Exhibit 10.2
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT (this "Amendment") is made
and entered as of April 7, 2003, by and between DIAMETRICS MEDICAL, INC., a
Minnesota corporation (the "Company"), BCC ACQUISITION II LLC, a Delaware
limited liability company ("BCC"), XXXXXX X. XXXX REVOCABLE TRUST ("Xxxx
Trust"), XXXXXX X. AND XXXXXX X. XXXX MEMORIAL FOUNDATION ("Xxxx Foundation"),
and AEOW 96, LLC ("AEOW"; BCC, Xxxx Trust, Xxxx Foundation and AEOW may be
referred to herein collectively as the "Purchasers" and individually and without
distinction as a "Purchaser").
RECITALS
1. The Company and the Purchasers entered into a Note Purchase Agreement
dated as of August 4, 1998 (the "Note Purchase Agreement"); and
2. The Company and the Purchasers have agreed to amend certain provisions
of the Note Purchase Agreement, subject to terms and conditions set forth in
this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby covenant
and agree to be bound as follows:
Section 1. Capitalized Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Note
Purchase Agreement, unless the context shall otherwise require.
Section 2. Amendments. The Note Purchase Agreement is hereby amended as
follows:
2.1 Definitions. Article I of the Note Purchase Agreement is amended
by adding thereto the follow definitions in alphabetical order:
"Xxxx Trust" means the Xxxxxx X. Xxxx Revocable Trust.
"First Amendment" means the First Amendment to Note Purchase
Agreement dated as of April 7, 2003, made by and between the Company
and the Purchasers.
"First Amendment Closing Date" means the date on which the First
Amendment becomes effective in accordance with its terms.
"First Amendment Warrants" means the warrants issued pursuant to
the First Amendment, substantially in the form of Exhibit 3A hereto.
"Net Proceeds" means the aggregate cash consideration received by
the Company in connection with (i) the sale or issuance, whether in a
public offering, a private placement or otherwise, of any equity
securities or other securities linked to equity securities (including,
without limitation, any securities convertible into or exchangeable
for, or any option, warrant, agreement or other right to purchase,
securities), but excluding any proceeds from an equity investment made
by any director, officer or employee of the Company pursuant to any
stock option plan or any stock rights (e.g., warrants) issued prior to
the First Amendment Closing Date, and (ii) the sale, license, lease or
other disposition of any material asset, property or interest of the
Company, in each case less the expenses (including reasonable
out-of-pocket expenses) incurred by the Company in connection with
such transaction (including without limitation underwriters'
commissions and fees) and, with respect to clause (ii) above, less the
amount of any federal and state taxes incurred by the Company in
connection with such transaction.
"Ownership Limit" shall mean, with respect to any Purchaser, the
greatest of (i) 20% or more of the Company's outstanding voting power,
(ii) the percentage ownership and/or voting position in excess of 20%
of the Company's outstanding voting power held by a shareholder, or an
identified group of shareholders, unaffiliated with such Purchaser,
(iii) the percentage ownership and/or voting position in excess of 20%
of the Company's outstanding voting power held by the Company's
officers and directors who are unaffiliated with such Purchaser, and
(iv) such percentage of the Company's voting power as would be
presumed to constitute a "change of control" for the purposes of
Nasdaq shareholder approval rules.
"Restricted Payments" has the meaning specified in Section
6.7(iv).
2.2 Mandatory Prepayment, Article IV of the Note Purchase Agreement is
amended by adding thereto the following Section 4.5:
Section 4.5 Mandatory Payments on Notes; Prepayment. Unless
Purchasers holding in excess of 50.1% of the aggregate principal
amounts of the Notes otherwise agree, the Company shall prepay the
Notes in an amount equal to 50% of any cumulative Net Proceeds in
excess of $10 million. In addition, with the consent of the Purchasers
holding in excess of 50.1% of the aggregate principal amount of the
Notes, at any time from April 7, 2003 through April 7, 2004, the
Company may prepay the Notes in full without prepayment premium or
penalty.
2.3 Conversion Rights. Section 5.1 of the Note Purchase Agreement is
amended in its entirety to read as follows:
Section 5.1 Conversion. Subject to and upon compliance with the
provisions of this Article V and subject to Section 4.4 hereof, the
Holder of any Notes shall have the right, at its option, at any time,
to convert any Note or any portion of the principal amount thereof
which is $1,000 or an integral multiple of $1,000 into fully paid and
nonassessable shares of Common Stock at the conversion price of (a)
$3.51 per share of Common Stock for all Holders other than the Xxxx
Trust, and (b) $8.40 per share of Common Stock for the Xxxx Trust,
subject to adjustment as set forth below, by surrendering the Notes to
be converted, in the manner provided in Section 5.2, provided that no
such right shall be exercised during the period of six consecutive
months from and after the First Amendment Closing Date unless a
Redemption Event occurs during such six month period, and provided
further, that no such right shall be exercised to the extent that such
exercise would cause the Holder to equal or exceed the Ownership
Limit, except in connection with a Redemption Event.
2.4 Conversion Price. Section 5.6 of the Note Purchase Agreement is
amended in its entirety to read as follows:
Section 5.6 Conversion Price. For purposes of this Article V, the
conversion price shall be (a) $3.51 in principal amount per share of
Common Stock for the Notes held by all Purchasers other than the Xxxx
Trust, and (b) $8.40 in principal amount per share of Common Stock for
the Note held by the Xxxx Trust, subject in each case to adjustment as
provided below (as applicable, the "Conversion Price").
2.5 Limitations on Dividends. Section 6.7 of the Note Purchase
Agreement is hereby amended by adding thereto the following clause (iv):
(iv) Declare or pay any dividend (other than dividends payable
solely in common stock of the Company or in capital stock of the
Company of the same class and series as that on which such dividends
are payable) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares
of any class of capital stock of the Company or any warrants or
options to purchase any such stock, whether now or hereafter
outstanding, or prepay any Debt not
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specifically permitted under the terms of this Agreement, or make any
other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Company (such
declarations, payments, setting apart, purchases, redemptions,
defeasances, retirements, acquisitions and distributions being herein
called "Restricted Payments").
2.6 Notice Addresses. Section 13.2 of the Note Purchase Agreement is
amended in its entirety to read as follows:
Section 13.2 Notices. All notices and other communications
pertaining to this Agreement or the Notes shall be in writing, shall
be sent by confirmed facsimile or mailed by first-class registered or
certified airmail, or nationally recognized overnight express courier,
postage prepaid, and shall be deemed to have been duly given when so
sent in the case of facsimile transmission, or when so received in the
case of mail or courier, and addressed as follows:
(i) If to a Purchaser, to the address and fax numbers set
forth below its name on the signature pages hereto:
with a copy to:
Xxxxxx and Xxxxxxx Illinois LLC
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Pucker and Xxxxxx X. Xxxx, Xx.
Phone: (000) 000-0000
Fax: (000) 000-0000
(ii) If to the Company:
Diametrics Medical, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, CEO and President
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx & Whitney LLP
00 Xxxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
or to such other person or address as shall be furnished to the
other party in writing.
2.7 Exhibit 1. Exhibit 1 to the Note Purchase Agreement is hereby
amended to read as set forth on Exhibit 1 attached to this Amendment which
is made a part of the Note Purchase Agreement as Exhibit 1 thereto. All
references in this Amendment and the Note Purchase Agreement to "Notes" or
a "Note" shall refer to the First Amended and Restated Convertible Senior
Secured Fixed Rate Notes in the form of such Exhibit 1.
2.8 Exhibit 3A. The Note Purchase Agreement is hereby amended to by
adding thereto Exhibit 3A in the form attached hereto as Exhibit 3A.
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Section 3. Closing Deliveries. Concurrently with the execution and delivery
of this Amendment, the Company shall deliver the following to the Purchasers:
3.1 A First Amended and Restated Convertible Senior Secured Fixed Rate
Note in favor of each Purchaser, in the amount for each Purchaser as set
forth on Schedule 1 to the Note Purchase Agreement, in the form attached
hereto as Exhibit 1, duly executed by the Company.
3.2 The First Amendment Warrants in the form attached hereto as
Exhibit 3A, in favor of each Purchaser in the number specified on Schedule
1 to this Amendment, duly executed by the Company.
3.3 An opinion of counsel of each of Xxxxxx & Whitney LLP's
Minneapolis office and London office in form and substance satisfactory to
the Purchasers (it being agreed that the Company shall deliver the opinion
from the London office of Xxxxxx & Xxxxxxx LLP within three (3) business
days following the Closing).
3.4 A copy of any consent of any Person required in order to give
effect to the agreements of the Company set forth in the Amendment
Documents (as defined below) or in the Note Purchase Agreement as amended
by this Amendment, or in order to prevent a violation of agreements with
such Person by execution of this Amendment by the Company.
3.5 A copy of any filings made with any Governmental Authority
required to give effect to the agreements of the Company set forth in the
Amendment Documents (as defined below) or in the Note Purchase Agreement as
amended by this Amendment.
3.6 A copy of the resolutions of the Board of Directors of the Company
ratifying, confirming and authorizing the execution, delivery and
performance of this Amendment and all other documents executed by the
Company in connection with this Amendment (collectively, with this
Amendment, the "Amendment Documents"), certified as true and accurate by an
officer of the Company, along with a certification by such officer (i)
certifying as to a true and correct copy of the current Articles of
Incorporation of the Company, (ii) certifying as to a true and correct copy
of the current Bylaws of the Company; and (iii) identifying each officer of
the Company authorized to execute the Amendment Documents and certifying as
to specimens of such officer's signature and such officer's incumbency in
such offices as such officer holds.
3.7 Evidence of the satisfaction by the Company of such other
conditions as reasonably specified by the Purchasers.
Section 4. Representations of the Company. Except as set forth on the
Schedule of Exceptions attached hereto, the Company hereby represents and
warrants to the Purchasers that, as of the date hereof and after giving effect
to this Amendment:
4.1 Organization and Standing. Each of the Company and its Subsidiary
(as hereinafter defined in this Section 4.1) has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its organization, has full corporate power and authority to
own or lease its properties and conduct its business as presently
conducted, and is duly qualified as a foreign corporation and is in good
standing in all jurisdictions in which the character of the property owned
or leased or the nature of the business transacted by it makes
qualification necessary (except where the failure to be so qualified would
not have a material adverse effect on the business, properties, financial
condition or results or operations of the Company or its Subsidiary). Other
than Diametrics Medical, Ltd., formerly known as Biomedical Sensors, Ltd.,
(the "Subsidiary"), the Company has no subsidiaries or equity interest in
any other entity.
4.2 Corporate Power; Authorization. The Company has all requisite
corporate power, and will have taken all requisite corporate action, to
execute and deliver this Amendment, the Notes and the
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First Amendment Warrants, to sell and issue the First Amendment Warrants,
to issue the shares issuable upon exercise of the First Amendment Warrants
(the "First Amendment Warrant Shares") and the Conversion Shares and to
carry out and perform all of its obligations hereunder and thereunder. Each
of this Amendment, the Notes and the First Amendment Warrants constitutes
the legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting the enforcement of creditors' rights generally, (ii) as limited
by equitable principles generally, and (iii) as rights to indemnity or
contributions hereunder may be limited by federal or state securities laws
or principles of public policy. The execution and delivery of this
Amendment, the Notes and the First Amendment Warrants do not, and the
performance of this Amendment, the Notes and the First Amendment Warrants
and the compliance with the provisions hereof and thereof and the issuance,
sale and delivery of the Notes, the First Amendment Warrants, the First
Amendment Warrant Shares and the Conversion Shares by the Company will not,
conflict with, or result in a breach or violation of the terms, conditions
or provisions of, or constitute a default under, or result in the creation
or imposition of any lien pursuant to the terms of, the Articles of
Incorporation or Bylaws of the Company or any statute, law, rule or
regulation applicable to the Company or its Subsidiary, or any state or
federal order, judgment or decree applicable to the Company or its
Subsidiary, or any indenture, mortgage, lease or other agreement or
instrument to which the Company or its Subsidiary or any of the properties
of such person is subject, except such as would not have a material adverse
effect on the business, properties, financial condition or results of
operations of the Company or its Subsidiary.
