EXHIBIT 10.18
EXOGEN, INC.
COMMON STOCK PURCHASE AGREEMENT
October 20, 1997
TABLE OF CONTENTS
1. Purchase and Sale of Stock....................................
1.1 Sale and Issuance of Common Stock....................
1.2 Closing..............................................
1.3 Actions at the Closing...............................
2. Representations and Warranties of the Company.................
2.1 Organization and Good Standing; Power and Authority;
Qualifications...................................
2.2 Authorization........................................
2.3 Capitalization.......................................
2.4 Valid Issuance of Common Stock.......................
2.5 Consents.............................................
2.6 Litigation...........................................
2.7 Compliance with Other Instruments....................
2.8 Financial Statements.................................
2.9 SEC Filings..........................................
2.10 Other Information....................................
2.11 Intellectual Property Rights.........................
2.12 Title to Assets and Properties; Insurance............
2.13 Compliance with Laws; Permits........................
2.14 Offering Exemption...................................
2.15 Taxes................................................
3. Representations and Warranties of the Investor................
3.1 Authorization........................................
3.2 Purchase Entirely for Own Account....................
3.3 Disclosure of Information............................
3.4 Investment Experience................................
3.5 Accredited Investor..................................
3.6 Restricted Securities................................
4. Certain Covenants.............................................
4.1 Use of Proceeds......................................
4.2 Rule 144 Reporting...................................
5. Transfer Taxes................................................
6. Expenses......................................................
7. Indemnification...............................................
7.1 General Indemnification..............................
7.2 Indemnification Principles...........................
7.3 Claim Notice.........................................
8. Remedies......................................................
9. Miscellaneous.................................................
9.1 Survival of Warranties...............................
9.2 Successors and Assigns...............................
9.3 Governing Law........................................
9.4 Counterparts.........................................
9.5 Titles and Subtitles.................................
9.6 Notices..............................................
9.7 Finder's Fee.........................................
9.8 Attorneys' Fees......................................
9.9 Amendments and Waivers...............................
9.10 Severability.........................................
9.11 Entire Agreement.....................................
9.12 Press Releases and Announcements.....................
SCHEDULE 1 - List of Investors, addresses, number of shares of Common Stock
being purchased and purchase price due from each Investor
EXHIBIT A - Registration Rights Agreement
EXHIBIT B-1 - Certificate for Individual Investors
EXHIBIT B-2 - Certificate for Corporate, Partnership, Trust, Foundation and
Joint Investors
EXHIBIT C - Secretary's Certificate
EXHIBIT D - Opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
COMMON STOCK PURCHASE AGREEMENT
-------------------------------
THIS STOCK PURCHASE AGREEMENT is made as of the 20th day of
October, 1997, by and between Exogen, Inc., a Delaware corporation (the
"Company"), and the investors listed on Schedule 1 attached hereto, each of
which is herein referred to as an "Investor".
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Common Stock. Subject to the terms
and conditions of this Agreement, each Investor agrees to purchase at the
Closing and the Company agrees to sell and issue to the Investor at the Closing,
that number of shares of the Company's common stock, $.0001 par value per share
("Common Stock"), and at a purchase price per share, as is set forth opposite
each Investor named on Schedule 1 attached hereto (such transaction referred to
as the "Purchase"). The maximum aggregate number of shares of Common Stock sold
pursuant to this Agreement shall be One Million Nine Hundred Eighty-Nine
Thousand Six Hundred Thirty (1,989,630) shares.
1.2 Closing. The purchase and sale of the Common Stock shall
take place at the offices of Xxxxxxx, Phleger & Xxxxxxxx LLP, 0000 Xxxxxxxx,
00xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m. New York Time, on the date
hereof, or at such time and place upon which the Company and Investors shall
agree (the "Closing"). At the Closing, the Company shall deliver to each
Investor a certificate or certificates representing the Common Stock which such
Investor is purchasing, registered in the name of such Investor or its nominee,
against payment of the purchase price therefor by wire transfer to the Company's
bank account (designated at least one business day prior to the Closing) in the
amount set forth on Schedule 1.
