Exhibit 10.16
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of
February 15, 2002, by and among BICO, Inc, a Pennsylvania
corporation, with headquarters located at 2275 Swallow Hill Road,
Bldg. 2500, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and
▇.▇. ▇▇▇▇▇ Asset Management, a Georgia corporation, with
headquarters located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Buyer").
WHEREAS:
A. The Company and the Buyer are executing and delivering
this Agreement in reliance upon the exemption from securities
registration pursuant to Section 4(2) and/or Regulation D of the
Securities Act of 1933, as amended (the "1933 Act"),
B. The Company has offered to sell to the Buyer 4% Series
K Convertible Preferred Stock (the "Preferred Stock") of the
Company. The terms of the Preferred Stock, including the terms
on which the Preferred Stock may be converted into the common
stock of the Company, $0.10 par value, are set forth in the
Certificate of Designation of Series K Preferred Stock, in
substantially the form attached as Exhibit "A" hereto.
C. The Buyer has agreed to purchase, upon the terms and
conditions stated in this Agreement, an aggregate principal
amount of $25,000,000 of Preferred Stock;
D. Contemporaneously with the execution and delivery of
this Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement substantially in the form attached
hereto as Exhibit "B" (the "Registration Rights Agreement")
pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state
securities laws, and an Escrow Agreement substantially in the
form attached hereto as Exhibit "C" (the "Escrow Agreement");
NOW THEREFORE, the Company and the Buyer hereby agree as
follows:
1 . PURCHASE AND SALE OF PREFERRED STOCK.
a. Purchase of Preferred Stock. Subject to the
satisfaction (or waiver) of the conditions set forth in
Sections 6 and 7 below, the Company shall issue and sell to
the Buyer and the Buyer shall purchase from the Company an
aggregate principal amount of Preferred Stock set forth
above (the "Closing").
b. Closing Dates. The date and time of the Closings
(the "Closing Date") shall be 10:00 a.m. Eastern Standard
Time, beginning one (1) business day following the date
that the Registration Statement on Form S-1 to be filed by
the Company in February 2002 is declared effective by the
U.S. Securities and Exchange Commission, subject to
notification of satisfaction (or waiver) of the conditions
to the Closing set forth in Sections 6 and 7 below (or such
later date as is mutually agreed to by the Company and the
Buyer in writing). Each Closing Date shall occur as
follows:
(i) Following the initial Closing Date, the Company will provide
notice to the Buyer, from time to time, of its request for funds
(the "Company's Notice") which shall be a sum not greater than:
the amount set forth in this Section 1, paragraph 1(b)(ii), set
forth below, or three million dollars ($3,000,000);
(ii) Upon receipt of the Company's Notice, the Buyer shall
purchase an amount of Preferred Stock to be determined as
follows: six (6) times the average of the "Daily Trading Values"
during the twenty-two (22) trading days prior to the Company's
Notice. The Daily Trading Value shall mean the closing bid price
multiplied by the day's trading volume of the Common Stock. In
the event that the average of the Daily Trading Values is less
than $50,000 for any ten (10) day period, then the Buyer shall
not be obligated to purchase pursuant to the Company's Notice.
c. Form of Payment. On each Closing Date, (i) the
Escrow Agent shall pay the Purchase Price to the Company
for the Preferred Stock to be issued and sold to such Buyer
at such Closing, by wire transfer of immediately available
funds in accordance with the Company's written wire
instructions, and (ii) the Escrow Agent shall deliver to
each Buyer, certificates representing such Preferred Stock
which such Buyer is then purchasing, duly executed on
behalf of the Company and registered in the name of such
Buyer or its designee (the "Certificates"), as further set
forth in the Escrow Agreement.
