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SECURITIES PURCHASE AGREEMENT
Among
XXXXXXXXXX.XXX, INC.
and
THE PURCHASERS LISTED ON SCHEDULE I
Dated as of December 3, 1999
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated
as of December 3, 1999, among XxxxxxXxxx.xxx, Inc., a Pennsylvania corporation
(the "Company"), and the various purchasers identified and listed on Schedule I
hereto (each referred to herein as a "Purchaser" and, collectively, the
"Purchasers").
WHEREAS, the Company and the Purchasers are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by Rule 506 under Regulation D as promulgated by the
United States Securities and Exchange Commission (the "Commission") under
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchasers, and the
Purchasers desire to acquire from the Company, that number of shares of the
Company's common stock, no par value per share (the "Common Stock"), as set
forth in Schedule I hereto (the "Shares"), at a price of $15.00 per share; and
WHEREAS, contemporaneously with the execution and delivery of
this Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement substantially in the form of Exhibit A attached hereto (the
"Registration Rights Agreement") pursuant to which the Company has agreed to
provide certain registration rights under the Securities Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
NOW THEREFORE, in consideration of the promises and mutual
covenants and agreements hereinafter, the Company and the Purchasers hereby
agree as follows:
ARTICLE I.
PURCHASE AND SALE OF THE SHARES
1.1 Purchase and Sale. Subject to the terms and conditions set forth
herein, the Company shall issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, shall purchase from the Company on the Closing Date
(as defined below), that number of Shares as set forth for such Purchaser on
Schedule I.
1.2 The Closing. The closing of the purchase and sale of the Shares
(the "Closing") shall take place at the offices of Akin, Gump, Strauss, Xxxxx &
Xxxx, L.L.P., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or by transmission
by facsimile and overnight courier, immediately following the execution hereof
or such later date or different location as the parties shall agree, but not
prior to the date that the conditions set forth in Section 4.1 have been
satisfied or waived by the appropriate party (the "Closing Date"). At the
Closing:
(i) Each Purchaser shall deliver, as directed by the Company, its
portion of the purchase price as set forth next to its name on Schedule I in
United States dollars in immediately available funds to an account or accounts
designated in writing by the Company;
(ii) The Company shall deliver to each Purchaser, within three (3)
Business Days following the Closing Date, a stock certificate or certificates,
in definitive form, registered in the name of such Purchaser, representing the
number of Shares purchased by such Purchaser, as set forth on Schedule I hereto;
and
(iii) The parties shall execute and deliver each of the documents
referred to in Section 4.1 hereof.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations, Warranties and Agreements of the Company. The
Company hereby makes the following representations and warranties to each of the
Purchasers:
a. Organization and Qualification. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. Except as set forth on Schedule 2.1(a), the Company has no
subsidiaries (collectively, the "Subsidiaries"). Each of the Subsidiaries (which
for purposes of this Agreement means any entity in which the Company, directly
or indirectly, owns the majority of such entity's capital stock or holds an
equivalent equity or similar interest) is a corporation duly incorporated,
validly existing and in good standing, or subsisting, as the case may be, under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the full corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Each
of the Company and the Subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, would not, individually or in
the aggregate, (x) adversely affect the legality, validity or enforceability of
any of this Agreement or the Transaction Documents (as defined in Section
2.1(b)) or any of the transactions contemplated hereby or thereby, (y) have or
result in a material adverse effect on the results of operations, assets,
prospects, or financial condition of the Company and its Subsidiaries, taken as
a whole or (z) adversely affect the Company's ability to perform fully its
obligations under any Transaction Document (any of (x), (y) or (z), being a
"Material Adverse Effect").
b. Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the Registration Rights Agreement
(collectively, the "Transaction Documents"), and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and
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thereby have been duly authorized by all necessary corporate action and no
further action is required by the Company, its Board of Directors or its
stockholders. Each of the Transaction Documents has been duly executed by the
Company and when delivered in accordance with the terms hereof, assuming due
authorization, execution and delivery by the other parties thereto, will
constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws (including insurance related laws and regulations)
relating to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application, except that
rights to indemnification and contribution may be limited by Federal or state
securities laws or public policy relating thereto.
c. Capitalization. As of the date hereof, the authorized capital
stock of the Company is as set forth in Schedule 2.1(c). All of such outstanding
shares of capital stock have been, or upon issuance will be, validly authorized
and issued, fully paid and nonassessable and were issued pursuant to valid
exemptions from the Securities Act. Except as disclosed in Schedule 2.1(c), (i)
no shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company, (ii) there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, or giving any Person
(as defined below) any right to subscribe for or acquire, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iii) there are no outstanding debt
securities of the Company or any of its Subsidiaries, (iv) there are no
outstanding securities of the Company or any of its Subsidiaries which contain
any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries, (v) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the sale of the
Shares, (vi) the Company does not have any stock appreciation rights or "phantom
stock" plans or agreements or any similar plan or agreement and (vii) no Person
(as defined below) or group of related Persons beneficially owns (as determined
pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) or has the right to acquire by agreement with or
by obligation binding upon the Company beneficial ownership of in excess of 5%
of the Common Stock other than Provident American Corporation ("Provident"),
parent company of the Company, and UICI. "Person" means an individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
d. Authorization, Validity and Issuance of Shares. The Shares are
and will at all times hereafter continue to be duly authorized, validly issued,
fully paid and non-assessable, free and clear of all liens, encumbrances and
Company rights of first refusal, other than liens and encumbrances created by
the Purchasers (collectively, "Liens") and will not be subject to any preemptive
or similar rights, except for Liens or preemptive or similar rights which have
been waived. The issuance by the Company of the Shares is exempt from
registration under the Securities Act.
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e. No Conflicts. The execution, delivery and performance of each of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby do not and will not (i)
conflict with or violate any provision of the Company's Amended and Restated
Certificate of Incorporation, as amended and as in effect on the date hereof
(the "Certificate of Incorporation") and the Company's Bylaws, as in effect on
the date hereof (the "Bylaws") or other organizational documents of the Company
or any of the Subsidiaries, (ii) subject to obtaining the consents referred to
in Section 2.1(f), conflict with, or constitute a breach or a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture, patent, or instrument (evidencing a
Company or Subsidiary debt or otherwise) to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is
bound or affected which, individually or in the aggregate, would be reasonably
expected to have a Material Adverse Effect, or (iii) result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or any
Subsidiary is subject (including Federal and state securities laws), or by which
any material property or asset of the Company or any Subsidiary is bound or
affected which, individually or in the aggregate, would be reasonably expected
to have a Material Adverse Effect.
f. Consents and Approvals. Except as specifically set forth on
Schedule 2.1(f), neither the Company nor any Subsidiary is required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority, regulatory or self regulatory agency, or other Person in
connection with the execution, delivery and performance by the Company of or the
Transaction Documents, other than (i) the filing of a registration statement
with the Commission, which shall be filed in accordance with the procedures set
forth in the Registration Rights Agreement and (ii) any filings, notices or
registrations under applicable state securities laws (together with the
consents, waivers, authorizations, orders, notices and filings referred to on
Schedule 2.1(f), the "Required Approvals").
g. Litigation; Proceedings. Except as specifically set forth on
Schedule 2.1(g), there is no action, suit, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company or any of its
Subsidiaries, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties before or by any court,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or (ii)
could reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.
h. No Default or Violation. Except as set forth on Schedule 2.1(h),
neither the Company nor any Subsidiary (i) is in default under or in violation
of any indenture, loan or other credit agreement or instrument to which it is a
party or by which it or any of its properties or assets is bound, (ii) is in
default under or in violation of any other agreement to which it is a party or
by which its properties or assets are bound, the default or violation of which,
individually or in the aggregate, would be reasonably expected to have a
Material Adverse Effect, (iii) is in violation of any order of any court,
arbitrator or governmental body applicable to it or (iv) is in violation of any
statute, rule or regulation of any governmental authority to which it is
subject.
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i. Disclosure; Absence of Certain Changes. None of this Agreement,
the Schedules to this Agreement, the Registration Rights Agreement or any other
written or formally presented information, report, financial statement, exhibit,
schedule or document furnished by or on behalf of the Company in connection with
the negotiation of the transactions contemplated hereby contained, contains, or
will contain at the time it was or is so furnished any untrue statement of a
material fact or omitted, omits or will omit at such time to state any material
fact necessary in order to make the statements made herein and therein, in light
of the circumstances under which they were made, not misleading. The Company has
not taken any steps, and does not currently expect to take any steps, to seek
protection pursuant to any bankruptcy law nor does the Company or any of its
Subsidiaries have any knowledge or reason to believe that its creditors intend
to initiate involuntary bankruptcy proceedings.
j. Private Offering; Solicitation. The Company and all Persons
acting on its behalf have not (i) made, directly or indirectly, and will not
make, offers or sales of any securities or solicited any offers to buy any
security under circumstances that would require registration of the Shares under
the Securities Act, (ii) distributed any offering materials in connection with
the offering and sale of the Shares (iii) solicited any offer to buy or sell the
Shares by means of any form of general solicitation or advertising (as those
terms are used in Rule 502(c) of Regulation D under the Exchange Act) in a
manner which would require registration under the Securities Act. The offer,
sale and issuance of the Shares to the Purchasers will not be integrated with
any other offer, sale and issuance of the Company's securities (past, current,
or future) under the Securities Act or any regulations of any exchange or
automated quotation system on which any of the securities of the Company are
listed or designated. Subject to the accuracy and completeness of the
representations and warranties of the respective Purchasers contained in Section
2.2 hereof, the offer, sale and issuance by the Company to the Purchasers of the
Shares is exempt from the registration requirements of the Securities Act.
k. Financial Statements. The financial statements of the Company
provided to the Purchasers present fairly, in all material respects, the
financial condition of the Company as of the respective dates thereof, and the
results of operations, changes in stockholders' equity, and the cash flow of the
Company for the periods indicated therein, all in conformity with generally
accepted accounting principals in the United States ("GAAP"), applied
consistently throughout such periods. No financial statements of any person
other than the Company and its Subsidiaries are required by GAAP to be included
in the consolidated financial statements of the Company.
l. Investment Company. The Company is not, and is not controlled by
or under common control with an affiliate (an "Affiliate") of an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
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m. Broker's Fees. No fees or commissions or similar payments with
respect to the transactions contemplated by the Transaction Documents have been
paid or will be payable by the Company to any broker, financial advisor, finder,
investment banker, or bank, other than as set forth in Schedule 2.1(m). The
Purchasers shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section 2.1(m) that may be due in connection with the transactions
contemplated by the Transaction Documents.
n. Tax Status; Firpta. Except as set forth on Schedule 2.1(n), the
Company and each of the Subsidiaries has made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith (which are set forth on
Schedule 2.1(n) hereof), and has set aside on it books provisions reasonably
adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim. The Company is not a "United States real property holding corporation"
within the meaning of Section 847(c)(2) of the Internal Revenue Code of 1986, as
amended.
o. Permits. The Company and each of its Subsidiaries possess all
certificates, authorizations, licenses, easements, consents, approvals, orders
and permits necessary to own, lease and operate their respective properties and
to conduct their respective businesses as currently conducted, free and clear of
any conflicts, defaults or violations thereunder, except where the failure to
possess such permits or the existence of any conflict, default or violation
would not, individually or in the aggregate, have a Material Adverse Effect
("Material Permits"), and, except as disclosed on Schedule 2.1 (o), there is no
proceeding pending, or, to the knowledge of the Company, threatened relating to
the revocation, modification, suspension or cancellation of any Material Permit.
p. Registration Rights; Rights of Participation. Except as
described on Schedule 2.1(p) hereto, (i) the Company has not granted or agreed
to grant to any Person any rights (including "piggy-back" registration rights)
to have any securities of the Company registered with the Commission or any
other governmental authority which has not been satisfied and (ii) no Person,
including, but not limited to, current or former stockholders of the Company,
underwriters, brokers or agents, has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by this Agreement or any Transaction Document.
q. Insurance. The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged.