1.3. Actions at the Closing. Simultaneously with, or prior to,
the execution and delivery of this Agreement, the following actions shall occur:
(a) The Registration Rights Agreement (the
"Registration Rights Agreement"), by and between the Company and the Investors,
substantially in the form of Exhibit A hereto, and all other schedules,
certificates and other documents being delivered pursuant to or in connection
with this Agreement by any party hereto at or prior to the Closing
(collectively, the "Ancillary Documents") shall be duly executed and delivered
by the parties thereto.
(b) The Company shall deliver to the Investors
certificates of good standing from the jurisdictions set forth on Schedule
1.3(b) under its name dated as of a date no earlier than five days prior to the
Closing.
(c) The Common Stock to be issued shall have been
approved for listing on The NASDAQ Stock Market, subject to official notice of
issuance.
(d) The Investors shall deliver to the Company a
completed certificate pertaining to such Investor's status as an investor
substantially in the form of Exhibit B-1 or B-2, as appropriate.
(e) The Company shall deliver to the Investors a
certificate executed by the secretary of the Company, substantially in the form
of Exhibit C hereto, certifying (i) a copy of its organizational documents
(including the Certificate of Incorporation and bylaws of the Company), (ii)
resolutions authorizing the transaction and (iii) incumbency matters.
(f) The Investors shall receive from Xxxxxxx, Phleger
& Xxxxxxxx LLP, counsel for the Company, an opinion addressed to the Investors,
dated as of the Closing, satisfactory in form and substance to the Investors,
which shall include the opinions set forth in Exhibit D attached hereto.
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Investor that:
2.1 Organization and Good Standing; Power and Authority;
Qualifications. Each of the Company and its subsidiary, Exogen (Europe) GmbH, a
German corporation (the "Subsidiary") (i) is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization and (ii)
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as presently conducted and as proposed to be
conducted. The Company has all requisite power and authority to enter into and
carry out the transactions contemplated by this Agreement and the Ancillary
Documents to which it is a party. Each of the Company and its Subsidiary is
qualified to transact business as a foreign corporation in, and is in good
standing under the laws of, those jurisdictions that constitute all of the
jurisdictions wherein the character of the property owned or leased or the
nature of the activities conducted by it makes such qualification necessary and
where failure to so qualify would individually or in the aggregate have a
material adverse effect on properties, business, prospects, operations,
earnings, assets, liabilities or the condition (financial or otherwise) of the
Company and its Subsidiary taken as a whole, whether or not in the ordinary
course of business (a "Material Adverse Effect"). All of the outstanding shares
of capital stock of each class (other than director qualifying shares) of the
Subsidiary have been validly issued and fully paid and nonassessable, and are
owned beneficially and of record, by the Company, free and clear of
Encumbrances.
2.2 Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement and the Ancillary
Documents, the performance of all obligations of the Company hereunder and
thereunder and the authorization, issuance and delivery of the Common Stock
being sold hereunder has been taken, and this Agreement and the Ancillary
Documents, constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Registration Rights Agreement may be limited by applicable federal or state
securities laws.
2.3 Capitalization. The authorized capitalization of the
Company immediately following the Purchase will consist of: (a) 3,000,000 shares
of preferred stock of the Company (the "Preferred Stock"), par value $.0001 per
share, of which no shares are issued and outstanding; and (b) 27,000,000 shares
of Common Stock, par value $.0001 per share ("Common Stock"), of which 9,998,140
shares are issued and outstanding and all such outstanding shares are validly
issued, fully paid and nonassessable and free and clear of all Encumbrances (as
defined in Section 2.12). No class of capital stock ("Capital Stock") of the
Company is entitled to preemptive rights. There are no outstanding options,
warrants, subscription rights, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, shares of any class of
Capital Stock of the Company, or contracts, by which the Company or its
Subsidiary is or may become bound to issue additional shares of its Capital
Stock or options, warrants or other rights to purchase or acquire any shares of
its Capital Stock, except as follows: (i) 750,000 shares of Common Stock have
been reserved for issuance pursuant to the Company's 1995 Stock Option/Stock
Issuance Plan (of which options to purchase 632,973 shares of Common Stock have
been granted and are outstanding), (ii) 150,000 shares of Common Stock have been
reserved for issuance pursuant to the Company's Employee Stock Purchase Plan (of
which 95,940 shares of Common Stock have been purchased and are included in
total shares of Common Stock outstanding), and (iii) as set forth on Schedule
2.3, shares of Common Stock reserved for issuance pursuant to a certain warrant
to purchase Common Stock of the Company and certain warrant obligations. Except
as set forth in Schedule 2.3 hereto, the Company has not declared or paid any
dividend or made any other distribution of cash, stock or other property to its
stockholders.
2.4 Valid Issuance of Common Stock. The Common Stock which is
being purchased by each Investor hereunder, when issued, sold and delivered in
accordance with the terms hereof for the consideration expressed herein, will be
duly and validly issued and outstanding, fully paid and nonassessable with no
personal liability attaching to the ownership thereof, free and clear of any
Encumbrances, other than Encumbrances, if any, arising as a result of actions
taken by the Investors, and not subject to preemptive or similar rights of
stockholders of the Company or others.
2.5 Consents. Except as disclosed on Schedule 2.5 hereto and
for any post-Closing notifications or filings as may be required under
applicable federal or state securities laws, if any, which shall be made on a
timely basis, no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any person (governmental
or private) on the part of the Company or its Subsidiary is required in
connection with the consummation of the transactions contemplated by this
Agreement and the Ancillary Documents.
2.6 Litigation. Except as set forth in the SEC Documents (as
defined below), there is no civil, criminal or administrative action, suit,
claim, notice, hearing, inquiry, proceeding or investigation at law or in equity
by or before any court, arbitrator or similar panel, governmental
instrumentality or other agency now pending or, to the best knowledge of the
Company, threatened against the Company or its Subsidiary or any of their
respective directors or executive officers in their capacities as directors and
executive officers of the Company or the assets (including the Intellectual
Property) of the Company or its Subsidiary (a "Litigation"). Neither the Company
nor its Subsidiary is a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company or its Subsidiary currently pending or which either of the Company or
its Subsidiary intends to initiate.
2.7 Compliance with Other Instruments. The Company is not in
violation or default of any provisions (a) of its Second Amended and Restated
Certificate of Incorporation, as amended, or Amended and Restated Bylaws or (b)
of any instrument, judgment, order, writ, decree or contract to which it is a
party or by which it is bound, or to its best knowledge, of any provision of
domestic (federal, state or local) or foreign law, statute, rule or regulation
applicable to the Company except, with respect to clause (b), where such
violation would not, individually or in the aggregate, have a Material Adverse
Effect. The execution, delivery and performance of this Agreement and the
Ancillary Documents by the Company and the consummation of the transactions
contemplated hereby and thereby will not (x) result in any such violation or be
in conflict with or constitute, with or without the passage of time and giving
of notice, either a default under any such agreement, instrument, judgment,
order, writ, decree or contract referred to in the previous sentence (including
any registration rights agreements), or (y) result in the creation of any lien,
charge or Encumbrance upon any assets of the Company or its Subsidiary or the
suspension, revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, authorization, or approval applicable to the Company or its
Subsidiary, their business or operations or any of their assets or properties.
