EXHIBIT 10.58
SECURITIES PURCHASE AGREEMENT
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MEMRY CORPORATION
JUNE 14, 1995
SECURITIES PURCHASE AGREEMENT
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THIS SECURITIES PURCHASE AGREEMENT ("Agreement") is made as of the 14th day
of June, 1995 by and between MEMRY CORPORATION, a Delaware corporation (the
"Company"), and _______________________, with an address at
_______________________________________________
_________________________________________ (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Securities.
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1.1. Purchase and Sale of Shares of Series G Preferred Stock. Subject
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to the terms and conditions of this Agreement, the Investor hereby subscribes
for, and upon the Company's acceptance of such subscription on the Closing Date
(as hereinafter defined) as evidenced by the Company's execution of this
Agreement on the Closing Date, the Company agrees to sell and issue to the
Investor, __________________________ (___________) shares (the "Shares") of the
Company's Series G Preferred Stock, par value $100 per share (the "G
Preferred"), for a purchase price of ___________________ ______________________
(__________) (the "Purchase Price"), being $6,500 per share. The sale of the
Shares pursuant hereto is part of an offering (the "Offering"), which Offering
shall terminate not later than July 15, 1995 (the "Termination Date") with
respect to cash sales, and August 31, 1995, with respect to exchanges (as
described below), of a minimum subscription consisting of the cash sale of 308
shares of G Preferred (the "Minimum Subscription") and a maximum subscription
consisting of (a) the cash sale of not more than 538 shares of G Preferred, and
(b) the sale of 55 shares of G Preferred to current investors of the Company who
may exchange previously issued securities of the Company, valued at the original
purchase price paid for such securities, for shares of G Preferred. The
purchasers of shares of G Preferred pursuant to the Offering, collectively with
the Investor, are hereinafter referred to as the "Investors."
1.2 Issuance of Shares; Payment of Purchase Price.
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(a) Subject to the terms of paragraph (b) of this Section 1.2, the
Company shall deliver to the Investor a certificate representing the appropriate
number of shares of G Preferred for which the Investor is subscribing (the
"Share Certificate") against delivery to the Company by such Investor of a check
in the amount of the Purchase Price.
(b) Pending the receipt of the Minimum Subscription, the Purchase
Price shall be deposited in a special segregated bank account maintained by the
Company and not used for any other purpose. When, prior to the Termination
Date, at least the Minimum Subscription is obtained, the Share Certificate shall
be issued and the Purchase Price, and all interest earned thereon, shall be
released to the Company (the "Closing," and
such date, the "Closing Date"). If for any reason the Minimum Subscription is
not obtained by the Termination Date, the Company will return the Purchase Price
to the Investor, without interest.
2. Representations and Warranties of the Investor. The Investor hereby
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represents and warrants to the Company, and acknowledges and intends that the
Company rely thereon, as follows:
2.1 The Investor is an "accredited investor" within the meaning of
Rule 501(a) of the Securities Act of 1933, as amended (the "Act"), and qualifies
as such under Rule 501(a)(6) of the Act.
2.2 The Investor will not sell, assign, pledge, transfer, or
otherwise dispose of, whether directly or indirectly, all or any portion of the
Shares or any Common Stock obtained upon the exercise or conversion of the
Shares or as a stock dividend on the Common Stock so obtained (such Common Stock
being hereinafter collectively referred to as the "Underlying Securities"; the
Shares and the Underlying Securities are hereinafter collectively referred to as
the "Securities") to any person or entity without complying with applicable
securities laws;
2.3 The Investor is acquiring the Securities for the Investor's own
account, for investment purposes only and not with a view to any distribution of
such Securities;
2.4 The Investor acknowledges and agrees that the Company has
informed the Investor that the Securities are not registered under any
securities laws, and therefore that (absent registration under or exemption from
applicable securities laws) the Securities are subject to substantial
restrictions on transfer and the Securities may not be transferred for an
indefinite period of time;
2.5 The Investor has investigated the purchase of the Securities to
the extent the Investor deems necessary or desirable, and the Company has
provided the Investor with any assistance in connection therewith which the
Investor has requested. The Investor has such knowledge and experience in
financial and business matters that the Investor is capable of evaluating the
merits and risks of the acquisition of the Securities and of making an informed
investment decision with respect thereto and the Investor has the ability to
bear the economic risk of an investment in the Company and to withstand a
complete loss of its investment. The Investor is financially able to hold the
Securities for an indefinite period of time;
2.6 The Investor is not relying on the Company or any of its
directors, officers, employees, or agents for guidance with respect to tax and
other applicable laws of any jurisdiction, or other economic considerations, and
Investor has been furnished by the Company with all information the Investor has
deemed necessary or appropriate in order to form an informed investment decision
concerning the purchase of the Securities. The Investor has been afforded an
opportunity to ask questions of and receive answers from
representatives of the Company concerning the terms and conditions of the
Investor's purchase of the Securities and has been afforded the opportunity to
obtain any additional information (to the extent that the Company had such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of information otherwise furnished by the
Company;
2.7 The Investor understands that no United States federal or state
agency or any agency of any other government has passed upon or made any
recommendation or endorsement of any investment in the Company;
2.8 The Investor has not been organized for the purpose of purchasing
the Securities; and
2.9 The Investor understands that the certificates evidencing the
Securities will bear a legend stating in substance:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH
ACT OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH SALE, OFFER FOR SALE, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION DOES NOT VIOLATE THE PROVISIONS OF SUCH ACT OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT."
provided, however that the Company agrees to cause such legend to be removed
from any certificates representing the Shares after such Shares have been
transferred pursuant to an effective registration under the Act or Rule 144
promulgated thereunder.
3. Representations and Warranties of the Company. The Company hereby
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represents and warrants to the Investor, and acknowledges and intends that the
Investor rely thereon, as follows:
3.1 Authorization. All action on the part of the Company, its
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directors and stockholders necessary for the authorization, execution, delivery
and performance by the Company of this Agreement and the consummation of the
transactions contemplated herein, and for the authorization, execution and
delivery of the Shares, have been taken (except that the Company has not
reserved for issuance shares of Common Stock to be issued upon the conversion of
the Shares nor does the Company currently have authorized and unreserved a
sufficient number of shares of Common Stock to allow for the conversion of the
Shares). This Agreement, including the exhibits hereto, is a valid and binding
obligation of the Company, enforceable in accordance with its terms against the
Company.
3.2 Disclosure. Neither this Agreement nor any other written
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statement furnished to the Investor nor its counsel in connection with the
investment made hereby contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
therein or herein not misleading in the light of the circumstances under which
they were made.
3.3 Capitalization.
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(a) Upon consummation of the Closing, all issued and outstanding
shares of capital stock of the Company will have been duly authorized and
validly issued, will be fully paid and nonassessable and will have been offered,
issued, sold and delivered by the Company in compliance with applicable federal
and state securities laws.
(b) The Company shall (i) convene a meeting of the Company's
stockholders as soon as possible, but in any event prior to the end of 1995 for
the purpose of amending the Company's Certificate of Incorporation to increase
the number of authorized shares of the Company's Common Stock to a number
sufficient to allow for the full exercise and conversion of the Shares, and (ii)
at such meeting, cause such proposed amendment (the "Capitalization Amendment")
to be adopted. Promptly upon the adoption of the Capitalization Amendment, the
Company shall (i) file with the Delaware Secretary of State a Certificate of
Amendment to Certificate of Incorporation giving effect to the Capitalization
Amendment and (ii) immediately upon the effectiveness of such filing, reserve a
sufficient number of shares of Common Stock to allow for the full exercise and
conversion of the Purchased Securities.
3.4 Certificate of Designations. The Company has, on or before the
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Closing Date, adopted and filed with the Delaware Secretary of State a
Certificate of Designations, Preferences and Rights of Series G Preferred Stock,
attached hereto as Exhibit A (the "Certificate of Designations").
