Exhibit 10.48
Xxxxx Instruments Corp.
Up to 3,296,000 Shares of Common Stock
SUBSCRIPTION AGREEMENT
----------------------
October 22, 2002
TO EACH OF THE PURCHASERS NAMED ON THE
SIGNATURE PAGES HEREOF
Ladies and Gentlemen:
Xxxxx Instruments Corp., a Delaware corporation (the
"COMPANY"), hereby confirms its agreement with you (the "PURCHASERS"), as set
forth below.
1. THE SHARES. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to each Purchaser the number
of shares of its Common Stock, par value $0.01 per share (the "Common Stock"),
set forth on the signature page of such Purchaser hereto (collectively, the
"Shares").
The Shares will be offered and sold to the Purchasers without
such offers and sales being registered under the Securities Act of 1933, as
amended (together with the rules and regulations of the Securities and Exchange
Commission (the "COMMISSION") promulgated thereunder, the "SECURITIES ACT"), in
reliance on exemptions therefrom.
In connection with the sale of the Shares, the Company has
made available its periodic reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (together with
the rules and regulations of the COMMISSION promulgated thereunder, the
"EXCHANGE ACT") since January 1, 2002. These reports and filings are
collectively referred to as the "DISCLOSURE DOCUMENTS". All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included" or "stated" in the Disclosure Documents (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Disclosure Documents.
The Purchasers and their direct and indirect transferees of
the Shares will be entitled to the benefits of the Registration Rights Agreement
to be dated as of the date hereof among the parties hereto (the "REGISTRATION
RIGHTS AGREEMENT") pursuant to which the Company has agreed, among other things,
to file a shelf registration statement (the "SHELF REGISTRATION STATEMENT")
pursuant to Rule 415 under the Securities Act relating to the resale of the
Shares (as defined herein) by holders thereof.
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The Registration Rights Agreement, the Engagement Letter dated
August 21, 2002 with Xxxx Capital Partners, LLC, and this Agreement are herein
collectively referred to as the "BASIC DOCUMENTS".
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with each Purchaser that:
(a) The Disclosure Documents as of their respective
dates did not, and any amendment or supplement thereto as of its date did not,
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Disclosure Documents, at the
time they were filed with the Commission, complied in all material respects with
the requirements of the Securities Act and/or the Exchange Act, as the case may
be (collectively, the "SECURITIES ACTS"), as applicable.
(b) Each of the Company and its subsidiaries (the
"SUBSIDIARIES") has been duly incorporated and each of the Company and the
Subsidiaries is validly existing in good standing as a corporation under the
laws of its jurisdiction of incorporation, with the requisite corporate power
and authority to own its properties and conduct its business as now conducted as
described in the Disclosure Documents and is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified is not
reasonably likely to have a material adverse effect on the business, condition
(financial or otherwise), business prospects or results of operations of the
Company and the Subsidiaries, taken as a whole (any such event, a "MATERIAL
ADVERSE EFFECT"); as of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Disclosure Documents
(subject to the issuance of shares pursuant to this Agreement or pursuant to
options outstanding under the Company's stock option plans or outstanding
warrants or other rights to acquire shares described in the Disclosure
Documents); all of the outstanding shares of capital stock of the Company and
the Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive or similar
rights; except as set forth in the Disclosure Documents, all of the outstanding
shares of capital stock of the Subsidiaries are owned, directly or indirectly,
by the Company; the shares of capital stock of the Company and the Subsidiaries
that are reserved for issuance pursuant to stock option plans or other equity
incentive plans is as set forth in the Disclosure Documents; and except as may
be outstanding under stock option plans or other equity incentive plans that are
described in the Disclosure Documents, there are no outstanding options,
warrants or other rights to purchase shares of capital stock of the Company or
the Subsidiaries.
(c) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under the Basic
Documents. Each of the Basic Documents has been duly and validly authorized by
the Company and, when executed and delivered by the Company, will constitute a
valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms except as (i) the enforcement thereof may
be limited by (A) bankruptcy, insolvency, reorganization, fraudulent conveyance,
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moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally or (B) general principles of equity and
the discretion of the court before which any proceeding therefore may be brought
(regardless of whether such enforcement is considered in a proceeding at law or
in equity) (collectively, the "ENFORCEABILITY EXCEPTIONS"), and (ii) any rights
to indemnity, or contribution under the Registration Rights Agreement may be
limited by federal and state securities laws and public policy considerations.
(d) The Shares have been duly authorized and, when
issued upon payment thereof in accordance with this Agreement, will have been
validly issued, fully paid and nonassessable. The capital stock of the Company,
including the Common Stock, conforms to the description thereof contained in the
Disclosure Documents. The stockholders of the Company have no preemptive or
similar rights with respect to the Common Stock.
