Exhibit 1
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______________________________________________________________________________
______________________________________________________________________________
SALES AGENCY AGREEMENT
Among
IMPAX LABORATORIES, INC.,
PRESIDENT (BVI) INTERNATIONAL INVESTMENT HOLDINGS LTD.
and
FIRST UNION SECURITIES, INC.
Dated: December 11, 2001
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
Page
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SECTION 1. Representations and Warranties........................................................ 2
(a) Representations and Warranties by the Company.............................................. 2
(b) Representations and Warranties by the Selling Stockholder.................................. 7
(c) Certificates............................................................................... 11
SECTION 2. Delivery to Sales Agent; Closing; Payment............................................. 12
(a) Securities................................................................................. 12
(b) Delivery; Closing Date; Net Proceeds....................................................... 12
SECTION 3. Covenants of the Company.............................................................. 13
(a) Compliance with Securities Regulations and Commission Requests............................. 13
(b) Filing of Amendments....................................................................... 14
(c) Delivery of Registration Statement......................................................... 14
(d) Delivery of Prospectus..................................................................... 14
(e) Continued Compliance with Securities Laws.................................................. 14
(f) Blue Sky Qualifications.................................................................... 15
(g) Rule 158................................................................................... 15
(h) Listing.................................................................................... 15
(i) Reporting Requirements..................................................................... 15
(j) Continuing Obligation to Advise the Sales Agent............................................ 15
(k) Consent to the Sales Agent's Trading....................................................... 15
(l) Preparation of Prospectus Supplement....................................................... 15
SECTION 4. Payment of Expenses................................................................... 16
(a) Expenses................................................................................... 16
(b) Expenses of the Selling Stockholder........................................................ 16
(c) Allocation of Expenses..................................................................... 16
(d) Termination of Agreement................................................................... 16
SECTION 5. Conditions of Sales Agent's Obligations............................................... 17
(a) Effectiveness of Registration Statement.................................................... 17
(b) Opinions of Counsel for Company............................................................ 17
(c) Accountant's Comfort Letter................................................................ 17
(d) Opinion of Counsel for the Selling Stockholder............................................. 18
(e) Officers' Certificate...................................................................... 18
(f) Certificate of Selling Stockholder......................................................... 18
(g) Tax Forms.................................................................................. 18
(h) Appointment of Agent for Service........................................................... 18
(i) Waiver of Standoff Agreement Lock-Up....................................................... 18
(j) Additional Documents....................................................................... 19
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(k) Termination of Agreement........................................................................ 19
SECTION 6. Indemnification............................................................................ 19
(a) Indemnification by Company...................................................................... 19
(b) Indemnification by Selling Stockholder.......................................................... 20
(c) Indemnification by Sales Agent.................................................................. 21
(d) Actions Against Parties; Notification........................................................... 21
(e) Settlement Without Consent if Failure to Reimburse.............................................. 21
(f) Other Agreements with Respect to Indemnification................................................ 22
SECTION 7. Contribution............................................................................... 22
SECTION 8. Representations, Warranties and Agreements to Survive Delivery............................. 23
SECTION 9. Termination of Agreement................................................................... 23
(a) Termination; General............................................................................ 23
(b) Liabilities..................................................................................... 24
(c) Termination of Sales Agent's Obligations........................................................ 24
(d) Termination of Prospective Purchasers' Obligations.............................................. 24
SECTION 10. Right of First Refusal..................................................................... 25
SECTION 11. Notices.................................................................................... 25
SECTION 12. Parties.................................................................................... 25
SECTION 13. Selling Stockholder's Consent to Jurisdiction; Appointment of Agent for Service of Process. 25
(a) Consent to Jurisdiction......................................................................... 25
(b) Agent for Service of Process.................................................................... 25
SECTION 14. Judgment Currency.......................................................................... 27
SECTION 15. GOVERNING LAW AND TIME.................................................................... 27
SECTION 16. Effect of Headings........................................................................ 27
SECTION 17. Counterparts.............................................................................. 27
ii
IMPAX LABORATORIES, INC.
(a Delaware corporation)
3,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
SALES AGENCY AGREEMENT
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December 11, 2001
First Union Securities, Inc.
0 Xx. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
IMPAX Laboratories, Inc., a Delaware corporation (the "Company"), and
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President (BVI) International Investment Holdings Ltd., a company incorporated
in the British Virgin Islands with limited liability (the "Selling
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Stockholder"), confirm their respective agreements with First Union Securities,
Inc. (the "Sales Agent") with respect to the sale by the Selling Stockholder of
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up to 3,000,000 shares (the "Securities") of Common Stock, par value $.01 per
share, of the Company ("Common Stock") through the Sales Agent, acting as agent,
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on a best efforts basis.
The Selling Stockholder understands that the execution of this Agreement by
the parties hereto does not constitute a guarantee that the Sales Agent will be
able to successfully solicit any potential buyers for any or all of the
Securities, nor shall this Agreement be construed to require the Sales Agent to
purchase any of the Securities from the Selling Stockholder for its own account.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-40590) covering the
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registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"). Such registration statement, including the exhibits thereto, the
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schedules thereto, if any, and the documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, as amended (if applicable) at the time it became effective, is herein
called the "Registration Statement". Any related registration statement filed
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by the Company pursuant to Rule 462(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") is herein referred to
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as the "Rule 462(b) Registration Statement," and after such filing the term
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"Registration Statement" shall include the Rule 462(b) Registration Statement.
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Promptly after the execution of this Agreement, the Company will file with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations a prospectus
supplement relating to the Securities (the "Prospectus Supplement"), together
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with the related prospectus dated June 30, 2000 (the "Base Prospectus"), and the
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Company and the Selling Stockholder have previously advised the Sales Agent of
all information (financial and other) that
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will be set forth therein. The Prospectus Supplement and the Base Prospectus,
including all documents incorporated or deemed to be incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first
furnished to the Sales Agent for use in connection with the offering of the
Securities, are hereinafter referred to, collectively, as the "Prospectus." Each
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prospectus supplement, if any, relating to the Securities used prior to the date
of this Agreement, together with the related prospectus and all documents
incorporated or deemed to be incorporated by reference therein pursuant to Item
12 of Form S-3, are hereinafter referred to, collectively, as a "preliminary
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prospectus". For purposes of this Agreement, all references to the Registration
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Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering Analysis and
Retrieval system ("XXXXX").
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All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in the Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated or deemed to be incorporated by
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reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company
represents and warrants to each of the Sales Agent and the Selling Stockholder
as of the date hereof and as of the Closing Date referred to in Section 2(b)
hereof, and agrees with each of the Sales Agent and the Selling Stockholder, as
follows:
(i) Compliance with Registration Requirements. The Company meets
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the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became or
become effective and at the Closing Date, the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not
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and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither the Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued or at the Closing Date, included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The representations and warranties in this subsection (i) shall not apply
to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Sales Agent expressly for use in
the Registration Statement or the Prospectus, as the case may be.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Sales Agent for
use in connection with this offering was identical to the electronically
transmitted copy thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
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be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
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with the other information in the Prospectus, at the time the Registration
Statement became effective, at the time the Prospectus was issued and at
the Closing Date, did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(ii) Independent Accountants. To the Company's knowledge, the
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accountants who certified the financial statements and supporting schedules
included in the Registration Statement and the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements of the
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Company included in the Registration Statement and the Prospectus, together
with the related schedules (if any) and notes, present fairly the financial
position of the Company at the dates indicated and the results of
operations, changes in shareholders' equity and cash flows of the Company
for the periods specified; and such financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
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applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The data appearing in the documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus under the captions "Selected Financial Data," "Summary Financial
Data" or any similar captions present fairly the information shown therein
and have been
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compiled on an accounting basis consistent with that of the audited
financial statements of the Company included in the Registration Statement
and the Prospectus.
