EXHIBIT 99.2
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") dated as of
February 10, 2004 among ChromaVision Medical Systems, Inc., a Delaware
corporation (the "COMPANY") and Safeguard Delaware, Inc., a Delaware corporation
(the "PURCHASER"). Certain terms are used herein as defined in Annex 1 hereto or
elsewhere in this Agreement.
BACKGROUND
The Company desires to sell to the Purchaser, and the Purchaser desires
to purchase from the Company shares of the Common Stock of the Company, $.01 par
value and the Warrant (as defined below) for an aggregate purchase price of
$5,000,000 in a private placement exempt from the registration requirements of
the Securities Act of 1933, as amended (the "SECURITIES ACT") all on terms
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. PURCHASE AND SALE OF COMMON SHARES AND WARRANT.
1.1 Purchase and Sale of Common Shares. Upon the terms and
conditions contained herein, the Company shall issue and sell to the Purchaser
and, subject to and in reliance upon the representations, warranties, terms and
conditions of this Agreement, the Purchaser shall purchase from the Company
2,295,230 shares of Common Stock of the Company (the "PURCHASE SHARES") for an
aggregate purchase price of $5,000,000 and a warrant (the "WARRANT") in the form
attached to this Agreement as EXHIBIT A to purchase 229,523 shares of Common
Stock of the Company, subject to adjustment as set forth in the Warrant (the
"WARRANT SHARES").
1.2 Closing. Such purchase and sale referred to in Section 1.1
shall take place at a closing (the "CLOSING") to be held at the offices of
Xxxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx on the date
hereof, or on such other date and at such time as may be mutually agreed upon by
the parties (the "CLOSING DATE"). At the Closing, (i) the Company will issue and
deliver certificates evidencing the Purchase Shares and the Warrant, registered
in the name of the Purchaser against payment to the Company of the purchase
price payable by the Purchaser, payable by wire transfer of immediately
available funds in accordance with wire transfer instructions to be delivered to
the Purchaser by the Company prior to the Closing and (ii) the Company and the
Purchaser will enter into a Registration Rights Agreement in the form of EXHIBIT
B hereto. (This Agreement, the Registration Rights Agreement and the Warrant are
referred to as the "TRANSACTION DOCUMENTS".)
1.3 Use of Proceeds. The Company agrees that it shall use the net
proceeds from the sale of the Purchase Shares for (i) any legally permitted
general corporate purposes and (ii) the payment of expenses incurred in
connection with this transaction as provided for in Section 5.1. Nothing in this
Section 1.3 is intended to or shall constitute a waiver by the Purchaser of, or
approval by it in connection with, any of the covenants set forth in the
Securities Purchase Agreement dated as of June 13, 2002 among the Company, the
Purchaser and Safeguard Scientifics, Inc.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Purchaser as follows:
2.1 Organization and Qualification; Material Adverse Effect. The
Company is a corporation duly incorporated and existing in good standing under
the laws of the State of Delaware and has the requisite corporate power to own
its properties and to carry on its business as now being conducted. The Company
does not have any direct or indirect Subsidiaries other than the Subsidiaries
listed in the Pre-Agreement SEC Documents (as defined in Section 2.9). Each of
the Company and its Subsidiaries is duly qualified as a foreign corporation to
do business and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary other than those in which the failure so to qualify would not have a
Material Adverse Effect. As applied to the Company "MATERIAL ADVERSE EFFECT"
means any adverse effect on the business, operations, prospects, properties or
condition (financial or otherwise) of the Company or such other entity with
respect to which such term is used and which is material to the Company and its
Subsidiaries taken as a whole, and any material adverse effect on the
transactions contemplated by, or the rights or remedies of the Company or
obligations of the other parties under, the Transaction Documents taken
together.
2.2 Authorization; Enforcement. (i) The Company has all requisite
corporate power and authority to enter into and perform the Transaction
Documents, to issue the Purchase Shares in accordance with the terms hereof and
to issue the Warrant Shares in accordance with the terms of the Warrant, (ii)
the execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including the issuance of the Purchase Shares and the issuance of the Warrant
Shares upon exercise of the Warrant, have been duly authorized by all corporate
action required under applicable law, and no further consent is required, (iii)
the Transaction Documents have been duly executed and delivered by the Company,
and (iv) the Transaction Documents constitute valid and binding obligations of
the Company enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application. The transactions contemplated
by the Transaction Documents have been (i) negotiated and approved by a special
committee of the board of directors of the Company formed for the purpose of
considering such transactions and (ii) approved by the majority vote of the
disinterested directors of the Company.
2.3 Capitalization. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, 200,000 shares of Series C
Convertible Preferred Stock and 12,500 shares of Series D 5% Convertible
Preferred Stock, of which there are 38,588,604 shares of Common Stock issued and
outstanding. Except as set forth on SCHEDULE 2.3, no shares of Common Stock and
no shares of preferred stock are reserved for issuance to persons other than the
Purchaser. All of the outstanding shares of the Common Stock and preferred stock
have
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been validly issued and are fully paid and non-assessable. Except as set forth
in SCHEDULE 2.3, no shares of capital stock are entitled to preemptive rights
and there are no outstanding options or outstanding warrants for shares of
Common Stock. Except as set forth on SCHEDULE 2.3, there are no other scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights exchangeable for or convertible into, any
shares of capital stock of the Company, or contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue additional shares of capital stock of the Company or options, warrants,
scrip, rights to subscribe to, or commitments to purchase or acquire, any
shares, or securities or rights convertible or exchangeable into shares, of
capital stock of the Company. The Company has furnished the Purchaser with a
true and correct copy of the Company's Certificate of Incorporation (the
"CHARTER"), as in effect on the date hereof, and a true and correct copy of the
Company's By-Laws, as in effect on the date hereof (the "BY-LAWS").
2.4 Issuance of Securities. The Purchase Shares and the Warrant
Shares are duly authorized and reserved for issuance and, upon issuance in
accordance with the terms of this Agreement or the Warrant, as applicable, the
Purchase Shares and the Warrant Shares will be validly issued, fully paid and
non-assessable, free and clear of any and all Liens, claims and encumbrances,
and, subject to the registration of such shares in accordance with the
applicable provisions of the Securities Act, the Purchase Shares have been
listed on the Nasdaq Small Cap Market, and, upon issuance of such shares, the
holders of such Shares shall be entitled to all rights and preferences then
accorded to a holder of Common Stock. The outstanding shares of freely tradable
Common Stock are currently quoted on the Nasdaq Small Cap Market.
2.5 No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby and the issuance of the Purchase
Shares and the Warrant Shares (upon exercise of the Warrant in accordance with
the terms thereof) do not and will not (i) result in a violation of the
Company's Charter or By-Laws, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture, patent, patent license or instrument
to which the Company or any of its Subsidiaries is a party (collectively,
"COMPANY AGREEMENTS"), (iii) result in a violation of any federal, state, local
or foreign law, rule, regulation, order, judgment or decree (including federal
and state securities laws and regulations) applicable to the Company or any of
its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, or (iv) conflict with, constitute a default
under, or result in a violation of any rule or regulation of, or any agreement
with, a self-regulatory authority, except (other than in the case of clause (i)
above) where such violation would not reasonably be expected to have a Material
Adverse Effect. Except as set forth on SCHEDULE 2.5, the business of the Company
and its direct and indirect Subsidiaries is being conducted in material
compliance with (i) its Charter and By-Laws, (ii) all Company Agreements, and
(iii) all applicable laws, ordinances or regulations of any Governmental
Authority, except (other than in the case of clause (i) above) where such
violation would not reasonably be expected to have a Material Adverse Effect.
Except as set forth on SCHEDULE 2.5, the Company is not required under federal,
state, local or foreign law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
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obligations under the Transaction Documents, or to issue and sell the
Securities, except for the registration provisions provided in the Registration
Rights Agreement and the requirements, of the Nasdaq Stock Market, Inc. and the
filing of a Form D with the Securities and Exchange Commission following
consummation of the transactions contemplated by this Agreement.
2.6 SEC Documents; No Non-Public Information. The Common Stock of
the Company is registered pursuant to Section 12(g) of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), and the Company and its
Subsidiaries have filed all reports, schedules, forms, statements and other
documents required to be filed by them with the Securities and Exchange
Commission ("SEC") since December 31, 1999 pursuant to the reporting
requirements of the Exchange Act, including all such proxy information and
registration statements, and any amendments thereto required to have been filed
as of the Closing Date (all of the foregoing including filings incorporated by
reference therein, together with all registration statements filed under the
Securities Act, being referred to herein as the "SEC DOCUMENTS"). As of their
respective filing dates, the SEC Documents complied in all material respects
with the requirements of the Exchange Act and the Securities Act, as the case
may be, and the rules and regulations of the SEC promulgated thereunder and
other federal, state and local laws, rules and regulations applicable to such
SEC Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The SEC Documents
contain all material information concerning the Company and its Subsidiaries
required to be disclosed therein as of the dates thereof, and no event or
circumstance has occurred prior to the date hereof which would require the
Company to disclose such event or circumstance in order to make the statements
in the SEC Documents not misleading but which has not, or will have not, been so
disclosed or which will be disclosed in the current report on Form 8-K to be
filed pursuant to Section 4.2.
