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EXHIBIT 10.2
SECURITIES PURCHASE AGREEMENT
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THE SHARES OF COMMON STOCK SUBJECT TO THIS SECURITIES PURCHASE AGREEMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS AND NEITHER THE
SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
OTHERWISE TRANSFERRED UNLESS: (1) A REGISTRATION STATEMENT WITH RESPECT THERETO
IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR
"BLUE SKY" LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER
OF SUCH SHARES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH SHARES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED
IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of
August 8, 2001, among WOMEN FIRST HEALTHCARE, INC., a Delaware corporation (the
"Company"), and the PURCHASERS listed in EXHIBIT A (each, a "Purchaser" and
collectively, the "Purchasers").
WHEREAS, the Company desires to issue and sell to Purchasers, and
Purchasers desire to purchase from the Company, an aggregate of 3,500,000 shares
(the "Shares") of Common Stock, $.001 par value per share (the "Common Stock")
in a private placement transaction as set forth in the Company's Confidential
Private Placement Memorandum, dated July 19, 2001 (together with exhibits and
attachments thereto, all as amended, collectively referred to herein as the
"Offering Materials"); and
WHEREAS, the Company distributed the Offering Materials to a limited
number of selected prospective investors in connection with the offering of such
Shares (the "Offering"), on the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing premises
and the mutual agreements and covenants hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound, the parties hereto do hereby agree
as follows:
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Section 1. Purchase of Company Securities.
1.1. Purchase and Sale of the Shares. Subject to the terms and
conditions of this Agreement, the Company will issue and sell to Purchasers, and
each Purchaser, severally and not jointly, will purchase from the Company the
number of Shares set forth in EXHIBIT A opposite such Purchaser's name at $9.00
per share ("Purchase Price").
Section 2. Closing. The closing (the "Closing") of the purchase and sale of the
Shares (the "Offering") will take place at the offices of Xxxxx Xxxxxxx Xxxxxxx
& Xxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 4:30
P.M., local time, on Tuesday, August 7, 2001. The Closing may take place at
another time, place or earlier date as is mutually agreed upon by the Company
and Purchasers. The date of the Closing is referred to as the "Closing Date." At
the Closing, the Company will register in the name of each Purchaser that number
of Shares being purchased by such Purchaser in accordance with EXHIBIT A,
against payment of each Purchaser's Purchase Price by wire transfer of
immediately available United States funds payable to the Company's account
pursuant to the wire transfer instructions set forth in EXHIBIT A. The Shares
will be registered in Purchasers' names or the names of the nominees of
Purchasers pursuant to instructions delivered to the Company not less than two
(2) business days prior to the Closing Date and will be delivered to Purchasers
within ten (10) business days after the Closing Date.
2.1 Escrow. Pending the Closing, all funds paid hereunder shall be
deposited by the Company in a separate account maintained by the Company for the
benefit of Purchasers. If the Company accepts subscriptions for the Shares at or
prior to the Closing Date, then all subscription proceeds received for
subscriptions accepted by the Company shall be paid over to the Company at the
Closing, net of the placement fee and offering expenses, which shall be paid to
the appropriate parties at such Closing. If the Company shall not have received
and accepted a Purchaser's subscription, then that subscription shall be void
and all funds paid hereunder by Purchaser, without deduction therefrom or
interest thereon, shall be promptly returned to Purchaser.
2.2. Return of Funds. Purchaser hereby authorizes and directs the
Company to return or direct the return of any funds from the separate account,
without deduction therefrom or interest thereon, to the same account from which
the funds were originally drawn.
Section 3. Conditions to the Obligations of Purchasers at Closing. The
obligation of each Purchaser to purchase and pay for the Shares at the Closing
is subject to the satisfaction on or prior to the Closing Date of the following
conditions, each of which may be waived by a majority of the Purchasers:
3.1 Opinion of Counsel to the Company. Each Purchaser shall have
received from Xxxxxx & Xxxxxxx, counsel for the Company, its opinion dated as of
the Closing Date and addressed to each Purchaser in substantially the form as
attached hereto as EXHIBIT B.
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3.2 Representations and Warranties. The representations and warranties
of the Company contained in SECTION 6 must be true and correct in all material
respects as of the Closing Date except to the extent that the representations
and warranties relate to an earlier date in which case the representations and
warranties must be true and correct in all material respects as of the earlier
date.
3.3 Performance of Covenants. The Company will have performed or
complied in all material respects with all covenants and agreements required to
be performed by it on or prior to the Closing pursuant to this Agreement.
3.4 No Injunctions; etc. No court or governmental injunction, order or
decree prohibiting the purchase and sale of the Shares will be in effect. There
will not be in effect any law, rule or regulation prohibiting or restricting the
sale or requiring any consent or approval of any person that has not been
obtained to issue and sell the Shares to Purchasers.
3.5 Closing Documents. The Company will have delivered to Purchasers the
following:
(a) a certificate of the Secretary of the Company, dated as of the
Closing Date, certifying (i) the attached copies of the Certificate of
Incorporation and By-laws of the Company, and (ii) the resolutions of the Board
of Directors of the Company authorizing the execution, delivery and performance
of this Agreement and the issuance of the Shares; and
(b) a certificate of the Secretary of State of the State of Delaware,
dated a recent date, to the effect that the Company is in good standing in the
State of Delaware and that all annual reports, if any, have been filed as
required and that all taxes and fees have been paid in connection therewith.
3.6 Waivers and Consents The Company will have obtained all material
consents and waivers necessary to execute and deliver this Agreement and all
related documents and agreements and to issue and deliver the Shares, and all
consents and waivers will be in full force and effect.
Section 4. Conditions to the Obligations of the Company at Closing. The
obligation of the Company to issue and sell the Shares to Purchasers at the
Closing is subject to the satisfaction on or prior to the Closing Date of the
following conditions, each of which may be waived by the Company:
4.1 Receipt of Purchase Price. The Company shall have received payment
of the Purchase Price with respect to the Shares purchased hereunder.
4.2 Representations and Warranties. The representations and warranties
of Purchasers contained in this Agreement must be true and correct in all
material respects as of the Closing Date.
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4.3 Questionnaire. All of the information furnished by Purchasers in the
confidential purchaser questionnaire accompanying this Agreement (the
"Questionnaire") shall have been accurate and complete in all material respects.
4.4 No Injunctions. No court or governmental injunction, order or decree
prohibiting the purchase or sale of the Shares will be in effect.
Section 5. Representations and Warranties of Purchasers. Each Purchaser,
severally and not jointly, represents and warrants to the Company that:
5.1 Accredited Investor. Purchaser is an "accredited investor" within
the meaning of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act"). Purchaser is purchasing the Shares for its own account or for
the account of its customers, each of whom is an "accredited investor" and not
with a view toward, or for sale in connection with, any distribution thereof in
violation of the registration requirements of the Securities Act, without
prejudice, however, to Purchaser's right, subject to the provisions of this
Agreement, at all times to sell or otherwise dispose of all or any part of the
Shares. Purchaser 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.
