PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made as of the
___ day of November 1997, by and between Derma Sciences, Inc., a corporation
organized under the laws of the Commonwealth of Pennsylvania (the "Company"),
with its principal offices at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx
Xxxxxx 00000, and the purchaser whose name and address is set forth on the
signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Purchaser agree as follows:
SECTION 1. Designation and Authorization of Sale of the
Debentures and Units. Subject to the terms and conditions of this Agreement, the
Company has authorized the sale of up to $1,800,000 aggregate principal amount
of the Company's Convertible Debentures due 1998 (the "Debentures"). The
Debentures will bear interest on, and subject to, the terms described therein
beginning on the 120th day from the date hereof if the Company has not obtained
authorization for the issuance of the Preferred Shares. The Debentures shall be
convertible on or after the Authorization Date (as defined herein) into such
number of Units (as defined herein) as shall result assuming a purchase price of
$0.80 per Unit. Each Unit (the "Unit") shall consist of one share of Series A
Convertible Preferred Stock, par value $.01 per share (the "Preferred Shares"),
and one exchangeable common stock purchase warrant (the "Warrants"). Each
Preferred Share will be convertible into one share (the "Conversion Shares") of
the Company's common stock, par value $.01 per share (the "Common Stock"), upon
the terms set forth in the Certificate of Designations, Rights, Preferences and
Privileges of the Series A Convertible Preferred Stock (the "Certificate of
Designations"), attached as Exhibit C to the Confidential Private Placement
Memorandum (as defined in Section 4.6 hereof.) Each Warrant shall be issued
pursuant to a Warrant Agreement (the "Warrant Agent Agreement") substantially in
the form included as Exhibit D to the Confidential Private Placement Memorandum.
On its face each Warrant will be exchangeable for such number of shares of
common stock (the "Warrant Shares") obtained by dividing (x) the value of the
Warrant (determined by subtracting the aggregate exercise price of the Warrant
from the aggregate fair market value of the number of shares of Common Stock
issuable upon exercise of the Warrant), by (y) the fair market value of one
share of Common Stock prior to the exchange. Each Warrant will also be
exercisable for one share of Common Stock at an initial exercise price of $0.90
per share (the "Warrant Price"). The Conversion Shares and the Warrant Shares
are referred herein as the "Underlying Common Shares."
SECTION 2. Agreement to Sell and Purchase the Units. (a) At
the Closing (as defined in Section 3), the Company will sell to the Purchaser,
and the Purchaser will buy from the Company, upon the terms and conditions
hereinafter set forth, Debentures in the aggregate principal amount shown below:
[AGGREGATE PRINCIPAL AMOUNT]
(b) The Company proposes to enter into this same form of
purchase agreement with certain other investors (the "Other Purchasers") and
expects to complete sales of the Debentures to them. The Purchaser and the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Purchasers," and this Agreement and the agreements executed by the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Agreements." The term "Documents" shall mean this Agreement, the Certificate of
Designations and the Warrant Agent Agreement, collectively, together with any
schedules or exhibits thereto.
(c) The Company reserves the right to reject this subscription
for Debentures in whole or in part at any time before the Closing Date (as
defined below) notwithstanding prior receipt by the Purchaser of notice of
acceptance of his subscription, if the Company deems such action to be in its
best interests.
SECTION 3. Delivery of the Debentures at the Closing. The
completion of the purchase and sale of the Debentures (the "Closing") shall
occur at a place and time (the "Closing Date") to be determined by the Company,
and of which the Purchasers will be notified by facsimile transmission or
otherwise. At the Closing, the Company shall deliver to the Purchaser (i) one or
more Debenture certificates registered in the name of the Purchaser, or in such
nominee name(s) as designated by the Purchaser, representing the principal
amount set forth in Section 2 above in such nominee name(s) designated by the
Purchaser as set forth in the Debenture/Stock/Warrant Certificate Questionnaire
attached hereto as part of Appendix I. The Company's obligation to complete the
purchase and sale of the Debentures and deliver such Debenture certificate(s) to
the Purchaser at the Closing shall be subject to receipt of Federal Reserve
(same-day) funds in the full amount of the purchase price for the Debentures
being purchased hereunder. The Purchaser's obligation to accept delivery of such
Debenture certificate(s) and to pay for the Debentures shall be subject to the
condition that the Company shall have (a) entered into a Registration Rights
Agreement in the form of Appendix III hereto (the "Registration Rights
Agreement") and (b) the accuracy in all material respects of the representations
and warranties made by the Company herein and the fulfillment in all material
respects of those undertakings of the Company to be fulfilled prior to Closing.