(e) No consent, approval, authorization, license,
qualification, exemption or order of any court or governmental agency or body or
third party is required for the performance of the Basic Documents by the
Company or for the consummation by the Company of any of the transactions
contemplated thereby, or the application of the proceeds of the issuance of the
Shares as described in the Disclosure Documents, except for such consents,
approvals, authorizations, licenses, qualifications, exemptions or orders (i) as
have been obtained on or prior to the Closing Date, (ii) as are not required to
be obtained on or prior to the Closing Date that will be obtained when required,
or (iii) the failure to obtain which would not, individually or in the
aggregate, have a Material Adverse Effect; all such consents, approvals,
authorizations, licenses, qualifications, exemptions and orders set forth in the
Disclosure Documents which are required to be obtained by the Closing Date will
be in full force and effect as of the Closing Date and not the subject of any
pending or, to the best knowledge of the Company, threatened attack by appeal or
direct proceeding or otherwise.
(f) None of the Company or the Subsidiaries is (i) in
violation of its certificate of incorporation or bylaws (or similar
organizational document), (ii) in breach or violation of any statute, judgment,
decree, order, rule or regulation applicable to it or any of its properties or
assets, or (iii) in default (nor has any event occurred which with notice or
passage of time, or both, would constitute a default) in the performance or
observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate or agreement or instrument to
which it is a party; which breach, violation, or default (with respect to any of
clauses (i) - (iii) of this Section 2(f)) would, individually or in the
aggregate, have a Material Adverse Effect.
(g) The execution, delivery and performance by the
Company of the Basic Documents and the consummation by the Company of the
transactions contemplated thereby and the fulfillment of the terms thereof will
not (a) violate, conflict with or constitute or result in a breach of or a
default under (or an event that, with notice or lapse of time, or both, would
constitute a breach of or a default under) any of (i) the terms or provisions of
any contract, indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate or agreement or instrument to
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which any of the Company or the Subsidiaries is a party or to which any of their
respective properties or assets are subject, (ii) the certificate of
incorporation or bylaws of any of the Company or the Subsidiaries (or similar
organizational document) or (iii) any statute, judgment, decree, order, rule or
regulation of any court or governmental agency or other body applicable to the
Company or the Subsidiaries or any of their respective properties or assets or
(b) result in the imposition of any lien upon or with respect to any of the
properties or assets now owned or hereafter acquired by the Company or any of
the Subsidiaries; which violation, conflict, breach, default or lien (with
respect to any of clauses (a) or (b) of this Section 2(g)) would, individually
or in the aggregate, have a Material Adverse Effect.
(h) The audited consolidated financial statements
included in the Disclosure Documents present fairly the consolidated financial
position, results of operations, cash flows and changes in stockholders' equity
of the Company, at the dates and for the periods to which they relate and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis; the interim unaudited consolidated financial
statements included in the Disclosure Documents present fairly the consolidated
financial position, results of operations and cash flows of the Company, at the
dates and for the periods to which they relate, subject to year-end audit
adjustments, and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis with the audited
consolidated financial statements included therein; the selected financial and
statistical data included in the Disclosure Documents present fairly the
information shown therein and have been prepared and compiled on a basis
consistent with the audited financial statements included therein, except as
otherwise stated therein; and PricewaterhouseCoopers LLP, which has examined
certain of such financial statements as set forth in its report included in the
Disclosure Documents, is an independent public accounting firm as required by
the Securities Act for an offering registered thereunder.
(i) Except as described in the Disclosure Documents,
there is not pending or, to the best knowledge of the Company, threatened any
action, suit, proceeding, inquiry or investigation, governmental or otherwise,
to which any of the Company or the Subsidiaries is a party, or to which their
respective properties or assets are subject, before or brought by any court,
arbitrator or governmental agency or body, that, if determined adversely to the
Company or any such Subsidiary, would, individually or in the aggregate, have a
Material Adverse Effect or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Shares to be
sold hereunder or the application of the proceeds therefrom or the other
transactions described in the Disclosure Documents.
(j) None of the Company or the Subsidiaries has, or,
after giving effect to the issuance and sale of the Shares, will have, any
liability for any prohibited transaction (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "CODE")),
accumulated funding deficiency (as defined in Section 302 of ERISA) or any
complete or partial withdrawal from a multiemployer plan (as defined in Section
4001(a)(3) of ERISA), with respect to any plan (as defined in Section 3(3) of
ERISA) as to which the Company or any of the Subsidiaries has any liability.
With respect to such plans, the Company and the Subsidiaries are, and, after
giving effect to the issuance and sale of the Shares, will be, in compliance in
all material respects with all applicable provisions of the Code and ERISA.
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(k) The Company and the Subsidiaries own or possess
adequate licenses or other rights to use all patents, trademarks, service marks,
trade names, copyrights and know-how that are necessary to conduct their
businesses as described in the Disclosure Documents. Except as disclosed in the
Disclosure Documents, none of the Company or the Subsidiaries has received any
written notice of infringement of or conflict with (or knows of any such
infringement of or conflict with) asserted rights of others with respect to any
patents, trademarks, service marks, trade names, copyrights or know-how that, if
such assertion of infringement or conflict were sustained, would, individually
or in the aggregate, have a Material Adverse Effect.
