company shall not terminate its status as
an issuer required to file reports under the Exchange Act even if the Exchange
Act or the rules and regulations thereunder would otherwise permit such
termination, other than as a result of a Change of Control (as such term is
defined in the Note and the Warrant, respectively) provided that the Company is
in compliance with the terms of the Note and the Warrant with respect to such
Change of Control.
(g) Listing. The Company shall promptly secure the listing of all of the
Underlying Shares upon each national securities exchange and automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance, as required by each such national securities
exchange and automated quotation system) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all Underlying
Shares from time to time issuable under the terms of the Transaction Documents.
The Company shall use all reasonable efforts to maintain the Common Stock's
authorization for quotation on the Nasdaq National Market (the "Principal
Market"). Neither the Company nor any of its Material Subsidiaries shall take
any action which would be reasonably expected to result in the delisting or
suspension of the Common Stock from the Principal Market. The Company shall pay
all fees and expenses in connection with satisfying its obligations under this
Section 4(g).
(h) Redemptions and Dividends. For so long as the Note is outstanding,
without the prior written approval of the Purchaser, the Company shall not
repurchase, redeem, or declare or pay any cash dividend or distribution on, any
shares of capital stock of the Company.
(i) Right of First Refusal. As long as the Note is outstanding, the
Purchaser has the right of first refusal to purchase its Pro Rata Share (as
defined below), of all (or any part) of any "New
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Securities" (as defined below) that the Company may from time to time issue
after the date of this Agreement until the second anniversary of the Closing
Date; provided, however, that the sum of (x) the aggregate number of New
Securities available for purchase by the Purchaser pursuant to this Section 7(i)
and (y) the number of Underlying Shares as of the date hereof (assuming full
conversion of the Note and full exercise of the Warrant) shall not exceed 19.9%
of the total number of shares of Common Stock of the Company outstanding as of
the date hereof. Purchaser's "Pro Rata Share" for purposes of this right of
first refusal is the ratio of (a) the number of Underlying Shares held by
Purchaser or subject to any unexercised portion of the Warrant or unconverted
portion of the Note at the time of the issuance of such New Securities, to (b)
the total number of shares of Common Stock of the Company then outstanding
(assuming full conversion and exercise of all outstanding convertible or
exercisable securities, options or warrants, other than options issued to
officers, directors, employees, consultants, contractors or advisors under any
employee or director benefit plan or any other purchase plan, stock grant or
other agreement).
(1) New Securities. "New Securities" shall mean any capital stock
of the Company, whether now authorized or not, and rights, options or warrants
to purchase such capital stock, and securities of any type whatsoever that are,
or may become, convertible or exchangeable into such capital stock; provided,
however, that the term "New Securities" does not include: (i) capital stock
issued or issuable upon the exercise of any warrants, options or convertible
securities issued and outstanding on the date hereof in accordance with the
terms of such securities as of such date; (ii) capital stock issued or issuable
to officers, directors, employees, consultants, contractors or advisors upon the
grant or exercise of any stock or options which may hereafter be granted or
exercised under any employee or director benefit plan of the Company now
existing or to be implemented in the future or any other purchase plan, stock
grant or other agreement, approved by a committee of independent directors of
the Company or the Company's Board of Directors; (iii) the Underlying Shares in
accordance with terms of the Securities Purchase Agreement; (iv) any securities
issued to strategic partners (A) investing in connection with a commercial
relationship with the Company or (B) providing the Company with equipment
leases, real property leases, loans, credit lines, guaranties of indebtedness,
cash price reductions or similar transactions; or (v) any securities issued in
connection with the acquisition of a business pursuant to an asset purchase,
securities purchase, merger or similar transaction.
(2) Procedures. In the event that the Company proposes to
undertake an issuance of New Securities, it shall give to Purchaser a written
notice of its intention to issue New Securities (the "Pro Rata Rights Notice"),
describing the type of New Securities and the price and the general terms upon
which the Company proposes to issue such New Securities. Purchaser shall have 5
business days from the date such Pro Rata Rights Notice is delivered hereunder,
to agree in writing to purchase Purchaser's Pro Rata Share of such New
Securities for the price and upon the general terms specified in the Notice by
giving written notice to the Company and stating therein the quantity of New
Securities to be purchased (not to exceed Purchaser's Pro Rata Share). If
Purchaser fails to so agree in writing within such 5 business day period to
purchase its full Pro Rata Share of an offering of New Securities, then
Purchaser shall forfeit the right hereunder to purchase that part of his Pro
Rata Share of such New Securities that he, she or it did not so agree to
purchase.
