VIDAMED, INC.
PURCHASE AGREEMENT
This Purchase Agreement (the "Agreement") is made as of November 16,
2000 (the "Agreement Date"), by and between VidaMed, Inc., a Delaware
corporation (the "Company") with its principal office at 00000 Xxxxxxx Xxxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000, and the purchasers set forth on Exhibit A hereto
(individually, a "Purchaser" and collectively, the "Purchasers").
RECITALS
WHEREAS, the Company desires to issue and sell to the Purchasers and
the Purchasers desire to purchase from the Company, on the terms and subject to
the conditions set forth in this Agreement, 4,425,000 shares of the Company's
common stock, $0.001 par value (the "Common Stock"), at a purchase price of
$2.00 per share for a total purchase price of $8,850,000.
AGREEMENT
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1
PURCHASE AND SALE OF COMMON STOCK
1.1 Purchase and Sale of Common Stock. Subject to the terms and conditions of
this Agreement, at the Closing (as defined below) each Purchaser, severally and
not jointly, agrees to purchase from the Company, and the Company agrees to
issue and sell to such Purchaser, the number of shares (the "Shares") of Common
Stock of the Company set forth opposite such Purchaser's name on Exhibit A
hereto, at a purchase price (the "Purchase Price") of $2.00 per share.
Section 2
CLOSING DATE; DELIVERY
2.1 Closing Date. The completion of the purchase and sale of the Shares will be
held at a location mutually agreeable to the parties on November 20, 2000 (the
"Closing"). The date of the Closing is hereinafter referred to as the "Closing
Date."
2.2 Delivery. At the Closing, the Company will deliver to each Purchaser the
certificates evidencing the Shares and an opinion of Xxxxxxxxxxx Xxxxx &
Xxxxxxxx LLP, counsel to the Company, in the form of Exhibit B. Such delivery
shall be against payment of the Purchase Price for the Shares by wire transfer
of immediately available funds to the Company's bank account (in accordance with
instructions furnished by the Company).
Section 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers as follows:
3.1 Organization and Standing. The Company is a corporation duly organized and
validly existing under the laws of the State of Delaware and is in good standing
as a domestic corporation under the laws of said state, and has the requisite
corporate power and authority to own its properties and to carry on its business
as now being conducted. Other than as disclosed in the SEC Documents (as defined
below), the Company has no subsidiaries or direct or indirect ownership in any
firm, corporation or business which either individually or in the aggregate is
material to the business of the Company. The Company is qualified to do business
and is in good standing as a foreign corporation in every jurisdiction in which
its ownership of property or conduct of business requires it to be so qualified
and in which the failure to so qualify would have a material adverse effect on
the financial condition or business of the Company and its subsidiaries, taken
as a whole.
3.2 Corporate Power; Authorization. The Company has all requisite legal and
corporate power and authority and has taken all requisite corporate action to
duly authorize, execute and deliver this Agreement, to sell and issue the
Shares, and to carry out and perform all of its obligations under and
contemplated by this Agreement. This Agreement has been duly executed and
delivered by an authorized officer of the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally, and (b) as limited by equitable principles
generally (regardless of whether such enforceability is considered a proceeding
in equity or at law).
3.3 Issuance and Delivery. The Shares have been duly authorized and, when issued
and delivered in compliance with this Agreement, will be duly and validly issued
and delivered and will be outstanding, fully paid, nonassessable and free and
clear of all pledges, liens, encumbrances and restrictions other than any liens
or encumbrances created by or imposed on the holders thereof through no action
of the Company; provided, however, that the Shares will be subject to
restrictions on transfer and state and federal securities laws and as provided
herein. No preemptive rights or other rights to subscribe for or purchase exist
with respect to the issuance and sale of the Shares by the Company pursuant to
this Agreement. Except as provided in this Agreement (including Schedule 3.3
hereto), no stockholder of the Company has any right (which has not been waived
or has not expired by reason of lapse of time following notification of the
Company's intent to file the Registration Statement (as defined below)) to
require the Company to register the sale of any shares owned by such holder
under the Securities Act of 1933, as amended (the "Securities Act"), in the
Registration Statement. Except as provided in Schedule 3.3, no further approval
or authority of the stockholders 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 herein.
3.4 SEC Documents; Financial Statements; Subsequent Events. The Company has
filed in a timely manner all documents that the Company was required to file
with the Securities and Exchange Commission ("SEC") during the twelve (12)
months preceding the date of this Agreement. As of their respective filing
dates, all documents filed by the Company with the SEC (the "SEC Documents")
complied in all material respects with the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the Securities Act, as
applicable and all rules and regulations thereunder. None of the SEC Documents
contained, as of their respective dates, any untrue statement of material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Documents (the "Financial Statements") comply in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with United States generally accepted accounting
principles consistently applied (except as may be indicated thereon or in the
notes thereto), and fairly present the financial position of the Company and any
subsidiaries at the dates thereof and the results of the Company's operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal adjustments). The Company meets the registrant eligibility
requirements for the use of Form S-3 contained in General Instructions I.A. of
Form S-3 under the Securities Act.
3.5 Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement that has not
been or will not be in a timely manner accomplished except for (a) the filing of
a Form D with the SEC with respect to the issuance of the Shares, (b) the filing
of a Nasdaq SmallCap Market Notification Form (pursuant to Rule 10b-17
promulgated under the Exchange Act) with the Nasdaq SmallCap Market, each of
which will be filed in a timely manner, and (c) qualification (or taking such
action as may be necessary to secure an exemption from qualification, if
available) of the offer and sale of the Shares under applicable state laws,
which filings and qualifications, if required, will be accomplished in a timely
manner.
3.6 Exempt Transactions. Subject to the accuracy of the Purchasers'
representations and warranties in Section 4 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.
3.7 No Material Adverse Change. Since September 30, 2000, there have not been
any materially adverse changes in the assets, liabilities, financial condition,
business or operations of the Company from that reflected in the Financial
Statements.
3.8 Intellectual Property. The Company owns or possesses adequate rights to use
all patents, patent rights, inventions, trademarks, trade names, copyrights,
licenses, governmental authorizations, trade secrets and know-how that are used
or necessary for the conduct of its business as described in the SEC Documents;
except as described in the SEC Documents, neither the Company nor any of its
subsidiaries has received any notice of, or has any knowledge of, any
infringement of or conflict with asserted rights of others with respect to any
patent, patent right, invention, trademarks, trade names, copyrights, licenses,
governmental authorizations, trade secret or know-how that, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the condition (financial or otherwise),
earnings, operations or business of the Company and its subsidiaries, taken as a
whole.
3.9 Authorized Capital Stock. The authorized capital stock of the Company
consists of a total of 60,000,000 shares of Common Stock, 30,394,542 shares of
which are issued and outstanding, and 5,000,000 shares of preferred stock, none
of which are issued and outstanding. The Company has reserved 6,841,935
authorized but unissued shares of Common Stock for issuance pursuant to
outstanding options, warrants and other commitments to acquire shares of Common
Stock or securities or obligations convertible into or exchangeable for shares
of Common Stock. The issued and outstanding shares of capital stock of the
Company have been duly authorized, validly issued and are fully paid and
nonassessable; except as set forth on Schedule 3.9, no warrants, options or
other rights to purchase, agreements or other obligation to issue, or agreements
or other rights to convert any obligation into, any shares of capital stock of
the Company have been granted or entered into by the Company. All of the above
shares of the Company were issued in compliance with all applicable federal and
state securities laws and were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase shares. No holder
of any security of the Company is entitled to any preemptive or similar rights
to purchase any shares of the Company.
3.10 Litigation. There are no actions, suits, proceedings or investigations
pending or, to the best of the Company's knowledge, threatened against the
Company or any of its properties before or by any court or arbitrator or any
governmental body, agency or official in which there is a reasonable likelihood
(in the judgment of the Company) of an adverse decision that (a) would have a
material adverse effect on the Company's properties or assets or the business of
the Company as presently conducted, or (b) would impair the ability of the
Company to perform in any material respect its obligations under this Agreement.
The Company is not in default with respect to any judgment, order or decree of
any court or governmental agency or instrumentality which, individually or in
the aggregate, would have a material adverse effect on the assets, properties or
business of the Company and its subsidiaries, taken as a whole.
3.11 Preemptive and Registration Rights. There are no preemptive rights, rights
of first refusal, repurchase rights or any other right of the Company or any
third party as to the Shares which have not been satisfied or waived, and except
as provided in this Agreement (including Schedule 3.11 hereto), the Company has
not granted or agreed to grant any registration rights that would be applicable
to the registration for resale of the Shares pursuant to the Registration
Statement, as defined in and contemplated by Section 7.1 hereof, to any person
or entity which have not been satisfied or waived.
3.12 Compliance With Other Instruments. The business and operations of the
Company have been and are being conducted in accordance with all applicable
laws, rules and regulations of all governmental authorities, except for such
violations of applicable laws, rules and regulations which would not,
individually or in the aggregate, have a material adverse effect on the assets,
properties, financial condition or business of the Company and its subsidiaries
taken as a whole. Neither the execution and delivery of, nor the performance or
compliance with, this Agreement and the transactions contemplated hereby, will,
with or without the giving of notice or the passage of time, (a) result in any
breach of, or constitute a default under, or result in the imposition of any
lien or encumbrance upon any asset or property of the Company pursuant to any
agreement or other instrument to which the Company is a party or by which it or
any of its properties, assets or rights is bound or effected, except for such
breach or default or the imposition of any such lien or encumbrance which,
either individually or in the aggregate, would not have a material adverse
effect on the assets, properties, financial condition or business of the
Company, or (b) violate the Certificate of Incorporation or Bylaws of the
Company, or any law, rule, regulation, judgment, order or decree. The Company is
not in violation of its Certificate of Incorporation or Bylaws nor in violation
of or in default under, any lien, indenture, mortgage, lease, agreement,
instrument, commitment or arrangements, except for such defaults which would
not, individually or in the aggregate, have a material adverse effect on the
assets, properties, financial condition or business of the Company and its
subsidiaries taken as a whole, or subject to any restriction which would
prohibit the Company from entering into or performing its obligations under the
Agreement. The Company is not in violation of any of the listing requirements of
the Nasdaq SmallCap Market.
3.13 Brokers or Finders. In connection with this transaction, no person, firm or
corporation has or will have, as a result of any act or omission of the Company,
any right, interest or valid claim against the Purchasers for any commission,
fee or other compensation as a finder or broker in connection with the
transactions contemplated by this Agreement.
3.14 Compliance With Environmental Laws. Except as disclosed in the SEC
Documents, the Company is not in violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety, and no
material expenditures are or will be required in order to comply with any such
existing statute, law or regulation. The Company does not have any material
liability to any governmental authority or other third party arising under or as
a result of any such past or existing statute, law or regulation.
3.15 Contracts. The contracts so described in the SEC 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, individually or in the
aggregate, not have a material adverse effect on the business, properties or
assets of the Company and its subsidiaries taken as a whole, and neither the
Company nor any of its subsidiaries, nor to the Company's knowledge, any other
party is in material breach of or default under any of such contracts.
3.16 Properties. The Company has good and marketable title to all the properties
and assets reflected as owned in the latest Financial Statements included in the
SEC Documents, subject to no lien, mortgage, pledge, charge or encumbrance of
any kind except (a) those, if any, reflected in such Financial Statements or SEC
Documents; (b) those which are not material in amount and do not adversely
affect the use made and promised to be made of such property by the Company and
its subsidiaries; or (c) those in favor of Transamerica Business Credit
Corporation. The Company and any applicable subsidiary occupies its leased
properties under valid and binding leases, with such exceptions as are not
materially significant in relation to the business of the Company and the
subsidiaries. Except as disclosed in the SEC Documents, the Company owns or
leases all such properties as are necessary to its operations as now conducted.
3.17 Compliance. The Company has not been advised and has no reason to believe
that either it or any of its subsidiaries is not conducting business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, except where failure to be so in compliance
would not materially adversely affect the condition (financial or otherwise),
business, results of operations or prospects of the Company and its
subsidiaries, taken as a whole.
3.18 Taxes. The Company and its subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns and have paid or accrued all
taxes shown as due thereon, and the Company has no knowledge of any tax
deficiency which has been or might be asserted or threatened against the Company
or its subsidiaries which could materially and adversely affect the business,
operations or properties of the Company and its subsidiaries.
3.19 Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection with the
sale and transfer of the Shares to be sold to the Purchasers hereunder 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 complied with fully.
3.20 Insurance. Each of the Company and its subsidiaries maintains insurance of
the types and in the amounts generally deemed adequate for its business,
including, but not limited to, insurance covering all real and personal property
owned or leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
3.21 Contributions. Neither the Company nor any of its subsidiaries has,
directly or indirectly, at any time during the last five years (a) made any
unlawful contribution to any candidate for public office, or failed to disclose
fully any contribution in violation of law, or (b) made any payment to any
federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.
Section 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
Each Purchaser, severally and for itself only, hereby represents and
warrants to the Company as follows:
4.1 Authorization. The Purchaser has all requisite legal and corporate or other
power and authority and has taken all requisite corporate or other action to
duly authorize, execute and deliver this Agreement, to purchase the Shares to be
purchased by it and to carry out and perform all of its obligations under this
Agreement. This Agreement has been duly executed and delivered and constitutes
the legal, valid and binding obligation of the Purchaser, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, or similar laws relating to or affecting the
enforcement of creditors' rights generally and (b) as limited by equitable
principles generally (regardless of whether such enforceability is considered a
proceeding in equity or at law).
4.2 Investment Experience; Accredited Investor. The Purchaser is a sophisticated
investor and has experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that the
Purchaser is capable of evaluating the merits and risks of the Purchaser's
investment in the Company and has the capacity to protect the Purchaser's own
interests. The Purchaser recognizes that an investment in the Company is highly
speculative and involves significant risks (including those identified in the
SEC Reports) including a complete loss of such investment. In addition, the
Purchaser is an "accredited investor" as defined in Rule 501(a) of Regulation D
under the Securities Act. The Purchaser has no need for liquidity in the
investment in the Shares, is able to bear the substantial economic risk of an
investment in the Shares for an indefinite period and could afford the complete
loss of the Purchaser's investment in the Shares.
4.3 Investment Intent. The Purchaser is purchasing the Shares for its own
account as principal, and not as a nominee or agent, for investment purposes
only, and not with a present view to, or for, resale, distribution or
fractionalization thereof, in whole or in part, within the meaning of the
Securities Act. If the Purchaser is not a natural person, it was not formed
solely for purposes of making this investment. The Purchaser understands that
the offer and sale of the Shares have not been registered under the Securities
Act or registered or qualified under any state securities law in reliance on
specific exemptions therefrom which exemptions may depend upon, among other
things, the bona fide nature of the Purchaser's investment intent as expressed
herein. 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.
4.4 Access to Data. The Purchaser has read carefully and understands this
Agreement and has consulted with the Purchaser's own attorney, accountant or
investment advisor with respect to the investment contemplated hereby and its
suitability for the Purchaser. The Purchaser has had an opportunity to discuss
the Company's business, management and financial affairs with its management and
has had the opportunity to review the Company's facilities. The Purchaser also
has had opportunity to ask questions of officers of the Company. The Purchaser's
taking advantage of any such opportunity however, does not limit or modify the
representations and warranties of the Company in Section 3 hereof or the right
of the Purchaser to rely thereon.
4.5 Registration or Exemption Requirements. The Purchaser further acknowledges
and understands that the Shares may not be resold or otherwise transferred
except in a transaction registered under the Securities Act or unless an
exemption from such registration is available. The Purchaser understands that
the certificate(s) evidencing the Shares will be imprinted with a legend that
prohibits the transfer of such shares unless (a) they are registered or such
registration is not required, and (b) if the transfer is pursuant to an
exemption from registration other than Rule 144 under the Securities Act and, if
the Company shall so request in writing, an opinion of counsel reasonably
satisfactory to the Company is obtained to the effect that the transaction is so
exempt.
4.6 Removal of Legend. Any legend endorsed on a certificate pursuant to this
Agreement shall be removed, and the Company shall issue a certificate without
such legend to the Purchaser, if such security is being disposed of pursuant to
a registration statement under the Securities Act or pursuant to Rule 144 or any
similar rule then in effect or if such holder provides the Company with an
opinion of counsel satisfactory to the Company to the effect that such legend is
no longer required.
Section 5
CONDITIONS TO THE PURCHASERS' OBLIGATION TO CLOSE
The obligation of each Purchaser to purchase the Shares at the Closing
is subject to the fulfillment as of the Closing Date of the following
conditions, any of which may be waived in whole or in part by such Purchaser.
5.1 Representations and Warranties. The representations and warranties made by
the Company in Section 3 hereof shall be true and correct as of the Closing Date
with the same force and effect as though such representations and warranties had
been made on the Closing Date except to the extent any such representation
specifically references an earlier date.
5.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects.
5.3 Compliance Certificate. The President or Chief Financial Officer of the
Company shall have delivered to the Purchasers a certificate, dated as of the
Closing Date, certifying that the conditions specified in Sections 5.1 and 5.2
have been fulfilled and stating that there have been no material adverse changes
in the assets, liabilities, financial condition, business or operations of the
Company from that reflected in the Financial Statements.
5.4 Stock Certificates. As soon as reasonably practicable after receipt of the
required consideration, the Company shall have delivered to each Purchaser's
representative, stock certificates representing the proper number of shares.
5.5 Legal Opinion of Company Counsel. Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel
to the Company, shall have delivered a legal opinion, addressed to the
Purchasers, in the form attached as Exhibit B hereto.
5.6 Listing. Listing and trading of the Common Stock on the Nasdaq SmallCap
Market shall not have been suspended by the SEC or the Nasdaq SmallCap Market.
5.7 Proceedings and Documents; Legal Matters. All corporate and other
proceedings in connection with the transactions contemplated at the Closing, and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to the Purchasers. All material matters of a legal nature which
pertain to this Agreement and the transactions contemplated hereby and thereby,
shall be reasonably approved by the Purchasers on advice of counsel.
5.8 Closing Date. The Closing shall have occurred on or prior to November 17,
2000.
Section 6
CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares at the Closing to
a Purchaser is subject to the fulfillment or waiver of the following conditions:
6.1 Representations and Warranties. The representations and warranties made by
such Purchaser in Section 4 hereof shall be true and correct as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on the Closing Date except to the extent any such
representation specifically references an earlier date.
6.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by such Purchaser on or prior to the Closing Date
shall have been performed or complied with in all material respects.
6.3 Proceedings and Documents; Legal Matters. All corporate and other
proceedings in connection with the transactions contemplated at the Closing, and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to the Company. All material matters of a legal nature which pertain
to this Agreement and the transactions contemplated hereby and thereby, shall be
reasonably approved by the Company on advice of counsel.
6.4 Closing Date. The Closing shall have occurred on or prior to November 17,
2000.
Section 7
REGISTRATION COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
7.1 Certain Definitions. As used in this Section 7, the following terms shall
have the following meanings:
(a) "Effectiveness Period" shall begin upon the effective date of a Registration
Statement and end on the earlier of (i) completion of the distribution described
in the Registration Statement or (ii) with respect to any Holder, such time as
all Registrable Securities held by such Holder may be sold in compliance with
Rule 144 within any three-month period.
(b) "Holder" shall mean a Purchaser and any transferee or subsequent transferee
of at least 20% of the Registrable Securities originally issued to such
Purchaser (other than a transferee who purchases the Registrable Securities in a
sale effected pursuant to any Registration Statement or pursuant to Rule 144)
provided that the Purchaser has assigned its rights under this Agreement to such
transferee, directly or indirectly, such transferee has assumed the obligations
of a Holder hereunder and a copy of such written assignment and assumption is
provided to the Company.
(c) "Indemnified Party" and "Indemnifying Party" shall be as defined in Section
7.7.
(d) "Losses" shall be as defined in Section 7.7.
(e) "Prospectus" shall mean the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement,
including, without limitation, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement and
all other amendments and supplements to the prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
(f) "Register," "registered" and "registration" shall refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.
(g) "Registrable Securities" shall mean the Shares and any other security of the
Company issued as a dividend or other distribution with respect to or in
exchange for or in replacement of the Shares; provided, however, that
Registrable Securities shall not include any such Shares (i) that have been sold
by a Holder under an effective Registration Statement or under Rule 144, (ii)
held by a transferee that does not become a Holder as defined in Section 7.1(b),
or (iii) that are eligible for sale under Rule 144(k).
(h) "Registration Statement" shall mean any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
(i) "Rule 144" shall mean Rule 144, as promulgated by the SEC under the
Securities Act, as such rule may be amended from time to time, or any similar
successor rule that may be promulgated by the SEC.
(j) "Rule 158" shall mean Rule 158, as promulgated by the SEC under the
Securities Act, as such rule may be amended from time to time, or any similar
successor rule that may be promulgated by the SEC.
(k) "Rule 424" shall mean Rule 424 as promulgated by the SEC under the
Securities Act, as such rule may be amended from time to time, or any similar
successor rule that may be promulgated by the SEC.
(l) "Rule 429" shall mean Rule 429 as promulgated by the SEC under the
Securities Act, as such rule may be amended from time to time, or any similar
successor rule that may be promulgated by the SEC.
(m) "Violation" shall be as defined in Section 7.7.
7.2 Registration Requirement. Within 20 days following the Closing, the Company
shall prepare and file a Registration Statement with the SEC under the
Securities Act to register the resale of the Registrable Securities by the
Holders, and the Company shall use its best efforts to secure the effectiveness
of such Registration Statement within 90 days following the Closing. The
Prospectus shall include all information which would currently be required in a
prospectus relating to the Company's securities (to the extent not yet sold)
covered by that certain Registration Statement on Form S-3, SEC file number
333-95321 filed on January 25, 2000, as permitted by Rule 429.
7.3 Registration Procedures. In connection with the Company's registration
obligations under Section 7.2 hereof, the Company shall effect such registration
to permit the sale of the Registrable Securities in accordance with the method
or methods of disposition thereof as previously provided to the Company, and
pursuant thereto the Company shall as expeditiously as reasonably practicable:
(a) Before filing any Registration Statement or Prospectus (other than documents
that would be incorporated or deemed to be incorporated therein by reference and
that the Company is required by applicable securities laws or stock exchange or
quotation system requirements to file), furnish to the Holders copies of all
such documents proposed to be filed, which documents will be subject to the
review of such Holders and their counsel, if any, and the Company shall not file
any such Registration Statement or any Prospectus (other than such documents
which, upon filing, would be incorporated or deemed to be incorporated by
reference therein and that the Company is required by applicable securities laws
or stock exchange or quotation system requirements to file) to which the Holders
of a majority of the shares covered by such Registration Statement shall
reasonably object on a timely basis. In the event of any such objection, the
Holders shall provide the Company with any requested revisions to such
prospectus or supplement within two (2) business days of such objection.
(b) Prepare and file with the SEC such amendments and post-effective amendments
to the Registration Statement as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period; cause the related
Prospectus to be amended or supplemented by any required Prospectus amendment or
supplement, and as so amended or supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act with respect to the disposition of all
shares covered by such Registration Statement during the applicable period in
accordance with the methods of disposition intended by the Holders thereof set
forth in such Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the Holders promptly, and confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of the issuance by the SEC
or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (iv) of the existence of any fact or the happening of any event that
makes any statement made in such Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or which requires the making of any changes in
such Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (v) of the Company's reasonable determination
that a post-effective amendment to a Registration Statement would be
appropriate.
(d) Use reasonable best efforts to obtain the withdrawal of any order suspending
the effectiveness of a Registration Statement, or the lifting of any suspension
of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction within the United States, at the
earliest reasonably practicable time.
(e) (i) Promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the Company and the Holders of a majority of such
shares agree should be included therein as required by applicable law, (ii) make
all required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment, and (iii) supplement or make amendments to any Registration Statement
consistent with clause (i) or (ii) above; provided, that the Company shall not
be required to take any actions under this paragraph that are not, in the
opinion of counsel for the Company, in compliance with applicable law.
(f) Furnish to each Holder and its counsel, if any, upon written request and
without charge to such Holder, at least one conformed copy of the Registration
Statement or Statements and any post-effective amendment thereto, including
financial statements (but excluding schedules, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits, unless
requested in writing by such Holder or counsel).
(g) Deliver to each Holder and its counsel, if any, without charge, as many
copies of the Prospectus or Prospectuses relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement thereto
as such persons may reasonably request; and the Company hereby consents to the
use of such Prospectus or each amendment or supplement thereto by each Holder in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto.
(h) Use best efforts to register and qualify the Registrable Securities under
(or obtain exemption from) the securities or blue sky laws of such jurisdictions
within the United States as any Holder reasonably requests in writing; use best
efforts to keep each such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and use best efforts to do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided, however, that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it is not then
so qualified or (ii) take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject.
(i) Within five (5) business days following the occurrence of any event
contemplated by paragraphs 7.3(c)(iv) or 7.3(c)(v) above, prepare and file with
the SEC a supplement or post-effective amendment to each Registration Statement
or an amendment or supplement to the related Prospectus or any document
incorporated therein by reference or file any other required document (such as a
Current Report on Form 8-K) so that, as thereafter delivered to the purchasers
of the Registrable Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(j) If necessary in connection with a disposition of Registrable Securities,
make available for inspection, at the offices where normally kept during
reasonable business hours, by a representative of any Holder, any underwriter
participating in any distribution pursuant to the Registration Statement and any
attorney or accountant retained by such Holder or underwriter, financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries as they may reasonably request, and cause the officers,
directors and employees of the Company and its subsidiaries to supply all
information reasonably requested by any such representative, attorney or
accountant in connection with such disposition; provided, that any records,
information or documents that are designated by the Company in writing as
confidential at the time of delivery of such records, information or documents
shall be kept confidential by such Persons, and such Persons shall so agree in
writing.
(k) Comply with all applicable rules and regulations of the SEC and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder no
later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) commencing on the
first day of the first fiscal quarter of the Company, after the effective date
of a Registration Statement, which statements shall cover said 12-month period.
(l) Provide a transfer agent and registrar for all such Registrable Securities
not later than the effective date of the Registration Statement and cooperate
with the Holders and transfer agent and registrar to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold by the Holders and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations and registered in such names
as a Holder may request.
(m) Cause the Shares to be listed on the Nasdaq SmallCap Market as soon as
practicable following the Closing and in any event no later than the date the
Registration Statement is declared effective, maintain such listing of the
Shares so long as the Purchasers own any of the Shares, and if the Company
becomes eligible for listing on the Nasdaq National Market and believes in good
faith that it will be able to maintain listing of its Common Stock on the Nasdaq
National Market, cause the Shares to be listed on the Nasdaq National Market
and, in connection therewith, to the extent applicable, to make any required
filings under the Exchange Act and to have such filings declared effective
thereunder.
(n) Enter into and perform its obligations under such customary agreements,
including underwriting agreements in customary form, and take all other actions
that the Holders reasonably request in order to expedite or facilitate the
disposition of the Registrable Securities.
(o) At the request of the Holders, furnish to the Holders and the underwriters,
if any, (i) a letter from the Company's independent certified public
accountants, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the Holders and the underwriters, if any; and (ii) an opinion from
counsel representing the Company for purposes of the Registration Statement, in
form and substance as is customarily given in an underwritten public offering,
addressed to the Holders and the underwriters, if any.
In connection with the disclosures in a Registration Statement, as
required under the Securities Act, the Company may require a Holder, and each
Holder agrees, to furnish to the Company in writing such information regarding
the distribution of the Registrable Securities covered by such Registration
Statement as the Company may, from time to time, reasonably request in writing
and the Company may exclude from such registration the Registrable Securities of
any Holder if such Holder unreasonably fails to furnish such information in
writing within a reasonable time after receiving such request. Each Holder
agrees promptly to furnish to the Company all information required to be
disclosed in such Registration Statement in order to make the information
previously furnished to the Company by such Holder not misleading. No Holder of
Registrable Securities shall be entitled to liquidated damages pursuant to
Section 7.6 hereof unless and until such Holder shall have provided all such
information. Any sale of any Registrable Securities by any Holder shall
constitute a representation and warranty by such Holder that the required
information relating to such Holder and its plan of distribution is as set forth
in the Prospectus delivered by such Holder in connection with such disposition,
that such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to such Holder or its plan of distribution
and that such Prospectus does not as of the time of such sale omit to state any
material fact relating to such Holder or its plan of distribution necessary to
make the statements in such Prospectus, in the light of the circumstances under
which they were made, not misleading.
Each Holder agrees that, upon receipt of any notice from the Company of
the happening of (i) any event of the kind described in paragraphs 7.3(c)(ii),
7.3(c)(iii), 7.3(c)(iv) or 7.3(c)(v) hereof, or (ii) a determination by the
Company's Board of Directors that it is advisable to suspend use of the
Prospectus for a discrete period of time due to pending corporate developments
such as negotiation of a material transaction which the Company in its sole
discretion after consultation with legal counsel, determines it would be
obligated to disclose in the Registration Statement, which disclosure the
Company believes would be premature or otherwise inadvisable at such time or
would have a material adverse effect on the Company and its stockholders, such
Holder will forthwith discontinue disposition of such Registrable Securities
covered by the applicable Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by paragraph 7.3(i) hereof, or until such Holder is advised in
writing by the Company that the use of the applicable Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus. The
period of time in which the use of a Prospectus or Registration Statement is so
suspended shall be referred to as a "Black-Out Period." The Company agrees to so
advise such Holder promptly of the commencement and termination of any such
Black-Out Period, and the Purchasers agree to keep the fact of such Black-Out
Period, confidential. The Company shall not impose a Black-Out Period under this
paragraph of Section 7.3 for more than 30 consecutive days and not more than
twice in any given year. Any period for which use of a Prospectus or
Registration Statement is suspended under this paragraph of Section 7.3 shall be
added to the time for which the Company is required to maintain the
effectiveness of such Registration Statement, including the Prospectus
constituting a part thereof, under Section 7.3(b).
7.4 Registration Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company and which are customarily paid
by an issuer shall be borne by the Company whether or not any of the
Registration Statement becomes effective and whether or not any of the
Registrable Securities are transferred pursuant to the Registration Statement.
Such fees and expenses shall include, without limitation, (a) all registration
and filing fees (including, without limitation, fees and expenses (i) with
respect to designation of the Registrable Securities as eligible for trading on
applicable securities exchange or quotation system, and (ii) of compliance with
securities or blue sky laws), (b) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing Prospectuses), (c) messenger, telephone and delivery expenses, (d) fees
and disbursements of counsel for the Company in connection with the Company's
performance of its obligations under this Agreement, (e) reasonable fees and
disbursements of the Company's independent certified public accountants, (f)
Securities Act liability insurance if the Company so desires such insurance, (g)
fees and expenses of any underwriter participating in any disposition pursuant
to the Registration Statement (excluding underwriting discounts and
commissions), (h) fees and expenses of all other persons retained by the Company
in connection with the performance by the Company of its duties under this
Agreement, and (i) reasonable and documented fees and disbursements of Ropes &
Xxxx, counsel to the Holders, not in excess of $35,000. Except as set forth in
the preceding sentences of this paragraph, the Company shall not be responsible
for paying the expenses of Holder, or its counsel, incurred in connection with
the registration or approval of the Registration Statement or the transactions
contemplated thereby by governmental agencies or authorities other than those
administering applicable securities laws and applicable exchange or quotation
system regulations. In addition, the Company will, in any event, bear its own
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange or quotation
system on which similar securities issued by the Company are then listed and the
fees and expenses of any person, including special experts, retained by the
Company. Underwriting discounts, selling commissions and transfer taxes for each
Holder and any other expenses incurred by each Holder not expressly included
above shall be borne by each Holder.
7.5 Limitations on Additional Registration Rights. The Registration Statement
filed in accordance with Section 7.2 may include other shares of the Company
with respect to which registration rights have been granted, and may include
shares of the Company being sold for the account of the Company; provided
however, that such inclusions do not adversely affect the registration of the
Registrable Securities.
7.6 Delayed Registration; Resale Restricted After Effectiveness.
(a) In the event the Registration Statement required by this Agreement is not
declared effective by the SEC within 90 days after Closing, the Company hereby
agrees to pay to each Holder of Registrable Securities affected thereby a fee
(the "Late Registration Fee") in an amount equal to one percent (1%) of the
Purchase Price paid by such Holder for the Registrable Securities purchased by
such Holder and not previously sold for each 30-day period after the end of such
90-day period. Such payments shall be pro-rated on a daily basis during each
30-day period. The parties agree that the Late Registration Fee represents a
reasonable endeavor by the parties to estimate a fair compensation for the
foreseeable losses that might result from the Registration Statement not being
declared effective by the SEC within 90 days after the Closing. The Company
shall pay the Holders such fee in cash on the earlier of either (i) the end of
each 30-day period of such delay, or (ii) the effective date of the Registration
Statement. Nothing herein shall limit the Holders' rights (i) to have the
Registration Statement become or be declared effective by the SEC on or prior to
90 days after Closing in accordance with the terms of this Agreement, or (ii) to
pursue actual damages for the Company's failure to have the Registration
Statement declared effective on or prior to 90 days after Closing if and to the
extent that such actual damages exceed the amount of the Late Registration Fee
to be received by the Holders pursuant to this Section 7.6(a).
(b) If, at any time after the effectiveness of the Registration Statement, (i)
sales cannot be made thereunder due to the failure of the Company to maintain
the effectiveness of the Registration Statement (other than the imposition by
the Company of a Permissible Black-Out Period, as defined below) or (ii) the
Common Stock is not listed or included for quotation on Nasdaq, the NYSE or
AMEX, in each case for a period of 10 consecutive days, or 30 days in the
aggregate during any 12-month period, the Company agrees to pay to each Holder
of Registrable Securities affected thereby a fee (the "Resale Restriction Fee")
in an amount equal to one percent (1%) of the Purchase Price paid by such Holder
for the Registrable Securities purchased by such Holder and not previously sold
for each 10 consecutive day period or 30-day period, as the case may be,
following the effectiveness of the Registration Statement that sales cannot be
made or that the Common Stock is not so listed or included for quotation. Such
payments shall be pro-rated on a daily basis during each 10 consecutive day
period or 30-day period, as the case may be. The parties agree that the Resale
Restriction Fee represents a reasonable endeavor by the parties to estimate a
fair compensation for the foreseeable losses that might result from the
Registration Statement not being continuously effective for the Effectiveness
Period and the Common Stock not being listed or included for quotation on
Nasdaq, the NYSE or AMEX. The Company shall pay the Holders such fee in cash in
respect of each such 10 consecutive day period or 30-day period, as the case may
be, immediately following the conclusion of any such 10 consecutive day period
or 30-day period. Nothing herein shall limit the Holders' rights (i) to have the
Registration Statement remain continuously effective for the Effectiveness
Period or have the Common Stock listed or included for quotation on Nasdaq, the
NYSE or AMEX in accordance with the terms of this Agreement, or (ii) to pursue
actual damages for the Company's failure to maintain the continuous
effectiveness of the Registration Statement during the Effectiveness Period or
failure to maintain the listing or inclusion for quotation of the Common Stock
on Nasdaq, the NYSE or AMEX if and to the extent that such actual damages exceed
the amount of the Resale Restriction Fee to be received by the Holders pursuant
to this Section 7.6(b). For purposes of this Section 7.6(b), a "Permissible
Black-Out Period" means a Black-Out Period that does not last more than 30 days,
that is not imposed by the Company more than twice during any 12-month period
and that does not follow a prior Black-Out Period by less than 30 days.
7.7 Indemnification.
(a) By the Company. To the maximum extent permitted by law, the Company will
indemnify and hold harmless each Holder of Registrable Securities, each person,
if any, who controls such Holder within the meaning of the Securities Act or the
Exchange Act, their respective officers, directors, partners, members,
stockholders and trustees, each underwriter, if any, of Registrable Securities,
their officers and directors, and each person, if any, who controls such
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, liabilities or expenses (joint or several)
(collectively "Losses") to which they may become subject under the Securities
Act, the Exchange Act or other federal or state law, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (any of the following, a "Violation"): (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) 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, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law. The
Company will reimburse each such Holder or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such Losses (or action in respect thereof); provided, however,
that the indemnity agreement contained in this Section 7.7 shall not apply to
amounts paid in settlement of any such Losses (or action in respect thereof) if
such settlement is effected without the consent of the Company (in which case
the parties shall first have met and conferred in good faith regarding such
settlement), nor shall the Company be liable in any such case for any such
Losses (or action in respect thereof) to the extent that they arise out of or
are based upon a Violation which arises out of or is based upon information
furnished in writing expressly for use in connection with such registration by
any such Holder or controlling person, as the case may be; provided, further,
that the Company will not be liable to any Holder or controlling person or
underwriter, as the case may be with respect to any Losses arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission to state a material fact in any preliminary prospectus which is
corrected in an amended, supplemented or final prospectus if the purchaser
asserting such Losses purchased from such Holder or underwriter, as applicable,
and was not, due to the fault of such Holder or underwriter, sent or given a
copy of such amended, supplemented or final prospectus at or prior to the sale
of Registrable Securities to such purchaser.
(b) By Holders. To the maximum extent permitted by law, each Holder (severally,
but not jointly) will, if Registrable Securities held by such Holder are
included in the Registrable Securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of its directors and officers, each underwriter, if any, of
Registrable Securities, and each person who controls the Company or such
underwriter within the meaning of the Securities Act or the Exchange Act,
against any Losses to which the Company or any such director or controlling
person may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such Losses (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation arises out of or is based upon
information furnished by such Holder in writing expressly for use in connection
with such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company, any such underwriter or any such
controlling person in connection with investigating or defending any such Losses
(or actions in respect thereof); provided, however, that the indemnity agreement
contained in this Section 7.7(b) shall not apply to amounts paid in settlement
of any such Losses (or actions in respect thereof) if such settlement is
effected without the consent of the Holder (in which case the parties shall
first have met and conferred in good faith regarding such settlement). Each
Holder's liability under this Section 7.7(b) shall not exceed the net proceeds
received by such Holder from the sale of Registrable Securities held by such
Holder included in such registration, qualification or compliance.
(c) Procedures. Each party entitled to indemnification under this Section 7.7
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld or delayed). Without limiting the generality of the foregoing, if the
Indemnified Party has been advised in writing by its counsel that representation
of both the Indemnified and Indemnifying Party by the same counsel would be
inappropriate under standards of professional conduct due to actual or potential
differing interests, with respect to such claim or litigation, the Indemnifying
Party shall bear the expense of another counsel who shall represent the
Indemnified Party and any other persons or entities who have indemnification
rights from the Indemnifying Party hereunder, with respect to such claim or
litigation, and shall be selected as provided in the first sentence of this
Section 7.7(c). The Indemnified Party may participate in such defense at such
party's expense (except to the extent that the Indemnifying Party is required to
pay the expense of such counsel pursuant to this Section 7.7(c)), and provided
further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Agreement, except to the extent such failure is prejudicial to the Indemnifying
Party in defending such claim or litigation. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party (which consent shall not be unreasonably withheld or delayed),
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability with respect to such
claim or litigation.
(d) Contribution. If the indemnification provided for in this Section 7.7 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any Losses referred to therein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party hereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party (on the one hand) and of the Indemnified Party
(on the other) in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. The relative
fault of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. Each Holder's liability under
this Section 7.7(d) shall not exceed the net proceeds received by such Holder
from the sale of the Registrable Securities held by such Holder included in such
registration.
7.8 Information Requirements. The Company shall file in a timely manner the
reports required to be filed by it under the Securities Act and the Exchange
Act, and if at any time the Company is not required to file such reports, it
will, upon the request of any Holder, make publicly available other information
so long as necessary to permit sales pursuant to Rule 144 under the Securities
Act and pursuant to Form S-3 or any similar short form registration statement.
The Company further covenants that it will cooperate with any Holder and take
such further action as such Holder may reasonably request (including without
limitation making such representations as any such Holder may reasonably
request), all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 under the Securities Act.
Upon the request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements.
The Company shall file in a timely manner the reports required to be filed by it
under the Exchange Act and shall comply with all other requirements set forth in
the instructions to any Securities Act registration form used in connection with
any registration effected pursuant hereto in order to allow the Company to be
eligible to file registration statements on such form. The Company shall use
commercially reasonable efforts to maintain its listing on Nasdaq for three
years from the Closing Date.
7.9 Underwriting. Holders representing a majority of the outstanding Registrable
Securities may request the Company to file a registration statement on Form S-3
with respect to an underwritten offering of securities (in which event a
majority of the initiating Holders may select the managing underwriter for such
underwritten offering, to be reasonably acceptable to the Company) or with
respect to plans of distribution not involving sales to and through
underwriters. Other holders of securities of the Company will have the right to
include securities held by them in a registration statement requested by the
initiating Holders only with respect to an underwritten offering of securities;
provided, however, that such inclusions do not adversely affect the registration
and sale of the Registrable Securities. In the event of any underwritten public
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the managing
underwriter(s) of such offering. Each Holder participating in such underwriting
shall also enter into and perform its obligations under such an agreement.
Section 8
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;
COMPLIANCE WITH SECURITIES ACT
8.1 Restrictions on Transferability. The Shares shall not be transferable in the
absence of a registration under the Securities Act or an exemption therefrom or
in the absence of compliance with any term of this Agreement.
8.2 Restrictive Legend. Each certificate representing the Shares shall bear
substantially the following legend (in addition to any legends required under
applicable securities laws):
THE SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
8.3 Transfer of Shares After Registration. Each Purchaser hereby covenants with
the Company not to make any sale of the Shares except either (a) in accordance
with the Registration Statement, in which case such Purchaser covenants to
comply with the requirement of delivering a current prospectus, (b) in
accordance with Rule 144, in which case such Purchaser covenants to comply with
Rule 144, or (c) in accordance with another exemption from the registration
requirements of the Securities Act. The legend set forth in Section 8.2 will be
removed from a certificate representing the Shares following and in connection
with any sale of the Shares pursuant to subsection (a) or (b) hereof, but not in
connection with any sale of Shares pursuant to subsection (c) hereof, and also
will be removed at such time that the Shares may be sold under Rule 144 without
restriction as to volume and manner of sale.
8.4 Purchaser Information. Each Purchaser covenants that it will promptly notify
the Company of any changes in the information set forth in the Registration
Statement regarding such Purchaser, under the heading "Selling Stockholders" or
"Plan of Distribution" or elsewhere.
Section 9
INDEMNIFICATION
The Company will indemnify, defend, protect, and hold harmless the Purchasers
and all of their respective stockholders, trustees, officers, directors,
employees and direct or indirect investors and any of their respective agents,
counsel or other representatives (collectively, the "Indemnitees") from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith
(regardless of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"), which may be incurred by any
Indemnitee or which may be asserted against any Indemnitee as a result of, or
arising out of, or relating to (a) any breach of any representation or warranty
made by the Company herein or in any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained herein or in any other certificate,
instrument or document contemplated hereby or thereby, or (c) any cause of
action, suit or claim brought or made against such Indemnitee and arising out of
or resulting from the execution, delivery, performance, breach or enforcement of
this Agreement by the Company. To the extent that the foregoing undertaking by
the Company is unenforceable for any reason, the Company will make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under applicable law.
Section 10
MISCELLANEOUS
10.1 Survival of Representations, Warranties and Agreements. The representations
and warranties of the Company in Section 3 hereof and the representations and
warranties of the Purchasers in Section 4 hereof shall survive the purchase of
the Shares for a period of 24 months following the Closing. No independent
investigation of the Company by any Purchaser, its counsel, or any of its agents
or employees, shall in any way limit or restrict the scope of the
representations and warranties made by the Company in this Agreement. All
covenants and agreements set forth herein shall survive the Closing without
limitation, except as otherwise specifically provided herein.
10.2 Construction. The Company and the Purchasers have participated jointly in
the negotiation and drafting of this Agreement. No presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.
10.3 Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted to be given to any party hereunder
shall be in writing and shall be deemed given only if delivered to the party
personally or sent to the party by telecopy, telegram or by registered or
certified mail (return receipt requested) with postage and registration or
certification fees thereon prepaid, addressed to the party at its address set
forth below:
If to the Company:
Vidamed, Inc.
00000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
With a copy to:
Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to a Purchaser, at the address for such Purchaser set forth
on Exhibit A hereto.
10.4 Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
10.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
conflicts of laws principles thereof.
10.6 Severability. The parties agree that (a) the provisions of this Agreement
shall be severable in the event that any provision hereof is held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, (b) such
invalid, void or otherwise unenforceable provision shall be automatically
replaced by another provision which is as similar as possible in terms to such
invalid, void or otherwise unenforceable provision but which is valid and
enforceable, and (c) the remaining provisions shall remain enforceable to the
fullest extent permitted by law.
10.7 No Third Party Beneficiaries. Nothing herein expressed or implied is
intended or should be construed to confer upon or give to any person other than
the parties hereto and their successors and assigns any rights or remedies under
or by reason of this Agreement.
10.8 Entire Agreement. This Agreement constitutes the entire understanding of
the parties with respect to the subject matter hereof, and supersedes any prior
agreements or understandings, written or oral, between the parties with respect
to the subject matter hereof.
10.9 Amendment and Waiver. The parties may, by mutual agreement, amend this
Agreement in any respect in a writing executed by each party, and any party, as
to such party, may waive any of its rights hereunder. To be effective, any such
waiver must be in writing and be signed by the party providing such waiver. The
rights and remedies herein provided are cumulative and are not exclusive of any
rights or remedies which any party may otherwise have at law or in equity. The
waiver by any party hereto of any breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach, whether
or not similar.
10.10 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but which together shall constitute
one and the same instrument.
10.11 Headings. The headings preceding the text of the sections and subsections
hereof are inserted solely for convenience of reference, and shall not
constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.
10.12 Public Announcement. The Company will not issue any press release or
public announcement listing the Purchasers as purchasers of the Shares without
each Purchaser's written consent (such consent not to be unreasonably withheld),
except as may be required by applicable law (including applicable SEC rules and
regulations) or stock exchange regulation, and except for information contained
in the Registration Statement.
10.13 Further Assurances. Each party to this Agreement shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as the other party hereto may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
10.14 Expenses. Each Purchaser and the Company shall each pay their own expenses
incident to this Agreement and the preparation for, and consummation of, the
transactions provided for herein; provided, however, that upon the Closing the
Company will pay the reasonable, documented legal fees and expenses of counsel
for the Purchasers, up to a maximum of $35,000.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first written above.
VIDAMED, INC.
/s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President & CEO
PURCHASERS:
BROOKSIDE CAPITAL PARTNERS FUND, L.P.
/s/ Xx Xxxxxxxx
Name: Xx Xxxxxxxx
Title: Managing Director
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first written above.
VIDAMED, INC.
/s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President & CEO
MEDTRONIC ASSET MANAGEMENT, INC.
/s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: VP & CDO
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first written above.
VIDAMED, INC.
/s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President & CEO
CIRCLE F VENTURES, LLC
/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President
XXXXXX X. XXXXXXX AND XXXXXXX X. XXXXXXX
REVOCABLE TRUST
/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
[Signatures of Additional Purchasers on subsequent pages]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first written above.
VIDAMED, INC.
/s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President & CEO
XXXXXXX CAPITAL GROUP, LLC
as agent and attorney-in-fact
/s/ Xxxx Xxxx
Name: Xxxx Xxxx
Title: Managing Director
For:
Public Employee Retirement System of Idaho
NFIB Serp Assets
City of Stamford Firemen's Pension Fund
Asphalt Green, Inc.
A. Xxxxx Xxxxxxx
Alexa X. Xxxxxxx
Xxxxx Xxxxxxx
Xxxxxx X. Xxxxxxx
Psychology Associates
Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxx
Xxxx X. Xxxxxxxx
Xxxxxxx X. and Xxxxxx X. Xxxxxx Foundation, Inc.
Xxxxxx X. Xxxxxx
Theeuwes Family Trust, Xxxxx Xxxxxxxx Trustee
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Exhibit A
SCHEDULE OF PURCHASERS
Total Aggregate
Number of Shares Purchase Price
Brookside Capital Partners Fund, L.P. 2,500,000 $5,000,000
Medtronic Asset Management, Inc. 800,000 $1,600,000
Xxxxxxx Capital Group LLC managed accounts:
Public Employee Retirement System of Idaho 75,000 $ 150,000
NFIB Serp Assets 25,000 $ 50,000
City of Stamford Firemen's Pension Fund 100,000 $ 200,000
Asphalt Green, Inc. 12,500 $ 25,000
A. Xxxxx Xxxxxxx 25,000 $ 50,000
Alexa X. Xxxxxxx 25,000 $ 50,000
Xxxxx Xxxxxxx 25,000 $ 50,000
Xxxxxx X. Xxxxxxx 25,000 $ 50,000
Psychology Associates 12,500 $ 25,000
Xxxxxxx Xxxxxxxx 25,000 $ 50,000
Xxxxx Xxxxxx 25,000 $ 50,000
Xxxx X. Xxxxxxxx 50,000 $ 100,000
Xxxxxxx X. and Xxxxxx X. Xxxxxx Foundation, Inc. 25,000 $ 50,000
Xxxxxx X. Xxxxxx 25,000 $ 50,000
Theeuwes Family Trust, Xxxxx Xxxxxxxx Trustee 75,000 $ 150,000
Xxxxxxx X. Xxxxx 25,000 $ 50,000
Xxxxxx X. Xxxxxxx 50,000 $ 100,000
Circle F Ventures, LLC 400,000 $ 800,000
Xxxxxx X. Xxxxxxx and XxXxxxx X. Xxxxxxx Revocable Trust 100,000 $ 200,000
Total 4,425,000 $8,850,000
Exhibit B
Form of Opinion of Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP
[OWD Letterhead]
November 20, 2000
To the Purchasers
Listed on Exhibit A to the Purchase Agreement
Described Herein
Ladies and Gentlemen:
We have acted as counsel to VidaMed, Inc., a Delaware corporation (the
"Company"), in connection with the sale by the Company of up to 4,425,000 shares
(the "Shares") of the Company's common stock, par value $.001 per share (the
"Common Stock"), pursuant to the Purchase Agreement dated as of November 16,
2000 (the "Purchase Agreement") among the Company and each of the persons or
entities listed on the Schedule of Purchasers attached thereto as Exhibit A
(each, a "Purchaser" and collectively, the "Purchasers"). This opinion is
furnished to you pursuant to Section 5.5 of the Purchase Agreement. Capitalized
terms used in this opinion are as defined in the Purchase Agreement unless
otherwise specifically provided herein.
In acting as counsel for the Company and arriving at the opinions expressed
below, we have examined and relied upon originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company,
agreements and other instruments, certificates of officers and representatives
of the Company, certificates of public officials and other documents we have
deemed necessary or appropriate as a basis for the opinions expressed herein. As
to the various questions of fact material to such opinions, we have, when
relevant facts were not independently established, relied upon officers of the
Company and upon statements of fact, as opposed to conclusions of law, contained
in the Purchase Agreement.
In our examination of such documents, we have assumed, in addition to the other
assumptions set forth herein, that all signatures on all documents submitted to
us are genuine, all documents submitted to us as originals are accurate and
complete and all documents submitted to us as copies are true, correct and
complete copies of originals thereof. In making our examination of documents
executed by parties other than the Company, we have assumed that such parties
have all necessary corporate or other power, authority and legal right and
capacity to execute and deliver such documents and perform their respective
obligations thereunder and have also assumed the due authorization by all
requisite action of the execution and delivery of such documents by such
parties.
Based on the foregoing, and subject to the qualifications and limitations stated
herein, it is our opinion that:
1. The Company is a corporation duly incorporated and validly existing
in good standing under the laws of the State of Delaware with full
corporate power and authority to execute and deliver the Purchase
Agreement and to perform the actions contemplated thereby.
2. The Shares have been duly authorized and, when issued, delivered and
paid for in compliance with the provisions of the Purchase Agreement,
will be validly issued, fully paid and nonassessable.
3. The Purchase Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms.
4. The execution, delivery and performance of and compliance with the
Purchase Agreement, and the issuance of the Shares, have not resulted
and will not result in a violation of, or conflict with, or constitute
a default under, the Company's Certificate of Incorporation or Bylaws,
any provision of applicable law, or to our knowledge, any material
contract attached as an exhibit to the SEC Reports to which the Company
is a party or by which the Company is bound.
5. Subject to the accuracy of the Purchasers' representations and
warranties in Section 4 of the Purchase Agreement, the offer, sale and
issuance of the Shares by the Company to the Purchasers pursuant to the
terms of the Purchase Agreement are exempt from the registration
requirements of the Securities Act, as now in effect.
In addition to the qualifications and limitations set forth above, the opinions
expressed herein are subject to the following qualifications and limitations:
(a) We express no opinion with respect to laws other than those of the
State of Delaware and the federal laws of the United States of America,
and we assume no responsibility as to the applicability thereto, or the
effect thereon, of the laws of any other jurisdiction.
(b) To the extent that the opinions expressed above relate to the
enforceability of any agreement or document referred to herein, the
opinions are subject to, and may be limited by, applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(c) Our opinion is subject to the effect of generally applicable laws
that (i) provide for the enforcement of oral waivers or modifications
where a material change of position in reliance thereon has occurred or
provide that a course of performance may operate as a waiver, (ii)
limit the enforcement of provisions of a contract that purport to
require waiver of the obligations of good faith, fair dealing,
diligence and reasonableness, (iii) provide that forum selection
clauses in contracts are not necessarily binding on courts, (iv) limit
the availability of a remedy under certain circumstances where another
remedy has been elected, (v) limit the enforceability of provisions
releasing, exculpating or exempting a party from, or requiring
indemnification of a party for, liability for its own action or
inaction, to the extent the action or inaction involves gross
negligence, recklessness, willful misconduct or unlawful conduct, (vi)
govern and afford judicial discretion regarding the determination of
damages and entitlement to attorneys' fees and other costs, (vii) may
permit a party who has materially failed to render or offer performance
required by a contract to cure that failure unless either permitting a
cure would unreasonably hinder the aggrieved party from making
substitute arrangements for performance or it is important under the
circumstances to the aggrieved party that performance occurs by the
date stated in the contract, (viii) may limit the enforceability of
provisions restricting competition, the solicitation of customers or
employees, the use of disclosure of information or other activities in
restraint of trade and (ix) may require mitigation of damages.
(d) Whenever our statements herein with respect to the existence or
absence of facts is qualified by the phrase "to our knowledge" or some
other similar phrase, it is intended to indicate that, during the
course of our representation, no information that would give us actual
knowledge of the existence or absence of such facts has come to the
attention of those persons in this firm who have rendered legal
services to the Company in connection with the representation described
above. We have not, however, undertaken any independent investigation
to determine the existence or absence of such facts, and any limited
inquiry undertaken by us during the preparation of this opinion letter
should not be regarded as such an investigation; no inference as to our
knowledge of the existence or absence of such facts should be drawn
from the fact of our representation of Company.
(e) In giving the opinion expressed in paragraph 5 above concerning the
exemption under the Securities Act of the issuance of the Shares, we
have assumed that (i) neither the Company nor any person acting on its
behalf offered or sold the Shares by any form of general solicitation
or general advertising within the meaning of Rule 502(c) of Regulation
D under the Securities Act; (ii) the representations and warranties of
the Purchasers in Section 4 of the Agreement are true and accurate in
all respects; and (iii) any person or entity that purchases securities
after the date hereof in a transaction that can be "integrated" with
the sales of the Shares will be an accredited investor as that term is
defined in Rule 501(a) of Regulation D under the Securities Act, as of
the date of such purchase.
(f) We express no opinions as to the Company's compliance or
noncompliance with applicable federal or state antifraud statutes,
laws, rules and regulations.
We are furnishing this opinion to you solely for your benefit in connection with
the above-described transactions. It is not to be used, circulated, quoted or
otherwise referred to for any other purpose, and no one other than the
addressees hereof are entitled to rely on this opinion. This opinion speaks only
as of the date above written, and we hereby expressly disclaim any duty to
update any of the statements made herein.
Very truly yours,
XXXXXXXXXXX XXXXX & XXXXXXXX LLP
VIDAMED, INC.
Form of Compliance Certificate
The undersigned, Xxxxx Xxxxxxxx, being the duly elected President and
Chief Executive Officer of VidaMed, Inc., a Delaware corporation (the
"Company"), and Xxxx Xxxx, being the duly elected Vice President, Finance and
Chief Financial Officer of the Company, pursuant to Section 5.3 of the Purchase
Agreement dated as of November 16, 2000 (the "Purchase Agreement") among the
Company, Brookside Capital Partners Fund, L.P., Medtronic Asset Management,
Inc., Xxxxxxx Capital Group, LLC, Circle F Ventures and other investor parties
thereto, hereby certify on behalf of the Company that:
1. Capitalized terms not otherwise defined herein have the meaning assigned in
the Purchase Agreement.
2. The representations and warranties made by the Company in Section 3 of the
Purchase Agreement are true and correct on this date with the same effect as
though made on this date.
3. The Company has performed and complied with all covenants, agreements or
conditions required by the Purchase Agreement to be performed and complied with
in all material respects prior to or as of the date hereof.
4. There have been no materially adverse changes in the assets, liabilities,
financial condition, business or operations of the Company from that reflected
in the Financial Statements.
Dated: November 20, 2000
Xxxxx Xxxxxxxx
President and Chief Executive Officer
Xxxx X. Xxxx
Vice President, Finance and Chief Financial
Officer