2. BUYER'S REPRESENTATIONS AND WARRANTEES.
Each Buyer represents and warrants:
a. Investment Purpose. Such Buyer (i) is
acquiring the Preferred Stock and, (ii) upon conversion
of the Preferred Stock will acquire the Conversion Shares
then issuable, for its own account for investment only
and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1933
Act; provided, however, that by making the
representations herein, such Buyer does not agree to hold
any Preferred Stock or Conversion Shares for any minimum
or other specific term and reserves the right to dispose
of Preferred Stock or Conversion Shares at any time in
accordance with or pursuant to a registration statement
or an exemption under the 1933 Act. Neither the Buyer nor
any of its affiliates have or will, directly or
indirectly, maintain any short position in any securities
of the Company or its affiliates until the later of: the
date that all of the Conversion Shares have been
distributed; or 150 days from the date of this Agreement.
Prior to the end of such time period, neither the Buyer
nor its affiliates shall, directly or indirectly, engage
in any other hedging transaction in connection with the
securities of the Company or its affiliates, including
but not limited to options, swaps, or other derivative
transactions.
b. Accredited Investor/Tax Status. Such Buyer is
an "accredited investor" as that term is defined in Rule
501(a)(3) of Regulation D ("Regulation D") as promulgated
by the United States Securities and Exchange Commission
(the "SEC"). Such Buyer is not subject to U.S.
withholding tax or other similar state tax.
c. Reliance on Exemptions. Such Buyer understands
that the Preferred Stock and Conversion Shares are being
offered and sold to it in reliance on specific exemptions
from the registration requirements of United States
federal and state securities laws and that the Company
is relying in part upon the truth and accuracy of,
and such Buyer's compliance with, the representations,
warranties,agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine
the availability of such exemptions and the eligibility
of such Buyer to acquire such securities. That at the time
of this offer and sale of the Securities, the Buyer was
not aware of and did not participate in any transaction
in contravention of the U.S. securities laws, and that it
is not and will not be part of any plan or scheme to
evade the Securities Act or its registration provisions.
d. Information. The Buyer and its advisors, if any,
have been furnished with all appropriate materials relating
to the business, finances and operations of the Company and
materials relating to the offer and sale of the Preferred
Stock and Conversion Shares, which have been requested by
such Buyer. The Buyer specifically acknowledges receiving
and reviewing the Company's SEC Documents (as defined
herein) including but not limited to its Form 10-K for the
year ended December 31, 2000; Form 10-Qs for the quarters
ended March 31, June 30, and September 30, 2001; its Form 8-
Ks filed since December 31, 2000, and its November 2001
Proxy Statement. Such Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the
Company. Neither such inquiries nor any other due diligence
investigations conducted by such Buyer or its advisors, if
any, or its representatives shall modify, amend or affect
such Buyer's right to rely on the Company's representations
and warranties contained in Section 3 below. Such Buyer
understands that its investment in the Preferred Stock and
the Conversion Shares involves a high degree of risk. Such
Buyer has sought such accounting, legal and tax advice as it
has considered necessary to make an informed investment
decision with respect to its acquisition of the Preferred
Stock and the Conversion Shares.
e. No Governmental Review. Such Buyer understands
that no United States federal or state agency or any other
government or governmental agency has passed on or made any
recommendation or endorsement of the Preferred Stock, the
Conversion Shares, or the fairness or suitability of the
investment in the Preferred Stock and the Conversion
Shares, nor have such authorities passed upon or endorsed
the merits of the offering of the Preferred Stock, and the
Conversion Shares.
f. Transfer or Resale. Such Buyer understands
that except as provided in the Registration Rights
Agreement: (i) the Preferred Stock and the Conversion
Shares have not been and are not being registered under the
1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless such
sale, assignment, or transfer is approved (unless to an
affiliate or successor entity) by the Company and (a)
subsequently registered thereunder, (b) such Buyer shall
have delivered to the Company an opinion of counsel, in a
generally acceptable form, to the effect that such
securities to be sold, assigned or transferred may be sold,
assigned or transferred pursuant to an exemption from such
registration, or (c) such Buyer provides the Company with
reasonable assurance that such securities can be sold,
assigned or transferred pursuant to Rule 144 promulgated
under the 1933 Act (or a successor rule thereto); (ii) any
sale of such securities made in reliance on Rule 144
promulgated under the 1933 Act (or a successor rule
thereto) ("Rule 144") may be made only in accordance with
the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such securities under
circumstances in which the seller (or the person through
whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the ▇▇▇▇ ▇▇▇) may require
compliance with some other exemption under the 1933 Act or
the rules and regulations of the SEC thereunder; and (iii)
neither the Company nor any other person is under any
obligation to register such securities under the 1933 Act
or any state securities laws or to comply with the terms
and conditions of any exemption thereunder.