2.8 Financial Statements. The financial statements (including
any related schedule and/or notes) included in the SEC Documents (the "Financial
Statements") are complete and correct in all material respects and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated. The Financial Statements
fairly present the consolidated financial condition, operating results and
changes in shareholders' equity of the Company as of the dates, and for the
periods, indicated therein. Except as set forth in the SEC Documents, the
Company has no liabilities or obligations, contingent or otherwise, except (i)
liabilities and obligations in the respective amounts reflected or reserved
against in the Company's balance sheet (the "Balance Sheet") as of June 30, 1997
included in the SEC Documents or (ii) liabilities and obligations (matured or
unmatured, fixed or contingent) incurred since June 30, 1997 in the ordinary
course of business consistent (in amount and kind) with past practice (none of
which is a liability resulting from breach of contract, breach of warranty,
tort, infringement, claim or lawsuit) which individually or in the aggregate do
not have a Material Adverse Effect. Since June 30, 1997, the Company and its
Subsidiary have operated their business only in the ordinary course and there
has not been individually or in the aggregate any change that would have a
Material Adverse Effect (a "Material Adverse Change") other than changes
disclosed in the SEC Documents or otherwise set forth in Schedule 2.8 hereto.
Except as set forth in the SEC Documents, the Company has never had, nor does it
presently have, any subsidiaries, nor has it owned, nor does it presently own,
whether directly or indirectly owned, any capital stock or other proprietary
interest, directly or indirectly, in any corporation, association, trust,
partnership, joint venture or other entity.
2.9 SEC Filings. The Company has filed all proxy statements,
reports and other documents required to be filed by it under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") from and after July 20,
1995 (the "SEC Documents"), and the Company has delivered to the Investor:
(a) its quarterly report on Form 10-Q for the quarter ended December
31, 1996;
(b) its quarterly report on Form 10-Q for the quarter ended March 31,
1997;
(c) its quarterly report on Form 10-Q for the quarter ended June 30,
1997;
(d) its annual report on Form 10-K for the fiscal year ended
September 30, 1996; and
(e) its proxy statement to stockholders as filed with the SEC on
January 8, 1997.
Each SEC Document was in compliance in all materials respects
with the requirements of its respective report form and, as of its filing date,
no such SEC Document filed by the Company with the Securities and Exchange
Commission ("SEC") contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in the light of the circumstances under
which they were made, not misleading.
2.10 Other Information. The Company has delivered to each
Investor copies of all press releases, reports to stockholders and other
documents released to the public since October 1, 1996.
2.11. Intellectual Property Rights. (a) Except as disclosed on
Schedule 2.11(a) hereto, the Company or its Subsidiary owns or has the right to
use all of the Intellectual Property (as defined below) necessary, required or
desirable for the conduct of its business as presently or as presently proposed
to be conducted, except where the absence of any thereof would not individually
or in the aggregate have a Material Adverse Effect.
(b) Except as disclosed on Schedule 2.11(b), to the best
knowledge of the Company, the Company has not interfered with, infringed upon or
misappropriated any Intellectual Property rights of third parties, except for
interferences, infringements and misappropriations which would not individually
or in the aggregate have a Material Adverse Effect, and the Company has not
received any claim, demand or notice alleging any such interference,
infringement or misappropriation (including any claim that it must license or
refrain from using any Intellectual Property rights of any third party). To the
best knowledge of the Company, no third party has interfered with, infringed
upon or misappropriated any Intellectual Property rights of the Company, except
for interferences, infringements and misappropriations which would not
individually or in the aggregate have a Material Adverse Effect.
As used in this Agreement, "Intellectual Property" means all
intellectual property owned, leased, licensed, and used by the Company or its
Subsidiary, including without limitation, (i) all world wide inventions and
discoveries (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent applications and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof, (ii)
all trademarks, service marks, trade dress, logos, trade names and corporate
names, together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, renewals and derivatives in connection therewith, (iii) all
copyrightable works, all copyrights and all applications, registrations and
renewals in connection therewith, (iv) all mask works and all applications,
registrations and renewals in connection therewith, (v) all know-how, trade
secrets and confidential business information, whether patentable or
unpatentable and whether or not reduced to practice (including ideas, research
and development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, addresses, phone numbers, pricing and cost
information, and business and marketing plans and proposals), (vi) all other
proprietary rights of any type of description (regardless of whether the same
have been formally registered), (vii) all copies and tangible embodiments
thereof (in whatever form or medium) and (viii) all licenses and agreements in
connection with the foregoing.