4.3 Issuance and Delivery of the Conversion Shares and the First
Amendment Warrant Shares; Grant of the First Amendment Warrants. The First
Amendment Warrant Shares and the Conversion Shares when issued and paid for
will be validly issued, fully paid and nonassessable, issued in compliance
with all applicable federal and state securities laws, and will not be
subject to preemptive, co-sale, right of first refusal or any other similar
rights of the shareholders of the Company or any liens or encumbrances. The
Company has not granted any registration rights which are still in effect
with respect to its securities other than the registration rights set forth
herein and the registration rights contained in the Common Stock Purchase
Agreement. Issuance of the Notes, the First Amendment Warrants, the First
Amendment Warrant Shares and the Conversion Shares or any of them does not
and will not constitute a default under or give rise to a right of
termination, cancellation, restriction or acceleration of any right or
obligation of the Company or its Subsidiary or a loss of any benefit to
which the Company or its Subsidiary is entitled under any provision of any
agreement, contract or other instrument binding upon or applicable to the
Company or its Subsidiary or any of the properties, assets, licenses,
franchises, permits or other similar authorizations of either of them.
4.4 SEC Documents; Financial Statements. Each of the Company and its
Subsidiary has filed in a timely manner all documents that such person was
required to file with the SEC under Sections 13, 14(a) and 15(d) of the
Exchange Act since August 4, 1998. As of their respective filing dates (or,
if amended, when amended), all documents filed by the Company or its
Subsidiary with the SEC, whether under the Exchange Act or under the
Securities Act since August 4, 1998 (the "SEC Documents") complied in all
material respects with the requirements of the Exchange Act or the
Securities Act, as the case may be. The Company satisfies the requirements
for the use of Form S-3 under the Securities Act to register the offers and
resales of the First Amendment Warrant Shares and the Conversion Shares
contemplated by the Shelf Registration Statement (as defined in Section 8
below). None of the SEC Documents as of their respective dates contained
any untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of the Company and its
Subsidiary included in the SEC Documents (the "Financial Statements")
comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto. The Financial Statements have been prepared in accordance
with generally accepted accounting principles consistently applied and
fairly present the consolidated financial position of the Company and its
Subsidiary at the dates thereof and the results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal, recurring adjustments and the absence of footnotes).
There is no material liability or commitment of the Company or its
Subsidiary
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which is not reflected in the most recent Financial Statements except
commitments made since the date of such Financial Statements in the
ordinary course of business. There have not been any changes in the assets,
liabilities, financial condition or operations of the Company or its
Subsidiary from those reflected in the most recent Financial Statements,
except changes in the ordinary course of business that have not had and are
not reasonably expected to have a material adverse effect on the business,
properties, financial condition or results of operations of the Company or
its Subsidiary.
4.5 Intellectual Property.
(a) Each of the Company and its Subsidiary has sufficient title
and ownership of all material patents, patent rights, inventions,
trademarks, service marks, copyrights, trade secrets, proprietary
rights, processes and know-how (collectively, "Intellectual Property")
owned or used by it or that are necessary for the conduct of its
business as presently conducted and believes it can obtain, on
commercially reasonable terms, any additional rights necessary for its
business as proposed to be conducted, and the Intellectual Property
does not, and will not, conflict with or constitute an infringement of
the rights of others;
(b) There are no outstanding options, licenses (whether to or
from the Company) or agreements of any kind relating to the
Intellectual Property described in paragraph (a) of this Section 4.5
or granting rights to any other person to manufacture, license,
produce, assemble, market or sell products or services derived or
derivable from the Intellectual Property of the Company or its
Subsidiary, nor is the Company or its Subsidiary bound by or a party
to any options, licenses or agreements of any kind with respect to the
Intellectual Property of any other person or entity;
(c) Neither the Company nor its Subsidiary has received any
communications alleging that such person or any of its employees has
violated or infringed or, by conducting its business as proposed,
would violate or infringe, any of the Intellectual Property of any
other person or entity;
(d) Neither the Company nor its Subsidiary is aware that any of
its employees is obligated under any contract (including licenses,
covenants, or commitments of any nature) or other agreement, or
subject to any judgment, decree, or order of any court or
administrative agency, that would interfere with the use of such
employee's best efforts to promote the interests of the Company or its
Subsidiary with respect to the Intellectual Property of the Company or
its Subsidiary or otherwise or that would conflict with the business
of the Company or its Subsidiary as proposed to be conducted; and
(e) Neither the execution nor delivery of this Amendment, nor the
carrying on of the business of the Company or its Subsidiary by the
employees of such person, nor the conduct of the business of the
Company or its Subsidiary as proposed, will, to the Company's
knowledge, conflict with or result in a breach of the terms,
conditions, or provisions of, or constitute a default under, any
contract, covenant, or instrument under which any of such employees is
now obligated. The Company does not believe it is or will be necessary
to utilize any inventions of any of the employees of the Company or
its Subsidiary (or people such person currently intends to hire) made
prior to their employment by such person.
4.6 Properties. The Company and its Subsidiary has good and valid
title to all of the properties and assets reflected as owned by the Company
or its Subsidiary in the Financial Statements, free and clear of all
material liens, mortgages (statutory or otherwise), security interests,
pledges, claims or encumbrances except those, if any, disclosed in the
Financial Statements. The Company and its Subsidiary holds its leased
properties under valid and binding leases, with such exceptions as are not
materially significant in relation to the business of the Company or its
Subsidiary. The Company and its Subsidiary owns or leases all of such
properties as are necessary to its operations as now conducted.
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4.7 Capitalization. The authorized capital stock of the Company
consists of 45,000,000 shares of Common Stock and 5,000,000 shares of
preferred stock. There are 27,182,732 shares of Common Stock and no shares
of Preferred Stock outstanding as of the date hereof, and, excluding the
exercise of vested options and warrants outstanding at the discretion of
the holder thereof and shares purchased through the Company's existing
employee stock purchase plan, immediately prior to the effectiveness of
this Amendment, 27,182,732 shares of Common Stock and no shares of
Preferred Stock will be outstanding. The certificates evidencing the First
Amendment Warrant Shares and the Conversion Shares will be in due and
proper legal form and will be duly authorized for issuance by the Company.
