Exhibit 10.1
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "Agreement") is entered into as of the
date set forth on the signature page hereof by and between Convera Corporation,
a Delaware corporation (together with its successors and permitted assigns, the
"Issuer"), and the undersigned investor (together with its successors and
permitted assigns, the "Investor"). Capitalized terms used but not otherwise
defined herein shall have the meanings set forth in Section 9.1.
RECITALS
Subject to the terms and conditions of this Agreement, the Investor desires
to subscribe for and purchase, and the Issuer desires to issue and sell to the
Investor, certain shares of the Issuer's common stock, par value $.01 per share
(the "Common Stock"). The Issuer is offering up to $30 million worth of shares
of Common Stock in a private placement to the Investor and other investors at a
purchase price of at least $4.50 per share and on the other terms and conditions
contained in this Agreement (the "Offering").
TERMS OF AGREEMENT
In consideration of the mutual representations and warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1
SUBSCRIPTION AND ISSUANCE OF COMMON STOCK
1.1 Subscription and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, the Issuer will issue and sell to the Investor and
the Investor subscribes for and will purchase from the Issuer the number of
shares of Common Stock set forth on the signature page hereof (the "Shares") for
the aggregate purchase price set forth on the signature page hereof, which shall
be equal to the product of the number of Shares subscribed for by the Investor
times $4.84 (the "Purchase Price").
1.2 Transfer Restrictions. The Shares may be disposed of only in compliance
with state and federal securities laws. In connection with any transfer of
Shares other than pursuant to an effective registration statement, to the
Issuer, or to an Affiliate of Investor, the Issuer may require the transferor
thereof to provide to the Issuer an opinion of counsel selected by the
transferor, at the expense of the Investor or transferee, the form and substance
of which opinion shall be reasonably satisfactory to the Issuer, to the effect
that such transfer does not require registration of such transferred Shares
under the Securities Act. As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of an Investor under this Agreement.
1.3 Legend. Any certificate or certificates representing the Shares shall
bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF
1933, AS AMENDED AND IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF
ANY STATE WITH RESPECT THERETO OR IN ACCORDANCE WITH AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND ALSO MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH
ANY APPLICABLE RULES OF THE SECURITIES AND EXCHANGE COMMISSION.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A SUBSCRIPTION AGREEMENT BETWEEN THE COMPANY AND THE
HOLDER, WHICH MAY RESTRICT THE TRANSFER OF SUCH SECURITIES IN CERTAIN
CIRCUMSTANCES. A COPY OF SUCH AGREEMENT MAY BE OBTAINED, WITHOUT
CHARGE, AT THE COMPANY'S PRINCIPAL OFFICE.
1.4 Removal of Legends. Any legend endorsed on a certificate evidencing the
Shares shall be removed upon the request of the Investor, and the Issuer shall
issue a certificate without such legend to the holder of such Shares, if such
Shares are being sold pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144(k) promulgated thereunder, and the
purchaser thereof may immediately resell such Shares without restriction and
without registration; provided, however, that in the case of a sale pursuant to
Rule 144(k), such holder of Shares shall provide such information as is
reasonably requested by the Issuer to ensure that such Shares may be sold in
reliance on Rule 144(k).
1.5 Legal, Tax or Investment Advice. The Investor understands that nothing
in this Agreement or any other materials presented to such Investor in
connection with the purchase and sale of the Shares constitutes legal, tax or
investment advice. The Investor has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Shares.
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ARTICLE 2
CLOSING
2.1 Closing. The closing of the transactions contemplated herein (the
"Closing") shall take place on a date designated by the Issuer, which date shall
be on or before July 5, 2005. The Closing shall take place at the offices of
Xxxxx & Company LLC, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx. At the Closing,
unless the Investor and the Issuer otherwise agree (i) the Investor shall pay
the Purchase Price to the Issuer, by wire transfer of immediately available
funds to an account designated in writing by the Issuer; (ii) the Issuer shall
issue to the Investor the Shares, and deliver to the Investor certificates for
the Shares duly registered in the name of the Investor, within three business
days or as soon as practicable thereafter; and (iii) all other agreements and
other documents referred to in this Agreement which are required for the Closing
shall be executed and delivered (if that is not done prior to the Closing).
2.2 Termination. This Agreement may be terminated at any time prior to the
Closing:
(a) by mutual written consent of the Issuer and the Investor;
(b) by the Investor, upon a breach of any material representation and
warranty, covenant or agreement on the part of the Issuer set forth in this
Agreement, or if any material representation and warranty of the Issuer shall
have become untrue in any material respect, in either case such that the
conditions in Section 8.1 would be incapable of being satisfied by the date of
the Closing; or
(c) by the Issuer, upon a breach of any material representation and
warranty, covenant or agreement on the part of the Investor set forth in this
Agreement, or if any material representation and warranty of the Investor shall
have become untrue in any material respect, in either case such that the
conditions in Section 8.2 would be incapable of being satisfied by the date of
the Closing.
2.3 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 2.2, this Agreement shall forthwith become void, there shall
be no liability on the part of the Issuer or the Investor to each other and all
rights and obligations of any party hereto shall cease; provided, however, that
nothing herein shall relieve any party from liability for the willful breach of
any of its representations and warranties, covenants or agreements set forth in
this Agreement.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
As a material inducement to the Investor entering into this Agreement and
subscribing for the Shares, the Issuer represents and warrants to the Investor
as follows:
3.1 Corporate Status. The Issuer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own and lease its properties and
assets and to conduct its business as now conducted except where the failure to
do so would not have a Material Adverse Effect. Each subsidiary as referred to
in the SEC Reports (as hereinafter defined) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own and
lease its properties and assets and to conduct its business as now conducted
except where the failure to do so would not have a Material Adverse Effect. The
Issuer and its subsidiaries are each qualified to do business as a foreign
corporation and are in good standing in all states where the conduct of their
respective businesses or their ownership or leasing of property requires such
qualification, except where the failure to so qualify would not have a Material
Adverse Effect.
3.2 Corporate Power and Authority. The Issuer has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and consummate the transactions contemplated hereby. At the time of
the closing, the Issuer will have taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
3.3 Enforceability. This Agreement has been duly executed and delivered by
the Issuer and (assuming it has been duly authorized, executed and delivered by
the Investor) constitutes a legal, valid and binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles, regardless of
whether such enforceability is considered in a proceeding at law or in equity.
