SECURITIES PURCHASE AGREEMENT
EXHIBIT
4.1
This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of
August 30, 2007, is made by and among Matritech, Inc., a corporation organized
under the laws of the State of Delaware (the “Company”), and
each of the purchasers (individually, a “Purchaser” and
collectively the “Purchasers”) set forth on the execution pages
hereof (each, an “Execution Page” and collectively the
“Execution Pages”).
BACKGROUND
A. The
Company and each Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as promulgated by
the United States Securities and Exchange Commission (the
“SEC”) under the Securities Act of 1933, as amended (the
“Securities Act”).
B. Upon
the
terms and conditions stated in this Agreement, the Company desires to issue
and
sell to the Purchasers, and each Purchaser desires to purchase (i) a secured
promissory note, in the form attached hereto as Exhibit A (collectively,
including any note or notes issued upon transfer of the secured promissory
notes, the “Series CNotes”), in the principal
face amount set forth on the Execution Pages hereof (for each Purchaser, the
“Subscription Amount”). The Series C Notes are sometimes
referenced herein as the “Securities” and each of them may
individually be referred to herein as a
“Security.”
C. In
connection with the Closing pursuant to this Agreement, the Company and the
Collateral Agent will execute and deliver a Second Amended and Restated Security
Agreement, which amends and restates the Amended and Restated Security Agreement
dated January 22, 2007, in the form attached hereto as Exhibit B (the
“Security Agreement” and, together with the License Agreement
(as defined below), the Pledge Agreement (as defined below) and any other
document securing the Series C Notes, the “Security
Documents”), such Security Agreement to be in favor of the Collateral
Agent (as defined herein) for the benefit of all of the Purchasers, the
purchasers of the 15% Secured Convertible Promissory Notes dated
January 13, 2006 (the “Series A Notes”) and the purchasers
of the Series B 15% Secured Convertible Promissory Notes dated January 22,
2007 (the “Series B Notes”), and to provide that the Company
has agreed to grant a security interest in certain collateral described in
the
Security Documents in order to secure its obligations under the Series C Notes,
the Series B Notes and the Series A Notes.
D. In
connection with the Closing pursuant to this Agreement, the Collateral Agent,
for itself and the holders of the Series C Notes, Series B Notes and Series
A
Notes, together with the Company will execute and deliver a Second Amended
and
Restated Contingent License Agreement, which amends and restates the Amended
and
Restated Contingent License Agreement dated January 22, 2007, which agreement
shall provide for the agreement by the Company, under certain circumstances,
to
provide a license to certain intellectual property rights to the Collateral
Agent for the benefit of the holders of the Series C Notes, the holders of
the
Series B Notes and the holders of the Series A Notes, in the form attached
hereto as Exhibit C (the “License Agreement”).
E. The
Company has entered into an Asset Purchase Agreement (the “Asset
Purchase Agreement”), dated August 27, 2007, by and among Inverness
Medical Innovations, Inc. (“Inverness”), Milano Acquisition
Corp., and the Company, under which the Company has agreed to sell substantially
all of its assets to Milano Acquisition Corp., in exchange for an initial
payment of shares of Inverness common stock valued at approximately $36 million
(the “Inverness Shares”). After the closing of the
sale of the Company’s assets contemplated under the Asset Purchase Agreement
(the “Asset Purchase Closing”), the Company intends to resell
the Inverness Shares pursuant to a Form S-3 registration statement to be filed
by Inverness immediately following the Asset Purchase Closing as soon as
reasonably practicable in order to repay the amounts owed by the Company
pursuant to the Series A Notes, the Series B Notes and the Series C Notes and
to
satisfy the Borrower’s other obligations.
F. In
connection with the Asset Purchase Closing, the holders of the Series C Notes
acknowledge that the Majority Holders of the Series A Notes (as defined in
the
Series A Notes) and the Majority Holders of the Series B Notes (as defined
in
the Series B Notes) have instructed the Collateral Agent to, immediately prior
to the Asset Purchase Closing, (i) release the existing liens and security
interests in the Collateral (as defined in the Security Documents); (ii)
terminate the existing Security Documents; (iii) terminate the existing UCC-1
filings made under the Security Documents and file in lieu thereof a new UCC-1
financing statement in respect of the Inverness Shares pledged as collateral
pursuant to the Pledge Agreement; (iv) terminate the License Agreement; and
(v)
enter into the Pledge Agreement attached hereto as Exhibit D (the
“Pledge Agreement”), pursuant to which the Company agrees to
(x) pledge that number of Inverness Shares evidenced by a stock certificate
as
would, upon the Asset Purchase Closing, have an aggregate value, as provided
in
the Asset Purchase Agreement, of 150% of all principal, interest and prepayment
premiums owed in respect of the Series A Notes, the Series B Notes and the
Series C Notes (the “Note Payment Amount”) and (y) in the event
the value of the pledged Inverness Shares decreases to less than 120% of the
Note Payment Amount for a period exceeding two consecutive trading days at
any
time prior to repayment in full of the Series A Notes, Series B Notes and the
Series C Notes, pledge an additional number of Inverness Shares, valued as
provided in the Asset Purchase Agreement, such that the aggregate value of
all
Inverness shares pledged under the Agreement shall be equal to 150% of the
Note
Payment Amount or provide other acceptable substitute collateral, within three
(3) business days after receipt of written demand from the Majority Holders
of
the Series A Notes and the Majority Holders of the Series B
Notes. The Purchasers hereby give the same instruction as set forth
above to the Collateral Agent.
G. This
Agreement, the Series C Notes, the License Agreement and the Security Documents
are collectively referred to herein as the “Transaction
Documents.”
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the Company and the Purchasers, intending to
be
legally bound, hereby agree as follows:
–
2
–
|
1.
|
PURCHASE
AND SALE OF SECURITIES.
|
(a) Purchase
and Sale of Securities. Subject to the terms and conditions
hereof, at the Closing (as defined in Section 1(b) below), the Company shall
issue and sell to the Purchasers an aggregate principal face amount of
Securities of $3,500,000 and each Purchaser, severally and not jointly, shall
purchase from the Company, its respective Subscription Amount.
(b) The
Closing. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 6 and 7 below, the closing of the transactions
contemplated hereby (the “Closing”) shall take place at the
offices of The Xxxxxxxx Law Group, LLC at 00 Xxxxx Xxxxxx,
Xxxxx
000, Xxxxxx, Xxxxxxxxxxxxx 00000 at 10:00 a.m., Boston, Massachusetts time,
on
or before August 30, 2007 or such other time or place as the Company and
the Purchasers may mutually agree (the “Closing
Date”).
|
2.
|
PURCHASER’S
REPRESENTATIONS AND WARRANTIES.
|
Each
Purchaser severally, but not
jointly, represents and warrants to the Company as follows:
(a) Purchase
for Own Account, Etc. Such Purchaser is purchasing the Securities
for such Purchaser’s own account for investment purposes only and not with a
present view towards the public sale or distribution thereof, except pursuant
to
sales that are exempt from the registration requirements of the Securities
Act
and/or sales registered under the Securities Act. Such Purchaser
understands that such Purchaser must bear the economic risk of this investment
indefinitely, unless the Securities are registered pursuant to the Securities
Act and any applicable state securities or blue sky laws or an exemption from
such registration is available, and that the Company has no present intention
of
registering the resale of any such Securities. Notwithstanding anything in
this
Section 2(a) to the contrary, by making the representations herein, such
Purchaser does not agree to hold the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time
in
accordance with or pursuant to a registration statement or an exemption from
the
registration requirements under the Securities Act.
(b) Accredited
Investor Status. Such Purchaser is an “Accredited
Investor” as that term is defined in Rule 501(a) of Regulation
D.
(c) Reliance
on Exemptions. Such Purchaser understands that the Securities are
being offered and sold to such Purchaser in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities.
(d) Information. Such
Purchaser and its counsel, if identified to the Company, have been furnished
all
materials relating to the business, finances and operations of the Company
and
materials relating to the offer and sale of the Securities which have been
specifically requested by such Purchaser or its counsel. Neither such
inquiries nor any other investigation conducted
–
3
–
by
such
Purchaser, its counsel or any of its representatives shall modify, amend or
affect such Purchaser’s right to rely on the Company’s representations and
warranties contained in Section 3 below. Such Purchaser understands
that such Purchaser’s investment in the Securities involves a high degree of
risk.
(e) Governmental
Review. Such Purchaser understands that no United States federal
or state agency or any other government or governmental agency has passed upon
or made any recommendation or endorsement of the Securities.
(f)
Authorization;
Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of such Purchaser and is the valid and binding
agreement of such Purchaser enforceable against such Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and general principles of equity.
(g) Residency. Such
Purchaser is a resident of, or has principal offices in the jurisdiction set
forth under such Purchaser’s name on the Execution Page hereto executed by or on
behalf of such Purchaser.
(h) No
Trading in Securities. Such Purchaser has not offered to sell,
solicited offers to buy, disposed of, loaned, pledged or granted any right
with
respect to the Company’s Common Stock since the date it agreed to learn the
confidential terms of the transactions contemplated by the Transaction
Documents.
(i)
Beneficial
Ownership. Prior to the Closing, such Purchaser is not a
“beneficial owner” of more than 5% of the Common Stock (as defined for purposes
of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)). Prior to, and as a result of the
purchase of the Series C Notes at the Closing, such Purchaser is not, and will
not be an “interested stockholder” as defined in Section 203 of the Delaware
General Corporation Law, as amended.