All of the issued and outstanding securities of the Company have been duly
authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with federal, state and other applicable laws and were
issued without violation of any preemptive, co-sale or other right. Except
as otherwise disclosed in the SEC Documents and in the Financial
Statements, there is no outstanding option, warrant, agreement or other
right calling for the issuance or redemption of, and there is no
commitment, plan or arrangement to issue or redeem, any securities of the
Company. The Company does not have any binding agreement with respect to
the acquisition or purchase of the securities of or owned by any person or
entity or the acquisition of the business, assets or liabilities of any
person or entity, and the Company does not have any agreement or
understanding with respect to the disposition or sale of its business, or
any of its material assets or property.
4.8 Litigation. There is no pending or, to the Company's knowledge,
threatened, action, suit or other proceeding to which the Company or its
Subsidiary is a party or to which the property or assets of the Company or
its Subsidiary is subject which might result in a material adverse effect
on the business, properties, financial condition or results of operations
of the Company or its Subsidiary.
4.9 No Defaults. Neither the Company nor its Subsidiary is in
violation or default of any provisions of its Articles of Incorporation or
Bylaws, or any organizational documents, or in breach with respect to any
provision of any agreement, judgment, decree, order, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument to
which it is a party or by which it or any of its properties are bound which
violation, default or breach would have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company or its Subsidiary, and there does not exist any state of facts
which constitutes an event of default on the part of the Company or its
Subsidiary as defined in such documents or which, with notice or lapse of
time or both, would constitute such an event of default.
4.10 Material Agreements. Each of the Company and its Subsidiary is a
party to all agreements that are necessary for the conduct of the business
of such person as presently conducted and all such agreements are currently
in effect. Neither the Company nor its Subsidiary is in breach of any
provision of any such agreement where such breach would have a material
adverse effect on the business, properties, financial condition or results
of operations of the Company or its Subsidiary.
4.11 Governmental Consents; Compliance with Law. No consent, approval,
order or authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state, or local governmental
authority on the part of the Company is required in connection with the
consummation of the transactions contemplated by this Amendment except for
(i) the filing of a Shelf Registration Statement and all amendments thereto
with the SEC as contemplated by Section 8.1 of this Amendment, (ii) any
filings required by state securities laws and (iii) if required, the filing
of a notification and report form under the United States Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Each of the
Company and its Subsidiary is conducting business in compliance in all
material respects with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including but not limited
to, all applicable local, state and federal environmental laws and
regulations.
4.12 Insurance. Each of the Company and its Subsidiary maintains
insurance of the types and in the amounts generally deemed adequate for its
business covering all risks customarily insured against, all of which
insurance is in full force and effect.
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4.13 Investment Company. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
4.14 Taxes. Each of the Company and its Subsidiary has filed all
necessary federal, state, local, and foreign income and franchise tax
returns and has paid or accrued all taxes shown as due thereon except for
such taxes as are being contested in good faith, and the Company has no
knowledge of any tax deficiency which has been or might be asserted or
threatened against the Company or its Subsidiary which would have a
material adverse effect on the business, properties, financial condition or
results of operations of the Company or its Subsidiary.
4.15 Listing. The Company's Common Stock is traded on The Nasdaq
SmallCap Market.
4.16 Broker's Fee. The Company represents that there are no brokers or
finders entitled to compensation by the Company or its Subsidiary in
connection with any of the transactions referred to or contemplated hereby,
and shall indemnify the Purchasers for any such fees for which the Company
or its Subsidiary is responsible.
4.17 Disclosure. No representation or warranty of the Company
contained in this Amendment or in the Schedule of Exceptions or in any
bring-down certificate required to be delivered to the Purchasers at the
Closing, contains or will contain any untrue statement of a material fact
or omit to state a material fact required to make the statements herein or
therein not misleading.
4.18 Exemption from Registration. The purchase and sale of the Notes
and the First Amendment Warrants are exempt from the registration
requirements of the Securities Act. No form of general solicitation or
general advertising was used by the Company in connection with the offer
and sale of the Notes or the First Amendment Warrants, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. No securities of the same
class as the Notes or the First Amendment Warrants have been issued or sold
by the Company within the six-month period immediately prior to the date
hereof. The Company agrees that neither it, nor anyone acting on its
behalf, will offer the Notes or the First Amendment Warrants so as to bring
the issuance and sale of any of the Notes or the First Amendment Warrants
within the provisions of Section 5 of the Securities Act nor offer any
similar securities for the issuance or sale to, or solicit any offer to
acquire the same from, or otherwise approach or negotiate with respect
thereto with, anyone if the sale of the Notes and/or the First Amendment
Warrants and any such securities would be integrated as a single offering
for the purposes of the Securities Act, including, without limitation,
Regulation D thereunder.
Section 5. Representations of the Purchasers. Each Purchaser, severally and
not jointly with other Purchasers, hereby represents and warrants to the
Company, as of the date hereof and after giving effect to this Amendment:
5.1 Investment Purposes.
(a) Such Purchaser acknowledges that the Notes and the First
Amendment Warrants are being issued in reliance upon the exception
from the registration requirements of the Securities Act provided by
Section 4(2) thereof and as such the Notes and the First Amendment
Warrants, the First Amendment Warrant Shares and the Conversion Shares
will be "restricted securities" within the meaning of Rule 144.
(b) Such Purchaser is acquiring the Notes and the First Amendment
Warrants pursuant to this Amendment in the ordinary course of its
business and for its own account for investment only and with no
present intention of distributing any of such Notes and First
Amendment Warrants or any arrangement or understanding with any other
persons regarding the
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distribution of the Notes or First Amendment Warrants except in each
case as conforms with all applicable requirements of the Securities
Act, applicable blue sky laws and all rules and regulations
promulgated thereunder.
(c) Such Purchaser 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
securities purchased hereunder except in compliance with the
Securities Act, applicable blue sky laws, and the rules and
regulations promulgated thereunder.
(d) Such Purchaser has, in connection with its decision to
acquire the Notes and the First Amendment Warrants, relied with
respect to the Company and its affairs solely upon the SEC Documents
and the representations and warranties of the Company contained
herein.
(e) Such Purchaser is an "accredited investor" within the meaning
of Rule 501 of Regulation D promulgated under the Securities Act.
