PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT ("Agreement") is made as of the ____ day of
November, 1999 by and between LifeCell Corporation, a Delaware corporation (the
"Company"), and the Investors set forth on the signature page affixed hereto
(each an "Investor" and collectively the "Investors").
RECITALS
A. The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended;
B. Each Investor wishes to purchase, and the Company wishes to
sell and issue to each Investor, upon the terms and conditions stated in this
Agreement, that number of shares of the common stock of the Company, $0.001 par
value per share (the "Common Stock") and that number of warrants to purchase
Common Stock in the form attached hereto as EXHIBIT A (the "Warrants"), as are
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set forth on the signature page attached hereto and executed by each such
Investor, for an aggregate offering of 925,000 shares of Common Stock and
200,000 Warrants; and
C. Contemporaneous with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement, in the form attached hereto as EXHIBIT B (the "Registration Rights
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Agreement"), pursuant to which the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended and the rules
and regulations promulgated thereunder, and applicable state securities laws;
In consideration of the mutual promises made herein and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. In addition to those terms defined above and elsewhere
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in this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings here set forth:
1.1 "Affiliate" means, with respect to any person, any other
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person which directly or indirectly controls, is controlled by, or is under
common control with, such person.
1.2 "Agreements" means this Agreement, the Registration Rights
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Agreement, and the Warrants.
1.3 "Closing" means the consummation of the transactions
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contemplated by this Agreement, and "Closing Date" shall have the meaning set
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forth in Section 3, below.
1.4 "Control" means the possession , direct or indirect, of the
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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.
1.5 "Market Price" means the average closing bid price of the
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Common Stock in the ten (10) trading days immediately preceding the date on
which the calculation is being made.
1.6 "Material Adverse Effect" means a material adverse effect on
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the (i) condition (financial or otherwise), business, assets, or results of
operations of the Company; (ii) ability of the Company to perform any of its
material obligations under the terms of this Agreement; or (iii) rights and
remedies of the Investor under the terms of this Agreement.
1.7 "Person" means an individual, corporation, partnership, trust,
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business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
1.8 "SEC Filings" has the meaning set forth in Section 4.6.
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1.9 "Securities" means the Shares, the Warrants and the Warrant
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Shares (defined below).
1.10 "Shares" means the shares of Common Stock being purchased by
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the Investors hereunder.
1.11 "Warrant Shares" means the shares of Common Stock issuable
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upon exercise of or otherwise pursuant to the Warrants.
1.12 "1933 Act" means the Securities Act of 1933, as amended, and
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the rules and regulations promulgated thereunder.
1.13 "1934 Act" means the Securities Exchange Act of 1934, as
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amended, and the rules and regulations promulgated thereunder.
2. Purchase and Sale of the Shares and Warrants. Subject to the terms
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and conditions of this Agreement, each of the Investors hereby severally, and
not jointly, agrees to purchase, and the Company hereby agrees to sell and issue
to the Investors, the number of Shares and Warrants to purchase the number of
shares of Common Stock set forth on such Investor's signature page attached
hereto. The purchase price per share of Common Stock purchased by each Investor
hereunder shall be $4.20 (the "Purchase Price"). The exercise price of the
Warrants shall be 130% of the Purchase Price, or $5.46 per share.
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3. Closing. The Company shall promptly deliver to Investors' counsel,
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in trust, a certificate or certificates, registered in such name or names as the
Investors shall have designated, representing all of the Shares and all of the
Warrants, with instructions that such certificates are to be held for release to
the Investors only upon payment of the Purchase Price to the Company. Upon
receipt by counsel to the Investors of the certificates, the Investors shall
promptly cause a wire transfer in same day funds to be sent to the account of
the Company as instructed in writing by the Company, in an amount representing
the entire Purchase Price. On the date the Company receives such funds, the
certificates evidencing the Shares and the Warrants shall be released to the
Investors (and such date shall be deemed the "Closing Date").
4. Representations and Warranties of the Company. The Company hereby
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represents and warrants to the Investors that:
4.1 Organization, Good Standing and Qualification. The Company is
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a corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to carry on its business as now conducted and own its
properties. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property makes such qualification or
licensing necessary unless the failure to so qualify would not have a Material
Adverse Effect. The Company has no subsidiaries.
4.2 Authorization. The Company has the requisite corporate power
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and authority and has taken all requisite action on the part of the Company, its
officers, directors and stockholders necessary for (i) the authorization,
execution and delivery of the Agreements, (ii) authorization of the performance
of all obligations of the Company hereunder or thereunder, and (iii) the
authorization, issuance (or reservation for issuance) and delivery of the
Securities. The Agreements constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors' rights generally.
4.3 Capitalization. Set forth on Schedule 4.3 hereto is (a) the
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authorized capital stock of the Company on the date hereof; (b) the number of
shares of capital stock issued and outstanding; (c) the number of shares of
capital stock issuable pursuant to the Company's stock plans; and (d) the number
of shares of capital stock issuable and reserved for issuance pursuant to
securities (other than the Shares and the Warrants) exercisable for, or
convertible into or exchangeable for any shares of capital stock. All of the
issued and outstanding shares of the Company's capital stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
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preemptive rights. Except as set forth on Schedule 4.3, no Person is entitled
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to preemptive or similar statutory or contractual rights with respect to any
securities of the Company. Except as set forth on Schedule 4.3, there are no
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outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which the Company is or may be
obligated to issue any equity securities of any kind and except as contemplated
by this Agreement, the Company is not currently in negotiations for the issuance
of any equity securities of any kind. Except as set forth on Schedule 4.3, the
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Company has no knowledge of any voting agreements, buy-sell agreements, option
or right of first purchase agreements or other agreements of any kind among any
of the securityholders of the Company relating to the securities of the Company
held by them. Except as set forth on Schedule 4.3, the Company has not granted
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any Person the right to require the Company to register any securities of the
Company under the 1933 Act, whether on a demand basis or in connection with the
registration of securities of the Company for its own account or for the account
of any other Person.
4.4 Valid Issuance. The Company has reserved a sufficient number
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of shares of Common Stock for the issuance of the Shares pursuant to this
Agreement and upon exercise of the Warrants. The Company will take such steps
as may be necessary to reserve sufficient shares for issuance pursuant to
Section 7 below when such issuance is determinable. The Shares and Warrants are
duly authorized, and such Securities, along with the Warrant Shares when issued
in accordance herewith and with the terms of the Warrants, will be duly
authorized, validly issued, fully paid, non-assessable and free and clear of all
encumbrances and restrictions, except for restrictions on transfer imposed by
applicable securities laws.
4.5 Consents. The execution, delivery and performance by the
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Company of the Agreements and the offer, issuance and sale of the Securities
require no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than filings that have been made
pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws and the requirements of the Nasdaq
Stock Market, which the Company undertakes to file within the applicable time
periods.
4.6 Delivery of SEC Filings; Business. The Company has provided
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the Investors with copies of the Company's most recent Annual Report on Form
10-K for the fiscal year ended December 31, 1998, and all other reports filed by
the Company pursuant to the 1934 Act since the filing of the Annual Report on
Form 10-K and prior to the date hereof (collectively, the "SEC Filings"). The
Company is engaged only in the business described in the SEC Filings and the SEC
Filings contain a complete and accurate description of the business of the
Company.
4.7 Use of Proceeds. The proceeds of the sale of the Common Stock
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and the Warrants hereunder shall be used by the Company for working capital and
general corporate purposes.
