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EXHIBIT 4.3
STOCK PURCHASE AGREEMENT
CIMA Labs Inc.
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The undersigned (the "Investor"), hereby confirms its agreement with you as
follows:
1. This Stock Purchase Agreement (the "Agreement") is made as of the date set
forth below between CIMA Labs, Inc., a Delaware corporation (the
"Company"), and the Investor.
2. The Company has authorized the sale and issuance of up to 1,200,000 shares
(the "Shares") of common stock of the Company, $.01 par value per share
(the "Common Stock"), subject to adjustment by the Company's Board of
Directors, to certain investors in a private placement (the "Offering").
3. The Company and the Investor agree that the Investor will purchase from
the Company and the Company will issue and sell to the Investor
shares, for a purchase price of $ per share,
or an aggregate purchase price of $ , pursuant to the
Terms and Conditions for Purchase of Shares attached hereto as Annex I and
incorporated herein by this reference as if fully set forth herein. Unless
otherwise requested by the Investor, certificates representing the Shares
purchased by the Investor will be registered in the Investor's name and
address as set forth below.
4. The Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three
years with the Company or its affiliates, (b) neither it, nor any group of
which it is a member or to which it is related, beneficially owns
(including the right to acquire or vote) any securities of the Company and
(c) it has no direct or indirect affiliation or association with any NASD
member. Exceptions:
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(If no exceptions, write "none." If left blank, response will be
deemed to be "none.")
Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.
DATED AS OF: March , 2000
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INVESTOR
By:
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Print Name:
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Title:
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Address:
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AGREED AND ACCEPTED:
CIMA LABS INC.
By:
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Title:
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Exhibit 4.3
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. AUTHORIZATION AND SALE OF THE SHARES. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of the Shares.
2. AGREEMENT TO SELL AND PURCHASE THE SHARES; SUBSCRIPTION DATE.
2.1 At the Closing (as defined in Section 3), the Company will
sell to the Investor, and the Investor will purchase from the Company, upon the
terms and conditions hereinafter set forth, the number of Shares set forth on
the signature page to which these Terms and Conditions for Purchase of Shares
are attached as Annex I (the "Signature Page") at the purchase price set forth
on such Signature Page.
2.2 The Company proposes to enter into this same form of Stock
Purchase Agreement with certain other investors (the "Other Investors") and
expects to complete sales of Shares to them. (The Investor and the Other
Investors are hereinafter sometimes collectively referred to as the "Investors,"
and this Agreement and the Stock Purchase Agreements executed by the Other
Investors are hereinafter sometimes collectively referred to as the
"Agreements.") The Company will accept executed Agreements from Investors for
the purchase of Shares commencing upon the date on which the Company provides
the Investors with the proposed purchase price per Share and concluding upon the
date (the "Subscription Date") on which the Company has (i) executed Agreements
with Investors for the purchase of Shares in the aggregate amount of at least
$10,000,000 and (ii) notified Deutsche Bank Securities, Inc. (in its capacity as
Placement Agent for the Shares, the "Placement Agent") in writing that it is no
longer accepting Agreements from Investors for the purchase of Shares.
2.3 Investor acknowledges that the Company intends to pay the
Placement Agent a fee in respect of the sale of Shares to the Investor.
3. DELIVERY OF THE SHARES AT CLOSING. The completion of the purchase
and sale of the Shares (the "Closing") shall occur not later than March 17, 2000
at a place and time (the "Closing Date") to be specified by the Company and the
Placement Agent, and of which the Investors will be notified in not less than
two business days in advance by the Placement Agent. At the Closing, after
receipt of payment therefor, the Company shall arrange delivery to the Investor
of one or more stock certificates representing the number of Shares set forth on
the signature page hereto, each such certificate to be registered in the name of
the Investor or, if so indicated on the Stock Certificate Questionnaire attached
hereto as Exhibit A, in the name of a nominee designated by the Investor.
The Company's obligation to issue the Shares to the Investor shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) receipt by the Company of the purchase price for the Shares
being purchased hereunder as set forth on the Signature Page hereto; (b)
completion of purchases and sales under the Agreements with the Other Investors;
and (c) the accuracy in all material respects of the representations and
warranties
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made by the Investors and the fulfillment in all material respects of those
undertakings of the Investors to be fulfilled prior to the Closing.
The Investor's obligation to purchase the Shares shall be subject to
the following conditions, any one or more of which may be waived by the
Investor:
(a) Investors shall have executed Agreements for the purchase of
Shares in the aggregate amount of at least $10,000,000;
(b) the satisfaction of all of the conditions set forth in the
Engagement Letter between the Company and the Placement Agent;
(c) the Closing of the purchase and sale of the Shares shall occur on
or before March 17, 2000;
(d) the representations and warranties made by the Company in this
Agreement shall be accurate in all material respects and the undertakings of the
Company shall have been fulfilled in all material respects on or before the
Closing; and
(e) the Company shall have delivered to the Investor a certificate
executed by the chairman of the board or president and the chief financial or
accounting officer of the Company, dated the Closing Date, in form and substance
reasonably satisfactory to the Investor, to the effect that the representations
and warranties of the Company set forth in Section 4 hereof are true and correct
in all material respects as of the date of this Agreement and as of the Closing
Date, and that the Company has complied with all the agreements and satisfied
all the conditions in this Agreement on its part to be performed or satisfied on
or before the Closing Date
Subject to clauses (a) through (e) above, the Investor's obligations
are expressly not conditioned on the purchase by any or all of the other
Investors of the Shares that they have agreed to purchase from the Company.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company hereby represents and warrants to, and covenants with, the Investor, as
follows (which representations and warranties shall be deemed to apply, where
appropriate, to each subsidiary of the Company):
4.1 ORGANIZATION. The Company is duly incorporated and validly
existing in good standing under the laws of the jurisdiction of its
organization. The Company has full power and authority to own, lease, operate
and occupy its properties and to conduct its business as presently conducted and
is registered or qualified to do business and in good standing in each
jurisdiction in which it owns or leases property or transacts business and where
the failure to be so qualified would have a material adverse effect upon the
business affairs and prospects, condition (financial or otherwise), properties,
assets or operations of the Company ("Material Adverse Effect"), and no
proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification.
