EXHIBIT 10.27
PROPRIETARY AND CONFIDENTIAL
COMMON STOCK
INVESTMENT AGREEMENT
Between
Promethean Investment Group L.L.C.
And
Angeion Corporation
Dated as of September 2, 1997
INVESTMENT AGREEMENT dated as of September 2, 1997 between Promethean
Investment Group L.L.C., a limited liability company organized and existing
under the laws of the State of New York (together with its successors in
interest and assigns or its designees, the "Investor"), and Angeion Corporation,
a corporation duly organized and existing under the laws of the State of
Minnesota (the "Company").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Investor shall invest up to $25,000,000 in
shares (the "Shares") of the Company's common stock, par value $.01 per share,
together with the preferred stock purchase rights attached thereto
(collectively, the "Common Stock"),
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
Terms used herein which are not defined herein but are defined in the
Registration Rights Exhibit, which is annexed hereto, incorporated herein and
hereby made an integral part hereof shall have the same meaning herein as
therein (this Agreement, together with the Registration Rights Exhibit attached
hereto, referred to collectively herein as, the "Agreement").
ARTICLE II
Purchase and Sale of Common Stock
Section 2.1. Purchase and Sale of Common Stock. Upon the terms and conditions
set forth herein, the Company shall issue and sell to the Investor, and the
Investor shall purchase from the Company, up to $25,000,000 of the Common Stock.
Section 2.2. Delivery of Put Notices.
(a) At any time and from time to time during the period beginning on
the calendar day following the initial effective date of the Registration
Statement and ending on the earlier of (i) the date two years after the initial
effective date of the Registration Statement and (ii) termination of this
Agreement in accordance with Article VIII (the "Open Period"), the Company may,
in its sole discretion, deliver written notices to the Investor (each such
notice hereinafter referred to as a "Put Notice") stating a dollar amount (the
"Dollar Amount") of Common Stock which the
Company intends to sell to the Investor within the seventeen Business Days (the
"Purchase Period") following the date (the "Put Notice Date") on which the Put
Notice is given to the Investor by the Company in accordance with this
Agreement. "Business Day" shall mean any day on which the Company's Principal
Market is open for trading. The Dollar Amount designated by the Company in any
given Put Notice shall be in increments of $250,000. Notwithstanding anything
herein to the contrary, (A) the Investor shall not be required to purchase
during the Purchase Period following a Put Notice Date a dollar amount of Common
Stock (the "Required Dollar Amount") which exceeds the lesser of (i) $5,000,000,
subject to reduction during the Purchase Period as hereinafter provided, or (ii)
ten percent of the aggregate Trading Dollar Value (hereinafter defined) during
those of the first fourteen (14) trading days of the Purchase Period during
which the average per share Trading Dollar Value is $2.00 or more, but (B) the
Investor may, at its election and pursuant to its Purchase Notices (hereinafter
defined), purchase during any such Purchase Period up to one hundred thirty
percent of the Required Dollar Amount; provided that (x) the Investor may not,
pursuant to clause (B) of this Section, invest all or any portion of any amount
in excess of a Required Dollar Amount, and (y) a Required Dollar Amount may not
in any event include an amount which, if invested by the Investor hereunder,
would result, in the case of either (x) or (y), in the Investor purchasing,
during a Purchase Period, shares of Common Stock at a price determined in
accordance with Section 2.3 hereof which, when aggregated with all other shares
of Common Stock acquired by the Investor pursuant to this Agreement in the 90
calendar days preceding such Purchase Period, would result in the Investor
having purchased pursuant to this Agreement, during such Purchase Period and
such period of 90 calendar days, shares of Common Stock totalling more than 4.9%
of the Common Stock outstanding on the Put Notice Date for such Purchase Period,
as determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the regulations promulgated
thereunder. The Put Notice shall include a representation of the Company as to
the Common Stock outstanding on the Put Notice Date as determined in accordance
with Section 13(d) of the Exchange Act. In the event that the amount of Common
Stock outstanding as determined in accordance with Section 13(d) of the Exchange
Act and the regulations promulgated thereunder is different on any date during a
Purchase Period than on the Put Notice Date associated with such Purchase
Period, the amount of Common Stock outstanding on such date during such Purchase
Period shall govern for purposes of determining whether the Investor, when
aggregating all purchases of Common Stock made pursuant to this Agreement in the
90 calendar days preceding such date, would have acquired more than 4.9% of the
Common Stock during such period. The
amount provided in clause (i) of this Section 2.2(a) shall be in effect at the
beginning of each Purchase Period but shall be reduced during such Purchase
Period by $357,143 for each trading day during the Purchase Period on which the
average per share Trading Dollar Value is less than $2.00 per share. For
purposes hereof "Trading Dollar Value" shall mean the dollar value of the Common
Stock traded on the Principal Market for the applicable day or period, provided
that individual trades of 15,000 shares or more on any trading day shall, for
this purpose, be treated as a trade of 5,000 shares at the average per share
price at which such trades of 15,000 shares or more were actually made.
