Exhibit 4.1
▇▇▇▇▇▇▇ TECHNOLOGY, INC.
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (this "Agreement"), is made and entered
into as of the __ day of April, 2002, by and among ▇▇▇▇▇▇▇ Technology, Inc., a
Delaware corporation (the "Company"), and the undersigned purchaser (the
"Purchaser").
1. Authorization of Sale of the Shares
Subject to the terms and conditions of this Agreement, as part of this
offering (this "Offering"), the Company has authorized the sale of up to Seven
Million Four Hundred Thousand (7,400,000) shares (the "Shares") of common stock,
par value $0.001 per share (the "Common Stock"), of the Company.
2. Agreement to Sell and Purchase the Shares
2.1 Purchase and Sale
Subject to the terms and conditions of this Agreement, the Purchaser
agrees to purchase, and the Company agrees to sell and issue to the Purchaser,
at the Closing (as defined below), _______ of the Shares (the "Purchaser's
Shares"). Up to the remaining number of Shares available for purchase under this
Offering may be purchased by other investors (the "Other Purchasers" and
collectively with the Purchaser, the "Purchasers") pursuant to purchase
agreements substantially similar in form to this Agreement (collectively, such
other purchase agreements and this Agreement are referred to as the "Purchase
Agreements").
2.2 Purchase Price
The purchase price of each Share shall be $__________ (the "Per Share
Price"). The Company shall not, during the period beginning on the date of this
Agreement and ending ninety (90) days after the Closing Date (as defined below),
without adjusting the price per Share hereunder accordingly, sell or issue or
enter into an agreement to sell or issue (i) shares of Common Stock at a price
per share of less than the Per Share Price, except (A) issuances of shares of
Common Stock pursuant to the exercise of either options or warrants that were
issued prior to January 1, 2002 or options that were issued or granted in the
ordinary course of business to employees or non-employee service providers
(including those issued after the date of this Agreement in accordance with (ii)
below) pursuant to the Company's stock option plans, and (B) issuances of shares
of Common Stock in the ordinary course of business to employees pursuant to the
Company's stock purchase plan (the Company's stock option and stock purchase
plans are, together, the "Stock Plans") or (ii) options, warrants or any other
securities that can be converted into, or otherwise exchanged for, shares of
Common Stock at a conversion, exchange or exercise price per share of less than
the Per Share Price, except grants to employees and consultants of the Company
of options to purchase up to an aggregate of 1,200,000 shares of Common Stock in
which the exercise price for each such option granted to an employee or
consultant is equal to or greater than the closing price of the Common Stock
traded on the NASDAQ stock market system on the day of grant of such option. In
the event the Company
sells or issues, or enters into an agreement to sell or issue, shares of Common
Stock, options, warrants or other securities that requires adjustment to the
price per share hereunder in accordance with the previous sentence, the Company
shall, within ten (10) business days of such sale or issuance, pay to the
Purchaser a cash amount equal to the number of Purchaser's Shares multiplied by
the difference between the Per Share Price and the per share price paid or to be
paid upon such sale or issuance or agreement to sell or issue.
3. Delivery of the Shares at the Closing
(a) The completion of the purchase and sale of the Shares (the
"Closing") shall occur at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Professional Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as
soon as practicable and as agreed by the parties hereto following notification
by the Securities and Exchange Commission (the "Commission") to the Company of
the Commission's willingness to declare effective the registration statement to
be filed by the Company pursuant to Section 7.1 hereof (the "Registration
Statement") at a time (the "Closing Date") to be agreed upon by the Company and
Bear ▇▇▇▇▇▇▇ & Co. Inc. (the "Placement Agent") and of which the Purchasers will
be notified by facsimile transmission or otherwise.
(b) At the Closing, the Company shall authorize its transfer agent (the
"Transfer Agent") to issue to the Purchaser one or more stock certificates, as
designated by the Purchaser, registered in the name of the Purchaser, or in such
nominee name(s) as designated by the Purchaser in writing, representing the
Purchaser's Shares. The Company will deliver such certificate(s) (the
"Certificates") against delivery of payment for the Purchaser's Shares by the
Purchaser. Prior to the Purchaser's delivery of payment for the Purchaser's
Shares, the Company will deliver via facsimile a copy of the Certificates to be
delivered upon Closing to the office of the Purchasers (at the fax number
indicated on the signature pages attached hereto).
(c) The Company's obligation to complete the purchase and sale of the
Purchaser's Shares shall be subject to the following conditions, any one or more
of which may be waived by the Company:
(i) receipt by the Company of same-day funds in the full amount of
the purchase price for the Purchaser's Shares being purchased under this
Agreement; and
(ii) the accuracy in all material respects of the representations
and warranties made by the Purchaser and the fulfillment in all material
respects of those undertakings of the Purchaser to be fulfilled before the
Closing.
(d) The Purchaser's obligation to accept delivery of such stock
certificates and to pay for the Purchaser's Shares evidenced by the Certificates
shall be subject to the following conditions, any one or more of which may be
waived by the Purchaser with respect to the Purchaser's obligation:
(i) the representations and warranties made by the Company in this
Agreement shall be accurate in all material respects and the undertakings of the
Company shall have been fulfilled in all material respects on or before the
Closing;
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(ii) the Company shall have delivered to the Purchaser a
certificate executed by the president and the chief financial officer of the
Company, dated the Closing Date, in form and substance reasonably satisfactory
to the Purchaser, to the effect that the representations and warranties of the
Company set forth in Section 4 hereof are true and correct in all material
respects as of the date of this Agreement and as of the Closing Date, and that
the Company has complied with all the agreements and satisfied all the
conditions in this Agreement on its part to be performed or satisfied on or
before the Closing Date;
(iii) the Company shall have delivered to the Purchasers and the
Placement Agent a legal opinion in a form reasonably acceptable to the Purchaser
and the Placement Agents;
(iv) the Company shall have obtained gross proceeds of at least
Twenty Five Million Dollars ($25,000,000) from the sale of the Shares at the
Closing pursuant to this Offering;
(v) the Commission shall have notified the Company of the
Commission's willingness to declare the Registration Statement effective; and
(vi) the Closing shall have occurred no later than one hundred
twenty (120) days after the date hereof.