2.7 Financial Statements. The financial statements (including any
related notes) of the Company and its Subsidiaries included in the SEC Documents
complied as to form and substance in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC or
other applicable rules and regulations with respect thereto in effect at the
time of their filing with the SEC. Such financial statements were prepared in
accordance with United States GAAP applied on a consistent basis during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly presented in all material respects the financial
position of the Company and its Subsidiaries as of the respective dates thereof
and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
2.8 Poison Pill Provisions. The Company has amended the Rights
Agreement, dated as of February 10, 1999, between the Company and Xxxxxx Trust
Company of California, as amended (the "RIGHTS AGREEMENT") to exclude Purchaser
and any of its Affiliates from the definition of "15% Stockholder" (as that term
is defined in the Rights Agreement), and, accordingly, the Company has taken all
action necessary to ensure that no Rights (as that term is defined in the Rights
Agreement) have been exercised or are exercisable in connection with the
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execution and delivery of the Transaction Documents or the consummation of the
transactions contemplated hereby or thereby. The Board of Directors of the
Company (at a meeting duly called and held) has, by the unanimous vote of all
directors present, approved such amendment to the Rights Agreement.
2.9 No Litigation. Except as set forth in SCHEDULE 2.9 or the
reports or documents filed at least five Trading Days prior to the Closing Date
by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act (the
"PRE-AGREEMENT SEC DOCUMENTS"), no litigation or claim (including those for
unpaid taxes) against the Company or any of its Subsidiaries is pending or, to
the Company's knowledge, threatened, and, to the Company's knowledge, no other
event has occurred which, if determined adversely, could reasonably be expected
to result in litigation which would have a Material Adverse Effect. There is no
legal or regulatory proceeding or inquiry described in the Pre-Agreement SEC
Documents that could reasonably be expected to have a Material Adverse Effect.
2.10 Application of Takeover Protections. The Company and its board
of directors have taken all necessary action, if any, in order to render
inapplicable any anti-takeover provision contained in the Company's Charter or
By-Laws or Delaware law which is or could become applicable to Purchaser or, to
the extent such action is permissible under Delaware law, its assignees and
transferees, as a result of the transactions contemplated by the Transaction
Documents, including, without limitation, (i) the Company's issuance of the
Purchase Shares and the Warrant Shares and (ii) the Purchaser's ownership of the
Purchase Shares and the Warrant.
2.11 Completeness of Disclosure. The Company has delivered to the
Purchaser true and complete copies of each agreement, contract, commitment or
other document (or summaries thereof) that is referred to specifically in the
Schedules or that has been requested in writing by the Purchaser. Neither this
Agreement nor any annex or schedule hereto or certificate provided pursuant
hereto contains or will contain any untrue statement of a material fact or omits
or will omit to state a material fact required to be stated herein or therein or
necessary to make any statement herein or therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser represents and warrants to the Company the following as
to itself:
3.1 Organization. The Purchaser is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation.
3.2 Authorization; Enforcement. (i) The Purchaser has the
requisite power and authority to enter into and perform the Transaction
Documents and to purchase the Purchase Shares and the Warrant being sold to it
hereunder, (ii) the execution and delivery of the Transaction Documents by the
Purchaser and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action, and (iii)
the Transaction Documents constitute valid and binding obligations of the
Purchaser enforceable against it in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application.
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3.3 No Conflicts. The execution, delivery and performance by the
Purchaser of the Transaction Documents and the consummation by the Purchaser of
the transactions contemplated hereby and thereby do not and will not (i) result
in a violation of the Purchaser's certificate of incorporation or by-laws, or
(ii) conflict with any agreement, indenture or instrument to which the Purchaser
is a party, or (iii) result in a violation of any law, rule, or regulation, or
any order, judgment or decree of any court or Governmental Authority applicable
to the Purchaser, except, in the case of clauses (ii) and (iii), for any such
violation or conflict which would not have a Material Adverse Effect on the
Purchaser. As applied to the Purchaser, "MATERIAL ADVERSE EFFECT" means any
adverse effect on the business operations, prospects, properties or condition
(financial or otherwise) of the relevant party which is material to the relevant
party and its consolidated subsidiaries, taken as a whole, and any material
adverse effect on the transactions contemplated by, or the rights or remedies of
the relevant party or the obligations of the other parties under the Transaction
Documents taken together.
3.4 Access to Other Information. The Purchaser acknowledges that
the Company has made available to the Purchaser the opportunity to examine such
additional documents from the Company and to ask questions of, and receive full
answers from, the Company concerning, among other things, the Company, its
financial condition, its management, its prior activities and any other
information which the Purchaser considers relevant or appropriate in connection
with entering into the Transaction Documents.
3.5 Risks of Investment. The Purchaser acknowledges that the
Purchase Shares, the Warrant and the Warrant Shares have not been registered
under the Securities Act. The Purchaser is capable of assessing the risks of an
investment in the Common Stock of the Company and is fully aware of the economic
risks thereof.
3.6 Investment Representation. The Purchaser is purchasing the
Purchase Shares and the Warrant (and if issued, the Warrant Shares) for its own
account and not with a view to distribution in violation of any securities laws;
provided, however, that by making the representations herein, such Purchaser
does not agree to hold such securities for any minimum or other specific term
and reserves the right to dispose of the securities at any time in accordance
with federal and state securities laws applicable to such disposition. Nothing
in this Section 3.6 is intended to limit or otherwise affect the obligations of
the Purchaser under Section 4.2.
3.7 Restricted Securities. The Purchaser acknowledges and
understands that the terms of issuance have not been reviewed by the SEC or by
any state securities authorities and that the Purchase Shares and the Warrant
have been (and, if issued, the Warrant Shares will be) issued in reliance on the
certain exemptions for non-public offerings under the Securities Act, which
exemptions depend upon, among other things, the representations made and
information furnished by the Purchaser.
3.8 Ability to Bear Economic Risk. The Purchaser is an "accredited
investor" as defined in Rule 501 of Regulation D, as amended, under the
Securities Act, and it (i) is able to bear the economic risk of its investment
in the Purchase Shares and the Warrant (and, if issued, the Warrant Shares), and
(ii) is able to hold such securities for an indefinite period of time, and (iii)
can afford a complete loss of its investment in such securities.
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4. COVENANTS.
4.1 Public Announcements. Except as provided for herein, no party
hereto shall make any public announcements or otherwise communicate with any
news media with respect to this Agreement or any of the transactions
contemplated hereby without prior consultation with the other party as to the
timing and contents of any such announcement; provided, that nothing contained
herein shall prevent either party from promptly making all filings with
Governmental Authorities and all disclosure as may, in its good faith judgment
after consulting with its legal counsel, be required in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby (in which case the disclosing party shall advise the other
parties and provide them with a copy of the proposed disclosure or filing prior
to making the disclosure or filing).
4.2 Securities Compliance. The Company shall take all action
necessary under applicable law, rule and regulation for the legal and valid
issuance of the Purchase Shares and the Warrant (and, if issued, the Warrant
Shares). Without limiting the foregoing, the Company shall, within one (1)
Trading Day following the Closing Date, issue a press release describing in
detail the transactions contemplated in the Transaction Documents, and within
two (2) Trading Days following the Closing Date, file a current report on Form
8-K with the SEC concerning the transactions contemplated hereby and attaching
this Agreement, together with all Exhibits hereto (excluding the Schedules), as
exhibits to such Form 8-K. Such Form 8-K and any other Form 8-K and/or press
release or other publicity concerning the Transaction Documents shall contain
such information as is reasonably requested by the Purchaser and as may be
reasonably approved by the Purchaser prior to issuance. If the Company fails to
so file a Form 8-K or issue a press release as required herein within the
requisite time period, the Purchaser at any time may issue a press release
covering the transactions contemplated by the Transaction Documents.
4.3 Form D; Blue Sky Laws. The Company agrees to file a Form D
with respect to the Purchase Shares, as required under Regulation D of the
Securities Act and to provide a copy thereof to the Purchaser promptly after
such filing. The Company shall, on or before the Closing Date, take such action
as the Company shall have reasonably determined is necessary to qualify the
applicable Purchase Shares and the Warrant for sale to Purchaser at the Closing
under applicable securities or "blue sky" laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to each Purchaser on or prior to the
Closing Date.
5. EXPENSES; INDEMNITY.
5.1 Expenses. Each party shall bear its own expenses incurred in
connection with the proposed transaction.
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5.2 Indemnification.
(a) In consideration of the Purchaser's execution and
delivery of this Agreement and the Registration Rights Agreement and in addition
to all of the Company's other obligations under the Transaction Documents, the
Company shall defend, protect, indemnify and hold harmless the Purchaser and all
of its officers, directors and employees, and any of the foregoing persons'
agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(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 (irrespective 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"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate or document contemplated hereby or thereby, (ii) any
breach of any covenant, agreement or obligation of the Company contained in the
Transaction Documents or any other certificate or document contemplated hereby
or thereby, (iii) any cause of action, suit or claim brought or made against
such Indemnitee by a third party (other than any cause of action, suit or claim
brought or asserted by or on behalf of any security holders of Safeguard
Scientifics Inc. in their capacity as such) and arising out of or resulting from
the execution, delivery, performance, breach by the Company or enforcement
against the Company of the Transaction Documents or any certificate or
instrument contemplated hereby or thereby and (iv) the enforcement of this
Section 5.2(a).
(b) In consideration of the Company's execution and
delivery of the Transaction Documents, the Purchaser shall defend, protect,
indemnify and hold harmless the Company and its officers, directors and
employees and any of the foregoing persons' agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "COMPANY
INDEMNITEES") from and against any and all Indemnified Liabilities, incurred by
any Company Indemnitee as a result of, or arising out of, or relating to (i) any
misrepresentation or breach of any representation or warranty made by the
Purchaser in the Transaction Documents or any other certificate or document
contemplated hereby or thereby, or (ii) any breach of any covenant, agreement or
obligation of the Purchaser contained in any of the Transaction Documents or any
other certificate or document contemplated hereby or thereby, and (iii) the
enforcement of this Section 5.2(b).
