Exhibit 2
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") is made and
entered into as of August __, 2004 (the "EXECUTION DATE"), by and among Warburg,
Xxxxxx Investors, L.P., a Delaware limited partnership ("WARBURG INVESTORS"),
Warburg, Xxxxxx Investors Liquidating Trust, a New York trust (the "LIQUIDATING
TRUST" and, together with Warburg Investors, referred to herein as "WARBURG"),
Indus International, Inc., a Delaware corporation (the "COMPANY"), and each of
the purchasers listed on Schedule A attached hereto (collectively, the
"PURCHASERS" and individually, a "PURCHASER").
RECITALS
WHEREAS, Warburg Investors has transferred all right, title, benefit
and interest in and to all of its assets to the Liquidating Trust pursuant to
that certain Warburg, Xxxxxx Investors Liquidating Trust Agreement, dated
September 30, 2003 (the "LIQUIDATING TRUST AGREEMENT"), including shares of
common stock, par value $.001 per share of the Company ("COMMON STOCK"), then
beneficially owned by Warburg Investors;
WHEREAS, the Liquidating Trust now wishes to liquidate a portion of the
Common Stock beneficially owned by the Liquidating Trust;
WHEREAS, the Liquidating Trust has a substantial interest in the
Company, and the Company has determined that it is in its best interest to
assist the Liquidating Trust in an orderly disposition of a portion of the
Common Stock beneficially owned by the Liquidating Trust to the Purchasers;
WHEREAS, the Liquidating Trust desires to sell to the Purchasers, and
the Purchasers desire to purchase from the Liquidating Trust, 14,587,544 shares
of Common Stock on the terms and conditions set forth in this Agreement; and
WHEREAS, Warburg Investors, the Liquidating Trust, the Company and each
Purchaser are effecting the transactions contemplated by this Agreement in
reliance upon an applicable exemption from securities registration under the
Securities Act of 1933, as amended (the "SECURITIES ACT").
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
(a) Authorization. The Liquidating Trust has authorized the sale,
pursuant to the terms and conditions of this Agreement, of 14,587,544 shares of
Common Stock beneficially owned by the Liquidating Trust (each, a "SHARE" and
collectively, the "SHARES").
(b) Agreement to Purchase and Sell Securities. Subject to the terms
and conditions of this Agreement, each Purchaser, severally and not jointly,
agrees to purchase, and the Liquidating Trust agrees to sell to each Purchaser,
at the Closing (as defined below), that number of Shares set forth opposite such
Purchaser's name on Schedule A attached hereto. The purchase price of each Share
shall be $1.25 (the "PER SHARE PRICE") and shall be payable as hereafter set
forth.
(c) Obligations Several and Not Joint. The obligations of each
Purchaser under this Agreement 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 this Agreement. The
decision of each of the Purchasers to purchase the Shares pursuant to this
Agreement has been made by such Purchaser independently of any other Purchaser.
Nothing contained herein, and no action taken by any Purchaser pursuant hereto,
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 this Agreement. Each Purchaser
shall be entitled to independently protect and enforce such Purchaser's rights,
including, without limitation, the rights arising out of this Agreement, and it
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.
2. CLOSING. The purchase and sale of the Shares shall take place at the
offices of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, located at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, at 10:00 a.m. eastern time, not later than three (3)
Business Days (as defined below) following the Execution Date, or at such other
time and place as the Liquidating Trust, the Company and Purchasers representing
a majority of the Shares to be purchased mutually agree upon (which time and
place are referred to in this Agreement as the "CLOSING"). At the Closing, the
Liquidating Trust shall, against receipt of full payment for the Shares sold
hereunder by wire transfer of immediately available funds in accordance with the
Liquidating Trust's instructions, deliver, or cause to be delivered, to the
Company certificates representing the Shares for cancellation duly endorsed in
blank and the Company shall deliver to each Purchaser one or more stock
certificates registered in the name of each Purchaser (or in such nominee
name(s) as designated by such Purchaser in the Stock Certificate Questionnaire,
attached hereto as Appendix I (the "STOCK CERTIFICATE QUESTIONNAIRE")),
representing the number of Shares set forth opposite the appropriate Purchaser's
name on Schedule A hereto, and bearing the legend set forth in Section 5(j)
herein; provided, however, the Company may deliver to each Purchaser by
overnight courier the original stock certificate(s) representing the Shares
purchased by such Purchaser no later than the fifth (5th) Business Day following
the Closing Date. Closing documents, other than the stock certificates
representing the Shares, may be delivered by facsimile on the Closing Date with
original signature pages sent by overnight courier. As used in this Agreement,
"CLOSING DATE" means the date of the Closing.
For purposes of this Agreement, "BUSINESS DAY" means any day except
Saturday, Sunday and any day which shall be a federal legal holiday or a day on
which banking institutions in the State of New York are authorized or required
by law or other governmental action to close.
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3. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE COMPANY.
The Company hereby represents and warrants to each Purchaser, Warburg Investors
and the Liquidating Trust that, except as set forth in the SEC Documents (as
defined below):
(a) Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all corporate power and authority required to
(i) own, operate and occupy its properties and to carry on its business as
presently conducted and (ii) enter into this Agreement and the other agreements,
instruments and documents contemplated hereby and to consummate the transactions
contemplated hereby and thereby. The Company is qualified to do business and is
in good standing in each jurisdiction in which the failure to so qualify would
have a Material Adverse Effect. As used in this Agreement, "MATERIAL ADVERSE
EFFECT" means a material adverse effect on, or a material adverse change in, or
a group of such effects on or changes in, the business, financial condition or
results of operations of the Company and its Subsidiaries (as defined below),
taken as a whole. For purposes of this Agreement, "SUBSIDIARIES" means the
entities listed in the SEC Documents or any exhibit thereto as the Company's
subsidiaries.
(b) Capitalization. The capitalization of the Company is as follows:
(i) The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par
value $.001 per share ("PREFERRED STOCK").
(ii) As of August 13, 2004, the issued and outstanding capital
stock of the Company consisted of 57,243,993 shares of Common Stock and no
shares of Preferred Stock.
(iii) As of August 13, 2004, the Company had (a) 11,147,838 shares
of Common Stock reserved for issuance upon exercise of outstanding options
granted under the Company's 1997 Stock Plan, 1997 Director's Option Plan and
1998 Indus International, Inc. Company Share Option Plan and other option plans
of the Company (collectively, the "OPTION PLANS") and (b) 946,349 additional
shares of Common Stock available for future grant under the Option Plans.
(iv) As of August 13, 2004, the Company had 2,280,128 shares of
Common Stock reserved for future purchase by employees of the Company under the
Company's 2003 Employee Stock Purchase Plan.
With the exception of the foregoing in this Section 3(b), there are no
outstanding subscriptions, options, warrants, convertible or exchangeable
securities or other rights granted to or by the Company to purchase shares of
Common Stock or other securities of the Company and there are no commitments,
plans or arrangements to issue any shares of Common Stock or any security
convertible into or exchangeable for Common Stock.
(c) Due Authorization. All corporate actions on the part of the
Company necessary for the authorization, execution, delivery of, and the
performance of all obligations of the Company under this Agreement have been
taken and no further consent or authorization of the Company, the Company's
board of directors (the "BOARD OF DIRECTORS") or the Company's stockholders is
required, and this Agreement constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except (i) as may be limited by (1) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and (2) the effect of rules of law
governing the availability of equitable remedies and (ii) as rights to indemnity
or contribution may be limited under federal or state securities laws or by
principles of public policy thereunder.
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(d) Valid Issuance of the Shares. The Shares to be sold to the
Purchasers pursuant to the terms of this Agreement have been duly authorized and
are validly issued, fully paid and nonassessable.
(e) Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, or notice to, any federal, state or local governmental authority or
self regulatory agency on the part of the Company is required in connection with
the sale of the Shares to the Purchasers or the consummation of the other
transactions contemplated by this Agreement, except (i) such filings as have
been made prior to the date hereof, (ii) the filings under applicable securities
laws required to comply with the Company's registration obligations under
Section 6(a) of this Agreement and (iii) such additional post-Closing filings as
may be required to comply with applicable state and federal securities laws.
(f) Non-Contravention. Assuming the accuracy of the representations
and warranties made by Warburg Investors and the Liquidating Trust in Section 4
hereof and by the Purchasers in Section 5 hereof, the execution, delivery and
performance of this Agreement by the Company, and the consummation by the
Company of the transactions contemplated hereby, do not: (i) contravene or
conflict with the certificate of incorporation, as amended (the "CERTIFICATE OF
INCORPORATION"), or bylaws, as amended (the "BYLAWS"), of the Company or any of
the Subsidiaries; (ii) constitute a violation of any provision of any federal,
state, local or foreign law, rule, regulation, order or decree applicable to the
Company or any of the Subsidiaries; or (iii) constitute a default or require any
consent under, give rise to any right of termination, cancellation or
acceleration of, or to a loss of any material benefit to which the Company or
any of the Subsidiaries is entitled under, or result in the creation or
imposition of any lien, claim or encumbrance on any asset of the Company or any
of the Subsidiaries under, any material contract to which the Company or any of
the Subsidiaries is a party or any material permit, license or similar right
relating to the Company or any of the Subsidiaries or by which the Company or
any of the Subsidiaries may be bound or affected, except in the case of clauses
(ii) and (iii), for such violations, breaches or defaults as would not
reasonably likely to have a Material Adverse Effect.
(g) Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation ("ACTION") pending or, to the Company's knowledge,
threatened that seeks to prevent, enjoin, alter, challenge or delay the
transactions contemplated by this Agreement. The Company is not a party to nor
subject to the provisions of, any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality that is reasonably expected to
prevent, enjoin, alter, challenge or delay the consummation of the transactions
contemplated by this Agreement. The SEC has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the
Company under the Securities Act or the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT").
