EXHIBIT 10.1
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XICOR, INC.,
as the Company
and
BUYERS,
as defined herein
SECURITIES PURCHASE AGREEMENT
Dated as of November 16, 2001
5.5% Convertible Subordinated Notes due 2006
and Warrants to Purchase Common Stock
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of
November 16, 2001, by and among Xicor, Inc., a California corporation (the
"Company"), and the Buyers listed on the Schedule of Buyers attached hereto as
Exhibit A (individually, a "Buyer" and, collectively, the "Buyers").
THE PARTIES TO THIS AGREEMENT enter into this Agreement on the
basis of the following facts, intentions and understandings:
A. In accordance with the terms and conditions of this Agreement,
the Company has agreed to issue and sell, and the Buyers have agreed to purchase
in the aggregate, (i) Thirty Five Million United States Dollars ($35,000,000)
principal amount of the Company's 5.5% Convertible Subordinated Notes due 2006
(such Convertible Subordinated Notes, substantially in the form attached hereto
as Exhibit B, as the same may be amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Notes"), which shall be
convertible into shares of the common stock, no par value per share (the "Common
Stock"), of the Company (as converted, the "Conversion Shares"), and (ii)
Warrants (such Warrants, substantially in the form attached hereto as Exhibit C,
as the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Buyer Warrants") to purchase
935,828.8765 shares of Common Stock (as exercised, collectively, the "Buyer
Warrant Shares").
B. To induce Xxxxxxxxx Xxxxxxxx, Inc. ("Xxxxxxxxx") to act as
exclusive placement agent with respect to the offering of the Notes and the
Buyer Warrants (the "Offering"), the Company has agreed (i) to issue Warrants
(such Warrants, substantially in the form attached hereto as Exhibit C, as the
same may be amended, modified or supplemented from time to time in accordance
with the terms thereof, the "Xxxxxxxxx Warrant" and, together with the Buyer
Warrants, the "Warrants") to purchase (A) the number of shares of Common Stock
set forth on the Schedule of Fees attached hereto as Exhibit D (the "Schedule of
Fees") and (B) in the event that Xxxxxxxxx exercises the Over-Allotment Option
(as defined below), an additional number of shares of Common Stock set forth on
the Schedule of Fees (as exercised collectively, the "Xxxxxxxxx Warrant Shares"
and, together with the Buyer Warrant Shares, the "Warrant Shares"), and (ii) to
xxxxx Xxxxxxxxx an option, exercisable only with the consent of the Company (the
"Over-Allotment Option"), which may be exercised at any time and from time to
time within the ninety (90) days after the Closing Date, to place or, at its
election, purchase and resell additional Notes and Warrants after the Closing
Date, so that the Offering is up to an aggregate of $45,000,000 principal amount
of Notes and Warrants to purchase 1,203,208.555 Warrant Shares.
C. Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement substantially in the form attached hereto as Exhibit E (as the same
may be amended, modified or supplemented from time to time in accordance with
the terms thereof, the "Registration Rights Agreement") pursuant to which the
Company has agreed to provide the Buyers and Xxxxxxxxx with the benefit of
certain registration rights under the Securities Act of 1933, as amended, and
the rules and
regulations promulgated thereunder (the "Securities Act") and applicable state
securities laws, on the terms and subject to the conditions set forth therein.
NOW THEREFORE, in consideration of the promises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:
SECTION 1. PURCHASE AND SALE OF NOTES AND WARRANTS.
(a) Purchase of Notes and Warrants. Subject to the satisfaction
(or waiver) of the conditions set forth in Sections 6 and 7 of this Agreement,
the Company shall issue and sell to each Buyer, and each Buyer severally and not
jointly agrees to purchase from the Company, the respective principal amount of
Notes, together with the related Warrants, set forth opposite such Buyer's name
on the Schedule of Buyers attached hereto as Exhibit A (the "Closing"). The
Company shall issue to each Buyer One Thousand United States Dollars ($1,000)
principal amount of the Notes and Warrants to purchase 26.7379679 Warrant Shares
for each One Thousand United States Dollars ($1,000) tendered by each such
Buyer.
(b) The Closing. The date and time of the Closing (the "Closing
Date") shall be 10:00 a.m., San Francisco time, on November 19, 2001, subject to
the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 of
this Agreement. The Closing shall occur on the Closing Date at the offices of
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx.
(c) Form of Payment. On the Closing Date, (i) each Buyer shall
pay the Company for the Notes and the related Warrants to be issued and sold to
such Buyer on the Closing Date, by wire transfer of immediately available funds
in accordance with the Company's written wire instructions attached hereto on
Schedule A, (ii) the Company shall reimburse each Buyer for its reasonable
expenses to the extent required by Section 4(i) of this Agreement, and (iii) the
Company shall deliver to each Buyer properly authenticated Notes (in the
denominations as such Buyer shall reasonably request) representing the principal
amount of Notes which such Buyer is then purchasing hereunder, along with
Warrants representing the related number of Warrant Shares, duly executed on
behalf of the Company and registered in the name of such Buyer.
SECTION 2. BUYER'S REPRESENTATIONS AND WARRANTIES. Each Buyer
represents and warrants to the Company with respect to only itself that as of
the date hereof:
(a) Investment Purpose. Such Buyer (i) is acquiring the Notes and
the Warrants, (ii) upon conversion of the Notes owned by it, will acquire the
Conversion Shares then issuable upon conversion thereof, and (iii) upon exercise
of the Warrants held by it, will acquire the Warrant Shares then issuable upon
exercise thereof (the Notes, the Conversion Shares, the Warrants and the Warrant
Shares collectively are referred to herein as the "Securities") for its own
account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the Securities Act; provided, however, that
by making the representations herein, such Buyer does not agree to hold any of
the Securities for any minimum or other specific term and reserves the
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right to dispose of the Securities at any time; provided, further, that such
disposition shall be in accordance with or pursuant to a registration statement
or an exemption under the Securities Act.
(b) Accredited Investor Status. Such Buyer is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D under the
Securities Act as of the date of this Agreement and was not organized for the
specific purpose of acquiring the Securities.
(c) Reliance on Exemptions. Such Buyer understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of the United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and such Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein and in the
applicable Note or Warrant in order to determine the availability of such
exemptions and the eligibility of such Buyer to acquire the Securities.
(d) Information. Such Buyer believes it (i) has been furnished
with or believes it has had full access to all of the information that it
considers necessary or appropriate for deciding whether to purchase the Notes,
the Warrants, the Conversion Shares and the Warrant Shares, (ii) has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Securities, (iii) can bear the
economic risk of a total loss of its investment in the Notes and the Warrants
and (iv) has such knowledge and experience in business and financial matters so
as to enable it to understand the risks of and form an investment decision with
respect to its investment in the Securities. Neither such inquiries nor any
other due diligence investigations conducted by such Buyer or its advisors, if
any, or its representatives shall limit, modify, amend or affect the Company's
representations and warranties contained in this Agreement and the Buyer's right
to rely thereon.
(e) No Governmental Review. Such Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
(f) Transfer or Resale. Such Buyer understands that, except as
provided in the Registration Rights Agreement, the Securities have not been, and
the Notes and the Warrants will not be, registered under the Securities Act or
any state securities laws, and may not be offered for sale, sold, assigned or
transferred without registration under the Securities Act or an exemption
therefrom and that, in the absence of an effective registration statement under
the Securities Act, such Securities may only be sold under certain circumstances
as set forth in the Securities Act. In that connection, such Buyer is aware of
Rule 144 under the Securities Act and the restrictions imposed thereby.
(g) Legends.
(1) Such Buyer understands that, until two (2) years after
the original issuance date of the Notes and the Warrants, any
certificate evidencing such Note and any certificate evidencing such
Warrant (and all securities issued in exchange
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therefor or in substitution thereof, other than Common Stock, if any,
issued upon conversion thereof (in the case of a Note) or upon exercise
thereof (in the case of a Warrant), which shall bear the legend set
forth in Section 2(g)(2) of this Agreement, if applicable) shall bear a
legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
THEREFROM. THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY
THE SECURITIES.
The Company shall place the following legend on any
Warrant or Note, as appropriate, held by or transferred to an
"affiliate" (as defined in Rule 501(b) of Regulation D under the
Securities Act) of the Company:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY
A PERSON WHO MAY BE DEEMED TO BE AN AFFILIATE OF THE
ISSUER FOR PURPOSES OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144, PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO A VALID EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT.
The legends set forth above shall be removed and the
Company shall issue a new Note or Warrant, as appropriate, of like tenor
and aggregate principal amount or number of shares, as appropriate, and
which shall not bear the restrictive legends required by this Section
2(g)(1), (i) if such Notes or Warrants, as appropriate, are registered
for resale under the Securities Act and are transferred or sold pursuant
to such registration, (ii) if, in connection with a sale transaction,
such holder provides the Company with an opinion of counsel reasonably
acceptable to the Company to the effect that a public sale, assignment
or transfer of the Notes or Warrants, as appropriate, may be made
without registration under the Securities Act, or (iii) upon expiration
of the two-year period under Rule 144(k) of the Securities Act (or any
successor rule). The Company shall not require such opinion of counsel
for the sale of Securities in accordance with Rule 144 of the Securities
Act, provided the Seller provides such representations that the Company
shall reasonably request confirming compliance with the requirements of
Rule 144.
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(2) Such Buyer understands that, until two (2) years after
the original issuance date of the Notes and the Warrants, any stock
certificate representing Conversion Shares or Warrant Shares shall bear
a legend in substantially the following form (unless such Conversion
Shares or Warrant Shares have been transferred pursuant to a
registration statement contemplated by the Registration Rights Agreement
(and which continues to be effective at the time of such transfer), or
the Notes or Warrants pursuant to which the Conversion Shares or the
Warrant Shares, respectively, were issued, were transferred pursuant to
a registration statement that has been declared effective under the
Securities Act, but only if such conversion or exercise, as appropriate,
was in compliance with Section 3(a)(9) of the Securities Act and which
was effective at the time of such transfer, or the Conversion Shares or
Warrant Shares, as appropriate, have been transferred pursuant to an
exemption from registration provided by Rule 144 under the Securities
Act, or unless otherwise agreed by the Company in writing with written
notice to the transfer agent):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE LAWS. THE SECURITIES MAY NOT
BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR
OTHERWISE UNLESS A REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
IS IN EFFECT OR THERE IS AN EXEMPTION THEREFROM.
The Company shall instruct the transfer agent to place the
following legend on any certificate evidencing shares of Common Stock
held by or transferred to an "affiliate" (as defined in Rule 501(b) of
Regulation D under the Securities Act) of the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A
PERSON WHO MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER
FOR PURPOSES OF RULE 144 PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY BE
SOLD ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO A VALID EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT.
The legend set forth above shall be removed and the
Company shall issue the relevant Securities without such legend to the
holder of the Securities upon which it is stamped, (i) if such
Securities are registered for resale under the Securities Act and are
transferred or sold pursuant to such registration, (ii) if, in
connection with a sale transaction, such holder provides the Company
with an opinion of counsel reasonably acceptable to the Company to the
effect that a public sale, assignment or transfer of the
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Securities may be made without registration under the Securities Act, or
(iii) upon expiration of the two-year period under Rule 144(k) of the
Securities Act (or any successor rule). The Company shall not require
such opinion of counsel for the sale of Securities in accordance with
Rule 144 of the Securities Act, provided the Seller provides such
representations that the Company shall reasonably request confirming
compliance with the requirements of Rule 144.
(3) Such Buyer understands that, in the event Rule 144(k)
as promulgated under the Securities Act (or any successor rule) is
amended to change the two-year period under Rule 144(k) (or the
corresponding period under any successor rule), (i) each reference in
Sections 2(g)(1) and 2(g)(2) of this Agreement to "two (2) years" or the
"two-year period" shall be deemed for all purposes of this Agreement to
be references to such changed period, and (ii) all corresponding
references in the Notes and Warrants shall be deemed for all purposes to
be references to the changed period, provided that such changes shall
not become effective if they are otherwise prohibited by, or would
otherwise cause a violation of, the then-applicable federal securities
laws.
(h) Authorization; Enforcement; Validity. This Agreement and the
Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of such Buyer and are valid and binding agreements of
such Buyer enforceable against such Buyer in accordance with their terms,
subject as to enforceability to general principles of equity and to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(i) Residency. Such Buyer is a resident of that country or state
specified in its address on the Schedule of Buyers attached hereto as Exhibit A.
(j) No Conflicts. The execution and performance of this Agreement
and the Registration Rights Agreement do not conflict with any agreement to
which such Buyer is a party or is bound thereby, any court order or judgment
addressed to such Buyer, or the constituent documents of such Buyer.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to Xxxxxxxxx and each of the Buyers that as of
the date hereof subject to such exceptions as set forth in a Disclosure
Schedule:
(a) Organization and Qualification. The Company and its
"Subsidiaries" (which, for purposes of this Agreement, means any entity in which
the Company, directly or indirectly, owns a majority of the capital stock or
other equity or similar interests) are corporations, partnerships or limited
liability companies duly organized and validly existing in good standing under
the laws of the jurisdiction in which they are incorporated or organized, and
have the requisite corporate, limited liability company or partnership power and
authorization to own their properties and to carry on their business as now
being conducted. Copies of the Company's Articles of Incorporation and Bylaws,
and all amendments thereto, have been filed as exhibits to the Company's SEC
Documents, are in full effect and have not been modified. Each of the Company
and its Subsidiaries is duly qualified as a foreign corporation, partnership or
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limited liability company to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business
conducted and proposed to be conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect. As used in this Agreement, "Material
Adverse Effect" means any material adverse effect on the business, properties,
assets, operations, results of operations or financial condition of the Company
and its Subsidiaries, taken as a whole, or on the transactions contemplated
hereby or by the agreements and instruments to be entered into in connection
herewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined below). A complete list
of Subsidiaries is set forth on Schedule 3(a).
(b) Authorization; Enforcement; Validity. The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Notes, the Warrants, the Registration
Rights Agreement, the Irrevocable Transfer Agent Instructions (as defined in
Section 5 of this Agreement) and each of the other agreements entered into by
the parties hereto in connection with the transactions contemplated by this
Agreement (collectively, the "Transaction Documents"), and to issue the
Securities in accordance with the terms hereof and thereof. The execution and
delivery of the Transaction Documents by the Company and the consummation by it
of the transactions contemplated hereby and thereby, including, without
limitation, the issuance and repayment of the Notes, the reservation for
issuance and the issuance of the Conversion Shares issuable upon conversion
thereof, the issuance of the Warrants and the reservation for issuance and the
issuance of the Warrant Shares issuable upon exercise of the Warrants, have been
duly authorized by the Company's Board of Directors and no further consent or
authorization is required of the Company's Board of Directors or shareholders.
The Transaction Documents have been duly executed and delivered by the Company.
The Transaction Documents constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.
(c) Capitalization. Except for any shares issuable upon exercise
of options issued pursuant to employee benefit plans disclosed in the Company's
SEC Documents, the capitalization of the Company is as described in the
Company's SEC Documents. All of the Company's outstanding shares have been, or
upon issuance will be, validly issued and are fully paid and nonassessable. The
Company's Common Stock is registered pursuant to Section 12(g) of the Exchange
Act of 1934, and is listed for trading on the Principal Market (as defined
below). Except as set forth in this Agreement, the Registration Rights Agreement
and as set forth in the SEC Documents, (i) no shares of the Company's capital
stock are subject to preemptive rights or any other similar rights or any liens
or encumbrances; (ii) there are no outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into, 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 or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries (other than any such
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options, warrants, scrip, rights, calls, commitments, securities, understandings
and arrangement outstanding under plans disclosed in the SEC Documents (as
defined below)); (iii) there are no outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, documents or instruments
evidencing indebtedness of the Company or any of its Subsidiaries or by which
the Company or any of its Subsidiaries is or may become bound; (iv) there are no
amounts outstanding under, and there will be no amounts due upon termination of,
any credit agreement or credit facility, except for the Xxx Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars ($1,700,000) of senior obligations to
Coast Business Credit securing a letter of credit; (v) there are no financing
statements securing obligations in any amounts greater than Fifty Thousand
United States Dollars ($50,000), singly, or Two Hundred Fifty Thousand United
States Dollars ($250,000) in the aggregate, filed in connection with the Company
or any of its Subsidiaries; (vi) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale
of any of their securities under the Securities Act; (vii) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries; (viii) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement; (ix) the Company does not have
any stock appreciation rights or "phantom" stock plans or agreements or any
similar plan or agreement; (x) to the Company's knowledge, (A) no current or
former officer or director who individually owns one percent (1%) or more of the
Company's outstanding capital stock or (B) other beneficial owner of five
percent (5%) or more of the Company's outstanding capital stock, has pledged
shares of the Company's capital stock in connection with a margin account or
other loan secured by such capital stock; and (xi) the Company and its
Subsidiaries have no liabilities or obligations required to be disclosed in the
SEC Documents but not so disclosed in the SEC Documents, other than those
incurred in the ordinary course of the Company's or its Subsidiaries' respective
businesses and which, individually or in the aggregate, do not or would not have
a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.
(d) Issuance of Securities. The Securities are duly authorized
and, upon issuance in accordance with the terms of the applicable Transaction
Documents, shall be (i) validly issued, fully paid and non-assessable and (ii)
free from all taxes, liens and charges with respect to the issuance thereof,
other than any liens or encumbrances created by or imposed by the Buyers, and
shall not be subject to preemptive rights or other similar rights of
shareholders of the Company. As of the Closing, at least 4,356,283.4218762
shares of Common Stock (subject to adjustment pursuant to the Company's covenant
set forth in Section 4(e) of this Agreement) will have been duly authorized and
reserved for issuance upon conversion of the Notes and exercise of the Warrants.
Upon conversion or issuance in accordance with the terms of the Notes or upon
exercise or issuance in accordance with the terms of the Warrants, as
applicable, the Conversion Shares and the Warrant Shares, as the case may be,
will be validly issued, fully paid and non-assessable and free from all taxes,
liens and charges with respect to the issue thereof, other than any liens or
encumbrances created by or imposed by the Buyers, with the holders being
entitled to all rights accorded to a holder of Common Stock. Subject to the
accuracy of the representations and warranties of each of the Buyers in this
Agreement, the issuance by the Company of the Securities is exempt from
registration under the Securities Act and state securities laws.
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(e) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
reservation for issuance and issuance of the Conversion Shares and the Warrant
Shares) will not (i) result in a violation of the Articles of Incorporation or
the Bylaws; (ii) 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, except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect; or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and the rules and
regulations of the Principal Market (as defined below)) 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. Neither the Company nor
its Subsidiaries is in violation of any material term of or in default under its
Articles of Incorporation, Bylaws or their organizational charter or bylaws,
respectively. Neither the Company nor any of its Subsidiaries is in violation of
any term of or in default under any contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its Subsidiaries, except where such
violations and defaults would not result, either individually or in the
aggregate, in a Material Adverse Effect. The business of the Company and its
Subsidiaries is not being conducted in violation of any law, ordinance or
regulation of any governmental entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse Effect.
Except as specifically contemplated by this Agreement, as required under the
Securities Act or as required by Blue Sky filings (but only to the extent that
such filings may be made after the Closing), 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 or contemplated by the Transaction Documents. Except as
disclosed in Schedule 3(e) of this Agreement, all consents, authorizations,
orders, filings and registrations which the Company is required to obtain
pursuant to the preceding sentence have been obtained or effected on or prior to
the date hereof and copies of such consents, authorizations, orders, filings and
registrations have been delivered to the Buyers. The Company is not in violation
of the listing requirements of the Principal Market, and has no actual knowledge
of any facts which would reasonably lead to delisting or suspension of the
Common Stock by the Principal Market in the foreseeable future. The Company and
its Subsidiaries are currently unaware of any facts or circumstances which might
give rise to any of the foregoing events set forth in this paragraph.
(f) SEC Documents; Financial Statements. Since January 1, 2000,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities and Exchange Commission
(the "Commission") pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act") (all of the foregoing filed prior to or on the
date hereof and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the "SEC Documents"). As of the date of filing of
such SEC Documents, each such SEC Document, as it may have been subsequently
amended by filings made by the Company with the SEC prior
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to the date hereof, complied in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Commission promulgated
thereunder applicable to such SEC Document. None of the SEC Documents, as of the
date filed and as they may have been subsequently amended by filings made by the
Company with the Commission prior to the date hereof, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and published rules and regulations of the Commission
with respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied in the
United States, 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 may exclude footnotes or may
be condensed or summary statements), corresponds to the books and records of the
Company and fairly present in all material respects the financial position of
the Company and its Subsidiaries as of the dates thereof and the results of its
operations and cash flows for the periods then ended. No other written
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC Documents, including, without limitation, information
referred to in Section 2(d) of this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they are
or were made, not misleading. The Company satisfies the requirements for use of
Form S-3 for registration of the resale of Registrable Securities (as defined in
the Registration Rights Agreement) and does not have any knowledge or reason to
believe that it does not satisfy such requirements or any knowledge of any fact
which would reasonably result in its not satisfying such requirements. The
Company is not required to file and will not be required to file any agreement,
note, lease, mortgage, deed or other instrument entered into prior to the date
hereof and to which the Company is a party or by which the Company is bound
which has not been previously filed as an exhibit to its reports filed with the
Commission under the Exchange Act. Except for the issuance of the Notes and the
Warrants contemplated by this Agreement, no event, liability, development or
circumstance has occurred or exists, or is currently contemplated to occur, with
respect to the Company or its Subsidiaries or their respective business,
properties, prospects, operations or financial condition, that would be required
to be disclosed by the Company under applicable securities laws and which has
not been publicly disclosed.
