STOCK PURCHASE AGREEMENT
EXHIBIT 10.1
This Stock Purchase Agreement (this “Agreement”) is made and entered into as of August 18,
2005, by NationsHealth, Inc., a Delaware corporation (the “Company”) US Bioservices Corporation, a
Delaware corporation (“Investor”).
The parties hereby agree as follows:
1. Purchase and Sale of Stock.
1.1. Sale and Issuance of Stock. Subject to the terms and conditions of this
Agreement, Investor agrees to purchase, and the Company agrees to sell and issue to Investor, that
number of shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), equal
to (a) $1,500,000 divided by (b) the average closing price per share of Common Stock, as reported
by Nasdaq, for the twenty (20) consecutive trading days immediately prior to the Closing (as such
term is defined in Section 1.2).
1.2. Closing. The purchase and sale of the shares of Common Stock that Investor is
purchasing (the “Shares”) shall take place at the offices of the Company, 00000 XX 0xx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (the “Closing”). At the Closing, the Company shall
execute and deliver to Investor a certificate representing the Shares in exchange for the payment
of the Purchase Price, as provided in Section 1.3. At the Closing, the Company and
Investor shall also enter into the Registration Rights Agreement in the form of Exhibit 1
hereto (the “Rights Agreement”).
1.3 Payment of Purchase Price. The Company hereby directs Investor to wire transfer
$1,500,000 (the “Purchase Price”), as consideration for the Shares, on account of the Company, to a
bank account in the name of NationsHealth Specialty Rx, LLC.
2. Representations and Warranties of the Company. The Company hereby represents and
warrants to Investor that except as set forth in the Company SEC Documents (as defined below):
2.1. Organization; Good Standing; Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware, has all
requisite corporate power and authority to own and operate its properties and assets and to carry
on its business as now conducted, to execute and deliver this Agreement and the Rights Agreement
(collectively, the “Agreements”), to issue and sell the Shares and to carry out the provisions of
the Agreements.
2.2. Authorization. All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution and delivery of the
Agreements, the performance of all obligations of the Company hereunder and thereunder and the
authorization, issuance, sale and delivery of the Shares being issued and sold hereunder has been
taken, and each of the Agreements has been duly and validly executed and delivered and constitutes
a valid and legally binding obligation of the Company, enforceable in accordance with its terms
except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting enforcement of creditors’ rights
generally, (b) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (c) to the extent the indemnification provisions
contained in the Rights Agreement may be limited by applicable federal or state securities laws.
2.3. Valid Issuance of Shares. The Shares that are being purchased and acquired by
the Investor hereunder, when issued, sold and delivered by the Company in accordance with the terms
of this Agreement for the consideration expressed herein, will be duly and validly issued, fully
paid and nonassessable, and will be free of restrictions on transfer other than restrictions on
transfer under applicable state and federal securities laws, including containing the restrictive
legend set forth in Section3.7 hereof.
2.4. Governmental Consents. No consent, approval, qualification, order or
authorization of, or filing with, any local, state or federal governmental authority is required on
the part of the Company in connection with its valid execution, delivery or performance of this
Agreement, the offer, sale or issuance of the Shares by the Company, except such filings as have
been made prior to the Closing, except that any notices of sale required to be filed with the
Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended
(the “Securities Act”), or such post-closing filings as may be required under applicable federal or
state securities laws, which will be timely filed within the applicable periods therefor.
2.5. Compliance With Other Instruments. The Company is not in violation of or default
under any provision of (a) its Second Amended Restated Certificate of Incorporation or Bylaws, (b)
any contract or agreement that is material to the conduct of the business of the Company, or (c)
any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the
Company. The execution, delivery and performance by the Company of the Agreements, and the
consummation of the transactions contemplated hereby and thereby, will not result in any violation
of or be in conflict with any such provision or constitute, with or without the passage of time or
giving of notice, either a default under any such provision or an event that results in the
creation of any material lien, charge or encumbrance upon any assets of the Company or the
suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization
or approval applicable to the Company, its business or operations, or any of its assets or
properties.
2.6. Litigation. There is no action, suit, proceeding or investigation pending or
currently threatened against the Company that questions the validity of the Agreements or the right
of the Company to enter into the Agreements, or to consummate the transactions contemplated hereby
or thereby, or that might result, either individually or in the aggregate, in any material adverse
change in the assets, business, properties, prospects or financial condition of the Company. There
is no order, writ, injunction, judgment or decree of any court, government agency or
instrumentality binding on the Company and having a material adverse effect on the Company.
