EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of the 5th day
of September, 2002 by and between EP MEDSYSTEMS, INC., a New Jersey corporation
(the "Company"), and BOSTON SCIENTIFIC CORPORATION, a Delaware corporation
("BSC").
WHEREAS, in connection with that License, Development and Supply Agreement
dated as of the date hereof between the Company and BSC (the "License
Agreement"), the Company desires to issue and sell to BSC, and BSC desires to
purchase from the Company, a number of shares (the "Shares") of authorized but
unissued shares of common stock, no par value per share, of the Company
("Company Common Stock"), to be determined in accordance with the terms and
conditions hereof, for a maximum aggregate purchase price of $3,000,000, upon
the terms and subject to the conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the following respective meanings:
"510(k) Submission" shall have the meaning set forth in the License Agreement.
"Abandonment Fee" shall have the meaning set forth in Section 2.3.
"Abandonment Fee Shares" shall have the meaning set forth in Section 2.3.
"Affiliate" means, with respect to any person or entity, any person or entity
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such person or entity.
"BSC Deliverables" shall have the meaning set forth in the License Agreement.
"Closing" shall mean the Initial Closing, the First Installment Closing, the
Second Installment Closing, the Third Installment Closing, or the Fourth
Installment Closing, as the case may be.
"Closing Date" means, with respect to each Closing, the date of such Closing.
"Closing Location" shall have the meaning set forth in Section 2.2(a).
"Company Licensed Intellectual Property" means all (i) material licenses of
Intellectual Property to the Company or any Company Subsidiary by any third
party, and (ii) material licenses of Intellectual Property by the Company or any
Company Subsidiary to any third party.
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"Company Owned Intellectual Property" means all material Intellectual Property
owned by the Company or any Company Subsidiary.
"Company Share Price" means the lesser of (x) $5.00 or (y) the average closing
sale price (rounded to the third decimal place) of the Company Common Stock on
the Nasdaq Stock Market for the 10 trading days up to and including the day that
is the second trading day immediately prior to: (i) the execution of this
Agreement, in the case of the Initial Closing Shares; (ii) the date of the
relevant Closing, in the case of each of the First Installment Shares, Second
Installment Shares, Third Installment Shares and Fourth Installment Shares; and
(iii) the date of the termination of the License Agreement, in the case of the
Abandonment Fee Shares.
"Company Subsidiary" shall have the meaning set forth in Section 3.2.
"Effective Date" shall have the meaning set forth in the License Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and all of
the rules and regulations promulgated thereunder.
"FDA" means the United States Food and Drug Administration, or any successor
entity.
"FDA Approval" shall have the meaning set forth in the License Agreement.
"First Installment Shares" shall have the meaning set forth on Exhibit A
attached hereto.
"First Milestone" shall have the meaning set forth on Exhibit A attached hereto.
"Fourth Installment Shares" shall have the meaning set forth on Exhibit A
attached hereto.
"Fourth Milestone" shall have the meaning set forth on Exhibit A attached
hereto.
"Governmental Authority" means any: (a) nation, state, commonwealth, territory,
county, municipality, district or other jurisdiction of any nature; (b) federal,
state, local municipal, foreign or other government; or (c) governmental or
quasi-governmental authority of any nature.
"Initial Closing" shall have the meaning set forth in Section 2.2(a).
"Initial Closing Shares" shall have the meaning set forth in Section 2.1(a).
"Installment Purchase" shall have the meaning set forth in Section 2.1(b).
"Intellectual Property" means intellectual property or proprietary rights of any
description including: (i) rights in any patent, patent application (including
any provisionals, continuations, divisions, continuations-in-part, extensions,
renewals, reissues, revivals and
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reexaminations, any national phase PCT applications, any PCT international
applications, and all foreign counterparts), copyright, industrial design, URL,
domain name, trademark, service ▇▇▇▇, logo, trade dress or trade name; (ii)
related registrations and applications for registration; (iii) trade secrets,
moral rights or publicity rights; (iv) inventions, discoveries, or improvements,
modification, know-how, technique, methodology, writing, work of authorship,
design or data, whether or not patented, patentable, copyrightable or reduced to
practice, including any inventions, discoveries, improvements, modification,
know-how, technique, methodology, writing, work of authorship, design or data
embodied or disclosed in any: (1) computer source codes (human readable format)
and object codes (machine readable format); (2) specifications; (3)
manufacturing, assembly, test, installation, service and inspection instructions
and procedures; (4) engineering, programming, service and maintenance notes and
logs; (5) technical, operating and service and maintenance manuals and data; (6)
hardware reference manuals; and (7) user documentation, help files or training
materials; and (v) good will related to any of the foregoing.
"Losses" means losses, claims, damages, liabilities and expenses of a party
being indemnified under this Agreement.
"Material Adverse Effect" shall mean, any event, circumstance, change or effect
that is or is reasonably likely to be materially adverse to the business,
results of operations, financial condition or prospects of (a) the Company and
the Company Subsidiaries or (b) BSC, as the case may be.
"Milestones" shall have the meaning set forth in Section 2.1(b).
"Milestone Achievement Notice" shall have the meaning set forth in Section
2.1(b).
"Person" (whether such term is capitalized or not) means an individual,
corporation, partnership, limited liability company, joint venture, syndicate,
person (including, without limitation, a "person" as defined in Section 13(d)(3)
of the Exchange Act), trust, association or entity.
"Program" shall have the meaning set forth in the License Agreement.
"Program Schedule" shall have the meaning set forth in the License Agreement.
"Registration Rights Agreement" shall mean that certain Registration Rights
Agreement, dated as of the date hereof, among the Company and BSC.
"RPM Equipped EP-WorkMate Systems" shall have the meaning set forth in the
License Agreement.
"SEC" shall mean the Securities and Exchange Commission.
"Second Installment Shares" shall have the meaning set forth on Exhibit A
attached hereto.
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"Second Milestone" shall have the meaning set forth on Exhibit A attached
hereto.
"Securities Act" shall mean the Securities Act of 1933, as amended, and all of
the rules and regulations promulgated thereunder.
"Third Installment Shares" shall have the meaning set forth on Exhibit A
attached hereto.
"Third Milestone" shall have the meaning set forth on Exhibit A attached hereto.