5.3 Survival. The obligations of the parties under this Section 5
shall survive the Closing and any transfer of any of the Purchase Shares or the
Warrant, enforcement, amendment or waiver of any provision of this Agreement or
the Registration Rights Agreement, and the termination of this Agreement or of
the Registration Rights Agreement.
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6. NOTICES.
6.1 Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing, must be delivered by (i) courier, mail or hand
delivery or (ii) facsimile, and will be deemed to have been delivered upon
receipt. The addresses and facsimile numbers for such communications shall be:
If to the Company:
ChromaVision Medical Systems, Inc.
00000 Xxxxx Xxxxxxx
Xxx Xxxx Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: W. Xxxx Xxxxxx, Esq.
If to Purchaser:
Safeguard Delaware, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Safeguard Scientifics, Inc.
000 Xxxxx Xxxx Xxxxx
000 Xxxxxxxx
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
and
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
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Each party shall provide five (5) days prior written notice to the
other party of any change in address, telephone number or facsimile number.
Written confirmation of receipt (i) given by the recipient of such notice,
consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender's facsimile machine containing the time, date and
recipient facsimile number or (iii) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.
7. TERMINATION.
7.1 Termination. This Agreement may be terminated (by written
notice by the terminating party to the other party) and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) By mutual written consent of the Purchaser and the
Company;
(b) By the Purchaser or the Company if the Closing has
not occurred on or before the second Business Day following the date
hereof (unless the parties have otherwise agreed in writing); or
(c) By the Purchaser or the Company if a Governmental
Authority or arbitrator shall have issued an order, decree or ruling or
taken any other action, in each case restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement
to occur at the Closing, and such order, decree, ruling or other action
shall not have been lifted.
7.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 7.1 hereof, this Agreement shall forthwith
become void and there shall be no liability on the part of either of the
parties, except as set forth in Sections 5, 6, 8.5, 8.6, 8.7, 8.9, 8.10, 8.11
and this Section 7.2.
8. MISCELLANEOUS.
8.1 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
8.2 Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
8.3 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
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8.4 Governing Law. THIS AGREEMENT AND THE VALIDITY AND PERFORMANCE
OF THE TERMS HEREOF SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY IN SUCH STATE.
8.5 Consent to Jurisdiction and Service of Process. EACH OF THE
COMPANY AND THE PURCHASER (I) HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT, COURTS OF THE STATE OF
DELAWARE AND OTHER COURTS OF THE UNITED STATES SITTING IN NEW CASTLE COUNTY,
DELAWARE FOR THE PURPOSES OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVES, AND AGREES NOT TO ASSERT IN
ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER. EACH OF THE COMPANY AND THE PURCHASER CONSENTS TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR
LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
8.6 Waiver of Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A
TRIAL BY JURY.
8.7 Entire Agreement; Amendments; Waivers. This Agreement
supersedes all other prior oral or written agreements between the Purchaser, the
Company, their Affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement and the instruments referenced
herein (including the other Transaction Documents) contain the entire
understanding of the parties with respect to the matters covered herein and
therein. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Purchaser, and no provision
hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought. The Purchaser may at any time elect, by
notice to the Company, to waive (whether permanently or temporarily, and subject
to such conditions, if any, as the Purchaser may specify in such notice) any of
its rights (but not obligations) under any of the Transaction Documents to
acquire shares of Common Stock from the Company, in which event such waiver
shall be binding against the Purchaser in accordance with its terms.
11
8.8 Successors and Assigns. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns. The Purchaser may assign some or all of
its rights hereunder without the consent of the Company in connection with any
sale or transfer of all or any portion of the Purchase Shares or the Warrant
held by the Purchaser (other than in connection with any sale or transfer
following which the securities transferred cease to be "restricted securities"
under the Securities Act). The Company shall not assign this Agreement or any
rights or obligations hereunder without the prior written consent of the
Purchaser, except in connection with a transfer of its business substantially or
as a whole, whether by merger, consolidation, sale of assets or otherwise and
provided that (1) the assignee assumes in writing all obligations hereunder and
(2) the Company remains liable to the extent still existing.
8.9 No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
8.10 Further Assurances. Each party 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 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.
8.11 Remedies. The Purchaser shall have all rights and remedies set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law. Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such
rights specifically, to recover damages by reason of any breach of any provision
of this Agreement and to exercise all other rights granted by law. The Purchaser
without prejudice may withdraw, revoke or suspend its pursuit of any remedy at
any time prior to its complete recovery as a result of such remedy.
8.12 Rescission and Withdrawal Right. Notwithstanding anything to
the contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, wherever the Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then the
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any such notice, demand or election in whole or
in part without prejudice to its future actions and rights.
8.13 Obligations Absolute. Except as expressly set forth in the
Transaction Documents, the parties' obligations under the Transaction Documents
are unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed as of the date and year first written
above.
CHROMAVISION MEDICAL SYSTEMS, INC.
/s/ Xxxxxxx X.X. Xxxxx
------------------------------------
By: Xxxxxxx X.X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
SAFEGUARD DELAWARE, INC.
/s/ Xxxxxxx Xxxxx
------------------------------------
By: Xxxxxxx Xxxxx
Title: Vice President
ANNEX I
CERTAIN DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"AFFILIATE" shall mean, at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person, and (b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests.
"AGREEMENT" shall have the meaning set forth in the preamble.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in Philadelphia, Pennsylvania are required or
authorized to be closed.
"BY-LAWS" shall have the meaning set forth in Section 2.3.
"CHARTER" shall have the meaning set forth in Section 2.3.
"CLOSING" shall have the meaning set forth in Section 1.2.
"CLOSING DATE" shall have the meaning set forth in Section 1.2.
"COMPANY" shall have the meaning set forth in the preamble.
"COMPANY AGREEMENTS" shall have the meaning set forth in Section 2.5.
"COMPANY INDEMNITEES" shall have the meaning set forth in Section
5.2(b).
"CONTROL" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"EXCHANGE ACT" shall have the meaning set forth in Section 2.6.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America. The term "GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES" shall mean accounting principles which are (a) consistent
with the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors as generally accepted accounting principles, and (b)
such that a certified public accountant would, insofar as the use of accounting
principles is pertinent, be in a position to deliver an unqualified opinion
(except for changes in which said accountants concur) as to financial statements
in which such principles have been properly applied.
"GOVERNMENTAL AUTHORITY" shall mean:
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) with respect to any Person, any jurisdiction in which
such Person or any of its Subsidiaries conducts all
or any part of its business, or which has
jurisdiction over any properties of such Person or
any of its Subsidiaries, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to,
any such government.
"INDEMNITEES" shall have the meaning set forth in Section 5.2(a).
"INDEMNIFIED LIABILITIES" shall have the meaning set forth in Section
5.2(a).
"MATERIAL ADVERSE EFFECT" shall have the meaning set forth in Sections
2.1 and 3.3.
"PERSON" or "PERSON" shall mean an individual, partnership,
corporation, limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision thereof.
"PRE-AGREEMENT SEC DOCUMENTS" shall have the meaning set forth in
Section 2.9
"PURCHASER" shall have the meaning set forth in the preamble.
"PURCHASE SHARES" shall have the meaning set forth in Section 1.1.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement, dated as the date hereof, between the Company and the Purchaser.
"RIGHTS AGREEMENT" shall have the meaning set forth in Section 2.8.
"SEC" shall have the meaning set forth in Section 2.6.
"SEC DOCUMENTS" shall have the meaning set forth in Section 2.6
"SECURITIES ACT" shall have the meaning set forth in the recitals.
"SUBSIDIARY" shall mean, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a
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50% interest in the profits or capital thereof is owned by such Person or one or
more of its Subsidiaries or such Person and one or more of its Subsidiaries
(unless such partnership can and does ordinarily take major business actions
without the prior approval of such Person or one or more of its Subsidiaries).
Except where specifically indicated to the contrary, all references in this
Agreement to Subsidiaries of a Person shall be deemed to refer to all direct and
indirect Subsidiaries of such Person.
"TRADING DAY" shall mean (x) if the Common Stock is listed on the New
York Stock Exchange or the American Stock Exchange, a day on which there is
trading on such stock exchange, or (y) if the Common Stock is not listed on
either of such stock exchanges but sale prices of the Common Stock are reported
on an automated quotation system, a day on which trading is reported on the
principal automated quotation system on which sales of the Common Stock are
reported, or (z) if the foregoing provisions are inapplicable, a day on which
quotations are reported by National Quotation Bureau Incorporated.
"TRANSACTION DOCUMENTS" shall have the meaning set forth in Section
1.2.
"WARRANT" shall have the meaning set forth in Section 1.1.
"WARRANT SHARES" shall have the meaning set forth in Section 1.1.
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EXHIBIT A
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.
THIS WARRANT DOES NOT REQUIRE PHYSICAL SURRENDER OF THE WARRANT UPON ANY PARTIAL
EXERCISE HEREOF. AS A RESULT FOLLOWING ANY EXERCISE OF ANY PORTION OF THIS
WARRANT, THE OUTSTANDING NUMBER OF SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
MAY BE LESS THAN THE AMOUNT OF SHARES SET FORTH BELOW.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE 229,523
SHARES OF COMMON STOCK OF
CHROMAVISION MEDICAL SYSTEMS, INC.
