NAME OF PURCHASER: Xxxxx Xxxxxxx Partners I, Ltd.
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To: ORTHOVITA, INC.
00 XXXXX XXXXXX XXXXXXX
XXXXXXX, XX 00000
ORTHOVITA, INC.
SUBSCRIPTION AGREEMENT
SECTION 1.
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1.1 Subscription. The undersigned (the "Purchaser"), intending to be
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legally bound, hereby subscribes for and agrees to purchase five hundred eight
thousand, four hundred seventy-five (508,475) shares (the "Shares") of common
stock, par value $.01 per share (the "Common Stock") of Orthovita, Inc., a
Pennsylvania corporation (the "Company"), subject to adjustment pursuant to
Section 1.4 hereof, together with a one year warrant to purchase seven hundred
sixty-two thousand, seven hundred twelve (762,712) shares of Common Stock at an
exercise price of USD$5.90 per share, subject to adjustment as described therein
(the "Warrants") for the aggregate purchase price of three million U.S. dollars
(USD$3,000,000) (the "Aggregate Purchase Price") in accordance with the terms
and conditions of this Subscription Agreement (the "Subscription Agreement").
1.2 Purchase of Securities; Delivery of Documents. At the Closing (as
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defined in Section 2.1 below), subject to the terms and conditions set forth
herein, the Company shall issue and sell to the Purchaser, and the Purchaser
shall purchase from the Company, the Shares and Warrants (collectively, the
"Securities") for the Aggregate Purchase Price.
1.3 Pricing of the Shares of Common Stock. The "Purchase Price" shall
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mean, for each Share of Common Stock, an amount equal to USD$5.90 per Share.
1.4 Dilution Shares. Immediately following the occurrence of a "Dilution
---------------
Event" (as such term is defined below) during the one year period following the
date of this Subscription Agreement, the Purchaser shall have the right to
purchase (the "Purchase Rights") from the Company, at a purchase price per share
equal to $.01 (the "Dilution Share Price"), that number of shares of Common
Stock calculated in accordance with the terms of Section 1.4(c) (such shares
being referred to as the "Dilution Shares").
(a) A Dilution Event shall be deemed to occur if the Company:
(i) issues or sells, or is deemed to have issued or sold, any
Common Stock (other than the Excluded Securities); or
(ii) in any manner grants, issues or sells any rights, options,
warrants,
options to subscribe for or to purchase Common Stock or any stock or other
securities convertible into or exchangeable for Common Stock (other than any
Excluded Securities) (such rights, options or warrants being herein called
"Options" and such convertible or exchangeable stock or securities being herein
called "Convertible Securities");
in each case, for a price per share less than the Comparison Price (as such term
is defined below) then in effect immediately prior to such issuance, sale or
grant (the "Lower Price"). For purposes of calculating the price per share (a)
with respect to paragraph 1.4(a)(i) above, the "price per share" shall be
determined by dividing the aggregate consideration received for the issuance or
sale by the total number of shares issued or sold; and (b) with respect to
paragraph 1.4(a)(ii), the "price per share" shall be determined by dividing (1)
the total amount, if any, received or receivable by the Company as consideration
for the granting of Options or the issuance or sale of Convertible Securities,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon exercise of all such Options or upon the conversion or
exchange of such Convertible Securities, by (2) the total maximum number of
shares of Common Stock issuable upon the exercise of such Options or the
conversion or exchange of all such Convertible Securities. The "Comparison
Price" shall initially be $5.90, provided, however, that the Comparison Price
shall equal the Lower Price immediately following a Dilution Event. In
addition, the Comparison Price then in effect shall be further adjusted for any
stock splits, combination, stock dividends, recapitalization or the like from
time to time.
