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PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
THIS PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT is made as of December
22, 2000 by and among MedicaLogic/Medscape, Inc., an Oregon corporation (the
"Company"), and the Investors listed on Schedule A attached hereto (the
"Investors").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Preferred Stock and Warrants.
1.1 Sale and Issuance of Preferred Stock and Warrants.
(a) The Company shall adopt and file with the Secretary of State
of Oregon on or before the Closing (as defined below) the articles of
amendment of its 1999 Restated Articles of Incorporation, as amended
(the "Amended Articles") in the form attached hereto as Exhibit A.
(b) Subject to the terms and conditions of this Agreement, the
Investors severally and not jointly agree to purchase at the Closing,
and the Company agrees to sell and issue to the Investors at the
Closing, (i) that number of shares of the Company's Series 1
Convertible Redeemable Preferred Stock (the "Series 1 Preferred
Stock") set forth opposite each Investor's name on Schedule A hereto
for the purchase price set forth thereon, and (ii) a warrant to
purchase that number of shares of the Company's Common Stock (the
"Common Stock") set forth opposite each Investor's name on Schedule A
hereto for the purchase price set forth thereon, such warrant to be in
substantially the form attached hereto as Exhibit B (the "Warrants").
The rights, privileges and preferences of the Series 1 Preferred Stock
will be as stated in the Amended Articles.
1.2 Closings. Unless this Agreement shall have terminated pursuant to
Section 7, and subject to the satisfaction or waiver of the conditions set
forth in Sections 5 and 6, the purchase and sale of the Series 1 Preferred
Stock and Warrants shall take place at one or more closings at the offices
of Stoel Rives LLP, ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ at
such times and places as the Company and the Investors mutually agree upon
orally or in writing (which times and places are designated as a
"Closing"). At the Closing the Company shall deliver to each Investor
purchasing Series 1 Preferred Stock and Warrants at such Closing Warrants
and stock certificates representing the number of shares of Series 1
Preferred Stock and Warrants that such Investor is purchasing against
payment of the purchase price therefor by check or wire transfer in
immediately available funds.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors that, except as set forth on a Schedule
of Exceptions (the "Schedule of Exceptions") furnished to the Investors,
specifically identifying the relevant subparagraph hereof, which exceptions
shall be deemed to be representations and warranties as if made hereunder:
2.1 Organization, Valid Existence and Qualification. The Company is a
corporation duly organized and validly existing under the laws of the state
of Oregon and has all
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requisite corporate power and authority to carry on its business as now
conducted. Each of the corporations or other persons in which the Company,
directly or indirectly, holds 50% or more of (i) the voting power of the
outstanding voting equity securities or (ii) the outstanding economic
equity interest (each, a "Subsidiary") is a corporation duly organized or
limited liability company duly formed and validly existing under the laws
of the state of its incorporation or formation, and has all requisite
corporate or limited liability company power and authority to carry on its
business as now conducted. The Company and each of its Subsidiaries is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business requires such qualification.
2.2 Subsidiaries. Neither the Company nor any Subsidiary presently
owns or controls, directly or indirectly, any interest in any other
corporation, association or other entity. Neither the Company nor any
Subsidiary is a participant in any joint venture, partnership, or similar
arrangement.
2.3 Authorization. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for (a) the
authorization, execution and delivery of this Agreement and the 2000 Second
Amended and Restated Investor Rights Agreement of even date herewith, by
and among the Company and the Investors (as defined therein) (the
"Investors' Rights Agreement") and the Warrants (collectively, the
"Transaction Documents"), (b) the performance of all obligations of the
Company hereunder and thereunder, (c) the authorization, issuance (or
reservation for issuance), sale and delivery of the Series 1 Preferred
Stock and Warrants being sold pursuant to this Agreement and the Common
Stock issuable upon conversion of the Series 1 Preferred Stock (the
"Conversion Shares") and the exercise of the Warrants (the "Warrant Shares"
and, together with the Conversion Shares, the "Shares"), and (d) the
authorization and adoption of the Amended Articles has been taken or will
be taken prior to the Closing, and the Transaction Documents constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally,
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to
the extent the indemnification provisions contained in the Investor Rights
Agreement may be limited by applicable federal or state securities laws.
2.4 Valid Issuance of Preferred and Common Stock.
(a) The Series 1 Preferred Stock that is being purchased by the
Investors pursuant to this Agreement, when issued, sold and delivered
in accordance with the terms of this Agreement for the consideration
expressed herein, will be duly and validly issued, fully paid, and
nonassessable, will be issued in compliance with the registration and
qualification requirements of all applicable federal and state
securities laws and will be free and clear
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of all Liens (as defined in Section 2.6) other than restrictions on
transfer under the Amended Articles, this Agreement and the other
Transaction Documents and under applicable state and federal
securities laws. The Shares have been duly and validly reserved for
issuance and, (i) in the case of the Conversion Shares, upon issuance
in accordance with the terms of the Amended Articles and, (ii) in the
case of the Warrant Shares, upon issuance in accordance with the terms
of the Warrants, will be duly and validly issued, fully paid, and
nonassessable and will be free and clear of all Liens other than
restrictions on transfer under this Agreement and the other
Transaction Documents and under applicable state and federal
securities laws.
(b) The issuance of the Series 1 Preferred Stock and the Warrants
is not subject to any preemptive rights or similar rights and the
issuance of the Conversion Shares upon the conversion of the Series 1
Preferred Stock and the Warrant Shares upon the exercise of the
Warrants will not be subject to any preemptive rights or similar
rights. The Company has denied preemptive rights to its shareholders
as contemplated by Section 60.174 of the Business Corporation Act of
Oregon, as amended. There are no approvals or consents required by
Section 60.810 or Section 60.835 of the Oregon Business Corporation
Act in order to consummate the transactions contemplated by the
Transaction Documents.
2.5 Capitalization.
(a) At the Closing the authorized capital stock of the Company
shall consist of 100,000,000 shares of Common Stock, 50,000,000 shares
of preferred stock, of which 5,766,666 shares shall have been
designated Series 1 Preferred Stock. At December 17, 2000, 55,719,682
shares of Common Stock (which includes shares of restricted Common
Stock described below) and no shares of preferred stock were issued
and outstanding. At December 17, 2000, 2,287,844 shares of Common
Stock remained available for issuance under the Company's 1999
Employee Stock Purchase Plan. At December 17, 2000, the aggregate
number of shares of restricted stock and options to purchase shares of
Common Stock available to be issued or granted pursuant to any stock
option plan or stock incentive plan of the Company or any Subsidiary
was 959,779. At December 17, 2000, options to purchase 9,143,282
shares of Common Stock were outstanding and 2,210,750 shares of
restricted Common Stock had been issued under such plans. Except for
the Series 1 Preferred Stock and the Warrants, shares issuable under
the Company's 1999 Employee Stock Purchase Plan and the stock options
referred to in the preceding sentence (as may be updated pursuant to
Section 5.16), there are no options, warrants, conversion privileges,
subscription or purchase rights or other rights presently outstanding
to purchase or otherwise acquire (x) any authorized but unissued,
unauthorized or treasury shares of the Company's capital stock or (y)
any securities of the Company convertible into or exercisable or
exchangeable for shares of Common Stock, and there are no commitments,
contracts, agreements, arrangements or understanding by the Company to
issue any such securities.
(b) The Company owns all of the issued and outstanding capital
stock of the Subsidiaries, free and clear of all Liens. All of such
shares of capital stock are duly authorized, validly issued, fully
paid and nonassessable, and were issued in compliance with the
registration and qualification requirements of all applicable federal
and state and foreign securities laws. There are no options, warrants,
conversion privileges, subscription or purchase rights or other rights
presently outstanding to purchase or otherwise acquire any authorized
but unissued, unauthorized or treasury shares of capital stock or
other securities of, or any proprietary interest in, any of the
Subsidiaries, and there is no outstanding security of any kind
convertible into or exchangeable for such shares or proprietary
interest.
2.6 No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of
the transactions
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contemplated hereby and thereby (including, without limitation, the
Company's issuance of the Series 1 Preferred Stock and Warrants and the
reservation for issuance and issuance of the Shares) will not (i) result in
a violation of the Company's 1999 Restated Articles of Incorporation, as
amended by the Amended Articles and as in effect on the date hereof, or the
Company's Bylaws, as amended and as in effect on the date hereof (the
"Bylaws") or (ii) conflict with, or constitute a breach or default (or an
event which with notice or lapse of time or both would result in a breach
or default) under, or result in the creation of any mortgage, deed of
trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or
other) or preference, priority, right or other security interest or
preferential arrangement of any kind or nature whatsoever (excluding
preferred stock and equity related preferences) (each, a "Lien"), or give
to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which
the Company or any Subsidiary is a party (except for possible conflicts,
breaches, defaults, terminations, amendments or other events that would not
result in a material adverse development in the business, properties,
operations, financial condition, results of operations or prospects of the
Company and its Subsidiaries, taken as a whole (a "Material Adverse
Effect")), or result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and
regulations), applicable to the Company or any Subsidiary or by which any
property or asset of the Company or any Subsidiary is bound or affected.
Except as specifically contemplated by this Agreement in connection with
(i) the listing of the Shares on Nasdaq National Market ("Nasdaq"), (ii)
registration of the resale of the Series 1 Preferred Stock and the Shares
under the Securities Act of 1933, as amended (the "Act"), as contemplated
by the Investors' Rights Agreement, and (iii) the filing of one of more
Forms D with respect to the Series 1 Preferred Stock and the Shares as
required under Regulation D, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration
with, any court or governmental agency or any regulatory or self-regulatory
agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents in
accordance with the terms hereof or thereof. The Company is not, and upon
consummation of the transactions contemplated by the Transaction Documents
will not be, in violation of the listing requirements of Nasdaq.
2.7 Offering. Assuming the accuracy of the Investors' representations
set forth in Section 3 of this Agreement, the offer, sale and issuance of
the Units as contemplated by this Agreement are exempt from the
registration requirements of the Act and from the qualification
requirements of the Oregon Securities Law, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that
would cause the loss of such exemption.
