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EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of August 27,
1998, between HEARx LTD., a corporation organized under the laws of the State of
Delaware (the "COMPANY"), and each of the purchasers (the "PURCHASERS") set
forth on the execution pages hereof (the "EXECUTION PAGES").
WHEREAS:
A. The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("REGULATION D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "SECURITIES ACT").
B. The Company desires to sell, and each Purchaser desires to purchase
severally and not jointly, upon the terms and conditions stated in this
Agreement, up to 7,500 units (the "UNITS"), each Unit consisting of (i) one
share of the Company's 1998 Convertible Preferred Stock, par value $1.00 per
share (the "PREFERRED SHARES"), convertible into shares of the Company's common
stock, par value $.10 per share (the "COMMON STOCK"), and (ii) a warrant, in the
form attached hereto as Exhibit A (the "WARRANT"), to acquire 75 shares of
Common Stock. The rights, preferences and privileges of the Preferred Shares,
including the terms upon which such Preferred Shares are convertible into shares
of Common Stock, are set forth in the form of Certificate of Designations,
Rights and Preferences attached hereto as Exhibit B (the "CERTIFICATE OF
DESIGNATION"). The shares of Common Stock issuable upon conversion of the
Preferred Shares or otherwise pursuant to the Certificate of Designation are
referred to herein as the "CONVERSION SHARES" and the shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Warrants are referred to
herein as the "WARRANT SHARES." The Preferred Shares, the Warrants, the
Conversion Shares and the Warrant Shares are collectively referred to herein as
the "SECURITIES" and each of them may individually be referred to herein as a
"SECURITY."
C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in the form attached hereto as Exhibit C (the "REGISTRATION RIGHTS AGREEMENT"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act and the rules and regulations promulgated thereunder,
and applicable state securities laws.
NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:
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1. PURCHASE AND SALE OF UNITS.
(a) Purchase of Units and Closing. Subject to the satisfaction (or
waiver) of the conditions set forth in Section 6 and Section 7 below, the
Purchasers, severally but not jointly, agree to purchase, that number of the
Units set forth on such Purchaser's Execution Page. The purchase price (the
"PURCHASE PRICE") per Unit shall be equal to One Thousand Dollars ($1,000.00).
The issuance and sale of the Units shall take place, subject to the satisfaction
or waiver of the conditions precedent thereto, in a closing, referred to herein
as the "CLOSING". The aggregate purchase price of the Units being acquired by
each Purchaser at the Closing is set forth on such Purchaser's Execution Page.
The Closing of the purchase, sale and exchange of the Units to be acquired by
the Purchasers from the Company under this Agreement shall take place at the
offices of Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx, 0000 Xxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxxxxxxx, XX 00000. The date and time of the Closing (the "CLOSING
DATE") shall be August 27, 1998, or at such time and date thereafter as the
Purchasers and the Company may agree. Each Purchaser's obligation to purchase
Units hereunder is distinct and separate from each other Purchaser's obligation
to purchase Units and no Purchaser shall be required to purchase hereunder more
than the number of Units set forth on such Purchaser's Execution Page hereto
notwithstanding any failure by any other Purchaser to purchase Units hereunder
nor shall any Purchaser have any liability by reason of any such failure by any
other Purchaser.
(b) Form of Payment. On the Closing Date, each Purchaser shall pay the
aggregate Purchase Price for the Units being purchased by such Purchaser on the
Closing Date by wire transfer to the Company, in accordance with the Company's
written wiring instructions, against delivery of duly executed certificates
representing the Preferred Shares and duly executed Warrants being purchased by
such Purchaser and the Company shall deliver such certificates and Warrants
against delivery of such aggregate Purchase Price.
2. PURCHASERS' REPRESENTATIONS AND WARRANTIES
Each Purchaser severally and not jointly represents and warrants to the
Company as follows:
(a) Purchase for Own Account, Etc. Purchaser is purchasing the Units
for Purchaser's own account and not with a present view towards the public sale
or distribution thereof. Purchaser understands that Purchaser must bear the
economic risk of this investment indefinitely, unless the Securities are
registered pursuant to the Securities Act and any applicable state securities or
blue sky laws or an exemption from such registration is available, and that the
Company has no present intention of registering the resale of any such
Securities other than as contemplated by the Registration Rights Agreement.
Notwithstanding anything in this Section 2(a) to the contrary, by making the
representations herein, the Purchaser does not agree to hold the Securities for
any minimum or other specific term and reserves the right to dispose of the
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Securities at any time in accordance with or pursuant to a registration
statement or an exemption from the registration requirements under the
Securities Act.
(b) Investor Status. Purchaser is an "ACCREDITED INVESTOR" as that term
is defined in Rule 501(a) of Regulation D. Purchaser is not a registered broker
dealer and is not engaged in the business of being a broker dealer.
(c) Reliance on Exemptions. Purchaser understands that the Units are
being offered and sold to Purchaser in reliance upon specific exemptions from
the registration requirements of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of, and Purchaser's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of Purchaser to acquire the
Units.
(d) Information. Purchaser and its counsel, if any, have been furnished
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Units which have been
specifically requested by Purchaser or its counsel. Purchaser and its counsel
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other investigation conducted by Purchaser or its counsel or
any of its representatives shall modify, amend or affect Purchaser's right to
rely on the Company's representations and warranties contained in Section 3
below. Purchaser understands that Purchaser's investment in the Units involves a
high degree of risk.
(e) Governmental Review. Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Units.