(g) Absence of Litigation. Except as disclosed in the section
titled "Legal Proceedings" in the Company's Annual Report on Form 10-K for the
period ended December 31, 2000, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened in writing against the Company or any of
the Subsidiaries or any of the Company's or the Subsidiaries' officers or
directors in their capacities as such.
(h) 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 cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
10
the Securities Act or any applicable shareholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated, nor will the Company or any of its Subsidiaries take any action or
steps that would cause the offering of the Securities to be integrated with
other offerings.
(i) Intellectual Property Rights. The Company and its
Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, trade dress, service marks, service xxxx registrations, service
names, patents (including, without limitation, those patent rights in dispute in
the Catalyst Litigation, as defined below), patent rights, copyrights,
inventions, technology licenses, approvals, governmental authorizations, trade
secrets, and other intellectual property rights (collectively, "Intellectual
Property") necessary to conduct their respective businesses as now conducted and
as currently contemplated to be conducted by them as described in the SEC
Documents, except where the failure to currently own or possess would not have a
Material Adverse Effect. The Company and its Subsidiaries do not have any
knowledge of any infringement by the Company or its Subsidiaries of Intellectual
Property rights of others, or of any development of similar or identical trade
secrets or technical information by others except for the facts giving rise to
the Company's suit filed on April 17, 2001 against Catalyst Semiconductor in
Delaware Federal District Court alleging violation of a Xicor Digital
Potentiometer patent (the "Catalyst Litigation"). Except for the Catalyst
Litigation, there is no claim, action or proceeding being made by the Company or
its Subsidiaries regarding the Intellectual Property rights of the Company or
its Subsidiaries or to the Company's knowledge, brought or currently threatened
against the Company or its Subsidiaries regarding the Intellectual Property
rights of or the use of any Intellectual Property by the Company or its
Subsidiaries of any third party that, if the subject of an unfavorable decision,
ruling or finding would have a Material Adverse Effect.
(j) 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 are commensurate with similarly situated
companies engaged in similar businesses as the Company and its Subsidiaries.
(k) Regulatory Permits. The Company and its Subsidiaries possess
all material certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their respective businesses as currently conducted (the "Permits"), and neither
the Company nor any such Subsidiary has received any written notice of
proceedings relating to the revocation or modification of any such Permit.
(l) Tax Status. The Company and each of its Subsidiaries (i) has
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges due with respect
to the periods covered by such returns, reports and declarations, except those
being contested in good faith and for which the Company has made appropriate
reserves on its books, and (iii) has paid or set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations (referred to in clause
(i) above) apply. There are no unpaid taxes that are
11
individually or in the aggregate material in amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim.
(m) Application of Takeover Protections. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Articles of Incorporation, the laws of the
state of its incorporation or the laws of any other state which is or could
become applicable to the Buyers as a result of the transactions contemplated by
this Agreement, including, without limitation, the Company's issuance of the
Securities and the Buyers' ownership of the Securities.
(n) Foreign Corrupt Practices. Neither the Company nor any of its
Subsidiaries, nor, to the Company's knowledge, any director, officer, agent,
employee or other person acting on behalf of the Company or any Subsidiary has,
in the course of his actions for, or on behalf of, the Company or any Subsidiary
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of
the United States Foreign Corrupt Practices Act of 1977, as amended; or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.
(o) Confidential Offering Memorandum. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in the Confidential Offering Memorandum dated as of October 30, 2001
(the "Confidential Offering Memorandum") in connection with the Offering
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading. If, at
any time prior to the Closing Date, any event with respect to the Company shall
occur which is required to be described in the Confidential Offering Memorandum,
such event shall be so described, and an appropriate amendment or supplement
shall be prepared by the Company.
(p) Transactions With Affiliates. Except as set forth on Schedule
3(p), and other than the grant of stock options granted pursuant to the
Company's employee benefit plans, none of the officers, directors or employees
of the Company is presently a party to any transaction with the Company or any
of its Subsidiaries (other than in connection with the provision of services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any such officer, director or employee or, to the knowledge of the
Company, any corporation, partnership, trust or other entity in which any such
officer, director, or employee has a substantial interest or is an officer,
director, trustee or partner, such that the transaction would be required to be
disclosed pursuant to Item 404 of Regulation S-K promulgated under the
Securities Act.
(q) Brokers and Finders. Except for fees payable to Xxxxxxxxx as
placement agent, no brokers, finders or financial advisory fees or commissions
will be payable by the Company with respect to the transactions contemplated by
this Agreement.
12
(r) Absence of Certain Changes. Except as disclosed in the SEC
Documents available on the XXXXX system, since November 14, 2001, there has been
no change or development that has had or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
SECTION 4. COVENANTS.
(a) Obligations. Each party shall timely satisfy each of the
conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement.
(b) Form D and Blue Sky. The Company agrees to file timely a Form
D with the Commission with respect to the Securities as required under
Regulation D and to provide a copy thereof to each Buyer promptly after such
filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary in order to obtain an
exemption for, or to qualify the Securities for, sale to the Buyers at the
Closing pursuant to this Agreement under applicable securities or "Blue Sky"
laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the
Buyers on or prior to the Closing Date. The Company shall make all timely
filings and reports relating to the offer and sale of the Securities required
under applicable securities or "Blue Sky" laws of the states of the United
States following the Closing Date.
(c) Reporting Status. With a view to making available to the
Investors (as that term is defined in the Registration Rights Agreement) the
benefits of Rule 144 promulgated under the Securities Act or any similar rule or
regulation of the Commission that may at any time permit the Investors to sell
securities of the Company to the public without registration ("Rule 144"), the
Company shall: (i) make and keep public information available, as those terms
are understood and defined in Rule 144; (2) file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and (3) furnish to each Investor, so long
as such Investor owns Registrable Securities (as that term is defined in the
Registration Rights Agreement) (the "Reporting Period"), promptly upon request,
(A) a written statement by the Company, if true, that it has complied with the
applicable reporting requirements of Rule 144, the Securities Act and the
Exchange Act, (B) a copy of the most recent annual or quarterly report of the
Company and copies of such other reports and documents so filed by the Company,
(C) the information required by Rule 144A(d)(4) (or any successor rule) under
the Securities Act, and (D) such other information as may be reasonably
requested to permit the Investors to sell such securities pursuant to Rule 144
without registration.
(d) Use of Proceeds. The Company intends to use the net proceeds
from the sale of the Notes and the Warrants for working capital and general
corporate purposes. The Company also will use the proceeds for acquisitions,
including acquisitions of intellectual property and design teams, if appropriate
candidates can be identified and mutually acceptable terms can be agreed upon.
(e) Reservation of Shares. The Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, no less than one hundred five percent (105%) of the number of shares
of Common Stock (the "Reservation Amount") needed
13
to provide for the issuance of the Conversion Shares upon conversion of all of
the Notes and the Warrant Shares upon exercise of all of the Warrants without
regard to any limitations on conversions or exercise.
(f) Listing. The Company shall promptly use its best efforts to
secure the listing of all of the Registrable Securities (as defined in the
Registration Rights Agreement) upon each national securities exchange and
automated quotation system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and, shall maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all
Registrable Securities from time to time issuable under the terms of the
Transaction Documents. So long as any Securities are outstanding, the Company
shall maintain the Common Stock's authorization for quotation or listing on The
New York Stock Exchange, Inc. (the "NYSE"), the American Stock Exchange, Inc.
("AMEX") or The Nasdaq National Market or SmallCap Market ("NASDAQ") (as
applicable, the "Principal Market"). The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section 4(f).
(g) Filing of Form 8-K. On the Business Day following the Closing
Date, the Company shall file a Current Report on Form 8-K with the Commission
describing the terms of the transactions contemplated by the Transaction
Documents and including as exhibits to such Current Report on Form 8-K (i) this
Agreement, (ii) the form of Note, (iii) the form of Warrants and (iv) the
Registration Rights Agreement, each in the form required by the Exchange Act.
"Business Day" means any day other than Saturday, Sunday or other day on which
commercial banks in the City of New York are required by law to remain closed.
(h) Proxy Statement. If the Company, at any time determines that
in connection with the issuance of the Securities, Shareholder Approval is
required pursuant to the rules of the Principal Market for the issuance of a
number of Conversion Shares and Warrant Shares greater in the aggregate than
19.99% of the number of shares of Common Stock outstanding immediately prior to
the Closing Date (the "19.99% Rule"), the Company shall provide each shareholder
entitled to vote at the next meeting of shareholders of the Company, which
meeting shall occur on or before ninety (90) days from the date of such
determination (the "Shareholders Meeting Deadline"), a proxy statement, which
has been previously reviewed by Xxxxxxxxx, the Buyers and a counsel of their
choice, soliciting each such shareholder's affirmative vote at such shareholder
meeting for approval of the Company's issuance of all of the Securities as
described in the Transaction Documents in accordance with applicable law and the
rules and regulations of the Principal Market (such affirmative approval being
referred to herein as the "Shareholder Approval"), and the Company shall solicit
its shareholders' approval of such issuance of the Securities and to cause the
Board of Directors of the Company to recommend to the shareholders that they
approve such proposal.
(i) Expenses. Subject to Section 9(l) of this Agreement, at the
Closing, the Company shall reimburse the Buyers for the Buyers' reasonable
out-of-pocket expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement, up to a maximum of $15,000.00,
which amount shall be paid by the Company to the Buyers concurrently with the
Company's receipt of the Purchase Price at the Closing.
14
(j) Additional Securities. For so long as any Buyer beneficially
owns any Securities, the Company will not issue any Notes or Warrants other than
to the Buyers as contemplated hereby and the Company shall not issue any other
securities that would cause a breach or default under the Notes; provided,
however, that the Company may, upon receipt of written notice from Xxxxxxxxx of
its election to exercise the Over-Allotment Option, issue up to an additional
$10 million principal amount of additional Notes (collectively, the "Additional
Notes") and Warrants to purchase 267,379.67 Warrant Shares (collectively, the
"Additional Warrants" and, together with the Additional Notes, the "Additional
Securities") within ninety (90) Business Days after the Closing Date on
identical terms and conditions as those set forth in the Transaction Documents.
The parties hereto agree to amend the Transaction Documents as is reasonably
necessary to provide solely for the issuance of the Additional Securities.
(k) Tax Matters. For United States Federal income tax purposes,
the Company and each Buyer agree (i) to treat the Notes as indebtedness, (ii)
that $3,574,900 of the aggregate purchase price for the securities issued by the
Company to the Buyers hereunder (assuming the sale of $35 million of Securities)
is attributable to the purchase of the Warrants, and (iii) to treat the Notes as
having been issued for an aggregate purchase price of $31,425,100 (assuming the
sale of $35 million of Securities), such that the aggregate original issue
discount that will accrue over the term of One Thousand Dollars ($1,000)
principal amount of the Notes is $102.14. If the Company shall be required to
withhold or deduct any tax or other governmental charge from any payment made
hereunder or under any Note to any Buyer, then, subject to the last sentence of
this Section 4(n), the Company shall pay to such Buyer such additional amounts
as are necessary such that such Buyer actually receives the amount such Buyer
would have received if no such withholding or deduction had been required. If
any Buyer is organized under the laws of a jurisdiction other than the United
States, any State thereof or the District of Columbia (a "Non-United States
Buyer"), such Buyer shall deliver to the Company either (a) two (2) copies of
either United States Internal Revenue Service Form W-8BEN or Form W-8ECI, or (b)
in the case of a Non-United States Buyer claiming exemption from United States
Federal withholding tax under Section 871(h) or 881(c) of the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder
(the "Code") with respect to payments of "portfolio interest", a certificate in
form and substance reasonably acceptable to the Company representing that such
Non-United States Buyer is not a bank for purposes of Section 881(c) of the
Code, is not a ten percent (10%) shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Company and is not a controlled foreign
corporation related to the Company (within the meaning of Section 864(d)(4) of
the Code), together with Internal Revenue Service Form W-8 or W-9, as
applicable, in all cases such forms and other documents being properly completed
and duly executed by such Non-United States Buyer claiming complete exemption
from United States Federal withholding tax on payments of interest by the
Company (or accruals of original issue discount) under the Notes. In addition,
each Buyer that is not otherwise exempt from "back-up withholding" shall deliver
to the Company properly completed and duly executed Internal Revenue Service
Form W-8 or W-9 indicating that such Buyer is not subject to "back-up
withholding" for United States Federal income tax purposes. The forms and other
documents required to be delivered pursuant to the two preceding sentences shall
be delivered within ten (10) days after the Closing Date. The Company shall not
be required to pay any additional amounts (x) to any Non-United States Buyer in
respect of United States Federal withholding tax or (y) to any Buyer in respect
of United States Federal "back-up withholding" tax to the extent that the
obligation to pay such additional amounts would not have arisen but for a
failure by such
15
Non-United States Buyer or Buyer, as the case may be, to comply with the
provisions of this Section 4(n).
(l) Violation of Laws. The business of the Company and its
Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any governmental entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse Effect.
(m) Limits on Additional Issuances. The Company shall not, in any
manner, within ninety (90) days after the Closing, issue or sell any rights,
warrants or options to subscribe for or purchase Common Stock or any security
directly or indirectly convertible into or exchangeable or exercisable for
Common Stock at a price which varies or may vary with the market price of the
Common Stock, including by way of one or more reset(s) to any fixed price unless
(i) the conversion, exchange or exercise price of any security can not be less
than the then applicable Conversion Price (as defined in the Notes) under any
Note, or the Exercise Price of the Warrants (as defined in the Warrants); (ii)
Xxxxxxxxx and holders representing a majority of the outstanding principal
amount of the Notes give their prior written consent to such issuance or sale;
(iii) the issuance is pursuant to employee benefits plans approved by the
Company's Board of Directors, (iv) the securities are issued for consideration
other than cash in connection with a bona fide business acquisition by the
Company whether by merger, consolidation, purchase of assets, sale or exchange
of stock or otherwise; or (v) the issuance is in connection with a commercial
banking arrangement, equipment financing, sponsored research, collaboration,
technology licensing, development agreements or other strategic partnership.
(n) CUSIP Numbers. The Company in issuing the Securities shall
use "CUSIP" numbers (if then generally in use), and shall use such "CUSIP"
numbers in notices to holders as a convenience to holders thereof; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice to such holders and that reliance may be placed only on other
identification numbers printed on such Securities, and any such Company action
referenced in such notice (including, without limitation, redemption or
automatic conversion of Notes) shall not be affected by any defect in or
omission of such numbers.
SECTION 5. TRANSFER AGENT INSTRUCTIONS. The Company shall issue
irrevocable instructions to its transfer agents, and any subsequent transfer
agent, to issue certificates or credit shares to the applicable balance accounts
at the Depositary Trust Company ("DTC"), registered in the name of Xxxxxxxxx and
each Buyer or their respective nominee(s), for the Conversion Shares and Warrant
Shares in such amounts as specified from time to time by Xxxxxxxxx or a Buyer to
the Company upon conversion of the Notes or exercise of the Warrants, as
applicable and in accordance with their respective terms (the "Irrevocable
Transfer Agent Instructions"), substantially in the form attached hereto as
Exhibit F. Prior to transfer or sale pursuant to a registration statement or
Rule 144 under the Securities Act of the Conversion Shares and the Warrant
Shares, all such certificates shall bear the restrictive legend specified in
Section 2(g) of this Agreement. The Company represents and warrants that no
instruction inconsistent with the Irrevocable Transfer Agent Instructions
referred to in this Section 5 will be given by the Company to its transfer agent
and that the Securities shall be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement, the
16
Notes, the Warrants and the Registration Rights Agreement. If a Buyer provides
the Company with an opinion of counsel, in form reasonably acceptable to the
Company, to the effect that a public sale, assignment or transfer of Securities
may be made without registration under the Securities Act or that the Securities
can be sold pursuant to Rule 144 without any restriction as to the number of
securities acquired as of a particular date that can then be immediately sold,
the Company shall permit the transfer, and, in the case of the Conversion Shares
and the Warrant Shares, promptly instruct its transfer agent to issue one or
more certificates, or credit shares to one or more balance accounts at DTC, in
such name and in such denominations as specified by such Buyer and without any
restrictive legend. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Buyers by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5 will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 5, that the
Buyers shall be entitled, in addition to all other available remedies, to an
order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any
bond or other security being required.
SECTION 6. CONDITIONS TO THE COMPANY'S OBLIGATION TO CLOSE. The
obligation of the Company to issue and sell the Notes and the Warrants to each
respective Buyer at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, 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 by providing such Buyer with prior written
notice thereof:
(a) Transaction Documents. Such Buyer shall have executed each of
the Transaction Documents to which it is a party and delivered the same to the
Company.
(b) Payment of Purchase Price. Such Buyer shall have delivered to
the Company the purchase price for the Notes and the Warrants being purchased by
such Buyer at the Closing, by wire transfer of immediately available funds
pursuant to the wire instructions attached hereto as Schedule A.
(c) Representations and Warranties; Covenants. The
representations and warranties of such Buyer shall be true, correct and complete
in all material respects (except to the extent that any of such representations
and warranties is already qualified as to materiality in Section 2 above, in
which case such representations and warranties shall be true, correct and
complete without further qualification) as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date (which shall be true, correct and
complete as of such date)), and such Buyer shall have performed, satisfied and
complied with in all material respects the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by such Buyer at or prior to the Closing Date.
SECTION 7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE. The
obligation of each Buyer hereunder to purchase the Notes and the Warrants from
the Company at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer's sole benefit and may be waived
17
by such Buyer at any time in its sole discretion by providing the Company with
prior written notice thereof:
(a) Transaction Documents. The Company shall have executed each
of the Transaction Documents and delivered the same to such Buyer.
(b) No Delisting of Common Stock. The Common Stock (i) shall be
designated for quotation or listed on the Principal Market and (ii) shall not
have been suspended by the Commission or the Principal Market from trading on
the Principal Market nor shall suspension by the Commission or the Principal
Market have been threatened either (A) in writing by the Commission or the
Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market; and the Conversion Shares issuable upon
conversion of the Notes (without regard to any limitations on conversions) and
the Warrant Shares issuable upon exercise of the Warrants (without regard to any
limitations on exercises) upon the Principal Market.
(c) Representations and Warranties; Covenants. The
representations and warranties of the Company shall be true, correct and
complete in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section
3 of this Agreement, in which case such representations and warranties shall be
true, correct and complete without further qualification) as of the date when
made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date (which shall be
true, correct and complete 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 the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such
Buyer shall have received a certificate, executed by the Chief Executive Officer
of the Company, dated as of the Closing Date, to the foregoing effect.
(d) Opinion of Counsel. The Company shall have delivered to such
Buyer the opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, dated as of the Closing
Date, in the form of Exhibit G, attached hereto.
(e) Delivery of Notes and Warrants. The Company shall have
executed and delivered to such Buyer the Notes and the Warrants (in such
denominations as such Buyer shall reasonably request) for the Notes and the
Warrants being purchased by such Buyer at the Closing.
(f) Reservation of Common Stock. As of the Closing Date, the
Company shall have reserved out of its authorized and unissued Common Stock,
solely for the purpose of effecting the conversion of the Notes and the exercise
of the Warrants, 4,356,283.4218762 shares of its Common Stock.
(g) Irrevocable Transfer Agent Instructions. The Company shall
have delivered the Irrevocable Transfer Agent Instructions, in the form of
Exhibit F attached hereto, to the Company's transfer agent.
18
(h) Good Standing Certificates. The Company shall have delivered
to Xxxxxxxxx (i) a certificate evidencing the incorporation and good standing of
the Company in California issued by the Secretary of State of California as of a
recent date; and (ii) a certificate of good standing (or appropriate
counterpart) from the appropriate governmental authority in each domestic
jurisdictions in which Subsidiaries are incorporated or organized as of a recent
date.