3.4 No Violation. The execution and delivery by the Issuer of this
Agreement, the consummation of the transactions contemplated hereby, and the
compliance by the Issuer with the terms and provisions hereof (including,
without limitation, the Issuer's issuance to the Investor of the Shares as
contemplated by and in accordance with this Agreement), will not result in a
default under (or give any other party the right, with the giving of notice or
the passage of time (or both), to declare a default or accelerate any obligation
under) or violate any provision of the Certificate of Incorporation or By-Laws
of the Issuer or any material Contract to which the Issuer is a party (except to
the extent such a default, acceleration or violation would not, in the case of a
Contract, have a Material Adverse Effect on the Issuer), or violate any material
Requirement of Law applicable to the Issuer, or result in the creation or
imposition of any material Lien upon any of the capital stock, properties or
assets of the Issuer or any of its Subsidiaries (except where such Lien would
not have a Material Adverse Effect on the Issuer).
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3.5 Consents/Approvals. Except for the filing of a registration statement
in accordance with Article 6 hereof and filings with the SEC, the securities
commissions of the states in which the Shares are to be issued and the Nasdaq
Stock Market, no consents, permits, filings, authorizations or other actions of
any Governmental Authority are required to be obtained or made by the Issuer for
the Issuer's execution, delivery and performance of this Agreement which have
not already been obtained or made. No consent, approval, waiver or other action
by any Person under any Contract to which the Issuer is a party or by which the
Issuer or any of its properties or assets are bound is required or necessary for
the execution, delivery or performance by the Issuer of this Agreement and the
consummation of the transactions contemplated hereby, except where the failure
to obtain such consents would not have a Material Adverse Effect on the Issuer.
3.6 Valid Issuance. Upon payment of the Purchase Price by the Investor and
delivery to the Investor of the certificates for the Shares, such Shares will be
validly issued, fully paid and non-assessable, free from all Liens with respect
to the issuance of such Shares and will not be subject to any preemptive or
similar rights.
3.7 SEC Filings, Other Filings and Nasdaq Compliance. The Issuer has
delivered or made accessible to the Investor true, accurate and complete copies
of (i) the Issuer's Annual Report on Form 10-K for the fiscal year ended January
31, 2005; (ii) the Issuer's Quarterly Report on Form 10-Q for the fiscal quarter
ended April 30, 2005; (iii) the Issuer's Current Reports on Form 8-K dated May
25, 2005 and June 1, 2005; and (iv) the Issuer's definitive proxy statement
dated May 31, 2005 relating to its 2005 Annual Meeting of Stockholders (the "SEC
Reports"). The SEC Reports, when filed, complied in all material respects with
all applicable requirements of the Exchange Act. None of the SEC Reports, at the
time of filing, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading in light of the circumstances in
which they were made. The Issuer has filed in a timely manner all documents that
the Issuer was required to file under the Exchange Act during the 12 months
preceding the date of this Agreement. The Issuer is currently eligible to
register the resale of the Shares in a secondary offering on a registration
statement on Form S-3 under the Securities Act. The Issuer has taken all
necessary actions to ensure its continued inclusion in, and the continued
eligibility of the Common Stock for trading on, The Nasdaq Stock Market under
all currently effective inclusion requirements. Each balance sheet included in
the SEC Reports (including any related notes and schedules) fairly presents in
all material respects the consolidated financial position of the Issuer as of
its date, and each of the other financial statements included in the SEC Reports
(including any related notes and Schedules) fairly presents in all material
respects the consolidated results of operations of the Issuer for the periods or
as of the dates therein set forth in accordance with GAAP consistently applied
during the periods involved (except that the interim reports are subject to
adjustments which might be required as a result of year end audit and except as
otherwise stated therein).
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3.8 Commissions. The Issuer has not incurred any other obligation for any
finder's or broker's or agent's fees or commissions in connection with the
transactions contemplated hereby, except that the Issuer will pay a 4%
commission to Xxxxx & Company LLC ("Xxxxx"), the placement agent for the
Offering on gross proceeds received from entities other than Xxxxx or its
affiliates.
3.9 Capitalization. The authorized capital stock of the Issuer consists of
140,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock. All
issued and outstanding shares of capital stock of the Issuer have been, and as
of the Closing Date will be, duly authorized and validly issued and are fully
paid and non-assessable. As of June 28, 2005, the Issuer has issued and
outstanding 38,917,442 shares of Common Stock and no shares of Preferred Stock.
Except as described in this Section 3.9 and on Schedule 3.9, there are no
outstanding options, warrants, rights (including conversion or preemptive rights
and rights of first refusal and similar rights) or agreements, orally or in
writing, for the purchase or acquisition from the Issuer of any shares of
capital stock and the Issuer is not a party to or subject to any agreement or
understanding, and to the Issuer's knowledge, there is no agreement or
understanding between any person and/or entities, which affects or relates to
the voting or giving of written consents with respect to any security or by a
director of the Issuer. The Issuer has no obligation, contingent or otherwise,
to redeem or repurchase any equity security or any security that is a
combination of debt and equity.
3.10 Material Changes. Except as set forth in the SEC Reports or as
otherwise contemplated herein, since April 30, 2005, there has been no Material
Adverse Change in the Issuer and its subsidiaries taken as a whole. Except as
set forth in the SEC Reports, since April 30, 2005, there has not been (i) any
direct or indirect redemption, purchase or other acquisition by the Issuer of
any shares of the Common Stock or (ii) declaration, setting aside or payment of
any dividend or other distribution by the Issuer with respect to the Common
Stock.
3.11 Litigation. Except as disclosed in the SEC Reports or on Schedule
3.11, there is no action, suit, proceeding or investigation pending or, to the
Issuer's knowledge, currently threatened against the Issuer or any of its
subsidiaries that questions the validity of this Agreement or the right of the
Issuer to enter into it, or to consummate the transactions contemplated hereby,
or that could reasonably be expected to either individually or in the aggregate,
in a Material Adverse Effect on the Issuer or any change in the current equity
ownership of the Issuer. The foregoing includes, without limitation, actions
pending or, to the Issuer's knowledge, threatened involving the prior employment
of any of the Issuer's employees or their use in connection with the Issuer's
business of any information or techniques allegedly proprietary to any of their
former employers. Neither the Issuer nor any of its subsidiaries is a party to
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Issuer or any of its subsidiaries currently
pending or which the Issuer or any of its subsidiaries currently intends to
initiate.
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3.12 Rights of Registration and Voting Rights. Except as contemplated in
this Agreement and as disclosed on Schedule 3.12, the Issuer has not granted or
agreed to grant any registration rights, including piggyback rights, to any
person or entity, and to the knowledge of the Issuer, no stockholder of the
Issuer has entered into any agreements with respect to the voting of capital
shares of the Issuer.
3.13 Offerings. Subject in part to the truth and accuracy of Investor's
representations and warranties set forth in this Agreement, the offer, sale and
issuance of the Shares as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act and any applicable state
securities laws, and neither the Issuer nor any authorized agent acting on its
behalf will take any action hereafter that would cause the loss of such
exemption. 3.14 Compliance with Certificate of Incorporation and By-laws;
Compliance with Laws. The Issuer is not in violation or default of any
provisions of its Certificate of Incorporation or Bylaws. The business and
operations of the Issuer have been conducted in accordance with all applicable
laws, rules and regulations of all governmental agencies, authorities and
instrumentalities (including, without limitation, under the federal and state
securities laws, Employee Retirement Income Security Act of 1974, as amended and
all laws relating to the employment of labor), except for such violations which
would not, individually or in the aggregate, have a Material Adverse Effect.
3.15 Nasdaq. The Common Stock is listed on the Nasdaq Stock Market and, to
the knowledge of the Issuer, there are no proceedings to revoke or suspend such
listing. The issuance of the Shares will not contravene any Nasdaq Marketplace
Rule. The Common Stock is registered pursuant to Section 12(g) of the Exchange
Act. The Issuer has taken no action designed to, or which to its knowledge is
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act, delisting the Common Stock from the Nasdaq Stock Market.
The Issuer has not received any notification that, and has no knowledge that,
the SEC or the NASD is contemplating terminating such listing or registration.
The issuance of the Shares does not require stockholder approval, including,
without limitation, as may be required pursuant to the Nasdaq Rules.
3.16 Tax Matters. The Issuer has filed all tax returns and reports as
required by federal, state, local, and foreign law and has paid all taxes shown
thereon that have become due and payable. Such returns and reports were
materially accurate and complete when filed and reflect all taxes and other
assessments due thereunder to be paid by the Issuer, except those contested by
it in good faith. The provision for taxes of the Issuer included in the
provision for accrued liabilities in the Issuer's Financial Statements is
adequate for taxes due or accrued as of the dates thereof. The Issuer has never
had any material tax deficiency proposed or assessed against it.
3.17 Xxxxxxxx-Xxxxx. The Chief Executive Officer and the Chief Financial
Officer of the Issuer have signed, and the Issuer has furnished to the SEC, all
certifications required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act of
2002, and neither the Issuer nor any of its officers has received notice from
any governmental entity questioning or challenging the accuracy, completeness,
form or manner of filing or submission of such certifications.
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3.18 Disclosure. The Issuer is aware of no facts which lead it to believe
that the Disclosure Documents, as of their respective dates, contain any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
As a material inducement to the Issuer entering into this Agreement and
issuing the Shares, the Investor represents and warrants to the Issuer as
follows:
4.1 Power and Authority. The Investor, if other than a natural person, is
an entity duly organized, validly existing and in good standing under the laws
of the state of its incorporation or formation. The Investor has the corporate,
partnership or other power and authority under applicable law to execute and
deliver this Agreement and consummate the transactions contemplated hereby, and
has all necessary authority to execute, deliver and perform its obligations
under this Agreement and consummate the transactions contemplated hereby. The
Investor has taken all necessary action to authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby.
4.2 No Violation. The execution and delivery by the Investor of this
Agreement, the consummation of the transactions contemplated hereby, and the
compliance by the Investor with the terms and provisions hereof, will not result
in a default under (or give any other party the right, with the giving of notice
or the passage of time (or both), to declare a default or accelerate any
obligation under) or violate any charter or similar documents of the Investor,
if other than a natural person, or any Contract to which the Investor is a party
or by which it or its properties or assets are bound, or violate any Requirement
of Law applicable to the Investor, other than such violations or defaults which,
individually and in the aggregate, do not and will not have a Material Adverse
Effect on the Investor. The Investor is familiar with Regulation M promulgated
under the Exchange Act, a copy of which is attached hereto as Exhibit A, and is
in full compliance with the provisions thereof with respect to the transactions
contemplated hereby.
4.3 Consents/Approvals. No consents, filings, authorizations or actions of
any Governmental Authority are required for the Investor's execution, delivery
and performance of this Agreement. No consent, approval, waiver or other actions
by any Person under any Contract to which the Investor is a party or by which
the Investor or any of its properties or assets are bound is required or
necessary for the execution, delivery and performance by the Investor of this
Agreement and the consummation of the transactions contemplated hereby.
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4.4 Enforceability. This Agreement has been duly executed and delivered by
the Investor and constitutes a legal, valid and binding obligation of the
Investor, enforceable against the Investor in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and general equitable principles, regardless of
whether enforceability is considered in a proceeding at law or in equity.
4.5 Investment Intent. The Investor is acquiring the Shares hereunder for
its own account and with no present intention of distributing or selling such
Shares and further agrees not to transfer such Shares in violation of the
Securities Act or any applicable state securities law, and no one other than the
Investor has any beneficial interest in the Shares. The Investor agrees that it
will not sell or otherwise dispose of any of the Shares unless such sale or
other disposition has been registered under the Securities Act or, in the
opinion of counsel acceptable to the Issuer, is exempt from registration under
the Securities Act and has been registered or qualified or, in the opinion of
such counsel acceptable to the Issuer, is exempt from registration or
qualification under applicable state securities laws. The Investor understands
that the offer and sale by the Issuer of the Shares being acquired by the
Investor hereunder has not been registered under the Securities Act by reason of
their contemplated issuance in transactions exempt from the registration and
prospectus delivery requirements of the Securities Act pursuant to Section 4(2)
thereof, and that the reliance of the Issuer on such exemption from registration
is predicated in part on these representations and warranties of the Investor.
The Investor acknowledges that pursuant to Section 1.3 of this Agreement a
restrictive legend consistent with the foregoing has been or will be placed on
the certificates for the Shares. The Investor is acquiring the Shares hereunder
in the ordinary course of its business. The Investor does not have any agreement
or understanding, directly or indirectly, with any Person to distribute any of
the Shares.
4.6 Accredited Investor. The Investor is an "accredited investor" as such
term is defined in Rule 501(a) of Regulation D under the Securities Act (a copy
of which is attached hereto as Exhibit B), and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the investment to be made by it hereunder.
4.7 Adequate Information. The Investor has received from the Issuer, and
has reviewed, such information which the Investor considers necessary or
appropriate to evaluate the risks and merits of an investment in the Shares,
including without limitation, the documents listed on Exhibit C, which have been
received by Investor as part of an informational packet of materials from the
Issuer (the "Disclosure Documents"). The Investor acknowledges that each of the
SEC Reports, including the risk factors contained therein, are specifically
incorporated herein by reference and form an integral part of this Agreement.
The Investor also acknowledges that the additional risk factors set forth on
Exhibit C and contained in the Disclosure Documents are specifically
incorporated herein by reference and forms an integral part of this Agreement.
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4.8 Opportunity to Question. The Investor has had the opportunity to
question, and has questioned, to the extent deemed necessary or appropriate,
representatives of the Issuer so as to receive answers and verify information
obtained in the Investor's examination of the Issuer, including the information
that the Investor has received and reviewed as referenced in Section 4.7 hereof
in relation to its investment in the Shares.