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(h) Compliance. Neither the Company nor any of the Subsidiaries is
in default (and there exists no condition which, with or without the passage of
time or giving of notice or both, would constitute a default) in any material
respect in the performance of any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries is bound or by which
the properties of the Company are bound, which default would be reasonably
likely to prevent, enjoin, alter, challenge or delay the transactions
contemplated by this Agreement.
(i) Material Non-Public Information. The Company has not provided,
and will not provide, to the Purchasers any material non-public information
other than information related to the transactions contemplated by this
Agreement, all of which information shall be disclosed by the Company pursuant
to Section 11(n) hereof.
(j) SEC Documents.
(i) Reports. Since April 1, 2003, the Company has filed in a
timely manner all reports, schedules, forms, statements and other documents
required to be filed by it with the Securities and Exchange Commission (the
"SEC") pursuant to the reporting requirements of the Exchange Act and the rules
and regulations promulgated thereunder. The Company's Annual Report on Form 10-K
for the fiscal year ended March 31, 2004, as amended (the "FORM 10-K"), its
quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2004 (the
"FORM 10-Q") and any Current Report on Form 8-K for events occurring since March
31, 2004 ("FORM 8-KS") filed by the Company with the SEC (the Form 10-K, the
Form 10-Q and the Form 8-Ks are collectively referred to herein as the "SEC
DOCUMENTS") are publicly available on the SEC's Electronic Data Gathering,
Analysis and Retrieval ("XXXXX") system. Each of the SEC Documents, as of the
respective dates thereof (or, if amended or superseded by a filing or
submission, as the case may be, prior to the Closing Date, then on the date of
such filing or submission, as the case may be), (1) did not contain any untrue
statement of a material fact nor omit to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading and (2) complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder applicable to such SEC Document; and neither the
Company nor any of its officers has received notice from any governmental entity
questioning or challenging the accuracy, completeness, form or manner of filing
or submission of such SEC Document. Without limiting the foregoing, the Company
is in compliance with any applicable requirements of the Xxxxxxxx-Xxxxx Act of
2002 and the rules and regulations promulgated thereunder, as amended, that are
currently in effect, except where such noncompliance would not have or
reasonably be expected to result in a Material Adverse Effect or which would not
reasonably be expected to prevent, enjoin, alter, challenge or delay the
transactions contemplated by this Agreement.
(ii) Financial Statements. The consolidated financial statements
of the Company included in the SEC Documents (1) comply in all material respects
with the rules and regulations of the SEC with respect thereto as were in effect
at the time of filing and (2) present fairly, in accordance with United States
generally accepted accounting principles ("GAAP"), consistently applied, the
financial position of the Company as of the dates indicated therein, and the
results of its operations and cash flows for the periods therein specified,
subject, in the case of unaudited financial statements for interim periods, to
normal, immaterial year-end audit adjustments.
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(k) Absence of Certain Changes Since the Balance Sheet Date. Since
June 30, 2004, the business and operations of the Company have been conducted in
the ordinary course consistent with past practice, and there has not been:
(i) any declaration, setting aside or payment of any dividend or
other distribution of the assets of the Company with respect to any shares of
capital stock of the Company or any repurchase, redemption or other acquisition
by the Company or any subsidiary of the Company of any outstanding shares of the
Company's capital stock;
(ii) any damage, destruction or loss to the Company's business or
assets, whether or not covered by insurance, except for such occurrences,
individually and collectively, that have not had, and would not reasonably be
expected to have, a Material Adverse Effect;
(iii) any waiver by the Company of a valuable right or of a
material debt owed to it, except for such waivers, individually and
collectively, that have not had, and would not reasonably be expected to have, a
Material Adverse Effect;
(iv) any material change or amendment to, or any waiver of any
material right under a material contract or arrangement by which the Company or
any of its assets or properties is bound or subject, except for such changes,
amendments or waivers, individually and collectively, that have not had, and
would not reasonably be expected to have, a Material Adverse Effect;
(v) any change by the Company in its accounting principles,
methods or practices or in the manner in which it keeps its accounting books and
records, except any such change required by a change in GAAP or by the SEC; or
(vi) any other event or condition of any character, except for
such events and conditions that have not resulted, and are not expected to
result, either individually or collectively, in a Material Adverse Effect.
(l) Registration Rights. Except as provided in Section 6 herein and
in the Disclosure Letter attached hereto as Exhibit A (the "DISCLOSURE LETTER"),
effective upon the Closing, the Company is not currently subject to any
agreement providing any person or entity any rights (including piggyback
registration rights) to have any securities of the Company registered with the
SEC or registered or qualified with any other governmental authority.
(m) Internal Accounting Controls. The Company and each of the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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(n) Transactions With Officers and Directors. None of the officers
or directors of the Company has entered into any transaction with the Company or
any of the Subsidiaries that would be required to be disclosed pursuant to Item
404(a), (b) or (c) of Regulation S-K of the SEC.
(o) General Solicitation. Neither the Company nor any other Person
authorized by the Company to act on its behalf has engaged in a general
solicitation or general advertising (within the meaning of Regulation D
("REGULATION D") as promulgated by the SEC under the Securities Act) of
investors with respect to offers or sales of the Shares. For purposes of this
Agreement, "PERSON" means an individual or corporation, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
(p) Registration Statement Matters. The Company currently meets the
eligibility requirements for use of a Form S-3 Registration Statement for the
resale of the Shares by the Purchasers. Assuming the completion and timely
delivery of the Registration Statement/Suitability Questionnaire, attached
hereto as Appendix II (the "REGISTRATION STATEMENT QUESTIONNAIRE"), by each
Purchaser to the Company, the Company is not aware of any facts or circumstances
that would prohibit or delay the preparation and filing of a registration
statement with respect to the Registrable Shares (as defined below).
(q) Market. The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock of
the Company to facilitate the sale or resale of the Shares.
(r) Nasdaq Trading Matters. The Common Stock of the Company is
registered pursuant to Section 12(g) of the Exchange Act and is listed on the
Nasdaq National Market ("NASDAQ") under the ticker symbol "IINT." The Company
has not received any notice that it is not currently in compliance with the
listing or maintenance requirements of Nasdaq. The sale of the Shares under this
Agreement does not contravene the rules and regulations of Nasdaq. The Company
has taken no action designed to terminate, or likely to have the effect of
terminating, the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from Nasdaq.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF WARBURG
INVESTORS AND THE LIQUIDATING TRUST. Warburg Investors and the Liquidating
Trust, jointly and severally, hereby represent and warrant to each Purchaser,
and as to the covenants contained herein agree that:
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(a) Organization and Good Standing.
(i) Warburg Investors is a duly organized and validly existing
limited partnership, and has all limited partnership power and authority
required to enter into this Agreement and the other agreements, instruments and
documents contemplated hereby, and to consummate the transactions contemplated
hereby and thereby.
(ii) The Liquidating Trust is a duly organized and validly existing
trust, and has all trust power and authority required to enter into this
Agreement and the other agreements, instruments and documents contemplated
hereby, and to consummate the transactions contemplated hereby and thereby.
(b) Due Authorization.
(i) All limited partnership actions on the part of Warburg Investors
necessary for the authorization, execution, delivery of, and the performance of
all obligations of Warburg Investors under, this Agreement have been taken and
no further consent or authorization of Warburg Investors or its partners is
required, and this Agreement constitutes the legal, valid and binding obligation
of Warburg Investors, enforceable in accordance with its terms, except (i) as
may be limited by (1) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and (2) the effect of rules of law governing the
availability of equitable remedies and (ii) as rights to indemnity or
contribution may be limited under federal or state securities laws or by
principles of public policy thereunder.
(ii) All trust actions on the part of the Liquidating Trust
necessary for the authorization, execution, delivery of, and the performance of
all obligations of the Liquidating Trust under, this Agreement have been taken
and no further consent or authorization of the Liquidating Trust or its trustee
is required, and this Agreement constitutes the legal, valid and binding
obligation of the Liquidating Trust, enforceable in accordance with its terms,
except (i) as may be limited by (1) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and (2) the effect of rules of law
governing the availability of equitable remedies and (ii) as rights to indemnity
or contribution may be limited under federal or state securities laws or by
principles of public policy thereunder.
(c) Compliance with Securities Laws. Subject to the accuracy of the
representations made by the Company in Section 3 hereof and by the Purchasers in
Section 5 hereof, the Shares will be sold and transferred to the Purchasers in
compliance with applicable exemptions from (i) the registration and prospectus
delivery requirements of the Securities Act and (ii) the registration and
qualification requirements of all applicable securities laws of the states of
the United States.
(d) Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, or
notice to, any federal, state or local governmental authority or self regulatory
agency on the part of Warburg Investors or the Liquidating Trust is required in
connection with the sale of the Shares to the Purchasers, or the consummation of
the other transactions contemplated by this Agreement, except (i) such filings
as have been made prior to the date hereof, (ii) the filings under applicable
securities laws required to comply with the Company's registration obligations
under Section 6(a) of this Agreement and (iii) such additional post-Closing
filings as may be required to comply with applicable state and federal
securities laws, including, but not limited to, the filing of a Schedule 13D
amendment and a Statement of Changes in Beneficial Ownership of Securities on
Form 4.
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(e) Non-Contravention.
(i) The execution, delivery and performance of this Agreement by
Warburg Investors, and the consummation by Warburg Investors of the transactions
contemplated hereby, do not: (1) contravene or conflict with the limited
partnership agreement (the "LIMITED PARTNERSHIP AGREEMENT") or other
organizational documents of Warburg Investors; (2) constitute a violation of any
provision of any federal, state, local or foreign law, rule or regulation, order
or decree applicable to Warburg Investors; or (3) constitute a default or
require any consent under, give rise to any right of termination, cancellation
or acceleration of, or to a loss of any material benefit to which Warburg
Investors is entitled under, or result in the creation or imposition of any
lien, claim or encumbrance on any asset of Warburg Investors or the Shares
under, any material contract to which Warburg Investors is a party or any
material permit, license or similar right relating to Warburg Investors or by
which Warburg Investors may be bound or affected.