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r. Transactions With Affiliates. Except as set forth on Schedule
2.1(c), or Schedule 2.1(r), none of the officers, directors, or employees of the
Company is presently a party to any transaction with the Company or any of its
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, other than transactions that would not require disclosure under Section
404 of Regulation S-K of the Securities Act and the Exchange Act (if the Company
were subject to such disclosure requirements).
s. Application to Takeover Protection. The Company and its Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination or other
similar anti-takeover provision under the Certificate of Incorporation, Bylaws
or the laws of the state of incorporation which is or could become applicable to
the Purchasers or the Transaction Documents in connection with the issuance of
the Shares. The issuance of the Shares will not trigger any poison pill
provisions of any of the Company's stockholders' rights or similar agreements.
t. Acknowledgement Regarding Purchasers' Purchase of Shares. The
Company acknowledges that the Purchasers are acting solely in the capacity of
arm's length purchasers with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that no Purchaser is
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereby and any statement made by any Purchaser or any of their respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby is not advice or a recommendation and is merely incidental
to the Purchasers' purchase of the Shares. The Company further represents to
each Purchaser that the Company's decision to enter into this Agreement has been
based solely on the independent evaluation of the Company and its
representatives.
The Purchasers acknowledges and agrees that the Company make no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.1.
2.2 Representations and Warranties of the Purchasers. Each of the
Purchasers, severally and not jointly, hereby represents and warrants to the
Company as follows:
a. Organization; Authority. Such Purchaser is a corporation or a
limited duration company or a limited liability company or limited partnership
duly formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation with the requisite power and
authority, corporate or otherwise, or is an individual which possesses the
requisite legal capacity and the right, to enter into and to consummate the
transactions contemplated hereby and by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The purchase by such
Purchaser of the Shares has been duly authorized by all necessary action on the
part of such Purchaser. Each of this Agreement and the Registration Rights
Agreement has been duly executed and delivered by such Purchaser and constitutes
the valid and legally binding obligation of such Purchaser, enforceable against
such Purchaser in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity.
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b. Investment Intent. Such Purchaser is acquiring the Shares for
its own account and not with a present view to or for distributing or reselling
such Shares or any part thereof or interest therein in violation of the
Securities Act; provided, however, that by making the representations herein,
such Purchaser does not agree to hold any Shares for any minimum or other
specific term and reserves the right to dispose of the Shares at any time in
accordance with or pursuant to a registration statement or an exemption under
the Securities Act.
c. Purchaser Status. At the time such Purchaser was offered the
Shares and at the Closing Date, (i) such Purchaser was and will be an
"accredited investor" as defined in Rule 501 under the Securities Act and (ii)
such Purchaser, either alone or together with its representatives, had and will
have such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Shares.
d. Reliance. Such Purchaser understands and acknowledges that (i)
the Shares are being offered and sold to such Purchaser without registration
under the Securities Act in a private placement that is exempt from the
registration provisions of the Securities Act under Section 4(2) of the
Securities Act or Regulation D promulgated thereunder and (ii) the availability
of such exemption depends in part on, and the Company will rely upon the
accuracy and truthfulness of, the representations set forth in this Section 2.2
and such Purchaser hereby consents to such reliance.
e. Information. Such Purchaser and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Shares which
have been requested by such Purchaser or its advisors. Such Purchaser and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company and its representatives. Neither such inquiries nor any other due
diligence investigation conducted by Purchaser or any of its advisors or
representatives shall modify, amend or affect Purchaser's right to rely on the
Company's representations and warranties contained in Section 2.1 above or
representations and warranties of the Company contained in any other Transaction
Document. Such Purchaser understands that its investment in the Shares involves
a significant degree of risk.
f. Governmental Review. Such Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Shares.
g. Residency. Such Purchaser is a resident of the jurisdiction set
forth immediately below such Purchaser's name on Schedule II hereto.
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The Company acknowledges and agrees that the Purchasers make no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2. The Company
further acknowledges that the Purchasers represent, collectively, they are not
acting as a group pursuant to Rule 13-d of the Exchange Act.
ARTICLE III.
OTHER AGREEMENTS
3.1 Transfer Restrictions.
a. If any Purchaser should decide to dispose of the Shares held by
it, such Purchaser understands and agrees that it may do so only pursuant to an
effective registration statement under the Securities Act, to the Company or
pursuant to an available exemption from the registration requirements of the
Securities Act and in compliance with applicable blue sky and state securities
laws. In connection with any transfer of any Shares other than pursuant to an
effective registration statement or to the Company, the Company may require the
transferor thereof to provide to the Company a written opinion of counsel
experienced in the area of United States securities laws selected by the
transferor, the form and substance of which opinion shall be customary for
opinions of counsel in comparable transactions, to the effect that such transfer
does not require registration of such transferred securities under the
Securities Act and qualification under applicable blue sky and state securities
laws. Notwithstanding the foregoing, the Company hereby consents to and agrees
to affect any transfer by any Purchaser to an Affiliate of such Purchaser,
provided that the transferee certifies to the Company that it is an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Any such
transferee shall also agree in writing to be bound by the terms of this
Agreement and shall have the rights of a Purchaser under this Agreement and the
Transaction Documents.
b. Each Purchaser agrees to the imprinting, so long as is required
by this Section 3.1(b), of the following legend on the Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
DEPARTMENT OR COMMISSION IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND APPLICABLE BLUE SKY OR STATE SECURITIES
LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
APPLICABLE BLUE SKY OR STATE SECURITIES LAWS OR PURSUANT TO
AVAILABLE EXEMPTIONS THEREFROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY
APPLICABLE BLUE SKY OR STATE SECURITIES LAWS.
The Shares shall not contain the legend set forth above (or any
other legend) if (i) the sale of the Shares is pursuant to an effective
Registration Statement (as defined in the Registration Rights Agreement) under
the Securities Act, (ii) if in the written opinion of counsel to the Company
experienced in the area of United States securities laws such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) or
(iii) if such Shares may be sold pursuant to Rule 144 promulgated under the
Securities Act. The Company agrees that it will provide each Purchaser, upon
request, with a certificate or certificates representing the Shares, free from
such legend at such time as such legend is no longer required hereunder. If such
certificate or certificates had previously been issued with such a legend or any
other legend, the Company shall, upon request and delivery of such certificate
or certificates to the Company by such Purchaser, reissue to such Purchaser such
certificate or certificates free of any legend.
