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EXHIBIT 10.14
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NOTE AND SERIES A- WARRANT
PURCHASE AGREEMENT
between
INTRACEL CORPORATION
and
NORTHSTAR ADVANTAGE HIGH TOTAL RETURN FUND
Dated as of June 21, 1996
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TABLE OF CONTENTS
Section Page
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ARTICLE I
THE SECURITIES
1.1. Issuance, Sale and Delivery of the Securities.......................................1
1.2. Closing; Purchase Price; Purchase Price Allocation..................................1
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. Organization, Qualifications and Corporate Power....................................2
2.2. Authorization of Agreements, etc....................................................2
2.3. Validity............................................................................3
2.4. Authorized Capital Stock............................................................3
2.5. Financial Statements................................................................4
2.5A. Absence of Undisclosed Liabilities and Changes......................................5
2.6. Events Subsequent to the Date of the Balance Sheet..................................5
2.7. Litigation; Compliance with Law.....................................................6
2.8. Title to Properties.................................................................6
2.9. Leasehold Interests.................................................................6
2.10. Taxes...............................................................................7
2.11. Other Agreements....................................................................7
2.12. Patents, Trademarks, etc............................................................8
2.13. Loans and Advances..................................................................9
2.14. Assumptions, Guaranties, etc. of Indebtedness of Other Persons......................9
2.15. Significant Customers and Suppliers.................................................9
2.16. Governmental Approvals..............................................................9
2.17. Accuracy of Statements.............................................................10
2.18. Insurance..........................................................................10
2.19. Employment Relations...............................................................10
2.20. Compensation of Key Employees......................................................10
2.21. Environmental Compliance...........................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3.1. Purchase of Securities.............................................................11
3.2. Authority..........................................................................11
3.3. Projections........................................................................12
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Section Page
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ARTICLE IV
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
4.1. Opinion of Company's Counsel.......................................................12
4.2. Representations and Warranties to be True and Correct..............................12
4.3. Performance........................................................................12
4.4. All Proceedings to be Satisfactory.................................................12
4.5. Supporting Documents...............................................................12
4.6. Fees of Purchaser..................................................................13
4.7. Warrant............................................................................14
4.8. Note and Other Loan Documents......................................................14
ARTICLE V
COVENANTS OF THE COMPANY
5.1. Reserve for Warrant Shares.........................................................14
5.2. Corporate Existence................................................................14
5.3. Restrictive Agreements Prohibited..................................................14
5.4. Compliance with Laws...............................................................15
5.5 Senior Indebtedness................................................................15
ARTICLE VI
REGISTRATION RIGHTS
6.1. Piggyback Registration.............................................................15
6.2. Registration Procedures............................................................17
6.3. Expenses...........................................................................19
6.4. Indemnification and Contribution...................................................19
6.5. Rule 144 Reporting.................................................................22
6.6. Termination of Piggyback Registration Rights.......................................22
6.7. Material Non-Public Information....................................................22
ARTICLE VII
MISCELLANEOUS
7.1. Expenses...........................................................................23
7.2. Survival of Agreements.............................................................23
7.3. Brokerage..........................................................................23
7.4. Parties in Interest................................................................23
7.5. Notices............................................................................23
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Section Page
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7.6. Governing Law......................................................................24
7.7. Entire Agreement...................................................................24
7.8. Counterparts.......................................................................24
7.9. Amendments.........................................................................24
7.10. Severability.......................................................................24
7.11. Titles and Subtitles...............................................................24
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SCHEDULES
EXHIBITS
Exhibit A - Note
Exhibit B - Warrant
Exhibit C - Opinion of Counsel for the Company
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NOTE AND SERIES A- WARRANT PURCHASE AGREEMENT (this "Agreement"), dated as of
June 21, 1996, between Intracel Corporation, a Massachusetts corporation (the
"Company") and Northstar Advantage High Total Return Fund, a Massachusetts
business trust (the "Purchaser").
PREAMBLE:
WHEREAS, the Company wishes to issue and sell to the Purchaser (i) the Company's
secured promissory note, in the principal amount of $2,000,000, substantially in
the form attached hereto as Exhibit A (the "Note"), and (ii) the Series A-
Common Stock Warrant, substantially in the form attached hereto as Exhibit B
(the "Warrant") to purchase up to 79,537 shares of common stock, no par value
per share (the "Warrant Shares"), of the Company (the Note and the Warrant shall
collectively be referred to as the "Securities"); and
WHEREAS, the Purchaser wishes to purchase the Securities on the terms
and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties hereto agree as follows:
ARTICLE I
THE SECURITIES
SECTION 1.1. Issuance, Sale and Delivery of the Securities. The Company
agrees to issue, sell and deliver to the Purchaser, and the Purchaser hereby
agrees to purchase from the Company, at the closing (the "Closing"), the (i)
Note and (ii) the Warrant.
SECTION 1.2. Closing; Purchase Price; Purchase Price Allocation. The
Closing shall take place at the offices of Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, at 10:00 a.m., New York time on June 21,
1996, or at such other place, date and time as may be otherwise mutually agreed
in writing by the parties hereto. The date on which the Closing actually occurs
is referred to herein as the "Closing Date." At the Closing, the Company shall
issue and deliver to the Purchaser the Note, in substantially the form attached
hereto as Exhibit A, and the Warrant, in substantially the form attached hereto
as Exhibit B. As payment in full for the Securities, and against delivery of the
Securities on the Closing Date, the Purchaser shall transfer the sum of
$1,960,000 by wire transfer of immediately available funds to such account or
accounts as the Company may direct. The Company and the Purchaser agree that
$100,000 of the aggregate consideration for the Securities shall be allocated to
the Warrants, and that the balance of such aggregate consideration shall be
allocated to the Note.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser as of the Closing
Date that:
SECTION 2.1. Organization, Qualifications and Corporate Power. The
Company is a corporation duly organized (originally under the name of Boston
Biological Technologies, Inc.), validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, Xxxxxxx, Inc. (the Company's
wholly-owned subsidiary) ("Xxxxxxx") is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and each
of the Company and Xxxxxxx is duly licensed or qualified to transact business as
a foreign corporation and is in good standing in each jurisdiction in which the
nature of the business transacted by it or the character of the properties owned
or leased by it requires such licensing or qualification, except where the
failure so to qualify will not have a material adverse effect on the business,
operations, property or financial condition of the Company or Xxxxxxx,
respectively. Each of the Company and Xxxxxxx has the power and authority to own
and hold its properties and to carry on its business as now conducted and as
proposed to be conducted, and the Company has the power and authority to
execute, deliver and perform this Agreement and the "Other Loan Documents" (as
defined in Section 4.8) (and, with respect to Xxxxxxx, the Security Agreement
and the Xxxxxxx Guaranty), to issue, sell and deliver the Note and the Warrant,
and to issue and deliver the Warrant Shares upon the exercise of the Warrant.
The Company has no subsidiaries, other than Xxxxxxx and the Company's ownership
of forty-five percent of the membership interests of German-American Institute
for AIDS Research GmbH, a limited liability company formed under the laws of
Germany.