4.8 No Material Adverse Change. Since the filing of the Company's
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most recent Annual Report on Form 10-K or as otherwise identified and described
in subsequent reports filed by the Company pursuant to the 1934 Act or as set
forth on Schedule 4.8 hereto, there has not been:
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(i) any change in the consolidated assets, liabilities,
financial condition or operating results of the Company from that reflected in
the financial statements included in the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30 1999, except changes in the ordinary course of
business which have not had, in the aggregate, a Material Adverse Effect;
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(ii) any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock of the
Company, or any redemption or repurchase of any securities of the Company;
(iii) any material damage, destruction or loss, whether or
not covered by insurance to any assets or properties of the Company;
(iv) any waiver by the Company of a valuable right or of a
material debt owed to it;
(v) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company taken as a
whole (as such business is presently conducted and as it is proposed to be
conducted);
(vi) any material change or amendment to a material
contract or arrangement by which the Company or any of its assets or properties
is bound or subject;
(vii) any material labor difficulties or labor union
organizing activities with respect to employees of the Company;
(viii) any transaction entered into by the Company other
than in the ordinary course of business; or
(ix) any other event or condition of any character that
might have a Material Adverse Effect.
4.9 SEC Filings; Material Contracts.
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(a) The SEC Filings complied as to form in all material respects
with the requirements of the 1934 Act and did not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.
(b) During the preceding two years, each registration
statement and any amendment thereto filed by the Company pursuant to the 1933
Act and the rules and regulations thereunder, as of the date such statement or
amendment became effective, complied as to form in all material respects with
the 1933 Act and did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading; and each prospectus filed pursuant to Rule
424(b) under the 1933 Act, as of its issue date and as of the closing of any
sale of securities pursuant thereto did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
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(c) Except as set forth on Schedule 4.3 hereto, there are no
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agreements or instruments currently in force and effect that constitute a
warrant, option, convertible security or other right, agreement or arrangement
of any character under which the Company is or may be obligated to issue any
material amounts of any equity security of any kind, or to transfer any material
amounts of any equity security of any kind.
4.10 Form S-3 Eligibility. The Company is currently eligible to
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register the resale of its Common Stock on a registration statement on Form S-3
under the 1933 Act.
4.11 No Conflict, Breach, Violation or Default. The execution,
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delivery and performance of the Agreements by the Company and the issuance and
sale of the Securities will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under (i) the
Company's Certificate of Incorporation or the Company's Bylaws, both as in
effect on the date hereof (copies of which have been provided to the Investors
before the date hereof), or (ii) except where it would not have a Material
Adverse Effect, (a) any statute, rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over the
Company or any of its properties, or (b) except as set forth on Schedule 4.11,
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any agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the properties of the Company is subject.
4.12 Tax Matters. The Company has timely prepared and filed all
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tax returns required to have been filed by the Company with all appropriate
governmental agencies and timely paid all taxes owed by it. There are no
material unpaid assessments against the Company nor, to the knowledge of the
Company, any basis for the assessment of any additional taxes, penalties or
interest for any fiscal period or audits by any federal, state or local taxing
authority except such as which are not material. All material taxes and other
assessments and levies that the Company is required to withhold or to collect
for payment have been duly withheld and collected and paid to the proper
governmental entity or third party when due. There are no tax liens or claims
pending or threatened against the Company or any of its respective assets or
property. There are no outstanding tax sharing agreements or other such
arrangements between the Company and any other corporation or entity.
4.13 Title to Properties. Except as disclosed in the SEC Filings
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or Schedule 4.13, the Company has good and marketable title to all real
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properties and all other properties and assets owned by it, in each case free
from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or currently planned to be
made thereof by them; and except as disclosed in the SEC Filings, the Company
holds any leased real or personal property under valid and enforceable leases
with no exceptions that would materially interfere with the use made or
currently planned to be made thereof by them.
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4.14 Certificates, Authorities and Permits. The Company possesses
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adequate certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by it and has
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if determined
adversely to the Company, would individually or in the aggregate have a Material
Adverse Effect.
4.15 No Labor Disputes. No material labor dispute with the
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employees of the Company exists or, to the knowledge of the Company, is
imminent.
4.16 Intellectual Property. The Company has sufficient title or
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adequate rights or licenses to use the inventions, know-how, patents,
copyrights, trademarks, trade names, confidential information and other
intellectual property (collectively, "Intellectual Property Rights"), material
to and used in the conduct of the business now operated by it, or presently
employed by it, and presently contemplated to be operated by it, and the Company
has not received any notice of infringement of or conflict with asserted rights
of others with respect to any Intellectual Property Rights. To the knowledge of
the Company, the Company's patents and other Intellectual Property Rights and
the present activities of the Company do not infringe any patent, copyright,
trademark, trade name or other proprietary rights of any third party.
4.17 Environmental Matters. The Company is not in violation of
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any statute, rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal or release
of hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "Environmental Laws"), does not own or operate any real property
contaminated with any substance that is subject to any Environmental Laws, is
not liable for any off-site disposal or contamination pursuant to any
Environmental Laws, and is not subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation that might lead to such a claim.
4.18 Litigation. Except as disclosed in the SEC Filings or on
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Schedule 4.18 hereto, there are no pending actions, suits or proceedings against
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or affecting the Company or any of its properties that, if determined adversely
to the Company, would individually or in the aggregate have a Material Adverse
Effect or would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise material in
the context of the sale of the Securities; and to the Company's knowledge, no
such actions, suits or proceedings are threatened or contemplated.
4.19 Financial Statements. The financial statements included in
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each SEC Filing present fairly and accurately in all material respects the
consolidated financial position of the Company as of the dates shown and its
consolidated results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis. Except as set
forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof, to the best of the Company's knowledge, the
Company has no liabilities, contingent or otherwise, except those which
individually or in the aggregate are not material to the financial condition or
operating results of the Company.
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4.20 Insurance Coverage. The Company maintains in full force and
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effect the insurance coverage set forth on Schedule 4.20, and the Company
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reasonably believes such insurance coverage to be adequate against all
liabilities, claims and risks against which it is customary for comparably
situated companies to insure.
4.21 Compliance with Nasdaq Continued Listing Requirements. The
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Company is in compliance with all applicable Nasdaq continued listing
requirements. There are no proceedings pending or to the Company's knowledge
threatened against the Company relating to the continued listing of the
Company's Common Stock on the Nasdaq National Market and the Company has not
received any notice of, nor to the knowledge of the Company is there any basis
for, the delisting of the Common Stock from the Nasdaq National Market.
4.22 Brokers and Finders. Except as set forth on Schedule 4.23
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hereof, the Company shall have no liability or responsibility for the payment of
any commission or finder's fee to any third party in connection with or
resulting from this agreement or the transactions contemplated by this
Agreement. No agreement by the Company with any third party will give rise to
any liability or responsibility of any Investor for a finder's fee or commission
related to this Agreement and the transactions contemplated hereby.
4.23 No Directed Selling Efforts or General Solicitation. Neither
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the Company nor any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Securities.
4.24 No Integrated Offering. Neither the Company nor any of its
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Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would adversely affect reliance by
the Company on Section 4(2) for the exemption from registration for the
transactions contemplated hereby or would require registration of the Securities
under the 0000 Xxx.
4.25 Disclosures. No representation or warranty made under any
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Section hereof contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein, in
light of the circumstances under which the statements were made, not misleading.
5. Representations and Warranties of the Investor. Each of the
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Investors hereby severally, and not jointly, represents and warrants to the
Company that:
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5.1 Organization and Existence. The Investor is a validly
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existing corporation or limited liability company and has all requisite
corporate or limited liability company power and authority to invest in the
Securities pursuant to this Agreement.
5.2 Authorization. The execution, delivery and performance by the
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Investor of the Agreements have been duly authorized and the Agreements will
each constitute the valid and legally binding obligation of the Investor,
enforceable against the Investor in accordance with their terms.
