EXHIBIT 10.6
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WOMEN FIRST HEALTHCARE, INC.
SENIOR CONVERTIBLE REDEEMABLE PREFERRED STOCK, SERIES A
______________________
PREFERRED STOCK PURCHASE AGREEMENT
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Dated as of June 25, 2002
TABLE OF CONTENTS
Page
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PARAGRAPH 1. AUTHORIZATION OF ISSUANCE OF THE PREFERRED STOCK. ........................ 1
PARAGRAPH 2. PURCHASE AND SALE OF PREFERRED STOCK. .................................... 1
PARAGRAPH 3. CONDITIONS PRECEDENT. .................................................... 2
3A. Purchasers' Conditions to Closing ....................................... 2
3B. Conditions Precedent to Obligations of the Company. ..................... 6
PARAGRAPH 4. INDEMNITY. ............................................................... 7
PARAGRAPH 5. USE OF PROCEEDS. ......................................................... 9
PARAGRAPH 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. ........................... 9
PARAGRAPH 7. REPRESENTATIONS AND COVENANTS OF THE PURCHASERS. ......................... 22
PARAGRAPH 8. DEFINITIONS. ............................................................. 24
PARAGRAPH 9. MISCELLANEOUS. ........................................................... 30
9A. Preferred Stock Payments ................................................ 30
9B. Expenses ................................................................ 30
9C. Consent to Amendments ................................................... 30
9D. Form, Registration, Transfer and Exchange of Preferred Stock; Lost
Preferred Stock ...................................................... 32
9E. Persons Deemed Owners; Participations ................................... 32
9F. Survival of Representations and Warranties; Entire Agreement ............ 32
9G. Successors and Assigns .................................................. 33
9H. Disclosure to Other Persons ............................................. 33
9I. Notices ................................................................. 33
9J. Payments Due on Non-Business Days ....................................... 34
9K. Satisfaction Requirement ................................................ 34
9L. Governing Law ........................................................... 34
9M. Severability ............................................................ 34
9N. Descriptive Headings .................................................... 34
9O. Counterparts ............................................................ ▇▇
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▇▇▇▇▇▇▇▇ ▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Schedule 6A-2 Subsidiaries
Schedule 6A-3 Options and Warrants
Schedule 6L Unaudited Financial Statements
Schedule 6M Pro Forma Financial Statements
Schedule 6P Licenses
Schedule 6U Liens
Schedule 6W Clinical Trials
EXHIBIT A FORM OF CERTIFICATE OF DESIGNATION
EXHIBIT B FORM OF PREFERRED STOCK CERTIFICATE
EXHIBIT C-1 FORM OF SECURITY AGREEMENT
EXHIBIT C-2 FORM OF INTERCREDITOR AGREEMENT
EXHIBIT D FORM OF OPINION OF ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
EXHIBIT E FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
EXHIBIT F FORM OF REGISTRATION RIGHTS AGREEMENT
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WOMEN FIRST HEALTHCARE, INC.
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▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
As of June 25, 2002
Ladies and Gentlemen:
The undersigned, WOMEN FIRST HEALTHCARE, INC., a Delaware
corporation (the "Company"), hereby agrees with each purchaser (collectively,
the "Purchasers") executing a signature page hereto as follows:
PARAGRAPH 1. AUTHORIZATION OF ISSUANCE OF THE PREFERRED STOCK.
The Company has authorized issuance of 13,000 shares of its Senior
Convertible Redeemable Preferred Stock, Series A due June 30, 2006 (the
"Preferred Stock") with a stated value of $1,000 per share which stated value
will increase at an annual rate of accretion, calculated quarterly, equal to (i)
ten percent (10%) per share of Series A Preferred Stock from the Date of Closing
until December 31, 2003, (ii) eleven and one-half percent (11.5%) from December
31, 2003 until June 30, 2004, and (iii) twelve and one-half percent (12.5%) from
June 30, 2004 until June 30, 2006, as set forth in the form of Certificate of
Designation attached as Exhibit A hereto (the "Certificate of Designation"). The
initial conversion price of the Preferred Stock shall be $6.35 per share,
subject to adjustment as set forth in the Certificate of Designation.
Certain capitalized terms used herein have the meanings specified
in Paragraph 8. Unless otherwise indicated, all dollar amounts contained in this
Agreement are in U.S. Dollars and all covenants contained herein shall be
calculated in U.S. Dollars.
PARAGRAPH 2. PURCHASE AND SALE OF PREFERRED STOCK.
Subject to the terms and conditions herein set forth, the Company
hereby agrees to sell to the Purchasers and each Purchaser agrees to purchase
from the Company at the Closing (as defined below), Preferred Stock in the
amount set forth on the signature pages hereof below its name at 100% of stated
value; provided, however, that all such issuances of Preferred Stock shall not
result in originally issued Preferred Stock with an aggregate stated value
exceeding $13,000,000. The Company will deliver to each Purchaser one or more
certificates representing shares of Preferred Stock in the form attached as
Exhibit B hereto
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registered in the name of such Purchaser (or its nominee), evidencing the number
of shares of Preferred Stock to be purchased by such Purchaser and in the
denomination or denominations specified by such Purchaser against payment of the
purchase price thereof by transfer of immediately available funds on the date of
closing, which shall be June 25, 2002 (the "Closing"; the "Date of Closing"), to
accounts specified by the Company in a funds flow memorandum to be delivered by
the Company to the Purchasers not later than one Business Day prior to the Date
of Closing.
PARAGRAPH 3. CONDITIONS PRECEDENT.
3A. Purchasers' Conditions to Closing. The obligation of each
Purchaser to purchase and pay for the Preferred Stock to be purchased by such
Purchaser hereunder is subject to the satisfaction of the following conditions,
on or before the Date of Closing:
(i) Documents To Be Delivered. Each Purchaser shall have received
all of the following, duly executed and delivered:
(a) A copy of the Certificate of Designation of the
Preferred Stock, which shall have been duly filed with and accepted
by the Secretary of State of the State of Delaware.
(b) The certificates representing the Preferred Stock.
(c) The Registration Rights Agreement in substantially the
form set forth as Exhibit F hereto.
(d) The Security Documents in substantially the forms set
forth as Exhibits C-1 and C-2 hereto.
(e) All filings required by the Security Agreement; and
arrangements reasonably satisfactory to the Purchasers shall have
been made for all recordings and filings of, or with respect to,
the Security Agreement, including filings with the United States
Patent and Trademark and Copyright offices, and delivery of such
other security and other documents, including, without limitation,
consents of counterparties, and the taking of all actions as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable, to perfect the Lien created, or purported to be created,
by the Security Agreement.
(f) A certificate of the Secretary of the Company dated the
Date of Closing, certifying the incumbency and authority of the
officers or authorized signatories of the Company who executed the
Documents and the truth, correctness and completeness of the
following exhibits attached thereto: (i) a copy of resolutions duly
adopted by the Board of Directors of the Company, in
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full force and effect at the time this Agreement is entered into,
authorizing the execution of this Agreement and the other Documents
delivered or to be delivered in connection herewith and the
consummation of the transactions contemplated herein and therein,
as applicable, (ii) a copy of the certificate of incorporation of
the Company, and all amendments thereto, certified by an
appropriate official of the Company's jurisdiction of
incorporation, and (iii) a copy of the By-laws of the Company.
(g) Certificates, dated as of a recent date, as to the valid
existence and good standing of the Company and each of its
Subsidiaries in its jurisdiction of formation, issued by the
appropriate authorities of such jurisdiction.
(h) A certificate executed by the principal executive
officer of the Company, dated the Date of Closing, in which such
officer certifies that the conditions set forth in subsections (a),
(b), and (c) of Paragraph 3A(iii) have been satisfied.
(i) The opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Company,
dated the Date of Closing, and substantially in the form set forth
as Exhibit D hereto, subject only to such qualifications,
limitations or exceptions as may be acceptable to each Purchaser.
(j) The opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, the Purchasers'
special counsel, dated the Date of Closing and substantially in the
form set forth as Exhibit E hereto, subject only to such
qualifications, limitations or exceptions as may be acceptable to
each Purchaser.
(k) Certificates, dated as of a recent date, of the
Company's and its Subsidiaries' good standing and qualification to
do business, issued by appropriate officials in each jurisdiction
listed on Schedule 3A(i)(k).
(ii) Fees and Expenses. The payment by the Company, by wire
transfer of immediately available funds, of (i) an upfront fee of 2.0% of
the total amount committed by the Purchasers (as defined in the commitment
letter dated June 18, 2002), to be allocated to such Purchasers pro rata
on the basis of their respective commitments set forth therein, (ii) the
travel and other reasonable out-of-pocket expenses of the Purchasers
related to the Vaniqa Acquisition or this Transaction and (iii) the
reasonable fees and disbursements of the Purchasers' counsel (including
without limitation ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇) and consultants related to the
Vaniqa Acquisition or this Transaction.
(iii) Representations; No Default. (a) All representations and
warranties made by the Company in any Document shall be true and correct
on and as of the Date
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of Closing (except to the extent that the facts upon which such
representations are based have been changed by the transactions herein
contemplated and such changes are set forth to the satisfaction of each
Purchaser) as if such representations and warranties had been made as of
the Date of Closing.
(b) No Default under this Agreement or the other Documents shall
exist at the Date of Closing.
(c) The Company shall have performed and complied with all
agreements and conditions required in the Documents to be performed or
complied with by the Company on or prior to the Date of Closing.
(iv) Purchase Permitted by Applicable Laws. The offer by the Company
of, and the purchase of and payment for, the Preferred Stock on the terms
and conditions herein provided (including the use of the proceeds of the
sale of such Preferred Stock by the Company) shall not violate any
applicable law or governmental regulation (including, without limitation,
Section 5 of the Securities Act) shall not be enjoined under the laws of
any jurisdiction to which the Company or either Purchaser is subject
(temporarily or permanently) and shall not subject any Purchaser or any
then holders of the Preferred Stock to any tax, penalty, liability or other
materially adverse condition under or pursuant to any applicable law or
governmental regulation.
(v) Concurrent Consummation of Acquisition. Concurrently with the
issuance of the Preferred Stock, the Company shall consummate the Vaniqa
Acquisition on terms and in form and substance reasonably satisfactory to
the Purchasers.
(vi) Concurrent Consummation of Notes Financing. Concurrently with
the issuance of the Preferred Stock, the Company shall consummate the
issuance and sale of the Notes and Warrants on terms and in form and
substance reasonably satisfactory to the Purchasers.
(vii) Proceedings. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be reasonably satisfactory in form and
substance to each Purchaser, and each Purchaser shall have received all
such counterpart originals or certified or other copies of such documents
as they or their counsel may reasonably request.
(viii) Reliance on Related Documents. Each Purchaser shall be entitled
to rely on all written representations, warranties and covenants rendered
by the Company in connection with the consummation of the transactions
contemplated by the Transaction Documents.
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(ix) No Adverse Change or Development, Etc. (I) There shall not have
occurred or become known to the Purchasers any events or changes (A) since
December 31, 2001 that, individually or in the aggregate, have had or could
reasonably be expected to have a Material Adverse Effect on the business,
Property, assets, nature of assets, liabilities, condition (financial or
otherwise), results of operations or prospects of the Company and its
Subsidiaries, taken as a whole, after giving effect to this Transaction, or
(B) that have had or could reasonably be expected to have an adverse effect
on the rights or remedies of any Purchaser, or on the ability of the
Company to perform its obligations to any Purchaser; (II) trading in any
securities of the Company shall not have been suspended or materially
limited by the Securities and Exchange Commission or Nasdaq and trading in
securities generally on the New York Stock Exchange, American Stock
Exchange, Ontario Stock Exchange or the Nasdaq National Market shall not
have been suspended or limited and minimum or maximum prices or maximum
ranges for prices shall not have been established on any such exchange;
(III) a banking moratorium shall not have been declared by New York,
Canadian or United States authorities; and (IV) there shall not have been
(A) an outbreak or escalation of material hostilities between the United
States and any foreign power, or (B) an outbreak or escalation of any other
material insurrection or armed conflict involving the United States or any
other national or international calamity or emergency or (C) any material
change or disruption in the general financial, banking or capital markets
of the United States which, in each case, in the judgment of the Purchasers
could reasonably be expected to materially and adversely affect or impair
the ability to syndicate, sell or place the Preferred Stock.
(x) Capital Structure. The pro forma consolidated capital structure
of the Company, after giving effect to the Transaction (including only
those adjustments approved by the Purchasers), shall be consistent in all
material respects with the Projections and capital structure contemplated
herein, and other than any Notes and other indebtedness satisfactory to the
Purchasers, after giving effect to, and upon consummation of, the
Transaction, the Company and its subsidiary shall have no outstanding
indebtedness for money borrowed other than currently outstanding
Indebtedness of the Company and its subsidiaries in an aggregate principal
amount outstanding not to exceed $21.6 million.
(xi) Approvals. All governmental and third party approvals required by
the Transaction and any other material governmental and third party
approvals required in connection with the financing contemplated hereby
shall have been obtained on reasonably satisfactory terms and shall be in
full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent
authority that would materially restrain, prevent or otherwise impose
material adverse conditions on the financing thereof.
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(xii) Financial Statements. The Purchasers shall have received (I)
satisfactory audited financial statements of the Company for the three most
recent Fiscal Years for which such financial statements are available, (II)
satisfactory unaudited interim consolidated financial statements of the
Company for each fiscal month and quarterly period ended after the latest
Fiscal Year referred to in clause (I) above as to which such financial
statements are available and for the corresponding period in the preceding
Fiscal Year, (III) a satisfactory pro forma (a) balance sheet of the
Company as of the date of the most recent financial statements provided
pursuant to clause (II) above and (b) income statement for the most recent
of the Fiscal Years provided pursuant to clause (I) above and for the
quarterly period provided pursuant to clause (II) above, in each case,
which shall give pro forma effect (including only those adjustments
approved by the Purchasers) to the Transaction and (IV) the Projections;
and such financial statements and Projections shall not reflect any
material adverse change in the consolidated financial condition of the
Company and its subsidiaries from what was reflected in the financial
statements or projections previously furnished to the Purchasers.
(xiii) Minimum EBITDA. The Purchasers shall be satisfied that
consolidated EBITDA (as adjusted on a pro forma basis for the Transaction
in accordance with customary investment banking practice and including only
those adjustments approved by the Purchasers) of the Company, after giving
effect to the Transaction, for the latest three month period annualized for
which the relevant financial information is available shall equal at least
$15.4 million, and the Company shall provide support for such calculation
of a nature that is satisfactory to the Purchasers.
(xiv) Minimum Cash Balance. The Purchasers shall be satisfied that,
as of the Date of Closing and after giving effect to the Transaction, the
Company shall have a minimum cash balance of at least $14.0 million.
(xv) Solvency. Each Purchaser shall have received a certificate
satisfactory in form and substance to the Purchasers and executed by the
Chief Executive Officer and the Chief Financial Officer of the Company that
shall certify to the solvency of the Company and its subsidiaries after
giving effect to the Transaction and the other transactions contemplated
hereby.
3B. Conditions Precedent to Obligations of the Company. The obligation
of the Company to issue and sell the Preferred Stock is subject to the
satisfaction, on or before the Date of Closing, of the following conditions:
(i) Purchaser Deliveries. (a) The Company shall have received the
following from each Purchaser, duly executed and delivered: (A) the
Registration Rights Agreement in substantially the form set forth as
Exhibit F hereto and (B) the Security Documents in substantially the forms
set forth as Exhibits C-1 and C-2 hereto.
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(b) The Purchasers shall have tendered payment pursuant to Paragraph
2 above.
(ii) Expenses. The Purchasers shall have provided to the Company a
statement of, and at the request of the Company reasonable documentation
for, (a) the travel and other reasonable out-of-pocket expenses of the
Purchasers related to the Vaniqa Acquisition or the Transaction and (b) the
reasonable fees and disbursements of the Purchasers' counsel (including
without limitation ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇) and consultants related to the
Vaniqa Acquisition or the Transaction.
(iii) Representations and Warranties. The representations and
warranties made by each Purchaser herein shall be true and correct on and
as of the Date of Closing with the same effect as though such
representations and warranties had been made on and as of the Date of
Closing.
(iv) Purchase Permitted by Applicable Laws. The offer by the Company
of, and the purchase of and payment for, the Preferred Stock on the terms
and conditions herein provided (including the use of the proceeds of the
sale of such Preferred Stock by the Company) shall not violate any
applicable law or governmental regulation (including, without limitation,
Section 5 of the Securities Act) and shall not be enjoined under the laws
of any jurisdiction to which the Company or any Purchaser is subject
(temporarily or permanently).
(v) Vaniqa Closing. All conditions to consummation of the Vaniqa
Acquisition shall have been performed or waived by the appropriate parties
thereto at the Date of Closing.
(vi) Concurrent Consummation of Note and Warrant Financing.
Concurrently with the issuance of the Preferred Stock, the Company shall
consummate the issuance and sale of the Notes and Warrants.
(vii) Approvals. All governmental and third party approvals required
by the Transaction and any other material governmental and third party
approvals required in connection with the financing contemplated hereby
shall have been obtained on reasonably satisfactory terms and shall be in
full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent
authority that would materially restrain, prevent or otherwise impose
material adverse conditions on the financing thereof.
PARAGRAPH 4. INDEMNITY.
(a) The Company agrees to indemnify each holder of Preferred Stock,
upon demand, from and against any and all liabilities, obligations, claims,
losses, damages,
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penalties, actions, judgments, suits, costs, expenses or disbursements
(including reasonable fees of attorneys, accountants, experts and advisors) of
any kind or nature whatsoever (in this section collectively called "liabilities
and costs") which to any extent (in whole or in part) may be imposed on,
incurred by or asserted against any holder of Preferred Stock growing out of,
resulting from or in any other way associated with the Documents and the
transactions and events associated herewith or therewith or contemplated herein
or therein. No holder of Preferred Stock shall be entitled under this paragraph
to receive indemnification for any liabilities and costs (i) to the extent
caused by its own individual gross negligence, willful misconduct or bad faith,
(ii) to the extent caused by its breach of any law, rule, regulation, order or
any contract, agreement or other instrument to which it is a party or otherwise
bound, or (iii) which arise from actions or proceedings convened by a holder of
Preferred Stock against another holder of Preferred Stock. The Company shall
not, in connection with any one action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be responsible
hereunder for the reasonable fees and expenses of more than one law firm, in
addition to any local counsel, for all of the holders of Preferred Stock, except
to the extent any holder of Preferred Stock shall have been advised by legal
counsel that there is a reasonable likelihood that there may exist a conflict of
interest between any of such holders of Preferred Stock or that any such holders
of Preferred Stock may have one or more defenses available that are different
from or additional to any defense or defenses available to any other holder of
Preferred Stock. Neither the Company nor any holder of Preferred Stock will,
without the prior written consent of the other, settle, compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification by such holder of Preferred Stock
may be sought hereunder (whether or not such holder of Preferred Stock is a
party to such claim, action, suit or proceeding); provided that the holder of
Preferred Stock may so settle such claim without such consent if such settlement
includes a full release of the Company by the holder of Preferred Stock or if
the Company is not then in material compliance with its obligations under this
Paragraph 4.
(b) The Company shall indemnify and hold harmless from time to time
(i) each Purchaser (and its successors and assigns) and (ii) in the case of a
Purchaser that is a partnership or other pass-through entity for tax purposes,
each direct or indirect owner of such Purchaser that is subject to tax with
respect to any of the Purchaser's income (and such person's successors and
assigns) (each person described in clause (i) or (ii), an "Indemnified Party")
from the excess, if any, of (a) all income, franchise or similar taxes (and
related interest and penalties) actually incurred by such Indemnified Party with
respect to such party's direct or indirect ownership of Preferred Stock over (b)
all income, franchise or similar taxes (and related interest and penalties) that
would have been incurred by such Indemnified Party with respect to such party's
direct or indirect ownership of Preferred Stock if Sections 305(b) and 305(c) of
the IRC were inapplicable to the Preferred Stock and no income, franchise or
similar tax were imposed with respect to any accretion of stated value or
increase in conversion rights until such Preferred Stock were disposed of in a
taxable disposition, except to the
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extent that such excess results from a change after the date hereof to Section
305 of the IRC or the Treasury Regulations promulgated thereunder. Any
indemnification payments made pursuant to the preceding sentence shall be
grossed-up to reflect any additional income, franchise or similar taxes imposed
on an Indemnified Party in connection with such indemnification payments. In
determining the amount of indemnification payments due to a direct or indirect
owner of Preferred Stock hereunder, the incremental taxes (and interest and
penalties) incurred by such owner shall be determined on an ongoing cumulative
basis (without offset for anticipated future tax savings not yet actually
realized by such owner) and, if and when future offsetting tax savings are
actually realized by such owner, the Purchaser shall be obligated to return to
the Company any excess indemnification payments previously paid to such owner.
(c) The Company hereby agrees that each Purchaser shall be entitled to
rely on all written representations, warranties and covenants rendered by the
Company in connection with the consummation of the transactions contemplated by
the Transaction Documents.
PARAGRAPH 5. Use of Proceeds.
(a) The proceeds from the issuance of the Preferred Stock on the Date
of Closing shall be used to consummate the Vaniqa Acquisition and pay related
fees and expenses.
(b) No portion of the proceeds from the issuance of Preferred Stock
shall be used in any manner which would violate Regulation U, T or X of the
Board of Governors of the Federal Reserve System or any other regulation of such
Board or to violate the Exchange Act, as in effect on the date or dates of such
borrowing and such use of proceeds.
PARAGRAPH 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
To induce each Purchaser to enter into this Agreement and to purchase
the Preferred Stock, the Company represents and warrants to and agrees with each
Purchaser, as of the date hereof and as of the Date of Closing, that:
(a) The Company and its Subsidiaries have been duly incorporated,
formed or organized, as the case may be, and each of the Company and its
Subsidiaries is validly existing in good standing as a corporation, limited
liability company or a limited partnership, as the case may be, under the
laws of its jurisdiction of incorporation, formation or organization, with
all requisite power and authority as a corporation, limited liability
company or limited partnership, as the case may be, to own its properties
and conduct its business as now conducted (as described in the Exchange Act
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Documents) and is duly qualified to do business as a corporation or foreign
limited liability company in good standing in all other jurisdictions where
the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect; as of the Date of Closing and after giving pro
forma effect to the closing of the Transaction, the Company will have the
authorized, issued and outstanding capitalization set forth in Schedule
6A-1; except as set forth in Schedule 6A-2 hereto, the Company does not
have any subsidiaries or own directly or indirectly any of the capital
stock or other equity or long-term debt securities of or have any equity
interest in any other person; all of the outstanding shares of capital
stock or membership interests, as the case may be, of the Company and its
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar rights; all of the outstanding shares of capital stock or
membership interests, as the case may be, of the Subsidiaries are owned
free and clear of all liens, encumbrances, equities and restrictions on
transferability or voting; all of the outstanding shares of capital stock
or membership interests, as the case may be, of the Subsidiaries are owned,
directly or indirectly, by the Company; except as set forth in this
Agreement and in Schedule 6A-3, no options, warrants or other rights to
purchase from the Company or any Subsidiary, or agreements or other
obligations of the Company or any Subsidiary to issue or other rights to
convert any obligation into, or exchange any securities for, shares of
capital stock of or ownership interests (including the Preferred Stock) in
the Company or any Subsidiary are outstanding and no holder of securities
of the Company or any Subsidiary is entitled to have such securities
registered under the Securities Act; there is no agreement, understanding
or arrangement among the Company or any Subsidiary and each of their
respective members or stockholders, as the case may be, or any other person
relating to the ownership or disposition of any capital stock or membership
interest (including any Preferred Stock), as the case may be, of the
Company or any Subsidiary or the election of directors or other governing
persons of the Company or any Subsidiary or the governance of the Company's
or any Subsidiary's affairs, and, if any, such agreements, understandings
and arrangements will not be breached or violated as a result of the
execution and delivery of, or the consummation of the transactions
contemplated by, this Agreement, the other Documents and the Transaction
Documents.
(b) The Company has all requisite power and authority as a corporation
to execute, deliver and perform its obligations under the Preferred Stock.
The shares of Preferred Stock have each been duly and validly authorized by
the Company for issuance and, when executed by the Company in accordance
with the provisions of this Agreement, and delivered to and paid for by the
Purchasers in accordance with the terms hereof, will be fully paid and
nonassessable and will not be issued in violation of any preemptive or
similar rights and will be issued free and clear of all liens,
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encumbrances, equities and restrictions on transferability or voting other
than those imposed under applicable federal and state securities laws; the
certificates representing the Preferred Stock are in the form contemplated
by this Agreement.
(c) The Company has all requisite power and authority as a corporation
to issue the shares of common stock upon conversion of the Preferred Stock
(the "Conversion Shares"). The Conversion Shares have each been duly and
validly authorized by the Company for issuance and, when issued by the
Company in accordance with the provisions of the Certificate of
Designation, will be fully paid and nonassessable and will not be issued in
violation of any preemptive or similar rights and will be issued free and
clear of all liens, encumbrances, equities and restrictions on
transferability or voting other than those imposed under applicable federal
and state securities laws.
(d) The Company has all requisite power and authority as a corporation
to execute, deliver and perform its obligations under this Agreement
(including without limitation the issuance of the Preferred Stock). This
Agreement has been duly and validly authorized by the Company, and, when
executed and delivered by the Company, will constitute a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms except that the enforcement thereof may be
limited by (A)(i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally or (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding at
law or in equity) (collectively, the "Enforceability Exceptions") and (B)
any rights to indemnity or contribution hereunder may be limited by federal
and state securities laws and public policy considerations.
(e) The Company has all requisite power and authority as a corporation
to execute, deliver and perform its obligations under each of the Security
Documents. Each Security Document has been duly and validly authorized by
the Company and, when executed by the Company and delivered to the
Purchasers in accordance with the terms hereof, will have been duly
executed and delivered and will constitute a valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms except that the enforcement thereof may be limited by the
Enforceability Exceptions and no representation or warranty is made by the
Company hereunder or in the Security Documents with respect to the validity
or enforceability of the Security Documents with respect to the rights, if
any, of the holders of the Preferred Stock thereunder, including with
respect the creation or perfection of a security interest, and the relative
priority of any such security interest, or the effect of the federal
Bankruptcy Code and comparable provisions of state law, and other
applicable antifraud laws, securities laws, usury laws or public policy
considerations on
-12-
the rights, if any, of such holders under the Security Documents
(collectively, the "Preferred Security Interest Exceptions").
(f) The Security Agreement is effective to create in favor of the
Collateral Agent, for the benefit of the Purchasers with respect to the
Notes, a legal, valid and enforceable security interest in the Collateral
and, when (i) the Security Agreement is filed in the United States Patent
and Trademark Office and the United States Copyright Office and (ii) such
other filings which are necessary to be made to create the security
interest pursuant to the Security Agreement, the Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in such Collateral (other
than as defined in the Security Agreement), in each case prior and superior
in right to any other person, subject to no other Liens except for Liens
expressly permitted to exist on such Collateral by the terms of the
Security Agreement, including the Lien granted to the holders of the Notes;
provided, however, that the foregoing representation and warranty is
expressly subject to the Preferred Security Interest Exceptions.
(g) The Company has all requisite power and authority as a corporation
to execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and
validly authorized by the Company and, when executed by the Company and
delivered to the Purchasers in accordance with the terms hereof, will have
been duly executed and delivered and will constitute a valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms except that the enforcement thereof may be
limited by the Enforceability Exceptions and (ii) any rights to indemnity
or contribution hereunder may be limited by federal and state securities
laws and public policy considerations.
(h) (i) The Company has delivered to the Purchasers a true and correct
copy of each of the Transaction Documents that have been executed and
delivered prior to the date of this Agreement and each other Transaction
Document in the form substantially as it will be executed and delivered on
or prior to the Date of Closing, together with all related agreements and
all schedules and exhibits thereto, and there have been no amendments,
alterations, modifications or waivers of any of the provisions of any of
the Transaction Documents since their date of execution or from the form in
which any such Transaction Document has been delivered to the Purchasers;
and (ii) to the Company's knowledge, there exists no event or condition
that would constitute a default or an event of default (in each case as
defined in each of the Transaction Documents) under any of the Transaction
Documents that could reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect or affect the ability of the
Company or its Subsidiaries to consummate the Vaniqa Acquisition.
-13-
(i) No consent, approval, authorization, license, qualification,
exemption or order of any court or governmental agency or body (including,
without limitation, the Food and Drug Administration (the "FDA")) or third
party is required for the performance of this Agreement, the Certificate of
Designation or the Preferred Stock by the Company, or for the consummation
by the Company of the Transaction or any transaction contemplated hereby,
or the application of the proceeds of the issuance of the Preferred Stock
as described in this Agreement, except as has already been acquired or as
may be required under state securities or "Blue Sky" laws in connection
with the purchase of the Preferred Stock by the Purchasers; all such
consents, approvals, authorizations, licenses, qualifications, exemptions
and orders which are required to be obtained by the Date of Closing have
been obtained or made, as the case may be, and are in full force and effect
and not the subject of any pending or, to the knowledge of the Company,
threatened attack by appeal or direct proceeding or otherwise.
(j) None of the Company or its Subsidiaries is (i) in violation of its
certificate of incorporation or bylaws (or similar organizational document,
including any certificate of formation and operating agreement), (ii) in
breach or violation of any statute, judgment, decree, order, rule or
regulation (including, without limitation, those relating to the
development, commercialization and sale of pharmaceutical and biotechnology
products) applicable to any of them or any of their properties or assets
(including, without limitation, any order, rule or regulation of the FDA,
the Securities and Exchange Commission and the National Association of
Securities Dealers, Inc.), which breach or violation could, individually or
in the aggregate, have a Material Adverse Effect, or (iii) except as set
forth in Schedule 6J, in default (nor has any event occurred which with
notice or passage of time, or both, would constitute a default) in the
performance or observance of any obligation, agreement, covenant or
condition contained in this Agreement or the Certificate of Designation or
any Transaction Document or any other contract, indenture, mortgage, deed
of trust, loan agreement, note, lease, license, permit, certificate or
agreement or instrument to which it is a party or to which it is subject,
which default could, individually or in the aggregate, have a Material
Adverse Effect.
(k) The execution, delivery and performance by the Company of this
Agreement (including without limitation, the issuance of the Preferred
Stock), the other Documents and the Transaction Documents and the
consummation by the Company of the transactions contemplated hereby and
thereby and the fulfillment of the terms hereof and thereof will not (a)
violate, conflict with or constitute or result in a breach of or a default
under (or an event that, with notice or lapse of time, or both, would
constitute a breach of or a default under) any of (i) the terms or
provisions of any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, permit, certificate or agreement or
instrument to which any of the Company or its Subsidiaries is a party or to
which any of their respective properties or assets are subject,
-14-
(ii) the certificate of incorporation or bylaws of any of the Company or
its Subsidiaries (or similar organizational document, including any
certificate of formation and operating agreement) or (iii) (assuming
compliance with all applicable state securities or "Blue Sky" laws and the
accuracy of the representations and warranties of the Purchasers in
Paragraph 7 hereof) any statute, judgment, decree, order, rule or
regulation of any court or governmental agency or other body applicable to
the Company or its Subsidiaries or any of their respective properties or
assets (including, without limitation, the rules and regulations of the
FDA), that, in each case described in this clause (a), could reasonably be
expected to result, individually or in the aggregate, in a Material Adverse
Effect, or (b) result in the imposition of any lien upon or with respect to
any of the properties or assets now owned or hereafter acquired by the
Company or any of their Subsidiaries, other than as contemplated by the
Security Agreements.
(l) The audited consolidated financial statements contained in the
Exchange Act Documents present fairly in all material respects the
consolidated financial position, results of operations and cash flows of
such entities at the dates and for the periods to which they relate and
have been prepared in accordance with GAAP applied on a consistent basis
except as otherwise stated therein; the interim unaudited consolidated
financial statements contained in the Exchange Act Documents and delivered
to the Purchasers as a closing condition and attached hereto as Schedule 6L
present fairly in all material respects the consolidated financial
position, results of operations and cash flows of such entities at the
dates and for the periods to which they relate subject to year-end audit
adjustments and have been prepared in accordance with GAAP applied on a
basis substantially consistent with the audited consolidated financial
statements included therein; and Ernst & Young LLP, which has examined
certain of such financial statements, is an independent certified public
accounting firm within the meaning of the Securities Act.
(m) The pro forma financial statements and other pro forma financial
information (including the Preferred Stock thereto) attached hereto as
Schedule 6M have been properly computed on the bases described therein; and
the assumptions used in the preparation of the pro forma financial
statements and other pro forma financial information are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein.
(n) The Projections have been prepared by the Company and are based on
the reasonable and good faith estimates and assumptions of the Company and
the Company has no reason to believe that such estimates and assumptions
are not fair and reasonable.
(o) There is not pending or, to the best knowledge of the Company,
threatened any action, suit, proceeding, inquiry or investigation,
governmental or otherwise,
-15-
to which any of the Company or its Subsidiaries is a party, or to which
their respective properties or assets are subject, before or brought by any
court, arbitrator or governmental agency or body, that, if determined
adversely to the Company or any such Subsidiary could, individually or in
the aggregate, have a Material Adverse Effect or that seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the Vaniqa
Acquisition or the issuance or sale of the Preferred Stock hereunder or the
application of the proceeds therefrom or the other transactions consummated
as of the date of this Agreement.
(p) Except as set forth on Schedule 6P, the Company and its
Subsidiaries possess, and upon consummation of the Vaniqa Acquisition will
possess, all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and have made all declarations and filings
with, all federal, state, local and other governmental authorities
(including, without limitation, the FDA), all self-regulatory organizations
and all courts and other tribunals, presently required or necessary to own
or lease, as the case may be, and to operate its respective properties and
to carry on its respective businesses as now or proposed to be conducted,
except where the failure to obtain such licenses, permits, certificates,
consents, orders, approvals and other authorizations, or to make all such
declarations and filings, could not, individually or in the aggregate, have
a Material Adverse Effect, and the Company and its Subsidiaries have not
received any notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization.
(q) To the best knowledge of the Company, none of the Company or its
Subsidiaries has, and, after giving effect to the Vaniqa Acquisition and
the issuance and sale of the Preferred Stock, will not have, any liability
for any prohibited transaction or funding deficiency or any complete or
partial withdrawal liability, or other liability under Title IV of ERISA,
with respect to any pension, profit sharing or other plan which is subject
to ERISA, to which any of the Company or its Subsidiaries makes or ever has
made a contribution and in which any employee of any of the Company or its
Subsidiaries is or has ever been a participant. With respect to such plans,
the Company and its Subsidiaries are, and, after giving effect to the
Vaniqa Acquisition and the issuance and sale of the Preferred Stock, will
be, in compliance in all material respects with all provisions of ERISA.
(r) The Exchange Act Documents, as of the date such filings were made,
did not contain any untrue statement of a material fact or omit to state a
material fact necessary to make such information or statements not
misleading. All information provided to the Purchasers about the Company,
its Subsidiaries and its existing business, financial conditions and
results of operations, and all statements made to the Purchasers about the
Company, did not when made and do not as of the date hereof contain or
include any untrue statement of a material fact or omit to state a material
-16-
fact necessary to make such information or statements, in the light of the
circumstances under which they were made or given, not misleading. To the
knowledge of the Company, all information provided to the Purchasers, and
all statements made to the Purchasers, about the Seller, ▇▇▇▇▇▇▇▇, BMS and
Vaniqa (as such terms are defined in the Vaniqa Acquisition Agreements),
did not when made and do not as of the date hereof contain or include any
untrue statement of a material fact or omit to state a material fact
necessary to make such information or statements, in the light of the
circumstances under which they were made or given, not misleading. The
statistical and market and industry-related data included therein are based
on or derived from sources which the Company believes to be reliable and
accurate or represent the Company's good faith estimates that are made on
the basis of data derived from such sources. The operating data included
therein are based on or derived from internal records of the Company or the
sellers of Vaniqa, as the case may be, which the Company has no reason to
believe are not reliable and accurate.
(s) Since March 31, 2002, except as contemplated by the Documents and
the Transaction Documents, (A) the Company has not (i) made, paid or
declared any dividend or distribution to any equity holder (in such
capacity) or redeemed any of its capital stock, (ii) varied its business
plan or practices, in any material respect, from past practices, (iii)
entered into any financing, joint venture, license or similar arrangement
that would limit or restrict its ability to perform its obligations
hereunder and under each of the other Documents or (iv) suffered or
permitted to be incurred any liability or obligation or any encumbrance
against any of its properties or assets that would limit or restrict its
ability to perform its obligations hereunder and under each of the other
Documents; and (B) there has not been any change or development which has
had, or could reasonably be expected to have, a Material Adverse Effect.
Without limiting the generality of the foregoing, since March 31, 2002,
there has not been (1) any lapse of any of the Company's trade secrets,
inventions, patents, patent applications or continuations (in whole or in
part), trademarks, trademark registrations, service marks, service ▇▇▇▇
registrations, copyrights, copyright registrations, or any application
therefor or filing in respect thereof (collectively, and together with any
and all know-how, trade secrets and proprietary business or technology
information, the "Intellectual Property"); (2) any loss of the services of
any of the key officers or key employees of the Company; (3) any incurrence
of or entry into any liability, mortgage, encumbrance, commitment or
transaction, including without limitation, any borrowing (or assumption or
guarantee thereof) or guarantee of a third party's obligations, or capital
expenditure (or lease in the nature of a conditional purchase of capital
equipment) in excess of $100,000 other than in the ordinary course of
business; (4) any material change by the Company in accounting methods or
principles; or (5) any change in the assets, liabilities, condition
(financial or otherwise), results or operations or prospects of the Company
from those reflected on the Exchange Act Documents, except changes in the
ordinary course of business and changes that have not had or could
-17-
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(t) Since March 31, 2002, the Company has not incurred or suffered any
liability or obligation, matured or unmatured, contingent or otherwise,
except in the ordinary course of business and except any such liability or
obligation that has not had and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(u) The Company owns or possesses sufficient legal rights to use
pursuant to license, sublicense, agreement or permission all Intellectual
Property used in the operation of its business as presently or proposed to
be conducted, in each case, subject to no encumbrances except as set forth
in the Exchange Act Documents. All of the Intellectual Property which is
owned by the Company is owned free and clear of all encumbrances, except
for the liens set forth on Schedule 6U, none of the Company's rights in or
use of the Intellectual Property has been or, to the Company's knowledge,
is currently threatened to be challenged; no current or currently planned
product based upon the Company's Intellectual Property would infringe or
otherwise conflict with any patent, trademark, service ▇▇▇▇, trade name or
copyright of any other person or entity issued or pending on the Date of
Closing if the Company were to distribute, sell, market or manufacture such
products, there are no actions, suits or judicial proceedings pending
relating to patents or proprietary information to which the Company is a
party or of which any property of the Company is subject, and the Company
is not aware of any actual or threatened claim by any person or entity
alleging any infringement or other conflict with the Company of a patent,
trademark, service ▇▇▇▇, trade name or copyright possessed by such person
or entity, or of any facts or circumstances which could render any
Intellectual Property invalid or inadequate to protect the interest of the
Company therein. None of such Intellectual Property, whether foreign or
domestic, has been canceled, abandoned, or otherwise terminated in a manner
which has had, or could reasonably be expected to have, a Material Adverse
Effect.
(v) The patent applications, if any, filed by or on behalf of the
Company (the "Patent Applications") have been properly prepared and filed
on behalf of the Company; each of the Patent Applications and each of the
patents that constitute Intellectual Property (the "Patents") is assigned
or licensed to the Company; except as set forth in the Exchange Act
Documents, no other entity or individual has any right or claim in any
Patent, Patent Application or any patent to be issued therefrom; and, to
the knowledge of the Company, each of the Patent Applications discloses
potentially patentable subject matter.
-18-
(w) The Phase IV human clinical trials conducted by or on behalf of
the Company or in which the Company has participated relating to Esclim are
the only human clinical trials currently being conducted by or on behalf of
the Company, and, to the best of the Company's knowledge, such trials were,
and, if still pending, are being, conducted in accordance with experimental
protocols, procedures and controls pursuant to accepted professional
scientific standards. Other than as set forth on Schedule 6W, the Company
has no knowledge of any studies or tests, the results of which call into
question the results of the clinical trials providing the basis for
approval of any of its products or Vaniqa. Other than as set forth on
Schedule 6W, the Company has not received any notices or correspondence
from the FDA or any other governmental agency requiring the termination,
suspension or modification of any clinical trials conducted by, or on
behalf of, the Company or in which the Company has participated or that
otherwise relate to its products or Vaniqa. All human clinical trials
previously conducted by or on behalf of the Company, while conducted by or
on behalf of the Company, were conducted in accordance with experimental
protocols, procedures and controls pursuant to accepted professional
scientific standards.
(x) There are no legal or governmental proceedings (including, without
limitation, proceedings before the FDA), nor are there any contracts or
other documents that would be required to be disclosed pursuant to the
Exchange Act that are not so disclosed.
(y) The relationships of the Company and its Subsidiaries with
suppliers, sales representatives, customers and others having business
relationships with them are generally satisfactory, and there is no
indication of any intention by any party thereto to terminate or modify the
terms of any such relationship. Without limiting the generality of the
foregoing, no supplier has notified or otherwise indicated to the Company
or any of its Subsidiaries that it intends to stop, or decrease the rate
of, or, other than publicly announced generally applicable price increases,
materially increase the cost of, its supply of materials, products or
services used by the Company and its Subsidiaries, and no supplier has,
since January 1, 2002, ceased materially decreased the rate of, or
materially raised the cost of, any such materials, products or services.
(z) All contracts that are material to the conduct of the Company's
business (including without limitation all supply contracts) constitute
legal, valid and binding obligations of the Company and, to the best
knowledge of the Company, each of the other parties thereto and are
enforceable against the Company and, to the best knowledge of the Company,
each of the other parties thereto in accordance with their terms, subject
to the Enforceability Exceptions and, to the extent any such contracts
contain indemnification or contribution provisions, subject to limitations
under federal and state securities laws and public policy considerations,
and no act, omission or course of conduct has occurred that would impair
the enforceability of any such
-19-
material contract against the other party or parties thereto. As regards
such material contracts, the Company (A) is not in default (nor is there
any event which with notice or lapse of time or both would constitute a
default), and (B) has not received notification (i) that any such material
contract is about to be terminated or otherwise modified (ii) alleging that
the Company or any employee thereof has breached any obligation under, or
violated any term of, any such material contract.
(aa) The Company and its Subsidiaries have good and marketable title
to all real property described in the Company's filings under the Exchange
Act as being owned by them and good and marketable title to the leasehold
estate in the real property described therein as being leased by them, free
and clear of all liens, charges, encumbrances or restrictions, except, in
each case, such as could not, individually or in the aggregate, have a
Material Adverse Effect. All leases, contracts and agreements, including
those referred to in the Exchange Act Documents, to which the Company or
any of its Subsidiaries is a party or by which any of them is bound are
valid and enforceable against the Company or any such Subsidiary, are, to
the knowledge of the Company, valid and enforceable against the other party
or parties thereto and are in full force and effect subject, in each case,
to the Enforceability Exceptions except as could not, individually or in
the aggregate, have a Material Adverse Effect.
(bb) The Company and its Subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns, except where
the failure to so file such returns could not, individually or in the
aggregate, have a Material Adverse Effect, and have paid all taxes shown as
due thereon; and other than tax deficiencies which the Company or any
Subsidiary is contesting in good faith and for which adequate reserves have
been provided in accordance with GAAP, there is no tax deficiency that has
been asserted against the Company or any Subsidiary that could,
individually or in the aggregate, have a Material Adverse Effect.
(cc) (i) Immediately after the consummation of the Vaniqa Acquisition
and the other transactions contemplated by this Agreement, the other
Documents and the Transaction Documents, the fair value and present fair
saleable value of the assets of each of the Company and its Subsidiaries
will exceed the sum of their stated liabilities and identified contingent
liabilities; and (ii) the Company and its Subsidiaries are not, nor will
they be, after giving effect to the execution, delivery and performance of
this Agreement, the other Documents and the Transaction Documents, and the
consummation of the Vaniqa Acquisition and the other transactions
contemplated hereby and thereby, (a) left with unreasonably small capital
with which to carry on their business as it is proposed to be conducted,
(b) unable to pay their debts (contingent or otherwise) as they mature or
(c) otherwise insolvent.
-20-
(dd) Except as could not, individually or in the aggregate, have a
Material Adverse Effect, (A) each of the Company and its Subsidiaries is in
compliance with all applicable Environmental Laws (as defined below), (B)
each of the Company and its Subsidiaries has made all filings and provided
all notices required under any applicable Environmental Law, and has all
permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance with their requirements, (C) there
is no civil, criminal or administrative action, suit, demand, claim,
hearing, notice of violation, investigation, proceeding, notice or demand
letter or request for information pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries under
any Environmental Law, (D) no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets,
facility or property owned, operated, leased or controlled by the Company
or any of its Subsidiaries, (E) neither the Company nor any of its
Subsidiaries have received notice that they have been identified as a
potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), or
any comparable state law, and (F) no property or facility of the Company or
any of its Subsidiaries is (i) listed or proposed for listing on the
National Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation and Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any 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
binding on the Company or its Subsidiaries, relating to pollution or
protection of the environment or health or safety or any chemical, material
or substance, that is subject to regulation thereunder. "Environmental
Claims" means any and all administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, notices of responsibility,
information requests, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental Law.
(ee) Neither the Company nor its Subsidiaries are, or immediately
after the Date of Closing will be, required to register as an "investment
company" or a company "controlled by" an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(ff) Neither the Company nor its Subsidiaries nor any of such
entities' directors, officers, employees, agents or controlling persons
have taken, directly or indirectly, any action designed, or that might
reasonably be expected, to cause or result,
-21-
under the Securities Act or otherwise, in, or that has constituted,
stabilization or manipulation of the price of the Preferred Stock; provided
that no representation or warranty is made as to the activities of any
purchaser of the Preferred Stock or any person acting on such purchaser's
behalf.
(gg) Neither the Company, its Subsidiaries nor any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Securities
Act) directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any "security" (as
defined in the Securities Act) which is or could be integrated with the
sale of the Preferred Stock in a manner that would require the registration
under the Securities Act of the Preferred Stock or (ii) engaged in any form
of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) in connection with the offering of
the Preferred Stock or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; provided that no
representation or warranty is made as to the activities of any purchaser of
the Preferred Stock or any person acting on such purchaser's behalf.
Assuming the accuracy of the representations and warranties of the
Purchasers in Paragraph 7 hereof, the offer and sale of the Preferred Stock
pursuant to this Agreement are exempt from the registration and prospectus
delivery requirements of the Securities Act.
(hh) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of its Subsidiaries which is pending
or, to the knowledge of the Company or any of its Subsidiaries, threatened.
(ii) Each of the Company and its Subsidiaries carries insurance in
such amounts and covering such risks as in its reasonable determination is
adequate for the conduct of its business and the value of its properties.
(jj) Each of the Company and its Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements in
conformity with GAAP and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(kk) None of the Company, its Subsidiaries, any of their respective
Affiliates or any person acting on its or their behalf (other than any
purchaser of the Preferred Stock or any other person acting on such
purchaser's behalf) has engaged in any directed selling efforts (as that
term is defined in Regulation S under the Securities Act ("Regulation S"))
with respect to the Preferred Stock and each of the Company, its
-22-
Subsidiaries and their respective Affiliates and any person acting on
its or their behalf (other than the Purchasers and any other person
acting on their behalf) has acted in accordance with the offering
restrictions requirement of Regulation S.
PARAGRAPH 7. REPRESENTATIONS AND COVENANTS OF THE PURCHASERS.
(a) Each Purchaser, severally but not jointly, hereby represents
and warrants as to itself as follows:
(i) Such Purchaser has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement.
This Agreement has been duly and validly authorized by such Purchaser,
and, when executed and delivered by such Purchaser, will constitute a
valid and legally binding agreement of such Purchaser, enforceable
against such Purchaser in accordance with its terms, except as may be
limited by the Enforceability Exceptions.
(ii) The Preferred Stock to be acquired by such Purchaser
pursuant to this Agreement are being or will be acquired for its own
account and with no intention of distributing or reselling such
securities or any part thereof in any transaction that would be in
violation of the securities laws of the United States of America, or
any state, without prejudice, however, to its right at all times to
sell or otherwise dispose of all or any part of the Preferred Stock,
under an effective registration statement under the Securities Act, or
under an exemption from such registration available under the
Securities Act, and subject, nevertheless, to the disposition of its
property being at all times within its control. If such Purchaser
should in the future decide to dispose of any of the Preferred Stock,
such Purchaser understands and agrees that it may do so only in
compliance with the Securities Act and applicable state securities
laws, as then in effect.
(iii) Such Purchaser acknowledges that investment in the
Preferred Stock involves a high degree of risk, and represents that it
is able to hold the Preferred Stock, and securities which may underlie
them, for an indefinite period of time and to suffer a complete loss
of its investment.
(iv) Such Purchaser is an "accredited investor" as such term is
defined in Rule 501 under the Securities Act.
(v) Each Purchaser is a United States person (as defined by
Section 7701(a)(30) of the IRC) (a "U.S. Person").
(b) Each Purchaser understands and acknowledges to the Company
that:
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(i) the offering and sale of the Preferred Stock is intended to
be exempt from registration under the Securities Act by virtue of the
provisions of Section 4(2) of the Securities Act;
(ii) there is no existing public or other market for the
Preferred Stock and there can be no assurance that such Purchaser will
be able to sell or dispose of its Preferred Stock;
(iii) it is aware that federal and state securities laws prohibit
any person who has material non-public information about an issuer
from purchasing or selling securities of such issuer or from
communicating such information to any other person under circumstances
in which it is reasonably foreseeable that such person is likely to
purchase or sell such securities; provided, however, that an affiliate
of any Purchaser may buy or sell securities of the Company so long as
such affiliate has not has access to any material non-public
information; and
(iv) the Projections are not to be viewed as facts, actual
results may differ from such statements, and the differences may be
material.
(c) Each Purchaser covenants to the Company that if it offers,
sells or otherwise transfers, pledges or hypothecates all or any part of
the Preferred Stock (other than pursuant to an effective registration
statement under the Securities Act or pursuant to Rule 144 or, in the case
of the Notes only, Rule 144A), it shall deliver to the Company (i) a
written opinion of counsel reasonably satisfactory to the Company (who may
be in-house or special counsel), reasonably satisfactory in form and
substance to the Company, that an exemption from the registration
requirements of the Securities Act and applicable state securities laws is
available; provided, however, that such an opinion is not required in the
event that any holder of Preferred Stock pledges Preferred Stock held by
it, in whole or in part, to its lenders or securityholders, or any trustee
or agent therefor, or transfers Preferred Stock held by it to any entity
formed for the purpose of holding the Preferred Stock and/or other
securities held by such holder; and (ii) a letter to the Company from the
proposed transferee stating (A) whether the proposed transferee is a U.S.
Person and (B) if such proposed transferee is not a U.S. Person,
acknowledging that the Company may withhold amounts with respect to the
Preferred Stock to the extent required by the IRC. Upon original issuance
thereof, and until such time as the same is no longer a Restricted
Security, each certificate evidencing the Preferred Stock (and all
securities issued in exchange therefor or substitution thereof) shall bear
a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE "ACT"), AND THE SHARES OF PREFERRED STOCK
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
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OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM.
PARAGRAPH 8. DEFINITIONS.
For the purpose of this Agreement, the following terms shall have
the meanings specified with respect thereto below (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Accreted Stated Value" shall equal the stated value of a share
of Preferred Stock, as accreted through the date of calculation.
"Affiliate" shall mean, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person, including,
but not limited to, any holder of 10% or more of the voting securities of
any Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Attributable Indebtedness" means, with respect to any Sale and
Leaseback Transaction, as at the time of determination, the greater of (1)
the fair market value of the property subject to such arrangement and (2)
the present value of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such Sale and
Leaseback Transaction (including any period for which such lease has been
extended). Such present value shall be calculated using a discount rate
equal to the rate of interest implicit in such transaction, determined in
accordance with GAAP.
"Board of Directors" means, with respect to any Person, the
Board of Directors, management committee, or reasonable equivalent thereof,
as the case may be, of such Person or any committee of the Board of
Directors, management committee, or reasonable equivalent thereof, as the
case may be, of such Person duly authorized, with respect to any particular
matter, to exercise the power of the Board of Directors, management
committee, or reasonable equivalent thereof, as the case may be, of such
Person.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which commercial banks in New York, New York are required or
authorized to be closed.
"Capital Expenditure" means any amount paid or incurred in
connection with the purchase of real estate, plant, machinery or equipment,
the transfer of technology or other similar expenditure (including all
renewals, improvements and replacements thereto, and all
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obligations under any lease of any of the foregoing) which would be
required to be capitalized and shown on the consolidated balance sheet of
the Company in accordance with GAAP.
"Capital Lease" shall mean any lease of Property which in
accordance with GAAP would be capitalized on the lessee's balance sheet.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated)
of corporate stock or membership interests, as the case may be, including
each class of common stock and preferred stock of such Person.
"Capitalized Lease Obligations" means with respect to any Person,
Indebtedness represented by obligations under a lease that is required to
be capitalized for financial reporting purposes in accordance with GAAP,
and the amount of such Indebtedness shall be the capitalized amount of such
obligations determined in accordance with GAAP.
"Certificate of Designation" means the Certificate of Designation
of the Preferred Stock as filed with the Secretary of State of the State of
Delaware and in substantially the form set forth as Exhibit B hereto.
"Closing" and "Date of Closing" shall have the meaning specified
in Paragraph 2.
"Collateral" shall mean all the rights and interests related to
Vaniqa acquired by the Company in connection with the Transaction.
"Debt" or "Indebtedness" means (without duplication), with
respect to any Person, any indebtedness at any time outstanding, secured or
unsecured, contingent or otherwise, which is for borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person
or only to a portion thereof), or evidenced by bonds, notes, debentures or
similar instruments or representing the balance deferred and unpaid of the
purchase price of any property (excluding, without limitation, any balances
that constitute subscriber advance payments and deposits, accounts payable
or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, and shall also include, to the extent not otherwise
included:
(1) any Capitalized Lease Obligations of such Person;
(2) obligations secured by a Lien to which the property or assets
owned or held by such Person are subject, whether or not the
obligation or obligations secured thereby shall have been assumed;
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(3) guarantees of Indebtedness of other Persons which would be
included within this definition for such other Persons (whether or not
such items would appear upon the balance sheet of the guarantor);
(4) all obligations (including contingent obligations) for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction;
(5) Disqualified Capital Stock of such Person or any Subsidiary
thereof;
(6) Attributable Indebtedness with respect to any Sale and
Leaseback Transaction; and
(7) obligations of any such Person under any currency agreement
or any Interest Rate Agreement applicable to any of the foregoing (if
and to the extent such currency agreement or Interest Rate Agreement
obligations would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP).
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the
obligation; provided that Indebtedness shall not include any liability for
federal, state, local or other taxes. Notwithstanding any other provision
of the foregoing definition, any trade payable arising from the purchase of
goods or materials or for services obtained in the ordinary course of
business shall not be deemed to be Indebtedness of the Company or any of
its Subsidiaries for purposes of this definition. Furthermore, guarantees
of (or obligations with respect to letters of credit supporting)
Indebtedness otherwise included in the determination of such amount shall
also not be included.
"Disqualified Capital Stock" shall mean any Capital Stock which,
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holders),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
sole option of the holder thereof, in whole or in part, on or prior to the
final maturity date of the Preferred Stock for cash or securities
constituting Debt.
"Documents" shall mean this Agreement, the Certificate of
Designation, the Security Documents and the Registration Rights Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, together with all rules and regulations
promulgated with respect thereto.
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"Esclim" shall mean the estrogen patch system for which the
Company acquired rights to market, use, distribute and sell in the United
States and Puerto Rico from Laboratoires ▇▇▇▇▇▇▇▇ ▇.▇., as described in the
Exchange Act Documents.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Act Documents" means the Company's Annual Report on
Form 10-K for the Fiscal Year ended December 31, 2001 and its Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2002.
"Fiscal Year" means each annual accounting period of the Company
ending on December 31 of each calendar year.
"GAAP" shall mean United States generally accepted accounting
principles as they may be amended as of the Date of Closing.
"Interest Rate Agreement" means, with respect to any Person, any
interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement or other similar agreement designed to protect the party
indicated therein against fluctuations in interest rates.
"IRC" shall mean the Internal Revenue Code of 1986, as amended.
"IRS" shall mean the Internal Revenue Service.
"Lien" shall mean, as to any Person, any mortgage, lien, pledge,
adverse claim, charge, security interest or other encumbrance in or on, or
interest of title of any vendor, lessor, lender or other secured party to
or of the Person under a conditional sale or other title retention
agreement or Capital Lease with respect to, any Property or asset of such
Person, or the signing or filing of a financing statement which names such
Person as debtor, or the signing of any security agreement authorizing any
other party as the secured party thereunder to file any financing
statement.
"Material Adverse Effect" shall mean, with respect to the Company
and its Subsidiaries, a material adverse effect on (a) the business,
condition (financial or otherwise), properties, results of operations or
prospects of the Company and its Subsidiaries, taken as a whole, or (b) the
validity or enforceability of, or the ability of the Company to perform its
obligations under, this Agreement or any of the other Documents, or the
rights or remedies of a Purchaser or the Collateral Agent hereunder or
thereunder.
"Notes" means the Senior Secured Notes due September 30, 2005
issued in connection with the Transaction.
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"Person" shall mean and include an individual, corporation,
partnership, trust or trustee thereof, estate or executor thereof,
unincorporated organization or joint venture, court or governmental unit or any
agency or subdivision thereof, or any other legally recognizable entity.
"Preferred Stock" means the Senior Convertible Redeemable
Preferred Stock, Series A of the Company to be issued on the Date of Closing as
part of the financing of the Vaniqa Acquisition.
"Projections" shall mean the financial projections concerning
the Company delivered to the Purchasers by the Company pursuant to Paragraph
3A(xii).
"Property" shall mean any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Purchasers" shall have the meaning set forth in the
introductory paragraph of this Agreement and shall include their successors and
assigns.
"Registration Rights Agreement" shall mean the Registration
Rights Agreement relating to the Preferred Stock dated as of the date hereof by
and between the Company and the Purchasers.
"Required Holders" shall mean the holders of at least 66 2/3% of
the aggregate Accreted Stated Value of the Preferred Stock from time to time
outstanding.
"Restricted Security" shall mean any share of Preferred Stock
upon original issuance thereof, and at all times subsequent thereto until, in
the case of any such share of Preferred Stock, (A) it has been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering it, or (B) it is sold pursuant to Rule 144 or
becomes eligible for resale under Rule 144(k).
"Sale and Leaseback Transaction" means any arrangement with any
Person providing for the leasing by the Company or any Subsidiary of the Company
of any real or tangible personal property, which property has been or is to be
sold or transferred by the Company or such Subsidiary to such Person in
contemplation of such leasing.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Securities and Exchange Commission" shall mean the Securities
and Exchange Commission of the United States.
"Security Documents" means the Security Agreement and the
Intercreditor Agreement in substantially the form as set forth as Exhibits C-1
and C-2 hereto.
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"Subsidiary" shall mean any corporation or other entity of which
a Person owns, directly or indirectly, that number of shares of Voting Stock
which has the power to elect a majority of the Board of Directors or other
governing body.
"Taxes" shall mean all taxes, assessments, fees and other
charges including, without limitation, withholding taxes, penalties, and
interest.
"Total Indebtedness" means, of any Person, as of the date of
determination, all Indebtedness of such Person which, in accordance with GAAP,
would be included as indebtedness on a consolidated balance sheet of such Person
at such date. For the avoidance of doubt, the Preferred Stock shall not be
considered part of Total Indebtedness.
"Transaction" shall mean the Vaniqa Acquisition and the
financing thereof.
"Transaction Documents" shall mean each agreement entered into
in connection with the Transaction.
"Transferee" shall mean any direct or indirect transferee of all
or any part of any share of Preferred Stock purchased under this Agreement.
"UCC" means the Uniform Commercial Code as in effect in any
applicable jurisdiction.
"Vaniqa" shall mean VANIQA(R) (eflornithine hydrochloride)
Cream, 13.9%.
"Vaniqa Acquisition" shall mean the acquisition by the Company
of Vaniqa and related assets from Westwood-Squibb Colton Holdings Partnership,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company, for approximately $38.3
million.
"Voting Stock" shall mean, with respect to any corporation or
other Person, as the case may be, any shares of Capital Stock of any class or
classes of such corporation or other Person, as the case may be, whose holders
are entitled under ordinary circumstances to vote for the election of directors
of such corporation or other Person, as the case may be, or persons performing
similar functions (irrespective of whether or not at the time Capital Stock of
the class or any other class or classes shall have or might have special voting
power or rights by reason of the happening of any contingency).
"Warrants" means the Warrants issued in connection with the
Transaction.
Unless otherwise specified or the context otherwise requires,
all phrases used herein that have a specific meaning under GAAP shall have their
meaning under GAAP.
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PARAGRAPH 9. MISCELLANEOUS.
9A. Preferred Stock Payments. So long as each Purchaser shall
hold any share of Preferred Stock, the Company will make any cash payments in
accordance with terms of the Certificate of Designation, by wire transfer of
immediately available funds for credit (not later than 1:00 p.m., New York time,
on the date due) to the account or accounts as specified in the signature pages
hereto, or such other account or accounts in the United States as such Purchaser
may designate in writing, notwithstanding any contrary provision herein or in
any Note with respect to the place of payment. Each Purchaser agrees that,
before disposing of any share of Preferred Stock, such Purchaser will make a
notation thereon (or on a schedule attached thereto) of all dividend payments
previously made thereon, if any, and of the date to which the dividend thereon
has been paid. The Company agrees to afford the benefits of this Paragraph 9A to
any Transferee which shall have made the same agreement as each Purchaser has
made in this Paragraph 9A.
9B. Expenses. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay, and save each
Purchaser and any Transferee harmless against liability for the payment of, all
reasonable out-of-pocket expenses arising in connection with such transactions,
including (i) all fees and expenses of the Purchasers' counsel in connection
with this Agreement and the transactions contemplated hereby, (ii) all document
production and duplication charges and the reasonable fees and expenses of any
counsel engaged by such Purchaser or such Transferee in connection with any
subsequent proposed modification of, or proposed consent under, this Agreement,
whether or not such proposed modification shall be effected or proposed consent
granted, and (iii) the costs and expenses, including reasonable attorneys' fees,
incurred by such Purchaser or such Transferee in enforcing (or determining
whether or how to enforce) any rights under this Agreement, the Certificate of
Designation or the other Documents or in responding to any subpoena or other
legal process or informal investigative demand issued in connection with this
Agreement or the transactions contemplated hereby or by reason of such
Purchaser's or such Transferee's having acquired any share of Preferred Stock,
including without limitation costs and expenses incurred in any bankruptcy case.
The obligations of the Company under this Paragraph 9B shall survive the
transfer of any share of Preferred Stock or portion thereof or interest therein
by each Purchaser or any Transferee and any payment in connection with any share
of Preferred Stock.
9C. Consent to Amendments. This Agreement may be amended, and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by them, if the Company shall obtain the written
consent to such amendment, action or omission to act, of the Required Holders
except that, without the written consent of each holder, no amendment to this
Agreement shall
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(a) reduce the amount of Preferred Stock whose holders must
consent to an amendment, supplement or waiver to this Agreement or the
Certificate of Designation;
(b) reduce the rate of or change the time for payment of
accretion or dividends, including defaulted dividends, on any share of
Preferred Stock;
(c) reduce Accreted Stated Value of or accretion or dividend
rate of or change the stated mandatory redemption date of any share of
Preferred Stock or reduce the redemption price thereof;
(d) make any share of Preferred Stock payable in money other
than that stated in the Certificate of Designation or change the place
of payment from New York, New York;
(e) waive a default on the payment of the Accreted Stated Value
of, dividend on, or redemption payment with respect to any share of
Preferred Stock;
(f) make any change in the provisions of this Agreement or the
Certificate of Designation protecting the right of each holder of
Preferred Stock to receive payment of the Accreted Stated Value of and
dividend on such share of Preferred Stock on or after the due date
thereof or to bring suit to enforce such payment, or permitting holders
of a majority of Accreted Stated Value at the mandatory redemption date
of Preferred Stock to waive Defaults or Events of Default;
(g) amend, change or modify in any material respect the
obligation of the Company to redeem all or a portion of the Preferred
Stock in the event of a Change in Control (as defined in the
Certificate of Designation) or modify any provisions or definitions
with respect thereto; or
(h) modify or change any provision of this Agreement or the
related definitions affecting the ranking of the Preferred Stock in a
manner which adversely affects the holders of Preferred Stock.
Subject to the Certificate of Designation, each holder of any
share of Preferred Stock at the time or thereafter outstanding shall be bound by
any consent authorized by this ▇▇▇▇▇▇▇▇▇ ▇▇, whether or not such share of
Preferred Stock shall have been marked to indicate such consent, but any
Preferred Stock issued thereafter may bear a notation referring to any such
consent. No course of dealing between the Company and the holder of any share of
Preferred Stock nor any delay in exercising any rights hereunder or under any
share of Preferred Stock shall operate as a waiver of any rights of any holder
of such share of Preferred Stock. As used herein and in the Certificate of
Designation, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
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9D. Form, Registration, Transfer and Exchange of Preferred
Stock; Lost Preferred Stock. The Preferred Stock are issuable as registered
shares of Preferred Stock in denominations of at least $1,000, except as may be
necessary to reflect any Accreted Stated Value not evenly divisible by $1,000.
The Company shall keep at its principal office a register in which the Company
shall provide for the registration of Preferred Stock and of transfers of
Preferred Stock. Upon surrender for registration of transfer of any share of
Preferred Stock at the principal office of the Company, the Company shall, at
its expense, execute and deliver one or more new shares of Preferred Stock of
the like tenor and of a like aggregate Accreted Stated Value or number,
registered in the name of such transferee or transferees; provided, that in no
event will the Company be required to register for transfer or execute and
deliver new shares of Preferred Stock in connection with any transfer of less
than 100 shares unless the transferee thereof is a registered holder of
Preferred Stock at the time of such transfer or the amount to be transferred
represents the entire Accreted Stated Value of Preferred Stock registered in the
name of the transferor. At the option of the holder of any share of Preferred
Stock, such share may be exchanged for other Preferred Stock of like tenor and
of any authorized denominations, of a like aggregate Accreted Stated Value or
number, upon surrender of the share of Preferred Stock to be exchanged at the
principal office of the Company. Whenever any shares of Preferred Stock are so
surrendered for exchange, the Company shall, at its expense, execute and deliver
the shares of Preferred Stock which the holder making the exchange is entitled
to receive. Every share of Preferred Stock surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed by the holder of such share of Preferred
Stock or such holder's attorney duly authorized in writing. Any share of
Preferred Stock issued in exchange for any share of Preferred Stock or upon
transfer thereof shall carry the rights to unpaid dividends to accrue which were
carried by the share of Preferred Stock so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer or
exchange. Upon receipt of written notice from the holder of any share of
Preferred Stock of the loss, theft, destruction or mutilation of such share of
Preferred Stock and, in the case of any such loss, theft or destruction, upon
receipt of such holder's unsecured indemnity agreement, or in the case of any
such mutilation upon surrender and cancellation of such share of Preferred
Stock, the Company will make and deliver a new share of Preferred Stock, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated share of Preferred
Stock.
9E. Persons Deemed Owners; Participations. Prior to due
presentment for registration of transfer, the Company may treat the Person in
whose name any share of Preferred Stock is registered as the owner and holder of
such share of Preferred Stock for the purpose of receiving any redemption or
dividend payment on such share of Preferred Stock and for all other purposes
whatsoever, whether or not such share of Preferred Stock shall be overdue, and
the Company shall not be affected by notice to the contrary.
9F. Survival of Representations and Warranties; Entire
Agreement. All representations and warranties contained herein or made in
writing by or on behalf of the
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Company or any Purchaser in connection herewith shall survive
the execution and delivery of this Agreement, the Certificate of Designation and
the Documents and the transfer by any Purchaser of any share of Preferred Stock
or portion thereof or interest therein, and may be relied upon by any
Transferee, regardless of any investigation made at any time by or on behalf of
any Purchaser or any Transferee. Subject to the preceding sentence, this
Agreement and the other Documents embody the entire agreement and understanding
between the Purchasers and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
9G. Successors and Assigns. All covenants and other agreements
in this Agreement contained by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.
9H. Disclosure to Other Persons. The Company acknowledges that
the holder of any share of Preferred Stock may deliver copies of any financial
statements and other documents delivered to such holder, and disclose any other
information disclosed to such holder, by or on behalf of the Company or any of
its Subsidiaries in connection with or pursuant to this Agreement to (i) such
holder's directors, officers, employees, agents and professional consultants,
(ii) any other holder of any share of Preferred Stock, (iii) any Person to which
such holder offers to sell such share of Preferred Stock or any part thereof,
(iv) any Person from which such holder offers to purchase any security of the
Company, (v) any federal or state regulatory authority having jurisdiction over
such holder or proposed purchase of a share of Preferred Stock or interest
therein, (vi) the National Association of Insurance Commissioners or any similar
organization or (vii) any other Person to which such delivery or disclosure may
be necessary or appropriate (a) in compliance with any law, rule, regulation or
order applicable to such holder, (b) in response to any subpoena or other legal
process or informal investigative demand or (c) in connection with any
litigation to which such holder is a party; provided that, in respect of (i)
through (vii), there shall be no violation of applicable securities laws and, in
respect of (i), (iii), (iv) and (vii)(c), the Person to whom such information is
disclosed shall be apprised of the confidential nature of such information and
shall agree with the Company to keep such information confidential.
9I. Notices. All notices or other communications provided for
hereunder shall be in writing and sent by first class mail or overnight delivery
service (with charges prepaid) and (i) if to a Purchaser, addressed to such
Purchaser at the address specified for such communications on the signature
pages hereof, or at such other address as such Purchaser shall have specified to
the Company in writing, (ii) if to any other holder of any share of Preferred
Stock, addressed to such other holder at such address as such other holder shall
have specified to the Company in writing or, if any such other holder shall not
have so specified an address to the Company, then addressed to such other holder
in care of the last holder of such share of Preferred Stock which shall have so
specified an address to the Company and (iii) if to the
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Company, addressed to it at ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Chief Financial Officer, or at such other address as the
Company shall have specified to the holder of each share of Preferred Stock.
9J. Payments Due on Non-Business Days. Anything in this
Agreement or the Certificate of Designation to the contrary notwithstanding, any
payment of interest or any redemption payment on any share of Preferred Stock
that is due on a date other than a Business Day shall be made on the next
succeeding Business Day. If the date for any payment is extended to the next
succeeding Business Day by reason of the preceding sentence, the period of such
extension shall be included in the computation of the dividend payable on such
Business Day.
9K. Satisfaction Requirement. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to the Required Holders, the determination
of such satisfaction shall be made by the Required Holders in the sole and
exclusive judgment (exercised in good faith) of the Person or Persons making
such determination.
9L. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS. This Agreement may be changed only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.
9M. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9N. Descriptive Headings. The descriptive headings of the
several paragraphs of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.
▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument.
If you are in agreement with the foregoing, please sign the form
of acceptance below or on the enclosed counterpart of this letter and return the
same to the Company, whereupon this letter shall become a binding agreement
between the Company and you.
Very truly yours,
WOMEN FIRST HEALTHCARE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Exhibit F
SIGNATURE PAGE TO PURCHASE AGREEMENT
Accepted and Agreed as of the
date first above written:
CIBC WMC INC.
By: /s/ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
-2-
Accepted and Agreed as of the
date first above written:
▇▇▇▇▇▇▇▇▇ CAPITAL, L.P.
By: ▇▇▇▇▇▇▇▇▇ ▇▇, L.L.C.
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member and Manager
BROAD STREET ASSOCIATES LLC
By: : /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Attorney-in-Fact