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EXHIBIT 10.82
SECURITIES PURCHASE AGREEMENT
THE SECURITIES BEING SUBSCRIBED FOR HEREIN (AND THE SECURITIES
ISSUABLE UPON CONVERSION OF PREFERRED STOCK) HAVE NOT BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED, (THE "1933 ACT") OR THE SECURITIES COMMISSION OF ANY STATE
UNDER ANY STATE SECURITIES LAW. SUCH SECURITIES ARE BEING OFFERED PURSUANT TO
THE SAFE HARBOR EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT AFFORDED BY
REGULATION S ("REGULATION S") PROMULGATED UNDER THE 1933 ACT. SUCH SECURITIES
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO
U.S. PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S) UNLESS THE SECURITIES
ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR SUCH
OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. AN INVESTMENT IN SUCH SECURITIES INVOLVES A HIGH DEGREE OF RISK. IN
MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND THE RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED, APPROVED OR DISAPPROVED
BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT REVIEWED, PASSED UPON,
CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THIS DOCUMENT OR ANY
INFORMATION PROVIDED BY THE COMPANY TO POTENTIAL INVESTORS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of February
20, 1996 by and among AMERICAN BIOMED, INC., a Delaware corporation, with
headquarters located at 00000 Xxxxxxx'x Xxxx Xxxx, Xxxxx 000, Xxx Xxxxxxxxx,
Xxxxx 00000 (the "COMPANY"), and each of the Purchasers (individually, a
"PURCHASER" and collectively, the "PURCHASERS") set forth on the execution
pages hereof (the "EXECUTION PAGES").
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WHEREAS:
A. The Company and the Purchasers are executing and delivering this
Agreement in reliance upon the safe harbor exemption from securities
registration afforded by the provisions Regulation S ("REGULATION S"), as
promulgated by the United States Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "1933 ACT");
B. Each of the Purchasers desires to purchase, upon the terms and
conditions stated in this Agreement, (i) the number of shares of the Company's
Common Stock, par value $.001 per share (the "Common Stock") at a price equal
to Twenty-four Cents ($.24) and/or (ii) the number of shares of the Company's
Series A Convertible Preferred Stock, par value $.001 per share (the "PREFERRED
STOCK"), at a price equal to One Thousand Dollars ($1,000) per share, the
stated value thereof, set forth immediately below each such Purchaser's name on
the Execution Pages. The rights, preferences and privileges of the Preferred
Stock, including the terms upon which such Preferred Stock is convertible into
shares of the Company's Common Stock, are set forth in the form of Certificate
of Designation attached hereto as EXHIBIT "A" (the "CERTIFICATE OF
DESIGNATION"). The shares of Common Stock and Preferred Stock to be issued and
sold hereunder are hereinafter referred to as the "COMMON SHARES" and the
"PREFERRED SHARES", respectively, and the shares of Common Stock issuable upon
conversion of the Preferred Shares are hereinafter referred to as the
"CONVERSION SHARES".
C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights
Agreement, in the form attached hereto as EXHIBIT "B" (the "REGISTRATION RIGHTS
AGREEMENT"), pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations
promulgated thereunder, and applicable state securities laws;
NOW THEREFORE, the Company and the Purchasers hereby agree as follows:
1. PURCHASE AND SALE OF COMMON SHARES AND PREFERRED SHARES.
a. Purchase of Common Shares and Preferred Shares. Subject to the
satisfaction (or waiver) of the conditions set forth in Section 6 and Section 7
below, the Company shall issue and sell to each Purchaser and each Purchaser
shall purchase from the Company (i) the number of Common Shares at a price
equal to Twenty-four cents ($.24) per share and/or (ii) the number of Preferred
Shares at a price equal to One Thousand Dollars ($1,000) per share, the stated
value thereof (collectively, the "PURCHASE PRICE"), set forth immediately below
each such Purchaser's name on the Execution Pages.
b. Form of Payment. At the Closing (as hereinafter defined), (i) the
Purchasers shall pay the Purchase Price by wire transfer to the Company, in
accordance with the Company's written wiring instructions, against delivery of
duly executed certificates representing such Common Shares
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and/or Preferred Shares, and (ii) the Company shall deliver such certificates
against delivery of such Purchase Price.
c. Closing/Closing Date. Subject to the satisfaction (or waiver) of
the conditions thereto set forth in Section 6 and Section 7 below, an
individual closing ("CLOSING") shall be conducted with respect to each
Purchaser or group of Purchasers on July 24, 1996 or on such other date as the
parties shall agree. Such Closings shall occur at the offices of Klehr,
Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000. For the purposes of this Agreement and compliance with
Regulation S, the date on which the last such Closing takes place, and all
Common Shares and/or Preferred Shares offered hereby have been purchased, shall
be deemed to be the "CLOSING DATE".
