EXHIBIT 4.1
INTEG INCORPORATED
SERIES B PREFERRED STOCK
PURCHASE AGREEMENT
This Agreement is made and entered into as of the 15th day of February,
2000, by and between Integ Incorporated, a Minnesota corporation (the "Company")
and Amira Medical, a Delaware corporation ("Purchaser").
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Company and Purchaser agree as follows:
1. Authorization of Securities. The Company shall authorize, issue and sell
an aggregate of up to 3,000,000 shares of series B preferred stock (the
"Preferred Shares") of the Company, to be issued pursuant to, and be entitled to
the benefits of the provisions of, a certificate of designation to the Articles
of Incorporation of the Company (the "Certificate") substantially as set forth
in Exhibit A hereto. On or before the Closing Date, the Company shall cause the
Certificate to be filed with the Secretary of State of Minnesota.
The Preferred Shares shall be automatically converted into shares of the
Company's common stock, par value $.01 per share ("Common Stock") (such shares
of Common Stock into which the Preferred Shares are convertible and all shares
of Common Stock of the Company issued in exchange or substitution therefor being
hereinafter sometimes referred to as the "Conversion Stock"), at the rate and
upon the terms and conditions set forth in the Certificate. The Preferred Shares
shall be subject in all respects to all of the other provisions of the
Certificate.
2. Sale and Purchase of Preferred Shares.
2.1 On or before April 1, 2000, the Company shall establish an account (the
"Company Account") at Silicon Valley Bank. Purchaser will authorize the Company
to make withdrawals from one of Purchasers accounts ("Purchaser Account") at
Silicon Valley Bank to fund the Company Account in accordance with the
provisions of this Section 2.1. Purchaser shall maintain funds in the Purchaser
Account in amounts sufficient to allow the Company to make withdrawals from the
Purchaser Account to the Company Account, and to pay amounts presented to the
Company Account for payment of expenses as incurred in accordance with the
provisions of this Section 2.1. The Company shall not be entitled to make
withdrawals from the Purchasers Account until the Company's cash balance has
first declined to $1,500,000. After the first date that the Company's cash
balance has declined to $1,500,000, the Company shall be entitled to make
withdrawals at such times to pay amounts presented to the Company Account for
payment of expenses as incurred in accordance with Integ 2000 Budget, signed by
both Company and Purchaser for identification, such that in no event shall the
Company be required to decrease its cash balance to less than $1,500,000 in
order to pay expenses incurred in accordance with the Integ 2000 Budget. The
maximum cumulative amount which the Company may withdraw from the Purchaser
Account is $5,600,000.
2.2 Within five (5) business days after the end of each calendar month in
which the Company makes a withdrawal in accordance with Section 2.1 hereof, the
Company shall issue to Purchaser a number of Preferred Shares (rounded down to
the nearest whole share) equal to (a) the amount of the cash withdrawn from the
Purchaser Account, divided by (b) the price per share of the Preferred Shares
(as determined pursuant to the formula set forth in the next sentence). The
price per share of the Preferred Shares shall be equal to the last sale price of
the Company's Common Stock on the Nasdaq National Market on the date of such
withdrawal from the Purchaser Account by the Company.
3. Closings. Closings of the sale to, and purchase by, the Purchaser of the
Preferred Shares under Section 2 above (each a "Closing") shall occur from time
to time at the offices of the Company, at 10:00 a.m., Minneapolis time, five
business days after the end of each calendar month in which the Company makes a
withdrawal from the Purchaser Account, or on such other day or at such other
time or place as the Purchaser and the Company shall agree upon (each a "Closing
Date").
At each Closing, the Company will deliver to the Purchaser certificates
representing the Preferred Shares being purchased by the Purchaser at that
Closing, registered in its name, together with a certificate signed by an
officer of the Company setting forth (a) the amount of the withdrawal from the
Purchaser Account, (b) the price per share of the Preferred Shares as determined
pursuant to Section 2.2 above, and (c) the number of Preferred Shares which were
purchased on the date of the withdrawal from the Purchaser Account and are being
delivered by the Purchaser at that Closing.