(b) For the purposes of this Section 1.4, the term "Excluded
Securities" shall mean: (i) shares of Common Stock issued or issuable pursuant
to the Warrants, (ii) any Dilution Shares issued or issuable hereunder; (iii)
shares of Common Stock (including options and warrants) issuable upon the
exercise of, or pursuant to the anti-dilution provisions contained within, any
options, restricted stock awards or warrants outstanding on the date hereof;
(iv) up to 623,571 shares of Common Stock or Options issued or issuable to
officers, employees or directors of, or consultants to, the Company pursuant to
a stock purchase or option plan or other employee stock bonus arrangement
approved by the Company's Board of Directors; (v) shares of Common Stock,
Options or Convertible Securities issued or issuable pursuant to a stock split,
combination, subdivision, dividend or other distribution on outstanding shares
of Common Stock; (vi) any shares of Common Stock, Options or Convertible
Securities issued pursuant to Sections 13.5 or 13.6 of the Warrants; (vii)
shares of Common Stock, if any, issued as payment for a Registration Delay
Payment (as defined in the Registration Rights Agreement, defined below); or
(viii) one or more issuances of Common Stock, Options or Convertible Securities
that, in the aggregate, do not exceed .5% of the Company's Common Stock then
outstanding, to the extent that the aggregate proceeds raised in connection
therewith do not exceed $500,000.
(c) The number of Dilution Shares of Common Stock that may be
purchased following the occurrence of a Dilution Event shall be calculated by
subtracting the number of Shares (excluding any Excluded Securities) that the
Purchaser owns beneficially and of record upon the
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occurrence of the Dilution Event (the "Owned Shares") from the quotient obtained
by dividing (x) the product of the Owned Shares and the Comparison Price then in
effect immediately prior to the Dilution Event by (y) the Lower Price.
(d) A Purchase Right is exercisable by the Purchaser for the period
commencing on the date of the Dilution Event giving rise to the applicable
Purchase Right and ending on the one year anniversary of the date of this
Subscription Agreement (the "Purchase Right Period"), by the Purchaser giving
the Company a written notice of its desire to exercise a Purchase Right
substantially in the form attached hereto as Exhibit C (the "Purchase Right
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Notice"), together with (i) payment of the Dilution Share Price for all Dilution
Shares being purchased as set forth in the Purchase Right Notice (the aggregate
of the Dilution Share Price for all Dilution Shares being purchased being
referred to herein as the "Aggregate Dilution Share Price"). Payment of the
Aggregate Dilution Share Price shall be made (i) by check or bank draft payable
to the order of the Company or (ii) by wire transfer to the account of the
Company. Within five business days after the Company receives the Purchase
Right Notice, Aggregate Dilution Share Price and the Investor Certificate from
the Purchaser, the Company shall deliver or cause to be delivered to the
Purchaser a certificate issued in the name of the Purchaser and representing the
number of Dilution Shares so purchased.
(e) Notwithstanding anything herein to the contrary, in no event
shall the Purchaser or the Company have the right or be required to exercise a
Purchase Right to the extent that such exercise would cause the aggregate number
of shares of Common Stock beneficially owned by such Purchaser and its
Affiliates to exceed 4.99% of the outstanding shares of the Common Stock
following such exercise. For purposes of this Section 1.4(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The provisions of this
Section 1.4(e) may be waived by a Holder as to itself (and solely as to itself)
upon not less than 65 days prior written notice to the Company, and the
provisions of this Section 1.4(e) shall continue to apply until such 65th day
(or later, if stated in the notice of waiver).
(f) Notwithstanding anything herein to the contrary, upon the
expiration of Options or Convertible Securities, the issuance of which resulted
in a Purchase Right pursuant to this Section 1.4, if all of such Options or
Convertible Securities shall not have been exercised or converted, that
particular Purchase Right shall immediately upon such expiration be deemed null
and void, and the Purchase Right Period with respect thereto expired.
(g) As used in this Section 1.4, the terms set forth below shall have
the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
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directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this
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definition, "control", when used with respect to any Person, means the
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possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise; and the terms "affiliated",
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controlling" and "controlled" have meanings correlative to the foregoing.