(l) Each of the Company and the Subsidiaries
possesses all licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals presently required or necessary
to own or lease, as the case may be, and to operate its respective properties
and to carry on its respective businesses as now or proposed to be conducted as
set forth in the Disclosure Documents ("PERMITS"), except where the failure to
obtain such Permits would not, individually or in the aggregate, have a Material
Adverse Effect; each of the Company and the Subsidiaries has fulfilled and
performed all of its obligations with respect to such Permits and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other impairment of the rights of the
holder of any such Permit, except where such revocation, termination or
impairment would not, individually or in the aggregate, have a Material Adverse
Effect; and none of the Company or the Subsidiaries has received any written
notice of any proceeding relating to revocation or modification of any such
Permit, except as described in the Disclosure Documents and except where such
revocation or modification would not, individually or in the aggregate, have a
Material Adverse Effect.
(m) Subsequent to the respective dates as of which
information is given in the Disclosure Documents and except as described
therein, (i) the Company and the Subsidiaries have not incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business, (ii) the Company and the
Subsidiaries have not purchased any of their respective outstanding capital
stock, or declared, paid or otherwise made any dividend or distribution of any
kind on any of their respective capital stock or otherwise (other than, with
respect to any of such Subsidiaries, the purchase of, or a dividend or
distribution on, capital stock owned by the Company), (iii) there has not been
any material change in the capital stock or any increase in the long-term
indebtedness of the Company or any of the Subsidiaries, (iv) there has not
occurred any event or condition, individually or in the aggregate, that has a
Material Adverse Effect and (v) the Company and the Subsidiaries have not
sustained any material loss or interference with respect to their respective
businesses or properties from fire, flood, hurricane, earthquake, accident or
other calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding.
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(n) There are no legal or governmental proceedings
nor are there any contracts or other documents required by the Securities Act to
be described in a prospectus that are not described in the Disclosure Documents.
Except as described in the Disclosure Documents, none of the Company or the
Subsidiaries is in default under any of the contracts described in the
Disclosure Documents, has received a notice or claim of any such default or has
knowledge of any breach of such contracts by the other party or parties thereto,
except such defaults or breaches as would not, individually or in the aggregate,
have a Material Adverse Effect.
(o) Each of the Company and the Subsidiaries has good
title to all real property described in the Disclosure Documents as being owned
by it and valid and enforceable leases for all real property described therein
as being leased by it, free and clear of all liens, charges, encumbrances or
restrictions, except, in each case, as described in the Disclosure Documents or
such as would not, individually or in the aggregate, have a Material Adverse
Effect. All leases, contracts and agreements, including those referred to in the
Disclosure Documents, to which the Company or any of the Subsidiaries is a party
or by which any of them is bound are, to the knowledge of the Company, valid and
enforceable against the other party or parties thereto, except where the
invalidity or unenforceability would not, individually or in the aggregate, have
a Material Adverse Effect.
(p) Each of the Company and the Subsidiaries has
filed all necessary federal, state and foreign income and franchise tax returns,
except where the failure to so file such returns would not, individually or in
the aggregate, have a Material Adverse Effect, and has paid all taxes shown as
due thereon; and other than tax deficiencies which the Company or any Subsidiary
is contesting in good faith and for which adequate reserves have been provided
in accordance with generally accepted accounting principles, there is no tax
deficiency that has been asserted against the Company or any Subsidiary that
would, individually or in the aggregate, have a Material Adverse Effect.
(q) For purposes of this Agreement, the following
terms shall have the following meanings: "ENVIRONMENTAL LAW" means any federal,
state, local or municipal statute, law, rule, regulation, ordinance, code,
policy or rule of common law and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment binding on any of the Company or the Subsidiaries, relating to
pollution or protection of the environment, natural resources or health or
safety including, without limitation, any relating to the release or threatened
release of any pollutant, contaminated substance, material, waste, chemical or
contaminant subject to regulation thereunder. Except as disclosed in the
Disclosure Documents and except as would not, individually or in the aggregate,
have a Material Adverse Effect, (A) each of the Company and the Subsidiaries is
in compliance with all, and is not subject to liability (including, without
limitation, fines or penalties) under any, applicable Environmental Laws, (B)
each of the Company and the Subsidiaries has made all filings and provided all
notices required under any applicable Environmental Law, and has all permits,
authorizations and approvals required under any applicable Environmental Laws
and is in compliance with their requirements, (C) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice of violation,
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investigation, proceeding, notice or demand letter or request for information
pending or, to the best knowledge of the Company, threatened against the Company
or any of the Subsidiaries under any Environmental Law, (D) no lien, charge,
encumbrance or restriction has been recorded under any Environmental Law with
respect to any assets, facility or property owned, operated, leased or
controlled by the Company or any of the Subsidiaries, (E) neither the Company
nor any of the Subsidiaries is subject to any order, decree or agreement
requiring, or is otherwise obligated or required to perform any response or
corrective action relating to any hazardous material, (F) neither the Company
nor any of the Subsidiaries has received written notice that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any comparable state law, (G) no property or facility of the
Company or any of the Subsidiaries is (i) listed or proposed for listing on the
National Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation and Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority and (H) there are no past or present
actions, events, operations or activities which could reasonably be expected to
prevent or interfere with compliance by the Company or any Subsidiary with any
applicable Environmental Law or to result in liability (including, without
limitation, fines or penalties) under any applicable Environmental Law.