4. Registration. The Company covenants and agrees as follows:
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4.1 Definitions. For purposes of this Section 4:
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(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means (i) the shares of Common
Stock of the Investors obtained upon the exercise or conversion of any shares of
G Preferred or as a stock dividend on the Common Stock so obtained and any
shares of Common Stock (whether issued or issuable) of any other persons and
entities which enter into agreements with the Company pursuant to which they
become entitled to the privileges and subject to the restrictions of this
Section 4 (collectively, the "Common Shares"), and (ii) any Common Stock of the
Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
the Common Shares, excluding in all cases, however, any Registrable Securities
(i) sold by a person in a transaction in which its rights under this Section 4
are not assigned, (ii) sold pursuant to a registration, or (iii) saleable under
paragraph (k) of Rule 144 promulgated under the Act.
(c) The number of shares of "Registrable Securities then outstanding"
shall be the number of shares of Common Stock outstanding which are, and the
number of shares of Common Stock issuable pursuant to exercisable or convertible
securities which are, Registrable Securities;
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 4.13 hereof; and
(e) The term "Form S-3" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently adopted by
the Securities and Exchange Commission (the "SEC") which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
4.2 Registration.
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(a) The Company shall use its best efforts to effect the registration
under the Act of all Registrable Securities on an applicable form (the
"Registration Statement") by March 15, 1996. If the Company fails to effect the
Registration Statement by March 15, 1996, it will continue to use its best
efforts to effect such Registration Statement as soon as possible thereafter.
(b) The Company shall maintain the effectiveness of the Registration
Statement for a period of three years from the effective date therof and shall
use its best efforts to allow the Investor to continually sell Registrable
Securities pursuant to the Registration Statement free from any stop orders or
suspensions by the Company or upon the advice of the Company's counsel or the
Investor's counsel to cease trading. The Company shall furnish to the Investor
copies of all documents filed and correspondence with the SEC relating to the
Registration Statement, and such other information as the Investor shall
reasonably request.
4.3 Piggyback Registration.
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(a) Whenever the Company proposes to register the sale of any of its
equity securities under the Act other than on Form S-4 or Form S-8 promulgated
under the Act or any similar form then in effect, the Company shall give written
notice thereof to each Holder as soon as practicable (but in any event at least
30 days before such filing), offering such Holder the opportunity to register on
such registration statement such number
of Registrable Securities as such Holder may request in writing, subject to the
provisions of Section 4.3(b) hereof, not later than 20 days after the date of
the giving of such notice (a "Piggyback Registration"). Upon receipt by the
Company of any such request, the Company shall use reasonable efforts to, or in
the case of an underwritten offering, to cause the managing underwriter or
underwriters to, include such Registrable Securities in such registration
statement(or in a separate registration statement concurrently filed) and to
cause such registration statement to become effective with respect to such
Registrable Securities. If the Company's registration is to be effected pursuant
to an underwritten offering, Registrable Securities registered pursuant to this
Section 4 shall be distributed in accordance with such offering. Notwithstanding
the foregoing, if at any time after giving written notice of its intention to
register its equity securities and before the effectiveness of the registration
statement filed in connection with such registration, the Company determines for
any reason either not to effect such registration or to delay such registration,
the Company may, at its election, by delivery of written notice to each Holder
(A) in the case of a determination not to effect registration, relieve itself of
its obligation to register the Registrable Securities in connection with such
registration or (B) in the case of a determination to delay registration, delay
the registration of such Registrable Securities for the same period as the delay
in the registration of such other equity securities. Each Holder requesting
inclusion in a registration pursuant to this Section 4.3 may, at any time before
the effective date of the registration statement relating to such registration,
revoke such request by delivering written notice of such revocation to the
Company (which notice shall be effective only upon receipt by the Company);
provided, however, that if the Company, in consultation with its financial and
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legal advisors, determines that such revocation would materially delay the
registration or otherwise require a recirculation of the prospectus contained in
the registration statement, then such holder shall have no right to so revoke
its request.