5.3 Purchase Entirely for Own Account. The Securities to be
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received by the Investor hereunder will be acquired for investment for the
Investor's own account, not as nominee or agent, and not with a view to the
resale or distribution of any part thereof, and the Investor has no present
intention of selling, granting any participation in, or otherwise distributing
the same. The Investor is not a registered broker dealer or an entity engaged
in the business of being a broker dealer.
5.4 Investment Experience. The Investor acknowledges that it can
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bear the economic risk and complete loss of its investment in the Securities and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment contemplated
hereby.
5.5 Disclosure of Information. The Investor has had an
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opportunity to receive documents related to the Company and to ask questions of
and receive answers from the Company regarding the Company, its business and the
terms and conditions of the offering of the Securities. The Investor
acknowledges receipt of the SEC Filings and any other filings which it requested
be made by the Company with the SEC. Neither such inquiries nor any other due
diligence investigation conducted by the Investor shall modify, amend or affect
the Investor's right to rely on the Company's representations and warranties
contained in this Agreement.
5.6 Restricted Securities. The Investor understands that the
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Securities are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
5.7 Legends. It is understood that, until registration for resale
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pursuant to the Registration Rights Agreement, certificates evidencing the
Securities may bear one or all of the following legends:
(a) "The shares represented by this certificate may not be
transferred without (i) the opinion of counsel satisfactory to the corporation
that such transfer may lawfully be made without registration under the
Securities Act of 1933 or qualification under applicable state securities laws;
or (ii) such registration or qualification."
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(b) If required by the authorities of any state in connection
with the issuance of sale of the Securities, the legend required by such state
authority.
Upon registration for resale pursuant to the Registration Rights
Agreement, the Company shall promptly cause certificates evidencing the Shares
previously issued hereunder to be replaced with certificates which do not bear
such restrictive legends, and each Investor will thereafter sell the Common
Stock evidenced by such certificates only pursuant to the Prospectus (as defined
in the Registration Rights Agreement) or pursuant to Rule 144(k).
5.8 Accredited Investor. The Investor is an accredited investor
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as defined in Rule 501(a) of Regulation D, as amended, under the 0000 Xxx.
5.9 No General Solicitation. The Investor did not learn of the
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investment in the Securities as a result of any public advertising or general
solicitation.
5.10 Reliance. The Investor understands and acknowledges that (i)
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the Securities to be acquired by it hereunder are being offered and sold to it
without registration under the 1933 Act in a private placement that is exempt
from the registration provisions of the 1933 Act and (ii) the availability of
such exemption depends in part on and the Company will rely upon the accuracy
and truthfulness of the representations contained herein and the Investor hereby
consents to such reliance.
5.11 Transactions in Common Stock. The Investor has not, during
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the thirty (30) trading days immediately preceding the date hereof, sold or
established a short position in, any shares of Common Stock.
6. Registration Rights Agreement. The parties acknowledge and agree
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that part of the inducement for the Investor to enter into this Agreement is the
Company's execution and delivery of the Registration Rights Agreement. The
parties acknowledge and agree that simultaneously with the execution hereof, the
Registration Rights Agreement is being duly executed and delivered by the
parties thereto.
7. Covenants and Agreements of the Company.
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7.1 Purchase Price Adjustments.
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(a) Potential Adjustments. Subject to Section 7.1(e), if the
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Market Price on the first, second or third anniversary of the Closing is lower
than $2.60, $4.00 or $4.00, respectively, the Company shall issue to each of the
Investors that number of shares of Common Stock at such Market Price equal in
value to the difference between such Market Price and $2.60, $4.00 and $4.00,
respectively, multiplied by the number of Shares originally acquired by such
Investor hereunder. For so long as an Investor owns 65% or more of the Shares
originally acquired by such Investor hereunder, which holdings shall be
confirmed in writing by the Investor in the form attached as Schedule 7.1, such
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Investor shall be entitled to the full benefit of the adjustment required by
this Section 7.1(a). In the event an Investor on any anniversary date then owns
less than 65% of the Shares acquired by it hereunder, such Investor shall be
entitled to additional shares only with respect to the number of Shares then
owned by such Investor (i.e., the multiplier shall be only that number of Shares
as the Investor still owns). The term "Shares" as used in this Agreement shall
include shares issued to the Investors pursuant to this Section 7.1.
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(b) Adjustment Mechanics. If an adjustment is required
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pursuant to Section 7.1(a), the Company shall deliver to the Investors within
twenty (20) business days ("Delivery Date") each Investor's additional shares of
Common Stock; provided however, that the Company shall effect such adjustment in
cash, in whole or in part, to the extent required by Section 7.1(c). In the
event the Company fails to deliver the additional shares (or cash, as the case
may be) within ten (10) days of the Delivery Date, the Company shall be liable
to the Investors for a penalty equal to 1% of the aggregate adjustment per month
(in each instance to such Investor pro rata in accordance with its participation
in this offering), payable in Common Stock or cash, at the Company's election.
Any adjustment made on the second and third anniversaries of the Closing shall
take into account the adjustment(s) made, if any, on the first anniversary and
on the first and second anniversaries, respectively, such that the per share
cash amount of the adjustment in the second and third years shall be reduced by
the per share cash amount of the adjustment in the preceding year(s). By way of
illustration, if on the first anniversary the Market Price is $2.00, the
Investors will be entitled to a $.60 per share adjustment. If then on the
second anniversary, the Market Price is $3.00, the Investors will be entitled to
a $.40 per share adjustment (to wit, $1.00 difference from the $4.00 per share
target for year two, less $.60 per share adjustment paid on the first
anniversary).
(c) Limitation on Number of Shares.
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(i) If by way of any adjustment required by this Section
7.1, an Investor would receive a number of shares of Common Stock such that the
total number of such shares held by the Investor as of the date of such
adjustment would be greater than 9.90% but less than 13.0% of the total
outstanding Common Stock of the Company, then the Company shall not effect the
adjustment required by this Section to the extent necessary to avoid causing the
aforesaid limitation to be exceeded until 120 days following the date such
adjustment would have otherwise been made.
(ii) If by way of any adjustment required by this
Section 7.1, an Investor would receive a number of shares of Common Stock such
that the total number of such shares held by the Investor as of the date of such
adjustment would equal or exceed 13.0% of the total outstanding Common Stock of
the Company, then the Company shall not effect the adjustment required by this
Section to the extent necessary to avoid causing the aforesaid limitation to be
exceeded until 180 days following the date such adjustment would have otherwise
been made.
(iii) In the event that the Company would be obligated
to issue an amount of shares of Common Stock which, when aggregated with all
shares of Common Stock issued to an Investor, would constitute a breach of the
Company's obligations under the rules or regulations of Nasdaq as they apply to
the Company, or any other principal securities exchange or market upon which the
Common Stock is or becomes traded (the "Cap Regulations"), the Company shall not
be obligated to issue any such shares of Common Stock. Instead, the Company
shall immediately seek shareholder approval of this transaction if such approval
would, under the Cap Regulations, permit the Company to issue the shares of
Common Stock without violation of the Cap Regulations. If such shareholder
approval will not afford a cure of the breach of the Cap Regulations, or if such
shareholder approval is not obtained within eighty (80) days, then the Company
shall promptly redeem the Investor at a redemption price equal to 105% of the
cash value of the adjustment.
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Only shares acquired pursuant to this Agreement will be included in
determining whether the limitations would be exceeded for purposes of this
Section 7.1(c).
(d) Capital Adjustments. In case of any stock split or
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reverse stock split of the Common Stock, stock dividend on the Common Stock,
reclassification of the common stock, recapitalization, merger or consolidation,
or like capital adjustment affecting the Common Stock of the Company, the
provisions of Section 7.1 shall be applied in a fair, equitable and reasonable
manner so as to give effect, as nearly as may be, to the purposes hereof. No
adjustment shall be required by reason of stock dividends paid on the Series B
Preferred Stock.