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3.2 Stop Transfer Instruction. Except as otherwise required by law, the
Company may not make any notation on its records or give instructions to any
transfer agent of the Company which enlarge the restrictions on transfer set
forth in Section 3.1.
3.3 Furnishing of Information. As long as any Purchaser owns the
Shares, if the Company is not required to file reports pursuant to Section 13(a)
or 15(d) of the Exchange Act, it will prepare and furnish to the Purchasers (i)
quarterly balance and income statements and (ii) annual audited financial
statements; provided, however, that if the quarterly balance and income
statements contain material non-public information regarding the Company or
Provident, the Company shall notify each Purchaser of such fact and shall only
provide such statements to any Purchaser upon written request by such Purchaser
(provided, that such Purchaser agrees not to engage in any trading activities
with respect to the capital stock of Provident until such financial information
is disclosed publicly). If at any time while any Purchaser owns the Shares the
Company is at any time required to register its Common Stock under Section 12(g)
of the Exchange Act or to file reports pursuant to Section 13, 14, or 15(d) of
the Exchange Act, then the Company will cause the Shares to continue at all
times to be registered under Section 12(g) of the Exchange Act, will timely file
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to Section 13, 14 or 15(d) of the Exchange Act and shall promptly
furnish, but in no event later than two (2) business days after the filing
thereof with the Commission, the Purchasers with true and complete copies of all
such filings, and will not take any action or file any document (whether or not
permitted by the Exchange Act or the rules thereunder) to terminate or suspend
such reporting and filing obligations. The Company covenants that it will take
such further action as any holder of the Shares may reasonably request, all to
the extent required from time to time to enable such Person to sell Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act. The
Company further covenants that it will deliver to the Purchasers copies of any
notices and other information made available or given to any other stockholders
of the Company which relates to the Company or its securities, contemporaneously
with the making available or giving thereof to such other stockholders.
3.4 Integration. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Shares in a manner that would require the registration under the
Securities Act of the sale of such Shares to any Purchaser.
10
3.5 Notice of Breaches.
a. The Company and each Purchaser shall give prompt written notice
to the other of any breach by it of any representation, warranty or other
agreement contained in this Agreement or in the Registration Rights Agreement,
as well as any events or occurrences arising after the date hereof and prior to
the Closing Date, which would reasonably be likely to cause any representation
or warranty or other agreement of such party, as the case may be, contained
herein to be incorrect or breached as of the Closing Date; provided such notice
will not constitute material non-public information. However, no disclosure by
either party pursuant to this Section 3.7 shall be deemed to cure any breach of
any representation, warranty or other agreement contained herein or in the
Transaction Documents.
b. Notwithstanding the generality of Section 3.7(a), the Company
shall promptly notify, provided such notification will not constitute material
non-public information, each Purchaser of any notice or claim (written or oral)
that it receives from any lender of the Company or any Subsidiary to the effect
that the consummation of the transactions contemplated hereby and by the
Registration Rights Agreement violates or would violate any written agreement or
understanding between such lender and the Company or any Subsidiary, and the
Company shall promptly furnish by facsimile to the Purchasers a copy of any
written statement in support of or relating to such claim or notice.
c. The default by any Purchaser of any of its obligations,
representations or warranties under this Agreement or the Transaction Documents
shall not be imputed to, and shall have no effect upon, any other Purchaser or
affect the Company's obligations under this Agreement or any Transaction
Document to any non-defaulting Purchaser.
3.6 Form D. The Company agrees to file a Form D with respect to the
Shares as required by Rule 506 under Regulation D and to provide a copy thereof
to each Purchaser promptly after such filing.
3.7 Use of Proceeds. The Company shall use the proceeds from the sale
of the Shares for working capital and other general corporate purposes,
including but not limited to expansion of its sales and marketing activities and
the further development of the Company's Internet services and technologies.
3.8 Press Release; Filing of Form 8-K. Subject to the provisions of
Section 6.10 hereof, prior to the opening of NASDAQ on December 7, 1999, the
Company shall issue a press release in form and substance acceptable to the
Purchasers. On or before the 10th Business Day following the Closing Date the
Company shall file a Form 8-K with the Commission describing the terms of the
transaction contemplated by the Transaction Documents in the form required by
the Exchange Act.
3.9 Ordinary Course Brokerage and Trading. Subject to compliance with
all applicable securities laws and NASDAQ regulations, no Purchaser shall be
prohibited from engaging in its ordinary course brokerage and trading activities
in respect of the capital stock of Provident; provided, however, that no
Purchaser shall engage in such activities until one (1) Business Day after the
Company files the Form 8-K pursuant to Section 3.8 hereof.
11
3.10 Best Efforts. Each of the parties hereto shall use its best
efforts to satisfy each of the conditions to be satisfied by it as provided in
Article IV of this Agreement.
3.11 Corporate Existence. Until such time as all of the Purchasers
provide the Company with written notice that they do not beneficially own any
Shares, the Company shall maintain its corporate existence and shall not sell
all or substantially all of the Company's assets, except in the event of a
merger or consolidation or sale of all or substantially all of the Company's
assets, other than the proposed mergers with Insurdata Incorporated, Provident
or a subsidiary of Provident, where the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
agreements and instruments entered into in connection herewith and (ii) is a
publicly traded corporation whose common stock is listed or quoted for trading
on the NASDAQ, the New York Stock Exchange or the American Stock Exchange.
Notwithstanding the foregoing, the Purchasers consent to the pending merger
between the Company and Insurdata Incorporated, which respect to which a
definitive agreement shall be entered into on December 6, 1999.
3.12 Transactions with Provident. The Company agrees that, in the event
of the merger of the Company with Provident or a Provident subsidiary and
simultaneously with the merger, the Company resulting from the merger shall
register with the Commission under the Securities Act, as amended, the
securities held by or to be issued to holders of the outstanding securities of
the Company (including all Common Stock) and securities issued shall be listed
on a national securities exchange or quoted on the NASDAQ Stock Market and be
freely tradable upon consummation of the merger, subject to the requirements of
applicable state and federal securities laws, including Rule 145 promulgated
under the Securities Act.