4.9 No Other Representations. No oral or written representations have been
made to the Investor in connection with the Investor's acquisition of the Shares
which were in any way inconsistent with the information reviewed by the
Investor. The Investor acknowledges that no representations or warranties of any
type or description have been made to it by any Person with regard to the
Issuer, any of its Subsidiaries, any of their respective businesses, properties
or prospects or the investment contemplated herein, other than the
representations and warranties set forth in Article 3 hereof.
4.10 Knowledge and Experience. The Investor has such knowledge and
experience in financial, tax and business matters, including substantial
experience in evaluating and investing in common stock and other securities
(including the common stock and other securities of speculative companies), so
as to enable the Investor to utilize the information referred to in Section 4.7
hereof and any other information made available by the Issuer to the Investor in
order to evaluate the merits and risks of an investment in the Shares and to
make an informed investment decision with respect thereto. The Investor is able
to bear the economic risk of an investment in the Shares and is able to afford a
complete loss of such investment.
4.11 Independent Decision. The Investor is not relying on the Issuer, any
other potential Investor or on any legal or other opinion in the materials
reviewed by the Investor with respect to the financial or tax considerations of
the Investor relating to its investment in the Shares. The Investor has relied
solely on the representations and warranties, covenants and agreements of the
Issuer in this Agreement (including the Exhibits hereto) and on its examination
and independent investigation in making its decision to acquire the Shares.
4.12 General Solicitation. The Investor is not purchasing the Shares as a
result of any advertisement, article, notice or other communication regarding
the Shares published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
solicitation or general advertisement.
4.13 Residence. If the Investor is an individual, then such Investor
resides in the state or province identified in the address of such Investor set
forth on the signature page hereto; if such Investor is a partnership,
corporation, limited liability company or other entity, then the office or
offices of such Investor in which its investment decision was made is located at
the address or addresses of such Investor set forth on the signature page
hereto.
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4.14 No Prior Short Selling. At no time during the 30 days prior to the
Closing has the Investor engaged in or effected, in any manner whatsoever,
directly or indirectly, in any "short sale" (as such term is defined in Rule
3b-3 of the Exchange Act) of the Common Stock (a "Short Sale").
4.15 Commissions. The Investor has not incurred any obligation for any
finder's or broker's or agent's fees or commissions in connection with the
transactions contemplated hereby.
4.16 No Broker -Dealer. The Investor is not required to be registered as a
broker-dealer pursuant to Section 15 of the Exchange Act.
ARTICLE 5
COVENANTS
5.1 Public Announcements. Each party to this Agreement agrees that it shall
not issue or release any public announcement with respect to this Agreement or
the transactions provided for herein, which names the other party, without the
prior consent of the other party. Notwithstanding the foregoing, nothing in this
Section 5.1 shall prevent any party hereto from making such public announcements
or filings as it may consider necessary in order to satisfy its legal
obligations. On or before the fourth business day following the Closing, the
Issuer will issue a press release acceptable to each of the parties hereto
describing the transactions contemplated by this Agreement, and promptly
thereafter file a Current Report on Form 8-K with the SEC, attaching such press
release.
5.2 Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby. Each of
the Investor and the Issuer shall make on a prompt and timely basis all
governmental or regulatory notifications and filings required to be made by it
with or to any Governmental Authority in connection with the consummation of the
transactions contemplated hereby. The Issuer and the Investor each agree to
cooperate with the other in the preparation and filing of all forms,
notifications, reports and information, if any, required or reasonably deemed
advisable pursuant to any Requirement of Law or the rules of Nasdaq Stock Market
in connection with the transactions contemplated by this Agreement and to use
their respective best efforts to agree jointly on a method to overcome any
objections by any Governmental Authority to any such transactions. Except as may
be specifically required hereunder, neither of the parties hereto or their
respective Affiliates shall be required to agree to take any action that in the
reasonable opinion of such party would result in or produce a Material Adverse
Effect on such party.
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5.3 Notification of Certain Matters. Each party hereto shall give prompt
notice to the other party of the occurrence, or non-occurrence, of any event
which would be likely to cause any representation and warranty herein to be
untrue or inaccurate, or any covenant, condition or agreement herein not to be
complied with or satisfied.
5.4 Confidential Information; Standstill. (a) The Investor agrees that no
portion of the Confidential Information (as defined below) shall be disclosed to
third parties, except as may be required by law, without the prior express
written consent of the Issuer provided that the Investor may share such
information with such of its officers and professional advisors as may need to
know such information to assist the Investor in its evaluation thereof on the
condition that such parties agree to be bound by the terms hereof. All
Confidential Information received by the Investor shall be promptly returned or
destroyed, as directed by the Issuer. "Confidential Information" means all oral
or written data, reports, records or materials and any and all other
confidential or disclosure information or materials obtained from the Issuer or
its professional advisors, which are not yet publicly available. Confidential
Information excludes information that is publicly available or already known to
the Investor through a source not bound by any confidentiality obligation.
(b) For a period of one year from the Closing Date, the Investor will not,
without the prior written consent of the Issuer (i) propose to enter into any
acquisition of all or substantially of the assets or stock of the Issuer or a
merger or other business combination involving the Issuer; (ii) seek to control
the management, Board of Directors or policies of the Issuer; or (iii) form,
join or in any way participate in a "group" (within the meaning of Section 13(d)
(3) of the Securities Act of 1934) with respect to any securities of the Issuer
in connection with any of the foregoing. Notwithstanding the foregoing, this
section shall not restrict the Investor's acquisition or disposition of shares
of the Issuer's Common Stock through open market purchases or sales.
5.5 Form D Filing. The Issuer agrees that it shall file in a timely manner
a Form D relating to the sale of the Shares under this Agreement, pursuant to
Regulation D promulgated under the Securities Act.
ARTICLE 6
REGISTRATION RIGHTS
The Investor shall have the following registration rights with respect to
the Registrable Securities owned by it:
6.1 Transfer of Registration Rights. The Investor may assign the
registration rights with respect to the Shares to any party or parties to which
it may from time to time transfer the Shares, provided that the transferee
agrees in writing with the Issuer to be bound by the applicable provisions of
this Agreement regarding such registration rights and indemnification relating
thereto. Upon assignment of any registration rights pursuant to this Section
6.1, the Investor shall deliver to the Issuer a notice of such assignment which
includes the identity and address of any assignee and such other information
reasonably requested by the Issuer in connection with effecting any such
registration (collectively, the Investor and each such subsequent holder is
referred to as a "Holder").