(f) Such Purchaser has full right, power, authority and capacity
to enter into this Amendment and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Amendment. Upon the
execution and delivery of this Amendment by such Purchaser, this
Amendment shall constitute a valid and binding obligation of such
Purchaser, enforceable in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors' rights generally, (ii) as limited by equitable principles
generally, including any specific performance, and (iii) as rights to
indemnity or contributions hereunder may be limited by federal or
state securities laws or principles of public policy.
5.2 No Advice. Such Purchaser understands that nothing in this
Amendment or any other materials presented to such Purchaser in connection
with the acquisition of the Notes and the First Amendment Warrants
constitutes legal, tax or investment advice to such Purchaser. Such
Purchaser has consulted such legal, tax and investment advisors as it, in
its sole discretion, has deemed necessary or appropriate in connection with
its purchase of the Notes and the First Amendment Warrants.
5.3 Broker's Fee. Such Purchaser represents that there are no brokers
or finders entitled to compensation by such Purchaser in connection with
any of the transactions referred to herein or contemplated hereby, and
shall indemnify the Company for any such fees for which such Purchaser is
responsible.
Section 6. Affirmation, Further References, Confirmation and Continuation
of Security Interest. The Purchasers and the Company each acknowledge and affirm
that the Note Purchase Agreement, as hereby amended, is hereby ratified and
confirmed in all respects and all terms, conditions and provisions of the Note
Purchase Agreement, except as amended by this Amendment, shall remain unmodified
and in full force and effect. All references in any document or instrument to
the Note Purchase Agreement are hereby deemed amended and shall refer to the
Note Purchase Agreement as amended by this Amendment. The Company confirms to
the Purchasers that the payment obligations, as amended by this Amendment and
the Notes, are and continue to be secured by the security interest granted by
the Company in favor of the Purchasers under the Security Documents.
Section 7. Survival of Representations, Warranties and Agreements;
Indemnification.
7.1 Survival. Notwithstanding any investigation made by any party to
this Amendment, all covenants, agreements, representations and warranties
made by the Company and the Purchasers herein and in the certificates for
the securities delivered pursuant hereto and in the Note Purchase Agreement
as amended by this Amendment shall survive the execution of this Amendment,
the delivery to the Purchasers of the certificates representing the First
Amendment Warrants, and the payment of the Notes until the fifth
-9-
anniversary of the First Amendment Closing Date, except for the
representations set forth in Section 4.2, 4.7 and 4.16 and the
representations set forth in Section 4.3, which shall survive indefinitely,
and the representations as to taxes set forth in Section 4.14, which shall
survive for the longer of (i) the fifth anniversary of the First Amendment
Closing Date and (ii) the period expiring ninety (90) days after the
expiration of the period during which a claim by the applicable taxing
authority for a deficiency or other tax adjustment would not be barred by
the statute of limitations applicable to such taxes (any such period an
"Indemnity Period").
7.2 Purchaser's Right to Indemnification. Subject to the provisions of
this Section 7 and in addition to the indemnification provided in Article
XII of the Note Purchase Agreement, the Company hereby agrees to indemnify
and hold harmless the Purchasers and the employees, agents, directors,
officers, equity holders, successors, predecessors, assigns and affiliates
of any of them (collectively, the "Purchaser Indemnified Parties") from and
against (i) any and all losses, obligations, liabilities, damages, claims,
deficiencies, costs and expenses (including, but not limited to, the amount
of any settlement entered into pursuant hereto and all reasonable legal and
other expenses incurred in connection with the investigation, prosecution
or defense of the matter but excluding consequential damages)
(collectively, "Claims"), which may be asserted against or sustained or
incurred by the Purchaser Indemnified Parties in connection with, arising
out of, or relating to (A) any breach or alleged breach of any of the
representations, warranties, agreements and covenants made by the Company
herein or in any certificate or other document delivered to any Purchaser
Indemnified Party by or on behalf of the Company in connection with this
Amendment; or (B) any false, incorrect or misleading representation or
warranty made by or on behalf of the Company herein or in any certificate
or other document delivered to any Purchaser Indemnified Party by or on
behalf of the Company in connection with this Amendment; and (ii) any and
all costs and expenses (including, but not limited to, reasonable legal
expenses) incurred by any Purchaser Indemnified Party in connection with
the enforcement of its rights under this Amendment. No claim for
indemnification pursuant to this Section 7 may be commenced after the
relevant Indemnity Period; provided, however, that claims made within such
Indemnity Period shall survive to the extent of the Claim covered thereby
until such Claim is finally determined and, if applicable, paid.
7.3 Procedure for Claims.
(a) Promptly, but in any event within ten (10) days after
obtaining knowledge of any claim or demand which may give rise to, or
could reasonably give rise to, a claim for indemnification hereunder
(an "Indemnification Claim"), the Purchaser affected by such claim
shall give written notice to the Company of such Indemnification Claim
("Notice of Claim"). A Notice of Claim shall be given with respect to
all Indemnification Claims; provided, however, that the failure to
give a timely Notice of Claim to the Company shall not relieve the
Company from any liability that it may have to the Purchaser
Indemnified Parties hereunder to the extent that the Company is not
prejudiced by such failure. The Notice of Claim shall set forth the
amount (or a reasonable estimate) of the loss, damage or expense
suffered, or which may be suffered, by the Purchaser Indemnified Party
as a result of such Indemnification Claim and the aggregate amount of
all Indemnification Claims to date and a brief description of the
facts giving rise to such Indemnification Claim. Each Purchaser shall
furnish to the Company such information (in reasonable detail) as such
Purchaser may have with respect to such Indemnification Claim
(including copies of any summons, complaint or other pleading which
may have been served on it and any written claim, demand, invoice,
billing or other document evidencing or asserting the same).
(b) If the claim or demand set forth in the Notice of Claim is a
claim or demand asserted by a third party (a "Third Party Claim"), the
Company shall have fifteen (15) days (or such shorter period (but not
less than ten (10) days) if any answer or other response or filing
with respect to the pleadings served by the third party is required
prior to the fifteenth day) after the date of receipt by the Company
of the Notice of Claim (the "Notice Date") to notify the Purchasers in
writing of the election by the Company to defend the Third Party Claim
on behalf of the Purchaser Indemnified Parties.
-10-
(c) If the Company elects to defend a Third Party Claim on behalf
of the Purchaser Indemnified Parties, each Purchaser shall make
available to the Company and its agents and representatives all
records and other materials in such Purchaser's possession which are
reasonably required in the defense of the Third Party Claim and the
Company shall pay any expenses payable in connection with the defense
of the Third Party Claim as they are incurred (whether incurred by the
Purchasers or the Company).