(ii) The execution, delivery and performance of this Agreement by
the Liquidating Trust, and the consummation by the Liquidating Trust of the
transactions contemplated hereby, do not: (1) contravene or conflict with the
Liquidating Trust Agreement or other organizational documents of the Liquidating
Trust; (2) constitute a violation of any provision of any federal, state, local
or foreign law, rule or regulation, order or decree applicable to the
Liquidating Trust; or (3) constitute a default or require any consent under,
give rise to any right of termination, cancellation or acceleration of, or to a
loss of any material benefit to which the Liquidating Trust is entitled under,
or result in the creation or imposition of any lien, claim or encumbrance on any
asset of the Liquidating Trust or the Shares under, any material contract to
which the Liquidating Trust is a party or any material permit, license or
similar right relating to the Liquidating Trust or by which the Liquidating
Trust may be bound or affected.
(f) Litigation. There is no Action pending or, to Warburg Investors'
or the Liquidating Trust's knowledge, threatened against Warburg Investors or
the Liquidating Trust, their activities, properties or assets, or any officer,
director, trustee or employee of Warburg Investors or the Liquidating Trust that
seeks to prevent, enjoin, alter, challenge or delay the transactions
contemplated by this Agreement. Neither Warburg Investors nor the Liquidating
Trust is a party to or subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality that is
reasonably expected to prevent, enjoin, alter, challenge or delay the
consummation of the transactions contemplated by this Agreement.
(g) Compliance with Law and Charter Documents.
(i) Warburg Investors is not (1) in violation or default of any
material provisions of the Limited Partnership Agreement or any of its other
organizational documents or (2) in default (and there exists no condition which,
with or without the passage of time or giving of notice or both, would
constitute a default) in any material respect in the performance of any bond,
debenture, note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust or any other material agreement or instrument to which
Warburg Investors is a party or by which Warburg Investors is bound or by which
the properties of Warburg Investors are bound, in either such case which
violation or default would be reasonably likely to prevent, enjoin, alter,
challenge or delay the transactions contemplated by this Agreement.
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(ii) The Liquidating Trust is not (1) in violation or default of
any material provisions of the Liquidating Trust Agreement or any of its other
organizational documents or (2) in default (and there exists no condition which,
with or without the passage of time or giving of notice or both, would
constitute a default) in any material respect in the performance of any bond,
debenture, note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust or any other material agreement or instrument to which
the Liquidating Trust is a party or by which the Liquidating Trust is bound or
by which the properties of the Liquidating Trust are bound, in either such case
which violation or default would be reasonably likely to prevent, enjoin, alter,
challenge or delay the transactions contemplated by this Agreement.
(h) Title. Warburg Investors is the sole record and the Liquidating
Trust is the beneficial owner of the Shares and delivery, pursuant to this
Agreement, of the certificates representing the Shares, upon payment therefor by
the Purchasers, will pass good and valid title to the Shares to the Purchasers
and the Purchasers will acquire all the rights of the Liquidating Trust in the
Shares (assuming the Purchasers have no knowledge of an adverse claim), free and
clear of any security interest, claims, liens or other encumbrances, except for
restrictions on transfer otherwise provided or contemplated hereunder.
(i) Market. Neither Warburg Investors nor the Liquidating Trust has
taken or will take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock of the Company to facilitate the sale or resale of
the Shares.
(j) General Solicitation. Neither Warburg Investors, the Liquidating
Trust nor any other person or entity authorized by Warburg Investors or the
Liquidating Trust to act on their behalf has engaged in a general solicitation
or general advertising (within the meaning of Regulation D of the Securities
Act) of investors with respect to offers or sales of the Shares.
(k) Lock-up. Each of Warburg Investors and the Liquidating Trust
hereby agrees that it will not, without the prior written consent of X.X.
Xxxxxxxxx, Towbin ("CEUT"), offer, sell, contract to sell, pledge or otherwise
dispose of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition as effective economic disposition due to cash settlement or
otherwise) by the Warburg or any affiliate of Warburg or any person in privity
with Warburg or any affiliate of Warburg), directly or indirectly, or establish
or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder with respect to, any additional shares of
Common Stock beneficially owned by it (other than the Shares), or publicly
announce an intention to effect any such transaction, for a period of 90 days
after the Closing Date. The parties hereto hereby acknowledge CEUT's authority
pursuant to this Section 4(k) and that CEUT shall be entitled to independently
protect, enforce and waive its rights arising out of this Section 4(k), and it
shall not be necessary for the Company or any Purchaser to be joined as an
additional party in any act or proceeding for such purpose.
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5. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE
PURCHASERS. Each Purchaser, severally and not jointly, hereby represents and
warrants to the Company, Warburg Investors and the Liquidating Trust, and agrees
that:
(a) Power and Authority. The Purchaser has all corporate, limited
liability company, partnership, trust or individual, as the case may be, power
and authority required to enter into this Agreement and the other agreements,
instruments and documents contemplated hereby, and to consummate the
transactions contemplated hereby and thereby.
(b) Due. All corporate, limited liability company, partnership,
trust or individual, as the case may be, action on the part of the Purchaser
necessary for the authorization, execution, delivery of and the performance of
all obligations of the Purchaser under this Agreement have been taken and no
further consent or authorization of the Purchaser is necessary, and this
Agreement constitutes the Purchaser's legal, valid and binding obligation,
enforceable in accordance with its terms, except (i) as may be limited by (1)
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and (2) the effect of rules of law governing the availability of
equitable remedies and (ii) as rights to indemnity or contribution may be
limited under federal or state securities laws or by principles of public policy
thereunder.
(c) Litigation. There is no Action pending to which such Purchaser
is a party that is reasonably likely to prevent, enjoin, alter or delay the
transactions contemplated by this Agreement.
(d) Purchase for Own Account. The Shares are being acquired for
investment for the Purchaser's own account, not as a nominee or agent, in the
ordinary course of business, and not with a view to the public resale or
distribution thereof within the meaning of the Securities Act. The Purchaser
also represents that it has not been formed for the specific purpose of
acquiring the Shares. The Purchaser does not have any agreement or
understanding, direct or indirect, with any other Person to sell or otherwise
distribute the Shares. Notwithstanding the foregoing, the parties hereto
acknowledge the Purchaser's right at all times to sell or otherwise dispose of
all or any part of such securities in compliance with applicable federal and
state securities laws and as otherwise contemplated by this Agreement.
(e) Investment Experience. The Purchaser understands that the
purchase of the Shares involves substantial risk. The Purchaser has experience
as an investor in securities of companies and acknowledges that it can bear the
economic risk of its investment in the Shares and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of this investment in the Shares and protecting its own
interests in connection with this investment.
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(f) Accredited Purchaser Status. The Purchaser is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act or a "qualified institutional buyer" as defined in Rule 144A promulgated
under the Securities Act.
(g) Reliance Upon Purchaser's Representations. The Purchaser
understands that the sale of the Shares to it will not be registered under the
Securities Act on the ground that such issuance and sale will be exempt from
registration under the Securities Act, and that the Company's, Warburg
Investors' and the Liquidating Trust's reliance on such exemption is based on
the Purchaser's representations set forth herein.
(h) Receipt of Information. The Purchaser has had an opportunity to
ask questions and receive answers from the Company and Warburg regarding the
terms and conditions of the sale of the Shares and the business, properties,
prospects and financial condition of the Company and to obtain any additional
information requested and has received and considered all information it deems
relevant to make an informed decision to purchase the Shares. 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
Purchaser's right to rely on the truth, accuracy and completeness of such
information and the Company's, Warburg Investors' and the Liquidating Trust's
respective representations and warranties contained in this Agreement.
(i) Restricted Securities and Restrictions on Transfer.
(i) The Purchaser understands that the Shares have not been
registered under the Securities Act and will not sell, offer to sell, assign,
pledge, hypothecate or otherwise transfer any of the Shares (except as permitted
in Section 5(j) below), unless (1) pursuant to an effective registration
statement under the Securities Act, (2) the Purchaser provides a reasonably
acceptable legal opinion to the Company, to the effect that a sale, assignment,
pledge, hypothecation or other transfer of the Shares may be made without
registration under the Securities Act and the transferee agrees to be bound by
the terms and conditions of this Agreement, (3) the Purchaser provides to the
Company a "no action" letter from the SEC to the effect that the transfer of the
Shares without registration will not result in a recommendation by the Staff of
the SEC that enforcement action be taken with respect thereto, (4) the Purchaser
provides the Company with reasonable assurances (in the form of seller and
broker representation letters) that the Shares can be sold pursuant to Rule 144
promulgated under the Securities Act ("RULE 144"), (5) the Purchaser provides
the Company with reasonable assurances (in the form of seller representation
letters) that the Shares can be sold pursuant to Rule 144(k) promulgated under
the Securities Act following the applicable holding period or (6) pursuant to
any other exception contained in the Securities Act provided that the Purchaser
provides a reasonably acceptable legal opinion to the Company. Notwithstanding
anything to the contrary contained in this Agreement, including but not limited
to in Section 6(c)(i) below, the Purchaser may transfer the Shares to its
Affiliates provided that (x) the Purchaser provides the Company with a
reasonably acceptable legal opinion, (y) such Affiliate is an "accredited
investor" under Regulation D of the Securities Act and (z) each such Affiliate
agrees to be bound by the terms and conditions of this Agreement, and in
particular, confirms to the Company that all of the representations set forth in
Section 5 of this Agreement are true and correct as to such Affiliate as of the
date of the transfer to such Affiliate.
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For the purposes of this Agreement, an "AFFILIATE" of any specified
Person means any other Person directly or indirectly controlling, controlled by
or under direct or indirect common control with such specified Person. For
purposes of this definition, "CONTROL" means the power to direct the management
and policies of such person or firm, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.
(ii) Prior to any proposed transfer pursuant to clause (2), (3),
(4), (5) or (6) in Section 5(i) above, the Purchaser shall give written notice
to the Company of such Purchaser's intention to effect such transfer. Each such
notice shall describe the manner and circumstances of the proposed transfer in
sufficient detail, and shall be accompanied by the applicable legal opinion, "no
action" letter or seller and broker representation letters.
(iii) Notwithstanding the foregoing provisions of this Section
5(i), no registration statement, legal opinion or "no action" letter shall be
necessary for a transfer (1) by a Purchaser that is a partnership to a partner
of such partnership or a retired partner of such partnership who retires after
the date of this Agreement, (2) by a Purchaser that is a limited liability
company to a member of such limited liability company, (3) by a Purchaser that
is a partnership or limited liability company to the estate of any partner,
retired partner, or member thereof or (4) by any partner or member of a
Purchaser that is a partnership or limited liability company by gift, will or
intestate succession to such partner or member's spouse or to the siblings,
lineal descendants, ancestors of such partner or member or his or her spouse.
(j) Legends. The Purchaser agrees that the certificates for the
Shares shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD OR TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT
COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT OR
(II) THE TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT AND, IF THE COMPANY REQUESTS, AN OPINION SATISFACTORY
TO THE COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL."
The Company acknowledges and agrees that Purchaser may from time to
time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Shares to a
financial institution that is an "accredited investor" as defined in Rule 501(a)
under the Securities Act and who agrees to be bound by the provisions of this
Agreement and, if required under the terms of such arrangement, such Purchaser
may transfer pledged or secured Shares 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 legal counsel of the pledgee, secured party or pledgor shall be
required in connection therewith. Further, no notice shall be required of such
pledge. At the expense of the Purchaser who shall have pledged or otherwise
granted a security interest in its Shares, the Company will execute and deliver
such reasonable documentation as a pledgee or secured party of the Shares may
reasonably request in connection with a pledge or transfer of the Shares, the
preparation and filing of any required prospectus supplement under Rule
424(b)(3) under the Securities Act or other applicable provision of the
Securities Act to appropriately amend the list of selling stockholders
thereunder.
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In addition, the Purchaser agrees that the Company may place stop
transfer orders with its transfer agent with respect to such certificates in
order to implement the restrictions on transfer set forth in this Agreement. The
appropriate portion of the legend and the stop transfer orders will be removed
promptly upon delivery to the Company of such satisfactory evidence as
reasonably may be required by the Company that such legend or stop transfer
orders are not required to ensure compliance with the Securities Act.
(k) Questionnaires. The Purchaser has completed or caused to be
completed the Stock Certificate Questionnaire and the Registration Statement
Questionnaire for use in preparation of the Registration Statement (as defined
in Section 6(a) below), and the answers to such questionnaires are true and
correct as of the date of this Agreement; provided, that the Purchasers shall be
entitled to update such information by providing written notice thereof to the
Company before the effective date of the Registration Statement.
(l) Restrictions on Short Sales. Neither the Purchaser nor any
Affiliate of such Purchaser which (i) had knowledge of the transactions
contemplated hereby, (ii) has or shares discretion relating to such Purchaser's
investments or trading or information concerning such Purchaser's investments,
including in respect of the Shares, or (iii) is subject to such Purchaser's
review or input concerning such Affiliate's investments or trading, has or will,
directly or indirectly, during the period beginning on the date on which CEUT,
financial advisors to Warburg, first contacted such Purchaser regarding the
transactions contemplated by this Agreement until the time of the filing of the
Current Report on Form 8-K required by Section 11(n), engage in (1) any "short
sales" (as such term is defined in Rule 3b-3 promulgated under the Exchange Act)
of the Common Stock, including, without limitation, the maintaining of any short
position with respect to, establishing or maintaining a "put equivalent
position" (within the meaning of Rule 16a-1(h) under the Exchange Act) with
respect to, entering into any swap, derivative transaction or other arrangement
(whether any such transaction is to be settled by delivery of Common Stock,
other securities, cash or other consideration) that transfers to another, in
whole or in part, any economic consequences or ownership, or otherwise dispose
of, any of the Shares by the Purchaser or (2) any hedging transaction which
establishes a net short position with respect to the Shares (clauses (1) and (2)
together, a "SHORT SALE"); except for (A) Short Sales by the Purchaser or
Affiliate of such Purchaser which was, prior to the date on which such Purchaser
was first contacted by CEUT regarding the transactions contemplated by this
Agreement, a market maker for the Common Stock, provided that such Short Sales
are in the ordinary course of business of such Purchaser or Affiliate of such
Purchaser and are in compliance with the Securities Act, the rules and
regulations of the Securities Act and such other securities laws as may be
applicable, (B) Short Sales by the Purchaser or an Affiliate of such Purchaser
which by virtue of the procedures of such Purchaser are made without knowledge
of the transactions contemplated by this Agreement or (C) Short Sales by the
Purchaser or an Affiliate of such Purchaser to the extent that such Purchaser or
Affiliate of such Purchaser is acting in the capacity of a broker-dealer
executing unsolicited third-party transactions.
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(m) Independent Investment. The Purchaser has not agreed to act with
any other Purchaser for the purpose of acquiring, holding or disposing of any of
the Shares for purposes of Section 13(d) of the Exchange Act, and such Purchaser
is acting independently with respect to its investment in the Shares.
(n) Confidentiality. The Purchaser agrees to use any information it
receives in the course of and in connection with the transactions contemplated
under this Agreement for the sole purpose of evaluating a possible investment in
the Shares and the Purchaser hereby acknowledges that it is prohibited from
reproducing or distributing any such information, this Agreement, or any other
offering materials provided by the Company, Warburg Investors, the Liquidating
Trust, any of their respective Affiliates or, to the extent any such information
is provided by CEUT, CEUT in connection with the Purchaser's consideration of
its investment in the Company, in whole or in part, or divulging or discussing
any of their contents except to its advisors and representatives for the purpose
of evaluating such investment. The foregoing agreements shall not apply to any
information that (i) is or becomes publicly available through no fault of the
Purchaser, (ii) was already known to the Purchaser prior to its disclosure by
the Company, Warburg Investors, the Liquidating Trust, any of their respective
Affiliates or, to the extent any such information is disclosed by CEUT, CEUT to
the Purchasers, as evidenced by documentation or other evidence reasonably
satisfactory to the Company, (iii) is or becomes available to the Purchaser on a
non-confidential basis from a source other than the Company, Warburg Investors,
the Liquidating Trust, any of their respective Affiliates or, to the extent
applicable, CEUT (so long as the Purchaser is not aware such disclosure is in
breach of a confidentiality obligation to the Company, Warburg Investors, the
Liquidating Trust or CEUT, as the case may be), (iv) is independently developed
by the Purchaser's personnel without access to or use of the confidential
information received from the Company, Warburg Investors, the Liquidating Trust,
any of their respective Affiliates or, to the extent any such information is
received from CEUT, CEUT, as evidenced by documentation or other evidence
reasonably satisfactory to the Company or (v) is legally required to be
disclosed by the Purchaser under operation of law or judicial or other
governmental order; provided, however, that if the Purchaser is requested or
ordered to disclose any such information pursuant to any court or other
governmental order or any other applicable legal procedure, it shall provide the
Company with reasonably prompt notice of any such request or order to enable the
Company to seek an appropriate protective order and shall provide the Company
with reasonable assistance in obtaining such protective order at the Company's
sole expense.
6. REGISTRATION; COMPLIANCE WITH THE SECURITIES ACT.
(a) Registration of the Shares. The Company hereby agrees that it
shall:
(i) prepare and file with the SEC as soon as practicable and in no
event later than thirty (30) days following the Closing Date (the "REQUIRED
FILING DATE") a registration statement on Form S-3 or such other form that is
available to the Company under the Securities Act (the "REGISTRATION
STATEMENT"), to enable the resale of the Shares (together with any shares of
Common Stock issued as a dividend or other distribution with respect to, or in
exchange for, or in replacement of, the Shares, the "REGISTRABLE SHARES") by the
Purchasers from time to time on Nasdaq. The Company shall use all commercially
reasonable efforts to cause the Registration Statement (x) to be declared
effective as promptly as possible after filing, but in any event, no later than
the 90th day following the Closing Date (the "REQUIRED EFFECTIVE DATE"), or, in
the event of a review of the Registration Statement by the SEC, the Required
Effective Date will be no later than the 150th day following the Closing Date,
and (y) to remain continuously effective until the earliest of (1) the second
anniversary of the effective date of the Registration Statement, (2) the date on
which all Registrable Shares purchased by the Purchasers pursuant to this
Agreement have been sold thereunder or (3) the date on which the Registrable
Shares can be sold by nonaffiliates of the Company pursuant to Rule 144(k)
promulgated under the Securities Act (the "REGISTRATION PERIOD"). If the Company
receives notification from the SEC that the Registration Statement will receive
no action or review from the SEC, then the Company will use its commercially
reasonable efforts to cause the Registration Statement become effective within
five (5) Business Days after such SEC notification. In the event that, following
the Closing Date and prior to the end of the Registration Period, the Company
does not meet the requirements for the use of Form S-3, the Company shall use
such other form as is available for the registration of the Shares, and shall
convert such other form into Form S-3, or file a replacement registration
statement on Form S-3, promptly after the first date on which it meets such
requirements;
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(ii) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
Prospectus (as defined below) used in connection therewith as may be necessary
to keep the Registration Statement effective at all times until the end of the
Registration Period;
(iii) furnish to the Purchasers, with respect to the Registrable
Shares registered under the Registration Statement, such reasonable number of
copies of any prospectus in conformity with the requirements of the Securities
Act and such other documents as the Purchasers may reasonably request in
writing, in order to facilitate the public sale or other disposition of all or
any of the Registrable Shares by the Purchasers;
(iv) use its commercially reasonable efforts to file documents
required of the Company for normal blue sky clearance in states specified in
writing by the Purchasers; provided, however, that the Company shall not be
required to qualify to do business or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so consented;
(v) promptly notify the Purchasers in writing of the effectiveness
of the Registration Statement within one (1) Business Day following the day the
Registration Statement has been declared effective;
(vi) promptly notify the Purchasers in writing of the existence of
any fact or the happening of any event, during the Registration Period (but not
as to the substance of any such fact or event), that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any amendment
or supplement thereto, or any document incorporated by reference therein untrue,
or that requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make such statements not misleading;
provided, however, that no notice by the Company shall be required pursuant to
this subsection (vi) in the event that the Company either contemporaneously
files a prospectus supplement to update the Prospectus or, if applicable, a
Current Report on Form 8-K or other appropriate Exchange Act report that is
incorporated by reference into the Registration Statement, which, in either
case, contains the requisite information with respect to such material event
that results in such Registration Statement no longer containing any such untrue
or misleading statements; and
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(vii) bear all expenses in connection with the procedures
described in paragraphs (i) through (vi) of this Section 6(a) and the
registration of the Registrable Shares pursuant to the Registration Statement,
other than fees and expenses, if any, of legal counsel or other advisers to
Warburg, CEUT or the Purchasers or underwriting discounts, brokerage fees and
commissions incurred by the Purchasers, if any.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 6(a) with respect to Registrable Shares
held by a Purchaser that such Purchaser shall timely furnish to the Company a
completed Registration Statement Questionnaire on or before the Closing Date and
such other written information regarding such Purchaser, the Registrable Shares
to be sold by such Purchaser and the intended method of disposition of the
Registrable Shares as the Company may deem necessary or advisable to effect the
registration of the Registrable Shares. The Purchasers shall update such
information as and when necessary by written notice to the Company.
(b) Liquidated Damages.
(i) Delay in Filing of Registration Statement. In the event that
the Registration Statement is not filed by the Required Filing Date, the Company
shall pay to each Purchaser (except for any Purchaser whose failure to provide
information as required hereunder causes a delay in filing) liquidated damages
(in addition to the rights and remedies available to each Purchaser under
applicable law and this Agreement), at a rate equal to one percent (1%) per
month (pro rata on a 30-day basis) of the total purchase price of the Shares
purchased by such Purchaser pursuant to this Agreement for the period from and
including the first day following the Required Filing Date until, but excluding,
the date the Registration Statement is filed. Such liquidated damages shall be
payable in cash within ten (10) days of the end of each one (1) month
anniversary of the Required Filing Date.
(ii) Delay in Effectiveness of Registration Statement. In the
event that the Registration Statement is not declared effective by the Required
Effective Date, each Purchaser (except for any Purchaser whose failure to
provide information as required hereunder causes a delay in obtaining
effectiveness) shall be entitled to liquidated damages (in addition to the
rights and remedies available to each Purchaser under applicable law and this
Agreement), at a rate equal to one percent (1%) per month (pro rata on a 30-day
basis) of the total purchase price of the Shares purchased by such Purchaser
pursuant to this Agreement for the period from and including the first day
following the Required Effective Date, until, but excluding, the date the SEC
declares the Registration Statement effective. Warburg Investors and the
Liquidating Trust, severally and jointly, shall be responsible for the payment
of such liquidated damages for the period from and including the first day
following the Required Effective Date until, but excluding, the earlier of (A)
the date the SEC declares the Registration Statement effective or (B) the one
hundred eightieth (180th) day following the Required Effective Date (the
"WARBURG LIQUIDATED DAMAGES PERIOD"), and, if the Registration Statement is not
declared effective by the expiration of the Warburg Liquidated Damages Period,
the Company shall be responsible for the payment of such liquidated damages for
the period from and including the date of expiration of the Warburg Liquidated
Damages Period until, but excluding, the date the SEC declares the Registration
Statement effective. Such liquidated damages shall be payable in cash within ten
(10) days of the end of each one (1) month anniversary of the Required Effective
Date.
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(iii) Lapse in Effectiveness of Registration Statement. In the
event that the Registration Statement is filed and declared effective but,
during the Registration Period, the Registration Statement ceases to be
effective or useable or the prospectus included in the Registration Statement
(the "PROSPECTUS", as amended or supplemented by any prospectus supplement and
by all other amendments thereto and all material incorporated by reference in
such Prospectus) ceases to be usable, in either case, in connection with resales
of Registrable Shares, without such lapse being cured within ten (10) Business
Days (the "CURE PERIOD") by a post-effective amendment to the Registration
Statement, a supplement to the Prospectus or a report filed with the SEC
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that cures
such lapse, then the Company shall pay to each Purchaser liquidated damages (in
addition to the rights and remedies available to each Purchaser under applicable
law and this Agreement), for the period from and including the first day
following the expiration of the Cure Period until, but excluding, the earlier of
(1) the date on which such failure is cured and (2) the date on which the
Registration Period expires, at a rate equal to one percent (1%) per month (pro
rata on a 30-day basis) of the total purchase price of the Shares purchased and
still held by such Purchaser pursuant to this Agreement. Such liquidated damages
shall be payable in cash within ten (10) days of the end of each one (1) month
anniversary of the expiration of the Cure Period. Notwithstanding anything to
the contrary herein, liquidated damages shall not be payable under this Section
6(c)(iii) by the Company as a result of any suspension by the Company of the use
of the Prospectus pursuant to Section 6(c)(ii) hereof.
(c) Transfer of Registrable Shares After Registration; Suspension.
(i) The Purchasers agree that they will not offer to sell or make
any sale, assignment, pledge, hypothecation or other transfer with respect to
the Registrable Shares that would constitute a sale within the meaning of the
Securities Act except pursuant to either (1) the Registration Statement in the
manner described in the "Plan of Distribution" therein, (2) Rule 144 promulgated
under the Securities Act or (3) any other exemption from registration under the
Securities Act, and that they will promptly notify the Company of any changes in
the information set forth in the Registration Statement after it is prepared
regarding the Purchaser or its plan of distribution to the extent required by
applicable law.
(ii) In addition to any suspension rights under paragraph (iii)
below, upon the happening of any pending corporate development, public filing
with the SEC or similar event that, in the judgment of the Board of Directors,
renders it advisable to suspend the use of the Prospectus or upon the request by
an underwriter in connection with an underwritten public offering of the
Company's securities, the Company may, on not more than two (2) occasions for
not more than sixty (60) days on each such occasion, suspend use of the
Prospectus on written notice to each Purchaser (which notice will not disclose
the content of any material non-public information and will indicate the date of
the beginning and end of the intended period of suspension, if known), in which
case each Purchaser shall discontinue any disposition of Registrable Shares
covered by the Registration Statement or Prospectus until copies of a
supplemented or amended Prospectus are distributed to the Purchasers or until
the Purchasers are advised in writing by the Company that sales of Registrable
Shares under the applicable Prospectus may be resumed and have received copies
of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus. The suspension and notice
thereof described in this Section 6(c)(ii) shall be held by each Purchaser in
strictest confidence and shall not be disclosed by such Purchaser.
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(iii) Subject to paragraph (iv) below, in the event of: (1) any
request by the SEC or any other federal or state governmental authority during
the Registration Period for amendments or supplements to a Registration
Statement or related prospectus or for additional information; (2) the issuance
by the SEC or any other federal or state governmental authority of any stop
order suspending the effectiveness of a Registration Statement or the initiation
of any proceedings for that purpose; (3) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Shares for sale in any jurisdiction
or the initiation of any proceeding for such purpose; or (4) any event or
circumstance which necessitates the making of any changes in the Registration
Statement or Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or any
omission 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, then the Company shall deliver a certificate in
writing to the Purchasers (the "SUSPENSION NOTICE") to the effect of the
foregoing (which notice will not disclose the content of any material non-public
information and will indicate the date of the beginning and end of the intended
period of suspension, if known), and, upon receipt of such Suspension Notice,
the Purchasers will discontinue disposition of Registrable Shares covered by to
the Registration Statement or Prospectus (a "SUSPENSION") until the Purchasers'
receipt of copies of a supplemented or amended Prospectus prepared and filed by
the Company, or until the Purchasers are advised in writing by the Company that
the current Prospectus may be used and have received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in any such prospectus. In the event of any Suspension, the Company will use its
commercially reasonable efforts to cause the use of the Prospectus so suspended
to be resumed as soon as possible after delivery of a Suspension Notice to the
Purchasers. The Suspension and Suspension Notice described in this Section
6(c)(iii) shall be held in strictest confidence by each Purchaser and shall not
be disclosed by such Purchaser.
(iv) Provided that a Suspension is not then in effect, the
Purchasers may sell Registrable Shares under the Registration Statement in the
manner described in the "Plan of Distribution" therein, provided that the
selling Purchaser arranges for delivery of a current Prospectus to the
transferee of such Registrable Shares to the extent such delivery is required by
applicable law.
(v) In the event of a sale of Registrable Shares by a Purchaser,
such Purchaser must also deliver to the Company's transfer agent, with a copy to
the Company, a certificate of subsequent sale reasonably satisfactory to the
Company, so that ownership of the Registrable Shares may be properly
transferred. The Company will cooperate to facilitate the timely preparation and
delivery of certificates (unless otherwise required by applicable law)
representing Registrable Shares sold.
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(d) Indemnification. For the purpose of this Section 6(d), the term
"REGISTRATION STATEMENT" shall include any final Prospectus, exhibit, supplement
or amendment included in or relating to the Registration Statement referred to
in Section 6(a).
(i) Indemnification by the Company. The Company agrees to
indemnify and hold harmless Warburg, each of the Purchasers, their respective
officers, directors, trustees, agents and employees, and each person, if any,
who controls Warburg or any Purchaser within the meaning of the Securities Act,
against any losses, claims, damages, liabilities or expenses, joint or several,
to which Warburg, such Purchasers, such officers, directors, trustees, agents or
employees, or such controlling persons may become subject, under the Securities
Act, the Exchange Act or any other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Company, which
consent shall not be unreasonably withheld), insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement to the Registration Statement or
Prospectus, or arise out of or are based upon (i) the omission or alleged
omission to state in any of them a material fact required to be stated therein
or necessary to make the statements in any of them, in light of the
circumstances under which they were made, not misleading or (ii) any inaccuracy
in or breach of the representations and warranties or covenants made by the
Company herein, and will reimburse Warburg, each Purchaser, each of their
respective directors, officers, trustees, agents and employees, and each such
controlling person for any reasonable out-of-pocket legal and other expenses
incurred by Warburg, such Purchaser, such directors, officers, trustees, agents
or employees, or such controlling persons in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Company will not be
liable for any such case to the extent that any such loss, claim, damage,
liability, expense or action arises out of or is based upon (1) an untrue
statement or alleged untrue statement or omission or alleged omission in the
Registration Statement, the Prospectus or any amendment to or supplement of the
Registration Statement or the Prospectus made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of Warburg or
the Purchaser demanding such indemnification expressly for use in the
Registration Statement or the Prospectus, (2) the failure of Warburg or such
Purchaser to comply with the covenants and agreements contained in this
Agreement respecting resale of the Shares or (3) any untrue statement or
omission of a material fact required to make such statement not misleading in
any Prospectus that is corrected in any subsequent Prospectus that was delivered
to such Purchaser before the pertinent sale or sales by such Purchaser.
(ii) Indemnification by Warburg. Warburg Investors and the
Liquidating Trust, severally and jointly, agree to indemnify and hold harmless
the Company, each of the Purchasers, their respective officers, directors,
agents and employees, and each person, if any, who controls the Company or any
Purchaser within the meaning of the Securities Act, against any losses, claims,
damages, liabilities or expenses, joint or several, to which the Company, such
Purchasers, such officers, directors, officers, agents or employees or any such
controlling persons may become subject, under the Securities Act, the Exchange
Act or any other federal or state statutory law or regulation or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of Warburg, which consent shall not be
unreasonably withheld), insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon any inaccuracy in or breach of the representations, warranties or
covenants made by Warburg herein, and Warburg Investors and the Liquidating
Trust, severally and jointly, will reimburse the Company, each Purchaser, each
of their respective directors, officers, agents and employees, and each such
controlling person for any reasonable legal and other expenses incurred by the
Company, such Purchaser, such directors, officers, agents or employees or such
controlling persons in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that in no event shall Warburg Investors or the
Liquidating Trust, severally or jointly, be liable under the provisions of this
Section 6(d) for any amount in excess of the aggregate amount of the net
proceeds received by Warburg from the sale of the Shares pursuant to this
Agreement.
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(iii) Indemnification by each Purchaser. Each Purchaser agrees,
severally and not jointly, to indemnify and hold harmless the Company, Warburg,
each of their respective directors, officers, trustees, agents and employees,
and each person, if any, who controls the Company or Warburg within the meaning
of the Securities Act, against any losses, claims, damages, liabilities or
expenses to which the Company, Warburg, their respective directors, officers,
trustees, agents or employees, or any controlling persons may become subject,
under the Securities Act, the Exchange Act, or any other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Purchaser, which consent shall not be unreasonably withheld)
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon (i) any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Purchaser expressly for use therein, or (ii) any
inaccuracy in or breach of the representations, warranties or convenants made by
such Purchaser herein and such Purchaser will reimburse the Company, each of its
directors, officers, agents and employees, and any controlling persons for any
reasonable legal and other expenses incurred by the Company, its directors,
officers, agents or employees, or any controlling persons in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that such Purchaser
shall not be liable for any such untrue or alleged untrue statement or omission
or alleged omission with respect to which such Purchaser has delivered to the
Company in writing a correction of such untrue or alleged untrue statement or
omission or alleged omission, before the occurrence of the event from which such
loss, claim, damage, liability or expense was incurred. Notwithstanding the
provisions of this Section 6(d), such Purchaser shall not be liable for any
indemnification obligation under this Agreement in excess of the aggregate
amount of net proceeds received by such Purchaser from the sale of the
Registrable Shares pursuant to the Registration Statement.
-21-
(iv) Indemnification Procedure.
(i) Promptly after receipt by an indemnified party under this
Section 6(d) of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 6(d), promptly notify the indemnifying
party in writing of the claim and provide to the indemnifying party copies of
all written documents relating to such threatened or commenced action; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise under the indemnity agreement contained in this Section 6(d) or
otherwise, to the extent it is not prejudiced as a result of such failure.
(ii) In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with all other indemnifying parties
similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it or other indemnified parties that are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 6(d) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless:
a) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel,
reasonably approved by such indemnifying party, representing all of the
indemnified parties who are parties to such action); or
b) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action
against the indemnified party,
in each of which cases the reasonable out-of-pocket fees and expenses of counsel
for the indemnified party shall be at the expense of the indemnifying party.
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(v) Contribution. If the indemnification provided for in this
Section 6(d) is required by its terms but is for any reason held to be
unavailable to, or is otherwise insufficient to hold harmless, an indemnified
party under this Section 6(d) with respect to any losses, claims, damages,
liabilities or expenses referred to in this Agreement, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
in this Agreement:
(i) in such proportion as is appropriate to reflect the relative
faults of the Company, Warburg and the Purchasers in connection with the
statements or omissions or inaccuracies in the representations and warranties in
this Agreement that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations, or
(ii) if the allocation provided by clause (1) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative faults referred to in clause (1) above but also the relative
benefits received by the Company, Warburg and the Purchasers from the sale of
the Shares.
The respective relative benefits received by the Company and Warburg on
the one hand and each Purchaser on the other shall be deemed to be in the same
proportion as the amount to which the consideration paid by such Purchaser to
Warburg pursuant to this Agreement for the Shares purchased by such Purchaser
that were sold pursuant to the Registration Statement bears to the difference
(the "DIFFERENCE") between the amount such Purchaser paid for the Shares that
were sold pursuant to the Registration Statement and the amount received by such
Purchaser from such sale. The relative fault of the Company, Warburg and each
Purchaser shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, Warburg or such Purchaser and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 6(d)(iii), any
reasonable legal or other fees or expenses incurred by such party in connection
with investigating or defending any such action or claim. The provisions set
forth in Section 6(d)(iii) with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for contribution is
to be made under this Section 6(d)(iv); provided, however, that no additional
notice shall be required with respect to any threat or action for which notice
has been given under Section 6(d)(iii) for purposes of indemnification. The
Company, Warburg and each Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 6(d)(iv) were determined
solely by pro rata allocation (even if the Purchasers were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 6(d)(iv), (i) no Purchaser shall
be required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and (ii) Warburg Investors and the Liquidating
Trust shall not be required, severally or jointly, to contribute any amount in
excess of the aggregate amount of the net proceeds received by Warburg from the
sale of the Shares pursuant to this Agreement. 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 is not guilty of such
fraudulent misrepresentation. The Purchasers' obligations to contribute pursuant
to this Section 6(d)(iv) are several and not joint.
-23-
(e) Rule 144 Information. For two years after the date of this
Agreement, the Company shall file in a timely manner all reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations promulgated thereunder and shall take such further action to the
extent required to enable the Purchasers to sell the Shares pursuant to Rule 144
under the Securities Act (as such rule may be amended from time to time).
7. ADVISORY FEE. The Purchasers acknowledge that Warburg intends to pay
to CEUT, as financial advisor, a fee in respect of the sale of the Shares. Each
of the parties to this Agreement hereby represents that, on the basis of any
actions and agreements by it, there are no other brokers or finders entitled to
compensation in connection with the sale of the Shares to the Purchasers.
Warburg Investors and the Liquidating Trust, severally and jointly, shall
indemnify and hold harmless the Purchasers and the Company from and against all
fees, commissions or other payments owing by Warburg to CEUT or any other person
or firm acting on behalf of Warburg hereunder. Each Purchaser, severally and not
jointly, shall indemnify and hold harmless Warburg and the Company from and
against all fees, commissions or other payments owing by such Purchasers to any
person, other than CEUT in the case of Warburg, acting on behalf of the
Purchasers hereunder.
8. CONDITIONS TO THE PURCHASERS' OBLIGATIONS AT CLOSING. The
obligations of the Purchasers to consummate the transactions contemplated herein
are subject to the fulfillment or waiver, on or before the Closing, of each of
the following conditions:
(a) Representations and Warranties True. Each of the representations
and warranties of the Company contained in Section 3 and of Warburg Investors
and the Liquidating Trust contained in Section 4 shall be true and correct in
all material respects on and as of the date hereof (provided, however, that such
qualification shall only apply to representations or warranties not otherwise
qualified by materiality) and on and as of the Closing Date with the same effect
as though such representations and warranties had been made as of the Closing
(except for representations and warranties that speak as of a specific date).
(b) Performance. The Company, Warburg Investors and the Liquidating
Trust shall have performed and complied in all material respects with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by them on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein; provided, however, as provided
in Section 2 hereof, the Company may deliver to each Purchaser by overnight
courier the original stock certificate(s) representing the Shares purchased by
such Purchaser no later than the fifth (5th) Business Day following the Closing
Date.
(c) Company Compliance Certificate. The Company will have delivered
to the Purchasers a certificate signed on its behalf by its Chief Executive
Officer or Chief Financial Officer, dated as of the Closing Date, certifying
that the conditions specified in Sections 8(a) and 8(b) hereof have been
fulfilled, as such provisions may apply to the Company.
-24-
(d) Warburg Compliance Certificates. Each of Warburg Investors and
the Liquidating Trust shall have delivered to the Purchasers a certificate
signed on its behalf of an authorized representative of Warburg Investors or the
Liquidating Trust, as the case may be, certifying that the conditions specified
in Section 8(a) and 8(b) hereof have been fulfilled, as such provisions may
apply to Warburg Investors or the Liquidating Trust, as the case may be.
(e) Agreement. The Company, Warburg Investors and the Liquidating
Trust shall have executed and delivered to the Purchasers counterpart signature
pages to this Agreement.
(f) Securities Law Exemptions. The offer and sale of the Shares to
the Purchasers pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act and the registration and/or qualification
requirements of all applicable state securities laws.
(g) Good Standing Certificate. The Company shall have delivered to
the Purchasers a certificate of the Secretary of State of the State of Delaware,
dated as of a date within ten days of the date of the Closing, with respect to
the good standing of the Company.
(h) Assistant Secretary's Certificate. The Company shall have
delivered to the Purchasers a certificate of the Company executed by the
Company's Assistant Secretary, dated as of the Closing Date, attaching and
certifying to the truth and correctness of (1) the Certificate of Incorporation,
(2) the Bylaws and (3) the resolutions adopted by the Company's Board of
Directors in connection with the transactions contemplated by this Agreement.
(i) Opinion of Company Counsel and Warburg Counsel. The Purchasers
will have received (i) an opinion on behalf of the Company, dated as of the
Closing Date, from Xxxxxx & Bird LLP, counsel to the Company, substantially in
the form attached hereto as Exhibit B and (ii) an opinion on behalf of Warburg,
dated as of the Closing Date, from Xxxxxxx Xxxx & Xxxxxxxxx LLP, counsel to
Warburg, substantially in the form attached hereto as Exhibit C.
(j) No Statute or Rule Challenging Transaction. No statute, rule,
regulation, executive order, decree, ruling, injunction, action, proceeding or
interpretation shall have been enacted, entered, promulgated, endorsed or
adopted by any court or governmental authority of competent jurisdiction or any
self-regulatory organization or the staff of any of the foregoing, having
authority over the matters contemplated hereby which questions the validity of,
or challenges or prohibits the consummation of, any of the transactions
contemplated by this Agreement.
(k) No Suspension of Trading or Listing of Common Stock. The Common
Stock shall not have been suspended from trading on Nasdaq.
(l) Other Actions. The Company, Warburg Investors and the
Liquidating Trust shall have executed such certificates, agreements, instruments
and other documents, and taken such other actions as shall be customary or
reasonably requested by the Purchasers in writing in connection with the
transactions contemplated hereby.
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9. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to consummate the transactions contemplated herein are subject to
the fulfillment or waiver, on or before the Closing, of each of the following
conditions:
(a) Representations and Warranties True. Each of the representations
and warranties of Warburg Investors and the Liquidating Trust contained in
Section 4 and of the Purchasers contained in Section 5 shall be true and correct
in all material respects on and as of the date hereof (provided, however, that
such qualification shall only apply to representations and warranties not
otherwise qualified by materiality) and on and as of the Closing Date with the
same effect as though such representations and warranties had been made as of
the Closing (except for representations and warranties that speak as of a
specific date).
(b) Performance. Warburg Investors, the Liquidating Trust and the
Purchasers shall have performed and complied in all material respects with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by them on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
(c) Warburg Compliance Certificates. Each of Warburg Investors and
the Liquidating Trust shall have delivered to the Company a certificate signed
on its behalf of an authorized representative of Warburg Investors or the
Liquidating Trust, as the case may be, certifying that the conditions specified
in Section 9(a) and 9(b) hereof have been fulfilled, as such provisions may
apply to Warburg Investors or the Liquidating Trust, as the case may be.
(d) Opinion of Warburg Counsel. The Company will have received an
opinion on behalf of Warburg, dated as of the Closing Date, from Xxxxxxx Xxxx &
Xxxxxxxxx LLP, counsel to Warburg, substantially in the form attached hereto as
Exhibit C.
(e) Agreement. Each Purchaser shall have executed and delivered to
the Company counterpart signature pages to this Agreement (and Appendix I and II
hereto).
(f) Securities Law Exemptions. The offer and sale of the Shares to
the Purchasers pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act and the registration and/or qualification
requirements of all applicable state securities laws.
(g) Other Actions. The Purchasers shall have executed such
certificates, agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by the Company in
connection with the transactions contemplated hereby.
(h) No Statute or Rule Challenging Transaction. No statute, rule,
regulation, executive order, decree, ruling, injunction, action, proceeding or
interpretation shall have been enacted, entered, promulgated, endorsed or
adopted by any court or governmental authority of competent jurisdiction or any
self-regulatory organization or the staff of any of the foregoing, having
authority over the matters contemplated hereby which questions the validity of,
or challenges or prohibits the consummation of, any of the transactions
contemplated by this Agreement.
-26-
10. CONDITIONS TO WARBURG'S OBLIGATIONS AT CLOSING. The obligations of
the Liquidating Trust to consummate the transactions contemplated herein are
subject to the fulfillment or waiver, on or before the Closing, of each of the
following conditions:
(a) Representations and Warranties True. Each of the representations
and warranties of the Company contained in Section 3 and the Purchasers
contained in Section 5 shall be true and correct in all material respects on and
as of the date hereof (provided, however, that such qualification shall only
apply to representations and warranties not otherwise qualified by materiality)
and on and as of the Closing Date with the same effect as though such
representations and warranties had been made as of the Closing (except for
representations and warranties that speak as of a specific date).
(b) Performance. The Purchasers and the Company shall have performed
and complied in all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by them on or before the Closing and shall have obtained all
approvals, consents and qualifications necessary to complete the purchase and
sale described herein.
(c) Company Compliance Certificate. The Company will have delivered
to Warburg Investors and the Liquidating Trust a certificate signed on its
behalf by its Chief Executive Officer or Chief Financial Officer, dated as of
the Closing Date, certifying that the conditions specified in Sections 10(a) and
10(b) hereof have been fulfilled, as such provisions may apply to the Company.
(d) Agreement. Each Purchaser shall have executed and delivered to
Warburg Investors and the Liquidating Trust counterpart signature pages to this
Agreement (and Appendix I and II hereto).
(e) Securities Law Exemptions. The offer and sale of the Shares to
the Purchasers pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act and the registration and/or qualification
requirements of all applicable state securities laws.
(f) Payment of Purchase Price. Each Purchaser shall have delivered
to the Liquidating Trust by wire transfer of immediately available funds an
amount equal to the product of (i) the Per Share Price and (ii) the number of
Shares set forth opposite such Purchaser's name on Schedule A hereto.
(g) Other Actions. The Purchasers shall have executed such
certificates, agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by Warburg Investors or
the Liquidating Trust in connection with the transactions contemplated hereby.
-27-
(h) No Statute or Rule Challenging Transaction. No statute, rule,
regulation, executive order, decree, ruling, injunction, action, proceeding or
interpretation shall have been enacted, entered, promulgated, endorsed or
adopted by any court or governmental authority of competent jurisdiction or any
self-regulatory organization or the staff of any of the foregoing, having
authority over the matters contemplated hereby which questions the validity of,
or challenges or prohibits the consummation of, any of the transactions
contemplated by this Agreement.
11. MISCELLANEOUS.
(a) Termination. Unless the Closing has occurred prior thereto, this
Agreement and, except as herein provided, all the rights and obligations of the
parties hereto, shall terminate ninety (90) days from the date hereof (unless
such date is extended by the mutual written consent of Warburg Investors, the
Liquidating Trust, the Company and the Purchasers). In the event of such
termination, this Agreement shall become null and void and be of no further
force or effect.
(b) Successors and Assigns. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties. None of the Company, Warburg
Investors nor the Liquidating Trust shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Purchasers
holding at least a majority of the total aggregate number of Shares then
outstanding (excluding any shares sold to the public pursuant to Rule 144 or
otherwise). Any Purchaser may assign its rights under this Agreement to any
person to whom such Purchaser assigns or transfers any of the Shares, provided
that such transferee agrees in writing to be bound by the terms and provisions
of this Agreement, and such transfer is in compliance with the terms and
provisions of this Agreement and permitted by federal and state securities laws.
(c) Governing Law. This Agreement will be governed by and construed
and enforced under the internal laws of the State of New York, without reference
to principles of conflict of laws or choice of laws. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(d) Survival. The representations and warranties of the Company,
Warburg Investors, the Liquidating Trust and the Purchasers contained in
Sections 3, 4 and 5 of this Agreement shall survive until the first (1st)
anniversary of the Closing Date.
(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(f) Headings. The headings and captions used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules will, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by reference.
-28-
(g) Notices. Any notices and other communications required or
permitted under this Agreement shall be in writing and shall be delivered (i)
personally by hand or by courier, (ii) mailed by United States first-class mail,
postage prepaid or (iii) sent by facsimile directed (A) if to any Purchaser, at
such Purchaser's address or facsimile number set forth on Schedule A to this
Agreement, or at such address or facsimile number as such Purchaser may
designate by giving at least ten (10) days' advance written notice to the
Company, Warburg Investors and the Liquidating Trust or (b) if to the Company,
Warburg Investors or the Liquidating Trust, to their respective address or
facsimile number set forth below, or at such other address or facsimile number
as the Company, Warburg Investors or the Liquidating Trust, as the case may be,
may designate by giving at least ten (10) days' advance written notice to the
Purchasers. All such notices and other communications shall be deemed given upon
(i) receipt or refusal of receipt, if delivered personally, (ii) three days
after being placed in the mail, if mailed, or (iii) confirmation of facsimile
transfer, if faxed.
If to the Company:
Indus International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Tel: (770)
Fax: (770)
Attention: Xxxx Xxxxxxx
with a copy to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxx
If to Warburg Investors or the Liquidating Trust:
c/o Warburg, Xxxxxx Investors, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
-29-
(h) Amendments and Waivers. This Agreement may be amended and the
observance of any term of this Agreement may be waived only with the written
consent of the Company, Warburg Investors, the Liquidating Trust and the
Purchasers holding at least a majority of the total aggregate number of the
Shares then outstanding (excluding any shares then already sold to the public
pursuant to Rule 144 or otherwise). Any amendment effected in accordance with
this Section 11(h) will be binding upon the Purchasers, the Company, Warburg
Investors, the Liquidating Trust and their respective successors and assigns.
(i) Severability. If any provision of this Agreement is held to be
unenforceable under applicable law, such provision will be excluded from this
Agreement and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.
(j) Entire Agreement. This Agreement, together with all exhibits and
schedules hereto, constitute the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersede any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties with respect to the subject matter hereof.
(k) Further Assurances. From and after the date of this Agreement,
upon the request of the Company, Warburg Investors, the Liquidating Trust or the
Purchasers, the Company, Warburg Investors, the Liquidating Trust and the
Purchasers will execute and deliver such instruments, documents or other
writings, and take such other actions, as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
(l) Meaning of Include and Including. Whenever in this Agreement the
word "include" or "including" is used, it shall be deemed to mean "include,
without limitation" or "including, without limitation," as the case may be, and
the language following "include" or "including" shall not be deemed to set forth
an exhaustive list.
(m) Fees, Costs and Expenses. Except as otherwise provided for in
this Agreement, all fees, costs and expenses (including attorneys' fees and
expenses) incurred by any party hereto in connection with the preparation,
negotiation and execution of this Agreement and the exhibits and schedules
hereto and the consummation of the transactions contemplated hereby and thereby
(including the costs associated with any filings with, or compliance with any of
the requirements of any governmental authorities), shall be the sole and
exclusive responsibility of such party.
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(n) 8-K Filing and Publicity. As soon as practicable following the
execution of this Agreement, but in no event later than 9:30 a.m., eastern time
on the day following the Execution Date, the Company shall file a Current Report
on Form 8-K with the SEC describing the terms of the transactions contemplated
by this Agreement and attaching this Agreement and the press release referred to
below as exhibits to such filing (the "8-K FILING" including all attachments).
Neither the Company, Warburg Investors, the Liquidating Trust nor any Purchaser
shall issue any press releases or any other public statements with respect to
the transactions contemplated by this Agreement; provided, however, that the
Company shall be entitled, without the prior approval of Warburg Investors, the
Liquidating Trust or any Purchaser, to issue any press release or make any other
public disclosure (including a press release (concerning the offering of the
Shares) pursuant to Rule 135(c) under the Securities Act) with respect to such
transactions (i) in substantial conformity with the 8-K Filing and (ii) as is
required by applicable law, regulations, and Nasdaq rules; and, provided
further, that no such release may identify a Purchaser unless such Purchaser has
consented thereto in writing, or as required by law.
(o) Waivers. No waiver by any party to this Agreement 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 other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
(p) Stock Splits, Dividends and other Similar Events. The provisions
of this Agreement shall be appropriately adjusted to reflect any stock split,
stock dividend, reorganization or other similar event that may occur with
respect to the Company after the date hereof.
(q) Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each
Purchaser, Warburg Investors, the Liquidating Trust and the Company will be
entitled to specific performance under this Agreement. 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.
[Remainder of page intentionally left blank.]
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
INDUS INTERNATIONAL, INC.
By:
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Name:
Title:
WARBURG, XXXXXX INVESTORS, L.P.
By: Warburg Pincus & Co., general partner
By:
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Name:
Title:
WARBURG, XXXXXX INVESTORS LIQUIDATING TRUST
By:
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Name:
Title:
[PURCHASER SIGNATURE PAGES TO FOLLOW]
SIGNATURE PAGE TO
SECURITIES PURCHASE AGREEMENT
DATED AS OF AUGUST __, 2004
BY AND AMONG
WARBURG, XXXXXX INVESTORS L.P.,
WARBURG, XXXXXX INVESTORS LIQUIDATING TRUST
INDUS INTERNATIONAL, INC.,
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Warburg, Xxxxxx
Investors L.P., Warburg, Xxxxxx Investors Liquidating Trust and Indus
International, Inc., the Securities Purchase Agreement (the "AGREEMENT") to
which this signature page is attached effective as of the date of the Agreement,
which Agreement and signature sage, together with all counterparts of such
Agreement and signature pages of the other Purchasers named in such Agreement,
shall constitute one and the same document in accordance with the terms of such
Agreement.
Number of Shares Purchased:
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"Purchaser"
Signature:
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Name:
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Title:
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Address:
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Telephone:
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Facsimile:
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E-mail:
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Tax ID Number:
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SCHEDULE A
SCHEDULE OF PURCHASERS
Name and Address Number of Shares Purchased Purchase Price
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APPENDIX I
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 5(k) of the Agreement, please provide us with the
following information:
1. The exact name that the Purchaser's Shares are to be registered in
(this is the name that will appear on your stock certificate(s)). A nominee name
may be used if appropriate:
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2. The relationship between the Purchaser of the Shares and the
Registered Holder listed in response to Item 1 above:
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3. The mailing address of the Registered Holder listed in response to
Item 1 above:
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4. The Social Security Number or Tax Identification Number of the
Registered Holder listed in response to Item 1 above:
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APPENDIX II
REGISTRATION STATEMENT/SUITABILITY QUESTIONNAIRE
Pursuant to Section 5(k) of the Agreement, please provide the information below.
All capitalized terms not defined in this Appendix II shall have the meanings
assigned to them in the Agreement.
PART A
In connection with the preparation of the Registration Statement, please provide
us with the following information:
1. Pursuant to the "Selling Stockholder" section of the Registration
Statement, please state the Purchaser's name exactly as it should appear in the
Registration Statement:
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2. Please provide the number of shares of Common Stock that the
Purchaser will own immediately after Closing, including those Shares purchased
by the Purchaser pursuant to the Agreement and those shares purchased by the
Purchaser through other transactions:
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3. Please explain the nature of the beneficial ownership of the shares
of Common Stock owned by the Purchaser organization, including any shares of
Common Stock not held of record by the Purchaser:
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4. If the Purchaser is not a natural person, please identify each
natural person who will exercise sole or shared voting and/or dispositive power
with respect to the shares of Common Stock owned by the Purchaser immediately
after the Closing. Please also specify in what capacity such person(s) will
exercise their voting and/or dispositive power with respect to such shares.
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NATURAL PERSON(S) RELATIONSHIP TO PURCHASER
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5. Disclose the details of any rights to acquire shares of Common Stock
that the Purchaser may have:
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6. Has the Purchaser had any material relationship within the past
three years with the Company or its affiliates?
Yes |_| No |_|
If yes, please indicate the nature of any such relationships below:
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7. Is the Purchaser a broker-dealer registered with the SEC?
Yes |_| No |_|
8. Is the Purchaser affiliated with any registered broker-dealer?
Yes |_| No |_|
If yes, please identify such broker-dealer and explain the relationship
that such registered broker-dealer has with the Purchaser (including details of
any affiliation or other relationship).
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REGISTERED BROKER-DEALER RELATIONSHIP TO PURCHASER
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PART B
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Pursuant to Section 5 of the Agreement, please provide us with the following
information, and we will use the Purchaser's responses to qualify the Purchaser
for purposes of federal and state securities laws:
9. IDENTIFICATION
Name:
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Address of principal place of business:
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State (or Country) of formation or incorporation:
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Contact Person:
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Telephone Number:
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Facsimile Number:
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Email Address:
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Type of Entity (corporation, partnership, trust, etc.):
Social Security or Taxpayer or Employer Identification Number:
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10. STATUS AS AN ACCREDITED INVESTOR
Please confirm that the Purchaser is an "accredited investor" as defined under
the Securities Act of 1933, as amended (the "Act"), by checking all applicable
boxes to indicate the exemption qualifying you as an accredited investor, as
provided in Rule 501(a) under the Securities Act of 1933, as amended.
|_| a corporation, organization described in Section 501(c)(3) of the
Internal Revenue Code, a Massachusetts or similar business trust or a
partnership, in each case, not formed for the purpose of this investment, with
total assets in excess of $5,000,000;
|_| a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
|_| a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;
|_| an investment company registered under the Investment Company Act
of 1940 or a business development company as defined in Section 2(a)(48) of that
Act;
|_| a bank as defined in Section 3(a)(2) or a savings and loan
association or other institution defined in Section 3(a)(5)(A) of the Act acting
in either an individual or fiduciary capacity;
|_| an insurance company as defined in Section 2(13) of the Securities
Act;
|_| an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 whose investment decision is
made by a fiduciary which is either a bank, savings and loan association,
insurance company, or registered investment advisor, or whose total assets
exceed $5,000,000, or, if a self-directed plan, a plan whose investment
decisions are made solely by persons who are accredited investors;
|_| a director, executive officer or general partner of the issuer of
the securities being offered or sold;
|_| a natural person whose individual net worth, or joint net worth
with your spouse, at the time of purchase exceeds $1,000,000;
|_| a natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with your spouse in excess
of $300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year;
|_| a trust with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii) of the Securities
Act;
|_| an entity in which all the equity owners are accredited investors;
or
|_| other - Please describe:
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11. RESIDENCE INFORMATION
Please indicate the jurisdiction in which the Purchaser
resides, if the Purchaser is a natural person, or in which the Purchaser is
chartered and the jurisdiction in which it maintains its
principal offices:
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12. INVESTMENT REPRESENTATION
Is the Purchaser purchasing the securities offered for its and for
investment purposes only?
Yes |_| No |_|
If no, please state for whom is the Purchaser investing and/or the
reason for investing.
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13. SIGNATURE
The above information is true and correct in all material respects and
the undersigned recognizes that the Company, Warburg Investors, the
Liquidating Trust and their respective counsel are relying on the truth
and accuracy of such information in reliance on the exemption under the
Securities Act. The undersigned agrees to notify the Company, Warburg
Investors and the Liquidating Trust promptly of any changes in the
foregoing information which may occur prior to the investment.
Executed at _________________________,______________on _______ , 2004.
Name of Entity:________________________________________________________
By: ____________________________________
(Signature)
_______________________________________
(Name and title of signatory)
IF THE INVESTMENT WILL BE MADE BY MORE THAN ONE ENTITY, WHETHER OR
NOT AFFILIATED, PLEASE COMPLETE A COPY OF THIS QUESTIONNAIRE FOR
EACH ENTITY.
EXHIBIT A
DISCLOSURE LETTER
EXHIBIT B
FORM OF OPINION OF XXXXXX & BIRD LLP
EXHIBIT C
FORM OF OPINION OF XXXXXXX XXXX & XXXXXXXXX LLP