2. PURCHASERS' REPRESENTATIONS AND WARRANTIES
Each Purchaser represents and warrants to the Company solely with
respect to such Purchaser that:
a. Investment Purpose. The Purchaser is purchasing the Common Shares
and/or Preferred Shares (including the Conversion Shares) (collectively, the
Common Shares, the Preferred Shares and the Conversion Shares are hereinafter
referred to as the "SECURITIES")) for its own account for investment only and
not with a present view towards the public sale or distribution thereof, except
pursuant to sales that are exempt from the registration requirements of the
1933 Act and/or sales registered under the 1933 Act. Purchaser understands that
Purchaser must bear the economic risk of this investment indefinitely, unless
the Securities are registered pursuant to the 1933 Act and any applicable state
securities or blue sky laws ("State Acts") or an exemption from such
registration is available, and that the Company has no present intention of
registering any such Securities other than as contemplated by the Registration
Rights Agreement. Purchaser represents and warrants to the Company, as of the
date of this Agreement, that Purchaser has no present plan or intention to sell
the Securities in the United States or to a U.S. person at any predetermined
time, and has made no predetermined arrangements to sell the Securities.
Purchaser covenants that neither Purchaser nor its affiliates nor any person
acting on its or their behalf has entered, has the intention of entering, or
will enter into any put option, short position or other similar instrument or
position in the U.S. with respect to the Securities at any time after receipt
of the term sheet concerning the transaction contemplated thereby (the "Term
Sheet") until the expiration of the period commencing on the Closing Date and
ending forty (40) days thereafter (the "Restricted Period") or for the intended
purpose of lowering the price at which the Preferred Shares are convertible
into Conversion Shares and neither Purchaser nor any of its affiliates nor any
person acting on its or their behalf will at any time use Conversion Shares or
Preferred Shares to settle/cover any put option, short position or other
similar instrument or position entered into prior to the end of the Restricted
Period.
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b. Accredited Investor Status. The Purchaser is an "ACCREDITED
INVESTOR" as that term is defined in Rule 501(a) of Regulation D ("REGULATION
D") as promulgated by the SEC under the 1933 Act.
c. Reliance on Exemptions. The Purchaser understands that the Common
Shares and/or the Preferred Shares are being offered and sold to it in reliance
upon specific exemptions from the registration requirements of United States
federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Purchaser's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the Preferred
Shares.
d. Information. The Purchaser and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by the Purchaser or its advisors. The Purchaser and
its advisors, if any, have been afforded the opportunity to ask questions of
the Company and have received what the Purchaser believes to be satisfactory
answers to any such inquiries. Neither such inquiries nor any other due
diligence investigation conducted by Purchaser or any of its advisors or
representatives shall modify, amend or affect Purchaser's right to rely on the
Company's representations and warranties contained in Section 3 below. The
Purchaser understands that its investment in the Securities involves a high
degree of risk.
e. Governmental Review. The Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.
f. Offshore Transaction. The Purchaser represents and warrants to the
Company that (i) the Purchaser is not a "U.S. person" as that term is defined
in Rule 902(o) of Regulation S and, in that regard, further represents that (a)
it is organized under the laws of a jurisdiction other than the United States
and (b) if organized by a "U.S. Person" principally for the purpose of
investing in securities not registered under the Act, it was organized and is
owned by Accredited Investors who are not natural persons, estates or trusts;
(ii) the Preferred Shares were not offered to the Purchaser in the United
States and at the time of execution of this Subscription Agreement and the time
of any offer to the Purchaser to purchase Preferred Shares hereunder, the
Purchaser was physically outside the United States; (iii) the Purchaser is
purchasing the Securities for its own account and not on behalf of or for the
benefit of any U.S. person and the sale and resale of the Securities have not
been prearranged with any U.S. person or buyer in the United States; (iv) the
Purchaser agrees that all offers and sales of the Securities prior to the
expiration of the Restricted Period shall not be made to U.S. persons or for
the account or benefit of U.S. persons and shall otherwise be made in
compliance with the provisions of Regulation S. Purchaser is not a distributor
or dealer with respect to the Securities.
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g. Signatory's Representation. The Purchaser represents and warrants
that the signatory to this Agreement is not a U.S. Person (as defined in
Regulation S), and is not located in the U.S. at the time of signing this
Agreement.
h. No Scheme to Evade Registration. Purchaser's acquisition of the
Securities is not a transaction (or any element of a series of transactions)
that is part of a plan or scheme to evade the registration provisions of the
1933 Act.
i. Authorization; Enforcement. This Agreement and the Registration
Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of the Purchaser and are valid and binding agreements of the
Purchaser enforceable in accordance with their terms.
j. Residency. The Purchaser is a resident of the country set forth
immediately below its name on the Execution Pages.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
a. Organization and Qualification. The Company and each of its
subsidiaries is a corporation duly organized and existing in good standing
under the laws of the jurisdiction in which it is incorporated, and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted. The Company and each of its subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary and where the failure so to qualify would have a
Material Adverse Effect. "MATERIAL ADVERSE EFFECT" means any material adverse
effect on the operations, properties, financial condition or prospects of the
Company or on the transactions contemplated hereby.
b. Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform this Agreement, and the
Registration Rights Agreement to issue and sell the Common Shares and/or the
Preferred Shares in accordance with the terms hereof and, upon approval of the
Amendment by the Company's stockholders and the filing thereof with the
Secretary of State of the State of Delaware, to issue the Conversion Shares
upon conversion of the Preferred Shares in accordance with the terms of the
Certificate of Designation, (ii) the execution and delivery of this Agreement
and the Registration Rights Agreement by the Company and the consummation by it
of the transactions contemplated hereby and thereby (including without
limitation the issuance of the Common Shares and/or the Preferred Shares and
the issuance and reservation for issuance of the Conversion Shares issuable
upon conversion thereof) have been duly authorized by the Company's Board of
Directors and, except for the approval of the Amendment (as hereinafter
defined) by the Company's stockholders, no further consent or authorization of
the Company, its Board or Directors, or its stockholders is required, (iii)
this Agreement has been
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duly executed and delivered by the Company, and (iv) this Agreement
constitutes, and upon execution and delivery by the Company of the Registration
Rights Agreement, such agreement will constitute, a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms.
c. Capitalization. The capitalization of the Company as of the date
hereof, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares reserved for issuance pursuant to the
Company's stock option plans, the number of shares reserved for issuance
pursuant to securities (other than the Preferred Shares) exercisable for, or
convertible into or exchangeable for any shares of Common Stock and the number
of shares to be reserved for issuance upon conversion of the Preferred Shares
upon the effective date of the Amendment (subject to adjustment pursuant to the
Company's covenant set forth in Section 4(f) below), is set forth on SCHEDULE
3(C). All of such outstanding shares of capital stock have been, or upon
issuance will be, validly issued, fully paid and nonassessable. No shares of
capital stock of the Company are subject to preemptive rights or any other
similar rights of the stockholders of the Company or any liens or encumbrances.
Except as disclosed in SCHEDULE 3(C), as of the date of this Agreement, (i)
there are no outstanding options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for any shares of capital stock of the
Company or any of its subsidiaries, or arrangements by which the Company or any
of its subsidiaries is or may become bound to issue additional shares of
capital stock of the Company or any of its subsidiaries, and (ii) there are no
agreements or arrangements under which the Company or any of its subsidiaries
is obligated to register the sale of any of its or their securities under the
1933 Act (except the Registration Rights Agreement). The Company has furnished
to the Purchaser true and correct copies of the Company's Restated Certificate
of Incorporation as in effect on the date hereof ("CERTIFICATE OF
INCORPORATION"), the Company's By-laws, as in effect on the date hereof (the
"BY-LAWS"), the Certificate of Designation and the terms of all securities
convertible into or exercisable for Common Stock of the Company and the
material rights of the holders thereof in respect thereto. The Company shall
provide the Purchaser with a written update of this representation signed by
the Company's Chief Executive or Chief Financial Officer on behalf of the
Company as of the Closing Date.
d. Issuance of Shares. The Common Shares and/or Preferred Shares are,
and upon the effective date of the Amendment, the Conversion Shares will be
duly authorized and, upon issuance in accordance with the terms of this
Agreement, the Conversion Shares shall be validly issued, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issue thereof and shall not be subject to preemptive rights or other similar
rights of stockholders of the Company.
e. No Conflicts. The execution, delivery and performance of this
Agreement, and the Registration Rights Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including without limitation, the issuance of the Common Shares and/or the
Preferred Shares, and after the effective date of the Amendment, the issuance
and reservation for issuance of the Conversion Shares) will not (i) result in a
violation of the Certificate of Incorporation or By-laws or (ii) conflict with,
or constitute a default (or an event
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which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or any of its subsidiaries or
by which any property or asset of the Company or any of its subsidiaries is
bound or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect). Except as
set forth on Schedule 3(e) hereof, neither the Company nor any of its
subsidiaries is in violation of its Certificate of Incorporation, By-laws or
other organizational documents and neither the Company nor any of its
subsidiaries is in default (and no event has occurred which with notice or
lapse of time or both would put the Company or any of its subsidiaries in
default) under, nor has there occurred any event giving others (with notice or
lapse of time or both) any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its subsidiaries is a party, except for possible defaults or rights as
would not, individually or in the aggregate, have a Material Adverse Effect.
The businesses of the Company and its subsidiaries are not being conducted, and
shall not be conducted so long as a Purchaser owns any of the Securities, in
violation of any law, ordinance or regulation of any governmental entity,
except for possible violations which either singly or in the aggregate do not
have a Material Adverse Effect. Except as specifically contemplated by this
Agreement and as required under the 1933 Act and any applicable state
securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court
or governmental agency or any regulatory or self regulatory agency in order for
it to execute, deliver or perform any of its obligations under this Agreement,
or the Registration Rights Agreement or to perform its obligations under the
Certificate of Designation, in each case in accordance with the terms hereof or
thereof.
f. SEC Documents, Financial Statements. Since December 31, 1995, the
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Exchange Act of 1934, as amended (the "1934 ACT") (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits)
incorporated by reference therein, being hereinafter referred to herein as the
"SEC DOCUMENTS"). The Company has delivered to Purchaser true and complete
copies of the SEC Documents, except for such exhibits, schedules and
incorporated documents. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have
been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods
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involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may include footnotes or may be condensed or summary
statements) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in the financial
statements of the Company included in the SEC Documents, the Company has no
liabilities, contingent or otherwise, other than (i) liabilities incurred in
the ordinary course of business subsequent to December 31, 1995 and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected in such financial statements, which, individually or in the
aggregate, are not material to the financial condition or operating results of
the Company. The Company has not provided to any Purchaser any information
which, according to applicable law, rule or regulation, should have been
disclosed publicly by the Company but which has not been so disclosed.
g. Absence of Certain Changes. Since December 31, 1995 there has been
no material adverse change and no material adverse development in the business,
properties, operations, financial condition, results of operations or prospects
of the Company, except as disclosed in Schedule 2(g) or in the SEC Documents.
h. Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of
the Company or any of its subsidiaries, threatened against or affecting the
Company or any of its subsidiaries.
i. Disclosure. All information relating to or concerning the Company
set forth in this Agreement and provided to the Purchaser pursuant to Section
2(d) hereof and otherwise in connection with the transactions contemplated
hereby is true and correct in all material respects and the Company has not
omitted to state any material fact necessary in order to make the statements
made herein or therein, in light of the circumstances under which they were
made, not misleading. No event or circumstance has occurred or exists with
respect to Company or its subsidiaries or the respective business, properties,
prospects, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed.
j. Acknowledgment Regarding Purchaser's Purchase of the Common Shares
and/or the Preferred Shares. The Company further acknowledges that Purchaser is
not acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by the Purchaser or any of its
representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to the Purchaser's
purchase of the Common Shares and/or the Preferred Shares. The Company further
represents to Purchaser that the Company's decision to enter into this
Agreement has been based solely on the independent evaluation of the Company
and its representatives.
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k. Current Public Information. The Company represents and warrants to
the Purchaser that the Company is a "domestic issuer" and a "reporting issuer"
as defined in Rule 902 of Regulation S. The Common Stock is registered under
Section 12(b) or 12(g) of the 1934 Act, and the Company has filed all the
materials required to be filed as reports pursuant to the 1934 Act for a period
of at least twelve months preceding the date hereof (or for such shorter period
as the Company was required by law to file such material), and all such filings
have been made on a timely basis. The Company is currently eligible to register
the resale of its Common Stock on a registration statement Form S-3 under the
1933 Act.
l. No Securities Offered in U.S. or to any U.S. Person. Based upon,
among other things, the representations and warranties of the Purchasers in
this Agreement, the Company represents that it has not offered the Common
Shares and/or the Preferred Shares offered hereunder to any Purchaser in the
U.S. or to any person in the United States or any U.S. Person (as defined in
Regulation S).
m. No Directed Selling Efforts in Regard to this Transaction. Neither
the Company nor any distributor participating in the transaction contemplated
hereby (if any) nor any person acting for the Company, or any such distributor,
has conducted any "directed selling efforts" in the United States, as such term
is defined in Rule 902 of Regulation S, or any general solicitation, as such
term is defined in Regulation D, with respect to any of the Securities.
n. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offerers
to buy any security under circumstances that would require registration of the
Securities under the 1933 Act.
o. No Brokers. The Company has taken no action which would give rise
to any claim by any person for brokerage commissions, finder's fees or similar
payments by any Purchaser relating to this Agreement or the transactions
contemplated hereby, except for dealings with Zanett Capital Inc., whose
commissions and fees will be paid for by the Company.