2. PURCHASE AND SALE OF SHARES; CLOSINGS.
2.1 PURCHASE AND SALE. Subject to and upon the terms and conditions
set forth in this Agreement, the Company hereby agrees to issue and sell to BSC,
and BSC hereby agrees to purchase from the Company, such number of Shares as may
be determined as follows:
(a) Upon the parties' execution of this Agreement, BSC shall purchase,
for an aggregate purchase price of $500,000, such nearest whole number of Shares
as shall be equal to the quotient obtained by dividing $500,000 by the Company
Share Price, determined as of the date hereof (the "Initial Closing Shares").
(b) BSC shall purchase such number of additional Shares as shall be
determined pursuant to Exhibit A attached hereto (each such purchase, an
"Installment Purchase") within five days of the achievement, to BSC's reasonable
satisfaction, of each of the applicable milestones (the "Milestones") set forth
on Exhibit A in accordance with the provisions set forth thereon. The Company
shall be required to give BSC prompt written notice of the achievement of each
Milestone (each, a "Milestone Achievement Notice"). In the case of the
Milestones relating to the First Installment Shares, the Second Installment
Shares and the Third Installment Shares, BSC shall be entitled to request and
receive such additional information relating to the achievement of any such
Milestone, and to conduct such additional investigation as it shall reasonably
request for purposes of determining whether such Milestone has been achieved. In
the event that BSC disagrees that any Milestone has been achieved, BSC and the
Company agree to discuss such disagreement in good faith. Upon the agreement of
BSC and the Company that a Milestone has been achieved, the relevant Closing
shall be jointly scheduled by the Company and BSC. BSC shall have no obligation
to purchase any Shares pursuant to a Milestone unless such Milestone has been
achieved in accordance with the provisions of Exhibit A and this Section 2.1(b).
2.2 CLOSINGS.
(a) At the initial closing of the transactions contemplated under this
Agreement (the "Initial Closing"), the Company shall deliver to BSC a stock
certificate, registered in the name of BSC, representing the number of Initial
Closing Shares purchased by BSC as of the Initial Closing, or shall cause such
Initial Shares to be credited to the account of BSC electronically though the
Depository Trust Company ("DTC") against
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payment of the purchase price of $500,000 by wire transfer of immediately
available funds to such account or accounts as the Company shall designate in
writing. The Initial Closing shall take place at the Boston offices of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Closing
Location") at 10:00 a.m. on September 5, 2002 or at such other location, date
and time as may be agreed upon between BSC and the Company (unless other
arrangements to close by mail or fax are mutually agreed upon by the parties as
to the Initial Closing or any subsequent Closing).
(b) Each and any subsequent closing of the sale and purchase of the
First Installment Shares, Second Installment Shares, Third Installment Shares or
Fourth Installment Shares based upon achievement of Milestones pursuant to the
terms and conditions hereof (such closings are referred to respectively as the
"First Installment Closing", "Second Installment Closing", "Third Installment
Closing", and "Fourth Installment Closing", and each, with the Initial Closing,
a "Closing"), shall be held at the Closing Location. At each such Closing, the
Company shall deliver to BSC a stock certificate, registered in the name of BSC
representing the number of Shares purchased by BSC pursuant to such Installment
Purchase, or shall cause such Shares to be credited to the account of BSC
electronically though DTC to an account designated by BSC to the Company no
later than twenty-four (24) hours prior to any such issuance, against payment of
the purchase price therefor by wire transfer of immediately available funds to
such account or accounts as the Company shall designate in writing.
2.3 ABANDONMENT FEE. If the Company elects to terminate the License
Agreement pursuant to Section 11.2(a) thereof, (for any reason or for no reason
under such Section 11.2(a), provided BSC has delivered the BSC Deliverables (as
defined thereunder) to the Company), then the Company shall promptly give BSC
written notice of such termination and shall forthwith, at its election, (i)
without additional consideration, pay an abandonment fee (the "Abandonment Fee")
to BSC payable, at the Company's option, in the form of: (i) a stock
certificate, registered in the name of BSC, for such nearest whole number of
shares of Company Common Stock as shall equal the quotient obtained by dividing
$1,000,000 by the Company Share Price (the "Abandonment Fee Shares"), or,
alternatively, the Company shall cause the Abandonment Fee Shares to be credited
to the account of BSC electronically though DTC to an account designated by BSC
to the Company no later than twenty-four (24) hours prior to any such issuance;
or (ii) pay the Abandonment Fee of $1,000,000 to BSC in the form of cash. It is
agreed by BSC and the Company that (i) the Abandonment Fee is an accurate
estimate of the damages that would be incurred by BSC in the event that the
Company elects to terminate the License Agreement pursuant to this Section 2.3,
(ii) the Abandonment Fee shall serve as the sole liquidated damages available to
BSC in the event of such termination, and (iii) in no event shall the Company be
liable for any penalty or other fees associated with the termination of the
License Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to BSC as follows as of the date hereof and as of each
Closing Date:
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3.1 INCORPORATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of New Jersey,
is qualified to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification, and has
all requisite corporate power and authority and all authorizations, licenses and
permits necessary to own its properties and to carry on its businesses as now
conducted, except where the failure to hold such authorizations, licenses and
permits would not have a Material Adverse Effect.
3.2 SUBSIDIARIES. Each subsidiary of the Company set forth on Schedule
3.2 (each, a "Company Subsidiary") is a U.S. corporation or foreign company duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite corporate power and authority
and all authorizations, licenses and permits necessary to own its properties and
to carry on its businesses as now conducted, except where the failure to hold
such authorizations, licenses and permits or to be so qualified would not have a
Material Adverse Effect. Each Company Subsidiary is duly qualified to do
business and is in good standing in each jurisdiction in which the character of
its properties or the nature of its business requires such qualification, except
where the failure to so qualify would not have a Material Adverse Effect. Except
as set forth on Schedule 3.2 hereto, as of the date hereof, neither the Company
nor any Company Subsidiary owns or holds the right to acquire any stock,
partnership interest or joint venture interest or other equity ownership
interest in any other Person. The Company owns all of the issued and outstanding
capital stock of each Company Subsidiary. The Company has made available to BSC
complete and correct copies of the charter, by-laws, minute books and other
applicable organizational documents of the Company and each Company Subsidiary,
in each case with all amendments thereto.