4. Representations, Warranties and Covenants of the Company
Except as set forth on the Schedule of Exceptions delivered to the
Purchaser and signed by the Company's Chief Financial Officer, the Company
hereby represents, warrants and covenants to the Purchaser as follows (which
representations, warranties and covenants shall be deemed to apply, where
appropriate, to each subsidiary of the Company):
4.1 Organization and Qualification
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Company has the corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted and to enter into
and perform its obligations under this Agreement. The Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not, singly or in the aggregate, materially and
adversely affect the business, financial condition, properties, operations,
assets or business affairs or prospects in the year 2002 of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect").
4.2 Capitalization
(a) The authorized capital stock of the Company consists of 120,000,000
shares of Common Stock and 2,000,000 shares of Preferred Stock.
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(b) As of the date of this Agreement, the issued and outstanding
capital stock of the Company consists of 37,118,222 shares of Common Stock
(excluding any shares issued upon the exercise of stock options after March 15,
2002). The shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
have not been issued in violation of or are not otherwise subject to any
preemptive or other similar rights.
(c) The Company has reserved 8,934,000 shares of Common Stock for
issuance upon the exercise of stock options granted or available for future
grant under the Company's Stock Plans.
(d) Up to 3,482,000 shares of Common Stock may be issued upon
conversion of outstanding indebtedness owed to STEAG Electronic Systems AG
("SES").
With the exception of the foregoing, there are no outstanding
subscriptions, options, warrants, convertible or exchangeable securities or
other rights granted to or by the Company to purchase shares of Common Stock or
other securities of the Company and, except as provided in connection with this
financing, there are no current commitments to issue any shares of Common Stock
or any security convertible into or exchangeable for Common Stock. Each of SES
and the Company's executive officers and directors has executed a lock-up
agreement in the form previously furnished to the Purchaser.
4.3 Issuance, Sale and Delivery of the Shares
(a) The Shares have been duly authorized for issuance and sale to the
Purchasers pursuant to the Purchase Agreements and, when issued and delivered by
the Company pursuant to this Agreement against payment of the consideration set
forth in this Agreement, will be validly issued and fully paid and nonassessable
and free and clear of all pledges, liens and encumbrances. The certificates
evidencing the Shares are in due and proper form under Delaware law.
(b) The issuance of the Shares is not subject to preemptive or other
similar rights except such as have been waived or complied with. No further
approval or authority of the shareholders or the Board of Directors of the
Company will be required for the issuance and sale of the Shares to be sold by
the Company as contemplated in the Purchase Agreements.
(c) Subject to the accuracy of the Purchasers' representations and
warranties in Section 5 of this Agreement, the offer, sale, and issuance of the
Shares in conformity with the terms of this Agreement constitute transactions
exempt from the registration requirements of Section 5 of the Securities Act and
from the registration or qualification requirements of the laws of any
applicable state or United States jurisdiction.
4.4 Financial Statements
The financial statements included (as exhibits or otherwise) in the
Company Documents (as defined below) present fairly the financial position of
the Company as of the dates indicated and the results of their operations for
the periods specified. Except as otherwise stated in such Company Documents,
such financial statements have been prepared in conformity with generally
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accepted accounting principles applied on a consistent basis, and any supporting
schedules included with the financial statements present fairly the information
stated in such schedule and reflected in the financial statements. The financial
and statistical data set forth in the Company Documents were prepared on an
accounting basis consistent with such financial statements.
4.5 No Material Change
Since December 31, 2001, (i) the Company has not incurred any
liabilities or obligations, indirect, or contingent, or entered into any verbal
or written agreement or other transaction that was not in the ordinary course of
business or that would have a Material Adverse Effect on the Company; (ii) the
Company has not sustained any material loss or interference with its businesses
or properties from fire, flood, windstorm, accident or other calamity not
covered by insurance; (iii) the Company has not paid or declared any dividends
or other distributions with respect to its capital stock and the Company is not
in default in the payment of principal or interest on any outstanding debt
obligations; (iv) other than in connection with grants or exercises of stock
options or issuances of shares to its employees under the Company's Stock Plans,
there has not been any change in the capital stock of the Company or increase in
indebtedness material to the Company; (v) the Company has not incurred or
sustained any other event or change that would have a Material Adverse Effect on
the Company; and (vi) the Company has conducted its business only in the
ordinary course of business in accordance with past practice.
The Company has no material contingent obligations, except as set forth
in the financial statements included in the Company Documents.
4.6 Environmental
Except as would not, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect,
(a) the Company is in compliance with all applicable Environmental Laws
(as defined below);
(b) the Company has all permits, authorizations and approvals required
under any applicable Environmental Laws and is in compliance with the
requirements of such permits authorizations and approvals, except where the
failure to comply would not, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(c) there are no pending or, to the best knowledge of the Company,
threatened Environmental Claims (as defined below) against the Company; and
(d) under applicable law, to the Company's knowledge, there are no
circumstances with respect to any property or operations of the Company that are
reasonably likely to form the basis of an Environmental Claim against the
Company.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) Federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law
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and any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment binding on the
Company, relating to the environment, health, safety or any chemical, material
or substance, exposure to which is prohibited, limited or regulated by any
governmental authority. "Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law.
4.7 No Defaults
The Company is not in violation of its certificate of incorporation or
bylaws or in material default in the performance or observance of any
obligation, agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement, deed, trust, note, lease, sublease, voting
agreement, voting trust, or other instrument or material agreement to which the
Company is a party or by which it may be bound, or to which any of the property
or assets of the Company is subject.
4.8 Labor Matters
No labor dispute with the employees of the Company exists or, to the
best knowledge of the Company, is imminent, which would reasonably likely result
in a Material Adverse Effect.
4.9 No Actions
There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company which,
singly or in the aggregate, might reasonably be expected to have a Material
Adverse Effect and/or which might materially and adversely affect the
consummation of this Agreement, nor, to the best knowledge of the Company, is
there any reasonable basis therefor. The Company is not in default with respect
to any judgment, order or decree of any court or governmental agency or
instrumentality which, singly or in the aggregate, would have a Material Adverse
Effect on the Company.
4.10 Intellectual Property
(a) The Company, to the best of its knowledge in the course of
diligent inquiry (which shall be deemed to exclude any patent searches not
actually conducted), owns or is licensed to use all patents, patent
applications, inventions, trademarks, trade names, applications for registration
of trademarks, service marks, service ▇▇▇▇ applications, copyrights, know-how,
manufacturing processes, formulae, trade secrets, licenses and rights in any
thereof and any other intangible property and assets that are material to the
business of the Company as now conducted and as proposed to be conducted in the
year 2002 (in this Agreement called the "Proprietary Rights"), or is seeking, or
will seek, to obtain rights to use such Proprietary Rights that are material to
the business of the Company as proposed to be conducted in the year 2002.
(b) The Company does not have any knowledge of, and the Company has
not given or received any notice of, any pending conflicts with or infringement
of the rights of others with
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respect to any Proprietary Rights or with respect to any license of Proprietary
Rights which are material to the business of the Company.
(c) No action, suit, arbitration, or legal, administrative or other
proceeding, or investigation is pending, or, to the best knowledge of the
Company, threatened, which involves any Proprietary Rights and which could
reasonably be expected to have a Material Adverse Effect, nor, to the best
knowledge of the Company, is there any reasonable basis therefor.
(d) The Company is not subject to any judgment, order, writ,
injunction or decree of any court or any Federal, state, local, foreign or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or any arbitrator, and has not entered into or is not a
party to any contract which restricts or impairs the use of any such Proprietary
Rights in a manner which would have a material adverse effect on the use of any
of the Proprietary Rights.
(e) The Company has not received written notice of any pending
conflict with or infringement upon any third-party proprietary rights, which
could reasonably be expected to have a Material Adverse Effect.
(f) The Company has not entered into any consent, indemnification,
forbearance to ▇▇▇ or settlement agreement with respect to Proprietary Rights
other than in the ordinary course of business.
(g) The Company has complied, in all material respects, with its
obligations relating to the protection of the Proprietary Rights which are
material to the business of the Company used pursuant to licenses.
(h) To the best knowledge of the Company, no person is infringing on
or violating the Proprietary Rights, which infringement or violation could
reasonably be expected to have a Material Adverse Effect.
4.11 Permits
The Company possesses and is operating in compliance with all material
licenses, certificates, consents, authorities, approvals and permits from all
state, federal, foreign and other regulatory agencies or bodies necessary to
conduct the businesses now operated by it, except where the failure to be in
compliance would not reasonably be expected to have a Material Adverse Effect
and the Company has not received any notice of proceedings relating to the
revocation or modification of any such permit or any circumstance which would
lead it to believe that such proceedings are reasonably likely which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would reasonably be expected to have a Material Adverse Effect.
4.12 Due Execution, Delivery and Performance
(a) This Agreement has been duly executed and delivered by the Company
and constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy,
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insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and except as enforceability may be subject to general
principals of equity and except as indemnification provisions herein may be held
violative of public policy and legality unenforceable.
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and the
fulfillment of the terms of this Agreement, including the sale, issuance and
delivery of the Shares, (i) have been duly authorized by all necessary corporate
action on the part of the Company, its directors and stockholders; (ii) will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, any contract, indenture, mortgage, loan
agreement, deed, trust, note, lease, sublease, voting agreement, voting trust or
other instrument or agreement to which the Company is a party or by which it may
be bound, or to which any of the property or assets of the Company is subject
and in each case which would reasonably likely have a Material Adverse Effect;
(iii) will not trigger anti-dilution rights or other rights to acquire
additional equity securities of the Company except for those which have been
waived or complied with; and (iv) will not result in any violation of the
provisions of the certificate of incorporation or bylaws of the Company or any
applicable statute, law, rule, regulation, ordinance, decision, directive or
order and in each case which would reasonably likely have a Material Adverse
Effect.
4.13 Properties
The Company has good and marketable title to its properties, free and
clear of all material security interests, mortgages, pledges, liens, charges,
encumbrances and claims of record. The properties of the Company are, in the
aggregate, in good repair (reasonable wear and tear excepted), and suitable for
their respective uses. Any real property held under lease by the Company is held
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the conduct of the business of the Company.
The Company owns or leases all such properties as are necessary to its business
or operations as now conducted.
4.14 Compliance
The Company has conducted and, to its knowledge, is conducting its
business in compliance with all applicable Federal, state, local and foreign
statutes, laws, rules, regulations, ordinances, codes, decisions, decrees,
directives and orders, except where the failure to do so would not, singly or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
4.15 Security Measures
The Company takes reasonable security measures designed to enable the
Company to assert trade secret protection in its non-patented technology for
which the Company can obtain trade secret protection.
4.16 Contributions
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To the best of the Company's knowledge, neither the Company nor any
employee or agent of the Company on the Company's behalf, has made any payment
of funds of the Company or received or retained any funds in violation of any
law, rule or regulation.
4.17 Use of Proceeds; Investment Company
The Company intends to use the proceeds from the sale of the Shares for
working capital and other general corporate purposes, including the possible
repayment of debt. The Company is not now, and after the sale of the Shares
under this Agreement and under all other agreements and the application of the
net proceeds from the sale of the Shares described in the proceeding sentence
will not be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
4.18 Prior Offerings
All offers and sales of capital stock of the Company before the date of
this Agreement were at all relevant times duly registered or exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act") and were duly registered or subject to an available exemption
from the registration requirements of the applicable state securities or Blue
Sky laws, except for violations that would not have a Material Adverse Effect.
4.19 Taxes
The Company has filed all material tax returns required to be filed,
which returns are true and correct in all material respects, and the Company is
not in default in the payment of any taxes, including penalties and interest,
assessments, fees and other charges, shown thereon due or otherwise assessed,
other than those being contested in good faith and for which adequate reserves
have been provided or those currently payable without interest which were
payable pursuant to said returns or any assessments with respect thereto.
4.20 Other Governmental Proceedings
To the Company's knowledge, there are no rulemaking or similar
proceedings before any Federal, state, local or foreign government bodies that
involve the Company or that affect the particular industry in which the Company
operates in a way that is materially different than other industries, which, if
the subject of an action unfavorable to the Company, could involve a prospective
Material Adverse Effect.
4.21 Non-Competition Agreements
To the knowledge of the Company, any full-time employee who has entered
into any non-competition, non-disclosure, confidentiality or other similar
agreement with any party other than the Company is neither in violation of nor
is expected to be in violation of that agreement as a result of the business
currently conducted or expected to be conducted by the Company or such person's
performance of his or her obligations to the Company. The Company has not
received written notice that any consultant or scientific advisor of the Company
is currently in violation of any non-competition, non-disclosure,
confidentiality or similar agreement.