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6.2 Required Registration. As promptly as practicable after the Closing,
but in no event later than ninety (90) days after the date of the Closing, the
Issuer agrees to file a Registration Statement on Form S-3 (the "Shelf
Registration Statement") to register the resale of all of the Shares. The Issuer
shall use reasonable efforts to cause the SEC to declare the Shelf Registration
Statement effective as soon as practicable after filing and to thereafter
maintain the effectiveness of the Shelf Registration Statement until such time
as the Issuer reasonably determines, based on an opinion of counsel, that the
Holders will be eligible to sell all of the Shares then owned by the Holders
without the need for continued registration of the Shares in the three month
period immediately following the termination of the effectiveness of the Shelf
Registration Statement. The Issuer's obligations contained in this Section 6.2
shall terminate on the second anniversary of the date on which the Shares are
issued hereunder. The Issuer covenants that it will provide written notice to
the Investor that the Issuer's registration statement on Form S-3 registering
the Shares sold hereunder to the Investor has been declared effective by the
SEC, which notice shall be given promptly after the Issuer has received notice
of such effectiveness from the SEC.
6.3 Registration Procedures.
(a) In case of the Shelf Registration Statement effected by the Issuer
subject to this Article 6, the Issuer shall keep the Investor, on behalf of each
Holder, advised in writing as to the initiation of such registration, and as to
the completion thereof. In addition, subject to Section 6.2 above, the Issuer
shall, to the extent applicable to the Shelf Registration Statement:
(i) prepare and file with the SEC such amendments and supplements to
the Shelf Registration Statement as may be necessary to keep such
registration, effective and comply with provisions of the Securities Act
with respect to the disposition of all securities covered thereby during
the period referred to in Section 6.2;
(ii) update, correct, amend and supplement the Shelf Registration
Statement as necessary;
(iii) notify Holder when the Shelf Registration Statement is declared
effective by the SEC, and furnish such number of prospectuses, including
preliminary prospectuses, and other documents incident thereto as Holder
may reasonably request from time to time;
(iv) use its commercially reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of
such jurisdictions of the United States where an exemption is not available
and as Holder may reasonably request to enable it to consummate the
disposition in such jurisdiction of the Registrable Securities (provided
that the Issuer will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this provision, or (ii) consent to general service of
process in any such jurisdiction, or (iii) subject itself to taxation in
any jurisdiction where it is not already subject to taxation);
(v) notify Holder at any time when a prospectus relating to the
Registrable Securities is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus
included in the Shelf Registration Statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements
therein not misleading, and at the request of Holder, the Issuer will
prepare a supplement or amendment to such prospectus, so that, as
thereafter delivered to purchasers of such shares, such prospectus will not
contain any untrue statements of a material fact or omit to state any fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(vi) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Issuer are
then listed and obtain all necessary approvals from the Nasdaq Stock Market
for trading thereon;
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(vii) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of the Shelf Registration
Statement; and
(viii) upon the sale of any Registrable Securities pursuant to the
Shelf Registration Statement, direct the transfer agent to remove all
restrictive legends from all certificates or other instruments evidencing
the Registrable Securities.
(b) Notwithstanding anything stated or implied to the contrary in Section
6.3(a) above, the Issuer shall not be required to consent to any underwritten
offering of the Registrable Securities or to any specific underwriter
participating in any underwritten public offering of the Registrable Securities.
(c) Each Holder agrees that upon receipt of any notice from the Issuer of
the happening of any event of the kind described in Section 6.3(a)(v), such
Holder will forthwith discontinue such Holder's disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 6.3(a)(v) and, if so directed by the
Issuer, will deliver to the Issuer at the Issuer's expense all copies, other
than permanent file copies, then in such Holder's possession, of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
(d) Except as required by law, all expenses incurred by the Issuer in
complying with this Article 6, including but not limited to, all registration,
qualification and filing fees, printing expenses, fees and disbursements of
counsel and accountants for the Issuer, blue sky fees and expenses (including
fees and disbursements of counsel related to all blue sky matters)
("Registration Expenses") incurred in connection with any registration,
qualification or compliance pursuant to this Article 6 shall be borne by the
Issuer. All underwriting discounts and selling commissions applicable to a sale
incurred in connection with any registration of Registrable Securities and the
legal fees and other expenses of a Holder shall be borne by such Holder.
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6.4 Further Information. If Registrable Securities owned by a Holder are
included in any registration, such Holder shall furnish the Issuer such
information regarding itself as the Issuer may reasonably request and as shall
be required in connection with any registration (or amendment thereto), referred
to in this Agreement, and Holder shall indemnify the Issuer with respect thereto
in accordance with Article 7 hereof. The Investor hereby represents and warrants
to the Issuer that it has accurately and completely provided the requested
information and answered the questions numbered (a) through (d) on the signature
pages of this Agreement, and the Investor agrees and acknowledges that the
Issuer may rely on such information as being true and correct for purposes of
preparing and filing the Shelf Registration Statement at the time of filing
thereof and at the time it is declared effective, unless the Investor has
notified the Issuer in writing to the contrary prior to such time.
6.5 Right of Suspension
(a) Notwithstanding any other provision of this Agreement or any
related agreement to the contrary, if any, the Issuer shall have the right,
at any time, to suspend the effectiveness of the Shelf Registration
Statement and offers and sales of the Registrable Securities covered
thereby whenever, in the good faith judgment of the Issuer, (i) continuing
such effectiveness or permitting such offers and sales could reasonably be
expected to have an adverse effect upon a proposed sale of all or
substantially all of the assets of the Issuer or a merger, acquisition,
reorganization, recapitalization or similar current transaction materially
affecting the capital structure or equity ownership of the Issuer, (ii)
there exists a material development or a potential material development
with respect to or involving the Issuer that the Issuer would be obligated
to disclose in the prospectus used in connection with the Shelf
Registration Statement, which disclosure, in the good faith judgment of the
Issuer, after considering the advice of counsel, would be premature or
otherwise inadvisable at such time, or (iii) the Shelf Registration
Statement or related prospectus or any document incorporated or deemed to
be incorporated therein by reference contains an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances, not misleading (a "Suspension Event"). In the event that the
Issuer shall determine to so suspend the effectiveness of the Shelf
Registration Statement and offers and sales of the Registrable Securities
covered thereby, the Issuer shall, in addition to performing those acts
required to be performed under the Securities Act and/or the Exchange Act
or deemed advisable by the Issuer, deliver to each Holder written notice
thereof, signed by the Chief Financial Officer or Chief Executive Officer
of the Issuer. Upon receipt of such notice, the Holders shall discontinue
disposition of the Registrable Securities covered by the Shelf Registration
Statement and prospectus until such Holders (x) are advised in writing by
the Issuer that the use of the Shelf Registration Statement and prospectus
(and offers and sales thereunder) may be resumed, (y) have received copies
of a supplemental or amended prospectus, if applicable, and (z) have
received copies of any additional or supplemental filings which are
incorporated or deemed to be incorporated by reference into such
prospectus. The Issuer will exercise commercially reasonable efforts to
ensure that the use of the Shelf Registration Statement and prospectus may
be resumed as quickly as practicable, provided, however, that in the event
of a Suspension Event, the Issuer's obligation under Section 6.2 to
maintain the effectiveness of the registration statement until the first
anniversary of the date of the effectiveness of the registration statement
shall be extended on a day-for-day basis equal to the amount of time that
such Shelf Registration Statement shall have been suspended.