2.8 SEC Documents; Financial Statements. As of the Closing, the
Company shall have filed all reports, schedules, forms, statements and
other documents required to be filed by it with the Securities and Exchange
Commission ("SEC") pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing
filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the "SEC Documents"). As
of their respective dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with
the SEC, contained any untrue statement of a material fact or
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omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. As of their respective dates,
the financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied, during
the periods involved (except in the case of unaudited interim statements,
to the extent they may exclude footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Investors which
is not included in the SEC Documents contains any untrue statement of a
material fact or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstance under which
they are or were made, not misleading.
2.9 Absence of Certain Changes. Since the Company's Form 10-Q for the
quarter ended September 30, 2000 (the "Most Recent Filing"), there has been
no material adverse change and no development that would result in a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries
has taken any steps, and does not currently expect to take any steps, to
seek protection pursuant to any bankruptcy law nor does the Company or any
of its Subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings.
2.10 Liabilities. Neither the Company nor any Subsidiary has any
direct or indirect obligation or liability and, to the Company's knowledge,
there is no existing condition, event or arrangement that could reasonably
be expected to give rise to such an obligation or liability, other than (a)
those provided for in the financial statements included in the SEC
Documents and (b) those incurred since the Most Recent Filing in the
ordinary course of business consistent with past practices.
2.11 Material Contracts. Each of the agreements, contracts, leases and
other commitments listed as an exhibit to any SEC Document filed since
January 1, 2000 (each, a "Material Contract") is a legal, valid and binding
agreement of the Company or a Subsidiary, and is in full force and effect,
except to the extent such agreement has been fully performed or terminated
pursuant to its terms, and, to the Company's knowledge, no party thereto is
in default or breach, and there exists no event or circumstance that with
notice or lapse of time or both would constitute a default or breach
thereunder, except in each case for those defaults and breaches which could
not reasonably be expected, either individually or in the aggregate, to
result in a Material Adverse Effect.
2.12 Absence of Litigation. Except as set forth in the SEC Documents,
there is no action, suit, proceeding, inquiry or investigation before or by
any court, public board, government agency, self-regulatory organization or
body pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of the Company's or any
Subsidiary's officers or directors in their capacities as such that would
have a Material
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Adverse Effect and, to the knowledge of the Company, there is no reasonable
basis for any of the foregoing.
2.13 Intellectual Property.
(a) The Company or one of its Subsidiaries owns, or has a valid
license to use, all patents, trademarks, service marks, trade names,
copyrights, trade secrets, domain names, software, technology,
know-how and other intellectual property (the "Intellectual Property")
necessary to or used in the conduct of the business of the Company and
its Subsidiaries as now conducted and as proposed to be conducted. All
Intellectual Property owned by the Company or any of its Subsidiaries
is owned by them free and clear of all Liens. To the knowledge of the
Company, the conduct of the business of the Company and its
Subsidiaries does not conflict with or infringe upon any Intellectual
Property rights of any other person and no claims of conflict or
infringement are pending or threatened against the Company or any of
its Subsidiaries which, in any event, would reasonably be expected to
have a Material Adverse Effect.
(b) All of the Intellectual Property licenses, sublicenses,
distributor agreements and other agreements under which the Company or
any Subsidiary is either a licensor, licensee or distributor
(excluding those related to off-the-shelf software commercially
available on a retail basis and used solely on the computers of the
Company and/or any Subsidiary) are valid, enforceable and in full
force and effect, and neither the Company nor any Subsidiary is
required to pay any royalty payment pursuant to any such agreement
(except for such agreements that were entered into in the ordinary
course of business consistent with past practice). Except as set forth
in the SEC Documents, no former employer of any employee of the
Company or any Subsidiary, and no current or former client of any
consultant of the Company or any Subsidiary, has made a claim against
the Company or any Subsidiary or, to the Company's knowledge, against
any other person, that such employee or consultant is utilizing
Intellectual Property of such former employer or client.
(c) The Company has policies and procedures that provide that all
employees of the Company and each Subsidiary execute and deliver
proprietary invention agreements with the Company, and be obligated
under the terms thereof to assign all inventions made by them during
the course of employment to the Company or such Subsidiary, and the
Company uses its best efforts to abide by those policies and
procedures.
2.14 Compliance with Other Instruments. Neither the Company nor any
Subsidiary is in violation or default in any respect (i) of any provision
of its 1999 Restated Articles of Incorporation, as amended by the Amended
Articles (when filed), or Bylaws, or (ii) of any judgment, order, writ,
decree to which it is a party or by which it is bound, or of any provision
of any federal or state statute, rule or regulation applicable to it, or
(iii) of any agreement, indenture or instrument to which it is a party
(except for violations or defaults with respect to clauses (ii) and (iii)
that would not have a Material Adverse Effect). The execution, delivery and
performance of the Transaction Documents, and the consummation of the
transactions contemplated hereby and thereby will not result in any such
violation or be in conflict with or constitute, with or without the passage
of time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an
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event that results in the creation of any Lien upon any assets of the
Company or the suspension, revocation, impairment, forfeiture, or
nonrenewal of any material permit, license, authorization or approval
applicable to the Company, its business or operations or any of its assets
or properties (except for violations, conflicts, defaults, liens, damages,
encumbrances, suspensions, revocations, impairments or forfeitures that
would not, either individually or in the aggregate, have a Material Adverse
Effect).
2.15 Related-Party Transactions. Except as set forth in the SEC
Documents, no 5% or greater shareholder of the Company, officer, or
director of the Company or any Subsidiary or member of his or her immediate
family is indebted to the Company in any material amount, nor is the
Company indebted (or committed to make loans or extend or guarantee credit)
to any of them in any material amount. To the best of the Company's
knowledge, none of the Company's officers or directors has any direct or
indirect ownership interest in any firm or corporation with which the
Company or any Subsidiary is affiliated or with which the Company or any
Subsidiary has a business relationship, or any firm or corporation that
competes with the Company or any Subsidiary, except that officers or
directors of the Company and members of their immediate families may own
less than 2% of the outstanding stock in a publicly traded company that may
compete with the Company. No member of the immediate family of any officer
or director of the Company is directly or indirectly interested in any
material contract with the Company. None of the foregoing transactions is
currently contemplated by the Company.
2.16 Permits. The Company and each of its Subsidiaries have all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business as now being conducted or proposed to be conducted
by it, the lack of which could result in a Material Adverse Effect. The
Company is not in default in any material respect under any of such
franchises, permits, licenses, or other similar authority.
2.17 Outstanding Borrowing. Except as set forth in the SEC Documents
and incurred in the ordinary course of business consistent with past
practices, since the Most Recent Filing, neither the Company nor any
Subsidiary has (a) any obligation for borrowed money (including, without
limitation, reimbursement or other obligations with respect to surety
bonds, letters of credit and bankers' acceptances, whether or not matured),
(b) any obligation to pay the deferred purchase price of property or
services, except trade accounts payable and accrued commercial or trade
liabilities arising in the ordinary course of business, (c) any payment
obligation, whether periodic or upon the occurrence of a contingency, under
any interest rate or currency swap, cap, collar or similar agreement or
hedging device, (d) indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired
by such party (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or
sale of such property), (e) any obligation under leases which have been or
should be, in accordance with generally accepted accounting principles,
recorded as capital leases, (f) any indebtedness secured by any Lien (other
than Liens in favor of lessors under leases other than leases included in
clause (e)) on any property or asset owned or held by such party regardless
of whether the indebtedness secured thereby shall have been assumed by that
party or is nonrecourse to the credit of that party, and (g) any direct or
indirect liability with respect to any obligation of a third party of the
type described in clauses (a) through (e) of this section (the "Primary
Obligation"), whether or not
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contingent, (i) to purchase, repurchase or otherwise acquire such Primary
Obligation or any property constituting direct or indirect security
therefor, (ii) to advance or provide funds for the payment or discharge of
any such Primary Obligation or to maintain working capital or equity
capital of the third party or to otherwise maintain the net worth or
solvency of any balance sheet item, level of income or financial condition
of such third party, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such Primary
Obligation of the ability of such third party to make payment of such
Primary Obligation, or (iv) to otherwise assure or hold harmless the owner
of any such Primary Obligation against loss or failure or inability to
perform in respect thereof.
2.18 Environmental and Safety Laws. The Company is not in violation of
any applicable statute, law or regulation relating to the environment or
occupational health and safety, and no material expenditures are or will be
required in order to comply with any such existing statute, law or
regulation.
2.19 Manufacturing and Marketing Rights. The Company has not granted
rights to manufacture, produce, assemble, license, market or sell its
products to any other person and is not bound by any agreement that affects
the Company's exclusive right to develop, manufacture, assemble,
distribute, market or sell its products.
2.20 Disclosure. Neither the Transaction Documents nor any other
statements or certificates made or delivered in connection therewith
contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements made herein or therein not
misleading.
2.21 Registration Rights. Except as provided in the Investor Rights
Agreement, the Company has not granted or agreed to grant any registration
rights, including piggyback rights, to any person or entity.
2.22 Title to Property and Assets. The Company and each Subsidiary
owns their respective properties and assets free and clear of all Liens,
except such Liens that arise in the ordinary course of business and do not
materially impair the Company's ownership or use of such property or
assets. With respect to the property and assets it leases, the Company is
in compliance with such leases and, to the best of the Company's knowledge,
such leases are in full force and effect and the Company holds a valid
leasehold interest free of any Liens. No other property or assets are
necessary to the conduct of their respective businesses, as presently
conducted or as proposed to be conducted.
2.23 Taxes.
(a) The Company and each of its Subsidiaries has timely filed all
income, franchise and other material tax returns, reports, forms and
other such documents ("Tax Returns") required to be filed by it prior
to the date hereof. Such Tax Returns are true and correct in all
material respects. The Company and each of its Subsidiaries has paid
or caused to be paid all Tax liabilities for all fiscal years that
have not been examined and closed by any Tax authority (or closed by
applicable statutes). No additional Tax assessment, Tax deficiency
(whether assessed or unassessed) or claim for additional Taxes
(including interest thereon and
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penalties in connection therewith) has been heretofore proposed or
threatened by any Tax authority and no audit is in progress and no
extension of time is in force with respect to any date on which any
Tax Return is to be filed and no waiver or agreement is in force for
the extension of time for the assessment or payment of any Tax.
Neither the Company nor any Subsidiary has made an election under
Section 341(f) of the Code
(b) There are no Liens for Taxes (other than for taxes not yet
due and payable) upon the assets of the Company or any Subsidiary.
(c) Neither the Company or any Subsidiary (i) is a party to or
bound by, or has any obligations under, any tax allocation, sharing,
indemnity or similar agreement or arrangement, (ii) is or has been a
member of any consolidated, combined or unitary group of corporations,
other than a group of which the Company is the common parent, for
purposes of filing tax returns or paying taxes and (iii) other than as
a result of being a member of a consolidated, combined or unitary
group of corporations of which the Company is the common parent, is
liable for the taxes of any other Person, under Treasury Regulations
section 1.1502-6 (or any similar provision of foreign, state or local
law) or as a transferee, successor or otherwise.
(d) Neither the Company nor any Subsidiary is a party to any
agreement, contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of section 280G of the Code or
any similar provision of foreign, state or local law as a result of a
transaction occurring on or before the date hereof.
(e) Neither the Company nor any Subsidiary has ever been a
"United States real property holding corporation" (a "USRPHC") as that
term is defined in Section 897(c)(2) of the Code and the treasury
regulations promulgated thereunder (the "Treasury Regulations"). (f)
There are no (i) outstanding rulings of, or requests for rulings with,
the Internal Revenue Service or any other Tax authority addressed to
the Company or any Subsidiary, that are, or if issued would be,
binding on the Company or any Subsidiary, (ii) closing agreements with
any Tax authority and (iii) other binding agreements entered into with
any Tax authority. The Company and each Subsidiary have provided the
Investors with copies of any such rulings, ruling requests, closing
agreement or other binding agreements.
(g) Neither the Company nor any Subsidiary has been a
"distributing corporation" or a "controlled corporation" (within the
meaning of Section 355 of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code in the
two years prior to the date of this Agreement.
(h) As used in this Agreement, "Tax" or "Taxes" means any
federal, state, county, local, foreign and other taxes (including,
without limitation, income, profits, premium, estimated, excise,
sales, use, occupancy, gross receipts, franchise, ad valorem,
severance, capital levy, production, transfer, withholding,
employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether
or not measured in whole or in part by net income, and including
deficiencies, interest, additions to tax or interest, and penalties
with respect thereto, and
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including expenses associated with contesting any proposed adjustments
related to any of the foregoing, except that they do not contain
footnotes or normal period-end adjustments.
2.24 Insurance. The Company and each of its Subsidiaries has in full
force and effect insurance policies in such amounts and against such risks
as are customarily maintained and insured against by comparable businesses.
The Company has in full force and effect products liability and errors and
omissions insurance in amounts customary for companies similarly situated.
All such policies are listed on the Schedule of Exceptions, together with
the effective date and coverage amounts with respect thereto.
2.25 Labor Agreements and Actions. Neither the Company nor any
Subsidiary is bound by or subject to (and none of its assets or properties
is bound by or subject to) any written or oral, express or implied,
contract, commitment or arrangement with any labor union, and no labor
union has requested or, to the best of the Company's knowledge, has sought
to represent any of the employees, representatives or agents of the Company
or any Subsidiary. There is no strike or other labor dispute involving the
Company or any Subsidiary pending, or to the best of the Company's
knowledge, threatened, that could have a Material Adverse Effect, nor is
the Company aware of any labor organization activity involving its
employees. To the best of the Company's knowledge, no officer or key
employee, or any group of key employees, intends to terminate their
employment with the Company or any Subsidiary. The employment of each
officer and employee of the Company or any Subsidiary is terminable at the
will of the Company or any Subsidiary, and neither the Company nor any
Subsidiary has an employment agreement with any officer. The Company and
each Subsidiary has complied in all respects with all applicable state and
federal equal employment opportunity and other laws related to employment.
2.26 "Company's Knowledge" Defined. As used in this Section 2, the
terms "to the best of the Company's knowledge," "to the best knowledge of
the Company," or "known to the Company" shall mean the knowledge of the
Company, its Subsidiaries and the officers, directors and management of
each, after careful consideration of the matters set forth in the
representation that is so qualified.
2.27 Eligibility. As of December 9, 2000, the Company will be eligible
to register the resale of the Unit Shares on a registration statement on
Form S-3 under the Act.
2.28 Employee Benefit Plans. The Company does not have any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of
1974, as amended.
3. Representations and Warranties of the Investors. Each Investor severally
and not jointly hereby represents and warrants that:
3.1 Authorization. Such Investor has full power and authority to enter
into the Transaction Documents to which it is a party, and each such
agreement constitutes its valid and legally binding obligation enforceable
in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally,
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to
10
Page 31 of 92 Pages
the extent the indemnification provisions contained in the Investor Rights
Agreement may be limited by applicable federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made with the
Investors in reliance upon such Investor's representations to the Company,
that the Series 1 Preferred Stock and Warrant to be received by such
Investor and the Shares (the "Securities") will be acquired for investment
for such Investor's own account in the ordinary course of business, not as
a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Investor has no present intention,
agreements or understandings, directly or indirectly, of selling, granting
any participation in, or otherwise distributing the same. By executing this
Agreement, such Investor further represents that it does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person,
with respect to any of the Securities.
3.3 Disclosure of Information. Such Investor represents that it has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Series 1
Preferred Stock and Warrant and the business, properties, prospects and
financial condition of the Company. The foregoing, however, does not limit
or modify the representations and warranties of the Company in Section 2 of
this Agreement or the right of such Investor to rely thereon.