3.13 Reimbursement. In the event that any Purchaser, other than by
reason of its gross negligence or willful misconduct, becomes involved in any
capacity in any action, proceeding or investigation brought by or against any
person, including shareholders of the Company, in connection with or as a result
of (a) any misrepresentation or breach of any representation or warranty made by
the Company in this Agreement or the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in this
Agreement or the Transaction Documents or any other certificate, instrument or
document hereby or thereby, or (c) any cause of action, suit or claim brought or
made against such Purchaser and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or the Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby, the Company will reimburse such Purchaser for its legal and other
actual out-of-pocket expenses (including the cost of any investigation and
preparation) incurred in connection therewith. The reimbursement obligations of
the Company under this paragraph shall be in addition to any liability which the
Company may otherwise have, shall extend upon the same terms and conditions to
any affiliate of the Purchasers and partners, directors, agents, employees and
controlling persons (if any), as the case may be, of the Purchasers and any such
affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Company, the Purchasers and
any such affiliate and any such Person. The Company also agrees that no
Purchaser or any Affiliates, partners, directors, agents, employees or
controlling persons of such Purchaser shall have any liability to the Company or
any Person asserting claims on behalf of or in right of the Company in
connection with or as a result of the consummation of this Agreement or any of
the Transaction Documents except to the extent that any losses, claims, damages,
liabilities or expenses incurred by the Company result from the gross negligence
or willful misconduct of such Purchaser, or from a breach of a representation,
warranty or covenant made herein by such Purchaser, in connection with the
transactions contemplated by this Agreement or the Registration Rights
Agreement, in which event such Purchaser, severally and not jointly, shall
reimburse the Company for its legal and other actual out-of-pocket expenses
(including the cost of any investigation and preparation) incurred in connection
therewith, up to the amount of the Purchase Price paid by such Purchaser. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of its obligations hereunder which is permissible under applicable
law.
12
3.14 Material Information. The Company covenants that any information
provided by the Company or Provident to the Purchasers and their agents or their
counsel which could be deemed to constitute material non-public information will
cease to be material non-public information (either through disclosure by the
Company or otherwise) on that date which is one (1) Business Day after the
Company file Form 8-K pursuant to Section 3.8 hereof.
3.15 Future Financings. As long as any Shares are outstanding, except
for (i) shares of Common Stock deemed to have been issued by the Company in
connection with any plan which has been approved by the Board of Directors of
the Company, pursuant to which the Company's securities may be issued to any
employee, officer, director or consultant of the Company; (ii) shares of Common
Stock issuable upon the exercise of any options or warrants outstanding on the
date hereof and listed in Schedule 2.1(c) hereto; or (iii) shares of Common
Stock issued in connection with the Company's merger transactions with Insurdata
Incorporated, Provident or a subsidiary of Provident, if the Company agrees to
issue shares of Common Stock or other securities convertible into or
exchangeable or exercisable for Common Stock (any of (i), (ii) or (iii), the
"New Security") at an effective price per share of Common Stock which is less or
may be less (including, without limitation, any security which is convertible
into or exchangeable or exercisable for Common Stock at a price which may change
with the market price of the Common Stock) than $15.00 per share (a "Future
Financing"), the Company shall provide to the Purchasers by 5:00 p.m. (New York
time) on or before the third (3rd) Business Day (as defined below) after the
decision to issue the New Security has been made, written notice of the Future
Financing containing in reasonable detail (i) the proposed terms of the Future
Financing, (ii) the amount of the proceeds that will be raised and (iii) the
Person with whom such Future Financing shall be effected, and attached to which
shall be a term sheet or similar document relating thereto (the "Future
Financing Notice"). Upon receiving the Future Financing Notice, each Purchaser
shall have the pro rata right (based on the principal amount of the Shares held
by such Purchaser relative to the aggregate principal amount of Shares purchased
hereunder) to purchase, on the same terms as the Future Financing, an amount of
New Securities having a purchase price which shall not exceed the aggregate
investment by such Purchaser hereunder. In the event a Purchaser desires to
exercise the right granted under this Section 3.15, such Purchaser must notify
the Company on or prior to the fifth (5th) Business Day after such Purchaser has
received the Future Financing Notice. In the event the terms and conditions of a
proposed Future Financing are amended in any respect after delivery of the
Future Financing Notice but prior to the closing of the proposed Future
Financing to which such Future Financing Notice relates, the Company shall
deliver a new notice to each Purchaser describing the amended terms and
conditions of the proposed Future Financing and each Purchaser thereafter shall
have an option during the five (5) Business Days period following delivery of
such new notice to purchase its pro rata share (based on the Purchaser's
percentage of the principal amount such Purchaser's investment hereunder) of the
New Securities being offered on the same terms as contemplated by such proposed
Future Financing, as amended. The foregoing sentence shall apply to successive
amendments to the terms and conditions of any proposed Future Financing. At the
closing for such Future Financing, the transactions contemplated by this Section
3.15 shall close, subject to the completion of mutually satisfactory
documentation, and the Company shall tender to each Purchaser certificates
representing the New Securities that it agreed to purchase and the Purchasers
shall make payment for the entire purchase price in immediately available funds
at the closing of such sale.
13
ARTICLE IV.
CONDITIONS
4.1 Closing Conditions.
a. Conditions Precedent to the Obligation of the Company to Sell.
The obligation of the Company to sell the Shares hereunder is subject to the
satisfaction or waiver (with prior written notice to each Purchaser) by the
Company, at or before the Closing, of each of the following conditions:
(i) Accuracy of the Purchasers' Representations and Warranties.