(i) Organizational Documents of Subsidiaries. The Company shall
have delivered to such Buyer a certified copy of the organizational documents of
each domestic Subsidiary as certified by the appropriate governmental authority
in each jurisdiction in which such Subsidiary is incorporated or organized as of
a date within two (2) days prior to the Closing Date or on the Closing Date.
(j) Secretary's Certificate. The Company shall have delivered to
such Buyer a secretary's certificate, dated as of the Closing Date, certifying
as to (i) adoption of the form of resolutions of the Board of Directors of the
Company consistent with Section 3(b) of this Agreement and in a form reasonably
acceptable to such Buyer, (ii) the Articles of Incorporation and (iii) the
Bylaws, each as in effect at the Closing.
(k) Filings; Authorizations. The Company shall have made all
filings under all applicable federal and state securities laws necessary to
consummate the issuance of the Securities pursuant to this Agreement in
compliance with such laws, and shall have obtained all authorizations, approvals
and permits necessary to consummate the transactions contemplated by the
Transaction Documents and such authorizations, approvals and permits shall be
effective as of the Closing Date.
(l) No Injunctions. No temporary restraining order, preliminary
or permanent injunction or other order or decree, and no other legal restraint
or prohibition shall exist which prevents or arguably prevents the consummation
of the transactions contemplated by the Transaction Documents, nor shall any
proceeding have been commenced or threatened with respect to the foregoing.
(m) No Material Adverse Effect. Between the time of execution of
this Agreement and the Closing Date, (i) no Material Adverse Effect shall occur
or become known (whether or not arising in the ordinary course of business) and
(ii) no transaction which is material and unfavorable to the Company shall have
been entered into by the Company.
(n) Payment of Fees. The Company shall have satisfied its
obligations under Section 9(p) of this Agreement.
SECTION 8. INDEMNIFICATION.
(a) Indemnification by the Company. In consideration of each
Buyer's execution and delivery of the Transaction Documents and acquiring the
Securities thereunder and Xxxxxxxxx'x agreement to act as exclusive placement
agent and in addition to all of the Company's other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless Xxxxxxxxx and each Buyer and each other holder of the Securities and
all of their shareholders, partners, members, officers, directors, employees and
19
direct or indirect investors and any of the foregoing persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (collectively, "Claims"), incurred
by any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents, (b) any breach of any covenant, agreement
or obligation of the Company contained in the Transaction Documents, (c) any
cause of action, suit or claim brought or made against such Indemnitee and
arising out of or resulting from (i) the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (ii) any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of the
issuance of the Securities or (iii) the status of such Buyer or holder of the
Securities as an investor in the Company. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. Subject
to Section 8(b) of this Agreement, the Company shall reimburse the Indemnitees,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with the
investigating or defending any such Claim.
(b) Procedures for Indemnification. Promptly after an Indemnitee
has knowledge of any Claim as to which such Indemnitee reasonably believes
indemnity may be sought or promptly after such Indemnitee receives notice of the
commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnitee shall, if a Claim in respect
thereof is to be made against any the Company under this Section 8, deliver to
the Company a written notice of such Claim, and the Company shall have the right
to participate in, and, to the extent the Company so desires, to assume control
of the defense thereof with counsel mutually satisfactory to the Company and the
Indemnitee; provided, however, that an Indemnitee shall have the right to retain
its own counsel if, in the reasonable opinion of counsel retained by the
Company, the representation by such counsel of the Indemnitee and the Company
would be inappropriate due to actual or potential differing interests between
such Indemnitee and the Company; provided, further, that the Company shall not
be responsible for the reasonable fees and expense of more than one (1) separate
legal counsel for such Indemnitee. In the case of an Indemnitee, the legal
counsel referred to in the immediately preceding sentence shall be selected by
the Investors holding at least a majority in interest of the Securities to which
the Claim relates. The Indemnitee shall cooperate fully with the Company in
connection with any negotiation or defense of any such action or Claim by the
Company and shall furnish to the Company all information reasonably available to
the Indemnitee which relates to such action or Claim. The Company shall keep the
Indemnitee fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. The Company shall not be liable
for any settlement of any Claim effected without its prior written consent;
provided, however, that the Company shall not unreasonably withhold, delay or
condition its consent. The Company shall not, without the prior written consent
of the Indemnitee, consent to entry of any judgment or enter into any settlement
or other compromise
20
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee of a full release from all liability in
respect to such Claim and action and proceeding. After indemnification as
provided for under this Agreement, the rights of the Company shall be subrogated
to all rights of the Indemnitee with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made. The
failure to deliver written notice to the Company as provided in this Agreement
shall not relieve the Company of any liability to the Indemnitee under this
Section 8, except to the extent that the Company is prejudiced in its ability to
defend such action.
(c) Survival of Indemnification Obligations. The obligations of
the Company under this Section 8 shall survive the transfer of the Securities by
the Indemnitees.
SECTION 9. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of
the state and federal courts sitting in the City of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
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 in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other parties hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
(c) Headings. The headings of this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
21
(d) Entire Agreement. This Agreement, the Registration Rights
Agreement, the Notes and the Warrants and the documents referenced herein and
therein constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the Registration Rights Agreement, the Notes and the
Warrants supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
(e) Consents. All consents and other determinations required to
be made by Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by Investors holding at least a majority of the
Conversion Shares and Warrant Shares, determined as if all of the Notes held by
Buyers then outstanding have been converted into Conversion Shares and all
Warrants then outstanding have been exercised for Warrant Shares without regard
to any limitations on conversion of the Notes or on the exercise of the
Warrants.
(f) Waivers. No provision of this Agreement may be amended or
waived other than by an instrument in writing signed by the Company and the
holders of at least a majority of the outstanding principal amount of the Notes
or Conversion Shares, as applicable. No such amendment shall be effective to the
extent that it applies to less than all of the holders of the Notes then
outstanding. No consideration shall be offered or paid to any person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties to
the Transaction Documents or holders of the Conversion Shares, as the case may
be.
(g) Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile;
or (iii) one (1) Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If to the Company:
Xicor Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxx,
Vice President of Finance
22
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Page Xxxxxxxxx, Esq.
Xxx X. Xxxxxxxx, Esq.
If to Xxxxxxxxx Xxxxxxxx:
Xxxxxxxxx Xxxxxxxx, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxxxxx
Xx. Xxxx Xxxxxxx
with a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to Legal Counsel:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to a Buyer, to its address and facsimile number set forth on the
Schedule of Buyers attached hereto as Exhibit A, with copies to such Buyer's
representatives as set forth on the Schedule of Buyers, or at such other address
and/or facsimile number and/or to the attention of such other person as the
recipient party has specified by written notice given to each other party five
(5) days prior to the effectiveness of such change. Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender's
facsimile machine containing the time, date, recipient
23
facsimile number and an image of the first page of such transmission, or (C)
provided by a courier or overnight courier service shall be rebuttal evidence of
personal service, receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
(h) No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
(i) 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, 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.
(j) Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person other than Xxxxxxxxx.
(k) 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 in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(l) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Securities. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of at least a majority of the outstanding
principal amount of the Notes including by merger or consolidation, except
pursuant to a Change of Control (as defined in the Notes) with respect to which
the Company is in compliance with the terms of the Notes and Section 4(i) of
this Agreement. A Buyer may assign some or all of its rights and obligations
hereunder without the consent of the Company; provided, however, that the
transferee has agreed in writing to be bound by the applicable provisions of
this Agreement and provided, further, that such assignment shall be in
connection with a transfer of all or a portion of the Notes and Warrants held by
such Buyer and subject to the terms and conditions of the Warrants and Notes, as
applicable.
(m) Survival. Unless this Agreement is terminated under Section
9(o) of this Agreement, the representations and warranties of the Company and
the Buyers contained in Sections 2 and 3 of this Agreement, and the
indemnification provisions set forth in Section 8 of this Agreement, the
agreements and covenants set forth in Sections 4, 5 and 9 of this Agreement
shall survive until such time as no Notes, Conversion Shares, Warrants or
Warrant Shares remain outstanding. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.
24
(n) Publicity. The Company and Xxxxxxxxx shall have the right to
approve before issuance any press releases or any other public statements with
respect to the transactions contemplated by the Transaction Documents.
(o) Termination. In the event that the Closing shall not have
occurred with respect to a Buyer on or before five (5) Business Days from the
date hereof due to the Company's or such Buyer's failure to satisfy the
conditions set forth in Sections 6 and 7 of this Agreement (and the nonbreaching
party's failure to waive such unsatisfied conditions), the nonbreaching party
shall have the option to terminate this Agreement with respect to such breaching
party at the close of business on such date without liability of any party to
any other party; provided, however, that if this Agreement is terminated
pursuant to this Section 9(o), the Company shall remain obligated to reimburse
any nonbreaching Buyer for the expenses described in Section 4(k) of this
Agreement.
(p) Placement Agent. The Company acknowledges that it has engaged
Xxxxxxxxx Xxxxxxxx, Inc. as placement agent in connection with the sale of the
Notes and the Warrants and that the compensation of such agent is as set forth
on the Schedule of Fees attached hereto as Exhibit D. The Company shall be
responsible for the payment of any placement agent's fees, financial advisory
fees, or brokers' commissions (other than for persons engaged by any Buyer or
its investment advisor) relating to or arising out of the transactions
contemplated hereby. The Company shall pay, and hold each Buyer harmless
against, any liability, loss or expense (including, without limitation,
attorney's fees and out-of-pocket expenses) arising in connection with any such
claim.
(q) Remedies. Each Buyer and each holder of the Securities shall
have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any
other agreement or contract and all of the rights which such holders have under
any law. Any person having any rights under any provision of this Agreement
shall be entitled to enforce such rights to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. Furthermore, the Company recognizes that in the event that it
fails to perform, observe, or discharge any or all of its obligations under this
Agreement, any remedy at law may prove to be inadequate relief to the Buyers.
The Company therefore agrees that the Buyers shall be entitled to seek temporary
and permanent injunctive relief in any such case without the necessity of
proving actual damages and without posting a bond or other security.
(r) Payment Set Aside. To the extent that the Company makes a
payment or payments to any Buyer hereunder or pursuant to any of the other
Transaction Documents, or the Buyers enforce or exercise their rights hereunder
or thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
25
IN WITNESS WHEREOF, the parties have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.
"COMPANY"
XICOR INC.
By: /s/ Xxxxx XxXxxxx
-------------------------------------
Xxxxx XxXxxxx
President and Chief Executive
Officer
ACKNOWLEDGED AND AGREED:
"XXXXXXXXX"
XXXXXXXXX XXXXXXXX, INC.
By: /s/ Xxxxxxx Xxxxx
------------------------------
Its: Managing Director
--------------------------
Head of Convertible Securities
[Signatures of Buyers on Following Page]
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
"BUYER"
Franklin Small Cap Growth Fund II
-----------------------------------------
(print full legal name of Buyer)
By: /s/ Xxxxx X. Xxxx
-------------------------------------
(signature of authorized
representative)
Name: Xxxxx X. Xxxx
------------------------------------
Title: Vice President
------------------------------------
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
"BUYER"
FRANKLIN CONVERTIBLE SECURITIES FUND
-----------------------------------------
(print full legal name of Buyer)
By: /s/ Xxxxx X. Xxxx
-------------------------------------
(signature of authorized
representative)
Name: Xxxxx X. Xxxx
------------------------------------
Title: Vice President
------------------------------------
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
"BUYER"
Franklin Aggressive Growth Fund
-----------------------------------------
(print full legal name of Buyer)
By: /s/ Xxxxx X. Xxxx
-------------------------------------
(signature of authorized
representative)
Name: Xxxxx X. Xxxx
------------------------------------
Title: Vice President
------------------------------------
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
"BUYER"
Franklin California Growth Fund
-----------------------------------------
(print full legal name of Buyer)
By: /s/ Xxxxx X. Xxxx
-------------------------------------
(signature of authorized
representative)
Name: Xxxxx X. Xxxx
------------------------------------
Title: Vice President
------------------------------------
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
"BUYER"
The Northwestern Mutual Life Insurance
Company
-----------------------------------------
(print full legal name of Buyer)
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
(signature of authorized
representative)
Name: Xxxxxx X. Xxxxx
------------------------------------
Its: Authorized Representative
------------------------------------
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
"BUYER"
Levco Alternative Fund, Ltd.
-----------------------------------------
(print full legal name of Buyer)
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
(signature of authorized
representative)
Name: Xxxxxx Xxxxxx
------------------------------------
Its: VP & General Counsel
------------------------------------
Xxxx X. Xxxxx & Co., Inc.
Investment Manager
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
"BUYER"
Purchase Associates, L.P.
-----------------------------------------
(print full legal name of Buyer)
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
(signature of authorized
representative)
Name: Xxxxxx Xxxxxx
------------------------------------
Its: VP & General Counsel
------------------------------------
Levco GP, Inc.
Managing General Partner
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
"BUYER"
Pine Ridge Financial, Inc.
-----------------------------------------
(print full legal name of Buyer)
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
(signature of authorized
representative)
Name: Xxxxxxx Xxxxxxxxx
------------------------------------
Its: Attorney-in-fact
------------------------------------
[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
"BUYER"
First Investors Holding Co., Inc.
-----------------------------------------
(print full legal name of Buyer)
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
(signature of authorized
representative)
Name: Xxxxxxx Xxxxxxxxx
------------------------------------
Its: Attorney-in-fact
------------------------------------
TABLE OF CONTENTS
PAGE
SECTION 1. Purchase and Sale of Notes and Warrants..........................2
SECTION 2. Buyer's Representations and Warranties...........................2
SECTION 3. Representations and Warranties of the Company....................6
SECTION 4. Covenants.......................................................13
SECTION 5. Transfer Agent Instructions.....................................16
SECTION 6. Conditions to the Company's Obligation to Close.................17
SECTION 7. Conditions to Each Buyer's Obligation to Purchase...............17
SECTION 8. Indemnification.................................................19
SECTION 9. Miscellaneous...................................................21
SCHEDULES
[omitted]
EXHIBITS
[omitted]
i
