Exhibit 2.3
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[Conformed Copy]
STOCK PURCHASE AGREEMENT
by and between
NUTRAMAX PRODUCTS, INC.,
and
CAPE ▇▇▇ INVESTORS, L.L.C.
Dated as of August 12, 1997
TABLE OF CONTENTS
Page
I. PURCHASE AND SALE.............................................2
1.1. Purchase and Sale...............................2
1.2. Purchase Price..................................2
1.3. Closing.........................................2
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY................7
2.1. Due Organization, etc...........................7
2.2. Compliance with Law.............................8
2.3. Authorization; Execution and Delivery
of Agreement....................................8
2.4. No Conflict; No Consent.........................9
2.5. Capital Stock..................................10
2.6. SEC Reports....................................11
2.7. Financial Statements...........................12
2.8. No Brokers.....................................13
2.9. Litigation and Claims..........................13
2.10. Use of Proceeds................................13
2.11. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Matters......................13
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............14
3.1. Due Organization, etc..........................14
3.2. Authorization; Execution and Delivery
of Agreement...................................14
3.3. No Conflict; No Consent........................14
3.4. No Brokers.....................................15
3.5. Litigation and Claims..........................15
3.6. Investment Purposes............................15
3.7. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Matters......................16
IV. COVENANTS OF THE COMPANY....................................17
4.1. Conduct of Business............................17
4.2. Exchange of Stock Certificates.................18
4.3. Lost, Stolen, Destroyed or Mutilated
Stock Certificates.............................18
4.4. Course of Dealings with AWC....................18
4.5. Board Representation...........................18
4.6. Additional Financing Commitment................19
V. COVENANTS OF THE PURCHASER AND THE COMPANY...................19
5.1. Access; Confidentiality........................19
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5.2. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act Filings................ 20
5.3. Public Disclosure and Confidentiality........ 21
5.4. Certain Notifications........................ 21
5.5. Efforts to Consummate; Further Actions....... 21
5.6. Standstill Obligations of the Purchaser...... 22
VI. REGISTRATION RIGHTS....................................... 28
6.1. "Piggyback" Registration..................... 28
6.2. Demand Registration.......................... 29
6.3. General Provisions........................... 31
6.4. Information, Documents, Etc.................. 33
6.5. Expenses..................................... 33
6.6. Cooperation.................................. 34
6.7. Action to Suspend Effectiveness; Supplement
to Registration Statement.................... 35
6.8. Indemnification.............................. 37
VII. INDEMNIFICATION.......................................... 43
7.1. Indemnification by the Company............... 43
7.2. Indemnification by the Purchaser............. 44
VIII. TERMINATION............................................ 44
8.1 Termination.................................... 44
IX. GENERAL PROVISIONS........................................ 46
9.1. Survival of Representations, Warranties
and Agreements............................... 46
9.2. Notices...................................... 46
9.3. General...................................... 47
9.4. Governing Law................................ 48
9.5. Severability of Provisions................... 48
9.6. Captions..................................... 49
9.7. Expenses..................................... 49
9.8. Equitable Relief............................. 50
9.9. Definitions.................................. 50
SCHEDULE 2.5(b)
SCHEDULE 5.6
ii
STOCK PURCHASE AGREEMENT (this "Agreement") dated as of August 12,
1997 by and between NUTRAMAX PRODUCTS, INC., a Delaware corporation (the
"Company"), and CAPE ▇▇▇ INVESTORS, L.L.C., a Delaware limited liability company
(the "Purchaser").
WHEREAS, the Purchaser wishes to purchase from the Company, and the
Company wishes to sell to the Purchaser, a number of shares (the "Shares") of
the Company's Common Stock, par value $0.001 per share (the "Common Stock"),
determined in accordance with the provisions hereof;
WHEREAS, the Purchaser and the Company are entering into this
Agreement to provide for such purchase and sale and to establish various rights
and obligations in connection therewith;
WHEREAS, the purchase of the Shares hereunder is being made in
connection with, and as part of, the acquisition (the "Asset Acquisition") by
the Company of certain of the assets of American White Cross, Inc., a Delaware
corporation ("White Cross"), and its wholly-owned subsidiary ▇▇▇▇▇▇
Manufacturing Corporation, a New Jersey corporation ("▇▇▇▇▇▇" and, collectively
with White Cross, "AWC"), debtors and debtors in possession in chapter 11
proceedings pending before the United States Bankruptcy Court for the District
of Delaware, on terms and conditions set forth in that certain Asset Purchase
Agreement (the "Asset Purchase Agreement"), dated as of July 21, 1997, among the
Company, White Cross and ▇▇▇▇▇▇ and previously approved by the Purchaser; and
WHEREAS, the proceeds from the sale of the Shares, together with such
additional debt financing as the Company shall obtain, shall be used to fund the
consideration paid for the Asset Acquisition by the Company;
NOW THEREFORE, in consideration of these premises and other good and
valuable consideration, the parties hereto hereby agree as follows:
I.PURCHASE AND SALE
1.1. Purchase and Sale. Upon the terms and subject to the conditions
set forth in this Agreement, the Company agrees to issue, sell and deliver to
the Purchaser, and the Purchaser agrees to purchase from the Company, 1,405,000
Shares; provided, however, that, at the Company's option on notice to the
Purchaser given no less than ten days before the Closing (as hereinafter
defined), the number of Shares purchased and sold hereunder may be reduced, but
not below 846,154 Shares. The Shares purchased and sold hereunder shall be free
and clear of any liens, security interests, pledges, voting agreements, claims,
options and encumbrances of every kind, character and description whatsoever
("Encumbrances"), except as contemplated by this Agreement.
1.2. Purchase Price. As consideration for the sale of the Shares, at
the Closing the Purchaser shall pay the Company, in immediately available funds,
a purchase price of $13.00 per share.
1.3. Closing. (a) The closing of the transactions provided for in
this Agreement (the "Closing") shall take place simultaneously with the closing
of the Asset Acquisition pursuant to the terms of the Asset Purchase Agreement
at the offices of ▇▇▇▇▇▇▇, Procter & ▇▇▇▇, LLP, Exchange Place, Boston,
Massachusetts.
(b) Conditions Precedent to the Purchaser's Obligations. The
obligation of the Purchaser to consummate the transactions described in this
Agreement shall be subject to the satisfaction of the following conditions on or
prior to the Closing: (i) the representations and warranties of the Company
contained in this Agreement shall have been true and correct when
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made and shall be true and correct in all material respects on the date of
Closing with the same effect as if they were made on such date; (ii) the Company
shall have performed and complied in all material respects with all covenants
and agreements required by this Agreement to be performed or complied with by
the Company on or prior to the Closing; (iii) the Company shall have delivered
to the Purchaser a certificate, dated the date of Closing and signed by a duly
authorized officer of the Company, certifying as to the matters described in the
foregoing clauses (i) and (ii); (iv) no action, suit, investigation or
proceeding shall have been instituted before any court, administrative body or
governmental agency (a "Governmental Entity") which seeks to restrain the
consummation of, prohibit or declare illegal, or obtain a material amount of
damages arising from the Asset Acquisition or the transactions contemplated by
this Agreement and which is likely, in the Purchaser's reasonable judgment, to
be successful on the merits, and no temporary restraining order or injunction
shall have been issued by any Governmental Entity restraining or prohibiting,
and no other Legal Requirement (as hereinafter defined) shall have come into
effect making illegal, the performance of this Agreement or the consummation of
any of the transactions contemplated hereby; (v) all consents, approvals,
permits and authorizations required to be obtained from, and all filings
required to be made with, any Authority (as hereinafter defined) in connection
with the consummation of the transactions contemplated hereby shall have been
obtained or made, and all waiting periods specified under applicable Legal
Requirements (including any such waiting period applicable to the transactions
contemplated hereby under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act")), and all extensions thereof, the
passing of which is required for such consummation, shall have passed, except as
to such consents, approvals,
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permits, authorizations or filings that, individually or in the aggregate, would
not have a material adverse effect on the condition (financial or otherwise),
business, operations, properties, assets or liabilities of the Company and its
Subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse
Effect"); (vi) from and after the date of this Agreement, there shall not have
occurred any changes concerning the Company that, when combined, without
duplication, with all other changes concerning the Company from and after the
date of this Agreement, have had or would reasonably be expected to have a
Material Adverse Effect; (vii) there shall not have occurred a material adverse
change in the material terms of the final agreements entered into between the
Company and its lenders relating to the debt financing to be raised by the
Company in connection with the Asset Acquisition when compared to the material
terms of such debt financing set forth in the letter dated August 6, 1997 from
BankBoston, N.A. to the Company (the "August 6th Commitment Letter"), as such
terms may be amended by the Additional Commitment Letter (as hereinafter
defined) to be delivered to the Purchaser in accordance with Section 4.6 hereof;
and (viii) all conditions precedent to consummation of the Asset Acquisition
shall have been satisfied or waived by the appropriate party, and no amendment
to the Asset Purchase Agreement shall have been executed or agreed to that
increases the purchase price thereunder to more than $50,000,000.00 without the
Purchaser's prior written consent. In the event any of the foregoing conditions
to the Purchaser's obligation to close hereunder is not satisfied on or before
the Closing, the Purchaser may waive such condition and proceed to Closing. As
used herein, "Legal Requirements" shall include laws, regulations, ordinances,
orders, decrees, permits, licenses, consents, approvals, registrations,
authorizations and
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qualifications required by or from any federal, state, local or foreign
governmental or regulatory authority (each, an "Authority").