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(3) Failure to Exercise. In the event that the Purchaser fails to
exercise in full the right of first refusal within such 5 business day period,
then the Company shall have one hundred twenty (120) days thereafter to sell the
New Securities with respect to which the Purchaser's right of first refusal
hereunder was not exercised, at a price and upon general terms not materially
more favorable to the purchasers thereof than specified in the Company's Notice
to the Rights Holders. In the event that the Company has not issued and sold the
New Securities within such one hundred twenty (120) day period, then the Company
shall not thereafter issue or sell any New Securities without again first
offering such New Securities to the Purchaser pursuant to this Section 4(i).
(j) No Encumbrance of Property. For so long as the Note is outstanding,
without the prior written approval of the Purchaser, the Company shall not
create, incur, assume or suffer to exist any mortgage, pledge, lien, security
interest or other encumbrance of any kind on the Property (as defined in the
Deed of Trust) except for (i) liens for taxes, assessments, fees and other
governmental charges, and for claims the payment of which is not yet overdue or
is being contested in good faith (and for which adequate reserves have been
established by the Company on its books in conformity with GAAP), (ii) statutory
liens of landlords, carriers, warehousemen, processors, mechanics, materialmen
or suppliers incurred in the ordinary course of business and securing amounts
not yet due or declared to be due by the claimant thereunder; (iii) liens or
security interests in favor of Purchaser; (iv) zoning restrictions and
easements, licenses, covenants and other restrictions affecting the use of real
property that do not individually or in the aggregate have a material adverse
effect on the ability of the Company and its Subsidiaries to use such real
property for its intended purpose in connection with its business; or (v)
matters disclosed in the title insurance report.
SECTION 5. REGISTRATION OF THE UNDERLYING SHARES.
(a) Resale S-3 Registration Procedures and Other Matters. The Company
shall:
(1) subject to receipt of the information called for by the
questionnaire attached to this Agreement as Exhibit C from the Purchaser after
prompt written request from the Company to the Purchaser to provide such
information, prepare and file with the SEC, within nine months after the Closing
Date, a registration statement on Form S-3 promulgated under the Securities Act
(the "Registration Statement") to enable the resale of the Underlying Shares by
the Purchaser from time to time through the automated quotation system of the
Nasdaq National Market or in privately-negotiated transactions;
(2) cause the Registration Statement to become effective within
thirty (30) days following the first anniversary of the Closing Date (the
"Effectiveness Target Date");
(3) prepare and file with the SEC such amendments and supplements
to the Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep the Registration Statement current and effective for a
period not to exceed the earlier of (i) the first date on which the Purchaser
may sell all Underlying Shares then held or issuable upon conversion of the Note
or exercise of the Warrant within a ninety (90) day period pursuant to Rule
144(k) under the Securities Act or any other rule of similar effect, or (ii)
such time as all Underlying Shares have been sold;
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(4) furnish to the Purchaser with respect to the Underlying
Shares registered under the Registration Statement such number of copies of the
Registration Statement, prospectuses and preliminary prospectuses in conformity
with the requirements of the Securities Act and such other documents as the
Purchaser may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Underlying Shares by the Purchaser;
provided, however, that the obligation of the Company to deliver copies of
prospectuses or preliminary prospectuses to the Purchaser shall be subject to
the receipt by the Company of reasonable assurances from the Purchaser that the
Purchaser will comply with the applicable provisions of the Securities Act and
of such other securities or blue sky laws as may be applicable in connection
with any use of such prospectuses or preliminary prospectuses;
(5) file documents required of the Company for blue sky clearance
(x) in all U.S. jurisdictions in which any of the Underlying Shares are
originally sold and (y) in states where specified in writing by Purchaser;
provided, however, that, as to clause (y), the Company shall not be required to
qualify to do business or consent to service of process in any jurisdiction in
which it is not now so qualified or has not so consented;
(6) bear all expenses in connection with the procedures in
paragraph (1) through (5) of this Section 5(a) and the registration of the
Underlying Shares pursuant to the Registration Statement; including the
reasonable fees and expenses, if any, of one counsel to the Purchaser, but
excluding underwriting discounts, brokerage fees and commissions incurred by the
Purchaser;
(7) advise the Purchaser promptly after it shall receive notice
or obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceeding for that purpose; and it will promptly use its
reasonable best efforts to prevent the issuance of any stop order or to obtain
its withdrawal at the earliest possible moment if such stop order should be
issued; and
(8) if it determines to register any of its equity securities
either for its own account or for the account of other shareholders at any time
after the Note becomes convertible until the Final Maturity Date of the Note (as
defined therein), other than (i) a registration relating solely to employee
benefit plans, (ii) a registration relating solely to a SEC Rule 145 transaction
or (iii) a registration on any registration form which does not permit secondary
sales or does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Securities, advise Purchaser as soon as reasonably possible prior to filing any
such registration statement under the Securities Act and discuss the feasibility
of including Underlying Shares in such registration statement.