5.2 No Brokers. Other than Gruntal & Co., L.L.C. (as placement agent on
behalf of the Company), no finder, broker, agent, financial person or other
intermediary has acted on behalf of Purchaser in connection with the purchase of
the Shares by Purchaser or the consummation of this Agreement or any of the
transactions contemplated hereby. Purchaser has not had any direct or indirect
contact with any other investment banking firm (or similar firm) with respect to
the offer of the Shares by the Company to Purchaser or Purchaser's subscription
for the Shares.
5.3 Certain Trading Activity. Purchaser and its affiliates have not
directly or indirectly sold any shares of Common Stock since the earlier of (a)
the twenty (20) trading days preceding the Closing Date or (b) the date on which
Purchaser first received a copy of the Memorandum. As of the Closing Date,
Purchaser does not directly or indirectly have a "short" position and has not
directly or indirectly entered into any hedging transaction with respect to the
Common Stock.
5.4 Ability to Bear Risks of Investment. Purchaser confirms that it is
able (i) to bear the economic risk of this investment, as well as other risk
factors as more fully set forth herein and in the Offering Materials, (ii) to
hold the Shares for an indefinite period of time, and (iii) to bear a complete
loss of Purchaser's investment; and Purchaser represents that it has sufficient
liquid assets so that the illiquidity associated with this investment will not
cause any undue financial difficulties or affect Purchaser's ability to provide
for its current needs and possible financial contingencies, and that Purchaser's
commitment to all high risk investments (including this one if this subscription
is accepted by the Company) is reasonable in relation to Purchaser's net worth
and/or annual income.
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5.5 Access to Information. Purchaser acknowledges that it (i) has
received, read carefully and is fully familiar with the Offering Materials,
including, without limitation, the risk factors set forth in the Offering
Materials, this Agreement and all other materials furnished herewith; (ii) has
been afforded the opportunity to ask the questions it deemed necessary of, and
to receive answers from, representatives of the Company concerning the Company
and the terms and conditions of the Offering; and (iii) has been afforded the
opportunity to request additional information concerning the Company as the
Company possesses or can acquire without unreasonable effort or expense.
However, the Company agrees that such access and opportunity shall in no way
limit or modify the representations and warranties of the Company in Section 6
or the right of any Purchaser to rely on them.
5.6 No General Solicitation. Purchaser did not (i) receive or review any
advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether
closed circuit, or generally available, with respect to the Shares or (ii)
attend any seminar, meeting or investor or other conference whose attendees
were, to Purchaser's knowledge, invited by any general solicitation or general
advertising with respect to the Shares.
5.7 Investment Experience. Either by reason of Purchaser's business or
financial experience or the business or financial experience of its professional
advisors (who are unaffiliated with and are not compensated by the Company or
any affiliate, finder or selling agent of the Company, directly or indirectly),
Purchaser has the capacity to protect Purchaser's interests in connection with
the transactions contemplated by this Agreement.
5.8 Organization, Good Standing, Authorization If Purchaser is an
entity, it is a corporation, limited liability company, trust or partnership or
other similar entity duly organized, validly existing and in good standing under
the laws of its jurisdiction. Purchaser has full power and authority (corporate
or otherwise) to execute, deliver and enter into this Agreement and to purchase
the Shares. The execution and delivery by Purchaser of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate or other action on the part of Purchaser. If
Purchaser is an individual, Purchaser has the legal capacity to enter into this
Agreement and is a bona fide resident of the state shown in the address set
forth in EXHIBIT A This Agreement constitutes a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies, and to limitations of public
policy.
5.9 No Conflicts. No court or governmental injunction, order or decree
affecting Purchaser and prohibiting the execution and delivery by Purchaser of
this Agreement and the consummation of the transactions contemplated hereby is
in effect, and the terms of this Agreement do not conflict with the provision of
the Certificate or Articles of Incorporation or By-laws (or comparable charter,
partnership or other organizational documents) of Purchaser, or conflict with,
or result in a material breach or violation of, any of the terms or provisions
of, or constitute (with due notice or lapse of time or both) a material default
under, any material lease,
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loan agreement, mortgage, security agreement, trust indenture or other agreement
or instrument to which Purchaser is a party.
5.10 Consents, Approvals, etc. No material consent, approval, license,
permit, order or authorization of, or registration, declaration or filing with,
any court, administrative agency or commission or other governmental authority
or instrumentality, domestic or foreign, remains to be obtained or is otherwise
required to be obtained by Purchaser in connection with the authorization,
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, including, without limitation the purchase and sale of the
Shares.
5.11 No Registration. Purchaser is aware that the Shares have not been
registered under the Securities Act or any state or foreign securities or "blue
sky" laws, that the Shares will be issued on the basis of the statutory
exemption provided by Section 4(2) of the Securities Act or Regulation D
promulgated thereunder, or both, relating to transactions by an issuer not
involving any public offering and under similar exemptions under certain state
securities or "blue sky" laws, that neither the Offering Materials nor the terms
of the Offering have been reviewed by, passed on or submitted to any federal or
state agency or self-regulatory organization where an exemption is being relied
upon, and that the Company's reliance thereon is based, in part, upon the truth,
completeness and accuracy of the representations made by Purchaser in this
Agreement. In this connection, Purchaser understands that it is the position of
the Securities and Exchange Commission (the "Commission") that the statutory
basis for such exemption would not be present if Purchaser's representation
merely meant that its present intention was to hold such securities for any
specified period, such as the capital gains period of tax statutes, for a
deferred sale, for a market rise or for any other fixed period. Purchaser
realizes that, in the view of the Commission, a purchase now with an intent to
resell would represent a purchase with an intent inconsistent with Purchaser's
representation to the Company, and the Commission might regard such purchase by
Purchaser as a transaction to which an exemption from the registration
requirements of the Securities Act would not be available.
5.12 Tax Consequences Purchaser acknowledges that the Offering may
involve tax consequences and that the contents of the Offering Materials do not
contain tax advice or information. Purchaser confirms that it is not relying on
any statements or representations of the Company or any of its agents with
respect to the tax and other economic considerations of an investment in the
Shares and acknowledges that Purchaser must retain its own professional advisors
to evaluate the federal, state and local tax and other economic considerations
of an investment in the Shares. Purchaser also acknowledges that it is solely
responsible for any of its own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
5.13 No Inquiry. Purchaser acknowledges that the Company will review
this Agreement and the Questionnaire without making any independent
investigation and that the representations, warranties and agreements made by
Purchaser herein shall survive the execution and delivery of this Agreement and
the purchase of the Shares.
5.14 Non-U.S. Persons. If Purchaser is not a United States person, such
Purchaser hereby represents that it is satisfied as to the full observance of
the laws of its jurisdiction in
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connection with any invitation to subscribe for the Shares or any use of this
Agreement, including (i) the legal requirements within its jurisdiction for the
purchase of the Shares, (ii) any foreign exchange restrictions applicable to
such purchase, (iii) any governmental or other consents that may need to be
obtained and (iv) the income tax and other tax consequences, if any, that may be
relevant to the purchase, holding, redemption, sale or transfer of the Shares.
Such Purchaser further represents that its subscription and payment for, and
continued beneficial ownership of, the Shares will not violate any applicable
securities or other laws of Purchaser's jurisdiction.
Section 6. Representations and Warranties of the Company. The Company represents
and warrants to each Purchaser that:
6.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has full corporate power and authority to
own and hold its properties and to conduct its business. The Company is duly
licensed or qualified to do business, and in good standing, in each jurisdiction
in which the nature of its business requires licensing, qualification or good
standing, except for any failure to be so licensed or qualified or in good
standing that would not have a material adverse effect on the Company or its
results of operations, assets, or financial condition or on its ability to
perform its obligations under this Agreement or the Shares (a "Material Adverse
Effect"). Each direct or indirect subsidiary of the Company (a "Subsidiary") and
its state or country of organization is listed on Exhibit 21.1 to the Company's
Annual Report on Form 10-K for the year ended December 31, 2000 (the "2000
10-K"). Each Subsidiary is duly organized, validly existing and in good standing
under the laws of the jurisdiction of in which it was organized and has full
corporate power and authority to own and hold its properties and to conduct its
business.
6.2 Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of 40,000,000 shares of Common Stock, par value $.001
per share, and 5,000,000 shares of Preferred Stock, par value $0.01 per share.
As of June 30, 2001, (i) 18,392,133 shares of Common Stock were issued and
outstanding, (ii) no shares of Preferred Stock were issued and outstanding,
(iii) 2,635,493 shares of Common Stock were reserved for issuance upon exercise
of outstanding options issued or issuable under the Company's Incentive Stock
Plan, 1999 Non-Qualified Stock Option Plan and 1998 Long-Term Incentive Plan
(the "Option Plans"), (iv) no shares of Common Stock are reserved for issuance
under stock options granted by the Company outside the Option Plans and (v)
297,507 shares of Common Stock were reserved for issuance upon the exercise of
outstanding warrants (except the warrants to be issued to Gruntal & Co., L.L.C.
in connection with the Offering). All the outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable and free of preemptive rights created by or through the Company.
Except as set forth in this Section 6.2 and except for the anti-dilution
protection granted to Elan Pharma International Limited in that certain
Convertible Secured Promissory Note, more fully described in the Company's
Current Report on Form 8-K filed July 3, 2001, there are no other options,
warrants or other rights, convertible debt, agreements, arrangements or
commitments of any character obligating the Company or any of its subsidiaries
to issue or sell any shares of capital stock of or other equity interests in the
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Company. The Company is not obligated to retire, redeem, repurchase or otherwise
reacquire any of its capital stock or other securities.
6.3 Corporate Power, Authorization; Enforceability. The Company has full
corporate power and authority to execute, deliver and enter into this Agreement
and to consummate the transactions contemplated hereby. All action on the part
of the Company, its directors or stockholders necessary for the authorization,
execution, delivery and performance of this Agreement by the Company, the
authorization, sale, issuance and delivery of the Shares contemplated hereby and
the performance of the Company's obligations hereunder and thereunder has been
taken. The Shares to be purchased on the Closing Date have been duly authorized
and, when issued in accordance with this Agreement, will be validly issued,
fully paid and nonassessable and will be free and clear of all liens, adverse
claims or encumbrances (collectively, "Liens") imposed by or through the Company
other than restrictions imposed by this Agreement and applicable securities
laws. No preemptive or other rights to subscribe for or purchase equity
securities of the Company exists with respect to the issuance and sale of the
Shares by the Company pursuant to this Agreement (except the warrants to be
issued to Gruntal & Co., L.L.C. in connection with the Offering). This Agreement
has been duly executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies, and to
limitations of public policy.
6.4 Financial Statements and Commission Filings (a) Included in the 2000
10-K are true and complete copies of the audited balance sheet (the "Balance
Sheet") of the Company as of December 31, 1999 and 2000, and the related audited
statements of operations, stockholders' equity (deficit) and cash flows for the
years ended December 31, 1998, 1999 and 2000 (the "Financial Statements"),
accompanied by the report of Ernst & Young LLP. The Financial Statements have
been prepared in accordance with generally accepted accounting principles,
applied consistently with the past practices of the Company (except as may be
indicated in the notes thereto), and as of their respective dates, fairly
present, in all material respects, the financial position of the Company and the
results of its operations as of the time and for the periods indicated therein.
The Company keeps proper accounting records in which all material assets and
liabilities and all material transactions of the Company are recorded in
conformity with generally accepted accounting principles.
(b) The Company has provided to each Purchaser the 2000 10-K and the
Company's Quarterly Report on Form 10-Q for the period ended March 31, 2001. A
copy of each report, schedule, effective registration statement and definitive
proxy statement filed by the Company with the Commission since December 31,
2000, including, but not limited to the Company's Current Report on Form 8-K
filed on July 3, 2001 (as the documents may have been amended since the time of
their filing, the "Commission Documents") has also been made available to each
Purchaser either by physical delivery or via the Commission's XXXXX System. As
of their respective filing dates, each Commission Document complied in all
material respects with the requirements of the Securities Act or the Securities
Exchange Act of 1934, as amended (the
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"Exchange Act"), as applicable, and the rules and regulations of the Commission
thereunder applicable to the Commission Document, and no Commission Document
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective filing dates, the financial statements of the
Company included in the Commission Documents complied as to form in all material
respects with then applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto, were prepared in
accordance with generally accepted accounting principles, applied consistently
with the past practices of the Company, and as of their respective dates, fairly
presented in all material respects the financial position of the Company and the
results of its operations as of the time and for the periods indicated therein
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q, and Regulations S-K and S-X of
the Commission).
(c) The information contained in the Offering Materials does not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading.
6.5 No Material Adverse Changes. Since December 31, 2000, except as
disclosed in the Commission Documents filed subsequent to that date, there has
not been any material adverse change in the business, financial condition or
operating results of the Company and its Subsidiaries except for changes that,
individually or in the aggregate, have not had or resulted in a Material Adverse
Effect.
6.6 Absence of Certain Developments. Except as contemplated by this
Agreement, the Commission Documents and the Manufacturing Site Transfer of
Estriopipate 1.25 mg. and 0.625 mg. (Ortho-Est) Strength Tablets Between
Pharmaceutical International Inc. and the Company, dated June 22, 2001, since
December 31, 2000, through the date immediately preceding the Closing Date,
neither the Company nor any of its Subsidiaries has (a) issued any stock,
options, bonds or other corporate securities other than pursuant to the Option
Plans, (b) borrowed any amount or incurred or became subject to any liabilities
(absolute, accrued or contingent), other than current liabilities incurred in
the ordinary course of business and liabilities under contracts entered into in
the ordinary course of business, (c) discharged or satisfied any lien or adverse
claim or paid any obligation or liability (absolute, accrued or contingent),
other than current liabilities shown on the Balance Sheet and current
liabilities incurred in the ordinary course of business, (d) declared or made
any payment or distribution of cash or other property to the stockholders of the
Company or purchased or redeemed any securities of the Company, (e) mortgaged,
pledged or subjected to any lien or adverse claim any of its properties or
assets, except for liens for taxes not yet due and payable or otherwise in the
ordinary course of business, (f) sold, assigned or transferred any of its
assets, tangible or intangible, except in the ordinary course of business or in
an amount less than $250,000, (g) suffered any extraordinary losses or waived
any rights of material value other than in the ordinary course of business, (h)
made any capital expenditures or commitments therefor other than in the ordinary
course of business or in an amount less than $250,000, (i) entered into any
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other transaction other than in the ordinary course of business in an amount
less than $250,000 or entered into any material transaction, whether or not in
the ordinary course of business, (j) made any charitable contributions or
pledges, (k) suffered any damages, destruction or casualty loss, whether or not
covered by insurance, affecting any of the properties or assets of the Company
or any other properties or assets of the Company which could, individually or in
the aggregate, have or result in a Material Adverse Effect, (l) made any
material change in the nature or operations of the business of the Company, or
(m) entered into any agreement or commitment to do any of the foregoing.
6.7 No Conflict; Governmental Consents. (a) The execution and delivery
by the Company of this Agreement and the consummation of the transactions
contemplated hereby will not (i) result in the violation of any provision of the
Certificate of Incorporation or By-laws of the Company, (ii) to the Company's
knowledge, result in any violation of any law, statute, rule, regulation, order,
writ, injunction, judgment or decree of any court or governmental authority to
or by which the Company or any of its Subsidiaries is bound, or (iii) conflict
with, or result in a breach or violation of, any of the terms or provisions of,
or constitute (with due notice or lapse of time or both) a default under, any
lease, loan agreement, mortgage, security agreement, trust indenture or other
agreement to which the Company or any of its Subsidiaries is a party or by which
it is bound or to which any of its properties or assets is subject, nor result
in the creation or imposition of any Lien upon any of the properties or assets
of the Company or any of its Subsidiaries.
(b) No consent, approval, license, permit, order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority remains to be obtained or
is otherwise required to be obtained by the Company in connection with the
authorization, execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby, including, without limitation the issue
and sale of the Shares, except (i) filings as may be required to be made by the
Company after the Closing with (A) the Commission, (B) the National Association
of Securities Dealers, Inc. ("NASD"), (C) the Nasdaq Stock Market, Inc. and (D)
state blue sky or other securities regulatory authorities and (ii) notice to
Holders of Registrable Securities and Holders of Registrable Securities under
the Prior Agreement (as such terms are defined in the Registration Rights
Agreement by and among the Company, Elan International Services, Ltd. and
Bermuda International Limited dated as of June 29, 2001, and attached to the
Company's Current Report on Form 8-K) of the Company's intent to register the
Shares pursuant to this Agreement and providing such Holders with an opportunity
to include their Registrable Securities in the registration described in Section
7 herein.
6.8 Licenses. The Company and its Subsidiaries have sufficient licenses,
permits and other governmental authorizations currently required for the conduct
of its current business and the ownership of its properties and is in all
respects complying therewith.
6.9 Litigation. Except as set forth in the Company's Commission
Documents and SCHEDULE 6.9, there are no pending or to the Company's knowledge,
threatened legal or governmental proceedings against the Company and its
Subsidiaries.
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6.10 Investment Company. The Company is not, and following the Closing
of the Offering will not be, an "investment company" within the meaning of that
term under the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
6.11 No Default or Violation. Except as described in SCHEDULE 6.11,
neither the Company nor any of its Subsidiaries is (i) in default under or in
violation of any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party of by which it or any of its properties is
bound or (ii) in violation of any order of any court, arbitrator or governmental
body, except for any of the foregoing that is not reasonably expected to,
individually or in the aggregate, have or result in a Material Adverse Effect.
6.12 Listing and Maintenance Requirements Compliance/Form S-3
Eligibility. The Company has not since December 31, 2000, received notice
(written or oral) from any stock exchange or market on which the Common Stock is
or has been listed (or on which it has been quoted) to the effect that the
Company is not in compliance with the continuing listing or maintenance
requirements of the exchange or market. The Company meets the requirements for
use of Form S-3 for registration of the resale of the Shares as contemplated
herein and in the Offering Materials.
6.13 Patents and Trademarks. Except as set forth in the Company's 2000
10-K and SCHEDULE 6.13, the Company and its Subsidiaries have, or have rights to
use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights and licenses (collectively, the
"Intellectual Property Rights") which are necessary for use in connection with
its business as presently conducted and which the failure to have would have a
Material Adverse Effect and to the Company's knowledge, there is no existing
infringement by another person or entity of any of the Intellectual Property
Rights which are necessary for use in connection with the Company's business as
presently conducted. Except as set forth in SCHEDULE 6.13, there is no pending
or threatened action, suit, proceeding or claim by others challenging the
validity or scope of the Intellectual Property Rights or alleging that the
Company infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary right of others, other than claims which would not
reasonably be expected to have a Material Adverse Effect.
6.14 Environmental Matters. The Company and its Subsidiaries have
obtained all permits, licenses and other authorizations which are required under
federal, state and local laws relating to pollution or protection of the
environment, including laws related to emissions, discharges, releases or
threatened releases of pollutants, contaminants or hazardous or toxic material
or wastes into ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling or pollutants, contaminants or hazardous or
toxic materials or wastes ("Environmental Laws"), except for any failures to
obtain the permits, licenses or authorizations which would not, individually or
in the aggregate, have or result in a Material Adverse Effect. The Company and
its Subsidiaries are in compliance with all terms and conditions of the required
permits, licenses and authorizations and is also in full compliance with all
other limitations, restrictions,
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conditions and requirements contained in the Environmental Laws or contained in
any plan, order, judgement, decree or notice, except for any non-compliance
which could not, individually or in the aggregate, have or result in a Material
Adverse Effect. The Company is not aware of, nor has the Company received notice
of, any events, conditions, circumstances, actions or plans which may interfere
with or prevent continued compliance or which would give rise to any liability
under any Environmental Laws, except for any liability which could not,
individually or in the aggregate, have or result in a Material Adverse Effect.
6.15 Contracts. Except as set forth on SCHEDULE 6.15, all material
agreements to which the Company and its Subsidiaries are parties and which are
required to have been filed by the Company pursuant to the Securities Act, the
Exchange Act and the rules and regulations thereunder have been filed by the
Company with the Commission. As of the date hereof, except for those agreements
that by their terms are no longer in effect, each such agreement is in full
force and effect and is binding on the Company and, to the Company's knowledge,
is binding upon such other parties, in each case in accordance with its terms,
and neither the Company nor, to the Company's knowledge, any other party thereto
is in breach of or default under any such agreement, which breach or default
would have a Material Adverse Effect. Except as noted on SCHEDULE 6.15, the
Company has not received any written notice regarding the termination of any
such agreements.
6.16 Properties. The Company has good title to all the properties and
assets reflected as owned by it in the consolidated financial statements
included in the Offering Materials, subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except (i) those, if any, reflected in such
consolidated financial statements or (ii) those which are not material in amount
and do not adversely affect the use made and intended to be made of such
property by the Company. The Company holds its leased properties under valid and
binding leases, with such exceptions as are not materially significant in
relation to its business. Except as disclosed in the Offering Materials, the
Company owns or leases all such properties as are necessary to its operations as
now conducted.
6.17 Insurance. The Company and its subsidiaries maintain insurance of
the types, against such losses and in the amounts and with such insurers as are
customary in the Company's industry and otherwise reasonably prudent, including,
but not limited to, insurance covering all real and personal property owned or
leased by the Company against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against by similarly situated companies, all
of which insurance is in full force and effect.
6.18 Compliance. The Company has not been advised, nor does it have
reason to believe, that it is not conducting its business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is
conducting its business except where failure to be in compliance would not have
a Material Adverse Effect.
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Section 7. Registration of Common Stock.
7.1 Registrable Securities. For the purposes of this Agreement,
"Registrable Securities" means (a) the Shares and (b) shares of Common Stock
issued as a dividend or other distribution with respect to or in replacement of
the Shares; provided that (i) any shares of Common Stock will cease to be
Registrable Securities, and (ii) the Company will not be obligated to maintain
the effectiveness of the Shelf Registration Statement (as defined below), and
the Company's obligations under SECTION 7.2 will cease, with respect to a
holder's (a "Holder") Registrable Securities following the earlier of (x) the
second anniversary of the Closing Date and (y) the date on which the Company
delivers an opinion of counsel in form and substance reasonably satisfactory to
the Holder that (1) the Holder may sell in a single transaction all Registrable
Securities then held or issuable to the Holder on a registered securities
exchange or Nasdaq market under an applicable exemption from the registration
requirements of the Securities Act (pursuant to Rule 144 under the Securities
Act or otherwise) and (2) all transfer restrictions and restrictive legends with
respect to the Registrable Securities will be removed upon the consummation of
the sale. The period of time during which the Company is required to keep the
Shelf Registration Statement (defined below) effective is referred to as the
"Registration Period."
7.2 Registration. The Company will as soon as practicable following the
Closing Date but not later than thirty (30) days after the Closing Date (the
"Filing Period"), file with the Commission a shelf registration statement on
Form X-0, X-0 or successor form or another form selected by the Company that is
available to it under the Securities Act (the "Shelf Registration Statement")
with respect to the Registrable Securities beneficially owned by Purchasers
following the Closing to permit the sale of such securities in accordance with
the methods of distribution provided by the Holders. The Purchasers acknowledge
that the Company may be required to register additional securities pursuant to
the terms of the Registration Rights Agreement described in Section 6.7(b)
herein and that, in the event of an underwritten offering of the Shares, the
Holders identified in the Registration Rights Agreement will receive priority.
The Company may amend the Shelf Registration Statement from time to time to
register securities other than Registrable Securities for sale for the account
of any person or entity; provided, however, that the amendment will be permitted
only so long as the Commission rules provide that the amendment does not give
the Commission the right to review the Shelf Registration Statement.
7.3 Registration Procedures. In connection with the registration of any
Registrable Securities under the Securities Act as provided in this SECTION 7,
the Company will use its best efforts:
(a) To cause the Shelf Registration Statement (and any other related
registrations, qualifications or compliances as may be reasonably requested and
as would permit or facilitate that sale and distribution of all Registrable
Securities until the distribution thereof is complete) to become effective as
soon as practicable following the filing thereof but not later than one hundred
and twenty (120) days after the Closing Date and remain effective until no
longer required under Section 7.1 (the "Effectiveness Period");
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(b) Prepare and file with the Commission the amendments and supplements
to the Shelf Registration Statement and the prospectus used in connection
therewith and take all other actions as may be necessary to keep the Shelf
Registration Statement continuously effective until the disposition of all
securities in accordance with the intended methods of disposition by the Holder
or Holders thereof set forth in the Shelf Registration Statement will be
completed, and to comply with the provisions of the Securities Act (to the
extent applicable to the Company) with respect to the dispositions;
(c) Furnish to each Holder of Registrable Securities a reasonable number
of copies of the Shelf Registration Statement and of each amendment and
supplement thereto, a number of copies of the prospectus included in the Shelf
Registration Statement (including each preliminary prospectus), in conformity
with the requirements of the Securities Act, and the other documents (including
exhibits to any of the foregoing), as the Holder may reasonably request, in
order to facilitate the disposition of the Registrable Securities owned by
Holder;
(d) To register or qualify the Registrable Securities covered by the
Shelf Registration Statement under blue sky laws of the various states as any
Holder reasonably requests, and do any and all other acts and things that may be
reasonably necessary or advisable to enable a Holder to consummate the
disposition in the states the Registrable Securities owned by Holder, except
that the Company will not be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not, but for the
requirements of this SECTION 7.3(d) be obligated to be qualified, to subject
itself to taxation in any the jurisdiction, or to consent to general service of
process in any the jurisdiction;
(e) Provide a transfer agent and registrar for the Registrable
Securities covered by the Shelf Registration Statement not later than the
effective date of the Shelf Registration Statement;
(f) To notify the Holders promptly, and confirm such notice in writing,
(i) when a prospectus as contained in the Shelf Registration Statement
("Prospectus") or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Shelf Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of the issuance by the
Commission or any other federal or state governmental authority or any stop
order suspending the effectiveness of a Shelf Registration Statement or the
initiation of any proceedings for that purpose, (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification or any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (iv) of the existence of any fact or the happening of any event that
makes any statement made in such Shelf Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in such Shelf Registration Statement, Prospectus or documents so that,
in the case of the Shelf Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the Prospectus, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
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under which they were made, not misleading, and (v) of the Company's reasonable
determination that a post-effective amendment to a Shelf Registration Statement
would be appropriate.
(g) To comply with all applicable rules and regulations of the
Commission and make generally available its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder no later than 45 days after the end of any twelve (12) month period
(or ninety (90) days after the end of any twelve (12) month period if such
period is a fiscal year) commencing on the first day of the first fiscal quarter
of the Company, after the effective date of the Shelf Registration Statement,
which statements shall cover said twelve (12) month period.
(h) Cause all Registrable Securities to be listed on each securities
exchange or automated over-the-counter trading system on which similar
securities issued by the Company are now listed and to maintain such listing for
so long as any Purchaser holds any Shares;
(i) Enter into customary agreements (including, in the event the Holders
elect to engage an underwriter in connection with the Shelf Registration
Statement, an underwriting agreement containing customary terms and conditions)
and take all other actions as reasonably required in order to expedite or
facilitate the disposition of Registrable Securities; provided, however, that
the Company will not be liable for any underwriter's fees, commissions and
discounts or similar expenses;
(j) Make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Shelf Registration Statement at the earliest
possible time.
7.3A. Rule 144. With a view to making available to the Holders the
benefits of certain rules and regulations of the Commission that at any time
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to:
(A) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(B) file with the Commission in a timely manner all reports and
other documents required of the Company under the Exchange Act; and
(C) so long as a Holder owns any unregistered Registrable
Securities, furnish to the Holder upon any reasonable request a written
statement by the Company as to its compliance with the public
information requirements of Rule 144 under the Securities Act, and of
the Exchange Act, a copy of the most recent annual or quarterly report
of the Company, and the other Commission reports and documents of the
Company as the Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing a Holder to sell any
Registrable Securities without registration (excluding any reports or
documents of the Company that the Company, in its sole discretion, deems
confidential).
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7.4 Registration and Selling Expenses. All expenses incurred by the
Company in connection with the Company's performance of or compliance with this
SECTION 7, including, without limitation, (i) all Commission registration and
filing fees, (ii) blue sky fees and expenses, (iii) all necessary printing and
duplicating expenses and (iv) all fees and disbursements of counsel and
accountants retained on behalf of the Company (all expenses being called
"Registration Expenses"), will be paid by the Company. Each Holder may, at its
election, retain its own counsel and other representatives and advisors as it
chooses at its own expense.
7.5 No Delay. The Holders will have no right to take any action to
restrain, enjoin or otherwise delay any registration pursuant to SECTION 7.2
hereof as a result of any dispute, controversy or other matter that may arise
with respect to the interpretation or implementation of this Agreement.
7.5A. Delayed Registration. In the event the Shelf Registration
Statement required by the Agreement is not filed with the Commission within
thirty (30) days after Closing, the Company hereby agrees to pay to each Holder
of Registrable Securities affected thereby a fee (the "Late Registration Fee")
in an amount equal to one percent (1%) of the Purchase Price paid by such Holder
for the Registrable Securities purchased by such Holder. The parties agree that
the Late Registration Fee represents a reasonable endeavor by the parties to
estimate a fair compensation for the foreseeable losses that might result from
the Shelf Registration Statement not being filed with the Commission within
thirty (30) days after the Closing. The Company shall pay the Holders such fee
in cash at the end of such thirty (30) day period. Nothing herein shall limit
the Holders' rights to pursue actual damages for the Company's failure to have
the Shelf Registration Statement filed on or prior to thirty (30) days after
Closing if and to the extent that such actual damages exceed the amount of the
Late Registration Fee to be received by the Holders pursuant to this SECTION
7.5A.
7.6 Certain Obligations of Holders. (a) Each Holder agrees that, upon
receipt of any notice from the Company of the happening of (i) any event of the
kind described in SECTIONS 7.3(f)(ii), 7.3(f)(iii), 7.3(f)(iv) or 7.3(f)(v)
hereof, or (ii) a determination by the Company's Board of Directors that it is
advisable to suspend use of the Prospectus for a discrete period of time due to
pending corporate developments such as negotiation of a material transaction
which the Company in its sole discretion after consultation with legal counsel,
determines it would be obligated to disclose in the Shelf Registration
Statement, which disclosure the Company believes would be premature or otherwise
inadvisable at such time or would have a material adverse effect on the Company
and its stockholders, such Holder will forthwith discontinue disposition of such
Registrable Securities covered by the Shelf Registration Statement or Prospectus
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by SECTION 7.3(b) hereof, or until such Holder is
advised in writing by the Company that the use of the applicable Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
Prospectus. The period of time in which the use of a Prospectus or Shelf
Registration Statement is so suspended shall be referred to as a "Black-Out
Period." The Company agrees to so advise such Holder promptly of the
commencement and termination of any such Black-Out Period, and
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the Purchasers agree to keep the fact of such Black-Out Period confidential. The
Company shall not impose a Black-Out Period under this Section 7.6 for more than
ninety (90) consecutive days and not more than once in any given twelve (12)
month period.
(b) As a condition to the inclusion of its Registrable Securities, each
Holder will furnish to the Company the information regarding the Holder and the
intended method of distribution of the securities as the Company may from time
to time request and as is legally required in connection with any registration,
qualification or compliance referred to in this SECTION 7.
(c) Each Holder hereby covenants with the Company not to make any sale
of the Registrable Securities without effectively causing the prospectus
delivery requirements under the Securities Act to be satisfied.
(d) Each Holder acknowledges and agrees that the Registrable Securities
sold pursuant to the Shelf Registration Statement are not transferable on the
books of the Company unless the stock certificate submitted to the transfer
agent evidencing the Registrable Securities is accompanied by a certificate
reasonably satisfactory to the Company to the effect that (i) the Registrable
Securities have been sold in accordance with this Agreement and the Shelf
Registration Statement and (ii) the requirement of delivering a current
prospectus has been satisfied.
(e) Each Holder is hereby advised that the anti-manipulation provisions
of Regulation M under the Exchange Act may apply to sales of the Registrable
Securities offered pursuant to the Shelf Registration Statement and agrees not
to take any action with respect to any distribution deemed to be made pursuant
to the Shelf Registration Statement that constitutes a violation of Regulation M
under the Exchange Act or any other applicable rule, regulation or law.
(f) At the end of the Registration Period, the Holders of Registrable
Securities included in the Shelf Registration Statement shall discontinue sales
of shares pursuant thereto upon receipt of notice from the Company of its
intention to remove from registration the shares covered thereby which remain
unsold, and the Holders shall promptly notify the Company of the number of
shares registered that remain unsold immediately upon receipt of the notice from
the Company.
(g) The rights to cause the Company to register Registrable Securities
granted to the Holders by the Company under SECTION 7.2 may be assigned in whole
or in part by a Holder, provided, that: (i) the transfer may otherwise be
effected in accordance with applicable securities laws, (ii) the transfer
involves not less than the lesser of all of the Holder's Registrable Securities
or 25,000 shares of Common Stock, (iii) the Holder gives prior written notice to
the Company, and (iv) the transferee agrees to comply with the terms and
provisions of this Agreement in a written instrument satisfactory in form and
substance to the Company and its counsel. Except as specifically permitted by
this SECTION 7.6, the rights of a Holder with respect to Registrable Securities
will not be transferable to any other person or entity, and any attempted
transfer will
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cause all rights of the Holder therein to be forfeited, void ab initio and of no
further force and effect.
(h) With the written consent of the Company and the Holders holding at
least 66 2/3% of the Registrable Securities that are then outstanding, any
provision of this SECTION 7 may be waived (either generally or in a particular
instance, either retroactively or prospectively and either for a specified
period of time or indefinitely) or amended. Upon the effectuation of each waiver
or amendment, the Company will promptly give written notice thereof to the
Holders, if any, who have not previously received notice thereof or consented
thereto in writing.
7.7 Indemnification. (a) The Company will indemnify and hold harmless
each Holder of Registrable Securities, each person, if any, who controls such
Holder within the meaning of the Securities Act or the Exchange Act, their
respective officers, directors, partners, members, stockholders and trustees,
each underwriter, if any, of Registrable Securities, their officers and
directors, and each person, if any, who controls such underwriter within the
meaning of the Securities Act of the Exchange Act, against any losses, claims,
damages, liabilities or expenses (joint or several) (collectively "Losses") to
which they may become subject under the Securities Act, the Exchange Act of
other federal or state law, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (any of the following, a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law. The
Company will reimburse each such Holder or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such Losses (or action in respect thereof); provided, however,
that the indemnity agreement contained in this SECTION 7.7 shall not apply to
amounts paid in settlement of any such Losses or action in respect thereof) if
such settlement is effected without the consent of the Company (in which case
the parties shall first have met and conferred in good faith regarding such
settlement), nor shall the Company be liable in any such case for any such
Losses (or action in respect thereof) to the extent that they arise out of or
are based upon a Violation which arises out of or is based upon information
furnished in writing expressly for use in connection with such registration by
any such Holder or controlling person, as the case may be; provided, further,
that the Company will not be liable to any Holder or its officers, directors,
partners, members, stockholders and trustees, each underwriter, if any, of
Registrable Securities, their officers and directors, and each person, if any,
who controls such underwriter within the meaning of the Securities Act of the
Exchange Act, as the case may be, with respect to any Losses arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission to state a material fact in any preliminary prospectus which is
corrected in an amended, supplemented or final prospectus if the purchaser
asserting such Losses purchased from such Holder or underwriter, as applicable,
and was not, due to the fault of such Holder or underwriter, sent or given a
copy of such
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amended, supplemented or final prospectus at or prior to the sale of Registrable
Securities to such purchaser.
(b) In connection with any registration statement in which a Holder of
Registrable Securities is participating, each Holder will furnish to the Company
in writing the information as is reasonably requested by the Company for use in
any the registration statement or prospectus and will severally, but not
jointly, indemnify, to the extent permitted by law, the Company, its directors
and officers and each person or entity, if any, who controls the Company within
the meaning of Section 15 of the Securities Act (the "Company Indemnified
Parties"), against any Losses resulting from any untrue statement or omission or
alleged untrue statement or omission of a material fact required to be stated in
the registration statement or prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein not misleading, but only to
the extent the Losses are caused by an untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with the
written information so furnished by such Holder and stated specifically for use
in connection with the preparation of the registration statement or prospectus;
provided that the indemnity will not apply to the extent that the Losses arises
out of or is based upon a violation of this Agreement by the Company.
Notwithstanding the foregoing or any other provision of this Agreement, in no
event will a Holder of Registrable Securities be liable for any the Losses in
excess of the net proceeds received by the Holder in connection with its
disposition of Registrable Securities.
(c) Promptly after receipt by an indemnified party under SECTION 7.7(a)
or (b) of notice of any claim as to which indemnity may be sought, including,
without limitation, the commencement of any action or proceeding, the
indemnified party will, if a claim in respect thereof may be made against the
indemnifying party under this Section, promptly notify the indemnifying party in
writing of the commencement thereof; provided that the failure of the
indemnified party so to notify the indemnifying party will not relieve the
indemnifying party from its obligations under this Section except to the extent
that the indemnifying party is adversely affected by the failure. In case any
action or proceeding is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party and
its counsel will conduct the defense of any action with counsel approved by the
indemnified party (which approval will not be withheld or delayed unreasonably)
although the indemnified party will be entitled to participate therein, and
after notice from the indemnifying party to the indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to the indemnified party under that Section for any legal or any other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof (other than reasonable costs of investigation) unless incurred
at the written request of the indemnifying party. Notwithstanding the above, the
indemnified party will have the right to employ counsel of its own choice in any
action or proceeding (and be reimbursed by the indemnifying party for the
reasonable fees and expenses of the counsel and other reasonable costs of the
defense) if representation of the indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests or conflicts between the indemnified party and any other
party represented by the counsel in the action or proceeding or counsel to the
indemnified party is of the opinion that it would not be desirable for the same
counsel to represent both the indemnifying party and the indemnified party
because the representation might result in a conflict of interest; provided,
however, that the
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indemnifying party will not in connection with any one action or proceeding or
separate but substantially similar actions or proceedings arising out of the
same general allegations, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys at any time for all indemnified parties,
except to the extent that local counsel, in addition to regular counsel, is
required in order to effectively defend against the action or proceeding. An
indemnifying party will not be liable to any indemnified party for any
settlement or entry of judgment concerning any action or proceeding effected
without the consent of the indemnifying party.
(d) If the indemnification provided for in SECTION 7.7(a) or (b) is held
by a court of competent jurisdiction to be unavailable under applicable law to
an indemnified party in respect of any losses, claims, damages or liabilities
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying the indemnified party, will contribute to the amount paid or
payable by the indemnified party as a result of the losses, claims, damages or
liabilities in the proportion as is appropriate to reflect the relative fault of
the Company on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in the losses,
claims, damages, or liabilities, as well as any other relevant equitable
considerations including the relative benefits to the parties. The relative
fault of the Company on the one hand and of the indemnified party on the other
will be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the Company or by the indemnified party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent the statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages and liabilities
referred to above will be deemed to include, subject to the limitations set
forth in SECTION 7.7(c), any legal or other fees or expenses reasonably incurred
by the party in connection with investigating or defending any action or claim.
No person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity that is not guilty of fraudulent misrepresentation. In no
event will a Holder be liable under SECTIONS 7.6(b) AND (d) for any amount in
excess of the net proceeds received by the Holder in connection with its sale of
Registrable Securities.
Section 8. Legends. Purchaser acknowledges that the certificates evidencing the
Shares shall bear the following, or substantially similar, legends and such
other legends as may be required by state securities or "blue sky" laws:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES OR "BLUE SKY" LAWS AND NEITHER SUCH SECURITIES NOR
ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT
THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES OR "BLUE SKY" LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL
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AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT
SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED
IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES OR "BLUE SKY"
LAWS."
Section 9. Termination.
9.1 Termination. This Agreement may be terminated at any time with
respect to the applicable parties prior to the Closing:
(a) by mutual written agreement of the Company and the Purchasers;
(b) by a Purchaser, on the one hand, or the Company, on the other hand
(provided that the terminating party (or parties) is not then in material breach
of any representation, warranty, covenant or other agreement contained in this
Agreement) if the Closing shall not have been consummated on or before August
20, 2001;
(c) by a Purchaser, on the one hand, or the Company, on the other hand,
if a court of competent jurisdiction or a governmental, regulatory or
administrative agency or commission shall have issued a non-appealable final
order, decree or ruling or taken any other action having the effect of
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement;
(d) by a Purchaser, on the one hand, or the Company, on the other hand,
(provided that the terminating party (or parties) is not then in material breach
of any representation, warranty, covenant or other agreement contained in this
Agreement) in the event of a material breach by the other party (or parties) of
any representation or warranty contained in this Agreement that cannot be or has
not been cured within ten (10) days after the giving of written notice to the
breaching party of such breach; or
(e) by a Purchaser, on the one hand, or the Company, on the other hand,
(provided that the terminating party (or parties) is not then in material breach
of any representation, warranty, covenant or other agreement contained in this
Agreement) in the event of a material breach by the other party of any covenant
or agreement contained in this Agreement that cannot be or has not been cured
within ten (10) days after the giving of written notice to the breaching party
of such breach.
9.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to SECTION 9.1, this Agreement shall forthwith become void
with respect to the applicable parties and there shall be no liability on the
part of any such party hereto (or any stockholder, director, officer, partner,
employee, agent, consultant or representative of such party); provided, however,
that nothing contained in this Agreement shall relieve any party from liability
for any breach of this Agreement and provided further that SECTION 7 shall
survive termination of this Agreement.
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Section 10. Miscellaneous.
10.1 Notices. Any notice or other communication given hereunder will be
deemed sufficient if in writing and sent by registered or certified mail, return
receipt requested, or delivered by hand against written receipt therefor,
addressed to:
If to the Company:
Women First HealthCare, Inc.
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Chairman, President & CEO
With a copy to:
Xxxxxx & Xxxxxxx
00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx, Esq.
If to Purchasers:
To the names and addresses on EXHIBIT A.
With a copy to:
Gruntal & Co., L.L.C.
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx
With a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxxx, Esq.
Notices will be deemed to have been given or delivered on the date of mailing,
except notices of change of address, which will be deemed to have been given or
delivered when received.
10.2 Successors and Assigns. Subject to SECTION 7.6(h), this Agreement
will be binding upon and inure to the benefit of the parties hereto and to their
respective heirs, legal representatives, successors and assigns.
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10.3 Entire Agreement; Survival of Representations and Warranties. This
Agreement sets forth the entire agreement and understanding among the parties as
to the subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them; provided that
any confidentiality agreement between the Company and any of the Purchasers
shall remain in effect. This Agreement may be amended only by mutual written
agreement of the Company and Purchasers holding 66 2/3% of the shares, and the
Company may take any action herein prohibited or omit to take any action herein
required to be performed by it, and any breach of any covenant, agreement,
warranty or representation may be waived, only if the Company has obtained the
written consent or waiver of Purchasers. The representations and warranties of
the Company set forth in this Agreement shall survive the Closing Date for
eighteen (18) months except that the representations and warranties set forth in
SECTIONS 6.2 and 6.3 shall survive indefinitely.
10.4 Governing Law; Consent to Jurisdiction; etc. (a) Notwithstanding
the place where this Agreement may be executed by any of the parties hereto, the
parties expressly agree that all the terms and provisions hereof shall be
construed in accordance with and governed by the laws of the State of Delaware
without regard to that State's conflicts of law principles. In the event that a
judicial proceeding is necessary, the parties who are not citizens or residents
of the United States agree that the sole forum for resolving disputes arising
out of or relating to this agreement is the federal or state courts in the City
and County of New York in the State of New York, and all related appellate
courts (collectively, the "Courts"), and each Purchaser irrevocably and
unconditionally consents to the jurisdiction of the Courts.
(b) Each of the parties who are not citizens or residents of the United
States, irrevocably and unconditionally consents to venue in the Courts, and
irrevocably and unconditionally waives any objection to the laying of venue of
any judicial proceeding in the Courts, and agrees not to plead or claim in any
Court that any judicial proceeding brought in any court has been brought in an
inconvenient forum.
10.5 Severability. The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction will not affect
any other provision of this Agreement, which will remain in full force and
effect. If any provision of this Agreement is declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, the provision will be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof will nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions will be deemed dependent upon any other covenant
or provision unless so expressed herein.
10.6 No Waiver. A waiver by either party of a breach of any provision of
this Agreement will not operate, or be construed, as a waiver of any subsequent
breach by that same party.
10.7 Further Assurances. The parties agree to execute and deliver all
further documents, agreements and instruments and take further action as may be
necessary or
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appropriate to carry out the purposes and intent of this Agreement. Any
documentary, stamp tax or similar issuance or transfer taxes due as a result of
the conveyance, transfer or sale of the Shares between Purchasers (or any of
their permitted transferees), on the one hand, and the Company, on the other
hand, pursuant to this Agreement shall be borne by Purchasers (or their
respective permitted transferees).
10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which will
together constitute the same instrument.
10.9 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, supersedes all
prior written or oral agreements, and may be amended or superseded only by a
writing executed by the parties.
10.10 No Third Party Beneficiaries. Nothing in this Agreement creates in
any person not a party to this Agreement any legal or equitable right, remedy or
claim under this Agreement, and this Agreement is for the exclusive benefit of
the parties hereto. The parties expressly recognize that this Agreement is not
intended to create a partnership, joint venture or other similar arrangement
between any of the parties or their respective affiliates.
10.11 Headings. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
10.12 Publicity Restrictions. No press release or other public
disclosure relating to the transactions contemplated by this Agreement may be
issued or made by or on behalf of any Purchaser without prior consultation with
the Company, except as required by applicable law, court process or stock
exchange rules, in which case Purchaser required to make the disclosure will
allow the Company reasonable time (to the extent practicable) to comment thereon
in advance of the issuance.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year this subscription has been accepted by the Company as set
forth below.
----------------------------------
Print Name of Purchaser
By:
-------------------------------
(Signature of Purchaser or
Authorized Signatory)
Name:
Title:
Accepted on _________ ___, 2001 by:
WOMEN FIRST HEALTHCARE, INC.
By:
--------------------------------
Name:
Title:
