EXHIBIT 99.16
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") dated as of
February 10, 2004 among ChromaVision Medical Systems, Inc., a Delaware
corporation (the "COMPANY") and Safeguard Delaware, Inc., a Delaware corporation
(the "PURCHASER"). Certain terms are used herein as defined in Annex 1 hereto or
elsewhere in this Agreement.
BACKGROUND
The Company desires to sell to the Purchaser, and the Purchaser desires
to purchase from the Company shares of the Common Stock of the Company, $.01 par
value and the Warrant (as defined below) for an aggregate purchase price of
$5,000,000 in a private placement exempt from the registration requirements of
the Securities Act of 1933, as amended (the "SECURITIES ACT") all on terms
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. PURCHASE AND SALE OF COMMON SHARES AND WARRANT.
1.1 Purchase and Sale of Common Shares. Upon the terms and
conditions contained herein, the Company shall issue and sell to the Purchaser
and, subject to and in reliance upon the representations, warranties, terms and
conditions of this Agreement, the Purchaser shall purchase from the Company
2,295,230 shares of Common Stock of the Company (the "PURCHASE SHARES") for an
aggregate purchase price of $5,000,000 and a warrant (the "WARRANT") in the form
attached to this Agreement as EXHIBIT A to purchase 229,523 shares of Common
Stock of the Company, subject to adjustment as set forth in the Warrant (the
"WARRANT SHARES").
1.2 Closing. Such purchase and sale referred to in Section 1.1
shall take place at a closing (the "CLOSING") to be held at the offices of
Xxxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx on the date
hereof, or on such other date and at such time as may be mutually agreed upon by
the parties (the "CLOSING DATE"). At the Closing, (i) the Company will issue and
deliver certificates evidencing the Purchase Shares and the Warrant, registered
in the name of the Purchaser against payment to the Company of the purchase
price payable by the Purchaser, payable by wire transfer of immediately
available funds in accordance with wire transfer instructions to be delivered to
the Purchaser by the Company prior to the Closing and (ii) the Company and the
Purchaser will enter into a Registration Rights Agreement in the form of EXHIBIT
B hereto. (This Agreement, the Registration Rights Agreement and the Warrant are
referred to as the "TRANSACTION DOCUMENTS".)
1.3 Use of Proceeds. The Company agrees that it shall use the net
proceeds from the sale of the Purchase Shares for (i) any legally permitted
general corporate purposes and (ii) the payment of expenses incurred in
connection with this transaction as provided for in Section 5.1. Nothing in this
Section 1.3 is intended to or shall constitute a waiver by the Purchaser of, or
approval by it in connection with, any of the covenants set forth in the
Securities Purchase Agreement dated as of June 13, 2002 among the Company, the
Purchaser and Safeguard Scientifics, Inc.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Purchaser as follows:
2.1 Organization and Qualification; Material Adverse Effect. The
Company is a corporation duly incorporated and existing in good standing under
the laws of the State of Delaware and has the requisite corporate power to own
its properties and to carry on its business as now being conducted. The Company
does not have any direct or indirect Subsidiaries other than the Subsidiaries
listed in the Pre-Agreement SEC Documents (as defined in Section 2.9). Each of
the Company and 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 or property owned by it makes such qualification
necessary other than those in which the failure so to qualify would not have a
Material Adverse Effect. As applied to the Company "MATERIAL ADVERSE EFFECT"
means any adverse effect on the business, operations, prospects, properties or
condition (financial or otherwise) of the Company or such other entity with
respect to which such term is used and which is material to the Company and its
Subsidiaries taken as a whole, and any material adverse effect on the
transactions contemplated by, or the rights or remedies of the Company or
obligations of the other parties under, the Transaction Documents taken
together.
2.2 Authorization; Enforcement. (i) The Company has all requisite
corporate power and authority to enter into and perform the Transaction
Documents, to issue the Purchase Shares in accordance with the terms hereof and
to issue the Warrant Shares in accordance with the terms of the Warrant, (ii)
the execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including the issuance of the Purchase Shares and the issuance of the Warrant
Shares upon exercise of the Warrant, have been duly authorized by all corporate
action required under applicable law, and no further consent is required, (iii)
the Transaction Documents have been duly executed and delivered by the Company,
and (iv) the Transaction Documents constitute valid and binding obligations of
the Company enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application. The transactions contemplated
by the Transaction Documents have been (i) negotiated and approved by a special
committee of the board of directors of the Company formed for the purpose of
considering such transactions and (ii) approved by the majority vote of the
disinterested directors of the Company.
2.3 Capitalization. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, 200,000 shares of Series C
Convertible Preferred Stock and 12,500 shares of Series D 5% Convertible
Preferred Stock, of which there are 38,588,604 shares of Common Stock issued and
outstanding. Except as set forth on SCHEDULE 2.3, no shares of Common Stock and
no shares of preferred stock are reserved for issuance to persons other than the
Purchaser. All of the outstanding shares of the Common Stock and preferred stock
have
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been validly issued and are fully paid and non-assessable. Except as set forth
in SCHEDULE 2.3, no shares of capital stock are entitled to preemptive rights
and there are no outstanding options or outstanding warrants for shares of
Common Stock. Except as set forth on SCHEDULE 2.3, there are no other scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights exchangeable for or convertible into, any
shares of capital stock of the Company, or contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue additional shares of capital stock of the Company or options, warrants,
scrip, rights to subscribe to, or commitments to purchase or acquire, any
shares, or securities or rights convertible or exchangeable into shares, of
capital stock of the Company. The Company has furnished the Purchaser with a
true and correct copy of the Company's Certificate of Incorporation (the
"CHARTER"), as in effect on the date hereof, and a true and correct copy of the
Company's By-Laws, as in effect on the date hereof (the "BY-LAWS").
2.4 Issuance of Securities. The Purchase Shares and the Warrant
Shares are duly authorized and reserved for issuance and, upon issuance in
accordance with the terms of this Agreement or the Warrant, as applicable, the
Purchase Shares and the Warrant Shares will be validly issued, fully paid and
non-assessable, free and clear of any and all Liens, claims and encumbrances,
and, subject to the registration of such shares in accordance with the
applicable provisions of the Securities Act, the Purchase Shares have been
listed on the Nasdaq Small Cap Market, and, upon issuance of such shares, the
holders of such Shares shall be entitled to all rights and preferences then
accorded to a holder of Common Stock. The outstanding shares of freely tradable
Common Stock are currently quoted on the Nasdaq Small Cap Market.
2.5 No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby and the issuance of the Purchase
Shares and the Warrant Shares (upon exercise of the Warrant in accordance with
the terms thereof) do not and will not (i) result in a violation of the
Company's Charter or By-Laws, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture, patent, patent license or instrument
to which the Company or any of its Subsidiaries is a party (collectively,
"COMPANY AGREEMENTS"), (iii) result in a violation of any federal, state, local
or foreign 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, or (iv) conflict with, constitute a default
under, or result in a violation of any rule or regulation of, or any agreement
with, a self-regulatory authority, except (other than in the case of clause (i)
above) where such violation would not reasonably be expected to have a Material
Adverse Effect. Except as set forth on SCHEDULE 2.5, the business of the Company
and its direct and indirect Subsidiaries is being conducted in material
compliance with (i) its Charter and By-Laws, (ii) all Company Agreements, and
(iii) all applicable laws, ordinances or regulations of any Governmental
Authority, except (other than in the case of clause (i) above) where such
violation would not reasonably be expected to have a Material Adverse Effect.
Except as set forth on SCHEDULE 2.5, the Company is not required under federal,
state, local or foreign law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
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obligations under the Transaction Documents, or to issue and sell the
Securities, except for the registration provisions provided in the Registration
Rights Agreement and the requirements, of the Nasdaq Stock Market, Inc. and the
filing of a Form D with the Securities and Exchange Commission following
consummation of the transactions contemplated by this Agreement.
2.6 SEC Documents; No Non-Public Information. The Common Stock of
the Company is registered pursuant to Section 12(g) of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), and the Company and its
Subsidiaries have filed all reports, schedules, forms, statements and other
documents required to be filed by them with the Securities and Exchange
Commission ("SEC") since December 31, 1999 pursuant to the reporting
requirements of the Exchange Act, including all such proxy information and
registration statements, and any amendments thereto required to have been filed
as of the Closing Date (all of the foregoing including filings incorporated by
reference therein, together with all registration statements filed under the
Securities Act, being referred to herein as the "SEC DOCUMENTS"). As of their
respective filing dates, the SEC Documents complied in all material respects
with the requirements of the Exchange Act and the Securities Act, as the case
may be, and the rules and regulations of the SEC promulgated thereunder and
other federal, state and local laws, rules and regulations applicable to such
SEC Documents, and none of the SEC Documents 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. The SEC Documents
contain all material information concerning the Company and its Subsidiaries
required to be disclosed therein as of the dates thereof, and no event or
circumstance has occurred prior to the date hereof which would require the
Company to disclose such event or circumstance in order to make the statements
in the SEC Documents not misleading but which has not, or will have not, been so
disclosed or which will be disclosed in the current report on Form 8-K to be
filed pursuant to Section 4.2.
2.7 Financial Statements. The financial statements (including any
related notes) of the Company and its Subsidiaries included in the SEC Documents
complied as to form and substance in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC or
other applicable rules and regulations with respect thereto in effect at the
time of their filing with the SEC. Such financial statements were prepared in
accordance with United States GAAP applied on a consistent basis during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly presented in all material respects the financial
position of the Company and its Subsidiaries as of the respective dates thereof
and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
2.8 Poison Pill Provisions. The Company has amended the Rights
Agreement, dated as of February 10, 1999, between the Company and Xxxxxx Trust
Company of California, as amended (the "RIGHTS AGREEMENT") to exclude Purchaser
and any of its Affiliates from the definition of "15% Stockholder" (as that term
is defined in the Rights Agreement), and, accordingly, the Company has taken all
action necessary to ensure that no Rights (as that term is defined in the Rights
Agreement) have been exercised or are exercisable in connection with the
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execution and delivery of the Transaction Documents or the consummation of the
transactions contemplated hereby or thereby. The Board of Directors of the
Company (at a meeting duly called and held) has, by the unanimous vote of all
directors present, approved such amendment to the Rights Agreement.
2.9 No Litigation. Except as set forth in SCHEDULE 2.9 or the
reports or documents filed at least five Trading Days prior to the Closing Date
by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act (the
"PRE-AGREEMENT SEC DOCUMENTS"), no litigation or claim (including those for
unpaid taxes) against the Company or any of its Subsidiaries is pending or, to
the Company's knowledge, threatened, and, to the Company's knowledge, no other
event has occurred which, if determined adversely, could reasonably be expected
to result in litigation which would have a Material Adverse Effect. There is no
legal or regulatory proceeding or inquiry described in the Pre-Agreement SEC
Documents that could reasonably be expected to have a Material Adverse Effect.
2.10 Application of Takeover Protections. The Company and its board
of directors have taken all necessary action, if any, in order to render
inapplicable any anti-takeover provision contained in the Company's Charter or
By-Laws or Delaware law which is or could become applicable to Purchaser or, to
the extent such action is permissible under Delaware law, its assignees and
transferees, as a result of the transactions contemplated by the Transaction
Documents, including, without limitation, (i) the Company's issuance of the
Purchase Shares and the Warrant Shares and (ii) the Purchaser's ownership of the
Purchase Shares and the Warrant.
2.11 Completeness of Disclosure. The Company has delivered to the
Purchaser true and complete copies of each agreement, contract, commitment or
other document (or summaries thereof) that is referred to specifically in the
Schedules or that has been requested in writing by the Purchaser. Neither this
Agreement nor any annex or schedule hereto or certificate provided pursuant
hereto contains or will contain any untrue statement of a material fact or omits
or will omit to state a material fact required to be stated herein or therein or
necessary to make any statement herein or therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser represents and warrants to the Company the following as
to itself:
3.1 Organization. The Purchaser is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation.
3.2 Authorization; Enforcement. (i) The Purchaser has the
requisite power and authority to enter into and perform the Transaction
Documents and to purchase the Purchase Shares and the Warrant being sold to it
hereunder, (ii) the execution and delivery of the Transaction Documents by the
Purchaser and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action, and (iii)
the Transaction Documents constitute valid and binding obligations of the
Purchaser enforceable against it in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar
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laws relating to, or affecting generally the enforcement of creditors' rights
and remedies or by other equitable principles of general application.
3.3 No Conflicts. The execution, delivery and performance by the
Purchaser of the Transaction Documents and the consummation by the Purchaser of
the transactions contemplated hereby and thereby do not and will not (i) result
in a violation of the Purchaser's certificate of incorporation or by-laws, or
(ii) conflict with any agreement, indenture or instrument to which the Purchaser
is a party, or (iii) result in a violation of any law, rule, or regulation, or
any order, judgment or decree of any court or Governmental Authority applicable
to the Purchaser, except, in the case of clauses (ii) and (iii), for any such
violation or conflict which would not have a Material Adverse Effect on the
Purchaser. As applied to the Purchaser, "MATERIAL ADVERSE EFFECT" means any
adverse effect on the business operations, prospects, properties or condition
(financial or otherwise) of the relevant party which is material to the relevant
party and its consolidated subsidiaries, taken as a whole, and any material
adverse effect on the transactions contemplated by, or the rights or remedies of
the relevant party or the obligations of the other parties under the Transaction
Documents taken together.
3.4 Access to Other Information. The Purchaser acknowledges that
the Company has made available to the Purchaser the opportunity to examine such
additional documents from the Company and to ask questions of, and receive full
answers from, the Company concerning, among other things, the Company, its
financial condition, its management, its prior activities and any other
information which the Purchaser considers relevant or appropriate in connection
with entering into the Transaction Documents.
3.5 Risks of Investment. The Purchaser acknowledges that the
Purchase Shares, the Warrant and the Warrant Shares have not been registered
under the Securities Act. The Purchaser is capable of assessing the risks of an
investment in the Common Stock of the Company and is fully aware of the economic
risks thereof.
3.6 Investment Representation. The Purchaser is purchasing the
Purchase Shares and the Warrant (and if issued, the Warrant Shares) for its own
account and not with a view to distribution in violation of any securities laws;
provided, however, that by making the representations herein, such Purchaser
does not agree to hold such securities for any minimum or other specific term
and reserves the right to dispose of the securities at any time in accordance
with federal and state securities laws applicable to such disposition. Nothing
in this Section 3.6 is intended to limit or otherwise affect the obligations of
the Purchaser under Section 4.2.
3.7 Restricted Securities. The Purchaser acknowledges and
understands that the terms of issuance have not been reviewed by the SEC or by
any state securities authorities and that the Purchase Shares and the Warrant
have been (and, if issued, the Warrant Shares will be) issued in reliance on the
certain exemptions for non-public offerings under the Securities Act, which
exemptions depend upon, among other things, the representations made and
information furnished by the Purchaser.
3.8 Ability to Bear Economic Risk. The Purchaser is an "accredited
investor" as defined in Rule 501 of Regulation D, as amended, under the
Securities Act, and it (i) is able to bear the economic risk of its investment
in the Purchase Shares and the Warrant (and, if issued,
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the Warrant Shares), and (ii) is able to hold such securities for an indefinite
period of time, and (iii) can afford a complete loss of its investment in such
securities.
4. COVENANTS.
4.1 Public Announcements. Except as provided for herein, no party
hereto shall make any public announcements or otherwise communicate with any
news media with respect to this Agreement or any of the transactions
contemplated hereby without prior consultation with the other party as to the
timing and contents of any such announcement; provided, that nothing contained
herein shall prevent either party from promptly making all filings with
Governmental Authorities and all disclosure as may, in its good faith judgment
after consulting with its legal counsel, be required in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby (in which case the disclosing party shall advise the other
parties and provide them with a copy of the proposed disclosure or filing prior
to making the disclosure or filing).
4.2 Securities Compliance. The Company shall take all action
necessary under applicable law, rule and regulation for the legal and valid
issuance of the Purchase Shares and the Warrant (and, if issued, the Warrant
Shares). Without limiting the foregoing, the Company shall, within one (1)
Trading Day following the Closing Date, issue a press release describing in
detail the transactions contemplated in the Transaction Documents, and within
two (2) Trading Days following the Closing Date, file a current report on Form
8-K with the SEC concerning the transactions contemplated hereby and attaching
this Agreement, together with all Exhibits hereto (excluding the Schedules), as
exhibits to such Form 8-K. Such Form 8-K and any other Form 8-K and/or press
release or other publicity concerning the Transaction Documents shall contain
such information as is reasonably requested by the Purchaser and as may be
reasonably approved by the Purchaser prior to issuance. If the Company fails to
so file a Form 8-K or issue a press release as required herein within the
requisite time period, the Purchaser at any time may issue a press release
covering the transactions contemplated by the Transaction Documents.
4.3 Form D; Blue Sky Laws. The Company agrees to file a Form D
with respect to the Purchase Shares, as required under Regulation D of the
Securities Act and to provide a copy thereof to the Purchaser promptly after
such filing. The Company shall, on or before the Closing Date, take such action
as the Company shall have reasonably determined is necessary to qualify the
applicable Purchase Shares and the Warrant for sale to Purchaser at the Closing
under applicable securities or "blue sky" laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to each Purchaser on or prior to the
Closing Date.
5. EXPENSES; INDEMNITY.
5.1 Expenses. Each party shall bear its own expenses incurred in
connection with the proposed transaction.
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5.2 Indemnification.
(a) In consideration of the Purchaser's execution and
delivery of this Agreement and the Registration Rights Agreement and in addition
to all of the Company's other obligations under the Transaction Documents, the
Company shall defend, protect, indemnify and hold harmless the Purchaser and all
of its officers, directors and employees, and any of the foregoing persons'
agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "INDEMNITEES") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"INDEMNIFIED LIABILITIES"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate or document contemplated hereby or thereby, (ii) any
breach of any covenant, agreement or obligation of the Company contained in the
Transaction Documents or any other certificate or document contemplated hereby
or thereby, (iii) any cause of action, suit or claim brought or made against
such Indemnitee by a third party (other than any cause of action, suit or claim
brought or asserted by or on behalf of any security holders of Safeguard
Scientifics Inc. in their capacity as such) and arising out of or resulting from
the execution, delivery, performance, breach by the Company or enforcement
against the Company of the Transaction Documents or any certificate or
instrument contemplated hereby or thereby and (iv) the enforcement of this
Section 5.2(a).
(b) In consideration of the Company's execution and
delivery of the Transaction Documents, the Purchaser shall defend, protect,
indemnify and hold harmless the Company and its officers, directors and
employees and any of the foregoing persons' agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "COMPANY
INDEMNITEES") from and against any and all Indemnified Liabilities, incurred by
any Company Indemnitee as a result of, or arising out of, or relating to (i) any
misrepresentation or breach of any representation or warranty made by the
Purchaser in the Transaction Documents or any other certificate or document
contemplated hereby or thereby, or (ii) any breach of any covenant, agreement or
obligation of the Purchaser contained in any of the Transaction Documents or any
other certificate or document contemplated hereby or thereby, and (iii) the
enforcement of this Section 5.2(b).
5.3 Survival. The obligations of the parties under this Section 5
shall survive the Closing and any transfer of any of the Purchase Shares or the
Warrant, enforcement, amendment or waiver of any provision of this Agreement or
the Registration Rights Agreement, and the termination of this Agreement or of
the Registration Rights Agreement.
6. NOTICES.
6.1 Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing, must be delivered by
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(i) courier, mail or hand delivery or (ii) facsimile, and will be deemed to have
been delivered upon receipt. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
ChromaVision Medical Systems, Inc.
00000 Xxxxx Xxxxxxx
Xxx Xxxx Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: W. Xxxx Xxxxxx, Esq.
If to Purchaser:
Safeguard Delaware, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Safeguard Scientifics, Inc.
000 Xxxxx Xxxx Xxxxx
000 Xxxxxxxx
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
and
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Each party shall provide five (5) days prior written notice to the
other party of any change
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in address, telephone number or facsimile number. Written confirmation of
receipt (i) given by the recipient of such notice, consent, waiver or other
communication, (ii) mechanically or electronically generated by the sender's
facsimile machine containing the time, date and recipient facsimile number or
(iii) provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.
7. TERMINATION.
7.1 Termination. This Agreement may be terminated (by written
notice by the terminating party to the other party) and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) By mutual written consent of the Purchaser and the
Company;
(b) By the Purchaser or the Company if the Closing has
not occurred on or before the second Business Day following the date
hereof (unless the parties have otherwise agreed in writing); or
(c) By the Purchaser or the Company if a Governmental
Authority or arbitrator shall have issued an order, decree or ruling or
taken any other action, in each case restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement
to occur at the Closing, and such order, decree, ruling or other action
shall not have been lifted.
7.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 7.1 hereof, this Agreement shall forthwith
become void and there shall be no liability on the part of either of the
parties, except as set forth in Sections 5, 6, 8.5, 8.6, 8.7, 8.9, 8.10, 8.11
and this Section 7.2.
8. MISCELLANEOUS.
8.1 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
8.2 Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
8.3 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each
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counterpart may consist of a number of copies hereof, each signed by less than
all, but together signed by all, of the parties hereto.
8.4 Governing Law. THIS AGREEMENT AND THE VALIDITY AND PERFORMANCE
OF THE TERMS HEREOF SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY IN SUCH STATE.
8.5 Consent to Jurisdiction and Service of Process. EACH OF THE
COMPANY AND THE PURCHASER (I) HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT, COURTS OF THE STATE OF
DELAWARE AND OTHER COURTS OF THE UNITED STATES SITTING IN NEW CASTLE COUNTY,
DELAWARE FOR THE PURPOSES OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVES, AND AGREES NOT TO ASSERT IN
ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER. EACH OF THE COMPANY AND THE PURCHASER CONSENTS TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR
LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
8.6 Waiver of Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A
TRIAL BY JURY.
8.7 Entire Agreement; Amendments; Waivers. This Agreement
supersedes all other prior oral or written agreements between the Purchaser, the
Company, their Affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement and the instruments referenced
herein (including the other Transaction Documents) contain the entire
understanding of the parties with respect to the matters covered herein and
therein. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Purchaser, and no provision
hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought. The Purchaser may at any time elect, by
notice to the Company, to waive (whether permanently or temporarily, and subject
to such conditions, if any, as the Purchaser may specify in such notice) any of
its rights (but not obligations) under any of the Transaction Documents to
acquire shares of Common Stock from the Company, in which event such waiver
shall be binding against the Purchaser in accordance with its terms.
8.8 Successors and Assigns. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and
11
assigns. The Purchaser may assign some or all of its rights hereunder without
the consent of the Company in connection with any sale or transfer of all or any
portion of the Purchase Shares or the Warrant held by the Purchaser (other than
in connection with any sale or transfer following which the securities
transferred cease to be "restricted securities" under the Securities Act). The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser, except in connection with a
transfer of its business substantially or as a whole, whether by merger,
consolidation, sale of assets or otherwise and provided that (1) the assignee
assumes in writing all obligations hereunder and (2) the Company remains liable
to the extent still existing.
8.9 No 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.
8.10 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.
8.11 Remedies. The Purchaser shall have all rights and remedies set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law. Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such
rights specifically, to recover damages by reason of any breach of any provision
of this Agreement and to exercise all other rights granted by law. The Purchaser
without prejudice may withdraw, revoke or suspend its pursuit of any remedy at
any time prior to its complete recovery as a result of such remedy.
8.12 Rescission and Withdrawal Right. Notwithstanding anything to
the contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, wherever the Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then the
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any such notice, demand or election in whole or
in part without prejudice to its future actions and rights.
8.13 Obligations Absolute. Except as expressly set forth in the
Transaction Documents, the parties' obligations under the Transaction Documents
are unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction.
* * * * *
12
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed as of the date and year first written
above.
CHROMAVISION MEDICAL SYSTEMS, INC.
_______________________________
By:
Title:
SAFEGUARD DELAWARE, INC.
_______________________________
By:
Title:
ANNEX I
CERTAIN DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"AFFILIATE" shall mean, at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person, and (b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests.
"AGREEMENT" shall have the meaning set forth in the preamble.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in Philadelphia, Pennsylvania are required or
authorized to be closed.
"BY-LAWS" shall have the meaning set forth in Section 2.3.
"CHARTER" shall have the meaning set forth in Section 2.3.
"CLOSING" shall have the meaning set forth in Section 1.2.
"CLOSING DATE" shall have the meaning set forth in Section 1.2.
"COMPANY" shall have the meaning set forth in the preamble.
"COMPANY AGREEMENTS" shall have the meaning set forth in Section 2.5.
"COMPANY INDEMNITEES" shall have the meaning set forth in Section
5.2(b).
"CONTROL" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"EXCHANGE ACT" shall have the meaning set forth in Section 2.6.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America. The term "GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES" shall mean accounting principles which are (a) consistent
with the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors as generally accepted accounting principles, and (b)
such that a certified public accountant would, insofar as the use of accounting
principles is pertinent, be in a position to deliver an unqualified opinion
(except for changes in which said accountants concur) as to financial statements
in which such principles have been properly applied.
"GOVERNMENTAL AUTHORITY" shall mean:
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) with respect to any Person, any jurisdiction in which
such Person or any of its Subsidiaries conducts all
or any part of its business, or which has
jurisdiction over any properties of such Person or
any of its Subsidiaries, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to,
any such government.
"INDEMNITEES" shall have the meaning set forth in Section 5.2(a).
"INDEMNIFIED LIABILITIES" shall have the meaning set forth in Section
5.2(a).
"MATERIAL ADVERSE EFFECT" shall have the meaning set forth in Sections
2.1 and 3.3.
"PERSON" or "PERSON" shall mean an individual, partnership,
corporation, limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision thereof.
"PRE-AGREEMENT SEC DOCUMENTS" shall have the meaning set forth in
Section 2.9
"PURCHASER" shall have the meaning set forth in the preamble.
"PURCHASE SHARES" shall have the meaning set forth in Section 1.1.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement, dated as the date hereof, between the Company and the Purchaser.
"RIGHTS AGREEMENT" shall have the meaning set forth in Section 2.8.
"SEC" shall have the meaning set forth in Section 2.6.
"SEC DOCUMENTS" shall have the meaning set forth in Section 2.6
"SECURITIES ACT" shall have the meaning set forth in the recitals.
"SUBSIDIARY" shall mean, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and
does ordinarily take major business actions without the prior approval of such
Person or one or more of its Subsidiaries). Except where specifically indicated
to the contrary, all references in this Agreement to Subsidiaries of a Person
shall be deemed to refer to all direct and indirect Subsidiaries of such Person.
"TRADING DAY" shall mean (x) if the Common Stock is listed on the New
York Stock Exchange or the American Stock Exchange, a day on which there is
trading on such stock exchange, or (y) if the Common Stock is not listed on
either of such stock exchanges but sale prices of the Common Stock are reported
on an automated quotation system, a day on which trading is reported on the
principal automated quotation system on which sales of the Common Stock are
reported, or (z) if the foregoing provisions are inapplicable, a day on which
quotations are reported by National Quotation Bureau Incorporated.
"TRANSACTION DOCUMENTS" shall have the meaning set forth in Section
1.2.
"WARRANT" shall have the meaning set forth in Section 1.1.
"WARRANT SHARES" shall have the meaning set forth in Section 1.1.
SCHEDULE 2.3
6,112,355 shares subject to options held by present and former officers,
directors and employees of the Company,
602,685 shares subject to warrants outstanding, and
975,000 additional shares subject to the warrant held by Safeguard Delaware,
Inc. issued pursuant to the Securities Purchase Agreement dated as June 13, 2002
among the Company, Safeguard Delaware, Inc. and Safeguard Scientifics, Inc.
Safeguard Delaware, Inc. has a right of first refusal to participate in certain
transactions involving the issuance of shares by the Company pursuant to Section
4.3 of the Securities Purchase Agreement dated as June 13, 2002 among the
Company, Safeguard Delaware, Inc. and Safeguard Scientifics, Inc. and the right
to acquire additional shares pursuant to Section 4.3(d)(i) and (ii) of that
Agreement.
SCHEDULE 2.5
The Company may have inadvertently issued options and shares of restricted stock
to employees following the Company's delisting from the Nasdaq National Market
without an applicable exemption from the qualification requirements of
California state securities laws. The Company may elect to conduct a rescission
offer to employees in California who received such awards under Section 25507 of
the California Corporate Securities Law.
SCHEDULE 2.9
None