(c) Conditions Precedent to the Company's Obligations. The
obligation of the Company to consummate the transactions described in this
Agreement shall be subject to the satisfaction of the following conditions on or
prior to the Closing: (i) the representations and warranties of the Purchaser
contained in this Agreement shall have been true and correct when made and shall
be true and correct in all material respects on the date of Closing with the
same effect as if they were made on such date; (ii) the Purchaser shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by the
Purchaser on or prior to the Closing; (iii) the Purchaser shall have delivered
to the Company a certificate, dated the date of Closing and signed by a duly
authorized signatory of the Purchaser, certifying as to the matters described in
the foregoing clauses (i) and (ii); (iv) no action, suit, investigation or
proceeding shall have been instituted before any Governmental Entity which seeks
to restrain the consummation of, prohibit or declare illegal, or obtain a
material amount of damages arising from the Asset Acquisition or the
transactions contemplated by this Agreement and which is likely, in the
Company's reasonable judgment, to be successful on the merits and no temporary
restraining order or injunction shall have been issued by any Governmental
Entity restraining or prohibiting, and no other Legal Requirement shall have
come into effect making illegal, the performance of this Agreement or the
consummation of any of the transactions contemplated hereby; (v) all consents,
approvals, permits and authorizations required to be obtained from, and all
filings required to be made with, any Authority in connection with the
consummation of the transactions contemplated hereby shall have been obtained or
made, and all waiting periods specified under applicable Legal
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Requirements (including any such waiting period applicable to the transactions
contemplated hereby under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act), and all extensions
thereof, the passing of which is required for such consummation, shall have
passed, except as to such consents, approvals, permits, authorizations or
filings that, individually or in the aggregate would not have a Material Adverse
Effect; (vi) from and after the date of this Agreement, there shall not have
occurred any changes concerning the Purchaser that, when combined, without
duplication, with all other changes concerning the Purchaser from and after the
date of this Agreement, have had or would reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), business,
operations, properties, assets or liabilities of the Purchaser (a "Purchaser
Material Adverse Effect"); and (vii) all conditions precedent to consummation of
the Asset Acquisition shall have been satisfied or waived by the appropriate
party. In the event any of the foregoing conditions to the Company's obligation
to close hereunder is not satisfied on or before the Closing, the Company may
waive such condition and proceed to Closing.
(d) Company Closing Deliveries. At the Closing, the Company will
deliver to the Purchaser the following:
(i) a stock certificate or certificates representing the
Shares; and
(ii) a certificate of the Secretary of the Company certifying as
to the adoption and effect of resolutions of the Board of
Directors of the Company (the "Board") authorizing the
execution, delivery and performance of this Agreement.
(e) Purchaser Closing Deliveries. At the Closing, the Purchaser will
deliver to the Company the following:
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(i) a certificate of the Managing Member of the Purchaser
certifying as to the adoption and effect of resolutions of
the Purchaser authorizing the execution, delivery and
performance of this Agreement; and
(ii) payment of the purchase price provided by Section 1.2.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. Due Organization, etc. The Company and each of its Subsidiaries
(as hereinafter defined) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, and
each has all requisite corporate power and authority to own, operate and lease
its respective properties and assets and to conduct its respective businesses as
now conducted and is qualified to do business in each state or other
jurisdiction where the nature of its properties, assets or businesses requires
such qualification other than where the failure to be so qualified would not,
individually or in the aggregate have a Material Adverse Effect. All of the
outstanding shares of capital stock of each Subsidiary of the Company are
validly issued, fully paid and non-assessable, other than the shares of capital
stock of foreign Subsidiaries which are not fully paid and which failure to be
fully paid, individually or in the aggregate, does not have a Material Adverse
Effect, and all of such outstanding shares are owned, directly or indirectly, by
the Company free and clear of all Encumbrances, except for liens or security
interests or pledge arrangements involving the capital stock of the Subsidiaries
in favor of the Company's lenders. "Subsidiary" means a corporation or other
business arrangement a majority of the outstanding voting securities or
ownership interests of which is owned, directly or indirectly, by the Company,
by one or more other Subsidiaries or by the Company and one or more other
Subsidiaries.
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2.2. Compliance with Law. The Company and each Subsidiary has
obtained and maintains in full force and effect all permits, licenses, consents,
approvals, registrations, memberships, authorizations and qualifications under
all federal, state, local and foreign laws and regulations, and with all
Authorities, required for the conduct by it of its businesses and the ownership
or possession by it of its properties and assets other than where the failure to
obtain or maintain such permits, licenses, consents, approvals, registrations,
memberships, authorizations or qualifications would not, individually or in the
aggregate, have a Material Adverse Effect. The Company and each Subsidiary are
in compliance with all laws, regulations, ordinances, orders and decrees
(including, without limitation, all environmental and occupational, health and
safety laws) of any Authority applicable to the conduct by the Company and each
Subsidiary of their respective businesses and to their ownership and possession
of their respective properties and assets, other than where the failure so to
comply would not, individually or in the aggregate, have a Material Adverse
Effect.
2.3. Authorization; Execution and Delivery of Agreement. (a) Except
to the extent that the By-laws of, or other rules or regulations promulgated by,
the National Association of Securities Dealers ("NASD") applicable to Nasdaq
SmallCap listed companies may require approval of the issuance of shares
hereunder, the execution and delivery of this Agreement, the issuance and sale
of the Shares to the Purchaser and the consummation of the transactions
contemplated hereby (i) do not require the approval or consent of any
stockholders of the Company and (ii) have been duly authorized by all necessary
corporate action on the part of the Company for all purposes, including Section
203 of the Delaware General Corporation Law. Except to the extent that the By-
laws of, or other rules or regulations promulgated by, the NASD applicable to
Nasdaq SmallCap listed companies may require approval of the issuance of shares
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hereunder, this Agreement has been duly executed and delivered by the Company
and this Agreement constitutes the legal, valid, binding and enforceable
obligation of the Company, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity. The Company has full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder.
(b) Except to the extent that the By-laws of, or other rules or
regulations promulgated by, the NASD applicable to Nasdaq SmallCap listed
companies may require approval of the issuance of shares hereunder, (i) the
Shares have been duly authorized by all necessary corporate action on the part
of the Company, and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration therefor set forth herein, the
Shares will be validly issued, fully paid and non-assessable and (ii) the
Purchaser will acquire valid and marketable title to the Shares, free and clear
of any Encumbrances except as contemplated by this Agreement.
2.4. No Conflict; No Consent. Except to the extent that the By-laws
of, or other rules or regulations promulgated by, the NASD applicable to Nasdaq
SmallCap listed companies may require approval of the issuance of shares
hereunder, the execution and delivery of this Agreement, the issuance and sale
of the Shares to the Purchaser and the consummation of the transactions
contemplated hereby do not, and will not, conflict with, or result in any
violation of or default under, or permit the acceleration of any obligation
under, or the creation or imposition of any Encumbrance on any of the properties
or assets of the Company or any Subsidiary under, (i) any provision of the
certificate of incorporation or by-laws or similar constituent documents of the
Company or any Subsidiary, (ii) any indenture, lease, mortgage, deed of trust,
loan agreement or other agreement or instrument, or any permit, license,
9
registration, membership, authorization or qualification from any Authority, of
the Company or any Subsidiary or (iii) any judgment, order, decree, statute,
law, ordinance, rule or regulation of any Authority to which the Company or any
of its Subsidiaries is a party or by which any of them is bound, other than, in
the case of clause (ii) above, where such conflict, violation, default,
acceleration or Encumbrance would not, individually or in the aggregate, have a
Material Adverse Effect. No consent, approval, order or authorization of, or
registration, declaration, filing with or notice to, any Authority or third
party is required to be made or obtained by the Company or any Subsidiary
(including, without limitation, under any environmental or occupational, health
and safety laws) in order to execute or deliver this Agreement, issue and sell
the Shares or to consummate the transactions contemplated hereby, other than (A)
as may be required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, (B) as a result of the periodic
reporting requirements under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and (C) the listing requirements of the NASDAQ SmallCap
Market, or except where the failure to make or obtain any such consent,
approval, order, authorization, registration, declaration, filing or notice
would not have a Material Adverse Effect.
2.5. Capital Stock. (a) The authorized capital stock of the Company
consists of 20,000,000 shares of common stock, par value $0.001 per share (the
"Common Stock"), of which, as of June 28, 1997, 4,763,014 shares were
outstanding and 4,037,258 shares were held in treasury and 1,705,839 shares are
reserved for future issuance pursuant to any option, warrant or other rights
agreement, arrangement or other commitment. All of the issued and outstanding
shares of Common Stock have been validly issued and are fully paid and non-
assessable.