(f) Transfer or Resale. Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the sale or resale of the
Securities have not been and are not being registered under the Securities Act
or any state securities laws, and the Securities may not be transferred unless
(a) the resale of the Securities has been registered thereunder; or (b)
Purchaser shall have delivered to the Company an opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; or (c) the Securities are sold under Rule 144 promulgated under
the Securities Act (or a successor rule) ("RULE 144"); or (d) the Securities are
sold or transferred to a non-broker dealer affiliate of Purchaser who agrees to
sell or otherwise transfer the Securities only in accordance with the provisions
of this Section 2(f) and who is an Accredited Investor; and (ii) neither the
Company nor any other person is under any obligation to register such Securities
under the Securities Act or any state securities laws (other than pursuant to
the Registration Rights Agreement). Notwithstanding the foregoing or anything
else contained herein to the contrary, the Securities may be pledged as
collateral in connection with a bona fide
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margin account or other lending arrangement.
(g) Legends. Purchaser understands that the certificates for the
Preferred Shares and the Warrants and, until such time as the Conversion Shares
and Warrant Shares have been registered under the Securities Act (including
registration pursuant to Rule 416 thereunder) as contemplated by the
Registration Rights Agreement or otherwise may be sold by Purchaser under Rule
144(k), the certificates for the Conversion Shares and Warrant Shares may bear a
restrictive legend in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state of the United States. The securities
represented hereby may not be offered, sold or transferred in the
absence of an effective registration statement for the securities
under applicable securities laws unless offered, sold or
transferred under an available exemption from the registration
requirements of those laws.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped if, unless otherwise required by state securities laws, (a) the sale of
such Security is registered under the Securities Act (including registration
pursuant to Rule 416 thereunder) as contemplated by the Registration Rights
Agreement; (b) such holder provides the Company with an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may
be made without registration under the Securities Act; or (c) such holder
provides the Company with reasonable assurances that such Security can be sold
under Rule 144(k). Purchaser agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, pursuant
to an effective registration statement, under an exemption from the registration
requirements of the Securities Act or in accordance with Rule 144(k). In the
event the above legend is removed from any Security and thereafter the
securities are not sold or the effectiveness of a registration statement
covering such Security is suspended or the Company determines that a supplement
or amendment thereto is required by applicable securities laws, then upon
reasonable advance notice to Purchaser the Company may require that the above
legend be placed on any such Security that cannot then be sold pursuant to an
effective registration statement or under Rule 144(k) and Purchaser shall
cooperate in the replacement of such legend. Such legend shall thereafter be
removed when such Security may again be sold pursuant to an effective
registration statement or under Rule 144(k).
(h) Authorization; Enforcement. This Agreement and the Registration
Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of Purchaser and are valid and binding agreements of Purchaser
enforceable against Purchaser in accordance with their terms.
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(i) Residency. Purchaser is a resident of the jurisdiction set forth
under Purchaser's name on the Execution Page hereto executed by Purchaser.
(j) Acknowledgments Regarding Placement Agent. Purchaser acknowledges
that The Zanett Securities Corporation is acting as placement agent (the
"PLACEMENT AGENT") for the Securities being offered hereby and will be
compensated by the Company for acting in such capacity. Purchaser further
acknowledges that the Placement Agent has acted solely as placement agent in
connection with the offering of the Securities by the Company, that the
information and data provided to Purchaser and referred to in subsection (d)
above or otherwise in connection with the transactions contemplated hereby have
not been subjected to independent verification by the Placement Agent, and that
the Placement Agent makes no representation or warranty with respect to the
accuracy or completeness of such information, data or other related disclosure
material. Purchaser further acknowledges that in making its decision to enter
into this Agreement and purchase the Securities it has relied on the Company's
representations and warranties contained in Section 3 below and on its own
examination of the Company and the terms of, and consequences of holding, the
Securities. Purchaser further acknowledges that the provisions of this Section
2(j) are for the benefit of, and may be enforced by, the Placement Agent.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser as follows:
(a) Organization and Qualification. The Company is a corporation duly
organized and existing in good standing under the laws of the State of Delaware
and has the requisite corporate power to own its properties and to carry on its
business as now being conducted. The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which its ownership of property or the nature of the business conducted by it
makes such qualification necessary and where the failure so to qualify would
have a Material Adverse Effect. "MATERIAL ADVERSE EFFECT" means any material
adverse effect on (i) the Securities, (ii) the ability of the Company to perform
its obligations hereunder or under the Certificate of Designation, the Warrants
or the Registration Rights Agreement or (iii) the business, operations,
properties, financial condition or previously publicly announced prospects of
the Company.
(b) Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Warrants and the Registration Rights Agreement, to issue and
sell the Units in accordance with the terms hereof, to issue the Conversion
Shares upon conversion of the Preferred Shares in accordance with the terms of
the Certificate of Designation and to issue the Warrant Shares upon exercise of
the Warrants in accordance with the terms of such Warrants; (ii) the execution,
delivery and performance of this Agreement, the Warrants and the Registration
Rights Agreement by the
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Company and the consummation by it of the transactions contemplated hereby and
thereby (including, without limitation, the issuance of the Preferred Shares and
Warrants and the issuance and reservation for issuance of the Conversion Shares
and Warrant Shares) have been duly authorized by the Company's Board of
Directors and no further consent or authorization of the Company, its Board of
Directors, any committee of the Board of Directors or, except as set forth on
Schedule 3(b), the Company's shareholders is required, and (iii) this Agreement
constitutes, and, upon execution and delivery by the Company of the Warrants and
the Registration Rights Agreement, such agreements will constitute, valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms.