(b) Notwithstanding any of the foregoing, the Company may not deliver a
Put Notice (i) if the Applicable Trading Price (hereinafter defined) on the day
prior to delivery of such Put Notice was less than $2.00 per share or (ii) if
trading of the Common Stock on the Principal Market is suspended or the Common
Stock is delisted or threatened to be delisted from the Principal Market, or
(iii) if the Common Stock is not registered under the Exchange Act or if the
Registration Statement is no longer effective or is subject to a stop order or
its use or the use of the prospectus which is a part thereof is otherwise
suspended. If (a) the Applicable Trading Price on any trading day during the
Purchase Period associated with an effective Put Notice shall be less than $2.00
per share or (b) any of the events described in clauses (ii) and (iii) above
occurs after an effective Put Notice is so delivered, and if any such
circumstance described in (a) or (b) above so occurs before the entire Required
Dollar Amount of Common Stock covered by such Put Notice shall have been
purchased during the Purchase Period, then the Investor shall have no further
obligation to purchase the balance of such Required Dollar Amount of Common
Stock during such Purchase Period; provided, however, that on any day during the
balance of such Purchase Period upon which such events described in clauses (ii)
and (iii) above do not exist or which follows a trading day upon which the
Applicable Trading Price shall be $2.00 per share or more, the Investor may in
its sole discretion but shall not be required to give the Company one or more
Purchase Notices covering some or all of such balance of the Required Dollar
Amount, as well as some or all of the additional amounts of Common Stock which
the Investor may elect to purchase during such Purchase Period pursuant to
Section 2.2(a)(B) above. For purposes of this Section 2.2(b), the "Applicable
Trading Price" with respect to the Common Stock on any day, shall mean the last
reported per share sales price of Common Stock reported on such Business Day or,
in case no sales take place on such day, the average of the closing bid and
asked prices on such prior day, in either case, as reported on the Bloomberg
Financial Markets for such day, or, if not reported on the Bloomberg Financial
Markets, the
last quoted price on such prior day (or, if not so quoted, the average of the
last quoted high bid and low asked prices) in the over the counter market, as
reported by NASDAQ or such other system then in use, or, if on any such prior
day no bids are quoted by any such organization, the average of the closing bid
and asked prices on such prior day furnished by a professional market maker
making a market in Common Stock selected by the Board of Directors of the
Company, and, if on any such prior day, no market maker is making a market in
the Common Stock, the fair market value of the Common Stock as of such prior day
determined reasonably and in good faith by the Board of Directors of the
Company.
(c) During the Open Period, Put Notices may be delivered no more
frequently than once in each period of seventeen consecutive Business Days, such
that Put Notices and associated Purchase Periods do not overlap each other.
(d) The Investor shall not in any event be required to invest more than
$25,000,000 in the aggregate (excluding additional purchases which may be made
at the election or option of the Investor pursuant to Section 2.2(a)(B)), under
or pursuant to Put Notices given hereunder.
Section 2.3. Determination of Price Per Share. The prices (each, a
"Purchase Period Price Per Share") at which shares that the Company shall be
obligated to issue and sell and the Investor shall be obligated to purchase in
connection with a Put Notice (including, without limitations any such additional
purchases pursuant to Section 2.2(a)(B)) shall be 92% (the "Common Stock
Investment Percentage") of the lowest of the per share daily low trading prices
of the Common Stock on the Principal Market during the three Business Days
immediately preceding a Purchase Notice Date (hereinafter defined) upon which
shares of the Common Stock were traded on the Principal Market (the "Market
Stock Price"); provided, however, that if a sale of Common Stock shall have been
made by the Investor or an affiliate of the Investor at the low trading price on
any such trading day, such trade shall be disregarded for purposes of the
foregoing. The number of shares so to be purchased pursuant to each Purchase
Notice shall be rounded to the nearest whole number so as to avoid the issuance
of fractional shares.
Section 2.4. Purchase Closings.
(a) Purchases of Common Stock by the Investor during a Purchase Period
may be made at any time and from time to time during the Purchase Period
pursuant to one or more "Purchase Notices" given by the Investor to the Company
during the Purchase Period, each specifying
the dollar amount to be invested by the Investor pursuant to such Purchase
Notice and the Purchase Period Price Per Share at which Common Stock is to be so
purchased pursuant to such Purchase Notice. If the entire Required Dollar Amount
of Common Stock required to be purchased during such Period shall not have been
covered by Purchase Notices before the last day of the Purchase Period, the
Investor shall be deemed so to have given the Company a Purchase Notice on the
last day of the Purchase Period specifying therein the balance of such Required
Dollar Amount of Common Stock so to be purchased during such Period and the
Purchase Period Price Per Share applicable to such purchase. Each date upon
which a Purchase Notice is or is deemed so to have been given is herein referred
to as a "Purchase Notice Date." In the event the Company does not deliver a Put
Notice to the Investor, the Investor shall have no right to deliver a Purchase
Notice to the Company, and no Purchase Notice will be deemed to have been given
to the Company.
(b) Each purchase and sale of Common Stock pursuant to a Purchase
Notice (a "Closing") shall take place on the third Business Day following the
giving of the Purchase Notice to which such Closing relates, or the earliest
date thereafter on which all conditions to Closing have been satisfied. Each
date on which a Closing occurs is referred to herein as a "Closing Date."
(c) (i) On each Closing Date, the Company shall deliver to the Investor
certificates representing the shares of Common Stock to be issued and sold to
the Investor on such date and registered in the name of the Investor or deposit
such shares into the accounts designated by the Investor for the benefit of the
Investor and (ii) on each Closing Date, the Investor shall deliver to the
Company the price to be paid for such shares, determined as aforesaid, by
cashier's check or wire transfer in immediately available funds to such account
as shall be designated in writing by the Company. In addition, each of the
Company and the Investor shall deliver all documents, instruments and writings
required to be delivered by either of them pursuant to this Agreement at or
prior to each Closing.
Section 2.5. Certain Adjustments. Market Stock Prices, Purchase Period
Prices Per Share, the Maximum Common Stock Issuance (hereinafter defined), the
$2.00 amounts provided in Sections 2.2(a) and 2.2(b) hereof and the $2.00
amounts provided in Section 5.2 shall be adjusted appropriately to reflect stock
splits, stock dividends, combinations and like transactions affecting the Common
Stock.
Section 2.6. Delisting/Deregistration/Suspension. If at any time during
the Open Period or within thirty days after the end of the Open Period, (i) the
Common Stock is delisted from the Principal Market or (ii) the Common Stock is
not registered under the Exchange Act or (iii) trading of the Common Stock on
the Principal Market is suspended for more than two consecutive full trading
days or for any cause(s) or reason(s) which have or are likely to have,
individually or in the aggregate, a significant effect on the business,
operations, properties, prospects, or financial condition of the Company and any
other entities controlled by the Company, taken as a whole, which is material
and adverse to the Company and such entities, taken as a whole, and which,
during the ten trading days following public disclosure of such event, results
in a 30% or more decrease in the Applicable Trading Price of the Common Stock or
(iv) if any registration statement with respect to the Common Stock issued or
issuable hereunder (including the Registration Statement) is no longer effective
or subject to a stop order or otherwise suspended by the Company or as a result
of action or inaction by the Company, and if, in the case of the circumstances
described in clause (iv) of this Section 2.6, such circumstances shall exist for
periods in excess of those provided in Section 8 of the Registration Rights
Exhibit with respect thereto, the Investor shall have the right, at its option
in its sole discretion, which right shall be exercised within thirty days of
such event or occurrence, to sell to the Company, and the Company agrees to buy,
promptly upon the exercise of such right by the Investor and subject to the
limitations imposed by the Minnesota Business Corporation Act, all or any part
of the Common Stock issued to the Investor and then held by the Investor at a
price per share equal to the Market Stock Price at the time such share was
purchased or at the time such right pursuant to this Section 2.6 is exercised by
the Investor, whichever is greater; provided, however, that the number of Shares
of Common Stock subject to the Investor's option hereunder shall in no event
exceed the number of such Shares acquired by the Investor hereunder during the
60 trading days preceding the Investor's exercise of the option provided to it
in this Section 2.6 and during no part of which any of the circumstances
described in clause (i) through (iv) of this Section 2.6 existed.