The representations and warranties of each Purchaser in this Agreement shall be
true and correct in all material respects as of the date when made (except for
representations and warranties that speak as of a specific date) and as of the
Closing Date;
(ii) Performance by the Purchasers. Each Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Purchaser at or prior to the Closing; and
(iii) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Transaction Documents.
b. Conditions Precedent to the Obligation of the Purchasers to
Purchase. The obligation of each Purchaser hereunder to acquire and pay for the
Shares is subject to the satisfaction or waiver (with prior written notice to
the Company and each other Purchaser) by such Purchaser, at or before the
Closing, of each of the following conditions:
(i) Accuracy of the Company's Representations and Warranties.
The representations and warranties of the Company set forth in this Agreement
shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date);
14
(ii) Performance by the Company. The Company shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing;
(iii) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement and the Transaction Documents;
(iv) Required Approvals. All Required Approvals shall have been
obtained and copies thereof delivered to such Purchaser;
(v) Shares of Common Stock. The Company shall have duly
authorized the number of Shares required by this Agreement to be issued pursuant
to the terms hereof;
(vi) Resolutions. The Board of Directors of the Company shall
have adopted resolutions consistent with Section 2.1(b) and in a form reasonably
acceptable to each Purchaser (the "Resolutions").
c. Documents and Certificates. At the Closing, the Company shall
have delivered to the Purchasers the following in form and substance reasonably
satisfactory to the Purchasers:
(i) Opinion. An opinion of the Company's legal counsel in the
form attached hereto as Exhibit B dated as of the Closing Date;
(ii) Certificates. Share Certificates representing the principal
amount of Shares purchased by such Purchaser as set forth next to such
Purchaser's name on Schedule I, registered in the name of such Purchaser, each
in form satisfactory to the Purchaser and in conformity in all respects with the
requirements of the Pennsylvania Business Corporation Law, as amended;
(iii) Registration Rights. The Company shall have executed and
delivered the Registration Rights Agreement;
(iv) Officer's Certificate. An Officer's Certificate dated the
Closing Date and signed by an executive officer of the Company confirming the
accuracy of the Company's representations, warranties and covenants as of the
Closing Date and confirming the compliance by the Company with the conditions
precedent set forth in this Section 4.1 as of the Closing Date;
(v) Secretary's Certificate. A Secretary's Certificate dated the
Closing Date and signed by the Secretary or Assistant Secretary of the Company
certifying (A) that attached thereto is a true and complete copy of the
Certificate of Incorporation of the Company, as in effect on the Closing Date,
(B) that attached thereto is a true and complete copy of the by-laws of the
Company, as in effect on the Closing Date and (C) that attached thereto is a
true and complete copy of the Resolutions duly adopted by the Board of Directors
of the Company authorizing the execution, delivery and performance of this
Agreement and of the Transaction Documents, and that such Resolutions have not
been modified, rescinded or revoked;
15
(vi) Certificates of Incorporation. The Company shall have
delivered to counsel to Xxxxx Xxxxxxx a copy of a certificate evidencing the
incorporation and good standing of the Company and each Subsidiary, in such
corporation's state of incorporation issued by the Secretary of State of such
state of incorporation as of a date within thirty days of the Closing Date. The
Company shall have delivered to counsel to Xxxxx Xxxxxxx a copy of its
Certificate of Incorporation as certified by the Secretary of State of the
Commonwealth of Pennsylvania within thirty days of the Closing Date;
(vii) Other Documents. The Company shall have delivered to each
Purchaser such other documents relating to the transactions contemplated by the
Transaction Documents as the Purchasers or its counsel may reasonably request.
ARTICLE V.
MISCELLANEOUS
5.1 Entire Agreement. This Agreement, together with the Exhibits
and Schedules hereto and the Transaction Documents contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters.
5.2 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
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party (if received by 7:00 p.m. EST where such
notice is received) or the first business day following such delivery (if
received after 7:00 p.m. EST where such notice is received); or (iii) one
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 or to Provident:
c/o Provident American Corporation
0000 XxXxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
With a copy to:
Blank Rome Xxxxxxx & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx
16
If to Xxxxx Xxxxxxx Strategic Growth Fund, Ltd., Xxxxx Xxxxxxx
Strategic Growth Fund, L.P., Xxxxxxx Xxxxx, Xxxx Xxxxxx or Xxxxxxxx Xxxx to:
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx
If to Xxxxx Xxxxxxx - XXX Investments LLC to
c/o OTA Limited Partnership
0 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx XxXxxx
With a copy, in the case of Notice to Xxxxx Xxxxxxx Strategic
Growth Fund, Ltd., Xxxxx Xxxxxxx Strategic Growth Fund, L.P. or Xxxxx Xxxxxxx -
XXX Investments LLC to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxx
If to Xxxxx Xxxxxxx to:
c/x Xxxxx Xxxxxxx Asset Management, LLC
000 Xxxx Xxxxxx, Xxxxx 0
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
17
If to LB I Group Inc. or Xxxxxx Xxxxxxxxx to:
c/x Xxxxxx Brothers, Inc.
3 World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
If to Royal Bank of Canada to:
c/o RBC Dominion Securities
One Liberty Plaza - 2nd Floor
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile (000) 000-0000
Attention: Vice President, Global Middle Office
and to: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Vauban Investissement SA to:
c/o Shoreline Advisory Group
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx
If to Seneca Capital L.P. or Seneca Capital International,
Ltd., to:
c/o Seneca Capital Advisors, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxx Xxxxxx
18
With a copy, in the case of Notice to Seneca Capital, L.P. or
Seneca Capital International. Ltd., to:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Good Family LLC to:
0000 Xxxx Xxxx
Xxxx Xxxxxx, XX
Telephone: (000) 000-0000
Facsimile:
Attention: Xxxxxx Good
If to The Raptor Global Portfolio Limited or Altar Rock Fund
L.P. to:
c/o Tudor Investment Corporation
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
If to MBK Investment Partners to:
c/o X.X. Xxxxxx & Co. LLP
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxx Margenbesser
If to Xxxxxx Capital Management to:
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxxx Xxxxxx
19
If to Europa International Incorporated to:
x/x Xxxxx Xxxxxxx Xxxxxxxxxx, X.X.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxx Xxxxx
If to Xxxxxxx X. Xxxx to:
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Xxxxxxx XxXxxxx to:
00 Xxxxxx Xxxxx
Xxxxx Xxxxx, X.X. 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Xxxxx Xxxxxxx to:
c/o Deltec Securities (U.K.) Limited
Xxxxxxxxxx Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxx Xxxxxxx XX0X 0XX
Telephone: (000) 00-000-000-0000
Facsimile: (000) 00-000-000-0000
If to Fordham Follies L.L.C. to:
c/o Xxxxxxxx Xxxxx
000 Xxxx 00xx Xxxxxx, Xxx. 00X
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Each party shall provide written notice to the other party of any change in
address or facsimile number in accordance with the provisions hereof.