3.4 Investment Experience. Such Investor is an investor in securities
of companies in the development stage and acknowledges that it can bear the
economic risk of its investment, and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits
and risks of the investment in the Series 1 Preferred Stock and Warrants.
Such Investor has not been organized for the purpose of acquiring the
Series 1 Preferred Stock and Warrants.
3.5 Accredited Investor. Such Investor is an "accredited investor"
within the meaning of Rule 501 promulgated under the Act, as presently in
effect.
3.6 Restricted Securities. Such Investor understands that the
Securities it is purchasing are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under
such laws and applicable regulations such securities may be resold, without
registration under the Act, only in certain limited circumstances. In this
connection, such Investor represents that it is familiar with Rule 144
promulgated under the Act, as presently in effect, and understands the
resale limitations imposed thereby and by the Act.
3.7 Further Limitations on Disposition. Without in any way limiting
the representations set forth above, such Investor (and, by accepting
delivery of the Securities, each transferee) further agrees not to make any
disposition of all or any portion of the Securities that are "restricted
securities" under the Act unless, if reasonably requested by the Company,
such Investor shall have furnished the Company with an opinion of counsel,
reasonably satisfactory to the Company that such disposition will not
require registration of such shares under the Act. Such opinion shall not
be required if there is then in effect a Registration Statement under the
11
Page 32 of 92 Pages
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement.
3.8 Legends. It is understood that the certificates evidencing the
Securities may bear legends similar to the following:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. EACH INVESTOR SHOULD
BE AWARE THAT IT MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT, UNLESS THE SECURITIES ARE RESOLD
IN COMPLIANCE WITH RULE 144, AND ANY APPLICABLE STATE SECURITIES LAWS.
(b) A FULL STATEMENT OF THE DESIGNATIONS, RELATIVE RIGHTS,
PREFERENCES AND LIMITATIONS OF THE SHARES OF EACH CLASS OF STOCK OF
THE ISSUER, THE VARIATIONS IN THE RELATIVE RIGHTS AND PREFERENCES
BETWEEN THE SHARES OF EACH SERIES OF PREFERRED STOCK SO FAR AS FIXED
AND DETERMINED, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO
DETERMINE VARIATIONS FOR FUTURE SERIES MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE RECORD HOLDER OF THIS CERTIFICATE TO THE
SECRETARY OF THE ISSUER AT ITS PRINCIPAL OFFICE.
(c) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN TRANSFER RESTRICTIONS AS SET FORTH IN A UNIT PURCHASE
AGREEMENT TO WHICH THE ORIGINAL HOLDER OF THESE SHARES IS A PARTY, A
COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES.
4. Covenants of the Company.
4.1 Conduct of Business. From the date of this Agreement until the
Closing, the Company will (a) conduct its business in a reasonable and
prudent manner and in accordance with its normal practices; (b) engage in
no transaction (including, without limitation, capital expenditures) out of
the ordinary course of its business and consistent with past practices; (c)
not dispose of any of its assets or properties except to the extent these
are used, retired or replaced in the ordinary course of its business; (d)
conduct its business in accordance with all applicable laws, regulations
and ordinances; (e) maintain and keep in force any governmental licenses,
permits, authorizations, consents or approvals required by the Company to
own its assets and
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Page 33 of 92 Pages
properties or to carry on its business as currently conducted; (f) maintain
and keep in force its Intellectual Property rights; (g) perform all
material obligations required to be performed by it under any of the
Material Contracts; (h) refrain from entering into transactions with
affiliates of the Company; (i) not pay dividends to, or redeem the shares
of, stockholders of the Company other than pursuant to existing restricted
stock purchase agreement with current or former employees; and (j) not
amend the 1999 Restated Articles of Incorporation or Bylaws of the Company.
4.2 Anti-dilution.
(a) The Company shall not, without first obtaining shareholder
approval, issue shares of Common Stock or Other Securities (as defined
in the Amended Articles) for a per share consideration less than (i)
the then-current Conversion Price (as defined in the Amended Articles)
or (ii) the Fair Market Price (as defined in the Amended Articles) of
the Common Stock at the time of such issuance, if such issuance would
violate Nasdaq Marketplace Rule 4460(i)(1)(D)(i).
(b) The Company shall use its best efforts to obtain the
shareholder approval necessary to allow it to make any adjustments (i)
to the Conversion Price or otherwise required by the anti-dilution
provisions set forth in the Amended Articles and (ii) the Exercise
Price (as defined in the Warrant) or otherwise required by the
anti-dilution provisions set forth in the Warrant without any
subsequent shareholder approval, in compliance with Nasdaq Marketplace
Rule 4460(i)(1)(D)(i), at its next regularly scheduled annual meeting
of shareholders following the Closing.
4.3 Registration. The Company shall use its efforts to prepare and
file with the SEC, within sixty (60) days after the Closing and after
giving Investors' legal counsel reasonable time to review and comment, a
registration statement to register the resale of the Shares by the
Investors from time to time under the Act. This filing and registration
shall be treated as a request for registration pursuant to Section
1.2(a)(iii) of the Investors' Rights Agreement and shall otherwise be
governed by the terms and conditions set forth in the Investors' Rights
Agreement.