4. Representations and Warranties by Company. The Company represents and
warrants to the Purchaser that:
4.1 Organization, Standing, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota, and has the requisite corporate power and authority to own its
properties and to carry on its business in all material respects as it is now
being conducted. The Company has the requisite corporate power and authority to
issue the Preferred Shares and the Conversion Stock, and to otherwise perform
its obligations under this Agreement. The copies of the Articles of
Incorporation and Bylaws of the Company delivered to the Purchaser or their
agents prior to the execution of this Agreement are true and complete copies of
the duly and legally adopted Articles of Incorporation and Bylaws of the Company
in effect as of the date of this Agreement. The Company does not have any direct
or indirect equity interest in any other firm, corporation, partnership, joint
venture association or other business organization.
4.2 Qualification. The Company is duly qualified or licensed as a foreign
corporation in good standing in each jurisdiction wherein the nature of its
activities or of its properties owned or leased makes such qualification or
licensing necessary and failure to be so qualified or licensed would have a
material adverse effect on its business.
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4.3 Preferred Shares and Conversion Stock; Warrants and Warrant Stock. The
Preferred Shares, when issued and paid for pursuant to the terms of this
Agreement, will be duly authorized, validly issued and outstanding, fully paid,
nonassessable and free and clear of all pledges, liens, encumbrances and
restrictions, except as set forth in Section 9 hereof, and the shares of
Conversion Stock issuable upon conversion of the Preferred Shares have been
reserved for issuance, and when issued upon conversion will be duly authorized,
validly issued and outstanding, fully paid, nonassessable and free and clear of
all pledges, liens, encumbrances and restrictions, except as set forth in
Section 9 hereof. The certificates representing the Preferred Shares to be
delivered by the Company hereunder, and the certificates representing the
Conversion Stock to be delivered upon the conversion of the Preferred Shares
will be genuine, and the Company has no knowledge of any fact which would impair
the validity thereof.
4.4 Securities Laws. Based in part upon the representations and warranties
contained in Section 5 hereof, no consent, authorization, approval, permit or
order of or filing with any governmental or regulatory authority is required
under current laws and regulations in connection with the execution and delivery
of this Agreement or the offer, issuance, sale or delivery of the Preferred
Shares or the offer of the Conversion Stock. The Company has not, directly or
through an agent, offered the Preferred Shares or the Conversion Stock, or any
similar securities for sale, or solicited any offers to acquire such securities,
by means of any form of general solicitation. Under the circumstances
contemplated hereby, the offer, issuance, sale and delivery of the Preferred
Shares and the offer of the Conversion Stock will not under current laws and
regulations require compliance with the prospectus delivery or registration
requirements of the Securities Act or applicable state laws.
4.5 Corporate Acts and Proceedings. This Agreement has been duly authorized
by all necessary corporate action on behalf of the Company, and has been duly
executed and delivered by authorized officers of the Company. All corporate
action necessary to the authorization, creation, issuance and delivery of the
Preferred Shares and the Conversion Stock, has been taken on the part of the
Company, or will be taken by the Company on or prior to the Closing Date. This
Agreement is a valid and binding agreement of the Company enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors' rights generally, and except for
judicial limitations on the enforcement of the remedy of specific enforcement
and other equitable remedies.
5. Representations and Warranties of Purchaser. Purchaser represents and
warrants to the Company that:
5.1 Investment Intent. The Preferred Shares being acquired by Purchaser
hereunder are being purchased, and the Conversion Stock acquired by Purchaser
upon conversion of such Preferred Shares will be acquired, for Purchaser's own
account and not with the view to, or for resale in connection with, any
distribution or public offering thereof within the meaning of the Securities
Act. Purchaser understands that the Preferred Shares and the Conversion Stock
have not been registered under the Securities Act or any applicable state laws
by reason of their issuance or contemplated issuance in a transaction exempt
from the registration and prospectus delivery requirements of the Securities Act
and such laws, and that the reliance of the Company and others
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upon this exemption is predicated in part upon this representation and warranty.
Purchaser further understands that the Preferred Shares and Conversion may not
be transferred or resold without (a) registration under the Securities Act and
any applicable state securities laws, or (b) an exemption from the requirements
of the Securities Act and applicable state securities laws.
Purchaser understands that an exemption from such registration is not
presently available pursuant to Rule 144 promulgated under the Securities Act by
the Securities and Exchange Commission (the "Commission") and that in any event
Purchaser may not sell any securities pursuant to Rule 144 prior to the
expiration of a two-year period after such Purchaser has acquired the
securities. Purchaser understands that any sales pursuant to Rule 144 may only
be made in full compliance with the provisions of Rule 144.
5.2 Location of Principal Office and Qualification as Accredited Investor.
The state in which Purchaser's principal office is located is California.
Purchaser qualifies as an accredited investor within the meaning of Rule 501
under the Securities Act because Purchaser is a corporation, not formed for the
specific purpose of acquiring the securities offered, with total assets in
excess of $5,000,000. Purchaser has such knowledge and experience in financial
and business matters that Purchaser is capable of evaluating the merits and
risks of the investment to be made hereunder by Purchaser. Purchaser has and has
had access to all of the Company's material books and records and access to the
Company's executive officers has been provided to Purchaser or to Purchaser's
qualified agents.
5.3 Acts and Proceedings. This Agreement has been duly authorized by all
necessary action on the part of Purchaser, has been duly executed and delivered
by Purchaser, and is a valid and binding agreement upon the part of Purchaser.
5.4 No Brokers or Finders. No person, firm or corporation has or will have,
as a result of any act or omission by Purchaser, any right, interest or valid
claim against the Company for any commission, fee or other compensation as a
finder or broker, or in any similar capacity, in connection with the
transactions contemplated by this Agreement.
6. Conditions of Purchaser's Obligation to the Closing. The obligation to
purchase and pay for the Preferred Shares which Purchaser has agreed to purchase
on the Closing Dates is subject to the fulfillment prior to or on that Closing
Date of the following conditions.
6.1 No Errors, etc. The representations and warranties of the Company under
this Agreement shall be true in all material respects as of the Closing Date
with the same effect as though made on and as of the applicable Closing Date.
6.2 Compliance with Agreement. The Company shall have performed and
complied with all agreements or conditions required by this Agreement to be
performed and complied with by it prior to or as of the applicable Closing Date.
6.3 Qualification Under State Securities Laws. All registrations,
qualifications, permits and approvals required under applicable state securities
laws for the lawful execution and
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delivery of this Agreement and the offer, sale, issuance and delivery of the
Preferred Shares and the offer of the Conversion Stock shall have been obtained.
7. Conditions of the Company's Obligation to the Closings. The obligation
to issue the Preferred Shares which the Company has agreed to sell on the
Closing Dates is subject to the fulfillment prior to or on that Closing Date of
the following conditions.
7.1 No Errors, etc. The representations and warranties of Purchaser under
this Agreement shall be true in all material respects as of the Closing Date
with the same effect as though made on and as of the Closing Date.
7.2 Compliance with Agreement. The Purchaser shall have performed and
complied with all agreements or conditions required by this Agreement to be
performed and complied with by it prior to or as of the applicable Closing Date.
8. Affirmative Covenants.
8.1 Replacement of Certificates Representing Preferred Shares or Conversion
Stock. The Company covenants and agrees that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
certificates representing Preferred Shares or Conversion Stock, and, in the case
of any such loss, theft or destruction, upon delivery of a bond of indemnity
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of the certificates representing Preferred Shares or
Conversion Stock, as the case may be, the Company will issue new certificates
representing Preferred Shares or Conversion Stock, as the case may be, of like
tenor, in lieu of such lost, stolen, destroyed or mutilated certificates
representing Preferred Shares or Conversion Stock, as the case may be.
8.2. Participation in Merger Consideration. Purchaser covenants and agrees
that in the event that the Company exercises its option to merge with and into a
newly formed, wholly owned subsidiary of Purchaser (the "Merger") pursuant to
the terms of the Option Agreement (the "Option Agreement"), dated as of April 2,
1999, by and between the Company and the Purchaser, upon consummation of the
Merger, the Preferred Shares and/or the Conversions Stock shall be canceled and
extinguished in connection with such Merger. In no event shall the Preferred
Shares or the Conversion Stock be entitled to receive any portion of the Merger
Consideration (as defined in the Option Agreement) otherwise payable to
shareholders of the Company.
8.3 Filing of Certificate and Amendment to Rights Agreement. Before April
1, 2000, the Company will file the Certificate with the Minnesota Secretary of
State and will enter the Amendment to Rights Agreement, dated November 26, 1996
between the Company and Norwest Bank Minnesota, National Association attached
hereto as Exhibit B (the "Rights Agreement Amendment"). The Company will not
modify the Certificate or the Agreement Amendment without the written consent of
Purchaser. The Company will not amend the Certificate without the written
consent of Purchaser or take any action which would cause the Purchaser to be
considered an Acquiring Person under the Rights
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Agreement or to cause a Distribution Date to have occurred due to this Agreement
or the issuance of the Preferred Stock or the Conversion Stock.
8.4 Minnesota Antitakeover Law. Before April 1, 2000, the Company shall
take all actions necessary so that Section 302A.673 of the Minnesota Business
Corporations Act does not apply to Purchaser, this Agreement or the issuance of
Preferred Shares or Conversion Stock.
9. Restriction on Transfer of Securities.
9.1 Restrictions. The Preferred Shares and the Conversion Stock are
transferable only pursuant to (a) a public offering registered under the
Securities Act of 1933, as amended (the "Securities Act"), (b) Rule 144 (or any
similar rule then in effect) adopted under the Securities Act, if such rule is
available, and (c) subject to the conditions elsewhere specified in this Section
9, any other legally available means of transfer.
9.2 (a) Legend. Each certificate representing Preferred Shares shall be
endorsed with the following legends:
"The securities evidenced hereby may not be transferred without (i) the
opinion of counsel satisfactory to the Company that such transfer may be
lawfully made without registration under the Federal Securities Act of 1933
and all applicable state securities laws or (ii) such registration.
The securities represented by this certificate are subject to certain
transfer restrictions, repurchase rights, and conversion rights set forth
in an agreement, dated February 15, 2000, among the registered owner of
such securities and the issuer of such securities, and may not be sold,
assigned, transferred, pledged, encumbered or otherwise disposed of except
in compliance with the terms of such agreement, a copy of which is
available for inspection in the principal executive office of the issuer of
such securities."
Upon the conversion of any Preferred Shares, unless the Company receives an
opinion of counsel from the holder of such a security satisfactory to the
Company to the effect that a sale, transfer, assignment, pledge or distribution
of the Conversion Stock issuable upon such conversion or exercise may be made
without registration, or unless such Conversion Stock is being disposed of
pursuant to registration under the Securities Act and any applicable state act,
the same legend shall be endorsed on the certificate evidencing such Conversion
Stock.
(b) Stop Transfer Order. A stop transfer order shall be placed with the
Company's transfer agent preventing transfer of any of the securities referred
to in paragraph (a) above pending compliance with the conditions set forth in
any such legend (except as otherwise provided in paragraph (a) above).
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9.3 Register of Securities. The Company or its duly appointed agent shall
maintain a register for the Preferred Shares in which it shall register the
issuance and transfer of all Preferred Shares. All transfers of Preferred Shares
shall be recorded on the register maintained by the Company or its agent, and
the Company shall be entitled to regard the registered holder of such securities
as the actual owner of the securities so registered until the Company or its
agent is required to record a transfer of such securities on its register. The
Company or its agent shall be required to record any such transfer when it
receives (a) the security to be transferred duly and properly endorsed by the
registered holder thereof or by its attorney duly authorized in writing, and (b)
the opinion of counsel satisfactory to the Company that such transfer may be
lawfully made without registration under the Securities Act and all applicable
state securities laws or such registration .
10. Redemption of Preferred Shares. The Company may redeem and repurchase
Preferred Shares from the Purchaser at the times and upon the terms and
conditions set forth in the Certificate.
11 Events of Default .
11.1 By Purchaser. In the event that Purchaser defaults in its obligations
under Section 2.1 hereof and the Company's cash balance declines to less than
$1,500,000, then Purchaser shall be in material breach of this Agreement unless
within 30 days after the default (a) Purchaser shall remit to the Company an
amount of cash sufficient to restore the Company's cash balance to $1,500,000
and (b) the Company resumes compliance with its obligations under Section 2.1
hereof.
11.2 By Company. In the event that Company defaults in its obligations
under Sections 2.2 , 3 or 8 hereof, then Purchaser may defer any of its
obligations under Section 2.1 hereof until the Company has cured its default by
issuing shares of Series B Preferred to Purchaser in accordance with the
provisions of this Agreement.
12 Amendment and Waiver. This Agreement may not be amended, changed,
waived, discharged or terminated except in a writing executed by the party
against which such amendment, change, waiver, discharge or termination is sought
to be enforced. No course of dealing between or among any persons having any
interest in this Agreement will be deemed effective to modify or amend any part
of this Agreement or any rights or obligations of any person under or by reason
of this Agreement.
13 Notices. All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be hand delivered,
sent by overnight courier or mailed first-class postage prepaid, registered or
certified mail,
(a) if to Purchaser, addressed to Purchaser, 0000 Xxxxxx Xxxxxx Xxxxx,
Xxxxxx Xxxxxx, Xxxxxxxxxx 00000, attention President, or to such other
address as the Purchaser may specify by written notice to the Company or
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(b) if to the Company, addressed to the Company, 0000 Xxxxxx, Xx.
Xxxx, Xxxxxxxxx 00000, attention President, or to such other address as the
Company may specify by written notice to the Purchaser,
and such notices and other communications shall for all purposes of this
Agreement be treated as being effective or having been given if delivered
personally, the next business day if sent by overnight courier or, if sent by
mail, three business days after mailing.
14 Survival of Representations and Warranties, etc. All representations,
warranties and covenants contained herein shall survive the execution and
delivery of this Agreement, any investigation at any time made by the Purchaser
or on its behalf, any modification or termination under Section 12 hereof and
the sale and purchase of the Preferred Shares and payment therefor.
15 Parties in Interest. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, whether so expressed or
not, and, in particular, shall inure to the benefit of and be enforceable by and
against the holder or holders at the time of any of the Preferred Shares or
Conversion Stock.
16 Headings. The headings of the Sections and paragraphs of this Agreement
have been inserted for convenience of reference only and do not constitute a
part of this Agreement.
17 Choice of Law. It is the intention of the parties that the laws of
Minnesota, without regard to its conflicts of laws provisions, shall govern the
validity of this Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties.
18 Counterparts. This Agreement may be executed concurrently in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. Arbitration. Any dispute under this Agreement which is not settled by
mutual consent shall be finally settled by binding arbitration, conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association by three arbitrators appointed in accordance with said rules. The
arbitration shall be held in Denver, Colorado and at least one of the
arbitrators shall be an independent expert in securities laws. The arbitrators
shall determine what discovery will be permitted, consistent with the goal of
limiting the cost and time which the parties may expend for discovery, provided
that the arbitrators shall permit such discovery as they deem necessary to
permit an equitable resolution of the dispute. The costs of the arbitration,
including administrative and arbitrators' fees, shall be shared equally by the
parties and each party shall bear its own costs and attorneys and witness' fees
incurred in connection with the arbitration. A disputed performance or suspended
performances pending the resolution of the arbitration must be completed within
30 days following the final decision of the arbitrators or such other reasonable
period as the arbitrators determine in a written opinion. Any arbitration shall
be completed within one year from the filing of notice of a request for such
arbitration. The arbitration proceedings and the decision shall not be made
public without the joint consent of the
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parties and each party shall maintain the confidentiality of such proceedings
and decision unless otherwise permitted by the other party. Any decision which
requires a monetary payment shall require such payment to be payable in United
States dollars, free of any tax or other deduction. The parties agree that the
decision shall be the sole, exclusive and binding remedy between them regarding
any and all disputes, controversies, claims and counterclaims presented to the
arbitrators. Application may be made to any court having jurisdiction over the
party (or its assets) against whom the decision is rendered for a judicial
recognition of the decision and an order of enforcement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the date first set forth
above.
INTEG INCORPORATED
By /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Its President
AMIRA MEDICAL
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Its President & CEO
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