(d) If the Company has assumed control of the defense, the
Company may contest or settle the Third Party Claim on such terms as
the Company may choose, provided, however, that the Company will not
have the right, without the prior written consent of the Purchaser
affected by such claim, to settle any such claim if such settlement
(i) arises from or is part of any criminal action, suit or proceeding
(ii) contains a stipulation to, confession of judgment with respect
to, or admission or acknowledgment of, any liability or wrongdoing on
the part of any Purchaser Indemnified Party, (iii) relates to any
foreign federal, state or local tax matters, (iv) provides for
injunctive relief, or other relief other than damages, which is
binding on any Purchaser Indemnified Party, (v) does not fully release
all Purchaser Indemnified Parties with respect to the relevant Third
Party Claim or (vi) has any res judicata or collateral estoppel effect
that could be adverse to any Purchaser Indemnified Party.
(e) If the Company elects to defend a Third Party Claim, the
Purchaser Indemnified Parties shall have the right to participate in
the defense of the Third Party Claim, at the Purchaser Indemnified
Parties' expense (and without the right to indemnification for such
expense under this Amendment); provided, however, that the reasonable
fees and expenses of counsel retained by the Purchaser Indemnified
Parties shall be at the expense of the Company if (A) the use of the
counsel chosen by the Company to represent the Purchaser Indemnified
Parties would present such counsel with a conflict of interest; (B)
the parties to such proceeding include both Purchaser Indemnified
Parties and the Company and there may be legal defenses available to
Purchaser Indemnified Parties which are different from or additional
to those available to the Company; (C) within ten (10) days after
being advised by the Company of the identity of counsel to be retained
to represent the Purchaser Indemnified Parties, the Purchaser
Indemnified Party affected by such claim shall have objected to the
retention of such counsel for valid reasons (which shall be stated in
a written notice to the Company), and the Company shall not have
retained different counsel reasonably satisfactory to such Purchaser
Indemnified Party; or (iv) the Company shall authorize the Purchaser
Indemnified Parties to retain separate counsel at the expense of the
Company.
(f) If the Company elects to defend a Third Party Claim, and does
not defend a Third Party Claim in good faith, the Purchaser
Indemnified Parties shall have the right, in addition to any other
right or remedy it may have hereunder, at the sole and exclusive
expense of the Company, to defend such Third Party Claim; provided,
however, that such expenses shall be payable by the Company only if
and when such Third Party Claim becomes payable.
(g) The Purchasers shall cooperate with the Company in the
defense of Third Party Claims. Subject to the foregoing, (i) the
Purchaser Indemnified Parties shall not have any obligation to
participate in the defense of or to defend any Third Party Claim and
(ii) the Purchaser Indemnified Parties' defense of or participation in
the defense of any Third Party Claim shall not in any way diminish or
lessen the right to indemnification as provided in this Section 7.
Section 8. Registration Rights; Compliance with the Securities Act.
8.1 Registration Procedures and Expenses.
(a) As soon as practicable following the First Amendment Closing
Date and in any event no later than forty-five (45) days following the
First Amendment Closing Date, the Company shall prepare and file with
the SEC, and thereafter shall use its reasonable best efforts to
-11-
cause to be declared effective, (i) a shelf registration statement on
an appropriate form under the Securities Act, or (ii) an amendment to
a currently effective shelf registration statement of the Company,
relating to the offer and resale of the First Amendment Warrant Shares
(which shall, together with the Shares and the Warrant Shares (as such
terms are defined in the Common Stock Purchase Agreement) and the
Conversion Shares to be "Registrable Securities") by the Purchasers
and/or the Holders of Notes and by any holders thereof from time to
time, in accordance with the methods of distribution set forth in such
shelf registration statement, through The Nasdaq SmallCap Market or
the facilities of any national securities exchange or market system on
which the Company's Common Stock is then traded, or in
privately-negotiated transactions (the "Shelf Registration
Statement"). All Registrable Securities shall, together with the
Shares and the Warrant Shares, be included in such Shelf Registration
Statement.
(b) The Company shall use its reasonable best efforts (including,
without limitation, the preparation and filing with the SEC of
amendments and supplements to the Shelf Registration Statement and a
prospectus to be used in connection therewith) to keep the Shelf
Registration Statement continuously effective and not misleading for a
period of five (5) years from the First Amendment Closing Date or such
shorter period that will terminate when all the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant
thereto. The Company shall be deemed not to have used its reasonable
best efforts to keep the Shelf Registration Statement effective during
the requisite period if it takes any action that would result in the
holders of the Registrable Securities covered thereby not being able
to offer and sell such Registrable Securities during that period,
unless such action is required by applicable law. Notwithstanding the
foregoing, following the effectiveness of the Shelf Registration
Statement, the Company may, at any time, suspend the effectiveness of
the Shelf Registration Statement for up to no longer than seventy-five
(75) days, as appropriate (a "Suspension Period"), by giving notice to
the Purchasers and Holders of the Notes, if (i) the Company shall have
determined that the Company may be required to disclose any material
corporate development or (ii) the Company shall be involved in an
underwritten public offering of its securities. The Company will use
its best efforts to minimize the length of any Suspension Period.
Notwithstanding the foregoing, no more than two Suspension Periods may
occur in any twelve (12) month period. Each Purchaser and Holder of a
Note agrees that, upon receipt of any notice from the Company of a
Suspension Period, it will not sell (subject to the limitations on the
Company set forth above) any Registrable Securities pursuant to the
Shelf Registration Statement until (i) such Purchase or Holder of a
Note is advised in writing by the Company that the use of the
applicable prospectus may be resumed, (ii) such Purchaser or Holder of
a Note has received copies of any additional or supplemental or
amended prospectus, if applicable, and (iii) such Purchaser or Holder
of a Note has received copies of any additional or supplemental
filings which are incorporated or deemed to be incorporated by
reference in such prospectus.
(c) In order to facilitate the public sale or other disposition
of all or any of the Registrable Securities by the holders thereof,
the Company shall furnish to the Purchasers with respect to the
Registrable Securities registered under the Shelf Registration
Statement such number of copies of prospectuses, prospectus
supplements and preliminary prospectuses as the holders reasonably
request in conformity with the requirements of the Securities Act.