(b) (i) Other than this Agreement and the Asset Purchase Agreement
or as set forth on Schedule 2.5(b) hereto, there are not authorized or
outstanding any subscriptions,
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options, conversion rights, warrants or other agreements, securities or
commitments of any nature whatsoever (whether oral or written and whether firm
or conditional) obligating the Company or any Subsidiary to issue, deliver or
sell, or cause to be issued, delivered or sold, to any person any shares of
Common Stock or any other shares of the capital stock of the Company or any
shares of the capital stock of any Subsidiary, or any securities convertible
into or exchangeable for any such shares, or obligating any such person to
grant, extend or enter into any such agreement or commitment; and (ii) except as
set forth on Schedule 2.5(b) hereto, there is no obligation, contingent or
otherwise, of the Company to repurchase, redeem or otherwise acquire any share
of capital stock or other equity interests of the Company or any Subsidiary. No
class of capital stock of the Company is entitled to preemptive rights.
2.6. SEC Reports. The Company has filed with the Securities and
Exchange Commission (the "Commission") all proxy statements, reports, forms and
other documents required to be filed by it after January 1, 1995 under the
Exchange Act (collectively, the "SEC Reports"). As of their respective dates,
the SEC Reports (i) complied as to form in all material respects with the
applicable requirements of the Exchange Act and the rules and regulations of the
Commission thereunder and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
2.7. Financial Statements. (a) The financial statements (including
any related notes) included in the SEC Reports (the "Financial Statements") have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as may be noted
therein) and fairly present the consolidated financial condition, results of
operations and cash flows of the Company and its consolidated Subsidiaries
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as of the dates thereof and for the periods ended on such dates (in each case
subject, as to interim statements, to changes resulting from year-end
adjustments (none of which were or, except as otherwise disclosed to the
Purchaser in writing, will be material in amount or effect) and except as
permitted by Form 10-Q pursuant to Section 13 or 15(d) of the Exchange Act).
(b) On the date hereof, except as disclosed in the SEC Reports,
neither the Company nor any Subsidiary has any liabilities or obligations of any
nature, whether accrued, absolute, contingent or otherwise, and whether due or
to become due and whether or not required to be disclosed in the SEC Reports,
other than liabilities that have been disclosed to the Purchaser in writing,
have been incurred in the ordinary course of business or are not in the
aggregate material to the Company and its Subsidiaries taken as a whole. Since
September 28, 1996, the Company has not declared or paid any dividends to any of
its stockholders.
(c) Since September 28, 1996, the Company and each of its
Subsidiaries have conducted their respective businesses only in the ordinary
course in substantially the same manner as theretofore conducted and the Company
and its Subsidiaries, taken as a whole, have not undergone or suffered any
Material Adverse Effect, except as otherwise disclosed to the Purchaser in
writing.
2.8. No Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
the Company.
2.9. Litigation and Claims. There is no claim, prosecution, suit,
action, arbitration, proceeding, investigation or review pending or, to the
knowledge of the Company, threatened against or affecting the Company, any of
its Subsidiaries or any of their respective properties or assets (nor, to the
knowledge of the Company, are there any facts or circumstances
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providing a basis for any such claim, prosecution, suit, action, arbitration,
proceeding, investigation or review) which, if adversely determined, would be
reasonably likely to have a Material Adverse Effect or would prohibit or impose
any limitations on the Purchaser's ownership of the Shares or would prohibit or
make illegal the acceptance for payment, purchase of or payment for the Shares.
Neither the Company nor any of its Subsidiaries is in default with respect to
any judgment, decree, injunction, rule or order of any court, arbitrator or
Authority outstanding against or binding upon the Company or any of its
Subsidiaries, other than where any such defaults would not, individually or in
the aggregate, have a Material Adverse Effect.
2.10. Use of Proceeds. The Company intends to use the proceeds from
the sale of Shares solely for the Asset Acquisition.
2.11. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Matters. The Company, taken together with the
"ultimate parent entity" of the Company, if any, and all entities which the
Company and such ultimate parent entity control directly or indirectly, is not a
person which has total assets or annual net sales (as such terms are defined
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act) of $100,000,000 or more for purposes of 15
U.S.C. ss.18a(a) of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
III. REPRESENTATIONS AND WARRANTIES OF
THE PURCHASER
The Purchaser represents and warrants to the Company that:
3.1. Due Organization, etc. The Purchaser is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware. The Purchaser has no direct or indirect subsidiaries.
3.2. Authorization; Execution and Delivery of Agreement. The
Purchaser has all requisite power and authority to execute this Agreement, to
perform its obligations hereunder
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and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser
and this Agreement constitutes the legal, valid, binding and enforceable
obligation of the Purchaser, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity.
3.3. No Conflict; No Consent. The execution and delivery of this
Agreement, the issuance and sale of the Shares to the Purchaser and the
consummation of the transactions contemplated hereby do not, and will not,
conflict with, or result in any violation of or default under, or permit the
acceleration of any obligation under, or the creation or imposition of any
Encumbrance on any of the properties or assets of the Purchaser under, (i) any
provision of the certificate of organization and limited liability company
agreement or similar constituent documents of the Purchaser, (ii) any indenture,
lease, mortgage, deed of trust, loan agreement or other agreement or instrument,
or any permit, license, registration, membership, authorization or qualification
from any Authority, of the Purchaser or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation of any Authority to which the
Purchaser is a party or by which it is bound, other than, in the case of clause
(ii) above, where such conflict, violation, default, acceleration or Encumbrance
would not, individually or in the aggregate, have a Purchaser Material Adverse
Effect. Other than as required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act or as a result of
the reporting requirements of the Exchange Act, no consent, approval, order or
authorization of, or registration, declaration, filing with or notice to, any
Authority is required to be made or obtained by the Purchaser in order to
execute or deliver this Agreement or to consummate the transactions contemplated
hereby.
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3.4. No Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
the Purchaser.
3.5. Litigation and Claims. There is no claim, prosecution, suit,
action, arbitration, proceeding, investigation or review pending or, to the
knowledge of the Purchaser, threatened against or affecting the Purchaser, or
any of its properties or assets which, if adversely determined, would prohibit
or make illegal the purchase of or payment for the Shares.
3.6. Investment Purposes. (a) The Purchaser, by reason of its
business and financial experience, has such knowledge, sophistication and
experience in business and financial matters as to be capable of evaluating the
merits and risks of its investment in the Shares, and is purchasing the Shares
hereunder for its own account, for investment only and not with a view to, or
any present intention of, effecting a distribution of such securities or any
part thereof. The Purchaser acknowledges that the Shares to be purchased
hereunder have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), or the securities laws of any state or other
jurisdiction and cannot be disposed of unless they are subsequently registered
under the Securities Act and any applicable state laws or exemption from such
registration is available.
(b) The Purchaser is an "accredited investor" as that term is
defined in Rule 501 promulgated under the Securities Act.
(c) The Purchaser has had the opportunity to ask questions and to
receive answers concerning the financial condition, operations and prospects of
the Company and the terms and conditions of the Purchaser's investment, as well
as the opportunity to obtain any additional information necessary to verify the
accuracy of information furnished in connection therewith that the Company
possesses or can acquire without unreasonable effort or expense.
15
3.7. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Matters. The Purchaser, taken together with
the "ultimate parent entity" of the Purchaser, if any, and all entities which
the Purchaser and such ultimate parent entity control directly or indirectly, is
not a person which has total assets or annual net sales (as such terms are
defined under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act) of $100,000,000 or more for purposes of
15 U.S.C. ss.18a(a) of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
IV.COVENANTS OF THE COMPANY
The Company covenants and agrees that:
4.1. Conduct of Business. Except as specifically consented to in
writing by the Purchaser or expressly contemplated by this Agreement or by the
Asset Purchase Agreement, with no amendment being made to the Asset Purchase
Agreement that provides for a purchase price in excess of $50,000,000.00 or that
provides for the issuance of any stock of any class other than pursuant to this
Agreement, during the period from the date of this Agreement up to and including
the date of the Closing, the Company shall, and shall cause each of its
Subsidiaries to, (i) conduct its business in the usual and ordinary course
consistent with past practice and use its reasonable best efforts to preserve
its business organization intact, to keep available the services of its key
employees, material independent contractors and material consultants currently
employed, to preserve the present relationships with customers, suppliers and
other Persons (as hereinafter defined) with whom it has significant business
relations, to maintain books and records in the usual and ordinary manner, and
to preserve the goodwill and ongoing business; and (ii) except pursuant to
agreements or commitments entered into by the Company or its Subsidiaries prior
to the date of this Agreement and listed on Schedule 2.5(b) hereto, not issue or
sell (or agree to issue or sell) any stock of any class or any other securities,
or any options, warrants, conversion or other rights to purchase any such
securities, or grant, or agree to grant,
16
any such options or modify or alter the terms of any of the above. As used
herein, "Person" means any individual, partnership, joint venture, firm,
corporation, association, trust or other entity or any government or political
subdivision or agency, department or instrumentality thereof.
4.2. Exchange of Stock Certificates. Promptly upon surrender of any
certificates representing Shares at the office of the Company, the Company will,
at its expense, execute and deliver to the Purchaser a new certificate or
certificates in denominations specified by the Purchaser for an aggregate number
of Shares equal to the number of Shares represented by the certificates
surrendered.
4.3. Lost, Stolen, Destroyed or Mutilated Stock Certificates. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of any certificate for Shares and, in the case of loss, theft or
destruction, upon delivery of an indemnity satisfactory to the Company (which,
in the case of the Purchaser may be an undertaking by the Purchaser to so
indemnify the Company), or, in the case of mutilation, upon surrender and
cancellation thereof, the Company will issue a new certificate of like tenor for
a number of Shares equal to the number of Shares represented by the certificate
lost, stolen, destroyed or mutilated.
4.4. Course of Dealings with AWC. The Company shall keep the
Purchaser apprised of all material developments in connection with the Asset
Acquisition, including any amendment of the Asset Purchase Agreement or waiver
of any terms or conditions thereof.
4.5. Board Representation. As promptly as practicable after the
Closing, the Company shall take or cause to be taken all necessary actions to
appoint or elect ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to the Board, which is currently composed of
four members. At each annual meeting of
17
the stockholders of the Company thereafter, so long as the Purchaser shall own
Shares representing 5% or more of the total issued and outstanding shares of
Common Stock as of the date which is thirty (30) days immediately preceding the
record date of such meeting, the Company shall include in the slate of nominees
for election as the Board at such meeting, one officer or individual member of
the Purchaser designated by the Purchaser (which designee shall not include any
individual whose membership on the Board would be a violation of law), provided
that the Company has consented to such designee, which consent shall not be
unreasonably withheld.
4.6. Additional Financing Commitment. The Company shall provide to
the Purchaser, promptly after receipt thereof by the Company, a copy of the
commitment letter (the "Additional Commitment Letter") relating to an increase
in the aggregate principal amount of the debt financing commitment set forth in
the August 6th Commitment Letter. On or prior to the third calendar day
immediately following the Purchaser's receipt of such copy of the Additional
Commitment Letter, the Purchaser shall notify the Company in writing if the
terms of such Additional Commitment Letter are materially and adversely
different from those contained in the August 6th Commitment Letter (other than
with respect to the aggregate principal amount of the debt financing) and shall
include in such notice whether it elects, as a consequence thereof, to terminate
this Agreement pursuant to Section 8.1(v).
V.COVENANTS OF THE PURCHASER AND THE COMPANY
5.1. Access; Confidentiality. (a) At the reasonable request of the
Purchaser, the Company shall give the officers, attorneys, accountants and other
authorized representatives of the Purchaser access, during normal business hours
and upon reasonable notice, to all of the Company's, and the Subsidiaries'
offices, facilities, properties and personnel. The Company will
18
furnish the representatives of the Purchaser with all such information
concerning the Company and its Subsidiaries as such representatives may
reasonably request and cause the employees, accountants, independent accountants
and attorneys of the Company and its Subsidiaries to cooperate fully with such
representatives in connection with such review and examination and to make full
disclosure to the Purchaser of all material facts concerning the Company and its
Subsidiaries; provided, however, that the Purchaser will hold in strict
confidence and not use for its own benefit (other than in connection with the
transactions contemplated by this Agreement), prior to the Closing, the
documents and information (including all evaluation material relating to
employees) furnished to the Purchaser concerning the Company and its
Subsidiaries; and, if the transactions contemplated by this Agreement shall not
be consummated, such confidence shall be maintained and all such documents and
all copies thereof shall promptly thereafter be returned to the Company. The
Purchaser further agrees that it shall be responsible for any breach of this
Section 5.1 by any of its officers, attorneys, accountants and other authorized
representatives. No investigation by the Purchaser or any of its representatives
pursuant to this Section 5.1 shall affect any representation, warranty or
closing condition of any party hereto.
(b) Chilmark Fund II, L.P. ("Chilmark") agrees that it shall be
bound by the obligations of the Purchaser set forth in Section 5.1(a) as if it
were the Purchaser for purposes of said section.
5.2. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act Filings. Each party covenants and agrees
to file, if required, on a date no later than ten days from the date hereof a
notification and report form pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act with respect
to the purchase by the Purchaser of the Shares pursuant to this Agreement and
will provide promptly any supplemental information that may be requested in
connection therewith. Each party will comply with all reasonable requests of
19
the other party for information necessary in connection with the preparation by
such other party of its notification and report form.
5.3. Public Disclosure and Confidentiality. Each party hereby agrees
that, prior to the Closing, except as required by applicable law (or under the
rules and regulations of the Nasdaq Stock Market (or any national securities
exchange on which the Common Stock is listed)), no press release or public
announcement or communication will be made or caused to be made concerning the
execution or performance of this Agreement, the terms hereof or the transactions
contemplated hereby unless specifically approved in advance by both parties. In
the event that a party views disclosure as required by applicable law (or the
rules and regulations of the Nasdaq Stock Market or any such national stock
exchange) as contemplated by the previous sentence, such disclosing party shall
provide a copy of such disclosure to the other party within a reasonable period
of time prior to such disclosure.
5.4. Certain Notifications. At all times prior to the Closing, each
party hereto shall promptly notify the other party in writing of the occurrence
of any event which will or could reasonably result in the failure of any of the
conditions contained in Article I hereof to be satisfied. Such notice shall be
in additional to and not in lieu of the other notices and communications
provided for herein.
5.5. Efforts to Consummate; Further Actions. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate the
Asset Acquisition and the transactions contemplated by this Agreement.
20
5.6. Standstill Obligations of the Purchaser. (a) As of the date of
this Agreement, none of the Purchaser, Chilmark or any Affiliate (as hereinafter
defined) thereof beneficially owns any shares of Common Stock, except as set
forth on Schedule 5.6. From and after the date of this Agreement until the
Closing, none of the Purchaser or Chilmark (collectively, the "Stockholders") or
any of their Affiliates will acquire any securities issued by the Company or
convertible into or exchangeable for any equity securities of the Company
(collectively referred to as "Stock"), except pursuant to the terms of this
Agreement. For purposes of this Agreement, an "Affiliate" of any person, entity
or corporation shall mean and include (i) any person, entity or corporation, now
or hereafter, directly or indirectly through one or more intermediaries,
controlling, controlled by or under common control with (through the ownership
of voting securities or interests, by contract or otherwise) such person, entity
or corporation, or (ii) any other person, entity or corporation acting in
concert with such person, entity or corporation in connection with the Company
with respect to any matter referred to in Section 5.6(d) of this Agreement or
clauses (a)-(j) of Item 4 of Schedule 13D under the Exchange Act, or with
respect to acquiring, holding, voting or disposing of any Stock. Each of the
Stockholders acknowledges and agrees that a breach of any provision of this
Agreement by any Stockholder or any Affiliate thereof shall constitute a breach
by each Stockholder and that each Stockholder shall be fully liable for any
breach of this Agreement by any other Stockholder or by any Affiliate of any
Stockholder, it being understood that notwithstanding any other provision of
this Agreement, any of the Stockholders and their Affiliates shall be entitled
to act in concert with one another with respect to any action which a
Stockholder or an Affiliate of a Stockholder would be permitted to take
individually hereunder. For the purposes of this Agreement,
21
beneficial ownership shall be determined pursuant to Rule 13d-3 ("Rule 13d-3")
promulgated by the Commission pursuant to the Exchange Act.
(b) Each of the Stockholders hereby jointly and severally covenants
and agrees that from and after the date hereof none of the Stockholders or their
Affiliates will, without the prior written consent of the Company specifically
expressed in a vote adopted after the Closing by the Board, directly or
indirectly, purchase or cause to be purchased or otherwise acquire (other than
pursuant to a stock split, stock dividend or similar transaction) or agree to
acquire, or become or agree to become the beneficial owner of, any additional
Stock, except that the Stockholders and their Affiliates may purchase from time
to time, in the open market or in privately negotiated transactions, up to an
aggregate number of shares of Common Stock which, when added to the shares of
Common Stock then owned by the Stockholders and their Affiliates, would result
in the Stockholders and their Affiliates owning no more than the percentage of
voting securities of the Company held by the Stockholders and their Affiliates
immediately following the Closing. Each of the Stockholders agrees that none of
the Stockholders or their Affiliates will, without the prior written consent of
the Board specifically expressed in a vote adopted by the Board, directly or
indirectly, transfer any shares of Stock now owned or hereafter acquired by
them, except for transfers made: (i) pursuant to the provisions of Section
5.6(c) below, (ii) pursuant to a publicly announced tender offer for any shares
of Stock by any corporation, entity, person or group (other than any of the
Stockholders or their Affiliates) which the Board has voted to recommend to
holders of any shares of Stock, (iii) pursuant to the exercise of the
registration rights provided in Article VI hereof, (iv) pursuant to open market
sales made in accordance with Rule 144 under the Securities Act, including, if
applicable, paragraph (k) thereof or (v) to the members or investors of the
Purchaser, and to their members or investors, by
22
distribution, dissolution or otherwise; provided, however, that in no event
shall any such member or investor who is an Affiliate of either of the
Stockholders be permitted to, directly or indirectly, transfer any shares of
Stock now owned or hereafter acquired, except in accordance with this Section
5.6(b). For purposes of this Agreement, "transfer" shall mean and include any
sale, assignment, gift, pledge, the imposition of any other encumbrance or any
other disposition or any agreement or obligation to do any of the foregoing.
(c) If any Stockholder or any Affiliate thereof desires to sell any
shares of Stock (a "Selling Stockholder") (other than pursuant to clause (ii),
(iii), (iv) or (v) of Section 5.6(b) hereof), the following requirements shall
be satisfied:
(i) The Selling Stockholder shall notify the Company in
writing of the proposed sale (the "Notice of Proposed Transfer"). The Notice of
Proposed Transfer shall identify and provide reasonable information concerning
the background, business experience and business affiliations of the proposed
transferee (the "Transferee"), the purchase price or other consideration, if
any, the number of shares and type of Stock to be transferred and the complete
terms of the proposed transaction.
(ii) For a period of ten (10) business days following the
receipt of the Notice of Proposed Transfer, the Company and/or any substitute
purchaser(s) as designated by the Company (the Company and/or such substituted
purchaser is hereinafter sometimes called the "Buyer") shall have the option to
purchase all, but not less than all, the Stock specified in the Notice of
Proposed Transfer at the price and upon the terms set forthin the Notice of
Proposed Transfer; provided, however, that if the type of consideration that was
to be paid was non-cash consideration, then the amount payable by the Buyer for
such Stock shall be determined in good faith by the Board, after consultation
with the Company's investment banker. In the event that
23
Buyer elects to purchase all, but not less than all, of the Stock specified in
the Notice of Proposed Transfer, it shall give written notice to the Selling
Stockholder of its election, in which case settlement for said Stock shall be
made and the Buyer shall purchase such Stock for such price, in cash within ten
(10) business days after the date the Company receives the Notice of Proposed
Transfer. In the event that Buyer elects not to purchase all of the Stock
specified in the Notice of Proposed Transfer, the Selling Stockholder may
consummate the proposed transfer of said Stock with the Transferee, provided,
however, that such transfer shall not be consummated unless and until such
Transferee agrees in writing to be bound by all of the terms of and to perform
all of the obligations of the Stockholders contained in Section 5.6(b), this
Section 5.6(c) and in Section 5.6(d) of this Agreement in the same manner as if
such Transferee were a party to this Agreement.
(d) Each of the Stockholders hereby agrees that, prior to the date
on which the Stockholders beneficially own collectively less than 0.5% of the
total issued and outstanding shares of Common Stock, none of the Stockholders or
their Affiliates will, directly or indirectly, or will solicit, request, advise,
assist or encourage others, directly or indirectly, to:
(i) form, join in or in any other way participate in a
"partnership, limited partnership, syndicate or other group" within the meaning
of Section 13(d)(3) of the Exchange Act with respect to shares of Stock or
deposit any Stock in a voting trust or similar arrangement or subject any Stock
to any voting agreement or pooling arrangement, other than solely with one or
more other Stockholders or Affiliates with respect to shares of Common Stock
permitted to be owned hereunder;
(ii) solicit proxies or written consents of shareholders with
respect to Stock under any circumstances, or make, or in any way participate in,
any "solicitation" of any
24
"proxy" to vote any shares of Stock, or become a "participant" in any election
contest with respect to the Company (as such terms are defined or used in Rules
14a-1 and 14a-11 under the Exchange Act);
(iii) seek to call, or to request the call of, a special meeting
of the shareholders of the Company or seek to make, or make, a shareholder
proposal, or seek to make or make, any nomination of any candidate as a director
of the Company other than a designee of the Purchaser pursuant to Section 4.5
hereof or any candidate nominated by the Board, at any meeting of the
shareholders of the Company;
(iv) commence or announce any intention to commence any tender
offer for any shares of Stock;
(v) make a proposal or bid with respect to, announce any
intention or desire to make, or discuss with any person, or publicly make or
disclose, cause to be made or disclosed publicly, facilitate the making public
or public disclosure of, any proposal or bid with respect to, the acquisition of
any substantial portion of the assets of the Company or of the assets or stock
of any of its Subsidiaries or of all or any portion of the outstanding Stock, or
any merger, consolidation, other business combination, restructuring,
recapitalization, liquidation or other extraordinary transaction involving the
Company or any of its Subsidiaries;
(vi) otherwise act alone or in concert with others to seek to
control or influence in any manner the management or the Board (including the
composition thereof) or the business, operations or affairs of the Company;
provided, however, that this provision shall not prevent the Purchaser's
designee on the Board from participating in, or otherwise seeking to affect the
outcome of, discussions and votes of the Board with respect to matters coming
before it;
25
(vii) arrange, or in any way participate in, any financing for
any transaction referred to in clauses (i) through (vi) above inclusive;
(viii) make public, or cause or facilitate the making public
(including by disclosure to any journalist or other representative of the media)
of, any request, or otherwise seek, to obtain any waiver or amendment of any
provision of this Agreement, or to take any action restricted hereby.
Notwithstanding the foregoing, (i) the Stockholders may make such
filings with the Commission pursuant to Sections 13(d) and 16(a) of the Exchange
Act to reflect changes in the beneficial ownership of any shares of Stock of any
Stockholder (to the extent such changes reflect action taken by such Stockholder
which is permitted by this Agreement) and (ii) the Purchaser may exercise its
rights with respect to the election of a director to the Board pursuant to
Section 4.5 of this Agreement.
(e) So long as the Stockholders beneficially own collectively 5.0% or
more of the total issued and outstanding shares of Common Stock or an individual
designated by the Purchaser pursuant to Section 4.5 is a member of the Board,
whenever there shall be submitted to the stockholders of the Company nominees
for election to the Board, each of the Stockholders and any Affiliate of such
Stockholder controlled directly or indirectly by such Stockholder hereby agrees
to vote, or to cause to be voted, all Stock then held by such Stockholder,
whether beneficially or of record, and entitled to vote on such matter, in favor
of such nominees designated or nominated by the Board, and, unless otherwise
requested by the Company, not in favor of any other nominee or nominees other
than a designee of the Purchaser pursuant to Section 4.5.
26
(f) Each of the Stockholders hereby covenants and agrees that each
Stockholder will promptly notify the Company when and if such Stockholder
receives or learns of (A) any oral or written request to any of the Stockholders
or any of their Affiliates to participate in any of the transactions or actions
referred to in paragraphs (i) through (viii) of subsection (d) above inclusive
or (B) any oral or written communication from or by any person or entity (other
than the Company) with respect to any of the transactions or actions referred to
in paragraphs (i) through (viii) of subsection (d) above inclusive, if such
person or entity could reasonably be deemed to be capable of effecting,
participating in or materially assisting in such an action or transaction
(through one or more Affiliates or otherwise) and such oral or written
communication was of a nature that could reasonably be deemed to indicate a
serious interest in effecting, participating in or materially assisting in such
an action or transaction.
VI. REGISTRATION RIGHTS
The Company covenants and agrees to provide the following
registration rights:
6.1. "Piggyback" Registration. If, at any time while the Purchaser
shall hold Shares, the Company proposes to file a registration statement
relating to the offering of any of its capital stock under the Securities Act
(other than (i) a registration statement required to be filed in respect of
employee benefit plans of the Company on Form S-8 or any similar form from time
to time in effect, (ii) any registration statement on Form S-4 or similar
successor form, or (iii) a registration statement relating to a transaction
pursuant to Rule 145 of the Securities Act), whether or not for sale for its own
account, the Company shall, at least twenty-one days (or if such twenty-one day
period is not practicable, then a reasonable shorter period which shall not be
less than seven days) prior to such filing, give written notice of such proposed
filing to the Purchaser. Upon receipt by the Company not more than seven days
(unless the notice given to
27
the Purchaser pursuant to the previous sentence is less than ten days, in which
case such seven-day period shall be shortened to five days) after such notice of
a written request from the Purchaser for registration of Purchaser's Stock (as
hereinafter defined), (i) the Company shall, subject to Section 6.3, include
such Purchaser's Stock in such registration statement, and shall use all
reasonable efforts to cause such registration statement to become effective with
respect to such Purchaser's Stock, unless the managing underwriter therefor
concludes in its reasonable judgment that the number of securities requested to
be included in such registration exceeds the number which can reasonably be sold
in (or during the time of) such offering, in which case the Company may (i)
include all securities initially proposed by the Company to be sold for its own
account and (ii) decrease the number of shares of Purchaser's Stock and any
other securities (other than securities included by virtue of clause (i) above)
proposed to be sold to the extent necessary to reduce the number of securities
to be included in the registration to the level recommended by the managing
underwriter; provided, however, that there shall be no such decrease in the
number of shares of Purchaser's Stock unless the number of shares of Purchaser's
Stock and such other securities (other than the securities included by virtue of
clause (i) above) proposed to be sold has been decreased on a pro rata basis,
calculated according to the number of shares of Purchaser's Stock and other
securities requested to be included by the respective holders of each.