3.3 CAPITALIZATION. The authorized capital stock of the Company as of
the date hereof consists of (i) 25,000,000 shares of Company Common Stock, of
which 14,963,652 shares are outstanding on the date hereof and (ii) 5,000,000
shares of preferred stock, of which 373,653 shares of Series A Convertible
Preferred Stock are outstanding on the date hereof. All outstanding shares of
the capital stock of the Company have been duly authorized and are validly
issued, fully paid and nonassessable. Except as set forth on Schedule 3.3
hereto, as of the date hereof, there are no existing options, warrants, calls,
preemptive (or similar) rights, subscriptions or other rights, agreements,
arrangements or commitments of any character obligating the Company to issue,
transfer or sell, or cause to be issued, transferred or sold, any shares of the
capital stock of the Company or other equity interests in the Company or any
securities convertible into or exchangeable for such shares of capital stock or
other equity interests, and there are no outstanding contractual obligations of
the Company to repurchase, redeem or otherwise acquire any shares of its capital
stock or other equity interests.
3.4 AUTHORIZATION.
(a) All corporate action on the part of the Company and its officers,
directors and stockholders necessary for the authorization, execution, delivery
and performance of this Agreement, the Registration Rights Agreement and the
License Agreement and the consummation of the transactions contemplated herein
and therein has
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been taken. When executed and delivered by the Company and each of the other
parties hereto and thereto, each of this Agreement, the License Agreement and
the Registration Rights Agreement shall constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally and by
general equitable principles. The Company has full legal right, all requisite
corporate power and all authority and approvals required to execute and deliver
this Agreement, the Registration Rights Agreement and the License Agreement, and
to carry out and perform fully the obligations of the Company hereunder and
thereunder. This Agreement, the Registration Rights Agreement and the License
Agreement have been duly executed and delivered by the Company, and, assuming
due execution and delivery hereof and thereof by the other parties hereto and
thereto, this Agreement, the Registration Rights Agreement and the License
Agreement will be legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms.
(b) The execution and delivery by the Company of this Agreement, the
Registration Rights Agreement and the License Agreement, the consummation of the
transactions contemplated hereby and thereby, and the performance by the Company
of this Agreement, the Registration Rights Agreement and the License Agreement
in accordance with their respective terms and conditions will not:
(i) violate any provision of the organizational documents of the
Company or any Company Subsidiary;
(ii) violate, conflict with or result in the breach of any of the
terms and conditions of, otherwise cause the termination of or give any other
contracting party the right to terminate or cancel, or constitute (or with
notice or lapse of time or both constitute) a default under, or accelerate any
rights of any party to, any material indenture, mortgage, lease, loan agreement,
instrument, permit, franchise, license, judgment, or other material agreement or
instrument to which the Company or any Company Subsidiary is bound, provided
that the Company or such Company Subsidiary obtains those consents, approvals,
authorizations or actions of, or makes those filings with or gives those notices
to, any Governmental Authority or any other Person, set forth on Schedule 3.4(b)
hereto (the "Company Consents and Notices"); or
(iii) if the Company Consents and Notices are obtained or made,
violate any laws, rules, regulations or orders of any Governmental Authority
applicable to the Company or any Company Subsidiary.
3.5 VALID ISSUANCE OF THE SHARES. The Shares to be purchased by BSC
hereunder will, upon issuance pursuant to the terms hereof, be duly authorized
and validly issued, fully paid and nonassessable and not subject to any liens,
encumbrances, preemptive rights or any other similar contractual rights of the
stockholders of the Company or others, and, based in part on the representations
and warranties of BSC set forth in Section 4 hereof, will be in compliance with
applicable federal and state securities laws.
3.6 FINANCIAL STATEMENTS; SEC DOCUMENTS.
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(a) The Company has furnished to BSC its audited Statements of Income,
Stockholders' Equity and Cash Flows for each of its three most recently
completed fiscal years ending prior to the date hereof, its audited Consolidated
Balance Sheet as of the end of each of its two most recently completed fiscal
years ending prior to the date hereof, its unaudited Statements of Income,
Stockholders' Equity and Cash Flows for the period covering its two most
recently completed fiscal quarters ending prior to the date hereof, and its
unaudited Balance Sheet as of its most recently completed fiscal quarter ending
prior to the date hereof. All such financial statements are hereinafter referred
to collectively as the "Financial Statements". The Financial Statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved, and fairly present,
in all material respects, the financial position of the Company and the Company
Subsidiaries and the results of their operations as of the date and for the
periods indicated thereon, except that the unaudited financial statements may
not be in accordance with generally accepted accounting principles because of
the absence of footnotes normally contained therein and are subject to normal
year-end audit adjustments which, individually and in the aggregate, will not be
material.
(b) The Company has furnished to BSC a true and complete copy of the
Company's Annual Report on Form 10-KSB for its most recently completed fiscal
year ending prior to the date hereof (the "Latest 10-KSB"), the Company's
Quarterly Reports on Form 10-QSB for two most recently completed fiscal quarters
ending prior to the date hereof (collectively the "Prior Two 10-QSBs"), and any
amendments thereto, and any other statement, report, registration statement
(other than registration statements on Form S-8) or definitive proxy statement
filed by the Company with the SEC during the period commencing as of the start
of its most recently completed fiscal year and ending on the date hereof. The
Company will, promptly upon the filing thereof, also furnish to BSC all
statements, reports (including, without limitation, Quarterly Reports on Form
10-QSB and Current Reports on Form 8-K), registration statements and definitive
proxy statements filed by the Company with the SEC during the period commencing
on the date hereof and ending on each Closing Date (all such materials required
to be furnished to BSC pursuant to this sentence or pursuant to the next
preceding sentence of this Section 3.6 being called, collectively, the "SEC
Documents"). As of their respective filing dates, the SEC Documents did comply
and shall comply in all material respects with the requirements of the Exchange
Act or the Securities Act, as applicable, and none of the SEC Documents did
contain or shall contain any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading, as of their respective filing dates. Except as set
forth on Schedule 3.6 hereto, the Company has, during the period that the
Company has been subject to the requirements of Section 12 or 15(d) of the
Exchange Act, filed in a timely manner all reports and other material required
to be filed by it pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
Except as set forth on Schedule 3.6 hereto, the Company has not filed any
amendment to its Latest 10-KSB or either of its Prior Two 10-QSBs. Since the
filing of its Latest 10-KSB, the Company has not filed any Current Report on
Form 8-K.
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3.7 CONSENTS. Except for (i) the filing and effectiveness of any
registration statement required to be filed by the Company under the Securities
Act in connection with the exercise by BSC of its rights under the Registration
Rights Agreement and (ii) any required state "blue sky" law filings in
connection with the transactions contemplated under such registration statement,
all consents, approvals, orders and authorizations required on the part of the
Company and each Company Subsidiary in connection with the execution, delivery
or performance of this Agreement, the License Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated herein
and therein have been obtained and will be effective as of each Closing Date.
3.8 INSURANCE. All the insurable properties of the Company and of each
Company Subsidiary are insured for the benefit of the Company or such Company
Subsidiary, as the case may be, against all risks usually insured against by
persons operating similar properties in the locality where such properties are
located under valid and enforceable policies issued by insurance companies of
recognized responsibility in sufficient amounts.
3.9 NASDAQ STOCK MARKET. The Company Common Stock is currently listed
and traded on the Nasdaq Stock Market, the Company has maintained all
requirements for the continued listing of the Company Common Stock on the Nasdaq
Stock Market, and there are no proceedings to revoke or suspend such listing.
The sale of the Shares as contemplated hereby will not result in a violation of
any Nasdaq rules and regulations.
3.10 FORM S-3 ELIGIBILITY. As of the date hereof, the Company is
eligible to file a Registration Statement on Form S-3, or any successor form,
pursuant to Section 2 of the Registration Rights Agreement. The Company is not
aware of any facts that would prevent or destroy such eligibility.
3.11 PRIVATE OFFERING. Except as set forth on Schedule 3.11 hereto,
during the six months preceding the date of this Agreement, neither the Company
nor any person acting on its behalf has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of
any security (as defined in the Securities Act) that is or may be integrated
with the sale of the Shares in a manner that would require the registration of
the Shares under the Securities Act. Except as set forth on Schedule 3.11
hereto, during the six months preceding the date of this Agreement, neither the
Company nor any person acting on its behalf has offered or sold any Shares by
means of any general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act. Assuming the accuracy of BSC's
representations in Section 4 hereof, the offering and sale of the Shares will
satisfy the requirements of Rule 506 under the Securities Act.
3.12 ABSENCE OF LITIGATION. There is no action, suit or proceeding or,
to the Company's knowledge, any investigation, pending, or to the Company's
knowledge, overtly threatened against the Company or any Company Subsidiary and
in which an unfavorable outcome, ruling or finding in any said matter, or for
all matters taken as a whole, might have a Material Adverse Effect. The
foregoing includes, without limitation, any such action, suit,
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proceeding or investigation that questions this Agreement, the License Agreement
or the Registration Rights Agreement or the right of the Company to execute,
deliver and perform under any of the same.
3.13 TITLE TO PROPERTIES AND ASSETS, LIENS, ETC. Except as set forth
on Schedule 3.13 hereto, the Company has good and marketable title to its
properties and assets, and good title to its leasehold estates, in each case
subject to no mortgage, pledge, lien, lease, encumbrance, or charge, other than
(i) those resulting from taxes which have not yet become delinquent, (ii) minor
liens and encumbrances which do not materially detract from the value of the
property subject thereto or, individually or in the aggregate, have a Material
Adverse Effect, (iii) those that have otherwise arisen in the ordinary course of
business, and (iv) those relating to indebtedness for borrowed money that are
reflected in the Financial Statements.
3.14 COMPLIANCE WITH LAWS. Each of the Company and each Company
Subsidiary has complied, and is in compliance with, all federal, state, county,
local and foreign laws, rules, regulations, ordinances, and orders applicable to
the operation of its business or to the real property or personal property that
it owns or leases (including, without limitation, all such laws, rules,
ordinances, and orders relating to antitrust, consumer protection, currency
exchange, environmental protection, equal opportunity, health, occupational
safety, pension, securities and trading-with-the-enemy matters), the failure to
comply with which would, individually or in the aggregate, have a Material
Adverse Effect. Neither the Company nor any Company Subsidiary has received any
notification of any asserted present or past unremedied failure by it to comply
with any of such laws, rules, regulations, ordinances, or orders.
3.15 NO UNDISCLOSED LIABILITIES. Except as set forth on Schedule 3.15
hereto, from June 30, 2002 to the date hereof, neither the Company nor any
Company Subsidiary has incurred any liabilities or obligations, fixed or
contingent, matured or unmatured or otherwise, except for liabilities or
obligations that, individually or in the aggregate, do not or would not have a
Material Adverse Effect.
3.16. CHANGES. Except as set forth on Schedule 3.16 hereto, since the
end of the Company's last completed fiscal quarter, there has not been with
respect to the Company and the Company Subsidiaries:
(a) Any change in the assets, liabilities, financial condition or
operations of the Company or any Company Subsidiary from that reflected in the
Financial Statements, other than changes in the ordinary course, none of which
individually or in the aggregate constitutes a Material Adverse Effect;
(b) Any resignation or termination of any key officers or employees of
the Company or any Company Subsidiary; and to the knowledge of the Company,
there is no impending resignation or termination of employment of any such
officer or employee;
(c) Any material change, except in the ordinary course, in the
contingent obligations of the Company or any Company Subsidiary by way of
guaranty, endorsement, indemnity, warranty or otherwise;
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(d) Any damage, destruction or loss, whether or not covered by
insurance, which constitutes a Material Adverse Effect;
(e) Any waiver by the Company or any Company Subsidiary of a material
right or of a material debt owed to it other than in the ordinary course
consistent with past practices;
(f) Any direct or indirect loans made by the Company or any Company
Subsidiary to any stockholder, employee, officer or director of the Company or
any Company Subsidiary, other than advances made in the ordinary course
consistent with past practices;
(g) Any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder other than in the ordinary
course consistent with past practices;
(h) Any declaration or payment of any dividend or other distribution
of the assets of the Company;
(i) Any labor organization activity;
(j) Any indebtedness for borrowed money, obligation or liability
incurred, assumed or guaranteed by the Company or any Company Subsidiary, except
those for immaterial amounts and for current liabilities incurred in the
ordinary course;
(k) Any sale, assignment, license or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets except in the
ordinary course;
(l) Any change in any material agreement to which the Company or any
Company Subsidiary is a party or by which it is bound that constitutes a
Material Adverse Effect; or
(m) Any other event or condition of any character that constitutes a
Material Adverse Effect with respect to the Company or any Company Subsidiary.
3.17 LABOR MATTERS. The Company has no collective bargaining agreement
with any of its employees and, to the Company's knowledge, there is no labor
union organizing activity pending or threatened with respect to the Company or
any Company Subsidiary. There are no disputes pending or, to the knowledge of
the Company, overtly threatened between the Company or any Company Subsidiary,
on the one hand, and any employees, on the other hand, other than employee
grievances arising in the ordinary course of business which would not,
individually or in the aggregate, have a Material Adverse Effect.
3.18 MATERIAL CONTRACTS. Except as set forth on Schedule 3.18 hereto,
the contracts listed as exhibits to the SEC Documents are all of the material
contracts (as defined in the Exchange Act) to which the Company is a party or by
which it or its assets may be bound. The Company is, and, to the Company's
knowledge, all other parties to such material contracts are, in compliance in
all material respects with their obligations thereunder.
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3.19 INTELLECTUAL PROPERTY.
(a) The operation of the business of each of the Company and each
Company Subsidiary as currently conducted does not interfere with, conflict
with, infringe upon, misappropriate or otherwise violate, in any material
respect, the Intellectual Property rights of any third party, and no action or
claim is pending or overtly threatened alleging that the operation of such
business interferes with, conflicts with, infringes upon, misappropriates or
otherwise violates, in any material respect, the Intellectual Property rights of
any third party and, to the knowledge of the Company, there is no reasonable
basis therefor.
(b) The Company is the sole owner of the entire right, title and
interest in and to the Company Owned Intellectual Property, or has a valid
license or other legal right under the Company Licensed Intellectual Property,
in either case used in or necessary to the operation of its business as
presently conducted, subject to the terms of the license agreements governing
the Company Licensed Intellectual Property.
(c) Except as set forth on Schedule 3.19(c) hereto, there are no
outstanding options, licenses, or agreements of any kind between the Company and
any third party relating to the Company's Intellectual Property, nor is the
Company or any Company Subsidiary bound by or a party to any options, licenses
or agreements of any kind with respect to the patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes of any other person or entity.
(d) The Company has no present knowledge from which it could
reasonably conclude that the Company Owned Intellectual Property and any
Intellectual Property licensed to the Company under the Company Licensed
Intellectual Property, are invalid or unenforceable, and, to the Company's
knowledge, the same have not been adjudged invalid or unenforceable in whole or
in part. The Company Owned Intellectual Property and the Company Licensed
Intellectual Property constitute all of the Intellectual Property necessary for
the operation of the business of the Company and the Company Subsidiaries as
currently conducted. The Company has complied in all material respects with all
of its obligations of confidentiality in respect of the claimed trade secrets or
proprietary information of others and knows of no violation of such obligations
of confidentiality as are owed to it.
(e) No claims or actions have been asserted, are pending or overtly
threatened against the Company or any Company Subsidiary that if adversely
determined to the Company would have a Material Adverse Effect (i) based upon or
challenging or seeking to deny or restrict the ownership by or license rights of
the Company or any of the Company Subsidiaries of any of the Company Owned
Intellectual Property or Company Licensed Intellectual Property, (ii) alleging
that any services provided by, processes used by, or products manufactured or
sold by the Company or any of its subsidiaries infringe or misappropriate any
Intellectual Property right of any third party in any material respects, or
(iii) alleging that the Company Licensed Intellectual Property is being licensed
or sublicensed in conflict with the terms of any license or other agreement.
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(f) As of the date hereof, to the knowledge of the Company, no person
is engaging in any activity that infringes or misappropriates the Company Owned
Intellectual Property or Company Licensed Intellectual Property in any material
respect. Except as set forth on Schedule 3.19(f) hereto, neither the Company nor
any Company Subsidiary has granted any license or other right to any third party
with respect to the Company Owned Intellectual Property or Company Licensed
Intellectual Property. The execution, delivery and performance of this
Agreement, the License Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated herein and therein by the Company
will not breach, violate or conflict with any material instrument or agreement
concerning the Company Owned Intellectual Property, or cause the forfeiture or
termination or give rise to a right of forfeiture or termination of any of the
Company Owned Intellectual Property that would have a Material Adverse Effect.
(g) The Company has delivered or made available to BSC correct and
complete copies of all the material licenses of the Company Licensed
Intellectual Property, other than licenses of commercial off-the-shelf computer
software. With respect to each such license:
(i) such license is valid and binding and in full force and
effect and represents the entire agreement between the respective licensor and
licensee with respect to the subject matter of such license;
(ii) such license will not cease to be valid and binding and in
full force and effect on terms identical in all material respects to those
currently in effect as a result of the consummation of the transactions
contemplated by this Agreement, the License Agreement and the Registration
Rights Agreement, nor will the consummation of the transactions contemplated
hereby or thereby constitute a material breach or default under such license or
otherwise so as to give the licensor a right to terminate such license;
(iii) neither the Company nor any Company Subsidiary has (A)
received any notice of termination or cancellation under such license, (B)
received any notice of a material breach or default under such license, which
breach has not been cured, or (C) granted to any other third party any rights,
adverse or otherwise, under such license that would constitute a material breach
of such license; and
(iv) neither the Company nor, to the knowledge of the Company,
any other party to such license (including any Company Subsidiary) is in
material breach or default thereof, and, to the knowledge of the Company, no
event has occurred that, with notice or lapse of time, would constitute such a
material breach or default or permit termination, modification or acceleration
under such license.
(h) Except as set forth on Schedule 3.19(h) hereto, the Company is not
aware that any of the respective employees, officers, directors, agents or
consultants of the Company or any Company Subsidiary is (i) subject to
confidentiality restrictions in favor of any third person the breach of which
could subject the Company or any of its subsidiaries to any liability, or (ii)
obligated under any contract (including licenses, covenants or
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commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere in
any material respect with their duties to the Company or any Company Subsidiary,
as applicable, or that would conflict in any material respect with the Company's
or any Company Subsidiary's business as presently proposed to be conducted. Each
key employee, officer and consultant of the Company and each Company Subsidiary
has executed a proprietary information and inventions agreement in the form of
Exhibit B attached hereto. No current or former employee, officer or consultant
of the Company or any Company Subsidiary has excluded works or inventions made
prior to his or her employment or relationship with the Company or such Company
Subsidiary from his or her assignment of inventions pursuant to such employee,
officer or consultant's proprietary information and inventions agreement.