5. Conditions of Investors' Obligations at Closing. The obligations of the
Investors under subsection 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
in writing thereto:
5.1 Representations and Warranties. The representations and warranties
of the Company contained in Section 2 shall be true in all material
respects on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing.
5.2 Performance. The Company shall have performed and complied in all
material respects with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by it
on or before the Closing.
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Page 34 of 92 Pages
5.3 Compliance Certificate. The President of the Company shall deliver
to the Investors at the Closing a certificate stating that the conditions
specified in Sections 5.1 and 5.2 have been fulfilled and stating that
there shall have been no material adverse change in the business, affairs,
prospects, operations, properties, assets or condition of the Company since
the date of the financial statements contained in the Most Recent Filing.
5.4 Qualifications. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
5.5 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Investors, and they shall have received all such
counterpart original and certified or other copies of such documents as
they may reasonably request.
5.6 Board of Directors. The directors of the Company as of Closing
shall consist of the following individuals, and may include up to two other
individuals to be appointed by the Board of Directors:
▇▇▇▇▇ ▇▇▇▇▇
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
5.7 Articles of Amendment. The Company shall have filed the Amended
Articles with the Secretary of State of Oregon and the Investors shall have
received evidence of such filing prior to the Closing.
5.8 Opinion of Company Counsel. The Investors shall have received from
Stoel Rives LLP, counsel for the Company, an opinion, dated as of the
Closing, in the form attached hereto as Exhibit C.
5.9 Certificate of Existence. The Company shall have delivered to the
Investors a certificate dated as of a recent date issued by the Secretary
of State of the State of Oregon to the effect that the Company is validly
existing.
5.10 Secretary's Certificate. The Company shall have delivered to the
Investors a certificate executed by the Secretary of the Company dated as
of the Closing, certifying the following matters: (a) resolutions adopted
by the Company's Board of Directors relating to the transactions
contemplated by this Agreement; (b) Amended Articles of the
14
Page 35 of 92 Pages
Company; (c) Bylaws of the Company; (d) incumbency of officers of the
Company; and (e) such other matters as the Investors may reasonably
request.
5.11 Investor Rights Agreement. The Company, the Investors and the
holders of a majority of the outstanding Registrable Securities (as defined
in the 2000 Amended and Restated Investor Rights Agreement, dated May 19,
2000, among the Company and the shareholders signatory thereto) shall have
entered into the Investor Rights Agreement in the form attached as Exhibit
D.
5.12 Minimum Investment. The Company shall have received an aggregate
minimum investment from the Investors of $17,000,000.
5.13 Nasdaq Approval. The Investors shall have received reasonably
satisfactory evidence that Nasdaq has approved (i) the proposals set forth
by the Company in (a) the letter dated December 6, 2000 and (b) the letter
dated December 11, 2000 from the Company to the office of Nasdaq Listing
Qualifications and (ii) the Shares for listing on the Nasdaq National
Market.
5.14 Due Diligence. The Investor's counsel shall be reasonably
satisfied with the results of its due diligence inquiry regarding the
outstanding litigation of the Company and its Subsidiaries.
5.15 Adverse Change. There shall have been no material adverse change
in the Company's business from that reported in the Most Recent Filing
prior to the Closing. For purposes of this Section 5.13, "material adverse
change" means a circumstance, fact, change, development or effect (i) that
has been, could or could reasonably be expected to be materially adverse to
the properties, business, prospects, results of operations or condition,
financial or otherwise, of the Company taken as a whole or (ii) that
adversely effects the ability of the Company to consummate the transactions
contemplated by the Transaction Documents or materially impairs or delays
the ability of the Company to effect the Closing or (iii) that could
reasonably be expected to require a material expenditure by any of the
Company, a Subsidiary or the Investors.
5.16 Capitalization Schedule. The Company shall have delivered to the
Investors a schedule reasonably satisfactory to the Investors reflecting,
after giving effect to the transactions contemplated by this Agreement, (i)
the Company's authorized, issued and outstanding shares of Common Stock and
Series 1 Preferred Stock and (ii) the aggregate number of shares of
restricted stock and options to purchase shares of Common Stock which may
be issued and which have been granted pursuant to any stock option plan or
stock incentive plan of the Company or any Subsidiary or are issuable
pursuant to the Company's 1999 Employee Stock Purchase Plan. The
information in such Schedule shall be as of the Closing.
5.17 Viacom Waiver. The Investors shall have received a copy of a
waiver, in form reasonably satisfactory to Investor's counsel, executed by
Viacom waiving its right of participation in the transactions contemplated
by this Agreement.
15
Page 36 of 92 Pages
6. Conditions of the Company's Obligations at Closing. The obligations of
the Company to the Investors under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions by the Investors:
6.1 Representations and Warranties. The representations and warranties
of the Investors contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties
had been made on and as of the Closing.
6.2 Payment of Purchase Price. The Investors shall have delivered the
purchase price specified in Section 1.
6.3 Qualifications. All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
6.4 Minimum Investment. The Company shall have received an aggregate
minimum investment from the Investors of $17,000,000.
7. Termination.
7.1 Right to Termination. This Agreement may be terminated and the
proposed transactions abandoned:
(a) At any time, by mutual written consent of the Company and
Investors committed to purchase a majority of the Series 1 Preferred
Stock;
(b) At the option of an Investor and by notice to the Company
stating the reasons for such action, (i) in the event the Closing
shall not have occurred by January 31, 2001 (or any other date that
the parties may designate by mutual agreement) by reason of the
failure of any of the conditions set forth in Section 5 or (ii) at any
time prior to the Closing, in the event of a material breach of any of
the representations or warranties by the Company set forth in Section
2 or a material breach of any of the covenants of the Company set
forth in Section 4; or
(c) At the option of the Company and by notice to the Investors
stating the reasons for such action, (i) in the event the Closing
shall not have occurred by January 31, 2001 (or any other date that
the parties may designate by mutual agreement) by reason of the
failure of any of the conditions set forth in Section 6 or (ii) at any
time prior to the Closing, in the event of a material breach of any of
the representations or warranties of the Investors set forth in
Section 3.
7.2 Effect of Termination. Termination by a party pursuant to
subsection 7.1(b) or subsection 7.1(c) shall not adversely affect such
party's other available rights and remedies. The rights and remedies of the
party terminating this Agreement pursuant to subsection 7.1(b) or
subsection 7.1(c), whether contained in this Agreement or conferred
pursuant to applicable law or in equity, shall be cumulative and concurrent
and may be pursued singly, successively or together, at the discretion of
the holder thereof.
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Page 37 of 92 Pages
8. Miscellaneous.
8.1 Survival of Warranties. The warranties, representations and
covenants of the Company and the Investors contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement
and the Closing and shall in no way be affected by any investigation of the
subject matter thereof made by or on behalf of the Investors or the
Company.
8.2 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties
(including transferees of any Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the
parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
8.3 Governing Law. This Agreement shall be governed by and construed
under the laws of the state of Oregon.
8.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be
deemed effectively given upon personal delivery to the party to be notified
or upon deposit with the United States Post Office, by registered,
certified mail, Federal Express, or other express courier, postage prepaid
and addressed to the party to be notified at the address indicated for such
party on the signature page hereof, or at such other address as such party
may designate by ten (10) days' advance written notice to the other
parties. Any notice given to the Company under this Section 6.6 shall be
copied via email to ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
8.7 Finder's Fee. Except for the Shemano Group and as otherwise as set
forth in the Schedule of Exceptions, each party represents that it neither
is nor will be obligated for any finders' fee or commission in connection
with this transaction. The Investors agree to indemnify and to hold
harmless the Company from any liability for any commission or compensation
in the nature of a finders' fee (and the costs and expenses of defending
against such liability or asserted liability) for which the Investors or
any of their officers, partners, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless the
Investors from any liability for any commission or compensation in the
nature of a finders' fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.
8.8 Expenses. Each of the Company and the Investors shall bear their
own legal and other expenses incurred with respect to this Agreement and
the transactions
17
Page 38 of 92 Pages
contemplated hereby; provided, however, that the Company shall pay up to an
aggregate of $75,000 in the reasonable legal fees and expenses of counsel
to the Investors, contingent upon the Closing. The Investors shall require
their counsel to submit all invoices related to this Agreement and the
transactions contemplated hereby to the Company's General Counsel for his
review.
8.9 Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of the Transaction Documents, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
8.10 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term or condition of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the
Investors that have purchased, or, prior to the Closing, have agreed to
purchase, a majority of the Shares. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding
(including securities into which such securities are convertible), each
future holder of all such securities, and the Company.
8.11 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.
8.12 Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement among the parties and no party shall
be liable or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein or
therein.
8.13 Restriction on Separate Transfer of Warrants and Series 1
Preferred Stock. Until the first anniversary of the Closing, no holder of
Series 1 Preferred Stock shall transfer, sell, assign or hypothecate any
such shares without also transferring, selling, assigning or hypothecating
(a) Warrants to purchase a number of shares of Common Stock or (b) a number
of shares of Common Stock issued upon the exercise of Warrants, in either
case equal to one-half of the number of shares of Series 1 Preferred Stock
so transferred.
18
Page 39 of 92 Pages
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
MEDICALOGIC/MEDSCAPE, INC.
By: _____________________________________
Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
Address: ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
INVESTORS: QUANTUM INDUSTRIAL PARTNERS LDC
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: c/o Curacao Corporation
Company NV
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ Antilles
SFM DOMESTIC INVESTMENTS LLC
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: c/▇ ▇▇▇▇▇ Private Equity Partners
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
19
Page 39 of 92 Pages
PALLADIN GROUP
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ INTERNATIONAL
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
HBK INVESTMENTS LP
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
BOOTH IV, LP
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
20
Page 40 of 92 Pages
CROSSLINK CROSSOVER FUND III, LP
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
OFFSHORE CROSSLINK CROSSOVER
FUND III, LP
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
DELTA GROWTH, LP
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
21
Page 41 of 92 Pages
▇▇▇▇▇▇▇ CAPITAL MANAGEMENT
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
CRANSHIRE CAPITAL
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
LAGUNITAS PARTNERS LP
By: ______________________________________
Its: ______________________________________
Printed name: _____________________________
Address: __________________________________
__________________________________
__________________________________
22