2.12. Title to Assets and Properties; Insurance. (a) The
Company has good and marketable title, or a valid leasehold interest in or
contractual right to use, all of its assets and properties, free and clear of
any mortgages, judgments, claims, liens, security interests, pledges, escrows,
charges or other encumbrances of any kind or character whatsoever
("Encumbrances"), except in each case for such defects in title and such other
liens and Encumbrances which do not individually or in the aggregate materially
detract from the value to the Company of the properties and assets of the
Company and its Subsidiary taken as a whole.
(b) The Company and its Subsidiary maintain insurance in such
amounts (to the extent available in the public market), including
self-insurance, retainage and deductible arrangements, and of such a character
as is reasonable for companies engaged in the same or similar business.
2.13. Compliance with Laws; Permits. (a) Except as provided in
Schedule 2.13, the Company and its Subsidiary are in compliance, and the
business of the Company and its Subsidiary have been conducted in compliance
with, all federal, state, local and foreign laws, rules, ordinances, codes,
consents, authorizations, registrations, regulations, decrees, directives,
judgments and orders applicable to them, their business and the ownership of
their assets including, but not limited to, Environmental Laws (as defined
below) except where the failure to comply would not individually or in the
aggregate have a Material Adverse Effect. The Company and its Subsidiary have
all federal, state, local and foreign governmental licenses, permits,
qualifications and authorizations ("Permits") necessary in the conduct of the
business as currently conducted. All such Permits are in full force and effect,
and no violations have been recorded in respect of any such Permits; no
proceeding is pending or, to the best knowledge of the Company, threatened to
revoke or limit any such Permit; and no such Permit will be suspended, canceled
or adversely modified as a result of the execution and delivery of this
Agreement or the Ancillary Documents and the consummation of the transactions
contemplated hereby or thereby, except in any of the foregoing cases where
failure to have such Permit would not individually or in the aggregate have a
Material Adverse Effect.
(b) For purposes of this Agreement, "Environmental
Laws" means, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. xx.xx. 9601, et seq.; the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. xx.xx. 11001, et
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. xx.xx. 6901, et
seq.; the Toxic Substances Control Act, 15 U.S.C. xx.xx. 2601, et seq.; the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. xx.xx. 136, et
seq.; the Clean Air Act, 42 U.S.C. xx.xx. 7401, et seq.; the Clean Water Act
(Federal Water Pollution Control Act), 33 U.S.C. xx.xx. 1251, et seq.; the Safe
Drinking Water Act, 42 U.S.C. xx.xx. 300f, et seq.; the Occupational Safety and
Health Act, 29 U.S.C. xx.xx. 641, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. xx.xx. 1801, et seq.; as any of the above statutes
have been or may be amended from time to time, all rules and regulations
promulgated pursuant to any of the above statutes, and any other foreign,
federal, state or local law, statute, ordinance, rule or regulation governing
environmental matters, as the same have been or may be amended from time to
time, including any common law cause of action providing any right or remedy
with respect to environmental matters, and all applicable judicial and
administrative decisions, orders, and decrees relating to environmental matters.
2.14. Offering Exemption. Assuming the accuracy of the
representations and warranties contained in Section 3 hereof, the offer and sale
of the Common Stock and the issuance and delivery of the Common Stock to the
Investors are each exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act") and under applicable state securities and "blue
sky" laws, as currently in effect and are otherwise in compliance with
applicable federal and state securities laws.
2.15. Taxes. The Company and its Subsidiary have filed or
caused to be filed all income tax returns which are required to be filed and
have paid or caused to be paid all Taxes (as defined below) that have become
due, except Taxes the validity or amount of which is being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside. "Taxes," for purposes of this Agreement, means any taxes,
assessments, duties, fees, levies, imposts, deductions, withholdings, including,
without limitation, income, gross receipts, ad valorem, value added, excise,
real or personal property, asset, sales, use, license, payroll, transaction,
capital, net worth and franchise taxes, estimated taxes, withholding,
employment, social security, workers compensation, utility, severance,
production, unemployment compensation, occupation, premium, windfall profits,
transfer and gains taxes, or other governmental charges of any nature whatsoever
imposed by any government or taxing authority of any country or political
subdivision of any country and any liabilities with respect thereto, including
any penalties, additions to tax, fines or interest thereon, and includes any
liability of the Company and its Subsidiary arising under any tax sharing
agreement to which it is or has been a party.