(i) Each of the Company and each Company Subsidiary has taken
reasonable steps in accordance with normal industry practice to maintain the
confidentiality of its trade secrets and other confidential Intellectual
Property. To the knowledge of the Company, (i) there has been no
misappropriation of any material trade secrets or other material confidential
Company Owned Intellectual Property by any person; (ii) no employee, independent
contractor or agent of the Company or any Company Subsidiary has misappropriated
any trade secrets of any other person in the course of such performance as an
employee, independent contractor or agent; and (iii) no employee, independent
contractor or agent of the Company or any Company Subsidiary is in material
default or breach of any term of any employment agreement, non-disclosure
agreement, assignment of invention agreement or similar agreement or contract
relating in any way to the protection, ownership, development, use or transfer
of Company Owned Intellectual Property.
(j) Except to the extent already assigned to the Company or any
Company Subsidiary, neither the Company nor any Company Subsidiary believes that
it is or will be necessary to utilize any inventions or proprietary information
of any of its respective employees (or people it currently intends to hire) made
prior to their employment by the Company or any Company Subsidiary, as the case
may be.
3.20 FDA MATTERS.
(a) Neither the Company nor any Company Subsidiary has sold any
products anywhere in the world prior to receiving any required or necessary
approvals or consents from any Governmental Authority, including but not limited
to the FDA under the Food, Drug & Cosmetics Act of 1976, as amended, and the
regulations promulgated thereunder, or any corollary entity in any other
jurisdiction. Each of the Company and each Company Subsidiary has obtained in
the United States and in all countries where it is currently marketing its
products, all applicable material licenses, registrations, approvals, consents,
clearances and authorizations required by state or federal agencies in such
countries regulating the safety, effectiveness and market clearance of such
products to sell, promote and market such products. Neither the Company nor any
Company Subsidiary has received any notice of, and the Company is not aware of,
any outstanding, pending or overtly threatened actions, citations, decisions,
product recalls, medical device reports, information requests, warning letters
or Section 305 notices from the FDA or similar issues
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or notifications from any corollary entity in any other jurisdiction that are
material or which the Company is not diligently contesting.
(b) Except as set forth on Schedule 3.20(b) hereto, each of the
Company and each Company Subsidiary has (i) complied in all material respects
with all applicable laws, regulations and specifications with respect to the
design, manufacture, labeling, testing and inspection of all of its products and
the operation of manufacturing facilities promulgated by the FDA or any
corollary entity in any other jurisdiction, and (ii) conducted all of its
clinical trials with reasonable care and in accordance with all applicable laws
in all material respects and in accordance with the stated protocols for such
clinical trials.
(c) All of the Company's submissions to the FDA and any corollary
entity in any other jurisdiction whether oral, written or electronically
delivered were true, accurate and complete in all material respects as of the
date made, and together with any amendments to such submissions or supplemental
information provided to the FDA or such other corollary entity, remain true,
accurate and complete in all material respects as of the date hereof, and do not
materially misstate any of the statements or information included therein, or
omit to state a material fact necessary to make the statements therein not
misleading.
3.21 TAX MATTERS. The Company and each Company Subsidiary has filed
all federal, state, foreign and other tax returns which were required to be
filed on or before the date hereof and has paid all taxes which have become due
and payable. All such reports and returns (copies of which have been made
available to BSC) were materially accurate and complete when filed and reflect
all taxes required to be paid by the Company and the Company Subsidiaries for
the periods reported therein.
3.22 ENVIRONMENTAL COMPLIANCE.
(a) Neither the Company nor any Company Subsidiary has generated,
stored, treated, discharged or disposed of any hazardous substances or hazardous
waste in violation of any applicable law or regulation, nor is the Company aware
of any overt allegations that any such violations have occurred. The Company is
not aware of any claims, investigations, litigation or administrative
proceedings, whether actual or threatened, against the Company or any Company
Subsidiary relating to any environmental contamination of any property owned,
used or leased by any of them or arising out of any alleged violation of any
environmental law or regulation.
(b) To the Company's knowledge, none of the real property owned and/or
occupied by the Company or any Company Subsidiary has ever been used by previous
owners and/or operators to generate, manufacture, refine, transport, treat,
store, handle or dispose of "Hazardous Substances" or "Hazardous wastes," as
such terms are defined in the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. 9601, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. 6901, et seq., or applicable state and local laws, or
any regulations issued under any such laws.
3.23 BROKERS. The Company has not dealt with any broker or finder in
connection with the transactions contemplated by this Agreement, and the Company
has not
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incurred, and shall not incur, directly or indirectly, any liability for any
brokerage or finders' fees or agents commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
3.24. FULL DISCLOSURE. The representations and warranties of the
Company set forth in this Agreement do not contain any untrue statement of a
material fact or omit any material fact necessary to make the statements
contained herein, in the light of the circumstances under which they were made,
not misleading.
4. REPRESENTATIONS AND WARRANTIES OF BSC. BSC represents and warrants to
the Company as follows as of the date hereof and as of each Closing Date:
4.1 INCORPORATION. BSC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, is
qualified to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification, and has
all requisite corporate power and authority and all authorizations, licenses and
permits necessary to own its properties and to carry on its businesses as now
conducted, except where the failure to hold such authorizations, licenses and
permits would not have a Material Adverse Effect.
4.2 AUTHORIZATION. All corporate action on the part of BSC and its
officers, directors and stockholders necessary for the authorization, execution,
delivery and performance of this Agreement, the License Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein has been taken. When executed and delivered by
BSC and each of the other parties hereto and thereto, each of this Agreement,
the License Agreement and the Registration Rights Agreement shall constitute the
legal, valid and binding obligation of BSC, enforceable against BSC in
accordance with its terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally
and by general equitable principles. BSC has all requisite power and authority
to enter into each of this Agreement, the License Agreement and the Registration
Rights Agreement and to carry out and perform its obligations under the terms of
this Agreement, the License Agreement and the Registration Rights Agreement.