(b) Notwithstanding the foregoing, with respect to any primary
registration that is underwritten and with respect to which the managing
underwriter or underwriters advise the Company of an Underwriters Maximum Number
(as such term is hereinafter defined), then the Company will so notify all
Holders requesting inclusion in such registration and will be required to
include in such registration, to the extent of the Underwriters Maximum Number:
first, any equity securities that the Company proposes to sell for its own
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account; second, the Registrable Securities requested by Holders to be included
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in such registration and any equity securities requested to be included in such
registration by other holders of such securities allocated pro rata among such
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Holders and other holders on the basis of the number of securities requested to
be included therein by each such Holder or other holder; provided, however, the
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Company shall not be permitted to reduce the number of Registrable Securities
included in such registration to less than 33 1/3% of the number of Registrable
Securities sold in such offering.
(c) If any Piggyback Registration is in the form of an underwritten
offering, the managing underwriter or underwriters and any additional investment
bankers and managers to be used in connection with such registration shall be
selected by the Company (subject to any separate agreement with the holders on
behalf of which a
secondary underwritten offering is being made). The selection of such
underwriters shall also be subject to the approval by the Holders participating
in such underwritten offering holding a majority of the Registrable Securities
being registered, which approval shall not be unreasonably withheld.
(d) All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by the Company, and each Holder selling Registrable Securities shall participate
in such underwriting.
(e) If any Holder or other holder disapproves of the terms of any
such underwriting, he may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 180 days after the effective date
of the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
(f) The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 4.3 prior to the effectiveness
of such registration whether or not any Holder has elected to include securities
in such registration.
4.4 Registrations on Form S-3. At any time after the termination of
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the effectiveness of the Registration Statement as the Company shall be
qualified for the use of Form S-3, the Holders of at least 25% of the
Registrable Securities shall have the right to request in writing an unlimited
number of registrations of the resale of Registrable Securities on Form S-3,
which request or requests shall (a) specify the number of Registrable Securities
intended to be sold or disposed of and the holders thereof, (b) state the
intended method of disposition of such Registrable Securities and (c) relate to
Registrable Securities having an anticipated aggregate offering price of at
least $500,000; provided, however, the Company shall not be required to effect
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such a registration more than once every twelve calendar months.
4.5 Holdback Agreement. If the Company at any time shall register
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shares of Common Stock under the Act for sale to the public, the Investor shall
not sell publicly, make any short sale of, grant any option for the purchase of,
or otherwise dispose publicly of, any Registrable Securities (other than those
shares of Common Stock included in such registration) without the prior written
consent of the Company for a period designated by the Company in writing to the
Investor, which period shall begin not more than 10 days prior to the
effectiveness of the registration statement pursuant to which such public
offering shall be made and shall not last more than 180 days after the effective
date of such registration statement. The Company shall obtain the agreement of
any person permitted to sell shares of stock in a registration to be bound by
and to comply with this Section 4.5 as if such person was an Investor hereunder.
4.6 Obligations of the Company. Whenever required under this Section
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4 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and keep such registration statement
effective until the earlier to occur of the third anniversary of the effective
date of such registration statement and the sale of all of the Registrable
Securities shall by the Investor;
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of the securities covered by such
registration statement;
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them;
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders to
enable the Holders to consummate the disposition in such jurisdictions of such
securities, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions;
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering (each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement);
(f) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
made therein not misleading in the light of the circumstances then existing; and
(g) Furnish, at the request of any Holder, on the date that such
Holder's Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 4, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that
the registration statement with respect to such securities becomes effective,
(i) an opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders and (ii) a letter, dated such date, from the
independent public accountants of the Company, in form and substance as is
customarily given by independent public accounts to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and the
Holders.
4.7 Obligations of Selling Holders.
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(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 4 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company in writing such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
(b) The Holders of Registrable Securities included in the registration
statement will not (until further notice) effect sales thereof after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update a registration statement or prospectus.
4.8 Expenses of Registration. All expenses other than underwriting
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discounts and commissions incurred in connection with registrations, filings, or
qualifications, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, transportation expenses, mailing expenses, and the fees
and disbursements of counsel for the selling Holders shall be borne and paid by
the Company.