Section 2.7. Overall Limit on Common Stock Issuable; Minimum Dollar
Amount. Notwithstanding anything herein contained to the contrary, the number of
shares of Common Stock issuable by the Company hereunder shall not exceed twenty
percent of the outstanding Common Stock of the Company as of the date hereof,
subject to appropriate adjustment for stock splits, stock dividends,
combinations or other similar recapitalization affecting the Common Stock, (the
"Maximum Common Stock Issuance"), unless the issuance of Common Stock hereunder
in
excess of the Maximum Common Stock Issuance shall first be approved by the
Company's stockholders in accordance with applicable law and the by-laws of the
Company. Notwithstanding anything herein to the contrary, the Company will use
its best efforts and all due diligence to obtain its shareholders' approval of
the issuance and sale of the Common Stock or the substitute securities and all
transactions relating or pertaining thereto, as contemplated by this Agreement.
Without limiting the generality of the foregoing, such shareholders' approval
will duly authorize the issuance by the Company of shares of Common Stock
totalling twenty percent or more of the Company's Common Stock outstanding on
the date hereof. The parties understand and agree that the Company's failure to
obtain such approval shall in no way adversely affect the validity and due
authorization, as provided in Sections 4.4 and 4.6 hereof of the issuance and
sale of Common Stock hereunder, and that such approval pertains only to the
applicability of the Maximum Common Stock Issuance Limitation provided in this
Section 2.7.
ARTICLE III
Representations and Warranties of Investor
The Investor represents and warrants to the Company that:
Section 3.1. Intent. The Investor will be purchasing the Common Stock
to be purchased by it hereunder for its own account and the Investor has no
present arrangement (whether or not legally binding) at any time to sell any
such Common Stock to or through any person or entity; provided, however, that by
making the representations herein, the Investor does not agree to hold such
Common Stock for any minimum or other specific term and reserves the right to
dispose of such Common Stock at any time in accordance with federal and state
securities laws applicable to such disposition. The Investor understands that
such Common Stock must be held indefinitely unless such Common Stock is, either
at the time of purchase or subsequently, registered under the Securities Act or
an exemption from registration is available. The Investor has been advised or is
aware of the provisions of Rule 144 promulgated under the Securities Act.
Section 3.2. Sophisticated Investor. The Investor is a sophisticated
investor (as described in Rule 506(b)(2)(ii) of Regulation D promulgated under
the Securities Act ("Regulation D")) and an accredited investor (as defined in
Rule 501 of Regulation D), and the Investor has such experience in business and
financial matters that it is capable of evaluating the merits and risks of an
investment in such Common Stock.
The Investor acknowledges that an investment in the Common Stock is speculative
and involves a high degree of risk.
Section 3.3. Authority. The Investor has full power and authority to
enter into and to perform this Agreement in accordance with its terms. This
Agreement has been duly authorized and validly executed and delivered by the
Investor and is a valid and binding agreement of the Investor enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency or
similar laws relating to, or affecting generally the enforcement of creditors'
rights and remedies, and subject also to other equitable principles of general
application.
Section 3.4. No Brokers. The Investor has taken no action which would
give rise to any claim by any person for brokerage commission, finder fees, or
similar payments relating to this Agreement or the transactions contemplated
hereby.
Section 3.5. Not an Affiliate. The Investor is not an officer, director
or "affiliate" (as that term is defined in Rule 405 of the Securities Act) of
the Company.
Section 3.6. Organization and Standing. The Investor is duly organized,
validly existing, and in good standing under the laws of the place of its
organization set forth at the beginning of this Agreement. The Investor, if a
corporation, partnership, trust or other entity, has not been organized,
reorganized or recapitalized specifically for the purpose of investing in the
Company.
Section 3.7. Absence of Conflicts. The execution and delivery of this
Investment and any other documents or instruments executed in connection
herewith, and the consummation of the transactions contemplated hereby and
thereby, and compliance with the requirements thereof, will not violate the
Investor's organizational documents or any law, rule, regulation, order, writ,
judgment, injunction, decree or award applicable to the Investor, or the
provision of any indenture, instrument or agreement to which the Investor is a
party or is subject, or by which the Investor or any of its assets is bound, or
conflict with or constitute a material default thereunder, or result in the
creation or imposition of any lien pursuant to the terms of any such indenture,
instrument or agreement, or constitute a breach of any fiduciary duty owed by
the Investor to any third party, or require the approval of any third party
pursuant to any material contract, agreement, instrument, relationship or legal
obligation to which the Investor is subject or to which any of its assets,
operations or management may be subject.
Section 3.8. Disclosure, Access to Information. The Investor has
received all documents, records, books and other information pertaining to
Investor's Common Stock investment in the Company that have been requested by
the Investor. The Investor further acknowledges that it understands that the
Company is subject to the periodic reporting requirements of the Exchange Act,
and the Investor has reviewed or received copies of any such reports that have
been requested by it. The Investor has carefully reviewed the representations
concerning the Company contained in this Agreement and has made inquiry
concerning the Company, its business and its personnel; the officers of the
Company have made available to the Investor any and all written information
which it has requested and have answered all inquiries made by the Investor; and
the Investor has sufficient knowledge and experience in investing in companies
similar to the Company so as to be able to evaluate the risks and merits of its
investment in the Company and is able financially to bear the risks thereof.