(j) Investment
Permitted by Terms of Plan. The investment by the Purchasers in
the Series C Notes is permitted by the terms and conditions of the U.S. Boston
Corporation Profit Sharing Plan and will not violate any applicable provisions
of the Employee Retirement Income Security Act of 1974.
Each
Purchaser’s representations and warranties made in this Article 2 are made
solely for the purpose of permitting the Company to make a determination that
the offer and sale of the Securities pursuant to this Agreement comply with
applicable U.S. federal and state securities laws and not for any other
purpose. Accordingly, the Company may not rely on such
representations and warranties for any other purpose. No Purchaser
has made or hereby makes any other representations or warranties, express or
implied, to the Company in connection with the transactions contemplated
hereby.
–
4
–
|
3.
|
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
|
Except
as set forth on a Disclosure
Schedule executed and delivered by the Company to each Purchaser (the
“Disclosure Schedule”), the Company represents and warrants to
each Purchaser as follows:
(a) Organization
and Qualification. The Company and each of its direct and
indirect subsidiaries (collectively, the “Subsidiaries”) is a
corporation duly organized and existing in good standing under the laws of
the
jurisdiction in which it is incorporated or organized, and has the requisite
corporate power to own its properties and to carry on its business as now being
conducted. The Company and each of its Subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary and where the failure so to qualify or be in good
standing would have a Material Adverse Effect. For purposes of this
Agreement, “Material Adverse Effect” means any effect which,
individually or in the aggregate with all other effects, reasonably would be
expected to be materially adverse to (i) the Securities; (ii) the ability of
the
Company to perform its obligations under this Agreement, the Series C Notes
or
the other Transaction Documents; or (iii) the business, operations, properties,
prospects, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole.
(b) Authorization;
Enforcement. Except as set forth in Section 3(b) of the
Disclosure Schedule, (i) The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement, the
Series C Notes and the other Transaction Documents, and to issue and sell the
Series C Notes in accordance with the terms hereof and thereof; (ii) the
execution, delivery and performance of this Agreement, the Series C Notes and
the other Transaction Documents by the Company and the consummation by it of
the
transactions contemplated hereby and thereby (including, without limitation,
the
issuance of the Series C Notes) have been duly authorized by the Company’s Board
of Directors and, except as referenced in Section 7(g) hereof, no further
consent or authorization of the Company, its Board of Directors, or any
committee of the Board of Directors is required; and (iii) this Agreement
constitutes, and, upon execution and delivery by the Company of the other
Transaction Documents, such Transaction Documents will constitute, valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms.
(c) Charter;
Bylaws; Stock of Subsidiaries. The Company has furnished to each
Purchaser true and correct copies of the Company’s Amended and Restated
Certificate of Incorporation as amended and as in effect on the date hereof
(“Certificate of Incorporation”) and the Company’s Amended and
Restated Bylaws as in effect on the date hereof (the
“Bylaws”). For purposes of all provisions of this
Agreement, any document publicly available on the SEC’s XXXXX system shall be
considered to have been validly “furnished,” “delivered” or “provided” to a
Purchaser or its counsel, as applicable. The Company or one of its
Subsidiaries has the unrestricted right to vote, and (subject to limitations
imposed by applicable law) to receive dividends and distributions on, all
capital securities of its Subsidiaries as owned by the Company or any such
Subsidiary.
(d) Issuance
of Securities. The Series C Notes are duly authorized and, upon
issuance in accordance with the terms of this Agreement, (i) will be the legal,
valid and binding
–
5
–
obligations
of the Company, enforceable in accordance with their terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally; (ii) will not
be subject to rights of first refusal or other similar rights of stockholders
or
noteholders of the Company or any other person which have not been waived in
connection herewith; and (iii) will not impose personal liability on the holder
thereof.
(e) No
Conflicts; Consents. The execution, delivery and performance of
this Agreement and the other Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Series C Notes) will not
(i)
result in a violation of the Certificate of Incorporation or Bylaws; (ii)
conflict with, or constitute a default (or an event that with notice or lapse
of
time or both would become a default) under, or give to others any rights of
termination, amendment (including, without limitation, the triggering of any
anti-dilution provisions), acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is
a
party; or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including United States federal and state securities laws,
rules and regulations and rules and regulations of any self-regulatory
organizations to which either the Company or its securities are subject)
applicable to the Company or any of its Subsidiaries or by which any property
or
asset of the Company or any of its Subsidiaries is bound or affected (except,
with respect to clauses (ii) and (iii), for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations that
would
not, individually or in the aggregate, have a Material Adverse
Effect). Except (w) for the filing of a Form D with the SEC, (x) as
may be required for compliance with applicable state securities or “blue sky”
laws, (y) for the filing with the Secretary of the State of Delaware of a new
UCC-1 financing statement as contemplated in recital paragraph (F) above and
as
required in connection with the Pledge Agreement, or (z) as otherwise set forth
in Section 3(e) of the Disclosure Schedule, the Company is not required
to obtain any consent, approval, authorization or order of, or make any filing
or registration with, any court or governmental agency or any regulatory or
self-regulatory agency or other third party (including, without limitation,
pursuant to any Material Contract (as defined in Section 3(g) below)) in order
for it to execute, deliver or perform any of its obligations under this
Agreement or any of the other Transaction Documents.
(f) Compliance. The
Company is not in violation of its Certificate of Incorporation, Bylaws or
other
organizational documents and no Subsidiary is in violation of any of its
organizational documents. Except as set forth in Section 3(f)
of the Disclosure Schedule, neither the Company nor any of its Subsidiaries
is
in default (and no event has occurred that with notice or lapse of time or
both
would put the Company or any of its Subsidiaries in default) under, nor, to
the
knowledge of the Company or any of its Subsidiaries, has there occurred any
event giving others (with notice or lapse of time or both) any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is
a
party (including, without limitation, the Material Contracts), except for actual
or possible violations, defaults or rights that would not, individually or
in
the aggregate, have a Material Adverse Effect. The businesses of the
Company and its Subsidiaries are not being conducted, and shall not be conducted
so long as any Purchaser owns any of the Securities, in violation of any law,
ordinance or regulation of any governmental entity, except for possible
violations the sanctions for which either individually or in the aggregate
have
not had and would
–
6
–
not
have
a Material Adverse Effect. Neither the Company, nor any of its
Subsidiaries has, nor, to the knowledge of the Company or any of its
Subsidiaries, has any director, officer, agent, employee or other person acting
on behalf of the Company or any Subsidiary, in the course of his actions for,
or
on behalf of, the Company or any Subsidiary, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity, made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds,
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee. The Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, provincial or foreign regulatory authorities that are material to the
conduct of its business, and neither the Company nor any of its Subsidiaries
has
received any notice of proceeding relating to the revocation or modification
of
any such certificate, authorization or permit.
(g) SEC
Documents, Financial Statements. Since December 31, 2001, the
Company has timely filed (within applicable extension periods) all reports,
schedules, forms, statements and other documents required to be filed by it
with
the SEC pursuant to the reporting requirements of the Exchange Act (all of
the
foregoing filed prior to the date hereof and all exhibits included therein
and
financial statements and schedules thereto and documents incorporated by
reference therein, the “SEC Documents”). The Company
has delivered to each Purchaser true and complete copies of the SEC
Documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act or the
Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading. None of
the statements made in any such SEC Documents is, or has been, required to
be
amended or updated under applicable law (except for such statements as have
been
amended or updated in subsequent filings made prior to the date
hereof). As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC applicable with respect thereto. Such
financial statements have been prepared in accordance with U.S. generally
accepted accounting principles (“GAAP”), consistently applied,
during the periods involved (except as may be otherwise indicated in such
financial statements or the notes thereto or, in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed
or
summary statements) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal, immaterial year-end audit adjustments). Except as set forth
in the financial statements of the Company included in the Select SEC Documents
(as defined below), the Company has no liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business with
non-affiliated third parties subsequent to the date of such financial statements
and (ii) obligations under contracts and commitments incurred in the ordinary
course of business with non-affiliated third parties and not required under
GAAP
to be reflected in such financial statements, which
–
7
–
liabilities
and obligations referred to in clauses (i) and (ii), individually or in the
aggregate, are not material to the financial condition or operating results
of
the Company. To the extent required by the rules and regulations of
the SEC applicable thereto, the Select SEC Documents contain a complete and
accurate list of all material undischarged written or oral contracts,
agreements, leases or other instruments to which the Company or any Subsidiary
is a party or by which the Company or any Subsidiary is bound or to which any
of
the properties or assets of the Company or any Subsidiary is subject (each,
a
“Material Contract”). Except as set forth in the
Select SEC Documents, none of the Company, its Subsidiaries or, to the best
knowledge of the Company, any of the other parties thereto is in breach or
violation of any Material Contract, which breach or violation would have a
Material Adverse Effect. For purposes of this Agreement,
“Select SEC Documents” means the Company’s (A) Proxy Statement
for its 2007 Annual Meeting of Stockholders, (B) Annual Report on Form 10-K
for
the fiscal year ended December 31, 2006 (the “2006 Annual
Report”), (C) Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 2007 and June 30, 2007, and (D) Current Reports on Form 8-K
filed since December 31, 2006.
(h) Internal
Accounting Controls. The Company and each of its Subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets
at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company
and designed such disclosure controls and procedures to ensure that material
information relating to the Company, including its Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which the Company’s Annual Report on Form 10-K or Quarterly Report
on Form 10-Q, as the case may be, is being prepared. The Company’s
certifying officers have evaluated the effectiveness of the Company’s controls
and procedures as of the end of the period covered by the 2006 Annual Report
and
the Company’s most recently filed Quarterly Report on Form 10-Q (each such date,
an “Evaluation Date”). The Company presented in the
2006 Annual Report and its most recently filed Quarterly Report on Form 10-Q
the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the respective
Evaluation Date. Since the Evaluation Date for the 2006 Annual
Report, there have been no significant changes in the Company’s internal
controls (as such term is defined in Item 307(b) of Regulation S-K under the
Exchange Act) or, to the Company’s knowledge, in other factors that could
significantly affect the Company’s internal controls.
(i) Absence
of Certain Changes. Except as set forth in the Select SEC
Documents, since December 31, 2006, there has been no material adverse change
and no material adverse development in the business, properties, operations,
prospects, financial condition or results of operations of the Company and
its
Subsidiaries, taken as a whole. The Company has not taken any steps,
and does not currently expect to take any steps, to seek protection pursuant
to
any bankruptcy or receivership law, nor does the Company or any of its
Subsidiaries have any
–
8
–
knowledge
or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings with respect to the Company or any of its
Subsidiaries.
(j) Transactions
With Affiliates. Except as set forth in the Select SEC Documents,
none of the officers, directors, or employees of the Company or any of its
Subsidiaries is presently a party to any transaction with the Company or any
of
its Subsidiaries (other than for ordinary course services solely in their
capacity as officers, directors or employees), including any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has an ownership interest of five percent or more or
is an
officer, director, trustee or partner.
(k) Absence
of Litigation. Except as disclosed in the Select SEC Documents,
there is no action, suit, proceeding, inquiry or investigation before or by
any
court, public board, government agency, self-regulatory organization or body
(including, without limitation, the SEC) pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened against or affecting the Company,
any of its Subsidiaries, or any of their respective directors or officers in
their capacities as such. There are no facts which, if known by a
potential claimant or governmental authority, could give rise to a claim or
proceeding which, if asserted or conducted with results unfavorable to the
Company or any of its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect.
(l)
Intellectual
Property. Except for those matters described in the Company’s SEC
Documents or as otherwise set forth in Section 3(l) of the Disclosure
Schedule and except for other matters which are not material to the Company’s
business taken as a whole:
|
(i)
|
No
“Intellectual Property” (consisting
of patents, trademarks, service marks, trade dress, trade names and
corporate names, copyrights; and any registrations, applications
and
renewals for any of the foregoing) owned by the Company or its
Subsidiaries which is necessary for the conduct of the Company’s and each
of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted is now involved in any cancellation,
dispute or litigation, and, to the Company’s knowledge, no such action is
threatened.
|
|
(ii)
|
No
patent owned by the Company or its Subsidiaries is now involved in
any
interference, reissue, re-examination or opposition
proceeding.
|
|
(iii)
|
To
the knowledge of the Company and its Subsidiaries, neither the Company
nor
any Subsidiary of the Company infringes or is in conflict with any
right
of any other person with respect to any third party Intellectual
Property.
|
|
(iv)
|
Neither
the Company nor any of its Subsidiaries has received written notice
of any
pending conflict with or infringement upon such third party Intellectual
Property.
|
–
9
–
|
(v)
|
Neither
the Company nor any of its Subsidiaries has entered into any consent
agreement, forbearance to xxx or settlement agreement with respect
to the
validity of the Company’s or its Subsidiaries’ ownership of or right to
use its Intellectual Property.
|
|
(vi)
|
The
Company and its Subsidiaries have complied, in all material respects,
with
their respective contractual obligations relating to the protection
of the
Intellectual Property used pursuant to
licenses.
|
|
(vii)
|
To
the Company’s knowledge, no person is infringing on or violating the
Intellectual Property owned by the Company which is necessary for
the
conduct of Company’s and each of its Subsidiaries’ respective businesses
as currently conducted or as currently proposed to be
conducted.
|
(m) Title. The
Company and its Subsidiaries have good and marketable title in fee simple to
all
real property and good and merchantable title to all personal property owned
by
them that is material to the business of the Company and its Subsidiaries,
in
each case free and clear of all liens, encumbrances and defects except such
as
do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and its Subsidiaries. Any real property and facilities held
under lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material
and
do not materially interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries.
(n) Tax
Status. Except as set forth in the Select SEC Documents or as otherwise set
forth in Section 3(n) of the Disclosure Schedule, the Company and each of
its Subsidiaries has made or filed all foreign, U.S. federal, state, provincial
and local income and all other tax returns, reports and declarations required
by
any jurisdiction to which it is subject (unless and only to the extent that
the
Company and each of its Subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) and
has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside
on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by
the
taxing authority of any jurisdiction, and the officers of the Company know
of no
basis for any such claim. The Company has not executed a waiver with
respect to any statute of limitations relating to the assessment or collection
of any foreign, federal, state, provincial or local tax. None of the Company’s
tax returns is presently being audited by any taxing authority.
(o) Insurance. The
Company and each Subsidiary maintains in full force and effect insurance
coverage that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Company and each
Subsidiary, and the Company reasonably believes such insurance coverage to
be
adequate against all liabilities, claims and risks against which it is customary
for comparably situated companies to insure. To the Company’s knowledge, no
default or event has occurred that could give rise to a default under any such
policy.
–
10
–
(p) Solvency. Based
on the financial condition of the Company as of the Closing Date, and after
giving effect to the net proceeds of the transactions contemplated by this
Agreement, the Company’s fair saleable value of its assets exceeds the amount
that is currently required to be paid on or in respect of the Company’s existing
debts and other liabilities (including known contingent
liabilities). The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt).
(q) Anti-Takeover
Provisions. The Company and its board of directors have taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution
under
a rights agreement) or other similar anti-takeover provision under its
Certificate of Incorporation or the laws of the state of its incorporation
(including, without limitation, Section 203 of the Delaware General Corporation
Law, as amended) which is or could become applicable to any Purchaser as a
result of the transactions contemplated by this Agreement, including, without
limitation, the Company’s issuance of the Securities and any and all Purchaser’s
ownership of the Securities.
(r) Acknowledgment
Regarding Each Purchaser’s Purchase of the Securities. The
Company acknowledges and agrees that each Purchaser is acting solely in the
capacity of arm’s length purchaser with respect to this Agreement and the other
Transaction Documents and the transactions contemplated hereby and thereby,
and
that prior to the Closing no Purchaser is (i) an officer or director of the
Company; (ii) an “affiliate” of the Company (as defined in Rule 144 under the
Securities Act (including any successor rule, “Rule 144”)); or
(iii) a “beneficial owner” of more than 5% of the Common Stock (as defined for
purposes of Rule 13d-3 of the Exchange Act). The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of
the Company (or in any similar capacity) with respect to this Agreement or
the
other Transaction Documents and the transactions contemplated hereby and
thereby, and any advice given by a Purchaser or any of its representatives
or
agents in connection with this Agreement or the other Transaction Documents
and
the transactions contemplated hereby and thereby is merely incidental to such
Purchaser’s purchase of the Securities. The Company further
represents to each Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives.
(s) No
General Solicitation or Integrated Offering. Neither the Company
nor any distributor participating on the Company’s behalf in the transactions
contemplated hereby (if any) nor any person acting for the Company, or any
such
distributor, has conducted any “general solicitation” (as such term is defined
in Regulation D) with respect to any of the Securities being offered
hereby. Neither the Company nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or
sales of any security or solicited any offers to buy any security under
circumstances that would require registration of the Securities being offered
hereby under the Securities Act or cause this offering of Securities to be
integrated with any prior offering of securities of the Company for purposes
of
the Securities Act, which result of such integration would require registration
under the Securities Act, or any applicable stockholder approval
provisions.
–
11
–
(t) No
Brokers. The Company has taken no action that would give rise to
any claim by any person for brokerage commissions, finder’s fees or similar
payments by any Purchaser relating to this Agreement or the transactions
contemplated hereby.
(u) Disclosure. All
information relating to or concerning the Company and/or any of its Subsidiaries
set forth in this Agreement or provided to the Purchasers pursuant to Section
2(d) hereof or otherwise in connection with the transactions contemplated hereby
is true and correct in all material respects and the Company has not omitted
to
state any material fact necessary in order to make the statements made herein
or
therein, in light of the circumstances under which they were made, not
misleading. No event or circumstance has occurred or exists with
respect to the Company or its Subsidiaries or their respective businesses,
properties, prospects, operations or financial conditions, which has not been
publicly disclosed but, under applicable law, rule or regulation, would be
required to be disclosed by the Company in a registration statement filed on
the
date hereof by the Company under the Securities Act with respect to a primary
issuance of the Company’s securities.
|
4.
|
COVENANTS.
|
(a) Best
Efforts. The parties shall use their respective best efforts
timely to satisfy each of the conditions described in Sections 6 and 7 of this
Agreement.
(b) Form
D; Blue Sky Laws; Nonpublic Information; Publicity. The Company
shall file with the SEC a Form D with respect to the Securities as required
under Regulation D. The Company shall, on or before the Closing Date,
take such action, if any, as the Company shall reasonably determine is necessary
to qualify the Securities for sale to each Purchaser pursuant to this Agreement
under applicable securities or “blue sky” laws of the states of the United
States or obtain exemption therefrom. No later than the
second business day after the Closing Date, the Company shall file a Form 8-K
with the SEC concerning this Agreement and the transactions contemplated hereby,
which Form 8-K shall attach this Agreement and its Exhibits as exhibits to
such
Form 8-K (the “8-K Filing”). Except as set forth in
Section 4(b) to the Disclosure Schedules (which shall be deemed
to
include any information provided to the Purchasers in the Cash Budget (as
defined in Section 7(h) hereof) then remaining material and non-public),
from and after the date of the 8-K Filing, the Company hereby acknowledges
that
no Purchaser shall be in possession of any material nonpublic information
received from the Company, any of its Subsidiaries or, to the best of the
Company’s knowledge, any of its or their respective directors, officers,
employees, affiliates, stockholders, agents or representatives. The
Company shall not, and shall cause each of its Subsidiaries and its and each
of
their respective directors, officers, employees, affiliates, stockholders,
agents or representatives not to, provide any Purchaser with any material
nonpublic information regarding the Company or any of its Subsidiaries from
and
after the date of the 8-K Filing without the prior express written consent
of
such Purchaser; provided, however, that a Purchaser that
exercises its rights under Section 4(i) (Inspection of Properties and
Books) hereof shall be deemed to have given such express written
consent. In the event the covenant in the preceding sentence is
breached for any reason, whether or not as a result of the fault or nonfeasance
of the Company, the Company shall, as promptly as practicable and in no event
later than the first trading day after becoming aware of such breach, disclose
all such material nonpublic information to the public in accordance with
Regulation FD promulgated under the Exchange Act. Subject to the
foregoing, neither the Company nor any
–
12
–
Purchaser
shall issue any press releases or any other public statements with respect
to
the transactions contemplated hereby; provided, however, that
the Company shall be entitled, without the prior approval of any Purchaser,
to
make any press release or other public disclosure with respect to such
transactions as is required by applicable law and regulations (provided that
(a)
each Purchaser shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release and (b) in no
event will any Purchaser be identified by name in any press release, or other
public disclosure without the express prior approval of the Purchaser to be
named).
(c) Reporting
Status. So long as any Purchasers (or any of their respective
affiliates) beneficially own any of the Securities, the Company shall timely
file all reports required to be filed with the SEC pursuant to the Exchange
Act,
and the Company shall not terminate its status as an issuer required to file
reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would permit such termination.
(d) Use
of
Proceeds. The Company shall use the proceeds from the sale and
issuance of the Series C Notes for general corporate
purposes. Notwithstanding the foregoing, except as set forth on
Section 4(d) of the Disclosure Schedule such proceeds shall not be used
to (i) pay dividends; (ii) pay for any increase in executive
compensation or make any loan or other material advance to any officer,
employee, shareholder, director or other affiliate of the Company, without
the
express approval of the Board of Directors acting in accordance with past
practice; (iii) purchase debt or equity securities of any entity, including
those issued by the Company (except that the Company is expressly permitted
to
(i) repurchase certain warrants issued by it in connection with prior
financing transactions and (ii) subject to Section 7(k), make repayments or
other payments in respect of the Series A Notes and/or the Series B Notes),
except for (A) evidences of indebtedness issued or fully guaranteed by the
United States of America and having a maturity of not more than one year from
the date of acquisition, (B) certificates of deposit, notes, acceptances and
repurchase agreements having a maturity of not more than one year from the
date
of acquisition issued by a bank organized in the United States having capital,
surplus and undivided profits of at least $500,000,000, (C) the highest-rated
commercial paper having a maturity of not more than one year from the date
of
acquisition, and (D) “Money Market” fund shares, or money market accounts fully
insured by the Federal Deposit Insurance Corporation and sponsored by banks
and
other financial institutions, provided that the investments consist principally
of the types of investments described in clauses (A), (B), or (C) above; or
(iv)
make any investment not directly related to the current business of the
Company.
(e) Corporate
Existence. So long as any Purchasers (or any of their respective
affiliates) beneficially own any of the Securities, the Company shall maintain
its corporate existence, and in the event of a merger, consolidation or sale
of
all or substantially all of the Company’s assets, the Company shall ensure that
all its obligations under the Series C Notes are repaid in full in accordance
with the terms and conditions of the Series C Notes.
(f) Legal
Compliance. The Company shall conduct its business and the
business of its Subsidiaries in compliance with all laws, ordinances or
regulations of governmental entities applicable to such businesses, except
where
the failure to do so would not have a Material Adverse Effect.
–
13
–
(g) Redemptions,
Dividends and Repayments of Indebtedness. So long as any
Purchasers (or any of their respective affiliates) beneficially own any of
the
Series C Notes, the Company shall not, without first obtaining the written
approval of the holders of the Series C Notes then outstanding (which approval
may be given or withheld by such holders in their sole and absolute discretion),
repurchase, redeem or declare or pay any cash dividend or distribution on any
shares of capital stock of the Company or repay or prepay any principal of
or
interest on indebtedness of the Company other than as expressly set forth on
Schedule 4(g) hereto or as contemplated in this Agreement (including,
without limitation, in Section 4(d) hereof).
(h) Information. So
long as any Purchasers (or any of their respective affiliates) beneficially
own
any of the Securities, the Company shall furnish to each such Purchaser the
information the Company must deliver to any holder or to any prospective
transferee of Securities in order to permit the sale or other transfer of such
Securities pursuant to Rule 144A of the SEC or any similar rule then in
effect.
The
Company shall keep at its principal executive office a true copy of this
Agreement (as at the time in effect), and cause the same to be available for
inspection at such office during normal business hours by any holder of
Securities or any prospective transferee of Securities designated by a holder
thereof.
(i) Inspection
of Properties and Books. So long as any Purchasers (or any of
their respective affiliates) beneficially own any of the Securities, each such
Purchaser and its representatives and agents (collectively, the
“Inspectors”) shall have the right, at such Purchaser’s
expense, to visit and inspect any of the properties of the Company and of its
Subsidiaries, to examine the books of account and records of the Company and
of
its Subsidiaries, to make or be provided with copies and extracts therefrom,
to
discuss the affairs, finances and accounts of the Company and of its
Subsidiaries with, and to be advised as to the same by, its and their officers,
employees and independent public accountants (and by this provision the Company
authorizes such accountants to discuss such affairs, finances and accounts,
whether or not a representative of the Company is present) all at such
reasonable times and intervals and to such reasonable extent as the Purchasers
may desire; provided, however, that each Inspector shall hold
in confidence and shall not make any disclosure (except to such Purchaser)
of
any such information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(i) the parties mutually determine on a reasonable basis that the disclosure
of
such information is necessary to avoid or correct a misstatement or omission
in
any Registration Statement, (ii) the release of such information is ordered
pursuant to a subpoena or other order from a court or government body of
competent jurisdiction, or (iii) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. Each Purchaser agrees that it shall, upon learning
that disclosure of such information is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt notice to
the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the information
deemed confidential.
(j) Stockholders
Rights Plan. No claim shall be made or enforced by the Company or
any other person that any Purchaser is an “Acquiring Person” under any
stockholders rights plan or similar plan or arrangement in effect or hereafter
adopted by the Company, or that any
–
14
–
Purchaser
could be deemed to trigger the provisions of any such plan or arrangement,
by
virtue of receiving Securities under this Agreement or any other Transaction
Documents or under any other agreement between the Company and the
Purchasers.
(k) Pledge
of Securities. The Company acknowledges and agrees that the Securities may
be pledged by any Purchaser in connection with a bona fide margin agreement
or
other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Purchaser
effecting a pledge of Securities shall be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to
this Agreement or any other Transaction Document. The Company shall
execute and deliver such documentation as a pledgee of the Securities may
reasonably request in connection with a pledge of the Securities to such pledgee
by a Purchaser.
(l)
Expenses. At
the Closing, the Company shall reimburse the Purchasers for the out-of-pocket
expenses reasonably incurred by the Purchasers, their affiliates and their
advisors in connection with the negotiation, preparation, execution and delivery
of this Agreement and the other Transaction Documents and the consummation
of
the transactions contemplated hereby and thereby, including, without limitation,
the Purchasers’ and their respective affiliates’ and advisors’ reasonable due
diligence and attorneys’ fees and expenses (the “Expenses”);
provided, however, that the fees of the Purchasers’ outside
counsel, The Xxxxxxxx Law Group, LLC, shall not exceed $27,500
without the approval of the Company, which approval shall not be unreasonably
withheld. The Purchasers’ reasonable out-of-pocket costs and legal
fees will be paid regardless of whether the transaction closes.
(m) Restriction
on Sales. Until such time that the Company makes the 8-K Filing,
or otherwise publicly announces the transactions contemplated hereby, or until
such time that the Purchasers are no longer in possession of any material
non-public information related to the Cash Budget, the Purchasers will not
offer
to sell, solicit offers to buy, dispose of, loan, pledge or grant any right
with
respect to the Company’s common stock.
(n) Execution
of Pledge Agreement. Immediately prior to the Asset Purchase
Closing, the Company shall execute and deliver to the Collateral Agent the
Pledge Agreement. In addition, the Company shall use its commercially
reasonable efforts to give effect to the transactions contemplated by the Pledge
Agreement.
(o) Usury
Notices. The Company shall co-operate with the Purchasers with
respect to the filing of any usury notices that the Purchasers may elect to
file.
(p) Security
Interests. So long as the Purchasers (or any of their respective
affiliates) beneficially own any of the Series C Notes, the Company shall not,
without first obtaining the written approval of the Required Holders (as defined
herein), grant any additional security interests in the Company’s assets other
than those outstanding on the date hereof.
|
5.
|
SECURITIES
TRANSFER MATTERS.
|
(a) Transfer
or Resale. Each Purchaser understands that (i) the sale or resale
of the Securities have not been and are not being registered under the
Securities Act or any state
–
15
–
securities
laws, and the Securities may not be transferred unless (A) the transfer is
made
pursuant to and as set forth in an effective registration statement under the
Securities Act covering the Securities; or (B) such Purchaser shall have
delivered to the Company an opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Securities to be sold or transferred may
be
sold or transferred pursuant to an exemption from such registration; or (C)
sold
under and in compliance with Rule 144; or (D) sold or transferred to an
affiliate of such Purchaser that agrees to sell or otherwise transfer the
Securities only in accordance with the provisions of this Section 5(a); and
(ii)
neither the Company nor any other person is under any obligation to register
such Securities under the Securities Act or any state securities
laws. Notwithstanding the foregoing or anything else contained herein
to the contrary, the Securities may be pledged as collateral in connection
with
a bona fide margin account or other lending arrangement, provided such pledge
is
consistent with applicable laws, rules and regulations.
(b) Legends. Each
Purchaser understands that the Series C Notes may bear a restrictive legend
in
substantially the following form:
“The
securities represented hereby have not been registered under the Securities
Act
of 1933, as amended, or the securities laws of any state of the United States
or
in any other jurisdiction. The securities represented hereby may not
be offered, sold or transferred in the absence of an effective registration
statement for the securities under applicable securities laws unless offered,
sold or transferred pursuant to an available exemption from the registration
requirements of those laws.”
The
legend set forth above shall be removed and the Company shall issue the
Securities without such legend to the holder of any such Security upon which
it
is stamped, if, unless otherwise required by state securities laws, (i) the
sale
of such Security is registered under the Securities Act (including registration
pursuant to Rule 416 thereunder); (ii) such holder provides the Company with
an
opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or transfer
of such Security may be made without registration under the Securities Act;
or
(iii) such holder provides the Company with reasonable assurances that such
Security can be sold under Rule 144(k). In the event the above legend
is removed from any Security and thereafter the effectiveness of a registration
statement covering such Security is suspended or the Company determines that
a
supplement or amendment thereto is required by applicable securities laws,
then
upon reasonable advance written notice to such Purchaser the Company may require
that the above legend be placed on any such Security that cannot then be sold
pursuant to an effective registration statement or under Rule 144 and such
Purchaser shall cooperate in the replacement of such legend. Such
legend shall thereafter be removed when such Security may again be sold pursuant
to an effective registration statement or under Rule 144(k).
(c) Transfer
Agent Instruction. Upon compliance by any Purchaser with the
provisions of this Section 5 with respect to the transfer of any Securities,
the
Company shall permit the transfer of such Securities. The Company
shall not give any instructions to its transfer agent with respect to the
Securities, other than any permissible or required instructions provided
–
16
–
in
this
Section 5, and the Securities shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this
Agreement.
|
6.
|
CONDITIONS
TO THE COMPANY’S OBLIGATION TO
SELL.
|
The
obligation of the Company hereunder to issue and sell the Series C Notes to
each
Purchaser hereunder is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions as to such Purchaser, provided that
such conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion:
(a) Execution
of Transaction Documents. Each Purchaser shall have executed such
Purchaser’s Execution Page to this Agreement and each other Transaction Document
to which such Purchaser is a party and delivered the same to the
Company.
(b) Payment
of Purchase Price. Subject to Section 4(n), each Purchaser shall
have delivered the full amount of such Purchaser’s Subscription Amount to the
Company by wire transfer in accordance with the Company’s written wiring
instructions.
(c) Representations
and Warranties True; Covenants Performed. The representations and
warranties of each Purchaser shall be true and correct as of the date when
made
and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date, which
representations and warranties shall be true and correct as of such date),
and
such Purchaser shall have performed, satisfied and complied with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Purchaser at or prior to the Closing Date.
(d) No
Legal Prohibition. No statute, rule, regulation, executive order,
decree, ruling, injunction, action or proceeding shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority
over
the matters contemplated hereby which restricts or prohibits the consummation
of
any of the transactions contemplated by this Agreement.
|
7.
|
CONDITIONS
TO EACH PURCHASER’S OBLIGATION TO
PURCHASE.
|
The
obligation of each Purchaser hereunder to purchase the Series C Notes for which
it is subscribing from the Company hereunder is subject to the satisfaction,
at
or before the Closing Date, of each of the following conditions, provided that
such conditions are for each Purchaser’s individual and sole benefit and may be
waived by any Purchaser as to such Purchaser at any time in such Purchaser’s
sole discretion:
(a) Execution
of Transaction Documents. The Company shall have executed such
the Company’s Execution Page to this Agreement and each Transaction Document to
which the Company is a party and delivered executed originals of the same to
such Purchaser. All other parties to the Transaction Documents (other
than such Purchaser) shall have executed such Transaction Documents to which
they are a party. For clarity, the Transaction Documents to be
delivered to the Purchaser include, without limitation, the Security Agreement
and the License Agreement.
–
17
–
(b) Delivery
of Securities. The Company shall have delivered to each such
Purchaser a duly executed Series C Note for the Subscription Amount being
purchased by such Purchaser, registered in such Purchaser’s name.
(c) Representations
and Warranties True; Covenants Performed. The representations and
warranties of the Company shall be true and correct as of the date when made
and
as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date, which representations and
warranties shall be true and correct as of such date) and the Company shall
have
performed, satisfied and complied with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Closing Date.
(d) No
Legal Prohibition. No statute, rule, regulation, executive order,
decree, ruling, injunction, action or proceeding shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority
over
the matters contemplated hereby which restricts or prohibits the consummation
of, any of the transactions contemplated by this Agreement.
(e) Legal
Opinion. Such Purchaser shall have received an opinion of the
Company’s counsel dated as of the Closing Date in substantially the form
approved by the Purchasers prior to the Closing.
(f) No
Material Adverse Change. There shall have been no material
adverse changes and no material adverse developments in the business,
properties, operations, prospects, condition (financial or otherwise) or results
of operations of the Company and its Subsidiaries, taken as a whole, since
the
date hereof, and no information that is materially adverse to the Company and
of
which such Purchaser is not currently aware shall come to the attention of
such
Purchaser.
(g) Corporate
Approvals. Such Purchaser shall have received (i) a copy of
resolutions, duly adopted by the Board of Directors of the Company, which shall
be in full force and effect at the time of the Closing, authorizing the
execution, delivery and performance by the Company of this Agreement and the
other Transaction Documents and the consummation by the Company of the
transactions contemplated hereby and thereby and providing a determination
as to
whether any Purchasers are or will be an “interested stockholder” as defined in
Section 203 of the Delaware General Corporation Law, as amended, as a result
of
the transactions contemplated hereby, certified as such by the Secretary or
Assistant Secretary of the Company; (ii) consents of the holders of at least
75%
of the outstanding Series A Preferred Stock of the Company for the incurrence
of
aggregate debt of up to $15,300,000 since March 4, 2005; (iii) consents of
the
holders of a majority of outstanding principal balance of the Series A Notes
to
the incurrence by the Company of additional debt, including the issuance of
the
Series C Notes, and to the pari passu position of the Series C Notes to
the Series A Notes as to repayment and security; (iv) consents of the holders
of
a majority of outstanding principal balance of the Series B Notes to the
incurrence by the Company of additional debt, including the issuance of the
Series C Notes, and to the pari passu position of the Series C Notes to
the Series B Notes or Series B Notes as to repayment and security; and (v)
such
other documents as it reasonably requests in connection with the
Closing.
–
18
–
(h) Cash
Budget. The Company shall have delivered to the Purchasers an
operating budget, satisfactory to the Purchasers, for the period from June
30,
2007 to December 31, 2007 (the “Cash Budget”).
(i) Asset
Purchase Agreement. The Company shall have signed a definitive
asset purchase agreement with Inverness Medical Innovations, Inc. and Milano
Acquisition Corp. and shall have publicly announced the signing of such
agreement.
(j) Other
Security Documents. The Collateral Agent shall have provided to
the Purchasers copies of all filed financing statements and filings with the
United States Patent and Trademark Office relating to the collateral securing
the Series C Notes, and such copies shall be certified by the Collateral Agent
as being (1) true and correct copies of the applicable documents and (2) in
full
force and effect.
(k) Deferral
of Payments. The holders of at least a majority of outstanding
principal balance of the Series A Notes and the Series B Notes shall have agreed
to defer cash payments of principal and interest on their respective notes
until
the Maturity Date (as such term is defined in the Series C Notes) of the Series
C Notes.
|
8.
|
COLLATERAL
AGENCY PROVISIONS.
|
(a) Appointment
of Collateral Agent. The Purchasers hereby appoint SDS Capital
Group SPC, Ltd. (“SDS”) to act as collateral agent (the
“Collateral Agent”) and SDS agrees to act as Collateral Agent
for the Purchasers, as contemplated herein and in the Security
Documents.
(b) Collateral
Agent Authorized to Enter into Collateral Documents. Each of the
Purchasers authorizes the Collateral Agent to enter into the Security Documents
on its behalf.
(c) Amendment
to Security Documents. The Purchasers holding a majority of the
total outstanding principal balance of the Series C Notes (the “Required
Holders”) shall have the right to direct the Collateral Agent, from
time to time, to consent, on behalf of the Purchasers, to any amendment,
modification or supplement to or waiver of any provision of any Security
Document and to release any Collateral (as defined in the Security Documents)
from any lien or security interest held by the Collateral Agent;
provided, however, that (i) no such direction shall require
the Collateral Agent to consent to the modification of any provision or portion
thereof which (in the sole judgment of the Collateral Agent) is intended to
benefit the Collateral Agent; (ii) the Collateral Agent shall have the right
to
decline to follow any such direction if the Collateral Agent shall determine
in
good faith that the directed action is not permitted by the terms of any
Security Document or may not lawfully be taken; and (iii) no such direction
shall waive or modify any provision of any Security Document, the waiver or
modification of which expressly requires the consent of all of the Purchasers
unless all Purchasers consent thereto. The Collateral Agent may rely
on any such direction given to it by the Required Holders and shall be fully
protected in relying thereon, and shall under no circumstances be liable, except
in circumstances involving the Collateral Agent’s gross negligence or willful
misconduct as shall have been determined in a final nonappealable judgment
of a
court of competent jurisdiction, to any holder of the Series C Notes or any
other
–
19
–
person
or
entity for taking or refraining from taking action in accordance with any
direction or otherwise in accordance with any of the Security
Documents. For the avoidance of doubt, the undersigned Purchasers,
themselves the Required Holders, hereby give the Collateral Agent the
instruction set forth in recital paragraph (F) above.
(d) Duties
of Collateral Agent.
(i) Powers. The
Collateral Agent shall have and may exercise such powers under the Security
Documents as are specifically delegated to the Collateral Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto. The Collateral Agent shall not have any implied duties or
any obligations to take any action under the Security Documents except any
action specifically provided by the Security Documents to be taken by the
Collateral Agent.
(ii) Reliance
on Instructions of Required Holders. The Collateral Agent shall
be required to act or to refrain from acting (and shall be fully protected
in so
acting or refraining from acting) upon the written instructions of the Required
Holders, subject to Section 8(c) hereof, and such instructions shall be binding
upon all the Purchasers; provided, however, that the Collateral Agent
shall not be required to take any action which the Collateral Agent in good
faith believes (A) could reasonably be expected to expose it to personal
liability or (B) is contrary to this Agreement, the Security Documents and
applicable law. Notwithstanding anything to the contrary contained
herein, if the holders of the Series A Notes give the Collateral Agent any
direction, as provided in Section 8 of the Series A Purchase
Agreement, by and among the Company and the purchasers party thereto, dated
as of January 13, 2006, the holders of the Series C Notes party hereto
acknowledge and agree that (i) such direction shall be
deemed to be an instruction from the holders of the Series A Notes, the
Series B Notes and the Series C Notes acting jointly; (ii) the holders of
the Series C Notes shall not give a conflicting instruction to the Collateral
Agent pursuant to the provisions of this Agreement; and (iii) if the
Collateral Agent receives conflicting or inconsistent instructions from the
holders of the Series B Notes or the Series C Notes, the Collateral Agent
shall honor the instructions given by the holders of the Series A Notes and
disregard the instructions given by the holders of the Series B Notes and/or
the
holders of the Series C Notes. In addition, if, in the absence or
failure to act of the holders of the Series A Notes, the holders of the Series
B
Notes give the Collateral Agent any direction, as provided in Section 8 of
the
Series B Purchase Agreement, by and among the Company and the purchasers party
thereto, dated as of January 22, 2007, the holders of the Series C Notes party
hereto acknowledge and agree that (i) such direction shall be deemed to be
an
instruction from the holders of the Series A Notes, the Series B Notes and
the
Series C Notes acting jointly; (ii) the holders of the Series C Notes shall
not
give a conflicting instruction to the Collateral Agent pursuant to the
provisions of this Agreement; and (iii) if the Collateral Agent receives
conflicting or inconsistent instructions from the holders of the Series C Notes,
the Collateral Agent shall honor the instructions given by the holders of the
Series B Notes and disregard the instructions given by the holders of the
holders of the Series C Notes. Finally, if, in the absence or failure
to act of the holders of the Series A Notes and the Series B Notes, the holders
of the Series C Notes give the Collateral Agent any direction, as provided
in
this Section 8, such direction shall be deemed to be an instruction from the
holders of the Series A Notes, the Series B Notes and the Series C Notes acting
jointly and the holders of the Series C Notes acknowledge and agree that if
the
Collateral Agent receives conflicting or inconsistent
–
20
–
instructions
from the holders of the Series A Notes or the Series B Notes, the Collateral
Agent shall honor the instructions given by the holders of the such other Notes
and disregard the instructions given by the holders of the holders of the Series
C Notes.
(iii) Action
Without Instructions After Event of Default. Absent written
instructions from the Required Holders at a time when an Event of Default (as
defined in the Series C Notes) shall have occurred and be continuing, the
Collateral Agent may take, but shall have no obligation to take, any and all
actions under the Security Documents or any of them or otherwise as it shall
deem to be in the best interests of the Purchasers; provided, however,
that in the absence of written instructions from the Required Holders, the
Collateral Agent shall not exercise remedies available to it under any Security
Document with respect to the Collateral or any part thereof (other than
preserving, collecting and protecting the Collateral and the proceeds
thereof).
(iv) Independent
Right of Each Purchaser to Instruct Collateral Agent. The right
of each Purchaser to instruct the Collateral Agent is the separate and
individual property of such Purchaser and may be exercised as such Purchaser
sees fit in its sole discretion and with no liability to any other such
Purchaser for the exercise or non-exercise thereof. Without limiting
the foregoing, the Required Holders shall not be liable under any circumstances
to any other Purchaser for any action taken or omitted to be taken hereunder
by
the Collateral Agent upon written instructions from the Required
Holders.
(v)
Relationship
Between Collateral Agent and Purchasers. The relationship between
the Collateral Agent and the Purchasers is and shall be only to the extent
explicitly provided for herein that of agent and principal and nothing herein
contained shall be construed to constitute the Collateral Agent a trustee for
any Purchaser or to impose on the Collateral Agent duties and obligations other
than those expressly provided for herein. Without limiting the
generality of the foregoing, neither the Collateral Agent nor any of its
directors, officers, employees, partners or agents shall:
(A) be
responsible to the other Purchasers for any recitals, representations or
warranties contained in, or for the execution, validity, genuineness,
perfection, effectiveness or enforceability of, the Security Documents (it
being
expressly understood that any determination of the foregoing is the
responsibility of each Purchaser),
(B) be
responsible to the other Purchasers for the validity, genuineness, perfection,
effectiveness, enforceability, existence, value or enforcement of any security
interest in the Collateral (it being expressly understood that any determination
of the foregoing is the responsibility of each Purchaser),
(C) be
under
any duty to inquire into or pass upon any of the foregoing matters, or to make
any inquiry concerning the performance by any person or entity of its or their
obligations under any Security Document (it being expressly understood that
any
determination of the foregoing is the responsibility of each
Purchaser),
(D) be
deemed
to have knowledge of the occurrence of an Event of Default (as defined in either
the Series B Notes or the Series C Notes), or any event, condition or
–
21
–
circumstance
the occurrence of which would, with the giving of notice or the passage of
time
or both, constitute an Event of Default,
(E) be
responsible or liable to the Purchasers for any shortage, discrepancy, damage,
loss or destruction of any part of the Collateral wherever the same may be
located regardless of the cause thereof unless the same shall happen solely
through the gross negligence or willful misconduct of the Collateral Agent
as
shall have been determined in a final nonappealable judgment of a court of
competent jurisdiction,
(F) have
any
liability to the Purchasers for any error or omission or action or failure
to
act of any kind made in the settlement, collection or payment in connection
with
any of the Security Documents or any of the Collateral or any instrument
received in payment therefor or for any damage resulting therefrom other than
as
a sole result of its own gross negligence or willful misconduct as shall have
been determined in a final nonappealable judgment of a court of competent
jurisdiction, or
(G) in
any
event, be liable to the Purchasers as such for any action taken or omitted
by
it, absent its gross negligence or willful misconduct as shall have been
determined in a final nonappealable judgment of a court of competent
jurisdiction.
(e) Standard
of Care. Each Purchaser agrees with all other Purchasers and the
Collateral Agent that nothing contained in this Agreement shall be construed
to
give rise to, nor shall such Purchaser have, any claims whatsoever against
the
Collateral Agent on account of any act or omission to act in connection with
the
exercise of any right or remedy of the Collateral Agent with respect to the
Security Documents or the Collateral in the absence of gross negligence or
willful misconduct of the Collateral Agent as shall have been determined in
a
final nonappealable judgment of a court of competent jurisdiction.
(f) Collateral
In Possession of Collateral Agent. The Collateral Agent shall be
at liberty to place any of the Collateral, this Agreement, the Security
Documents and any other instruments, documents or deeds delivered to it pursuant
to or in connection with any of such documents in any safe deposit box, safe
or
receptacle selected by it or with any bank, any company whose business includes
undertaking the safe custody of documents or any firm of lawyers of good repute
and the Collateral Agent shall not be responsible for any loss thereby incurred
unless such loss is solely the result of the Collateral Agent’s gross negligence
or willful misconduct as shall have been determined in a final nonappealable
judgment of a court of competent jurisdiction. The Collateral Agent’s
books and records shall at all times show that the Collateral is held by the
Collateral Agent subject to the pledge and lien of the Security
Documents.
(g) Agents,
Officers and Employees of Collateral Agent. The Collateral Agent
may execute any of its duties under the Security Documents by or through its
agents, officers or employees. Neither the Collateral Agent nor any
of its agents, officers or employees shall be liable for any action taken or
omitted to be taken by it or them in good faith, be responsible for the
consequence of any oversight or error of judgment or answerable for any loss
unless any of the foregoing shall happen through its or their gross negligence
or willful misconduct as shall have been determined in a final nonappealable
judgment of a court of competent jurisdiction.
–
22
–
(h) Appointment
of Co-Agent. Whenever the Collateral Agent shall deem it
necessary or prudent in order either to conform to any law of any jurisdiction
in which all or any part of the Collateral shall be situated or to make any
claim or bring any suit with respect to the Collateral or the Security
Documents, or in the event that the Collateral Agent shall have been requested
to do so by or on behalf of the Required Holders, the Collateral Agent shall
execute and deliver a supplemental agreement and all other instruments and
agreements necessary or proper to constitute a bank or trust company, or one
or
more other persons or entities approved by the Collateral Agent, either to
act
as co-agent or co-agents with respect to all or any part of the Collateral
or
with respect to the Security Documents, jointly with the Collateral Agent or
any
successor or successors, or to act as separate agent or agents of any such
property, in any such case with such powers as may be provided in such
supplemental agreement, and to vest in such bank, trust company or other persons
or entities as such co-agent or separate agent, as the case may be, any
property, title, right or power of the Collateral Agent deemed necessary or
advisable by the Required Holders or the Collateral Agent.
(i)
Reliance
on Certain Documents. The Collateral Agent shall be entitled to
rely on any communication, instrument or document believed by it to be genuine
and correct and to have been signed or sent by the proper person or entity,
and
with respect to all legal matters shall be entitled to rely on the advice of
legal advisors selected by it concerning all matters relating to the Security
Documents and its duties hereunder and thereunder and otherwise shall rely
on
such experts as it deems necessary or desirable, and shall not be liable to
any
Purchaser or any other person or entity for the consequences of such reliance
in
the absence of gross negligence or willful misconduct as shall have been
determined in a final nonappealable judgment of a court of competent
jurisdiction.
(j)
Collateral
Agent May Have Separate Relationship with Parties. The Collateral
Agent (or any affiliate of the Collateral Agent) may, notwithstanding the fact
that it is the Collateral Agent, act as a lender to the Company and lend money
to, and generally engage in any kind of business with such party in the same
manner and to the same effect as though it were not the Collateral Agent; and
such business shall not constitute a breach of any obligation of the Collateral
Agent to the other Purchasers.
(k) Indemnification
of Collateral Agent. Each of the Purchasers, ratably on the basis
of the respective principal amounts of the Series C Notes outstanding at the
time of the occurrence giving rise to the below liabilities, losses, etc.,
agrees to indemnify the Collateral Agent for any and all liabilities, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Collateral Agent in its capacity as the Collateral Agent,
in any way relating to or arising out of the Security Documents or the
transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof (“Losses”), provided that
neither the Company nor any Purchaser shall be liable for any of the foregoing
to the extent they arise from gross negligence or willful misconduct on the
part
of the Collateral Agent as shall have been determined in a final nonappealable
judgment of a court of competent jurisdiction. This Section 8(k)
shall survive the termination of this Agreement. Prior to taking any
action hereunder as Collateral Agent, the Collateral Agent may require each
Purchaser to deposit with it sufficient sums as it determines in good faith
is
necessary to protect the Collateral Agent for costs and expenses associated
with
taking such action, and the Collateral Agent shall have no
–
23
–
liability
hereunder for failure to take such action unless the Purchasers promptly deposit
such sums.
(l)
Resignation. The
Collateral Agent at any time may resign, upon thirty (30) days’ prior written
notice, by an instrument addressed and delivered to the Purchasers and the
Company and may be removed at any time with or without cause upon thirty (30)
days’ prior written notice, by an instrument in writing duly executed by duly
authorized signatories of the Required Holders. The Required Holders
shall also have the right to appoint a successor to the Collateral Agent upon
any such resignation or removal, by instrument of substitution complying with
the requirements of applicable law, or, in the absence of any such requirement,
without any formality other than appointment and designation in writing, a
copy
of which instrument or writing shall be sent to each Purchaser. Upon
the making of such appointment and delivery to such successor Collateral Agent
of the Collateral then held by the retiring Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties conferred hereby and by the Security
Documents upon the Collateral Agent named herein, and one or more such
appointments and designations shall not exhaust the right to appoint and
designate further successor Collateral Agents hereunder. The retiring
Collateral Agent shall not be discharged from its duties and obligations
hereunder until, and the retiring Collateral Agent shall be so discharged when,
all the Collateral held by the retiring Collateral Agent has been delivered
to
the successor Collateral Agent and such successor Collateral Agent shall
execute, acknowledge and deliver to each holder of the Series C Notes and to
the
Company an instrument accepting such appointment. If no successor
shall be appointed and approved on or prior to the date of any such resignation,
the resigning Collateral Agent may apply to any court of competent jurisdiction
to appoint a successor to act until a successor shall have been appointed by
the
Required Holders as above provided.
(m) Rights
with Respect to Collateral.
(i) Each
Purchaser agrees with all other Purchasers (A) that it shall not, and shall
not
attempt to, exercise any rights with respect to its security interest in the
Collateral, whether pursuant to any other agreement or otherwise (other than
pursuant to this Agreement), or take or institute any action against the
Collateral Agent or any of the other Purchasers in respect of the Collateral
or
its rights hereunder (other than any such action arising from the breach of
this
Agreement) and (B) that such Purchaser has no other rights with respect to
the
Collateral other than as set forth in this Agreement and the Security
Documents.
(ii) Each
Purchaser agrees with all other Purchasers and the Collateral Agent that nothing
contained in this Section 8 shall be construed to give rise to, nor shall such
Purchaser have, any claims whatsoever against any other Purchaser or the
Collateral Agent on account of any act or omission to act in connection with
the
exercise of any right or remedy of the Collateral Agent or any other Purchaser
with respect to the Collateral in the absence of gross negligence or willful
misconduct of such other Purchaser or Collateral Agent, as applicable, as shall
have been determined in a final nonappealable judgment of a court of competent
jurisdiction.
–
24
–
|
9.
|
GOVERNING
LAW; MISCELLANEOUS.
|
(a) Governing
Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The
Company and each Purchaser irrevocably consent to the exclusive jurisdiction
of
the United States federal courts and the state courts located in the County
of
New Castle, the State of Delaware, in any suit or proceeding based on or arising
under this Agreement or the transactions contemplated hereby and irrevocably
agree that all claims between the parties in respect of such suit or proceeding
may be determined in such courts. The Company and each Purchaser irrevocably
waive the defense of an inconvenient forum to the maintenance of such suit
or
proceeding in such forum. The Company and each Purchaser further
agree that service of process upon the Company or any Purchaser mailed by first
class mail shall be deemed in every respect effective service of process upon
the Company or such Purchaser, as the case may be, in any such suit or
proceeding. Nothing herein shall affect the right of the Company or
any Purchaser to serve process in any other manner permitted by
law. The Company and each Purchaser agree that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful
manner.
(b) Counterparts. This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other
party. This Agreement, once executed by a party, may be delivered to
the other parties hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement. In
the event any signature is delivered by facsimile transmission, the party using
such means of delivery shall cause the manually executed execution page(s)
hereof to be physically delivered to the other party within five (5) days of
the
execution hereof, provided that the failure to so deliver any manually executed
execution page shall not affect the validity or enforceability of this
Agreement.
(c) Construction. Whenever
the context requires, the gender of any word used in this Agreement includes
the
masculine, feminine or neuter, and the number of any word includes the singular
or plural. Unless the context otherwise requires, all references to
articles and sections refer to articles and sections of this Agreement, and
all
references to schedules are to schedules attached hereto, each of which is
made
a part hereof for all purposes. The descriptive headings of the
several articles and sections of this Agreement are inserted for purposes of
reference only, and shall not affect the meaning or construction of any of
the
provisions hereof.
(d) Severability. If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
(e) Entire
Agreement; Amendments. This Agreement and the other Transaction
Documents (including any schedules and exhibits hereto and thereto) contain
the
entire understanding of the Purchasers, the Company, their affiliates and
persons acting on their behalf with respect to the matters covered herein and
therein and, except as specifically set forth herein
–
25
–
or
therein, or in any certificate or document contemplated thereby, neither the
Company nor the Purchasers make any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this
Agreement may be waived other than by an instrument in writing signed by the
party to be charged with enforcement, and no provision of this Agreement may
be
amended other than by an instrument in writing signed by the Company and the
Purchasers.
(f)
Notices. Any
notices required or permitted to be given under the terms of this Agreement
shall be in writing and sent by certified or registered mail (return receipt
requested) or delivered personally, by nationally recognized overnight carrier
or by confirmed facsimile transmission, and shall be effective five (5) days
after being placed in the mail, if mailed, or upon receipt or refusal of
receipt, if delivered personally or by nationally recognized overnight carrier
or confirmed facsimile transmission, in each case addressed to a party as
provided herein. The initial addresses for such communications shall
be as follows, and each party shall provide notice to the other parties of
any
change in such party’s address:
(i) If
to the
Company:
Matritech,
Inc.
000
Xxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile: (000)
000-0000
Attention: Chief
Executive Officer
with
a
copy simultaneously transmitted by like means (which transmittal shall not
constitute notice hereunder) to:
Xxxxxx,
Xxxx & Xxxxxxx LLP
Xxx
Xxxxxxxxxxxxx Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxxxx
(ii) If
to any Purchaser, to the address set forth under such Purchaser’s name on the
Execution Page hereto executed by such Purchaser,
with
a
copy simultaneously transmitted by like means (which transmittal shall not
constitute notice hereunder) to:
The
Xxxxxxxx Law Group,
LLC
00
Xxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxxxxxx 00000
Telephone: (000)
000-0000
Facsimile:
(000) 000-0000
Attention: Xxxxxxxxx
X. Xxxxxxxx
–
26
–
(g) Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and assigns. Except
as provided herein, the Company shall not assign this Agreement or any rights
or
obligations hereunder. Any Purchaser may assign or transfer the
Securities pursuant to the terms of this Agreement and of such Securities,
or
assign such Purchaser’s rights hereunder to any other person or
entity.
(h) Third
Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns,
and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person; provided, however, that Section 4(r) may be
enforced by any Purchaser’s affiliates and its or their advisors to the extent
the same is entitled to reimbursement of Expenses pursuant thereto.
(i)
Survival. The
representations and warranties of the Company and the agreements and covenants
set forth in Sections 3, 4, 5, 8 and 9 hereof shall survive the Closing
notwithstanding any due diligence investigation conducted by or on behalf of
any
Purchaser. Moreover, none of the representations and warranties made
by the Company herein shall act as a waiver of any rights or remedies any
Purchaser may have under applicable U.S. federal or state securities
laws.
(j)
Publicity. The
Company and each Purchaser shall have the right to approve before issuance
any
press releases or SEC filings, or any other public statements with respect
to
the transactions contemplated hereby; provided, however, that
the Company shall be entitled, without the prior approval of the Purchasers,
to
make any press release or SEC filings as is required by applicable law and
regulations (although the Purchasers shall be consulted by the Company in
connection with any such press release prior to its release, and the Purchasers
shall be provided with a copy thereof and must provide specific consent to
the
use of a Purchaser’s name in connection therewith).
(k) Further
Assurances. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the
other
party may reasonably request in order to carry out the intent and accomplish
the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(l) Indemnification. In
consideration of each Purchaser’s execution and delivery of this Agreement and
the other Transaction Documents and purchase of the Securities hereunder, and
in
addition to all of the Company’s other obligations under this Agreement and the
other Transaction Documents, from and after the Closing, the Company shall
defend, protect, indemnify and hold harmless each Purchaser and each other
holder of the Securities and all of their stockholders, partners, members,
officers, directors, employees and direct or indirect investors and any of
the
foregoing persons’ agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated
by
this Agreement, collectively, the “Indemnitees”) from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys’ fees
and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or
–
27
–
arising
out of, or relating to (i) any misrepresentation or breach of any representation
or warranty made by the Company in this Agreement, any other Transaction
Document or any other certificate, instrument or document contemplated hereby
or
thereby; (ii) any breach of any covenant, agreement or obligation of the Company
contained in this Agreement, any other Transaction Document or any other
certificate, instrument or document contemplated hereby or thereby; or (iii)
any
cause of action, suit, claim, order, proceeding or process brought or made
against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company) and arising out of or
resulting from (A) the execution, delivery, performance or enforcement of this
Agreement, any other Transaction Document or any other certificate, instrument
or document contemplated hereby or thereby, (B) any disclosure made by such
Purchaser pursuant to Section 4(b) or 4(i) hereof, or (C) the status of such
Purchaser or holder of the Securities as an investor in the Company;
provided, however, that with respect to clause (iii) above,
excluding any Indemnified Liabilities (a) resulting from the Indemnitee’s or the
Purchaser’s own acts of fraud or willful misconduct and (b) resulting from any
cause of action, suit, claim, order, proceeding or process brought or asserted
against any Indemnified Party by any investor in or partner, shareholder,
member, employee or agent of said Indemnified Party. To the extent
that the foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
(m) Payment
Set Aside. To the extent that the Company makes a payment or payments to any
Purchaser hereunder or pursuant to any of the other Transaction Documents or
any
Purchaser enforces or exercises its rights hereunder or thereunder, and such
payment or payments or the proceeds of such enforcement or exercise or any
part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to the Company, a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any
such restoration the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not
occurred.
(n) Joint
Participation in Drafting. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement and the other
Transaction Documents. As such, the language used herein and therein
shall be deemed to be the language chosen by the parties hereto to express
their
mutual intent, and no rule of strict construction will be applied against any
party to this Agreement.
(o) Remedies. No
provision of this Agreement or any other Transaction Document providing for
any
remedy to a Purchaser shall limit any other remedy which would otherwise be
available to such Purchaser at law, in equity or otherwise. Nothing
in this Agreement or any other Transaction Document shall limit any rights
any
Purchaser may have under any applicable federal or state securities laws with
respect to the investment contemplated hereby. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Purchasers by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations hereunder
(including, but not limited to, its obligations pursuant to Section 5
hereof)
–
28
–
will
be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Agreement (including, but not limited to,
its
obligations pursuant to Section 5 hereof), that each Purchaser shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate issuance and transfer of the
Securities, without the necessity of showing economic loss and without any
bond
or other security being required.
(p) Knowledge. As
used in this Agreement, the term “knowledge” of any person or entity shall mean
and include such person’s or entity’s or, with respect to the Company, the
Company’s executive officers’ actual knowledge and that knowledge which a
reasonably prudent business person could have obtained in the management of
his
or her business affairs after making due inquiry and exercising due diligence
which a prudent business person should have made or exercised, as applicable,
with respect thereto.
(q) Exculpation
Among Purchasers; No “Group”. Each Purchaser acknowledges that it
has independently evaluated the merits of the transactions contemplated by
this
Agreement and the other Transaction Documents, that it has independently
determined to enter into the transactions contemplated hereby and thereby,
that
it is not relying on any advice from or evaluation by any other Purchaser,
and
that it is not acting in concert with any other Purchaser in making its purchase
of securities hereunder or in monitoring its investment in the
Company. The Purchasers and, to its knowledge, the Company agree that
the Purchasers have not taken any actions that would deem such Purchasers to
be
members of a “group” for purposes of Section 13(d) of the Exchange Act, and the
Purchasers have not agreed to act together for the purpose of acquiring,
holding, voting or disposing of equity securities of the Company.
[REMAINDER
OF PAGE LEFT BLANK INTENTIONALLY]
–
29
–
IN
WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first above
written.
| MATRITECH, INC. | |||
|
By:
|
|||
| Name: Xxxxxxx X. Xxxxx | |||
| Title: Chief Executive Officer | |||
PURCHASER:
Xxxx
Xxxxxxxxx and Xxxxxxx Xxxxxxx, as Trustees
for
the
benefit of Xxxx Xxxxxxxxx
______________________________________________
Xxxx Xxxxxxxxx, Trustee
Xxxx Xxxxxxxxx, Trustee
______________________________________________
Xxxxxxx Xxxxxxx, Trustee
Xxxxxxx Xxxxxxx, Trustee
ADDRESS:
U.S. BOSTON
CORPORATION PROFIT SHARING XXXX
XXXXXXX
XXXXX
XXXXXXX,
XXXXXXXXXXXXX 00000
TEL:
(000)000-0000
FAX:
(000)000-0000
SUBSCRIPTION
AMOUNT:
Aggregate
Face Amount of Note: $1,750,000
PURCHASER:
Xxxx
Xxxxxxxxx and Xxxxxxx Xxxxxxx, as Trustees
for
the
benefit of Xxxxxxx Xxxxxxx
______________________________________________
Xxxx
Xxxxxxxxx, Trustee
______________________________________________
Xxxxxxx Xxxxxxx, Trustee
Xxxxxxx Xxxxxxx, Trustee
ADDRESS: U.S.
BOSTON CORPORATION PROFIT SHARING XXXX
XXXXXXX
XXXXX
XXXXXXX,
XXXXXXXXXXXXX 00000
TEL:
(000)000-0000
FAX:
(000)000-0000
SUBSCRIPTION
AMOUNT:
Aggregate
Face Amount of Note: $1,750,000
