EXHIBIT 10.01
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") made this ___ day of _________,
2003, by and among Derma Sciences, Inc., a Pennsylvania corporation with offices
located at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxxxx, 00000 ("Derma
Sciences" or "the Company") and , , and
(these latter individually, "Purchaser" and collectively, "Purchasers").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Company and each of the Purchasers agree as follows:
1. Authorization of Sale of the Common Stock. The Company has
authorized the sale of up to $2,000,000 in dollar amount of the Company's common
stock, par value $0.01 per share, ("Common Stock") at the price of $0.50 per
share pursuant to the terms and conditions of this Agreement.
2. Agreement to Sell and Purchase the Common Stock. At the Closing (as
defined in Section 4), the Company will sell and deliver to each Purchaser, and
each Purchaser will buy from the Company and accept delivery of, the Common
Stock at the price of $0.50 per share and upon the terms and conditions
hereinafter set forth:
2.1. Number and Dollar Amounts of the Common Stock. The number and
dollar amounts of the Common Stock to be purchased by each Purchaser are as
follows:
Purchaser Number of Shares Amount
____________________________ ______________ $________
____________________________ ______________ $________
____________________________ ______________ $________
2.2. Documents. This Agreement and all other agreements executed by the
Company and the Purchasers relative to the Common Stock are hereinafter
sometimes collectively referred to as the "Documents." The term Documents shall
mean this Agreement and the Registration Rights Agreement together with any
schedules or exhibits thereto.
2.3. Additional Purchasers. The Company may, but shall be under no
obligation to, sell the Common Stock upon the terms set forth in this Agreement
to purchasers in addition to those named in paragraph 2.1 hereinabove (these
latter individually, "Additional Purchaser" and collectively, "Additional
Purchasers"). The default of any Purchaser or Additional Purchaser under this
Agreement or any other agreement of like tenor for purchase of the Common Stock
shall not alter or affect the obligations of any other Purchaser or Additional
Purchaser hereunder or thereunder.
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3. Registration Rights. The Common Stock will be registered by the
Company for public sale. Terms and conditions governing registration of the
Common Stock are set forth in the Registration Rights Agreement attached hereto
as Exhibit 1.
4. Delivery of the Common Stock at the Closing. The completion of the
purchase and sale of the Common Stock (the "Closing") shall occur at a place and
time (the "Closing Date") to be determined by the Company and of which the
Purchasers will be notified by facsimile transmission or otherwise; provided,
however, that the Closing shall not occur later than May 31, 2003. At the
Closing, the Company shall deliver to each Purchaser one or more certificates
registered in the name of the Purchaser, or in such nominee name(s) as
designated by the Purchaser, representing the Common Stock purchased by such
Purchaser as set forth in section 2.1 hereof. The Company's obligation to
complete the purchase and sale of the Common Stock at the Closing shall be
subject to receipt of Federal Reserve (same-day) funds in the full amount of the
purchase price for the Common Stock being purchased hereunder by such Purchaser.
Each Purchaser's obligation to accept and to pay for the Common Stock shall be
subject to the condition that the Company shall have (a) entered into a
Registration Rights Agreement in the form of Exhibit 1 hereto (the "Registration
Rights Agreement") and (b) the accuracy in all material respects of the
representations and warranties made by the Company herein and the fulfillment in
all material respects of those undertakings of the Company to be fulfilled prior
to Closing.
5. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, each Purchaser as
follows:
5.1. Organization and Qualification. Each of the Company and its
subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to conduct its business as currently
conducted and to own its assets wherever located. Each of the Company and its
subsidiary is qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the operations of the Company and its subsidiary,
taken as a whole.