----------- ----------
"Person" means an individual or a corporation, partnership, trust,
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incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
(h) The Company will at all times reserve and keep available, solely
for issuance and delivery upon the exercise of Purchase Rights, all shares of
Common Stock from time to time issuable upon the exercise of the Purchase
Rights.
SECTION 2.
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2.1 Closing. The closing of the purchase and sale of the Securities
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(the "Closing") shall take place at the offices of Xxxxxx, Xxxxx & Xxxxxxx LLP,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 or such other place as may be
mutually agreed by the Company and the Purchaser, immediately following the
execution of this Agreement by the Purchaser and the Company. At the Closing of
the purchase and sale of the Securities subscribed to by the Purchaser, the
Company shall prepare for delivery to the Purchaser certificates for the Common
Stock to be issued and sold to the Purchaser and a Warrant certificate in the
form attached hereto as Exhibit A, duly registered in the Purchaser's name
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against payment in full by the Purchaser of the Aggregate Purchase Price in
United States dollars in immediately available funds to an account or accounts
designated in writing by the Company.
2.2 Closing Deliveries.
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(a) At or prior to the Closing, the Company shall deliver or cause to
be delivered to the Purchaser the following in form and substance reasonably
satisfactory to the Purchaser:
(i) An executed copy of this Agreement;
(ii) A certificate representing the Shares of Common Stock
purchased by the Purchaser, registered in the name of such Purchaser, in form
satisfactory to such Purchaser (provided that delivery of such certificate on
the business day immediately after the date of the Closing shall be deemed to
satisfy the Company's obligation in this Section 2.2(a)(ii));
(iii) An executed instrument representing the Warrant purchased
by the Purchaser, registered in the name of the Purchaser, substantially in the
form of Exhibit A;
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(iv) An executed Registration Rights Agreement, substantially in
the form attached hereto as Exhibit B (the "Registration Rights Agreement");
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(v) An opinion of the Company's legal counsel; and
(vi) Such other documents relating to the transaction as the
Purchaser and its counsel may reasonably request.
(b) At or prior to the Closing, the Purchaser shall deliver or cause
to be delivered to the Company the following in form and substance reasonably
satisfactory to the Company:
(i) An executed copy of this Agreement;
(ii) The Aggregate Purchase Price; and
(iii) Such other documents relating to the transaction as the
Company and its counsel may reasonably request.
2.3 Waiver of Participation Rights. In consideration of the offer to sell
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the Securities hereunder and as a condition to the Closing, the Purchaser hereby
irrevocably waives any and all participation rights previously granted to it by
the Company to purchase additional shares of the Company's capital stock as set
forth in a letter dated July 5, 2000 from the Company to the Purchaser.
SECTION 3.
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3.1 Representations and Warranties of the Company.
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The Company represents and warrants that:
(a) Each of the Company and its subsidiaries is a corporation duly
organized and validly subsisting under the laws of the state of its formation,
and duly qualified to do business and in good standing as a foreign corporation
in each state in which the nature of its business or properties requires such
qualification (except where failure as to qualify would not have a material
adverse effect on the Company taken as a whole), and the Company has full power
and authority, corporate and otherwise, to enter into and perform this
Subscription Agreement, and to execute and deliver the various instruments and
documents provided for herein.
(b) The execution, delivery and performance by the Company of this
Subscription Agreement and the Registration Rights Agreement, and the issuance
and delivery by the Company
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of the Securities as contemplated hereby, have been duly authorized by all
necessary corporate action and will not violate any provision of law, court
order or decree, or of the Company's Articles of Incorporation or Bylaws, or
result in the breach of, constitute a default under or result in the creation of
any lien, charge or encumbrance upon any property or assets of the Company
pursuant to any agreement or instrument to which the Company or any of its
subsidiaries is a party, or by which it or any of its subsidiaries' property may
be bound or affected. The issuance of the Securities will trigger certain anti-
dilution provisions set forth in common stock purchase warrants previously
granted by the Company that will result in the issuance of less than 2,000
additional shares under the effected warrants. Each of the Subscription
Agreement, the Warrant and the Registration Rights Agreement is a valid and
binding obligation of the Company, enforceable in accordance with its terms
subject to general principles of equity and bankruptcy and other laws affecting
creditors' rights generally.