(c) Stockholder Authorization. Except as set forth on Schedule 3(c),
the Company believes that neither the execution, delivery or performance of this
Agreement, the Warrants or the Registration Rights Agreement by the Company nor
the consummation by it of the transactions contemplated hereby or thereby
(including, without limitation, the issuance of the Preferred Shares or Warrants
or the issuance, reservation for issuance or listing of the Conversion Shares or
Warrant Shares) requires any consent, approval or authorization of the Company's
stockholders.
(d) Capitalization. The capitalization of the Company as of the date
hereof, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities (other than the Preferred Shares and Warrants)
exercisable or exchangeable for, or convertible into, any shares of capital
stock and the number of shares to be reserved for issuance upon conversion of
the Preferred Shares and exercise of the Warrants is set forth on Schedule 3(d).
All of such outstanding shares of capital stock have been, or upon issuance in
accordance with the terms of any such warrants, options or preferred stock, will
be, validly issued, fully paid and non-assessable. No shares of capital stock of
the Company (including the Preferred Shares, the Conversion Shares and the
Warrant Shares) are subject to preemptive rights or any other similar rights of
the stockholders of the Company. Except for the Securities and as set forth on
Schedule 3(d), as of the date of this Agreement, (i) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exercisable or exchangeable for, any shares of capital stock of the Company, or
arrangements by which the Company is or may become bound to issue additional
shares of capital stock of the Company, and (ii) there are no agreements or
arrangements under which the Company is obligated to register the sale of any of
its or their securities under the Securities Act (except the Registration Rights
Agreement). Except as set forth on Schedule 3(d), (i) there are no securities or
instruments containing antidilution or similar provisions that will be triggered
by the issuance of the Securities in accordance with the terms of this
Agreement, the Certificate of Designation or the Warrants, (ii) there are no
outstanding securities or instruments of the Company which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a
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security of the Company, and (iii) the Company does not have any stock
appreciation rights or "phantom stock" plans or agreements or any similar plan
or agreement. The Company has furnished or made available to the Purchasers true
and correct copies of the Company's Certificate of Incorporation as in effect on
the date hereof ("CERTIFICATE OF INCORPORATION"), the Company's By-laws as in
effect on the date hereof (the "BY-LAWS"), and all other instruments and
agreements governing securities convertible into or exercisable or exchangeable
for capital stock of the Company. The Certificate of Designation, in the form
attached hereto, will be duly filed prior to Closing with the Secretary of State
of the State of Delaware and, upon the issuance of the Preferred Shares in
accordance with the terms hereof, each Purchaser shall be entitled to the rights
set forth therein.
(e) Issuance of Shares. The Preferred Shares are duly authorized and,
upon issuance in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances and will not be subject to preemptive rights or other similar
rights of stockholders of the Company and will not impose personal liability on
the holders thereof. The Conversion Shares and Warrant Shares are duly
authorized and reserved for issuance, and, upon conversion of the Preferred
Shares in accordance with the Certificate of Designation, and exercise of the
Warrants in accordance with the terms thereof, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances
and will not be subject to preemptive rights or other similar rights of
stockholders of the Company and will not impose personal liability upon the
holder thereof.
(f) No Conflicts. Except as set forth on Schedule 3(f), the execution,
delivery and performance of this Agreement, the Warrants and the Registration
Rights Agreement by the Company, the performance by the Company of its
obligations under the Certificate of Designation, and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the issuance and reservation for issuance, as applicable, of the
Preferred Shares, Warrants, Conversion Shares and Warrant Shares) will not (i)
result in a violation of the Certificate of Incorporation or By-laws or (ii)
conflict with, or constitute a default (or an event which, with notice or lapse
of time or both, would become a default) under, or give to others any rights of
termination, amendment (including, without limitation, the triggering of any
anti-dilution provisions), acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or result in a
violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and rules or regulations of
any self-regulatory organizations to which either the Company or its securities
are subject) applicable to the Company or by which any property or asset of the
Company is bound or affected (except, with respect to clause (ii), for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations that would not, individually or in the aggregate, have a Material
Adverse Effect). The Company is not in violation of its Certificate of
Incorporation or By-laws and the Company is not in default (and no event has
occurred which, with notice or lapse of time or both, would put the Company in
default) under, nor has there occurred any event giving others (with notice or
lapse of time or both) any rights of termination,
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amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company is a party, except for actual or possible
violations, defaults or rights that would not, individually or in the aggregate,
have a Material Adverse Effect. The business of the Company is not being
conducted, and shall not be conducted so long as a Purchaser owns any of the
Securities, in violation of any law, ordinance or regulation of any governmental
entity, except for possible violations the sanctions for which either singly or
in the aggregate would not have a Material Adverse Effect. Except as
specifically contemplated by this Agreement and Schedule 3(f) and the
Registration Rights Agreement, the Company is not required to obtain any
consent, approval, authorization or order of, or make any filing or registration
with, any court or governmental agency or any regulatory or self regulatory
agency in order for it to execute, deliver or perform any of its obligations
under this Agreement, the Warrants or the Registration Rights Agreement or to
perform its obligations under the Certificate of Designation, in each case in
accordance with the terms hereof or thereof. The Company is not in violation of
the listing requirements of the AMEX and does not reasonably anticipate that the
Common Stock will be delisted by the American Stock Exchange ("AMEX") for the
foreseeable future.