g. Legends. Such Buyer understands that the
certificates or other instruments representing the
Preferred Stock, until such time as the sale of the
Conversion Shares have been registered under the 1933 Act
as contemplated by the Registration Rights Agreement, the
stock certificates representing the Conversion Shares shall
bear a restrictive legend in substantially the following
form (and a stop transfer order may be placed against
transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT.
The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder
of the Preferred Stock and the Conversion Shares, upon
which it is stamped, if, unless otherwise required by state
securities laws, (i) the sale of the Conversion Shares is
registered under the 1933 Act, (ii) in connection with a
sale transaction, such holder provides the Company with an
opinion of counsel, reasonably satisfactory to the Company,
to the effect that a public sale, assignment or transfer of
the Preferred Stock and the Conversion Shares may be made
without registration under the 1933 Act, or (iii) such
holder provides the Company with reasonable assurances that
the Preferred Stock or the Conversion Shares can be sold
pursuant to Rule 144 without any restriction as to the
number of securities acquired as of a particular date that
can then be immediately sold.
h. Authorization, Enforcement. This Agreement has
been duly and validly authorized, executed and delivered on
behalf of such Buyer and is a valid and binding agreement
of such Buyer enforceable in accordance with its terms,
subject as enforceability to general principles of equity
and to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to,
or affecting generally, the enforcement of applicable
creditors' rights and remedies.
i. Residency and Affiliations. The Buyer
represents that it is a resident of that state and
country specified in its address set forth herein, that
it is not an affiliate of the Company as defined in the
U.S. Securities Act of 1933 (the "Securities Act"), and
that following the purchase of the Securities, and the
conversion of same, neither the Buyer nor any of its
affiliates will be affiliates of the Company.
j. Review and Compliance. The Buyer covenants
that it has reviewed this transaction with its legal
counsel and advisors, and covenants that such purchase is
in compliance with its national and local securities laws
or regulations, and agrees to advise the Company if such
laws or regulations require the Company to place any
legends or restrictions on the certificates representing
the Securities. Such Buyer undertakes to take all steps
necessary to ensure that any purchase, offer or sale of
the Securities will comply with the laws and regulations
of all necessary state, federal or foreign regulatory or
self-regulatory authorities.
3 . REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyer that:
a. Organization and Qualification. The Company and
its subsidiaries are corporations duly organized and
validly existing in good standing under the laws of the
jurisdiction in which they are incorporated, and have
the requisite corporate power to own their properties
and to carry on their business as now being conducted.
Each of the Company and its subsidiaries is duly qualified
as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of
the business conducted by it makes such qualification
necessary, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole.
b. Authorization, Enforcement, Compliance with Other
Instruments. (i) The Company has the requisite corporate
power and authority to enter into and perform this
Agreement, the Registration Rights Agreement and any
related agreements, and to issue the Preferred Stock, the
Conversion Shares, in accordance with the terms hereof and
thereof, (ii) the execution and delivery of this Agreement,
the Registration Rights Agreement, the Escrow Agreement and
any related agreements by the Company and the consummation
by it of the transactions contemplated hereby and thereby,
including without limitation the issuance of the Preferred
Stock and the reservation for issuance and the issuance of
the Conversion Shares issuable upon conversion or exercise
thereof, have been duly authorized by the Company's Board
of Directors and, no further consent or authorization is
required by the Company, its Board of Directors or its
stockholders, (iii) this Agreement, the Registration Rights
Agreement, the Escrow Agreement and any related agreements
have been duly executed and delivered by the Company, and
(iv) this Agreement, the Registration Rights Agreement, the
Escrow Agreement, and any related agreements constitute the
valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except
as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of
creditors' rights and remedies.
c. Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of
4,000,000,000 shares of Common Stock, par value $0.10 per
share, and 500,000 shares of Preferred Stock, par value
$0.10 per share. All of such outstanding shares have been
validly issued and are fully paid and nonassessable. There
are no securities or instruments containing anti-dilution
or similar provisions that will be triggered by the
issuance of the Preferred Stock or the Conversion Shares as
described in this Agreement. Upon request of the Buyer,
the Company has furnished to the Buyer true and correct
copies of the Company's Certificate of Incorporation, as
amended and as in effect on the date hereof (the
"Certificate of Incorporation"), and the Company's By-laws,
as in effect on the date hereof (the "By-laws"), and the
terms of all securities convertible into or exercisable for
Common Stock and the material rights of the holders thereof
in respect thereto.
d. Issuance of Securities. The Preferred Stock is
duly authorized and, upon issuance in accordance with the
terms hereof, shall be (i) validly issued, fully paid and
nonassessable, are free from all taxes, liens and charges
with respect to the issue thereof and are entitled to the
rights and preferences set forth in the Certificate of
Designation of Preferred Stock. The Conversion Shares
issuable upon conversion of the Preferred Stock shall be
duly authorized and reserved for issuance. Upon conversion
or exercise in accordance with the Preferred Stock, the
Conversion Shares will be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges
with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common
Stock.
e. No Conflicts. Except as disclosed in the SEC
Documents, the execution, delivery and performance of this
Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby will not
(i) result in a violation of the Certificate of
Incorporation or By-laws or (ii) conflict with or
constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or
give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement,
indenture or instrument to which the Company or any of its
subsidiaries is a party, or result in a violation of any
law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and the
rules and regulations of the principal market or exchange
on which the Common Stock is traded or listed) applicable
to the Company or any of its subsidiaries or by which any
property or asset of the Company or any of its subsidiaries
is bound or affected. Neither the Company nor its
subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation or Bylaws or their
organizational charter or by-laws, respectively. The
business of the Company and its subsidiaries is not being
conducted, and shall not be conducted in violation of any
law, ordinance, regulation of any governmental entity.
Except as specifically contemplated by this Agreement and
as required under the 1933 Act and any applicable state
securities laws, to the best of the Company=s knowledge,
the Company is not required to obtain any consent,
authorization or order of, or make any filing or
registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its
obligations under or contemplated by this Agreement and the
Registration Rights Agreement in accordance with the terms
hereof or thereof. All consents, authorizations, orders,
filings and registrations which the Company is required to
obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the date hereof.
f. SEC Documents. Since January 1, 2001, the Company
had filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act") (all of
the foregoing filed prior to the date hereof and all
exhibits included therein and being hereinafter referred to
as the "SEC Documents").
g. Absence of Certain Changes. The Company has not
taken any steps, and does not currently expect to take any
steps, to seek protection pursuant to any bankruptcy law
nor does the Company or its subsidiaries have any knowledge
or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings.
h. No General Solicitation. Neither the Company, nor
any of its affiliates, nor any person acting on its or
their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of
Regulation D under the ▇▇▇▇ ▇▇▇) in connection with the
offer or sale of the Preferred Stock or the Conversion
Shares.
i. Employee Relations. Neither the Company nor any
of its subsidiaries is involved in any labor dispute nor,
to the knowledge of the Company or any of its subsidiaries,
is any such dispute threatened. None of the Company's or
its subsidiaries' employees is a member of a union and the
Company and its subsidiaries believe that their relations
with their employees are good.
j. Environmental Laws. To the best of the Company=s
knowledge, the Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the
protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval.