(c) Except as set forth in the Company's Annual Report on Form 10-K for
the year ended December 31, 1999 and all Quarterly Reports on Form 10-Q filed
thereafter (including the Company's Form 10-Q for the quarter ended June 30,
2000), including all exhibits thereto (collectively, the "Documents"), there are
no material lawsuits or proceedings pending, or, to the Company's knowledge,
threatened, against or affecting the Company or any of its subsidiaries and
there are no proceedings before any governmental commission, bureau or other
administrative agency pending, or, to the Company's knowledge, threatened,
against or affecting the Company or any of its subsidiaries.
(d) As of August 18, 2000, the authorized capital stock of the Company
consisted of 50,000,000 shares of Common Stock of which 12,805,158 shares were
issued and outstanding. An additional 2,339,896 shares of Common Stock are
issuable upon the exercise of outstanding warrants and outstanding vested and
unvested options and restricted stock awards as of August 18, 2000.
(e) The Shares issuable under this Subscription Agreement have been duly
authorized and, when issued in compliance with this Subscription Agreement
against payment therefor, will be validly issued, fully paid and nonassessable.
The shares of Common Stock issuable upon the exercise of the Warrant (the
"Warrant Shares") and the Placement Agent Warrant (as such term is defined in
Section 3.1(m) below) (the "Placement Agent Warrant Shares") have been duly
authorized and reserved for issuance. Upon a Dilution Event, the Company shall
reserve a sufficient number of shares of Common Stock issuable in connection
with the Purchase Rights, which shares shall be duly authorized. When issued in
accordance with the provisions of the Warrant, this Subscription Agreement and
the Placement Agent Warrant, including payment in full of the exercise price
therefor, the Warrant, the Dilution Shares and the Placement Agent Warrant
Shares, respectively, will be validly issued, fully paid and nonassessable. The
Shares, Warrant Shares, Dilution Shares and Placement Agent Warrant Shares will
be issued free and clear of any claim, lien, security interest or other
encumbrance other than as set forth therein; provided, however, that the Shares,
Warrant
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Shares, Dilution Shares and Placement Agent Warrant Shares may be subject to
restrictions applicable on transfer under state and/or federal securities laws.
(f) No governmental permit, consent, approval or authorization is required
in connection with (i) the execution, delivery and performance of this
Subscription Agreement, the Warrant and the Registration Rights Agreement by the
Company or (ii) the offer, sale, issuance and delivery of the Securities, the
Warrant Shares or the Dilution Shares contemplated hereby by the Company;
provided that, all representations made to the Company by the Purchaser in this
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Subscription Agreement and in any other document or instrument delivered in
connection herewith are assumed for purposes of this representation and warranty
to be accurate and complete.
(g) None of the Documents contains, as of the date thereof, any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements made therein, in the light of the circumstances in which and the
date on which they were made, not misleading, and each of such reports or
filings complied as to form in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and to the
Exchange Act, and the rules and regulations promulgated under each such Act. As
of the date hereof, except as disclosed in the Documents and except for
operating losses in the ordinary course of business, since June 30, 2000, there
has been no material adverse change and no material adverse development in the
business, properties, operations, condition (financial or otherwise), assets,
liabilities or results of operations or, insofar as can be reasonably foreseen,
prospects of the Company.
(h) Neither this Agreement nor the Documents, as of the date hereof,
contain any 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.
(i) As of the date hereof, the Common Stock is traded on the NASDAQ
National Market System and the EASDAQ stock market.
(j) Subject to the accuracy and completeness of the representations and
warranties of the Purchaser contained in Section 4 hereof, the offer, issuance
and sale by the Company to the Purchaser of the Securities is exempt from the
registration requirements of the Securities Act.