Section 3.9. Manner of Sale. At no time was the Investor presented with
or solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising with
respect to Investor's Common Stock investment.
Section 3.10. Reliance on Company. The Investor acknowledges that it
has had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with its own legal counsel and tax advisors.
Except for any statements or representations of the Company made in this
Agreement and the SEC Documents (as defined below), the Investor is not relying
on any other statements or representations of the Company or any of its
representatives or agents with respect to such investment.
Section 3.11. Xxxx-Xxxxx-Xxxxxx. (A) The Person (as that term is
defined in 16 C.F.R. ss.801.1(a)(I)) of which the Investor is a part does not
have total assets or annual net sales of $100,000,000 or more, as measured under
the applicable rules and regulations interpreting the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, ("HSR"), and/or (B) for purposes
of ss.802.9 of HSR, the Investor's acquisition of Common Stock will be made
solely for the purposes of investment and, as a result of such acquisition and
any such conversion or exercise, the Investor will hold ten percent or less of
the voting securities of the Company outstanding on the date hereof, and/or (C)
as a result of such acquisition and any such conversion or exercise, the
Investor will not hold assets or voting securities of the Company valued at more
than $1,500,000, and/or (D) the Investor is an Institutional Investor for
purposes of ss.802.64 of HSR, such voting securities of the Company will be
acquired directly by the Investor in the ordinary course of its business and
solely for the purpose of investment (for purposes of such ss.802.64) and, as a
result of any such acquisition the Investor will hold fifteen percent or less of
the voting securities of the Company outstanding on the date hereof or voting
securities of the issuer valued at $25,000,000 or less.
Section 3.12. Authorization, Enforcement. (i) The Investor has the
requisite power and authority to enter into and perform this Agreement all in
accordance with the terms hereof, (ii) the execution and delivery of this
Agreement and the consummation by the Investor of the transactions contemplated
hereby to be performed and observed by the Investor have been duly authorized by
the Investor, (iii) this Agreement has been duly executed and delivered by the
Investor, and (iv) this Agreement constitutes the valid and binding obligation
of the Investor enforceable against the Investor in accordance with its terms,
except where such enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application or the limitations on indemnification and contribution that may be
imposed by Federal securities laws.
ARTICLE IV
Representations and Warranties of the Company
The Company represents and warrants to the Investor that:
Section 4.1. Company Status. The Company has registered its Common
Stock pursuant to Section 12(b) or 12(g) of the Exchange Act, is in compliance
in all material respects with all reporting requirements of the Exchange Act,
and the Company has maintained all requirements for the continued listing of its
Common Stock, and such Common Stock is currently listed on the Principal Market.
As of the date hereof the Company's "Principal Market" is the Nasdaq National
Market System.
Section 4.2. Current Public Information. The Company has furnished the
Investor with true and correct copies of the Company's latest proxy statement
and Annual Report on Form 10-K and all reports and other documents filed with
the SEC by the Company since July 31, 1996, pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act (collectively, the "SEC Documents")
Section 4.3. General Solicitation in Regard to this Transaction.
Neither the Company nor any of its affiliates nor any distributor or any
person acting on its or their behalf has conducted any "directed selling
efforts" (as that term is defined in Rule 902(b) of Regulation S under the
Securities Act) with respect to the Common Stock which may be acquired
hereunder, nor has the Company conducted any general solicitation (as that term
is used in Rule 502(c) of Regulation D) with respect to any of such Common
Stock, nor have they made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would require registration
of such Common Stock under the Securities Act.
Section 4.4. Capitalization and Valid Issuance of Stock. As of the date
hereof, the Company has an authorized capitalization consisting of 50,000,000
shares of Common Stock, par value $.01, and 300,000 shares of Series B Junior
Preferred Stock, par value $01. As of the date hereof, the Company has issued
and outstanding 30,577,383 shares of Common Stock and no shares of Preferred
Stock. All options and warrants to acquire shares of the Company's Common Stock,
which were outstanding as of December 31, 1996 or which the Company was
obligated to issue as of December 31, 1996, are described as required in the SEC
Documents. As of the date hereof, the Company has outstanding stock options and
warrants to acquire a total of 3,339,016 and 92,000 shares, respectively, of the
Company's Common Stock, which outstanding options and warrants, to the extent
issued or granted prior to July 31, 1996, are described as required in the SEC
Documents and, to the extent granted since July 31, 1996, are upon terms which
are not materially different from the terms of those options and warrants as
have been issued or granted on or before July 31, 1996. Except as described in
the SEC Documents, the Company has not issued or granted and there are not now
outstanding, nor has the Company undertaken or become obligated to issue or
grant, any convertible securities or, apart from such stock options and warrants
outstanding on the date hereof, any options, warrants or other rights to acquire
Common Stock. All of the issued shares of Common Stock of the Company have been
duly and validly authorized and issued and are fully paid and non-assessable;
the Common Stock issuable pursuant to this Agreement, when issued, sold and
delivered against payment therefor in accordance with the terms of this
Agreement, will be duly and validly issued, fully paid and nonassessable; and
the holders of outstanding Common Stock of the Company are not and shall not be
entitled to preemptive or other rights afforded by the Company to subscribe for
the capital stock or other securities of the Company as a result of the sale of
the Common Stock to the Investor hereunder.
Section 4.5. Organization and Qualification. The Company is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Minnesota and has the requisite corporate power to own
its properties and to carry on its business as now being conducted. The Company
does not have any subsidiaries, except for those listed in the SEC Documents.
The Company and each such subsidiary, if any, is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, other than those in which the failure so to qualify
would not have a Material Adverse Effect. "Material Adverse Effect" means any
effect on the business, operations, properties, prospects, or financial
condition of the entity with respect to which such term is used and which is
material and adverse to such entity and other entities controlling or controlled
by such entity, taken as a whole, and/or any condition or situation which would
prohibit or otherwise interfere with the ability of the entity with respect to
which said term is used to enter into and perform its obligations under this
Agreement, including the Registration Rights Exhibit.
Section 4.6. Authorization, Enforcement. (i) The Company has the
requisite corporate power and authority to enter into and perform this Agreement
and to issue the Common Stock pursuant to this Agreement, all in accordance with
the terms hereof, (ii) the execution and delivery of this Agreement and the
issuance of such Common Stock by the Company and the consummation by the Company
of the transactions contemplated hereby to be performed and observed by the
Company have been duly authorized by all necessary corporate action, and no
further consent or authorization of the Company or its Board of Directors or
stockholders is required, (iii) this Agreement has been duly executed and
delivered by the Company, and (iv) this Agreement constitutes the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable principles
of general application or the limitations on indemnification and contribution
that may be imposed by Federal securities laws.
Section 4.7. Corporate Documents. The Company has furnished or made
available to the Investor true and correct copies of the Company's Articles of
Incorporation, as amended and in effect on the date hereof (the "Articles"), and
the Company's By-Laws, as amended and in effect on the date hereof (the
"By-Laws").
Section 4.8. No Conflicts. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby, including without
limitation the issuance of the Common Stock, do not and will not (i) result in a
violation of the Company's Articles or By-Laws or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any material agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party, or (iii)
result in a violation of any federal, state, local or foreign law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or any of its subsidiaries or by
which any property or asset of the Company or any of its subsidiaries is bound
or affected (except in the case of any of clause (i), (ii) or (iii) for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect). The business of the Company is not being conducted in violation
of any law, ordinance or regulation of any governmental entity, except for
possible violations which either singly or in the aggregate do not and will not
have a Material Adverse Effect. The Company is not required under federal,
state, local or foreign law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement or issue and/or sell such Common Stock in
accordance with the terms hereof (other than any SEC, NASD or state securities
filings which may be required or permitted to be made by the Company subsequent
to this date hereof, and any registration statement which may be filed incident
to this Agreement), provided that, for purposes of the representation made in
this sentence, the Company is assuming and relying upon the accuracy of the
relevant representations and agreements of the Investors herein. For purposes of
the Company's representations and warranties as to foreign law, rule or
regulation made in clause (iii) above and in the next preceding sentence of this
Section 4.8, such representations and warranties are made only to the best of
the Company's knowledge insofar as the execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby are or may be affected by the
status of the Investor under or pursuant to any such foreign law, rule or
regulation.
Section 4.9. SEC Documents. The Company has delivered or made available
to the Investor true and complete copies of the SEC Documents (including,
without limitation, proxy information and solicitation materials). The Company
has not provided to the Investor any information which, according to applicable
law, rule or regulation, should have been disclosed publicly prior to the date
hereof by the Company but
which has not been so disclosed. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder, and none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes thereto
or (ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements or to the extent
they are subject to normal year-end audit adjustments) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
Section 4.10. No Material Adverse Change. Since July 31, 1996, no event
which had or is likely to have a Material Adverse Effect on the Company has
occurred or exists that has not been publicly disclosed in the Company's SEC
Documents or otherwise.
Section 4.11. No Undisclosed Liabilities. The Company and its
subsidiaries have no liabilities or obligations which are material, individually
or in the aggregate, and which are not disclosed in the SEC Documents, other
than those incurred in the ordinary course of the Company's or its subsidiaries'
respective businesses since July 31, 1996, and which, individually or in the
aggregate, have had or are likely to have a Material Adverse Effect on the
Company and upon any of its subsidiaries.
Section 4.12. No Undisclosed Events or Circumstances. No event or
circumstance has occurred or exists with respect to the Company or its
subsidiaries or their respective businesses, properties, prospects, operations
or financial condition, which, under applicable law, rule or regulation,
requires public disclosure or announcement prior to the date hereof by the
Company but which has not been so publicly announced or disclosed.
Section 4.13. No Integrated Offering. Prior to the date hereof, neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, other than pursuant to this Agreement,
under circumstances that would require registration under the Securities Act of
the Common Stock issuable hereunder.
Section 4.14. No Brokers. The Company has taken no action which would
give rise to any claim by any person for brokerage commissions, finder's fees or
similar payments by the Investor relating to this Agreement or the transactions
contemplated hereby and thereby.
Section 4.15. Litigation and Other Proceedings. Except as may be set
forth in the SEC Documents, there are no lawsuits or proceedings pending or to
the best knowledge of the Company threatened, against the Company, nor has the
Company received any written or oral notice of any such action, suit, proceeding
or investigation, which, if decided adversely, is reasonably expected to have a
Material Adverse Effect on the Company or which might materially and adversely
affect this Agreement or the transactions contemplated by this Agreement. Except
as set forth in the SEC Documents, no judgment, order, writ, injunction or
decree or award has been issued by or, so far as is known by the Company,
requested of any court, arbitrator or governmental agency which is reasonably
expected to result in a Material Adverse Effect on the Company or which might
materially and adversely affect the transactions contemplated by this Agreement.
ARTICLE V
Covenants of The Company
Section 5.1. Registration Rights. The Registration Rights Exhibit is
hereby incorporated herein by reference and is hereby made an integral part
hereof as though fully set forth herein.
Section 5.2. Reservation of Common Stock. As of the date hereof, the
Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, shares of Common Stock for
the purpose of enabling the Company to satisfy any obligation to issue shares of
its Common Stock hereunder; provided, however, that the number of shares of
Common Stock initially so reserved, as of the beginning of each such fiscal
quarter, on the date hereof shall not be less than 6,000,000 shares and provided
further that in no event shall the number of shares so reserved be less than the
number which might
thereafter be issued at the Market Stock Price of the Common Stock on the
Principal Market as of the last trading day of the immediately preceding fiscal
quarter. The number of shares so reserved from time to time, as theretofore
increased or reduced as hereinafter provided, may be reduced by the number of
shares of Common Stock actually delivered hereunder and the number of shares so
reserved shall be increased to reflect stock splits and stock dividends and
distributions and like transactions with respect to the Common Stock. In the
event that, notwithstanding the foregoing, the Company determines that it does
not have a sufficient number of authorized shares of Common Stock to reserve and
keep available for issuance as described in this Section 5.2, the Company shall
use its best efforts to increase the number of authorized shares of Common Stock
by seeking stockholder approval for the authorization of such additional shares.