(e) Early Termination of Potential Adjustment Period. If at
-------------------------------------------------
any time prior to the expiration of the three-year period for potential
adjustments as contemplated by Section 7.1 (the "Potential Adjustment Period"),
the closing bid price for the Common Stock of the Company exceeds $10.00 for
twenty (20) consecutive trading days, the Potential Adjustment Period shall
thereupon terminate; provided that at all times during such twenty trading days,
the Shares were effectively registered for resale by the Investors.
7.2 Limitation on Transactions.
----------------------------
(a) Until the date of effectiveness of the Registration
Statement covering the Shares as contemplated by the Registration Rights
Agreement, without the prior written consent of the Investors (which consent may
be withheld in the Investors' discretion), the Company shall not issue or sell
or agree to issue or sell for cash in a non-public offering any equity
securities in a capital raising transaction.
(b) Until the expiration of the Potential Adjustment Period
(or its early termination pursuant to Section 7.1(e)) without the prior written
consent of the Investors (which consent may be withheld in the Investors'
discretion), the Company shall not issue or sell, or agree to issue or sell, for
cash in a non-public Variable Rate Transaction. For the purposes of this
Agreement, a "Variable Rate Transaction" shall mean: (A) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (x) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the Common Stock at any time
after the initial issuance of such debt or equity securities, or (y) with a
fixed conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock (but
excluding standard stock split anti-dilution provisions), or (B) any securities
of the Company pursuant to an "equity line" structure which provides for the
sale, from time to time, of securities of the Company which are registered for
resale pursuant to the 1933 Act; provided, however, that the foregoing
limitation on Variable Rate Transactions shall not apply to any such securities
with an aggregate face value outstanding at any time equal to or less than seven
and one-half percent (7.5%) of the Company's primary market capitalization.
12
7.3 Right of Investors to Participate in Future Transactions.
--------------------------------------------------------
Until the expiration of the Potential Adjustment Period (or its early
termination pursuant to Section 7.1(e)), or such earlier termination thereof,
the Investors will have a right to participate in future capital raising
transactions of the Company on the terms and conditions set forth in this
Section 7.3. During such period, the Company shall give five (5) business days
advance written notice to the Investors prior to any non-public offer or sale of
any of the Company's equity securities or any securities convertible into or
exchangeable or exercisable for such securities by providing to the Investors a
comprehensive term sheet containing all significant business terms of such a
proposed transaction. Prior to the closing of any such sale, the Investors
shall have the right to participate (pro rata in accordance with each Investor's
participation in this offering) in up to 20%, but if such right is exercised not
less than an aggregate of 10%, of such new offering. If such offering
constitutes a Variable Rate Transaction as defined above, the Investors shall
have the right to participate (pro rata in accordance with each Investor's
participation in this offering) in up to 50%, but if such right is exercised not
less than an aggregate of 10%, of such new offering. The Investor(s)' right
hereunder must be exercised in writing by the Investor(s) within five (5)
business days following receipt of the notice from the Company. If, subsequent
to the Company giving notice to the Investors hereunder but prior to the
Investor exercising its right to participate (or the expiration of the five-day
period without response from the Investor), the terms and conditions of the
proposed third-party sale are changed from that disclosed in the comprehensive
term sheet provided to the Investors, the Company shall be required to provide a
new notice to the Investors hereunder and the Investors shall have the right,
which must be exercised within five (5) business days of such new notice, to
exercise its rights to purchase the securities on such changed terms and
conditions as provided hereunder. In the event the Investors do not exercise
their rights hereunder, or affirmatively decline to engage in the proposed
transaction with the Company, then the Company may proceed with such proposed
transaction on the same terms and conditions as noticed to the Investors
(assuming the Investors have consented to the transaction, if required, pursuant
to Section 7.2 of this Agreement). The rights and obligations of this Section
7.3 shall in no way diminish the other rights of the Investor pursuant to this
Section 7.
7.4 Opinion of Counsel. On or prior to the Closing Date, the
--------------------
Company will deliver to the Investors the opinion of legal counsel to the
Company, in form and substance reasonably acceptable to the Investors,
addressing those legal matters set forth in Schedule 7.4 hereto.
-------------
13
7.5 Reservation of Common Stock Pursuant to Section 7.1 and
--------------------------------------------------------------
Exercise of Warrants. The Company hereby agrees at all times to reserve and
----------------
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of providing for the exercise of the Warrants, such number of
shares of Common Stock as shall from time to time equal the number of shares
sufficient to permit the exercise of the Warrants in accordance with the terms
of the Warrants. In addition, as soon as such number is determinable, the
Company agrees to reserve such shares as may be necessary to permit the
issuances to the Investors required by Section 7.1.
7.6 Reports. For so long as the Investors beneficially own any of
-------
the Securities, the Company will furnish to the Investors the following reports,
each of which shall be provided to the Investors by air mail (within one week of
filing with the SEC, in the case of SEC filings):
(a) Quarterly Reports. The Company's quarterly report on
------------------
Form 10-Q or, in the absence of such report, consolidated balance sheets of the
Company as at the end of such period and the related consolidated statements of
operations, stockholders' equity and cash flows for such period and for the
portion of the Company's fiscal year ended on the last day of such quarter, all
in reasonable detail and certified by a principal financial officer of the
Company to have been prepared in accordance with generally accepted accounting
principles, subject to year-end and audit adjustments.
(b) Annual Reports. The Company's Form 10-K or, in the
---------------
absence of a Form 10-K, consolidated balance sheets of the Company as at the end
of such year and the related consolidated statements of earnings, stockholders'
equity and cash flows for such year, all in reasonable detail and accompanied by
the report on such consolidated financial statements of an independent certified
public accountant selected by the Company and reasonably satisfactory to the
Investor.
(c) Securities Filings. Copies of (i) all notices, proxy
-------------------
statements, financial statements, reports and documents as the Company shall
send or make available generally to its stockholders or to financial analysts,
promptly after providing same to the stockholders and (ii) all periodic and
special reports, documents and registration statements (other than on Form S-8)
which the Company furnishes or files, or any officer or director of the Company
(in such person's capacity as such) furnishes or files with the SEC.
(d) Other Information. Such other information relating to
------------------
the Company as from time to time may reasonably be requested by the Investors
provided the Company produces such information in its ordinary course of
business, and further provided that the Company, solely in its own discretion,
determines that such information is not confidential in nature and disclosure to
the Investor would not be harmful to the Company.
7.7 Press Releases. Any press release or other publicity
---------------
concerning this Agreement or the transactions contemplated by this Agreement
shall be submitted to the Investors for comment at least two (2) business days
prior to issuance, unless the release is required to be issued within a shorter
period of time by law or pursuant to the rules of a national securities
exchange.
14
7.8 No Conflicting Agreements. The Company will not take any
---------------------------
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the obligations to the Investors under
the Agreements.
7.9 Insurance. So long as the Investors beneficially own any
---------
Securities, the Company shall not materially reduce the insurance coverages set
forth in Schedule 4.20.
--------------
7.10 Compliance with Laws. So long as the Investors beneficially
---------------------
own any Securities, the Company will use reasonable efforts to comply with all
applicable laws, rules, regulations, orders and decrees of all governmental
authorities, except to the extent non-compliance (in one instance or in the
aggregate) would not have a Material Adverse Effect.