(r) None of the Company or the Subsidiaries is, or
immediately after the Closing Date will be, required to register as an
"investment company" or a company "controlled by" an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "INVESTMENT
COMPANY ACT").
(s) None of the Company or the Subsidiaries or any of
such entities' directors, officers, employees, agents or controlling persons has
taken, directly or indirectly, any action designed, or that might reasonably be
expected, to cause or result, under the Securities Acts or otherwise, in, or
that has constituted, stabilization or manipulation of the price of the Shares.
(t) None of the Company, the Subsidiaries or any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of any "security" (as
defined in the Securities Act) which is or could be integrated with the sale of
the Shares in a manner that would require the registration under the Securities
Act of the Shares or (ii) engaged in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
in connection with the offering of the Shares or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act.
Assuming the accuracy of the representations and warranties of the Purchasers in
Section 8 hereof, it is not necessary in connection with the offer, sale and
delivery of the Shares to the Purchasers in the manner contemplated by this
Agreement to register any of the Shares under the Securities Act.
(u) Except as set forth in the Disclosure Documents,
there is no strike, labor dispute, slowdown or work stoppage with the employees
of the Company or any of the Subsidiaries which is pending or, to the best
knowledge of the Company, threatened.
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(v) Each of the Company and the Subsidiaries carries
insurance (including self-insurance) in such amounts and covering such risks as
in its reasonable determination is adequate for the conduct of its business and
the value of its properties.
(w) The Company (i) makes and keeps accurate books
and records and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability for its
assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(x) No holder of securities of the Company or any
Subsidiary will be entitled to have such securities (excluding the Shares)
registered under the Shelf Registration Statement.
(y) Except the fee payable to Xxxx Capital Partners,
LLC ("XXXX"), the Company does not know of any claims for services, either in
the nature of a finder's fee or financial advisory fee, with respect to the
offering of the Shares.
(z) The Common Stock is listed on the Nasdaq National
Market. The Company currently is not in violation of, and the consummation of
the transactions contemplated by the Basic Documents, will not violate, any rule
of the National Association of Securities Dealers, except that the Company may
issue the Shares prior to expiration of the full 15 day notice period set forth
in Section 4310(c)(17) of the NASD Manual.
(aa) The Company is eligible to use Form S-3 for the
resale of the Shares by Purchasers or their transferees. Any certificate signed
by any officer of the Company or any Subsidiary and delivered pursuant to this
Agreement shall be deemed a joint and several representation and warranty by the
Company to each Purchaser as to the matters covered thereby.
(bb) None of the Company, any of its Subsidiaries, or
to the Company's knowledge, any of its directors or officers (or any person
acting on behalf of the Company's directors or officers), has (i) made, paid or
received any unlawful bribes, kickbacks, stolen property or other similar
payments to or from any person or governmental authority, or (ii) made any
improper foreign payment (as defined in the Foreign Corrupt Practices Act).
(cc) Except as disclosed in Disclosure Documents,
none of the officers, directors, or, to the knowledge of the Company's officers,
the employees of the Company or any Subsidiary is presently a party to any
transaction with the Company or a Subsidiary or to a presently contemplated
transaction (other than for services as employees, officers and directors) that
would be required to be disclosed pursuant to Item 404 of Regulation S-K
promulgated under the Securities Act.
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3. AGREEMENT TO SELL AND PURCHASE THE SHARES.
(a) Subject to the terms of this Agreement, at the
Closing (as defined in Section 4(a)), the Company agrees to sell to each
Purchaser, and each Purchaser agrees to purchase from the Company, the number of
Shares set forth next to such Purchaser's signature on the counterpart execution
page hereof, at a purchase price of $2.40 per Share.
(b) Each Purchaser shall severally, and not jointly,
be liable for only the purchase of the number of Shares that appears next to
such Purchaser's signature on the counterpart execution page hereof. The
Company's agreement with each of the Purchasers is a separate agreement, and the
sale of Shares to each of the Purchasers is a separate sale. Except as provided
in Section 6(g), the obligations of each Purchaser hereunder are expressly not
conditioned on the purchase by any or all of the other Purchasers of the Shares
such other Purchasers have agreed to purchase.
(c) Each Purchaser understands and agrees that the
Company, in its sole discretion, reserves the right to accept or reject, in
whole or in part, any proposed purchase of Shares. The Company shall have no
obligation hereunder with respect to any Purchaser until the Company shall
execute and deliver to such Purchaser an executed copy of this Agreement. If
this Agreement is not executed and delivered by the Company or the offering is
terminated, this Agreement shall be of no further force and effect.
