EXHIBIT 10.1
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SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") is dated as of June
30, 2003 by and between Able Laboratories, Inc., a Delaware corporation (the
"COMPANY") and the purchasers identified on the signature pages hereto (each, a
"PURCHASER" and collectively, the "PURCHASERS").
WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), the Company desires to sell to the Purchasers, and the
Purchasers, severally and not jointly, desire to purchase from the Company,
securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, the following terms have the meanings indicated:
"8-K FILING" has the meaning set forth in Section 4.5.
"ADDITIONAL INVESTMENT RIGHTS" means the Company Additional Investment
Rights issued and sold by the Company under this Agreement in the form of
Exhibit A.
"ADVICE" has the meaning set forth in Section 6.5.
"AFFILIATE" means any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule
144 under the Securities Act.
"BUSINESS DAY" means any day other than Saturday, Sunday or other day
on which commercial banks in The City of New York are authorized or
required by law to remain closed.
"CLOSING" means the closing of the purchase and sale of the Shares and
the Additional Investment Rights pursuant to Section 2.1.
"CLOSING DATE" means the date of the closing.
"COMPANY COUNSEL" means Xxxxx Xxxx, LLP, counsel to the Company.
"COMPANY SECURITIES" means the Company Shares and the Underlying
Shares.
"COMPANY SHARES" means an aggregate of 1,600,000 shares of Common
Stock, which are being issued and sold by the Company to the Purchasers at
the Closing.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock of the Company, par value $0.01
per share.
"COMMON STOCK EQUIVALENTS" means, collectively, Options and
Convertible Securities.
"CONVERTIBLE SECURITIES" means any stock or securities (other than
Options) convertible into or exercisable or exchangeable for Common Stock.
"DISCLOSURE MATERIALS" has the meaning set forth in Section 3.1.
"EFFECTIVE DATE" means the date that the Registration Statement is
first declared effective by the Commission.
"EFFECTIVENESS PERIOD" has the meaning set forth in Section 6.1.
"ELIGIBLE MARKET" means any of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ National Market or the NASDAQ SmallCap
Market.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FILING DATE" means July 31, 2003
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.4.
"INDEMNIFYING PARTY" has the meaning set forth in Section 6.4.
"INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in Section
3.1.
"LIEN" means any lien, charge, claim, security interest, encumbrance,
right of first refusal or other restriction.
"LEAD PURCHASER" means Mainfield Enterprises, Inc.
"LOSSES" means any and all losses, claims, damages, liabilities,
settlement costs and expenses, including, without limitation, costs of
preparation and reasonable attorneys' fees.
"MATERIAL ADVERSE EFFECT" has the meaning set forth in Section 3.1.
"MATERIAL PERMITS" has the meaning set forth in Section 3.1.
"OPTIONS" means any rights, warrants or options to subscribe for or
purchase Common Stock, including without limitation all Additional
Investment Rights.
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"PER UNIT PURCHASE PRICE" means $19.00.
"PERSON" means any individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or any court or other federal, state, local or other
governmental authority or other entity of any kind.
"PROCEEDING" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by the Registration Statement, and all other
amendments and supplements to the Prospectus including post effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
"PURCHASER COUNSEL" means Proskauer Rose LLP, counsel to certain of
the Purchasers, or any other counsel selected by a Purchaser hereunder.
"REGISTRABLE SECURITIES" means any Common Stock, (including Underlying
Shares), issued or issuable pursuant to the Transaction Documents, together
with any securities issued or issuable upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to the
foregoing.
"REGISTRATION STATEMENT" means each registration statement required to
be filed under Article VI, including (in each case) the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
"RELATED PERSON" has the meaning set forth in Section 4.7.
"REQUIRED EFFECTIVENESS DATE" means September 30, 2003.
"RULE 144," "RULE 415," and "RULE 424" means Rule 144, Rule 415 and
Rule 424, respectively, promulgated by the Commission pursuant to the
Securities Act, as such Rules may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SEC REPORTS" has the meaning set forth in Section 3.1.
"SHARES" means shares of the Company's Common Stock.
"SHORT SALE" has the meaning set forth in Section 3.2.
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"SUBSIDIARY" means any Person in which the Company, directly or
indirectly, owns capital stock or holds an equity or similar interest.
"TRADING DAY" means (a) any day on which the Common Stock is listed or
quoted and traded on its primary Trading Market, (b) if the Common Stock is
not then listed or quoted and traded on any Eligible Market, then a day on
which trading occurs on the NASDAQ National Market (or any successor
thereto), or (c) if trading ceases to occur on the NASDAQ National Market
(or any successor thereto), any Business Day.
"TRADING MARKET" means the Nasdaq National Market or any other
Eligible Market, or any national securities exchange, market or trading or
quotation facility on which the Common Stock is then listed or quoted.
"TRANSACTION DOCUMENTS" means this Agreement, the Additional
Investment Rights and the Transfer Agent Instructions.
"TRANSFER AGENT" means American Stock Transfer and Trust Company.
"TRANSFER AGENT INSTRUCTIONS" means, with respect to the Company, the
Irrevocable Transfer Agent Instructions, in the form of Exhibit B, executed
by the Company and delivered to and acknowledged in writing by the Transfer
Agent.
"UNDERLYING SHARES" means the shares of Common Stock issuable upon
exercise of the Additional Investment Rights.
"UNIT" means one Share and an Additional Investment Right to acquire
0.275 of a share of Common Stock.
ARTICLE II
PURCHASE AND SALE
2.1 Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company,
such number of Units set forth opposite such Purchaser's name on Schedule A
hereto at the Per Unit Purchase Price. The Closing shall take place at the
offices of Purchaser Counsel immediately following the execution hereof, or at
such other location or time as the parties may agree.
2.2 Closing Deliveries.
(a) At the Closing, the Company shall deliver or cause to be delivered
to each Purchaser the following:
(i) one or more stock certificates, free and clear of all restrictive
and other legends (except as expressly provided in Section 4.1(b) hereof),
evidencing such number of Shares equal to the number Units set forth
opposite such Purchaser's name on Schedule A hereto, registered in the name
of such Purchaser;
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(ii) an Additional Investment Right, registered in the name of such
Purchaser, pursuant to which such Purchaser shall have the right to acquire
such number of Underlying Shares indicated below such Purchaser's name on
the signature page of this Agreement, on the terms set forth therein;
(iii) a legal opinion of Company Counsel, in the form of Exhibit C,
executed by such counsel and delivered to the Purchasers; and
(iv) duly executed Transfer Agent Instructions in the form of Exhibit
B acknowledged by the Company's transfer agent.
(b) At the Closing, each Purchaser shall deliver or cause to be delivered
to (i) the Company the Per Unit Purchase Price multiplied by the number of Units
set forth opposite such Purchaser's name on Schedule A hereto, in United States
dollars and in immediately available funds, by wire transfer to an account
designated in writing to such Purchaser by the Company for such purpose.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth on
the Schedule of Exceptions provided by the Company to the Purchaser, the Company
hereby represents and warrants to the Purchasers as follows:
(a) Subsidiaries. The Company has no direct or indirect Subsidiaries.
(b) Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with the requisite power and authority to own and use its properties
and assets and to carry on its business as currently conducted. The Company is
not in violation of any of the provisions of its certificate of incorporation or
bylaws. The Company is duly qualified to do business and is in good standing as
a foreign corporation or other entity in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not, individually or in the aggregate, (i) adversely
affect the legality, validity or enforceability of any Transaction Document,
(ii) have or result in a material adverse effect on the results of operations,
assets, prospects, business or condition (financial or otherwise) of the
Company, or (iii) adversely impair the Company's ability to perform fully on a
timely basis its obligations under any of the Transaction Documents (any of (i),
(ii) or (iii), a "MATERIAL ADVERSE EFFECT").
(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of each of the Transaction Documents to which it is a party by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of the
Company and no further consent or action is required by the Company, its Board
of Directors or its stockholders. Each of the Transaction Documents to which it
is a party has been (or upon
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delivery will be) duly executed by the Company and is, or when delivered in
accordance with the terms hereof, will constitute, the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents to which it is a party by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby do not and
will not (i) conflict with or violate any provision of the Company's 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, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company debt or
otherwise) or other understanding to which the Company is a party or by which
any property or asset of the Company is bound or affected, except to the extent
that such conflict, default or termination right could not reasonably be
expected to have a Material Adverse Effect, or (iii) result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations and the
rules and regulations of any self-regulatory organization to which the Company
or its securities are subject), or by which any property or asset of the Company
is bound or affected.
(e) Issuance of the Company Securities. The Company Securities
(including the Underlying Shares) are duly authorized and, when issued and paid
for in accordance with the Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens (except for
restrictions under applicable securities laws) and shall not be subject to
preemptive rights or similar rights of stockholders. The Company has reserved
from its duly authorized capital stock the maximum number of shares of Common
Stock issuable upon exercise of the Additional Investment Rights.
(f) Capitalization. The number of shares and type of all authorized,
issued and outstanding capital stock, options and other securities of the
Company (whether or not presently convertible into or exercisable or
exchangeable for shares of capital stock of the Company) is as set forth in the
"SEC Reports" as that term is defined in Section 3.1(g) below, as of the date of
each SEC Report and as of June 20, 2003, is as set forth in Schedule 3.1(f). All
outstanding shares of capital stock are duly authorized, validly issued, fully
paid and nonassessable and have been issued in compliance with all applicable
securities laws. Except as disclosed in Schedule 3.1(f), there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company is
or may become bound to issue additional shares of Common Stock, or securities or
rights convertible or exchangeable into shares of Common Stock. Except as set
forth on Schedule 3.1(f), there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in any agreement
providing rights to security holders) and the issue and sale of the Company
Securities will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Purchasers) and will not result
in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. To the knowledge
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of the Company, except as specifically disclosed in Schedule 3.1(f), no Person
or group of related Persons beneficially owns (as determined pursuant to Rule
13d-3 under the Exchange Act), or has the right to acquire, by agreement with or
by obligation binding upon the Company, beneficial ownership of in excess of 5%
of the outstanding Common Stock, ignoring for such purposes any limitation on
the number of shares of Common Stock that may be owned at any single time.
(g) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (the
foregoing materials (together with any materials filed by the Company under the
Exchange Act, whether or not required) being collectively referred to herein as
the "SEC REPORTS" and, together with this Agreement and the Schedules to this
Agreement, the "DISCLOSURE MATERIALS") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. The Company has delivered to the Lead
Purchaser true, correct and complete copies of all SEC Reports filed within the
10 days preceding the date hereof. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, 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 the
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved ("GAAP"), except as may be otherwise specified in
such financial statements or the notes thereto, and fairly present in all
material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, year-end audit adjustments and to the fact that they may
not contain footnotes required by GAAP. All material agreements to which the
Company is a party or to which the property or assets of the Company are subject
are included as part of or specifically identified in the SEC Reports.
(h) Material Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports or in Schedule 3.1(h), (i) there has been no event, occurrence
or development that, individually or in the aggregate, has had or that could
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting or the identity of its auditors, except as disclosed in its SEC
Reports, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) the
Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock-based plans.
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(i) Absence of Litigation. Except as set forth on Schedule 3.1(i),
there is no action, suit, claim, proceeding, inquiry or investigation before or
by any court, public board, government agency, self-regulatory organization or
body pending or, to the knowledge of the Company, threatened against or
affecting the Company that could, individually or in the aggregate, have a
Material Adverse Effect. Schedule 3.1(i) contains a complete list and summary
description of any pending or, to the knowledge of the Company, threatened
proceeding against or affecting the Company, without regard to whether it would,
individually or in the aggregate, have a Material Adverse Effect.
(j) Compliance. To the Company's knowledge, the Company (i) is not in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company under), the Company has not received written notice of a claim that
it is in default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not,
individually or in the aggregate, have or result in a Material Adverse Effect.
(k) Title to Assets. The Company owns no real property. The Company
has good title and marketable title in all personal property owned by it that is
material to the business of the Company, in each case free and clear of all
Liens, except for Liens disclosed on Schedule 3.1(k) and Liens that do not
materially affect the value of such property, do not materially interfere with
the use made and proposed to be made of such property by the Company and could
not, individually or in the aggregate, have or result in a Material Adverse
Effect. Any real property and facilities held under lease by the Company are
held by it under valid, subsisting and enforceable leases of which the Company
is in compliance in all material respects.
(l) Certain Fees. Except for the fees described in Schedule 3.1(l),
all of which are payable to registered broker-dealers, no brokerage or finder's
fees or commissions are or will be payable by the Company to any broker,
financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by this
Agreement, and the Company has not taken any action that would cause any
Purchaser to be liable for any such fees or commissions.
(m) Private Placement. Neither the Company nor any Person acting on
the Company's behalf has sold or offered to sell or solicited any offer to buy
the Company Securities by means of any form of general solicitation or
advertising. Neither the Company nor any of its Affiliates nor any person acting
on the Company's behalf has, directly or indirectly, at any time within the past
six months, made any offer or sale of any security or solicitation of any offer
to buy any security under circumstances that would (i) eliminate the
availability of the exemption from registration under Regulation D under the
Securities Act in connection with the offer and sale by the Company of the
Company Securities as contemplated hereby or (ii) cause the offering of the
Company Securities pursuant to the Transaction Documents to be integrated with
prior
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offerings by the Company for purposes of any applicable law, regulation or
stockholder approval provisions, including, without limitation, under the rules
and regulations of any Trading Market. The Company is not, and is not an
Affiliate of, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. The Company is not a United States real
property holding corporation within the meaning of the Foreign Investment in
Real Property Tax Act of 1980.
(n) Form S-3 Eligibility. The Company is eligible to register its
Common Stock for resale by the Purchasers using Form S-3 promulgated under the
Securities Act.
(o) Listing and Maintenance Requirements. The Company has not, in the
two years preceding the date hereof, received notice (written or oral) from any
Trading Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is in compliance with all
listing and maintenance requirements of the Nasdaq Stock Market, Inc. applicable
to the Company.
(p) Registration Rights. Except as described in Schedule 3.1(p), the
Company has not granted or agreed to grant to any Person any rights (including
"piggy-back" registration rights) to have any securities of the Company
registered with the Commission or any other governmental authority that have not
been satisfied.
(q) Application of Takeover Protections. There is no control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's
charter documents or the laws of its state of incorporation that is or could
become applicable to any of the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including, without limitation, as a result of the
Company's issuance of the Company Securities and the Purchasers' ownership of
the Company Securities.
(r) Disclosure. The Company confirms that neither it nor, to its
knowledge, any other Person acting on its behalf, has provided any of the
Purchasers or their agents or counsel with any information that constitutes or
might constitute material, nonpublic information. The Company understands and
confirms that each of the Purchasers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided
to the Purchasers regarding the Company, its business and the transactions
contemplated hereby, including the Schedules to this Agreement, furnished by or
on behalf of the Company are true and correct and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. No event or circumstance has
occurred or information exists with respect to the Company or its business,
properties, prospects, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed. The
Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3.2.
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(s) Acknowledgment Regarding Purchasers' Purchase of Company
Securities. The Company acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm's length purchaser with respect to this
Agreement and the transactions contemplated hereby. The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company or any other Purchaser (or in any similar capacity) with respect to
this Agreement and the transactions contemplated hereby and any advice given by
any Purchaser or any of their respective representatives or agents in connection
with this Agreement and the transactions contemplated hereby is merely
incidental to such Purchaser's purchase of the Company Securities. The Company
further represents to each Purchaser that the Company's decision to enter into
this Agreement has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
(t) Patents and Trademarks. The Company has, or has rights to use, all
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and other similar rights that are necessary or
material for use in connection with its business as described in the SEC Reports
and which the failure to so have could have a Material Adverse Effect
(collectively, the "INTELLECTUAL PROPERTY RIGHTS"). The Company has not received
written notice that the Intellectual Property Rights used by the Company
violates or infringes upon the rights of any Person. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property
Rights.
(u) Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses and location in which the Company is
engaged. The Company has no knowledge that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost.
(v) Regulatory Permits. The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to possess such
permits could not, individually or in the aggregate, have or result in a
Material Adverse Effect ("MATERIAL PERMITS"), and the Company has not received
any written notice of proceedings relating to the revocation or modification of
any Material Permit.
(w) Transactions With Affiliates and Employees. Except as set forth in
SEC Reports filed at least ten days prior to the date hereof or on Schedule
3.1(w), none of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a party to any
transaction with the Company (other than for services as employees, officers and
directors), 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 officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
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3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, as to itself only and for no other Purchaser, represents and warrants to
the Company as follows:
(a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The purchase by such Purchaser of the
Shares and the Additional Investment Rights hereunder has been duly authorized
by all necessary action on the part of such Purchaser. This Agreement has been
duly executed and delivered by such Purchaser and constitutes the valid and
binding obligation of such Purchaser, enforceable against it in accordance with
its terms.
(b) Investment Intent. Such Purchaser is acquiring the Company
Securities as principal for its own account for investment purposes only and not
with a view to or for distributing or reselling such Company Securities or any
part thereof, without prejudice, however, to such Purchaser's right, subject to
the provisions of this Agreement, at all times to sell or otherwise dispose of
all or any part of such Company Securities pursuant to an effective registration
statement under the Securities Act or under an exemption from such registration
and in compliance with applicable federal and state securities laws. Nothing
contained herein shall be deemed a representation or warranty by such Purchaser
to hold Company Securities for any period of time. Such Purchaser does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Company Securities.
(c) Purchaser Status. At the time such Purchaser was offered the
Shares and the Additional Investment Rights, it was, and at the date hereof it
is, an "accredited investor" as defined in Rule 501(a) under the Securities Act.
(d) Experience of such Purchaser. Such Purchaser, either alone or
together with its representatives has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Company Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is
able to bear the economic risk of an investment in the Company Securities and,
at the present time, is able to afford a complete loss of such investment. The
Purchaser understands that its investment in the Company Securities involves a
high degree of risk.
(e) Access to Information. Such Purchaser acknowledges that it has
reviewed the Disclosure Materials and has been afforded: (i) the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Company Securities and the merits and risks of investing in the
Company Securities; (ii) access to information about the Company and its
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect such
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Purchaser's right to rely on the truth, accuracy and completeness of the
Disclosure Materials and the Company's representations and warranties contained
in the Transaction Documents.
(f) Certain Trading Limitations. Each Purchaser agrees that beginning
on the date hereof until the earlier to occur of (a) 90 days from the Closing
Date and (b) the effective date of the registration statement to be filed in
connection with the sale of the Shares, it will not enter into any Short Sales.
For purposes of this Section 3.2, a "SHORT SALE" by a Purchaser means a sale of
Common Stock that is marked as a short sale and that is executed at a time when
such Purchaser has no equivalent offsetting long position in the Common Stock.
For purposes of determining whether a Purchaser has an equivalent offsetting
long position in the Common Stock, all Common Stock that would be issuable upon
exercise in full of all Options then held by such Purchaser (assuming that such
Options were then fully exercisable, notwithstanding any provisions to the
contrary, and giving effect to any exercise price adjustments scheduled to take
effect in the future) shall be deemed to be held long by such Purchaser.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) Company Securities may only be disposed of pursuant to an
effective registration statement under the Securities Act or pursuant to an
available exemption from the registration requirements of the Securities Act,
and in compliance with any applicable state securities laws. In connection with
any transfer of Company Securities other than pursuant to an effective
registration statement or to the Company or pursuant to Rule 144(k), except as
otherwise set forth herein, the Company may require the transferor to provide to
the Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration under the Securities
Act. The Company hereby consents to and agrees to register on the books of the
Company and with its transfer agent, without any such legal opinion (unless
otherwise required by its transfer agent), any transfer of Company Securities by
a Purchaser to an Affiliate of such Purchaser, provided that the transferee
agrees to be bound by all of the applicable provisions of the Transaction
Documents, including the representations of the Purchaser, and certifies to the
Company that it is an "accredited investor" as defined in Rule 501(a) under the
Securities Act.
(b) The Purchasers agree to the imprinting, so long as is required by
this Section 4.1(b), of the following legend on any certificate evidencing
Company Securities:
[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
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SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY
LAWS. NOTWITHSTANDING THE FOREGOING, THESE SECURITIES [AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES] MAY BE
PLEDGED IN COMPLIANCE WITH APPLICABLE LAWS AND IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY SUCH SECURITIES.
Certificates evidencing Company Securities shall not be required to contain such
legend or any other legend (i) following any sale of such Company Securities
pursuant to Rule 144, or (iii) if such Company Securities are eligible for sale
under Rule 144(k) or has been sold pursuant to an effective registration
statement, or (iv) if it is determined by the Company's counsel that such legend
is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Staff of the
Commission). The Company shall cause its counsel to issue the legal opinion
included in the Transfer Agent Instructions to the Company's transfer agent on
the Effective Date. Following the Effective Date or at such earlier time as a
legend is no longer required for certain Company Securities, the Company will no
later than three Trading Days following the delivery by a Purchaser to the
Company or the Company's transfer agent of a legended certificate representing
such Company Securities and an opinion of counsel to the extent required by
Section 4.1(a), deliver or cause to be delivered to such Purchaser a certificate
representing such Company Securities that is free from all restrictive and other
legends. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section.
(c) The Company acknowledges and agrees that a Purchaser may from time
to time pledge or grant a security interest in some or all of the Company
Securities in connection with a bona fide margin agreement or other loan or
financing arrangement secured by the Company Securities and, if required under
the terms of such agreement, loan or arrangement, such Purchaser may transfer
pledged or secured Company Securities to the pledgees or secured parties. Such a
pledge or transfer would not be subject to approval of the Company and no legal
opinion of the pledgee, secured party or pledgor shall be required in connection
therewith (unless otherwise required by the Company's transfer agent). Further,
no notice shall be required of such pledge. At the appropriate Purchaser's
expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Company Securities may reasonably request in
connection with a pledge or transfer of the Company Securities, including the
preparation and filing of any required prospectus supplement under Rule
424(b)(3) of the Securities Act or other applicable provision of the Securities
Act to appropriately amend the list of selling stockholders thereunder.
4.2 Furnishing of Information. As long as any Purchaser owns Company
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof
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pursuant to the Exchange Act. Upon the request of any Purchaser, the Company
shall deliver to such Purchaser a written certification of a duly authorized
officer as to whether it has complied with the preceding sentence. As long as
any Purchaser owns Company Securities, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Purchasers and
make publicly available in accordance with paragraph (c) of Rule 144 such
information as is required for the Purchasers to sell the Company Securities
under Rule 144. The Company further covenants that it will take such further
action as any holder of Company Securities may reasonably request to satisfy the
provisions of Rule 144 applicable to the issuer of securities relating to
transactions for the sale of securities pursuant to Rule 144.
4.3 Integration. The Company shall not, and shall use its best efforts to
ensure that no Affiliate thereof shall, sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) in any transaction that would be integrated with the
offer or sale of the Company Securities in a manner that would require the
registration under the Securities Act of the sale of the Company Securities to
the Purchasers or that would be integrated with the offer or sale of the Company
Securities for purposes of the rules and regulations of any Trading Market.
4.4 Reservation of Securities. The Company shall maintain a reserve from
its duly authorized shares of Common Stock for issuance pursuant to the
Transaction Documents in such amount as may be required to fulfill its
obligations in full under the Transaction Documents. In the event that at any
time the then authorized shares of Common Stock are insufficient for the Company
to satisfy its obligations in full under the Transaction Documents, the Company
shall promptly take such actions as may be required to increase the number of
authorized shares.
4.5 Subsequent Placements.
(a) From the date hereof until 90 Trading Days after the Effective
Date, the Company will not, directly or indirectly, offer, sell, grant any
option to purchase, or otherwise dispose of (or announce any offer, sale, grant
or any option to purchase or other disposition of) any of its equity or equity
equivalent securities, including without limitation any debt, preferred stock or
other instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for Common Stock.
(b) The restrictions contained in paragraph (a) of this Section 4.5
shall not apply to (A) any issuance of Common Stock or grant of Options to
employees, officers, directors of or consultants or advisors to the Company, in
each case, pursuant to a stock-based plan duly approved by the Company's board
of directors; (B) the issuance of securities in connection with a joint venture
or development agreement or strategic partnership or similar agreement approved
by the Company's board of directors, a primary purpose of which is not to raise
equity capital; or (C) upon exercise, conversion or exchange of any Common Stock
Equivalents described in Schedule 3.1(f) (provided that such exercise or
conversion occurs in accordance with the terms thereof, without amendment or
modification).
4.6 Securities Laws Disclosure; Publicity. The Company shall, on the
Closing Date, issue a press release reasonably acceptable to the Lead Purchaser
disclosing all material terms of the transactions contemplated hereby. On or
before 8:30 a.m., Eastern Standard time, on the first
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Trading Day following the Closing Date, the Company shall file a Current Report
on Form 8-K with the Commission (the "8-K FILING") describing the terms of the
transactions contemplated by the Transaction Documents and including as exhibits
to such Current Report on Form 8-K this Agreement and the form of Additional
Investment Rights, in the form required by the Exchange Act. Thereafter, the
Company shall timely file any filings and notices required by the Commission or
applicable law with respect to the transactions contemplated hereby and provide
copies thereof to the Purchasers promptly after filing. Except with respect to
the 8-K Filing (a copy of which will be provided to the Purchasers for their
review as early as practicable prior to its filing), the Company shall, at least
two Trading Days prior to the filing or dissemination of any disclosure required
by this paragraph, provide a copy thereof to the Purchasers for their review.
The Company and the Lead Purchasers shall consult with each other in issuing any
press releases or otherwise making public statements or filings and other
communications with the Commission or any regulatory agency or Trading Market
with respect to the transactions contemplated hereby, and no party shall issue
any such press release or otherwise make any such public statement, filing or
other communication without the prior consent of the other, except if such
disclosure is required by law, in which case the disclosing party shall promptly
provide the other party with prior notice of such public statement, filing or
other communication. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except to the
extent such disclosure (but not any disclosure as to the controlling Persons
thereof) is required by law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure. The
Company shall not, and shall use its reasonable best efforts to cause each of
its officers, directors, employees and agents not to, provide any Purchaser with
any material nonpublic information regarding the Company or any of its
Subsidiaries from and after the filing of the 8-K Filing without the express
written consent of such Purchaser. In the event of a breach of the foregoing
covenant by the Company or any of its or their respective officers, directors,
employees and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Purchaser shall have the right to make a public
disclosure, in the form of a press release or otherwise, of such material
nonpublic information without the prior approval by the Company or any of its or
their respective officers, directors, employees or agents. No Purchaser shall
have any liability to the Company or any of its or their respective officers,
directors, employees, shareholders or agents for any such disclosure. Subject to
the foregoing, neither the Company nor any of the Purchasers 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 (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith or (ii) as is
required by applicable law and regulations (provided that in the case of clause
(i) the Purchasers shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release).
4.7 Use of Proceeds. Except as set forth on Schedule 4.6, the Company shall
use the net proceeds from the sale of the Company Securities hereunder for
working capital and general corporate purposes.
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4.8 Reimbursement. If any Purchaser or any of its Affiliates or any
officer, director, partner, controlling person, employee or agent of a Purchaser
or any of its Affiliates (a "RELATED PERSON") becomes involved in any capacity
in any Proceeding brought by or against any Person in connection with or as a
result of the transactions contemplated by the Transaction Documents (other than
relating to the Registration Statement, the Prospectus or any other matter
covered by the indemnity in Article VI hereof), the Company will indemnify and
hold harmless such Purchaser or Related Person for its reasonable legal and
other expenses (including the reasonable costs of any investigation, preparation
and travel) and for any Losses incurred in connection therewith, if and as such
expenses or Losses are actually incurred, excluding only Losses that arise out
of or result directly from such Purchaser's or Related Person's gross negligence
or willful misconduct. In addition, (i) the Company shall indemnify and hold
harmless each Purchaser and Related Person from and against any and all Losses,
if and as actually incurred, arising out of or relating to any breach by the
Company of any of the representations, warranties or covenants made by the
Company in this Agreement or any other Transaction Document, or any allegation
by a third party that, if true, would constitute such a breach. The conduct of
any Proceedings for which indemnification is available under this paragraph
shall be governed by Section 6.4(c) below. The indemnification obligations of
the Company under this paragraph shall be in addition to any liability that the
Company may otherwise have and shall be binding upon and inure to the benefit of
any successors, assigns, heirs and personal representatives of the Purchasers
and any such Related Persons. The Company also agrees that neither the
Purchasers nor any Related Persons shall have any liability to the Company or
any Person asserting claims on behalf of or in right of the Company in
connection with or as a result of the transactions contemplated by the
Transaction Documents, except to the extent that any Losses incurred by the
Company arise out of or result from the gross negligence or willful misconduct
of the applicable Purchaser or Related Person in connection with such
transactions or arise out of or relate to any breach by a Purchaser of any of
the representations, warranties or covenants made by a Purchaser in this
Agreement or any other Transaction Document. If the Company breaches its
obligations under any Transaction Document, then, in addition to any other
liabilities the Company may have under any Transaction Document or applicable
law, the Company shall pay or reimburse the Purchasers on demand for all costs
of collection and enforcement (including reasonable attorneys fees and expenses)
actually incurred. Without limiting the generality of the foregoing, the Company
specifically agrees to reimburse the Purchasers on demand for all actually
incurred costs of enforcing the indemnification obligations in this paragraph.
ARTICLE V
CONDITIONS
5.1 Conditions Precedent to the Obligations of the Purchasers. The
obligation of each Purchaser to acquire Company Securities at the Closing is
subject to the satisfaction or waiver by such Purchaser, at or before the
Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing as though made on and as
of such date; and
16
(b) Performance. The Company and each other Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by it at or prior to the Closing.
5.2 Conditions Precedent to the Obligations of the Company. The obligation
of the Company to sell Company Securities at the Closing is subject to the
satisfaction or waiver by the Company, at or before the Closing, of each of the
following conditions:
(a) Representations and Warranties. The representations and warranties
of the Purchasers contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on
and as of such date; and
(b) Performance. The Purchasers shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Purchasers at or prior to the Closing.
ARTICLE VI
REGISTRATION RIGHTS
6.1 Shelf Registration
(a) As promptly as possible, and in any event on or prior to the
Filing Date, the Company shall prepare and file with the Commission a "shelf"
Registration Statement covering the resale of all Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form in accordance herewith as the
Purchasers may consent) and shall contain (except if otherwise directed by the
Purchasers) the "Plan of Distribution" attached hereto as Exhibit D.
(b) Subject to the receipt by the Company of the legal name of each
Purchaser and the number of Company Securities beneficially owned by each such
Purchaser, the Company shall use its best efforts to cause the Registration
Statement to be declared effective by the Commission as promptly as possible
after the filing thereof, but in any event on or prior to the Required
Effectiveness Date, and shall use its reasonable best efforts to keep the
Registration Statement continuously effective under the Securities Act until the
earlier of (i) as to each Purchaser, the date on which the Purchaser can sell
within a 90-day period all Registrable Securities covered by the Registration
Statement without restriction pursuant to the volume limitation of Rule 144(e);
or (ii) the date that all Registrable Securities covered by such Registration
Statement have been sold or can be sold publicly under Rule 144(k) (the
"EFFECTIVENESS PERIOD").
(c) The Company shall notify each Purchaser in writing promptly (and
in any event within one Business Day) after receiving notification from the
Commission that the Registration Statement has been declared effective.
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(d) Notwithstanding anything in this Agreement to the contrary, the
Company may, by written notice to the Purchasers, suspend sales under a
Registration Statement after the Effective Date thereof and/or require that the
Purchasers immediately cease the sale of shares of Common Stock pursuant thereto
and/or defer the filing of any subsequent Registration Statement if the Company
is engaged in a material merger, acquisition or sale and the Board of Directors
determines in good faith, by appropriate resolutions, that, as a result of such
sales activity it would be materially detrimental to the Company (other than
relating solely to the price of the Common Stock). Upon receipt of such notice,
each Purchaser shall immediately discontinue any sales of Registrable Securities
pursuant to such registration until such Purchaser has received copies of a
supplemented or amended Prospectus or until such Purchaser is advised in writing
by the Company that the then-current Prospectus may be used and has received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in such Prospectus. In no event, however, shall this
right be exercised to suspend sales beyond the period during which (in the good
faith determination of the Company's Board of Directors) the failure to require
such suspension would be materially detrimental to the Company. Furthermore, in
no event may the Company exercise its rights hereunder for a period of more than
5 consecutive Trading Days or more than 20 Trading Days in any twelve month
period. Immediately after the end of any suspension period under this Section
6(e), the Company shall take all necessary actions (including filing any
required supplemental prospectus) to restore the effectiveness of the applicable
Registration Statement and the ability of the Purchasers to publicly resell
their Registrable Securities pursuant to such effective Registration Statement.
(e) The Company shall not, prior to the Effective Date of the
Registration Statement, prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than a
registration statement on Form S-8 covering shares issuable under the Company's
1999 Stock Incentive Plan.
(f) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 6.1 that each Purchaser
shall furnish to the Company the legal name of such Purchaser, the number of
Company Securities beneficially owned by each such Purchaser and any additional
information required by the SEC.
6.2 Registration Procedures. In connection with the Company's registration
obligations hereunder, the Company shall:
(a) Not less than two Trading Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated or deemed to be
incorporated therein by reference), the Company shall (i) furnish to the Lead
Purchasers and Purchaser Counsel copies of all such documents proposed to be
filed, and (ii) cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of Purchaser Counsel, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which Purchasers holding a majority of the Registrable
Securities shall reasonably object within two Trading Days of receipt.
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(b) (i) Subject to Section 6.1(d), prepare and file with the
Commission such amendments, including post-effective amendments, to each
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep the Registration Statement continuously effective, as to the
applicable Registrable Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; (iii) respond as promptly as reasonably possible, and in any event
within ten days, to any comments received from the Commission with respect to
the Registration Statement or any amendment thereto and as promptly as
reasonably possible provide the Purchasers true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Purchasers thereof set forth in the Registration Statement as so amended or in
such Prospectus as so supplemented.
(c) Notify the Purchasers and Purchaser Counsel as promptly as
reasonably possible of any of the following events: (i) any Registration
Statement or any post-effective amendment is declared effective; (ii) the
Commission issues any stop order suspending the effectiveness of any
Registration Statement or initiates any Proceedings for that purpose; (iii) the
Company receives notice of any suspension of the qualification or exemption from
qualification of any Registrable Securities for sale in any jurisdiction, or the
initiation or threat of any Proceeding for such purpose; or (iv) the financial
statements included in any Registration Statement become ineligible for
inclusion therein or any statement made in any Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference is untrue in any material respect or any revision to a Registration
Statement, Prospectus or other document is required so that it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(d) Use its best efforts to avoid the issuance of or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of any
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as possible.
(e) If requested by a Purchaser, furnish to such Purchaser and
Purchaser Counsel, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules and all exhibits to the extent requested by such Person
(including those previously furnished or incorporated by reference) promptly
after the filing of such documents with the Commission.
(f) Promptly deliver to each Purchaser and Purchaser Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request. The Company hereby consents to the use of such Prospectus
and each amendment or supplement
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thereto by each of the selling Purchasers in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto [to the extent permitted
by federal and state securities laws and regulations].
(g) (i) In the time and manner required by each Trading Market,
prepare and file with such Trading Market an additional shares listing
application covering all of the Registrable Securities; (ii) take all steps
necessary to cause such Registrable Securities to be approved for listing on
each Trading Market as soon as possible thereafter; (iii) provide to the
Purchasers evidence of such listing; and (iv) maintain the listing of such
Registrable Securities on each such Trading Market or another Eligible Market.
(h) Prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Purchasers and
Purchaser Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Purchaser requests in writing, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified.
(i) Cooperate with the Purchasers to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to a Registration Statement, which certificates shall
be free, to the extent permitted by this Agreement under law, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Purchasers may request.
(j) Upon the occurrence of any event described in Section 6.2(c)(iv),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(k) Cooperate with any due diligence investigation undertaken by the
Purchasers in connection with the sale of Registrable Securities, including,
without limitation, by making available any documents and information; provided
that the Company will not deliver or make available to any Purchaser material,
nonpublic information unless such Purchaser specifically requests in advance to
receive material, nonpublic information in writing.
(l) Comply with all applicable rules and regulations of the
Commission.
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6.3 Registration Expenses. The Company shall pay (or reimburse the
Purchasers for) all fees and expenses incident to the performance of or
compliance with Article VI of this Agreement by the Company, including without
limitation (a) all registration and filing fees and expenses, including without
limitation those related to filings with the Commission, any Trading Market and
in connection with applicable state securities or Blue Sky laws, (b) printing
expenses (including without limitation expenses of printing certificates for
Registrable Securities and of printing prospectuses requested by the
Purchasers), (c) messenger, telephone and delivery expenses, (d) fees and
disbursements of counsel for the Company, (e) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, and (f) all listing fees to be paid
by the Company to the Trading Market.
6.4 Indemnification
(a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Purchaser,
the officers, directors, partners, members, agents and employees of each
Purchaser, each Person who controls any such Purchaser (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, partners, members, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all Losses, as incurred, arising out of or relating to any
untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (i) such untrue statements, alleged untrue
statements, omissions or alleged omissions are based solely upon information
regarding such Purchaser furnished in writing to the Company by or on behalf of
such Purchaser expressly for use therein, or such information relates to such
Purchaser or such Purchaser's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Purchaser
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto or (iii) in the case of an
occurrence of an event of the type specified in Section 6.2(c)(ii)-(iv), such
Purchaser uses an outdated or defective Prospectus after the Company has
notified such Purchaser in writing that the Prospectus is outdated or defective
and prior to the receipt by such Purchaser of the Advice contemplated in Section
6.5. The Company shall notify the Purchasers promptly of the institution, threat
or assertion of any Proceeding of which the Company is aware in connection with
the transactions contemplated by this Agreement.
(b) Indemnification by Purchasers. Each Purchaser shall, severally and
not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review) arising solely out of any untrue statement of a material
fact contained in the Registration
21
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or arising out of any omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading to the extent, but only
to the extent, that such untrue statement or omission is contained in any
information furnished in writing by or on behalf of such Purchaser to the
Company specifically for use in connection with such Registration Statement or
such Prospectus or to the extent that (i) such untrue statements or omissions
are based solely upon information regarding such Purchaser furnished in writing
to the Company by such Purchaser expressly for use therein, or to the extent
that such information relates to such Purchaser or such Purchaser's proposed
method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Purchaser expressly for use in the Registration
Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (iii) in the case of an occurrence of an event of the type
specified in Section 6.2(c)(ii)-(iv), such Purchaser uses an outdated or
defective Prospectus after the Company has notified such Purchaser in writing
that the Prospectus is outdated or defective and prior to the receipt by such
Purchaser of the Advice contemplated in Section 6.5. In no event shall the
liability of any selling Purchaser hereunder be greater in amount than the
dollar amount of the net proceeds received by such Purchaser upon the sale of
the Registrable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"INDEMNIFIED PARTY"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (i) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (iii) the
named parties to any such Proceeding (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). It being understood, however, that the Indemnifying
Party shall not, in connection with any one such Proceeding be liable for the
22
fees and expenses of more than one separate firm of attorneys at any time for
all Indemnified Parties, which firm shall be appointed by a majority of the
Indemnified Parties; provided, however, that in the case a single firm of
attorneys would be inappropriate due to actual or potential differing interests
or conflicts between such Indemnified Parties and any other party represented by
such counsel in such Proceeding or otherwise, then the Indemnifying Party shall
be liable for the fees and expenses of one additional firm of attorneys with
respect to such Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Trading
Days of written notice thereof to the Indemnifying Party (regardless of whether
it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 6.4(a)
or (b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 6.4(c), any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.4(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6.4(d), no Purchaser shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such Purchaser from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Purchaser has
23
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6.5 Dispositions. Each Purchaser agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement. Each Purchaser further agrees that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Sections
6.2(c)(ii), (iii) or (iv), such Purchaser will discontinue disposition of such
Registrable Securities under the Registration Statement until such Purchaser's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement contemplated by Section 6.2(j), or until it is advised in writing (the
"ADVICE") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph.
6.6 No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Purchasers in such capacity pursuant hereto)
may include securities of the Company in the Registration Statement other than
the Registrable Securities, and the Company shall not after the date hereof
enter into any agreement providing any such right to any of its security
holders.
6.7 Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Purchaser written notice of
such determination and if, within ten days after receipt of such notice, any
such Purchaser shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Purchaser requests to be registered.
ARTICLE VII
MISCELLANEOUS
7.1 Termination. This Agreement may be terminated by the Company or the
Lead Purchaser, by written notice to the other parties, if the Closing has not
been consummated by the third Business Day following the date of this Agreement;
provided that no such termination will affect the right of any party to xxx for
any breach by the other party (or parties).
24
7.2 Fees and Expenses. At the Closing, the Company shall pay to Lead
Purchaser an aggregate of $25,000 for their legal fees and expenses incurred in
connection with its due diligence and the preparation and negotiation of the
Transaction Documents. In lieu of the foregoing payment, Lead Purchaser may
retain such amount at the Closing or require the Company to pay such amount
directly to Purchaser Counsel. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees, stamp taxes and other taxes and duties levied in connection with the
sale and issuance of the Company Securities.
7.3 Entire Agreement. The Transaction Documents, together with the Exhibits
and Schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. At or
after the Closing, and without further consideration, the Company will execute
and deliver to the Purchasers such further documents as may be reasonably
requested in order to give practical effect to the intention of the parties
under the Transaction Documents. Notwithstanding anything to the contrary
herein, Company Securities may be assigned to any Person in connection with a
bona fide margin account or other loan or financing arrangement secured by such
Company Securities.
7.4 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
deposit with a nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given. The
addresses and facsimile numbers for such notices and communications are those
set forth on the signature pages hereof, or such other address or facsimile
number as may be designated in writing hereafter, in the same manner, by any
such Person.
7.5 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and each of the Purchasers or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right. Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Purchasers under Article VI and
that does not directly or indirectly affect the rights of other Purchasers may
be given by Purchasers holding at least a majority of the Registrable Securities
to which such waiver or consent relates.
25
7.6 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
7.7 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchasers. Any Purchaser may assign
its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers all Company Securities held by it, provided such transferee agrees in
writing to be bound, with respect to the transferred Company Securities, by the
provisions hereof that apply to the "Purchasers." Notwithstanding anything to
the contrary herein, Company Securities may be assigned to any Person in
connection with a bona fide margin account or other loan or financing
arrangement secured by such Company Securities.
7.8 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except that each Related Person is an intended third party
beneficiary of Section 4.7 and each Indemnified Party is an intended third party
beneficiary of Section 6.4 and (in each case) may enforce the provisions of such
Sections directly against the parties with obligations thereunder.
7.9 Governing Law; Venue; Waiver of Jury Trial. THE CORPORATE LAWS OF THE
STATE OF DELAWARE SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE
COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THE COMPANY AND PURCHASERS HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY
OR ANY PURCHASER HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE
ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE,
AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY
OR ANY PURCHASER, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
(WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD
AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN ANY
26
WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND
PURCHASERS HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.
7.10 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery and/or exercise of
the Company Securities, as applicable.
7.11 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together 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, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
7.12 Severability. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
7.13 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.
7.14 Replacement of Securities. If any certificate or instrument evidencing
any Company Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also comply with all applicable regulations and
reasonable procedures and pay any reasonable third-party costs associated with
the issuance of such replacement Company Securities.
7.15 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
27
7.16 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser hereunder or pursuant to the Additional Investment
Rights 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 by 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.
7.17 Adjustments in Share Numbers and Prices. In the event of any stock
split, subdivision, dividend or distribution payable in shares of Common Stock
(or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof, each
reference in any Transaction Document to a number of shares or a price per share
shall be amended to appropriately account for such event.
7.18 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. The decision of each Purchaser to
purchase Shares pursuant to this Agreement has been made by such Purchaser
independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or of the Subsidiary which may have been
made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser or any of its agents or employees shall have any
liability to any other Purchaser (or any other person) relating to or arising
from any such information, materials, statements or opinions. Nothing contained
herein or in any Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Document. Each Purchaser acknowledges that no other Purchaser has
acted as agent for such Purchaser in connection with making its investment
hereunder and that no other Purchaser will be acting as agent of such Purchaser
in connection with monitoring its investment hereunder. Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.
[Signature pages to follow]
28
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
ABLE LABORATORIES
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
Title: President and CEO
Address for Notice:
Able Laboratories
0 Xxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000 0000
Attn: Chief Financial Officer
With a copy to: Xxxxx Xxxx XXX
000 Xxxxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attn: Xxxxxx X'Xxxxxx
MAINFIELD ENTERPRISES, INC.
By: /s/ Avi Vidger
Name: Avi Vidger
Title: Authorized Signatory
Address for Notice:
Mainfield Enterprises, Inc.
c/o Sage Enterprises Growth, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Eldad Gal
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to: Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
CRANSHIRE CAPITAL, L.P.
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxxx
Title: President - Downsview Capital, Inc.,
The General Partner
Address for Notice:
Cranshire Capital, L.P.
c/o Xxxxxxxx X. Xxxxx
000 Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
THE OBERWEIS EMERGING GROWTH PORTFOLIO
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Portfolio Manager
Address for Notice:
Oberweis Asset Management
000 Xxx Xxxxx Xxxxx, Xxx. 000
Xxxxx Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attn: Xxx Xxxxxxxx, CFA
HIGHLINE CAPITAL PARTNERS, LP
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Managing Member of G.P.
Address for Notice:
Highland Capital Partners, LP
1270 Avenue of the Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx, CFO
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
HIGHLINE CAPITAL PARTNERS QP, LP
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Managing Member of GP
Address for Notice:
Highline Capital Partners QP, LP
1270 Avenue of the Xxxxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx, CFO
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
HIGHLINE CAPITAL INTERNATIONAL, LTD.
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Director and Managing Member of
Highline Capital Management Investments
Address for Notice:
Highline Capital International, Ltd.
1270 Avenue of the Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx, CFO
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
/s/ Xxxxx Xxxx, on behalf of Xxxxx Xxxxxx as
--------------------------------------------
per Investment Management Agreement
-----------------------------------
XXXXX XXXXXX
Address for Notice:
Xxxxx Xxxxxx
C/o/ Highline Capital
1270 Avenue of the Xxxxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
SMITHFIELD FIDUCIARY LLC
By: /s/ Xxxx X. Chill
Name: Xxxx X. Chill
Title: Authorized Signatory
Address for Notice:
Smithfield Fiduciary LLC
c/o Highbridge Capital Management, LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxx/Xxxx X. Chill
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Rx HEALTHCARE PARTNERS I LP
By: Rx Associates LLC, General Partner
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Member
Address for Notice:
Rx Healthcare Partners I LP
c/o Rx Capital Management LP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx, Esq.
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxx.
Xxx Xxxx, XX 00000
Sole counsel to the Purchaser, which is
acting independently and not as part of any
"group" for purposes of Section 13(d) in
connection with this transaction
Rx HEALTHCARE PARTNERS II LP
By: Rx Associates LLC, General Partner
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Member
Address for Notice:
Rx Healthcare Partners II LP
c/o Rx Capital Management LP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx, Esq.
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxx.
Xxx Xxxx, XX 00000
Sole counsel to the Purchaser, which is
acting independently and not as part of any
"group" for purposes of Section 13(d) in
connection with this transaction
Rx HEALTHCARE OVERSEAS FUND
By: Rx Capital Management LP, Investment
Manager
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: President
Address for Notice:
Rx Healthcare Overseas Fund
c/o Rx Capital Management LP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx, Esq.
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxx.
Xxx Xxxx, XX 00000
Sole counsel to the Purchaser, which is
acting independently and not as part of any
"group" for purposes of Section 13(d) in
connection with this transaction
PERRY PARTNERS, LP
By: /s/ Xxxxxxx Xxxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxxx
Title: CFO
Address for Notice:
Perry Partners, LP
c/o Perry Capital, LLC
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
PERRY PARTNERS INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxxx
Title: CFO
Address for Notice:
Perry Partners International, Inc.
c/o Perry Capital, LLC
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
UBS X'XXXXXX LLC f/b/o PIPES CORPORATE
STRATEGIES LTD.
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Executive Director
Address for Notice:
UBS X'Xxxxxx LLC f/b/o PIPES Corporate
Strategies Ltd.
c/o UBS X'Xxxxxx
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
UBS X'XXXXXX LLC f/b/o X'XXXXXX GLOBAL
CONVERTIBLE ARBITRAGE MASTER LIMITED
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Executive Director
Address for Notice:
UBS X'Xxxxxx LLC f/b/o X'Xxxxxx Global
Convertible Arbitrage Master Limited
c/o UBS X'Xxxxxx
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
EVERSPRING MASTER FUND LTD.
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxxx
Title: Managing Member/Director
Address for Notice:
Everspring Master Fund Ltd.
x/x Xxxx xx Xxxxxxx (Xxxxxx) Xxxxxxx
00X Xxxxxxx Xxxxx
Xx. Xxx'x Drive
Xxxxxx Town, Grand Cayman
Cayman Islands, B.W.I.
Attn: Xxx Xxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
SOVEREIGN GLOBAL AUSTRALIAN US SMALLER FUND
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Sr. VP, Director
Address for Notice:
Sovereign Global Australian US Smaller Fund
c/o Schroder Investment Management North
America, Inc.
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Attn:
Facsimile No.:
Telephone No.:
SCHRODER INTERNATIONAL SELECTION US SMALLER
COS FUND
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Sr. VP, Director
Address for Notice:
Schroder International Selection US Smaller
Cos Fund
c/o Schroder Investment Management North
America, Inc.
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Attn:
Facsimile No.:
Telephone No.:
SCHRODER US OPPORTUNITIES FUND
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Sr. VP/Director
Address for Notice:
Schroder US Opportunities Fund
c/o Schroder Investment Management North
America, Inc.
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Attn:
Facsimile No.:
Telephone No.:
XXXXX FARGO SMALL CAP OPPORTUNITIES FUND
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Sr. VP, Director
Address for Notice:
Xxxxx Fargo Small Cap Opportunities Fund
c/o _______________________________________
___________________________________________
___________________________________________
Attn:
Facsimile No.:
Telephone No.:
SF CAPITAL PARTNERS LTD.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signatory
Address for Notice:
SF Capital Partners Ltd.
0000 Xxxxx Xxxx Xxxxx
Xx. Xxxxxxx, XX 00000
Attn:
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Exhibits:
A Form of Additional Investment Right
B Company Transfer Agent Instructions
C Opinion of Company Counsel
D Plan of Distribution
SCHEDULE A
------------------------------------------------ ----------- ----------------
COMPANY
PURCHASER UNITS PURCHASE PRICE
------------------------------------------------ ----------- ----------------
Manfield Enterprises, Inc. 600,000 $11,375,000
------------------------------------------------ ----------- ----------------
Cranshire Capital, L.P. 155,000 $ 2,945,000
------------------------------------------------ ----------- ----------------
The Oberweis Emerging Growth Portfolio
(Holder is UMBTRU) 50,000 $ 950,000
------------------------------------------------ ----------- ----------------
Highline Capital Partners, L.P. 27,900 $ 530,100
------------------------------------------------ ----------- ----------------
Highline Capital Partners QP, L.P. 39,800 $ 756,200
------------------------------------------------ ----------- ----------------
Highline Capital International, Ltd. 81,800 $ 1,554,200
------------------------------------------------ ----------- ----------------
Xxxxx Xxxxxx 500 $ 9,500
------------------------------------------------ ----------- ----------------
Rx Healthcare Partners I LP 5,600 $ 106,400
------------------------------------------------ ----------- ----------------
Rx Healthcare Partners II LP 52,800 $ 1,003,200
------------------------------------------------ ----------- ----------------
Rx Healthcare Overseas Fund 41,600 $ 790,400
------------------------------------------------ ----------- ----------------
Perry Partners, LP 41,010 $ 779,190
------------------------------------------------ ----------- ----------------
Perry Partners International, Inc. 108,990 $ 2,070,810
------------------------------------------------ ----------- ----------------
UBS X'Xxxxxx LLC f/b/o PIPES Corporate
Strategies Ltd. 25,000 $ 475,000
------------------------------------------------ ----------- ----------------
UBS X'Xxxxxx LLC f/b/o X'Xxxxxx Global 25,000 $ 475,000
Convertible Arbitrage Master Limited
------------------------------------------------ ----------- ----------------
Smithfield Fiduciary LLC 155,000 $ 2,945,000
------------------------------------------------ ----------- ----------------
Everspring Master Fund Ltd. 20,000 $ 380,000
------------------------------------------------ ----------- ----------------
Sovereign Global Australian US Smaller Fund 4,400 $ 83,600
------------------------------------------------ ----------- ----------------
Schroder International Selection US Smaller
Cos Fund 46,000 $ 874,000
------------------------------------------------ ----------- ----------------
Schroder US Opportunities Fund 5,600 $ 106,400
------------------------------------------------ ----------- ----------------
Xxxxx Fargo Small Cap Opportunities Fund 44,000 $ 836,000
------------------------------------------------ ----------- ----------------
SF Capital Partners Ltd. 70,000 $ 1,330,000
------------------------------------------------ ----------- ----------------
TOTAL 1,600,000 $30,375,000
------------------------------------------------ ----------- ----------------