THIS CERTIFIES that, for value received, SAFEGUARD DELAWARE, INC., a
Delaware corporation, and its successors and assigns (the "HOLDER") is entitled,
upon the terms and subject to the conditions hereinafter set forth, at any time
and from time to time on and after the date hereof, and on and prior to 8:00
p.m. Eastern Time on March 1, 2008 (the "EXPIRATION DATE"), but not thereafter,
to subscribe for and purchase from CHROMAVISION MEDICAL SYSTEMS, INC., a
Delaware corporation (the "COMPANY"), 229,523 shares (the "WARRANT SHARES") of
common stock, $0.01 par value per share of the Company ("COMMON STOCK"). The
purchase price of one share of Common Stock under this Warrant shall be the
Exercise Price, as defined below and as may be adjusted from time to time
pursuant to the terms hereof. The Exercise Price and the number of shares for
which this Warrant is exercisable shall be subject to adjustment as provided
herein.
This Warrant is being delivered in connection with the Securities
Purchase Agreement dated on or about the date hereof (the "PURCHASE AGREEMENT")
entered into between the Company and the Holder.
1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Purchase Agreement. As
used in this Warrant, the following terms shall have the following respective
meanings:
"CHANGE IN CONTROL TRANSACTION" will be deemed to exist if (i) there
occurs any consolidation, merger or other business combination of the Company
with or into any other corporation or other entity or person (whether or not the
Company is the surviving corporation), or any other corporate reorganization or
transaction or series of related transactions in which in any of such events the
voting stockholders of the Company prior to such event cease to own 50% or more
of the voting stock, or corresponding voting equity interests, of the surviving
corporation after such event (including, without limitation, any "GOING PRIVATE"
transaction under Rule 13e-3 promulgated pursuant to the Exchange Act or tender
offer by the Company under Rule 13e-4 promulgated pursuant to the Exchange Act
for 20% or
more of the Company's Common Stock), (ii) any person (as defined in Section
13(d) of the Exchange Act), together with its affiliates and associates (as such
terms are defined in Rule 405 under the Act), other than Safeguard Scientifics,
Inc. or any successor thereto (collectively "SSI")and/or SSI's affiliates and
associates (as such terms are defined in Rule 405 under the Act), beneficially
owns or is deemed to beneficially own (as described in Rule 13d-3 under the
Exchange Act without regard to the 60-day exercise period) in excess of 50% of
the Company's voting power, (iii) there is a replacement of more than one-half
of the members of the Company's Board of Directors which is not approved by
those individuals who are members of the Company's Board of Directors
immediately prior to such replacement, (iv) in one or a series of related
transactions, there is a sale or transfer of all or substantially all of the
assets of the Company, determined on a consolidated basis or (v) the Company
enters into an agreement providing for an event set forth in clause (i), (ii),
(iii) or (iv) above, pursuant to which the Common Stock is converted or
reclassified into other securities, cash or property.
"CONVERTIBLE SECURITIES" means any convertible securities, warrants,
options or other rights to subscribe for or to purchase or exchange for, shares
of Common Stock.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXERCISE PRICE" means $2.95, as such figure may be adjusted as
provided herein.
"PRINCIPAL MARKET" shall mean the market or exchange on which the
Common Stock is then principally traded.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"TRADING DAY" shall mean a day on which there is trading on the
Principal Market.
"WARRANTS" shall mean this Warrant and any other warrants issued upon
full or partial transfer of this Warrant to any direct or indirect subsequent
transferees of this Warrant.
2. TITLE OF WARRANT. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose, in the name of
the record holder hereof from time to time. The Company may deem and treat the
registered holder as the absolute owner hereof for the purpose of any exercise
hereof or any distribution to the holder, and for all other purposes, and the
Company shall not be affected by notice to the contrary except as provided
herein.
With the written consent of the Company, such written consent not to be
unreasonably withheld, prior to the expiration hereof and subject to compliance
with applicable laws, this Warrant and all rights hereunder are transferable, in
whole or in part, at the office or agency of the Company by the holder hereof in
person or by duly authorized attorney, upon surrender of this Warrant together
with (a) the Assignment Form annexed hereto properly endorsed, and (b) any other
documentation reasonably necessary to satisfy the Company that such transfer is
in compliance with all applicable securities laws; provided that no such
transfer may be made to a person that is not an "ACCREDITED INVESTOR" as defined
in Rule 501 of Regulation D of the Securities Act; and provided further that no
consent of the Company is required for any transfer or assignment in whole or in
part from time to time to an affiliate of the Holder or the then holder that is
an "ACCREDITED INVESTOR." The term "HOLDER" as used herein shall refer to the
Holder or any subsequent permitted transferee of this Warrant. If this Warrant
is duly assigned in accordance with the terms hereof, then the Company agrees,
upon the request of the assignee, to amend or supplement promptly any effective
registration statement covering the Warrant Shares so that such assignee is
entitled to be a selling stockholder thereunder.
2
3. AUTHORIZATION OF SHARES. The Company covenants that all shares
of Common Stock which may be issued upon the exercise of rights represented by
this Warrant will, upon exercise of the rights represented by this Warrant and
payment of the Exercise Price as set forth herein, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens,
encumbrances and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue or otherwise
specified herein).
4. EXERCISE OF WARRANT.
(a) Exercise Procedure. Exercise of the purchase rights
represented by this Warrant may be made at any time and from time to time, in
whole or in part, on or after the date hereof but before 8:00 p.m. Eastern Time
on the Expiration Date, by delivering the Notice of Exercise annexed hereto duly
completed and executed (which delivery may be by facsimile) to the Company at
the principal office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered holder hereof
at the address of such holder appearing on the books of the Company), and upon
payment of the full Exercise Price of the shares thereby purchased (subject to
subsection (b) below), the holder shall be entitled to receive a certificate for
the number of shares of Common Stock so purchased. Subject to subsection (b)
below, payment of the Exercise Price of the shares shall be by certified check
or cashier's check or by wire transfer to an account designated by the Company
in an aggregate amount equal to the Exercise Price multiplied by the number of
shares being purchased.
(b) Cashless Exercise. Alternatively, and only in the
event the Warrant Shares are not subject to an effective registration statement,
the holder may exercise this Warrant, in whole or in part in a "CASHLESS" or
"NET-ISSUE" exercise by delivering to the offices of the Company or any transfer
agent for the Common Stock a Notice of Exercise specifying the number of Warrant
Shares to be delivered to such holder ("DELIVERABLE SHARES") and the number of
Warrant Shares with respect to which this Warrant is being exercised ("EXERCISED
SHARES"). The number of Deliverable Shares shall be calculated as follows:
(Fair Market Value of Common Stock less
# of Deliverable Shares = # of X Exercise Price) / Fair Market Value of
Exercised Shares Common Stock Price
"FAIR MARKET VALUE" shall be deemed to be the last reported
sale price of Common Stock on the Trading Day immediately prior to the date of
exercise, or, if not reported, the fair market value of such Common Stock as
reasonably determined by the Company and such holder.
(c) Issuance of Warrant Shares and Unexercised Warrants.
Subject to subsection (d) below, in the event that this Warrant is not exercised
in full, the number of Warrant Shares for which this Warrant may be exercised
shall be reduced by the number of such Warrant Shares for which this Warrant is
exercised and/or surrendered pursuant to this Section 4, and the Company, at its
expense, shall within five (5) Trading Days, issue and deliver to or upon the
order of the holder a new Warrant of like tenor in the name of the holder or as
the holder (upon payment by the holder of any applicable transfer taxes) may
request, reflecting such remaining number of Warrant Shares.
All exercises of this Warrant will be deemed to occur as of
the date of receipt by the Company of a validly executed Notice of Exercise (or
such later date as may be indicated on such Notice of Exercise) (such date being
referred to herein as the "EXERCISE DATE"), and certificates for shares of
Common Stock purchased hereunder shall be delivered to the holder hereof within
three (3) Trading Days after the Exercise Date. The holder may withdraw its
Notice of Exercise under Section 3(a) or 3(b) upon written notice to the Company
at any time thereafter, in whole or in part, if the Company fails to timely
deliver the applicable certificates to the holder as provided in this Warrant.
3
In lieu of delivering physical certificates representing the
Warrant Shares issuable upon conversion of this Warrant, provided the Company's
transfer agent is a participant in the Depository Trust Company ("DTC") Fast
Automated Securities Transfer ("FAST") program, upon request of the holder, the
Company shall use its best efforts to cause its transfer agent to electronically
transmit the Warrant Shares issuable upon exercise to the holder, by crediting
the account of the holder's prime broker with DTC through its Deposit Withdrawal
Agent Commission ("DWAC") system. The time periods for delivery described above
shall apply to the electronic transmittals through the DWAC system. The Company
agrees to use its best commercially reasonable efforts to coordinate with DTC to
accomplish this objective.
(d) Book-Entry. Notwithstanding anything to the contrary
set forth herein, upon partial exercise of this Warrant in accordance with the
terms hereof, the holder shall not be required to physically surrender this
Warrant to the Company unless such holder is purchasing the full amount of
Warrant Shares then represented by this Warrant. The holder and the Company
shall maintain records showing the number of Warrant Shares so purchased
hereunder and the dates of such purchases or shall use such other method,
reasonably satisfactory to the holder and the Company, so as not to require
physical surrender of this Warrant upon each such exercise.
5. NO FRACTIONAL SHARES OR SCRIP. No fractional Warrant Shares or
scrip representing fractional Warrant Shares shall be issued upon the exercise
of this Warrant. Any fractional share or scrip shall be rounded up to the
nearest whole number.
6. CHARGES, TAXES AND EXPENSES. Issuance of certificates for
shares of Common Stock upon the exercise of this Warrant shall be made without
charge to the holder hereof for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be issued in
the name of the holder or in such name or names as may be directed by the
holder; provided, however, that in the event certificates for shares of Common
Stock are to be issued in a name other than the name of the holder, this Warrant
when surrendered for exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the holder hereof, and provided further, that
the Company shall not be required to pay any tax or taxes or any other fees or
expenses applicable to the holder or its transferee which may be payable in
respect of any transfer involved in the issuance of any Warrant certificates or
any certificates for the Warrant Shares in a name other than the name of the
holder.