5.2. Due Execution, Delivery and Performance of the Agreement. The
Company has full power and authority to enter into this Agreement and each of
the Documents. This Agreement has been, and each Document and the Common Stock
will be, duly authorized, executed and delivered by the Company. The Company's
execution, delivery and performance of this Agreement and each Document will not
violate (i) any law, rule or regulation applicable to the Company or its
subsidiary or (ii) the Certificate of Incorporation or Bylaws of the Company or
its subsidiary or (iii) any provision of any indenture, mortgage, agreement,
contract or other instrument to which the Company or its subsidiary is a party
or by which the Company or its subsidiary or any of their properties or assets
is bound as of the date hereof, or result in a breach of or constitute (upon
notice or lapse of time or both) a default under any such indenture, mortgage,
agreement, contract or other instrument or result in the creation or imposition
of any lien, security interest, mortgage, pledge, charge or other encumbrance
upon any properties or assets of the Company or its subsidiary, except, in the
case of such clause (iii), where such violation, breach or default would not
have a material adverse effect on the business, properties, prospects, condition
(financial or otherwise), net worth or results of operations of the Company and
its subsidiary taken as a whole (a "Material Adverse Effect"). Upon their
execution and delivery (assuming the valid execution thereof by the respective
parties thereto other than the Company), this Agreement and the Documents will
constitute valid
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and binding obligations of the Company, enforceable in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
5.3. Issuance of the Common Stock. Upon issuance, the Common Stock will
be duly authorized and validly issued and, upon payment therefor, will be
non-assessable.
5.4. Litigation. There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened against or affecting the Company or
its subsidiary which might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiary, taken as a whole, or which
might materially and adversely affect their property or assets or which might
materially and adversely affect the consummation of this Agreement and the other
Documents. All pending legal or governmental proceedings to which the Company or
its subsidiary is a party or of which any of their property or assets is the
subject, including ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material to the business of the Company and its
subsidiary.
5.5. Exchange Act Reports; No Material Misstatement or Omission. The
Company has timely filed all periodic reports required to be filed under the
Securities Exchange Act of 1934 ("Exchange Act Reports"). As of their respective
dates, the Company's Exchange Act Reports do not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
5.6. No Material Change. Save as disclosed in the Company's Exchange
Act Reports, the Company has not incurred any material liabilities or
obligations, direct or contingent, nor has the Company or its subsidiary
purchased any of their outstanding capital stock, nor paid or declared any
dividends or other distributions on their capital stock; and there has been no
change in the capital stock or consolidated long-term debt or any increase in
the consolidated short-term borrowings (other than in the ordinary course of
business) of the Company or any material adverse change to the business,
properties, assets, net worth, condition (financial or other), results of
operations or prospects of the Company and its subsidiary, taken as a whole.
5.7. Legal Opinion. Prior to closing, Xxxxxx & Xxxxxx, counsel to the
Company, will deliver its legal opinion to the Company in the form of Exhibit 2
hereto and stating that each of the Purchasers may rely thereon as though such
opinion were addressed directly to such Purchaser.
5.8. Common Stock Legend. After the Registration Statement (as defined
in the Registration Rights Agreement) is declared effective by the Securities
and Exchange Commission, if any holder of Common Stock shall deliver to the
Company 's transfer agent (i) the certificate representing such Common Stock and
(ii) a letter of representations to the effect of Sections 6(b) and (c) herein,
then the Company's transfer agent shall within 3 business days after receipt of
the foregoing issue new Common Stock in exchange for the aforementioned legended
Common Stock which new Common Stock shall be legended as follows:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES MAY BE
SOLD PURSUANT TO THE REGISTRATION STATEMENT PROVIDED THAT THE
HOLDER COMPLIES WITH THE PROSPECTUS DELIVERY REQUIREMENTS UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE SALE IS IN
COMPLIANCE WITH THE PLAN OF DISTRIBUTION SET FORTH IN THE
PROSPECTUS.
5.9. Certificate. The Company shall deliver a certificate of the
Company executed by the Chairman of the Board or President and the chief
financial or accounting officer of the Company, to be dated the Closing Date, in
form and substance satisfactory to the Purchasers to the effect that the
representations and warranties of the Company set forth in this Section 5 are
true and correct as of the date of this Agreement and as of the Closing Date and
the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied on or prior to such Closing
Date.