(b) Transfer of Underlying Shares After Registration; Suspension.
(1) The Purchaser agrees that it will not effect any disposition
of the Underlying Shares under the Registration Statement referred to in Section
5(a) above except as contemplated in such Registration Statement and as
described below or as otherwise permitted by law, and that it will promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding the Purchaser or its plan of distribution;
provided, however, that nothing in this
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section shall in any way limit Purchaser's ability to transfer or otherwise
dispose of any of the Securities as permitted by any other section of this
Agreement and applicable law.
(2) Except in the event that paragraph (3) below applies, the
Company shall (i) prepare and file from time to time with the SEC a
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not 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 not misleading, and so that, as thereafter delivered
to purchasers of the Underlying Shares being sold thereunder, such Prospectus
will not 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 light of the circumstances under which they were made, not
misleading; (ii) provide the Purchaser copies of any documents filed pursuant to
Section 5(b)(2)(i); and (iii) inform Purchaser that the Company has complied
with its obligations in Section 5(b)(2)(i) (or that, if the Company has filed a
post-effective amendment to the Registration Statement which has not yet been
declared effective, the Company will notify the Purchaser to that effect, will
use its best efforts to secure the effectiveness of such post-effective
amendment as promptly as possible and will promptly notify the Purchaser
pursuant to Section 5(b)(2)(i) hereof when the amendment has become effective).
(3) Subject to paragraph (4) below, in the event (i) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related Prospectus or for additional
information; (ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Underlying Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; or (iv) of any event or circumstance which
in the good faith judgment of the Company's Board of Directors, upon advice of
counsel, would necessitate the making of any changes in the Registration
Statement or Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; then the Company shall, deliver a certificate in
writing to the Purchaser (the "Suspension Notice") to the effect of the
foregoing and, upon receipt of such Suspension Notice, the Purchaser will
refrain from selling any Underlying Shares pursuant to the Registration
Statement (a "Suspension") until the Purchaser's receipt of copies of a
supplemented or amended Prospectus prepared and filed by the Company, or until
it is advised in writing by the Company that the current Prospectus may be used,
and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such Prospectus. In the
event of any Suspension, the Company will use its reasonable best
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efforts to cause the use of the Prospectus so suspended to be resumed as
expeditiously as practicable after the delivery of a Suspension Notice to the
Purchaser. In addition to, and without limiting any other remedies (including,
without limitation, at law or at equity) available to Purchaser, the Purchaser
shall be entitled to specific performance in the event that the Company fails to
comply with the provisions of this Section 5(b)(3).
(4) Notwithstanding the foregoing paragraphs of this
Section 5(b), the Purchaser shall not be prohibited from selling Underlying
Shares under the Registration Statement as a result of Suspensions on more than
two occasions of not more than thirty (30) days in any twelve (12) month period,
and shall not be prohibited from selling Underlying Shares under the
Registration Statement as a result of a Suspension for at least thirty (30) days
after any Mandatory Conversion Date (as defined in the Note), except that,
following the second anniversary of the Closing Date, if in the good faith
judgment of the Company's Board of Directors, upon advice of counsel, the sale
of Underlying Shares under the Registration Statement in reliance on this
Section 5(b)(4) would be reasonably likely to cause a violation of the
Securities Act or the Exchange Act and result in liability to the Company, the
Company shall not be subject to the restrictions in this Section 5(b)(4), but
shall, in any event, otherwise comply with all other provisions of this Section
5(b), and use all reasonable efforts to promptly restore Purchaser's ability to
sell Underlying Shares under the Registration Statement.