7. CLOSING OF BOOKS. The Company will at no time close its
stockholder books or records in any manner which interferes with the timely
exercise of this Warrant.
8. NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. Subject to Sections
12 and 13 of this Warrant and the provisions of any other written agreement
between the Company and the holder, prior to the exercise of this Warrant as
provided herein, the holder shall not be entitled to vote or receive dividends
or be deemed the holder of Warrant Shares or any other securities of the Company
that may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the holder, as such,
any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, or change of stock to no par value, consolidation, merger,
conveyance or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights. However, at the time of the exercise of this
Warrant pursuant to Section 4 hereof, the Warrant Shares so purchased hereunder
shall be deemed to be issued to such holder as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
exercised.
4
9. REMEDIES. If the Company shall fail to deliver to the holder
the Warrant Shares to be issued to the holder hereunder by the third Trading Day
following the Exercise Date, whether by physical delivery of certificates or by
book-entry transfer through DTC for such Warrant Shares, the Company shall, in
addition to any other remedies under this Warrant or at law or in equity, pay as
additional damages in cash to the holder, by the seventh (7th) Trading Day
following the Exercise Date, an amount equal to one percent (1%) of the value of
the Warrant Shares, and on each succeeding fifth (5th) Trading Day thereafter
until such Warrant Shares are delivered, an amount equal to two percent (2%), of
the value of the Warrant Shares not delivered to the holder by such third (3rd)
Trading Day following the Exercise Date, based on the Fair Market Value as of
the Exercise Date. The Company acknowledges that this remedy is partial and
non-exclusive.
10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT;
DENOMINATION. In the event that any holder notifies the Company that its
Warrant(s) have been lost, stolen or destroyed, then replacement Warrant(s)
identical in all respects to the original Warrant(s) (except for any
registration number and any adjustments to the Exercise Price or the number of
Warrant Shares issuable hereunder pursuant hereto, if different than that shown
on the original Warrant(s)) shall be delivered to the holder by the Company
within three (3) Trading Days; provided that such holder executes and delivers
to the Company an agreement reasonably satisfactory to the Company to indemnify
the Company from any loss incurred by it in connection with such Warrants. This
Warrant is exchangeable for an equal aggregate number of Warrants of different
denominations, as requested by the holder surrendering the same. No service
charge will be made for such registration, replacement, transfer or exchange.
11. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday, Sunday or a legal holiday, then such action
may be taken or such right may be exercised on the next succeeding day not a
legal holiday.
12. EFFECT OF CERTAIN EVENTS. If at any time while this Warrant or
any portion hereof is outstanding and unexpired there shall be a Change in
Control Transaction, then the holder shall have the right thereafter to
purchase, by exercise of this Warrant and payment of the aggregate Exercise
Price in effect immediately prior to such Change in Control Transaction, the
kind and amount of consideration including cash, stock, other securities, assets
or any other property, which it would have owned or have been entitled to
receive upon or after the happening of such transaction had this Warrant been
exercised immediately prior thereto, subject to further adjustment as provided
in Section 13. The Company shall not consummate a Change in Control Transaction
unless the entity resulting from such transaction (if not the Company), or such
transferee entity, as the case may be, shall expressly assume, by supplemental
agreement reasonably satisfactory in form and substance to the holder, the due
and punctual performance and observance of each and every covenant and condition
of this Warrant to be performed and observed by the Company.
13. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
For purposes of any adjustment of the Exercise Price pursuant to this Section
13, the "EXERCISE PRICE" shall be deemed to be the Exercise Price as may have
been previously adjusted hereunder.
(a) Stock Dividends, Splits, Combinations and
Reclassifications. If, to the extent not covered by Section 12 above, the
Company or any Subsidiary, at any time while this Warrant or any portion thereof
is issued, outstanding and unexpired: (A) shall declare or pay a stock dividend
or otherwise make a distribution or distributions on any equity securities
(including securities convertible
5
into or exchangeable or exercisable for such equity securities) in shares of
Common Stock; (B) subdivide the then outstanding Common Stock into a larger
number of shares; (C) combine the then outstanding Common Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Common Stock (including, without limitation, in
connection with any merger or consolidation), then the Exercise Price then in
effect hereunder shall be adjusted by multiplying the Exercise Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding before such event and the
denominator of which shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding after such event. Any adjustment made
pursuant to this Section 13(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(b) Distributions. If the Company or any Subsidiary, at
any time while this Warrant is outstanding, shall distribute to all holders of
Common Stock evidences of its indebtedness or assets or cash or rights or
warrants to subscribe for or purchase any security of the Company or any of its
subsidiaries, then the Exercise Price in effect at the opening of business on
the day following the date fixed for the determination of holders of Common
Stock entitled to receive such distribution shall be adjusted by multiplying
such Exercise Price by a fraction, the numerator of which shall be the Fair
Market Price (as defined below) per share of the Common Stock less the then fair
market value as reasonably determined by the Board of Directors of the portion
of the evidences of indebtedness or assets or rights or warrants so distributed
(and for which an adjustment to the Exercise Price has not previously been made
pursuant to the terms of this Section 13) applicable to one share of Common
Stock, and the denominator of which shall be such Fair Market Price per share of
the Common Stock, such adjustment to become effective immediately after the
opening of business on the day following the date fixed for the determination of
holders of Common Stock entitled to receive such distribution. "FAIR MARKET
PRICE" shall mean the closing market price per share of Common Stock on the
Principal Market on the Trading Day next preceding such fixed determination date
or such other date on which the Fair Market Price is being determined. The
Company shall deliver to each holder a notice setting forth the Exercise Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment and the computation thereof. In the event that the Exercise
Price shall change by more than 5%, the holder shall have the right to have the
fair market value determined by an independent nationally reputable investment
banker mutually selected by the Company and the holder, at the Company's
expense.
For the purposes of the foregoing adjustments, in the case of
the issuance of any Convertible Securities, the maximum number of shares of
Common Stock issuable upon exercise, exchange or conversion of such Convertible
Securities shall be deemed to be outstanding, provided that no further
adjustment shall be made upon the actual issuance of Common Stock upon exercise,
exchange or conversion of such Convertible Securities.
(c) Inverse Proportional Adjustments to Exercise Price
and Warrant Shares. In the event of any adjustment in the number of Warrant
Shares issuable hereunder upon exercise pursuant to Section 13(a) or 13(b)
hereof, the Exercise Price shall be inversely proportionately increased or
decreased, as the case may be, such that aggregate purchase price for Warrant
Shares upon full exercise of this Warrant shall remain the same. Similarly, in
the event of any adjustment in the Exercise Price pursuant to Section 13(a) or
13(b) hereof, the number of Warrant Shares issuable hereunder upon exercise
shall be inversely proportionately increased or decreased as the case may be,
such that aggregate purchase price for Warrant Shares upon full exercise of this
Warrant shall remain the same.
6
(d) Additional Sales or Issuances of Securities. If the
Company sells or issues any securities of the Company during the period ending
on the date (such date, the "FINAL DATE") that is the earlier to occur of (i)
February 10, 2005 or (ii) the first date after the date hereof on which the
Company consummates one or more financings resulting in aggregate gross proceeds
to the Company of $10,000,000 or more and, in connection with such subsequent
sale(s) or issuance(s), a party is issued one or more warrants to purchase a
number of shares of Common Stock or Common Stock equivalents that is greater
than 10% (the percentage of shares which may be purchased by such warrant or
warrants, the "WARRANT COVERAGE PERCENTAGE") of the total number of shares of
Common Stock or Common Stock equivalents purchased by such party (excluding any
warrants issued other than in connection with a financing), then the number of
Warrant Shares issuable hereunder upon exercise shall be automatically increased
(but not decreased) by an amount (the "ADDITIONAL WARRANT SHARES AMOUNT") equal
to (X) the Warrant Coverage Percentage minus 10% multiplied by (Y) 2,295,230.
Any adjustment in the number of shares into which this Warrant is exercisable
pursuant to this Section 13(d) shall not result in an adjustment to the Exercise
Price pursuant to Section 13(c). In addition, notwithstanding anything herein to
the contrary, in the event of one or more partial transfers of this Warrant,
then the number of additional Warrant Shares, if any, into which this Warrant
may become exercisable pursuant to this Section 13(d) shall be proportionately
allocated between the Holder and any such partial transferees of this Warrant in
a manner such that under no circumstances will the aggregate number of
additional Warrant Shares issuable to all such transferee holders and the Holder
as a result of the adjustment contemplated by this Section 13(d) exceed the
Additional Warrant Shares Amount (and any replacement or partial replacement
Warrant certificates issued to any such transferees will reflect the allocation
contemplated by this sentence). In the event that the Company sells or issues
any securities on or prior to the Final Date other than in connection with a
placement of common stock, or any rights that could be exercised or converted
into common stock, with warrant coverage, the Company and the Holder shall
negotiate in good faith to determine the Additional Warrant Shares Amount, or in
the absence of agreement, such determination shall be made by a third party
independent appraiser mutually acceptable to the Company and the Holder, which
appraiser shall determine the Additional Warrant Shares Amount based on the
dilutive effect of any rights that could be exercised or converted into
securities issued in such sale(s) or issuance(s) as compared to the value of the
Warrant delivered in connection with the Purchase Agreement (with the objective
that the value of the Warrant issued in connection with the Purchase Agreement
(taking into account the size of the financing contemplated by the Purchase
Agreement) should be comparable to the value of the warrant issued in such other
sale(s) or issuance(s) (taking into account the size of the financing in such
other sale(s) or issuance(s)).
