EXHIBIT 10.11
VIVITECH, INC.
SERIES A AND SERIES B PREFERRED STOCK PURCHASE AGREEMENT
June 22, 1989
TABLE OF CONTENTS
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Section Page
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S1. Authorization; Purchase and Sale of Securities........ 1
1.01 Authorization of the Securities................. 1
1.02 Sale of the Securities.......................... 1
1.03 Certain Definitions............................. 1
1.04 The Closing..................................... 1
1.05 Use of Proceeds................................. 2
2. Representations and Warranties of the Company......... 2
2.01 Organization and Good Standing.................. 2
2.02 Capitalization.................................. 2
2.03 Financial Statements............................ 3
2.04 Absence of Changes.............................. 3
2.05 Compliance with Other Instruments............... 3
2.06 Authorization................................... 4
2.07 Finders......................................... 4
2.08 Taxes........................................... 4
2.09 Litigation...................................... 4
2.10 Properties...................................... 4
2.11 Compliance with Law............................. 5
2.12 Subsidiaries, Joint Ventures.................... 5
2.13 Contracts and Commitments....................... 5
2.14 Outstanding Indebtedness........................ 5
2.15 Patents, Trademarks............................. 5
2.16 Conflicting Agreements.......................... 5
2.17 Compliance with Securities Act of 1933.......... 6
2.18 Disclosure...................................... 6
2.19 Closing Date.................................... 6
3. Representations and Warranties of Founders............ 6
3.01 Conflicting Agreements.......................... 7
3.02 Conflict of Interests........................... 7
4. Representations and Warranties of Investors........... 7
4.01 Investment Intent............................... 7
4.02 Authorization................................... 8
4.03 Restricted Securities........................... 8
4.04 Finders......................................... 8
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Section Page
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5. Covenants of the Company.............................. 8
5.01 Compliance with Law............................. 8
5.02 Accounting System............................... 9
5.03 Board of Directors.............................. 9
(a) Representatives of Investors................ 9
(b) Voting Agreement............................ 9
(c) Expense of Directors........................ 10
(d) Board Approval Requirements................. 10
5.04 Inspection...................................... 10
5.05 Financial Statements and Other
Information................................... 10
5.06 Key Man Insurance and Other Insurance........... 11
5.07 Proprietary Information Agreements.............. 11
5.08 Material Changes and Litigation................. 12
5.09 Executive Compensation.......................... 12
5.10 Transactions with Affiliates.................... 12
5.11 Dividends....................................... 12
5.12 Issuance of Stock............................... 13
5.13 Merger; Sale of Assets.......................... 13
6. Conditions to Obligations of Investors
at the Closing...................................... 13
6.01 Representations and Warranties Correct.......... 13
6.02 Performance of Covenants and Agreements......... 13
6.03 Opinion of Counsel to the Company............... 13
6.04 Legal Action.................................... 15
6.05 Filing of Articles of Amendment................. 15
6.06 Restricted Stock Agreements..................... 15
6.07 Hologic License Agreement.......................
6.08 Hologic Management Agreement....................
6.09 Shareholders Agreement.......................... 16
6.10 Compliance Certificate.......................... 16
6.11 Proceedings Satisfactory........................ 16
7. Conditions to Obligations of the Company
at the Closing...................................... 16
8. Participation in Future Offerings..................... 16
8.01 Eligible Offerings; Notice...................... 16
8.02 Acceptance...................................... 17
8.03 Percentage Interest............................. 17
8.04 Excluded Offerings.............................. 17
8.05 No Accumulation................................. 17
8.06 Rights Personal................................. 17
8.07 Termination of Rights........................... 18
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Section Page
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9. Registration Rights................................... 18
9.01 Certain Definitions............................. 18
9.02 Sale or Transfer of the Shares.................. 19
9.03 Required Registration........................... 19
9.04 Incidental Registrations........................ 20
9.05 Registration Procedures......................... 21
9.06 Allocation of Expenses.......................... 23
9.07 Indemnification................................. 23
9.08 Indemnification with Respect to
Underwritten Offering........................ 24
9.09 Rule 144 Reporting.............................. 24
10. Definitions.......................................... 25
11. Miscellaneous Provisions............................. 25
11.01 Construction................................... 25
11.02 Notices........................................ 25
11.03 Assignment..................................... 26
11.04 Succession to Rights........................... 26
11.05 Amendments and Waiver.......................... 26
11.06 Counterparts................................... 27
11.07 Headings....................................... 27
11.08 Expenses....................................... 27
11.09 Confidential Information....................... 27
11.10 Knowledge and Absence of Personal
Liability of Certain Persons................ 27
Exhibits
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List of Investors..................................... Exhibit A
Articles of Amendment................................. Exhibit B
Restricted Stock Agreement............................ Exhibit C
Hologic License and Technology Agreement.............. Exhibit D
Hologic Management Services Agreement................. Exhibit E
Shareholders Agreement................................ Exhibit F
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SERIES A AND SERIES B PREFERRED STOCK PURCHASE AGREEMENT
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This Agreement, made and entered into the 22nd day of March, 1986 June,
1989 by and among VIVITECH, Inc., a corporation organized and existing under the
laws of the Commonwealth of Massachusetts (the "Company"), and the investors
listed on Exhibit A hereto (the "Investors").
The parties hereto hereby agree as follows:
1. Authorization; Purchase and Sale of Securities
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1.01 Authorization of the Securities. The Company will on or before the
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Closing Date (as defined in Section 1.04 below) file with the Secretary of the
Commonwealth of Massachusetts Articles of Amendment to the Articles of
Organization of the Company in the form of Exhibit B hereto (the "Articles of
Amendment"), creating a class of 484,375 shares of Preferred Stock, $.01 par
value, of the Company and establishing and designating the relative rights and
preferences of the Series A Preferred Stock (the "Series A Preferred") and the
Series B Preferred Stock (the "Series B Preferred") of the Company; and the
Company will have authorized the issuance to the Investors, pursuant to this
Agreement, of up to 234,375 shares of Series A Preferred and 250,000 shares of
Series B Preferred.
1.02 Sale of the Securities. Subject to the terms and conditions hereof,
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the Company hereby agrees to sell to each of the Investors, and each of the
Investors agrees to purchase from Company on the Closing Date, the number of
shares of Series A Preferred and Series B Preferred set forth opposite his or
its name under "Closing Date" on Exhibit A hereto. The purchase price for each
share of Series A Preferred sold pursuant to this Agreement will be $10.00. The
purchase price for each share of Series B Preferred sold pursuant to this
Agreement will be $0.625.
1.03 Certain Definitions. All of the shares of Series A Preferred and
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Series B Preferred being purchase hereunder are hereinafter sometimes referred
to as the "Shares." The total number of shares of the Company's Common Stock,
and any other securities issued or issuable upon conversion of the Series B
Preferred, are hereinafter sometimes referred to as the "Conversion Stock." The
Shares and the Conversion Stock are hereinafter sometimes collectively referred
to as the "Securities."
1.04 The Closing. The closing of the transactions contemplated by this
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Agreement (herein referred to as the "Closing") shall take place at the offices
of Brown, Rudnick, Freed & Gesmer, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
at 11:00 A.M., on June 22, 1989, or at such other place or on such other date or
time as shall be mutually agreed to by the Company and counsel to the Investors
(hereinafter referred to as the "Closing Date"). At the Closing, the Company
will deliver to each Inves-
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tor who is purchasing Shares at the Closing certificates, in such denominations
and registered in such name as each Investor may designate by notice to the
Company, representing the shares of Series A Preferred and Series B Preferred to
be purchased on the Closing Date by each Investor from the Company, against
payment of the purchase price for such Shares in cash or by certified or bank
cashier's check payable to the order of the Company.
1.05 Use of Proceeds. Not less than 95% of the proceeds to the Company
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from the sale of the Shares shall be used by the Company for the development,
manufacturing and marketing of products described in the Company's Business Plan
dated March, 1989 (the "Business Plan").