6. Representations, Warranties and Covenants of the Purchaser. (a) Each
Purchaser represents and warrants to, and covenants with, the Company that: (i)
the Purchaser is know-ledgeable, sophisticated and experienced in making, and is
qualified to make, decisions with respect to investments presenting an
investment decision like that involved in the purchase of the Common Stock and
has requested, received, reviewed and considered all information he/she/it deems
relevant in making an informed decision to purchase the Common Stock; (ii) the
Purchaser is acquiring the Common Stock set forth in Section 2 above in the
ordinary course of his/her/its business and for his/her/its own account for
investment (as defined for purposes of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act of 1976 and the regulations thereunder) only and with no present
intention of distributing any of such Common Stock or any arrangement or
understanding with any other persons regarding the distribution or purchase of
such Common Stock; (iii) the Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Common Stock
except in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder and the
Exchange Act, and the rules and regulations promulgated thereunder, and the
terms and conditions of this Agreement; (iv) the Purchaser has, in connection
with his/her/its decision to purchase the Common Stock set forth in Section 2
above, read and considered the Company's Form 10-KSB for the year ended December
31, 2002, together with such other of the Company's Exchange Act Reports as the
Purchaser considered appropriate, and has relied solely upon the information
contained in the Company's Exchange Act Reports and the representations and
warranties of the Company contained in writing herein, and has not relied upon
any other statements, representations, warranties, covenants or assurances of
the Company, (v) the Purchaser is an "accredited investor" within the meaning of
Rule 501 of Regulation D promulgated under the Securities Act ("Regulation D");
and (vi) the Purchaser understands that the Common Stock, except as provided in
Section 5.8 hereof, will contain a legend to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF EITHER AN
EFFECTIVE
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REGISTRATION STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT. THESE SECURITIES ARE SUBJECT TO
CERTAIN REGISTRATION RIGHTS AS SET FORTH IN A REGISTRATION RIGHTS
AGREEMENT A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
(b) Each Purchaser hereby covenants with the Company that he/she/it
will not directly or indirectly make any offer, sale, pledge, transfer or other
disposition of the Common Stock other than in accordance with all applicable
federal and state securities laws and the terms and conditions of this
Agreement, including, but not limited to, the other representations, warranties
and covenants of the Purchaser in this Section 6.
(c) Each Purchaser hereby covenants with the Company not to make any
public sale of the Common Stock without effectively causing any applicable
prospectus delivery requirement under the Securities Act to be satisfied, and
the Purchaser acknowledges and agrees that the Common Stock is not transferable
on the books of the Company unless the certificate submitted to the transfer
agent evidencing the Common Stock is accompanied by a separate officer's
certificate: (i) executed by an officer of, or other authorized person
designated by, the Purchaser, and (ii) to the effect that (A) the Common Stock
has been sold in accordance with a Registration Statement and (B) the
requirement of delivering a current prospectus has been satisfied or does not
apply.
(d) Each Purchaser further represents and warrants to, and covenants
with, the Company that (i) the Purchaser has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) upon the
execution and delivery of this Agreement, this Agreement shall constitute a
valid and binding obligation of the Purchaser enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(e) Each Purchaser acknowledges that he/she/it has had such access to
financial and other information concerning the Company and the Common Stock as
he/she/it deemed necessary in connection with his/her/its decision to purchase
same, including an opportunity to ask questions and request information from the
Company and its management, and all such questions have been answered and all
information requested has been provided to the satisfaction of the Purchaser.
(f) If a Purchaser proposes to sell, pledge, assign or otherwise
transfer or convey, directly or indirectly, any of the Common Stock prior to the
date that the Registration Statement becomes effective, then the Purchaser shall
provide the Company, prior to the sale of any such Common Stock, with a legal
opinion in form and substance satisfactory to the Company that such sale,
pledge, assignment, transfer or conveyance is exempt from the registration
requirements under the Securities Act and any applicable state securities and
blue sky laws.
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7. Survival of Representations, Warranties and Agreements.
Notwithstanding any representation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchasers in writing herein and in the closing certificates delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Purchasers of the Common Stock being purchased and the payment therefor.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be by telecopier with the original being
forwarded by a nationally recognized overnight express courier, shall be deemed
given when receipt is acknowledged by transmit confirmation report and shall be
addressed as set forth at the head of this Agreement or to such other address as
may hereafter be furnished in writing.
9. Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and each Purchaser.
10. Headings. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
11. Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania (without reference
to its rules as to conflicts of law) and the federal law of the United States of
America.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties. Facsimile signatures are considered to be
originals and shall have the same effect.
14. Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
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IN WITNESS WHEREOF, the Purchasers and the Company have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
COMPANY:
DERMA SCIENCES, INC.
By:________________________________
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
PURCHASERS:
________________________________
________________________________
________________________________
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