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