3. Representations and Warranties of the Investor. Each
Investor, severally and not jointly, hereby represents and warrants that:
3.1 Authorization. This Agreement constitutes its valid and
legally binding obligation, enforceable in accordance with its terms.
3.2 Purchase Entirely for Own Account. This Agreement is made
with each Investor in reliance upon each Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Common Stock to be received by such Investor will be
acquired for investment for such Investor's own account, not as a nominee or
agent, for investment purposes only, and not with a view to the resale or
distribution of any part thereof within the meaning of the Securities Act, and
that such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, each Investor further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to the Common
Stock. Each Investor represents that it will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the shares of Common
Stock except in compliance with the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations promulgated thereunder and applicable
state securities laws. Each Investor represents that it has full power and
authority to enter into this Agreement.
3.3 Disclosure of Information. Each Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Common Stock. Each Investor further represents that it
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Common Stock. The
foregoing, however, does not limit or modify the representations and warranties
of the Company in Section 2 of this Agreement or the right of each Investor to
rely thereon.
3.4 Investment Experience. Each Investor is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment and has
such knowledge and experience in financial or business matters such that it is
capable of evaluating the merits and risks of its investment in the Common
Stock.
3.5 Accredited Investor. Each Investor is an "accredited
investor" within the meaning of SEC Rule 501 of Regulation D, as presently in
effect. Each Investor has completed or caused to be completed the Certificate
for Investors attached hereto as Exhibit B-1 or B-2, as appropriate, and the
responses provided therein shall be true as of the Closing.
3.6 Restricted Securities. Each Investor understands that the
shares of Common Stock it is purchasing are characterized as "restricted
securities" ("Restricted Securities") under the federal securities laws inasmuch
as they are being acquired from the Company in a transaction not involving a
public offering and that under such laws and applicable regulations such
securities may not be resold without registration under the Act, except in
certain limited circumstances. In this connection, each Investor represents that
it is familiar with SEC Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the Act.
4. Certain Covenants
4.1 Use of Proceeds. The net proceeds received by the Company
from the sale of the Common Stock as contemplated by this Agreement will be used
by the Company for general working capital purposes.
4.2 Rule 144 Reporting. With a view to making available to the
Investors the benefits of certain rules and regulations of the SEC which may
permit the sale of the Common Stock to the public without registration, the
Company agrees to use its best efforts to:
(a) make and keep public information available, as
those terms are understood and defined in rule 144 under the Securities
Act, at all times;
(b) use its best efforts to file with the SEC in a
timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and
(c) so long as the Investor owns any Restricted
Securities (as defined in Section 3.6 hereof), furnish to the Investor
forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company filed with the Securities and
Exchange Commission, and such other reports and documents of the
Company and other information in the possession of or reasonably
obtainable by the Company as the Investor may reasonably request in
availing itself of any rule or regulation of the SEC allowing an
Investor to sell any such securities without registration.
5. Transfer Taxes. The Company agrees that it will pay, and
will hold each Investor harmless from, any and all liability with respect to any
stamp or similar Taxes which may be determined to be payable in connection with
the execution and delivery and performance of this Agreement, and that it will
similarly pay and hold each Investor harmless from all Taxes in respect of the
issuance of the Common Stock to such Investor.
6. Expenses. (a) Except as set forth in Section 6(b), the
Company and each Investor shall pay all the costs and expenses incurred by it or
on its behalf in connection with this Agreement and the consummation of the
transactions contemplated hereby.