SECTION 2.2. Authorization of Agreements, etc. (a) The execution and
delivery by the Company of this Agreement and the Other Loan Documents (and,
with respect to Xxxxxxx, the Security Agreement and the Xxxxxxx Guaranty), the
performance by the Company of its obligations hereunder and thereunder (and,
with respect to Xxxxxxx, the Security Agreement and the Xxxxxxx Guaranty), the
issuance, sale and delivery of the Note and the Warrant, and the issuance, sale
and delivery of the Warrant Shares upon the exercise of the Warrant, have been
duly authorized by all requisite corporate action and will not violate any
provision of law, any order of any court or other agency of government (except
that the issuance of the Warrant Shares may require filings under one or more
state securities laws, all of which filings will be made by the Company within
the requisite time period), the Articles of Organization of the Company, as
amended (the "Charter") or the By-laws of the Company, as amended (the
"By-laws") (or, with respect to Xxxxxxx, its Certificate of Incorporation or
By-laws), or any provision of any indenture, agreement or other instrument to
which either the Company or Xxxxxxx is a party or by which either the Company or
Xxxxxxx or any of its properties or assets is bound, or conflict with, result in
a breach of or constitute (whether with or without notice or lapse of time or
both) a default under any such indenture, agreement or other instrument, or
result in the creation or imposition of any lien, charge, restriction, claim or
encumbrance of any nature whatsoever upon any of the properties or assets of the
Company or Xxxxxxx.
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(b) The Warrant has been authorized and, when issued in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable with no personal liability attaching to the ownership
thereof and will be free and clear of all liens, charges, restrictions,
claims and encumbrances imposed by or through the Company except as set
forth in this Agreement. The Warrant Shares have been duly authorized
and reserved for issuance upon exercise of the Warrant, and, when so
issued, will be duly authorized, validly issued, fully paid and
nonassessable with no personal liability attaching to the ownership
thereof and will be free and clear of all liens, charges, restrictions,
claims and encumbrances imposed by or through the Company except as set
forth in this Agreement. Neither the issuance, sale or delivery of the
Warrant, nor the issuance or delivery of the Warrant Shares is subject
to any preemptive right of stockholders of the Company or to any right
of first refusal or other right in favor of any person, except as set
forth in Article VI of this Agreement.
SECTION 2.3. Validity. Each of this Agreement, the Note, the Other Loan
Documents, and the Warrant has been (or at the Closing, shall be) duly executed
and delivered by the Company and, where applicable, Xxxxxxx, and constitute the
legal, valid and binding obligation of the Company, and, where applicable,
Xxxxxxx, enforceable in accordance with its terms, subject to (i) applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and moratorium
laws and other similar laws of general application affecting enforcement of
creditors' rights generally and (ii) the availability of equitable remedies
including specific performance may be limited by equitable principles of general
applicability (regardless of whether enforcement is sought in a proceeding in
equity or at law).
SECTION 2.4. Authorized Capital Stock. The authorized capital stock of
(a) the Company consists of (i) 3,000,000 shares of preferred stock, no par
value per share (the "Preferred Stock"), of which 730,000 shares have been
designated "Series A Preferred" and 850,000 shares designated "Series A-I
Preferred" and (ii) 5,000,000 shares of common stock (the "Common Stock") and
(b) Xxxxxxx consists of 1,000 shares of common stock, par value $.01 per share.
Immediately prior to the Closing, all of the capital stock of Xxxxxxx which is
issued and outstanding will be owned by the Company, 1,983,450 shares of Common
Stock will be issued and outstanding all of which will be validly issued and
outstanding, fully paid and nonassessable with no personal liability attaching
to the ownership thereof, 525,492 shares of Series A Preferred Stock will be
issued and outstanding pursuant to the Convertible Stock Purchase Agreement,
dated July 22, 1994, by and among the Company and the Purchasers set forth on
"Schedule I" thereto (the "1994 Stock Purchase Agreement"), 566,874 shares of
Series A-I Preferred will be issued and outstanding pursuant to the Convertible
Stock Purchase Agreement, dated September 22, 1995, by and among the Company and
the purchasers set forth on "Schedule I" thereto (the "1995 Stock Purchase
Agreement") and 128,775 shares of Series A-I Preferred will be issued and
outstanding pursuant to a Convertible Preferred Stock Purchase Agreement, dated
November 16, 1995, between the Company and Northstar American Corporation. No
other shares of capital stock of the Company or Xxxxxxx have been issued or
reserved for issuance, except 385,000 shares of Common Stock reserved for
issuance in the event options granted pursuant to the 1989 and 1990-1991 Stock
Option Plans of the Company are exercised, 730,000 shares of Common Stock
reserved for issuance in the event of the conversion
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of the shares of Series A Preferred Stock and 52,000 shares of Common Stock
reserved for issuance in the event of the exercise of the Series A Warrant, both
having been granted pursuant to the 1994 Stock Purchase Agreement, 850,000
shares of Common Stock reserved for issuance in the event of the conversion of
the shares of Series A-I Preferred Stock granted pursuant to the 1995 Stock
Purchase Agreement, 86,462 shares of Common Stock reserved for issuance in the
event of the exercise of warrants granted pursuant to the Warrant Agreement,
dated September 22, 1995, between the Company and Dublind Investments, L.L.C.,
91,177 shares of Common Stock reserved for issuance in the event of the exercise
of the warrants granted pursuant to the Warrant Agreement, dated November 16,
1995, between the Company and Creditanstalt Bankverein ("Creditanstalt"), 94,010
shares of Common Stock reserved for issuance in the event of exercise of the
warrants granted pursuant to the Series A-II Warrant and Note Purchase
Agreement, dated December 27, 1995, between the Company and Purchaser, 159,073
shares of Common Stock reserved for issuance in the event of exercise of the
warrants granted pursuant to the Note and Series A-III Warrant Purchase
Agreement, dated June 11, 1996 between the Company and CoreStates Enterprise
Fund, a division of CoreStates Bank, N.A. ("CoreStates") and 79,537 shares of
Common Stock reserved for issuance in the event of the exercise of the Warrant
granted pursuant to this Agreement. The designations, powers, preferences,
rights, qualifications, limitations and restrictions in respect of the Series A
Preferred Stock and the Series A-I Preferred Stock are as set forth in both of
the Certificates of Vote of Directors Establishing a Series of a Class of Stock,
and all such designations, powers, preferences, rights, qualifications,
limitations and restrictions are valid, binding and enforceable and in
accordance with all applicable laws. Except as provided for in the Charter, the
Company has no obligation (contingent or other) to purchase, redeem or otherwise
acquire any of its equity securities or any interest therein or to pay any
dividend or make any other distribution in respect thereof. This Section 2.4
sets forth the aggregate number of outstanding warrants, options, agreements,
convertible securities or other commitments pursuant to which the Company is or
may become obligated to issue any shares of its capital stock or other
securities of the Company. Except as set forth above in this Section 2.4, there
are no preemptive or similar rights to purchase or otherwise acquire shares of
capital stock of the Company pursuant to any provisions of law, the Charter or
By-laws of the Company, in each case as amended to the date hereof, or any
agreement to which the Company is a party or otherwise. Except as set forth
above in this Section 2.4, or as contemplated herein, immediately upon
consummation at the Closing of the transactions contemplated hereby there will
be no agreement, restriction or encumbrance (such as a right of first refusal,
right of first offer, proxy, voting agreement, voting trust, bring-along or
come-along rights) with respect to the sale or voting of any shares of capital
stock of the Company (whether outstanding or issuable upon conversion or
exercise of outstanding securities) of which the Company has knowledge.
SECTION 2.5. Financial Statements . The Company has furnished to the
Purchaser the audited balance sheet of the Company for the year ended June 30,
1995 (the "Balance Sheet") and the related audited statements of income,
stockholders' equity and cash flows of the Company for the year ended June 30,
1995 and the balance sheet of the Company as of March 31, 1996 and the related
statements of income, stockholders' equity and cash flows of the Company as of
March 31, 1996. All such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied and fairly
present
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the financial position of the Company as of June 30, 1995 and March 31, 1996
respectively, and the results of its operations and cash flows as of June 30,
1995 and March 31, 1996 respectively. Since the date of the Balance Sheet, (i)
there has been no change in the assets, liabilities or financial condition of
the Company from that reflected in the Balance Sheet except for changes in the
ordinary course of business which in the aggregate have not been materially
adverse and (ii) none of the business, financial condition, operations or
property of the Company have been materially adversely affected by any
occurrence or development, individually or in the aggregate, whether or not
insured against.
SECTION 2.5A. Absence of Undisclosed Liabilities and Changes. Except as
set forth on Schedule 2.5A attached hereto, as of the date hereof, (a) the
Company had no liabilities of any nature (matured or unmatured, fixed or
contingent) which were not provided for on the balance sheet of the Company as
of such date, except for (i) liabilities which, individually and in the
aggregate, were not material to the financial condition of the Company or (ii)
liabilities incurred in the ordinary course of the Company's business and not
required to be so provided for under generally accepted accounting principles ,
and (b) all reserves established by the Company and set forth on such balance
sheet were adequate in all material respects. There are no loss contingencies
(as such term is used in Statement of Financial Accounting Standards No. 5
("Statement No. 5") issued by the Financial Accounting Standards Board in March
1975) which are not adequately provided for in such balance sheet as required by
Statement No. 5.
SECTION 2.6. Events Subsequent to the Date of the Balance Sheet. Except
as set forth in the attached Schedule 2.6 or as contemplated by this Agreement,
since the date of the Balance Sheet neither the Company nor Xxxxxxx has (i)
issued any stock, bond or other corporate security, (ii) borrowed any amount or
incurred or become subject to any liability (absolute, accrued or contingent),
except current liabilities incurred and liabilities under contracts entered into
in the ordinary course of business, (iii) discharged or satisfied any lien or
encumbrance or incurred or paid any obligation or liability (absolute, accrued
or contingent) other than current liabilities shown on the Balance Sheet and
current liabilities incurred since the date of the Balance Sheet in the ordinary
course of business, (iv) declared or made any payment or distribution to
stockholders or purchased or redeemed any share of its capital stock or other
security, (v) mortgaged, pledged or subjected to lien any of its assets,
tangible or intangible, other than liens of current real property taxes not yet
due and payable, (vi) sold, assigned or transferred any of its tangible assets
except in the ordinary course of business, or canceled any debt or claim, (vii)
sold, assigned, transferred or granted any exclusive license with respect to any
material patent, trademark, trade name, service xxxx, copyright, trade secret or
other intangible asset other than in the ordinary course of business, (viii)
suffered any material loss of property or waived any right of substantial value,
(ix) made any change in officer compensation except in the ordinary course of
business and consistent with past practice, (x) made any material change in the
manner of business or operations of the Company or Xxxxxxx, respectively, (xi)
entered into any transaction except in the ordinary course of business or as
otherwise contemplated hereby or (xii) entered into any commitment (contingent
or otherwise) to do any of the foregoing.
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SECTION 2.7. Litigation; Compliance with Law. There is no material (i)
action, suit, claim, proceeding or investigation pending or, to the knowledge of
the Company, threatened against or affecting the Company or Xxxxxxx,
respectively, at law or in equity, or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) arbitration proceeding relating to
the Company or Xxxxxxx, respectively, pending under a collective bargaining
agreement or otherwise or (iii) governmental inquiry pending or to the knowledge
of the Company, threatened against or affecting the Company or Xxxxxxx,
respectively, (including, without limitation, any inquiry as to the
qualification of the Company or Xxxxxxx, respectively, to hold or receive any
license or permit). The Company has not received any opinion or memorandum or
legal advice from legal counsel to the effect that it is exposed, from a legal
standpoint, to any liability or disadvantage which may be material to its
business, financial condition, operations or property. The Company is not in
default with respect to any order, writ, injunction or decree known to or served
upon the Company of any court or of any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign. There is no material action or suit by the Company pending
or threatened against others. Each of the Company and Xxxxxxx has complied in
all material respects with all laws, rules, regulations and orders applicable to
its business, operations, properties, assets, products and services, and each of
the Company and Xxxxxxx has all necessary permits, licenses and other
authorizations required to conduct its business as conducted and as proposed to
be conducted, except where the failure to own or possess such permits, licenses
or authorizations could not, either singly or in the aggregate, have a material
adverse effect on the business, operations, properties or financial condition of
the Company.
SECTION 2.8. Title to Properties. Except in instances that, either
singly or in the aggregate, could not have a material adverse effect on the
business, operations, properties or financial condition of the Company, and
except as disclosed in Schedule 2.8 hereof, each of the Company and Xxxxxxx has
good and marketable title to its properties and assets reflected on the Balance
Sheet (other than properties and assets disposed of in the ordinary course of
business since the date of the Balance Sheet), and all such properties and
assets are free and clear of mortgages, pledges, security interests, liens,
charges, claims, restrictions and other encumbrances, except for liens for
current taxes not yet due and payable and minor imperfections of title, if any,
not material in nature or amount and not materially detracting from the value or
materially impairing the use of the property subject thereto or impairing the
operations or proposed operations of the Company or Xxxxxxx, respectively.
SECTION 2.9. Leasehold Interests. Each lease or agreement to which the
Company or Xxxxxxx, respectively, is a party under which it is a lessee of any
property, real or personal (a list of all such leases being attached hereto as
Schedule 2.9), is a valid and subsisting agreement without any material default
of the Company or Xxxxxxx, respectively, thereunder and, to the knowledge of the
Company, without any material default thereunder of any other party thereto. No
event has occurred and is continuing which, with due notice or lapse of time or
both, would constitute a default or event of default by the Company or Xxxxxxx,
respectively, under any such lease or agreement or, to the knowledge of the
Company, by any other party thereto.
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SECTION 2.10. Taxes. The Company has filed or will file within the time
prescribed by law (including extensions of time approved by the appropriate
taxing authority) all tax returns, Federal, state, county and local, required to
be filed by it, and the Company has paid all taxes shown to be due by such
returns and extensions as well as all other taxes, assessments and governmental
charges which have become due or payable, including, without limitation, all
taxes which the Company is obligated to withhold from amounts owing to
employees, creditors and third parties. All such taxes with respect to which the
Company has become obligated have been paid and adequate reserves have been
established for all taxes accrued but not yet payable. No deficiency assessment
with respect to or proposed adjustment of the Company's Federal, state, county
or local taxes is pending or, to the knowledge of the Company, threatened. There
is no tax lien in favor of any Federal, state, county or local taxing authority,
outstanding against the assets, properties or business of the Company. Neither
the Company nor any of its stockholders has ever filed a consent pursuant to
Section 341(f) of the Internal Revenue Code of 1986, as amended (the "Code"),
relating to collapsible corporations.
SECTION 2.11. Other Agreements. Except as set forth in the attached
Schedule 2.11, neither the Company nor Xxxxxxx is a party to or otherwise bound
by any written or oral contract or instrument or other restriction which
individually or in the aggregate could materially adversely affect the business,
financial condition, operations or property of the Company. Except as set forth
in the attached Schedule 2.11, or as a result of the transactions contemplated
in this Agreement, the Note, the Other Loan Documents, or the Warrant, neither
the Company nor Xxxxxxx is a party to or otherwise bound by any written or oral:
(a) distributor, dealer, manufacturer's representative or sales
agency contract or agreement which is not terminable on less than ninety
(90) days' notice without cost or other liability to the Company or
Xxxxxxx;
(b) sales contract which entitles any customer to a rebate or
right of set-off, to return any product to the Company or Xxxxxxx after
acceptance thereof or to delay the acceptance thereof, or which varies
in any material respect from the Company's or Xxxxxxx' standard form
contracts;
(c) contract with any labor union (and, to the knowledge of the
Company, no organizational effort is being made with respect to any of
its or Xxxxxxx' employees);
(d) contract or other commitment with any supplier containing any
provision permitting any party other than the Company or Xxxxxxx to
renegotiate the price or other terms, or containing any pay-back or
other similar provision, upon the occurrence of a failure by the Company
or Xxxxxxx to meet its obligations under the contract when due or the
occurrence of any other event;
(e) contract for the future purchase of fixed assets or for the
future purchase of materials, supplies or equipment in excess of its
normal operating requirements;
(f) contract for the employment of any officer, employee or other
person (whether of a legally binding nature or in the nature of informal
understandings), on a full-time or
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consulting basis which is not terminable on notice without cost or other
liability to the Company or Xxxxxxx, except normal severance
arrangements and accrued vacation pay;
(g) agreement or indenture relating to the borrowing of money or
to the mortgaging or pledging of, or otherwise placing a lien or
security interest on, any asset of the Company or Xxxxxxx;
(h) guaranty of any obligation for borrowed money or otherwise;
(i) agreement, or group of related agreements with the same party
or any group of affiliated parties, under which the Company or Xxxxxxx
has advanced or agreed to advance money or has agreed to lease any
property as lessee or lessor;
(j) agreement or obligation (contingent or otherwise) to issue,
sell or otherwise distribute or to repurchase or otherwise acquire or
retire any share of its capital stock or any of its other equity
securities;
(k) assignment, license or other agreement with respect to any
form of intangible property or Intellectual Property (as defined in
Section 2.12) or the development or use thereof;
(l) agreement under which it has granted any person any
registration rights;
(m) agreement under which it has limited or restricted its right
to compete with any person in any respect; or
(n) other contract or group of related contracts with the same
party involving more than $50,000 or continuing over a period of more
than one year from the date or dates thereof (including renewals or
extensions optional with another party), which contract or group of
contracts is not terminable by the Company or Xxxxxxx without penalty
upon notice of thirty (30) days or less, but excluding any contract or
group of contracts with a customer of the Company or Xxxxxxx for the
sale, lease or rental of the Company's or Xxxxxxx' respective products
or services if such contract or group of contracts was entered into by
the Company or Xxxxxxx, respectively, in the ordinary course of
business.
SECTION 2.12. Patents, Trademarks, etc. Set forth in Schedule 2.12 is a
list and brief description of all patents, patent rights, patent applications,
trademarks, trademark applications, service marks, service xxxx applications,
trade names and copyrights, and all applications for such which are in the
process of being prepared, owned by or registered in the name of the Company or
Xxxxxxx, or of which the Company or Xxxxxxx is a licensor or licensee or in
which the Company or Xxxxxxx has any right, and in each case a brief description
of the nature of such right. Except as set forth in Schedule 2.12, each of the
Company and Xxxxxxx owns or possesses adequate licenses or other rights to use
all patents, patent applications, trademarks, trademark applications, service
marks, service xxxx applications, trade names, copyrights, manufacturing
processes, formulae, trade secrets and know-how (collectively, "Intellectual
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Property") necessary to the conduct of its business as conducted, and no claim
is pending or, to the knowledge of the Company, threatened to the effect that
the operations of the Company or Xxxxxxx infringe upon or conflict with the
rights of any other person under any Intellectual Property, and to the knowledge
of the Company there is no basis for any such claim. No claim is pending or, to
the knowledge of the Company, threatened to the effect that any such
Intellectual Property owned or licensed by the Company or Xxxxxxx, or which the
Company or Xxxxxxx otherwise has the right to use, is invalid or unenforceable
by the Company or Xxxxxxx, as applicable, and to the knowledge of the Company
there is no basis for any such claim. To the knowledge of the Company, all
technical information developed by and belonging to the Company or Xxxxxxx, as
applicable, which has not been patented has been kept confidential. The Company
has not granted or assigned to any other person or entity any right to
manufacture or assemble any products or proposed products of the Company, other
than to its affiliates, and to the knowledge of the Company no other person or
entity has asserted any such right.
SECTION 2.13. Loans and Advances. Except as set forth on Schedule 2.13,
neither the Company nor Xxxxxxx has any outstanding loans or advances to any
person and is not obligated to make any such loans or advances, except, in each
case, for advances to employees of the Company or Xxxxxxx in respect of
reimbursable business expenses anticipated to be incurred by them in connection
with their performance of services for the Company or Xxxxxxx.
SECTION 2.14. Assumptions, Guaranties, etc. of Indebtedness of Other
Persons. Neither the Company nor Xxxxxxx has assumed, guaranteed, endorsed or
otherwise become directly or contingently liable on any indebtedness of any
other person (including, without limitation, liability by way of agreement,
contingent or otherwise, to purchase, to provide funds for payment, to supply
funds to or otherwise invest in a debtor, or otherwise to assure a creditor
against loss), except for guaranties by endorsement of negotiable instruments
for deposit or collection in the ordinary course of business.
SECTION 2.15. Significant Customers and Suppliers. No customer which
accounted for 10% or more of the Company's sales or revenues during the periods
covered by the financial statements referred to in Section 2.5 or which has been
significant to the Company thereafter has terminated, materially reduced or
threatened to terminate or materially reduce its purchases from the Company. As
of the date of this Agreement, there is no supplier to the Company which is a
sole-source supplier.
SECTION 2.16. Governmental Approvals. Subject to the accuracy of the
representations and warranties of the Purchaser set forth in Article III hereof,
no registration or filing with, or consent or approval of or other action by,
any Federal, state or other governmental agency or instrumentality is or will be
necessary for the valid execution, delivery and performance by the Company of
this Agreement, the Note, the Other Loan Documents or the Warrant (and, with
respect to Xxxxxxx, the Security Agreement or Xxxxxxx Guaranty), or the
issuance, sale and delivery of the Warrant Shares upon exercise of the Warrant,
other than (i) filings pursuant to state securities laws in connection with the
issuance and sale of the Warrant and (ii) with respect to the registration
rights provisions contained in Article VI of this Agreement, the registration of
the shares covered thereby with the Securities and Exchange
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Commission or any successor regulatory entity (the "Commission") and filings
pursuant to state securities laws.
SECTION 2.17. Accuracy of Statements. Neither this Agreement nor any
Schedule, Exhibit, statement, list, document, certificate or other information
furnished by or on behalf of the Company to the Purchaser in connection with
this Agreement or any of the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein, in light of the
circumstances in which they are made, not misleading.
SECTION 2.18. Insurance. Schedule 2.18 lists all insurance policies
which the Company maintains with respect to its businesses, properties and
employees. Such policies are in full force and effect and the Company has
received no notice of termination from the insurance carriers. Such policies,
with respect to their amounts and types of coverage, are adequate in the
reasonable commercial judgment of the Company to insure against risks to which
the Company and its respective businesses. Since the date of the Balance Sheet,
there has been no material adverse change in the Company's relationship with its
insurers or in the premiums payable pursuant to such policies.
SECTION 2.19. Employment Relations. (a) The Company is in material
compliance with applicable federal, state or other applicable laws, domestic or
foreign, respecting employment and employment practices, safety, terms and
conditions of employment and wages and hours.
(b) The Company does not maintain or contribute to any employee
benefit plan ("Employee Benefit Plan") within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which is subject to ERISA but which is not in substantial
compliance with ERISA, or which has incurred any material liability to
the Pension Benefit Guaranty Company ("PBGC") in connection with any
Employee Benefit Plan covering any employees of the Company or any of
its subsidiaries or ceased operations at any facility or withdrawn from
any such Plan in a manner which could subject it to material liability
under Section 462(f), 4063 or 4064 of ERISA, and knows of no facts or
circumstances which might give rise to any material liability of the
Company to the PBGC under Title IV of ERISA.
SECTION 2.20. Compensation of Key Employees. Schedule 2.20 sets forth
the aggregate compensation (salaries, wages and bonuses) paid by the Company to
its four most highly compensated employees for the 1995 fiscal year and the
amount of such compensation scheduled to be paid to such employees for the 1996
fiscal year.
SECTION 2.21. Environmental Compliance. The Company is in compliance
with all applicable laws relating to environmental matters in each jurisdiction
where it is presently engaged in a material manufacturing business, except for
such failures to comply which, in the aggregate, could reasonably be expected
not to have a material adverse effect on the Company. The Company is not subject
to any liability under any such environmental laws, that, in the
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aggregate for all such liabilities, could be reasonably expected to have a
material adverse effect on the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as of the Closing
Date that:
SECTION 3.1. Purchase of Securities. (a) It is an "accredited investor"
within the meaning of Rule 501 under the Securities Act of 1933, as amended (the
"Securities Act") and was not organized for the specific purpose of acquiring
the Note or the Warrant.
(b) It has sufficient knowledge and experience in investing in
companies in a similar stage of development to the Company so as to be
able to evaluate the risks and merits of its investment in the Company
and it is able financially to bear the risks thereof.
(c) It has had an opportunity to discuss the Company's business,
management and financial condition with the Company's management.
(d) It is acquiring the Note and the Warrant for its own account
for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof.
(e) It understands that (i) the Note, the Warrant and, upon
exercise thereof, the Warrant Shares have not been registered under the
Securities Act by reason of their issuance in a transaction exempt from
the registration requirements of the Securities Act pursuant to Section
4(2) thereof or Rule 505 or 506 promulgated under the Securities Act,
(ii) the Note, the Warrant and, upon exercise thereof, the Warrant
Shares must be held indefinitely unless a subsequent disposition thereof
is registered under the Securities Act or is exempt from such
registration, (iii) the Note, the Warrant and, upon exercise thereof,
the Warrant Shares will bear a legend to such effect and (iv) the
Company will make a notation on its transfer books to such effect.
SECTION 3.2. Authority. It has all requisite power and authority to
execute, deliver and perform this Agreement, the Note, the Other Loan Documents,
and the Warrant and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement, the Note, the Other Loan Documents,
and the Warrant and the consummation of the transactions contemplated hereby and
thereby. This Agreement, the Note, the Other Loan Documents, and the Warrant on
the Closing Date will constitute the legal, valid and binding obligations of the
Purchaser, enforceable in accordance with their terms, except (i) to the extent
that enforceability may be limited by bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (ii) that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceedings therefor may be brought.
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SECTION 3.3. Projections. It understands that any and all financial
projections and other estimates delivered to it were based on the Company's
experience in the industry and on assumptions of fact and opinion which the
Company believes to have been, and to be, reasonable. It understands that the
Company cannot and does not assure or guarantee the attainment of such
projections or other estimates.
ARTICLE IV
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser to purchase and pay for the Note and
the Warrant, both being purchased by it on the Closing Date, are, at its option,
subject to the satisfaction of the following conditions on or before such
Closing Date:
SECTION 4.1. Opinion of Company's Counsel. The Purchaser shall have
received from Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company, an opinion dated
the Closing Date, in the form attached hereto as Exhibit C.
SECTION 4.2. Representations and Warranties to be True and Correct. The
representations and warranties contained in Article II hereof shall be true,
complete and correct on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of such date,
and the President of the Company shall have certified to such effect to the
Purchaser in writing.
SECTION 4.3. Performance. The Company shall have performed and complied
with all agreements contained herein required to be performed or complied with
by it prior to or at the Closing Date, and the President of the Company shall
have certified to the Purchaser in writing to such effect and to the further
effect that all of the conditions set forth in this Article IV have been
satisfied.
SECTION 4.4. All Proceedings to be Satisfactory. All corporate and other
proceedings to be taken by the Company in connection with the transaction
contemplated hereby and all documents incident thereto shall be satisfactory in
form and substance to the Purchaser and its counsel, and the Purchaser and its
counsel shall have received all such counterpart originals or certified or other
copies of such documents as they may reasonably request.
SECTION 4.5. Supporting Documents. At the Closing, the Purchaser shall
have received copies of the following documents:
(a) (i) the Charter, certified as of a recent date by the
Secretary of State of the Commonwealth of Massachusetts and (ii)
a certificate (A) of said Secretary dated as of a recent date as
to the due incorporation and subsistence of the Company, and
listing all documents of the Company on file with said Secretary
and (B) from the Secretary of State of the State of Delaware
dated as of a recent
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date as to the due incorporation and subsistence of Xxxxxxx, and
listing all documents of Xxxxxxx on file with said Secretary;
(b) a certificate of the Clerk or an Assistant Clerk of
the Company dated the Closing Date and certifying: (i) that
attached thereto is a true and complete copy of all resolutions
adopted by the Board of Directors (the "Company Board") or the
stockholders of the Company authorizing the execution, delivery
and performance of this Agreement and the Other Loan Documents,
the issuance, sale, delivery, and performance of the Note and the
Warrant, and the reservation, issuance and delivery of the
Warrant Shares upon the exercise of the Warrant, and that all
such resolutions are in full force and effect and are all the
resolutions adopted in connection with the transactions
contemplated by this Agreement; (ii) that the Charter has not
been amended since the date of the last amendment referred to in
the certificate delivered pursuant to clause (a)(ii) above; and
(iii) to the incumbency and specimen signature of each officer of
the Company executing this Agreement, the Note, the Other Loan
Documents, and the Warrant and any certificate or instrument
furnished pursuant hereto, and a certification by another officer
of the Company as to the incumbency and signature of the officer
signing the certificate referred to in this clause (b);
(c) the Purchaser shall have received an undated stock
power for each certificate representing shares of stock pledged
pursuant to the Junior Subordinated Pledge Agreement, dated as of
the Closing Date, between the Company and the Purchaser (the
"Subordinated Pledge Agreement"),executed in blank by a duly
authorized officer of the pledge thereof;
(d) the Purchaser shall have received evidence in form and
substance satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation,
the filing of duly executed financing statements on Form UCC-1,
necessary or, in the opinion of the Purchaser, desirable to
perfect the security interests created by the Other Loan
Documents and required by the Other Loan Documents have been
completed;
(e) a certificate from the Secretary or Assistant
Secretary of Xxxxxxx to the effect of the certificate deliverable
by the Company pursuant to clause (b) above; and
(f) such additional supporting documents and other
information with respect to the operations of the Company as the
Purchaser or its counsel may reasonably request.
SECTION 4.6. Fees of Purchaser. The Company shall have paid, in
accordance with Section 8.1, the reasonable legal and other fees and
disbursements of the Purchaser, as invoiced.
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SECTION 4.7. Warrant. The Company shall have issued the Warrant to the
Purchaser.
SECTION 4.8. Note and Other Loan Documents. The Purchaser shall have
received (i) the Note executed and delivered by a duly authorized officer of the
Company, and (ii) each of the following documents, each executed and delivered
by a duly authorized officer or representative of each of the parties thereof
and each dated as of the Closing Date: (A) the Junior Subordinated Security
Agreement between the Company, Xxxxxxx and the Purchaser (the "Security
Agreement"); (B) the Intercreditor and Subordination Agreement between the
Company, the Purchaser, CoreStates and Creditanstalt; (C) the Subordinated
Pledge Agreement; (D) the Junior Subordinated Subsidiary Guaranty (the "Xxxxxxx
Guaranty"); (E) the Agreement (Intracel Trademark) between the Company and the
Purchaser; (F) the Agreement (Intracel Patent) between the Company and the
Purchaser; (G) the Agreement (Xxxxxxx Patent) between Xxxxxxx and the Purchaser;
and (H) the Agreement (Xxxxxxx Trademark) between Xxxxxxx and the Purchaser
(collectively, the "Other Loan Documents").
ARTICLE V
COVENANTS OF THE COMPANY
The Company covenants and agrees with the Purchaser that until the
Warrant is exercised in full or until the Warrant expires, whichever event
occurs first (other than the covenant in Section 5.5, which shall only survive
until the Note is repaid in full):
SECTION 5.1. Reserve for Warrant Shares. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, for the purpose of effecting the exercise of the Warrant for Warrant
Shares, such number of its duly authorized shares of Common Stock as shall be
sufficient to effect the exercise of the Warrant. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the exercise of the Warrant, or otherwise to comply with the terms of this
Agreement, the Company will forthwith take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes. The Company will
obtain any authorization, consent, approval or other action by or make any
filing with any court or administrative body that may be required under
applicable state securities laws in connection with the issuance of shares of
Common Stock upon the exercise of the Warrant.
SECTION 5.2. Corporate Existence. The Company shall maintain its
corporate existence, rights and franchises in full force and effect.
SECTION 5.3. Restrictive Agreements Prohibited. The Company shall not
become a party to any agreement which by the terms thereof or as a result of the
performance thereof restricts the Company's performance of this Agreement, the
Note, the Other Loan Documents or the Warrant.
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SECTION 5.4. Compliance with Laws. The Company shall comply with all
applicable laws, rules, regulations and orders, noncompliance with which could
materially adversely affect its business or condition, financial or otherwise.
SECTION 5.5. Senior Indebtedness. The Company shall not incur any
indebtedness which is senior or pari passu in right of payment to the Note,
without first obtaining the consent of the Purchaser (which shall not be
unreasonably withheld) except for: (a) indebtedness existing on the Closing
Date; (b) any debt acquired or assumed in connection with an acquisition,
provided that such indebtedness is secured only by the assets so acquired; and
(c) any refinancings of indebtedness of the type described in (a) and (b) above,
provided that such refinancings do not result in an increase in the principal
amount of such loan, with respect to Creditanstalt, in excess of the original
principal amount of such indebtedness (and such amount in excess of the then
outstanding principal amount thereunder shall be amortized from and after July
1, 2001) and, with respect to CoreStates, in excess of the then outstanding
principal amount thereunder.
ARTICLE VI
REGISTRATION RIGHTS
SECTION 6.1. Piggyback Registration.
(a) If at any time or from time to time, the Company shall
determine to register any of its securities, for its own account or the
account of any of its shareholders, other than a registration relating
solely to employee benefit plans, or a registration relating solely to a
transaction of the type described in Rule 145(a) as promulgated under
the Exchange Act, a transaction relating solely to the sale of debt or
convertible debt instruments or a registration on any form (other than
Form X-0, X-0 or S-3, or their successor forms) which does not include
substantially the same information as would be required to be included
in a registration statement covering the sale of Registrable Stock, the
Company will:
(i) give to the holder of Registrable Stock written notice
thereof as soon as practicable prior to filing the registration
statement; and
(ii) include in such registration and in any underwriting
involved therein, all the Registrable Stock specified in a
written request or requests, made within fifteen (15) days after
receipt of such written notice from the Company, by the holder of
Registrable Stock, except as set forth in subsection (b) below.
(b) If the registration is for a registered public offering
involving an underwriting, the Company shall so advise the holder of
Registrable Stock as a part of the written notice given pursuant to
subsection (a)(i). In such event, the right of the holder of Registrable
Stock to registration pursuant to this Article VI shall be conditioned
upon the holder's participation in such underwriting to the extent
provided herein. If the holder of
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Registrable Stock proposes to distribute its securities through such
underwriting, it shall (together with the Company and the other holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Article VI, if the managing
underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may
limit the number of Shares of Registrable Stock to be included in the
registration and underwriting, or may exclude Registrable Stock entirely
from such registration if the registration is the first registered
offering for the sale of the Company's securities to the general public,
or a registered offering pursuant to Section 3 of the Registration
Rights Agreement dated July 22, 1994 between the Company and each of the
purchasers of shares of the Series A Convertible Preferred Stock of the
Company named therein, Section 3 of the Registration Rights Agreement
dated September 22, 1994 between the Company and each of the purchasers
of shares of the Series A-I Convertible Preferred Stock of the Company
named therein, Section 9 of the Series A-I Warrant issued by the Company
to Dublind Investments, L.L.C. on September 22, 1995, Section 9 of the
Series A-I Warrant granted by the Company to Creditanstalt on November
21, 1995, Section 9 of the Series A-II Warrant granted by the Company to
the Purchaser or Article VI of the Note and Series A-III Warrant
Purchase Agreement between the Company and CoreStates dated as of June
11, 1996 (provided that no shares held by officers of the Company, other
than shares subject to other registration rights granted by the Company
that may be owned by officers, are included in the registration and
underwriting). The Company shall so advise the holder of Registrable
Stock and the other holders distributing their securities through such
underwriting, and the number of shares of securities that may be
included in the registration and underwriting shall be allocated among
the holder of Registrable Stock and other holders in proportion, as
nearly as practicable, to the respective amounts of Registrable Stock
held by the Holder and other securities held by other holders at the
time of filing the registration statement. If the Holder disapproves of
the terms of any such underwriting, if may elect to withdraw therefrom
by written notice to the Company and the managing underwriter. Any
Registrable Stock excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
(c) As used in this Article VI the following terms, unless the
context otherwise requires, have the following respective meanings:
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar Federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"Registrable Stock" shall mean the Warrant Shares, but
only so long as such shares continue to be Restricted Stock. Any such
shares shall continue to be Restricted Stock until such time as such
shares (i) have been disposed of in accordance with a registration
statement which has become effective under the Securities Act or
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(ii) have been publicly sold in compliance with Rule 144 (or any similar
provision then in force) under the Securities Act.
(d) If requested in writing by the underwriter or underwriters
for the initial underwritten public offering of securities of the
Company, the holder of Registrable Stock shall agree not to sell
publicly any shares of Registrable Stock or any other shares of Common
Stock (other than Registrable Stock or other shares of Common Stock
being registered in such offering), without the consent of such
underwriter or underwriters, for a period of not more than 120 days
following the effective date of the registration statement relating to
such initial public offering.
SECTION 6.2. Registration Procedures. If and whenever the Company is
required by the provisions of Section 6.1 to effect the registration of any
shares of Registrable Stock under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare and file with the Commission a registration statement
with respect to such Registrable Stock and use its best efforts to cause
such registration statement to become and remain effective for the
period of the distribution contemplated thereby (determined as
hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and
comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Stock covered by such registration
statement in accordance with the holder's intended method of disposition
as set forth in such registration statement for such period;
(c) furnish to the holder of Registrable Stock and to each
underwriter such number of copies of the registration statement and
prospectus included therein (including each preliminary prospectus) as
such persons reasonably may request in order to facilitate the public
sale or other disposition of the Registrable Stock covered by such
registration statement;
(d) use its best efforts to register or qualify the Registrable
Stock covered by such registration statement under the securities or
"blue sky" laws of such jurisdiction as the holder of Registrable Stock
or, in the case of an underwritten public offering, the managing
underwriter reasonably shall request; provided, however, that the
Company shall not for any such purpose be required to qualify generally
to transact business as a foreign corporation in any jurisdiction where
it is not so qualified or to consent to general service of process in
any such jurisdiction;
(e) use its best efforts to list the Registrable Stock covered by
such registration statement with any securities exchange on which the
Common Stock of the Company is then listed;
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(f) in addition to its obligations under Section 6.2 hereof,
immediately notify the holder of Registrable Stock and each underwriter
under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act,
of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration statement,
as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;
(g) if the offering is underwritten, at the request of the holder
of Registrable Stock, furnish on the date that Registrable Stock is
delivered to the underwriters for sale pursuant to such registration:
(i) an opinion dated such date of counsel representing the Company for
the purposes of such registration, addressed to the underwriters and to
the holder of Registrable Stock, stating that such registration
statement has become effective under the Securities Act and that (A) to
the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the registration statement, the related prospectus
and each amendment or supplement thereof comply as to form in all
material respects with the requirements of the Securities Act (except
that such counsel need not express any opinion as to financial
statements or other financial data contained therein) and (C) to such
other effects as reasonably may be requested by counsel for the
underwriters or by the Holder or its counsel and (ii) a letter dated
such date from the independent public accountants retained by the
Company, addressed to the underwriters and to the holder of Registrable
Stock, stating that they are independent public accountants within the
meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information
as to the period ending no more than five business days prior to the
date of such letter) with respect to such registration as such
underwriters reasonably may request; and
(h) make available for inspection by the holder of Registrable
Stock, by any underwriter participating in any distribution pursuant to
such registration statement, and by any attorney, accountant or other
agent retained by the holder of Registrable Stock or underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors
and employees to supply all information reasonably requested by the
holder of Registrable Stock and any underwriter, attorney, accountant or
agent in connection with such registration statement.
For purposes of this Agreement, the period of distribution, if not
otherwise described in the Registration Statement of Registrable Stock in a firm
commitment underwritten public offering, shall be deemed to extend until each
underwriter has completed the distribution of all securities purchased by it,
and the period of distribution of Registrable Stock in any other
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registration shall be deemed to extend until the earlier of the sale of all
Registrable Stock covered thereby or 120 days after the effective date thereof.
In connection with each registration hereunder, the holder of
Registrable Stock will furnish to the Company in writing such information with
respect to itself and the proposed distribution by it as reasonably shall be
necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Section 6.1 covering an
underwritten public offering, the Company and the holder of Registrable Stock
agree to enter into a written agreement with the managing underwriter selected
in the manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
SECTION 6.3. Expenses. All expenses incurred by the Company in complying
with Section 6.1, including all registration and filing fees, printing expenses,
fees and disbursements of counsel and independent public accountants for the
Company, reasonable fees and expenses (including counsel fees) incurred in
connection with complying with state securities or "blue sky" laws, fees of the
National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars, costs of insurance and reasonable fees and
disbursements of one counsel for the sellers of Registrable Stock, but excluding
any Selling Expenses, are called "Registration Expenses". "Selling Expenses"
shall include only such underwriting discounts and selling commissions
applicable to the sale of any Registrable Stock which would not have been
incurred in the absence of the registration and sale of the Registrable Stock.
The Company will pay all Registration Expenses in connection with each
registration statement filed pursuant to Section 6.1; provided, however, that in
connection with a registration statement filed under Section 6.1, the Company
shall not be obligated to pay fees and expenses (including counsel fees)
incurred in connection with complying with state securities laws in any state in
which the Company is not otherwise registering for sale any of the shares the
Company proposes to sell in the offering. All Selling Expenses in connection
with each registration statement filed pursuant to Section 6.1 shall be borne by
the participating sellers in proportion to the number of shares sold by each, or
by such participating sellers as they may agree.
SECTION 6.4. Indemnification and Contribution
(a) In the event of a registration of any of the Registrable
Stock under the Securities Act pursuant to Section 6.1, the Company will
indemnify and hold harmless the holder of Registrable Stock, each
underwriter of Registrable Stock and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or
several, to which the holder of Registrable Stock, underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
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statement or alleged untrue statement of any material fact contained in
any registration statement under which such Registrable Stock was
registered under the Securities Act pursuant to Section 6.1, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon 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, and will reimburse the holder of Registrable Stock, each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case if and to
the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information
furnished by the holder of Registrable Stock, underwriter or controlling
person in writing specifically for use in such registration statement or
prospectus.
(b) In the event of a registration of any Registrable Stock under
the Securities Act pursuant to Section 6.1, the holder of Registrable
Stock will indemnify and hold harmless the Company, each person, if any,
who controls the Company within the meaning of the Securities Act, each
officer of the Company who signs the registration statement, each
director of the Company, each underwriter and each person who controls
any underwriter within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the
Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement
under which such Registrable Stock was registered under the Securities
Act pursuant to Section 6.1, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or
arise out of or are based upon 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, and will reimburse the
Company and each such officer, director, underwriter and controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Holder will be liable
hereunder in any such case only if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to
the holder of Registrable Stock, as such, furnished in writing to the
Company by the holder of Registrable Stock specifically for the use in
such registration statement or prospectus; provided, further, that the
liability of the holder of Registrable Stock shall be limited to the
proportion of any such loss, claim, damage, liability or expense which
is equal to the proportion that the public offering price of the
Registrable Stock sold by the holder of Registrable Stock under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not in any event to exceed the proceeds
received by the holder of
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Registrable Stock from the sale of Registrable Stock covered by such
registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party in writing thereof, but
the omission so to notify the indemnifying party shall not relieve it
from any liability which it may have to such indemnified party other
then under this Section 6.4 and shall only relieve it from any liability
which it may have to such indemnified party under this Section 6.4 if
and to the extent the indemnifying party is prejudiced by such omission.
In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake the defense thereof with
counsel reasonably satisfactory to such indemnified party, and, after
notice from the indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, the
indemnifying party shall not be liable to such indemnified party under
this Section 6.4 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so
selected; 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
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the
indemnified party reasonably may be considered by the indemnified party
to conflict with the interests of the indemnifying party, the
indemnified party shall have the right to select a separate counsel and
to assume such legal defenses and otherwise to participate in the
defense of such action, with reasonable expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred. No indemnifying party,
in defense of any such action, shall, except with the consent of each
indemnified party, consent to the entry of any judgment or enter into
any settlement (i) which does not include as an unconditional term
thereof the giving, by the claimant or plaintiff, to such indemnified
party of a release from all liability in respect to such action or (ii)
which involves any relief against the indemnified party other than the
payment of money which is to be paid in full by the indemnifying party.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i)
the holder of Registrable Stock exercising rights under this Agreement,
or any controlling person of the holder of Registrable Stock, makes a
claim for indemnification pursuant to this Section 6.4 but it is
judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or
the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section
6.4 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of the holder of
Registrable Stock or any such controlling person in circumstances for
which indemnification is provided under this
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Section 6.4; then, and in each such case, the Company and such holder
will contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (after contribution from others) in such
proportion so that the holder of Registrable Stock is responsible for
the portion represented by the percentage that the public offering price
of its Registrable Stock offered by the registration statement bears to
the public offering price of all securities offered by such registration
statement, and the Company is responsible for the remaining portion;
provided, however, that, in any such case, (A) the holder of Registrable
Stock will not be required to contribute any amount in excess of the
public offering price of all such Registrable Stock sold by the holder
of Registrable Stock pursuant to such registration statement; and (B) no
person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
SECTION 6.5. Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of Registrable Stock to the public without registration, at
all times after 90 days after any registration statement covering a public
offering of securities of the Company under the Securities Act shall have become
effective (or the Company shall otherwise have become subject to the periodic
reporting requirements of the Exchange Act), the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to each holder of Registrable Stock forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and
the Exchange Act, a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed by the
Company as such holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing such holder to sell any
Registrable Stock without registration.
SECTION 6.6. Termination of Piggyback Registration Rights. The
obligations of the Company to register shares of Registrable Stock under Section
6.1 shall terminate on April 1, 2005, unless such obligations terminate earlier
in accordance with the terms of the Warrant.
SECTION 6.7. Material Non-Public Information. Notwithstanding any
provision of this Agreement to the contrary, the Company's obligation to file a
registration statement, or cause such registration statement to become and
remain effective, shall be suspended for a period not to exceed 30 days (and for
periods not exceeding, in the aggregate, 60 days in any 24-month period) if
there exists at the time material non-public information relating to the Company
which, in the reasonable opinion of the Company, should not be disclosed.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Expenses. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby whether or not such
transactions shall be consummated; provided, however, that the Company shall pay
the reasonable legal and other fees and disbursements of the Purchaser, as
invoiced.
SECTION 7.2. Survival of Agreements. Unless otherwise expressly stated
herein, in the Warrant or in any certificate or instrument delivered pursuant to
or in connection therewith, all covenants and agreements made herein, in the
Warrant, or any certificate or instrument delivered to the Purchaser pursuant to
or in connection with this Agreement or the Warrant shall survive the execution
and delivery of this Agreement, the Warrant and the issuance and delivery of the
Warrant Shares from the date of this Agreement until the Warrant is exercised in
full or until the Warrant expires, whichever event occurs first; provided,
however, that the representations and warranties contained in the Note or the
Other Loan Documents shall survive until all amounts due under the Note shall be
paid in full. All statements contained in any certificate or other instrument
delivered by the Company hereunder or thereunder or in connection herewith or
therewith shall be deemed to constitute representations and warranties made by
the Company.
SECTION 7.3. Brokerage. Each party hereto will indemnify and hold
harmless the other against and in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
SECTION 7.4. Parties in Interest. All representations, covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. Without limiting the
generality of the foregoing, all representations, covenants and agreements
benefiting the Purchaser shall inure to the benefit of any and all subsequent
holders from time to time of the Note, the Warrant or the Warrant Shares.
SECTION 7.5. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person or
mailed by certified or registered mail, return receipt requested, as follows:
(a) if to the Company, at Intracel Corporation, 000
Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attention: President, with a
copy to Xxxxxx X. Xxxxxxxx, Esq., Xxxxxxxx & Xxxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000; and
(b) if to the Purchaser, at the address set forth beneath
the Purchaser's name on the signature page to this Agreement,
with a copy to
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Xxxxx X. Xxxxxxxxx, Esq., Reboul, MacMurray, Xxxxxx, Xxxxxxx &
Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000.
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other.
SECTION 7.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the State of New York,
regardless of the jurisdiction of creation or domicile of the Company or its
successors or of the Purchaser (without giving effect to its choice of law
principles).
SECTION 7.7. Entire Agreement. This Agreement, including the Schedules
and Exhibits hereto, constitutes the sole and entire agreement of the parties
with respect to the subject matter hereof. All Schedules and Exhibits hereto are
hereby incorporated herein by reference.
SECTION 7.8. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 7.9. Amendments. This Agreement may not be amended or modified,
and no provisions hereof may be waived, without the written consent of the
Company and the Purchaser.
SECTION 7.10. Severability. If any provision of this Agreement shall be
declared void or unenforceable by any judicial or administrative authority, the
validity of any other provision and of the entire Agreement shall not be
affected thereby.
SECTION 7.11. Titles and Subtitles. The titles and subtitles used in
this Agreement are for convenience only and are not to be considered in
construing or interpreting any term or provision of this Agreement.
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IN WITNESS WHEREOF, the Company and the Purchaser have executed this
Agreement as of the day and year first above written.
INTRACEL CORPORATION
[Corporate Seal] By:_______________________
Name:
Title:
Attest:
__________________________
Name:
Title:
NORTHSTAR ADVANTAGE
HIGH TOTAL RETURN FUND
By:______________________________
Name:
Title:
Address: x/x Xxxxxx Xxx Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
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