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4.2 DUE AUTHORIZATION. The Company has all requisite power and
authority to execute, deliver and perform its obligations under the Agreements,
and the Agreements have been duly authorized and validly executed and delivered
by the Company and constitute legal, valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, except as rights
to indemnity and contribution may be limited by state or federal securities laws
or the public policy underlying such laws, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4.3 NON-CONTRAVENTION. The execution, delivery and performance
of the Agreements, the issuance and sale of the Shares to be sold by the Company
under the Agreements, the fulfillment of the terms of the Agreements and the
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate action and will not (A) conflict with or constitute a
violation of, or default (with the passage of time or otherwise) under, (i) any
material bond, debenture, note or other evidence of indebtedness, or any
material lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instrument to which the Company is a party
or by which it or its property is bound, where such conflict, violation or
default is likely to result in a Material Adverse Effect, (ii) the charter,
by-laws or other organizational documents of the Company, or (iii) any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority binding upon the Company or its property,
where such conflict, violation or default is likely to result in a Material
Adverse Effect, or (B) result in the creation or imposition of any lien,
encumbrance, claim, security interest or restriction whatsoever upon any of the
material properties or assets of the Company or an acceleration of indebtedness
pursuant to any obligation, agreement or condition contained in any material
bond, debenture, note or any other evidence of indebtedness or any material
indenture, mortgage, deed of trust or any other agreement or instrument to which
the Company is a party or by which it is bound or to which any of the property
or assets of the Company is subject. No consent, approval, authorization or
other order of, or registration, qualification or filing with, any regulatory
body, administrative agency, or other governmental body in the United States is
required for the execution and delivery of the Agreements and the valid issuance
and sale of the Shares to be sold pursuant to the Agreements, other than such as
have been made or obtained, and except for any securities filings required to be
made under federal or state securities laws.
4.4 CAPITALIZATION. The Company has the authority to issue
20,000,000 shares of Common Stock, and 5,000,000 shares of preferred stock, $.01
par value (the "Preferred Stock"). As of March 9, 2000, 9,714,263 shares of
Common Stock were issued and outstanding and no shares of Preferred Stock were
issued and outstanding. The Company has not issued any capital stock since
September 30, 1999 other than pursuant to employee benefit plans disclosed in
the Company's SEC Documents (as defined herein). The Shares to be sold pursuant
to the Agreements have been duly authorized, and when issued and paid for in
accordance with the terms of the Agreements, will be duly and validly issued,
fully paid and nonassessable and free and clear of all pledges, liens and
encumbrances. The certificates evidencing the Shares are in due and proper form
under applicable state law. The outstanding shares of capital stock of the
Company
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have been duly and validly issued and are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, and were
not issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities. Except as described above , there are no outstanding
rights (including, without limitation, preemptive rights), warrants or options
to acquire, or instruments convertible into or exchangeable for, any unissued
shares of capital stock or other equity interest in the Company, or any
contract, commitment, agreement, understanding or arrangement of any kind to
which the Company is a party and relating to the issuance or sale of any capital
stock of the Company, any such convertible or exchangeable securities or any
such rights, warrants or options. Without limiting the foregoing, no preemptive
right, co-sale right, registration right, right of first refusal or other
similar right exists with respect to the issuance and sale of the Shares. Except
as described herein, there are no stockholders agreements, voting agreements or
other similar agreements with respect to the Common Stock to which the Company
is a party. No further approval or authority of the shareholders or the Board of
Directors of the Company will be required for the issuance and sale of the
Shares to be sold by the Company as contemplated in this Agreement. No
shareholder of the Company has any right (other than any right that has been
waived or has expired by reason of lapse of time following notification of the
Company's intent to file the Registration Statement (as hereinafter defined)) to
require the Company to register the sale of any securities owned by such holder
in such Registration Statement. Subject to the accuracy of the Investor's
representations and warranties in Section 5 of this Agreement, the offer, sale,
and issuance of the Shares in conformity with the terms of this Agreement
constitute transactions exempt from the registration requirements of Section 5
of the Securities Act and from the registration or qualification requirements of
the laws of any applicable state or United States jurisdiction.
4.5 LEGAL PROCEEDINGS. There is no action, suit or proceeding
before or by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or affecting
the Company which, singly or in the aggregate, might result in any Material
Adverse Effect or which might materially and adversely affect the consummation
of this Agreement, nor, to the best knowledge of the Company, is there any
reasonable basis therefor. The Company is not in default with respect to any
judgment, order or decree of any court or governmental agency or instrumentality
which, singly or in the aggregate, would have a material adverse effect on the
assets, properties or business of the Company.
4.6 NO VIOLATIONS. The Company is not in violation of its
charter, bylaws or other organizational document, or in violation of any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company, which
violation, individually or in the aggregate, would be reasonably likely to have
a Material Adverse Effect, or in default (and there exists no condition which,
with the passage of time or otherwise, would constitute a default) in the
performance or observance of any obligation, agreement, covenant or condition
contained in any bond, debenture, note, loan agreement or any other evidence of
indebtedness in any indenture, mortgage, deed of trust, lease, sublease, voting
agreement, voting trust or any other material agreement or instrument to which
the Company is a party or by which the Company is bound or by which the property
or assets of the Company is bound, which would be reasonably likely to have a
Material Adverse Effect.
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4.7 GOVERNMENTAL PERMITS, ETC. With the exception of the
matters which are dealt with separately in Sections 4.1, 4.12, and 4.13, the
Company possesses and is operating in compliance with all necessary franchises,
licenses, certificates, consents, authorities, approvals and permits and other
authorizations from any foreign, federal, state or local government or
governmental agency, department or body that are currently necessary for the
operation of the business of the Company as currently conducted, except where
the failure to currently possess could not reasonably be expected to have a
Material Adverse Effect, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such permit or any
circumstance which would lead it to believe that such proceedings are reasonably
likely, which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would be expected to have a Materially Adverse
Effect.
4.8 INTELLECTUAL PROPERTY.
(A) The Company has ownership or license or
legal right to use all patent, patent applications, inventions, know-how,
copyright, trade secret, trademark, trade names, applications for registration
of trademarks, service marks, service ▇▇▇▇ applications, licenses, customer
lists, designs, manufacturing or other processes, formulae, computer software,
systems, data compilation, research results or other proprietary rights used in
the business of the Company as now conducted and as proposed to be conducted and
material to the Company (collectively, "Intellectual Property") other than
Intellectual Property generally available on commercially reasonable terms from
other sources. All of such patents, trademarks and registered copyrights have
been duly registered in, filed in or issued by the United States Patent and
Trademark Office, the United States Register of Copyrights or the corresponding
offices of other jurisdictions and have been maintained and renewed in
accordance with all applicable provisions of law and administrative regulations
in the United States and all such jurisdictions.
(B) All material licenses or other material
agreements under which (i) the Company is granted
rights in Intellectual Property, other than Intellectual Property generally
available on commercially reasonable terms from other sources, and (ii) the
Company has granted rights to others in Intellectual Property owned or licensed
by the Company, are in full force and effect and, to the knowledge of the
Company, there is no material default by the Company thereto.
(C) The Company believes it has taken all steps
required in accordance with sound business practice
and business judgment to establish and preserve its ownership of all material
copyright, trade secret and other proprietary rights with respect to its
products and technology.
(D) The Company does not have any knowledge of,
and the Company has not given or received any notice of, any pending conflicts
with or infringement of the rights of others with respect to any Intellectual
Property or with respect to any license of Intellectual Property which are
material to the business of the Company.