14. NOTICES. If:
(i) the Company shall declare a dividend (or any other
distribution) on its Common Stock; or
(ii) the Company shall declare a special nonrecurring cash
dividend on or a redemption of its Common Stock; or
(iii) the Company shall authorize the granting to all
holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; or
(iv) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock
of the Company, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets
of the Company, or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property; or
7
(v) the Company shall authorize the voluntary
dissolution, liquidation or winding up of the affairs of the Company;
then the Company shall cause to be facsimiled and mailed to each holder at their
last addresses as they shall appear upon the Warrant register of the Company, at
least 20 business days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date fixed to determine which
holders of Common Stock of record will be entitled to such dividend,
distributions, redemption, rights or warrants and/or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up.
15. VOLUNTARY ADJUSTMENT BY THE COMPANY . The Company may at its
option, at any time during the term of this Warrant, reduce but not increase the
then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.
16. NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, the Company shall promptly
facsimile and mail by registered or certified mail, return receipt requested, to
the registered holder a notice setting forth the number of Warrant Shares (and
other securities or property) purchasable upon the exercise of this Warrant and
the Exercise Price of such Warrant Shares after giving effect to such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
17. AUTHORIZED SHARES . The Company covenants that during the
period this Warrant is outstanding and exercisable, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any and all purchase
rights under this Warrant. The Company further covenants that its issuance of
this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action as is
necessary and within its control to assure that such Warrant Shares may be
issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Principal Market or any other domestic securities
exchange or market upon which the Common Stock may be listed.
18. MISCELLANEOUS.
(a) Issue Date; Choice of Law; Venue; Jurisdiction; No
Jury Trial. THE PROVISIONS OF THIS WARRANT SHALL BE CONSTRUED AND SHALL BE GIVEN
EFFECT IN ALL RESPECTS AS IF IT HAD BEEN ISSUED AND DELIVERED BY THE COMPANY ON
THE DATE HEREOF. THIS WARRANT SHALL BE BINDING UPON ANY SUCCESSORS OR PERMITTED
ASSIGNS OF THE COMPANY. THIS WARRANT WILL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, EXCEPT FOR
MATTERS ARISING UNDER THE SECURITIES ACT, WITHOUT REFERENCE TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES CONSENTS TO THE EXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS SITTING IN THE COUNTY OF DELAWARE IN THE STATE OF
DELAWARE IN CONNECTION WITH ANY DISPUTE ARISING UNDER THIS WARRANT AND HEREBY
WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING,
WITHOUT LIMITATION, ANY
8
OBJECTION BASED ON FORUM NON CONVENIENS, TO THE BRINGING OF ANY SUCH PROCEEDING
IN SUCH JURISDICTION. EACH PARTY HEREBY AGREES THAT IF THE OTHER PARTY TO THIS
WARRANT OBTAINS A JUDGMENT AGAINST IT IN SUCH A PROCEEDING, THE PARTY WHICH
OBTAINED SUCH JUDGMENT MAY ENFORCE SAME BY SUMMARY JUDGMENT IN THE COURTS OF ANY
COUNTRY HAVING JURISDICTION OVER THE PARTY AGAINST WHOM SUCH JUDGMENT WAS
OBTAINED, AND EACH PARTY HEREBY WAIVES ANY DEFENSES AVAILABLE TO IT UNDER LOCAL
LAW AND AGREES TO THE ENFORCEMENT OF SUCH A JUDGMENT. EACH PARTY TO THIS WARRANT
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
SUCH PARTY AT ITS ADDRESS IN ACCORDANCE WITH SECTION 18(C). NOTHING HEREIN SHALL
AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY
(b) Modification and Waiver. This Warrant and any
provisions hereof may be changed, waived, discharged or terminated only with the
written approval of (i) the holder hereof and the Company or (ii) the Majority
Holders and the Company. "MAJORITY HOLDERS" means holders of a majority of the
Warrants (with such majority being determined based on the number of warrant
shares underlying such Warrants). Any amendment effected in accordance with
clause (i) of the preceding sentence shall be binding upon the Holder, each
future holder and the Company, and any amendment effected in accordance with
clause (ii) shall be binding upon all holders of Warrants (including the Holder)
and the Company. No waivers of, or exceptions to, any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision at any other time.
(c) Notices. Any notice, request or other document
required or permitted to be given or delivered to the Holder or future holders
hereof or the Company shall be personally delivered or facsimiled or shall be
sent by reputable overnight courier or certified or registered mail, postage
prepaid, to the Holder or each such holder at its address as shown on the books
of the Company or to the Company at the address set forth in the Purchase
Agreement. All notices under this Warrant shall be deemed to have been given (i)
in the case of personal or facsimile delivery, on the date of such delivery,
(ii) in the case of mailing, when received and (iii) in the case of overnight
courier, upon receipt. A party may from time to time change the address to which
notices to it are to be delivered or mailed hereunder by notice delivered in
accordance with the provisions of this Section 18(c).
(d) Severability. Whenever possible, each provision of
this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect the validity, legality or enforceability of any other provision of
this Warrant in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Warrant
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
(e) No Impairment. The Company shall not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issuance or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but shall at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to
9
protect the rights of the holder granted hereunder against impairment. Without
limiting the generality of the foregoing, the Company (a) shall not increase the
par value of any Warrant Shares above the amount payable therefor on such
exercise and (b) shall take all such action as may be reasonably necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares on the exercise of this Warrant.
(f) Specific Performance. The Company acknowledges and
agrees that irreparable damage would occur in the event that the Company fails
to perform any of the provisions of this Warrant in accordance with its specific
terms. It is accordingly agreed that the holder shall be entitled to seek an
injunction or injunctions to prevent or cure breaches of the provisions of this
Warrant and to enforce specifically the terms and provisions hereof this being
in addition to any other remedy to which the holder may be entitled at law or in
equity.
10
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its duly authorized officer.
Dated: February 10, 2004
CHROMAVISION MEDICAL SYSTEMS, INC.
By:_________________________________
Name:
Title:
11
NOTICE OF EXERCISE
(To be executed by the holder to exercise the right to
purchase shares of Common Stock under the foregoing Warrant)
TO: CHROMAVISION MEDICAL SYSTEMS, INC.
RE: COMMON STOCK PURCHASE WARRANT issued to _______________ on February __,
2004 to purchase shares of Common Stock (the
"Warrant")
(1) CHECK ONE:
___ (a) The undersigned hereby elects to purchase _________ shares of
Common Stock of CHROMAVISION MEDICAL SYSTEMS, INC. pursuant to Section
4(a) of the Warrant, and will tender payment of the purchase price in
full, together with all applicable transfer taxes payable pursuant to
the Warrant, if any.
OR
___ (b) The undersigned hereby exercises the Warrant with respect
_________ shares of Common Stock of CHROMAVISION MEDICAL SYSTEMS, INC.
on a cashless, "net basis" pursuant to Section 4(b) of the Warrant, and
hereby instructs the Company to deliver _______ shares of Common Stock
to the holder of the Warrant based on a Fair Market Value of $________.
(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
___________________________________
Name
___________________________________
Address
(3) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is
specified below:
___________________________________
Name
___________________________________
Address
Dated: _____________________________ Print Name of Holder:
___________________________
(Sign) By:__________________
Print Name:
Print Title:
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute
this form and supply the required information.
Do not use this form to exercise the
Warrant.)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the right represented by the within Warrant to
purchase _______ shares of Common Stock of CHROMAVISION MEDICAL SYSTEMS, INC. to
which the within Warrant relates and appoints ___________________ attorney to
transfer said right on the books of CHROMAVISION MEDICAL SYSTEMS, INC. with full
power of substitution in the premises.
Dated:
_____________________________
__________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
__________________________________________
Address of Transferee
__________________________________________
__________________________________________
In the presence of:
_____________________________
1
EXHIBIT B
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is entered into
as of February 10, 2004 between ChromaVision Medical Systems, Inc., a Delaware
corporation (the "COMPANY") and Safeguard Delaware, Inc., a Delaware corporation
(the "PURCHASER").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Securities Purchase Agreement, dated
as of the date hereof, between the Company and the Purchaser (the "PURCHASE
AGREEMENT"), the Company has agreed to sell and issue to the Purchaser, and the
Purchaser has agreed to purchase from the Company 2,295,230 shares of the
Company's common stock, $0.01 par value ("COMMON STOCK") and the Warrant (as
defined in the Purchase Agreement) to purchase Warrant Shares (as defined in the
Purchase Agreement) for an aggregate purchase price of $5,000,000 as more fully
specified and subject to the terms and conditions set forth in the Purchase
Agreement; and
WHEREAS, pursuant to the terms of, and in partial consideration for the
Purchaser's agreement to enter into, the Purchase Agreement, the Company has
agreed to provide the Purchaser with certain registration rights, as well as
certain other rights and remedies as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Purchase
Agreement and this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Purchaser hereby agrees as follows:
1. Certain Definitions. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed thereto in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following respective meanings:
"COMMISSION" or "SEC" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"HOLDER" and "HOLDERS" shall mean the Purchaser and any transferee of
Registrable Securities which have not been sold to the public to whom the
registration rights conferred by this Agreement have been transferred in
compliance with this Agreement.
"REGISTRABLE SECURITIES" shall mean: (i) the Shares, (ii) securities
issued or issuable upon any stock split, stock dividend, recapitalization or
similar event with respect to the Shares; and (iii) any other security issued as
a dividend or other distribution with respect to, in exchange for or in
replacement of the securities referred to in the preceding clauses.