4. CLOSING; DELIVERY OF SHARES AT CLOSING.
(a) The closing of the purchase and sale of the
Shares pursuant to this Agreement (the "CLOSING") shall be held at 10:00 a.m.
(Pacific Time) on the date (the "CLOSING DATE") that all of the conditions to
closing set forth in Section 6 and Section 7 have been satisfied or waived by
the party in whose favor such conditions run, at the offices of O'Melveny &
Xxxxx LLP, located at 000 Xxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx, or on such
other date and place as may be agreed to by the Company and the Purchasers.
(b) At the Closing, the Company shall deliver to each
Purchaser stock certificates registered in the name of such Purchaser, or in
such nominee name(s) as designated by such Purchaser, representing the Shares to
be purchased by such Purchaser at the Closing, against payment by or on behalf
of the Purchasers, of the purchase price therefore by wire transfer of
immediately available funds to the account of the Company previously designated
to it by the Company in writing. The name(s) in which the stock certificates are
to be issued to each Purchaser as well as the number of Shares to be purchased
by each Purchaser are set forth in the Purchaser's counterpart execution page
hereto, as completed by each Purchaser.
5. CERTAIN COVENANTS. The Company covenants and agrees with
each Purchaser that:
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(a) None of the Company or any of its Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any "security" (as defined in the Securities Act) which would be integrated
with the sale of the Shares in a manner which would require the registration
under the Securities Act of the Shares.
(b) The Company will apply the net proceeds from the
sale of the Shares to pay a portion of the purchase price due in connection with
the Company's pending acquisition of all of the outstanding capital stock of
Xxxxxxx Outdoor Corporation, a Delaware corporation, ("XXXXXXX").
(c) Except in connection with the filing of the Shelf
Registration Statement, the Company will not, and will not permit any of the
Subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
in connection with the offering of the Shares or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act.
(d) The Company will not become, at any time prior to
the expiration of three years after the Closing Date, an open-end investment
company, unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under Section 8 of
the Investment Company Act.
(e) The Company will file the additional listing
application for the Shares with the Nasdaq National Market prior to the Closing
Date and will use its best efforts to have the Shares listed on the Nasdaq
National Market on or prior to the effective date of the Shelf Registration
Statement.
(f) The Company will use its commercially reasonable
efforts to do and perform all things required to be done and performed by it
under this Agreement and the other Basic Documents prior to or after the Closing
Date and to satisfy all conditions precedent on its part to the obligations of
the Purchasers to purchase and accept delivery of the Shares.
6. CONDITIONS OF THE PURCHASERS' OBLIGATIONS. The obligation
of each Purchaser to purchase and pay for the Shares is subject to the following
conditions unless waived in writing by the relevant Purchaser:
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
(other than representations and warranties with a Material Adverse Effect
qualifier, which shall be true and correct as written) on and as of the Closing
Date; the Company shall have complied in all material respects with all
agreements and satisfied in all material respects all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date.
(b) None of the issuance and sale of the Shares
pursuant to this Agreement or any of the transactions contemplated by any of the
other Basic Documents shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued in respect
thereof; and there shall not have been any legal action, order, decree or other
administrative proceeding instituted or, to the Company's knowledge, threatened
against the Company or against any Purchaser relating to the issuance of the
Shares or any Purchaser's activities in connection therewith or any other
transactions contemplated by this Agreement or the other Basic Documents.
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(c) The Purchasers shall have received certificates,
dated the Closing Date and signed by the chief financial officer of the Company,
to the effect of Sections 6(a) and (b).
(d) On or before the Closing Date, the Purchasers
shall have received the Registration Rights Agreement executed by the Company
and such agreement shall be in full force and effect at all times from and after
the Closing Date, subject to the Enforceability Exceptions.
(e) On or before the Closing Date, the Nasdaq
National Market shall have provided verbal confirmation that no approvals are
needed from such organization in order to consummate the sale of the Shares as
contemplated herein.
(f) The Purchasers shall have received an opinion of
Xxxx X. Xxxxxxxx, Esq., counsel to the Company, with respect to the
authorization of the Shares and other customary matters in the form, with
respect to the opinions to be given, attached hereto as EXHIBIT A.
(g) The Company shall have issued and sold (or
concurrently issue and sell) at least 2,900,000 shares of its Common Stock to
the Purchasers at a purchase price of at least $2.40 per share.
7. CONDITIONS OF THE COMPANY'S OBLIGATIONS. The obligation of
the Company to issue the Shares is subject to the following conditions unless
waived in writing by the Company:
(a) None of the issuance and sale of the Shares
pursuant to this Agreement or any of the transactions contemplated by any of the
other Basic Documents shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued in respect
thereof; and there shall not have been any legal action, order, decree or other
administrative proceeding instituted or, to the Company's knowledge, threatened
against the Company or against any Purchaser relating to the issuance of the
Shares.
(b) On or before the Closing Date, the Nasdaq
National Market shall have provided verbal confirmation that no approvals are
needed from such organization in order to consummate the sale of the Shares as
contemplated herein.