(E) To the knowledge of the Company, the present
business, activities and products of the Company do not infringe any
intellectual property of any other person, No
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action, suit, arbitration, or legal, administrative or other proceeding, or
investigation is pending, or, to the best knowledge of the Company, threatened,
which involves any Intellectual Property, nor, to the best knowledge of the
Company, is there any reasonable basis therefor. To the Company's knowledge,
there exists no unexpired patent or patent application which includes claims
that would be infringed by or otherwise have a Material Adverse Effect on the
Company. To the knowledge of the Company, the Company is not making unauthorized
use of any confidential information or trade secrets of any person. Neither the
Company nor, to the knowledge of the Company, any of its employees have any
agreements or arrangements with any persons other than the Company related to
confidential information or trade secrets of such persons or restricting any
such employee's engagement in business activities of any nature. To the
Company's knowledge, the activities of the Company or any of its employees on
behalf of the Company do not violate any such agreements or arrangements known
to the Company which any such employees have with other persons, if any.
(F) The Company is not subject to any judgment,
order, writ, injunction or decree of any court or
any Federal, state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any
arbitrator, and has not entered into or is not a party to any contract which
restricts or impairs the use of any such Intellectual Property in a manner which
would have a material adverse effect on the use of any of the Intellectual
Property.
(G) To the best knowledge of the Company, no
Intellectual Property used by the Company, and no services or products sold by
the Company, conflict with or infringe upon any proprietary rights of any third
party. The Company has not received written notice of any pending conflict with
or infringement upon such third-party proprietary rights.
(H) The Company has not entered into any consent,
indemnification, forbearance to ▇▇▇ or settlement agreement with respect to
Intellectual Property other than in the ordinary course of business. No claims
have been asserted by any person with respect to the validity of the Company's
ownership or right to use the Intellectual Property and, to the best knowledge
of the Company, there is no reasonable basis for any such claim to be
successful.
(I) The Intellectual Property that are material
to the business of the Company are valid and enforceable and no registration
relating thereto has lapsed, expired or been abandoned or cancelled or is the
subject of cancellation or other adversarial proceedings, and all applications
therefor are pending and are in good standing.
(J) To the best of its knowledge, the Company
has complied, in all material respects, with its obligations relating to the
protection of the Intellectual Property which is material to the business of the
Company.
(K) To the best knowledge of the Company, no
person is infringing on or violating the Intellectual Property.
4.9 SECURITY MEASURES.
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The Company takes security measures designed to enable the
Company to assert trade secret protection in its non-patented technology.
4.10 FINANCIAL STATEMENTS. The financial statements of the
Company and the related notes contained in the Company's SEC Documents present
fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of the dates indicated, and the results of
its operations and cash flows for the periods therein specified. Such financial
statements (including the related notes) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified.
4.11 NO MATERIAL ADVERSE CHANGE. Since September 30, 1999,
there has not been (i) any material adverse change or any development involving
a prospective material adverse change in or affecting the condition, financial
or otherwise, or in the earnings, assets, business affairs or business prospects
of the Company, whether or not arising in the ordinary course of business; (ii)
any transactions entered into by the Company other than those in the ordinary
course of business, which are material with respect to the Company; (iii) any
dividend or distribution of any kind declared, paid or made on the capital stock
of the Company; or (iv) any loss or damage (whether or not insured) to the
physical property or assets of the Company which has been sustained which has a
Material Adverse Effect.
4.12 NASDAQ COMPLIANCE. The Company's Common Stock is
registered pursuant to Section 12(g) of the Exchange Act and is listed on The
Nasdaq National Market (the "Nasdaq Stock Market"), and the Company has taken no
action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq Stock Market. The Company is not aware of and has not
received any notice of, any efforts or actions to terminate the registration of
the Common Stock under the Exchange Act or delisting the Common Stock from the
Nasdaq Stock Market. The Company shall comply with all requirements of the
National Association of Securities Dealers, Inc. with respect to the issuance of
the Shares and the listing thereof on the Nasdaq Stock Market at all times
during the period beginning on the date hereof and ending two years from the
date of effectiveness of the Registration Statement.
4.13 REPORTING STATUS. The Company has filed in a timely
manner all documents that the Company was required to file under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), during the 12 months
preceding the date of this Agreement. The following documents (the "Company's
SEC Documents") complied in all material respects with the SEC's requirements as
of their respective filing dates, and the information contained therein as of
the date thereof did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under where they were made not
misleading:
(A) The Company's Annual Report on Form 10-K for
the year ended December 31, 1998 (the "10-K");
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(B) The Company's Quarterly Reports on Form 10-Q
for each of the quarters ended March 31, 1999, June 30, 1999 and
September 30, 1999;
(C) The Company's proxy statement for its 1999
Annual Meeting of Shareholders; and
(D) All other documents, if any, filed by the
Company with the Securities and Exchange Commission since December 31,
1998 pursuant to the reporting requirements of the Exchange Act.
4.14 NO ACTION. The Company shall take no action or
authorize any action to be taken on its behalf, including in connection with the
offering and sale of the Shares to other investors or the offer or sale of
additional securities of the Company following the Closing, that would
materially frustrate the consummation of the transactions contemplated herein.
4.15 FOREIGN CORRUPT PRACTICES. Neither the Company nor, to
the knowledge of the Company, any agent or other person acting on behalf of the
Company, have (i) directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds, (iii) failed to disclose
fully any contribution made by the Company or made by any person acting on its
behalf and of which the Company is aware in violation of law or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.
4.16 NO MANIPULATION OF STOCK. The Company has not taken and
will not, in violation of applicable law, take, any action outside the ordinary
course of business designed to or that might reasonably be expected to cause or
result in unlawful manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
4.17 ACCOUNTANTS. Ernst & Young LLP, who the Company expects
will express their opinion with respect to the financial statements to be
incorporated by reference from the Company's Annual Report on Form 10-K for the
year ended December 31, 1999 into the Registration Statement (as defined below)
and the Prospectus which forms a part thereof, are independent accountants as
required by the Securities Act and the rules and regulations promulgated
thereunder (the "Rules and Regulations").
4.18 CONTRACTS. The contracts described in the SEC Documents
or incorporated by reference therein are in full force and effect on the date
hereof, except for contracts the termination or expiration of which would not,
singly or in the aggregate, have a Material Adverse Effect. Neither the Company
nor, to the Company's knowledge, any other party to such contracts is in breach
of or default under any of such contracts which would have a Material Adverse
Effect.
4.19 ENVIRONMENTAL. Except as would not, singly or in
the aggregate, reasonably be expected to have a Material Adverse Effect,
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(a) the Company is in compliance with all applicable
Environmental Laws (as defined below);
(b) the Company has all permits, authorizations
and approvals required under any applicable Environmental Laws and is in
compliance with the requirements of such permits authorizations and approvals;
(c) there are no pending or, to the best knowledge
of the Company, threatened Environmental Claims against the Company; and
(d) under applicable law, to the best knowledge of
the Company, there are no circumstances with
respect to any property or operations of the Company that are reasonably likely
to form the basis of an Environmental Claim against the Company.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) Federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or any chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority. "Environmental
Claims" means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental Law.