7.11 Listing of Underlying Shares and Related Matters. The
------------------------------------------------------
Company hereby agrees, promptly following the Closing of the transactions
contemplated by this Agreement, to take such action to cause the Shares and the
Warrant Shares to be listed on the Nasdaq National Market as promptly as
possible but no later than the effective date of the registration contemplated
by the Registration Rights Agreement. The Company further agrees that if the
Company applies to have its Common Stock or other securities traded on any other
principal stock exchange or market, it will include in such application the
Warrant Shares and will take such other action as is necessary to cause such
Common Stock to be so listed. For so long as the Investors beneficially own any
of the Securities, the Company will take all action necessary to continue the
listing and trading of its Common Stock on the Nasdaq National Market and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of such exchange, as applicable, to ensure
the continued eligibility for trading of the Shares and the Warrant Shares
thereon.
7.12 Corporate Existence. So long as the Investors beneficially
--------------------
own any of the Shares or Warrants (but in no event longer than five years), the
Company shall maintain its corporate existence, except in the event of a merger,
consolidation or sale of all or substantially all of the Company's assets, as
long as the surviving or successor entity in such transaction (a) assumes the
Company's obligations hereunder and under the agreements and instruments entered
into in connection herewith, regardless of whether or not the Company would have
had a sufficient number of shares of Common Stock authorized and available for
issuance in order to fulfill its obligations hereunder and effect the exercise
in full of all Warrants outstanding as of the date of such transaction; (b) has
no legal, contractual or other restrictions on its ability to perform the
obligations of the Company hereunder and under the agreements and instruments
entered into in connection herewith; and (c) (i) is a publicly traded
corporation whose common stock and the shares of capital stock issuable upon
exercise of the Warrants are (or would be upon issuance thereof) listed for
trading on the Nasdaq National Market, the Nasdaq SmallCap Market, the New York
Stock Exchange or the American Stock Exchange, or (ii) if not such a publicly
traded corporation, then the buyer agrees that it will, at the election of an
Investor, purchase such Investor's Shares (and Warrant Shares) within 30 days of
such election at a per share purchase price of $4.20.
15
8. Survival. All representations, warranties, covenants and agreements
--------
contained in this Agreement shall be deemed to be representations, warranties,
covenants and agreements as of the date hereof and shall survive the execution
and delivery of this Agreement for a period of two years from the date of this
Agreement; provided, however, that the provisions contained in Section 7 hereof
shall survive in accordance therewith.
9. Arbitration.
-----------
9.1 Scope. Resolution of any and all disputes arising from or in
-----
connection with the Agreements, whether based on contract, tort, common law,
equity, statute, regulation, order or otherwise ("Disputes"), shall be
exclusively governed by and settled in accordance with the provisions of this
Section 9; provided, that the foregoing shall not preclude equitable or other
judicial relief to enforce the provisions hereof or to preserve the status quo
pending resolution of Disputes hereunder.
9.2. Binding Arbitration. The parties hereby agree to submit all
--------------------
Disputes to arbitration for final and binding resolution. Either party may
initiate such arbitration by delivery of a demand therefor (the "Arbitration
Demand") to the other party. The arbitration shall be conducted in New York,
New York by a sole arbitrator selected by agreement of the parties not later
than fifteen (15) business days after delivery of the Arbitration Demand, or,
failing such agreement, appointed pursuant to the Commercial Arbitration Rules
of the America Arbitration Association, as amended from time to time (the "AAA
Rules"). If the arbitrator becomes unable to serve, his successor(s) shall be
similarly selected or appointed.
9.3. Procedure. The arbitration shall be conducted pursuant to
---------
the Federal Arbitration Act and such procedures as the parties may agree or, in
the absence of or failing such agreement, pursuant to the AAA Rules.
Notwithstanding the foregoing, (a) each party shall have the right to conduct
limited discovery of information relevant to the Dispute; (b) each party shall
provide to the other, reasonably in advance of any hearing, copies of all
documents that a party intends to present in such hearing; (c) all hearings
shall be conducted on an expedited schedule; and (d) except as otherwise
required by law and as required to conduct the proceedings, all proceedings
shall be confidential, except that either party may at its expense make a
stenographic record thereof.
9.4. Timing. The arbitrator shall complete all hearings not later
------
than 90 days after his or her selection or appointment, and shall make a final
award not later than 30 days thereafter. The arbitrator shall apportion all
costs and expenses of the arbitration, including the arbitrator's fees and
expenses, and fees and expenses of experts ("Arbitration Costs") between the
prevailing and non-prevailing party as the arbitrator shall deem fair and
reasonable. In circumstances where a Dispute has been asserted or defended
against on grounds that the arbitrator deems frivolous, the arbitrator may
assess all Arbitration Costs against the non-prevailing party and may include in
the award the prevailing party's attorney's fees and expenses in connection with
any and all proceedings under this Section 9. Notwithstanding the foregoing, in
no event may the arbitrator award multiple or punitive damages.
16
10. Miscellaneous.
-------------
10.1 Successors and Assigns. This Agreement may not be assigned
------------------------
by a party hereto without the prior written consent of the other party hereto,
except that without the prior written consent of the Company, but after notice
duly given, an Investor may assign its rights and delegate its duties hereunder
to an Affiliate, and without the prior written consent of the Investors, but
after notice duly given and in compliance with this Agreement, the Company may
assign its rights and delegate its duties hereunder to any successor-in-interest
corporation in the event of a merger or consolidation of the Company with or
into another corporation, or any merger or consolidation of another corporation
with or into the Company that results directly or indirectly in an aggregate
change in the ownership or control of more than 50% of the voting rights of the
equity securities of the Company, or the sale of all or substantially all of the
Company's assets. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective permitted successors and assigns
of the parties. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
10.2 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.3 Titles and Subtitles. The titles and subtitles used in this
---------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
10.4 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given only upon delivery to each party to be notified by (i)
personal delivery, (ii) telex or telecopier, upon receipt of confirmation of
complete transmittal, or (iii) an internationally recognized overnight air
courier, addressed to the party to be notified at the address as follows, or at
such other address as such party may designate by ten days' advance written
notice to the other party:
If to the Company:
LifeCell Corporation
Xxx Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx
Chief Financial Officer
Fax: 000-000-0000
If to the Investors, to the addresses set forth on the
signature pages hereto.
17
10.5 Fees and Expenses. The parties hereto shall pay their own
-------------------
costs and expenses in connection herewith, except that the Company shall pay to
Tail Wind, Inc. a sum equal to 1% of the Purchase Price paid by each Investor as
and for reimbursement for legal and due diligence expenses incurred in
connection herewith and such amount shall be paid at Closing from gross proceeds
of the offering.
10.6 Amendments and Waivers. Any term of this Agreement may be
------------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investors.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any Securities purchased under this Agreement at the
time outstanding, each future holder of all such securities, and the Company.
10.7 Severability. If one or more provisions of this Agreement
------------
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
10.8 Entire Agreement. This Agreement, including the Exhibits and
----------------
Schedules hereto, and the Registration Rights Agreement constitute the entire
agreement among the parties hereof with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof and
thereof.
10.9 Further Assurances. The parties shall execute and deliver
-------------------
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
10.10 Applicable Law. This Agreement shall be governed by, and
---------------
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
18
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
The Company: LIFECELL CORPORATION
By:_________________________
Name:
Title:
19
The Investor: [___________________________]
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
Aggregate Purchase Price: __________
Number of Shares of Common Stock: ____________
Number of Warrants: _______________
Effective per share Purchase Price of Shares: $4.20
Exercise price of Warrants: $5.46
Address for Notice:
[____________________________]
[____________________________]
[____________________________]
[____________________________]
[____________________________]
[____________________________]
with a copy to:
Xxxxx Xxxx LLP
000 Xxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attn: XxXxxx Xxxxxx
Telephone: 202/000-0000
Facsimile: 202/508-6200
20
SCHEDULE 7.1
Date:
LifeCell Corporation
Xxx Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx
Gentlemen:
By this letter we represent that on this date we own ___________ shares of
LifeCell Corporation common stock. These shares are held in our brokerage
account at ________________________________________________.