4. COVENANTS.
a. Best Efforts. The parties shall use their best efforts timely to
satisfy each of the conditions described in Section 6 and 7 of this Agreement.
b. Reporting Status. So long as the Purchasers beneficially own any of
the Securities, the Company shall timely file all reports required to be filed
with the SEC pursuant to the 1934 Act, and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the
1934 Act or the rules and regulations thereunder would permit such termination.
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c. Use of Proceeds. The Company shall not use the proceeds from the
sale of the Common Shares and/or the Preferred Shares for anything other than
the Company's internal working capital purposes, and shall not, directly or
indirectly, use such proceeds for any loan to or investment in any other
corporation, partnership, enterprise or other person.
d. Financial Information. The Company agrees to send the following
reports to each Purchaser until such Purchaser transfers, assigns, or sells all
of the Securities: (i) within ten (10) days after the filing with the SEC, a
copy of its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and
any Current Reports on Form 8-K; and (ii) within one (1) day after release,
copies of all press releases issued by the Company or any of its subsidiaries.
e. Reservation of Shares. The Company shall, at all times after the
effective date of the Amendment, have authorized, and reserved for the purpose
of issuance, a sufficient number of shares of Common Stock to provide for the
full conversion of the outstanding Preferred Shares and issuance of the
Conversion Shares in connection therewith (based on the Conversion Price of the
Preferred Shares in effect from time to time). The Company shall not reduce the
number of shares reserved for issuance upon conversion of the Preferred Shares
without the consent of each of the Purchasers, which consent will not be
unreasonably withheld.
f. Listing. The Company shall take all actions necessary to continue
the listing and trading of its Common Stock on the National Association of
Securities Dealers, Inc. OTC Bulletin Board (the "OTC BULLETIN BOARD") and
shall comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the NASD until such time as such
Common Stock is listed on one of the securities exchanges or interdealer
question systems set forth in the next sentence. The Company shall use its best
efforts to secure the listing and trading of its Common Stock on either the
American Stock Exchange ("AMEX"), the New York Stock Exchange ("NYSE"), the
NASDAQ National Market System ("NASDAQ-NMS") or the NASDAQ Small Cap Market
("NASDAQ SMALL CAP") not later than December __, 1996, and thereafter to
continue the listing and trading of its Common Stock thereon and will comply in
all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the NASD and such exchanges, as applicable. The Company
shall promptly secure the listing of the Conversion Shares upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all Conversion Shares from time to time issuable upon conversion of
the Preferred Shares.
g. Corporate Existence. So long as the Purchaser beneficially owns any
Preferred Shares, the Company shall maintain its corporate existence, except in
the event of a merger, consolidation or sale of all or substantially all of the
Company's assets, as long as the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
agreements and instruments entered into in connection herewith and (ii) is a
publicly traded corporation whose Common Stock is listed for trading on the
AMEX, the NYSE or the NASDAQ-NMS.
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h. Amendment to Certificate of Incorporation. The Company shall use
its best efforts to amend, as soon as practicable after the date hereof (and in
any event no later than November 30, 1996), the Company's Certificate of
Incorporation to increase the number of shares of Common Stock the Company is
authorized to issue to at least such amount as will allow the reservation for
issuance and issuance of the full number of shares of Common Stock issuable
upon conversion of the Preferred Shares (the "AMENDMENT"). In that regard, the
Company shall present to its stockholders a proposal to approve the Amendment
at its next annual meeting of stockholders or a special meeting of stockholders
called for such purpose and shall prepare proxy materials with respect thereto
which contain the recommendation of the Company's Board of Directors for the
approval of the Amendment and which comply, in all material respects, with the
proxy rules promulgated pursuant to the 1934 Act.
i. Conclusion of Offering. The Company and the Purchasers agree that
the Closing Date shall be deemed to be a conclusion of the offering of Common
Shares and/or Preferred Shares contemplated hereby. The Company acknowledges
and agrees that, for purposes of clarifying and specifying the applicable
Restricted Period under Regulation S, the Purchasers intend to observe as the
Restricted Period (as defined in Regulation S) for the Common Shares and/or
Preferred Shares, the period commencing on the Closing Date and ending 40 days
thereafter.
j. Legends. The Conversion Shares, and the certificates evidencing the
same, shall at all times be free of legends (except as provided in Section 5
below), "stock transfer restrictions," or other restrictions, except for
covenants of the Purchasers expressly set forth in this Agreement.
k. Expenses. Except as otherwise provided in Section 5 of the
Registration Rights Agreement, each party hereto shall be responsible for the
payment of its own expenses incurred in connection with the negotiation,
execution, delivery and performance of this Agreement.
5. LEGENDS; SUBSEQUENT TRANSFERS.
a. Resales of Securities by Purchasers. Each Purchaser acknowledges,
covenants and agrees that the Securities may and will only be resold by it (a)
in compliance with Regulation S; or (b) pursuant to an exemption from
registration under the 1933 Act other than Regulation S; or (c) pursuant to an
effective and current registration statement under the 1933 Act. Each Purchaser
agrees that it shall not make any offers or sales of the Securities prior to
the expiration of the Restricted Period to any U.S. person or for the account
or benefit of any U.S. person and any such offers or sales prior to such
expiration shall otherwise be made in compliance with the provisions of
Regulation S. In connection with any sale or transfer of the Securities prior
to the end of the Restricted Period, the Purchaser transferring such Securities
will obtain and deliver to the Company a certificate of the prospective
transferee confirming that: (i) the prospective transferee is not a U.S.
person; (ii) the securities have been offered and sold or transferred to the
prospective transferee outside the United States, and the prospective
transferee has no present intention to reoffer or resale
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the Securities to a U.S. person or in the United States; (iii) prior to the end
of the Restricted Period, the prospective transferee will not offer to sell the
Securities to a U.S. person or for the account or benefit of a U.S. person or
in the United States; and (iv) if the prospective transferee effects any
further transfer, offer or sale of the Securities prior to the end of the
Restricted Period, such transfer, offer or sale shall comply with the terms of
Regulation S and the prospective transferee will obtain and deliver to the
Company a certificate of the subsequent transferee to the effect of clauses
(i)-(iv) of this sentence.
b. Legends. The certificates representing the Common Shares and/or the
Preferred Shares and any Conversion Shares issued during the Restricted Period,
shall bear the following legend (the "LEGEND"):
"The securities represented hereby have been issued pursuant
to Regulation S promulgated under the Securities Act of 1933, as
amended (the "1933 Act"), and have not been registered under the
1933 Act. Such securities may not be transferred, offered or sold
prior to the end of the forty (40) day period (the "Restricted
Period") commencing on July__, 1996 unless such transfer, offer or
sale is made in an "offshore transaction" and not to or for the
account of or benefit of a "U.S. Person" (as such terms are defined
in Regulation S) and is otherwise in accordance with the
requirements of Regulation S. Following expiration of the
Restricted Period, the securities represented hereby may not be
offered, sold or otherwise transferred in the United States or to a
U.S. Person unless the securities are registered under the 1933 Act
and applicable state securities laws, or such offers, sales and
transfers are made pursuant to an available exemption from the
registration requirements of those laws."
c. Removal of Legend Following the Expiration of the Restricted
Period. Following the expiration of the Restricted Period, the Company will
remove or will promptly instruct its transfer agent to remove the Legend from
the Common Shares and/or the Preferred Shares and, if applicable, from the
Conversion Shares issued during the Restricted Period (and will instruct its
transfer agent to issue without the Legend, the Conversion Shares issuable upon
any conversion or exercise occurring after the Restricted Period), if the
Purchaser holding such Securities or any other person in whose name such
certificates have been or are to be issued shall have delivered a certificate
(a "Removal Certificate") to the Company to the following effect:
"The undersigned acknowledges that the securities to which this
certificate relates have not been registered under the Securities
Act of 1933, as amended (the "1933 Act") and that offers, sales or
other transfers of such securities must be made in compliance with
Regulation S promulgated under the 1933 Act, pursuant to an
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effective registration statement under the 1933 Act or pursuant to
an available exemption from registration, and the undersigned
certifies that the undersigned has not made, nor will the
undersigned make or cause to be made, any offer, sale or other
transfer of such securities, in violation of the 1933 Act, other
applicable securities laws or the rules and regulations of the
Securities and Exchange Commission."
d. Removal of Legend in Connection with Bona Fide Pledge. Upon the
submission, at any time after the expiration of the Restricted Period, by a
Purchaser of a written request for legend removal for the purpose of a bona
fide pledge or deposit of the Common Shares and/or the Preferred Shares with a
margin account, together with the certificates for which the legend removal is
being requested, the Company will reissue or will promptly instruct its
transfer agent to reissue the certificates representing the Common Shares
and/or the Preferred Shares to be so pledged or deposited without the Legend,
and no Removal Certificate shall be required to be delivered in connection
therewith.
e. Irrevocable Instructions to Transfer Agent. The Company will issue
to its transfer agent an irrevocable instruction letter to issue Common Stock
upon conversion of the Preferred Shares (in accordance with the Certificate of
Designation and, so long as Section 5(c) above is complied with, free of the
Legend) upon receipt of a valid Notice of Conversion from the Purchaser and the
certificates representing the Preferred Shares.
f. Preservation of the Legend. Notwithstanding the provisions of this
Section 5, if with respect to the Company's receipt of a Removal Certificate
from any person, prior to any removal of the Legend, there shall have been
after the date hereof any amendment to the 1933 Act or Regulation S or any no
action letter or interpretative release shall have been promulgated by the SEC
after the date hereof which explicitly disallows the removal of the Legend
under the circumstances in which the request that it be removed is being made,
then the Company shall have no obligation to remove or to instruct its transfer
agent to remove the Legend, unless the Company shall have received from the
person requesting such removal a written letter of counsel to such person
reasonably acceptable to the Company and its counsel confirming that the Legend
may be so removed or share certificates may be so issued without the Legend
without violation of the 1933 Act. If the person requesting a removal of the
Legend is unable to supply the legal opinion referred to above then the Company
shall, upon demand of such person, be obligated to register the Common Stock
for resale pursuant to the terms of the Registration Rights Agreement.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Common
Shares and/or the Preferred Shares to each of the Purchasers at a Closing is
subject to the satisfaction, at or before the date and time of any such
Closing, of each of the following conditions thereto, provided that these
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conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion.
(i) The Purchaser shall have executed the signature page to
this Agreement and the Registration Rights Agreement, and delivered the same to
the Company.
(ii) The Purchaser shall have delivered the Purchase Price in
accordance with Section 1(b) above.
(iii) The representations and warranties of the Purchasers
shall be true and correct in all material respects as of the date when made and
as of the date and time of the Closing as though made at that time (except for
representations and warranties that speak as of a specific date), and the
Purchasers shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Purchasers at or
prior to such Closing.
(iv) No injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
7. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE.
The obligation of each of the Purchasers hereunder to purchase the
Preferred Shares at the closing is subject to the satisfaction, at or before
the Closing of each of the following conditions, provided that these conditions
are for the Purchasers' sole benefit and may be waived by a Purchaser at any
time in its sole discretion:
(i) The Company shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to the Purchaser.
(ii) The Certificate of Designation shall have been filed
with the Secretary of State of the State of Delaware, and a copy thereof
certified by the Secretary of State shall have been delivered to the Purchaser.
(iii) The Company shall have delivered duly executed
certificates representing the Common Shares and/or the Preferred Shares being
so purchased to the Purchaser in accordance with Section 1(b) above.
(iv) The Common Stock shall be authorized for quotation on
the OTC Bulletin Board and trading in the Common Stock (or on the OTC Bulletin
Board generally) shall not have
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been suspended by the SEC or the OTC Bulletin Board (the Purchaser acknowledges
that the Common Stock is authorized for quotation on the OTC Bulletin Board as
of the date hereof).
(v) The representations and warranties of the Company shall
be true and correct in all material respects as of the date when made and as of
the Closing as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing. The Purchasers
shall have received a certificate, executed by the chief executive officer of
the Company, dated as of the Closing, to the foregoing effect and as to such
other matters as may be reasonably requested by the Purchasers.
(vi) No injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
(vii) The Purchasers shall have received the officer's
certificate described in Section 3(c) above, dated as of the Closing.
8. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Delaware without regard to the
principles of conflict of laws. The parties hereto hereby submit to the
exclusive jurisdiction of the United States Federal Courts located in the
County of Kent in the State of Delaware with respect to any dispute arising
under this Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby.
b. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
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e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchasers make any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with enforcement.
f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier and shall be effective
five days after being placed in the mail, if mailed, or upon receipt or refusal
of receipt, if delivered personally or by courier, in each case addressed to a
party. The addresses for such communications shall be:
If to the Company:
American BioMed, Inc.
00000 Xxxxxxx'x Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx 00000
If to a Purchaser, to the address set forth immediately below such
Purchaser's name on the Execution Pages.
Each party shall provide notice to the other party of any change in
address.
g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor the Purchaser shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, each of the Purchasers may assign its rights
hereunder to any of its "affiliates," as that term is defined under the 1934
Act, without the consent of the Company. This provision shall not limit a
Purchaser's right to transfer the Securities pursuant to the terms of the
Certificate of Designation and this Agreement or to assign its rights hereunder
to any such transferee; provided, however, that a Purchaser may not sell or
otherwise transfer the Preferred Shares except (i) to the Company or to a
stockholder or a group of stockholders who immediately prior to the sale
control a majority of the Company's voting shares (a "Controlling Stockholder"
or "Controlling Group", as applicable); (ii) to an affiliate of such Purchaser;
(iii) in connection with any merger, consolidation, reorganization or sale of
more than fifty percent (50%) of the outstanding Common Stock of the Company (a
"Reorganization"); (iv) in a registered public offering or a public sale
pursuant to Rule 144 or other applicable exemption from the registration
requirements of the Act (or any successor rule or regulation); or (v) in a
private sale (other than to the Company, to a Controlling Stockholder or a
Controlling Group, to an affiliate of such Purchaser, or in a Reorganization),
provided that the Purchaser shall not sell or otherwise transfer during any
ninety (90) day period a portion(s) of the Preferred Shares which, if converted
into Common Stock at the time of the transfer, would represent, in the
aggregate (together with other shares of Common Stock
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the beneficial ownership of which is transferred), beneficial ownership by the
transferee(s) of more than four and nine-tenths percent (4.9%) of the Common
Stock then outstanding.
h. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
i. Survival. The representations and warranties of the Company and the
agreements and covenants set forth in Sections 3, 4, 5 and 8 shall survive the
Closings hereunder notwithstanding any due diligence investigation conducted by
or on behalf of the Purchasers. The Company agrees to indemnify and hold
harmless each of the Purchasers and each of its officers, directors, employees,
partners, agents and affiliates for loss or damage arising as a result of or
related to any breach or alleged breach by the Company of any of its
representations set forth in Section 3 hereof, including advancement of
expenses as they are incurred.
j. Publicity. The Company and each of the Purchasers shall have
the right to approve before issuance any press releases, SEC or NASD filings,
or any other public statements with respect to the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the
prior approval of the Purchaser, to make any press release or SEC or NASD
filings with respect to such transactions as is required by applicable law and
regulations (although the Purchasers shall be consulted by the Company in
connection with any such press release prior to its release and shall be
provided with a copy thereof).
k. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
l. Termination. In the event that a closing shall not have occurred on
or before fifteen (15) days from the date hereof, unless the parties agree
otherwise, this Agreement shall terminate at the close of business on such
date.
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IN WITNESS WHEREOF, the Purchaser and the Company have caused this
Agreement to be duly executed as of the date first above written.
AMERICAN BIOMED, INC.
By: /s/ XXXXXX X. XXXX
-------------------------
Name: /s/ Xxxxxx X. Xxxx
-----------------------
President & CEO
Its: -----------------------
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PURCHASER (Name and Signature):
HERIOT HOLDINGS, LTD.
By: /s/ P.M. BENEST
-------------------------
Name: P.M. Benest
-----------------------
Its: Authorized Signature
ADDRESS:
X.X. Xxx 000
Xx. Xxxxxx
Xxxxxx
Channel Islands
British Isles Admin.
RESIDENCE:
Jersey Management-British Virgin Island Register
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Preferred Shares: 100
Number of Common Shares 104,167
Purchase Price: $125,000
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HARLOW ENTERPRISES, INC.
By: /s/ P.M. BENEST
-------------------------
Name: P.M. Benest
-----------------------
Its: Authorized Signature
ADDRESS:
X.X. Xxx 000
Xx. Xxxxxx
Xxxxxx
Channel Islands
British Isles Admin.
RESIDENCE:
Jersey Management-Panama Registered
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Preferred Shares: 100
Number of Common Shares 104,167
Purchase Price: $125,000
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PARKLAND LIMITED
By: /s/ P.M. BENEST
-------------------------
Name: P.M. Benest
-----------------------
Its: Authorized Signature
ADDRESS:
X.X. Xxx 000
Xx. Xxxxxx
Xxxxxx
Channel Islands
British Isles Admin.
RESIDENCE:
Jersey Management-British Virgin Islands Register
AGGREGATE SUBSCRIPTION AMOUNT:
Number of Preferred Shares:
-------
Number of Common Shares 208,333
Purchase Price: $ 50,000
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