4.9 Underwriting Requirements. In connection with any offering
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involving an underwriting of shares being issued by the Company, the Company
shall not be required to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it, and then only in such
quantity as will not, in the opinion of the underwriters, jeopardize the success
of the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by shareholders to be included in such
offering exceeds the amount of Securities to be sold other than by the Company
that the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters believe will not jeopardize the success of the offering (the
"Underwriters Maximum Number") (subject to the provisions of Section 4.3 hereof
with respect to securities included pursuant to a Piggyback Registration, the
securities so included to be apportioned pro rata among the selling Holders
according to the total amount of securities entitled to be included therein
owned by each selling holder or in such other proportions as shall mutually be
agreed to by such selling Holders).
4.10 Delay of Registration. No Holder shall have any right to obtain
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or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 4.
4.11 Indemnification. In the event any Registrable Securities are
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included in a registration statement under this Section 4:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder requesting to join in such registration, any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act") against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements made therein not misleading, or (iii) any violation or
alleged violation by the Company of the Act, the 1934 Act, any state securities
law or any rule or regulation promulgated under the Act, the 1934 Act or any
state securities law applicable to the Company in connection with any such
Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided however,
that the indemnity agreement contained in this subsection 4.11(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written
information furnished by such Holder expressly for use in connection with such
registration; and such Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
subsection 4.11(b) in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 4.11(b) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this Section
4.11 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 4, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnified party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 4.11, but omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 4.11.
(d) The obligations of the Company and Holders under this Section 4.11
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 4, and otherwise.
4.12 Reports Under Securities Exchange Act of 1934. With a view to
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making available to the Holders the benefits of Rule 144 promulgated under the
Act ("Rule 144") and any other rule or regulation of the SEC that may at any
time permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees on
and after the Closing to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) Use its best efforts to enable the Holders to utilize Form S-3 for
the sale of their Registrable Securities;
(c) File with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) Furnish to any Holder, so long as the Holder owns Registrable
Securities representing two percent (2%) or more of the Company's Common Stock,
(i) forthwith upon request a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the Act and the 1934 Act,
or that it qualifies as a registrant whose securities may be resold pursuant to
Form S-3 (at any time after it so qualifies), (ii) substantially concurrently
with the filing thereof, copies of the annual and quarterly reports of the
Company filed with the SEC and such other reports and documents so filed by the
Company, (iii) as soon as they shall become available to the Company, any and
all audited financial statements of the Company and management letters from the
Company's independent auditors and the Company's response thereto, and (iv) such
other information as may be reasonably requested in availing any Holder of any
rule or regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
4.13 Assignment of Registration Rights. The rights to cause the
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Company to register Registrable Securities pursuant to this Section 4 may be
assigned by a Holder to a transferee or assignee of such securities provided the
Company is, prior to or simultaneously with such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act.
4.14 Amendment of Registration Rights. Any provision of this Section
--------------------------------
4 may be amended and the observance thereof may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of the Company and the holders of a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities, and the Company.
5. Covenants of the Company.
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The Company hereby covenants and agrees as follows:
5.1 Financial Information.
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(a) The Company shall furnish the following reports to the
Investor:
(i) as soon as practicable after the end of each fiscal quarter
(except the fourth quarter), and in any event within 45 days thereafter, an
unaudited
income statement and statement of cash flows for such fiscal quarter and an
unaudited balance sheet as of the end of such fiscal quarter; and
(ii) as soon as practicable after the end of each fiscal year, and in
any event within 90 days thereafter, an income statement and statement of cash
flows for such fiscal year, a balance sheet of the Company as of the end of such
fiscal year, and a statement of changes in financial condition for such fiscal
year, audited by independent public accountants of recognized national standing
selected by the Company;
(b) All financial statements provided for above shall be prepared in
accordance with general accepted accounting principles applied on a consistent
basis (except that such unaudited financial statements may be prepared without
footnotes and will be subject to normal year-end audit adjustments).
(c) The Investor agrees that any information obtained by such
Investor pursuant to this Section 4.1 which may be proprietary to the Company or
otherwise confidential shall not be disclosed without the prior written consent
of the Company. The Investor further acknowledges and understands that any
information so obtained which may be considered "inside" non-public information
will not be utilized by the Investor in connection with purchases and/or sales
of the Company's securities except in compliance with applicable state and
federal anti-fraud statutes.