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(b) The Issuer's right to suspend the effectiveness of the Shelf
Registration Statement and the offers and sales of the Registrable
Securities covered thereby, as described above, shall be for a period of
time (the "Suspension Period") beginning on the date of the occurrence of
the Suspension Event and expiring on the earlier to occur of (i) the date
on which the Suspension Event ceases, or (ii) forty five (45) days after
the occurrence of the Suspension Event; provided, however, that there shall
not be more than two Suspension Periods in any 12 month period.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification Generally. The Issuer, on the one hand, and the
Investor, on the other hand (each an "Indemnifying Party"), shall indemnify the
other from and against any and all losses, damages, liabilities, claims,
charges, actions, proceedings, demands, judgments, settlement costs and expenses
of any nature whatsoever (including, without limitation, reasonable attorneys'
fees and expenses) or deficiencies resulting from any breach of a representation
and warranty, covenant or agreement by the Indemnifying Party and all claims,
charges, actions or proceedings incident to or arising out of the foregoing.
7.2 Indemnification Relating to Registration Rights.
(a) With respect to any registration, effected or to be effected
pursuant to Article 6 of this Agreement, the Issuer shall indemnify each
Holder of Registrable Securities whose securities are included or are to be
included therein, each of such Holder's directors and officers, each
underwriter (as defined in the Securities Act) of the securities sold by
such Holder (if any), and each Person who controls (within the meaning of
the Securities Act) any such Holder or underwriter (a "Controlling Person")
from and against all losses, damages, liabilities, claims, charges,
actions, proceedings, demands, judgments, settlement costs and expenses of
any nature whatsoever (including, without limitation, reasonable attorneys'
fees and expenses) or deficiencies of any such Holder or any such
underwriter or Controlling Person concerning:
16
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification
or the like) incident to any such registration;
(ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statement therein, in the light of the circumstances under which it
was made, not misleading; or
(iii) any violation by the Issuer of the Securities Act or any
rule or regulation promulgated thereunder applicable to the Issuer, or
of any blue sky or other state securities laws or any rule or
regulation promulgated thereunder applicable to the Issuer,
in each case, relating to any action or inaction required of the Issuer in
connection with any such registration, and subject to Section 7.3 below will
reimburse each such Person entitled to indemnity under this Section 7.2 for all
legal and other expenses reasonably incurred in connection with investigating or
defending any such loss, damage, liability, claim, charge, action, proceeding,
demand, judgment, settlement or deficiency; provided, however, that, the
foregoing indemnity and reimbursement obligation shall not be applicable to the
extent that any such matter arises out of or is based on any untrue statement
(or alleged untrue statement) or omission (or alleged omission) made in reliance
upon and in conformity with written information furnished to the Issuer by or on
behalf of such Holder or by or on behalf of such an underwriter specifically for
use in such prospectus, offering circular or other document.
(b) With respect to any registration, qualification or compliance effected
or to be effected pursuant to this Agreement, each Holder of
Registrable Securities whose securities are included or are to be
included therein, shall indemnify the Issuer from and against all
losses, damages, liabilities, claims, charges, actions, proceedings,
demands, judgments, settlement costs and expenses of any nature
whatsoever (including, without limitation, reasonable attorneys' fees
and expenses) or deficiencies of the Issuer concerning:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification
or the like) incident to any such registration, qualification or
compliance;
(ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statement therein, in the light of the circumstances under which it
was made, not misleading; or
(iii) any violation by such Holder of the Securities Act or any
rule or regulation promulgated thereunder applicable to the Issuer or
such Holder or of any blue sky or other state securities laws or any
rule or regulation promulgated thereunder applicable to the Issuer or
such Holder,
17
in each case, relating to any action or inaction required of such
Holder in connection with any such registration, qualification or
compliance, and subject to Section 7.3 below will reimburse the Issuer
for all legal and other expenses reasonably incurred in connection
with investigating or defending any such loss, damage, liability,
claim, charge, action, proceeding, demand, judgment, settlement or
deficiency; provided, however, that, the foregoing indemnity and
reimbursement obligation shall only be applicable to the extent that
any such matter arises out of or is based on any untrue statement (or
alleged untrue statement) or omission (or alleged omission) made in
reliance upon and in conformity with written information furnished to
the Issuer by or on behalf of the Holder specifically for use in such
prospectus, offering circular or other document; provided, however,
that, the obligation of the Holder hereunder shall be limited to an
amount equal to the proceeds to the Holder of Registrable Securities
sold as contemplated hereunder.
7.3 Indemnification Procedures. Each Person entitled to indemnification
under this Section (an "Indemnified Party") shall give notice as promptly as
reasonably practicable to each party required to provide indemnification under
this Section (an "Indemnifying Party") of any action commenced against or by it
in respect of which indemnity may be sought hereunder, but failure to so notify
an Indemnifying Party shall not relieve such Indemnifying Party from any
liability that it may have otherwise than on account of this indemnity agreement
so long as such failure shall not have materially prejudiced the position of the
Indemnifying Party. Upon such notification, the Indemnifying Party shall assume
the defense of such action if it is a claim brought by a third party, if and
after such assumption the Indemnified Party shall not be entitled to
reimbursement of any expenses incurred by it in connection with such action
except as described below. In any such action, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the contrary or
(ii) the named parties in any such action (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing or conflicting interests between them. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent (which shall not be unreasonably withheld or delayed by such
Indemnifying Party), but if settled with such consent or if there be final
judgment for the plaintiff, the Indemnifying Party shall indemnify the
Indemnified Party from and against any loss, damage or liability by reason of
such settlement or judgment.
ARTICLE 8
CONDITIONS TO CLOSING
8.1 Conditions to the Obligations of the Investor. The obligations of the
Investor to proceed with the Closing is subject to the following conditions any
and all of which may be waived, in whole or in part, to the extent permitted by
applicable law:
18
(a) Representations and Warranties. Each of the representations
and warranties of the Issuer contained in this Agreement shall be true
and correct in all material respects as of the Closing as though made
on and as of the Closing, except (i) for changes specifically
permitted by this Agreement, and (ii) that those representations and
warranties which address matters only as of a particular date shall
remain true and correct as of such date, except in any case for such
failures to be true and correct which would not, individually or in
the aggregate, have a Material Adverse Effect on the Issuer. Unless
the Investor receives written notice to the contrary at the Closing,
Investor shall be entitled to assume that the preceding is accurate in
all respects at the Closing.
