Exhibit 10.21
February 28, 2000
Xxxxx Medical Corp.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Senior Vice President-Finance
Re: Subscription Agreement
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Ladies and Gentlemen:
1. Agreement to Purchase
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1.1 Subscription. Vantage Venture Partners, LP, a Delaware limited
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partnership ("Holder"), hereby subscribes for and agrees to purchase 50,000
shares of the Common Stock ("Securities") of Xxxxx Medical Corp., a Delaware
corporation ("Company"), at a purchase price of $10.00 per share, on the terms
and conditions described herein. Holder hereby tenders to the Company the amount
of $500,000 by wire transfer to the account of the Company.
1.2 Acceptance of Subscription. The Company, by its execution and return to
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Holder of an executed copy of this Subscription Agreement, accepts the Holder's
subscription. Such acceptance is subject to the execution and delivery by Asset
Management Partners of the Subscription Agreement referred to in Section 2.1
below.
2. Registration Under the Securities Act of 1933.
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2.1 Registrable Securities. As used herein the term "Registrable
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Securities" means (x) the aggregate of 100,000 shares of Common Stock of the
Company issuable under this Subscription Agreement and under a Subscription
Agreement between the Company and Asset Management Partners being executed on
the date hereof, together with (y) the 26,600 shares of Common Stock of the
Company owned at the date hereof beneficially by Xxxxxxxxxxx X. Xxxxx . In the
event of any merger, reorganization, consolidation or recapitalization affecting
the Common Stock, such adjustment will be made in the Registrable Securities as
is appropriate in order to prevent any diminution or enlargement of the rights
granted pursuant to this Section 2.
2.2 Registration. The Securities have not been registered for purposes of
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public distribution under the Securities Act of 1933 ("Act"). The Company will
(a) file a Registration Statement on Form S-3 under the Act registering the
Registrable Securities for a continuous or delayed offering pursuant to Rule 415
under the Act (the "S-3"), (b) keep the S-3 effective so long as such Securities
may not be publicly distributed without registration under the Act, and (c), if
so requested by Holder, amend the S-3 to cover the distribution of such
Securities in an underwritten offering.
2.3 Miscellaneous Registration Provisions. The Company and the Holder agree
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as follows:
(a) The Company will file the S-3 as expeditiously as reasonably
practicable after the filing of its Form 10-K for its 1999 fiscal year, but
in no event later than ninety days following the date thereof, and use its
best efforts to have it become effective at the earliest practicable date
thereafter, but no later than six months from the date hereof, and furnish
the Holder with such number of prospectuses as it may reasonably be
requested.
(b) The Company will pay all costs, fees and expenses in connection
with the S-3, including the Company's legal and accounting fees, printing
expenses, and blue sky fees and expenses, but not underwriting commissions
and discounts, if any, which will be payable by the Holder.
(c) The Company will take all necessary action which may be required
in qualifying or registering the Registrable Securities included in the S-3
for offering and sale under the securities or blue sky laws of such states
as are requested by the Holder, except that the Company will not, for any
such purpose, be required to quality to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified or to file
therein any general consent to service of process.
(d) The Company will indemnify and hold harmless the Holder and any
underwriter (as defined in the Act) for the Holder and each person, if any,
who controls the Holder or underwriter, within the meaning of the Act,
against any losses, claims, damages or liabilities (or actions in respect
thereof), joint or several, to which such indemnified party or parties may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) are caused by any
untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in the S-3, any prospectus
contained therein, or any amendment or supplement thereto, 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 such indemnified
party or parties for any legal (if the indemnifying party does not provide
legal counsel reasonably satisfactory to the indemnifying party or parties)
or other expenses reasonably incurred by it or them in connection with
investigating or defending against any such loss, claim, damage, liability
or action; provided, however, that the indemnifying party will not be
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liable in any such case to the extent that any such loss, damage, expense
or liability arises out of or is based upon an untrue statement, alleged
untrue statement, omission or alleged omission so made in conformity with
written information furnished by an indemnified party specifically for
inclusion in the S-3.
(e) The Holder will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration
Statement, and each person, if any, who controls the Company, within the
meaning of the Act, against any losses, claims, damages or liabilities to
which such indemnified party or parties may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) are caused by any untrue statement or alleged
untrue statement of any material fact contained, on the effective date
thereof, in the S-3, any prospectus contained therein, or any amendment or
supplement thereto, 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 such indemnified party or parties for any legal (if the
indemnifying party does not provide legal counsel reasonably satisfactory
to the indemnifying
party or parties) or other expenses reasonably incurred by it or them in
connection with investigating or defending against any such loss, claim,
damage, liability or action; provided, however, that the indemnifying party
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will not be liable in any such case except to the extent that any such
loss, damage, expense or liability arises out of or is based upon an untrue
statement, alleged untrue statement, omission or alleged omission so made
in conformity with written information furnished by the indemnifying party
specifically for inclusion in the S-3, provided further, however, that
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Holder will not be liable hereunder for any amount in excess of the
proceeds received by it on its sales of Registrable Securities under the
S-3.
(f) Promptly after receipt by an indemnified party pursuant hereto of
notice of any claim or the commencement of any action to which indemnity
would apply, such indemnified party will, if a claim thereof is made
against the indemnifying party pursuant hereto, notify the indemnifying
party of the claim or action, but the omission or delay so to notify the
indemnifying party will not relieve it from any liability which it may have
to any indemnified party hereunder, except to the extent that the
indemnifying party is prejudiced by such omission or delay. In case such
action is brought against any indemnified party, and it notified the
indemnifying party of the claim or action, the indemnifying party will be
entitled to participate in, and to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party.
(g) The Holder agrees to cooperate with the Company with the S-3 and
any listing on a national securities exchange (including NASDAQ), including
furnishing the Company with such information concerning the Holder and
executing and delivering such documents as may be required by applicable
securities laws or any such national securities exchange.
3. Holder's Representations and Warranties. The Holder acknowledges,
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represents and warrants to, and agrees with the Company, as follows:
(a) Holder is purchasing the Securities for its own account for investment
and not with a view to or for sale in connection with the distribution of the
Securities, nor with any present intention of selling or otherwise disposing of
all or any part of the Securities. Holder agrees that (i) the purchase of the
Securities is a long-term investment, (ii) it may have to bear the economic risk
of investment for an indefinite period of time because the Securities have not
been registered under the Act, and, notwithstanding the Company's commitment
herein, such Securities may not be registered, and cannot be resold, pledged,
assigned, or otherwise disposed of or transferred unless they are subsequently
registered under the Act and applicable state securities laws or any exemption
from such registration is available. Holder authorizes the Company to place a
legend denoting the restrictions on the Securities to be issued.
(b) Holder is an "accredited investor" as defined in Section 2(a)(15) of
the Act and in Rule 501 thereunder. Holder understands that Securities are being
sold without registration under the Act in reliance upon the exemption contained
in Sections 3(b), 4(2) or 4(6) of the Act and under applicable state securities
laws.
(c) Holder believes that the investment in the Securities is suitable for
it based upon its investment objectives and financial needs, and Holder and its
members have adequate means
for providing for their current financial needs and contingencies and have no
need for liquidity with respect to Holder's investment in the Company.
(d) Holder has been given access to full and complete information regarding
the Company and has utilized such access to its satisfaction for the purpose of
obtaining information, and Holder has either met with or been given reasonable
opportunity to meet with officers of the Company for the purpose of asking
questions of, and receiving answers from such officers concerning the terms and
conditions of operations of the Company and to obtain any additional information
to the extent reasonably available. Holder has received all information and
materials regarding the Company that it has requested.
(e) Except for the representations and warranties of the Company contained
in Section 4 hereof, Holder has relied solely upon its own investigation in
making a decision to invest in the Company and it has independently evaluated
the risks of purchasing the Securities. Holder has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Securities and have obtained, in its judgment,
sufficient information from the Company to evaluate the merits and risks of an
investment in the Company. Holder has not utilized any person as its "purchaser
representative" as defined in Regulation D under the Act in connection with
evaluating such merits and risks.
(f) Holder has received no representation or warranty from the Company or
any of its officers, directors, employees or agents in respect of its investment
in the Company other than as set forth herein.
(g) Holder understands that (i) none of the Securities have been registered
under the Act, or the securities laws of certain states, in reliance on the
specific exemptions from registration, (ii) no securities administrator of any
state or the federal government has recommended or endorsed the offer of the
Securities or made any finding or determination relating to the fairness of any
investment in the Company, and (iii) the Company is relying on my
representations and agreements for the purpose of determining whether this
transaction meets the requirements of the exemptions afforded by the Securities
Act and certain state securities laws.
4. Company's Representations and Warranties. The Company represents and
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warrants to, and agrees with the Holder, as follows:
(a) All corporate actions on the part of the Company necessary for the
authorization, execution, delivery and performance by the Company of this
Agreement have been taken.
(b) The execution, delivery and performance of this Agreement by the
Company do not conflict with any material provision by which the Company is
bound.
(c) The Company is a corporation duly organized, validly existing and in
good standing under the laws of Delaware.
(d) The Company has filed all reports required to be filed by it under the
Securities Exchange Act of 1934, such reports comply with the requirements of
said Exchange Act in all material respects, and, as of the date of filing
thereof, no such report contained an untrue
statement of material fact or omitted to state a fact necessary to make a
statement of material fact contained therein not misleading.
(e) There has been no material adverse change in the Company's performance
and financial condition, taken as a whole, from its performance and condition as
reported in its Form 10-Q for its third quarter of its 1999 fiscal year, except
as referred to in its press release dated February 15, 2000 summarizing its
fiscal year and fourth quarter results.
(f) The Company's capitalization is substantially as set forth in its Form
10-Q for its third quarter of the 1999 fiscal year.
(g) As of the date hereof, no legal proceedings would be required to be
reported under Item 3 of a Form 10-K for the Company's 1999 fiscal year other
than as reported under Item 3 of Form 10-K for its 1998 fiscal year.
(h) The Company has engaged no broker or finder in connection with the
transaction contemplated by this Agreement.
5. Miscellaneous.
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5.1 Governing Law and Jurisdiction. This Subscription Agreement will be
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deemed to have been made and delivered in New York City and will be governed as
to validity, interpretation, construction, effect and in all other respects by
the internal laws of the State of New York without giving effect to its
principles of conflicts of law. The Company and the Holder each hereby (a)
agrees that any suit, action or proceeding arising out of or relating to this
Subscription Agreement will be instituted exclusively in New York State Supreme
Court, County of New York, or in the United States District Court for the
Southern District of New York, (b) waives any objection to the venue of any such
suit, action or proceeding and the right to assert that such forum is not a
convenient forum for such suit, action or proceeding, and (c) irrevocably
consents to the jurisdiction of the New York State Supreme Court, County of New
York, and the United States District Court for the Southern District of New York
in any such suit, action or proceeding, and the Company and the Holder further
agree to accept and acknowledge service or any and all process that may be
served in any such suit, action or proceeding in the New York State Supreme
Court, County of New York or in the United States District Court for the
Southern District of New York and agrees that service of process upon it mailed
by certified mail to its address or given as provided for in Section 5.3 will be
deemed in every respect effective service of process upon it in any such suit,
action or proceeding.
5.2 Benefit. This Subscription Agreement will be binding upon and inure to
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the benefit of the parties hereto and their respective heirs, executors,
personal representatives and successors. The rights of the Holder under Section
2 may not be assigned or transferred by the Holder other than to a transferee of
Registrable Securities on a transfer which, in the written opinion addressed to
the Company and its transfer agent and reasonably acceptable to both, is exempt
from the registration provisions of the Act pursuant to Section 4(2) thereof,
provided, however, that such transferee agrees in a writing delivered to the
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Company prior to such transfer to be bound by and subject to all the obligations
of a Holder under this Agreement.
5.3 Notices. All communications under this Subscription Agreement shall be
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in writing and will be sufficiently given if delivered to the addresses in
person by overnight courier service, by confirmed facsimile transmission or, if
mailed, postage prepaid, by certified retail (return receipt requested), and
will be effective three days after being placed in the mail if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed facsimile transmission, in each case addressed to a party. The
addresses for such communications shall be, with respect to (a) the Company, its
address set forth above, and (b) the Holder, to its address as set forth below.
5.4 Entire Agreement. This Subscription Agreement constitutes the entire
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agreement between the parties with respect to the subject matter hereof and
supersedes all prior oral and written agreements between the parties hereto with
respect to the subject matter hereof. It may not be changed, waived, discharged
or terminated orally but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
Very truly yours,
VANTAGE VENTURE PARTNERS, LP
By its General Partner, Vantage Partners, LLC
By: /s/ Xxxxxxxxxxx X. Xxxxx
Xxxxxxxxxxx X. Xxxxx
Vantage Partners, LLC
c/o Vantage Partners, LLC
000 Xxxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, XX 00000
The foregoing subscription is accepted,
and the Company hereby agrees to be bound by its terms.
XXXXX MEDICAL CORP.
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Senior Vice President-Finance