Sincerely,
___________________________________
[Investor]
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (the "Agreement") is made and
entered into as of this ____ day of November, 1999 by and between LifeCell
Corporation, a Delaware corporation (the "Company"), and the "Investors" named
in that certain Purchase Agreement of even date herewith by and between the
Company and the Investors (the "Purchase Agreement").
The parties hereby agree as follows:
1. Certain Definitions
--------------------
As used in this Agreement, the following terms shall have the
following meanings:
"Additional Registrable Securities" shall mean the shares of
-----------------------------------
Common Stock, if any, issued to the Investors pursuant to Section 7.1 of the
Purchase Agreement.
"Common Stock" shall mean the Company's Common Stock, par value
-------------
$0.001 per share.
"Investors" shall mean the purchasers identified in the Purchase
---------
Agreement and any affiliate of any Investor who is a subsequent holder of any
Warrants, Registrable Securities or Additional Registrable Securities.
"Prospectus" shall mean the prospectus included in any
----------
Registration Statement, as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities or Additional Registrable Securities covered by such Registration
Statement and by all other amendments and supplements to the prospectus,
including post-effective amendments and all material incorporated by reference
in such prospectus.
"Register," "registered" and "registration" refer to a
-------- ---------- ------------
registration made by preparing and filing a registration statement or similar
document in compliance with the 1933 Act (as defined below), and the declaration
or ordering of effectiveness of such registration statement or document.
"Registrable Securities" shall mean the shares of Common Stock
-----------------------
issued and issuable to the Investors pursuant to the Purchase Agreement (other
than additional shares of Common Stock issuable pursuant to Section 7.1 of the
Purchase Agreement) and issuable upon the exercise of the Warrants.
"Registration Statement" shall mean any registration statement of
----------------------
the Company filed under the 1933 Act that covers the resale of any of the
Registrable Securities or Additional Registrable Securities pursuant to the
provisions of this Agreement, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such Registration Statement.
"SEC" means the U.S. Securities and Exchange Commission.
---
"1933 Act" means the Securities Act of 1933, as amended, and the
---------
rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
--------
and the rules and regulations promulgated thereunder.
"Warrants" mean the warrants to purchase shares of Common Stock
--------
issued to the Investors pursuant to the Purchase Agreement, the form of which is
attached to the Purchase Agreement as Exhibit A.
2. Registration.
------------
(a) Registration Statements.
------------------------
(i) Registrable Securities. Promptly following the
-----------------------
closing of the purchase and sale of Common Stock and Warrants contemplated by
the Purchase Agreement (the "Closing Date") (but no later than thirty (30) days
after the Closing Date), the Company shall prepare and file with the SEC one
Registration Statement on Form S-3 (or, if Form S-3 is not then available to the
Company, on such form of registration statement as is then available to effect a
registration for resale of the Registrable Securities, subject to the Investors'
consent) covering the resale of the Registrable Securities in an amount equal to
the number of shares of Common Stock issued to the Investors on the Closing Date
plus the number of shares of Common Stock necessary to permit the exercise in
full of the Warrants. Such Registration Statement also shall cover, to the
extent allowable under the 1933 Act and the Rules promulgated thereunder
(including Rule 416), such indeterminate number of additional shares of Common
Stock resulting from stock splits, stock dividends or similar transactions with
respect to the Registrable Securities. The Company shall use its best efforts
to obtain from each person who now has piggyback registration rights a waiver of
those rights with respect to the Registration Statement. No securities shall be
included in the Registration Statement without the consent of each Investor
other than the Registrable Securities and the securities subject to piggyback
registration rights on the date hereof for which the Company could not obtain
waivers. The Registration Statement (and each amendment or supplement thereto,
and each request for acceleration of effectiveness thereof) shall be provided in
accordance with Section 3(c) to the Investors and their counsel prior to its
filing or other submission.
2
(ii) Additional Registrable Securities. Upon the
-----------------------------------
written demand of any Investor and following the issuance of any additional
shares of Common Stock to such Investor pursuant to Section 7.1 of the Purchase
Agreement, the Company shall prepare and file with the SEC a Registration
Statement on Form S-3, and any additional Registration Statements on Form S-3
upon the written demand of any Investor pursuant to its rights during the
Potential Adjustment Period as that term is defined in the Purchase Agreement
(or, if Form S-3 is not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of the Additional Registrable Securities, subject to the Investor's consent),
covering the resale of the Additional Registrable Securities in an amount equal
to the number of shares of Common Stock issued to and designated in the demand
by such Investor. Such Registration Statement also shall cover, to the extent
allowable under the 1933 Act and the Rules promulgated thereunder (including
Rule 416), such indeterminate number of additional shares of Common Stock
resulting from stock splits, stock dividends or similar transactions with
respect to the Additional Registrable Securities. The Company shall use its
best efforts to obtain from each person who now has piggyback registration
rights a waiver of those rights with respect to the Registration Statement. No
securities shall be included in the Registration Statement without the consent
of the Investor other than the Registrable Securities and Additional Registrable
Securities and the securities subject to piggyback registration rights on the
date hereof for which the Company could not obtain waivers. The Registration
Statement (and each amendment or supplement thereto, and each request for
acceleration of effectiveness thereof) shall be provided in accordance with
Section 3(c) to the Investor and its counsel prior to its filing or other
submission.
(b) Expenses. The Company will pay all its expenses
--------
associated with each registration, and the Investors will pay all their expenses
subject to the reimbursement provided for in the Purchase Agreement (and to the
extent funds have been returned to the Company, in respect thereof, the Company
will pay them over subject to receipt of appropriate documentation). In no
event will the Company reimburse Investors for discounts, commissions, fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals.
(c) Effectiveness.
-------------
(i) The Company shall use its best efforts to have each
Registration Statement declared effective as soon as practicable. If (A) the
Registration Statement covering Registrable Securities is not declared effective
by the SEC within four (4) months following the Closing Date, or the
Registration Statement covering Additional Registrable Securities is not
declared effective by the SEC within four (4) months following the demand of an
Investor relating to the Additional Registrable Securities covered thereby
(each, a "Registration Date"), (B) after a Registration Statement has been
declared effective by the SEC, sales cannot be made pursuant to such
Registration Statement (by reason of a stop order, or the Company's failure to
update the Registration Statement) but except as excused pursuant to
subparagraph (ii) below, or (C) the Common Stock generally or the Registrable
Securities specifically is not listed or included for quotation on the Nasdaq
National Market System, the Nasdaq Small Cap Market, the New York Stock Exchange
or the American Stock Exchange, then the Company will make pro-rata payments to
each Investor, as liquidated damages and not as a penalty, in an amount equal to
2% of the aggregate amount paid by such Investor on the Closing Date to the
3
Company for shares of Common Stock still held by such Investor for any month or
pro rata for any portion thereof following the Registration Date during which
any of the events described in (A) or (B) or (C) above occurs and is continuing
(the "Blackout Period"). The Blackout Period shall terminate upon (x) the
effectiveness of the applicable Registration Statement in the case of (A) and
(B) above; (y) listing or inclusion of the Common Stock on the Nasdaq National
Market System, the Nasdaq Small Cap Market, the New York Stock Exchange or the
American Stock Exchange in the case of (C) above; and (z) in the case of the
events described in (A) or (B) above, the earlier termination of the
Registration Period (as defined in Section 3(a) below). The amounts payable as
liquidated damages pursuant to this paragraph shall be payable, at the option of
the Company, in lawful money of the United States or in shares of Common Stock
at the Market Price (as that term is defined in the Purchase Agreement), and
amounts payable as liquidated damages shall be paid monthly within two (2)
business days of the last day of each month following the commencement of the
Blackout Period until the termination of the Blackout Period. Amounts payable
as liquidated damages hereunder shall cease when an Investor no longer holds
Warrants or Registrable Securities, or Additional Registrable Securities, as
applicable. Notwithstanding the above, if after twelve (12) months, the Company
in good faith determines that it is unable to remedy the events set forth in
(A), (B) or (C), the Company may notify the Investors that the liquidated
damages will cease to accrue and, at the Investor's election, the Company shall
redeem (if and only if permitted under applicable law), in whole or in part, as
instructed by the Investor, the shares of Common Stock and Warrants held by such
Investor for an amount equal to 100% of the amount originally invested by such
Investor. If an Investor does not elect to have its Common Stock and Warrants
so redeemed, the Company shall use reasonable efforts to remedy the events set
forth in (A), (B) and (C), but the Investor will no longer be entitled to
further liquidated damages pursuant to this Agreement.
(ii) For not more than thirty (30) consecutive trading days
or for a total of not more than forty (40) trading days in any twelve (12) month
period, the Company may delay the disclosure of material non-public information
concerning the Company and terminate or suspend effectiveness of any
registration contemplated by this Section containing such information, if
disclosure of such information at the time is not, in the good faith opinion of
the Company, in the best interests of the Company (an "Allowed Delay");
provided, that the Company shall promptly (a) notify the Investors in writing of
the existence of (but in no event, without the prior written consent of an
Investor, shall the Company disclose to such Investor any of the facts or
circumstances regarding) material non-public information giving rise to an
Allowed Delay, and (b) advise the Investors in writing to cease all sales under
the Registration Statement until the end of the Allowed Delay. The duration of
the Restricted Period as provided in the Purchase Agreement will be extended by
the number of days of any and all Allowed Delays.
(d) Underwritten Offering. If any offering pursuant to a
----------------------
Registration Statement pursuant to Section 2(a) hereof involves an underwritten
offering, the Company shall have the right to select an investment banker and
manager to administer the offering, which investment banker or manager shall be
reasonably satisfactory to the Investors; provided, the Investors may only
object to such selection by the Company in extreme circumstances.
4
3. Company Obligations. The Company will use its best efforts to
--------------------
effect the registration of the Registrable Securities and Additional Registrable
Securities in accordance with the terms hereof, and pursuant thereto the Company
will, as expeditiously as possible:
(a) use its best efforts to cause such Registration Statement
to become effective and to remain continuously effective for a period that will
terminate upon the earlier of the date on which all Registrable Securities or
Additional Registrable Securities, as the case may be, covered by such
Registration Statement, as amended from time to time, have been sold or are
eligible for sale under Rule 144(k) promulgated under the Securities Act (the
"Registration Period");
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement and the Prospectus as
may be necessary to keep the Registration Statement effective for the period
specified in Section 3(a) and to comply with the provisions of the 1933 Act and
the 1934 Act with respect to the distribution of all Registrable Securities and
Additional Registrable Securities; provided that, at least three (3) days prior
to the filing of a Registration Statement or Prospectus, or any amendments or
supplements thereto, the Company will furnish to the Investors copies of all
documents proposed to be filed, which documents will be subject to the comments
of the Investors;
(c) permit one counsel designated by the Investors to review
each Registration Statement and all amendments and supplements thereto no fewer
than five (5) days prior to their filing with the SEC and not file any document
to which such counsel reasonably objects in a timely manner;
(d) furnish to the Investors and their legal counsel (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one copy of any Registration Statement and any
amendment thereto, each preliminary prospectus and Prospectus and each amendment
or supplement thereto, and each letter written by or on behalf of the Company to
the SEC or the staff of the SEC, and each item of correspondence from the SEC or
the staff of the SEC, in each case relating to such Registration Statement
(other than any portion of any thereof which contains information for which the
Company has sought confidential treatment), and (ii) such number of copies of a
Prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as each Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities and
Additional Registrable Securities owned by such Investor;
(e) in the event the Company selects an underwriter for the
offering, the Company shall enter into and perform its reasonable obligations
under an underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriter of such offering;
(f) if required by the underwriter, at the request of the
Investors, the Company shall furnish, on the date that Registrable Securities or
Additional Registrable Securities, as applicable, are delivered to an
underwriter, if any, for sale in connection with the Registration Statement (i)
an opinion, dated as of such date, from counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
underwriter and the Investors and (ii) a letter, dated such date, from the
Company's independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriter and the Investors;
5
(g) make effort to prevent the issuance of any stop order or
other suspension of effectiveness and, if such order is issued, obtain the
withdrawal of any such order at the earliest possible moment (except as allowed
under Section 2(c)(ii) hereof);
(h) furnish to each Investor a copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules by courier pursuant to the notice requirements of
Section 10.4 of the Purchase Agreement;
(i) use its reasonable best efforts to register or qualify or
cooperate with the Investors and their counsel in connection with the
registration or qualification of such Registrable Securities or Additional
Registrable Securities, as applicable, for offer and sale under the securities
or blue sky laws of such jurisdictions as the Investors reasonably request in
writing and do any and all other reasonable acts or things necessary or
advisable to enable the distribution in such jurisdictions of the Registrable
Securities or Additional Registrable Securities covered by the Registration
Statement;
(j) cause all Registrable Securities or Additional
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange, interdealer quotation system or other market on which
similar securities issued by the Company are then listed;
(k) immediately notify the Investors, at any time when a
Prospectus relating to the Registrable Securities or Additional Registrable
Securities is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the Prospectus
included in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, and subject to Section 2(c)(ii), at
the request of any such holder, promptly prepare and furnish to such holder a
reasonable number of copies of a supplement to or an amendment of such
Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities or Additional Registrable Securities,
as applicable, such Prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and
(l) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act,
take such other actions as may be reasonably necessary to facilitate the
registration of the Registrable Securities and Additional Registrable
Securities, if applicable, hereunder; and make available to its security
holders, as soon as reasonably practicable, but not later than the Availability
Date (as defined below), an earnings statement covering a period of at least
6
twelve months, beginning after the effective date of each Registration
Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the 1933 Act (for the purpose of this subsection 3(m), "Availability
Date" means the 45th day following the end of the fourth fiscal quarter that
includes the effective date of such Registration Statement, except that, if such
fourth fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter).
4. Obligations of the Investors.
-------------------------------
(a) It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities or Additional Registrable Securities, as
applicable, that each Investor shall furnish in writing to the Company such
information regarding itself, the Registrable Securities or Additional
Registrable Securities, as applicable, held by it and the intended method of
disposition of the Registrable Securities or Additional Registrable Securities,
as applicable, held by it, as shall be reasonably required to effect the
registration of such Registrable Securities or Additional Registrable
Securities, as applicable, and shall execute such documents in connection with
such registration as the Company may reasonably request. At least ten (10)
business days prior to the first anticipated filing date of any Registration
Statement, the Company shall notify each Investor of the information the Company
requires from such Investor if such Investor elects to have any of the
Registrable Securities or Additional Registrable Securities included in the
Registration Statement. An Investor shall provide such information to the
Company at least five (5) business days prior to the first anticipated filing
date of such Registration Statement if such Investor elects to have any of the
Registrable Securities or Additional Registrable Securities included in the
Registration Statement.
(b) Each Investor, by its acceptance of the Registrable
Securities and Additional Registrable Securities, if any, agrees to cooperate
with the Company as reasonably requested by the Company in connection with the
preparation and filing of a Registration Statement hereunder, unless such
Investor has notified the Company in writing of its election to exclude all of
its Registrable Securities or Additional Registrable Securities, as applicable,
from the Registration Statement, in which case the Investor shall be deemed to
have waived its rights to have Registrable Securities or Additional Registrable
Securities, as the case may be, registered under this Agreement, unless the
Investor reasonably believes sales of its securities under such Registration
Statement may violate federal securities laws.
(c) In the event the Company determines to engage the services of
an underwriter, each Investor agrees to enter into and perform its obligations
under an underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the dispositions of the
Registrable Securities or Additional Registrable Securities, as applicable.
7
(d) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event rendering a Registration
Statement no longer effective, such Investor will immediately discontinue
disposition of Registrable Securities or Additional Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities or
Additional Registrable Securities, until the Investor's receipt of the copies of
the supplemented or amended prospectus filed with the SEC and declared effective
and, if so directed by the Company, the Investor shall deliver to the Company
(at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Investor's possession of the
prospectus covering the Registrable Securities or Additional Registrable
Securities, as applicable, current at the time of receipt of such notice.
(e) No Investor may participate in any underwritten
registration hereunder unless it (i) agrees to sell the Registrable Securities
or Additional Registrable Securities, as applicable, on the basis provided in
any underwriting arrangements in usual and customary form entered into by the
Company, (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements, and (iii) agrees to pay its
pro rata share of all underwriting discounts and commissions and any expenses in
excess of those payable by the Company pursuant to the terms of this Agreement.
5. Indemnification.
---------------
(a) Indemnification by Company. The Company agrees to
----------------------------
indemnify and hold harmless, to the fullest extent permitted by law the
Investors, each of their officers, directors, partners and employees and each
person who controls the Investors (within the meaning of the 0000 Xxx) against
all losses, claims, damages, liabilities, costs (including, without limitation,
reasonable attorney's fees) and expenses imposed on such person caused by (i)
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or any preliminary prospectus or any
amendment or supplement thereto or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made, not
misleading, except insofar as the same are based entirely upon any information
furnished in writing to the Company by such Investors, expressly for use
therein, or (ii) any violation by the Company of any federal, state or common
law, rule or regulation applicable to the Company in connection with any
Registration Statement, Prospectus or any preliminary prospectus, or any
amendment or supplement thereto, provided that such violation was not caused by
the negligence or willful misconduct of the Investor and shall reimburse in
accordance with subparagraph (c) below, each of the foregoing persons for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claims. The foregoing is subject to the
condition that, insofar as the foregoing indemnities relate to any untrue
statement, alleged untrue statement, omission or alleged omission made in any
preliminary prospectus or Prospectus that is eliminated or remedied in any
Prospectus or amendment or supplement thereto, the above indemnity obligations
of the Company shall not inure to the benefit of any indemnified party if a copy
of such corrected Prospectus or amendment or supplement thereto had been made
available to such indemnified party and was not sent or given by such
8
indemnified party at or prior to the time such action was required of such
indemnified party by the 1933 Act and if delivery of such Prospectus or
amendment or supplement thereto would have eliminated (or been a sufficient
defense to) any liability of such indemnified party with respect to such
statement or omission. Indemnity under this Section 5(a) shall remain in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the permitted transfer of the Registrable
Securities and Additional Registrable Securities.
(b) Indemnification by Holder. In connection with any
---------------------------
registration pursuant to the terms of this Agreement, each Investor will furnish
to the Company in writing such information as the Company reasonably requests
concerning the holders of Registrable Securities and Additional Registrable
Securities or the proposed manner of distribution for use in connection with any
Registration Statement or Prospectus and agrees, severally but not jointly, to
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors, officers, employees, stockholders and each person who
controls the Company (within the meaning of the 0000 Xxx) against any losses,
claims, damages, liabilities and expense (including reasonable attorney's fees)
resulting from (i) any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement or Prospectus
or preliminary prospectus or amendment or supplement thereto or necessary to
make the statements therein in light of the circumstances under which they were
made, not misleading, to the extent, but only to the extent that such untrue
statement or omission is contained in any information furnished in writing by
such Investor to the Company specifically for inclusion in such Registration
Statement or Prospectus or amendment or supplement thereto and that such
information was substantially relied upon by the Company in preparation of the
Registration Statement or Prospectus or any amendment or supplement thereto; or
(ii) any violation by the Investor of any federal, state or common law, rule or
regulation applicable to the Investor in connection with the Registration
Statement, Prospectus or any preliminary prospectus or any amendment or
supplement thereto, provided that such violation was not caused by the
negligence or willful misconduct of the Company. In no event shall the
liability of an Investor be greater in amount than the dollar amount of the
proceeds (net of all expense paid by such Investor and the amount of any damages
such holder has otherwise been required to pay by reason of such untrue
statement or omission) received by such Investor upon the sale of the
Registrable Securities or Additional Registrable Securities included in the
Registration Statement giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any person
-----------------------------------------
entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided that any
--------
person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person unless (a)
the indemnifying party has agreed to pay such fees or expenses, or (b) the
9
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person or (c) in the reasonable
judgment of any such person, based upon written advice of its counsel, a
conflict of interest exists between such person and the indemnifying party with
respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such person); and
provided, further, that the failure of any indemnified party to give notice as
- -------
provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall
materially adversely affect the indemnifying party in the defense of any such
claim or litigation. It is understood that the indemnifying party shall not, in
connection with any proceeding in the same jurisdiction, be liable for fees or
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that 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 of such claim or litigation.
(d) Contribution. If for any reason the indemnification
------------
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless, other than as expressly
specified therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect the relative fault
of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations. No person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be
entitled to contribution from any person not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a holder of
Registrable Securities or Additional Registrable Securities be greater in amount
than the dollar amount of the proceeds (net of all expenses paid by such holder
and the amount of any damages such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable Securities or
Additional Registrable Securities giving rise to such contribution obligation.
6. Miscellaneous.
-------------
(a) Amendments and Waivers. This Agreement may be amended
------------------------
only by a writing signed by the parties hereto. The Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company shall have obtained the written consent to such
amendment, action or omission to act, of each Investor.
(b) Notices. All notices and other communications provided
-------
for or permitted hereunder shall be made as set forth in Section 10.4 of the
Purchase Agreement.
(c) Assignments and Transfers by Investors. This Agreement
----------------------------------------
and all the rights and obligations of the Investors hereunder may not be
assigned or transferred to any transferee or assignee except to an affiliate of
an Investor who is a subsequent holder of any Warrants, Registrable Securities
or Additional Registrable Securities.
10
(d) Assignments and Transfers by the Company. This Agreement
----------------------------------------
may not be assigned by the Company without the prior written consent of each
Investor then holding Registrable Securities, except that without the prior
written consent of the Investors, but after notice duly given, the Company shall
assign its rights and delegate its duties hereunder to any successor-in-interest
corporation, and such successor-in-interest shall assume such rights and duties,
in the event of a merger or consolidation of the Company with or into another
corporation or the sale of all or substantially all of the Company's assets.
(e) Benefits of the Agreement. The terms and conditions of
---------------------------
this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
(f) Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Titles and Subtitles. The titles and subtitles used in
----------------------
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(h) Severability. If one or more provisions of this
------------
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms to the fullest extent permitted by law.
(i) Further Assurances. The parties shall execute and
-------------------
deliver all such further instruments and documents and take all such other
actions as may reasonably be required to carry out the transactions contemplated
hereby and to evidence the fulfillment of the agreements herein contained.
(j) Entire Agreement. This Agreement is intended by the
-----------------
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
(k) Applicable Law. This Agreement shall be governed by, and
--------------
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of law.
11
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
The Company: LIFECELL CORPORATION
By:_________________________
Name:
Title:
The Investors:
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
12