2. Representations and Warranties of the Company.
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The Company hereby represents and warrants to each Investor as follows:
2.01 Organization and Good Standing. The Company is a corporation duly
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organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. The Company has all requisite corporate power
and authority, and holds all licenses, permits and other required authorizations
from governmental authorities, necessary to conduct its business as now
conducted and the business contemplated by this Agreement, and is duly qualified
and in good standing in each jurisdiction in the United States where the failure
to qualify would have a material adverse effect on its operations or financial
condition. The Company has delivered to counsel to the Investors true, correct
and complete copies of the Company's Articles of Organization and bylaws in
effect on the date hereof.
2.02 Capitalization. The Company's authorized capitalization consists of
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5,000,000 shares of Common Stock, $.01 par value, of which 1,500,000 shares are
issued and outstanding. After giving effect to the transactions contemplated
hereby, the authorized capital of the Company will consist of (i) 484,375 shares
of Preferred Stock, $.01 par value, of which (a) 234,375 shares will be
designated Series A Preferred Stock and will be outstanding, and (b) 250,000
shares will be designated Series B Preferred Stock and will be outstanding; and
(ii) 5,000,000 shares of Common Stock, of which 1,500,000 shares will be
outstanding. All of the outstanding shares of the Company's stock have been
duly and validly authorized and issued, and the issuance of the Shares pursuant
to the terms of this Agreement shall be, on the Closing Date, duly and validly
authorized, and no further approval or authority of the shareholders or the
directors of the Company or of any governmental authority or agency will be
required by the Company for the issuance and sale of the Shares as contemplated
by this Agreement. When issued and sold to the Investors, the Shares will be
duly and validly issued, fully paid and non-assessable, and the Articles of
Amendment and the certificates representing the Shares will be duly and validly
authorized, executed and delivered by the Company and will con-
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stitute valid and legally binding obligations in accordance with their
respective terms. The holders of the capital stock of the Company are not
entitled to any preemptive rights with respect to the sale of the Shares or any
other equity securities of the Company and are not entitled to any registration
rights, with respect to the capital stock held by them, for registration under
the Securities Act. Except as set forth in Schedule 2.02, there are no
outstanding options, warrants or other rights or commitments, written or oral,
to purchase or otherwise acquire any authorized but unissued shares of the
capital stock of the Company, or any security directly or indirectly convertible
into or exchangeable for shares of the capital stock of the Company.
2.03 Financial Statements. The Company has furnished to counsel for the
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Investors a balance sheet as of May 31, 1989 and statement of cash flow for the
period from the Company's incorporation (May 11, 1989) through May 31, 1989
(which balance sheet and statements are hereinafter referred to as the
"Financial Statements"). The Financial Statements were prepared in accordance
with generally accepted accounting principles, are correct and complete in all
material respects and fairly present the financial condition and operations of
the Company at the date thereof and for the period covered thereby.
2.04 Absence of Changes. Subsequent to the date of the balance sheet
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contained in the Financial Statements (the "Statement Date"), there has not been
any material adverse change in the condition (financial or otherwise), net worth
or results of operations of the Company, nor, to the knowledge of the Company,
has there occurred any event which would require disclosure in the Company's
financial statements in order that they may correctly, completely and fairly
present its financial condition in accordance with generally accepted accounting
principles.
2.05 Compliance with Other Instruments. The Company is not in default in
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the performance of any material obligation, agreement or condition contained in
any bond or debenture or any other evidence of indebtedness or any indenture or
loan agreement of the Company which default affords to any Person the
unconditional right to accelerate any material indebtedness or terminate any
material right or agreement of the Company, and the Company is not in violation
of its Articles of Organization or bylaws. Neither the sale of the Shares, nor
the execution and delivery of this Agreement, nor the fulfillment of the terms
herein set forth and the consummation of the transactions contemplated hereby,
will (i) conflict with or constitute a breach of, default under or violation of
the Articles of Organization or bylaws of the Company, any agreement, indenture,
mortgage, deed of trust or other material instrument or undertaking by which the
Company is bound or to which it or any of its properties are subject, or, to the
best knowledge of the Company, a violation of any law, administrative
regulation, or court decree binding upon the Company, or (ii) result in the
creation or imposition of any material lien, charge or encumbrance upon any
property or assets of the Company.
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2.06 Authorization. The Company has the corporate power and authority to
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enter into this Agreement and to perform all of its obligations hereunder. The
execution, delivery and performance of this Agreement by the Company have been
duly authorized by all necessary corporate action, and this Agreement
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms, except as such may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditor's rights. No consent, approval,
authorization or order of any court or governmental agency or board is required
to consummate the same, except for acceptance for filing by the Secretary of the
Commonwealth of Massachusetts of the Articles of Amendment.
2.07 Finders. No person is entitled, directly or indirectly, to
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compensation from the Company by reason of any contract or understanding or
contact with the Company, as a finder or broker in connection with the sale and
purchase of the Shares contemplated by this Agreement.
2.08 Taxes. The Company has filed all necessary federal and state
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property, income and franchise tax returns and has paid all taxes shown as due
thereon or otherwise owed by it to any taxing authority except those contested
in good faith and for which appropriate amounts have been reserved in accordance
with generally accepted principles; and there is no tax deficiency which has
been, or to the knowledge of the Company might be, asserted against the Company
which would materially affect the business or operations of the Company.
2.09 Litigation. There is not now pending or, to the knowledge of the
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Company, threatened, any litigation, action, suit or proceeding to which the
Company is or will be a party before or by any court or governmental agency or
body, which might result in any material adverse change in the condition
(financial or otherwise), business or prospects of the Company, or which might
materially and adversely affect the property or assets of the Company; nor, to
the knowledge of the Company is there any basis for any of the foregoing; and no
labor disturbance by the employees of the Company exists or is imminent which
might be expected materially to affect the conduct of the business, operations,
financial condition or income of the Company.
2.10 Properties. The Company has good and marketable title to all of its
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real and tangible personal properties and assets shown on the balance sheet
included in the Financial Statements, free and clear of all liens, charges, and
encumbrances except as set forth on said balance sheet.
2.11 Compliance with Law. To the knowledge of the Company, the Company
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has complied in all material respects with all applicable statutes and
regulations of the United States and of all states, municipalities and agencies
and of all foreign countries in respect of the conduct of its business.
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2.12 Subsidiaries, Joint Ventures. The Company does not have any
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investment or other ownership interest in any other corporation, joint venture,
general partnership, limited partnership or other business entity.
2.13 Contracts and Commitments. The Company is not a party to any written
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or oral contract or agreement which is materially adverse to its present or
proposed business. Except for the Hologic License Agreement and the Hologic
Management Agreement, the Company is not a party to or bound by any agreements
which obligate the Company to pay (in the case of each agreement) in excess of
$25,000, or (in the aggregate) in excess of $50,000, or which are otherwise
material to the conduct and operation of its business (as conducted and proposed
to be conducted) and its properties, including without limitation all employment
and consulting agreements and employee benefit plans and arrangements to which
the Company is a party or by which it is bound. All of such agreements and
contracts are valid, binding and in full force and effect, and true and complete
copies thereof have been delivered to counsel to the Investors.
2.14 Outstanding Indebtedness. The Company has no indebtedness for
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borrowed money which the Company had directly or indirectly created, incurred,
assumed or guaranteed, or with respect to which the Company has otherwise become
directly or indirectly liable. The Company has no material liability or
obligation, absolute or contingent, which is not shown or provided for in the
Financial Statements or disclosed in the Exhibits to this Agreement.