Section 5.3. Listing of Shares. The Company hereby agrees, promptly
following the date hereof, to take such action required, if any, or that may be
required to cause all of the Common Stock which may be or become issuable
hereunder to be listed on the Principal Market as promptly as possible but no
later than sixty (60) days following the date hereof. The Company further
agrees, if the Company applies to have the Common Stock traded on any other
Principal Market, it will include in such application all of the Common Stock so
issuable and will take such other action as is necessary or desirable to cause
the Common Stock to be listed on such other Principal Market as promptly as
possible.
Section 5.4. Exchange Act Registration. The Company will use its best
efforts to cause its Common Stock to continue to be registered under Section
12(b) or 12(g) of the Exchange Act, will comply in all material respects with
its reporting and filing obligations under said Act, and will not take any
action or file any document (whether or not permitted by said Act or the rules
thereunder) to terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under said Act. The Company will take all
reasonable action necessary to continue the listing and trading of its Common
Stock on the Principal Market and will comply in all material respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the NASD and the Principal Market.
Section 5.5. A. Legends. Except as hereinafter provided, certificates
evidencing any Common Stock issued hereunder will bear the following legend (the
"Legend").
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR
SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
UNLESS AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS OBTAINED TO
THE EFFECT THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED.
Prior to the Closing, the Company will issue to the transfer agent for
its Common Stock (and to any substitute or replacement transfer agent for its
Common Stock coterminous with the Company's appointment of any such substitute
or replacement transfer agent) instructions in substantially the form and
substance of the Transfer Agent Irrevocable Instruction Exhibit which is annexed
hereto and hereby made a part hereof. Such instructions shall be irrevocable by
the Company from and after the date hereof or from and after the issuance
thereof to any such substitute or replacement transfer agent, as the case may
be, except as otherwise expressly provided in the Registration Rights Exhibit.
Notwithstanding the foregoing, such Irrevocable Instruction may be revoked if
required by a change in law, as determined mutually by counsel to the Company
and counsel to the Investor or the successors and assigns of the Investor. It is
the intent and purpose of such instructions, as provided therein, to require the
transfer agent for the Common Stock from time to time to issue certificates
evidencing Common Stock free of the Legend and/or stock transfer restrictions
during the following periods and under the following circumstances and without
consultation by the transfer agent with the Company or its counsel and without
the need for any further advice or instruction to the transfer agent by or from
the Company or its counsel:
(a) For so long as the Registration Statement remains effective, other
than during any period of time (a "Black-Out Period") during which the
Registration Statement is not effective, for any reason or no reason, or during
which the Company has suspended the use of the Registration Statement pursuant
to Section 8 of the Registration Rights Exhibit,
(i) incident to the issuance of Common Stock hereunder by the
Company; and
(ii) upon any surrender of one or more certificates evidencing
Common Stock and which bear the Legend;
provided that in connection with such event, a notice is provided to the
transfer agent representing that (i) the holder of or the person or entity
acquiring such shares of Common Stock has sold or intends promptly to sell such
shares pursuant to and in accordance with the Registration Statement, including
the prospectus delivery requirements applicable thereto, and that (ii) to the
holder's knowledge, which has been confirmed in writing by the Company, the
Registration Statement was or will be effective on the date of the sale and the
sale did not occur or will not occur during a Black-Out Period, and requesting
that certificates for the shares sold or to be sold be issued free of the Legend
to the transferee of the holder or to the holder, as the case may be; and
provided further that if, in the event of any such representation in accordance
with Clause (i) of the preceding proviso, such certificate evidencing the Common
Stock so sold or to be sold is not delivered incident to or for purposes of the
completion of such sale within ten (10) trading days after the receipt of such
certificate by the Holder or by the Holder's designee, the Holder will return
such certificate to the transfer agent for the purpose of enabling the transfer
agent to add the Legend to such Certificate and then return the legended
certificate to the Holder.
(b) At any time from and after the Closing Date, upon any surrender of
one or more certificates evidencing Common Stock and which bear the Legend, to
the extent accompanied by a notice requesting the issuance of new certificates
free of the Legend to replace those surrendered and containing or also
accompanied by an opinion of counsel satisfactory to the Company that (i) the
then holder thereof is permitted to dispose thereof pursuant to Rule 144(k)
under the Securities Act or (ii) such holder intends to effect the sale or other
disposition of such stock, whether or not pursuant to the Registration
Statement, to a purchaser or purchasers who will not be subject to the
registration requirements of the Act, or (iii) such holder or the disposition of
such Common Stock is not then subject to such requirements.
B. No Other Legend or Stock Transfer Restrictions. No other restrictive
legends have been or shall be placed on the share certificates representing such
Common Stock and no instructions or "stop transfers," so called, "stock transfer
restrictions," so called, or other restrictions have been or shall be given to
the Company's transfer agent with respect thereto, other than as expressly set
forth in Section 5.5 A. hereof.
C. Investor's Compliance. Nothing in this Section 5.5 shall affect in
any way each holder's obligations under and agreement to comply with all
applicable securities laws upon resale of such Common Stock.
Section 5.6. Corporate Existence. The Company will take all steps
reasonably necessary to preserve and continue the corporate existence of the
Company.
Section 5.7. Additional SEC Documents. The Company will furnish to the
Investors, promptly after the originals thereof are submitted to the SEC for
filing, copies of all SEC Documents so furnished or submitted to the SEC.
ARTICLE VI
Preliminary Put Notice
In order to provide the Investor's designated representatives adequate
opportunity to conduct appropriate due diligence in connection with each Put
Notice, the Company shall deliver to the Investor, at least twelve (12) calendar
days prior to the delivery of each Put Notice, a Preliminary Put Notice, which
Notice shall state that the Company is considering delivery of a Put Notice to
the Investor twelve (12) or more calendar days following delivery of the
Preliminary Put Notice. In no event shall delivery of a Preliminary Put Notice
to the Investor obligate the Company to deliver any Put Notice to the Investor,
provided, however, that if the Company fails on more than two occasions in any
twelve month period to deliver a Put Notice within thirty days of delivery of a
Preliminary Put Notice, then the Company shall pay the reasonable due diligence
costs of the Investor with respect to each subsequent Preliminary Put Notice
delivered during such twelve month period, not to exceed $15,000 in each such
case.
ARTICLE VII
Conditions
Section 7.1. Conditions Precedent to the Obligation of the Company to
Sell Shares. The obligation hereunder of the Company to issue and/or sell the
Shares to the Investor is further subject to the satisfaction, at or before each
Closing, of each of the following conditions set forth below. These conditions
are for the Company's sole benefit and may be waived by the Company at any time
in its sole discretion.
(a) Accuracy of the Investor Representations and Warranties. The
representations and warranties of the Investor shall be true and correct in all
material respects as of the date when made and as of each Closing Date as though
made at that time (except for representations and warranties that speak as of a
particular date or refer to a particular point in time ).
(b) Performance by the Investor. The Investor shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Investor at or prior to such date.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
Section 7.2. Conditions Precedent to the Obligation of the Investor to
Purchase any Shares. The obligation of the Investor hereunder to acquire and pay
for Shares is subject to the satisfaction, at or before each Closing, of each of
the following conditions set forth below. These conditions are for the
Investor's sole benefit and may be waived by the Investor at any time in its
sole discretion.
(a) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company shall be true and correct in all
material respects as of the date when made and as of each Closing Date, as
though made at that time (except for representations and warranties that speak
as of a particular date or refer to a particular point in time).
(b) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to such Closing.
(c) Principal Market. Trading in the Company's Common Stock shall not
have been suspended by the SEC or the Principal Market during the twenty trading
days prior to the delivery of a Put Notice, (except for any suspension of
trading of limited duration agreed to between the Company and the Principal
Market, solely to permit dissemination of material information regarding the
Company), and
trading in securities generally as reported by the Principal Market, shall not
have been suspended or limited or minimum prices shall not have been established
on securities whose trades are reported by the Principal Market.
(d) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(e) Opinion of Counsel, Etc. At each Closing the Investor shall have
received an opinion of counsel to the Company, satisfactory to the Investor in
form and substance, dated the effective date of such Closing, and such other
certificates, opinions of other counsel and documents as the Investor or its
counsel shall reasonably require incident to such Closing; provided, however,
that if the Investor shall have received such an opinion incident to a Closing
which occurred no more than thirty days earlier, a new opinion shall not be
required of such counsel, other than updates of the earlier opinion provided
pursuant to counsel's undertaking therein to provide the same, and for all
purposes of the current Closing, the Investor may rely upon such earlier opinion
as the same may have been modified by such updates.
(f) Effectiveness of Registration Statement. The Registration Statement
shall be effective at the time of each Closing and no stop order suspending the
effectiveness of the Registration Statement shall have been instituted or shall
be pending.
(g) Accuracy of Registration Statement. At the time of each Closing,
the Registration Statement (including information or documents incorporated by
reference therein) and any amendments or supplements thereto shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(h) Auditor's Letter. Investor shall have received a letter of the
type, in the form and with the substance of the letter described in Section
2(b)(iii) of the Registration Rights Exhibit; provided, however, that if the
Investor shall have received such a letter incident to a Closing which occurred
no more than thirty days earlier, a new letter shall not be required of such
auditors, other than updates of the earlier letter provided pursuant to such
auditor's undertaking therein to provide the same, and
for all purposes of the current Closing, the Investor may rely upon such earlier
letter as the same may have been modified by such updates.
(i) Officer's Certificate. At each Closing the Investor shall have
received a certificate(s) from the CEO and/or CFO of the Company relating to the
representations and warranties of the Company herein which shall be satisfactory
to the Investor in form and substance.
(j) No Bankruptcy Filing. There shall have been no filing of a petition
in bankruptcy, either voluntarily or involuntarily with respect to the Company
and there shall not have been commenced any proceedings under any bankruptcy or
insolvency laws, or any laws relating to the relief of debtors, readjustment of
indebtedness or reorganization of debtors, and there shall have been no calling
of a meeting of creditors of the Company or appointment of a committee of
creditors or liquidating agents or offering of a composition or extension to
creditors by, for, with or without the consent or acquiescence of the Company.
(k) No Adverse Opinion of Counsel. During the twelve (12) calendar day
period following a Preliminary Put Notice, the Investor's counsel shall not have
delivered to the Company a copy of an opinion addressed to the Investor stating
Investor's counsel's belief that there is a reasonable likelihood that the
Registration Statement contains an untrue statement of material fact or omits a
material fact required to make the statements contained therein, in light of the
circumstances in which they were made, not misleading. If any such opinion is
delivered, copies of the same shall be delivered to the Company's counsel and
Investor's counsel shall communicate the basis for such opinion to the Company's
counsel promptly after rendering such opinion to Investor. The Company shall
have no right or claim against Investor's counsel with respect to any such
opinion. In the event that the Company's counsel and the Investor's Counsel are
unable, within four Business Days of such delivery of such opinion of Investor's
counsel, to agree upon the appropriate resolution of such belief expressed by
Investor's counsel in order that this condition (k) may be satisfied, either
counsel may refer the matter to the Neutral Lawyer in accordance with Section
2(d) of the Registration Rights Exhibit. Pending resolution of such belief in
accordance with such Section 2(d), the Company shall not deliver any new Put
Notices to the Investor and, at the Investor's election, purchases of Common
Stock pursuant to Put Notices outstanding and under which the Required Dollar
Amount of Common Stock shall not have been fully purchased at the time any such
opinion of Investor's counsel shall have been delivered, shall be suspended and
the Purchase Period applicable thereto extended by three days for each day
from delivery of such opinion to the date upon which such resolution has been
obtained and implemented.
ARTICLE VIII
Termination
Section 8.1. Optional Termination. This Agreement may be terminated at
any time by the mutual consent of the Company and the Investor, or at any time
upon written notice delivered to the Investor by the Company. The
representations, warranties and covenants contained in or incorporated into this
Agreement, insofar as applicable to the transactions consummated hereunder prior
to such termination, shall survive its termination for the period of any
applicable statute of limitations.
Section 8.2. Automatic Termination. This Agreement shall automatically
terminate without any further action of either party hereto when (a) the
Investor has invested an aggregate of $25,000,000 in the Common Stock of the
Company pursuant to this Agreement, apart from additional amounts which may be
invested pursuant to Section 2.2(a)(B); provided that the representations,
warranties and covenants contained in this Agreement insofar as applicable to
the transactions consummated hereunder prior to such termination, shall survive
the termination of this Agreement for the period of any applicable statute of
limitations or (b) the Open Period has ended.
All representations, warranties and covenants shall survive each
Closing and for six months after termination of this Agreement.
Section 8.3. Change in Control. From and after the date hereof upon any
Change of Control (as defined below), the Company shall no longer have the right
to deliver any Put Notice to the Investor, unless otherwise agreed by the
Investor. A "Change of Control" shall mean any transaction or series of
transactions which results in any person or affiliated group of persons becoming
the beneficial owner of 50% or more of the voting stock of the Company or
constituting 50% or more of the Company's board of directors.
ARTICLE IX
Miscellaneous
Section 9.1. Fees and Expenses. (a) Upon execution of this Agreement,
the Company shall issue to the Investor 100,000 shares of
Common Stock of the Company, registered in the name of the Investor. The
Certificate representing such shares shall bear no restrictive legend except the
legend referenced in Section 5.5A and the Company shall not give its transfer
agent any "stop transfer" or "stock transfer restrictions" with respect to such
shares. The Company shall, promptly after the date hereof, file and use its best
efforts to cause to become effective, as promptly as possible and in any event
by the sixtieth (60th) calendar day after such filing date, at no cost to the
Investor a registration statement on Form S-3 under the Securities Act or, if
Form S-3 is not then available, another appropriate form covering the resale of
such shares of Common Stock by the Investor or its designee. The terms and
conditions of such registration, except as expressly provided in this Section,
shall be the same as those set forth in the Registration Rights Exhibit.
(b) As a further inducement to the Investor to enter into this
Agreement, the Company agrees to reimburse the Investor or its designees or
clients, as applicable, for expenses relating to the negotiation and execution
of this Agreement and any closings hereunder up to $50,000 in the aggregate.
Such amounts to be paid promptly upon submission of an invoice by the Investor
to the Company.
(c) Except as otherwise set forth in this Section 9.1 and Article VI,
each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement. Any attorneys' fees and expenses incurred by either the Company
or by any Holder in connection with the preparation, negotiation, execution and
delivery of any amendments to this Agreement or relating to the enforcement of
the rights of any party, after the occurrence of any breach of the terms of this
Agreement by another party or any default by another party in respect of the
transactions contemplated hereunder, shall be paid on demand by the party which
breached the Agreement and/or defaulted, as the case may be. The Company shall
pay all stamp and other taxes and duties levied in connection with the issuance
of any Shares issued pursuant hereto.
Section 9.2. Specific Enforcement; Consent to Jurisdiction.
(a) The Company and the Investor acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which either of them may be entitled by law or equity.
(b) Each of the Company and the Investor (i) hereby irrevocably submits
to the exclusive jurisdiction of the United States District Court and other
courts of the United States sitting in New York City for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement and, if
such court or courts shall lack or deny jurisdiction thereof, of the courts of
the State of New York sitting in New York City and having jurisdiction thereof
and (ii) hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. Each of
the Company and the Investor consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof Nothing in
this paragraph shall affect or limit any right to serve process in any other
manner permitted by law.
Section 9.3. Entire Agreement; Amendments. Other than with respect to
matters described in the Registration Rights Exhibit and documents and
agreements relating thereto and hereto, this Agreement contains the entire
understanding of the parties with respect to the transactions contemplated
hereby and, except as specifically set forth herein, neither the Company nor the
Investor makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or amended
other than by a written instrument signed by the party against whom enforcement
of any such amendment or waiver is sought.
Section 9.4. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective upon
hand delivery or delivery by facsimile at the address or number designated below
(if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received). The addresses for such communications shall be:
to the Company: Angeion Corporation
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxxxxxxx
Fax: 000-000-0000
with copies to: Xxxxxxxxxxx Xxxxx & Xxxxxxxx
Plaza VII
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
to the Investor: Promethean Investment Group, L.L.C.
00 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. X'Xxxxx, Xx., Managing Member
Fax: 000-000-0000
with copies to:
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
Any of the foregoing may from time to time change its address for notices under
this Section 9.4 by giving written notice of such changed address to the other
party hereto.
Section 9.5. Waivers. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter. The parties hereto waive any and
all rights to a jury trial in connection with any action or proceeding arising
under this Agreement or transactions contemplated hereby or thereby.
Section 9.6. Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 9.7. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors
and assigns. The parties hereto may amend this Agreement without notice to or
the consent of any third party. Neither the Company nor the Investor shall
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other (which consent may be withheld for any reason in
the sole discretion of the party from whom consent is sought); provided,
however, that the Company may assign its rights and obligations hereunder to any
acquirer of substantially all of the assets or a controlling equity interest of
the Company provided that such assignment shall be subject to (i) the Change of
Control provisions contained in Section 8.3 above, (ii) Investor's prior written
consent which consent may not be unreasonably withheld; and provided further
that the Investor may assign its rights and obligations hereunder to any person
or entity either controlled by the Investor or whose portfolio investments are
made through accounts over which the Investor has discretionary authority
without the Company's consent, and other than those described in the immediately
preceding clause, with the Company's prior written consent, which consent may
not be unreasonably withheld. The assignment by a party of this Agreement or any
rights hereunder shall not affect the obligations of such party under this
Agreement.
Section 9.8. No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
Section 9.9. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without regard to the principles of conflict of laws.
Section 9.10. Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event any signature is delivered by facsimile
transmission, the party using such means of delivery shall cause four additional
executed signature pages to be physically delivered to the other party within
five days of the execution and delivery hereof.
Section 9.11. Publicity. The Company and the Investor shall consult and
cooperate with each other in issuing any press releases or otherwise making
public statements with respect to the transactions contemplated hereby, provided
the foregoing shall not interfere with the
legal obligations of either party with respect to public disclosure; and
provided further, that neither the Company nor the Investor shall be required to
consult with the other if any such press release or public statement does not
specifically name the other.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date hereof.
ANGEION CORPORATION
By:______________________________________
Name:
Its
PROMETHEAN INVESTMENT
GROUP L.L.C.
By:______________________________________
Xxxxx X. X'Xxxxx, Xx.
Managing Member