(5) Provided that a Suspension is not then in effect, the
Purchaser may sell Underlying Shares under the Registration Statement, provided
that it arranges for delivery of a current Prospectus to the transferee of such
Underlying Shares.
(c) Indemnification. For the purpose of this Section 5(c):
(i) the term "Selling Stockholder" shall include the Purchaser and any
officer, director, trustee or affiliate of such Purchaser; and
(ii) the term "Registration Statement" shall include any final
Prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 5(a).
(1) The Company agrees to indemnify and hold harmless each
Selling Stockholder from and against any losses, claims, damages or liabilities
to which such Selling Stockholder may become subject (under the Securities Act
or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon any untrue
statement, or alleged untrue statement, or any omission or alleged omission to
state a material fact required to be stated in a Registration Statement, or
necessary to make the statements therein, in light of the circumstances under
which they were made not misleading, at the time of effectiveness of the
Registration Statement, and the Company will reimburse such Selling Stockholder
for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, provided,
however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, (x)
an untrue statement made or alleged untrue statement or omission or alleged
omission in such Registration Statement in reliance upon and in conformity with
written information
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furnished to the Company by or on behalf of such Selling Stockholder
specifically for use in preparation of the Registration Statement, (y) the
failure of such Selling Stockholder to comply with its covenants and agreements
contained in Section 5(b) hereof respecting sale of the Underlying Shares, or
(z) any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Purchaser prior to the pertinent
sale or sales by the Purchaser.
(2) The Purchaser agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon , (i) any failure by such Purchaser to comply with the covenants and
agreements contained in Section 4(b) hereof respecting sale of the Underlying
Shares, or (ii) any untrue statement, or alleged untrue statement, or any
omission or alleged omission to state a material fact contained required to be
stated in a Registration Statement, or necessary to make the statements therein,
in light of the circumstances under which they were made not misleading, if such
untrue statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information furnished by or on
behalf of the Purchaser specifically for use in preparation of the Registration
Statement, and the Purchaser will reimburse the Company (or such officer,
director or controlling person), as the case may be, for any reasonable legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; provided that the Purchaser's
obligation to indemnify the Company shall be limited to the amount received by
the Purchaser from the sale of the Underlying Shares.
(3) Promptly after receipt by any indemnified person of a notice
of a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 5(c), such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 5(c) (except to the extent that such
omission materially and adversely affects the indemnifying party's ability to
defend such action) or from any liability otherwise than under this Section
5(c). Subject to the provisions hereinafter stated, in case any such action
shall be brought against an indemnified person, the indemnifying person shall be
entitled to participate therein, and, to the extent that it shall elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, shall be entitled to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
person. After notice from the indemnifying person to such indemnified person of
its election to assume the defense thereof, such indemnifying person shall not
be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof,
provided, however, that if there exists or shall exist a conflict of interest
that would make it inappropriate, in the opinion of counsel to the indemnified
person, for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying
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person; provided, however, that no indemnifying person shall be responsible for
the fees and expenses of more than one separate counsel (together with
appropriate local counsel) for all indemnified parties. In no event shall any
indemnifying person be liable in respect of any amounts paid in settlement of
any action unless the indemnifying person shall have approved the terms of such
settlement; provided that such consent shall not be unreasonably withheld. No
indemnifying person shall, without the prior written consent of the indemnified
person, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified person is or could have been a party and
indemnification could have been sought hereunder by such indemnified person,
unless such settlement includes an unconditional release of such indemnified
person from all liability on claims that are the subject matter of such
proceeding.
(4) If the indemnification provided for in this Section 5(c) is
unavailable to or insufficient to hold harmless an indemnified party under
Section 5(c) (1) or 4(c)(2) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Purchaser
as well as any other Selling Stockholders under such Registration Statement on
the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement or omission, whether the untrue statement or omission relates
to information supplied by the Company on the one hand or the Purchaser or other
Selling Stockholder on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 4(c)(4) were
determined by pro rata allocation (even if the Purchaser and other Selling
Stockholders were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to above in this Section 5(c)(4). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Section 5(c)(4) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 5(c)(4), the Purchaser
and the other Selling Stockholders shall not be required to contribute any
amount in excess of the amount by which the amount received by the Purchaser and
other Selling Stockholders from the sale of the Underlying Shares to which such
loss relates exceeds the amount of any damages which Purchaser or such other
Selling Stockholder has otherwise been required to pay by reason of such untrue
statement or omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(5) The Purchaser hereby acknowledges that it is a sophisticated
business person who was represented by counsel during the negotiations regarding
the provisions hereof including, without limitation, the provisions of this
Section 5(c), and is fully informed regarding said
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provisions. Purchaser further acknowledges that the provisions of this Section
5(c) fairly allocate the risks in light of the ability of the Purchaser to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement as required by the Act and the
Exchange Act.