2.15 Patents, Trademarks. The License and Technology Agreement dated June
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22, 1989 between the Company and Hologic, Inc. (the "Hologic License") is in
full force and effect and the Company is in compliance therewith. To the best
knowledge of the Company, the Hologic License provides to the Company all
intellectual property rights held by any third party reasonably necessary to
enable the company to develop the product described in the Business Plan. In
addition, the Company owns or possesses, or can obtain by payment of royalties
in amounts which, in the aggregate, do not materially adversely affect the
proposed business and the prospects of the Company, all of the patents,
trademarks, service marks, trade names, copyrights and licenses, or rights to
the foregoing, necessary for the conduct of the Company's business as proposed
to be conducted. To the best of the Company's knowledge, and subject to the
Hologic License, the business proposed by the Company will not cause the Company
to infringe rights of others under patents, trademarks, service marks, trade
names, copyrights and licenses.
2.16 Conflicting Agreements. To the best of the Company's knowledge,
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except for the Hologic Management Agreement, no officer, director, key employee,
prospective key employee or principal shareholder of the Company is a party to
or bound by any agreement, contract or commitment, or subject to any
restrictions
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in connection with any previous or current employment of any such person, which
materially and adversely affect, the proposed business or operations of the
Company or such person's ability to perform his duties as an officer, director
or employee or to own stock in the Company.
2.17 Compliance with Securities Act of 1933. Within the past twelve
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months, neither the Company nor any person acting on behalf of the Company has,
directly or indirectly, offered any capital stock, including the Shares or any
part thereof, or any rights, warrants or options to purchase any capital stock
of the Company, for sale to, or solicited any offers to buy any of the same
from, or negotiated with respect to any of the foregoing with, any person other
than the Investors and existing holders of Common Stock and options to purchase
Common Stock.
Neither the Company nor any person acting on behalf of the Company has,
directly or indirectly, taken or will take any action which would subject the
issuance or sale of the Shares to the registration requirements of the
Securities Act. All shares of capital stock of the Company heretofore sold and
issued by it were sold and issued in compliance with all applicable Federal and
state securities laws.
2.18 Disclosure. Neither this Agreement, the Business Plan of the
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Company, nor any financial statement, certificate, list, exhibit or other
written statement pertaining to the Company or to any officer, director, key
employee or principal shareholder, made or delivered to the Investors by the
Company or by its officers, directors, shareholders or employees, or the
authorized agents thereof, contains (when read together) any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements contained therein not misleading in light of the circumstances
under which they were made., except that the total proceeds to the Company from
this offering is $1,000,000 less than the amount reflected by the Business Plan
required to achieve positive cash flow, and the Company may require further
funding as described in the Business Plan. There exists no fact or circumstance
which, to the knowledge of any officer of the Company, materially and adversely
affects or will affect (so far as such persons can now reasonably foresee) the
business, properties or assets, or condition, financial or otherwise, of the
Company, both at the present and as proposed.
2.19 Closing Date. The representations and warranties of the Company
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contained in this Agreement and all information contained in any exhibit,
schedule or attachment hereto will be true and correct in all material respects
on the Closing Date as though then made and as though the Closing Date were
substituted for the date of this Agreement throughout this Agreement, except as
affected by the transactions expressly contemplated by this Agreement.
3. Representations and Warranties of Founders. S. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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("▇▇▇▇▇▇▇▇▇▇") and ▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇") (individually, the "Founder") each
represents and warrants to each Investor as follows:
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3.01 Conflicting Agreements. Such Founder is not in violation of any term
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of any employment contract, patent or other proprietary information disclosure
or assignment agreement or any other contract, agreement, or any judgment,
decree or order of any court or administrative agency relating to or affecting
the right of such Founder to be employed by the Company because of the nature of
the business conducted or proposed to be conducted by the Company or for any
other reason. No such term, judgment, decree, or order conflicts with such
Founder's obligation to use his best efforts to promote the interests of the
Company nor does the execution and delivery of this Agreement, nor the carrying
on of the Company's business as an officer of the Company, conflict with any
such term, judgment, decree or order.
3.02 Conflicts of Interests. Such Founder, the members of such Founder's
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immediate family and any corporations, partnership or other business entity in
which such Founder and such persons have, in the aggregate, more than a five
percent (5%) equity or income interest are not a party to any transaction,
agreement or understanding to which the Company is also a party and do not have
any interest in any Person with whom the Company does or intends to do business,
other than Hologic.
While employed by the Company, such Founder will devote such time to the
business of himself to the Company as may be appropriate and, except for his
employment by Hologic, on a full-time basis and will not engage in any other
business activity, either on a full-time or part-time basis, as an employee, a
consultant or in any other capacity, and whether or not he receives any
compensation therefor; provided, however, that nothing herein shall prohibit
such Founder from making and managing passive investments, which activities do
not, in the aggregate, materially interfere with such Founder's performance of
his duties to the Company.
4. Representations and Warranties of Investors.
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4.01 Investment Intent. Each Investor hereby represents and warrants to
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the Company that he or it is purchasing or acquiring the Securities for his or
its own account for investment and not with a present view to, or for sale in
connection with, any distribution thereof in violation of the Securities Act.
Each Investor hereby consents to the imposition of a legend substantially
similar to the following on each certificate representing the Securities, and
each Investor agrees that he will abide by the restrictions contained therein:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended
(the "Act") and may not be sold, transferred or assigned
unless such shares are registered under the Act or an
opinion of counsel, satisfactory to the corporation, is
obtained to the effect that such sale, transfer or
assignment is exempt
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from the registration requirements of the Act."
4.02 Authorization. Each Investor has the power and authority to enter
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into this Agreement and to perform all of his or its obligations hereunder, and
no consent, approval, authorization or order of any court or governmental agency
or board is required to consummate the same.
4.03 Restricted Securities. Each Investor is experienced in evaluating
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and investing in young, high technology companies such as the Company. Each
Investor understands that the Shares and Conversion Stock have not been
registered under the Securities Act by reason of a specific exemption from the
registration provision of the Securities Act which depends upon, among other
things, the bona fide nature of his or its investment intent as expressed
herein. Each Investor acknowledges that the Shares and Conversion Stock when
received, must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
Each Investor has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act, which rule permits limited resale of
securities purchased in a private placement subject to the satisfaction of
certain conditions, contained therein. Each Investor understands that Rule 144
is not presently available for the resale of his or its Shares.
4.04 Finders. No person is entitled, directly or indirectly, to
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compensation from any Investor by reason of any contract or understanding or
contact with such Investor, as a finder or broker in connection with the sale
and purchase of the Shares contemplated by this Agreement.
5. Covenants of the Company.
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So long as any Investor is the owner of any of the Securities or any other
security of the Company or of any successor issued in exchange for the
Securities, but not after the Company has filed a report with the Securities and
Exchange Commission pursuant to Section 13(a) of the Exchange Act by reason of
the Company having registered its Common Stock pursuant to Section 12(g) or
15(d) of the Exchange Act, the Company agrees that:
5.01 Compliance with Law. It will not knowingly contravene any material
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governmental laws, domestic or foreign, applicable to it, unless their validity
is contested reasonably and in good faith, and it will maintain and cause each
of its Subsidiaries to maintain, in good standing, their respective rights and
qualifications to do business in all United States jurisdictions in which they
may from time to time conduct business and own their respective properties and
where failure to qualify would have a material adverse effect on their
operations or financial condition, to the extent necessary therefor. The
Company will at all times remain a corporation incorporated under the laws of
the United States or of one of the States thereof.
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5.02 Accounting System. It will maintain and cause each of its
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Subsidiaries to maintain a system of accounting established and administered in
accordance with generally accepted accounting principles consistently applied,
and will set aside on its books and cause each of its operating Subsidiaries to
set aside on its books all such proper reserves as shall be required under
generally accepted accounted principles consistently applied.