2.7 Disclosure. Neither this Agreement nor any other written statements or
certificates made or delivered in connection herewith contain any untrue statement of a material
fact or omits to state a material fact necessary to make the statements herein or therein not
misleading.
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2.8. Offering. Subject in part to the truth and accuracy of Investor’s
representations set forth in this Agreement, the offer, sale and issuance of the Shares as
contemplated by this Agreement are exempt from the registration requirements of the Securities Act,
and neither the Company nor any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such exemption.
2.9. Financial Statements. The Company has furnished or made available to Investor
true and complete copies of all reports or registration statements it has filed with the Securities
and Exchange Commission (the “SEC”) under the Securities Act and the Securities Exchange Act of
1934, as amended (the “Exchange Act”), for all periods subsequent to September 1, 2004, all in the
form so filed (collectively, the “Company SEC Documents”). As of their respective filing dates,
the Company SEC Documents complied in all material respects with the requirements of the Securities
Act or the Exchange Act, as applicable, and, as of its respective filing date, no Company SEC
Document filed under the Exchange Act contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances in which they were made, not misleading, except to the
extent corrected by a subsequently filed document with the SEC. No Company SEC Document filed
under the Securities Act contained an untrue statement of material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading at the time such Company SEC Documents became effective under the Securities Act. The
Company’s financial statements, including the notes thereto, included in the Company SEC Documents
(the “Financial Statements”) comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting principles consistently applied
(“GAAP”) and present fairly the Company’s consolidated financial position at the dates thereof and
of its operations and cash flows for the periods specified (subject, in the case of unaudited
statements, to normal audit adjustments). Since the date of the most recent Company SEC Document,
the Company has not effected any change in any method of accounting or accounting practice, except
for any such change required because of a concurrent change in GAAP. Since May 16, 2005, (i) no
event has occurred that requires the filing of a Current Report on Form 8-K (an “8-K”) with the SEC
for which an 8-K has not been so filed and (ii) to the knowledge of the Company, there has not been
any event or condition of any character that has had or could reasonably be expected to have a
material adverse effect on (x) the assets, liabilities, results of operations, condition (financial
or otherwise) or business of the Company and its subsidiaries taken as a whole or (y) on the
ability of the Company to perform its obligations under this Agreement.
2.10 No Undisclosed Liabilities. The Company has no liabilities (whether accrued,
absolute, contingent or otherwise, and whether due or to become due or asserted or unasserted),
except (a) liabilities provided for in the Financial Statements (other than liabilities which, in
accordance with GAAP, need not be disclosed), or (b) liabilities (including accounts payable)
incurred since May 16, 2005 in the ordinary course of business consistent with past practice.
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2.11. Disclosure Controls and Procedures.
(a) The Company has established and maintains disclosure controls and procedures (as
such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act) that (i) are designed to
ensure that material information relating to the Company, including its consolidated subsidiaries,
is made known to the Company’s Chief Executive Officer and its Chief Financial Officer by others
within those entities, particularly during the periods in which the filings made by the Company
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act are being prepared, (ii)
have been evaluated for effectiveness as of March 31, 2005, and (iii) are effective to perform the
functions for which they were established; and
(b) To the extent required by the Exchange Act as of the date hereof, the
independent registered public accountants and the Audit Committee of the Board of Directors (the
“Board”) of the Company have been advised of (i) any significant deficiencies in the design or
operation of internal controls which could adversely affect the Company’s ability to record,
process, summarize and report financial data and (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the Company’s internal controls; any
material weaknesses in internal controls have been identified for the accountants; and since the
date of the most recent evaluation of such disclosure controls and procedures, there have been no
significant changes in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant deficiencies and
material weaknesses.
(c) The principal executive officer and principal financial officer of the Company
have made all certifications required by the Xxxxxxxx-Xxxxx Act of 2002 and any related rules and
regulations promulgated by the SEC, each in effect on the date thereof, and the statements
contained in any such certification were complete and correct as of their respective dates. The
Company is otherwise in material compliance with all applicable provisions of the Xxxxxxxx-Xxxxx
Act of 2002 that are effective and applicable to the Company as of the date hereof.
2.12. Tax Returns, Payments and Elections. The Company has filed all tax returns and
reports as required by law. These returns and reports are true and correct in all material
respects. The Company has paid all taxes and other assessments due, except those contested by the
Company in good faith. The provision for taxes of the Company included in the provision for
accrued liabilities in the Financial Statements is adequate for taxes due or accrued as of the date
thereof. Neither the Company nor any of the Subsidiaries have elected pursuant to the Internal
Revenue Code of 1986, as amended (“Code”), to be treated as an S corporation or a collapsible
corporation pursuant to section 341(f) or section 1362(a) of the Code, nor have any of them made
any other elections pursuant to the Code (other than elections that relate solely to methods of
accounting, depreciation or amortization) that would have a material effect on the business,
properties, prospects or financial condition of the Company. The Company has never had any
material tax deficiency proposed or assessed against any of them and have not executed any waiver
of any statute of limitations on the assessment or collection of any tax or governmental charge.
Since the date of the Financial Statements, the Company has made adequate provisions on its books
of account for all taxes, assessments and governmental charges with respect to its business,
properties and operations for such period. The Company has withheld or collected from each payment
made to each of its employees, the amount of all taxes, including, but not
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limited to, federal income taxes, Federal Insurance Contribution Act taxes and Federal
Unemployment Tax Act taxes required to be withheld or collected therefrom, and has paid the same to
the proper tax receiving officers or authorized depositaries.
2.13. Brokers; Financial Advisors. No agent, broker, investment banker, finder,
financial advisor or other person or entity is or will be entitled to any broker’s or finder’s fee
or any other commission or similar fee from the Company, directly or indirectly, in connection with
the transactions contemplated by this Agreement.
3. Representations and Warranties of Investor. Investor hereby represents and
warrants to the Company that:
3.1. Authorization. Investor has full power and authority to enter into this
Agreement and that this Agreement constitutes a valid and legally binding obligation of Investor
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, and (b) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable
remedies.
3.2. Purchase Entirely for Own Account. This Agreement is made with Investor in
reliance on Investor’s representation to the Company, which by its execution of this Agreement it
hereby confirms, that the Shares to be purchased by it will be purchased for investment for its own
account, not as a nominee or agent, and not with a view to the resale or distribution of any part
thereof, and that Investor has no present intention of selling, granting any participation in, or
otherwise distributing the Shares. By executing this Agreement, Investor further represents that
it does not have any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with respect to the Shares.
3.3. Reliance Upon Investor’s Representations. Investor understands that Shares are
not registered under the Securities Act on the ground that the sale provided for in this Agreement
and the issuance of Shares hereunder is exempt from registration under the Securities Act pursuant
to section 4(2) thereof and/or Regulation D thereunder, and that the Company’s reliance on such
exemption is based on Investor’s representations set forth herein. Investor realizes that the
basis for the exemption may not be present if, notwithstanding such representations, Investor has
in mind merely purchasing the Shares for a fixed or determinable period in the future, or for a
market rise, or for sale if the market does not rise. Investor does not have any such intention.
3.4. Receipt of Information. Investor has received all the information it considers
necessary or appropriate for deciding whether to purchase the Shares. Investor further represents
that it has had an opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Shares, the business, properties, prospects and
financial condition of the Company and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or expense) necessary to
verify the accuracy of any information furnished to it or to which it had access. The foregoing,
however, does not limit or modify the representations and warranties of the Company in Section
2 of this Agreement or the right of Investor to rely thereon.
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3.5. Investment Experience. Investor is experienced in evaluating and investing in
securities, of companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of the
investment in the Shares. Investor also represents it has not been organized for the purpose of
purchasing the Shares.
3.6. Accredited Investor. Investor is an accredited investor, as such term is defined
in Regulation D under the Securities Act.
3.7. Restricted Securities. Investor understands that the Shares may not be sold,
transferred or otherwise disposed of without registration under the Securities Act or an exemption
therefrom, and that in the absence of an effective registration statement covering the Shares or an
available exemption from registration under the Securities Act, the Shares must be held
indefinitely.
3.8. Legends. The certificate evidencing the Shares shall be endorsed with the legend
substantially in the form set forth below, and Investor covenants that, except to the extent such
restrictions are waived by the Company, Investor shall not transfer the securities represented by
any such certificate without complying with the restrictions on transfer described in the legend
endorsed on such certificate or other document:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF
REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS
OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.”
4. Deliveries at Closing. At the Closing, the Company shall execute and deliver to
Investor:
(a) A certificate evidencing the Shares;
(b) The Rights Agreement; and
(c) A corporate certificate (i) certifying as to and attaching a copy of the certificate of
incorporation, as amended, of the Company, (ii) certifying as to resolutions of the Board of
Directors of the Company with respect to the transactions contemplated by this Agreement, (iii)
attaching a copy of a certificate of good standing for the Company as issued by the Secretary of
State of the State of Delaware, and (iv) certifying as to the incumbency and signature of the
officers of the Company signing the certificate and the Agreements. At the Closing, Investor shall
pay the purchase price for the Shares in accordance with Section 1.3 and execute and
deliver to the Company the Rights Agreement.
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6. Miscellaneous.
6.1. Survival of Warranties. The warranties, representations and covenants of the
Company and Investor contained in this Agreement shall survive the execution and delivery of this
Agreement and the Closing.
6.2. Notices. Except as expressly set forth to the contrary in this Agreement, all
notices, requests, or consents provided for or permitted to be given under this Agreement must be
in writing and must be given either by depositing that writing in the United States mail, addressed
to the recipient, postage paid, and registered or certified with return receipt requested or by
delivering that writing to the recipient in person, by overnight delivery or courier, or by
facsimile transmission; and a notice, request, or consent given under this Agreement is effective
on receipt by the party to receive it. All notices, requests, and consents to be sent to a party
must be sent to or made at the address previously given by that party or such other address as that
party may specify by notice to the other party. Any notice, request, or consent must be given at
the following addresses:
If to the Company:
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NationsHealth, Inc. Attn: Chief Executive Officer 00000 XX 0xx Xxxxxx Xxxxx 000 Xxxxxxx, XX 00000 |
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with a copy to:
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Xxx X. Xxxxxxx, Esq. XxXxxxxxx Will & Xxxxx 000 Xxxxx Xxxxxxxx Xxxxxxxxx 00xx Xxxxx Xxxxx, XX 00000 |
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If to Investor:
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US Bioservices Corporation Attn: President 000 Xxxxxxxxx Xxxxx Xxxxxx Xxxx, XX 00000 |
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with a copy to:
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AmerisourceBergen Corporation Attn: General Counsel 0000 Xxxxxx Xxxxx, Xxxxx 000 Xxxxxxxxxxxx, XX 00000 |
Whenever any notice is required to be given by law or this Agreement, a written waiver thereof,
signed by the party entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
6.3. Entire Agreement. Each of the parties agrees that this Agreement, including the
other documents referred to herein, (i) constitutes the entire agreement and supersedes all prior
and contemporaneous agreements, understandings, negotiations and discussions, whether oral or
written, among the parties with respect to the subject matter of this Agreement, and (ii) is not
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intended to confer any rights or remedies, or impose any obligations, on any person other than
the parties hereto. Each of the parties expressly agrees and acknowledges that, other than those
statements expressly set forth in this Agreement, it is not relying on any statement, whether oral
or written, of any person or entity with respect to its entry into this Agreement or to the
consummation of the transactions contemplated by this Agreement.
6.4. Effect of Waiver or Consent. A waiver or consent, express or implied, to or of
any breach or default by any party in the performance by that party of its obligations is not a
consent or waiver to or of any other breach or default in the performance by that party of any
other obligations of that party. Failure on the part of a party to complain of any act of any
party or to declare any party in default, irrespective of how long that failure continues, does not
constitute a waiver by that party of its rights with respect to that default until the applicable
statute of limitations period has run.
6.5. Amendment or Modification. This Agreement may be amended or modified from time
to time only by a written instrument executed by the Company and Investor.
6.6. Successors and Assigns. Except as otherwise specifically provided, this
Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns.
6.7. Governing Law. This Agreement is governed by and shall be construed in
accordance with the law of the State of Delaware, excluding any conflict of laws rule or principle
that might refer the governance or the construction of this Agreement to the law of another
jurisdiction.
6.8. Illegal or Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws, such provision shall be fully
severable. This Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement, and the remaining provisions
of this Agreement shall remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu
of each such illegal, invalid, or unenforceable provision, there shall be added automatically, as a
part of this Agreement, a provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid and enforceable.
6.9. Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each party shall execute and deliver any additional documents and instruments
and perform any additional acts that may be necessary or appropriate to effectuate and perform the
provisions of this Agreement and those transactions.
6.10. Expenses. Irrespective of whether the Closing is effected, the Company and
Investor shall each pay all costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement.
6.11. Attorneys’ Fees. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable
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attorneys’ fees, costs and disbursements in addition to any other relief to which such party
may be entitled.
6.12. Finder’s Fee. The Company agrees to indemnify and hold harmless Investor from
any liability for any commission or compensation in the nature of a finder’s fee (and the costs and
expenses of defending against such liability or asserted liability) for which the Company or any of
its officers, employees or representatives is responsible.
6.13. Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if all signing parties had signed the same document. All counterparts shall be
construed together and constitute the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the Closing.
| US Bioservices Corporation |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | President | |||
| NationsHealth, Inc. |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | CEO | |||
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Exhibit 1
Registration Rights Agreement
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