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4.22 Transfer Taxes
On the Closing Date, all stock transfer or other taxes (other than
income taxes) that are required to be paid in connection with the sale and
transfer of the Purchaser's Shares to be sold to the Purchaser under this
Agreement will be, or will have been, fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been fully complied with.
4.23 Insurance
The Company maintains insurance of the type and in the amount that the
Company reasonably believes is adequate for its business, including, but not
limited to, insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.
4.24 Governmental/ Regulatory Consents
No registration, authorization, approval, qualification or consent with
or required by any court or governmental/ regulatory authority or agency is
necessary in connection with the execution and delivery of this Agreement or the
offering, issuance or sale of the Shares, except for any required filings with
the Commission, in connection with any applicable State or Blue Sky law, or with
Nasdaq or the National Association of Securities Dealers, Inc.
4.25 Securities and Exchange Commission Filings
The Company has timely filed with the Commission all documents required
to be filed by the Company under the Securities Exchange Act of 1934, as amended
(the "Exchange Act.")
4.26 Additional Information
The Company represents and warrants that the information contained in
the following documents (the "Company Documents"), which will be provided to
Purchaser before the Closing, is or will be true and correct in all material
respects as of their respective final dates, and do not omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made and at the
time that they were made, not misleading, as of their respective dates.
(a) the Company's Annual Report on Form 10-K for the year ended
December 31, 2001;
(b) Notice of Annual Meeting of Shareholders and Proxy Statement
for the Company's Annual Meeting held on May 16, 2001;
(c) the Confidential Private Placement Memorandum, dated as of
March 14, 2002, including all addenda and exhibits thereto, taken together (the
"Private Placement Memorandum"); and
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(d) all other documents, if any, filed by the Company with the
Commission since September 30, 2001 pursuant to the reporting requirements of
the Exchange Act.
4.27 Contracts
The contracts described in the Company Documents or incorporated by
reference therein are in full force and effect on the date hereof, except for
contracts the termination or expiration of which would not, singly or in the
aggregate, have a Material Adverse Effect on the Company. Neither the Company
nor, to the best knowledge of the Company, any other party is in material breach
of or default under any such contracts.
4.28 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 in
any security or solicited any offers to buy any security under circumstances
that would require registration under the Securities Act of the issuance of the
Shares to the Purchasers, except pursuant to this Agreement. The issuance of the
Shares to the Purchasers will not be integrated with any other issuance of the
Company's securities (past, current or future) for purposes of the Securities
Act or any applicable rules of Nasdaq (or of any national securities exchange on
which the Company's Common Stock is then traded), except where such action would
not cause the representations set forth in Section 4.3(c) above to be untrue.
The Company will not make any offers or sales of any security (other than the
Shares) that would cause this Offering of the Shares to be integrated with any
other offering of securities by the Company for purposes of any registration
requirement under the Securities Act or any applicable rules of Nasdaq (or of
any national securities exchange on which the Company's Common Stock is then
traded), except where such action would not cause the representations set forth
in Section 4.3(c) to be untrue.
4.29 Listing of Shares
On or prior to the Closing Date, the Company agrees to secure the
listing of the Shares upon each national securities exchange or automated
quotation system upon which shares of Common Stock are then listed and, so long
as any Purchaser owns any of the Shares, shall maintain such listing of all
Shares. The Company has taken no action designed to delist, or which is likely
to have the effect of delisting, the Common Stock from any of the national
securities exchange or automated quotation system upon which the shares of
Common Stock are then listed.
4.30 No Manipulation of Stock
The Company has not taken and will not, in violation of applicable law,
take any action outside the ordinary course of business designed to or that
might reasonably be expected to cause or result in unlawful manipulation of the
price of the Common Stock to facilitate the sale or resale of the Shares.
4.31 [Reserved]
4.32 No Material Nonpublic Information
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Immediately prior to the Closing, the Private Placement Memorandum, as
supplemented, will include no material nonpublic information with respect to the
Company.
4.33 Reliance by Placement Agent
The Company hereby acknowledges that the Placement Agent may rely on
the representations, warranties and covenants set forth in this Agreement as if
such representations, warranties and covenants were made to the Placement Agent
directly.
5. Representations, Warranties and Covenants of the Purchaser
5.1 Securities Law Representations and Warranties
The Purchaser represents, warrants and covenants to the Company as
follows:
(a) The Purchaser is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Purchaser's Shares, including investments in securities issued by the
Company, and has requested, received, reviewed and considered all information it
deems relevant in making an informed decision to purchase the Purchaser's
Shares.
(b) The Purchaser is acquiring the number of Shares set forth in
Section 2 above in the ordinary course of its business and for its own account
for investment (as defined for purposes of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvement Act of 1976 and the regulations thereunder) only, and has no present
intention of distributing any of the Purchaser's Shares nor any arrangement or
understanding with any other persons regarding the distribution of such Shares
within the meaning of Section 2(11) of the Securities Act, other than as
contemplated in Section 7 of this Agreement.
(c) The Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Purchaser's Shares except
in compliance with the Securities Act and the rules and regulations promulgated
thereunder (the "Rules and Regulations").
(d) The Purchaser has completed or caused to be completed the Stock
Certificate Questionnaire and the Registration Statement Questionnaire, attached
to this Agreement as Appendices I and II, for use in preparation of the
Registration Statement (as defined in Section 7.1 below), and the answers to the
Questionnaires are true and correct as of the date of this Agreement and will be
true and correct as of the effective date of the Registration Statement;
provided that the Purchaser shall be entitled to update such information by
providing notice thereof to the Company before the effective date of such
Registration Statement.
(e) The Purchaser has, in connection with its decision to purchase the
Purchaser's Shares, relied solely upon the Company Documents and the
representations and warranties of the Company contained in this Agreement.
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(f) The Purchaser is an "accredited investor" within the meaning of
Rule 501 of Regulation D promulgated under the Securities Act.
(g) The Purchaser understands that the Shares are being offered and
sold to it in reliance upon specific exemptions from the registration
requirements of the Securities Act, the Rules and Regulations and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Shares.
(h) Until the filing of the Registration Statement, the Purchaser
agrees with the Placement Agent and the Company to keep confidential all
information concerning this private placement. The Purchaser understands that
the information contained in the Private Placement Memorandum is strictly
confidential and proprietary to the Company and has been prepared from the
Company's publicly available documents and other information and is being
submitted to the Purchaser solely for such Purchaser's confidential use. The
Purchaser agrees to use the information contained in the Private Placement
Memorandum for the sole purpose of evaluating a possible investment in the
Shares and the Purchaser hereby acknowledges that it is prohibited from
reproducing and distributing to third parties the Private Placement Memorandum,
this Purchase Agreement, or any other offering materials or other information
provided by the Company in connection with the Purchaser's consideration of its
investment in the Company, in whole or in part, or divulging or discussing any
of their contents to third parties. Further, the Purchaser understands that the
existence, nature and content of all conversations and presentations, if any,
regarding the Company and this offering must be kept strictly confidential. The
Purchaser understands that the federal securities laws may impose restrictions
on trading based on information regarding this offering. In addition, the
Purchaser hereby acknowledges that unauthorized disclosure of information
regarding this offering may cause the Company to violate Regulation FD and
agrees not to engage in any such unauthorized disclosure. The restrictions in
this paragraph shall cease upon the filing of the Registration Statement.
(i) The Purchaser understands that its investment in the Shares
involves a significant degree of risk and that the market price of the Common
Stock has been and continues to be volatile and that no representation is being
made as to the future value or trading volume of the Common Stock. The Purchaser
has the knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Shares and
has the ability to bear the economic risks of an investment in the Shares.
(j) The 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 Shares.
(k) The Purchaser understands that, until such time as the Registration
Statement has been declared effective or the Shares may be sold pursuant to Rule
144(k) under the Securities Act without any restriction as to the number of
securities as of a particular date that can then be immediately sold, the Shares
may bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the certificates for the
Shares):
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"The securities represented by this certificate were issued in a
transaction that was not registered under the Securities Act of 1933, as
amended or any state or other securities law. The securities may not be
sold, pledged, transferred or assigned in the absence of an effective
registration statement for the securities under said Act, or an opinion of
counsel, in form, substance and scope reasonably acceptable to the Company,
that registration is not required under said Act or unless sold pursuant to
Rule 144 under said Act."
5.2 Resales of Shares
(a) The Purchaser hereby covenants with the Company not to make any sale
of the Purchaser's Shares without satisfying the requirements of this Agreement,
the Securities Act and the Rules and Regulations, including, in the event of any
resale under the Registration Statement, the prospectus delivery requirements
under the Securities Act, and the Purchaser acknowledges and agrees that such
Shares are not transferable on the books of the Company pursuant to a resale
under the Registration Statement unless the certificate submitted to the
transfer agent evidencing the Purchaser's Shares is accompanied by a separate
officer's certificate
(i) in the form of Appendix III to this Agreement;
(ii) executed by an officer of, or other authorized person designated
by, the Purchaser; and
(iii) to the effect that (A) the Purchaser's Shares have been sold in
accordance with the Registration Statement and (B) the requirement of delivering
a current prospectus has been satisfied.
(b) The Purchaser acknowledges that there may occasionally be times when
the Company determines, in good faith following consultation with its Board of
Directors or a committee thereof, that the use of the prospectus forming a part
of the Registration Statement (the "Prospectus," as further defined in Section
7.3.1 below) should be suspended until such time as an amendment or supplement
to the Registration Statement or the Prospectus has been filed by the Company
and any such amendment to the Registration Statement is declared effective by
the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Exchange Act. The Purchaser hereby
covenants that it will not sell any Shares pursuant to the Prospectus during the
period commencing at the time at which the Company gives the Purchaser written
notice of the suspension of the use of the Prospectus and ending at the time the
Company gives the Purchaser written notice that the Purchaser may thereafter
effect sales pursuant to the Prospectus. The Company may, upon written notice to
the Purchasers, suspend the use of the Prospectus one or more times for up to an
aggregate of sixty (60) days in any 365-day period (less the number of days in
such 365-day period that the Purchasers must suspend their use of the Prospectus
pursuant to the first sentence of this paragraph) based on the reasonable
determination of the Company's Board of Directors that there is a significant
business purpose for such determination, such as pending corporate developments,
public filings with the Commission or similar events. The Company shall in no
event be required to disclose the business purpose for which it has suspended
the use of the Prospectus if the Company determines in its good faith judgment
that the business purpose
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should remain confidential. In addition, the Company shall notify each Purchaser
(i) of any request by the Commission for an amendment or any supplement to such
Registration Statement or any related prospectus, or any other information
request by any other governmental agency directly relating to this Offering, and
(ii) of the issuance by the Commission of any stop order suspending the
effectiveness of such Registration Statement or of any order preventing or
suspending the use of any related prospectus or the initiation or threat of any
proceeding for that purpose.
(c) The Purchaser further covenants to notify the Company promptly of the
sale of any of its Shares, other than sales pursuant to a Registration Statement
contemplated in Section 7 of this Agreement or sales upon termination of the
transfer restrictions pursuant to Section 7.4 of this Agreement.
5.3 Due Execution, Delivery and Performance
The Purchaser represents and warrants to the Company as follows:
(a) The Purchaser has full right, power authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Purchaser and constitutes
a valid and binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms.
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and the
fulfillment of the terms of this Agreement have been duly authorized by all
necessary corporate, agency or other action and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Purchaser pursuant to, any contract, indenture, mortgage, loan agreement, deed,
trust, note, lease, sublease, voting agreement, voting trust or other instrument
or agreement to which the Purchaser is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Purchaser is subject,
nor will such action result in any violation of the provisions of the charter or
bylaws of the Purchaser or any applicable statute, law, rule, regulation,
ordinance, decision, directive or order.
5.4 Prohibition on Shorting
The Purchaser represents, warrants and covenants to each of the Other
Purchasers and the Company that the Purchaser, its affiliates and related
entities, (a) has not held, is not currently holding and will not hold any (i)
short positions in the Company's securities or (ii) put or other option to
dispose of the Company's securities, and (b) has not entered into and will not
enter into any transaction that has the effect of or is equivalent to selling
short the Company's securities. The parties to this Agreement intend that each
of the Purchasers and the Company be direct beneficiaries of the rights and
benefits arising from the representations, warranties and covenants made by the
Purchaser under this Section 5.4 and expressly acknowledge and agree that any
such beneficiary may exercise and enforce such rights and benefits.
5.5 Reliance by the Placement Agent
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The Purchaser hereby acknowledges that the Placement Agent may rely on the
representations, warranties and covenants set forth in this Section 5 as if such
representations, warranties and covenants were made to the Placement Agent
directly.
6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser in this Agreement and in the certificates for the Purchaser's
Shares delivered pursuant to this Agreement shall survive the execution of this
Agreement, the delivery to the Purchaser of the Purchaser's Shares being
purchased and the payment therefor; provided, that the representations and
warranties contained herein shall survive for a period of only two (2) years
after the Closing Date.
7. Form D Filing; Registration; Compliance with the Securities Act; Covenants
7.1.1 Form D Filing; Registration of Shares
The Company shall file in a timely manner a Form D relating to the sale of
the Shares under this Agreement, pursuant to Securities and Exchange Commission
Regulation D. In addition, the Company shall do the following:
(a) within five (5) business days after the date hereof, prepare and file
with the Commission a Registration Statement on Form S-3 relating to the sale of
the Shares by the Purchasers from time to time on the Nasdaq National Market (or
the facilities of any national securities exchange on which the Company's Common
Stock is then traded) or in privately negotiated transactions (the "Registration
Statement");
(b) provide to the Purchaser any information required to permit the sale
of the Purchaser's Shares under Rule 144A of the Securities Act;
(c) subject to receipt of necessary information from the Purchaser, use
reasonable best efforts to cause the Commission to notify the Company of the
Commission's willingness to declare the Registration Statement effective within
ninety (90) days after the date the Registration Statement is filed by the
Company, but in no event more than one hundred twenty (120) days after the date
hereof;
(d) notify Purchaser promptly upon the Registration Statement, and any
post-effective amendment thereto, being declared effective by the Commission;
(e) prepare and file with the Commission such amendments and supplements
to the Registration Statement and the Prospectus and take such other action, if
any, as may be necessary to keep the Registration Statement effective and notify
the Purchaser of the happening of any event as a result of which the Prospectus,
as then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, until the earlier of (i) three years from the Closing Date; (ii) the
date on which the Purchaser's Shares may
-16-
be resold by the Purchaser without registration and without regard to any volume
limitations by reason of Rule 144(k) under the Securities Act or any other rule
of similar effect or (iii) all of the Shares have been sold pursuant to the
Registration Statement or Rule 144 under the Securities Act or any other rule of
similar effect;
(f) promptly furnish to each of the Purchasers with respect to the Shares
registered under the Registration Statement such reasonable number of copies of
the Prospectus, including any preliminary prospectus and supplements to or
amendments of the Prospectus, as the Purchaser may reasonably request, in order
to facilitate the public sale or other disposition of all or any of the Shares
by the Purchasers; provided, however, that the obligation of the Company to
deliver copies of prospectuses to the Purchaser shall be subject to the receipt
by the Company of reasonable assurances from the Purchaser that the Purchaser
will comply with the applicable provisions of the Securities Act and such other
securities or blue sky laws as may be applicable in connection with any use of
such prospectuses and the resale of the Shares;
(g) during the period when copies of the Prospectus are required to be
delivered under the Securities Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the rules
and regulations promulgated thereunder;
(h) file documents required of the Company for customary Blue Sky
clearance in all states requiring Blue Sky clearance, upon request by the
Purchaser; provided, however, that the Company shall not be required to qualify
to do business or consent to service of process in any jurisdiction in which it
is not now so qualified or has not so consented; and
(i) bear all expenses in connection with the procedures in paragraphs (a)
through (h) of this Section 7.1 and the registration of the Shares pursuant to
the Registration Statement.
7.1.2
In the event that the Registration Statement is not declared effective
on or before the 30/th/ day following the Closing Date (the "Penalty Date"), the
Company shall pay to each Purchaser liquidated damages in an amount equal to
0.25% of the total purchase price of the Shares purchased by such Purchaser
pursuant to this Agreement for each week after the Penalty Date that the
Registration Statement is not declared effective.
7.2 Transfer of Shares After Registration
The Purchaser agrees that it will not effect any disposition of the
Purchaser's Shares or its right to purchase the Purchaser's Shares that would
constitute a sale within the meaning of the Securities Act, except as
contemplated in the Registration Statement referred to in Section 7.1 or as
otherwise permitted by law, and that it will promptly notify the Company of any
changes in the information set forth in the Registration Statement regarding the
Purchaser or its plan of distribution.
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7.3 Indemnification
For the purpose of this Section 7.3, the term "Registration Statement"
shall include any preliminary or final prospectus, exhibit, supplement or
amendment included in or relating to the Registration Statement referred to in
Section 7.1.
7.3.1 Indemnification by the Company
The Company agrees to indemnify and hold harmless the Purchaser and each
person, if any, who controls any Purchaser within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses, joint or
several, to which the Purchaser or such controlling person may become subject,
under the Securities Act, the Exchange Act, or any other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably withheld),
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, including the Prospectus, financial statements and
schedules, and all other documents filed as a part thereof, as amended at the
time of effectiveness of the Registration Statement, including any information
deemed to be a part thereof as of the time of effectiveness pursuant to
paragraph or the Prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state in any of them a material fact required to
be stated therein or necessary to make the statements in any of them, in light
of the circumstances under which they were made, not misleading, or arise out of
or are based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained in this Agreement, or any failure of the
Company to perform its obligations under this Agreement or under applicable law,
and will reimburse the Purchaser and each such controlling person for any
reasonable legal and other expenses as such expenses are reasonably incurred by
the Purchaser or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, the Prospectus or any amendment or supplement of the
Registration Statement or Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Purchaser
expressly for use in the Registration Statement or the Prospectus, or (ii) the
failure of the Purchaser to comply with the covenants and agreements contained
in Sections 5.2 or 7.2 of this Agreement respecting resale of the Purchaser's
Shares, or (iii) the inaccuracy of any representations made by the Purchaser in
this Agreement or (iv) any untrue statement or omission of a material fact
required to make such statement not misleading in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Purchaser
before the pertinent sale or sales by the Purchaser.