5.03 Board of Directors.
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(a) Representatives of Investors. The Company presently intends to
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maintain the authorized number of members of its Board of Directors at not more
than seven (7). The Investors shall have the right to designate in writing (i)
up to three (3) nominees to be included among management's nominees to be
elected as directors of the Company if the authorized number of directors
exceeds five (5), and (ii) up to two (2) nominees to be so included if the
authorized number of directors equals five (5) or less. Two nominees shall be
designees of Burr, Egan, Deleage & Co. and the third designee, if any, shall be
selected by the Investors. The designees of the Investors shall be subject to
approval by the Company, which approval shall not be unreasonably withheld. The
Company hereby agrees to use its best efforts to cause such representatives to
be elected to the Company's Board of Directors and to be renominated and
reelected annually until the number of shares of capital stock then held by all
of the Investors represents less than five percent (5%) of the total voting
power of the Company. One of the initial designees of the Burr, Egan, Deleage &
Co. shall be ▇▇▇▇▇ ▇▇▇▇▇. The Company shall give notice of each meeting of the
Board of Directors to the Investors, shall permit a representative of the
Investors to attend such meeting as a guest of the Board of Directors and shall
provide to Investors who so request, copies of minutes of all action taken by
the Board of Directors, whether at meetings or by written consent.
(b) Voting Agreement. The Investors agree to vote the shares of
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voting securities of the Company held or controlled by them, and will otherwise
use their best efforts to elect and maintain in office as a director of the
Company: (i) each of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, such agreement to terminate with
respect to each such person when the number of shares of capital stock then held
by such person represents less than five percent (5%) of the total voting power
of the Company or such person is no longer employed by the Company or a
Subsidiary; and (ii) one (1) additional designee of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, if the
authorized number of directors is five (5) or less, and two (2) additional
designees of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, if the authorized number of directors exceeds
five (5), until the voting agreement under clause (i) with respect to both
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ has terminated. In any particular election of directors,
the foregoing agreement of the Investors will not apply to any of the Investors
unless ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ first vote in favor of themselves or each other and
their designees the shares of the Company's voting
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securities held or controlled by them. In addition, if in any particular
election of directors, the Investors exercise the foregoing right to designate
up to two (or three) persons to be included among management's nominees, then
the foregoing voting agreement of the Investors will not apply until the
Investors have first voted the shares of the voting securities of the Company
held or controlled by the Investors in favor of such designees to the Board of
Directors.
(c) Expenses of Directors. The representatives of the Investors who
-------- -- ---------
serve as Directors shall be reimbursed by the Company for reasonable out-of-
pocket travel and other expenses, if any, incurred by them in attending Board of
Directors' meetings and in performing their duties as Directors.
(d) Board Approval Requirement. The minimum number of votes required
----- -------- -----------
for the approval of actions and the adoption of resolutions by the Board of
Directors shall be a majority of the actual number of directors then in office.
5.04 Inspection. It shall permit each holder of Securities, or any
----------
authorized representative thereof, to visit and inspect the properties of the
Company and its Subsidiaries, including their respective corporate and financial
records, and to discuss the business and finances of the Company and its
Subsidiaries with their respective officers during normal business hours
following reasonable notice and as often as may be reasonably requested. Any
holder exercising his or its rights under this Section, and his or its
representatives, shall maintain the confidentiality of all financial,
confidential and proprietary information of the Company and its Subsidiaries
acquired by them in exercising such rights.
5.05 Financial Statements and Other Information. It will deliver to each
--------- ---------- --- ----- -----------
Investor:
(a) within 90 days after the end of each fiscal year of the Company,
an audited balance sheet of the Company as at the end of such year and audited
statements of operations and of changes in financial condition of the Company
for such year, certified (without qualification as to scope) by certified public
accountants of established national reputation selected by the Company, and
prepared in accordance with generally accepted accounting principles
consistently applied;
(b) within 30 days after then end of each month in each fiscal year
of the Company, an unaudited balance sheet of the Company as at the end of such
month and unaudited statements of operations and of changes in financial
condition of the Company for such month, together with a statement setting forth
a comparison between said actual balance sheet and statements and the projected
monthly balance sheet and statements of operations and financial condition for
such period previously delivered to the Investors under clause (c) hereof;
-10-
(c) within 30 days of their review by the Company's Board of
Directors, but not later than the beginning of each fiscal year, projected
balance sheets of the Company as of the end of each fiscal month of said fiscal
year, and projected statements of operations and of changes in financial
condition of the Company, covering the same fiscal periods, all in reasonable
detail, or such other form of projected statements as approved by a majority of
the directors then if office (provided that the cash flow projections for the
first twelve months of operations of the Company contained in the Business Plan
shall be deemed to be the initial projected statements delivered hereunder);
(d) within 30 days of their review by the Company's Board of
Directors, any material revision of projected financial statements provided
under clause (c) above;
(e) with reasonable promptness, such other notices, information and
data with respect to the Company as the Company delivers to the holders of its
Common Stock, and such other information and data as such Investor may from time
to time reasonably request at such Investor's cost.
The foregoing financial statements shall be prepared on a consolidated and
consolidating basis if the Company then has any Subsidiaries; provided that any
consolidating statements required by clause (a) need not be audited. The
financial statements delivered pursuant to clauses (b) above shall be
accompanied by a certificate of the chief financial officer of the Company
stating that such statements have been prepared in accordance with generally
accepted accounting principles consistently applied and fairly present the
financial condition of the Company at the date thereof and for the period
covered thereby, subject only to nonrecurring year-end adjustments resulting
from an audit of the Company, which in the aggregate will not be materially
adverse.
5.06 Insurance. The Company will maintain workers' compensation insurance
---------
and such insurance with respect to its properties and business, including
insurance against loss, damage, fire, theft, public liability and other risks,
of the kinds and in the amounts which are standard for companies of similar size
engaged in the business in which the Company is engaged and intends to engage.
5.07 Proprietary Information Agreements. It will use its best efforts to
----------- ----------- ----------
enter into agreements, in a timely manner, with each of its employees and
consultants, requiring the assignment by them to the Company of all inventions
and discoveries of such employees and consultants during the course of their
employment or in connection with their activities as consultants, as the case
may be, and requiring that such persons maintain in confidence all proprietary
information of the Company and return to the Company, upon termination of
employment or engagement as a consultant, all proprietary information of the
Company then in their possession or under their control.
-11-
5.08 Material Changes and Litigation. The Company will promptly notify
-------- ------- --- ----------
the Investors of any material adverse change in the business, properties, assets
or condition, financial or otherwise, of the Company and of any litigation or
governmental proceeding or investigation pending or, to the best knowledge of
the Company, threatened against the Company, or against any officer, director,
key employee or principal shareholder of the Company materially affecting or
which, if adversely determined, would materially adversely affect its present or
proposed business, properties, or assets taken as a whole.
5.09 Executive Compensation. Services to the Company rendered by
--------- ------------
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall be paid for pursuant to the Hologic Management
Agreement, and no compensation shall be paid or accrued directly to ▇▇▇▇▇▇▇▇▇▇
or ▇▇▇▇▇ by the Company without the favorable vote of the Directors designated
by Burr, Egan, Deleage & Co.
5.10 Transactions with Affiliates. Except for the Hologic Management
------------ ---- ----------
Agreement and the Hologic License Agreement, without the unanimous written
consent of the Company's Board of Directors, or a vote by the Directors at a
meeting at which the Investors' representatives are present and vote in favor
such action (not including in either case, however, any Director having an
interest in the proposed transaction), the Company shall not engage in any
transaction with, nor enter into any contract, agreement or other arrangement
providing for the employment of, furnishing of services by, rental of real or
personal property from, or otherwise requiring payments to, any 10% shareholder,
officer or director of the Company, nor any "affiliate" or "associate" of such
persons (as such terms are defined in the rules and regulations promulgated
under the Securities Act), and in no event will any such transaction or
agreement be on terms which, at the time such transaction or agreement is
approved, are less favorable to the Company than would be similar transactions
or agreements with unrelated third parties.
5.11 Dividends. Without the unanimous written consent of the Company's
---------
Board of Directors, or a vote by the Directors at a meeting at which the
representatives of Burr, Egan, Deleage & Co. are present and vote in favor of
such action, it will not declare, set aside or pay any dividend on (other than a
dividend of capital stock of the Company), or declare or make any distri-bution
(other than liquidating distributions) with respect to, shares of the capital
stock of the Company junior in right of liquidation to the Series A Preferred.
5.12 Issuances of Stock. The Company has reserved 1,000,000 shares of
--------- -- -----
Common Stock for issuance to employees and consultants of the Company pursuant
to stock option or restricted stock arrangements, which vest such shares in
installments contingent on employment with the Company during a specified
period. The Board of Directors of the Company may authorize, from time to time,
the issuance of such shares, on such terms including price, payment and vesting
restrictions as the Directors deem appro-
-12-
priate; provided that a representative affiliated with Burr, Egan, Deleage & co.
consents to such actions or is present and votes in favor thereof at a meeting
of the Board.
5.13 Merger; Sale of Assets. Without the prior approval in writing or
------- ---- -- ------
favorable vote at a duly called stockholders meeting by Investors holding a
majority of the shares of Series A Preferred, there shall be no merger or
consolidation of the Company with or into another entity, in which the Company
is not the surviving entity, nor shall there be a sale of all or substantially
all of the assets of the Company to another entity.
6. Conditions to Obligations of Investors at the Closing.
---------- -- ----------- -- --------- -- --- -------
The obligations of each Investor under this Agreement at the Closing are
subject to satisfaction of the following conditions at or prior to the Closing,
any of which may be waived by such Investor:
6.01 Representations and Warranties Correct. All of the representations
--------------- --- ---------- -------
and warranties of the Company contained in this Agreement shall be true and
correct on the Closing Date with the same effect as if made on the Closing Date.
6.02 Performance of Covenants and Agreements. All of the covenants and
----------- -- --------- --- ----------
agreements of the Company contained in this Agreement and required to be
performed on or before the Closing Date shall have been performed.
6.03 Opinion of Counsel to the Company. The Investors shall have received
------- -- ------- -- --- -------
an opinion of counsel to the Company, Brown, Rudnick, Freed & Gesmer, addressed
to the Investors, in form and substance reasonably satisfactory to the Investors
and dated the Closing Date, substantially to the following effect:
(a) This Agreement, the Articles of Amendment and the certificates
representing the Shares to be purchased at the Closing have been duly and
validly authorized, executed, and delivered by the Company and constitute valid
and legally binding obligations of the Company enforceable in accordance with
their terms, except as such may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights, and except that no opinion need by expressed
with respect to the availability of equitable remedies or the enforceability of
Section 9.07 hereof (to the extent that the Company agrees to indemnify
directors, officers and controlling persons for liabilities arising under the
Securities Act);
(b) All corporate proceedings required by law or by the provisions of
this Agreement to be taken by the Company at or prior to the Closing in
connection with the transactions contemplated by this Agreement have been duly
and validly taken;
-13-
(c) The Company is validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has all requisite corporate power
and authority to own its properties and conduct its business;
(d) The Company has secured all governmental consents, approvals,
authorizations and, to the best knowledge of such counsel, has obtained such
other consents, approvals and authorizations, and has complied with all similar
requirements prescribed by any law, rule or regulation which must be obtained or
satisfied by the Company and which are necessary for the consummation of the
transactions contemplated by this Agreement at or prior to the Closing;
(e) The Company has the corporate right, power and authority to enter
into this Agreement and to issue, sell and deliver the Shares and to consummate
all other transactions contemplated hereby;
(f) The outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable, and, to
the best knowledge of such counsel, there are no outstanding options for the
purchase of, or any agreements providing for the issuance of (contingent or
otherwise), or any commitments or claims of any character relat-ing to, any such
capital stock or any shares of stock or securi-ties convertible into or
exchangeable for any such capital stock;
(g) The Company is not in violation of its Articles of Organization,
as amended, or bylaws or, to the best knowledge of such counsel, in default in
the performance of any material obligation, agreement or condition contained in
any bond, debenture or other evidence of indebtedness or any indenture or loan
agreement of the Company. Neither the sale of the Shares, nor the execution and
delivery of this Agreement, the consummation of the transactions herein
contemplated and the compliance with the terms of this Agreement do, or will,
(i) conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the Articles of Organization, as amended, or the
bylaws of the Company, or, to the best knowledge of such counsel, any material
indenture, mortgage or other agreement or instrument of which they have
knowledge to which the Company is as party or by which it or any of its
properties are bound, or (ii) to the best knowledge of such counsel, result in
the creation or imposition of any material lien, charge or encumbrance upon any
property or assets of the Company;
(h) Holders of the shares of Series A Preferred and Series B
Preferred have the respective rights, preference and privileges set forth in the
Articles of Amendment, which have been duly and properly adopted and filed in
all places where they are required to be filed;
(i) Based on the accuracy of the representations of the Company and
of the Investors contained in this Agreement, the
-14-
offer, issuance and sale of the Shares to the Investors pursuant to this
Agreement are exempt from registration under the Securities Act of 1933, as
amended; and
(j) To the best knowledge of such counsel, there is no litigation or
governmental proceeding or investigation pending or threatened against the
Company, relating to the present or proposed business, property or assets of the
Company.
In rendering such opinion, such counsel may rely to a reasonable extent
upon certificates of public officials and upon certificates of officers of the
Company as to matters of fact. Such opinion may be based on existing laws, rules
and regulations.
6.04 Legal Action.
----- ------
(a) There shall not have been instituted or threatened any material
legal proceeding seeking to prohibit the consummation of the transactions
contemplated by this Agreement, or to obtain damages from any Investor with
respect thereto.
(b) None of the parties hereto shall be prohibited by any order,
writ, injunction or decree of any governmental body of competent jurisdiction
from consummating the transactions contemplated by this Agreement, and no
material action or proceeding shall then be pending which questions the validity
of this Agreement, any of the transactions contemplated hereby or any action
which has been taken by either of the parties in connection herewith or in
connection with any of the transactions contemplated hereby.
6.05 Filing of Articles of Amendment. The Articles of Amendment shall
------ -- -------- -- ---------
have been filed with the Secretary of the Commonwealth of Massachusetts; and
except as so amended, the Company's Articles of Organization will not have been
amended or modified.
6.06 Restricted Stock Agreements. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall each have
---------- ----- ----------
executed and delivered to the Company a Restricted Stock Agreement in the form
of Exhibit C hereto (the "Restricted Stock Agreement").
6.07 Hologic License Agreement. The Company shall have entered into a
-------------------------
License and Technology Agreement with Hologic, Inc. in the form of Exhibit D
hereto.
6.08 Hologic Management Agreement. The Company shall have entered in a
----------------------------
Management Services Agreement with Hologic, Inc. in the form of Exhibit E
hereto.
6.09 Shareholders Agreement. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall have executed
------------ ---------
and delivered to the Investors a Shareholder Agreement substantially in the form
of Exhibit F hereto (the "Shareholders Agreement").
-15-
6.10 Compliance Certificate. The Company shall have delivered to each
---------- -----------
Investor at the Closing, an officer's certificate dated the Closing Date and
signed by the President and the Vice President of the Company stating that (i)
the conditions specified in Sections 6.01, 6.02 and 6.04 through 6.09 have been
satisfied, (ii) they have made, or have caused to be made, such investigations
as are necessary in order to permit them to verify the accuracy of the
information set forth in such certificate, and (iii) to the best of their
knowledge, such certificate does not misstate any material fact or omit any fact
necessary to make the certificate not misleading in any material respect.
6.11 Proceedings Satisfactory. All corporate and other proceedings taken
----------- ------------
prior to or at the Closing in connection with the transactions contemplated by
this Agreement, and all documents and instruments incident thereto, shall be
reasonably satisfactory in form and substance to counsel for the Investors.
7. Conditions to Obligations of the Company at the Closing. The obligations of
---------- -- ----------- -- --- ------- -- --- -------
the Company under this Agreement at the Closing are subject to satisfaction of
the condition (which may be waived by the Company) that all of the
representations and warranties of the Investors contained in this Agreement
shall be true and correct on the Closing Date with the same effect as if made on
the Closing Date.
8. Participation in Future Offerings. In order to afford the Investors the
------------- -- ------ ---------
opportunity to maintain their percentage ownership interest in the Company, the
Company agrees to offer to the Investors, and to issue and sell to accepting
offerees, such other securities of the Company, that evidence shares of Common
Stock or other Voting Stock or that bear rights to acquire, convert into or be
redeemed or exchanged for shares of Common Stock or Voting Stock, including
without limitation, any rights, options, warrants or convertible debt or equity
instruments that provide any right to subscribe for, purchase or otherwise
acquire shares of Common Stock or other Voting Stock, as may be offered by the
Company from time to time after the Closing Date (any such shares being herein
referred to as "New Shares"), all pursuant to the terms and conditions of this
Section 8.
8.01 Eligible Offerings; Notice. The Company shall deliver written notice
-------- ---------- ------
to the Investors of the terms and conditions of each offering, borrowing or
other similar transaction, not intended to be registered under the Securities
Act, pursuant to which the Company intends to issue New Shares. Such notice
shall be delivered to the Investors not later than twenty (20) business days
prior to the date upon which any such transaction closes. By such notice, the
Company shall offer to sell to the Investors the applicable amount of securities
calculated pursuant to Section 8.03.
8.02 Acceptance. Each Investor may accept any such offer in whole or in
----------
part by delivering to the Company a written agreement to make such purchase,
executed by such Investor, specifying the
-16-
amount of the securities to be purchased by such Investor, not later than ten
(10) business days following the date of delivery of the offer to such Investor
by the Company. The terms and conditions, price, timing of closing and other
provisions of such agreement by such Investor shall be not less favorable to the
Company than those of the other agreement to purchase such New Shares.
8.03 Percentage Interest. The amount of New Shares to be offered to each
---------- --------
Investor for purchase pursuant to this Section 8 shall, with respect to each
transaction subject hereto, be calculated by multiplying (a) the aggregate
number of New Shares offered, times (b) the percentage ownership of Voting Stock
of the Company held by such Investor immediately after the Closing hereunder, as
set forth opposite such Investor's name on Exhibit A hereto.
8.04 Excluded Offerings. The provisions of this Article 8 shall not apply
-------- ---------
to any issuance by the Company of New Shares;
(a) in connection with an acquisition by the Company or any Subsidiary
of the assets or securities of another business entity or the merger of any
business entity with or into the Company or any Subsidiary; or
(b) to employees or consultants of the Company or any Subsidiary
pursuant to Section 5.12 hereof or otherwise;
provided, however, that any such issuance of New Shares and the terms thereof
have been approved by the Board of Directors of the Company by unanimous written
consent or at a meeting at which [a majority of] the representatives of the
Investors are present and vote in favor thereof.
8.05 No Accumulation. Each transaction or proposed issuance under this
-- ------------
Section 8 is a separate transaction. The failure of an Investor to exercise in
whole or in part any prior offer shall not increase his or its rights with
respect to any future transaction subject hereto and the rights of any Investor
under this Section 8 with respect to any transactions are reduced pro rata to
the extent that such Investor acquires securities of the Company by
participating directly in such transaction.
8.06 Rights Personal. The rights created by this Section 8 are personal to
------ --------
the Investors and may not be assigned, except in connection with a transfer of
Securities purchased hereunder by any Investor which is a corporation or
partnership to its respective shareholders or partners.
8.07 Termination of Rights. The rights provided to the Investors in this
----------- -- ------
Section 8 shall terminate upon the effectiveness of any Registration Statement
(as defined in Section 9.01 hereof) filed by the Company under the Securities
Act covering any shares of its Common Stock.
-17-
9. Registration Rights.
------------ ------
9.01 Certain Definitions. As used in this Agreement, the following terms
------- -----------
shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any
----------
other Federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
-------- ---
or any similar Federal statute, and the rules and regulations of the Commission
issued under the Act, as they each may, from time to time, be in effect.
"Securities Act" means the Securities Act of 1933, as amended, or any
---------- ---
similar Federal statute, and the rules and regulations of the Commission issued
under that Act, as they each may, from time to time, be in effect.
"Person" means an individual, a corporation, a partnership, a trust,
------
an unincorporated organization, and a government or any department, agency, or
political subdivision thereof.
"Registration Statement" means (a) a registration statement (other
------------ ---------
than a registration statement on Form S-1 solely with respect to employee
benefit plans, on Form S-8, or on Form S-4 solely with respect to Rule 145
transactions, or any successor form or forms used for the purpose specified by
such forms), or (b) an offering circular or offering statement pursuant to
Regulation A under the Securities Act (provided that if such form is not
available for the transaction for which it is proposed to be utilized, it shall
not be deemed to be a "Registration Statement"), in either event filed by the
Company with the Commission for a public offering and sale of securities of the
Company.
"Registration Expenses" means the expenses described in paragraph (f)
------------ --------
of this Section 9.
"Registrable Shares" means (i) the shares of Conversion Stock issued
----------- ------
or issuable to the Investors upon conversion of their Series B Preferred, and
(ii) any other shares of Common Stock of the Company issued in respect of such
shares because of stock splits, stock dividends, reclassifications,
recapitalizations, mergers, consolidations, or similar events); provided,
--------
however, that any shares previously sold by an Investor to the public pursuant
-------
to a registered public offering or Rule 144 under the Securities Act shall cease
to be Registrable Shares. Whenever reference is made in this Agreement to a
request or consent in writing from the holders of a certain percentage of the
Registrable Shares, such reference shall include shares of Conversion Stock
issuable upon conversion of the Series B Preferred even though such conversion
has not then been effected.
"Stockholders" means the Investors and any persons or entities to whom
------------
shares of Series B Preferred or Conversion Stock
-18-
are transferred by an Investor or any subsequent transferee thereof.
9.02 Sale or Transfer of the Shares. The Shares shall not be sold or
---- -- -------- -- --- ------
transferred unless either (a) they first shall have been registered under the
Securities Act, (b) such shares are sold in compliance with Rule 144 under the
Securities Act, or (c) the Company first shall have been furnished with an
opinion of legal counsel, reasonably satisfactory to the Company or its counsel,
stating that such sale or transfer is an exempted transaction under the
Securities Act and, unless such opinion states that such Shares may be
transferred by the transferee immediately after acquisition without registration
under the Securities Act, a written agreement by the transferee thereof not to
sell or transfer such Shares without complying with the requirements provided
for in this Section 9.02. The Company or its transfer agent may require, as a
condition to registration of transfer following any sale pursuant to Rule 144
under the Securities Act, that it be furnished with an opinion of counsel
satisfactory to it to the effect stated in the preceding sentence. The fees and
expenses of such counsel in routine Rule 144 transactions not involving unusual
circumstances shall be borne by the Company.
9.03 Required Registration.
-------- ------------
(a) At any time after five years from the date of this Agreement, a
Stockholder or Stockholders holding in the aggregate at least 51% of the
Registrable Shares may request the Company, in writing, to effect the
registration under the Securities Act of Registrable Shares having an aggregate
offering price of at least $5,000,000. Upon receipt of any such request, the
Company shall promptly give written notice of such proposed registration to all
Stockholders. Such Stockholders shall have the right, by giving written notice
to the Company within 20 days from receipt of the Company's notice, to elect to
have included in such registration such of their Registrable Shares as such
Stockholders may request in such notice of election. Thereupon, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration, on the requested form of Registration Statement, of all
Registrable Shares which the Company has been requested to register. If such
request is in connection with an underwritten public offering, the underwriters
will be selected by the Company, subject to the approval of a majority of the
requesting holders, which approval will not be unreasonably withheld.
The Company shall not be required to effect more than one registration
pursuant to this paragraph (a). In addition, the Company shall not be required
to effect any registration within six months after the effective date of any
other Registration Statement of the Company.
(b) If at the time of any request to register Registrable Shares
pursuant to paragraph (a), (i) the Company is engaged or has fixed plans to
engage within 30 days of the time
-19-
of the request in a registered public offering as to which the Stockholders may
include Registrable Shares pursuant to paragraph (a), or (ii) is engaged in any
other activity which, in the good faith determination of the Company's Board of
Directors, would be adversely affected by the requested registration to the
material detriment of the Company, then the Company may at its option direct
that such request be delayed for a period not in excess of six months from the
effective date of such offering or the date of commencement of such other
material activity, as the case may be, such right to delay a request to be
exercised by the Company not more than once in any two year period. In an event
described in clause (i), the Company may, within the period stated therein, file
a Registration Statement, which Registration Statement, at the Company's option,
shall be deemed to be a Registration Statement filed under paragraph (b) of
Section 9.04 hereof.
9.04 Incidental Registrations.
---------- -------------
(a) If the Company at any time proposes to file a Registration
Statement covering any of its securities, whether of its own accord or at the
request or demand of any holder or holders of such securities, and if the
Registration Statement proposed to be used may be used for the registration of
Registrable Shares (an "Incidential Registration"), the Company will thereupon
give prompt written notice to all Stockholders of its intention to do so, and,
upon the written request of any such Stockholder made within 15 days after the
receipt of any such notice (which request will specify the Registrable Shares
intended to be disposed of by such Stockholder and state the intended method of
disposition thereof), the Company will use its best efforts to cause all such
Registrable Shares, the holders of which have so requested the registration
thereof, to be registered under the Securities Act to the extent requisite to
permit the disposition (in accordance with the intended methods thereof as
aforesaid) by the holders of the Registrable Shares to be so registered;
provided, however, that the Company shall not be obligated to use its best
efforts to cause all Registrable Shares of requesting holders to be registered
unless the aggregate proposed selling price of such Registrable Shares is
$250,000.
(b) If an Incidental Registration is a primary registration on behalf
of the Company and is in connection with an underwritten public offering, and if
the managing underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such registration (whether
by the Company, the holders of Registrable Shares pursuant to paragraph (a) of
this Section 9.04 or other holders of securities pursuant to any other rights
granted by the Company to demand inclusion of any such securities which can be
sold in such offering, the Company will include in such registration the number
of securities requested to be included which in the opinion of such underwriters
can be sold in the following order (i) first, all of the shares the Company
proposes to sell, (ii) second, all of the Registrable Shares requested to be
included in such registration, pro rata among the holders of Registrable Shares,
and (iii)
-20-
third, any other securities requested to be included in such registration.
(c) If an Incidental Registration is a secondary registration on
behalf of holders of the Company's securities and is in connection with an
underwritten public offering, and if the managing underwriters advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration (whether by such holders, by holders of
Registrable Shares pursuant to Section 9.03 of this Section 9 or by holders of
its securities pursuant to any other rights granted by the Company to demand
inclusion of securities in such registration) exceeds the number of securities
which can be sold in such offering, the Company will include in such offering
the number of securities requested to be included which in the opinion of such
underwriters can be sold in the following manner (i) first, the securities
requested to be included by the holders demanding such registration, and (ii)
second, any other securities (including the Registrable Shares, if the
Stockholders did not demand such registration pursuant to Section 9.03 requested
to be included in such registration, pro rata among the holders of all such
securities on the basis of the number of shares of such securities held by each
such holder.
(d) The rights given to the holders of Registrable Shares pursuant to
this Section 9.04 shall terminate, with respect to a particular holder, when
such holder may sell an unlimited number of Registrable Shares without regard to
any limitation on the number of securities to be sold, the manner of sale or any
other aspects of the proposed transfer, as such may be limited by Rule 144 or
any other similar rule or regulation of the Commission promulgated under the
Securities Act.
9.05 Registration Procedures. If and whenever the Company is required by
------------ ----------
the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
(b) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective for a period of not less than 90 days from the
effective date and to comply with the provisions of the Securities Act (to the
extent applicable to the Company) with respect to the disposition of all
Registrable Shares registered hereby in accordance with the intended methods of
disposition by the selling Stockholders thereof set forth in such Registration
Statement;
-21-
(c) as expeditiously as possible furnish to each selling Stockholder
such numbers of copies of the prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
instruments as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder; and
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states or jurisdictions as each selling
Stockholder shall reasonably request, and do any and all other acts and things
that may be necessary or desirable to enable the selling Stockholder to
consummate the public sale or other disposition in such jurisdictions of the
Registrable Shares owned by the selling Stockholder; provided, however, that the
-------- -------
Company shall not be required in connection with this paragraph (d) to qualify
as a foreign corporation or execute a general consent to service of process in
any jurisdiction.
(e) notify each selling Stockholder at any time when a prospectus
relating thereto is required to be delivered under the Securities Act within the
period mentioned in paragraph (b) above, of the happening of any event as a
result of which the prospectus included in such Registration Statement, as then
in effect, include an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and as
expeditiously as possible prepare and furnish to such selling Stockholder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Shares, such prospectus will not include an
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 not misleading in
light of the circumstances then existing;
(f) cause all such Registrable Shares covered by such Registration
Statement to be listed on securities exchanges on which similar securities
issued by the Company are then listed, if any;
(g) provide a transfer agent for all such Registrable Shares covered
by such Registration Statement not later than the effective date of such
Registration Statement; and
(h) take such other customary actions as the holders of a majority of
Registrable Shares being sold may reasonably request in order to expedite or
facilitate the disposition of such Registrable Shares.
If the number of holders requesting registration of Registrable Shares
exceeds three, the Company may, in its discretion,
-22-
require the holders who have requested registration to appoint an attorney-in-
fact to represent them in the registration proceedings and who shall have the
power to execute on their behalf the Registration Statement, any amendments to
the Registration Statement, the underwriting agreement, if any, and, to the
extent permitted by law, any other forms or letters required from such holders
by the Commission.
9.06 Allocation of Expenses. "Registration Expenses" shall mean all
---------- -- --------
expenses incurred by the Company in complying with this Section 9, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company and of one counsel for all selling
Stockholders, state securities or Blue Sky fees and expenses, and the expense of
any special audits incident to or required by any such registration, but
excluding underwriting discounts and selling commissions. The Company will pay
all Registration Expenses in connection with the registration pursuant to
paragraph (a) of Section 9.03 and in connection with all registrations pursuant
to Section 9.04.
9.07 Indemnification. In the event of any registration of any of the
---------------
Registrable Shares under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless the seller of such Registrable Shares,
each underwriter of such Registrable Shares, and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or arise
out of or are based upon the omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and the Company will reimburse such seller, such underwriter,
and each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
-------- -------
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in the Registration Statement,
preliminary prospectus or prospectus, or the amendment or supplement in reliance
upon and in conformity with written information furnished to the Company through
an instrument duly executed by or on behalf of such seller or underwriter
specifically for use in the preparation thereof.
-23-
In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, each seller of the Registrable
Shares, severally and not jointly, will indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, to the same extent and
against the same losses, claims, damages, liabilities, costs and expenses
described in the preceding paragraph, in respect of any untrue statement (or
alleged untrue statement) in or omission (or alleged omission) from any
Registration Statement or preliminary or final prospectus, if the statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of such seller, specifically for use
in connection with the preparation of the Registration Statement or prospectus.
9.08 Indemnification with Respect to Underwritten Offering. In the event
--------------- ---- ------- -- ------------ --------
that Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 9.03, the Company agrees to enter into
an underwriting agreement containing customary representations and warranties
with respect to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such
issuer, including, without limiting the generality of the foregoing, customary
provisions with respect to indemnification by the Company of the underwriters of
such offering.
9.09 Rule 144 Reporting. With a view to making available the benefits of
---- --- ---------
certain rules and regulations of the Commission which may at any time permit the
sale of restricted securities to the public without registration, after such
time as a public market exists for the Common Stock of the Company, the Company
agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effect date of the first registration under the Securities Act filed by the
Company for an offering of its securities to the general public;
(b) Use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) So long as an Investor owns any restricted securities, as such
term is defined in Rule 144, to furnish to such Investor forthwith upon request
a written statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after 90 days after the effective
date of the first regisration statement filed by the Company for an offering of
its securities to the general public), and of the
-24-
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company as an
Investor may reasonably request to avail himself or itself of any rule or
regulation of the Commission allowing an Investor to sell any such securities
without registration.
10. Definitions.
-----------
For purposes of this Agreement, the following terms have the respective
meanings set forth below:
10.01 "Affiliate" means any Person which directly or indirectly controls, is
---------
controlled by, or is under common control with, the indicated Person.
10.02 "Person" means an individual, a partnership, a joint venture, a
------
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
10.03 "Subsidiary" means any corporation at least a majority of the Voting
----------
Stock of which is, at the time as of which any determination is being made,
owned by the Company either directly or through Subsidiaries.
10.04 "Voting Stock" means any shares of stock having general voting power
------ -----
in electing the Board of Directors of the Company (irrespective of whether or
not at the time stock of any other class or classes has or might have voting
power by reason of the happening of any contingency).
11. Miscellaneous Provisions.
------------- ----------
11.01 Construction. This Agreement shall be construed and enforced in
------------
accordance with and governed by the laws of the Commonwealth of Massachusetts.
11.02 Notices. All notices, requests, demands and other communications
-------
called for or contemplated hereunder shall be in writing and shall be deemed
duly given when deposited in the U.S. mail, certified mail, or registered mail,
postage prepaid, with return receipt requested, or when transmitted by wire or
telex, addressed to the parties at the following addresses, or at such other
addresses as the parties may designate by written notice in the manner
aforesaid:
If to Investors: At the addresses listed on
Exhibit A hereto.
If to the Company: VIVITECH, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
-25-
11.03 Assignment. This Agreement shall be binding upon and shall inure to
----------
the benefit of the Company and the Investors and their respective successors and
assigns.
11.04 Succession to Rights. The rights and powers of each Investor
---------- -- ------
hereunder are granted to such Investor as an owner of the Shares. Consequently,
the parties agree that, except as limited by Section 8.05, such rights and
powers exist separately and distinctly with respect to each share of the
Securities and as to each such share shall pass with it so that any owner of any
shares of the Securities whether becoming such by transfer, assignment,
operation of law or otherwise, shall have all of the rights and powers of such
Investor hereunder, and shall be entitled to exercise them in full, with or
without the agreement or consent of other such owners, and no transfer or
assignment shall divest such Investor or any subsequent owner of such rights and
powers unless all shares of the Securities owned by such persons are transferred
or assigned.
11.05 Amendments and Waiver. This Agreement and all exhibits hereto set
---------- --- ------
forth the entire understanding of the parties with respect to the transactions
contemplated hereby, and no party shall be bound by or deemed to have made any
representations or warranties except those contained herein. The provisions of
this Agreement may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the holders of at least
60% of the Series A Preferred and 60% of the Series B Preferred (including for
purposes hereof Conversion Stock into which shares of Series B Preferred have
been converted). Notwithstanding anything to the contrary in this Section
11.05, no holder of Registrable Shares will be bound by any consent authorized
by this Section 11.05 to the extent that such consent relates to the rights of
such holder under Section 9 hereof, unless the holders of at least a majority of
the Registrable Shares then outstanding have so consented or agreed in writing
to be so bound. No breach of any covenant, agreement, warranty or
representation shall be deemed waived unless expressly waived in writing by the
party who might assert such breach.
11.06 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
11.07 Headings. The headings and the table of contents of this Agreement
--------
are for reference purposes only and shall not be deemed to have any substantive
effect.
11.08 Expenses. Whether or not the transactions contemplated by this
--------
Agreement are consummated, the Company shall pay the reasonable expenses and
legal fees of ▇▇▇▇ and DorrHale and ▇▇▇▇, counsel to the Investors, in
connection with the negotiation and drafting of this Agreement and the
transactions contemplated hereby.
-26-
11.09 Confidential Information. Each of the Investors agrees that it will
------------ -----------
treat all proprietary information received by it at any time concerning the
Company or its present or proposed business as confidential information and that
it will not, directly or indirectly, disclose such information to any third
party.
11.10 Knowledge and Absence of Personal Liability of Certain Persons. In
--------- --- ------- -- -------- --------- -- ------- -------
any provision of this Agreement or any certificate or other instrument delivered
pursuant hereto in which a fact or matter is stated to be to the best of the
party's knowledge or that the party has no reason to believe the existence or
nonexistence of a fact or matter, such statements shall be deemed to be limited
to the actual knowledge and state of mind of the officer or employee executing
and/or initialing and delivering such agreement or instrument on behalf of such
party. Each officer or individual who executes and/or initials and delivers
this Agreement or any certificate or other instrument pursuant hereto on behalf
of any party hereto, shall be deemed to be acting in a representative capacity,
and no such individual shall have any personal liability hereunder as a result
of so acting in the absence of fraud or gross negligence on the part of such
officer or individual.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
VIVITECH, INC.
By:_________________________
S. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
President
For the purposes of Article 3 hereof only, each of the undersigned Founders
has executed this Agreement as of the date first written above.
_____________________________
S. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
_____________________________
▇▇▇ ▇. ▇▇▇▇▇
-27-
THE INVESTORS: ALTA III Limited Partnership
By: Alta III Management
Partners Limited
Partnership
By:____________________________
General Partner
▇▇▇▇▇▇▇ PARTNERS II
By: Golden Coins, N.V.,
Investment General Partner
By: ABN Trustcompany (Curacao) N.V., Managing
Director
By:____________________________
Attorney-in-Fact
▇▇▇▇ ▇▇▇▇ C.V.
By: Golden Coins N.V., Managing General
Partner
By: ABN Trustcompany (Curacao) N.V., Managing
Director
By:____________________________
Under Power of Attorney
C.V. SOFINNOVA PARTNERS FOUR
By: Sofinnova (International) Four N.V.,
General Partner
By:____________________________
Under Power of Attorney
PIONEER CAPITAL CORPORATION
By:____________________________
▇▇▇▇▇▇▇ CAPITAL IV
By:____________________________
-28-
BETA PARTNERS LIMITED PARTNERSHIP
BY: Beta Management Limited
Partnership, General
Partner
By:____________________________
General Partner
MASSACHUSETTS CAPITAL RESOURCE
COMPANY
By:_____________________________
_______________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-29-
EXHIBIT A
------- -
INVESTORS
---------
Number of
Series A Aggregate Aggregate
Shares Considera- No. of Considera-
Name and Address Purchased tion Series B tion
------------------ --------- ---------- -------- ----------
Alta III
c/o Burr, Egan,
Deleage & Co., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 70,875 $708,750 75,600 $47,250
▇▇▇▇▇▇▇ Partners II
c/o Burr, Egan,
Deleage & Co., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 11,250 $112,500 12,000 $ 7,500
▇▇▇▇ ▇▇▇▇ C.V.
c/o Burr, Egan,
Deleage & Co., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 12,375 $123,750 13,200 $ 8,250
C.V. Sofinnova
Partners Four
c/o Burr, Egan,
Deleage & Co., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 18,000 $180,000 19,200 $12,000
Pioneer Ventures
Limited Partnership
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 35,625 $356,250 38,000 $23,750
▇▇▇▇▇▇▇ Capital IV
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 9,375 $ 93,750 10,000 $ 6,250
-30-
Beta Partners Limited
Partnership
c/o Beta Partners, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇ 37,500 $375,000 40,000 $25,000
Massachusetts Capital
Resource Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 37,500 $375,000 40,000 $25,000
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o Pioneer Capital
Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 1,875 $ 18,750 2,000 $ 1,250
-31-