(d) Termination of Conditions and Obligations. The conditions precedent
imposed by this Section 5 upon the transferability of the Underlying Shares
shall cease and terminate as to any particular number of the Underlying Shares
when such Underlying Shares shall have been effectively registered under the
Securities Act and sold or otherwise disposed of in accordance with the intended
method of disposition set forth in the Registration Statement covering such
Underlying Shares or at such time as an opinion of counsel satisfactory to the
Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
(e) Information Available. So long as the Registration Statement is
effective covering the resale of Underlying Shares owned by the Purchaser, the
Company will furnish to or otherwise make available to the Purchaser upon the
Purchaser's request:
(1) as soon as practicable after it is available, one copy of (i)
its Annual Report to Stockholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting principles
by a national firm of certified public accountants), (ii) its Annual Report on
Form 10-K and (iii) its Quarterly Reports on Form 10-Q (the foregoing, in each
case, excluding exhibits);
(2) all exhibits excluded by the parenthetical to
subparagraph (a) of this Section 5(e) as filed with the SEC and all other
information that is made available to shareholders;
(3) a full copy of the Registration Statement; and
(4) an adequate number of copies of the prospectuses to supply to
any other party requiring such prospectuses; and upon the reasonable request of
the Purchaser, the Company will meet with the Purchaser or a representative
thereof at the Company's headquarters to discuss all information relevant for
disclosure in the Registration Statement covering the Underlying Shares and will
otherwise cooperate with the Purchaser for the purpose of reducing or
eliminating such Purchaser's exposure to liability under the Securities Act,
including the reasonable production of information at the Company's
headquarters; provided, that the Company shall not be required to disclose any
confidential information to or meet at its headquarters with Purchaser until and
unless the Purchaser shall have entered into a confidentiality agreement in form
and substance reasonably satisfactory to the Company with the Company with
respect thereto.
SECTION 6. CONDITIONS TO THE COMPANY'S OBLIGATION TO CLOSE. The
obligation of the Company to issue and sell the Note and the Warrant to the
Purchaser at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing Purchaser with prior written
notice thereof:
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(a) Transaction Documents. Purchaser shall have executed each of the
Transaction Documents to which it is a party and delivered the same to First
American Title Insurance Company ("Title Company"), 0000 Xxxxx Xxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxx XX 00000 (other than this Agreement, which shall have been
delivered to the Company), and the Title Company shall have issued or committed
to issue to Purchaser Title Company's lender's policy of title insurance (ALTA
1970 form) for $12,000,000, insuring the first lien priority of the Deed of
Trust, such policy of title insurance to be in conformity with the Proforma
Policy attached hereto as Exhibit E, provided that Purchaser shall be the
beneficiary.
(b) Payment of Purchase Price. Purchaser shall have delivered to the
Company the purchase price for the Note and the Warrant being purchased by such
Purchaser at the Closing by the Closing Date by wire transfer of immediately
available funds pursuant to the wire instructions attached hereto as Schedule A.
(c) Representations and Warranties; Covenants. The representations and
warranties of such Purchaser shall be true, correct and complete in all 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 specific date
(which shall be true, correct and complete as of such date)), and such Purchaser
shall have performed, satisfied and complied with in all material respects the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by such Purchaser at or prior to the
Closing Date.
SECTION 7. CONDITIONS TO PURCHASER'S OBLIGATION TO PURCHASE. The
obligation of Purchaser hereunder to purchase the Note and the Warrant from the
Company at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for Purchaser's sole benefit and may be waived by Purchaser at any time in its
sole discretion by providing the Company with prior written notice thereof:
(a) Transaction Documents. The Company shall have (i) executed each of
the Transaction Documents and delivered the same to the Title Company (other
than this Agreement, which shall have been delivered to the Purchaser), and (ii)
executed and delivered the Deed of Trust, in the form attached hereto as Exhibit
D (the "Deed of Trust"), to the Title Company, for recordation in the Office of
the Recorder of Santa Xxxxx County, and the Title Company shall have issued or
committed to issue to Purchaser Title Company's lender's policy of title
insurance (ALTA 1970 form) for $12,000,000, insuring the first lien priority of
the Deed of Trust, such policy of title insurance to be in conformity with the
Proforma Policy attached hereto as Exhibit E, provided that Purchaser shall be
the beneficiary.