5.3 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by both the Company and each of the Purchasers or, in the case of a waiver, by
the party against whom a waiver of any such provision is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter. The Company shall not
offer or pay any consideration to a Purchaser for consenting to such an
amendment or waiver unless the same consideration is offered to each Purchaser
and the same consideration is paid to each Purchaser which consents to such
amendment or waiver.
20
5.4 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns
and, in the case of the Company, any entity succeeding to the Company by merger
or acquisition of all or substantially all the assets of the Company. Except as
provided in this Section 5.5, the Company may not assign this Agreement or any
rights or obligations hereunder without the prior written consent of each of the
Purchasers. The Purchasers may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Company,
provided, that any assignees must make the representations and warranties set
forth in Section 2.2 and otherwise comply with the terms of this Agreement
otherwise applicable to its assignor. This provision shall not limit a
Purchaser's right to transfer securities in accordance with all of the terms of
this Agreement or the Transaction Documents.
5.6 No 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.
5.7 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York
without regard to the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the nonexclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan, 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 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. 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.
21
5.8 Survival. The representations and warranties of the Company and the
Purchasers contained in Sections 2.1 and 2.2, the agreements and covenants set
forth in Section 3, and the reimbursement provisions set forth in Section 3.16,
shall survive the Closing and any sale of the Shares regardless of any
investigation made by or on behalf of the such Purchaser or by or on behalf of
the Company, except that, in the case of representations and warranties such
survival shall be limited to the period of six (6) years following the Closing
Date on which they were made or deemed to have been made (other than with
respect to any claim by a third party against the party to this Agreement who
seeks to assert a claim based on such representations and warranties). This
section shall have no effect on the survival of the indemnification provisions
of the Registration Rights Agreement.
5.9 Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
5.10 Publicity. The Company and the Purchasers shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed, except that no prior consent shall be required if such
disclosure is required by law, in which such case the disclosing party shall
provide the other party with prior notice of such public statement. The Company
shall not publicly or otherwise disclose the names of any of the Purchasers
without each such Purchaser's prior written consent. The Purchasers and their
affiliated companies shall, without further cost, have the right to use in its
advertising, marketing or other similar materials, the Company's logo and
trademarks and all or parts of the Company's press releases that focus on the
Transaction forming the subject matter of this Agreement or which make reference
to the Transaction. The Purchasers understand that this grant by the Company
only waives objections that the Company might have to the use of such materials
by the Purchasers and in no way constitutes a representation by the Company that
references in such materials to the activities of third-parties have been
cleared or constitute a fair use.
5.11 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.
5.12 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the Purchasers
will be entitled to specific performance of the obligations of the Company under
this Agreement or the Transaction Documents without the showing of economic loss
and without any bond or other security being required. Each of the Company and
the Purchasers (severally and not jointly) agree that monetary damages would not
be adequate compensation for any loss incurred by reason of any breach of its
obligations described in the foregoing sentence and hereby agree to waive in any
action for specific performance of any such obligation the defense that a remedy
at law would be adequate.
22
5.13 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder is several and not joint with the
obligations of the other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.
5.14 Payment Set Aside. To the extent that the Company makes a payment
or payments to the Purchasers hereunder or pursuant to the Transaction Documents
or the Purchasers enforce or exercise their rights hereunder or thereunder, and
such payment or payments or the proceeds of such enforcement or exercise or any
part thereof are subsequently invalidated, declared fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any
such restoration the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
5.15 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.
5.16 Fees and Expenses. Except as set forth in the Registration Rights
Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement; provided, however, that the Company shall pay the
reasonable legal fees of Akin, Gump, Strauss, Hauer, & Xxxx, L.L.P. within
thirty (30) Business Days of the Closing in an amount not to exceed, without the
prior written consent of the Company, $20,000. The Company shall pay all stamp
and other taxes and duties levied in connection with the issuance of the Shares
pursuant hereto.
23
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive Officer
XXXXX XXXXXXX STRATEGIC
GROWTH FUND, LTD.
By: Xxxxx Xxxxxxx Asset Management, LLC
By:____________________________________
Name:
Title:
XXXXX XXXXXXX STRATEGIC
GROWTH FUND, L.P.
By: Xxxxx Xxxxxxx Capital, LLC
its general partner
By:____________________________________
Name:
Title:
XXXXX XXXXXXX - XXX INVESTMENTS LLC
By:____________________________________
Name:
Title:
LB I GROUP INC.
By: /s/ Xxxxxx Xxxxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Senior Vice President
ROYAL BANK OF CANADA
By its Agent
RBC Dominion Securities Corporation
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President, Deputy General Counsel
VAUBAN INVESTISSMENT SA
By:______________________________
Name:
Title:
SENECA CAPITAL, L.P.
By: Seneca Capital Advisors, LLC, its
general partner
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Managing Partner
SENECA CAPITAL INTERNATIONAL, LTD.
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Managing Partner
GOOD FAMILY LLC
By: /s/ Xxxxxx X. Good
----------------------
Name: Xxxxxx X. Good
Title: Manager
EUROPA INTERNATIONAL INCORPORATED
By: Xxxxx Capital Management, L.P.
its investment manager
By:______________________________
Name:
Title:
XXXXXX CAPITAL MANAGEMENT, LLC
By:______________________________
Name:
Title:
THE RAPTOR GLOBAL PORTOLIO LIMITED
By: Tudor Investment Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
ALTAR ROCK FUND L.P.