(k) The Company and its Board of Directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination or other similar anti-takeover provision under the Articles
of Incorporation, Bylaws or the laws of the state of incorporation of the
Company which is or could become applicable to the Purchaser or the Subscription
Agreement or Warrants as a result of the transactions contemplated by the
Subscription Agreement or Warrants. None of the transactions contemplated by
this Subscription Agreement and the Warrants, including the exercise of the
Warrants, will trigger any poison pill provisions of any of the Company's
stockholders' rights or similar agreements.
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(l) As of the date hereof, the Company is eligible to register securities
for resale with the Securities and Exchange Commission (the "Commission") on
Form S-3 promulgated under the Securities Act.
(m) In consideration for services rendered by the Placement Agent in
placing the Securities, the Company has agreed to pay the Placement Agent an
aggregate commission consisting of (x) a cash payment equal to 7.5% of the
Aggregate Purchase Price and any sums received by the Company as payment of the
Exercise Price (as such term is defined in the Warrant) for the Warrant Shares;
and (y) five-year warrants to purchase an aggregate 63,559 shares of Common
Stock at an exercise price of $5.90 per share (the "Placement Agent Warrants").
Other than as set forth herein, the Company has no other obligation to pay
brokers' fees or commissions by virtue of the sale of the Securities.
SECTION 4.
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4.1 Purchaser Representations and Warranties. The Purchaser hereby
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acknowledges, represents and warrants to, and agrees with, the Company and its
affiliates as follows:
(a) The Purchaser has received, read carefully and understands the
Documents and has had an adequate opportunity to consult his own attorney,
accountant or investment advisor (his "Advisors") with respect to the
suitability of the investment contemplated hereby for the Purchaser. The
Purchaser further acknowledges that the Purchaser and his Advisors have also
made such other investigation, review, examination and inquiry concerning the
Company and its business and affairs as they have deemed appropriate so as to
understand the nature of the investment in the Securities, the Warrant Shares
and the Dilution Shares (collectively, the "Aggregate Securities"), including
without limitation, the merits and risks thereof.
(b) The Purchaser is acquiring the Aggregate Securities for the
Purchaser's own account as principal, not as a nominee or agent, for investment
purposes only, and not with a view to, or for, resale, distribution or
fractionalization thereof in whole or in part in violation of the Securities
Act. Further, the Purchaser does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to the Aggregate Securities, for
which the Purchaser is subscribing.
(c) The Purchaser has full power and authority to enter into this
Subscription Agreement and the Registration Rights Agreement. The execution and
delivery of this Subscription Agreement and the Registration Rights Agreement
has been duly authorized by the Purchaser, and this Subscription Agreement
constitutes a valid and legally binding obligation of the Purchaser.
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(d) The Purchaser acknowledges the Purchaser's understanding that the
offering and sale of the Aggregate Securities is intended to be exempt from
registration under the Securities Act by virtue of Section 4(2) thereof and the
provisions of Regulation D promulgated thereunder ("Regulation D"). In
furtherance thereof, the Purchaser represents and warrants to and agrees with
the Company and its affiliates as follows:
(i) The Purchaser understands that the basis for the exemption from
registration may not be present if, notwithstanding such representations,
the Purchaser's intention is merely to acquire the Aggregate Securities for
a fixed or determinable period in the future, or for a market rise, or for
sale if the market does not rise. Accordingly, the Purchaser does not have
any such intention;
(ii) The Purchaser has the financial ability to bear the economic
risk of the Purchaser's investment, which is speculative in nature, has
adequate means for providing for the Purchaser's current needs and personal
contingencies and has no need for liquidity with respect to the Purchaser's
investment in the Company; and
(iii) The Purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
prospective investment in the Aggregate Securities. If other than an
individual, the Purchaser also represents it has not been organized for the
purpose of acquiring the Aggregate Securities.
(e) The Purchaser is an "accredited investor," as that term is defined in
Rule 501 of Regulation D (as described in Appendix I hereto).
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(f) The Purchaser has been advised by the Company that the Confidential
Private Placement Memorandum dated April 7, 2000 is outdated and has not been
updated by the Company, and the Purchaser has not relied on such Memorandum in
any way and to any extent whatsoever in its efforts to understand the nature of
the investment in the Aggregate Securities, including, without limitation, the
merits and risks thereof.
(g) The Purchaser:
(i) Has been furnished with copies of the Documents. The Purchaser
acknowledges and agrees that the Documents supercede all written
information regarding the Company that the Purchaser may have received
prior to the date of the Documents. The Purchaser has carefully read the
Documents and has relied solely (except as indicated in subsections (ii)
and (iii) below) on the information contained in the Documents (including
all exhibits thereto), provided, however, that the foregoing does not limit
or modify the representations and warranties of the Company contained in
Section 3 hereof or the right of the Purchaser to rely thereon;
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(ii) Has been provided an opportunity for a reasonable period of time
prior to the date hereof to obtain additional information concerning the
offering of the Aggregate Securities hereunder and the Company to the
extent the Company possesses such information or can acquire it without
unreasonable effort or expense;
(iii) Has been given the opportunity for a reasonable period of time
prior to the date hereof to ask questions of, and receive answers from, the
Company or its representatives concerning the terms and conditions of the
offering of the Aggregate Securities and other matters pertaining to this
investment, and has been given the opportunity for a reasonable period of
time prior to the date hereof to obtain such additional information
necessary to verify the accuracy of the information contained in the
Documents or that which was otherwise provided in order for the Purchaser
to evaluate the merits and risks of purchase of the Aggregate Securities to
the extent the Company possesses such information or can acquire it without
unreasonable effort or expense;
(iv) Has not been furnished with any oral representation or oral
information in connection with the offering of the Aggregate Securities
which is not contained herein or in the Documents; and
(v) Has determined that the Aggregate Securities are a suitable
investment for the Purchaser and that at this time the Purchaser could bear
a complete loss of such investment.
(h) The Purchaser is not relying on the Company or its affiliates with
respect to economic considerations involved in this investment.
(i) This offer is not transferable or assignable by the Purchaser unless
the Purchaser complies with the terms of transfer hereof. The Purchaser further
represents, warrants and agrees that the Purchaser will not sell or otherwise
transfer any of the Aggregate Securities issued in connection with the this
Subscription Agreement or the Warrant, without registration under the Securities
Act or an exemption therefrom, and that the Purchaser fully understands and
agrees that the Purchaser must bear the economic risk of the Purchaser's
purchase because, among other reasons, none of the Aggregate Securities have
been registered under the Securities Act or under the securities laws of any
state and, therefore, cannot be resold, pledged, assigned or otherwise disposed
of unless subsequently registered under the Securities Act and under the
applicable securities laws of such states or an exemption from such registration
is available. In particular, the Purchaser is aware that the Aggregate
Securities are "restricted securities," as such term is defined in Rule 144
promulgated under the Securities Act ("Rule 144"), and may not be sold pursuant
to Rule 144 unless all of the conditions of Rule 144 are met. The Purchaser
also understands that, except as otherwise provided in the Registration Rights
Agreement, the Company is under no obligation to register any of the Aggregate
Securities on the Purchaser's behalf or to assist the Purchaser in complying
with
-10-
any exemption from registration under the Securities Act or applicable state
securities laws. The Purchaser further understands that sales or transfers of
the Aggregate Securities are further restricted by state securities laws and the
provisions of this Subscription Agreement.
(j) No representations or warranties have been made to the Purchaser by
the Company, or any officer, employee, agent, affiliate or subsidiary of the
Company, other than the representations of the Company contained herein, and in
subscribing for the Aggregate Securities the Purchaser is not relying upon any
representations other than those contained herein.
(k) Any information which the Purchaser has heretofore furnished to the
Company with respect to the Purchaser's financial position and business
experience is correct and complete as of the date of this Subscription Agreement
and, if there should be any material change in such information, the Purchaser
will immediately furnish such revised or corrected information to the Company.
(l) The Purchaser understands and agrees that the certificates for the
Aggregate Securities shall bear the following legend, or a similar legend to the
same effect, until (i) the Shares, Warrant Shares and Dilution Shares shall have
been registered under the Securities Act pursuant to the Registration Rights
Agreement and effectively been disposed of in accordance with a registration
statement that has been declared effective; or (ii) in the opinion of counsel
for the Company such Aggregate Securities may be sold without registration under
the Securities Act or any applicable "Blue Sky" or state securities laws:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR
THE SECURITIES INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND ALL SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE
SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY
ARE EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO
COUNSEL FOR THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE,
TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION
UNDER THE ACT."
(m) The Purchaser's overall commitment to investments which are not
readily marketable is not disproportionate to the Purchaser's net worth, and an
investment in the Aggregate Securities pursuant to the offering hereunder will
not cause such overall commitment to become excessive.
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(n) The Purchaser: is not (i) a director, officer, or substantial security
holder of the Company (a "Related Party"), (ii) a subsidiary, affiliate or other
closely-related person of a Related Party, or (iii) any person, company or
entity in which a Related Party has a substantial direct or indirect interest.
(o) No Federal or state agency has made any findings or determination as
to the fairness of the offering of the Securities hereunder (or any part
thereof) for public investment, or any recommendation or endorsement of the
Aggregate Securities (or any part thereof).
SECTION 5.
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5.1 Modification. Neither this Subscription Agreement nor any provisions
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hereof shall be modified, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.
5.2 Notices. All notices, authorizations, consents, notices, waivers,
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demands, requests or other communications required or permitted to be given
under the terms of this Subscription Agreement shall be in writing and shall be
deemed to have been delivered (i) upon the date of delivery, if personally
delivered, (ii) one Business Day after deposit with a nationally-recognized
overnight courier with charges prepaid, or (iii) upon the date of transmission,
when sent by facsimile, provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party (if transmission
is completed by or before 5:00 p.m. Eastern Time) or the first Business Day
following such transmission if completed after 5:00 p.m. Eastern Time. Notices
shall be addressed as follows:
If to the Company, to:
Orthovita, Inc.
00 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
President and Chief Executive Officer
Fax: 000-000-0000
With copies (which copies shall not constitute notice) to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxx, Esquire
Fax: 000-000-0000
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If to the Purchaser, to:
Xxxxx Xxxxxxx Partners I Ltd.
c/x Xxxxx Xxxxxxx Asset Management LLC
Carnegie Hall Tower
000 Xxxx 00/xx/ Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Managing Principal,
Chief Operating Officer and General Counsel
Fax: 000-000-0000
With copies (which copies shall not constitute notice) to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxx, Esquire
Fax: 000-000-0000
or to such other address as the party to whom the notice is to be given may have
furnished to the other party hereto in writing in accordance with the provisions
of this Section 5.2.
5.3 Counterparts. This Subscription Agreement may be executed through the
------------
use of separate signature pages or in any number of counterparts (and by
facsimile signature), and each of such counterparts shall, for all purposes,
constitute one agreement binding on all parties, notwithstanding that all
parties are not signatories to the same counterpart.
5.4 Binding Effect. Except as otherwise provided herein, this
--------------
Subscription Agreement shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors, legal
representatives and assigns. If the Purchaser is more than one person, the
obligation of the Purchaser shall be joint and several and the agreements,
representations, warranties and acknowledgments herein contained shall be deemed
to be made by and be binding upon each such person and his heirs, executors,
administrators and successors.
5.5 Severability. In the event that any provision of this Subscription
------------
Agreement shall be deemed to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
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5.6 Entire Agreement. This Subscription Agreement and the documents
----------------
referenced herein contain the entire agreement of the parties and there are no
representations, covenants or other agreements except as stated or referred to
herein and therein.
5.7 Assignability. This Subscription Agreement is not transferable or
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assignable by the Purchaser.
5.8 Applicable Law. This Subscription Agreement shall be governed by and
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construed in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles of such State.