(b) No Delisting of Common Stock. The Common Stock (i) shall be
designated for quotation or listed on the Nasdaq National Market (the "Principal
Market") and (ii) shall not have been suspended by the Commission or the
Principal Market from trading on the Principal Market nor shall suspension by
the Commission or the Principal Market have been threatened either (A) in
writing by the Commission or the Principal Market or (B) by the Company falling
below the minimum listing maintenance requirements of the Principal Market; and
the Conversion Shares issuable upon conversion of the Note (without regard to
any limitations on conversions) and the
-22-
Warrant Shares issuable upon exercise of the Warrant (without regard to any
limitations on exercises) shall be designated for quotation or listed upon the
Principal Market.
(c) Representations and Warranties; Covenants. The representations and
warranties of the Company shall be true, correct and complete in all 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 specific date
(which shall be true, correct and complete as of such date)) and the Company
shall have performed, satisfied and complied with in all respects the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such
Purchaser shall have received a certificate, executed by the principal financial
officer of the Company, dated as of the Closing Date, to the foregoing effect.
(d) Reservation of Common Stock. As of the Closing Date, the Company
shall have reserved out of its authorized and unissued Common Stock, solely for
the purpose of effecting the conversion of the Note and the exercise of the
Warrant, 2,500,000 shares of its Common Stock.
(e) Good Standing Certificates. The Company shall have delivered to
Purchaser a certificate evidencing the incorporation and good standing of the
Company in Massachusetts issued by the Secretary of the Commonwealth of
Massachusetts as of a date within ten days of the Closing Date and a certified
copy of the Company's articles of organization, certified by the Secretary of
the Commonwealth of Massachusetts, as of a date within ten days of the Closing
Date.
(f) Certificate of the Clerk. The Company shall have delivered to such
Purchaser a clerk's certificate, in the form attached hereto as Exhibit F and
dated as of the Closing Date, certifying as to adoption without subsequent
modification or amendment of the form of resolutions of the Board of Directors
of the Company consistent with Section 3(b) of this Agreement and certifying as
to the Company's articles of organization and by-laws, each as in effect at the
Closing.
(g) Filings; Authorizations. The Company shall have made all filings
under all applicable federal and state securities laws necessary to consummate
the issuance of the Securities pursuant to this Agreement in compliance with
such laws, except for any filings that may be made after the Closing.
(h) No Injunctions. No temporary restraining order, preliminary or
permanent injunction or other order or decree, and no other legal restraint or
prohibition shall exist which prevents or arguably prevents the consummation of
the transactions contemplated by the Transaction Documents, nor shall any
proceeding have been commenced or threatened with respect to the foregoing.
(i) No Material Adverse Effect. Between the time of execution of this
Agreement and the Closing Date, no Material Adverse Effect shall occur or become
known (whether or not arising in the ordinary course of business).
(j) Canadian Securities Clearance. The Company shall have received an
order, in a form reasonably acceptable to the Purchaser, from the Quebec
Securities Commission granting relief from
-23-
the registration and prospectus requirements under the securities laws of the
Province of Quebec in connection with the issuance by the Company of the Note
and Warrant to the Purchaser, which order shall not impose any restrictions or
conditions on (i) the conversion of the Note or the exercise of the Warrant, or
(ii) the sale of any or all of the shares of Common Stock underlying the Note or
the Warrant provided that such sale is through an exchange or market outside of
the Province of Quebec.
SECTION 8. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement
shall be deemed to be a contract made under the laws of the State of California,
and for all purposes shall be, governed by, and considered in accordance with,
the law of the State of California. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in Santa
Xxxxx County, California, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other parties hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
(c) Headings. The headings of this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(d) Entire Agreement. This Agreement, the Note and the Warrant and the
documents referenced herein and therein constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the Note and the
Warrant supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
-24-
(e) Amendments. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and Purchaser.