(d) The Company shall file any documents required of the Company
for normal blue sky clearance in states specified in writing by the
holders of Registrable Securities; provided, however, that the Company
shall not be required to qualify to do business or consent to service
of process in any jurisdiction in which it is not now so qualified or
has not so consented.
(e) Other than fees and expenses, if any, of counsel or other
advisers to the holders of Registrable Securities, which fees and
expenses shall be borne by them, the Company shall bear all expenses
(exclusive of any brokerage fees, underwriting discounts and
commissions) in connection with the procedures in paragraphs (a)
through (d) of this Section 8.1.
-12-
8.2 Transfer of Securities After Shelf Registration. Each Purchaser or
Holder of a Note agrees that it will not effect any disposition of the
Registrable Securities that would constitute a sale within the meaning of
the Securities Act, except:
(a) pursuant to the Shelf Registration Statement, in which case
the transferring Purchaser or Holder of a Note shall submit the
certificates evidencing the Registrable Securities to the Company's
transfer agent, accompanied by a separate "Purchaser's Certificate"
(A) in the form of Appendix I attached hereto, (B) executed by an
officer of, or other authorized person designated by, such Purchaser
or Holder of a Note, and (C) to the effect that (1) the Registrable
Securities have been sold in accordance with the Shelf Registration
Statement and (2) the requirement of delivering a current prospectus
has been satisfied; or
(b) in a transaction exempt from registration under the
Securities Act.
8.3 Indemnification in Connection with Registration. As used in this
Section 8.3 the following terms shall have the following respective
meanings:
(a) "Selling Shareholder" shall mean each Purchaser or Holder of
a Note and any transferee of either of them who is entitled to resell
Registrable Securities pursuant to the Shelf Registration Statement,
including any underwriter involved in such resale, and each person, if
any, who controls such Selling Shareholder within the meaning of
Section 15 of the Securities Act, and each officer and each director
of such Selling Shareholder;
(b) "Shelf Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating
to the Shelf Registration Statement referred to in Section 8.1; and
(c) "Untrue Statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state
in the Shelf Registration Statement a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling Shareholder
from and against any losses, claims, damages or liabilities to which such
Selling Shareholder may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any Untrue
Statement on or after the effective date of the Shelf Registration Statement, or
on or after the date of any prospectus or prospectus supplement or the date of
any sale by any purchaser thereunder, or arise out of any failure by the Company
to fulfill any undertaking included in the Shelf Registration Statement and the
Company will reimburse such Selling Shareholder for any reasonable legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that the Company
shall not be liable to such Selling Shareholder in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an
Untrue Statement made in such Shelf Registration Statement in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of such Selling Shareholder specifically for use in preparation of the Shelf
Registration Statement, or the failure of such Selling Shareholder to comply
with the covenants and agreements contained in Section 8.1 or 8.2 hereof
respecting sale of the Registrable Securities or any statement or omission in
any prospectus that is corrected in any subsequent prospectus that was delivered
to the Selling Shareholder prior to the pertinent sale or sales by the Selling
Shareholder.
Each Purchaser or Holder of a Note, severally and not jointly, agrees to
indemnify and hold harmless the Company (and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act, each officer
of the Company who signs the Shelf Registration Statement and each director of
the Company) from and against any losses, claims, damages or liabilities to
which the Company (or any such officer, director or controlling person) may
become subject (under the Securities Act or otherwise), insofar as such losses,
claims,
-13-
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any failure by such Purchaser or Holder of a Note to
comply with the covenants and agreements contained in Section 8.1 or 8.2 hereof
respecting sale of the Registrable Securities, or any Untrue Statement contained
in the Shelf Registration Statement on or after the effective date thereof, or
in any prospectus supplement as of its issue date or date of any sale by any
Purchaser thereunder, if such Untrue Statement was made in reliance upon and in
conformity with written information furnished by or on behalf of such Purchaser
or Holder of a Note specifically for use in preparation of the Shelf
Registration Statement, and such Purchaser or a Holder of a Note will reimburse
the Company (or such officer, director or controlling person), as the case may
be, for any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim; provided
that in no event shall any indemnity by such Purchaser or Holder of a Note under
this Section 8.3 exceed the gross proceeds received by all of the Purchasers and
Holders of Notes from the sale of Registrable Securities covered by such Shelf
Registration Statement.
Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 8.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate, in the opinion of counsel
to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel for all indemnified parties.
8.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 8 upon the transferability
of the Registrable Securities shall cease and terminate as to any
particular number of the Registrable Securities when such Registrable
Securities shall have been sold or otherwise disposed of in accordance with
the intended method of disposition set forth in the Shelf Registration
Statement covering such Registrable Securities or at such time as an
opinion of counsel satisfactory to the Company shall have been rendered to
the effect that such conditions are not necessary in order to comply with
the Securities Act.
8.5 Information Available. So long as any Purchaser or Holder of a
Note continues to own any of the Registrable Securities and the Shelf
Registration Statement is effective covering the resale of Registrable
Securities owned by such person, the Company will furnish to each such
person:
(a) as soon as practicable after available (but in the case of
the Company's Annual Report to Shareholders, within one hundred twenty
(120) days after the end of each fiscal year of the Company), one copy
of (i) its Annual Report to Shareholders (which Annual Report shall
contain financial statements audited in accordance with generally
accepted auditing standards certified by a national firm of certified
public accountants); (ii) its Annual Report on Form 10-K (excluding
exhibits); (iii) its quarterly reports on Form 10-Q (excluding
exhibits); (iv) its Proxy Statement; and (v) its current reports on
Form 8-K, if any (excluding exhibits);
(b) upon the request of any such person, all exhibits excluded by
the parentheticals to subparagraphs (a)(ii),(iii) and (v) of this
Section 8.5, in the form generally available to the public; and
(c) upon the reasonable request of any such person, an adequate
number of copies of the prospectuses and supplements to supply to any
other party requiring such prospectuses.
-14-
8.6 Changes in Information. Each Purchaser and each Holder of a Note
agrees to promptly notify the Company of any changes in the information set
forth in the Shelf Registration Statement regarding such person or such
person's plan of distribution set forth in such Shelf Registration
Statement.
8.7 Third Party Beneficiaries. The Selling Shareholders (as defined in
the Common Stock Purchase Agreement) are third party beneficiaries of this
Section 8, and shall be entitled to rely upon and enforce the provisions of
this Section 8 as though they were parties hereto.
Section 9. Merger and Integration, Superseding Effect. The Note Purchase
Agreement, as amended by this Amendment, together with the Common Stock Purchase
Agreement, and the related instruments and documents contemplated hereby and
thereby (including, without limitation, the Note and the First Amendment
Warrants), embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof, and supersedes and has merged
into it all prior oral and written agreements on the same subjects by and
between the parties hereto with the effect that this Amendment shall control
with respect to the specific subjects hereof.
Section 10. Legal Expenses. As provided in (but not in limitation of)
Section 13.1 of the Note Purchase Agreement, the Company agrees to reimburse the
Purchasers for all reasonable out-of-pocket expenses (including attorneys' fees
and legal expenses of counsel for the Purchasers) incurred in connection with
the negotiation or preparation of the Amendment Documents and all other
documents negotiated and prepared in connection with this Amendment, and the
Company agrees to reimburse the Purchasers upon demand for all other reasonable
expenses, including attorneys' fees incurred as a result of or in connection
with the enforcement of the Note Purchase Agreement as amended hereby, and
including, without limitation, all expenses of collection of any loans made or
to be made under the Note Purchase Agreement as amended hereby.
Section 11. Severability. Each provision of this Amendment and any other
statement, instrument or transactions contemplated hereby or relating hereto
shall be interpreted in such manner as to be effective, valid and enforceable
under the applicable law of any jurisdiction, but, if any provision of this
Amendment or relating hereto or thereto shall be held to be prohibited, invalid
or unenforceable under the applicable law, such provision shall be ineffective
in such jurisdiction only to the extent of such prohibition, invalidity or
unenforceability, without invalidating or rendering unenforceable the remainder
of such provision or the remaining provisions of this Amendment or any other
statement, instrument or transaction contemplated hereby or thereby or relating
hereto or thereto in such jurisdiction, or affecting the effectiveness, validity
or enforceability of such provision in any such jurisdiction.
Section 12. Confidentiality. Unless required by law or in connection with
obtaining any required consent to the transactions contemplated hereby
(including without limitation filings, authorizations and consents from any
Governmental Authority), no party hereto shall issue any press release or make
any other communication pertaining to the transactions contemplated hereby
(including the terms hereof) without the prior consent of the other parties
hereto; provided, that any party may make such disclosure as is necessary in
connection with the evaluation and negotiation of the transactions contemplated
hereby.
Section 13. Successors. This Amendment shall be binding upon the Company
and the Purchasers and their respective successors and assigns, and shall inure
to the benefit of the Company and the Purchasers and the successors and assigns
of the Company and the Purchasers.
Section 14. Headings. The headings of various sections of this Amendment
have been inserted for reference only and shall not be deemed to be a part of
this Amendment.
Section 15. Counterparts. This Amendment may be executed in several
counterparts, all or any of which shall be regarded as one and the same document
and either party to such agreements may execute any such agreement by executing
a counterpart of such agreement.
-15-
Section 16. Governing Law. The validity, construction and enforceability of
this Amendment shall be governed by the internal law of the State of Minnesota,
without regard to conflict of law principle.
[Signature pages follow.]
-16-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date and year first above written.
THE COMPANY:
DIAMETRICS MEDICAL, INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Chief Executive Officer and President
THE PURCHASERS:
[see attached signature pages]
[Signature Page to First Amendment to Note Purchase Agreement]
S - 1
PURCHASER:
BCC ACQUISITION II LLC
By: THE BAY CITY CAPITAL FUND I, L.P.
Its: Manager
By: Bay City Capital Management LLC
Its: General Partner
By: /s/ Xxxx Craves
----------------------------------------
Name: Xxxx Craves
Title: Managing Director
-2-
PURCHASER:
XXXXXX X. XXXX REVOCABLE TRUST
By: /s/ Xxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Trustee
-3-
PURCHASER:
XXXXXX X. AND XXXXXX X. XXXX MEMORIAL
FOUNDATION
By: /s/ Xxxx Xxx Xxxxxx
--------------------------------------------
Name: Xxxx Xxx Xxxxxx
Title: Trust Officer, Northeast Pennsylvania Trust
Company, Trustee
-4-
PURCHASER:
AEOW 96, LLC
By: /s/
----------------------------------------
Name:
---------------------------------------
Title: Authorized Signatory
-5-
Appendix 1 to
First Amendment to Note Purchase Agreement
APPENDIX I
DIAMETRICS MEDICAL, INC.
PURCHASER'S CERTIFICATE OF RESALE OF THE SHARES
The undersigned, an officer of, or other person duly authorized by
--------------------------------------------------------------------------------
[fill in official name of individual or institution]
hereby certifies that [he / she / said institution] is the Purchaser of the
Shares evidenced by the attached stock certificate(s) and as such, sold such
Shares on [date] in accordance with shelf registration
------------------
statement number
----------------------------------------------------------------
--------------------------------------------------------------------------------
[fill in the number of or otherwise identify shelf registration statement]
and the requirement of delivering a current prospectus and current annual,
quarterly and current reports (Forms 10-K, 10-Q and 8-K) by the Company has been
complied with in connection with such sale.
Print or Type:
Name of Purchaser:
-------------------------------------
Name of Individual representing Purchaser:
-------------------------------------
Title of Individual representing Purchaser:
-------------------------------------
Signature by:
Individual representing Purchaser:
-------------------------------------
Schedule 1 to
First Amendment to Note Purchase Agreement
SCHEDULE 1
FIRST AMENDMENT WARRANTS TO PURCHASERS
Number of Shares under
Principal Amount of First Amendment
Name of Purchaser Notes Warrant
----------------- ------------------- ----------------------
BCC ACQUISITION II LLC $6,700,000 3,870,476.19
XXXXXX X. XXXX REVOCABLE TRUST 400,000 269,824.32
XXXXXX X. AND XXXXXX X. XXXX MEMORIAL FOUNDATION 100,000 57,768.30
AEOW 96, LLC 100,000 57,768.30
