EXHIBIT 4.2
CARDIOGENESIS CORPORATION SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT (this "Agreement"), is made and entered
into as of December 21, 2001, by and among CARDIOGENESIS CORPORATION, a
California corporation (the "Company"), and the purchasers listed on Schedule A
attached hereto (collectively, the "Purchasers" and individually, a
"Purchaser").
1. AUTHORIZATION OF SALE OF THE SHARES
Subject to the terms and conditions of this Agreement, the Company has
authorized the sale of 2,222,225 shares (the "Shares") of common stock, no par
value (the "Common Stock"), of the Company.
2. AGREEMENT TO SELL AND PURCHASE THE SHARES
2.1 PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, each Purchaser
severally agrees to purchase, and the Company agrees to sell and issue to each
Purchaser, at the Closing (as defined below) that number of Shares set forth
opposite such Purchaser's name on Schedule A attached hereto.
2.2 PURCHASE PRICE
The purchase price of each Share shall be $.90 (the "Per Share Price").
The Company shall not, during (i) the period beginning on the date of this
Agreement and ending ninety (90) days after the Closing Date (as defined below),
(ii) or in the next offering of shares of Common Stock (the "Second Tranche
Offering") (without adjusting the price per share hereunder accordingly, sell
(i) shares of Common Stock at a price per share of less than the Per Share
Price, or (ii) options, warrants or any other securities that can be converted
into, or otherwise exchanged for, shares of the Company's common stock at a
conversion, exchange or exercise price per share of less than the Per Share
Price. In the event the Company shall, during the period beginning on the date
of this Agreement and ending ninety (90) days after the Closing Date, sell any
shares of the Company's common stock at, or any instruments that can be
converted into or otherwise exchanged for the Company's common stock (the
"Subsequent Sale") exercisable at, a price per share (the "Subsequent Purchase
Price") of less than the Per Share Price, the Company shall, within ten (10)
business days of the Subsequent Sale, pay to the Purchaser a cash amount equal
to the number of Shares times the difference between the Per Share Price and the
Subsequent Purchase Price.
The Company covenants and agrees to use its best efforts to use the same
form of share purchase agreement for the Second Tranche Offering as this
Agreement
3. DELIVERY OF THE SHARES AT THE CLOSING
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(a) The completion of the purchase and sale of the Shares (the
"Closing") shall occur at the offices of Xxxxxx, Xxxx & Xxxxxxxx
LLP, counsel to the Company, at 0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx, at 9:00 a.m. local time on December 26,
2001 or such other time and date as may be agreed by the parties
(the "Closing Date").
(b) At the Closing, the Company shall authorize its transfer agent (the
"Transfer Agent") to issue to each Purchaser one or more stock
certificates registered in the name of such Purchaser, or in such
nominee name(s) as designated by such Purchaser in writing,
representing the number of Shares set forth in Section 2 above and
bearing an appropriate legend referring to the fact that the Shares
were sold in reliance upon the exemption from registration provided
by Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"), and Rule 506 under the Securities Act. The
Company will deliver one certificate representing 1,777,780 Shares
and one certificate representing 444,445 Shares (the "Certificates")
against delivery of payment for the Shares by the Purchasers. Prior
to the Purchasers' delivery of payment for the Shares, the Company
will deliver via facsimile a copy of the Certificates to be
delivered upon Closing to the office of the Purchasers (at the fax
number indicated on the signature pages attached hereto).
(c) The Company's obligation to complete the purchase and sale of the
Shares shall be subject to the following conditions, any one or more
of which may be waived by the Company:
(i) receipt by the Company from stockholders holding rights to require
the Company to register the sale of any securities owned by such
holder in the Registration Statement (as defined below) of waivers
of such rights (including the waiver of any notice requirements
related to such rights);
(ii) receipt by the Company of same-day funds in the full amount of the
purchase price for the Shares being purchased under this Agreement;
and
(iii) the accuracy in all material respects of the representations and
warranties made by the Purchasers and the fulfillment in all
material respects of those undertakings of the Purchasers to be
fulfilled before the Closing.
(d) The Purchasers' obligations to accept delivery of such stock
certificates and to pay for the Shares evidenced by the certificates
shall be subject to the following conditions, any one or more of
which may be waived by a Purchaser with respect to such Purchaser's
obligation:
(i) the representations and warranties made by the Company in this
Agreement shall be accurate in all material respects and the
undertakings of the Company shall have been fulfilled in all
material respects on or before the Closing;
(ii) the Company shall have delivered to the Purchasers a certificate
executed by the chairman of the board or president and the chief
financial or accounting officer of the Company, dated the Closing
Date, in form and substance reasonably satisfactory to
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the Purchasers, to the effect that the representations and
warranties of the Company set forth in Section 4 hereof are true and
correct in all material respects as of the date of this Agreement
and as of the Closing Date, and that the Company has complied with
all the agreements and satisfied all the conditions in this
Agreement on its part to be performed or satisfied on or before the
Closing Date; and
(iii) the Company shall have delivered to Purchasers a legal opinion in
substantially the form attached hereto as Exhibit A.
(iv) the Company shall have obtained gross proceeds of at least
$2,000,002.50 from the sale of the Shares at the Closing.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit B, the Company hereby represents and warrants to the Purchasers as
follows (which representations and warranties shall be deemed to apply, where
appropriate, to each subsidiary of the Company):
4.1 ORGANIZATION AND QUALIFICATION
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of California. The
Company has the corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted and to enter into
and perform its obligations under this Agreement. The Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company.
4.2 CAPITALIZATION
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(a) The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock.
(b) As of September 30, 2001, the issued and outstanding capital stock
of the Company consists of 34,209,065 shares of Common Stock. The
shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued, are fully paid and
nonassessable and have not been issued in violation of or are not
otherwise subject to any preemptive or other similar rights.
(c) The Company has reserved 5,925,000 shares of Common Stock for
issuance upon the exercise of stock options granted or available for
future grant under the Company's stock option plans.
(d) The Company has reserved 75,000 shares of Common Stock for issuance
upon the exercise of outstanding warrants to purchase Common Stock.
With the exception of the foregoing, there are no outstanding
subscriptions, options, warrants, convertible or exchangeable securities or
other rights granted to or by the Company to purchase shares of Common Stock or
other securities of the Company and there are no commitments, plans or
arrangements to issue any shares of Common Stock or any security convertible
into or exchangeable for Common Stock.
4.3 ISSUANCE, SALE AND DELIVERY OF THE SHARES
(a) The Shares have been duly authorized for issuance and sale to the
Purchasers pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth in this Agreement, will be validly issued
and fully paid and nonassessable and free and clear of all pledges,
liens and encumbrances. The certificates evidencing the Shares are
in due and proper form under California law.
(b) The issuance of the Shares is not subject to preemptive or other
similar rights. No further approval or authority of the shareholders
or the Board of Directors of the Company will be required for the
issuance and sale of the Shares to be sold by the Company as
contemplated in this Agreement.
(c) Subject to the accuracy of the Purchasers' representations and
warranties in Section 5 of this Agreement, the offer, sale, and
issuance of the Shares in conformity with the terms of this
Agreement constitute transactions exempt from the registration
requirements of Section 5 of the Securities Act and from the
registration or qualification requirements of the laws of any
applicable state or United States jurisdiction.
4.4 FINANCIAL STATEMENTS
The financial statements included (as exhibits or otherwise) in the
Company Documents (as defined below) present fairly the financial position of
the Company as of the dates indicated and the results of their operations for
the periods specified. Except as otherwise stated in such
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Company Documents, such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis, and
any supporting schedules included with the financial statements present fairly
the information stated in the financial statements. The financial and
statistical data set forth in the Company Documents were prepared on an
accounting basis consistent with such financial statements.
4.5 NO MATERIAL CHANGE
Since October 1, 2001,
(a) there has been no material adverse change or any development
involving a prospective material adverse change in or affecting the
condition, financial or otherwise, or in the earnings, assets,
business affairs or business prospects of the Company, whether or
not arising in the ordinary course of business;
(b) there have been no transactions entered into by the Company other
than those in the ordinary course of business, which are material
with respect to the Company; and
(c) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
The Company has no material contingent obligations.
4.6 ENVIRONMENTAL
Except as would not, singly or in the aggregate, reasonably be expected
to have a material adverse effect on the condition, financial or otherwise, or
the earnings, assets, business affairs or business prospects of the Company,
(a) the Company is in compliance with all applicable Environmental Laws
(as defined below);
(b) the Company has all permits, authorizations and approvals required
under any applicable Environmental Laws and is in compliance with
the requirements of such permits authorizations and approvals;
(c) there are no pending or, to the best knowledge of the Company,
threatened Environmental Claims (as defined below) against the
Company; and
(d) under applicable law, there are no circumstances with respect to any
property or operations of the Company that are reasonably likely to
form the basis of an Environmental Claim against the Company.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) Federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or any chemical,
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material or substance, exposure to which is prohibited, limited or regulated by
any governmental authority. "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law.
4.7 NO DEFAULTS
The Company is not in violation of its certificate of incorporation or
bylaws or in material default in the performance or observance of any
obligation, agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement, deed, trust, note, lease, sublease, voting
agreement, voting trust, or other instrument or material agreement to which the
Company is a party or by which it may be bound, or to which any of the property
or assets of the Company is subject.
4.8 LABOR MATTERS
No labor dispute with the employees of the Company exists or, to the
best knowledge of the Company, is imminent.
4.9 NO ACTIONS
There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company which,
singly or in the aggregate, might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, or which, singly or in the aggregate, might
materially and adversely affect the properties or assets thereof or which might
materially and adversely affect the consummation of this Agreement, nor, to the
best knowledge of the Company, is there any reasonable basis therefor. The
Company is not in default with respect to any judgment, order or decree of any
court or governmental agency or instrumentality which, singly or in the
aggregate, would have a material adverse effect on the assets, properties or
business of the Company.
4.10 INTELLECTUAL PROPERTY
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(a) The Company, to the best of its knowledge in the course of diligent
inquiry, owns or is licensed to use all patents, patent
applications, inventions, trademarks, trade names, applications for
registration of trademarks, service marks, service xxxx
applications, copyrights, know-how, manufacturing processes,
formulae, trade secrets, licenses and rights in any thereof and any
other intangible property and assets that are material to the
business of the Company as now conducted and as proposed to be
conducted (in this Agreement called the "Proprietary Rights"), or is
seeking, or will seek, to obtain rights to use such Proprietary
Rights that are material to the business of the Company as proposed
to be conducted.
(b) The Company does not have any knowledge of, and the Company has not
given or received any notice of, any pending conflicts with or
infringement of the rights of others with respect to any Proprietary
Rights or with respect to any license of Proprietary Rights which
are material to the business of the Company.
(c) No action, suit, arbitration, or legal, administrative or other
proceeding, or investigation is pending, or, to the best knowledge
of the Company, threatened, which involves any Proprietary Rights,
nor, to the best knowledge of the Company, is there any reasonable
basis therefor.
(d) The Company is not subject to any judgment, order, writ, injunction
or decree of any court or any Federal, state, local, foreign or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any arbitrator, and has not
entered into or is not a party to any contract which restricts or
impairs the use of any such Proprietary Rights in a manner which
would have a material adverse effect on the use of any of the
Proprietary Rights.
(e) The Company has not received written notice of any pending conflict
with or infringement upon any third-party proprietary rights.
(f) The Company has not entered into any consent, indemnification,
forbearance to xxx or settlement agreement with respect to
Proprietary Rights other than in the ordinary course of business. No
claims have been asserted by any person with respect to the validity
of the Company's ownership or right to use the Proprietary Rights
and, to the best knowledge of the Company, there is no reasonable
basis for any such claim to be successful.
(g) The Company has complied, in all material respects, with its
obligations relating to the protection of the Proprietary Rights
which are material to the business of the Company used pursuant to
licenses.
(h) To the best knowledge of the Company, no person is infringing on or
violating the Proprietary Rights.
4.11 PERMITS
The Company possesses and is operating in compliance with all material
licenses, certificates, consents, authorities, approvals and permits from all
state, federal, foreign and other
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regulatory agencies or bodies necessary to conduct the businesses now operated
by it, and the Company has not received any notice of proceedings relating to
the revocation or modification of any such permit or any circumstance which
would lead it to believe that such proceedings are reasonably likely which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially and adversely affect the condition, financial or
otherwise, or the earnings, assets, business affairs or business prospects of
the Company.
4.12 DUE EXECUTION, DELIVERY AND PERFORMANCE
(a) This Agreement has been duly executed and delivered by the Company
and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and
the fulfillment of the terms of this Agreement, including the sale,
issuance and delivery of the Shares, (i) have been duly authorized
by all necessary corporate action on the part of the Company, its
directors and stockholders; (ii) will not conflict with or
constitute a breach of, or default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to, any contract, indenture,
mortgage, loan agreement, deed, trust, note, lease, sublease, voting
agreement, voting trust or other instrument or agreement to which
the Company is a party or by which it may be bound, or to which any
of the property or assets of the Company is subject; (iii) will not
trigger anti-dilution rights or other rights to acquire additional
equity securities of the Company; and (iv) will not result in any
violation of the provisions of the articles of incorporation or
bylaws of the Company or any applicable statute, law, rule,
regulation, ordinance, decision, directive or order.
4.13 PROPERTIES
The Company has good and marketable title to its properties, free and
clear of all material security interests, mortgages, pledges, liens, charges,
encumbrances and claims of record. The properties of the Company are, in the
aggregate, in good repair (reasonable wear and tear excepted), and suitable for
their respective uses. Any real property held under lease by the Company is held
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the conduct of the business of the Company.
The Company owns or leases all such properties as are necessary to its business
or operations as now conducted.
4.14 COMPLIANCE
The Company has conducted and is conducting its business in compliance
with all applicable Federal, state, local and foreign statutes, laws, rules,
regulations, ordinances, codes, decisions, decrees, directives and orders,
except where the failure to do so would not, singly or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or on the
earnings, assets, business affairs or business prospects of the Company.
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4.15 SECURITY MEASURES
The Company takes security measures designed to enable the Company to
assert trade secret protection in its non-patented technology.
4.16 CONTRIBUTIONS
To the best of the Company's knowledge, neither the Company nor any
employee or agent of the Company has made any payment of funds of the Company or
received or retained any funds in violation of any law, rule or regulation.
4.17 USE OF PROCEEDS; INVESTMENT COMPANY
The Company intends to use the proceeds from the sale of the Shares for
working capital and other general corporate purposes. The Company is not now,
and after the sale of the Shares under this Agreement and under all other
agreements and the application of the net proceeds from the sale of the Shares
described in the proceeding sentence will not be, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
4.18 PRIOR OFFERINGS
All offers and sales of capital stock of the Company before the date of
this Agreement were at all relevant times duly registered or exempt from the
registration requirements of the Securities Act and were duly registered or
subject to an available exemption from the registration requirements of the
applicable state securities or Blue Sky laws.
4.19 Taxes
The Company has filed all material tax returns required to be filed,
which returns are true and correct in all material respects, and the Company is
not in default in the payment of any taxes, including penalties and interest,
assessments, fees and other charges, shown thereon due or otherwise assessed,
other than those being contested in good faith and for which adequate reserves
have been provided or those currently payable without interest which were
payable pursuant to said returns or any assessments with respect thereto.
4.20 OTHER GOVERNMENTAL PROCEEDINGS
To the Company's knowledge, there are no rulemaking or similar
proceedings before any Federal, state, local or foreign government bodies that
involve or affect the Company, which, if the subject of an action unfavorable to
the Company, could involve a prospective material adverse change in or effect on
the condition, financial or otherwise, or in the earnings, assets, business
affairs or business prospects of the Company.
4.21 NON-COMPETITION AGREEMENTS
To the knowledge of the Company, any full-time employee who has entered
into any non-competition, non-disclosure, confidentiality or other similar
agreement with any party other than the Company is neither in violation of nor
is expected to be in violation of that agreement as
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a result of the business currently conducted or expected to be conducted by the
Company or such person's performance of his or her obligations to the Company.
The Company has not received written notice that any consultant or scientific
advisor of the Company is in violation of any non-competition, non-disclosure,
confidentiality or similar agreement.
4.22 TRANSFER TAXES
On the Closing Date, all stock transfer or other taxes (other than
income taxes) that are required to be paid in connection with the sale and
transfer of the Shares to be sold to the Purchasers under this Agreement will
be, or will have been, fully paid or provided for by the Company and all laws
imposing such taxes will be or will have been fully complied with.
4.23 INSURANCE
The Company maintains insurance of the type and in the amount that the
Company reasonably believes is adequate for its business, including, but not
limited to, insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.
4.24 GOVERNMENTAL/ REGULATORY CONSENTS
No registration, authorization, approval, qualification or consent with
or required by any court or governmental/ regulatory authority or agency is
necessary in connection with the execution and delivery of this Agreement or the
offering, issuance or sale of the Shares under this Agreement.
4.25 SECURITIES AND EXCHANGE COMMISSION FILINGS
The Company has timely filed with the Securities and Exchange Commission
(the "Commission") all documents required to be filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act.")
4.26 ADDITIONAL INFORMATION
The Company represents and warrants that the information contained in
the following documents (the "Company Documents"), which will be provided to
Purchaser before the Closing, is or will be true and correct in all material
respects as of their respective final dates:
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(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000;
(b) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 2001, June 30, 2001 and September 30, 2001;
(c) the Company's Proxy Statement for its 2001 Annual Meeting of
Shareholders; and
(d) all other documents, if any, filed by the Company with the
Commission since January 1, 2001 pursuant to the reporting
requirements of the Securities Exchange Act.
4.27 CONTRACTS
The contracts described in the Company Documents or incorporated by
reference therein are in full force and effect on the date hereof, except for
contracts the termination or expiration of which would not, singly or in the
aggregate, have a material adverse effect on the business, properties or assets
of the Company. Neither the Company nor, to the best knowledge of the Company,
any other party is in material breach of or default under any such contracts.
4.28 NO INTEGRATED OFFERING
Neither the Company, nor any of its affiliates, nor any person acting on
its or their behalf, has directly or indirectly made any offers or sales in any
security or solicited any offers to buy any security under circumstances that
would require registration under the Securities Act of the issuance of the
Shares to the Purchasers. The issuance of the Shares to the Purchasers will not
be integrated with any other issuance of the Company's securities (past, current
or future) for purposes of the Securities Act or any applicable rules of Nasdaq
(or of any national securities exchange on which the Company's Common Stock is
then traded). The Company will not make any offers or sales of any security
(other than the Shares) that would cause the offering of the Shares to be
integrated with any other offering of securities by the Company for purposes of
any registration requirement under the Securities Act or any applicable rules of
Nasdaq (or of any national securities exchange on which the Company's Common
Stock is then traded).
4.29 LISTING OF SHARES
The Company agrees to promptly secure the listing of the Shares upon
each national securities exchange or automated quotation system upon which
shares of Common Stock are then listed and, so long as any Purchaser owns any of
the Shares, shall maintain such listing of all Shares. The Company has taken no
action designed to delist, or which is likely to have the effect of delisting,
the Common Stock from any of the national securities exchange or automated
quotation system upon which the shares of Common Stock are then listed.
4.30 NO MANIPULATION OF STOCK
The Company has not taken and will not, in violation of applicable law,
take any action outside the ordinary course of business designed to or that
might reasonably be expected to cause
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or result in unlawful manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
4.31 XXXXX II AND ANTI-KICKBACK
Company represents and warrants that it shall not knowingly sell, lease
or provide services to an entity which Company knows is in violation of the
federal Xxxxx II (42 USCA 1395nn) law ("Xxxxx II Law") and/or the federal
anti-kickback (42 USCA 1320a-7b) law ("Anti-kickback Law"). In the event Company
breaches the warranties, representations and covenants contained in this Section
4.31, Company agrees to purchase from Purchaser, upon prior written notice from
the Purchaser, the Shares purchased by Purchaser under this Agreement at a price
per share equal to the Per Share Price plus an additional 20%.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
5.1 SECURITIES LAW REPRESENTATIONS AND WARRANTIES
Each Purchaser represents, warrants and covenants to the Company as
follows:
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(a) The Purchaser is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that
involved in the purchase of the Shares, including investments in
securities issued by the Company, and has requested, received,
reviewed and considered all information it deems relevant in making
an informed decision to purchase the Shares.
(b) The Purchaser is acquiring the number of Shares set forth in Section
2 above in the ordinary course of its business and for its own
account for investment (as defined for purposes of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976 and the
regulations thereunder) only, and has no present intention of
distributing any of the Shares nor any arrangement or understanding
with any other persons regarding the distribution of such Shares
within the meaning of Section 2(11) of the Securities Act, other
than as contemplated in Section 7 of this Agreement.
(c) The 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 Shares
except in compliance with the Securities Act and the rules and
regulations promulgated thereunder (the "Rules and Regulations").
(d) The Purchaser has completed or caused to be completed the Stock
Certificate Questionnaire and the Registration Statement
Questionnaire, attached to this Agreement as Appendices I and II,
for use in preparation of the Registration Statement (as defined in
Section 7.3 below), and the answers to the Questionnaires are true
and correct as of the date of this Agreement and will be true and
correct as of the effective date of the Registration Statement;
provided that the Purchasers shall be entitled to update such
information by providing notice thereof to the Company before the
effective date of such Registration Statement.
(e) The Purchaser has, in connection with its decision to purchase the
number of Shares set forth in Section 2 above, relied solely upon
the Company Documents and the representations and warranties of the
Company contained in this Agreement.
(f) The Purchaser is an "accredited investor" within the meaning of Rule
501 of Regulation D promulgated under the Securities Act.
5.2 RESALES OF SHARES
(a) The Purchaser hereby covenants with the Company not to make any sale
of the Shares without satisfying the requirements of the Securities
Act and the Rules and Regulations, including, in the event of any
resale under the Registration Statement, the prospectus delivery
requirements under the Securities Act, and the Purchaser
acknowledges and agrees that such Shares are not transferable on the
books of the Company pursuant to a resale under the Registration
Statement unless the certificate submitted to the transfer agent
evidencing the Shares is accompanied by a separate officer's
certificate
(i) in the form of Appendix III to this Agreement;
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(ii) executed by an officer of, or other authorized person designated
by, the Purchaser; and
(iii) to the effect that (A) the Shares have been sold in accordance
with the Registration Statement and (B) the requirement of
delivering a current prospectus has been satisfied.
(b) The Purchaser acknowledges that there may occasionally be times when
the Company determines, in good faith following consultation with
its Board of Directors or a committee thereof, the use of the
prospectus forming a part of the Registration Statement (the
"Prospectus," as further defined in Section 7.3.1 below) should be
suspended until such time as an amendment or supplement to the
Registration Statement or the Prospectus has been filed by the
Company and any such amendment to the Registration Statement is
declared effective by the Commission, or until such time as the
Company has filed an appropriate report with the Commission pursuant
to the Exchange Act. The Purchaser hereby covenants that it will not
sell any Shares pursuant to the Prospectus during the period
commencing at the time at which the Company gives the Purchaser
written notice of the suspension of the use of the Prospectus and
ending at the time the Company gives the Purchaser written notice
that the Purchaser may thereafter effect sales pursuant to the
Prospectus. The Company may, upon written notice to the Purchasers,
suspend the use of the Prospectus for up to thirty (30) days in any
365-day period based on the reasonable determination of the
Company's Board of Directors that there is a significant business
purpose for such determination, such as pending corporate
developments, public filings with the SEC or similar events. The
Company shall in no event be required to disclose the business
purpose for which it has suspended the use of the Prospectus if the
Company determines in its good faith judgment that the business
purpose should remain confidential. In addition, the Company shall
notify each Purchaser (i) of any request by the SEC for an amendment
or any supplement to such Registration Statement or any related
prospectus, or any other information request by any other
governmental agency directly relating to the offering, and (ii) of
the issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or of any order
preventing or suspending the use of any related prospectus or the
initiation or threat of any proceeding for that purpose.
(c) The Purchaser further covenants to notify the Company promptly of
the sale of any of its Shares, other than sales pursuant to a
Registration Statement contemplated in Section 7 of this Agreement
or sales upon termination of the transfer restrictions pursuant to
Section 7.4 of this Agreement.
5.3 DUE EXECUTION, DELIVERY AND PERFORMANCE
20
(a) This Agreement has been duly executed and delivered by the Purchaser
and constitutes a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and
the fulfillment of the terms of this Agreement have been duly
authorized by all necessary corporate, agency or other action and
will not conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Purchaser pursuant
to, any contract, indenture, mortgage, loan agreement, deed, trust,
note, lease, sublease, voting agreement, voting trust or other
instrument or agreement to which the Purchaser is a party or by
which it or any of them may be bound, or to which any of the
property or assets of the Purchaser is subject, nor will such action
result in any violation of the provisions of the charter or bylaws
of the Purchaser or any applicable statute, law, rule, regulation,
ordinance, decision, directive or order.
6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement,
all covenants, agreements, representations and warranties made by the Company
and the Purchasers in this Agreement and in the certificates for the Shares
delivered pursuant to this Agreement shall survive the execution of this
Agreement, the delivery to the Purchasers of the Shares being purchased and the
payment therefor.
7. FORM D FILING; REGISTRATION; COMPLIANCE WITH THE SECURITIES ACT;
COVENANTS
7.1 FORM D FILING; REGISTRATION OF SHARES
7.1.1 REGISTRATION STATEMENT; EXPENSES
The Company shall:
21
(a) file in a timely manner a Form D relating to the sale of the Shares
under this Agreement, pursuant to Securities and Exchange Commission
Regulation D.
(b) as soon as practicable after the Closing Date, but in no event later
than the 30th day following the Closing Date, prepare and file with
the Commission a Registration Statement on Form S-3 (or, if the
Company is ineligible to use Form S-3, then on Form S-1) relating to
the sale of the Shares by the Purchasers from time to time on the
Nasdaq National Market (or the facilities of any national securities
exchange on which the Company's Common Stock is then traded) or in
privately negotiated transactions (the "Registration Statement");
(c) provide to Purchasers any information required to permit the sale of
the Shares under Rule 144A of the Securities Act;
(d) subject to receipt of necessary information from the Purchasers, use
its best efforts to cause the Commission to notify the Company of
the Commission's willingness to declare the Registration Statement
effective on or before 90 days after the Closing Date;
(e) notify Purchasers promptly upon the Registration Statement, and any
post-effective amendment thereto, being declared effective by the
Commission;
(f) prepare and file with the Commission such amendments and supplements
to the Registration Statement and the Prospectus (as defined in
Section 7.3.1 below) and take such other action, if any, as may be
necessary to keep the Registration Statement effective until the
earlier of (i) the date on which the Shares may be resold by the
Purchasers without registration and without regard to any volume
limitations by reason of Rule 144(k) under the Securities Act or any
other rule of similar effect or (ii) all of the Shares have been
sold pursuant to the Registration Statement or Rule 144 under the
Securities Act or any other rule of similar effect;
(g) promptly furnish to the Purchasers with respect to the Shares
registered under the Registration Statement such reasonable number
of copies of the Prospectus, including any supplements to or
amendments of the Prospectus, in order to facilitate the public sale
or other disposition of all or any of the Shares by the Purchasers;
(h) during the period when copies of the Prospectus are required to be
delivered under the Securities Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the Exchange Act within the time periods
required by the Exchange Act and the rules and regulations
promulgated thereunder;
(i) file documents required of the Company for customary Blue Sky
clearance in all states requiring Blue Sky clearance; 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; and
22
(j) bear all expenses in connection with the procedures in paragraphs
(a) through (i) of this Section 7.1.1 and the registration of the
Shares pursuant to the Registration Statement.
7.1.2 DELAY IN EFFECTIVENESS OF REGISTRATION STATEMENT
In the event that the Registration Statement is not declared effective
on or before March 31, 2002 (the "Penalty Date"), the Company shall pay to each
Purchaser liquidated damages in an amount equal to 0.25% of the total purchase
price of the Shares purchased by such Purchaser pursuant to this Agreement for
each week after the Penalty Date that the Registration Statement is not declared
effective.
7.2 TRANSFER OF SHARES AFTER REGISTRATION
Each Purchaser agrees that it will not effect any disposition of the
Shares or its right to purchase the Shares that would constitute a sale within
the meaning of the Securities Act, except as contemplated in the Registration
Statement referred to in Section 7.1 or as otherwise permitted by law, and that
it will promptly notify the Company of any changes in the information set forth
in the Registration Statement regarding the Purchaser or its plan of
distribution.
7.3 INDEMNIFICATION
For the purpose of this Section 7.3, the term "Registration Statement"
shall include any preliminary or final prospectus, exhibit, supplement or
amendment included in or relating to the Registration Statement referred to in
Section 7.1.
7.3.1 INDEMNIFICATION BY THE COMPANY
The Company agrees to indemnify and hold harmless each of the Purchasers
and each person, if any, who controls any Purchaser within the meaning of the
Securities Act, against any losses, claims, damages, liabilities or expenses,
joint or several, to which such Purchasers or such controlling person may become
subject, under the Securities Act, the Exchange Act, or any other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably withheld),
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, including the Prospectus, financial statements and
schedules, and all other documents filed as a part thereof, as amended at the
time of effectiveness of the Registration Statement, including any information
deemed to be a part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules and
Regulations, or the Prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state in any of them a material
fact required to be stated therein or necessary to make the statements in any of
them, in light of the circumstances under which they were made, not misleading,
or arise out of or are based in whole or in part on any inaccuracy in the
representations and warranties of
23
the Company contained in this Agreement, or any failure of the Company to
perform its obligations under this Agreement or under applicable law, and will
reimburse each Purchaser and each such controlling person for any legal and
other expenses as such expenses are reasonably incurred by such Purchaser or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense arises out
of or is based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the Prospectus
or any amendment or supplement of the Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Purchaser expressly for use in the Registration
Statement or the Prospectus, or (ii) the failure of such Purchaser to comply
with the covenants and agreements contained in Sections 5.2 or 7.2 of this
Agreement respecting resale of the Shares, or (iii) the inaccuracy of any
representations made by such Purchaser in this Agreement or (iv) any untrue
statement or omission of a material fact required to make such statement not
misleading in any Prospectus that is corrected in any subsequent Prospectus that
was delivered to the Purchaser before the pertinent sale or sales by the
Purchaser.
24
7.3.2 INDEMNIFICATION BY THE PURCHASER
Each Purchaser will severally and not jointly indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act, against any losses, claims, damages,
liabilities or expenses to which the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person may become
subject, under the Securities Act, the Exchange Act, or any other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Purchaser, which consent shall not be unreasonably withheld)
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon (i) any
failure on the part of such Purchaser to comply with the covenants and
agreements contained in Sections 5.2 or 7.2 of this Agreement respecting the
sale of the Shares or (ii) the inaccuracy of any representation made by such
Purchaser in this Agreement or (iii) any untrue or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus, or
any amendment or supplement to the Registration Statement or Prospectus, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Purchaser expressly
for use therein; provided, however, that the Purchaser shall not be liable for
any such untrue or alleged untrue statement or omission or alleged omission of
which the Purchaser has delivered to the Company in writing a correction before
the occurrence of the transaction from which such loss was incurred, and the
Purchaser will reimburse the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person for any
legal and other expense reasonably incurred by the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action.
7.3.3 INDEMNIFICATION PROCEDURE
(a) Promptly after receipt by an indemnified party under this Section
7.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 7.3, promptly
notify the indemnifying party in writing of the claim; but the
omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party for
contribution or otherwise under the indemnity agreement contained in
this Section 7.3 or to the extent it is not prejudiced as a result
of such failure.
(b) In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the
25
defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there
may be a conflict between the positions of the indemnifying party
and the indemnified party in conducting the defense of any such
action or that there may be legal defenses available to it or other
indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7.3
for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless:
(i) the indemnified party shall have employed such counsel in connection
with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than
one separate counsel, approved by such indemnifying party
representing all of the indemnified parties who are parties to such
action) or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of
action, in each of which cases the reasonable fees and expenses of
counsel shall be at the expense of the indemnifying party.
Notwithstanding the provisions of this Section 7.3, the Purchaser
shall not be liable for any indemnification obligation under this
Agreement in excess of the amount of net proceeds received by the
Purchaser from the sale of the Shares.
7.3.4 CONTRIBUTION
If the indemnification provided for in this Section 7.3 is required by
its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under this Section 7.3 in
respect to any losses, claims, damages, liabilities or expenses referred to in
this Agreement, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to in this Agreement
(a) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Purchaser from the
placement of Common Stock or
(b) if the allocation provided by clause (a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (a) above but the
relative fault of the Company and the Purchaser in connection with
the statements or omissions or inaccuracies in the representations
and
26
warranties in this Agreement that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations.
The respective relative benefits received by the Company on the one hand
and each Purchaser on the other shall be deemed to be in the same proportion as
the amount paid by such Purchaser to the Company pursuant to this Agreement for
the Shares purchased by such Purchaser that were sold pursuant to the
Registration Statement bears to the difference (the "Difference") between the
amount such Purchaser paid for the Shares that were sold pursuant to the
Registration Statement and the amount received by such Purchaser from such sale.
The relative fault of the Company and each Purchaser shall be determined by
reference to, among other things, whether the untrue or alleged statement of a
material fact or the omission or alleged omission to state a material fact or
the inaccurate or the alleged inaccurate representation or warranty relates to
information supplied by the Company or by such Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7.3.3, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in Section 7.3.3 with respect to the notice of the threat
or commencement of any threat or action shall apply if a claim for contribution
is to be made under this Section 7.3.4; provided, however, that no additional
notice shall be required with respect to any threat or action for which notice
has been given under Section 7.3 for purposes of indemnification. The Company
and each Purchaser agree that it would not be just and equitable if contribution
pursuant to this Section 7.3 were determined solely by pro rata allocation (even
if the Purchaser were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
7.3, no Purchaser shall be required to contribute any amount in excess of the
amount by which the Difference exceeds the amount of any damages that such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Purchasers' obligations to contribute pursuant
to this Section 7.3 are several and not joint.
7.4 TERMINATION OF CONDITIONS AND OBLIGATIONS
The restrictions imposed by Section 5 or this Section 7 upon the
transferability of the Shares shall cease and terminate as to any particular
number of the Shares upon the passage of two years from the Closing Date or at
such time as an opinion of counsel satisfactory in form and substance to the
Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
7.5 INFORMATION AVAILABLE
From the date of this Agreement through the date the Registration
Statement covering the resale of Shares owned by any Purchaser is no longer
effective, the Company will furnish to such Purchaser:
27
(a) as soon as practicable after available (but in the case of the
Company's Annual Report to Shareholders, within 90 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
accounting principles by a national firm of certified public
accountants);
(ii) if not included in substance in the Annual Report to Shareholders,
its Annual Report on Form 10-K;
(iii) if not included in substance in its Quarterly Reports to
Shareholders, its quarterly reports on Form 10-Q; and
(iv) a full copy of the particular Registration Statement covering the
Shares (the foregoing, in each case, excluding exhibits);
(b) upon the request of the Purchaser, a reasonable number of copies of
the Prospectus to supply to any other party requiring the
Prospectus.
7.6 RULE 144 INFORMATION
Until the earlier of (i) the date on which the Shares may be resold by
the Purchasers without registration and without regard to any volume limitations
by reason of Rule 144(k) under the Securities Act or any other rule of similar
effect or (ii) all of the Shares have been sold pursuant to the Registration
Statement or Rule 144 under the Securities Act or any other rule of similar
effect, the Company shall file all reports required to be filed by it under the
Securities Act, the Rules and Regulations and the Exchange Act and shall take
such further action to the extent required to enable the Purchasers to sell the
Shares pursuant to Rule 144 under the Securities Act (as such rule may be
amended from time to time).
7.7 STOCK OPTION MATTERS AND PROHIBITION ON TOXICS
The Company shall,
(a) within thirty (30) days of the Closing Date, adopt such amendments
to, with respect to (i) and (ii) below, the Company's stock option plans and
By-laws, and, with respect to (iii) and (iv) below, the Company's By-laws
(together, the "Stock Option Plan and By-law Amendments") to provide that,
unless approved by the holders of a majority of the shares present and entitled
to vote at a duly convened meeting of shareholders, the Company shall not:
(i) grant any stock option, including stock appreciation right, with an
exercise price that is less than 100% of the fair market value of
the underlying stock on the date of grant;
(ii) reduce the exercise price of any stock option, including stock
appreciation right, outstanding or to be granted in the future;
cancel and re-grant options at a lower exercise price (including
entering into any "6 month and 1 day" cancellation and re-grant
scheme), whether or not the cancelled options are put back into the
available
28
pool for grant; replace underwater options with restricted stock in
an exchange, buy-back or other scheme; or replace any options with
new options having a lower exercise price or accelerated vesting
schedule in an exchange, buy-back or other scheme;
(iii) sell or issue any security of the Company convertible, exercisable
or exchangeable into shares of common stock of the Company, having a
conversion, exercise or exchange price per share which is subject to
downward adjustment based on the market price of the common stock at
the time of conversion, exercise or exchange of such security into
common stock (except for appropriate adjustments made to give effect
to any stock splits or stock dividends); or
(iv) enter into (a) any equity line or similar agreement or arrangement;
or (b) any agreement to sell common stock of the Company (or any
security convertible, exercisable or exchangeable into shares of
common stock ("Common Stock Equivalent")) at a per share price (or,
with respect to a Common Stock Equivalent, at a conversion, exercise
or exchange price, as the case may be ("Equivalent Price")) that is
fixed after the execution date of the agreement, whether or not
based on any predetermined price-setting formula or calculation
method. Notwithstanding the foregoing, however, a price protection
clause shall be permitted in an agreement for sale of common stock
or Common Stock Equivalent, if such clause provides for an
adjustment to the price per share of common stock or, with respect
to a Common Stock Equivalent, to the Equivalent Price (provided that
such price or Equivalent Price is fixed on or before the execution
date of the agreement) (the "Fixed Price") in the event that the
Company, during the period beginning on the date of the agreement
and ending no later than 90 days after the closing date of the
transaction, sells shares of common stock or Common Stock Equivalent
to another investor at a price or Equivalent Price, as the case may
be, below the Fixed Price.
The Stock Option Plan and By-law Amendments may not be further amended
or repealed without the affirmative vote of the holders of a majority of the
shares present and entitled to vote at a duly convened meeting of shareholders.
Upon the adoption of the Stock Option Plan and By-law Amendments, the Company
shall promptly furnish a copy of such amendments to the Purchasers. The Company
agrees that, prior to the adoption of the Stock Option Plan and By-law
Amendments by all necessary corporate action of the Company as described above,
the Company shall not conduct any of the actions specified in (i), (ii), (iii)
or (iv) above of this Section 7.7. The Company further agrees that it will not
obtain additional funding under the Common Stock Purchase Agreement dated as of
August 17, 2000 between the Company and Acqua Wellington North American Equities
Fund, Ltd.
(b) not later than the earlier to occur of (i) January 31, 2002 or (ii)
three days prior to the execution date of the share purchase agreement for the
Second Tranche Offering, amend the Rights Agreement, dated as of August 17, 2001
between the Company and EquiServe Trust Company, N.A., as Rights Agent (the
"Shareholder Rights Agreement"), so that the State of Wisconsin Investment Board
("SWIB") may beneficially own up to and including 20% of the then outstanding
Voting Shares, as defined in the Shareholders Rights Agreement, without becoming
an Acquiring Person, as defined in the Shareholders Rights Agreement, subject to
the
29
same provisos as provided in the definition of "Acquiring Person", except that
references in the provisos to 15% should be 21% instead with respect to SWIB.
Upon the adoption of such amendment to the Shareholder Rights Agreement, the
Company shall promptly furnish a copy of the amendment to SWIB.
8. LEGAL FEES AND OTHER TRANSACTION EXPENSES
At the Closing, the Company agrees to pay a flat fee of $5,000 to the
State of Wisconsin Investment Board for their legal and other transaction
expenses (whether internal or external) arising in connection with the
transactions contemplated by this Agreement.
9. BROKER'S FEE
The Purchasers acknowledge that the Company does not intend to pay any
fee in respect of the sale of the Shares. Each of the parties to this Agreement
hereby represents that, on the basis of any actions and agreements by it, there
are no brokers or finders entitled to compensation in connection with the sale
of the Shares to the Purchasers. The Company shall indemnify and hold harmless
the Purchasers from and against all fees, commissions or other payments owing by
the Company to any person or firm acting on behalf of the Company hereunder.
10. NOTICES
All notices, requests, consents and other communications under this
Agreement shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be delivered as addressed as follows:
30
(a) if to the Company, to:
CardioGenesis CORPORATION
00000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
Attn: Chief Executive Officer
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and
(b) if to a Purchaser, at its address as set forth on the signature page
to this Agreement, or at such other address or addresses as may have
been furnished to the Company in writing.
Such notice shall be deemed effectively given upon confirmation of
receipt by facsimile, one business day after deposit with such overnight courier
or three days after deposit of such registered or certified airmail with the
U.S. Postal Service, as applicable.
11. MODIFICATION; AMENDMENT
This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and each of the Purchasers.
12. TERMINATION
This Agreement may be terminated as to any Purchaser, at the option of
such Purchaser, if the Closing has not occurred on or before thirty (30) days
from the date of this Agreement.
13. HEADINGS
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
14. SEVERABILITY
If any provision contained in this Agreement should be held to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby.
15. GOVERNING LAW; JURISDICTION
This Agreement shall be governed by and construed in accordance with the
laws of the state of California and the federal law of the United States of
America. The parties hereto hereby submit to the jurisdiction of the courts of
the State of Wisconsin, or of the United States of America sitting in the State
of Wisconsin, over any action, suit, or proceeding arising out of or relating to
this Agreement. Nothing herein shall affect the right of the Purchaser to serve
process in any manner permitted by law or limit the right of the Purchaser to
bring proceedings against the Company in the competent courts of any other
jurisdiction or jurisdictions.
31
16. NO CONFLICTS OF INTEREST
The Company represents, warrants, and covenants that, to the best of its
knowledge, no trustee or employee of the State of Wisconsin Investment Board
identified on the attached list, either directly or indirectly (a) currently
holds, except as may be specifically set forth below, a personal interest in the
Company or any of its affiliates (together, the "Entity") or the Entity's
property or securities, or (b) will, in connection with the investment made
pursuant to this Agreement, receive (i) a personal interest in the Entity or the
Entity's property or securities or (ii) anything of substantial economic value
for his or her private benefit from the Entity or anyone acting on its behalf.
As to ownership of an interest in the Entity's publicly traded securities,
"knowledge" hereunder is based on an examination of record holders of the
Entity's securities and actual knowledge of the undersigned.
17. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party to this Agreement and delivered to
the other parties.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
CARDIOGENESIS CORPORATION
By /s/ XXXXXXX X. XXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Its: President, Chief Executive Officer
and Chairman
STATE OF WISCONSIN INVESTMENT BOARD
By: /s/ XXXX X. XXXXXX
---------------------------------------
Name: Xxxx X. Xxxxxx
-------------------------------------
Title: Investment Director
------------------------------------
Address:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
SCHEDULE A
PURCHASER
STATE OF WISCONSIN INVESTMENT BOARD
(Purchasing an aggregate of 2,222,225 shares of CardioGenesis Common Stock).
EXHIBIT A
December __, 2001
(000) 000-0000 C 26399-00001
State of Wisconsin Investment Board
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Re: CardioGenesis Corporation
Dear Sir/Madam:
We have acted as legal counsel to CardioGenesis Corporation, a
California corporation (the "Company"), in connection with (i) the issuance and
sale by the Company to you of two million (2,000,000) shares (the "Shares") of
its common stock, no par value per share (the "Common Stock"), pursuant to a
Share Purchase Agreement dated as of December __, 2001 (the "Purchase
Agreement") and (ii) the negotiation of the provisions of the Purchase
Agreement. Capitalized terms used herein, but not otherwise defined herein,
shall have the meanings ascribed to those terms in the Purchase Agreement.
For the purpose of rendering this opinion, we have investigated such
questions of law as we have deemed necessary. As to factual matters, we have
relied, with your permission and without verification, on the representations
and warranties as to facts set forth in the Purchase Agreement and such
certificates and statements of the Company and its officers as we have deemed
necessary. In addition, we have obtained and relied upon, with your permission,
such other certificates and assurances from public officials as we have deemed
necessary, desirable or appropriate for the purpose of rendering the opinions
expressed herein.
We have assumed, with your permission, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies and the
authenticity of the originals of such copied documents. We have assumed that
each of the parties to the Purchase Agreement other than the Company have the
power, authority and legal right to enter into and perform the terms and
conditions on the part of such party to be performed, and the due authorization,
execution and
delivery by such party of the Purchase Agreement. We have further assumed that
the Purchase Agreement constitutes the legal, valid and binding obligation of
the parties thereto other than the Company, enforceable against such other
parties in accordance with its terms.
We have assumed, with your permission, that there are no documents,
agreements, understandings or negotiations between you and the Company which
would expand, modify or otherwise affect the respective rights and obligations
of the parties set forth in the Purchase Agreement and that the Purchase
Agreement correctly and completely sets forth the intent of all parties thereto.
Based on the foregoing and in reliance thereon, and subject to the
assumptions, exceptions, qualifications and limitations set forth herein, we are
of the opinion that:
1. The Company has been duly incorporated and is validly existing in
good standing under the laws of the State of California. The Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure to so qualify would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company. The Company has
the requisite corporate power to own or lease its property and assets and to
conduct its business as currently conducted.
2. The Purchase Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered on behalf of the Company and constitutes a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium and other laws of general applicability relating to or
affecting creditors' rights, and (ii) as limited by equitable principles
generally and limitations on the availability of equitable remedies, whether
such enforceability is considered in a proceeding in equity or at law.
3. The Shares have been duly authorized and when issued, delivered and
paid for in accordance with the terms of the Agreement, will be validly issued,
fully paid and nonassessable and free of any pre-emptive or similar rights.
4. Except as set forth in the Purchase Agreement, to our knowledge,
there is no action, proceeding or investigation pending or overtly threatened in
writing against the Company which could reasonably be anticipated to result,
either individually or in the aggregate, in any material adverse change in the
assets, financial condition or operations of the Company, or which questions the
validity or enforceability of, or seeks to enjoin or invalidate, the Purchase
Agreement or any action to be taken by the Company in connection therewith.
5. The offer and sale of the Shares by the Company to you is exempt from
the registration requirements of the Securities Act of 1933, as amended, subject
to timely filing of a Form D pursuant to Securities and Exchange Commission
Regulation D.
6. The execution, delivery and performance of the Purchase Agreement by
the Company and the consummation of the issuance and sale of the Shares by the
Company as
3
contemplated therein do not conflict with or violate any provisions of the
Company's Articles of Incorporation or By-laws or any provision of any
applicable material federal or state law, rule or regulation; or, to the best of
our knowledge, any material agreements to which the Company is a party.
7. All consents, approvals, authorizations, or orders of, and filings,
registrations and qualifications with any regulatory authority or governmental
body in the United States required for the issuance by the Company of the Shares
as contemplated by the Purchase Agreement, have been made or obtained, except
for (i) the filing of a Form D pursuant to Securities and Exchange Commission
Regulation D, and (ii) the filing of a Form D with the Securities Commissioners
of the State of California.
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations:
A. We express no opinion as to the legality, validity, binding effect or
enforceability of any choice of law, arbitration, submission to jurisdiction or
service of process provisions or any severability provisions.
B. We express no opinion as to the legality, validity, binding nature or
enforceability of any provision in the Purchase Agreement: (i) indemnifying a
party or requiring contribution from a party, to the extent such provision may
be held unenforceable as contrary to or limited by federal or state securities
laws or public policy, including without limitation provisions indemnifying a
party against losses attributable to or liability for its own negligent acts;
(ii) providing for the payment or reimbursement of costs and expenses or
indemnification for claims, losses or liabilities in excess of a reasonable
amount determined by any court or other tribunal; or (iii) regarding the ability
of any party to collect attorneys' fees and costs in an action involving the
Purchase Agreement.
C. We express no opinion as to the legality, validity, binding effect or
enforceability of any provisions of the Purchase Agreement regarding: (i) the
remedies available to any party; (ii) the ability of any party to take
discretionary action which is arbitrary, unreasonable or capricious, or is not
taken in good faith or in a commercially reasonable manner, whether or not such
action is permitted under the Purchase Agreement; or (iii) for violations or
breaches which are determined by a court to be non-material or without
substantial adverse effect upon the ability of the obligor to perform its
material obligations thereunder.
D. We express no opinion as to the legality, validity, binding nature or
enforceability of any: (i) waiver of unknown future rights or waiver of rights
existing, or duties owed, that are broadly or vaguely stated or that do not
describe the right or duty purportedly waived with reasonable specificity, or
(ii) waiver or consent (whether or not characterized as a waiver or consent in
the Purchase Agreement) relating to the rights of the Company or duties owing to
it existing as a matter of law, to the extent such waiver or consent is found to
be against public policy.
E. We express no opinion as to the legality, validity, binding nature or
enforceability of any provisions of the Purchase Agreement requiring written
amendments or waivers insofar as
4
it suggests that oral or other modifications, amendments or waivers could not be
effectively agreed upon by the parties.
F. We express no opinion as to the legality, validity, binding nature or
enforceability of any provision in the Purchase Agreement to the effect that
rights or remedies are not exclusive, that every right or remedy is cumulative
and may be exercised in addition to any other right or remedy, that the election
of some particular remedy does not preclude recourse to one or more others or
that failure to exercise or delay in exercising rights or remedies will not
operate as a waiver of any such right or remedy.
G. We express no opinion as to any anti-fraud provision of any
securities laws or antitrust laws, regulations or rules.
H. We express no opinion as to the ability to obtain specific
performance, injunctive relief or other equitable relief as a remedy for
noncompliance with the Purchase Agreement.
With respect to any opinion herein in regard to the existence or absence
of facts that is stated to be "to our knowledge," "to the best of our knowledge"
or "known to us," such statement means that, during the course of our
representation of the Company in this matter or any other matter, no information
has come to the attention of the lawyers in our firm participating in such
representation that has given them actual knowledge of facts contrary to the
existence or absence of the facts indicated. However, we have not undertaken any
independent investigation to determine the existence or absence of such facts,
and no inference as to our knowledge of the existence or absence of such facts
should be drawn from our representation of the Company in this matter.
We are admitted to practice in the State of California. We render no
opinion herein as to matters involving the laws of any jurisdiction other than
the State of California and the federal laws of the United States of America.
This opinion is limited to the laws set forth above, as such laws presently
exist, to present judicial interpretations thereof and to the facts as they
presently exist. In rendering this opinion, we assume no obligation to revise or
supplement this opinion should the present laws of the jurisdictions mentioned
herein be changed by legislative action, judicial decision or otherwise. This
opinion is rendered as of the date hereof, and we express no opinion as to, and
disclaim any undertaking or obligation to update this opinion in respect of,
changes of circumstances or events which occur subsequent to this date.
This opinion is rendered in connection with the Purchase Agreement, and
may not be relied upon by any person other than you or by you in any other
context. The opinions expressed herein are solely for your benefit in connection
with the transactions contemplated by the Purchase Agreement. This opinion may
not be quoted in whole or in part nor may copies hereof be delivered to any
other person without our prior written consent.
Very truly yours,
5
EXHIBIT B
SCHEDULE OF EXCEPTIONS
-NONE-
EXHIBIT C
TRUSTEES OF THE STATE OF WISCONSIN INVESTMENT BOARD
Xxx X. Xxxxxx Xxxxx XxXxxxxxx
Xxxx Xxxxxxxx III Xxxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxxxxxxx Xxxxx X. Xxxxxx
Xxxxxx Xxxxx Xxxxxxxx Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxx
RELEVANT EMPLOYEES OF THE STATE OF WISCONSIN INVESTMENT BOARD
ALL TRANSACTIONS
----------------
Xxxxxxxx Xxxxxx Executive Director
Xxxx Xxxxxxx Chief Investment Officer -- Equities
Xxx Xxxxxx Chief Investment Officer -- Fixed Income
Xxxxx Xxxxxxx Chief Legal Counsel
Xxxxxx Xxx Assistant Legal Counsel
Xxxxxxx Xxxxxxx Assistant Legal Counsel
FOR SMALL CAP PORTFOLIO DIRECT PLACEMENTS
-----------------------------------------
Xxxx Xxxxxx Investment Director
Xxxx Xxxxxxx Assistant Portfolio Manager
Xxxxxx Xxxxxx Securities Analyst
Xxxx Xxxxxxx Securities Analyst
Xxx Xxxx Securities Analyst
APPENDIX I
CARDIOGENESIS CORPORATION
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be registered in (this is the
name that will appear on your stock certificate(s)). You may use a
nominee name if appropriate:
__________________________________
2. The relationship between the Purchaser of the Shares and the Registered
Holder listed in response to item 1 above:_____________________________
3. The mailing address of the Registered Holder listed in response to item
1 above:
__________________________________
__________________________________
__________________________________
__________________________________
4. The Social Security Number or Tax Identification Number of the
Registered Holder listed in response to item 1 above:
__________________________________
APPENDIX II
CARDIOGENESIS CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
5. Pursuant to the "Selling Shareholder" section of the Registration
Statement, please state your or your organization's name exactly as it
should appear in the Registration Statement:
_____________________________________________
6. Please provide the number of shares that you or your organization will
own immediately after Closing, including those Shares purchased by you
or your organization pursuant to this Purchase Agreement and those
shares purchased by you or your organization through other
transactions:_____________________________________________
7. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or
its affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
APPENDIX III
CARDIOGENESIS CORPORATION
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, an officer of, or other person duly authorized by
--------------------------------------------------------------------------------
[fill in official name of individual or institution]
hereby certifies that he/she/it is the Purchaser of the shares evidenced by the
attached certificate, and as such, sold such shares on ________________, 200__
in accordance with Registration Statement number 333-________________, and
complied with the requirement of delivering a current prospectus in connection
with such sale.
PRINT OR TYPE:
Name of Purchaser (Individual or Institution):
--------------------------------------------------------------------------------
Name of Individual representing Purchaser (if an Institution)
--------------------------------------------------------------------------------
Title of Individual representing Purchaser (if an Institution):
--------------------------------------------------------------------------------
SIGNATURE:
Individual Purchaser or Individual representing Purchaser:
--------------------------------------------------------------------------------