(v) No Material Adverse Change in Business. Since the respective
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dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company,
other than those in the ordinary course of business, which are material
with respect to the Company, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
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organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in the States of California and
Pennsylvania and in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except (solely in the case of jurisdictions other than
the states of California and Pennsylvania) where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
The Company does not have any subsidiaries.
(vii) Capitalization. The authorized, issued and outstanding
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capital stock of the Company is as set forth in the balance sheet (and
notes thereto) included in the Company's most recent Quarterly Report on
Form 10-Q filed with the Commission (except for subsequent issuances of
shares of Common Stock pursuant to employee benefit plans or outstanding
employee stock options described in the Prospectus, upon the conversion of
outstanding convertible securities described in the Prospectus or upon the
exercise of outstanding warrants described in the Prospectus); the shares
of issued and outstanding capital stock of the Company (including the
Securities to be sold by the Selling Stockholder under this Agreement) have
been duly authorized and validly issued and are fully paid and non-
assessable; none of the outstanding shares of capital stock of the Company
(including the Securities to be sold by the Selling Stockholder under this
Agreement) was issued in violation of any preemptive rights, rights of
first refusal or other similar rights of any securityholder of the Company;
and the Company does not have a so-called "shareholder rights plan".
(viii) Authorization of Agreement. This Agreement has been duly
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authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The Common Stock,
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each class or series of the Company's outstanding preferred stock (the
"Outstanding Preferred Stock"), the Company's authorized but unissued
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preferred stock (the "Authorized Preferred Stock") and the Company's
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charter and by-laws conform in all material
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respects to all of the respective statements relating thereto contained in
the Prospectus (including the statements incorporated by reference in the
Prospectus from the Company's Form 8-A filed on December 8, 1995, as
amended on December 14, 1997 (as so amended, the "Form 8-A")); such
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statements conform to the rights set forth in the respective instruments
and agreements defining the same; and no holder of the Securities is or
will be subject to personal liability by reason of being such a holder.
(x) Absence of Defaults and Conflicts. The Company is not in
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violation of its Organizational Documents (as defined below) or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company is a party or by which it may be bound, or to which any
of the property or assets of the Company is subject (collectively,
"Agreements and Instruments"), except for such defaults that would not
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result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement and compliance by the
Company with its obligations under this Agreement have been duly authorized
by all necessary action, corporate or other, and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant
to, any Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of
the provisions of the Organizational Documents of the Company or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its assets,
properties or operations. As used herein, "Organizational Documents" means,
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in the case of a corporation, its charter and by-laws; in the case of a
limited or general partnership, (a) its partnership certificate,
certificate of formation or similar organizational document and (b) its
partnership agreement; in the case of a limited liability company, (c) its
articles of organization, certificate of formation or similar
organizational document and (d) its operating agreement, limited liability
company agreement, membership agreement or other similar agreement; in the
case of a trust, its trust agreement; and, in the case of any other entity,
the organizational documents of such entity; and a "Repayment Event" means
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any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the obligor.
(xi) Absence of Proceedings. Except for such actions, suits,
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proceedings, inquiries or investigations disclosed in the Registration
Statement and the Prospectus, there is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company which is required to
be disclosed in the Registration Statement, or which might reasonably be
expected to
5
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations under this Agreement; the
aggregate of all pending legal or governmental proceedings to which the
Company is a party or of which any of its property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(xii) Accuracy of Exhibits. There are no contracts or documents
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which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated or deemed to be incorporated by
reference therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiii) Absence of Further Requirements. (A) No filing with, or
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authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, (B) no authorization, approval, vote or other consent
of any shareholder of the Company, and (C) no authorization, approval, vote
or other consent of any other person or entity, is necessary or required
for the performance by the Company of its obligations under this Agreement,
for the offer, sale and delivery of the Securities as contemplated by this
Agreement or for the consummation of any of the other transactions
contemplated by this Agreement, in each case on the terms contemplated by
the Prospectus, except such as have been already obtained under the 1933
Act or the 1933 Act Regulations or such as may be required under state
securities or blue sky laws; provided that no representation is made with
respect to any filing, authorization, approval, consent, license, order,
registration, qualification, decree or vote referred to in clause (A) or
clause (C) of this paragraph (xiii) that is applicable solely with respect
to the Selling Stockholder.
(xiv) Investment Company Act. The Company is not, and upon the sale
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of the Securities as herein contemplated will not be, an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
----
Act").
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(xv) Nasdaq Stock Market's National Market. The outstanding shares
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of Common Stock (including the Securities to be sold by the Selling
Stockholder under this Agreement) are duly listed, and admitted and
authorized for trading, on the Nasdaq Stock Market's National Market.
(xvi) Stock Certificates. The Securities to be sold by the Selling
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Stockholder pursuant to this Agreement are not, and will not be, subject to
any stop transfer instructions or similar restrictions on transfer and the
certificates evidencing such Securities will not, at the time of delivery
of such certificates to the purchasers thereof on the Closing Date as
contemplated by this Agreement, bear any legends restricting the transfer
thereof or other similar legends.
(xvii) No Right of First Refusal. The sale of the Securities as
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contemplated by this Agreement is not and will not be subject to any
preemptive rights, rights of first
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refusal or other similar rights arising under the charter or by-laws of the
Company, the Delaware General Corporation Law (the "DGCL") or any agreement
or instrument to which the Company is a party or by which it is bound or,
to the knowledge of the Company, otherwise; and the Securities are not and,
at the Closing Date, will not be subject to any restrictions on transfer
arising under the charter or bylaws of the Company, the DGCL or any
instrument or agreement to which the Company is a party or by which it is
bound or, to the knowledge of the Company, otherwise.
(xviii) NASD Matters. The Company is eligible to use Form S-3 under
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the 1933 Act pursuant to the standards for that Form as in effect
immediately prior to October 21, 1992.
(b) Representations and Warranties by the Selling Stockholder. The Selling
Stockholder represents and warrants to the Sales Agent as of the date hereof and
as of the Closing Date, and agrees with the Sales Agent, as follows:
(i) Accurate Disclosure. The Selling Stockholder has reviewed and
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will review, and is and will be familiar with, the Registration Statement
as originally filed with the Commission and all amendments thereto, if any,
and with each preliminary prospectus and the Prospectus and any amendments
or supplements thereto; and, at the respective times the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment thereto became or becomes effective, at the date of this
Agreement and at the Closing Date, the information relating to the Selling
Stockholder (including the information with respect to the Selling
Stockholder's Securities and any other shares of Common Stock or other
securities of the Company which are owned or held by the Selling
Stockholder), and, to the knowledge of the Selling Stockholder, the other
information that is set forth in the Registration Statement (or any
amendment thereto) and in the Prospectus (or any amendment or supplement
thereto) did not and will not contain any untrue statement of a material
fact and did not and will not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; provided that this representation, warranty and agreement shall
not apply to statements in or omissions from the Registration Statement (or
any amendment thereto) or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Sales Agent expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus.
(ii) Sales Agency Agreement. This Agreement has been duly
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authorized, executed and delivered by the Selling Stockholder.
(iii) Power of Attorney. The Selling Stockholder has duly
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authorized, executed and delivered a power of attorney (a "Power of
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Attorney") appointing Xxx Tu as the Selling Stockholder's attorney-in-fact
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(the "Attorney-in-Fact"), and a Letter of Transmittal and Custody Agreement
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(the "Custody Agreement") with StockTrans, Inc., as custodian (the
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"Custodian"); each of the Power of Attorney and the Custody Agreement
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constitutes a valid and binding obligation of the Selling Stockholder,
enforceable in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws
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relating to or affecting enforcement of creditors' rights generally or by
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); the Attorney-in-Fact is
authorized, on behalf of the Selling Stockholder, to execute and deliver
this Agreement and the certificate referred to in Section 5(f) hereof, to
approve the price at which the Securities are sold by the Selling
Stockholder pursuant to this Agreement, to approve the form and terms of,
execute and deliver this Agreement, to authorize the delivery to the Sales
Agent of the Common Stock to be sold by the Selling Stockholder under this
Agreement and to accept payment therefor and to duly endorse (in blank or
otherwise) the certificate or certificates representing such Securities or
a stock power or powers with respect thereto and otherwise to act on behalf
of the Selling Stockholder in connection with this Agreement and the
transactions contemplated hereby.
(iv) Good Standing. The Selling Stockholder has been duly organized
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and is validly existing and in good standing as a limited liability company
under the laws of the British Virgin Islands.
(v) Authority. The Selling Stockholder has full power and authority
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to execute, deliver and perform its obligations under this Agreement, the
Power of Attorney and the Custody Agreement and to sell, transfer and
deliver the Securities to be sold by the Selling Stockholder under this
Agreement.
(vi) Non-Contravention. The execution, delivery and performance of
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this Agreement, the Power of Attorney and the Custody Agreement by the
Selling Stockholder and the consummation of the transactions contemplated
by this Agreement, the Power of Attorney and the Custody Agreement
(including the sale and delivery of the Common Stock to be sold by the
Selling Stockholder pursuant to this Agreement), and compliance by the
Selling Stockholder with its obligations under this Agreement, the Power of
Attorney and the Custody Agreement, have been duly authorized by all
necessary action on the part of the Selling Stockholder and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the Securities to be sold by the Selling
Stockholder under this Agreement or any other property or assets of the
Selling Stockholder or, if applicable, any of its subsidiaries pursuant to,
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Selling
Stockholder or, if applicable, any of its subsidiaries is a party or by
which the Selling Stockholder or, if applicable, any of its subsidiaries
may be bound or to which any of the property or assets of the Selling
Stockholder or, if applicable, any of its subsidiaries is subject, nor will
such action result in any violation of the provisions of the Organizational
Documents (which term, when used herein with respect to the Selling
Stockholder, includes, without limitation, the memorandum of association
and articles of association of the Selling Stockholder) of the Selling
Stockholder or, if applicable, any of its subsidiaries, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Selling Stockholder or, if applicable, any of
its subsidiaries or any of their respective assets, properties or
operations, except where such conflict, breach, default, Repayment Event,
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lien, charge, encumbrance or violation would not affect the offering, sale
or delivery of the Securities as contemplated by this Agreement and could
not be reasonably expected to affect any of the other transactions
contemplated by this Agreement.
(vii) Good and Marketable Title. The Selling Stockholder now has
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and, at the time that the Selling Stockholder delivers Securities to the
purchasers thereof on the Closing Date pursuant to this Agreement, will
have all legal and beneficial right, title and interest in and to the
Securities to be sold by the Selling Stockholder hereunder, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, charge,
claim or equity of any kind (each, a "Lien") other than pursuant to this
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Agreement; the Selling Stockholder is and, at the time that the Selling
Stockholder delivers Securities to the purchasers thereof on the Closing
Date pursuant to this Agreement, will be the legal, record and beneficial
owner of the Securities to be sold by the Selling Stockholder hereunder;
upon delivery of the Securities to the purchasers thereof against payment
to the Custodian of the consideration therefor specified in this Agreement,
assuming that none of such purchasers has notice of any "adverse claim"
(within the meaning of Section 8-105 of the Uniform Commercial Code of the
State of New York (the "UCC")) with respect to such Securities, each of
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such purchasers will receive all legal and beneficial right, title and
interest in and to the Securities purchased by it from the Selling
Stockholder, free and clear of any Lien and will have acquired a
"securities entitlement" (within the meaning of UCC Section 8-102(a)(17))
to such Securities, free and clear of any such adverse claim or Lien.
(viii) Waiver of Lock Up. The Selling Stockholder has executed a
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waiver (the "Waiver") to the restrictions provided for in the Market
Standoff Agreement dated as of November 28, 2000 and the Amended and
Restated Market Standoff Agreement dated as of September 21, 2001 by and
among the Selling Stockholder and certain other stockholders of the Company
(together, the "Standoff Agreement") which Waiver waives the restrictions
of the Standoff Agreement which do not permit the sale of Securities as
contemplated by this Agreement and contains the consent of the signatories
thereto to such sale; and the Waiver has been executed by all such parties
as is required for the Waiver to be effective under the terms of the
Standoff Agreement to allow the Selling Stockholder to sell the Securities
in accordance with this Agreement without violating the terms of the
Standoff Agreement.
(ix) Absence of Rights of First Refusal. The Securities to be sold
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by the Selling Stockholder under this Agreement are not subject to any
option, warrant, put, call, preemptive right, right of first refusal or
other right to acquire or purchase any such Securities other than pursuant
to this Agreement; and, except for a legend restricting transfers of the
Securities (which legend is in customary form for privately placed
securities and which legend will be removed from the Securities prior to
the delivery of the Securities to the purchasers thereof on the Closing
Date), the Securities to be sold by the Selling Stockholder under this
Agreement are not and, at the time that the Selling Stockholder delivers
the Securities to the purchasers thereof on the Closing Date, will not be
subject to any restrictions on transfer, including, without limitation, any
lock-up, standstill or other similar agreements or arrangements.
9
(x) Absence of Manipulation. The Selling Stockholder has not
-----------------------
taken and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected
to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(xi) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, vote, order, registration, qualification
or decree of, any court or governmental authority or agency, domestic or
foreign, or any creditor of the Selling Stockholder or, if applicable, any
of its subsidiaries, or of any stockholder, partner, member or
securityholder of or holder of an equity interest in the Selling
Stockholder or, if applicable, any of its subsidiaries, is necessary or
required for the execution or delivery by the Selling Stockholder of, or
the performance by the Selling Stockholder of its obligations under, this
Agreement, the Custody Agreement or the Power of Attorney, for the sale and
delivery by the Selling Stockholder of the Securities to be sold by it
under this Agreement or for the consummation by the Selling Stockholder of
the other transactions contemplated by this Agreement, the Custody
Agreement or the Power of Attorney, except such as may be required under
the 1933 Act or the 1933 Act Regulations, the 1934 Act, the 1934 Act
Regulations or state securities or blue sky laws.
(xii) Restriction on Sale of Securities. For a period beginning on
---------------------------------
and including the date of this Agreement through and including the date
which is 90 days from the Closing Date, the Selling Stockholder will not,
without the prior written consent of the Sales Agent, offer, sell, contract
to sell, pledge or otherwise dispose of (or enter into any transaction that
is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Selling Stockholder
or any person or entity controlled by or acting on behalf of the Selling
Stockholder or any person in privity with the Selling Stockholder or any
person or entity controlled by or acting on behalf of the Selling
Stockholder), directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the 1934 Act and the rules and regulations of the
Commission promulgated thereunder with respect to, any shares of Common
Stock or other capital stock of the Company or any securities convertible
into or exercisable or exchangeable for any shares of Common Stock or other
capital stock of the Company, or publicly announce an intention to effect
any such transaction, provided that the provisions set forth in this
paragraph will terminate at midnight (New York City time) on December 14,
2001 unless, on or prior to that time, a total of at least 3,000,000
Securities have been sold by the Selling Stockholder through the Sales
Agent pursuant to this Agreement.
(xiii) Certificates Suitable for Transfer. Certificates for all of
----------------------------------
the Securities to be sold by the Selling Stockholder pursuant to this
Agreement, in form suitable for transfer by delivery and accompanied by
duly executed stock powers endorsed in blank by the Selling Stockholder
with signatures guaranteed, have been placed in custody with the Custodian
for the purpose of effecting delivery hereunder and thereunder.
10
(xiv) Delivery of Registration Statements. The Selling Stockholder
-----------------------------------
will, without charge to the Sales Agent, provide, or cause to be provided
to the Sales Agent and its counsel (i) a conformed copy of the Registration
Statement and each amendment thereto (in each case including exhibits
thereto) and (ii) so long as a prospectus relating to the Securities is
required to be delivered under the 1933 Act or the 1934 Act, as many copies
of the Prospectus or any amendment or supplement thereto as the Sales Agent
may reasonably request.
(xv) Failure to Deliver Certificates. In addition to any other
-------------------------------
rights available to the Sales Agent under this Agreement or otherwise, if
the Selling Stockholder fails to deliver any Securities (any such
Securities which the Selling Stockholder fails to deliver are hereinafter
called "Defaulted Securities") to the Custodian which are to be sold by the
--------------------
Selling Stockholder hereunder by the date (the "Delivery Date") which is
-------------
the date of this Agreement, and if after the Delivery Date the Sales Agent
purchases (in an open market transaction or otherwise) shares of the
Company's Common Stock (any shares so purchased being hereinafter called
"Replacement Securities") to deliver in satisfaction of any transaction
----------------------
effected pursuant to this Agreement, then the Selling Stockholder shall
immediately pay in cash (by wire transfer of immediately available funds)
to the Sales Agent the amount, if any, (which amount shall be paid as
liquidated damages and not as a penalty), by which (A) the Sales Agent's
total purchase price (including brokerage commissions, if any) for such
Replacement Securities exceeds (B) an amount equal to (i) the total
purchase price paid to the Sales Agent for the Replacement Securities by
the purchasers thereof minus (ii) the sum of (x) an amount equal to the
Agent Fee which would have been payable by the Selling Stockholder to the
Sales Agent with respect to the Defaulted Securities pursuant to Section
2(a) of this Agreement plus (y) the aggregate amount of any Transfer Taxes
and Transaction Fees (as such terms are hereinafter defined) payable in
connection with the transfer and delivery of the Replacement Securities. In
the event that any amount is payable by the Selling Stockholder to the
Sales Agent pursuant to this subsection (xiv), then the Sales Agent, in its
sole and absolute discretion, may deduct the amount so payable from any
proceeds which are payable to the Selling Stockholder or the Custodian from
the sale of other Securities pursuant to Section 2 of this Agreement.
(xvi) Stock Certificates. The Securities to be sold by the Selling
------------------
Stockholder pursuant to this Agreement are not, and will not be, subject to
any stop transfer instructions or similar restrictions on transfer and the
certificates evidencing such Securities will not, at the time of delivery
of such certificates to the purchasers thereof on the Closing Date as
contemplated by this Agreement, bear any legends restricting the transfer
thereof or other similar legends.
(c) Certificates. Any certificate signed by any officer of the Company and
delivered to the Sales Agent or counsel for the Sales Agent shall be deemed a
representation and warranty by the Company to the Sales Agent as to the matters
covered thereby; and any certificate signed by or on behalf of the Selling
Stockholder and delivered to the Sales Agent or counsel for the Sales Agent
shall be deemed a representation and warranty by the Selling Stockholder to the
Sales Agent as to the matters covered thereby.
11
SECTION 2. Delivery to Sales Agent; Closing; Payment.
-----------------------------------------
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Selling
Stockholder agrees to sell through the Sales Agent, as exclusive agent of the
Selling Stockholder, and the Sales Agent agrees to use its best efforts to sell,
as agent, the Securities. The Selling Stockholder agrees to pay the Sales
Agent, on the Closing Date, a commission (the "Agent Fee") equal to 4% of the
amount obtained by multiplying (i) the number of Securities sold through the
Sales Agent pursuant to this Agreement times (ii) the Public Offering Price (as
defined below) (equivalent to $0.41 for each Security sold through the Sales
Agent pursuant to this Agreement).
Anything in this Agreement to the contrary notwithstanding, if the Sales
Agent furnishes to the Selling Stockholder aggregate purchase orders or
indications of interest from prospective purchasers (which need not be in
writing) for 3,000,000 Securities at a price to the Selling Stockholder (after
deducting an agent fee of 4% of the aggregate proposed purchase price of such
Securities to be paid by the proposed purchasers thereof but without deducting
Transfer Taxes, Transaction Fees or any other expenses) of not less than U.S.
$9.00 per share, then the Selling Stockholder agrees that it will either (i)
accept all such purchase orders and indications of interest and sell such
Securities as contemplated by this Agreement or (ii) pay the Sales Agent an
agent fee equal to 4% of the aggregate price at which such Securities were to
have been purchased by the prospective purchasers thereof.
(b) Delivery; Closing Date; Net Proceeds. The Securities shall be offered
to investors initially at a public offering price of $10.25 per Security (the
"Public Offering Price").
---------------------
Settlement for sales of the Securities will occur, if at all, on the third
business day following the date of this Agreement (the "Closing Date"). Payment
------------
of the purchase price for, and delivery of certificates for, the Securities to
be sold on the Closing Date shall be made at the offices of Sidley Xxxxxx Xxxxx
& Xxxx llp, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 or at such other place
as is agreed upon by the Sales Agent and the Selling Stockholder. Upon receipt
by the Sales Agent of immediately available funds from the buyers of the
Securities being sold on such Closing Date, the Sales Agent shall deduct
therefrom (i) the Agent Fee, (ii) any stock transfer taxes, stamp duties,
capital duties or other similar duties, taxes or charges payable in connection
with the transfer and delivery of such Securities (collectively, "Transfer
--------
Taxes") and (iii) any withholding taxes and any other transaction fees imposed
-----
by any governmental or self-regulatory organization with respect to such sales
(collectively, "Transaction Fees") and shall remit the balance by wire transfer
----------------
to a single bank account at the Custodian, which account shall be designated by
the Custodian. The Selling Stockholder agrees that the Sales Agent shall have
no liability or responsibility, in contract, tort, or otherwise, if any buyer of
Securities fails to pay all or any portion of the purchase price therefor and
that the Sales Agent shall under no circumstances be required to purchase any of
the Securities for its own account or to advance funds to purchase Securities on
behalf of any buyer.
Certificates for the Securities delivered on the Closing Date shall be in
such denominations and registered in such names as the Sales Agent may request
at least one business day before the Closing
12
Date. The certificates for the Securities to be delivered on the Closing Date
will be made available for examination by the Sales Agent in The City of New
York not later than noon (Eastern time) on the business day prior to the Closing
Date.
If the Selling Stockholder shall default on its obligation to deliver any
Securities on the Closing Date, the Selling Stockholder shall, in addition to
any payment the Selling Stockholder may be required to make pursuant to Section
1(b)(xiv) above and in addition to any other rights available to the Sales Agent
under this Agreement or otherwise, (i) indemnify and hold harmless the Sales
Agent from and against any and all loss, liability, claim, damage or expense
arising from or as a result of such default by the Selling Stockholder and (ii)
pay the Sales Agent the Agent Fee to which it would otherwise be entitled absent
such default; provided that no amount will be payable pursuant to clause (ii) of
this paragraph in respect of any Defaulted Securities to the extent that the
Selling Stockholder shall have paid to the Selling Agent the liquidated damages
in respect of such Defaulted Securities specified by Section 1(b)(xiv) hereof.
In the event that any amount is payable by the Selling Stockholder to the Sales
Agent pursuant to the preceding sentence, then the Sales Agent, in its sole and
absolute discretion, may deduct the amounts payable from any proceeds which are
payable to the Selling Stockholder or the Custodian from the sale of Securities
pursuant to this Agreement.
In acting as agent for the Selling Stockholder hereunder, the Sales Agent
shall have the right, in its sole and absolute discretion, to withdraw, cancel
or modify the offer of the Securities and accept or reject any offer for the
purchase of the Securities, in whole or in part, and any such withdrawal,
cancellation, modification, acceptance or rejection shall not be deemed a breach
of its agreement contained herein. The Selling Stockholder may accept or reject
any offer for the purchase of Securities, in whole or in part.
SECTION 3. Covenants of the Company. The Company covenants with each of
------------------------
the Sales Agent and the Selling Stockholder as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will notify the Sales Agent immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus and/or prospectus
supplement transmitted for filing under Rule 424(b) was received for filing by
the Commission and, in the event that it was not, it will promptly file such
prospectus and/or prospectus supplement. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
13
(b) Filing of Amendments. The Company will give the Sales Agent and the
Selling Stockholder notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Sales Agent and the Selling Stockholder with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Sales Agent or the
Selling Stockholder or their respective counsel shall object.
(c) Delivery of Registration Statement. The Company has furnished or will
deliver to the Sales Agent and the Selling Stockholder and their respective
counsel without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Sales Agent
and the Selling Stockholder, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for the Sales Agent. The copies of the Registration Statement
and each amendment thereto furnished to the Sales Agent and the Selling
Stockholder will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectus. The Company will furnish to the Sales Agent,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as the Sales Agent may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Sales Agent will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Sales Agent or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Sales Agent and the
Selling Stockholder such
14
number of copies of such amendment or supplement as the Sales Agent or the
Selling Stockholder may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Sales Agent, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Sales Agent may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the date of this Agreement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the later of
the date of this Agreement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Listing. The Company will use its best efforts to maintain the
quotation of the Securities on the Nasdaq Stock Market's National Market and
will file with the Nasdaq Stock Market's National Market all documents and
notices required by the Nasdaq Stock Market's National Market of companies that
have securities that are traded in the over-the-counter market and quotations
for which are reported by the Nasdaq Stock Market's National Market.
(i) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(j) Continuing Obligation to Advise the Sales Agent. The Company will, at
any time during the term of this Agreement, advise the Sales Agent and the
Selling Stockholder, by telephone confirmed in writing, immediately after the
Company shall have received notice or obtained knowledge thereof, of any
information or fact that would alter or affect any opinion, certificate, letter
and other document provided to the Sales Agent or the Selling Stockholder
pursuant to Section 5 herein.
(k) Consent to the Sales Agent's Trading. The Sales Agent may trade in the
Company's Common Stock for its own account or as agent at the same time as the
Selling Stockholder's sales pursuant to this Agreement.
(l) Preparation of Prospectus Supplement. Immediately following the
execution of this Agreement, the Company will prepare the Prospectus Supplement
containing the public offering price and other selling terms of the Securities,
the plan of distribution thereof and such
15
other information as may be required by the 1933 Act or the 1933 Act Regulations
or as the Sales Agent and the Company may deem appropriate, will file or
transmit for filing with the Commission, in accordance with Rule 424(b) of the
1933 Act Regulations, copies of the Prospectus, including such Prospectus
Supplement and, not later than the close of business on the business day after
the date of this Agreement, will deliver to the Sales Agent such number of
printed copies of the Prospectus as the Sales Agent may request.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement (except for expenses payable
by the Selling Stockholder pursuant to Section 4(b) hereof), including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, issuance and delivery of the certificates for the
Securities to the Sales Agent, (iii) the fees and disbursements of the counsel,
accountants and other advisors to the Company, (iv) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Sales Agent in connection with the preparation of the Blue Sky
Survey and any supplements thereto, (v) the printing and delivery to the Sales
Agent of copies of each preliminary prospectus and the Prospectus and any
amendments or supplements thereto and (vi) the preparation, printing and
delivery to the Sales Agent of copies of the Blue Sky Survey and any supplements
thereto.
(b) Expenses of the Selling Stockholder. The Selling Stockholder will pay
the following expenses incident to the performance of its obligations under, and
the consummation of the transactions contemplated by, this Agreement: (i) the
Agent Fee, (ii) any Transfer Taxes and Transaction Fees payable in connection
with the sale or delivery of the Securities to the purchasers thereof (and the
Selling Stockholder hereby authorizes the payment of any such amounts by
deduction from either the proceeds of the Securities to be sold by the Selling
Stockholder under this Agreement or from any funds from time to time held for
the account of the Selling Stockholder by the Custodian), (iii) the fees and
expenses of the Custodian and the transfer agent or registrar for the
Securities, (iv) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Sales Agent in connection with, the review, if
any, by the National Association of Securities Dealers, Inc. (the "NASD") of the
terms of the sale of the Securities and (v) the fees and disbursements of the
Selling Stockholder's counsel and accountants.
(c) Allocation of Expenses. The provisions of this Section 4 shall
supersede any prior agreement that the Company and the Selling Stockholder have
made for the allocation between themselves of expenses and costs in connection
with the performance of their obligations under this Agreement.
(d) Termination of Agreement. If this Agreement is terminated by the Sales
Agent in accordance with the provisions of Section 5 because any condition
specified in paragraph (d), (f), (g), (h) or (i) of Section 5, or because any
condition relating solely to the Selling Stockholder specified in paragraph (j)
of Section 5, shall not have been fulfilled when and as required to be
fulfilled, the Selling Stockholder shall reimburse the Sales Agent for all of
its out-of-pocket expenses,
16
including the reasonable fees and disbursements of counsel for the Sales Agent.
If this Agreement is terminated by the Sales Agent in accordance with the
provisions of Section 5 because any condition specified in Section 5 (other than
any of the conditions specified in the immediately preceding sentence) shall not
have been fulfilled when and as required to be fulfilled, or if this Agreement
is terminated by the Sales Agent in accordance with the provisions of Section
9(a)(i) hereof, the Company shall reimburse the Sales Agent for all of its out-
of-pocket expenses, including the reasonable fees and disbursements of counsel
for the Sales Agent.
SECTION 5. Conditions of Sales Agent's Obligations. The obligations of
---------------------------------------
the Sales Agent hereunder, and the obligations of any prospective purchaser of
Securities sold through the Sales Agent to purchase such Securities, are subject
to the accuracy of the representations and warranties of the Company and the
Selling Stockholder contained in Section 1 hereof and in certificates of any
officer of the Company or of or on behalf of the Selling Stockholder delivered
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholder of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, is effective and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or, to the knowledge
of the Company, threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Sales Agent. The Prospectus shall have
been filed or transmitted for filing with the Commission pursuant to Rule 424(b)
of the 1933 Act Regulations within the time period prescribed by such Rule, and,
within two business days after the date of this Agreement, the Company shall
have provided evidence satisfactory to the Sales Agent of such timely filing or
transmittal.
(b) Opinions of Counsel for Company. At the Closing Date, the Sales Agent
shall have received the favorable opinions of Blank Rome Xxxxxxx and XxXxxxxx
LLP, counsel for the Company, and of Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC,
regulatory counsel for the Company, each dated the Closing Date and in form and
substance satisfactory to counsel for the Sales Agent, to the effect set forth
in Exhibits A and B hereto, respectively, and to such further effect as counsel
to the Sales Agent may reasonably request.
(c) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Sales Agent shall have received from PricewaterhouseCoopers LLP a
letter, dated the date of this Agreement and in form and substance satisfactory
to the Sales Agent, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information of the Company contained
in the Registration Statement and the Prospectus; and, on the Closing Date, the
Sales Agent shall have received from PricewaterhouseCoopers LLP a letter, dated
as of the Closing Date and in form and substance satisfactory to the Sales
Agent, to the effect that they reaffirm the statements made in the letter
furnished pursuant to the first clause of this subsection (c), except that the
specified date referred to in such letter shall be a date no more than three
business days prior to the Closing Date.
17
(d) Opinion of Counsel for the Selling Stockholder. At the Closing Date,
the Sales Agent shall have received the favorable opinions of Xxxxx Day Xxxxxx &
Xxxxx, U.S. and Republic of China counsel to the Selling Stockholder, and of
Xxxxxxx Xxxx & Xxxxxxx, British Virgin Islands counsel for the Selling
Stockholder, each dated the Closing Date and in form and substance satisfactory
to counsel for the Sales Agent, to the effect set forth in Exhibits C and D
hereto, respectively, and to such further effect as counsel to the Sales Agent
may reasonably request.
(e) Officers' Certificate. At the Closing Date, the Sales Agent shall have
received a certificate signed by the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the Company,
to the effect that (i) the representations and warranties of the Company in
Section 1(a) hereof are true and correct on and as of the Closing Date as if
made on and as of the Closing Date, (ii) the Company has complied in all
material respects with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Date, and (iii) the
Company has reviewed and is familiar with the Prospectus and any amendments or
supplements thereto and the Prospectus, as so amended or supplemented (if
applicable), does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading.
(f) Certificate of Selling Stockholder. At the Closing Date, the Sales
Agent shall have received a certificate signed by the Attorney-in-Fact on behalf
of the Selling Stockholder, to the effect that (i) the representations and
warranties of the Selling Stockholder in Section 1(b) hereof are true and
correct on and as of the Closing Date as if made on and as of the Closing Date,
(ii) the Selling Stockholder has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date, and (iii) the Selling Stockholder has reviewed and is familiar with the
Prospectus and any amendments or supplements thereto and the information
relating to the Selling Stockholder (including the information with respect to
the Selling Stockholder's Securities and any other shares of Common Stock or
other securities of the Company which are owned or held by the Selling
Stockholder) that is set forth in the Prospectus, as so amended or supplemented
(if applicable), does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading.
(g) Tax Forms. Prior to the date hereof, to the extent applicable, the
Sales Agent shall have received a properly completed and executed United States
Treasury Department Form X-0, X-0XXX, X-0XXX or W-8IMY (or other applicable
form) from the Selling Stockholder.
(h) Appointment of Agent for Service. At the Closing Date, the Sales Agent
shall have received a copy of an agreement, signed by the Selling Stockholder
and CT Corporation System ("CT"), whereby the Selling Stockholder shall appoint
--
CT as the Selling Stockholder's agent for service of process and CT shall accept
such appointment, all as contemplated by Section 13 hereof.
(i) Waiver of Standoff Agreement Lock-Up. Prior to the date hereof, the
Sales Agent shall have received from the Selling Stockholder a true and correct
copy of the executed Waiver to the Standoff Agreement, and the Waiver shall be
in full force and effect at the Closing Date.
18
(j) Additional Documents. At the Closing Date, counsel for the Sales Agent
shall have been furnished with such documents and opinions as they may require
in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, contained in this Agreement; and
all proceedings taken by the Company and the Selling Stockholder in connection
with the offering and sale of the Securities as herein contemplated and in
connection with the other transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Sales Agent and counsel for the Sales
Agent.
(k) Termination of Agreement. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Sales Agent by notice to the Company and the
Selling Stockholder at any time at or prior to the delivery of and payment for
the Securities on the Closing Date (in which case the prospective purchasers of
the Securities shall be released from any obligation to the Selling Stockholder
to purchase such Securities), and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7, 8, 13 and 14 shall survive any such termination and remain in
full force and effect and such termination shall also be without liability of
any such prospective purchaser to the Selling Stockholder.
SECTION 6. Indemnification.
----------------
(a) Indemnification by Company. The Company agrees to indemnify and hold
harmless the Sales Agent and each person, if any, who controls the Sales Agent
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
-----
the fees and disbursements of counsel chosen by the Sales Agent),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue
19
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Sales Agent expressly for use in the Registration Statement (or any amendment
thereto) or in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, that this indemnity agreement with
-------- -------
respect to any preliminary prospectus shall not inure to the benefit of the
Sales Agent through whom the person asserting any such losses, liabilities,
claims, damages or expenses purchased Securities, or any person controlling the
Sales Agent, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any such amendments or supplements thereto, but
excluding documents incorporated or deemed to be incorporated by reference
therein) was not sent or given by or on behalf of the Sales Agent to such
person, if such is required by law, at or prior to the written confirmation of
the sale of such Securities to such person and if the Prospectus (as so amended
or supplemented, if applicable) would have corrected the defect giving rise to
such loss, liability, claim, damage or expense, except that this proviso shall
not be applicable if such defect shall have been corrected in a document which
is incorporated or deemed to be incorporated by reference in the Prospectus.
(b) Indemnification by Selling Stockholder. The Selling Stockholder agrees
to indemnify and hold harmless the Sales Agent and each person, if any, who
controls the Sales Agent within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense (i) described in the indemnity contained in subsection (a) of this
Section 6, as incurred, but only with respect to untrue statements or omissions
or alleged untrue statement or omissions made in the Registration Statement (or
any amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and conformity with
information furnished or confirmed (in each case orally or in writing) to the
Company by or on behalf of the Selling Stockholder expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) or (ii) arising out
of or based upon the engagement of the Sales Agent pursuant to, or the
performance by the Sales Agent of the services contemplated by, this Agreement,
as incurred; provided that the indemnity set forth in clause (ii) of this
subsection (b) shall not apply to the extent that any such loss, liability,
claim, damage or expense is found in a final judgment by a court of competent
jurisdiction to have resulted from the bad faith, willful misconduct or gross
negligence of the Sales Agent or the reckless disregard by the Sales Agent of
its duties and obligations hereunder; and provided, further, that
notwithstanding anything to the contrary contained in this Agreement, the
liability of the Selling Stockholder for any breach of the Selling Stockholder's
representations and warranties contained in Section 1(b) of this Agreement and
under the indemnity and contribution agreements contained in this Section 6 and
in Section 7 of this Agreement shall be limited to an amount equal to the
aggregate Public Offering Price of the Securities sold by the Selling
Stockholder through the Sales Agent pursuant to this Agreement less the total
Agent Fee paid to the Sales Agent by the Selling Stockholder pursuant to this
Agreement. For purposes of the immediately preceding proviso, the aggregate
Public Offering Price of the Securities sold by the Selling Stockholder through
the Sales Agent pursuant to this
20
Agreement shall be deemed to include the aggregate Public Offering Price of any
Replacement Securities sold by the Sales Agent in lieu of Defaulted Securities.
(c) Indemnification by Sales Agent. The Sales Agent agrees to indemnify
and hold harmless the Company, its directors, each of its officers who signed
the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 6, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by the Sales Agent expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(d) Actions Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against 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 hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) and 6(b)
above, counsel to the indemnified parties shall be selected by the Sales Agent
(provided that such counsel shall be mutually reasonably acceptable to the
Company and the Sales Agent), and, in the case of parties indemnified pursuant
to Section 6(c) above, counsel to the indemnified parties shall be selected by
the Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such
21
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section 6 shall not affect any agreements between the Company and the
Selling Stockholder with respect to indemnification of each other, and the
provisions of this Section 6 and Section 7 hereof shall not limit or otherwise
affect any other rights to indemnification or contribution to which the Sales
Agent may otherwise be entitled.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder on the one hand and the Sales Agent on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Stockholder on the one hand and of the Sales Agent on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Stockholder
on the one hand and the Sales Agent on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as (i) the aggregate Public Offering Price of
the Securities sold by the Selling Stockholder through the Sales Agent pursuant
to this Agreement less the total Agent Fee paid to the Sales Agent by the
Selling Stockholder pursuant to this Agreement and (ii) the total Agent Fee
received by the Sales Agent from the Selling Stockholder pursuant to this
Agreement, bear to the aggregate Public Offering Price of the Securities sold by
the Selling Stockholder through the Sales Agent pursuant to this Agreement. For
purposes of the immediately preceding sentence, the aggregate Public Offering
Price of the Securities sold by the Selling Stockholder through the Sales Agent
pursuant this Agreement should be deemed to include the aggregate Public
Offering Price of any Replacement Securities sold by the Sales Agent in lieu of
Defaulted Securities.
The relative fault of the Company and the Selling Stockholder on the one
hand and the Sales Agent on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Stockholder or by the
Sales Agent and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Sales Agent agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or
22
by any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Sales Agent shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Securities actually sold to investors through the Sales Agent
pursuant to this Agreement were offered to the public exceeds the amount of any
damages which the Sales Agent has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the Sales
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as the Sales Agent, and each
director of the Company, each officer of the Company who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
The provisions of this Section 7 shall not affect any agreements between
the Company and the Selling Stockholder with respect to contribution between
themselves.
The obligations of the Company and the Selling Stockholder pursuant to this
Section 7 are joint and several; provided that the Selling Stockholder shall be
required to contribute only in respect of losses, liabilities, claims, damages
and expenses described in Section 6(b) of this Agreement.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
---------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates signed officers of the Company or signed by or on behalf of the
Selling Stockholder submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Sales Agent or any controlling person, or by or on behalf of the Company or
by or on behalf of the Selling Stockholder, and shall survive the purchase of
the Securities by the purchasers thereof through the Sales Agent.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Sales Agent may terminate this Agreement,
by notice to the Company and the Selling Stockholder, at any time at or prior to
the time of the payment for and delivery of the Securities on the Closing Date
(and, upon such termination, the obligations of the prospective purchasers of
the Securities to the Selling Stockholder shall also
23
terminate) (i) if there has been, since the time of execution of this Agreement
or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company, whether or not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the financial markets in the
United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Sales Agent, impracticable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in any securities of the Company has been suspended or materially
limited by the Commission or the Nasdaq Stock Market's National Market, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq Stock Market's National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
or Section 5 of this Agreement, such termination shall be without liability of
any party to any other party except as provided in Section 4 hereof, and
provided further that Sections 1, 6, 7, 8, 13 and 14 shall survive such
termination and remain in full force and effect and such termination also shall
also be without liability of any prospective purchaser of Securities to the
Selling Stockholder.
(c) Termination of Sales Agent's Obligations. Anything herein to the
contrary notwithstanding, all obligations of the Sales Agent to offer or sell
the Securities as agent of the Selling Stockholder shall terminate at the close
of business (New York City time) on the business day immediately preceding the
Closing Date; provided that the Selling Stockholder acknowledges and agrees that
settlement for the purchase and sale of securities traded on the Nasdaq National
Market typically occurs on the third trading day after the trade date, that the
Closing Date is the third trading day date after the date of this Agreement, and
as a result, that prospective purchasers of Securities may be unwilling or
unable to purchase those Securities on the Closing Date if the trade date for
those transactions is later than the date of this Agreement, and accordingly,
that the Sales Agent shall have no liability or obligation whatsoever to the
Selling Stockholder in the event that any prospective purchasers are unable or
unwilling to purchase Securities because the trade dates for such purchases are
after the date of this Agreement.
(d) Termination of Prospective Purchasers' Obligations. Anything herein to
the contrary notwithstanding, in the event that this Agreement is terminated by
the Sales Agent pursuant to subsection (a) of this Section 9 or Section 5
hereof, then the obligations of the prospective purchasers to purchase
Securities from the Selling Stockholder shall automatically terminate, and such
termination shall be without liability of the Sales Agent or any such purchasers
to the Selling Stockholder.
24
SECTION 10. Right of First Refusal. Provided at least 3,000,000
-----------------------
Securities have been sold through the Sales Agent for the account of the Selling
Stockholder on or prior to December 14, 2001, the Selling Stockholder hereby
grants to the Sales Agent the right of first refusal to act as the exclusive
sales agent for the Selling Stockholder in connection with the sale of any
shares of Common Stock, whether now owned or hereafter acquired by the Selling
Stockholder, until June 30, 2002.
SECTION 11. Notices. All notices and other communications hereunder shall
--------
be in writing and shall be deemed to have been duly given if mailed, sent by
Federal Express or similar delivery service, or transmitted by facsimile or any
other standard form of telecommunication. Notices to the Sales Agent shall be
directed to the Sales Agent at c/o Wachovia Securities, 0 Xx. Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, attention of Xxxxxxx Xxxxxxxx; notices to the Company
shall be directed to it at 00000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 000000, attention
of Chief Financial Officer; and notices to the Selling Stockholder shall be
directed to it in care of Xxx Tu, as Attorney-in-Fact at c/o President
International Development Corp., 10F-1, 000, Xxxxx Xxxxx X. Xx. Xxx. 0, Xxxxxx,
Xxxxxx, facsimile number: 011-886-2-223-458-681.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the Sales Agent, the Company and the Selling Stockholder and
their respective successors. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation, other
than the Sales Agent, the Company and the Selling Stockholder and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Sales Agent, the Company and the Selling Stockholder and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities through the Sales Agent shall be deemed
to be a successor by reason merely of such purchase. Notwithstanding the
foregoing provisions of this Section 12, any provision of this Agreement which
provides that the prospective purchasers of Securities shall have no liability
to the Selling Stockholder or to the effect that any obligations of such
prospective purchasers to the Selling Stockholder shall terminate shall inure to
the benefit of such prospective purchasers and their respective successors,
heirs and legal representatives.
SECTION 13. Selling Stockholder's Consent to Jurisdiction; Appointment of
-------------------------------------------------------------
Agent for Service of Process.
----------------------------
(a) Consent to Jurisdiction. The Selling Stockholder hereby irrevocably
consents and submits to the nonexclusive jurisdiction of the federal courts
located in the City and County of New York, New York and the courts of the State
of New York located in the City and County of New York, New York with respect to
any legal action, suit or proceeding arising out of or in connection with this
Agreement.
(b) Agent for Service of Process. The Selling Stockholder further, by the
execution and delivery of this Agreement, for a period ending on the sixth
anniversary of the Closing Date
25
irrevocably agrees to designate, appoint and empower CT Corporation System, 000
Xxxxx Xxxxxx, Xxx Xxxx, XX, 00000, as its designee, appointee and authorized
agent to receive for and on its behalf service of any and all legal process,
summons, notices and documents that may be served in any action, suit or
proceeding brought against or otherwise involving the Selling Stockholder with
respect to its obligations, liabilities or any other matter arising out of or in
connection with this Agreement and that may be made on such designee, appointee
and authorized agent in accordance with applicable legal procedures, it being
understood that the designation and appointment of CT Corporation System as such
authorized agent shall become effective immediately without any further action
on the part of the Selling Stockholder. The Selling Stockholder represents to
the Sales Agent that it has notified CT Corporation System of such designation
and appointment in writing and that CT Corporation System has accepted the same
in writing. The Selling Stockholder further agrees that, to the extent permitted
by law, service of process upon CT Corporation System (or its successors as
agent for service of process) and written notice of said service to the Selling
Stockholder given as provided in Section 11 hereof, shall be deemed in every
respect effective service of process upon the Selling Stockholder in any such
action, suit or proceeding. If for any reason such designee, appointee and agent
hereunder shall cease to be available to act as such, the Selling Stockholder
agrees to designate a new designee, appointee and agent in The City and County
of New York, New York on the terms and for the purposes of this Section 13
reasonably satisfactory to the Sales Agent. The Selling Stockholder further
hereby irrevocably consents and agrees to accept the service of any and all
legal process, summons, notices and documents in any such action, suit or
proceeding if service of a copy thereof is made upon the agent for service of
process referred to in this Section 13(b) (whether or not the appointment of
such agent shall for any reason prove to be ineffective and whether or not such
agent shall accept or acknowledge such service) and a copy thereof is sent to
the Selling Stockholder at its address and in the manner specified in Section 11
of this Agreement. So long as a copy of the applicable legal process, summons,
notice or other document has been sent to the Selling Stockholder as provided in
the preceding sentence, the Selling Stockholder agrees that the failure of any
such designee, appointee and agent to give any notice of such service to the
Selling Stockholder shall not impair or affect in any way the validity of such
service or any judgment rendered in any action or proceeding based thereon.
Nothing herein shall in any way be deemed to limit the ability of the Sales
Agent to serve any such legal process, summons, notices and documents in any
other manner permitted by applicable law or to obtain jurisdiction over the
Selling Stockholder or bring actions, suits or proceedings against the Selling
Stockholder in other jurisdictions, and in such manner, as may be permitted by
applicable law. The Selling Stockholder hereby irrevocably and unconditionally
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of venue of any of the aforesaid actions, suits or
proceedings arising out of or in connection with this Agreement brought in the
federal courts located in The City and County of New York, New York or the
courts of the State of New York located in The City and County of New York, New
York and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
The provisions of this Section 13 shall survive any termination of this
Agreement, in whole or in part.
26
SECTION 14. Judgment Currency. The Selling Stockholder and the Company
------------------
severally agree to indemnify and hold harmless the Sales Agent, its successors,
and the controlling persons referred to in Sections 6 and 7 and their heirs and
legal representatives, from and against any and all loss incurred by any of them
as a result of any judgment or order being given or made against the Selling
Stockholder or the Company, respectively, for an amount due under or in
connection with this Agreement or any of the transactions or other instruments
or agreements contemplated hereby, and such judgment or order being paid in a
currency other than United States dollars (the "Judgment Currency") as a result
of any variation as between (i) the rate of exchange at which the United States
dollars amount is converted into the Judgment Currency for the purpose of such
judgment or order, and (ii) the rate of exchange at which the Sales Agent,
successor, controlling person, heir or legal representative, as the case may be,
is able to purchase United States dollars with the amount of the Judgment
Currency actually received by such person or entity. The foregoing indemnity
shall constitute separate and independent obligations of the Selling Stockholder
and the Company and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term "rate of exchange" shall include
any premiums and costs of exchange payable in connection with the purchase of,
or conversion of, the relevant currency.
SECTION 15. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 16. Effect of Headings. The Article and Section headings herein
-------------------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 17. Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[Signature Page Follows]
27
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Selling Stockholder a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Sales Agent, the Selling Stockholder and the Company
in accordance with its terms.
Very truly yours,
IMPAX LABORATORIES, INC.
By /s/ Xxxxx X. Xxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-CEO
PRESIDENT (BVI) INTERNATIONAL INVESTMENT
HOLDINGS LTD.
By /s/Xxx Tu
--------------------------
Name: Xxx Tu
Attorney-in-Fact
CONFIRMED AND ACCEPTED,
as of the date first above written:
FIRST UNION SECURITIES, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Authorized Signatory
Xxxxxxx X. Xxxxxxxx
Managing Director
28