The Purchaser's obligations hereunder are not conditioned on the purchase by any
or all of the Other Purchasers of the Debentures that they have agreed to
purchase from the Company. The parties agree that there may be more than one
Closing; provided, that any subsequent Closing must be held within seven days of
the initial Closing Date.
SECTION 4. Representations, Warranties and Covenants
of the Company. The Company hereby represents and warrants to, and covenants
with, the Purchaser as follows:
4.1. Organization and Qualification. Each of the Company and
its subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to conduct its business as currently
conducted. Each of the Company and its subsidiaries is qualified to do business
as a foreign corporation and is in good standing in each jurisdiction in which
the failure to so qualify would have a material adverse effect on the operations
of the Company and its subsidiaries, taken as a whole.
4.2. Authorized Capital Stock; Authorization of Securities. As
of the date hereof, the authorized capital stock of the Company consists of
fifteen million (15,000,000) shares of Common Stock, of which 4,067,632 shares
were validly issued and are outstanding, fully paid and non-assessable. Except
as set forth in the Confidential Private Placement Memorandum, there are no
outstanding securities exercisable for or convertible into shares of capital
stock of the Company.
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4.3. Due Execution, Delivery and Performance of the
Agreements. The Company has full power and authority to enter into this
Agreement and each Document. This Agreement has been, and each Document and the
Debentures will be, duly authorized, executed and delivered by the Company. The
Company's execution, delivery and performance of this Agreement, the Debentures
and each Document will not violate (i) any law, rule or regulation applicable to
the Company or any of its subsidiaries or (ii) the Certificate of Incorporation
or Bylaws of the Company or any of its subsidiaries or (iii) any provision of
any material indenture, mortgage, agreement, contract or other instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their properties or assets is bound as of
the date hereof, or result in a breach of or constitute (upon notice or lapse of
time or both) a default under any such material indenture, mortgage, agreement,
contract or other instrument or result in the creation or imposition of any
lien, security interest, mortgage, pledge, charge or other encumbrance upon any
properties or assets of the Company or any of its subsidiaries, except, in the
case of such clause (iii), where such violation, breach or default would not
have a material adverse effect on the business, properties, prospects, condition
(financial or otherwise), net worth or results of operations of the Company and
its subsidiaries taken as a whole (a "Material Adverse Effect"). Upon their
execution and delivery (assuming the valid execution thereof by the respective
parties thereto other than the Company), this Agreement, the Documents and the
Debentures will constitute valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' and contracting parties' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4.4. Issuance, Sale and Delivery of the Debentures. When
executed and delivered by the Company, the Debentures, will constitute valid and
legally binding obligations of the Company enforceable against the Company in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding at equity or at law).
The principal amount outstanding under the Debentures will be convertible into
Units in accordance with their terms and, the Preferred Shares and the Warrants
comprising such Units will have been authorized and reserved for issuance within
120 days of the date hereof (the "Authorization Date"), and when issued and
delivered in accordance with the terms of the Debentures, will be validly
issued, fully paid and nonassessable.
4.5. Litigation. There is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or affecting
the Company or any of its subsidiaries which are not described in the
Confidential Private Placement Memorandum and which might result in any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries,
taken as a whole, or which might materially and adversely affect their property
or assets or which might materially and adversely affect the consummation of
this Agreement and the other Documents. All pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or of
which any of their property or assets is the subject which are not described in
the Confidential Private Placement Memorandum (as defined below), including
ordinary routine litigation incidental to the business, are, considered in the
aggregate, not material to the business of the Company and its subsidiaries,
taken as a whole.
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4.6. Additional Information. The information contained in the
following documents which the Company has furnished to the Purchaser, or will
furnish prior to the Closing, is or will be true and correct in all material
respects as of their respective dates:
(a) the Confidential Private Placement Memorandum dated
November 10, 1997 (including all exhibits thereto,
the "Confidential Private Placement Memorandum")
containing certain summary information relating to
the sale of the Debentures to the Purchasers by the
Company pursuant to the Agreements, including all
addenda and exhibits thereto not listed below;
(b) the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1996;
(c) the Company's Quarterly Report on Form 10-QSB for
the quarter ended March 31, 1997;
(d) the Company's Quarterly Report on Form 10-QSB for
the quarter ended June 30, 1997;
(e) the Company's Quarterly Report on Form 10-QSB for
the quarter ended September 30, 1997;
(f) the Company's Current Report on Form 8-K dated
April 8, 1997;
(g) the Company's Current Report on Form 8-K dated
May 29, 1997; and
(h) all other documents, if any (the "Other Exchange Act
Documents"), filed by the Company with the Securities
and Exchange Commission (the "Commission") since
September 30, 1997 pursuant to the reporting
requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
4.7. No Material Change; No Material Misstatement or Omission.
(a) As of the date hereof, there has been no material adverse change in the
consolidated financial condition, business or results of operations of the
Company since September 30, 1997. Neither the Company nor any of its
subsidiaries has incurred, other than in the ordinary course of its business,
any material liabilities or obligations, direct or contingent, nor has the
Company or any of its subsidiaries purchased any of their outstanding capital
stock, nor paid or declared any dividends or other distributions on their
capital stock; and there has been no change in the capital stock or,
consolidated long-term debt or, any increase in the consolidated short-term
borrowings (other than in the ordinary course of business) of the Company or any
material adverse change to the business, properties, assets, net worth,
condition (financial or other), results of operations or prospects of the
Company and its subsidiaries, taken as a whole.
(b) As of the date thereof, the Confidential Private Placement
Memorandum, including all addenda and exhibits thereto, does not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
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4.8. Legal Opinion. Prior to closing, Xxxxxx & Xxxxxx, counsel
to the Company, will deliver its legal opinion to the Company in the form of
Appendix V hereto and stating that each of the Purchasers may rely thereon as
though such opinion was addressed directly to such Purchaser.
4.9. Issuance of Units. Commencing on the Authorization Date
the Company shall within three (3) business days of the receipt by the Company
of any of the Debentures for conversion, issue to such Purchaser, a certificate
or certificates representing the number of securities comprising the Units to
which such Purchaser is entitled, which shall be legended as provided in the
Debentures. The Company shall issue Warrant Shares upon exercise of the Warrants
in accordance with the terms of the Warrant Agreement, which shall be legended
as provided therein. After the Registration Statement (as defined) is declared
effective by the Commission, if any holder of legended Warrants or Underlying
Common Shares shall deliver to the Company (i) the certificate representing such
Warrants or Underlying Common Shares and (ii) a letter of representations to the
effect of Sections 5(b) and (c) herein, then the Company shall within three
business days after receipt by the Company of the foregoing issue new Warrants
or Underlying Common Shares in exchange for the aforementioned legended Warrants
or Underlying Common Shares, which new Warrants or Underlying Common Shares
shall be legended as follows:
THE SHARES/WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SHARES/WARRANTS MAY BE SOLD PURSUANT TO THE REGISTRATION
STATEMENT PROVIDED THAT THE HOLDER COMPLIES WITH THE PROSPECTUS
DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE SALE IS IN COMPLIANCE WITH THE PLAN OF
DISTRIBUTION SET FORTH IN THE PROSPECTUS. THE SHARES/WARRANTS ARE
SUBJECT TO CERTAIN REGISTRATION RIGHTS AS SET FORTH IN A
REGISTRATION RIGHTS AGREEMENT, A COPY OF WHICH MAY BE OBTAINED
FROM THE CORPORATION.
4.10. Certificate. The Company shall deliver a certificate of
the Company executed by the Chairman of the Board or President and the chief
financial or accounting officer of the Company, to be dated the Closing Date, in
form and substance satisfactory to the Purchasers to the effect that the
representations and warranties of the Company set forth in this Section 4 are
true and correct as of the date of this Agreement and as of the Closing Date,
and the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied on or prior to such Closing
Date.
4.11. Authorization Date. The Company agrees and covenants
with the Purchaser to use its best efforts to obtain the necessary authorization
for the issuance of the Preferred Shares prior to the Authorization Date.
SECTION 5. Representations, Warranties and Covenants of the
Purchaser. (a) The Purchaser represents and warrants to, and covenants with, the
Company that: (i) the Purchaser is knowledgeable, sophisticated and experienced
in making, and is qualified to make, decisions with respect to investments in
shares presenting an investment decision like that involved in the purchase of
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the Debentures, including investments in securities issued by the Company, and
has requested, received, reviewed and considered all information it deems
relevant in making an informed decision to purchase the Debentures; (ii) the
Purchaser is acquiring the principal amount of Debentures set forth in Section 2
above in the ordinary course of its business and for its own account for
investment (as defined for purposes of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act of 1976 and the regulations thereunder) only and with no present
intention of distributing any of such Debentures, Units, Preferred Shares,
Warrants or Underlying Common Shares or any arrangement or understanding with
any other persons regarding the distribution or purchase of such Debentures,
Units, Preferred Shares, Warrants or Underlying Common Shares (this
representation and warranty does not limit the Purchaser's right to sell
pursuant to an exemption from registration or pursuant to any registration
statement to be filed by the Company pursuant to the Registration Rights
Agreement or, other than with respect to any claims arising out of a breach of
this representation and warranty, the Purchaser's right to indemnification under
the Registration Rights Agreement); (iii) the Purchaser will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Debentures, Units, Preferred Shares, Warrants or Underlying Common Shares except
in compliance with the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations promulgated thereunder and the Exchange
Act, and the rules and regulations promulgated thereunder, and the terms and
conditions of this Agreement; (iv) the Purchaser has completed or caused to be
completed the Registration Statement Questionnaire and the
Debenture/Stock/Warrant Certificate Questionnaire, both attached hereto as
Appendix I, for use in preparation of the Registration Statement and the answers
thereto are true and correct to the best knowledge of the Purchaser as of the
date hereof and will be true and correct as of the effective date of the
Registration Statement; (v) the Purchaser has, in connection with its decision
to purchase the principal amount of Debentures set forth in Section 2 above,
relied solely upon the Confidential Private Placement Memorandum and the
representations and warranties of the Company contained in writing herein, and
has not relied upon any other statements, representations, warranties, covenants
or assurances of the Company, (vi) the Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act ("Regulation D"); and (vii) the Purchaser understands that the Debentures
and the Preferred Shares and, except as provided in Section 4.9 hereof, the
Warrants and the Underlying Common Shares will contain a legend to the following
effect (provided that certificates for the Preferred Shares shall omit the last
sentence thereof):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF EITHER AN
EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. THESE
SECURITIES ARE SUBJECT TO CERTAIN REGISTRATION RIGHTS AS SET
FORTH IN A REGISTRATION RIGHTS AGREEMENT, A COPY OF WHICH MAY
BE OBTAINED FROM THE COMPANY.
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(b) The Purchaser hereby covenants with the Company that it
will not directly or indirectly make any offer, sale, pledge, transfer or other
disposition of the Debentures, the Units, the Preferred Shares, the Warrants or
the Underlying Common Shares other than in accordance with all applicable
federal and state securities laws and the terms and conditions of this
Agreement, including, but not limited to, the other representations, warranties
and covenants of the Purchaser in this Section 5.
(c) The Purchaser hereby covenants with the Company not to
make any sale of the Warrants or the Underlying Common Shares without
effectively causing the prospectus delivery requirement under the Securities Act
to be satisfied, and the Purchaser acknowledges and agrees that the Warrants and
the Underlying Common Shares are not transferable on the books of the Company
unless the certificate submitted to the transfer agent evidencing the Warrants
or the Underlying Common Shares is accompanied by a separate officer's
certificate: (i) in the form of Appendix IV hereto, (ii) executed by an officer
of, or other authorized person designated by, the Purchaser, and (iii) to the
effect that (A) the Underlying Common Shares have been sold in accordance with a
Registration Statement and (B) the requirement of delivering a current
prospectus has been satisfied.
(d) The Purchaser further represents and warrants to, and
covenants with, the Company that (i) the Purchaser has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) upon the
execution and delivery of this Agreement, this Agreement shall constitute a
valid and binding obligation of the Purchaser enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(e) The Purchaser acknowledges that it has had such access to
financial and other information concerning the Company, the Debentures, the
Units, the Preferred Shares and the Warrants as it deemed necessary in
connection with its decision to purchase the Debentures and the underlying
Preferred Shares and the Warrants, including an opportunity to ask questions and
request information from the Company and its management and all such questions
have been answered and all information requested has been provided to the
satisfaction of the Purchaser and has not relied on any third party to conduct
due diligence.
(f) If the Purchaser proposes to sell, pledge, assign or
otherwise transfer or convey, directly or indirectly, any of the Debentures, the
Units, Preferred Shares, the Warrants or the Underlying Common Shares prior to
the date that the Registration Statement becomes effective, then the Purchaser
shall provide the Company, prior to the sale of any such Debentures, Units,
Preferred Shares, the Warrants or the Underlying Common Shares with a legal
opinion in form and substance satisfactory to the Company of legal counsel
satisfactory to the Company that such sale, pledge, assignment, transfer or
conveyance is exempt from the registration requirements under the Securities Act
and any applicable state securities and blue sky laws.
SECTION 6. Additional Interest. The Company and the Purchasers
agree that the holders of the Debentures will suffer damages if the Company
fails to promptly, but in no event later than the Authorization Date, obtain the
necessary authorization for the issuance of the Preferred Stock comprising the
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Units and the additional shares of Common Stock underlying the Warrants, and
that it would not be feasible to ascertain the extent of such damages with
precision. The Company agrees that if it has failed within 120 days of the date
hereof to obtain the necessary authorization it shall pay additional interest
("Additional Interest") on the Debentures. Additional Interest shall accrue on
the principal amount of the Debentures over and above the stated interest at a
rate of 6.0% per annum and such Additional Interest rate shall increase at a
rate of an additional 1.5% per annum at the beginning of each subsequent 90-day
period.
SECTION 7. Survival of Representations, Warranties and
Agreements. Notwithstanding any representation made by any party to this
Agreement, all covenants, agreements, representations and warranties made by the
Company and the Purchaser in writing herein and in the closing certificates
delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Debentures being purchased and the payment
therefor.
SECTION 8. Registration of Underlying Common Shares. In
recognition of the fact that Purchasers, even though purchasing Preferred Shares
and Warrants for investment, may wish to be legally permitted to sell the
Underlying Common Shares when they deem appropriate, the Company has agreed to
use its best efforts to prepare and file with the Commission a Registration
Statement (the "Registration Statement") with respect to the resale of the
Underlying Common Shares from time to time through the Nasdaq SmallCap Market,
the Boston Stock Exchange, Pacific Exchange or in privately-negotiated
transactions all as described more fully in the Registration Rights Agreement.
SECTION 9. Broker's Fee. Each of the parties hereto hereby
represents that, on the basis of any actions and agreements by it, there are no
brokers or finders entitled to compensation in connection with the sale of the
Debentures, the Units, the Preferred Shares and the Warrants to the Purchaser.
SECTION 10. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be by telecopier, with a
copy being mailed by a nationally recognized overnight express courier, and
shall be deemed given when receipt is acknowledged by transmit confirmation
report and shall be addressed as follows:
(a) if to the Company, to:
Derma Sciences, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or to such other person at such other place as the
Company shall designate to the Purchaser in writing;
(b) if to the Purchaser, at its address and telecopier
number as set forth at the end of this Agreement, or
at such other address or addresses as may have been
furnished to the Company in writing.
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SECTION 6. Changes. This Agreement may not be
modified or amended except pursuant to an instrument in writing signed by the
Company and the Purchaser.
SECTION 7. Headings. The headings of the various
sections of this Agreement have been inserted for convenience of reference only
and shall not be deemed to be part of this Agreement.
SECTION 8. Severability. In case any provision contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 9. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
(without reference to its rules as to conflicts of law) and the federal law of
the United States of America.
SECTION 10. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties. Facsimile signatures are considered
to be originals and shall have the same effect.
SECTION 11. Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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IN WITNESS WHEREOF, the Purchaser has caused this Agreement to
be executed by its duly authorized representative as of the day and year first
above written.
Print or Type: Name of Purchaser
(Individual or Institution):
------------------------------------
Name of Individual representing
Purchaser (if an Institution):
------------------------------------
Title of Individual representing
Purchaser (if an Institution):
------------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
------------------------------------
Address:____________________________
------------------------------------
------------------------------------
Telephone:__________________________
Telecopier:_________________________
ACCEPTED AND AGREED TO
THIS ___ DAY OF NOVEMBER, 1997:
DERMA SCIENCES, INC.
By: -----------------------
Xxxxxx X. Xxxxxx
Chairman
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Appendix I-1
(one of two)
DERMA SCIENCES, INC.
DEBENTURE/STOCK/WARRANT CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Debentures are to be
registered in (this is the name that will appear on
your certificate(s)). You may use a nominee name if
appropriate:
---------------------------
2. The relationship between the Purchaser and the
Registered Holder listed in response to item 1:
--------------------------
3. The mailing address of the Registered Holder listed
in response to item 1 above:
---------------------------
4. The Social Security Number or Tax Identification
Number of the Registered Holder listed in response to item 1 above:
--------------------------
Appendix I-2
(two of two)
DERMA SCIENCES, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration
Statement, please provide us with the following information:
1. Please state the name of the beneficial owner of the
Debentures to be purchased pursuant to the Purchase Agreement to which this
Appendix I-2 is attached. This is the name that will appear in the "Selling
Securityholder" section of the Registration Statement.
--------------------------------------------------------------------------------
2. Please provide below the number of: (1) Units purchased by
the person or entity named in Item 1 above; (2) Preferred Shares purchased by
the person or entity named in Item 1 above; (3) Warrants purchased by the person
or entity named in Item 1 above; and (4) shares of Common Stock that the person
or entity named in Item 1 above owned at November 10, 1997:
(1) (2) (3) (4)
Number of Units Number of Number of Number of Shares of
Purchased Preferred Shares Warrants Common Stock Owned at
Purchased Purchased November 10, 1997
--------------- ---------------- ---------- ---------------------
3. Unless you check the following box, all Underlying Common
Shares relating to the Preferred Shares and the Warrants listed above will be
included in the Registration Statement.
[ ]
If you checked the foregoing box, please indicate a lesser number of Preferred
Shares or Warrants to be used to determine the number of Underlying Common
Shares to be included in the Registration Statement.
--------------------------------------------------------------------------------
4. Have you, your organization or the beneficial owner named
above had any position, office or other material relationship within the past
three years with the Company or its affiliates other than as disclosed in the
Prospectus included in the Registration Statement?
____ Yes ____ No
If yes, please indicate the nature of any such relationships
below:
Appendix II
CONVERSION NOTICE
URGENT/FOR IMMEDIATE ATTENTION
addressed to:
Derma Sciences, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Name of Nominee or Registered Holder:
...............................................................................
(Print)
Telecopier number to which confirmation of receipt of this Conversion Notice
should be sent:
...............................................................................
Number of shares of Preferred Stock being converted hereby: ___________________
If you want the Common Stock certificate, if any, made out in another person's
name, fill in the form below:
(INSERT OTHER PERSON'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER, WHERE APPLICABLE)
[ ]
................................................................................
................................................................................
................................................................................
................................................................................
(Print or type assignee's name, title, address and zip code)
Date:...........................................................................
Your
Signature:.....................................................................
Appendix III
REGISTRATION RIGHTS AGREEMENT
Please refer to Exhibit 10.02
Appendix IV
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly authorized by]
--------------------------------------------------------------------------------
[fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of the shares/
warrants evidenced by the attached certificate, and as such, sold such shares/
warrants on ______________________ in accordance with registration statement
[date]
number ____________________________________________________________________
[fill in number or otherwise identify registration statement]
and the requirement of delivering a current prospectus and current annual and
quarterly reports by the Company has been complied with in connection with such
sale.
Print or Type:
Name of Purchaser
(Individual or
Institution):___________________________________________
Name of Individual
representing Purchaser
(if an Institution):_____________________________________
Title of Individual
representing Purchaser
(if an Institution):______________________________________
Signature by:
Individual Purchaser
or Individual
representing
Purchaser:_______________________________________________
APPENDIX V
FORM OF OPINION OF COUNSEL TO THE COMPANY
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to conduct its business as currently
conducted.
2. As of the date hereof, the authorized capital stock of the Company
consists of (i) fifteen million (15,000,000) shares of common stock, par value
$.01 per share ("Common Stock"), of which 4,067,632 shares are validly issued
and outstanding. To such counsel's knowledge, except as set forth in the
Confidential Private Placement Memorandum, there are no outstanding securities
exercisable for or convertible into shares of capital stock of the Company.
3. The Debentures to be issued and sold by the Company to the
Purchasers will be, upon issuance and payment therefor, duly authorized and
validly issued and legally binding obligations of the Company enforceable
against it in accordance with their terms and entitled to be benefits thereof.
The principal amount outstanding under the Debentures will be convertible into
the Units in accordance with their terms on or after the Authorization Date.
4. The Company has full corporate power and authority to enter into
this Agreement and each Document. This Agreement has been, and each Document and
the Debentures will be, duly authorized, executed and delivered by the Company.
The Company's execution, delivery and performance of this Agreement, the
Debentures and each Document will not violate (i) any statute, rule or
regulation known to such counsel to be applicable to the Company or its
subsidiaries, (ii) to the best of such counsel's knowledge, any order, judgment,
ruling or decree of any court or any governmental, regulatory or administrative
body applicable to the Company or any of its subsidiaries, (iii) the Certificate
of Incorporation or Bylaws of the Company, or (iv) any provision of any
indenture, mortgage, agreement, contract or other instrument (X) filed by the
Company with (A) its quarterly reports on Form 10-QSB for the quarterly periods
ended March 31, 1997, June 30, 1997 and September 30, 1997, (B) filed by the
Company with its Annual Report on Form 10-KSB for the year ended December 31,
1996, and (C) all other Exchange Act Documents or result in a breach of or
constitute (upon notice or lapse of time or both) a default under any thereof,
or result in the creation or imposition of any lien, security interest,
mortgage, pledge, charge or other encumbrance upon any properties or assets of
the Company or any of its subsidiaries, except in the case of the foregoing
clauses (i), (ii) and (iv) for those violations, breaches or defaults which
would not singly or in the aggregate, have a Material Adverse Effect. Upon their
execution and delivery (assuming the valid execution thereof by the respective
parties thereto other than the Company), this Agreement, the Documents and the
Debentures will constitute valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' and contracting parties' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
5. Except as described in the Confidential Private Placement
Memorandum, to such counsel's knowledge (without independent investigation),
there is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending, or threatened, against or
affecting the Company or any of its subsidiaries which might, singly or in the
aggregate, have a Material Adverse Effect, or which might materially and
adversely affect the consummation of this Agreement and the other Documents; to
such counsel's knowledge without independent investigation all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is a
party or of which any of their property or assets is the subject which are not
described in the Confidential Private Placement Memorandum, including ordinary
routine litigation incidental to the business, are, considered in the aggregate,
not material to the business of the Company and its subsidiaries, taken as a
whole.
6. To such counsel's knowledge, no consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with any
court or any public, governmental, or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, except for such as may be required by under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Debentures (as to which such counsel need express no opinion).