(b) Agreement and Covenants. The Issuer shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on
or prior to the Closing. Unless the Investor receives written notice
to the contrary at the Closing, Investor shall be entitled to assume
that the preceding is accurate in all respects at the Closing.
(c) No Order. No governmental authority or other agency or
commission or federal or state court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, executive order, decree, injunction, or other order
(whether temporary, preliminary or permanent) which is in effect and
which materially restricts, prevents or prohibits consummation of the
Closing or any transaction contemplated by this Agreement.
(d) Opinion of Issuer's Counsel. The Holder shall have received
an opinion of Issuer's counsel, dated the Closing Date, with respect
to legal matters customary for private offerings of this type.
(e) Securities Exemptions. The offer and sale of the Shares
pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act and the registration and/or
qualification requirements of all applicable state securities laws.
(f) No Suspension of Trading or Listing of Common Stock. The
Common Stock of the Issuer (i) shall be designated for quotation or
listed on Nasdaq and (ii) shall not have been suspended from trading
on Nasdaq.
8.2 Conditions to the Obligations of the Issuer. The obligations of the
Issuer to proceed with the Closing is subject to the following conditions any
and all of which may be waived, in whole or in part, to the extent permitted by
applicable law:
(a) Representations and Warranties. Each of the representations
and warranties of the Investor contained in this Agreement shall be
true and correct as of the Closing as though made on and as of the
Closing, except (i) for changes specifically permitted by this
Agreement, and (ii) that those representations and warranties which
address matters only as of a particular date shall remain true and
correct as of such date. Unless the Issuer receives written
notification to the contrary at the Closing, the Issuer shall be
entitled to assume that the preceding is accurate in all respects at
the Closing.
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(b) Agreement and Covenants. The Investor shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on
or prior to the Closing. Unless the Issuer receives written
notification to the contrary at the Closing, the Issuer shall be
entitled to assume that the preceding is accurate in all respects at
the Closing.
(c) No Order. No governmental authority or other agency or
commission or federal or state court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, executive order, decree, injunction, or other order
(whether temporary, preliminary or permanent) which is in effect and
which materially restricts, prevents or prohibits consummation of the
Closing or any transaction contemplated by this Agreement.
(d) Securities Exemptions. The offer and sale of the Shares
pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act and the registration and/or
qualification requirements of all applicable state securities laws.
(e) No Suspension of Trading or Listing of Common Stock. The
Common Stock of the Issuer (i) shall be designated for quotation or
listed on Nasdaq and (ii) shall not have been suspended from trading
on Nasdaq.
ARTICLE 9
MISCELLANEOUS
9.1 Defined Terms. As used herein the following terms shall have the following
meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
hereof.
"Certificate of Incorporation" means the Issuer's Certificate of
Incorporation, as the same may be supplemented, amended or restated from time to
time.
"Closing" has the meaning in Article 2 of this Agreement.
"Common Stock" has the meaning specified in the Recitals to this Agreement.
"Contract" means any indenture, lease, sublease, loan agreement, mortgage,
note, restriction, commitment, obligation or other contract, agreement or
instrument.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in effect in the
United States of America from time to time.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any entity or official exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Investor" has the meaning specified in the Recitals to this Agreement.
"Issuer" means Convera Corporation, a Delaware corporation.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code or comparable law
or any jurisdiction in connection with such mortgage, pledge, security interest,
encumbrance, lien or charge).
"Material Adverse Change (or Effect)" means a material and adverse change
in (or effect on) the financial condition, properties, assets, liabilities,
rights, obligations, operations or business, of a Person and its Subsidiaries
taken as a whole.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, estate, trust, unincorporated association, joint venture,
Governmental Authority or other entity, of whatever nature.
"Purchase Price" has the meaning specified in Section 1.1 of this
Agreement.
"Register", "registered" and "registration" refer to a registration of the
offering and sale or resale of Common Stock effected by preparing and filing a
registration statement in compliance with the Securities Act and the declaration
or ordering of the effectiveness of such registration statement.
"Registrable Securities" means all Shares of Common Stock acquired by the
Investor pursuant to this Agreement and any other shares of Common Stock or
other securities issued in respect of such Shares by way of a stock dividend or
stock split or in connection with a combination or subdivision of the Issuer's
Common Stock or by way of a recapitalization, merger or consolidation or
reorganization of the Issuer; provided, however, that, as to any particular
securities, such securities will cease to be Registrable Securities when they
have been sold pursuant to registration or in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions and restrictive legends
with respect thereto are removed upon the consummation of such sale and the
purchaser and seller receive an opinion of counsel for the Issuer, which shall
be in form and substance reasonably satisfactory to the purchaser and seller and
their respective counsel, to the effect that such stock in the hands of the
purchaser is freely transferable without restriction or registration under the
Securities Act in any public or private transaction.
21
"Requirements of Law" means as to any Person, the certificate of
incorporation, by-laws or other organizational or governing documents of such
person, and any domestic or foreign and federal, state or local law, rule,
regulation, statute or ordinance or determination of any arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its properties or to which such Person or any of its property
is subject.
"SEC" means the Securities and Exchange Commission.
"SEC Reports" has the meaning specified in Section 3.7 of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" has the meaning specified in Section 1.1 of this Agreement.
"Subsidiary" means as to any Person, a corporation or limited partnership
of which more than 50% of the outstanding capital stock or partnership interests
having full voting power is at the time directly or indirectly owned or
controlled by such Person.
9.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise
requires.
(b) Terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
(c) All accounting terms shall have a meaning determined in accordance
with GAAP.
(d) As used herein, the neuter gender shall also denote the masculine and
feminine, and the masculine gender shall also denote the neuter and
feminine, where the context so permits.
22
(e) The words "hereof," "herein" and "hereunder," and words of similar
import, when used in this Agreement shall refer to this Agreement as a
whole (including any Exhibits hereto) and not to any particular
provision of this Agreement.
9.3 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall
subsequently designate in writing to the other party):
(a) if to the Issuer to:
Convera Corporation
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
(b) if to the Investor to the address set forth next to its name on
the signature page hereto.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered by hand, by messenger or by courier, or if sent by facsimile,
upon confirmation of receipt.
9.4 Entire Agreement. This Agreement (including the Exhibits attached
hereto) and other documents delivered at the Closing pursuant hereto, contain
the entire understanding of the parties in respect of its subject matter and
supersedes all prior agreements and understandings between or among the parties
with respect to such subject matter. The Exhibits constitute a part hereof as
though set forth in full above.