(f) Waivers. No provision of this Agreement may be amended or waived
other than by an instrument in writing signed by the Company and the Purchaser.
No consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
(g) Expenses. The Company and Purchaser shall bear their own legal and
other expenses with respect to this Agreement and the transactions contemplated
hereby.
(h) Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile, provided that
such notice is also delivered via regular mail; or (iii) 1 Business Day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Company:
Sipex Corporation
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. XxXxxxxx, CFO
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Day
If to Purchaser, to its address and facsimile number set forth on the
signature page hereto executed by it, with copies to such Purchaser's
representatives as set forth thereon, or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party 5 days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission, or (C) provided by a courier or overnight courier
service shall be rebuttal evidence of
-25-
personal service, receipt by facsimile, receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
(i) Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(j) Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
(k) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(l) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Purchaser.
Purchaser may assign its rights under this Agreement to any person or persons to
whom the Purchaser assigns or transfers any Securities, provided that such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the Purchaser.
(m) Survival. Unless this Agreement is terminated under Section 8(o) of
this Agreement, the representations and warranties of the Company and the
Purchaser contained in Sections 2 and 3 of this Agreement and the agreements and
covenants set forth in Sections 3 and 4 of this Agreement shall survive until
such time as no Securities remain outstanding. Purchaser shall be responsible
only for its own representations, warranties, agreements and covenants
hereunder.
(n) Publicity. On or before the third business day following the Closing
Date, the Company shall file a Form 8-K describing the terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act,
and attaching the material Transaction Documents (including, without limitation,
this Agreement, the form of Note, and the form of Warrant as exhibits to such
filing (including all attachments, the "8-K Filing"). Subject to the foregoing,
neither the Company nor Purchaser shall issue any press releases or any other
public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of Purchaser (although the Purchaser shall be consulted by the Company
in connection with any such press release prior to its release and shall be
given the opportunity to review its contents), to make any press release or
other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations. The Company shall have the right to
approve before issuance any press releases or any other public statements with
respect to the transactions contemplated by the Transaction Documents.
-26-
(o) Termination. In the event that the Closing shall not have occurred
with respect to the Purchaser on or before 30 Business Days from the date hereof
due to the Company's or such Purchaser's failure to satisfy the conditions set
forth in Sections 6 and 7 of this Agreement (and the nonbreaching party's
failure to waive such unsatisfied conditions), the nonbreaching party shall have
the option to terminate this Agreement with respect to such breaching party at
the close of business on such date without liability of any non-breaching party
to any other party, and the Company shall return any and all funds paid
hereunder to the Purchaser no later than the close of business on the Business
Day following such termination; provided, however, that if this Agreement is
terminated pursuant to this Section 8(o).
(p) Remedies. Purchaser and each holder of the Securities shall have all
rights and remedies set forth in the Transaction Documents and all rights and
remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any person having any rights under any provision of this Agreement shall be
entitled to enforce such rights to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law.
Furthermore, the Company recognizes that in the event that it fails to perform,
observe, or discharge any or all of its obligations under this Agreement, any
remedy at law may prove to be inadequate relief to the Purchaser. The Company
therefore agrees that the Purchaser shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
-27-
IN WITNESS WHEREOF, the parties have caused this Securities Purchase
Agreement to be duly executed as of the date first written above.
"COMPANY"
SIPEX CORPORATION
By: /s/ Xxxxx X. XxXxxxxx
----------------------------------------
Xxxxx X. XxXxxxxx, Chief Financial
Officer, Treasurer and Clerk
[Signature of the Purchaser on Following Page]
"PURCHASER"
S&F Financial Holdings Inc.
By: /s/ Xxxxxxxxx Xxxxxxx
------------------------------------------
(signature of authorized representative)
Name: Xxxxxxxxx Xxxxxxx
----------------------------------------
Its:
----------------------------------------
Address:
-------------------------------------
Telephone:
------------------------------------
Fax:
-----------------------------------------
Tax I.D. or SSN:
-----------------------------
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
EXHIBIT A
FORM OF NOTE
EXHIBIT B
FORM OF WARRANT
EXHIBIT C
FORM OF PURCHASER QUESTIONNAIRE
EXHIBIT D
DEED OF TRUST
EXHIBIT E
PROFORMA POLICY
EXHIBIT F
CERTIFICATE OF THE CLERK
SCHEDULE A
WIRE INSTRUCTIONS