(c) The closing of the Company's acquisition of
Xxxxxxx shall have occurred or shall concurrently occur with the Closing.
(d) The Company shall have issued and sold (or
concurrently issue and sell) at least 2,900,000 shares of its Common Stock to
the Purchasers at a purchase price of at least $2.40 per share.
11
8. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
(a) Each Purchaser, severally and not jointly and as
to itself only, represents and warrants to the Company that the Shares to be
acquired by it hereunder are being acquired for its own account for investment
(and/or on behalf of managed accounts who are purchasing solely for their own
accounts for investment) and with no intention of distributing or reselling such
Shares or any part thereof or interest therein in any transaction which would be
in violation of the securities laws of the United States of America or any
State, without prejudice, however, to a Purchaser's right, subject to the
provisions of this Agreement and the Registration Rights Agreement, at all times
to sell or otherwise dispose of all or any part of such Shares under an
effective registration statement under the Securities Act and in compliance with
applicable state securities laws or under an exemption from such registration,
and subject, nevertheless, to the disposition of a Purchaser's property being at
all times within its control. By executing this Agreement, each Purchaser
further represents that such Purchaser does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to any Person with respect to any of the Shares.
(b) Each Purchaser understands that the Shares have
not been registered under the Securities Act and may not be offered, resold,
pledged or otherwise transferred except (a) pursuant to an exemption from
registration under the Securities Act (and, if requested by the Company, based
upon an opinion of counsel acceptable to the Company) or pursuant to an
effective registration statement under the Securities Act and (b) in accordance
with all applicable securities laws of the states of the United States and other
jurisdictions.
Each Purchaser agrees to the imprinting, so long as
appropriate, of the following legend on the Shares:
THE SHARES OF COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
("TRANSFERRED") IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. IN THE ABSENCE OF SUCH REGISTRATION, SUCH SHARES
MAY NOT BE TRANSFERRED UNLESS, IF THE COMPANY REQUESTS, THE COMPANY HAS
RECEIVED A WRITTEN OPINION FROM COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE COMPANY STATING THAT SUCH TRANSFER IS BEING MADE IN
COMPLIANCE WITH ALL APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
The legend set forth above may be removed if and when (i) the
Shares are disposed of pursuant to an effective registration statement under the
Securities Act, (ii) a registration statement registering the resale of the
Shares under the Securities Act has been declared effective by the Commission,
(iii) the Shares become available for resale under Rule 144(k) under the
Securities Act, or (iv) in the opinion of counsel to the Company experienced in
the area of United States Federal securities laws such legends are no longer
required under applicable requirements of the Securities Act. The Shares shall
also bear any other legends required by applicable Federal or state securities
12
laws, which legends may be removed when in the opinion of counsel to the Company
experienced in the applicable securities laws, the same are no longer required
under the applicable requirements of such securities laws. The Company agrees
that it will provide each Purchaser, upon request, with a substitute Share
certificate, not bearing such legend at such time as such legend is no longer
applicable. Each Purchaser agrees that, in connection with any transfer of
Shares by it pursuant to an effective registration statement under the
Securities Act, such Purchaser will comply with all prospectus delivery
requirements of the Securities Act. The Company makes no representation,
warranty or agreement as to the availability of any exemption from registration
under the Securities Act with respect to any resale of Shares.
(c) Each Purchaser is an institutional investor that
is an accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.
(d) Each Purchaser, severally and not jointly and as
to itself only, represents and warrants to the Company that it has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the Shares, such Purchaser having been represented by counsel, and has so
evaluated the merits and risks of such investment and is able to bear the
economic risk of such investment and, at the present time, is able to afford a
complete loss of such investment.
(e) Each Purchaser, severally and not jointly and as
to itself only, represents and warrants to the Company that (i) the purchase of
the Shares to be purchased by it has been duly and properly authorized and this
Agreement has been duly executed and delivered by it or on its behalf and
constitutes the valid and legally binding obligation of such Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principals of equity; (ii) the purchase of the Shares
to be purchased by it does not conflict with or violate its charter, by-laws or
any law, regulation or court order applicable to it; and (iii) the purchase of
Shares to be purchased by it does not impose any penalty or other onerous
condition on such Purchaser under or pursuant to any applicable law or
governmental regulation.
(f) Each Purchaser, severally and not jointly and as
to itself only, represents and warrants to the Company that neither it nor any
of its directors, officers, employees, agents, or controlling persons has taken,
directly or indirectly, any actions designed, or might reasonably be expected to
cause or result, under the Securities Acts or otherwise, in, or that has
constituted, stabilization, or manipulation of the price of the shares.
(g) Each Purchaser acknowledges receipt of the
Disclosure Documents and further acknowledges that it has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Shares and the merits and risks of investing in the
Shares; (ii) access to information about the Company and the Company's financial
condition, results of operations, business, properties, management and prospects
13
sufficient to enable it to evaluate its investment in the Shares; and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without unreasonable effort or expense that is necessary to verify
the accuracy and completeness of the information contained in the Disclosure
Documents. The foregoing shall not limit each Purchaser's right to rely on the
Company's representations and warranties contained in this Agreement.