(b) Within 10 days from the receipt of a billing
statement from one of the Pequot entities listed on Schedule 1 (the
"Pequot Entities"), the Company shall pay and shall reimburse the
Pequot Entities for all of their reasonable legal costs and expenses
incurred in connection with this transaction (including the negotiation
and preparation of this Agreement and the Ancillary Documents and the
consummation of the transactions contemplated hereby and thereby);
provided, however, in no event shall the liability of the Company under
this Section 6(b) in the aggregate exceed $25,000.
7. Indemnification.
7.1 General Indemnification. The Company shall indemnify,
defend and hold each Investor, its affiliates, their respective officers,
directors, partners, employees, agents, representatives, successors and assigns
(each an "Investor Entity") harmless from and against all Losses (as defined
below) incurred or suffered by an Investor Entity (whether incurred or suffered
directly or indirectly through ownership of capital stock of the Company)
arising from the breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in any Ancillary Document.
Each Investor, severally and not jointly, shall indemnify, defend and hold the
Company, its affiliates, their respective officers, directors, employees,
agents, representatives, successors and assigns harmless against all Losses
arising from the breach of any of its representations, warranties, covenants or
agreements in this Agreement or in any Ancillary Documents. Notwithstanding
anything to the contrary in this Agreement, no indemnification payment by the
Company pursuant to this Section 7 with respect to any Losses otherwise payable
hereunder as a result of a breach of the representations and warranties of the
Company (other than any Losses resulting from breaches of the representation and
warranty in Section 2.3 which shall not be subject to the Deductible (as defined
below)) shall be payable until the time as such Losses shall aggregate for all
Investor Entities to more than $75,000 (the "Deductible"), and then only to the
extent that such Losses, in the aggregate for all Investor Entities, exceed the
Deductible.
7.2 Indemnification Principles. For purposes of this Section
7, (i) "Losses" shall mean each and all of the following items: claims, losses,
(including, without limitation, losses of earnings) liabilities, obligations,
payments, damages, charges, judgments, fines, penalties, amounts paid in
settlement, costs and expenses (including, without limitation, interest which
may be imposed in connection therewith, costs and expenses of investigation,
actions, suits, proceedings, demands, assessments and fees, expenses and
disbursements of counsel, consultants and other experts); and (ii) each of the
representations and warranties made by any party in this Agreement and in the
Ancillary Documents shall be deemed to have been made without the inclusion of
limitations or qualifications as to materiality, such as the words "Material
Adverse Effect," "immaterial," "material" and "in all material respects" or
words of similar import. Any payment (or deemed payment) by the Company to an
Investor pursuant to this Section 7, shall be treated for federal income tax
purposes as an adjustment to the price paid by such Investor for the Common
Stock pursuant to this Agreement.
7.3 Claim Notice. A party seeking indemnification under this
Section 7 shall, promptly upon becoming aware of the facts indicating that a
claim for indemnification may be warranted, give to the party from whom
indemnification is being sought a claim notice relating to such Loss (a "Claim
Notice"). Each Claim Notice shall specify the nature of the claim, the
applicable provision(s) of this Agreement or other instrument under which the
claim for indemnity arises, and, if possible, the amount or the estimated amount
thereof. No failure or delay in giving a Claim Notice (so long as the same is
given prior to expiration of the representation or warranty upon which the claim
is based) and no failure to include any specific information relating to the
claim (such as the amount or estimated amount thereof) or any reference to any
provision of this Agreement or other instrument under which the claim arises
shall affect the obligation of the party from whom indemnity is sought.
8. Remedies. In case any one or more of the covenants and/or
agreements set forth in this Agreement shall have been breached by any party
hereto, each Investor, with respect to a breach by the Company, and the Company,
with respect to a breach by an Investor, may proceed to protect and enforce its
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.
9. Miscellaneous.
9.1 Survival of Warranties. The warranties, representations
and covenants of the Company and each Investor contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
9.2 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors, permitted assigns, heirs and
personal representatives of the parties (including transferees of any shares of
Common Stock sold hereunder), except that the Company may not assign its rights
and obligations under this Agreement to any person without the prior written
consent of the Investors purchasing two-thirds of the Common Stock to be sold
pursuant to this Agreement, except in connection with a merger, consolidation or
sale of all or substantially all of the assets of the Company. 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.