-18-
7.3.2 Indemnification by the Purchaser
The Purchaser will severally and not jointly indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages, liabilities or expenses to which the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Purchaser, which consent shall not be
unreasonably withheld) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon (i) any failure on the part of the Purchaser to comply with the
covenants and agreements contained in Sections 5.2 or 7.2 of this Agreement
respecting the sale of the Purchaser's Shares or to perform its obligations
under applicable federal or state securities laws or (ii) the inaccuracy of any
representation made by the Purchaser in this Agreement or (iii) any untrue or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement to the Registration
Statement or Prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Purchaser expressly for use therein; provided, however, that
the Purchaser shall not be liable for any such untrue or alleged untrue
statement or omission or alleged omission of which the Purchaser has delivered
to the Company in writing a correction before the occurrence of the transaction
from which such loss was incurred, and the Purchaser will reimburse the Company,
each of its directors, each of its officers who signed the Registration
Statement or controlling person for any legal and other expense reasonably
incurred by the Company, each of its directors, each of its officers who signed
the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
7.3.3 Indemnification Procedure
(a) Promptly after receipt by an indemnified party under this Section 7.3
of notice of the threat or commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 7.3, promptly notify the indemnifying party in writing of the
claim; but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party for contribution
or otherwise under the indemnity agreement contained in this Section 7.3 to the
extent it is not prejudiced as a result of such failure.
(b) In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel
-19-
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it or other indemnified parties that are
inconsistent with those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7.3 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless:
(i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel,
approved by such indemnifying party representing all of the indemnified parties
who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of action, in each
of which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party. Notwithstanding the provisions of this
Section 7.3, the Purchaser shall not be liable for any indemnification
obligation under this Agreement, if the Purchaser shall not have sold Shares
pursuant to the Registration Statement, in excess of the gross proceeds paid by
such Purchaser for shares purchased hereunder or, if the Purchaser shall have
sold Shares pursuant to the Registration Statement, in excess of the amount of
net proceeds received by the Purchaser from the sale of the Purchaser's Shares.
7.3.4 Contribution
If the indemnification provided for in this Section 7.3 is required by its
terms but is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party under this Section 7.3 in respect to any
losses, claims, damages, liabilities or expenses referred to in this Agreement,
then each applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any losses, claims, damages,
liabilities or expenses referred to in this Agreement
(a) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Purchaser from the placement of Common Stock; or
(b) if the allocation provided by clause (a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (a) above but the relative fault of the
Company and the Purchaser in connection with the statements or omissions or
inaccuracies in the representations and warranties in this Agreement that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations.
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The respective relative benefits received by the Company on the one hand
and each Purchaser on the other shall be deemed to be in the same proportion as
the amount paid by such Purchaser to the Company for the Shares purchased by
such Purchaser that were sold pursuant to the Registration Statement bears to
the difference (the "Difference") between the amount such Purchaser paid for the
portion of the Shares that were sold pursuant to the Registration Statement and
the amount received by such Purchaser from such sale. The relative fault of the
Company and each Purchaser shall be determined by reference to, among other
things, whether the untrue or alleged statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation or warranty relates to information supplied by
the Company or by such Purchaser and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission and/or its distribution. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7.3.3, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in Section 7.3.3 with respect to the notice of the threat
or commencement of any action shall apply if a claim for contribution is to be
made under this Section 7.3.4; provided, however, that no additional notice
shall be required with respect to any threat or action for which notice has been
given under Section 7.3 for purposes of indemnification. The Company and the
Purchaser agree that it would not be just and equitable if contribution pursuant
to this Section 7.3 were determined solely by pro rata allocation (even if the
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
7.3, no Purchaser shall be required to contribute any amount in excess of the
amount by which the Difference exceeds the amount of any damages that such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Purchasers' obligations to contribute pursuant
to this Section 7.3 are several and not joint.
7.4 Termination of Conditions and Obligations
The restrictions imposed by Section 5.2 or Section 7.2 upon the
transferability of the Purchaser's Shares shall cease and terminate as to any
particular number of the Purchaser's Shares upon the passage of two years from
the Closing Date or at such time as an opinion of counsel satisfactory in form
and substance to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.
7.5 Information Available
From the date of this Agreement through the date the Registration Statement
covering the resale of Shares owned by the Purchaser is no longer effective, the
Company will furnish to the Purchaser:
(a) as soon as practicable after available, and in the case of (i) through
(iii), upon the request of Purchaser, one copy of
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(i) its Annual Report to Stockholders, if any (which Annual Report
shall contain financial statements audited in accordance with generally accepted
accounting principles by a national firm of certified public accountants);
(ii) if not included in substance in the Annual Report to
Stockholders, its Annual Report on Form 10-K;
(iii) if not included in substance in its Quarterly Reports to
Stockholders, its quarterly reports on Form 10-Q; and
(iv) a full copy of the Registration Statement covering the Shares
(the foregoing, in each case, excluding exhibits; provided however such exhibits
shall be submitted to the Purchaser upon the request of the Purchaser);
(b) upon the request of the Purchaser, a reasonable number of copies of
the Prospectus to supply to any other party requiring the Prospectus.
7.6 Rule 144 Information
Until the earlier of (i) the date on which the Purchaser's Shares may be
resold by the Purchaser without registration and without regard to any volume
limitations by reason of Rule 144(k) under the Securities Act or any other rule
of similar effect or (ii) all of the Purchaser's Shares have been sold pursuant
to the Registration Statement or Rule 144 under the Securities Act or any other
rule of similar effect, the Company shall file all reports required to be filed
by it under the Securities Act, the Rules and Regulations and the Exchange Act
and shall take such further action to the extent required to enable the
Purchasers to sell the Shares pursuant to Rule 144 under the Securities Act (as
such rule may be amended from time to time).