4.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. BSC is acquiring the Shares
being purchased by it hereunder for its own account for investment and not for
resale or with a view to distribution thereof in violation of the Securities
Act.
4.4 INVESTOR STATUS. BSC certifies and represents to the Company that
it is an "Accredited Investor" as defined in Rule 501 of Regulation D
promulgated under the Securities Act and was not organized for the purpose of
acquiring any of the Shares.
4.5 SHARES NOT REGISTERED. BSC understands that the Shares have not
been registered under the Securities Act, by reason of their issuance by the
Company in a transaction exempt from the registration requirements of the
Securities Act, and that the
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Shares must continue to be held by BSC unless a subsequent disposition thereof
is registered under the Securities Act or is exempt from such registration.
4.6 NO CONFLICT. The execution and delivery of this Agreement, the
License Agreement and the Registration Rights Agreement by BSC and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in any violation of or default by BSC (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
benefit under (i) any provision of the organizational documents of BSC or (ii)
any agreement or instrument, permit, franchise, license, judgment, order,
statute, law, ordinance, rule or regulations, applicable to BSC or its
respective properties or assets.
4.7 BROKERS. BSC has not retained, utilized or been represented by any
broker or finder in connection with the transactions contemplated by this
Agreement.
4.8 CONSENTS. All consents, approvals, orders and authorizations
required on the part of BSC in connection with the execution, delivery or
performance of this Agreement and the consummation of the transactions
contemplated herein have been obtained and will be effective as of each Closing
Date.
5. CONDITIONS PRECEDENT.
5.1 CONDITIONS TO THE OBLIGATION OF BSC TO CONSUMMATE THE CLOSINGS. In
addition to the conditions set forth in Section 2.1(b) and Exhibit A, the
obligation of BSC to consummate each Closing and to purchase and pay for those
Shares being purchased by it pursuant to such Closing is subject to the
satisfaction of the following conditions precedent, any of which, other than
with respect to Section 5.1(o), may be waived by BSC in its sole discretion at
such Closing:
(a) The representations and warranties contained herein of the Company
shall have been true and correct in all material respects when made and shall be
true and correct in all material respects on and as of such Closing Date with
the same force and effect as though made on and as of such Closing Date (with
updated Schedules provided to BSC from time to time being integrated herein
solely for purposes of determining the accuracy of the representations and
warranties as of such date).
(b) Each of the Registration Rights Agreement and the License
Agreement shall have been executed and delivered by the Company and shall be in
full force and effect. The Company shall not be in material breach of this
Agreement or the Registration Rights Agreement as of such Closing Date, nor
shall the License Agreement have been terminated pursuant its terms as of such
Closing Date.
(c) The Company shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by it on
or prior to such Closing Date.
-18-
(d) No proceeding challenging this Agreement or the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or materially delay
such Closing, shall have been instituted before any court, arbitrator or
governmental body, agency or official and shall be pending.
(e) The purchase of, and payment for, the Shares by BSC shall not be
prohibited by any law or governmental order or regulation. All necessary
consents, approvals, licenses, permits, orders and authorizations of, or
registrations, declarations and filings with, any governmental or administrative
agency or of any other person with respect to any of the transactions
contemplated hereby shall have been duly obtained or made and shall be in full
force and effect.
(f) All instruments and corporate proceedings in connection with the
transactions contemplated by this Agreement to be consummated at such Closing
shall be satisfactory in form and substance to BSC, and, as of the Initial
Closing, BSC shall have received copies (executed or certified, as may be
appropriate) of all documents which BSC may have reasonably requested in
connection with such transactions.
(g) The offer and sale of the Shares pursuant to this Agreement shall
be exempt from registration under the Securities Act.
(h) There shall have been no material adverse change (actual or
threatened), taken individually or in the aggregate, in the assets, liabilities
(contingent or other), affairs, operations, prospects or condition (financial or
other) of the Company and the Company Subsidiaries, taken as a whole, prior to
such Closing Date.
(i) The Company Common Stock shall be listed and eligible for trading
on the Nasdaq Stock Market, the Company shall have maintained all requirements
for such continued listing on the Nasdaq Stock Market, and there shall be no
pending or overtly threatened proceedings to revoke or suspend such eligibility.
(j) The Company shall have obtained any and all necessary stockholder
approval required by the rules and regulations of the Nasdaq Stock Market for
the issuance of the Shares at such Closing.
(k) The Company Common Stock shall be registered under Section 12 of
the Exchange Act.
(l) The Company shall be in compliance in all material respects with
all reporting requirements of the Exchange Act.
(m) BSC shall have received from Stradley, Ronon, ▇▇▇▇▇▇▇ & ▇▇▇▇▇,
LLP, counsel to the Company, an opinion addressed to BSC, dated as of the
Closing Date of the Initial Closing and in the form of Exhibit C hereto.
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(n) There shall not have been a Change in Control (as such term is
defined in the License Agreement), whether or not such Change in Control has
been consented to by BSC.
(o) BSC shall not have purchased at such Closing such number of Shares
that would cause the aggregate number of Shares purchased by BSC under this
Agreement to exceed 2,977,766 (which number represents 19.9% of the outstanding
shares of Company Common Stock immediately prior to any purchases hereunder).
5.2 CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CONSUMMATE THE
CLOSING. The obligation of the Company to consummate each Closing and to issue
and sell the Shares to BSC to be purchased by it at such Closing is subject to
the satisfaction of the following conditions precedent:
(a) The representations and warranties contained herein of BSC shall
be true and correct in all material respects on and as of such Closing Date with
the same force and effect as though made on and as of such Closing Date.
(b) Each of the Registration Rights Agreement and the License
Agreement shall have been executed and delivered by BSC and shall be in full
force and effect. BSC shall not be in material breach of this Agreement or the
Registration Rights Agreement as of such Closing Date, nor shall the License
Agreement have been terminated (except as provided in Section 2.3 above)
pursuant its terms as of such Closing Date.
(c) BSC shall have performed in all material respects all obligations
and conditions herein required to be performed or observed by it on or prior to
such Closing Date.
(d) No proceeding challenging this Agreement or the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or materially delay
such Closing, shall have been instituted before any court, arbitrator or
governmental body, agency or official and shall be pending.
(e) The sale of the Shares by the Company shall not be prohibited by
any law or governmental order or regulation. All necessary consents, approvals,
licenses, permits, orders and authorizations of, or registrations, declarations
and filings with, any governmental or administrative agency or of any other
person with respect to any of the transactions contemplated hereby shall have
been duly obtained or made and shall be in full force and effect.
(f) All instruments and corporate proceedings in connection with the
transactions contemplated by this Agreement to be consummated at such Closing
shall be satisfactory in form and substance to the Company, and the Company
shall have received copies (executed or certified, as may be appropriate) of all
documents which the Company may have reasonably requested in connection with
such transactions.
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(g) The Company shall have obtained any and all necessary stockholder
approval required by the rules and regulations of the Nasdaq Stock Market for
the issuance of the Shares at such Closing.
6. TRANSFER, LEGENDS.
6.1 TRANSFER OF SECURITIES. BSC shall not sell, assign, pledge,
transfer or otherwise dispose or encumber any of those Shares being purchased by
it hereunder, except (i) pursuant to an effective registration statement under
the Securities Act or (ii) pursuant to an available exemption from registration
under the Securities Act and applicable state securities laws and, if requested
by the Company, upon delivery by BSC of either an opinion of counsel of BSC
reasonably satisfactory to the Company to the effect that the proposed transfer
is exempt from registration under the Securities Act and applicable state
securities laws or a representation letter of BSC reasonably satisfactory to the
Company setting forth a factual basis for concluding that such proposed transfer
is exempt from registration under the Securities Act and applicable state
securities laws. Any transfer or purported transfer of the Shares in violation
of this Section 6.1 shall be void. The Company shall not register any transfer
of the Shares in violation of this Section 6.1. The Company may, and may
instruct any transfer agent for the Company, to place such stop transfer orders
as may be required on the transfer books of the Company in order to ensure
compliance with the provisions of this Section 6.1.
6.2 LEGENDS. To the extent applicable, each certificate or other
document evidencing any of the Shares shall be endorsed with the legend set
forth below, and BSC covenants that, except to the extent such restrictions are
waived by the Company, it shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer described in
this Agreement and the legends endorsed on such certificate:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD,
ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISED DISPOSED OF IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER SAID ACT AND, IF REQUESTED BY
THE COMPANY, UPON DELIVERY OF EITHER AN OPINION OF COUNSEL REASONABLE
SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM SAID
ACT OR OF A REPRESENTATION LETTER SETTING FORTH A FACTUAL BASIS FOR
CONCLUDING THAT THE PROPOSED TRANSFER IS EXEMPT FROM SAID ACT."
7. COMPANY SHAREHOLDER APPROVAL. The Company covenants that it shall use
its best efforts to solicit and obtain from its stockholders at any time prior
to any Closing all necessary approvals in connection with the sale and issuance
of the Shares at
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such Closing, including without limitation any approval required by the rules
and regulations of the Nasdaq Stock Market.
8. SURVIVAL; INDEMNIFICATION; TERMINATION.
8.1 SURVIVAL. The representations, warranties, covenants and
agreements set forth in this Agreement shall survive for one (1) year after the
final Closing contemplated herein.
8.2 INDEMNIFICATION. Each party shall indemnify, defend and hold
harmless, the other party (and its respective Affiliates, directors, officers,
employees, successors and assigns) from and against any and all Losses based
upon, arising out of or otherwise in respect of any inaccuracy in or any breach
of the representations or warranties of such party and the covenants or
agreements made by such party in this Agreement.
8.3 TERMINATION. This Agreement may be terminated as follows: (i) by
mutual agreement of the parties; (ii) by either the Company or BSC in the event
of a breach by the other party of any representation, warranty, covenant or
agreement set forth herein that is material and that is not cured within ten
(10) days after notice thereof is given by the non-breaching party; and (iii) in
the event that the Third Milestone is not achieved on or prior to the date that
is six (6) months after BSC's delivery to the Company of the last of the BSC
Deliverables in accordance with the License Agreement, then BSC may terminate
this Agreement at any time upon written notice to the Company effective on the
date of such notice, and BSC shall thereafter have no further obligation to
purchase any Shares. Termination of this Agreement shall not affect the rights
and obligations of either party that may have accrued prior to the effective
date of termination, or any obligation that by its nature or express terms
survives termination. Without limiting the foregoing, the provisions of Sections
1, 3, 4, 8 and 9 shall survive any termination of this Agreement.
9. MISCELLANEOUS PROVISIONS.
9.1 RIGHTS CUMULATIVE. Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have at
law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.
9.2 NOTICES.
(a) Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be given
hereunder shall be sent by postage prepaid first class mail, courier or telecopy
or delivered by hand to the party to whom such correspondence is required or
permitted to be given hereunder. The date of giving any notice shall be the date
of its actual receipt.
(b) All correspondence to the Company shall be addressed as follows:
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EP Medsystems, Inc.
▇▇▇▇▇▇ Run Executive Park
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Stradley, Ronon, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(c) All correspondence to BSC shall be addressed as follows:
Boston Scientific Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Boston Scientific Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
9.3 CAPTIONS. The captions and paragraph headings of this Agreement
are solely for the convenience of reference and shall not affect its
interpretation.
9.4 SEVERABILITY. Should any part or provision of this Agreement be
held unenforceable or in conflict with the applicable laws or regulations of any
jurisdiction, the invalid or unenforceable part or provisions shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties
hereto.
9.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal and substantive laws of the Commonwealth of
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Massachusetts and without regard to any conflicts of laws concepts that would
apply the substantive law of some other jurisdiction.
9.6 WAIVER. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
9.7 ASSIGNMENT. The rights and obligations of any party hereto shall
inure to the benefit of and shall be binding upon the authorized successors and
permitted assigns of such party whether so expressed or not.
9.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto respecting the subject matter hereof and supersedes
all prior agreements, negotiations, understandings, representations and
statements respecting the subject matter hereof, whether written or oral. No
modification, alteration, waiver or change in any of the terms of this Agreement
shall be valid or binding upon the parties hereto unless made in writing and
duly executed by the parties hereto.
[signature page immediately follows]
-24-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the day and year first above written.
EP MEDSYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and CEO
BOSTON SCIENTIFIC CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Best
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Best
Title: Chief Financial Officer