9.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to the
principles of conflicts or choice of law. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of New York and of the United States of America, for
any Litigation arising out of or relating to this Agreement and the Ancillary
Documents and the transactions contemplated hereby and thereby, and further
agrees that service of any process, summons, notice or document by U.S.
registered mail to its respective address set forth in this Agreement shall be
effective service of process for any Litigation brought against it in any such
court.
9.4 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.
9.5 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.
9.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
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 in the case of the Company
and on Schedule 1 in the case of each Investor, or at such other address as such
party may designate by ten (10) days' advance written notice to the other
parties.
9.7 Finder's Fee. Each party represents that it neither is nor
will be obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless the
Investors from any liability for any commission or compensation in the nature of
a finders' fee (and the costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers, employees
or representatives is responsible.
9.8 Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
9.9 Amendments and Waivers. No term of this Agreement may be
amended, discharged or terminated and the observance of any term of this
Agreement may not be waived (either generally or in a particular instance and
either retroactively or prospectively), without the prior written consent of the
Investors purchasing two-thirds of the Common Stock to be sold pursuant to this
Agreement. 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, each future holder of all such securities,
and the Company. No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar). No delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof.
9.10 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.
9.11 Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
9.12 Press Releases and Announcements. Each of the parties
hereto agrees that it will not issue any press release or announcement relating
to the subject matter of this Agreement without the prior written approval of
the other parties; provided, however, that any party may make any public
disclosure it believes in good faith is required by law or regulation (in which
case the disclosing party shall advise the other parties, provide them with a
copy of the proposed disclosure prior to making the disclosure, and use
reasonable efforts to agree upon the text of such press release, before issuing
any such press release).
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties have executed this Common
Stock Purchase Agreement as of the date first above written.
EXOGEN, INC.
By: /s/ Xxxxxxx X. XxXxxxxx
-----------------------
Name: Xxxxxxx X. XxXxxxxx
Title: President and Chief Executive Officer
Address: 00 Xxxxxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
INVESTORS:
DELPHI VENTURES III, L.P.
By: Delphi Management Partners III, L.L.C.,
General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Member
DELPHI BIO-INVESTMENTS III, L.P.
By: Delphi Management Partners III, L.L.C.,
General Partners
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Member
COMMON STOCK PURCHASE AGREEMENT
THE DEMETER TRUST DTD 6/5/90
TRUSTEE
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxxx
XXXXXXXXX X. XXXXXXXX TRUST DTD
11/6/78
Trustee
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxxx
XXXXXXXX X. XXXXXXXX TRUST DTD
11/6/78
Trustee
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxxx
XXXXXXX X. XXXXXXXX TRUST DTD
11/6/7
Trustee
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxxx
XXXXXX X. XXXXXXXX
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
COMMON STOCK PURCHASE AGREEMENT
PEQUOT PRIVATE EQUITY FUND L.P.
By: /s/ Xxxxx Xxxxxx
-----------------
Name: Xxxxx Xxxxxx
Title: CFO, DSCMI Inv. Mgr.
PEQUOT OFFSHORE PRIVATE EQUITY
FUND, INC.
By: /s/ Xxxxx Xxxxxx
----------------
Name: Xxxxx Xxxxxx
Title: CFO, DSCMI Inv. Mgr.
COMMON STOCK PURCHASE AGREEMENT
XXXXX XXXXXXX HEALTHCARE CAPITAL
LIMITED PARTNERSHIP (SBIC)
By: Piper Ventures Management IV Limited
Partnership, its General Partner
By: /s/ Buzz Xxxxxx
---------------
Buzz Xxxxxx, Managing Director Piper
Ventures Capital, Inc., Its General Partner
COMMON STOCK PURCHASE AGREEMENT
XXXXXXX X. XXXX
By: /s/ Xxxxxxx X. Xxxx
-------------------
Xxxxxxx X. Xxxx
COMMON STOCK PURCHASE AGREEMENT