4.20 LABOR MATTERS. No labor dispute with the employees of
the Company exists or, to the best knowledge of the Company, is imminent.
4.21 COMPLIANCE. The Company has conducted and is conducting
its business in compliance with all applicable Federal, state, local and foreign
statutes, laws, rules, regulations, ordinances, codes, decisions, decrees,
directives and orders, except where the failure to do so would not, singly or in
the aggregate, have a material adverse effect on the condition, financial or
otherwise, or on the earnings, assets, business affairs or business prospects of
the Company.
4.22 PROPERTIES. The Company has good and marketable title
to its properties, free and clear of all material security interests, mortgages,
pledges, liens, charges, encumbrances and claims of record except as described
in the SEC Documents. The properties of the Company are, in the aggregate, in
good repair (reasonable wear and tear excepted), and suitable for their
respective uses. Any real property held under lease by the Company is held under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the conduct of the business of the Company.
The Company owns or leases all such properties as are necessary to its business
or operations as now conducted.
4.23 TAXES. The Company has filed all material tax returns
required to be filed, which returns are true and correct in all material
respects, and the Company is not in default in the payment of any taxes,
including penalties and interest, assessments, fees and other charges, shown
thereon due or otherwise assessed, other than those being contested in good
faith and for which
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adequate reserves have been provided or those currently payable without interest
which were payable pursuant to said returns or any assessments with respect
thereto.
4.24 TRANSFER TAXES. On the Closing Date, all stock transfer
or other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares to be sold to the Investor
hereunder will be, or will have been, fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been fully complied with.
4.25 CONTRIBUTIONS. To the best of the Company's knowledge,
neither the Company nor any employee or agent of the Company has made any
payment of funds of the Company or received or retained any funds in violation
of any law, rule or regulation.
4.26 USE OF PROCEEDS; INVESTMENT COMPANY. The Company
intends to use the proceeds from the sale of the Shares for working capital and
other general corporate purposes. The Company is not now, and after the sale of
the Shares under this Agreement and under all other agreements and the
application of the net proceeds from the sale of the Shares described in the
proceeding sentence will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
4.27 PRIOR OFFERINGS. All offers and sales of capital stock
of the Company before the date of this Agreement were at all relevant times duly
registered or exempt from the registration requirements of the Securities Act
and were duly registered or subject to an available exemption from the
registration requirements of the applicable state securities or Blue Sky laws.
4.28 INSURANCE. The Company maintains and will continue to
maintain insurance of the types and in the amounts that the Company reasonably
believes is adequate for its business, including, but not limited to, insurance
covering all real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against by similarly situated companies, all of which insurance is in
full force and effect.
4.29 OTHER GOVERNMENTAL PROCEEDINGS. To the Company's
knowledge, there are no rulemaking or similar proceedings before The United
States Food and Drug Administration or comparable Federal, state, local or
foreign government bodies that involve or affect the Company, which, if the
subject of an action unfavorable to the Company, could involve a prospective
material adverse change in or effect on the condition, financial or otherwise,
or in the earnings, assets, business affairs or business prospects of the
Company.
4.30 NON-COMPETITION AGREEMENTS. To the knowledge of the
Company, any full-time employee who has entered into any non-competition,
non-disclosure, confidentiality or other similar agreement with any party other
than the Company is neither in violation of nor is expected to be in violation
of that agreement as a result of the business currently conducted or expected to
be conducted by the Company or such person's performance of his or her
obligations to the Company. The Company has not received written notice that any
consultant or scientific advisor of the Company is in violation of any
non-competition, non-disclosure, confidentiality or
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similar agreement.
4.31 LEGAL OPINION. The Company shall cause to be delivered to
the Investors and the Placement Agent by counsel to the Company a customary
legal opinion pertaining to the availability of an exemption from the
registration provisions of the Securities Act and to such counsel's knowledge as
to any misstatements or omissions in the Company's SEC Documents.
4.32 OFFERING MATERIALS. Other than the SEC Documents (the
"Offering Materials"), the Company has not distributed and will not distribute
prior to the Closing Date any offering material in connection with the offering
and sale of the Shares. The Company has not in the past nor will it hereafter
take any action independent of the Placement Agent to sell, offer for sale or
solicit offers to buy any securities of the Company which would bring the offer,
issuance or sale of the Shares, as contemplated by this Agreement, within the
provisions of Section 5 of the Securities Act, unless such offer, issuance or
sale was or shall be within the exemptions of Section 4 of the Securities Act.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR.
5.1 The Investor represents and warrants to, and covenants with,
the Company that: (i) the Investor is an "accredited investor" as defined in
Regulation D under the Securities Act and the Investor is also knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions with
respect to, investments in shares presenting an investment decision like that
involved in the purchase of the Shares, including investments in securities
issued by the Company and investments in comparable companies, and has
requested, received, reviewed and considered all information it deemed relevant
in making an informed decision to purchase the Shares; (ii) the Investor is
acquiring the number of Shares set forth on the Signature Page hereto in the
ordinary course of its business and for its own account for investment only and
with no present intention of distributing any of such Shares or any arrangement
or understanding with any other persons regarding the distribution of such
Shares other than as contemplated in Section 7 of this Agreement; (iii) the
Investor will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Shares except in compliance with the
Securities Act, applicable state securities laws and the respective rules and
regulations promulgated thereunder; (iv) the Investor has answered all questions
on the Signature Page hereto and the Investor Questionnaire attached hereto as
Exhibit B for use in preparation of the Registration Statement and the answers
thereto are true and correct as of the date hereof and will be true and correct
as of the Closing Date; (v) the Investor will notify the Company immediately of
any change in any of such information until such time as the Investor has sold
all of its Shares or until the Company is no longer required to keep the
Registration Statement effective; and (vi) the Investor has, in connection with
its decision to purchase the number of Shares set forth on the signature page
hereto, relied only upon the Company Information provided to the Investor by the
Company in contemplation of this offering and the representations and warranties
of the Company contained herein. Investor understands that its acquisition of
the Shares has not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), or registered or qualified under any state securities
law in reliance on specific exemptions therefrom, which exemptions may depend
upon, among other things, the bona fide nature of the Investor's investment
intent as expressed herein. Investor has completed
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or caused to be completed and delivered to the Company the Investor
Questionnaire attached hereto Exhibit B, which questionnaire is true and correct
in all material respects.
5.2 The Investor acknowledges, represents and agrees that no
action has been or will be taken in any jurisdiction outside the United States
by the Company or the Placement Agent that would permit an offering of the
Shares, or possession or distribution of offering materials in connection with
the issue of the Shares, in any jurisdiction outside the United States where
action for that purpose is required. Each Investor outside the United States
will comply with all applicable laws and regulations in each foreign
jurisdiction in which it purchases, offers, sells or delivers Shares or has in
its possession or distributes any offering material, in all cases at its own
expense. The Placement Agent is not authorized to make any representation or use
any information in connection with the issue, placement, purchase and sale of
the Shares.
5.3 The Investor hereby covenants with the Company not to make
any sale of the Shares without satisfying the requirements of the Securities Act
and the Rules and Regulations thereunder, including in the event of resale under
the Registration Statement, the prospectus delivery requirement under the
Securities Act to be satisfied, and the Investor acknowledges that the
certificates evidencing the Shares will be imprinted with a legend that
prohibits their transfer except in accordance therewith. The Investor
acknowledges that there may occasionally be times when the Company, based on the
advice of its counsel, determines that it must suspend the use of the Prospectus
forming a part of the Registration Statement until such time as an amendment to
the Registration Statement has been filed by the Company and declared effective
by the SEC or until the Company has amended or supplemented such Prospectus.
5.4 The Investor further represents and warrants to, and
covenants with, the Company that (i) the Investor has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) this
Agreement constitutes a valid and binding obligation of the Investor enforceable
against the Investor in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the Investors
herein may be legally unenforceable.
5.5 The Investor understands that nothing in this Agreement or
any other materials presented to the Investor in connection with the purchase
and sale of the Shares constitutes legal, tax or investment advice. The Investor
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Shares.
6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement or by the
Placement Agent, all covenants, agreements, representations and warranties made
by the Company and the Investor herein
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shall survive the execution of this Agreement, the delivery to the Investor of
the Shares being purchased and the payment therefor.
7. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT.
7.1 REGISTRATION PROCEDURES AND EXPENSES. The Company shall:
(A) subject to receipt of necessary information from the
Investors, prepare and file with the SEC, as soon as practicable, but
in no event later than thirty (30) days after the Closing Date, a
registration statement on Form S-3 (or, if the Company is ineligible to
use Form S-3, then on Form S-1) (the "Registration Statement") to
enable the resale of the Shares by the Investors from time to time
through the automated quotation system of the Nasdaq Stock Market (or
the facilities of any national securities exchange on which the
Company's Common Stock is then traded) or in privately-negotiated
transactions;
(B) use its reasonable efforts, subject to receipt of
necessary information from the Investors, to cause the Registration
Statement to become effective as soon as practicable and within ninety
(90) days after the Registration Statement is filed by the Company.
(C) use its reasonable efforts to prepare and file with the
SEC such amendments and supplements to the Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep
the Registration Statement current and effective for a period not
exceeding, with respect to each Investor's Shares purchased hereunder,
the earlier of (i) the second anniversary of the Closing Date, (ii) the
date on which the Investor may sell all Shares then held by the
Investor without registration or without regard to any volume
limitations by reason of Rule 144(k) of the Securities Act or (iii)
such time as all Shares purchased by such Investor in this Offering
have been sold pursuant to a registration statement.
(D) furnish to the Placement Agent and to the Investor with
respect to the Shares registered under the Registration Statement such
number of copies of the Registration Statement, Prospectuses and
Preliminary Prospectuses in conformity with the requirements of the
Securities Act and such other documents as the Investor may reasonably
request, in order to facilitate the public sale or other disposition of
all or any of the Shares by the Investor, provided, however, that the
obligation of the Company to deliver copies of Prospectuses or
Preliminary Prospectuses to the Investor shall be subject to the
receipt by the Company of reasonable assurances from the Investor that
the Investor will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such Prospectuses or
Preliminary Prospectuses;
(E) file documents required of the Company for normal blue
sky clearance in states specified in writing by the Investor, provided,
however, that the
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Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so
qualified or has not so consented;
(F) during the period when copies of the Prospectus are
required to be delivered under the Securities Act or the Exchange Act,
will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act within the time
periods required by the Exchange Act and the rules and regulations
promulgated thereunder;
(G) bear all expenses in connection with the procedures in
paragraph (a) through (f) of this Section 7.1 and the registration of
the Shares pursuant to the Registration Statement; and
(H) advise the Investors, promptly after it shall receive
notice or obtain knowledge of the issuance of any stop order by the SEC
delaying or suspending the effectiveness of the Registration Statement
or of the initiation of any proceeding for that purpose; and it will
promptly use its commercially reasonable efforts to prevent the
issuance of any stop order or to obtain its withdrawal at the earliest
possible moment if such stop order should be issued.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 7.1 that the Investor shall furnish to
the Company such information regarding itself, the Shares to be sold by
Investor, and the intended method of disposition of such securities as shall be
required to effect the registration of the Shares.
The Company understands that the Investor disclaims being an
underwriter, but the Investor being deemed an underwriter by the SEC shall not
relieve the Company of any obligations it has hereunder, provided, however, that
if the Company receives notification from the SEC that the Investor is deemed an
underwriter, then the period by which the Company is obligated to submit an
acceleration request to the SEC shall be extended to the earlier of (i) the 90th
day after such SEC notification, or (ii) 120 days after the initial filing of
the Registration Statement with the SEC.
7.2 TRANSFER OF SHARES AFTER REGISTRATION; SUSPENSION.
The Investor agrees that it will not effect any Disposition of the Shares or its
right to purchase the Shares that would constitute a sale within the meaning of
the Securities Act except as contemplated in the Registration Statement referred
to in Section 7.1 or as otherwise permitted by law, and that it will promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding the Investor or its plan of distribution.
(A) Except in the event that paragraph (c) below applies,
the Company shall: (i) if deemed necessary by the Company, prepare and
file from time to time with the SEC a post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or a
supplement or amendment to any document incorporated therein by
reference or file any other required document so that such Registration
Statement will not contain an untrue statement of a material fact or
omit to state a material fact required
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to be stated therein or necessary to make the statements therein not
misleading, and so that, as thereafter delivered to Investors of the
Shares being sold thereunder, such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (ii) provide the Investor copies of any documents filed
pursuant to Section 7.2(b)(i); and (iii) inform each Investor that the
Company has complied with its obligations in Section 7.2(b)(i) (or
that, if the Company has filed a post-effective amendment to the
Registration Statement which has not yet been declared effective, the
Company will notify the Investor to that effect, will use its
reasonable efforts to secure the effectiveness of such post-effective
amendment as promptly as possible and will promptly notify the Investor
pursuant to Section 7.2(b)(i) hereof when the amendment has become
effective).
(B) Subject to paragraph (c) below, in the event: (i) of
any request by the SEC or any other federal or state governmental
authority during the period of effectiveness of the Registration
Statement for amendments or supplements to a Registration Statement or
related Prospectus or for additional information; (ii) of the issuance
by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose; (iii) of the
receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any
of the Shares for sale in any jurisdiction or the initiation of any
proceeding for such purpose; or (iv) of any event or circumstance which
necessitates the making of any changes in the Registration Statement or
Prospectus, or any document incorporated or deemed to be incorporated
therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact
or any omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
then the Company shall deliver a certificate in writing to the Investor
(the "Suspension Notice") to the effect of the foregoing and, upon
receipt of such Suspension Notice, the Investor will refrain from
selling any Shares pursuant to the Registration Statement (a
"Suspension") until the Investor's receipt of copies of a supplemented
or amended Prospectus prepared and filed by the Company, or until it is
advised in writing by the Company that the current Prospectus may be
used, and has received copies of any additional or supplemental filings
that are incorporated or deemed incorporated by reference in any such
Prospectus. In the event of any Suspension, the Company will use its
reasonable efforts to cause the use of the Prospectus so suspended to
be resumed as soon as reasonably practicable within 20 business days
after delivery of a Suspension Notice to the Investors. In addition to
and without limiting any other remedies (including, without limitation,
at law or at equity) available to the Investor, the Investor shall be
entitled to specific performance in the event that the Company fails to
comply with the provisions of this Section 7.2(b).
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(C) Notwithstanding the foregoing paragraphs of this
Section 7.2, the Investor shall not be prohibited from selling Shares
under the Registration Statement as a result of Suspensions on more
than three occasions of not more than 30 days each in any twelve month
period, unless, in the good faith judgment of the Company's Board of
Directors, upon advice of counsel, the sale of Shares under the
Registration Statement in reliance on this paragraph 7.2(d) would be
reasonably likely to cause a violation of the Securities Act or the
Exchange Act and result in potential liability to the Company.
(D) Provided that a Suspension is not then in effect the
Investor may sell Shares under the Registration Statement, provided
that it arranges for delivery of a current Prospectus to the transferee
of such Shares. Upon receipt of a request therefor, the Company has
agreed to provide an adequate number of current Prospectuses to the
Investor and to supply copies to any other parties requiring such
Prospectuses.
(E) In the event of a sale of Shares by the Investor, the
Investor must also deliver to the Company's transfer agent, with a copy
to the Company, a Certificate of Subsequent Sale substantially in the
form attached hereto as Exhibit C, so that the shares may be properly
transferred.
7.3 DELAY IN EFFECTIVENESS OF REGISTRATION. In the event that
the Registration Statement is not declared effective within ninety (90) days
after the date of filing of the Registration Statement, the Company shall pay to
each Investor liquidated damages in an amount equal to 0.25% of the number of
Shares purchased by Investor pursuant to this Agreement for each week after the
filing date of the Registration Statement that the Registration Statement is not
declared effective. Such liquidated damages shall be paid through the issuance
of additional Shares at such time as the Registration Statement is declared
effective. Such additional Shares shall also be registered within thirty (30)
days of issuance under the terms and conditions described in Sections 7.1.1(a) -
(g) hereof.
7.4 INDEMNIFICATION. For the purpose of this Section 7.4:
(A) the term "Selling Stockholder" shall include the
Investor and each person, if any, who controls the Investor within the
meaning of the Securities Act or any affiliate of such Investor;
(B) the term "Registration Statement" shall include any
final Prospectus, exhibit, supplement or amendment included in or
relating to the Registration Statement referred to in Section 7.1; and
(C) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any omission or alleged
omission to state in the Registration Statement a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(I) The Company agrees to indemnify and hold
harmless each Selling Stockholder from and against any losses,
claims, damages, liabilities or
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expenses, joint or several, to which such Selling Stockholder
may become subject (under the Securities Act the Exchange Act,
or any other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably
withheld), insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, including the Prospectus, financial
statements and schedules, and all other documents filed as a
part thereof, as amended at the time of effectiveness of the
Registration Statement, including any information deemed to be a
part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A, or pursuant to Rule 434, of the
Rules and Regulations, or the Prospectus, in the form first
filed with the Commission pursuant to Rule 424(b) of the
Regulations, or filed as part of the Registration Statement at
the time of effectiveness if no Rule 424(b) filing is required
(the "Prospectus"), or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission
to state in any of them a material fact required to be stated
therein or necessary to make the statements in any of them, in
light of the circumstances under which they were made, not
misleading, or arise out of or are based in whole or in part on
any inaccuracy in the representations and warranties of the
Company contained in this Agreement, or any failure of the
Company to perform its obligations under this Agreement or under
law, and will reimburse each Investor and each such controlling
person for any legal and other expenses as such expenses are
reasonably incurred by such Investor or such controlling person
in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability,
expense or action and the Company will reimburse such Selling
Stockholder for any reasonable legal or other expenses
reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim, provided, however,
that the Company shall not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of,
or is based upon, an untrue statement made in such Registration
Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such
Selling Stockholder specifically for use in preparation of the
Registration Statement or the failure of such Selling
Stockholder to comply with its covenants and agreements
contained in Sections 5.1, 5.2, 5.3 or 7.2 hereof or any
statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Investor prior
to the pertinent sale or sales by the Investor.
(II) The Investor agrees to indemnify and hold
harmless the Company (and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act,
each officer of the Company who signs the Registration Statement
and each director of the Company) from and against any losses,
claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject
(under the Securities Act or
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otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise
out of, or are based upon, (i) any failure to comply with the
covenants and agreements contained in Section 5.1, 5.2, 5.3 or
7.2 hereof, or (ii) any untrue statement of a material fact
contained in the Registration Statement but only to the extent
that such untrue statement was made in reliance upon and in
conformity with written information furnished by or on behalf of
the Investor specifically for use in preparation of the
Registration Statement, and the Investor will reimburse the
Company (or such officer, director or controlling person), as
the case may be, for any legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any
such action, proceeding or claim; provided, however, that the
Investor shall not be liable for any such untrue or alleged
untrue statement or omission or alleged omission of which the
Investor has delivered to the Company in writing a correction
before the occurrence of the transaction from which such loss
was incurred, and the Investor will reimburse the Company, each
of its directors, each of its officers who signed the
Registration Statement or controlling person for any legal and
other expense reasonably incurred by the Company, each of its
directors, each of its officers who signed the Registration
Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action.
(III) Promptly after receipt by any indemnified
person of a notice of a claim or the beginning of any action in
respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 7.4, such
indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, but
the omission to so notify the indemnifying party will not
relieve it from any liability which it may have to any
indemnified party under this Section 7.4 (except to the extent
that such omission materially and adversely affects the
indemnifying party's ability to defend such action) or from any
liability otherwise than under this Section 7.4. Subject to the
provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person
shall be entitled to participate therein, and, to the extent
that it shall elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice
from such indemnified party, shall be entitled to assume the
defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to
such indemnified person of its election to assume the defense
thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense
thereof, provided, however, that if there exists or shall exist
a conflict of interest that would make it inappropriate, in the
reasonable opinion of counsel to the indemnified person, for the
same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the
indemnified person shall be entitled to retain its own counsel
at the expense of such indemnifying person; provided, however,
that no indemnifying person shall be
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responsible for the fees and expenses of more than one separate
counsel (together with appropriate local counsel) for all
indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any
action unless the indemnifying person shall have approved the
terms of such settlement; provided that such consent shall not
be unreasonably withheld. No indemnifying person shall, without
the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified person is or could have been a party and
indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an
unconditional release of such indemnified person from all
liability on claims that are the subject matter of such
proceeding. Notwithstanding the provisions of this Section 7.4,
Investor shall not be liable for any indemnification obligation
under this Agreement in excess of the amount of gross proceeds
received by the Investor from the sale of the Shares.
(IV) If the indemnification provided for in
this Section 7.4 is unavailable to or insufficient to hold
harmless an indemnified party under subsection (a) or (b) above
in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to (a) reflect the relative
benefits received by the Company and the Investor from the
placement of Common Stock or if the allocation provided by
clause (a) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (a) above but the relative fault
of the Company and the Investor in connection with the
statements or omissions or inaccuracies in the representations
and warranties in this Agreement that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The respective relative
benefits received by the Company on the one hand and each
Investor on the other shall be deemed to be in the same
proportion as the amount paid by such Investor to the Company
pursuant to this Agreement for the Shares purchased by such
Investor that were sold pursuant to the Registration Statement
bears to the difference (the "Difference") between the amount
such Investor paid for the Shares that were sold pursuant to the
Registration Statement and the amount received by such Investor
from such sale. The relative fault shall be determined by
reference to, among other things, , whether the untrue statement
or the omission or alleged omission to state a mutual fact or
the inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company on the one hand
or an Investor on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such untrue statement. The provisions set forth in
Section 7.4 with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for
contribution is to be made under this Section; provided,
however, that no additional notice shall be required with
respect to any threat or action for which
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notice has been given under Section 7.4 for purposes of
indemnification. The Company and the Investors agree that it
would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if
the Investors were treated as one entity for such purpose) or by
any other method of allocation which does not take into account
the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include, subject to the
limitations set forth in this Section 7.4, any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), no
Investor shall be required to contribute any amount in excess of
the amount by which the Difference exceeds the amount of any
damages which such Investor has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
The Investors' obligations in this subsection to contribute are
several in proportion to their sales of Shares to which such
loss relates and not joint.
(V) The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who
were represented by counsel during the negotiations regarding
the provisions hereof including, without limitation, the
provisions of this Section 7.4, and are fully informed regarding
said provisions. They further acknowledge that the provisions of
this Section 7.4 fairly allocate the risks in light of the
ability of the parties to investigate the Company and its
business in order to assure that adequate disclosure is made in
the Registration Statement as required by the Act and the
Exchange Act. The parties are advised that federal or state
public policy as interpreted by the courts in certain
jurisdictions may be contrary to certain of the provisions of
this Section 7.4, and the parties hereto hereby expressly waive
and relinquish any right or ability to assert such public policy
as a defense to a claim under this Section 7.4 and further agree
not to attempt to assert any such defense.
7.5 TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of the
Shares shall cease and terminate as to any particular number of the Shares upon
the passage of two years from the effective date of the Registration Statement
or when such Shares shall have been effectively registered under the Securities
Act and sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such Shares or at
such time as an opinion of counsel satisfactory to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.
7.6 INFORMATION AVAILABLE. So long as the Registration Statement
is effective covering the resale of Shares owned by the Investor, the Company
will furnish to the Investor:
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(A) as soon as practicable after it is available
(but in the case of the Company's Annual Report to Shareholders, within
120 days after the end of each fiscal year of the Company), one copy of
(i) its Annual Report to Stockholders (which Annual Report shall
contain financial statements audited in accordance with generally
accepted accounting principles by a national firm of certified public
accountants); (ii) if not included in substance in the Annual Report to
Stockholders, its Annual Report on Form 10-K (the foregoing, in each
case, excluding exhibits); (iii) if not included in substance in its
Quarterly Reports to Shareholders, its quarterly reports on Form 10-Q;
and (iv) a full copy of the particular Registration Statement covering
the Shares (the foregoing, in each case, excluding exhibits);
(B) upon the reasonable request of the Investor,
all exhibits excluded by the parenthetical to subparagraphs (a)(ii),
(iii) and (iv) of this Section 7.6 as filed with the SEC and all other
information that is made available to shareholders; and
(C) upon the reasonable request of the Investor, an
adequate number of copies of the Prospectuses to supply to any other
party requiring such Prospectuses; and the Company, upon the reasonable
request of the Investor, will meet with the Investor or a
representative thereof at the Company's headquarters to discuss all
information relevant for disclosure in the Registration Statement
covering the Shares and will otherwise cooperate with any Investor
conducting an investigation for the purpose of reducing or eliminating
such Investor's exposure to liability under the Securities Act,
including the reasonable production of information at the Company's
headquarters; provided, that the Company shall not be required to
disclose any confidential information to or meet at its headquarters
with any Investor until and unless the Investor shall have entered into
a confidentiality agreement in form and substance reasonably
satisfactory to the Company with the Company with respect thereto.
7.7 RULE 144 INFORMATION. For two years after the date of
this Agreement, the Company shall file all reports required to be filed by it
under the Securities Act, the Rules and Regulations and the Exchange Act and
shall take such further action to the extent required to enable the Investors to
sell the Shares pursuant to Rule 144 under the Securities Act (as such rule may
be amended from time to time).
7.8 BROKER'S FEE. The Investors acknowledge that the Company
intends to pay to Deutsche Banc Alex. ▇▇▇▇▇, the placement agent, a fee in
respect of the sale of the Shares to the Investors. Each of the parties to this
Agreement hereby represents that, on the basis of any actions and agreements by
it, there are no other brokers or finders entitled to compensation in connection
with the sale of the Shares to the Investors.
8. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if delivered
from outside the United States, by International Federal Express or facsimile,
and shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if delivered
by nationally recognized overnight
21
23
carrier, one (1) business day after so mailed, (iii) if delivered by
International Federal Express, two (2) business days after so mailed, (iv) if
delivered by facsimile, upon electric confirmation of receipt and shall be
delivered as addressed as follows:
(A) if to the Company, to:
CIMA Labs Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
(B) with a copy mailed to:
Faegre & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
(C) if to the Investor, at its address on the Signature Page
hereto, or at such other address or addresses as may have been
furnished to the Company in writing.
9. CHANGES. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor.
10. TERMINATION. This Agreement may be terminated as to any Investor,
at the option of such Investor, if the Closing has not occurred on or before
March 17, 2000.
11. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
12. SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
13. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of California, without giving
effect to the principles of conflicts of law.
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute
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24
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other parties.
15. CONFIDENTIAL DISCLOSURE AGREEMENT. Notwithstanding any provision
of this Agreement to the contrary, any confidential disclosure agreement
previously executed by the Company and the Investor in connection with the
transactions contemplated by this Agreement shall remain in full force and
effect in accordance with its terms following the execution of this Agreement
and the consummation of the transactions contemplated hereby.
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EXHIBIT 4.3
EXHIBIT A
CIMA LABS INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 5 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be
registered in (this is the name that will --------------------------
appear on your stock certificate(s)).
You may use a nominee name if appropriate:
2. The relationship between the Investor and the
registered holder listed in response to item 1 --------------------------
above:
3. The mailing address of the registered holder
listed in response to item 1 above: --------------------------
4. The Social Security Number or Tax
Identification Number of the registered holder --------------------------
listed in the response to item 1 above:
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26
EXHIBIT B
CIMA LABS INC.
INVESTOR QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
To: CIMA Labs Inc.
This Investor Questionnaire ("Questionnaire") must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, par value $0.01 per share, of CIMA Labs Inc. (the "Securities").
The Securities are being offered and sold by [Name of Company] (the
"Corporation") without registration under the Securities Act of 1933, as amended
(the "Act"), and the securities laws of certain states, in reliance on the
exemptions contained in Section 4(2) of the Act and on Regulation D promulgated
thereunder and in reliance on similar exemptions under applicable state laws.
The Corporation must determine that a potential investor meets certain
suitability requirements before offering or selling Securities to such investor.
The purpose of this Questionnaire is to assure the Corporation that each
investor will meet the applicable suitability requirements. The information
supplied by you will be used in determining whether you meet such criteria, and
reliance upon the private offering exemption from registration is based in part
on the information herein supplied.
This Questionnaire does not constitute an offer to sell or a
solicitation of an offer to buy any security. Your answers will be kept strictly
confidential. However, by signing this Questionnaire you will be authorizing the
Corporation to provide a completed copy of this Questionnaire to such parties as
the Corporation deems appropriate in order to ensure that the offer and sale of
the Securities will not result in a violation of the Act or the securities laws
of any state and that you otherwise satisfy the suitability standards applicable
to purchasers of the Securities. All potential investors must answer all
applicable questions and complete, date and sign this Questionnaire. Please
print or type your responses and attach additional sheets of paper if necessary
to complete your answers to any item.
A. BACKGROUND INFORMATION
Name:
-----------------------------------------------------------------------------------------------------------
Business Address:
----------------------------------------------------------------------------------------------
(Number and Street)
----------------------------------------------------------------------------------------------------------------
(City) (State) (Zip Code)
Telephone Number: ( )
----------------------------------------------------------------------------------
Residence Address:
----------------------------------------------------------------------------------------------
(Number and Street)
----------------------------------------------------------------------------------------------------------------
(City) (State) (Zip Code)
Telephone Number: ( )
----------------------------------------------------------------------------------
If an individual:
Age: Citizenship: Where registered to vote:
------ ---------- --------------------
If a corporation, partnership, limited liability company, trust or other entity:
Type of entity:
-------------------------------------------------------------------------------------------------
State of formation: Date of formation:
-------------- ----------------------------
Social Security or Taxpayer Identification No.
------------------------------------------------------------------
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27
Send all correspondence to (check one): Residence Address Business Address
---- ----
B. STATUS AS ACCREDITED INVESTOR
The undersigned is an "accredited investor" as such term is defined in
Regulation D under the Act, as at the time of the sale of the Securities the
undersigned falls within one or more of the following categories (Please initial
one or more, as applicable):(1)
(1) a bank as defined in Section 3(a)(2) of the Act, or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the Act
whether acting in its individual or fiduciary capacity; a broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in Section 2(13) of the Act; an investment company
registered under the Investment Corporation Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act; a Small Business
Investment Corporation licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan
established and maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions for the benefit of
its employees, if such plan has total assets in excess of $5,000,000; an
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with the investment decisions made solely by persons that
are accredited investors;1
(2) a private business development company as defined in Section 202(a)(22)
of the Investment Adviser Act of 1940;
(3) an organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the Securities
offered, with total assets in excess of $5,000,000;
(4) a natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase of the Securities
exceeds $1,000,000;
(5) a natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
(6) a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities offered, whose purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D;
and
(7) an entity in which all of the equity owners are accredited investors
(as defined above).
C. REPRESENTATIONS
The undersigned hereby represents and warrants to the Corporation as follows:
--------
(1) As used in this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
subsection (4), the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, the investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depiction,
contributions to an ▇▇▇ or ▇▇▇▇▇ retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
B-2
28
1. Any purchase of the Securities would be solely for the account of
the undersigned and not for the account of any other person or with a view to
any resale, fractionalization, division, or distribution thereof.
2. The information contained herein is complete and accurate and may be
relied upon by the Corporation, and the undersigned will notify the Corporation
immediately of any material change in any of such information occurring prior to
the closing, if any, with respect to the purchase of Securities by the
undersigned or any co-purchaser.
3. There are no suits, pending litigation, or claims against the
undersigned that could materially affect the net worth of the undersigned as
reported in this Questionnaire.
4. The undersigned acknowledges that there may occasionally be times
when the Corporation, based on the advice of its counsel, determines that it
must suspend the use of the Prospectus forming a part of the Registration
Statement (as such terms are defined in the Stock Purchase Agreement to which
this Questionnaire is attached) until such time as an amendment to the
Registration Statement has been filed by the Company and declared effective by
the Securities and Exchange Commission or until the Corporation has amended or
supplemented such Prospectus. The undersigned is aware that, in such event, the
Securities will not be subject to ready liquidation, and that any Securities
purchased by the undersigned would have to be held during such suspension. The
overall commitment of the undersigned to investments which are not readily
marketable is not excessive in view of the undersigned's net worth and financial
circumstances, and any purchase of the Securities will not cause such commitment
to become excessive. The undersigned is able to bear the economic risk of an
investment in the Securities.
5. In addition to reviewing the Corporation's SEC Documents, the
undersigned has carefully considered the potential risks relating to the
Corporation and a purchase of the Securities, and fully understands that the
Securities are speculative investments which involve a high degree of risk of
loss of the undersigned's entire investment. Among others, the undersigned has
carefully considered each of the risks described under the heading "Risk
Factors" in the Corporation's most recent annual report on Form 10-K.
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire this
day of , 2000, and declares under oath that it is truthful and
correct.
Print Name
By:
-----------------------------------------
Signature
Title:
--------------------------------------
(required for any purchaser that is a
corporation, partnership, trust or
other entity)
B-3
29
EXHIBIT C
CIMA LABS INC.
CERTIFICATE OF SUBSEQUENT SALE
ChaseMellon Shareholder Services
RE: Sale of Shares of Common Stock of CIMA Labs Inc. (the "Company")
pursuant to the Company's Prospectus dated , 2000
(the "Prospectus")
Dear Sir/Madam:
The undersigned hereby certifies, in connection with the sale of shares
of Common Stock of the Company included in the table of Selling Shareholders in
the Prospectus, that the undersigned has sold the Shares pursuant to the
Prospectus and in a manner described under the caption "Plan of Distribution" in
the Prospectus and that such sale complies with all applicable securities laws,
including, without limitation, the Prospectus delivery requirements of the
Securities Act of 1933, as amended.
Selling Shareholder (the beneficial owner):
---------------------------
Record Holder (e.g., if held in name of nominee):
---------------------
Restricted Stock Certificate No.(s):
----------------------------------
Number of Shares Sold:
------------------------------------------------
Date of Sale:
---------------------------------------------------------
In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Very truly yours,
By:
----------------------------
Print Name:
--------------------
Title:
-------------------------
Dated:
----------------------------
cc: Investor Relations
CIMA Labs Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
C-1