(h) Each Purchaser understands and acknowledges that
(i) the net proceeds from the sale of the Shares will be used by the Company to
fund a portion of the purchase price for the Company's acquisition of all of the
outstanding capital stock of Xxxxxxx, (ii) such Purchaser has been afforded the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the Xxxxxxx acquisition and the impact of such acquisition on the Company,
and (iii) neither financial statements or pro forma financial information with
respect to Xxxxxxx has been or will be made available to such Purchaser prior to
the Closing Date.
(i) Each Purchaser understands and acknowledges that
(i) the Shares are offered and sold without registration under the Securities
Act in a private placement that is exempt from the registration provisions of
the Securities Act and (ii) the availability of such exemption depends in part
on, and that the Company, its counsel and Xxxx will rely upon, the accuracy and
truthfulness of the foregoing representations and such Purchaser hereby consents
to such reliance.
9. SURVIVAL CLAUSE. The respective representations,
warranties, agreements and covenants of the Company and the Purchasers set forth
in this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, or any Purchaser and (ii) delivery of, payment for or disposition of
the Shares, and shall be binding upon and shall inure to the benefit of any
successors, assigns, heirs or personal representatives of the Company and the
Purchasers.
10. TERMINATION.
(a) Unless the Closing has first occurred, this
Agreement shall terminate on October 31, 2002. Except as provided in Section
10(d), upon termination of this Agreement pursuant to this Section 10(a),
neither the Company nor any of the Purchasers shall have any obligation to the
other under this Agreement.
(b) This Agreement may be terminated in the sole
discretion of the Company by notice to each Purchaser severally and not jointly
if at the Closing Date:
(i) the representations and warranties made
by such Purchaser in Section 8 are not true and
correct in all material respects; or
(ii) as to the Company, the sale of the
Shares hereunder is prohibited or enjoined by any
applicable law or governmental regulation.
14
(c) This Agreement may be terminated in the sole
discretion of any Purchaser by notice to the Company given in the event that the
Company shall have failed, refused or been unable to satisfy all conditions on
its part to be performed or satisfied hereunder on or prior to the Closing Date
or if after the execution and delivery of this Agreement and prior to the
Closing Date:
(i) trading in securities of the Company on
the NASDAQ National Market shall have been suspended;
(ii) a banking moratorium shall have been
declared by New York or United States authorities; or
(iii) there shall have been (A) an outbreak
or escalation of hostilities between the United
States and any foreign power, (B) an outbreak or
escalation of any other insurrection or armed
conflict involving the United States or any other
national or international calamity or emergency, or
(C) any material change in the financial markets of
the United States that, in the case of (A), (B) or
(C) above, in the sole judgment of any Purchaser,
makes it impracticable or inadvisable to proceed with
the delivery of the Shares as contemplated by this
Agreement.
(d) Nothing in this Section 10 shall be deemed to
release any party from any liability for any breach (prior to the termination of
this Agreement) by such party of the terms and provisions of this Agreement.
11. NOTICES. All communications hereunder shall be in writing
and, (i) if sent to a Purchaser, shall be hand delivered, mailed by first-class
mail, couriered by next-day air courier or telecopied and confirmed in writing
to their address on their signature page hereof and (ii) if sent to the Company,
shall be hand delivered, mailed by first-class mail, couriered by next-day air
courier or telecopied and confirmed in writing to Xxxxx Instruments Corp., 0000
Xxx Xxxxxx, Xxxxxx, XX 00000-0000, Attention: Legal Department, and with a copy
to J. Xxx Xxxxxx, Esq., O'Melveny & Xxxxx LLP, 000 Xxxxxxxx, Xxxxx 000,Xxxxxx,
XX 00000-0000.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one business
day after being timely delivered to a next-day air courier guaranteeing
overnight delivery; and when receipt is acknowledged by the addressee, if
telecopied.
12. SUCCESSORS. This Agreement shall not be assignable by any
Purchaser without the prior written consent of the Company, which consent shall
not be unreasonably withheld. This Agreement shall inure to the benefit of and
be binding upon each Purchaser and the Company and their respective permitted
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
15
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person. No purchaser of
Shares from any Purchaser will be deemed a successor because of such purchase.
13. NO WAIVER; MODIFICATIONS IN WRITING. No failure or delay
on the part of the Company or any Purchaser in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or any Purchaser at law or in
equity or otherwise. No waiver of or consent to any departure by the Company or
any Purchaser from any provision of this Agreement shall be effective unless
signed in writing by the party entitled to the benefit thereof, provided that
notice of any such waiver shall be given to each party hereto as set forth
below. Except as otherwise provided herein, no amendment, modification or
termination of any provision of this Agreement shall be effective unless signed
in writing by or on behalf of each of the Company and the relevant Purchaser.