5.9 Pronouns. The use herein of the masculine pronouns "he," "him" or
--------
"his" or similar terms shall be deemed to include the feminine and neuter
genders as well and the use herein of the singular pronoun shall be deemed to
include the plural as well.
5.10 Survival. The respective indemnities, representations, warranties and
--------
agreements of the Company and the Purchaser contained in this Subscription
Agreement or made by or on behalf on them, respectively, pursuant to this
Subscription Agreement, shall survive the delivery of and payment for the
Securities and shall remain in full force and effect regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
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IN WITNESS WHEREOF, the parties hereto have executed this Subscription Agreement
as of this 22nd day of August 2000.
Number of Shares of Common Stock subscribed for: 508,475 .
---------------
Amount of check enclosed or wire transfer: $ 3,000,000.--.
---------------
Date: August 22, 2000 Xxxxx Xxxxxxx Partners I, Ltd
--------------------------------------------
(Print Name of Entity)
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Attorney-in-Fact
Date: August 22, 2000 ORTHOVITA, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
President and Chief Executive Officer
Appendix I
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Pursuant to Rule 501 of Regulation D promulgated under the Securities Act,
an accredited investor means:
(a) Any bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity; any broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934; any
insurance company as defined in Section 2(13) of the Securities Act;
any investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section 2(a)(48)
of that act; any Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958; any plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
$5,000,000; any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of
such act, which is either a bank, savings and loan association,
insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of $5,000,000, or, if
a self-directed plan, with investment decision made solely by persons
that are accredited investors;
(b) Any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(c) Any organization described in Section 501(c)(3) of the Internal
Revenue Code (the "Code"), corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of
$5,000,000;
(d) Any director or executive officer of the Company;
(e) Any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase exceeds
$1,000,000;
(f) Any natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and who
reasonably expects to reach the same income level in the current year;
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(g) Any trust, with assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase
is directed by a person having such knowledge and experience in
financial and business matters so such person is capable of evaluating
the merits and risks of the investment to be made; or
(h) Any entity in which all of the equity owners are accredited investors.
In addition, a participant in a defined contribution or profit sharing plan
qualified under Section 401 of the Code may be deemed the purchaser of the
Common Stock for the purpose of determining whether the plan is an accredited
investor if the following conditions are satisfied: (x) the plan trust must
provide for segregated accounts for each plan participant, (y) the plan document
must provide the participant with the power to direct the trustee to make each
particular investment to the extent of the participant's voluntary contributions
plus that portion of employer contributions that have vested to the
participant's benefit and (z) the investment in the Securities must have been
made pursuant to an exercise by the participant of the power to direct the
investment of his or her account in the plan trust.
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EXHIBIT A
FORM OF WARRANT
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EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
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EXHIBIT C
FORM OF PURCHASE RIGHTS NOTICE
To: ORTHOVITA, INC.
00 XXXXX XXXXXX XXXXXXX
XXXXXXX, XX 00000
Pursuant to Section 1.4 of the Subscription Agreement (the "Subscription
Agreement") dated as of August 22, 2000 between the undersigned and Orthovita,
Inc., the undersigned hereby elects to purchase _______________ shares of Common
Stock (the "Dilution Shares") at a purchase price of $0.01 per share for an
aggregate purchase price of $______________ (the "Aggregate Dilution Share
Price"). Payment in full of the Aggregate Dilution Share Price has been or is
being made simultaneous with the delivery of this Notice in accordance with the
provisions of Section 1.4(d) of the Subscription Agreement. In connection with
the purchase of the Dilution Shares, the undersigned ratifies and confirms that
the representations and warranties it made in Section 4 in the Subscription
Agreement with respect to its acquisition of the Dilution Shares are true and
correct as of the date hereof. Certificates representing the Dilution Shares
should be in the name of the undersigned and delivered to:
________________________________________________________________________________
___________________________________________________________________________.
Dated: ________________________ Xxxxx Xxxxxxx Partners I, Ltd.
By: __________________________
Name:
Title:
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