(g) SEC Documents, Financial Statements. Since December 1, 1995, the
Company has timely filed (within applicable extension periods) all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT") (all of the foregoing and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as the "SEC
DOCUMENTS"). The Company has delivered to the Purchasers true and complete
copies of the SEC Documents. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Exchange Act or
the Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, 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, in light of
the circumstances under which they were made, not misleading. None of the
statements made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have been
amended or updated in subsequent filings made prior to the date hereof). As of
their respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
applicable with respect thereto. Such financial statements have been prepared in
accordance with U.S. generally accepted accounting principles ("GAAP"),
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements and fairly present in all
material respects the consolidated financial position of the Company as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
immaterial year-end
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audit adjustments)). Except as set forth in the financial statements of the
Company included in the SEC Documents filed prior to the date hereof, the
Company has no liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to the date of such
financial statements, (ii) liabilities not required by GAAP to be disclosed on a
balance sheet prepared in accordance with GAAP, and (iii) obligations under
contracts and commitments incurred in the ordinary course of business and not
required under GAAP to be reflected in such financial statements, which
liabilities and obligations referred to in clauses (i), (ii) and (iii),
individually or in the aggregate, are not material to the financial condition or
operating results of the Company. Neither the Company nor any of its officers,
directors, employees or agents have provided the Purchasers with any material,
nonpublic information.
(h) Absence of Certain Changes. Since December 26, 1997, there has been
no material adverse change and no material adverse development in the business,
properties, operations, financial condition, results of operations or previously
publicly announced prospects of the Company, except as disclosed in Schedule
3(h) or in the SEC Documents filed prior to the date hereof.
(i) Absence of Litigation. Except as expressly disclosed in the SEC
Documents filed prior to the date hereof, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, or any of its directors or
officers in their capacities as such. To the best knowledge of the Company,
there are no facts which, if known by a potential claimant or governmental
authority, could give rise to a claim or proceeding which, if asserted or
conducted with results unfavorable to the Company, could reasonably be expected
to have a Material Adverse Effect.
(j) Intellectual Property. The Company owns or is licensed to use all
patents, patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, permits, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, "INTANGIBLES") necessary for the conduct of
its business as now being conducted and as described in the Company's Annual
Report on Form 10-K for the fiscal year ended December 26, 1997. To the best
knowledge of the Company, the Company does not infringe and is not acting in
conflict with any right of any other person with respect to any Intangibles
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect. The Company
has not received written notice of any pending conflict with or infringement
upon such third party Intangibles, which alleged pending conflict or alleged
infringement, if adversely determined, would result in a Material Adverse
Effect. Except as disclosed in Schedule 3(j) or in the SEC Documents filed prior
to the date hereof, the termination of the Company's ownership of, or right to
use, any single Intangible would not result in a Material Adverse Effect on the
Company. The Company has not entered into any consent agreement, indemnification
agreement, forbearance to
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xxx or settlement agreement with respect to the validity of the Company's
ownership or right to use its Intangibles and, to the best knowledge of the
Company, there is no reasonable basis for any such claim to be successful. The
Intangibles are valid and enforceable and no registration relating thereto has
lapsed, expired or been abandoned or canceled or is the subject of cancellation
or other adversarial proceedings, and all applications therefor are pending and
in good standing. The Company has complied, in all material respects, with its
contractual obligations relating to the protection of the Intangibles used
pursuant to licenses. To the best knowledge of the Company, no person is
infringing on or violating the Intangibles owned or used by the Company.
(k) Foreign Corrupt Practices. Neither the Company nor any director,
officer, agent, employee or other person acting on behalf of the Company has, in
the course of his actions for, or on behalf of, the Company, used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.
(l) Disclosure. All information relating to or concerning the Company
set forth in this Agreement or provided by the Company to the Purchasers
pursuant to Section 2(d) hereof or otherwise provided by the Company to the
Purchasers in connection with the transactions contemplated hereby is true and
correct in all material respects and the Company has not omitted to state any
material fact necessary in order to make the statements made herein or therein,
in light of the circumstances under which they were made, not misleading. No
event or circumstance has occurred or exists with respect to the Company or its
businesses, properties, prospects, operations or financial conditions, which has
not been publicly disclosed but, under applicable law, rule or regulation, would
be required to be disclosed by the Company in a registration statement filed on
the date hereof by the Company under the Securities Act with respect to the
primary issuance of the Company's securities.
(m) Acknowledgment Regarding Purchasers' Purchase of the Units. The
Company acknowledges and agrees that none of the Purchasers or the Placement
Agent is acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement or the transactions
contemplated hereby, the relationship between the Company and the Purchasers and
the Placement Agent is "arms-length" and any statement made by any Purchaser or
the Placement Agent or any of their respective representatives or agents in
connection with this Agreement and the transactions contemplated hereby is not
advice or a recommendation and is merely incidental to such Purchaser's purchase
of Securities or such Placement Agent's role as a placement agent and has not
been relied upon by the Company, its officers or its directors in any way. The
Company further acknowledges that the Company's decision to enter into this
Agreement has been based solely on an independent evaluation by the
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Company and its representatives.
(n) Form S-3 Eligibility. The Company is currently eligible to register
the resale of its Common Stock on a registration statement on Form S-3 under the
Securities Act. There exist no facts or circumstances that would prohibit or
delay the preparation and filing of a registration statement on Form S-3 with
respect to the Registrable Securities (as defined in the Registration Rights
Agreement).
(o) No General Solicitation. Neither the Company nor any person
participating on the Company's behalf in the transactions contemplated hereby
has conducted any "general solicitation," as such term is defined in Regulation
D, with respect to any of the Securities being offered hereby.
(p) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration of the
Securities being offered hereby under the Securities Act or cause this offering
of Securities to be integrated with any prior offering of securities of the
Company for purposes of the Securities Act or any applicable stockholder
approval provisions.
(q) No Brokers. The Company has taken no action which would give rise
to any claim by any person for brokerage commissions, finder's fees or similar
payments by any Purchaser relating to this Agreement or the transactions
contemplated hereby, except for The Zanett Securities Corporation.