k. Insurance. The Company and each of its
subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and
in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the
Company and its subsidiaries are engaged. Neither the
Company nor any such subsidiary has been refused any
insurance coverage sought or applied for and neither the
Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not
materially and adversely affect the condition, financial or
otherwise, or the earnings, business or operations of the
Company and its subsidiaries, taken as a whole.
l. Internal Accounting Controls. The Company and
each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit
preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific
authorization and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to
any differences.
m. Tax Status. The Company and each of its
subsidiaries has made or filed all federal and state income
and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject (unless
and only to the extent that the Company and each of its
subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in
amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in
good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes
in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.
n. Dilutive Effect. The Company understands and
acknowledges that the number of Conversion Shares issuable
upon conversion of the Preferred Stock will increase in
certain circumstances. The Company further acknowledges
that its obligation to issue Conversion Shares upon
conversion of the Preferred Stock in accordance with this
Agreement and the Preferred Stock, in each case, absolute
and unconditional regardless of the dilutive effect that
such issuance may have on the ownership interests of other
stockholders of the Company.
o. Fees and Rights of First Refusal. The Company is
not obligated to offer the securities offered hereunder on
a right of first refusal basis or otherwise to any third
parties including, but not limited to, current or former
shareholders of the Company, underwriters, brokers, agents,
or other third parties.
4. COVENANTS.
a. Best Efforts. Each party shall use its best
efforts timely to satisfy each of the conditions to be
satisfied by it as provided in Sections 6 and 7 of this
Agreement.
b. Reporting Status. Until the earlier of (i) the
date as of which the Investors (as that term is defined in
the Registration Rights Agreement) may sell all of the
Conversion Shares without restriction pursuant to Rule
144(k) promulgated under the 1933 Act (or successor
thereto), or (ii) the date on which (A) the Investors shall
have sold all the Conversion Shares and (B) none of the
Preferred Stock are outstanding (the "Registration
Period"), the Company shall file all reports required to be
filed with the SEC pursuant to the 1934 Act, and the
Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the
1934 Act or the rules and regulations thereunder would
otherwise permit such termination.
c. Use of Proceeds. The Company will use the
proceeds from the sale of the Preferred Stock for working
capital and research and development. The Buyer
acknowledges reviewing the Company's SEC Documents,
including but not limited to its November 2001 Proxy
materials, for more detailed information regarding the way
the Company uses its funds, as well as its plans for future
funds.
d. Reservation of Shares. The Company shall take all
action necessary to at all times have authorized, and
reserved for the purpose of issuance, no less than 100% of
the number of shares of Common Stock needed to provide for
the issuance of the Conversion Shares, which could be
issued at any time. In the event that the Company does not
have a sufficient number of shares available to provide for
the issuance of the Conversion Shares, it will take the
appropriate steps necessary to obtain the approval of its
shareholders to authorize a sufficient number of additional
shares.
e. Expenses. Each of the Company and the Buyer shall
pay all costs and expenses incurred by such party in
connection with the negotiation, investigation,
preparation, execution and delivery of this Agreement and
the Registration Rights Agreement.
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall issue irrevocable instructions to
its transfer agent to issue certificates, registered in the name
of the Buyer, for the Conversion Shares in such amounts as
specified from time to time by the Buyer to the Company upon
conversion of the Preferred Stock (the "Irrevocable Transfer
Agent Instructions"). Prior to registration of the Conversion
Shares under the 1933 Act, all such certificates shall bear the
restrictive legend specified herein. The Company warrants that
no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5, and stop transfer
instructions to give effect to Section 2 herein (in the case of
the Conversion Shares, prior to registration of such shares under
the ▇▇▇▇ ▇▇▇) will be given by the Company to its transfer agent
and that the Preferred Stock and the Conversion Shares shall
otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement or the
Registration Rights Agreement. Nothing in this Section 5 shall
affect in any way the Buyer's obligations and agreement to comply
with all applicable securities laws upon resale of the Preferred
Stock or the Conversion Shares. If the Buyer provides the
Company with an opinion of counsel, reasonably satisfactory in
form, and substance to the Company, that registration of a resale
by the Buyer of any of the Preferred Stock or the Conversion
Shares is not required under the 1933 Act, the Company shall
permit the transfer, and, in the case of the Conversion Shares,
promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified
by the Buyer. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the
Buyer by vitiating the intent and purpose of the transaction
contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this
Section 5 will be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this
Section 5, that the Buyer shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach
and requiring immediate issuance and transfer, without the
necessity of showing economic loss and without any bond or other
security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and
sell the Preferred Stock to the Buyer at the Closing is subject
to the satisfaction, at or before the Closing Date, of each of
the following conditions, provided that these conditions are for
the Company's sole benefit and may be waived by the Company at
any time in its sole discretion:
a. The Buyer shall have executed this Agreement, the
Registration Rights Agreement, and the Escrow Agreement and
delivered the same to the Company.
b. The Buyer shall have delivered to the Escrow Agent
the Purchase Price for the Preferred Stock being purchased
by the Buyer at the Closing by wire transfer of immediately
available funds pursuant to the wire instructions provided
by the Company.
c. The representations and warranties of the Buyer
shall be true and correct in all material respects as of
the date when made and as of the Closing Date as though
made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer
shall have performed, satisfied and complied in all
material respects with the covenants, agreements and
conditions required by this Agreement to be performed,
satisfied or complied with by the Buyer at or prior to the
Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The obligation of the Buyer hereunder to purchase the
Preferred Stock at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions,
provided that these conditions are for the Buyer's sole benefit
and may be waived by the Buyer at any time in its sole
discretion:
a. The Company shall have executed this Agreement,
the Registration Rights Agreement, and the Escrow Agreement
and delivered the same to the Buyer.
b. The representations and warranties of the Company
shall be true and correct in all material respects (except
to the extent that any of such representations and
warranties is already qualified as to materiality in
Section 3 above, in which case, such representations and
warranties shall be true and correct without further
qualification) as of the date when made and as of the
Closing Date as though made at that time (except for
representations and warranties that speak as of a specific
date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or
prior to the Closing Date.
c. The Company shall have executed and delivered to
the Buyer the Certificates (in such denominations as the
Buyer shall request) for the Preferred Stock being
purchased by the Buyer at the Closing.
8. INDEMNIFICATION.
In consideration of the Buyer's execution and delivery
of this Agreement and acquiring the Preferred Stock and the
Conversion Shares, hereunder and in addition to all of the
Company's other obligations under this Agreement, the Company
shall defend, protect, indemnify and hold harmless the Buyer and
each other holder of the Preferred Stock, the Conversion Shares,
and all of their officers, directors, employees and agents
(including, without limitation, those retained in connection with
the transactions contemplated by this Agreement) (collectively,
the "Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the
action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities"), incurred by the Indemnitees or any of
them as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty
made by the Company in this Agreement, the Preferred Stock or the
Registration Rights Agreement or any other certificate,
instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company
contained in this Agreement, the Preferred Stock, the
Registration Rights Agreement, or any other certificate,
instrument or document contemplated hereby or thereby, or (c) any
cause of action, suit or claim brought or made against such
Indemnitee by any third party and arising out of or resulting
from the execution, delivery, performance or enforcement of this
Agreement or any other instrument, document or agreement executed
pursuant hereto by any of the Indemnities, any transaction
financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Preferred
Stock or the status of the Buyer or holder of the Preferred
Stock, the Conversion Shares, as an investor in the Company. To
the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the
Indemnified Liabilities, which is permissible under applicable
law.
9. GOVERNING LAW: MISCELLANEOUS.
a. Governing Law. This Agreement shall be governed
by and interpreted in accordance with the laws of the
Commonwealth of Pennsylvania without regard to the
principles of conflict of laws. The parties expressly
consent to the jurisdiction and venue of the Common Pleas
Court of Allegheny County, Pennsylvania, and the United
States District Court for the Western District of
Pennsylvania for the adjudication of any civil action
asserted pursuant to this Paragraph.
b. Acknowledgment Regarding Buyer=s Purchase of
Preferred Stock. The parties acknowledge and agree that
the Buyer is acting solely in the capacity of an arm's
length purchaser with respect to this Agreement and the
transactions contemplated hereby. The parties further
acknowledge that the Buyer is not acting as a financial
advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the
transactions contemplated hereby and any advice given by
the Buyer or any of their respective representatives or
agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to
such Buyer's purchase of the Preferred Stock or the
Conversion Shares. The parties further acknowledge Buyer
that the Company=s decision to enter into this Agreement
has been based solely on the independent evaluation by the
Company and its representatives.
c. Counterparts. This Agreement may be executed in
two or more identical counterparts, all of which shall be
considered one and the same agreement and shall become
effective when counterparts have been signed by each party
and delivered to the other party. Signatures delivered by
facsimile transmission shall be deemed to have the same
force as an original signature.
d. Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or
affect the interpretation of, this Agreement.
e. Severability. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this
Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any
other jurisdiction.
f. Entire Agreement, Amendments. This Agreement
supersedes all other prior oral or written agreements
between the Buyer, the Company, their affiliates and
persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any
representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement
may be waived or amended other than by an instrument in
writing signed by the party to be charged with enforcement.
g. Notices. Any notices consents, waivers or other
communications required or permitted to be given under the
terms of this Agreement must be in writing and will be
deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by
facsimile, provided a copy is mailed by U.S. certified
mail, return receipt requested; (iii) three (3) days after
being sent by U.S. certified mail, return receipt
requested, or (iv) one (I) day after deposit with a
nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same.
The addresses and facsimile numbers for such communications
shall be:
If to the Company:
BICO, Inc.
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CFO
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Buyer:
▇.▇. ▇▇▇▇▇ Asset Management
Atlanta Financial Center, East Tower
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Transfer Agent:
Mellon Investor Services
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each party shall provide five (5) days' prior written
notice to the other party of any change in address or
facsimile number.
h. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and
their respective successors and assigns. Neither the
Company nor the Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written
consent of the other.
i. No Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced
by, any other person.
j. Survival. Unless this Agreement is terminated
under Section 9(m), the representations and warranties of
the Company and the Buyer contained in Sections 2 and 3,
the agreements and covenants set forth in Sections 4, 5 and
9, the indemnification provisions set forth in Section 8,
shall survive the Closing. The Buyer shall be responsible
only for its own representations, warranties, agreements
and covenants hereunder.
k. Publicity. The Company shall have the right to
approve before issuance any press releases or any other
public statements with respect to the transactions
contemplated hereby; provided, however, that the Company
shall be entitled, without the prior approval of the Buyer,
to make any press release or other public disclosure with
respect to such transactions as is required by applicable
law and regulations.
l. Further Assurances. Each party shall do and
perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and
documents, as the other party may reasonably request in
order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions
contemplated hereby.
m. Termination. In the event that the Closing shall
not have occurred with respect to the Buyer on or before
the Closing Date due to the Company's or the Buyer's
failure to satisfy the conditions set forth in Sections 6
and 7 above (and the nonbreaching party's failure to waive
such unsatisfied condition(s)), the nonbreaching party
shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on
such date without liability of any party. Prior to the
Closing Date, the Company may terminate this Securities
Purchase Agreement and its related obligations pursuant to
the Registration Rights Agreement, the Escrow Agreement and
any related agreements upon thirty (30) days written notice
to the Buyer.
o. No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of
strict construction will be applied against any party.
IN WITNESS WHEREOF, the Buyer and the Company have caused
this Securities Purchase Agreement to be duly executed as of the
date first written above.
ACOMPANY@
BICO, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CEO
"BUYER"
▇.▇. ▇▇▇▇▇ ASSET MANAGEMENT
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