By: Tudor Investment Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
MBK INVESTMENT PARTNERS
By: /s/ Xxxxxxx Xxxx
--------------------------
Name: Xxxxxxx Xxxx
Title: Partner
/s/ Xxxxxx Xxxxxxxxx
-------------------------
Xxxxxx Xxxxxxxxx
-------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxx
-------------------------
Xxxxx X. Xxxxxxx
--------------------------
Xxxxxxxx X. Xxxx
--------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
---------------------------
Xxxxxxx X. Xxxx
/s/ Xxxxx X. Xxxxxxx
---------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxxx XxXxxxx
---------------------------
Xxxxxxx XxXxxxx
Fordham Follies L.L.C.
By:________________________
Name:
Title:
Schedule I
------------------------------------------------ ---------------------------------- ---------------------------------
Number of Shares Purchase Price for
Name of Purchaser Acquired at Closing Acquired Shares
----------------- ------------------- ------------------
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxx Xxxxxxx Strategic Growth Fund, Ltd. 333,333 $5,000,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxx Xxxxxxx Strategic Growth Fund, L.P. 466,667 $7,000,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxx Xxxxxxx - XXX Investments LLC 66,667 $1,000,000
------------------------------------------------ ---------------------------------- ---------------------------------
LB I Group Inc. 766,667 $11,500,000
------------------------------------------------ ---------------------------------- ---------------------------------
Royal Bank of Canada 800,000 $12,000,000
------------------------------------------------ ---------------------------------- ---------------------------------
The Raptor Global Portfolio Limited 464,800 $6,972,000
------------------------------------------------ ---------------------------------- ---------------------------------
Altar Rock Fund, L.P. 1,867 $28,000
------------------------------------------------ ---------------------------------- ---------------------------------
Seneca Capital L.P. 104,820 $1,572,300
------------------------------------------------ ---------------------------------- ---------------------------------
Seneca Capital International, Ltd. 128,513 $1,927,700
------------------------------------------------ ---------------------------------- ---------------------------------
Europa International Incorporated 133,333 $2,000,000
------------------------------------------------ ---------------------------------- ---------------------------------
Provident American Corporation 133,333 $2,000,000
------------------------------------------------ ---------------------------------- ---------------------------------
Good Family LLC 133,333 $2,000,000
------------------------------------------------ ---------------------------------- ---------------------------------
Vauban Investisement SA 66,667 $1,000,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxxxx XxXxxxx 66,667 $1,000,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxxx Capital Management 46,667 $700,000
------------------------------------------------ ---------------------------------- ---------------------------------
MBK Investment Partners 33,333 $500,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxx Xxxxxx 16,667 $250,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxx Xxxxxxx 16,667 $250,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxxxxx Xxxx 16,667 $250,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxxx Xxxxxxxxx 16,667 $250,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxx X. Xxxxxxx 16,667 $250,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxxxx Xxxxx 6,667 $100,000
------------------------------------------------ ---------------------------------- ---------------------------------
Xxxxxxx X. Xxxx 6,667 $100,000
------------------------------------------------ ---------------------------------- ---------------------------------
Fordham Follies, L.L.C. 2,667 $40,000
------------------------------------------------ ---------------------------------- ---------------------------------
Schedule II
Name of Purchaser Address
----------------- -------
Xxxxx Xxxxxxx Strategic Growth Fund, Ltd. 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Fax: (000) 000-0000
Residence: Grand Cayman, Cayman Islands
Xxxxx Xxxxxxx Strategic Growth Fund, L.P., 000 Xxxx 00xx Xxxxxx, 40th Floor
Xxxx Xxxxxx, Xxxxxxx Xxxxx and Xxxxxxxx Xxxx Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Fax: (000) 000-0000
Residence: New York, New York
Xxxxx Xxxxxxx c/x Xxxxx Xxxxxxx Asset Management, LLC
000 Xxxx Xxxxxx, Xxxxx 0
Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
Residence: California
Xxxxx Xxxxxxx - XXX Investments LLC c/o OTA Limited Partnership
0 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx XxXxxx
Fax: (000) 000-0000
Residence: New York
LB I Group Inc., Xxxxxx Xxxxxxxxx c/x Xxxxxx Brothers, Inc.
3 World Financial Center
New York, New York 10285
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
Residence: New York
Royal Bank of Canada c/o RBC Dominion Securities
One Liberty Plaza - 2nd Floor
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Vice President, Global Middle Office
Fax: (000) 000-0000
Residence: New York
and to: Xxxxx Xxxxxxxx
Fax: (000) 000-0000
Vauban Investissment SA c/o Shoreline Advisory Group
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Fax: (000) 000-0000
Residence: Netherlands Antilles
Seneca Capital L.P. c/o Seneca Capital Advisors, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxxx
Fax: (000) 000-0000
Residence: Delaware
Seneca Capital International, Ltd. c/o Seneca Capital Advisors, LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxx Xxxxxx
Fax: (000) 000-0000
Residence: Cayman Islands
Good Family LLC 0000 Xxxx Xxxx
Xxxx Xxxxxx, XX
Attn: Xxxxxx Good
Residence: Illinois
The Raptor Global Portfolio Limited, Altar Rock Fund L.P. c/o Tudor Investment Corporation
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
Residence: Delaware
MBK Investment Partners c/o X.X. Xxxxxx & Co. LLP
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx Margenbesser
Fax: (000) 000-0000
Residence: New York
Xxxxxx Capital Management 000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx
Attn: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
Residence: New York
Europa International Incorporated x/x Xxxxx Xxxxxxx Xxxxxxxxxx, X.X.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxx
Fax: (000) 000-0000
Residence: British Virgin Islands
Xxxxxxx X. Xxxx 0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Residence: New York
Xxxxxxx XxXxxxx 00 Xxxxxx Xxxxx
Xxxxx Xxxxxx, X.X. 00000
Residence: New Jersey
Xxxxx Xxxxxxx c/o Deltec Securities (U.K.) Limited
Xxxxxxxxxx Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxx Xxxxxxx XX0X 0XX
Fax: (000) 00-000-000-0000
Fordham Follies L.L.C. x/x 000 Xxxx 00xx Xxxxxx, Xxx. 00X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxx
Residence: New York
Provident American Corporation 0000 XxXxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
Residence: Pennsylvania