(r) Acknowledgment of Dilution. The number of Conversion Shares
issuable upon conversion of the Preferred Shares may increase in certain
circumstances, including if the trading price of the Common Stock declines. The
Company's executive officers have studied and fully understand the nature of the
Securities being sold hereunder. The Company acknowledges that its obligation to
issue Conversion Shares upon conversion of the Preferred Shares in accordance
with the Certificate of Designation is absolute and unconditional, regardless of
the dilution that such issuance may have on the ownership interests of other
stockholders. Taking the foregoing into account, the Company's Board of
Directors has determined in its good faith business judgment that the issuance
of the Preferred Shares and Warrants hereunder and the consummation of the other
transactions contemplated hereby are in the best interests of the Company and
its stockholders.
(s) Title. The Company has good and marketable title in fee simple to
all real property and good and merchantable title to all personal property owned
by it that is material to the business of the Company, in each case free and
clear of all liens, encumbrances and defects except such as are described in the
SEC Documents or such as do not materially affect the value of such property and
do not materially interfere with the use made and proposed to be made of
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such property by the Company. Any real property and facilities held under lease
by the Company are held by it under valid, subsisting and enforceable leases
with such exceptions as are not material and do not materially interfere with
the use made and proposed to be made of such property and buildings by the
Company.
(t) Tax Status. The Company has made or filed all material foreign,
federal, state and local income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim. The Company has not executed a waiver with respect to
any statute of limitations relating to the assessment or collection of any
federal, state or local tax. None of the Company's tax returns is presently
being audited by any taxing authority.
(u) Environmental Laws. The Company (i) to the best of its knowledge,
is in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) to the best of its knowledge, has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) to the best of
its knowledge, is in compliance with all terms and conditions of any such
permit, license or approval. To the best knowledge of the Company, no
contaminant, pollutant or toxic or hazardous waste has been generated, used,
treated, stored or disposed of at, or transported to or from, or released into
the air, soil, surface or ground waters at, on or under any real property at any
time owned, leased, operated or used by the Company. The Company is not
currently involved in and, to the best knowledge of the Company, no person or
entity has taken any action or threatened or proposed to involve the Company in
any environmental clean-up or remediation or sought to expose the Company to
contribution or liability for such remediation.
(v) Regulatory Permits. The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct its business, except where the
failure to possess a certificate, authorization or permit would not result in a
Material Adverse Effect, and the Company has not received any written notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit.
(w) No Other Agreements. The Company has not, directly or indirectly,
made any
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agreements with any Purchasers relating to the terms or conditions of the
transactions contemplated by this Agreement, the Certificate of Designation, the
Registration Rights Agreement and the Warrants except as set forth in such
documents.
4. COVENANTS.
(a) Best Efforts. The parties shall use their best efforts timely to
satisfy each of the conditions described in Section 6 and Section 7 of this
Agreement.
(b) Form D: Blue Sky Laws. The Company shall file with the SEC a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof to each Purchaser promptly after such filing. The Company shall, on
or before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Securities for sale to the Purchasers
pursuant to this Agreement under applicable securities or "blue sky" laws of the
states of the United States set forth on Schedule 4(b) or obtain exemption
therefrom, and shall provide evidence of any such action so taken to the
Purchasers on or prior to the Closing Date.
(c) Reporting Status. So long as any Purchaser beneficially owns any of
the Securities, the Company shall timely file all reports required to be filed
with the SEC pursuant to the Exchange Act, and the Company shall not terminate
its status as an issuer required to file reports under the Exchange Act even if
the Exchange Act or the rules and regulations thereunder would permit such
termination. In addition, the Company shall take all actions necessary to
continue to be eligible to register the resale of its Common Stock on a
registration statement on Form S-3 under the Securities Act for so long as the
Company has an obligation to register securities under the Registration Rights
Agreement.
(d) Use of Proceeds. The Company shall use the proceeds from the sale
of the Preferred Shares and Warrants as set forth in Schedule 4(d).
(e) Expenses. Except as otherwise provided herein, in the Placement
Agency Agreement and in the Registration Rights Agreement, each party hereto
shall be responsible for its own expenses incurred in connection with the
negotiation, preparation, execution, delivery and performance of this Agreement
and the other agreements to be executed in connection herewith.
(f) Financial Information. The Company shall send the following reports
to each Purchaser until such Purchaser transfers, assigns or sells all of its
Securities: (i) within 10 days after the filing with the SEC, a copy of its
Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, its proxy
statements and any Current Reports on Form 8-K; (ii) within one day after
release, copies of all press releases issued by the Company; and (iii) copies of
any notices and
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other information made available or given to shareholders of the Company
generally, contemporaneously with making available or giving thereof to such
shareholders.
(g) Reservation of Shares. The Company shall at all times have
authorized and reserved for the purpose of issuance a sufficient number of
shares of Common Stock to provide for the full conversion of the outstanding
Preferred Shares and issuance of the Conversion Shares in connection therewith
and the full exercise of the Warrants and the issuance of the Warrant Shares in
connection therewith, subject to and as otherwise required by the Certificate of
Designation and the Warrants.
(h) Listing. The Company shall promptly secure the listing of the
Conversion Shares and Warrant Shares upon each national securities exchange or
automated quotation system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and shall maintain, so long as
any Purchaser (or any of their affiliates) own any Securities, such listing of
all Conversion Shares and Warrant Shares from time to time issuable upon
conversion of the Preferred Shares and exercise of the Warrants. The Company
will use its best efforts to continue the listing and trading of its Common
Stock on the American Stock Exchange ("AMEX") or the NASDAQ Small Cap Market
("NSCM"), the NASDAQ National Market ("NNM"), or the New York Stock Exchange
("NYSE") and will comply in all respects with the reporting, filing and other
obligations under the bylaws or rules of the AMEX, NSCM, NNM or NYSE as
applicable. The Company shall promptly provide to each holder of Preferred
Shares or Warrants copies of any notices it receives regarding the continued
eligibility of the Common Stock for trading on AMEX, or, if applicable, any
other securities exchange or automated quotation system on which securities of
the same class or series issued by the Company are then listed or quoted, if
any.
(i) Corporate Existence. So long as a Purchaser beneficially owns any
Securities, the Company shall maintain its corporate existence, and in the event
of a merger, consolidation or sale of all or substantially all of the Company's
assets, the Company shall ensure that the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
Certificate of Designation, the Warrants (except as otherwise provided therein)
and the agreements and instruments entered into in connection herewith
regardless of whether or not the Company would have had a sufficient number of
shares of Common Stock authorized and available for issuance in order to effect
the conversion of all Preferred Shares and exercise in full of all Warrants
outstanding as of the date of such transaction and (ii) is a publicly traded
corporation whose common stock is listed for trading on the AMEX, NSCM, NNM or
NYSE. Notwithstanding the foregoing, the Company covenants and agrees that it
will not engage in any merger, consolidation or sale of all or substantially all
of its assets at any time prior to the effectiveness of the registration
statement required to be filed pursuant to the Registration Rights Agreement
without (A) providing each Purchaser with written notice of such transaction at
least 60 days prior to the consummation of such transaction, (B) obtaining the
written consent of the Purchasers holding a majority-in-interest of the then
outstanding Preferred Shares on or
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before the 10th day after the delivery of such notice by the Company, and (C)
publicly announcing such transaction.
(j) No Integrated Offerings. The Company shall not make any offers or
sales of any security (other than pursuant to this Agreement and the
Registration Rights Agreement) under circumstances that would require
registration of the Securities being offered or sold hereunder under the
Securities Act or cause the offering of the Securities to be integrated with any
other offering of securities by the Company for purposes of any stockholder
approval provision applicable to the Company or its securities.
(k) Legal Compliance. The Company shall conduct its business in
compliance with all laws, ordinances or regulations of governmental entities
applicable to such businesses, except where the failure to do so would not have
a Material Adverse Effect.
(l) Filing of Form 8-K. On or before the fifth (5th) business day
following the Closing Date, the Company shall file a Current Report on Form 8-K
with the SEC describing the terms of the transactions contemplated by this
Agreement, the Certificate of Designation, the Registration Rights Agreement and
the Warrants in the form required by the Exchange Act.
(m) Intentionally omitted.
(n) No Manipulation. So long as a Purchaser beneficially owns any
Preferred Shares, neither the Purchaser nor any person acting on behalf of such
Purchaser shall take any action intended to decrease the trading price of the
Company's Common Stock during any period in which the Conversion Price (as
defined in the Certificate of Designation) is being computed for purposes of any
conversion of Preferred Shares under the Certificate of Designation. For as long
as the Preferred Shares are outstanding, each Purchaser agrees not to effect
"short" sales in the Common Stock, loan shares or otherwise participate in any
transaction which could be considered as a "short sale" under the rules and
regulations promulgated under the Exchange Act (a "SHORT SALE") and agrees to
prohibit each stockholder, executive, employee, representative, affiliate,
officer, director or control person of the Purchaser from effecting any Short
Sale. Notwithstanding the foregoing, the provisions of this subsection (n) shall
not prohibit a sale, including a Short Sale, by a Purchaser of shares of Common
Stock effected within two business days after the date on which a notice of
conversion of Preferred Shares is delivered to the Company entitling such
Purchaser to receive a number of shares of Common Stock at least equal to the
number of shares so sold.
(o) No Five Percent Holders. As more fully provided in the Certificate
of Designation and subject to the terms and limitations provided in the
Certificate of Designation, a holder of the Preferred Shares shall not be
entitled to receive shares of Common Stock upon conversion where receipt of such
Common Stock would result in such holder of Preferred Shares beneficially owning
more than 4.99% of the Company's outstanding Common Stock.
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5. TRANSFER AGENT INSTRUCTIONS.
(a) The Company shall instruct its transfer agent to issue
certificates, registered in the name of each Purchaser or its nominee, for the
Conversion Shares and the Warrant Shares in such amounts as specified from time
to time by such Purchaser to the Company upon conversion of the Preferred Shares
in accordance with the terms of the Certificate of Designation, or exercise of
the Warrants in accordance with the terms thereof, as applicable.
(b) The Company warrants that no instruction other than such
instructions referred to in this Section 5, and stop transfer instructions to
give effect to Section 2(f) and (g) hereof in the case of the transfer of the
Conversion Shares or Warrant Shares prior to registration of the Conversion
Shares and Warrant Shares under the Securities Act or without an exemption
therefrom, will be given by the Company to its transfer agent and that the
Securities shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the Registration
Rights Agreement. Nothing in this Section shall affect in any way (i) each
Purchaser's obligations and agreement set forth in Section 2(g) hereof to resell
the Securities pursuant to an effective registration statement or under an
exemption from the registration requirements of applicable securities law or
(ii) the Company's ability to institute a Delay Period pursuant to Section 2(f)
of the Registration Rights Agreement.
(c) If a Purchaser provides the Company and the transfer agent with an
opinion of counsel, which opinion of counsel shall be in form, substance and
scope customary for opinions of counsel in comparable transactions, to the
effect that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from registration, or a Purchaser provides the Company
with reasonable assurances that such Securities may be sold under Rule 144(k),
the Company shall permit the transfer and, in the case of the Conversion Shares
and Warrant Shares, promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by such
Purchaser.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Units to a
Purchaser at the Closing is subject to the satisfaction, at or before the
Closing, of each of the following conditions, provided that such conditions are
for the Company's sole benefit and may be waived by the Company at any time in
its sole discretion by providing prior written notice to each Purchaser. The
obligation of the Company to issue and sell the Units to any Purchaser hereunder
is distinct and separate from its obligation to issue and sell Units to any
other Purchaser hereunder and any failure by one or more Purchasers to fulfill
the conditions set forth herein or to consummate the purchase of Units hereunder
will not relieve the Company of its obligations with respect to any other
Purchaser.
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(a) The applicable Purchaser shall have executed this Agreement and the
Registration Rights Agreement, and delivered executed copies to the Company.
(b) The applicable Purchaser shall have delivered the Purchase Price
for the Units in accordance with Section 1(b) above.
(c) The representations and warranties of the applicable Purchaser
shall be true and correct as of the date when made and as of the date and time
of such closing as though made at that time (except for representations and
warranties that relate to a different date, which shall be true and correct as
of such date), and the applicable Purchaser shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
applicable Purchaser at or prior to the Closing Date.
(d) No litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby that prohibits the consummation of any of the transactions contemplated
by this Agreement.
7. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE.
The obligation of each Purchaser hereunder to purchase the Units to be
purchased by it at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that such conditions
are for such Purchaser's sole benefit and may be waived by such Purchaser at any
time in such Purchaser's sole discretion:
(a) The Company shall have executed this Agreement and the Registration
Rights Agreement, and delivered executed copies to such Purchaser.
(b) The Certificate of Designation shall have been accepted for filing
with the Secretary of State of the State of Delaware and a copy thereof
certified by the Secretary of State of the State of Delaware shall have been
delivered to such Purchaser.
(c) The Company shall have delivered to such Purchaser duly executed
certificates and Warrant agreements representing the Preferred Shares and
Warrants being so purchased by such Purchaser in accordance with Section 1(b)
above.
(d) The Common Stock shall be authorized for quotation and listed on
AMEX and trading in the Common Stock (or AMEX generally) shall not have been
suspended by the SEC or AMEX.
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(e) The representations and warranties of the Company shall be true and
correct as of the date when made and as of the Closing Date as though made at
that time (except for representations and warranties that relate to a different
date, which shall be true and correct as of such date) and the Company shall
have performed, satisfied and complied with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. Such Purchaser shall have
received a certificate, executed by the Chief Executive Officer of the Company,
dated as of the Closing Date to the foregoing effect and certifying that (i) he
is the duly elected and acting Chief Executive Officer of the Company, (ii) the
capitalization of the Company described in Schedule 3(d) hereto has not changed
and (iii) there have been no material adverse changes in the business, affairs,
operations, properties, assets, condition or previously publicly announced
prospects of the Company since December 26, 1997, other than the continued
utilization of cash resources.
(f) No litigation, statute, rule, regulation, executive order, decree,
ruling, injunction, action or proceeding shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby that questions the validity of, or challenges or
prohibits the consummation of, any of the transactions contemplated by this
Agreement.
(g) Such Purchaser shall have received an opinion of the Company's
counsel, dated as of the Closing Date, in form, scope and substance reasonably
satisfactory to the Purchaser and in substantially the form of Exhibit D
attached hereto.
(h) The Company shall have delivered evidence reasonably satisfactory
to the Purchasers that the Company's transfer agent has agreed to act in
accordance with irrevocable instructions in the form attached hereto as Exhibit
E.
(i) There shall have been no material adverse changes and no material
adverse developments in the business, properties, operations, prospects,
financial condition or results of operations of the Company, taken as a whole,
since the date hereof, and no information, of which the Purchasers are not
currently aware, shall come to the attention of the Purchasers that is
materially adverse to the Company.
(j) The Board of Directors of the Company shall have adopted
resolutions consistent with Section 3(b)(ii) above and in a form reasonably
acceptable to such Purchaser.
(k) The Company shall have delivered to such Purchaser a certificate
evidencing the incorporation and good standing of the Company in its state of
incorporation issued by the Secretary of State of such state of incorporation as
of a date within ten days of the Closing Date.
(l) The Company shall have delivered to such Purchaser a certified copy
of the
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Articles of Incorporation as certified by the Secretary of State of the State of
Delaware within ten days of the Closing Date.
(m) The Company shall have delivered to such Purchaser a secretary's
certificate, dated as of the Closing Date, as to (i) the resolutions described
in Section 7(k), (ii) the Certificate of Incorporation and (iii) the Bylaws,
each as in effect at the Closing.
8. GOVERNING LAW; MISCELLANEOUS.
(a) Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to principles of choice of law or conflicts of laws that would defer to
the substantive law of another jurisdiction. The Company irrevocably consents to
the jurisdiction of the United States federal courts and the state courts
located in the State of New York in any suit or proceeding based on or arising
under this Agreement and irrevocably agrees that any and all claims arising out
of this Agreement or related to the transactions contemplated by this Agreement
shall be determined exclusively in such courts. The Company irrevocably waives
the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The Company further agrees that service of process mailed by first
class mail shall be deemed in every respect effective service of process in any
such suit or proceeding. Nothing herein shall affect the right of any Purchaser
to serve process in any other manner permitted by law. The Company agrees that a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on such judgment or in any
other lawful manner.
(b) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
(c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the Purchasers, the
Company, their affiliates and persons acting on their behalf with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor any Purchaser makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
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this Agreement may be waived other than by an instrument in writing signed by
the party to be charged with enforcement and no provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and a
majority in interest of the Purchasers.
(f) Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
facsimile, and shall be effective upon receipt or refusal of receipt, if
delivered personally or by courier or confirmed facsimile, in each case
addressed to a party. The addresses for such communications shall be:
If to the Company:
HEARx Ltd.
0000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxx, M.D.
Chairman of the Board
If to any Purchaser, to such address set forth under such Purchaser's
name on the Execution Page hereto executed by such Purchaser.
Each party shall provide notice to the other parties of any change in
address.
(g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Except as
provided herein or therein, the Company shall not assign this Agreement, the
Registration Rights Agreement or the Warrants or any rights or obligations
hereunder or thereunder.
(h) Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person, except for the provisions of Section 2(j) and Section 3(m)
which are for the benefit of, and may be enforced by, the Placement Agent.
(i) Survival. The representations, warranties, agreements and covenants
of the Company set forth in Sections 3, 4, 5 and 8 hereof shall survive the
Closing notwithstanding any investigation conducted by or on behalf of any
Purchasers. None of the representations and warranties made by the Company
herein shall act as a waiver of any rights or remedies a Purchaser may have
under applicable federal or state securities laws. The Company shall indemnify
and hold harmless each Purchaser and each of such Purchaser's officers,
directors, employees, partners, members, agents and affiliates for all losses or
damages arising as a result of
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or related to any breach or alleged breach by the Company of any of its
representations or covenants set forth herein, including advancement of
reasonable expenses as they are incurred.
(j) Publicity. The Company and each Purchaser shall have the right to
review before issuance any press releases, SEC or NASDAQ filings, or any other
public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior review
of the Purchasers, to make any press release or SEC or NASDAQ filings with
respect to such transactions as is required by applicable law and regulations
(although the Purchasers shall be consulted by the Company in connection with
any such press release and filing prior to its release and shall be provided
with a copy thereof).
(k) Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(l) Termination. In the event that the Closing shall not have occurred
on or before August 31, 1998, unless the parties agree otherwise, this Agreement
shall terminate at midnight, New York City time on such date. Notwithstanding
any termination of this Agreement, any party not in breach of this Agreement
shall preserve all rights and remedies it may have against another party hereto
for a breach of this Agreement prior to or relating to the termination hereof.
(m) Joint Participation in Drafting. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement, the Certificate
of Designation, the Warrants and the Registration Rights Agreement. As such, the
language used herein and therein shall be deemed to be the language chosen by
the parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party to this Agreement.
(n) Equitable Relief. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to a Purchaser by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations hereunder (including, but not limited to, its obligations pursuant
to Section 5 hereof) will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement (including,
but not limited to, its obligations pursuant to Section 5 hereof), that a
Purchaser shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and transfer
of the Securities, without the necessity of showing economic loss and without
any bond or other security being required. Notwithstanding anything in this
Section 8(n) to the contrary, the Purchasers shall not be entitled to equitable
relief in the event of a breach by the Company of a representation or warranty
contained in Section 3 of this Agreement.
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IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
HEARx LTD.
By: /s/ Xxxx X. Xxxxx, MD
---------------------
Name: Xxxx X Xxxxx, MD
Title: Chairman and CEO
PURCHASER:
ZANETT LOMBARDIER, LTD.
By: /s/ G.A. Cicogna
----------------
Name: G.A. Cicogna
Title: Director to Advisor
RESIDENCE: Cayman Islands
ADDRESS: c/o Bank Xxxxxx Xxxx Trust Co.
Xxxx House, P.O. Box 1100
Grand Cayman, Cayman Islands
British West Indies
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with copies of all notices to:
The Zanett Securities corporation
Tower 49, 31st Floor
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
SUBSCRIPTION AMOUNT
Number of Units 5,600
Purchase Price ($1,000 per Unit): $5,600,000
23
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
HEARx LTD.
By: /s/ Xxxx X. Xxxxx, MD
---------------------
Name: Xxxx X Xxxxx, MD
Title: Chairman and CEO
PURCHASER:
XXXXXXX SACHS PERFORMANCE PARTNERS, L.P.
BY: COMMODITIES CORPORATION LLC, ITS GENERAL PARTNER
By: Xxxxx X. Judge
--------------
Name: Xxxxx X. Judge
Title: Vice President
RESIDENCE: Delaware
ADDRESS: c/o Commodities Corporation LLC
000 Xxxxx Xxxxx Xxxx
XX 000
Xxxxxxxxx, XX 00000
SUBSCRIPTION AMOUNT
Number of Units 1,050
Purchase Price ($1,000 per Unit): $1,050,000
24
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
HEARx LTD.
By: /s/ Xxxx X. Xxxxx, MD
---------------------
Name: Xxxx X Xxxxx, MD
Title: Chairman and CEO
PURCHASER:
XXXXXXX SACHS PERFORMANCE PARTNERS (OFFSHORE), L.P.
BY: COMMODITIES CORPORATION LLC, ITS GENERAL PARTNER
By: Xxxxx X. Judge
--------------
Name: Xxxxx X. Judge
Title: Vice President
RESIDENCE: Cayman Islands
ADDRESS: P.O. Box 309
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
with copies of all notices to:
c/o Commodities Corporation LLC
000 Xxxxx Xxxxx Xxxx
XX 000
Xxxxxxxxx, XX 00000
SUBSCRIPTION AMOUNT
Number of Xxxxx 000
Xxxxxxxx Price ($1,000 per Unit): $850,000