9.5 Expenses; Taxes. Except as otherwise provided in this Agreement, the
parties shall pay their own fees and expenses, including their own counsel fees,
incurred in connection with this Agreement or any transaction contemplated
hereby. Any sales tax, stamp duty, deed transfer or other tax (except taxes
based on the income of the Investor) arising out of the issuance of the Shares
by the Issuer to the Investor and consummation of the transactions contemplated
by this Agreement shall be paid by the Issuer.
9.6 Amendment; Waiver. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
both parties. No failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall any
23
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege. No waiver of any breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts. The rights and remedies of the parties under this Agreement
are in addition to all other rights and remedies, at law or equity, that they
may have against each other.
9.7 Binding Effect; Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and legal assigns. The rights and obligations of this
Agreement may not be assigned by any party without the prior written consent of
the other party.
9.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
9.9 Headings. The headings contained in this Agreement are for convenience
of reference only and are not to be given any legal effect and shall not affect
the meaning or interpretation of this Agreement.
9.10 Governing Law; Interpretation. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of
Delaware applicable to contracts executed and to be wholly performed within such
State.
9.11 Severability. The parties stipulate that the terms and provisions of
this Agreement are fair and reasonable as of the date of this Agreement.
However, any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. If, moreover, any of those provisions shall for any reason be
determined by a court of competent jurisdiction to be unenforceable because
excessively broad or vague as to duration, activity or subject, it shall be
construed by limiting, reducing or defining it, so as to be enforceable.
[SIGNATURES AND OTHER INFORMATION ON NEXT THREE PAGES]
24
IN WITNESS WHEREOF, the parties hereto have caused this Subscription
Agreement to be duly executed and delivered as of the date set forth below.
NAME OF INVESTOR: ADDRESS FOR NOTICES (Please Print):
______________________________ __________________________________
___________________________________
SIGNATURE: ___________________________________
Attention:_________________________
By:___________________________ Telecopy:_________________________
Name:
Title: Tax Identification #:______________
Exact Name to appear on Stock Certificate: __________________________
Number of Shares Subscribed For: ______________________
Aggregate Purchase Price (see Section 1.1): $______________________
The Investor hereby provides the following additional information:
(a) Excluding the shares of Common Stock subscribed for above, set forth
below is the number of shares of Common Stock and options rights or
warrants of Convera Corporation. ("Options" and together with the
Common Stock, "Securities") which the Investor beneficially owns or of
which the Investor is the record owner on the date hereof. Please
refer to the definition of beneficial ownership on Exhibit D attached
hereto. If none, please so state.
Number of Shares: __________________ (excluding the Shares subscribed
for above)
Number of Options: __________________
Please indicate by an asterisk (*) above if the Investor disclaims
"beneficial ownership" of any of the above listed Securities, and
indicate in response to question (b) below who has beneficial
ownership.
(b) If the Investor disclaims "beneficial ownership" in question (a),
please furnish the following information with respect to the person(s)
other than the Investor who is the beneficial owner(s) of the
Securities in question. If not applicable, please check box: |_|
Name of Beneficial Owner:__________________________________
Relationship to the Investor:______________________________
Number of Securities Beneficially Owned:___________________
NAME OF INVESTOR:____________________________
(c) As to the Securities indicated as being "beneficially owned" in
answers to question (a) and (b) does any person other than the person
identified as the "beneficial owner" have:
(i) the sole or shared power to vote or to direct the vote of any
such Securities?
Yes No
or
(ii) the sole or shared power to dispose or to direct the disposition
of any such Securities (referred to as "dispositive power")?
Yes No
If the answer is "Yes" to either of the forgoing questions, the Investor
should set forth below the name and address of each person who has either
such power or with whom the indicated "beneficial owner" shares such power,
together with such number of shares to which such rights relates.
IF THE INVESTOR IS AN ENTITY OR A TRUST:
The Investor must list the name of each natural person associated with the
Investor entity or trust who has or shares voting or dispositive power with
respect to the shares indicated as being "beneficially owned" in answers to
questions (a) or (c). For an investment or holding company, the investment
manager(s) would normally be the person(s) who hold(s) or share(s) voting
and dispositive power. For a trust, the natural person(s) holding or
sharing voting or dispositive power would normally be the trustee(s). For
other types of entities, the natural person(s) holding or sharing voting or
dispositive power would normally be the officer(s) empowered by the board
of directors to make such decisions, or if there is no such officer, each
of the directors. Disclosure is required for each natural person who in
practice has voting or dispositive power, regardless of that person's
formal title or position within the organization.
NAME OF INVESTOR:____________________________
------------------------------- ---------------------------- ---------------------------- ----------------------------
Type of Power:
Name of Natural Person Voting/Dispositive/
Both Address Position or Title
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
(d) In any pending legal proceeding, is the Investor or any of its
affiliates a party, or does the Investor or any such associate
have an interest, adverse to the Issuer or any affiliate of the
Issuer?
Yes No
If the answer is "Yes," please describe, and state the nature and
amount of, such interest.
(e) Is there any family relationship (including relationships by
blood, marriage, and adoption, except those more remote than
first cousin) between the Investor or any of its affiliates and
any director or officer of the Issuer, any affiliate of the
Issuer or any person who has been chosen to become a director or
officer of the Issuer?
Yes No
If the answer is "Yes," please describe the relationship.
(f) Are any of the Securities listed in response to question (a) the
subject of a voting agreement, contract or other arrangement
whereby others have voting control over, or any other interest
in, any of the Investor's Securities?
|_| Yes |_| No
If the answer is "Yes", please give details:
____________________________________________.
(g) Please describe each position, office or other material
relationship which the Investor has had with the Issuer or any of
its affiliates, including any Subsidiary of the Issuer, within
the past three years. Please include a description of any loans
or other indebtedness, and any contracts or other arrangements or
transactions involving a material amount, payable by the Investor
to the Issuer or any of its affiliates, including its
Subsidiaries, or by the Issuer or any of its affiliates,
including its Subsidiaries, to the Investor. "Affiliates" of the
Issuer include its directors and executive officers, and any
other person controlling or controlled by the Issuer. If none,
please so state.
Answer:
(h) Please provide the name and address of other person(s), if any,
to whom any proxy statements, registration statements (including
notice of effectiveness thereof), prospectuses or similar
documents and information should be delivered by the Issuer on
behalf of the Investor in the future, with respect to the
Investor's shares:
____________________________ _____________________________
____________________________ _____________________________
____________________________ _____________________________
____________________________ _____________________________
(i) Please advise of special stock certificate delivery requirements
for closing, if any:
(j) Please advise if a NASD member has placed with you the Shares
being purchased hereunder: (Name of Member:)
__________________________________________
ACCEPTED: CONVERA CORPORATION
By: Dated: July 1, 2005
Name:
Title