5.2 Access of Records. So long as the Investor holds any shares of G
-----------------
Preferred, the Company will afford the Investor and its counsel and other
authorized representatives, free and full access and opportunity, at all
reasonable times during normal business hours and upon reasonable notice, to all
books, records and properties of the Company and to discuss the business,
affairs and finances of the Company with the officers of the Company. Each
Investor shall maintain the confidentiality of any information obtained by it
pursuant to this Section 5.2 that is not known to the public or among persons
providing similar services and, in connection with the review of any proprietary
or confidential information of the Company by such employees or representatives
execute a non-disclosure agreement with respect to their review of such
proprietary or confidential information.
6. Miscellaneous.
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6.1 Survival of Warranties. The warranties, representations and
----------------------
covenants of the Company and Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing shall in no way be affected by any investigation of the subject matter
thereof made by or on behalf of the Investor or the Company.
6.2 Successors and Assigns. The terms and conditions of this
----------------------
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of
the parties. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of Connecticut as applied to agreements among
Connecticut residents entered into and to be performed entirely within
Connecticut.
6.4 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this agreement.
6.6 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given (i) upon personal delivery to the party to be notified, (ii)
48 hours after deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties, (iii) upon transmission of a confirmed telecopy to such party
at a telecopier number furnished by such party for such purpose, or (iv) upon
delivery to such address by Federal Express or other courier service.
6.7 Amendments and Waivers. Except as specified in Section 4.14, any term
----------------------
of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the holders of a majority of the outstanding Shares. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities are convertible), each future
holder of all such securities and the Company.
6.8 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
6.9 Indemnification.
---------------
(a) The Company shall, with respect to the representations,
warranties, covenants and agreements made by the Company herein, indemnify,
defend and
hold the Investor harmless against all liability, loss or damage, together with
all reasonable costs and expenses related thereto (including legal and
accounting fees and expenses), arising from the untruth, inaccuracy or breach of
any such representations, warranties, covenants or agreements of the Company.
(b) The Investor shall, with respect to the representations,
warranties, covenants and agreements made by the Investor herein, indemnify,
defend and hold the Company harmless against all liability, loss or damage,
together with all reasonable costs and expenses related thereto (including legal
and accounting fees and expenses), arising from the untruth, inaccuracy or
breach of any such representations, warranties, covenants or agreements of the
Investor.
6.10 Remedies. In case any one or more of the covenants and/or
--------
agreements set forth in this Agreement shall have been breached by the Company,
the Investor may proceed to protect and enforce its or their rights either by
suit in equity and/or by action at law, including, but not limited to, an action
for damages as a result of any such breach and/or an action for specific
performance of any such covenant or agreement contained in this Agreement. A
party acting pursuant to this Section 6.10 shall be indemnified against all
liability, loss or damage, together with all reasonable costs land expenses
related thereto (including legal and accounting fees and expenses) in accordance
with Section 6.9.
6.11 Nouns and Pronouns. Whenever the context may require, any
------------------
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice versa.
6.12 Information to be Provided by Investor. Investor agrees to
--------------------------------------
provide to the Company such information as the Company may reasonably request in
order to make accurate and timely required filings and disclosures to its
stockholders and to federal, state and self-regulatory agencies.
6.13 Confidentiality. Any information provided to Investor pursuant
---------------
to this Agreement shall be used by the Investor solely for, and will only be
disclosed to Investor's officers, employees, agents and professional advisors
who need to know such information and who will use such information solely for,
the purpose of evaluating the Investor's investment in the Company and in
furtherance of its interests as an investor in the Company, and the Investor
will, and will cause such officers, employees, agents and professional advisors
to, maintain the confidentiality of all non-public information of the Company
obtained pursuant to this Agreement which is designated by the Company as
confidential and which could not otherwise be legally and legitimately obtained
by the Investor.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
MEMRY CORPORATION
00 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
By:
____________________________
Xxxxx X. Xxxxx, President
INVESTOR
_______________________________
Name:
Title, if appropriate:
