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EXHIBIT 99.5
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT ("Agreement") is entered into as of
October 27, 1997, by and between Selfcare, Inc., a Delaware corporation (the
"Company"), with headquarters located at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000
and the purchasers ("Purchasers") set forth on the execution pages hereof, with
regard to the following:
RECITALS
A. The Company and Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act").
B. Purchasers desire (a) to purchase, upon the terms and conditions
stated in this Agreement, Ten Million U.S. Dollars face amount of the Company's
Senior Subordinated Convertible Notes (the "Notes"), in the form attached hereto
as Exhibit A, convertible into shares of the Company's Common Shares, par value
$.001 per share (the "Common Stock"), and (b) to receive, in consideration for
such purchase, Stock Purchase Warrants (the "Warrants"), in the form attached
hereto as Exhibit B, to acquire shares of Common Stock. The shares of Common
Stock issuable upon exercise of or otherwise pursuant to the Warrants are
referred to herein as "Warrant Shares". The shares of Common Stock to be issued
to the Purchasers upon conversion of the Notes hereunder are referred to herein
as the "Common Shares." The Notes, the Common Shares, the Warrants, and the
Warrant Shares are collectively referred to herein as the "Securities."
C. Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement (the "Registration Rights Agreement"), pursuant to which the Company
has agreed to provide certain registration rights under the Securities Act, the
rules and regulations promulgated thereunder and applicable state securities
laws.
AGREEMENTS
NOW, THEREFORE, in consideration of their respective promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and Purchasers hereby agree as
follows:
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ARTICLE I
PURCHASE AND SALE OF NOTES
1.1 Purchase of Notes. Subject to the terms and conditions of this
Agreement, the issuance, sale and purchase of the Notes shall be consummated in
a "Closing". On the date of the Closing, subject to the satisfaction or waiver
of the conditions set forth in Articles VI and VII, the Company shall issue and
sell to the Purchasers, and the Purchasers agree to purchase from the Company,
the Notes for an aggregate purchase price of Ten Million U.S. Dollars (the
"Purchase Price"), each Purchaser purchasing 50% of the Notes and paying 50% of
the Purchase Price.
1.2 Form of Payment. The Purchasers shall pay the Purchase Price for
the Notes by wire transfer to the account designated by the Company on the
signature page of this Agreement, upon delivery to the Purchasers of the Notes
and the Warrants, all in accordance with the terms of this Agreement, and upon
satisfaction of the other Closing conditions..
1.3 Closing Date. Subject to the satisfaction (or waiver) of the
conditions set forth in Articles VI and VII below, the date and time of the
issuance, sale and purchase of the Notes pursuant to this Agreement shall be at
6:00 p.m. New York City time, on October 27, 1997; provided, however, that in
the event the Purchasers have not irrevocably notified their bank(s) to promptly
wire the Purchase Price to the account or accounts directed by the Company by
2:15 p.m., October 28, 1997, the transactions contemplated by this Agreement
shall become void and this Agreement shall promptly terminate. Purchasers agree
to deliver to the Company, and the Company agrees to deliver to the Purchasers,
all signature pages signed by the other to this Agreement, the Registration
Rights Agreement, the Notes and the Warrants immediately following such
termination.
1.4 Warrants. In consideration of the purchase by Purchasers of the
Notes, the Company shall at the Closing issue to the Purchasers Warrants to
acquire an aggregate of One Hundred Six Thousand Seven Hundred (106,700) shares
of Common Stock (a Warrant representing 50% of such shares shall be delivered to
each Purchaser).
ARTICLE II
PURCHASER'S REPRESENTATIONS AND
WARRANTIES
Each Purchaser represents and warrants to the Company as of the date
hereof and as of the Closing as set forth in this Article II. The Purchasers
make no other representations or warranties, express or implied, to the Company
in connection with the transactions contemplated hereby and any and all prior
representations and warranties, if any, which may have been made by the
Purchasers to the Company in connection with the transactions contemplated
hereby shall be deemed to have been merged in this Agreement and any such prior
representations and
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warranties, if any, shall not survive the execution and delivery of this
Agreement.
2.1 Investment Purpose. Purchaser is purchasing the Notes and the
Warrants for Purchaser's own account for investment only and not with a view
toward or in connection with the public sale or distribution thereof in
violation of the applicable securities laws. Purchaser will not, directly or
indirectly, offer, sell, pledge or otherwise transfer the Notes or Warrants or
any interest therein except pursuant to transactions that are exempt from the
registration requirements of the Securities Act or sales registered under the
Securities Act, the rules and regulations promulgated pursuant thereto and
applicable state securities laws. Purchaser understands that Purchaser must bear
the economic risk of this investment indefinitely, unless the Securities are
registered pursuant to the Securities Act and any applicable state securities
laws or an exemption from such registration is available, and that the Company
has no present intention of registering any such Securities other than as
contemplated by the Registration Rights Agreement. By making the representations
in this Section 2.1, the Purchaser does not agree to hold the Securities for any
minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption from registration under the Securities Act and any
applicable state securities laws.
2.2 Accredited Investor Status. Purchaser is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D.
2.3 Reliance on Exemptions. Purchaser understands that the Notes and
Warrants are being offered and sold to Purchaser in reliance upon specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of Purchaser
to acquire the Notes and Warrants.
2.4 Information. Purchaser or its counsel have been furnished all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities which have been
specifically requested by Purchaser, including without limitation the Company's
Registration Statement on Form S-3 filed with the Securities and Exchange
Commission ("SEC") on October 15, 1997, Annual Report on Form 10-KSB/A for the
Year ended December 31, 1996, Quarterly Reports on Form 10-QSB for the periods
ended March 31, 1997 and June 30, 1997, Current Report on Form 8-K filed with
the SEC on March 5, 1997, as amended by Form 8-K/A filed with the SEC on May 5,
1997, Prospectus dated March 7, 1997 ("Prospectus") and Proxy Statement dated
May 6, 1997 (such documents collectively, the "Furnished SEC Documents").
Purchaser has been afforded the
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opportunity to ask questions of the Company and has received what Purchaser
believes to be complete and satisfactory answers to any such inquiries. The
Company agrees that neither such inquiries nor any other due diligence
investigation conducted by Purchaser or any of its representatives nor any other
disclosures or documents (including without limitation the Furnished SEC
Documents and the SEC Documents, as hereinafter defined) shall modify, amend or
affect Purchaser's right to rely on the Company's representations and warranties
contained in this Agreement or in any Exhibit or Schedule hereto or in any
certificate delivered pursuant hereto or thereto. Purchaser understands that
Purchaser's investment in the Securities involves a high degree of risk,
including without limitation the risks and uncertainties disclosed in the SEC
Documents. Subject to the foregoing, Purchaser acknowledges the disclosures
presented under the caption "Risk Factors" in the Company's Form 10-K SB/A for
the year ended December 31, 1996 and in the Prospectus.
2.5 Governmental Review. Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
2.6 Transfer or Resale. Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be offered, sold, pledged or otherwise transferred by Purchaser
unless subsequently registered thereunder or an exemption from such registration
is available (which exemption the Company expressly agrees may be established as
contemplated in clauses (b), (c) and/or (d) of Section 5.1 hereof); (ii) any
sale of such Securities made in reliance on Rule 144 under the Securities Act
(or a successor rule) ("Rule 144") may be made only in accordance with the terms
of Rule 144 and further, if Rule 144 is not applicable, any resale of such
Securities without registration under the Securities Act under circumstances in
which the seller may be deemed to be an underwriter (as that term is defined in
the Securities Act) may require compliance with some other exemption under the
Securities Act or the rules and regulations of the SEC thereunder, and (iii)
neither the Company nor any other person is under any obligation to register
such Securities under the Securities Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder (in each case,
other than pursuant to this Agreement or the Registration Rights Agreement).
2.7 Legends. Purchaser understands that, subject to Article V hereof,
the certificates for the Notes and Warrants and, until such time as the Common
Shares and Warrant Shares have been registered under the Securities Act as
contemplated by the Registration Rights Agreement or otherwise may be sold by
Purchaser pursuant to Rule 144 (subject to and in accordance with the procedures
specified in Article V hereof), the certificates
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for the Common Shares and Warrant Shares, will bear a restrictive legend (the
"Legend") in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR UNLESS OFFERED, SOLD OR
TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS.
2.8 Authorization: Enforcement. This Agreement and the Registration
Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of Purchaser and are valid and binding agreements of Purchaser
enforceable in accordance with their respective terms, except (i) to the extent
that such validity or enforceability may be subject to or affected by any
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors' rights or
remedies of creditors generally, or by other equitable principles of general
application, and (ii) as rights to indemnity and contribution under the
Registration Rights Agreement may be limited by Federal or state securities
laws.
2.9 Residency. Purchaser is a resident of the jurisdiction set forth
under Purchaser's name on the signature page hereto executed by Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each Purchaser as of the date
hereof and as of the Closing as set forth in this Agreement and in any Exhibit,
Schedule, agreement or certificate delivered in connection herewith or
therewith. Except as contemplated above and in Section 8.5, the Company makes no
other representations or warranties, express or implied, to the Purchaser in
connection with the transactions contemplated hereby and any and all prior
representations and warranties, if any, which may have been made by the Company
to the Purchaser in connection with the transactions contemplated hereby shall
be deemed to have been merged in this Agreement and any such prior
representations and warranties, if any, shall not survive the execution and
delivery of this Agreement.
3.1 Organization and Qualification. Each of the Company and its
direct and indirect subsidiaries (collectively, "Subsidiaries") is a corporation
duly organized and existing in good standing under the laws of the jurisdiction
in which it is incorporated, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The Company and
each of its Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in
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every jurisdiction where the failure so to qualify or be in good standing would
have a Material Adverse Effect. "Material Adverse Effect" means any effect
which, individually or in the aggregate with all other effects, is or reasonably
would be expected to be materially adverse to the business, operations,
properties, financial condition or operating results of the Company and its
Subsidiaries, taken as a whole on a consolidated basis, or to the transactions
contemplated hereby or to any of the Securities.
3.2 Authorization: Enforcement. (a) The Company has the requisite
corporate power and authority to enter into and perform this Agreement and the
Registration Rights Agreement, and to issue, sell and perform its obligations
with respect to the Registration Rights Agreement, Notes and Warrants in
accordance with the terms hereof and the terms of the Registration Rights
Agreement, Notes and Warrants, and to issue the Common Shares and Warrant Shares
upon conversion of the Note and exercise of the Warrant, respectively, in
accordance with the terms and conditions of the Notes and Warrants,
respectively; (b) the execution, delivery and performance of this Agreement and
the Registration Rights Agreement by the Company and the consummation by it of
the transactions contemplated hereby and thereby (including without limitation
the issuance of the Notes and the Warrants, and the issuance and reservation for
issuance of the Common Shares and the Warrant Shares) have been duly authorized
by all necessary corporate action and, except as set forth on Schedule 3.2
hereof, no further consent or authorization of the Company, its board of
directors, or its stockholders or any other person, body or agency, and except
for a listing application with respect to the Common Shares and the Warrant
Shares to be filed by the Company promptly after Closing with AMEX (as herein
defined), no filing with any person, body or agency, is required with respect to
any of the transactions contemplated hereby or thereby (whether under rules of
the American Stock Exchange ("AMEX"), the National Association of Securities
Dealers or otherwise); (c) this Agreement, the Registration Rights Agreement,
the Notes, and the Warrants have been duly executed and delivered by the
Company; and (d) this Agreement, the Registration Rights Agreement, the Notes,
and the Warrants constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms,
except (i) to the extent that such validity or enforceability may be subject to
or affected by any bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights or remedies of creditors generally, or by other equitable
principles of general application, and (ii) as rights to indemnity and
contribution under the Registration Rights Agreement may be limited by Federal
or state securities laws.
3.3 Capitalization. The capitalization of the Company as of the date
hereof, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares reserved for issuance pursuant to the
Company's stock option plans, the number of shares reserved for issuance
pursuant to securities (other than the Notes or the Warrants) exercisable
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for, or convertible into or exchangeable for any shares of Common Stock and the
number of shares to be reserved for issuance upon conversion of the Notes and
exercise of the Warrants is set forth on Schedule 3.3. All of such outstanding
shares of capital stock of the Company (including the Common Shares and the
Warrant Shares) have been, or upon issuance will be, validly issued, fully paid
and nonassessable. No shares of capital stock of the Company (including the
Common Shares and the Warrant Shares) are, and no such Common Shares or Warrant
Shares will be, subject to preemptive rights or any other similar rights
granted, created, suffered or caused by the Company or any liens or encumbrances
granted, created, suffered or caused by the Company or any of its Subsidiaries.
Except as disclosed in Schedule 3.3, as of the date of this Agreement, (i) there
are no outstanding options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital stock
of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries, and (ii) issuance of the Securities will not
trigger antidilution or similar rights for any other present or future
outstanding or authorized securities of the Company, and (iii) there are no
agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of its or their securities under the
Securities Act (except the Registration Rights Agreement). The Company has
furnished to Purchaser true and correct copies of the Company's Certificate of
Incorporation as in effect on the date hereof ("Certificate of Incorporation"),
and the Company's By-laws as in effect on the date hereof (the "By-laws"). The
Company has set forth on Schedule 3.3 all instruments and agreements (other than
the Certificate of Incorporation and By-laws) governing or concerning securities
convertible into or exercisable or exchangeable for Common Stock of the Company
(and the Company shall provide to Purchasers copies thereof upon the request of
Purchasers). Unless signing and Closing occur simultaneously, the Company shall
provide Purchasers with a written confirmation of this representation signed by
the Company's Chief Executive Officer or Chief Financial Officer on behalf of
the Company as of the date of the Closing.
3.4 Issuance of Shares. The Common Shares and Warrant Shares are duly
authorized and reserved for issuance, and, upon conversion in the case of the
Notes and exercise in the case of the Warrants in accordance with the terms
thereof, as applicable, will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances directly or indirectly
imposed or suffered by the Company or any of its Subsidiaries or affiliates,
will be entitled to all rights and preferences accorded to a holder of Common
Stock, shall be entitled to be traded on the same markets and exchanges as the
other shares of Common Stock of the Company are traded, and will not be subject
to preemptive rights or other similar rights of stockholders of the Company or
of any other person or entity
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granted, created, suffered or caused by the Company or any of its Subsidiaries.
The Notes and Warrants are duly authorized and validly issued, fully paid and
nonassessable, and free from all liens, claims and encumbrances directly or
indirectly imposed or suffered by the Company or any of its Subsidiaries or
affiliates and will not be subject to preemptive rights or other similar rights
of stockholders of the Company or of any other person or entity granted,
created, suffered or caused by the Company or any of its Subsidiaries.
3.5 No Conflicts. The execution, delivery and performance of this
Agreement, the Notes, the Warrants and the Registration Rights Agreement by the
Company, and the consummation by the Company of transactions contemplated hereby
and thereby (including, without limitation, the issuance and reservation for
issuance, as applicable, of the Notes, Common Shares, Warrants, and Warrant
Shares) will not (a) result in a violation of the Certificate of Incorporation
or By-laws or (b) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including U.S. federal and state securities laws and
regulations and the rules and regulations of AMEX) applicable to the Company or
any of its Subsidiaries, or by which any property or asset of the Company or any
of its Subsidiaries is bound or affected (except for such possible conflicts,
defaults, terminations, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect,
or that result solely and directly from any misrepresentation of the Purchasers
set forth herein). Neither the Company nor any of its Subsidiaries is in
violation of its Certificate of Incorporation or other organizational documents,
and neither the Company nor any of its Subsidiaries is in default (and no event
has occurred which has not been permanently waived and released which, with
notice or lapse of time or both, would put the Company or any of its
Subsidiaries in default) under, nor has there occurred any event giving others
(with notice or lapse of time or both) any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party, except for possible
violations, defaults or rights as would not, individually or in the aggregate,
have a Material Adverse Effect. The businesses of the Company and its
Subsidiaries are not being conducted, and shall not be conducted so long as any
Purchaser (or any transferee or assignee of Purchaser or of such transferee or
assignee, and their successors and assigns, in a transaction of the type
referred to in Section 5.1(b) below ("Purchaser Transferee")) owns any of the
Securities, in violation of any law, ordinance or regulation of any governmental
entity, except for possible violations the sanctions for which either
individually or in the aggregate would not have a Material Adverse Effect.
Except as set forth on Schedule 3.5, or except (A) such as may be required under
the
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Securities Act in connection with the performance of the Company's obligations
under the Registration Rights Agreement, (B) filing of a Form D with the SEC,
(C) filing of the listing application referred to in Section 3.2(b) above with
AMEX, and (D) compliance with the state securities or Blue Sky laws of
applicable jurisdictions, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for it
to execute, deliver or perform any of its obligations under this Agreement, the
Notes, the Warrants or the Registration Rights Agreement or to perform its
obligations in accordance with the terms hereof or thereof. The Company is not
in violation of the listing requirements of AMEX, does not know of or anticipate
any event which could be grounds for any delisting, and does not reasonably
anticipate that the Common Stock will be delisted by AMEX for the foreseeable
future.
3.6 SEC Documents. Except as disclosed in Schedule 3.6, since
December 31, 1996, the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (all of the foregoing filed after December 31, 1996 and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being referred to herein as the
"SEC Documents"). The Company has delivered to each Purchaser true and complete
copies of the Furnished SEC Documents, except for exhibits, schedules and
incorporated documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act and the rules
and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of the statements made in any such SEC Documents which is
required to be updated or amended under applicable law has not been so updated
or amended. None of the statements made in any such SEC Documents which was or
has become inaccurate or misleading, and which would have a Material Adverse
Effect, has not been so updated or amended. The financial statements of the
Company included in the SEC Documents have been prepared in accordance with U.S.
generally accepted accounting principles, consistently applied, and the rules
and regulations of the SEC during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they do not include
footnotes or are condensed or summary statements) and, fairly present in all
material respects the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements,
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to normal, immaterial year-end audit adjustments). Except as specifically set
forth in the Furnished SEC Documents, the Company has no liabilities, contingent
or otherwise, other than (i) liabilities incurred in the ordinary course of
business consistent with past practice subsequent to the date of such financial
statements and (ii) obligations not required under generally accepted accounting
principles to be reflected in such financial statements under contracts and
commitments incurred in the ordinary course of business consistent with past
practice and (iii) liabilities not required under generally accepted accounting
principles to be reflected in such financial statements, in each case of clause
(i), (ii) and (iii) next above which, individually or in the aggregate, are not
material to the financial condition, business, operations, properties, operating
results or prospects of the Company and its Subsidiaries on a consolidated
basis, or to the transactions contemplated hereby or to the Securities. To the
extent required by the rules of the SEC applicable thereto, the SEC Documents
contain a complete and accurate list of all material undischarged written or
oral contracts, agreements, leases or other instruments existing as of the
respective date of each such SEC Document (or such other date required by the
rules of the SEC) to which the Company or any subsidiary is a party or by which
the Company or any subsidiary is bound or to which any of the properties or
assets of the Company or any subsidiary is subject (each a "Contract"). Except
as set forth in Schedule 3.6 or as specifically disclosed in the Furnished SEC
Documents, none of the Company, its Subsidiaries or, to the best knowledge of
the Company, any of the other parties thereto, is in breach or violation of any
Contract, which breach or violation would have a Material Adverse Effect, or of
any other existing agreement or document which the Company will be required to
list or describe in any subsequent SEC filing. No event, occurrence or condition
exists which, with the lapse of time, the giving of notice, or both, would
become a default by the Company or its Subsidiaries under any such Contracts,
agreements or documents which would have a Material Adverse Effect. The Company
has not provided and will not provide to any Purchaser any material non-public
information or any other information which, according to applicable law, rule or
regulation, should have been disclosed publicly by the Company but which has not
been so disclosed, except that with respect to any previously material
non-public information disclosed to the Purchasers, any such information will be
publicly disclosed by the Company within the time period set forth in the
Confidentiality Agreement referred to in Section 8.5 below.
3.7 Absence of Certain Changes. Since December 31, 1996, there has
been no Material Adverse Effect, except as disclosed in Schedule 3.7 or as
specifically disclosed in the Furnished SEC Documents.
3.8 Absence of Litigation. Except as disclosed in Schedule 3.8, there
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, or self-regulatory organization or body pending
or, to the knowledge of the Company or any of its Subsidiaries,
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threatened against the Company, any of its Subsidiaries, or any of their
respective directors or officers in their capacities as such, which could
reasonably be expected to result in an unfavorable decision, ruling or finding
which would have a Material Adverse Effect or would adversely affect in any
material respect the transactions contemplated by this Agreement or any of the
documents executed and delivered pursuant hereto or which would adversely affect
the validity or enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of such other documents.
There are no facts known to the Company which, if known by a potential claimant
or governmental authority, could reasonably be expected to give rise to a claim
or proceeding which, if asserted or conducted with results unfavorable to the
Company or any of its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect.
3.9 Disclosure. No information, statement or representation relating
to or concerning the Company or any of its Subsidiaries set forth in this
Agreement or in any Schedule, Exhibit, certificate or agreement provided to a
Purchaser in connection with the transactions contemplated hereby contains an
untrue statement of a material fact. No information relating to or concerning
the Company or any of its Subsidiaries set forth in any of the Furnished SEC
Documents contains a statement of material fact that was untrue as of the date
such Furnished SEC Document was filed with the SEC. The Company has not omitted
to state a material fact necessary in order to make the statements and
representations made herein or in any of the foregoing, in light of the
circumstances under which they were made and at the time they were made, not
misleading.
3.10 Acknowledgment Regarding Purchasers' Purchase of the Securities.
The Company acknowledges and agrees that each Purchaser is not acting as a
financial advisor or fiduciary of the Company or any of its Subsidiaries (or in
any similar capacity) with respect to this Agreement or the transactions
contemplated hereby, that this Agreement and the transaction contemplated
hereby, and the relationship between each Purchaser and the Company, are
"arms-length", and that any statement made by any Purchaser (except as set forth
in Article II), or any of its representatives or agents, in connection with this
Agreement and the transactions contemplated hereby is not advice or a
recommendation, is merely incidental to each Purchaser's purchase of the
Securities and has not been relied upon as such in any way by the Company, its
officers or directors. The Company further represents to each Purchaser that the
Company's decision to enter into this Agreement and the transactions
contemplated hereby have been based solely on an independent evaluation by the
Company and its representatives.
3.11 S-3 Registration. The Company is currently eligible to register
the resale of its Common Stock (including the Common Shares and the Warrant
Shares) on a registration statement on Form S-3 under the Securities Act.
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3.12 No General Solicitation. Neither the Company nor any distributor
participating on the Company's behalf in the transactions contemplated hereby
(if any) nor any person acting for the Company, or any such distributor, has
conducted any "general solicitation," as described in Rule 502(c) under
Regulation D, with respect to any of the Securities being offered hereby.
3.13 No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would either require registration of
any of the Securities under the Act or prevent the parties hereto from
consummating, or delay or interfere with the consummation of, the transactions
contemplated hereby pursuant to an exemption from registration under the
Securities Act pursuant to the provisions of Regulation D. The transactions
contemplated hereby are exempt from the registration requirements of the
Securities Act, assuming the accuracy of the relevant representations and
warranties herein contained of the Purchasers and of Shoreline Pacific
Institutional Finance, the Institutional Division of Financial West Group
("Shoreline") in its agreement with the Company, to the extent relevant for such
determination. To the Company's knowledge, such representations and warranties
of Shoreline are accurate.
3.14 No Brokers. The Company has taken no action, directly or
indirectly, which would give rise to any claim by any person for brokerage
commissions, finder's fees or similar payments by Purchasers relating to this
Agreement or the transactions contemplated hereby. With respect to the Company's
dealings with Shoreline, the fees due Shoreline are the sole obligation of the
Company, and shall be paid in full by the Company. The Company will indemnify
the Purchasers from and against any fees and expenses (including without
limitation reasonable attorneys fees and expenses) sought or other claims made
by Shoreline with respect to any such fees. Shoreline has advised the Company
that Purchasers have no liability to Shoreline with respect to such fees.
3.15 Intellectual Property. Except as specifically disclosed in the
Furnished SEC Documents, each of the Company and its Subsidiaries owns, is
licensed to use, or possesses adequate and enforceable rights to use all
material patents, patent applications, trademarks, trademark applications, trade
names, service marks, copyrights, copyright applications, licenses, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, "Intangibles") used or necessary for the
conduct of its business as now being conducted and as described in the Company's
Annual Report on Form 10-KSB/A for its most recently ended fiscal year. To the
Company's best knowledge, except as specifically disclosed in the Furnished SEC
Documents or set forth in Schedule 3.15, neither the Company nor any Subsidiary
of
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13
the Company infringes on or is in conflict with any right of any other person
with respect to any Intangibles nor is there any claim of infringement made by a
third party against or involving the Company or any of its Subsidiaries, which
infringement, conflict or claim, individually or in the aggregate, could
reasonably be expected to result in an unfavorable decision, ruling or finding
which would have a Material Adverse Effect.
3.16 Key Employees. Each Key Employee (as defined below) is currently
serving the Company in the capacity disclosed in the Prospectus dated March 7,
1997. No Key Employee, to the best of the knowledge of the Company and its
Subsidiaries, after consultation by the Company with each Key Employee, is, or
is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each Key Employee does not subject the
Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters. Xxx Xxxxxxxxx, to the best of the knowledge of the Company
and its Subsidiaries after consultation by the Company with Xxx Xxxxxxxxx, has
no intention to terminate his employment with, or services to, the Company or
any of its Subsidiaries. "Key Employee" means each of Xxxxxxx X. Xxxx, Ph.D.,
Xxxx Xxxx and Xxx Xxxxxxxxx. No Key Employee has margined more than 20% of his
Common Stock, or placed more than 20% of his Common Stock in a situation which
could result in an involuntary sale thereof.
3.17 The Company does not have in effect a shareholders rights plan or
similar plan in the nature of a "poison pill." If the Company adopts such a
plan, none of the Purchasers' Notes, Warrants, Common Shares and Warrant Shares,
nor any of the transactions contemplated hereunder or thereunder, will be deemed
to trigger such plan.
3.18 Dilution. The number of Common Shares and Warrant Shares may
increase substantially in certain circumstances, including the circumstances
where the trading price of the Company's Common Stock declines. The Company
acknowledges that its obligation to issue Common Shares and Warrant Shares upon
conversion of the Notes and exercise of the Warrants is absolute and
unconditional, regardless of the dilution that such issuance may have on other
shareholders of the Company.
3.19 Certain Transactions. Except as disclosed in the SEC Documents
and except for arm's length transactions pursuant to which the Company or any of
its direct or indirect Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable than the Company or any of its direct or
indirect Subsidiaries could obtain from third parties, none of the officers,
directors, or employees of the Company is presently a party to any transaction
with the Company or any of its direct or indirect Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
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14
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
3.20 Permits; Compliance. The Company and each of its Subsidiaries is
in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the "Company Permits"), and there is
no action pending or, to the knowledge of the Company, threatened regarding
suspension or cancellation of any of the Company Permits, except for such
Company Permits the failure of which to possess, or the cancellation or
suspension of which, would not, individually or in the aggregate, have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in
conflict with, or in default or violation of, any of the Company Permits, except
for any such conflicts, defaults or violations which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
Since January 1, 1996, neither the Company nor any of its Subsidiaries has
received any notification with respect to possible conflicts, defaults or
violations of applicable laws, except for notices relating to possible
conflicts, defaults or violations, which conflicts, defaults or violations would
not have a Material Adverse Effect.
3.21 Insurance. The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have a Material
Adverse Effect.
ARTICLE IV
COVENANTS
4.1 Reasonable Efforts. The parties shall use commercially reasonably
efforts to timely satisfy each of the conditions described in Articles VI and
VII of this Agreement.
4.2 Securities Laws. The Company agrees to timely file a Form D with
respect to the Securities with the SEC as required under Regulation D and to
provide a copy thereof to each Purchaser promptly after such filing. The Company
agrees to timely file the appropriate SEC Form disclosing this Agreement and the
transactions contemplated hereby with the SEC. The
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15
Company shall, on or prior to the date of Closing, take such action as is
necessary to qualify the Securities for sale to the Purchasers in compliance
with applicable securities laws of the states of the United States or obtain
exemption therefrom, and shall provide evidence of any such action so taken to
the Purchasers on or prior to the date of the Closing.
4.3 Reporting Status. So long as any Purchaser or any Purchaser
Transferee beneficially owns any of the Securities, (a) the Company shall timely
file all reports required to be filed with the SEC pursuant to the Exchange Act,
and the Company shall not terminate its status as an issuer required to file
reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would permit such termination, and (b) the Company will
maintain its ability and eligibility to register its Common Stock (including the
Common Shares and the Warrant Shares) on Form S-3.
4.4 Information. The Company agrees to send the following reports,
documents and information to each Purchaser and each Purchaser's Transferee
until each Purchaser and each Purchaser's Transferee transfers, assigns or sells
all of its Securities in transactions in which the transferee is (unless such
transferee is an affiliate) not subject to securities law resale restrictions or
limitations: (a) within three (3) business days after the filing with the SEC, a
copy of its Annual Report on Form 10-KSB, its Quarterly Reports on Form 10-QSB,
any proxy statements and any Current Reports on Form 8-K; (b) within one (1)
business day after release, copies of all press releases issued by the Company
or any of its Subsidiaries and; (c) contemporaneously with the sending of any
document, notice or information to any class of the Company's equity security
holders, a copy of each document, notice or information furnished to any class
of the Company's equity security holders. The Company further agrees to promptly
provide to each Purchaser and each Purchaser's Transferee any information with
respect to the Company, its properties, or its business or each Purchaser's
investment as any Purchaser or Purchaser's Transferee may reasonably request;
provided, however, that the Company shall not be required to give any Purchaser
any material non-public information. If any information requested by a Purchaser
from the Company contains material non-public information, and if the Company is
willing to provide such material non-public information to a Purchaser, the
Company shall inform the Purchaser in writing that the information requested
contains material non-public information and shall in no event provide such
information to Purchaser without the express written consent of the Purchaser
after being so informed. Further, so long as any Purchaser or any Purchaser's
Transferee beneficially owns any Notes, Warrants, Common Shares or Warrant
Shares, the Company will give such Purchaser and any Purchaser's Transferee
prior notice of, promptly upon its occurrence, (a) any event or transaction
which has occurred or failed to occur (i) which will require an adjustment of
any component of the conversion or exercise rights or provisions under the Notes
or the Warrants, or (ii) which is a default or breach (with or without the
giving of
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16
notice or the passage of time) by the Company under this Agreement, the
Registration Rights Agreement, the Notes or the Warrants, and (b) the selection
by the Company of a record date with respect to any of its equity securities,
and the purpose for which such record date was selected.
4.5 Listing. The Company shall continue the uninterrupted listing and
trading of its Common Stock and the Common Shares and Warrant Shares on the
Nasdaq National Market, the New York Stock Exchange or AMEX; and comply in all
material respects with the Company's reporting, filing and other obligations
under the By-laws and rules of the Nasdaq and such Exchange, as applicable. If
and so long as the Common Stock, the Common Shares and the Warrant Shares are
not listed on the Nasdaq or one of such Exchanges, as partial compensation for
the added liquidity risk of such delisting the Company shall be obligated to
make the following additional cash payments (the "Delisting Payments"). The
Delisting Payments will be equal to two percent (2%) of the Purchase Price (plus
accrued but unpaid interest) of any outstanding Notes for each month (pro rata
for partial months) following the date any such shares are delisted (the
"Delisting Date") continuing through the date all such shares are listed on
Nasdaq or one of such Exchanges (the "New Listing"). If such delisting occurs
within three (3) trading days of the date a Purchaser converts its Notes, and if
within such three (3) trading day period the Purchaser has not effectively sold
its Common Shares received upon such conversion, then, for the purpose of
calculating the Delisting Payment, the Notes so converted shall be deemed
outstanding until the New Listing date. The Delisting Payments will be paid to
the Holders of the Notes in cash within five (5) business days following the
earlier of (i) the end of each month following the Delisting Date, or (ii) the
effective date of the New Listing. Nothing herein shall limit the Note Holder's
right to pursue damages (including without limitation lost trading or other
profits and reimbursement for expenses and reasonable legal fees incurred;
excluding, however, other consequential damages and punitive damages)
(collectively, "Damages") for the Company's failure to maintain its listing on
Nasdaq or any such Exchange. The period between each Delisting Date and New
Listing date is herein called the "Delisting Period." A default by the Company
shall be deemed to exist hereunder and under the Warrants, without notice, and
an Event of Default shall automatically exist under the Notes, without notice,
at such time as the aggregate number of trading days in all Delisting Periods
during any twelve month period exceeds five (5) trading days.
4.6 Prospectus Delivery Requirement. Each Purchaser understands that
the Securities Act may require delivery of a prospectus relating to the Common
Shares and Warrant Shares in connection with any sale thereof pursuant to a
registration statement under the Securities Act covering the resale by a
Purchaser of the Common Shares and Warrant Shares being sold, and each Purchaser
shall comply with the applicable prospectus delivery requirements of the
Securities Act in connection with any such sale; in this regard, the Company
covenants that it
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17
shall at all times provide each Purchaser, promptly upon its request, with
adequate quantities of prospectuses which comply with all applicable securities
laws.
4.7 Corporate Existence. So long as any Purchaser or any Purchaser
Transferee beneficially owns any Notes, Warrants, Common Shares or Warrant
Shares, the Company shall maintain its corporate existence; except in the event
of a merger, consolidation or sale of all or substantially all of the Company's
assets pursuant to which the surviving or successor entity in such transaction
(i) unconditionally and irrevocably assumes in writing the Company's obligations
hereunder and under the agreements and instruments (including the Notes,
Warrants and Registration Rights Agreement) entered into in connection herewith
and (ii) is a publicly traded corporation whose Common Stock is listed and
remains eligible for listings (both immediately before and after such
transaction) for trading on the NASDAQ, the Nasdaq Small Cap Market, the New
York Stock Exchange or the AMEX.
4.8 Deferred Registration. The Company agrees that no registration
statement with respect to any shares of Common Stock, options or conversion
rights shall be declared effective by the SEC earlier than 180 days (plus such
additional days as equals the total number of days during each Delay Period,
defined in the Registration Agreement, and during each Delisting Period), after
the effective date of the registration statement with respect to the Securities
("Restricted Registration Period"). Notwithstanding the foregoing, such
restriction shall not apply to registration statements relating to equity
securities to be issued solely in connection with an acquisition of any entity
or business, or in connection with stock option or other employee benefit plans,
or to not more than one underwritten public offering by the Company which covers
only shares of Common Stock being sold by the Company for its own account (and
not for the account of any other person or entity), or to registration
statements required to be filed by the Company during the Restricted
Registration Period pursuant to a non-appealable court order involuntarily
imposed upon the Company. The Company agrees to diligently use its commercially
reasonable efforts to oppose any such court order, and to seek appellate review
thereof if permissible.
4.9 Other Covenants. The Company agrees that, from the date hereof
until a date which is 180 days following the Required Effective Date (as that
term is defined in Section 2(a) of the Registration Rights Agreement), no Key
Employee shall margin more than 20% of his Common Stock, or place more than 20%
of his Common Stock in a situation which could result in an involuntary sale
thereof.
ARTICLE V
LEGEND REMOVAL, TRANSFER, CERTAIN SALES, ADDITIONAL SHARES
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18
5.1 Removal of Legend. The Legend shall be removed and the Company
shall issue, or shall cause to be issued, a certificate without such Legend to
the holder of any Security upon which it is stamped, and a certificate for a
security shall be originally issued without the Legend, if, (a) the resale of
such Security is registered under the Securities Act, (b) such holder provides
the Company with an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions and reasonably satisfactory
to the Company and its counsel to the effect that a sale or transfer of such
Security may be made without registration under the Securities Act pursuant to
an exemption from such registration requirements or (c) such Security can be
sold pursuant to Rule 144, the Holder provides the Company with reasonable
assurances that the Security is to be so sold, and a registered broker dealer
provides to the Company's transfer agent and counsel copies of (i) a customary
seller's representation letter reasonably acceptable to such transfer agent and
counsel with respect to such a sale to be made pursuant to Rule 144 and (ii) a
Form 144 in respect of such Security executed by such holder and filed (or
mailed for filing) with the SEC or (d) such Security can be sold pursuant to
Rule 144(k). Each Purchaser agrees to sell all its registered Securities,
including those represented by a certificate(s) from which the Legend has been
removed, or which were originally issued without the Legend, only pursuant to an
effective registration statement, in accordance with the manner of distribution
described in such registration statement and to deliver a prospectus, as
contemplated in Section 4.6, in connection with such sale or in compliance with
an exemption from the registration requirements of the Securities Act or any
applicable state securities laws. In the event the Legend is removed from any
Security or any Security is issued without the Legend and the Security is to be
disposed of other than pursuant to the registration statement or pursuant to
Rule 144, then prior to, and as a condition to, such disposition such Security
shall be relegended as provided herein in connection with any disposition if the
subsequent transfer thereof would be restricted under the Securities Act. Also,
in the event the Legend is removed from any Security or any Security is issued
without the Legend and thereafter the effectiveness of a registration statement
covering the resale of such Security is suspended or the Company determines that
a supplement or amendment thereto is required by applicable securities laws,
then upon reasonable advance notice to Purchaser holding such Security, the
Company may require that the Legend be placed on any such Security that cannot
then be sold pursuant to an effective registration statement or Rule 144 or with
respect to which the opinion referred to in clause (b) next above has not been
rendered and/or has given stop transfer instructions to the Company's transfer
agent, which Legend and stop transfer instructions shall be promptly removed
when such Security may be sold pursuant to an effective registration statement
or Rule 144 or such holder provides the opinion with respect thereto described
in clause (b) next above.
5.2 Transfer Agent Instructions. The Company shall instruct its
transfer agent to issue certificates, registered in
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19
the name of each Purchaser or its nominee, for the Common Shares and the Warrant
Shares in such amounts specified from time to time by each Purchaser upon
conversion or exercise of the Notes and the Warrants, respectively. Such
certificates shall bear the Legend only to the extent provided by Section 5.1
above. The Company covenants that no instruction other than such instructions
referred to in this Article V, and stop transfer instructions to give effect to
Section 2.6 hereof in the case of the Common Shares and Warrant Shares prior to
registration of the Common Shares and Warrant Shares under the Securities Act or
stop transfer instructions to give effect to "black-out" periods as provided in
the Registrations Rights Agreement will be given by the Company to its transfer
agent and that the Securities shall otherwise be freely transferable on the
books and records of the Company. Nothing in this Section shall affect in any
way the Purchasers' obligations and agreement set forth in Section 5.1 hereof to
resell the Securities pursuant to an effective registration statement and to
deliver a prospectus as required in Section 5.1 in connection with such sale or
in compliance with an exemption from the registration requirements of applicable
securities laws. If (a) a Purchaser provides the Company with an opinion of
counsel, which opinion of counsel shall be in form, substance and scope
customary for opinions of counsel in comparable transactions and reasonably
satisfactory to the Company and its counsel to the effect that the Securities to
be sold or transferred may be sold or transferred in the manner proposed
pursuant to an exemption from registration or (b) a Purchaser transfers
Securities to an affiliate which is an accredited investor (within the meaning
of Regulation D under the Securities Act) and which delivers to the Company in
written form the same representations, warranties and covenants, to the extent
relevant to such transfer, made by Purchasers hereunder or pursuant to Rule 144,
the Company shall permit the transfer, and, in the case of the Common Shares and
Warrant Shares, promptly instruct its transfer agent to issue one or more
certificates in such name and in such denomination as specified by such
Purchaser. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Purchasers by vitiating the intent
and purpose of the transaction contemplated hereby.
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
6.1 The obligation of the Company hereunder to issue and sell the
Notes and Warrants to the Purchasers at the Closing is subject to the
satisfaction, as of the date of the Closing, of each of the following conditions
thereto, provided that these conditions are for the Company's sole benefit and
may be waived by the Company at any time in its sole discretion:
(i) Both Purchasers shall have executed the signature page to
this Agreement and the Registration Rights Agreement, and delivered the
same to the Company.
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20
(ii) Both Purchasers shall have wired to the account of the
Company the portion of the Purchase Price payable by it.
(iii) The representations and warranties of each Purchaser shall
be true and correct in all material respects as of the date when made
and as of the Closing as though made at that time (except for
representations and warranties that speak as of a specific date, which
representations and warranties shall be true and correct as of such
date), and each Purchaser shall have performed, satisfied and complied
with in all material respects the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with
by the Purchaser at or prior to the Closing.
(iv) No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which restricts or prohibits or limits
the consummation of any of the transactions contemplated by this
Agreement.
ARTICLE VII
CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE
7.1 The obligation of each Purchaser hereunder to purchase the Notes
and Warrants to be purchased by it on the date of the Closing is subject to the
satisfaction as of the date of the Closing, of each of the following conditions,
provided that these conditions are for each Purchaser's sole benefit and may be
waived by each Purchaser at any time in the Purchaser's sole discretion:
(i) The Company shall have executed signature pages to this
Agreement and the Registration Rights Agreement and delivered the same
to each Purchaser.
(ii) The Company shall have delivered to each Purchaser duly
issued Notes being so purchased by such Purchaser and certificates for
the Warrants being issued to such Purchaser at the Closing in such
number and denominations as are reasonably requested by each Purchaser.
(iii) The Common Stock shall be listed on the AMEX and trading in
the Common Stock shall not have been suspended or limited by the AMEX
or the SEC or other regulatory authority, and no such proceeding
seeking suspension shall be pending.
(iv) The representations and warranties of the Company shall be
true and correct in all material respects as of the date when made and
as of the Closing as though made at that time (except for
representations and warranties that speak
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21
as of a specific date, which representations and warranties shall be
true and correct as of such date), and the Company shall have
performed, satisfied and complied with in all material respects the
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the
Closing. Purchaser shall have received a certificate, executed by the
Chief Executive Officer or Chief Financial Officer of the Company,
dated as of the Closing, to the foregoing effect.
(v) No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits or restricts the
consummation of any of the transactions contemplated by this Agreement.
(vi) Purchaser shall have received the officer's certificate
described in Section 3.3, dated as of the Closing.
(vii) Purchaser shall have received opinions of Xxxxxxx, Procter
& Xxxx, dated as of the Closing, in the form attached hereto as
Exhibit C.
(viii) The Company shall have paid all reasonable legal fees, due
diligence fees and expenses incurred by each Purchaser in connection
with the transactions contemplated hereby in an aggregate amount not to
exceed $25,000.
ARTICLE VIII
GOVERNING LAW; MISCELLANEOUS
8.1 Governing Law: Jurisdiction. This Agreement shall be governed by
and construed in accordance with Delaware law. The parties hereto irrevocably
consent to the jurisdiction of the United States federal courts and state courts
located in the County of New Castle in the State of Delaware or the Borough of
Manhattan in the State of New York in any suit or proceeding based on or arising
under this Agreement or the transactions contemplated hereby and irrevocably
agree that all claims in respect of such suit or proceeding may be determined in
such courts. The Company and each Purchaser irrevocably waives the defense of an
inconvenient forum to the maintenance of such suit or proceeding in such forum.
The Company and each Purchaser further agrees that service of process upon the
Company or such Purchaser, as applicable, mailed by first class mail in
accordance with Section 8.6 shall be deemed in every respect effective service
of process upon the Company or such Purchaser in any suit or proceeding arising
hereunder. Nothing herein shall affect any Purchaser's or the Company's right to
serve process in any other manner permitted by law. The parties hereto agree
that a final non-appealable judgment in any such suit or
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22
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner. The parties hereto
irrevocably waive any right to trial by jury under applicable law.
8.2 Counterparts. This Agreement may be executed in two or more
counterparts, including, without limitation, by facsimile transmission, all of
which counterparts shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered
to the other party. In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall promptly cause
additional original executed signature pages to be delivered to the other
parties.
8.3 Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
8.4 Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
8.5 Entire Agreement: Amendments. This Agreement and the Exhibits and
Schedules hereto and the certificates and agreements required to be delivered
hereby and thereby contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor any Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived other than by an instrument in
writing signed by the party to be charged with enforcement and no provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company and each Purchaser. Nothing in this Agreement or in any Exhibit or
document issued in connection herewith shall waive or release any of the
Company's obligations or any of the Purchasers rights under the Confidentiality
Agreement between Xxxxxxx Associates, L.P. and the Company by fax dated
September 23, 1997. The parties agree that, for purposes of such Confidentiality
Agreement, it shall be deemed dated and entered into on September 23, 1997.
8.6 Notice. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by nationally-recognized
overnight courier or by facsimile machine confirmed telecopy, and shall be
deemed delivered at the time and date of receipt (which shall include telephone
line facsimile transmission). The addresses for such communications shall be:
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23
If to the Company:
Selfcare, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxxxxx
and with a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, P.C. &
Xxxxxx Xxxxxxxxxx, III, P.C.
If to either Purchaser:
c/o Stonington Management Corporation
000 Xxxxx Xxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx
and with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
in each case with a copy to:
Shoreline Pacific Institutional Finance
0 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Counsel
Each party shall provide notice to the other party of any change in address.
8.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor any Purchaser shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other, which
consent by the Company shall not be unreasonably withheld or unreasonably
delayed. Notwithstanding the foregoing, each Purchaser may, subject to and in
compliance with Article 5 hereof, assign all or part of its rights and
obligations hereunder to any of its "affiliates," as that term is defined under
the Securities Act, or to a "Financial Institution" (as defined below), without
the consent of the Company so long as
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such affiliate or Financial Institution is an accredited investor (within the
meaning of Regulation D under the Securities Act) and agrees in writing to be
bound by the applicable provisions of this Agreement. A "Financial Institution"
shall include those institutions commonly called financial institutions as well
as banks, savings and loans, mutual funds, private investment partnerships
(commonly called "hedge funds"), investment banks, brokers, dealers, pension and
profit sharing plans, insurance companies, and similar entities. This provision
shall not limit a Purchaser's right to transfer the Securities pursuant to the
terms of this Agreement or the instruments or documents referenced herein, or to
assign the Purchaser's rights hereunder to any such transferee pursuant to the
terms of this Agreement or the instruments or documents referenced herein.
8.8 Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors, assigns
transferees and participants and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
8.9 Survival. The representations and warranties of the Company and
each Purchaser and the agreements and covenants set forth herein shall survive
the closing hereunder notwithstanding any due diligence investigation conducted
by or on behalf of the Company or any Purchaser, as the case may be. The Company
and each Purchaser agrees to indemnify and hold harmless each Purchaser or the
Company, as the case may be, and each of such party's respective officers,
directors, employees, partners, agents and affiliates for loss or damage or
expenses (including reasonable attorneys fees) arising as a result of or related
to any breach or alleged breach by the Company or any Purchaser, as the case may
be, of any of their respective representations or covenants set forth herein,
including advancement of expenses as they are incurred.
8.10 Public Filings; Publicity. As soon as practicable following
Closing, the Company shall issue a press release with respect to the
transactions contemplated hereby. The Company and each Purchaser shall have the
right to approve before issuance any press releases, relevant portions of SEC or
AMEX or other exchange filings, or any other public statements, with respect to
the transactions contemplated hereby (which approval shall not be unreasonably
withheld or delayed); provided, however, that the Company shall be entitled,
without the prior approval of a Purchaser, to make any press release or SEC,
AMEX, NASD or exchange filings with respect to such transactions as is required
by applicable law and regulations (although the Company shall make all
reasonable efforts to consult with each Purchaser in connection with any such
press release prior to its release and shall provide each Purchaser with a copy
thereof as provided in Section 4.4 hereof).
8.11 Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements,
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certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
8.12 Remedies. No provision of this Agreement providing for any remedy
to a Purchaser shall limit any remedy which would otherwise be available to such
Purchaser at law or in equity. Nothing in this Agreement shall limit any rights
a Purchaser may have with under any applicable federal or state securities laws
with respect to the investment contemplated hereby. The Company and each
Purchaser acknowledges that a breach by it of its respective obligations
hereunder will cause irreparable harm to each Purchaser, in the case of the
Company, and the Company, in the case of a Purchaser. Accordingly, the Company
and each Purchaser acknowledges that the remedy at law for a breach of its
respective obligations under this Agreement will be inadequate and agrees, in
the event of a breach or threatened breach by the Company or a Purchaser, as the
case may be, of the provisions of this Agreement, that a Purchaser or the
Company, as the case may be, shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring
immediate compliance, without the necessity of showing economic loss and without
any bond or other security being required.
8.13 Expenses. The Company shall pay at Closing, and promptly upon
receipt of any invoice relating to same, all reasonable legal fees and
disbursements and reasonable due diligence fees and expenses, up to an aggregate
maximum of $25,000, incurred by Purchasers in connection with this Agreement and
the transactions contemplated hereby.
8.14 Several Liability. Notwithstanding anything in this Agreement to
the contrary, the obligations, representations, warranties, and liabilities of
the Purchasers hereunder shall be several and not joint.
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IN WITNESS WHEREOF, the undersigned Purchasers and the Company have
caused this Securities Purchase Agreement to be duly executed as of the date
first above written.
PURCHASERS:
XXXXXXX ASSOCIATES, L.P.
By: /s/ Xxxx Xxxxx
---------------------------
Name:
Title:
Residency: New York, U.S.A.
WESTGATE INTERNATIONAL, L.P.
By: Martley International, Inc.
Attorney-in-fact
By: /s/ Xxxx Xxxxx
---------------------------
Name:
Title:
Residency: Cayman Islands
SELFCARE, INC.:
By: /s/ Xxx Xxxxxxxxx
---------------------------
Name: Xxx Xxxxxxxxx
Title: President and CEO
Wire Transfer instructions:
Routing ABA #000000000
Fleet Prov
Beneficiary Account #: 050124672800101
Beneficiary Name: Retirement Plan Services
For further credit
Account Name: Selfcare, Incorporated
Account #: 000 210 5670
Attn: Xxxxx Xxxxx (Phone # 000-000-0000)
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