"Purchaser's Stock" means any Shares for which the Purchaser requests
registration pursuant to Section 6.1 or 6.2.
6.2. Demand Registration. If the Company shall receive at any time or
from time to time a written request from the Purchaser requesting the Company to
register any shares of Purchaser's Stock under the Securities Act on Form S-3
(or if the Company is not eligible to use Form S-3, then on Form S-1 or S-2), or
any other similar form then in effect, the Company
28
agrees that it will use all reasonable efforts to cause the prompt registration
of all shares of Purchaser's Stock as to which such request is made (or will
amend or supplement an effective registration statement to include Purchaser's
Stock). The Company may postpone for a limited time, which in no event shall be
longer than 90 days, compliance with a request for registration pursuant to this
Section 6.2 if (i) the Company shall have given notice to the Purchaser of the
occurrence of a Suspension Event (as hereinafter defined) or (ii) the Company is
conducting a public offering of capital stock and the managing underwriter
concludes in its reasonable judgment that such compliance would materially
adversely affect such offering. Notwithstanding anything in this Section 6.2 to
the contrary, the Company shall not be required to: (a) comply with more than
two (2) requests of the Purchaser pursuant to this Section 6.2 or (b) prepare or
cause to be prepared audited financial statements of the Company other than
those prepared in the normal course of the Company's business at its fiscal year
end. Any underwriter selected by the Purchaser to act as such in connection with
a registration pursuant to this Section 6.2 shall be reasonably acceptable to
the Company. The Company shall not be required to file and effect a new
registration pursuant to this Section 6.2(b) until a period of nine (9) months
has elapsed from the termination of the registration statement with respect to
Purchaser's Stock covered by a prior registration request. The Company agrees
that in the event the Purchaser makes a request under this Section 6.2 to cause
the Company to effect a demand registration and the Company is precluded from
effecting such registration with respect to 25% or more of the shares of
Purchaser's Stock subject to such request as a consequence of the terms of
registration rights previously granted by the Company to any of the Other
Holders, then, under such
29
circumstances, such request shall not be counted against the number of demand
requests granted to Purchaser under this Section 6.2.
6.3. General Provisions. (a) The Company will use all reasonable
efforts to cause any registration statement referred to in Sections 6.1 and 6.2
to become effective and to remain effective (with a prospectus at all times
meeting the requirement of the 1933 Act) until the earlier of 180 days from the
effective date of the registration statement and the date the Purchaser
completes its distribution of Purchaser's Stock, subject, however, to the
Company's suspension rights set forth in Section 6.7(b). The Company will use
all reasonable efforts to effect such qualifications under applicable Blue Sky
or other state securities laws as may be reasonably requested by the Purchaser
(provided that the Company shall not be obligated to file a general consent to
service of process or qualify to do business as a foreign corporation or
otherwise subject itself to taxation in any jurisdiction solely for the purpose
of any such qualification) to permit or facilitate such sale or other
distribution. The Company will cause the Purchaser's Stock to be listed on the
principal stock exchange on which the shares of Common Stock are listed.
(b) The Purchaser acknowledges that the Company has previously
granted registration rights to other holders of Common Stock and/or other
securities issued by the Company that are convertible into or exercisable for
shares of Common Stock (collectively, the "Other Holders"). The Purchaser
further acknowledges that, notwithstanding anything to the contrary provided in
this Agreement, the registration rights granted to the Purchaser under this
Agreement shall, in every case, be subject to the rights of the Other Holders
and, to the extent, if any, that any of the provisions of this Article VI
conflict or are inconsistent with any of such
30
rights of the Other Holders, such rights of the Other Holders shall govern with
respect to the subject matter of such conflict or inconsistency.
(c) The Purchaser agrees, if requested by the managing underwriter or
underwriters in an underwritten offering (an "Offering"), not to effect any
public sale or distribution of any of the securities of the Company of any class
included in such Offering, including a sale pursuant to Rule 144 or Rule 144A
under the Securities Act (except as part of such Offering), during the 15-day
period prior to, and during the 90-day period beginning on, the date of pricing
of each Offering, to the extent timely notified in writing by the Company or the
managing underwriters. Furthermore, notwithstanding anything to the contrary set
forth in the Agreement, the Company's obligation under this Agreement to cause a
registration statement and any filings with any state securities commission to
be made or to become effective or to amend or supplement such registration
statement shall be suspended in the event and during such period as the Company
is proceeding with an Offering if the Company is advised by the underwriters
that the sale of shares of Purchaser's Stock under such registration statement
would have a material adverse effect on the Offering.
(d) Following the effectiveness of a registration statement and the
filings with any state securities commissions, the Purchaser agrees that it will
not effect any sales of the Purchaser's Stock pursuant to such registration
statement or any such filings at any time after it has received notice from the
Company to suspend sales (i) as a result of the occurrence or existence of any
Suspension Event, or (ii) so that the Company may amend or supplement such
registration statement or such filing. The Purchaser may recommence effecting
sales of the Purchaser's Stock pursuant to the registration statement or such
filings following further notice to such effect from the Company, which notice
shall be given by the Company not later than
31
three (3) business days after the conclusion of any such Suspension Event or
amendment or supplement.
6.4. Information, Documents, Etc. Upon making a request for
registration pursuant to Sections 6.1 or 6.2, the Purchaser shall furnish to the
Company such information regarding its holdings and the proposed manner of
distribution thereof as the Company may reasonably request and as shall be
required in connection with any registration, qualification or compliance
referred to in this Article VI. The Company agrees that it will furnish to the
Purchaser the number of prospectuses, offering circulars or other documents, or
any amendments or supplements thereto, incident to any registration,
qualification or compliance referred to in this Article VI as the Purchaser from
time to time may reasonably request.
6.5. Expenses. The Company will bear all expenses of registrations
pursuant to Section 6.1 and one-half of all expenses of the first registration
(and amendments and supplements related thereto) pursuant to Section 6.2 (in
each case, other than underwriting discounts and commissions and brokerage
commissions and fees, if any, payable with respect to shares of Purchaser's
Stock sold by the Purchaser, and fees and expenses of any accountants, counsel
or other parties retained or employed by holders of Purchaser's Stock)
including, without limitation, registration fees, printing expenses, expenses of
compliance with Blue Sky or other state securities laws, and legal and audit
fees incurred by the Company in connection with such registration and amendments
or supplements in connection therewith. The Purchaser will bear one-half of all
expenses of the first registration (and amendments and supplements related
thereto) and all expenses of the second registration (and amendments and
supplements related thereto) pursuant to Section 6.2, including, without
limitation, registration fees, printing expenses, expenses of compliance with
Blue Sky or other state securities laws, and legal and
32
audit fees incurred by the Company and the Purchaser and the holders of
Purchaser's Stock. Notwithstanding the foregoing, the Company agrees that in the
event that subsequent to the date hereof the Company shall grant demand
registration rights to a third party and shall agree in connection therewith to
bear all or a greater portion of the expenses of such demand registrations than
as set out above, then this Section 6.5 shall be deemed to have been amended to
provide for the Company to bear, and the Company shall bear, the same portion of
the expenses of any subsequent registration pursuant to Section 6.2 of this
Agreement as the Company shall have agreed to bear for such third party.
6.6. Cooperation. In connection with any registration of Purchaser's
Stock pursuant to this Article VI, the Company agrees to :
(a) enter into such customary agreement (including an underwriting
agreement containing such representations and warranties by the Company and such
other terms and provisions, including indemnification provisions, as are
customarily contained in underwriting agreements for comparable offerings and,
if no underwriting agreement is entered into, an indemnification agreement on
such terms as is customary in transactions of such nature) and take all such
other actions as the Purchaser or the underwriters, if any, participating in
such offering and sale may reasonably request in order to expedite or facilitate
such offering and sale;
(b) furnish, at the request of the Purchaser or any underwriters
participating in such offering and sale, (i) a comfort letter or letters, dated
the date of the final prospectus with respect to the Purchaser's Stock and/or
the date of the closing for the sale of the Purchaser's Stock from the
independent certified public accountants of the Company and addressed to the
Purchaser and any underwriters participating in such offering and sale, which
letter or letters shall state that such accountants are independent with respect
to the Company within the
33
meaning of Rule 1.01 of the Code of Professional Ethics of the American
Institute of Certified Public Accountants and shall be in form reasonably
satisfactory to the managing underwriter (or, if none, to the Purchaser) and
shall cover matters of the type customarily covered in "cold comfort" letters in
connection with transactions of a similar nature for similar entities and (ii)
an opinion, dated the date of the closing for the sale of the Purchaser's Stock,
of the counsel representing the Company with respect to such offering and sale
(which counsel may be the General Counsel of the Company or other counsel
reasonably satisfactory to the Purchaser), addressed to the Purchaser and any
such underwriters, which opinion shall be in form reasonably satisfactory to the
managing underwriter (or, if none, to the Purchaser) and shall address such
matters as are customary in transactions of a similar nature for similar
entities;
(c) make available for inspection by the Purchaser, the underwriters,
if any, participating in such offering and sale (which inspecting underwriters
shall, if reasonably possible, be limited to any manager or managers for such
participating underwriters), the counsel for the Purchaser, one accountant or
accounting firm retained by the Purchaser and any such underwriters, or any
other agent retained by the Purchaser or such underwriters, all financial and
other records, corporate documents and properties of the Company, and supply
such additional information, as they shall reasonably request; provided that any
such party shall keep the contents thereof confidential in the manner prescribed
by Section 5.1.
6.7. Action to Suspend Effectiveness; Supplement to Registration
Statement. (a) The Company will notify the Purchaser and its counsel promptly of
(i) any action by the Commission to suspend the effectiveness of the
registration statement covering the Purchaser's Stock or the institution or
threatening of any proceeding for such purpose (a "stop order") or (ii) the
receipt by the Company of any notification with respect to the suspension of the
qualification
34
of the Purchaser's Stock for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. Immediately upon receipt of any
such notice, the Purchaser shall cease to offer or sell any Purchaser's Stock
pursuant to the registration statement in the jurisdiction to which such stop
order or suspension relates. The Company will use all reasonable efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if any such stop order is issued or any such qualification is
suspended, to obtain as soon as possible the withdrawal or revocation thereof,
and will notify the Purchaser and its counsel at the earliest practicable date
of the date on which the Purchaser may offer and sell Purchaser's Stock pursuant
to the registration statement.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, the Company's obligation under this Agreement to cause the
registration of Purchaser's Stock and any filings with any state securities
commission to be made or to become effective or to amend or supplement a
registration statement shall be suspended in the event and during such period
that there are pending negotiations relating to, or consummation of, a
transaction or the occurrence of an event that would require additional
disclosure of material information by the Company in such registration statement
or such filing (such circumstances being hereinafter referred to as a
"Suspension Event") that would make it impractical or inadvisable to cause such
registration statement or such filings to be made or to become effective or to
amend or supplement such registration statement, but such suspension shall
continue only for so long as such event or its effect is continuing but in no
event will that suspension exceed ninety (90) days. Immediately upon receipt by
the Purchaser of notice of a Suspension Event, the Purchaser shall cease to
offer or sell any Purchaser's Stock pursuant to such registration statement,
cease to deliver or use such registration statement and, if so requested by the
Company, return to the
35
Company, at its expense, all copies (other than permanent file copies) of such
registration statement.
(c) In the event the Company shall determine that it is necessary to
amend or supplement any registration statement relating to Purchaser's Stock,
the Company will furnish copies of such proposed amendment or supplement to the
Purchaser and its counsel and will not file or distribute such amendment or
supplement without the prior consent of the Purchaser, which consent shall not
be unreasonably withheld.
6.8. Indemnification. In the event any Purchaser's Stock is included
in a registration statement under this Article VI:
(a) To the full extent permitted by law, the Company will indemnify
and hold harmless the Purchaser and each subsequent holder of Purchaser's Stock
as set forth in Section 9.3(d) hereof (each, a "Holder") and the affiliates of
such Holder, and their respective directors, officers, employees, general and
limited partners, members, agents and representatives (and the directors,
officers, affiliates and controlling persons thereof), and each other person, if
any, who controls such Holder within the meaning of the Securities Act or the
Exchange Act, from and against any losses, claims, damages, or liabilities
(joint or several) to which they may become subject under the Securities Act,
the Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus, any final prospectus contained therein or any amendments or
supplements thereto, (ii) any omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not
36
misleading, or (iii) any violation or alleged violation by the Company in
connection with the registration of Purchaser's Stock under the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law; and the
Company will pay to each such Holder, affiliate or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, that the indemnity agreement contained in this Section 6.8(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable hereunder in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
the Purchaser or controlling person; and provided, further, that the Company
shall not be liable hereunder in any such case to the extent it is determined
that any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made:
(A) in any such preliminary prospectus, if (I) it was the
responsibility of such Holder to provide the person asserting such loss,
claim, damage, liability or expense with a current copy of the prospectus
and such Holder failed to deliver or cause to be delivered a copy of the
prospectus to such person after the Company had furnished such Holder with
a sufficient number of copies of the same and (II) the prospectus
corrected such untrue statement or omission; or
37
(B) in such prospectus, if such untrue statement or omission is
corrected in an amendment or supplement to such prospectus and the Holder
thereafter fails to deliver the prospectus as so amended or supplemented
prior to or concurrently with the sale of Purchaser's Stock to the person
asserting such loss, claim, damage, liability or expense after the Company
had furnished such Holder with a sufficient number copies of the same.
Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Holder or any such director,
officer, employee, general or limited partner, member, agent, representative or
controlling person and shall survive the transfer of such securities by such
Holder. Each Holder shall furnish such information regarding itself or the claim
in question as the Company may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim and litigation
resulting therefrom.
(b) To the full extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any losses,
claims, damages or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon (i) any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for
38
use in connection with such registration or (ii) an untrue statement or alleged
untrue statement or omission or alleged omission made in the circumstances
described in clauses (A) or (B) of Section 6.8(a); and each such Holder will
pay, as incurred, any legal or other expenses reasonably incurred by any person
intended to be indemnified pursuant to this Section 6.8(b), in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, that the indemnity agreement contained in this Section 6.8(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld; provided, that, in no
event shall any indemnity under this Section 6.8(b) exceed the gross proceeds
from the offering received by such Holder; and provided, further, that the
obligation to provide indemnification pursuant to this Section 6.8(b) shall be
several, and not joint and several, among such indemnifying parties. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or any such director, officer,
representative or controlling person and shall survive the transfer of such
securities by such prospective Seller.
(c) Promptly after receipt by an indemnified party under this Section
6.8 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 6.8, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel selected by the
indemnifying party or parties. The failure to deliver written notice to the
indemnifying party within a reasonable time after the
39
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 6.8 to the extent of such prejudice,
but the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 6.8. The indemnified party shall have the right, but not
the obligation, to participate in the defense of any action referred to above
through counsel of its own choosing and shall have the right, but not the
obligation, to assert any and all separate defenses, cross claims or
counterclaims which it may have, and the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of such
counsel has been specifically authorized in advance by the indemnifying party,
(ii) there is a conflict of interest that prevents counsel for the indemnifying
party from adequately representing the interests of the indemnified party or
there are defenses available to the indemnified party that are different from,
or additional to, the defenses that are available to the indemnifying party, or
(iii) the indemnifying party fails to assume the defense or does not reasonably
contest such action in good faith, in which case, if the indemnified party
notifies the indemnifying party that it elects to employ separate counsel, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party and the reasonable fees and expenses of such
separate counsel shall be borne by the indemnifying party; provided, however,
that, the indemnifying party shall not, in connection with any proceeding or
related proceedings, be liable for the reasonable fees and expenses of more than
one separate firm (in addition to one firm acting as local counsel) for all
indemnified parties.
(d) Contribution. If for any reason (other than the reasons expressly
specified in this Section 6.8) the foregoing indemnity and payment obligation is
unavailable or is
40
insufficient to hold harmless an indemnified party under paragraphs (a) or (b)
of this Section 6.8, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of any loss, claim, damage
or liability (or actions or proceedings in respect thereof), including, without
limitation, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and the indemnified
party on the other. The relative fault shall be determined by reference to,
among other things, whether the action in question, including any untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact has been taken or made by, or relates to information
supplied by, the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action, untrue statement or omission. If, however, the allocation
provided in the second preceding sentence is not permitted by applicable law, or
if the allocation provided in the second preceding sentence provides a lesser
sum to the indemnified party than the amount hereinafter calculated, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative fault but also the relative benefits to the indemnifying party and the
indemnified party as well as any other relevant equitable considerations. The
parties agree that it would not be just and equitable if contributions pursuant
to this Section 6.8(d) were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the preceding sentences of this Section 6.8(d).
Notwithstanding anything in this Section 6.8(d) to the contrary, no indemnifying
party
41
(other than the Company) shall be required pursuant to this Section 6.8(d) to
contribute any amount in excess of the gross proceeds received by such
indemnifying party from the sale of Purchaser's Stock in the offering to which
the losses, claims, damages or liabilities of the indemnified parties relate. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and the Holders under this Section
6.8 shall survive the completion of any offering of Purchaser's Stock in a
registration statement under this Article VI.
(f) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement (if
any) entered into in connection with any underwritten public offering of the
Purchaser's Stock are in conflict with the foregoing provisions, the provisions
in such underwriting agreement shall control.
VII. INDEMNIFICATION
7.1. Indemnification by the Company. The Company shall indemnify and
hold the Purchaser and each of its members, employees, officers and agents
harmless from and against any and all losses, claims, damages or liabilities
whatsoever (including legal fees and expenses) incurred by any of them based
upon, resulting from or arising out of any material breach of any
representation, warranty, covenant or agreement of the Company contained in this
Agreement.