7.7 Stock Option Matters and Prohibition on Toxics
The Company shall, within thirty (30) days of the Closing Date, adopt such
amendments to, with respect to (i), (ii) and (v) below, the Company's stock
option plans and Bylaws, and, with respect to (iii) and (iv) below, the
Company's Bylaws (together, the "Stock Option Plan and Bylaw Amendments") to
provide that, unless approved by a majority vote of the shares of common stock
outstanding, the company shall not:
(i) grant any stock option, including stock appreciation right, with
an exercise price that is less than 100% of the fair market value of the
underlying stock on the date of grant;
(ii) reduce the exercise price of any stock option, including stock
appreciation right, outstanding or to be granted in the future; cancel and
re-grant options at a lower exercise price (including entering into any "6 month
and 1 day" cancellation and re-grant scheme), whether or not the cancelled
options are put back into the available pool for grant; replace underwater
options with restricted stock in an exchange, buy-back or other scheme; or
replace any options with new options having a lower exercise price or
accelerated vesting schedule in an exchange, buy-back or other scheme;
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(iii) sell or issue any security of the Company convertible,
exercisable or exchangeable into shares of common stock, having a conversion,
exercise or exchange price per share that is subject to downward adjustment
based on the market price of the common stock at the time of conversion,
exercise or exchange of such security into common stock (except for appropriate
adjustments made to give effect to any stock splits or stock dividends); or
(iv) enter into (a) any equity line or similar agreement or
arrangement; or (b) any agreement to sell common stock (or any security
convertible, exercisable or exchangeable into shares of common stock ("Common
Stock Equivalent")) at a per share price (or, with respect to a Common Stock
Equivalent, at a conversion, exercise or exchange price, as the case may be
("Equivalent Price")) that is fixed after the execution date of the agreement,
whether or not based on any predetermined price-setting formula or calculation
method. Notwithstanding the foregoing provisions of this Section 7.7, however, a
price protection clause shall be permitted in an agreement for sale of common
stock or Common Stock Equivalent, if such clause provides for an adjustment to
the price per share of common stock or, with respect to a Common Stock
Equivalent, to the Equivalent Price (provided that such price or Equivalent
Price is fixed on or before the execution date of the agreement)(the "Fixed
Price") in the event that the Company, during the period beginning on the date
of the agreement and ending no later than 90 days after the closing date of the
transaction, sells shares of common stock or Common Stock Equivalent to another
investor at a price or Equivalent Price, as the case may be, below the Fixed
Price.
(v) amend or repeal any of the provisions relating to (i) to (iv)
above.
Upon the adoption of the Stock Option Plan and Bylaw Amendments, the
Company shall promptly furnish a copy of such amendments to the Purchasers. The
Company agrees that, prior to the adoption of the Stock Option Plan and Bylaw
Amendments by all necessary corporate action of the Company as described above,
the Company shall not conduct any of the actions specified in (i), (ii), (iii)
or (iv) above of this Section 7.7.
8. Broker's Fee
The Purchaser acknowledges that the Company intends to pay to the Placement
Agent and ABN AMRO Incorporated a fee in respect of the sale of the Shares to
the Purchasers. Each of the parties to this Agreement hereby represents that, on
the basis of any actions and agreements by it, there are no other brokers or
finders entitled to compensation in connection with the sale of the Shares to
the Purchasers. The Company shall indemnify and hold harmless the Purchaser from
and against all fees, commissions or other payments owing by the Company or the
Other Purchasers to the Placement Agent, ABN AMRO Incorporated or any other
person or firm acting on behalf of the Company hereunder.
9. Notices
All notices, requests, consents and other communications under this
Agreement shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be delivered as addressed as follows:
(a) if to the Company, to:
-23-
▇▇▇▇▇▇▇ Technology, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Rock, Esq.
or to such other person at such other place as the
Company shall designate to the Purchaser in writing;
and
(b) if to the Purchaser, at its address as set forth on the signature page
to this Agreement, or at such other address or addresses as may have been
furnished to the Company in writing.
Such notice shall be deemed effectively given upon confirmation of receipt
by facsimile, one business day after deposit with such overnight courier or
three days after deposit of such registered or certified airmail with the U.S.
Postal Service, as applicable.
10. Modification; Amendment
This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and each of the Purchasers.
11. Termination
This Agreement may be terminated by the Purchaser if the Closing has not
occurred on or before one hundred twenty (120) days from the date of this
Agreement. This Agreement may be terminated by the Company if the Closing has
not occurred on or before one hundred eighty (180) days from the date of this
Agreement; provided, the Company has used its reasonable best efforts to cause
--------
the Commission to declare the Registration Statement effective.
12. Headings
The headings of the various sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be part of this
Agreement.
13. Severability
If any provision contained in this Agreement should be held to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby.
14. Governing Law; Jurisdiction
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This Agreement shall be governed by and construed in accordance with
the laws of the state of Delaware and the federal law of the United States of
America. The parties hereto hereby submit to the jurisdiction of the courts of
the United States of America sitting in the State of Wisconsin, over any action,
suit, or proceeding arising out of or relating to this Agreement. Nothing herein
shall affect the right of the Purchaser to serve process in any manner permitted
by law or limit the right of the Purchaser to bring proceedings against the
Company in the competent courts of any other jurisdiction or jurisdictions.
15. Counterparts
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party to this Agreement and delivered to
the other parties.
[Signature pages follow]
-25-
Share Purchase Agreement
Signature Page
In Witness Whereof, the parties to this Agreement have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
▇▇▇▇▇▇▇ Technology, Inc.,
By_______________________________
Name: __________________________
Its: ___________________________
_________________________________
[Name of Purchaser]
By: ____________________________
Name: __________________________
Title: _________________________
Address:
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Appendix I
▇▇▇▇▇▇▇ TECHNOLOGY, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be registered in (this is the
name that will appear on your stock certificate(s)). You may use a
nominee name if appropriate:
__________________________________
2. The relationship between the Purchaser of the Purchaser's Shares and
the Registered Holder listed in response to item 1 above:______________
3. The mailing address of the Registered Holder listed in response to item
1 above:
__________________________________
__________________________________
__________________________________
__________________________________
4. The Social Security Number or Tax Identification Number of the
Registered Holder listed in response to item 1 above:
5. Special Instructions:
______________________________________________________________
______________________________________________________________
______________________________________________________________
Appendix II
▇▇▇▇▇▇▇ TECHNOLOGY, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the Registration
Statement, please state your or your organization's name exactly as it should
appear in the Registration Statement:
_______________________________________________________
2. Please provide the number of shares that you or your organization
will own immediately after Closing, including those Shares purchased by you or
your organization pursuant to this Purchase Agreement and those shares purchased
by you or your organization through other transactions:
_____________________________________________
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
______________________________________________________________
______________________________________________________________
______________________________________________________________
2.
Appendix III
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, an officer of, or other person duly authorized by
________________________________________________________________________________
[fill in official name of individual or institution]
hereby certifies that he/she/it is the Purchaser of the shares evidenced by the
attached certificate, and as such, sold such shares on ________________, 200__
in accordance with Registration Statement number 333-________________, and
complied with the requirement of delivering a current prospectus in connection
with such sale.
Print or Type:
Name of Purchaser (Individual or Institution):
________________________________________________________________________________
Name of Individual representing Purchaser (if an Institution)
________________________________________________________________________________
Title of Individual representing Purchaser (if an Institution):
________________________________________________________________________________
Signature:
Individual Purchaser or Individual representing Purchaser:
________________________________________________________________________________
3.