Any amendment, supplement or modification of or to any provision of this
Agreement, any waiver of any provision of this Agreement, and any consent to any
departure by the Company or any Purchaser from the terms of any provision of
this Agreement shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement, no notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar or
other circumstances.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO PROVISIONS RELATING TO CONFLICTS OF LAW TO THE EXTENT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
16. 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.
16
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this Agreement shall constitute a binding agreement among the
Company and the Purchasers.
Very truly yours,
XXXXX INSTRUMENTS CORP.
By: /S/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President and
General Counsel
17
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
Accepted and Agreed
Number of Shares Purchased: ________
_________________________________ Total Investment: $_________________
Name of Purchaser (Print)
By: __________________________
Name:__________________
Title:_________________
Date: ____________________________
Address: ____________________________
____________________________
____________________________
Telephone:___________________________
Facsimile:___________________________
Please register Shares as follows:
Name: ____________________________
____________________________
____________________________
Tax I.D. Number of Person in whose name
the Shares are to be registered:
________________________________________
18
EXHIBIT A
---------
_________________________
(a) The Company has been duly incorporated, and is validly existing in
good standing under the laws of the State of Delaware, with corporate power to
own its properties and assets and to carry on its business as described in the
Disclosure Documents.
(b) Each corporation identified in the Company Certificate as a
subsidiary of the Company (the "Subsidiaries"), is validly existing in good
standing under the laws of its state of incorporation, with corporate power to
own its properties and assets and to carry on its business as described in the
Disclosure Documents.
(c) The authorized capital stock of the Company consists of 50,000,000
shares of common stock, $0.01 par value per share. To our knowledge, except as
set forth in the Registration Rights Agreement, no holder of securities of the
Company is entitled to have such securities registered under the Shelf
Registration Statement.
(d) The Shares have been duly authorized by all necessary corporate
action on the part of the Company and, upon payment for and delivery of the
Shares in accordance with the Subscription Agreement and the countersigning of
the certificate or certificates representing the Shares by a duly authorized
signatory of the registrar for the Company's Common Stock, the Shares will be
validly issued, fully paid and non-assessable, and will not be issued in
violation of any preemptive rights pursuant to any Material Agreement. Holders
of the capital stock of the Company are not entitled to any preemptive right to
subscribe to any additional shares of the Company's capital stock under the
Company's Certificate of Incorporation or By-laws or the corporate law of the
state of incorporation of the Company. The term "MATERIAL AGREEMENTS" shall mean
only those agreements to which the Company is a party and which are listed as an
exhibit to the Company's most recently filed Annual Report on Form 10-K and
Quarterly Report on Form 10-Q.
(e) The execution, delivery and performance of the Transaction
Documents have been duly authorized by all necessary corporate action on the
part of the Company, and the Transaction Documents have been duly executed and
delivered by the Company. The Subscription Agreement, the Engagement Letter and
the Registration Rights Agreement are herein collectively referred to as the
"TRANSACTION DOCUMENTS."
(f) Each of the Transaction Documents constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally (including, without limitation, fraudulent conveyance laws) and
by general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or at law.
A-1
(g) No order, consent, permit or approval of any California or federal
governmental authority that we have, in the exercise of customary professional
diligence, recognized as applicable to the Company or to transactions of the
type contemplated by the Transaction Documents is required on the part of the
Company for the execution and delivery of, and performance of its obligations
under, the Transaction Documents, except such consents, approvals,
authorizations, licenses, qualifications, exemptions or orders as may be
required under (i) the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and state securities or Blue Sky laws in connection with registration,
pursuant to the Registration Rights Agreement, of the resale of the Shares and
(ii) federal or state securities or Blue Sky laws in connection with the
issuance and sale of the Shares pursuant to the Subscription Agreement.
(h) The execution and delivery by the Company of the Transaction
Documents do not, and the Company's performance of its obligations under the
Transaction Documents will not, (i) violate the Company's Certificate of
Incorporation or By-laws, (ii) violate, breach, or result in a default under,
any existing obligation of or restriction on the Company under any Material
Agreement, or (iii) breach or otherwise violate any existing obligation of or
restriction on the Company under any order, judgment or decree of any California
or federal court or governmental authority binding on the Company identified in
the Company Certificate. We express no opinion as to the effect of the Company's
performance of its obligations in the Transaction Documents on the Company's
compliance with financial covenants in the Material Agreements.
(i) To our knowledge, except as described in the Disclosure Documents,
there is not pending or threatened any action, suit, proceeding, inquiry or
investigation, governmental or otherwise, that (i) seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or sale of the
Shares or the application of the proceeds therefrom by the Company in the manner
described in the Subscription Agreement or (ii) if determined adversely to the
Company, is reasonably likely to have a Material Adverse Effect.
(j) Assuming the accuracy of your representations in Section 8 of the
Subscription Agreement, it is not necessary in connection with the sale of the
Shares under the circumstances contemplated by the Subscription Agreement to
register the Shares under the Securities Act, it being understood that no
opinion is expressed as to any subsequent resale of any of the Shares. We
express no opinion as to the securities laws of any jurisdiction.
A-2