7.2. Indemnification by the Purchaser. The Purchaser (and with
respect to Sections 5.1, 5.2 and 5.6, Chilmark) shall indemnify and hold the
Company and each of its employees, directors, officers and agents harmless from
and against any and all losses, claims, damages or liabilities whatsoever
(including legal fees and expenses) incurred by any of them
42
(i) in the case of the Purchaser, resulting from or arising out of any material
breach of any representation, warranty, covenant or agreement of the Purchaser
contained in this Agreement and (ii) in the case of Chilmark, resulting from or
arising out of any material breach of any covenant or agreement of Chilmark
contained in Sections 5.1, 5.2 or 5.6 of this Agreement.
VIII. TERMINATION
8.1 Termination. (a) This Agreement may be terminated and the
transactions contemplated herein may be abandoned at any time prior to the
Closing:
(i) by the Company or the Purchaser, if the Closing has not
occurred by December 31, 1997;
(ii) by mutual written consent of the Company and the Purchaser;
(iii) by the Company, if there has been a material misrepresentation
or breach of warranty on the part of the Purchaser in the representations and
warranties contained herein or a material breach of covenants on the part of the
Purchaser and the same has not been cured within 30 days after notice thereof;
(iv) by the Purchaser, if there has been a material
misrepresentation or breach of warranty on the part of the Company in the
representations and warranties contained herein or a material breach of
covenants on the part of the Company and the same has not been cured within 30
days after notice thereof;
(v) by the Purchaser, in accordance with Section 4.6, if the terms
of the Additional Commitment Letter are materially and adversely different from
those contained in the August 6th Commitment Letter; or
(vi) by either the Purchaser or the Company, if any Governmental
Entity shall have issued a final order, decree or ruling or taken any other
action permanently enjoining,
43
restraining or otherwise prohibiting the Asset Acquisition or the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and nonappealable, provided that the party seeking to
terminate shall have used its best efforts to appeal such order, decree, ruling
or other action.
(b) Notwithstanding anything herein to the contrary, the right to
terminate this Agreement under this Section 8.1 shall not be available to any
party to the extent the failure of such party to fulfill any of its obligations
under this Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before such date (as a result, for example, of an action
or failure to act causing a failure of a condition precedent).
(c) A party terminating this Agreement pursuant to this Section 8.1
shall give written notice thereof the other party hereto, whereupon this
Agreement shall terminate and be of no further force and effect, the
transactions contemplated hereby shall be abandoned without further action by
any party and there shall be no liability on the part of the Company or the
Purchaser, except as provided in Section 9.7 hereof and except for any liability
for any willful breach hereof; provided however that the provisions of Sections
5.1, 7.1 and 7.2 shall survive any such termination.
IX. GENERAL PROVISIONS
9.1. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation conducted or notice or knowledge obtained by
or on behalf of any party hereto, each representation and warranty in this
Agreement and each agreement or covenant in this Agreement which does not by its
own terms expire on or prior to the Closing shall survive the Closing without
limitation as to time, except as specifically referred to herein.
44
9.2. Notices. Any notice, request, instruction or other document to
be given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (i) when received if given in person, or (ii) on the date of
transmission if sent by nationally recognized overnight courier, certified or
registered mail, return receipt requested or (iii) three days after being
deposited in the U.S. mail, postage prepaid:
(a) if to the Purchaser, addressed as follows:
Cape ▇▇▇ Investors, L.L.C.
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) if to the Company, addressed as follows:
NutraMax Products, Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President and
Chief Financial Officer
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇, Procter & ▇▇▇▇, LLP
Exchange Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III, Esq.
45
or to such other individual or address as a party hereto my designate for itself
by notice given as herein provided.
9.3. General. (a) This Agreement (including the documents and
instruments referred to or incorporated herein) constitutes the entire
agreement, and supersedes all of the prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
(b) This Agreement is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder other than as
contemplated in Article VI, Article VII and Section 9.3(d) and shall not be
assigned by any party by operation of law or otherwise.
(c) This Agreement may be executed in two or more counterparts which
together shall constitute a single agreement.
(d) This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors, heirs and permitted assigns. This
Agreement is not assignable except by consent of each of the parties hereto or
operation of law; provided that in the event Purchaser shall distribute the
Shares to its investors (whether as a result of dissolution or otherwise), (i)
the holders of such Shares shall succeed to the rights and obligations of the
Purchaser contained in Article VI hereof and (ii) Chilmark Fund II, L.P. shall
succeed to the rights and obligations of the Purchaser contained in Section 4.5
hereof so long as it shall hold any Shares. Any purported assignment of this
Agreement in violation of this Section 9.3 shall be null and void.
9.4. Governing Law. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES CREATED HEREBY SHALL BE GOVERNED BY THE
46
INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
RULES THEREOF.
(b) Each party agrees that any proceeding relating to this Agreement
shall be brought in a state court of Delaware. Each party hereby consents to
personal jurisdiction in any such action brought in any such Delaware court,
consents to service of process by mail made upon such party and such party's
agent and waives any objection to venue in any such Delaware court or to any
claim that any such Delaware court is an inconvenient forum.
9.5. Severability of Provisions. If any provision or any portion of
any provision of this Agreement or the application of any such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, to the extent permitted by law, the remaining portion of such
provision and the remaining provisions of this Agreement, or the application of
such provision or portion of such provision as is held invalid or unenforceable
to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby.
9.6. Captions. All section titles or captions contained in this
Agreement are for convenience only, shall not be deemed a part of this Agreement
and shall not affect the meaning or interpretation of this Agreement. All
references herein to Sections shall be deemed references to such parts of this
Agreement, unless the context shall otherwise require.
9.7. Expenses. Except as otherwise expressly provided in this
Agreement, each party hereto shall pay its own expenses incidental to the
preparation of this Agreement, the carrying out of the provisions hereof and the
consummation of the transactions contemplated hereby. In the event that the
Company shall become entitled to a break-up fee or reimbursement of expenses
from AWC pursuant to the terms of the Asset Purchase Agreement, the Company
47
agrees that the aggregate amount of the break-up fee and expense reimbursement
to which it is entitled shall be allocated, first, to reimburse the out-of-
pocket costs and expenses incurred by each of the Company and the Purchaser in
connection with the Asset Acquisition and the transactions contemplated by this
Agreement (including, without limitation, the bank financing sought by the
Company in connection with the Asset Acquisition) (provided that should the
amount of such break-up fee and expense reimbursement be insufficient to
reimburse the Company and the Purchaser in full, the Company and the Purchaser
shall share such amount pro-rata in accordance with their respective out-of-
pocket costs and expenses) and, second, the balance of such funds shall be
allocated two-thirds to the Company and one-third to the Purchaser. Any payments
to be made to the Purchaser under this Section 9.7 shall be made to the account
of the general partner of the managing member of the Purchaser.
9.8. Equitable Relief. Each party acknowledges that, in the event of
any breach of this Agreement by a party, the other party would be irreparably
and immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that such other party, in addition to any other remedy to
which it may be entitled, shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to compel specific
performance of this Agreement. Any requirements for the securing or posting of
any bond with respect to such remedy are hereby waived by each of the parties
hereto.
9.9. Definitions. The following terms shall have the respective
meanings specified in the indicated Sections of this Agreement:
Term Agreement Section
---- -----------------
Additional Commitment Letter 4.6
Affiliate 5.6(a)
Agreement Recitals
48
Asset Acquisition Recitals
Asset Purchase Agreement Recitals
August 6th Commitment Letter 1.3(b)
Authority 1.3(b)
Board 1.3(d)(ii)
Buyer 5.6(c)(ii)
Chilmark 5.1(b)
Closing 1.3(a)
Code 5.6
Commission 2.6
Common Stock 2.5(a)
Company Recitals
Encumbrances 1.1
Exchange Act 2.4
Financial Statements 2.7(a)
Governmental Entity 1.3(b)
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act 1.3(b)
Holder 6.8(a)
Legal Requirements 1.3(b)
Material Adverse Effect 1.3(b)
NASD 2.3(a)
Notice of Proposed Transfer 5.6(c)(i)
Offering 6.3(c)
Other Holders 6.3(b)
Person 4.1
Purchaser Recitals
Purchaser Material Adverse Effect 1.3(c)
Purchaser's Stock 6.1
Rule 13d-3 5.6(a)
SEC Reports 2.6
Securities Act 3.6
Selling Stockholder 5.6(c)
Shares Recitals
Stock 5.6(a)
Stockholders 5.6(a)
Subsidiary 2.1
Suspension Event 6.7(b)
Transferee 5.6(c)(i)
▇▇▇▇▇▇ Recitals
White Cross Recitals
49
IN WITNESS WHEREOF, each of the parties hereto have duly executed and
delivered this Agreement as of the date first above written.
NUTRAMAX PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President/CEO
CAPE ▇▇▇ INVESTORS, L.L.C.
By: Chilmark Fund II, L.P.,
its Managing Member
By: Chilmark II, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
SOLELY FOR PURPOSES OF
SECTIONS 5.1, 5.2, 5.6 AND 7.2:
CHILMARK FUND II, L.P.
By: Chilmark II, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President