The terms "REGISTER", "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"REGISTRATION EXPENSES" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement other than Selling Expenses, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, "blue sky" fees and expenses, reasonable fees and
disbursements of counsel to Holders (using a single counsel selected by a
majority in interest of the Holders if more than one Holder is participating in
a registration hereunder) for a "due diligence" examination of the Company and
review of the registration statement and related documents, and the expense of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities, and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses."
"SHARES" shall mean the Purchased Shares and the Warrant Shares.
2. Request for Registration.
(a) If the Company receives from a Holder or Holders a
written request that the Company effect a registration with respect to shares of
Registrable Securities held by such Holder or Holders having an aggregate price
to the public (net of underwriters' discounts and commissions) of at least
$500,000 or with respect to at least 300,000 Shares, the Company will, as soon
as practicable, use commercially reasonable efforts to effect such registration
(including, without limitation, appropriate qualification under applicable state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other governmental requirements or regulations)
as may be so requested and as would permit or facilitate the sale and
distribution, though negotiated, underwritten or other transactions or through a
combination of such methods of sale at the election of such Holder, of all or
such portion of such the Registrable Securities as are specified in such
request.
(b) Notwithstanding Section 2(a), the Company shall not
be obligated to take any action to effect or complete any such registration
pursuant to this Section 2:
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(i) During the period starting with the date
ninety (90) days prior to the Company's estimated date of filing of, and ending
on the date sixty (60) days immediately following the effective date of, any
registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided, that the Company gives notice of its intention
to file such registration statement to the Holder or Holders within thirty (30)
days of its request for registration; and provided, further that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; however, the Company may not delay a
requested registration under this paragraph if the Company's registration
statement will include no equity securities or securities convertible into
equity securities and the requested registration will not be part of an
underwritten public offering; or
(ii) After the Company has effected two
registrations pursuant to this Section 2; provided that any registration request
that (A) is delayed by the Company pursuant to Section 2(b)(i) or (B) does not
result in a registration being effected, will not count towards such two
registration limit;
(iii) If the Holder requesting registration is
able to sell all of such Holder's shares requested to be registered under Rule
144(k) of the Securities and Exchange Commission adopted under the Securities
Act; or
(iv) If the Company shall furnish to the Holder
or Holders requesting registration a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors of the
Company, it would be detrimental to the Company and its stockholders for such
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, the Company shall have the right to defer
such filing for a period of not more than 120 days after receipt of the request
of the initiating Holders; provided, however, that the Company may not utilize
this right more than once in any 12-month period.
(c) If the registration pursuant to this Section 2 is
effected through a firm commitment underwritten public offering at the election
of the Holder, the Company shall, together with such Holder, enter into an
underwriting agreement in customary form with a managing underwriter selected by
the Holder. Notwithstanding any other provision of this Section 2, if the
managing underwriter advises the Company in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Company shall so advise the Holder and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
limited to such amount; provided, however, that in the event of such limitation
on the number of shares to be underwritten, no securities to be registered for
sale by the Company shall be included unless all shares of Registrable
Securities requested by the Holder to be included in such underwriting are so
included.
-3-
3. Company Registration.
(a) If at any time or from time to time the Company shall
determine to register any of its equity securities, either for its own account
for the account of a Holder or the account of a stockholder who is not a Holder,
the Company shall:
(i) promptly give the Holders (excluding any
such Holder for whose account the shares are determined to be registered)
written notice thereof; and
(ii) include in such registration (and any
related qualifications including compliance with "blue sky" laws), and in any
underwriting involved therein, all the shares of Registrable Securities
specified in a written request or requests, made within 20 days after the date
of such written notice from the Company, by any such Holder.
(b) If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, the Company shall
so advise each Holder as a part of the written notice given pursuant to Section
3(a)(i). In such event, the right of each Holder to registration pursuant to
this Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of shares of Registrable Securities in the
underwriting shall be limited to the extent provided herein. Each Holder shall
(together with the Company and the other stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company. Notwithstanding any other provision of this Section 3, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, no securities to be registered for sale
by Holders shall be included unless all shares to be registered for sale by the
Company to be included in such underwriting are so included and any remaining
securities to be included in such registration shall be allocated (i) first, to
holders of securities having prior registration rights to the Holders pursuant
to which the Company has previously agreed to include the securities of such
holders in a registration of the type contemplated by this Section 3 and (ii)
second, pro rata among the Holders and any other holders of "piggy-back"
registration rights, based on the number of shares requested to be included in
such registration by all such holders. The Company shall so advise each Holder
and the number of shares of Registrable Securities to be included in the
registration and underwriting shall be so limited.
(c) If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, all Holders shall
provide upon request customary lock-up agreements for themselves and their
affiliates by which they agree not sell any of their shares for a period of 180
days from the effective date of the registration statement.
4. Registration on Form S-3.
(a) In case the Company shall receive from a Holder or
Holders a written request that the Company file a registration statement on Form
S-3 (or any
-4-
successor form to Form S-3) for a public offering of shares of Registrable
Securities having an aggregate price to the public (net of underwriters
discounts and commissions) of at least $500,000 or a public offering of at least
300,000 Shares and the Company is a registrant entitled to use Form S-3 to
register the shares of Registrable Securities for such an offering, the Company
shall use commercially reasonable efforts to cause such shares of Registrable
Securities to be registered for the offering on such form and to cause such
shares of Registrable Securities to be qualified in such jurisdictions as such
Holder may reasonably request. If such offer is to be an underwritten offering,
the underwriters shall be selected by the Holder or Holders requesting the
registration.
(b) There shall be no limit on the number of registration
requests by Holders pursuant to the preceding paragraph.
(c) The provisions of Section 2(b)(i), (iii), and (iv)
and Section 2(c) shall apply to any request for registration pursuant to Section
4(a).
5. Registration Procedures. In connection with each registration
effected pursuant to Section 2, 3 or 4, the Company shall, except as provided in
Section 2(b) and 4(c):
(a) Promptly prepare and file with the SEC a registration
statement and such amendments and supplements to such registration statement and
the prospectus used in connection with such registration statement, or prepare
and file such additional registration statements, as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement in accordance with the
intended methods of disposition by the seller thereof as set forth in the
registration statement (and the disposition of all shares of Registrable
Securities as necessary to comply with this Agreement) and notify each Holder of
the filing and effectiveness of such registration statement and any amendments
or supplements thereto. The Company shall promptly forward to each participating
Holder's counsel a copy of any correspondence or other written communications
with the SEC or other regulatory authority, relating to the registration
statement or the shares of Registrable Securities.
(b) After the registration, furnish to each participating
Holder such number of copies of a current prospectus conforming with the
requirements of the Securities Act and any other documents incident thereto,
copies of the registration statement, any amendment or supplement to such
prospectus or registration statement and any documents incorporated by reference
therein and such other documents as such Holder may from time to time reasonably
request in order to facilitate the disposition of the shares of Registrable
Securities registered on behalf of such Holder.
(c) Use commercially reasonable efforts to register and
qualify the shares of Registrable Securities covered by such registration
statement under such other securities or "blue sky" laws of all United States
jurisdictions (except in any such jurisdiction where the registration and
qualification of the securities covered by such
-5-
registration statement is exempt under the laws and regulations of such
jurisdiction); provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(d) Notify the participating Holders immediately of the
happening of any event known to the Company (but not the substance or details of
any such event unless specifically requested by any such Holder) as a result of
which the prospectus (including any supplements thereto or thereof and any
information incorporated or deemed to be incorporated by reference therein)
included in such registration statement, as then in effect, includes an untrue
statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and use commercially reasonable
efforts to promptly update and/or correct such prospectus. Notwithstanding the
foregoing, if the Company shall furnish to the Holder or Holders whose
Registrable Securities have been so registered a certificate signed by the
President of the Company stating that in the good faith judgment of the Board of
Directors of the Company it would be detrimental to the Company and its
stockholders to update and/or correct any such prospectus, the Company shall
have the right to defer updating or correcting such prospectus for a period of
not more than 120 days after the notification to the Holders; provided, however,
that the Company may not utilize this right more than once in any 12-month
period. During any such 120-day or shorter period, the Holders will not deliver
any such prospectus or sell any Registrable Securities in reliance thereon.
(e) Notify each participating Holder immediately of the
issuance by the Commission or any state securities commission or agency of any
stop order suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose. The Company shall use its
commercially reasonable efforts to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible time.
(f) Permit a single firm of counsel, selected by the
participating Holders, to review the registration statement and all amendments
and supplements thereto within a reasonable period of time prior to each filing,
and shall not file any document in a form to which such counsel reasonably
objects.
(g) Use commercially reasonable efforts to cause the
shares of Registrable Securities registered by the registration statement to be
listed or quoted on each securities exchange and/or market on which the Common
Stock is then listed and/or quoted and prepare and file any required filings
with the National Association of Securities Dealers, Inc. or any exchange or
market where the Common Stock is then listed and/or traded.
-6-
(h) If applicable, take all steps necessary to enable
each participating Holder to avail themselves of the prospectus delivery
mechanism set forth in Rule 153 (or successor thereto) under the Securities Act.
6. Holder Deemed an Underwriter. In the event that a Holder
selling Registrable Securities is deemed to be an underwriter, the Company shall
enter into such customary agreements with such Holder as would customarily be
entered into with an underwriter (excluding provisions for the purchase and sale
of the Common Stock and any discounts or other consideration) and:
(a) make such representations and warranties to such
Holder in form, substance and scope as are customarily made by issuers to
underwriters in secondary offerings;
(b) cause to be delivered, if requested, to such Holder
opinions of independent counsel to the Company, on and dated as of the effective
day of the registration statement, and within 90 days following the end of each
fiscal year thereafter, which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to such Holder and their counsel and
covering, without limitation, such matters as the due authorization and issuance
of the securities being registered and compliance with securities laws by the
Company in connection with the authorization, issuance and registration thereof
and other matters that are customarily given to underwriters in underwritten
offerings, addressed to such Holder;
(c) cause to be delivered, immediately prior to the
effectiveness of the registration statement, and at the beginning of each fiscal
year following a year during which the Company's independent certified public
accountants shall have reviewed any of the Company's books or records, a
"comfort" letter from the Company's independent certified public accountants
addressed to such Holder, stating that such accountants are independent public
accountants within the meaning of the Securities Act and the applicable
published rules and regulations thereunder, and otherwise in customary form and
covering such financial and accounting matters as are customarily covered by
letters of the independent certified public accountants delivered in connection
with secondary offerings; such accountants shall have undertaken in each such
letter to update the same quarterly during each such fiscal year for which such
books or records are being reviewed so that each such letter shall remain
current, correct and complete as of the end of such accountant's review of the
Company's quarterly financial statements; and each such letter and update
thereof, if any, shall be reasonably satisfactory to such Holder(s);
(d) shall include in such agreements customary
indemnification and contribution provisions to and from underwriters; and
(e) deliver such documents and certificates as may be
reasonably requested by the Holder to evidence compliance with clause (a) above
and with any customary conditions contained in underwriting agreements, if any.
-7-
7. Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance with
registration pursuant to this Agreement shall be borne by the Company, and all
Selling Expenses shall be borne by the Holder or Holders.
8. Registration on Form S-3; Other Forms. In connection with each
registration effected pursuant to this Agreement, the Company shall use
commercially reasonable efforts to qualify for registration on Form S-3 or any
comparable or successor form or forms, or in the event that the Company is
ineligible to use such form, such form as the Company is eligible to use under
the Securities Act.
9. Registration Period. In the case of a registration effected by
the Company pursuant to this Agreement, the Company will use commercially
reasonable efforts to keep such registration effective at all times during the
period commencing on the effective date of the registration statement and
continuing thereafter until the all Registrable Securities covered by such
registration have been sold thereunder.
10. Indemnification.
(a) The Company Indemnity. The Company will indemnify
each Holder, each of its officers, directors and partners, and each person
controlling each Holder, within the meaning of Section 15 of the Securities Act
and the rules and regulations thereunder with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls, within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, any
underwriter, including any of the foregoing incurred in any litigation,
commenced or threatened, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any violation by the
Company of its representations to or covenants with the Holders under this
Agreement or any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other document prepared
by the Company (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any 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 any violation by the Company of the Securities Act or any state
securities law or in either case, any rule or regulation thereunder applicable
to the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each Holder, each of its officers, directors and partners, and each
person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action; provided that the Company will not be liable in any
such case to a Holder to the extent that any such claim, loss, damage, liability
or expense arises out of or is based on any untrue statement or omission based
upon written
-8-
information furnished to the Company by such Holder or the underwriter (if any)
therefor and stated to be specifically for use therein. The indemnity agreement
contained in this Section 10(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent will not be unreasonably
withheld).
(b) Holder Indemnity. Each Holder will, severally and not
jointly, if Registrable Securities held by it are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors, officers, partners, and each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act and the rules and regulations
thereunder, each other Holder (if any), and each of their officers, directors
and partners, and each person controlling such other Holder(s), against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any violation by the such Holder of its representations to or
covenants with the Company under this Agreement or any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading, and will reimburse
the Company and such other Holder(s) and their directors, officers and partners,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein, and provided that the maximum amount for which such Holder shall be
liable under this indemnity shall not exceed the net proceeds received by such
Holder from the sale or sales of the Registrable Securities which gave rise to
the claim for indemnification. The indemnity agreement contained in this Section
10(b) shall not apply to amounts paid in settlement of any such claims, losses,
damages or liabilities if such settlement is effected without the consent of
such Holder (which consent shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification
under this Section 10 (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 in any litigation resulting therefrom; provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense; and provided
-9-
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
Section except to the extent that the Indemnifying Party is materially and
adversely affected by such failure to provide notice. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, 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 in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
11. Contribution.
(a) If the indemnification provided for in Section 10
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), then each such Indemnifying Party, in lieu of
indemnifying each of such Indemnified Parties, shall contribute to the amount
paid or payable by each such Indemnified Party as a result of such losses,
claims, damages or liabilities as between the Company on the one hand and any
Holder on the other, in such proportion as is appropriate to reflect the
relative fault of the Company and of such Holder in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of any Holder on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by such
Holder.
(b) In no event shall the obligation of any Indemnifying
Party to contribute under this Section 11 exceed the amount that such
Indemnifying Party would have been obligated to pay by way of indemnification if
the indemnification provided for under Section 10(a) or 10(b) hereof had been
available under the circumstances.
(c) The Company and the Holders agree that it would not
be just and equitable if contribution pursuant to this Section 11 were
determined by pro rata allocation (even if the Holders or the underwriters 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 the
immediately preceding paragraphs. The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraphs shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this section, no Holder or
-10-
underwriter shall be required to contribute any amount in excess of the amount
by which (i) in the case of any Holder, the net proceeds received by such Holder
from the sale of Registrable Securities which gave rise to the necessity for
contribution or (ii) in the case of an underwriter, the amount by which the
total price at which the Registrable Securities purchased by it and distributed
to the public were offered to the public exceeds, in any such case, the amount
of any damages that such Holder or underwriter 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.
12. Survival. The indemnity and contribution agreements contained
in Sections 10 and 11 and the representations and warranties of the Company
referred to in Section 6(a) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or the Purchase Agreement or
any underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation
of the sale or successive resales of the Shares.
13. Information by Holders. Each Holder shall reasonably promptly
furnish to the Company such information regarding such Holder and the
distribution and/or sale proposed by such Holder as the Company may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement. The
intended method or methods of disposition and/or sale (Plan of Distribution) of
such securities as so provided by such Holder shall be included without
alteration in the registration statement covering the Shares and shall not be
changed without written consent of such Holder, except that such Holder may not
require an intended method of disposition which, in the reasonable opinion of
counsel to the Company, violates applicable securities law.
14. Replacement Certificates. The certificate(s) representing the
Shares held by a Holder may be exchanged by such Holder at any time and from
time to time for certificates with different denominations representing an equal
aggregate number of Shares, as reasonably requested by such Holder upon
surrendering the same. No service charge will be made for such registration or
transfer or exchange.
15. Transfer or Assignment. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Purchaser by
the Company under this Agreement to cause the Company to register Shares may be
transferred or assigned (in whole or in part) to up to two transferees or
assignees of Shares , and all other rights granted to the Purchaser by the
Company hereunder may be transferred or assigned to up to two transferees or
assignees of any Shares; provided in each case that the Company must be given
written notice by the Purchaser at the time of or within a
-11-
reasonable time after said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided,
further, that the transferee or assignee of such rights agrees in writing to be
bound by the provisions of this Agreement.
16. Miscellaneous.
(a) Remedies. The Company and the Purchaser acknowledge
and agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity.
(b) Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing, must be delivered by (i) courier, mail or hand
delivery or (ii) facsimile, and will be deemed to have been delivered upon
receipt. The addresses and facsimile numbers for such communications shall be:
to the Company:
ChromaVision Medical Systems, Inc.
00000 Xxxxx Xxxxxxx
Xxx Xxxx Xxxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Financial Officer
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: W. Xxxx Xxxxxx, Esq.
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to the Purchaser:
Safeguard Delaware, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
with copies to:
Safeguard Scientifics, Inc.
000 Xxxxx Xxxx Xxxxx
000 Xxxxxxxx
Xxxxx, Xxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
Xxxxxx, Xxxxx & Bockius
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Each party shall provide five (5) days prior written notice to the
other party of any change in address, telephone number or facsimile number.
Written confirmation of receipt (i) given by the recipient of such notice,
consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender's facsimile machine containing the time, date and
recipient facsimile number or (iii) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.
(c) Waivers. No waiver by any party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter. The representations and warranties and
the agreements and covenants of the Company and the Purchaser contained herein
shall survive the Closing.
(d) Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement, it being understood that all parties need not sign the same
counterpart.
(e) Entire Agreement. This Agreement, together with the
Purchase Agreement and the agreements and documents contemplated hereby and
thereby, contains the entire understanding and agreement of the parties, and may
not be modified, amended or terminated except by a written agreement signed by
both parties.
-13-
(f) Jurisdiction. EACH OF THE COMPANY AND THE PURCHASER
(I) HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT, COURTS OF THE STATE OF DELAWARE AND OTHER COURTS OF THE
UNITED STATES SITTING IN NEW CASTLE COUNTY, DELAWARE FOR THE PURPOSES OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND (II)
HEREBY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH SUIT ACTION OR PROCEEDING,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT,
THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT
THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH OF THE COMPANY AND
THE PURCHASER CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR
NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE
GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING IN THIS
PARAGRAPH SHALL AFFECT OR LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
(g) Governing Law. THIS AGREEMENT AND THE VALIDITY AND
PERFORMANCE OF THE TERMS HEREOF SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY IN SUCH STATE.
(h) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A
TRIAL BY JURY.
(i) Titles. The titles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.
* * * Signature page follows * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
COMPANY:
CHROMAVISION MEDICAL SYSTEMS, INC.
By:_________________________________
Name:
Title:
PURCHASER:
SAFEGUARD DELAWARE, INC.
By:_________________________________
Name:
Title:
