Exhibit 99.1
HESKA SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT (this "Agreement"), is made and entered into as of
December 13,2001, by and among Heska Corporation, a Delaware corporation (the
"Company"), and the purchasers listed on Schedule A attached hereto
(collectively, the "Purchasers" and individually, a "Purchaser").
1. Authorization of Sale of the Securities
Subject to the terms and conditions of this Agreement, the Company has
authorized the sale of up to 7,792,808 shares (the "Shares") of common stock,
par value $0.001 per share (the "Common Stock"), of the Company.
2. Agreement to Sell and Purchase the Securities
2.1 Purchase and Sale of Shares
Subject to the terms and conditions of this Agreement, each Purchaser
severally agrees to purchase, and the Company agrees to sell and issue to each
Purchaser, at the Closing (as defined below) that number of Shares set forth
opposite such Purchaser's name on Schedule A attached hereto.
2.2 Purchase Price of Shares
The purchase price of each Share shall be $0.77 (the "Per Share Price"). The
Company shall not, during the period beginning on the date of this Agreement and
ending ninety (90) days after the Closing Date (as defined below), without
adjusting the Per Share Price hereunder accordingly, sell (i) Shares at a price
per share of less than the Per Share Price, or (ii) options, warrants or any
other securities that can be converted into, or otherwise exchanged for, shares
of the Company's common stock at a conversion, exchange or exercise price of
less than the Per Share Price, other than to employees, directors and
consultants under existing stock option plans, employee stock purchase plans or
issued warrants; provided, that the conversion, exchange or exercise price of
each such option, warrant or other security is not lower than the fair market
value of the underlying stock on the date of the sale or grant. In the event
the Company shall, during the period beginning on the date of this Agreement and
ending ninety (90) days after the Closing Date, sell any shares of the Company's
common stock at, or any instruments that can be converted into or otherwise
exchanged for the Company's common stock (the "Subsequent Sale") exercisable at,
a price per share (the "Subsequent Purchase Price") of less than the Per Share
Price (prior to any adjustment pursuant to this Section 2.2), the Company shall,
within ten (10) business days of the Subsequent Sale, pay to each Purchaser a
cash amount equal to the number of Shares purchased by such Purchaser times the
difference between the Per Share Price and the Subsequent Purchase Price.
3. Delivery of the Securities at the Closing
(a) The completion of the purchase and sale of the Shares
(the "Closing") shall occur at the offices of Wilson, Sonsini, Xxxxxxxx and
Xxxxxx, counsel to the Company, at One Market, Xxxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxx Xxxxxxxxx, Xxxxxxxxxx at 9:00 a.m. local time, on December 18, 2001, or
such other time and date as may be agreed by the parties (the "Closing Date").
(b) At the Closing, the Company shall authorize its transfer
agent (the "Transfer Agent") to issue to each Purchaser one or more stock
certificates registered in the name of such Purchaser, or in such nominee
name(s) as designated by such Purchaser in writing, representing the number of
Shares set forth in Section 2 above and bearing an appropriate legend referring
to the fact that the Shares were sold in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act"), and Rule 506 under the Securities Act. The Company will
deliver certificates in such denominations requested by the Purchasers (the
"Certificates") against delivery of payment for the Shares by the Purchasers.
Prior to the Purchasers' delivery of payment for the Shares, the Company will
deliver via facsimile a copy of the Certificates to be delivered upon Closing to
the offices of the Purchasers (at the fax number indicated on the signature
pages attached hereto).
(c) The Company's obligation to complete the purchase and
sale of the Shares shall be subject to the following conditions, any one or
more of which may be waived by the Company:
(i) receipt by the Company from stockholders holding
rights to require the Company to register the sale of any securities owned by
such holder in the Registration Statement (as defined below) of waivers of such
rights (including the waiver of any notice requirements related to such rights);
(ii) receipt by the Company of same-day funds in the
full amount of the purchase price for the Shares being purchased under this
Agreement; and
(iii) the accuracy in all material respects of the
representations and warranties made by the Purchasers and the
fulfillment in all material respects of those undertakings of the
Purchasers to be fulfilled before the Closing.
(d) The Purchasers' obligations to accept delivery of such
stock certificates, and to pay for the Shares evidenced by the certificates
shall be subject to the following conditions, any one or more of which may be
waived by a Purchaser with respect to such Purchaser's obligation:
(i) the representations and warranties made by the
Company in this Agreementshall be accurate in all material respects and the
undertakings of the Company shall have been fulfilled in all material respects
on or before the Closing;
(ii) the Company shall have delivered to each of the
Purchasers a certificate executed by the chairman of the board or president and
the chief financial or accounting officer of the Company, dated the Closing
Date, in form and substance reasonably satisfactory to the Purchasers, to the
effect that the representations and warranties of the Company set forth in
Section 4 hereof are true and correct in all material respects as of the date
of this Agreement and as of the Closing Date, and that the Company has complied
with all the agreements and satisfied all the conditions in this Agreement on
its part to be performed or satisfied on or before the Closing Date;
(iii) the Company shall have delivered to Purchasers
a legal opinion in substantially the form attached hereto as Exhibit A; and
(iv) the Company shall have obtained gross proceeds
of at least $6,000,000 from the sale of the Shares at the Closing.
4. Representations, Warranties and Covenants of the Company
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit B, the Company hereby represents and warrants to the Purchasers as
follows (which representations and warranties shall be deemed to apply, where
appropriate, to each subsidiary of the Company):
4.1 Organization and Qualification
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Company has the corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted and to enter into
and perform its obligations under this Agreement. Other than as disclosed in
the Company Documents, the Company has no subsidiaries or direct or indirect
ownership in any firm, corporation or business which either, individually or in
the aggregate, is material to the business of the Company. The Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure to so qualify would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company.
4.2 Capitalization
(a) The authorized capital stock of the Company consists of
75,000,000 shares of Common Stock and 25,000,000 shares of Preferred Stock. As
of December 12, 2001,
(i) the issued and outstanding capital stock of the
Company consists of 39,905,407 shares of Common Stock. The shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and have not been issued in violation
of or are not otherwise subject to any preemptive or other similar rights;
(ii) the Company has reserved 6,705,567 shares of
Common Stock for issuance upon the exercise of stock options granted or
available for future grant under the Company's 1997 Stock Incentive Plan and
1988 Stock Option Plan. No shares are available for issuance under the
Company's 1988 Stock Option Plan or 1994 Key Executive Option Plan;
(iii) the Company has reserved 10,000 shares of
Common Stock for issuance upon the exercise of outstanding options and warrants
to purchase Common Stock; and
(iv) the Company has reserved 150,384 shares of
Common Stock issued pursuant to the employee stock purchase plan.
(b) Except as set forth in this Section 4.2, there are no
outstanding subscriptions, options, warrants, convertible or exchangeable
securities or other rights granted to or by the Company to purchase shares of
Common Stock or other securities of the Company and there are no commitments,
plans or arrangements to issue any shares of Common Stock or any security
convertible into or exchangeable for Common Stock.
4.3 Issuance, Sale and Delivery of the Securities
(a) The Shares have been duly authorized for issuance and
sale to the Purchasers pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the consideration
set forth in this Agreement, will be validly issued and fully paid and
nonassessable and free and clear of all pledges, liens and encumbrances. The
certificates evidencing the Shares are in due and proper form under Delaware
law.
(b) The issuance of the Shares is not subject to
preemptive or other similar rights. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required for
the issuance and sale of the Shares to be sold by the Company as contemplated
in this Agreement.
(c) Subject to the accuracy of the Purchasers'
representations and warranties in Section 5 of this Agreement, the offer, sale,
and issuance of the Securities in conformity with the terms of this Agreement
constitute transactions exempt from the registration requirements of Section 5
of the Securities Act and from the registration or qualification requirements
of the laws of any applicable state or United States jurisdiction.
4.4 Financial Statements
The financial statements included (as exhibits or otherwise) in the Company
Documents (as defined below) present fairly the financial position of the
Company as of the dates indicated and the results of their operations for the
periods specified. Except as otherwise stated in such Company Documents, such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and any supporting
schedules included with the financial statements present fairly the information
stated in the financial statements. The financial and statistical data set
forth in the Company Documents were prepared on an accounting basis consistent
with such financial statements.
4.5 No Material Change
Since September 30, 2001,
(a) there has been no material adverse change or any
development involving a prospective material adverse change in or affecting
the condition, financial or otherwise, or in the earnings, assets, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business;
(b) there have been no transactions entered into by the
Company other than those in the ordinary course of business, which are
material with respect to the Company;
(c) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital stock;
and
(d) the Company has incurred no material contingent
obligations.
4.6 Environmental
Except as would not, singly or in the aggregate, reasonably be expected to
have a material adverse effect on the condition, financial or otherwise, or the
earnings, assets, business affairs or business prospects of the Company,
(a) the Company is in compliance with all applicable
Environmental Laws (as defined below);
(b) the Company has all permits, authorizations and
approvals required under any applicable Environmental Laws and is in compliance
with the requirements of such permits authorizations and approvals;
(c) there are no pending or, to the best knowledge of the
Company, threatened Environmental Claims (as defined below) against the
Company; and
(d) under applicable law, there are no circumstances with
respect to any property or operations of the Company that are reasonably likely
to form the basis of an Environmental Claim against the Company.
For purposes of this Agreement, the following terms shall have the following
meanings: "Environmental Law" means any United States (or other applicable
jurisdiction's) Federal, state, local or municipal statute, law, rule,
regulation, ordinance, code, policy or rule of common law and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or any chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority. "Environmental Claims" means any
and all administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law.
4.7 No Defaults
The Company is not in violation of its certificate of incorporation or bylaws
or in material default in the performance or observance of any obligation,
agreement, covenant or condition contained in any material contract, indenture,
mortgage, loan agreement, deed, trust, note, lease, sublease, voting agreement,
voting trust, or other instrument or material agreement to which the Company is
a party or by which it may be bound, or to which any of the property or assets
of the Company is subject.
4.8 Labor Matters
No labor dispute with the employees of the Company exists or, to the best
knowledge of the Company, is imminent.
4.9 No Actions
Other than as disclosed in the Company Documents (as defined below), there is
no action, suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company which, singly or in the aggregate,
might result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company, or which, singly or in the aggregate, might materially and adversely
affect the properties or assets thereof or which might materially and adversely
affect the consummation of this Agreement, nor, to the best knowledge of the
Company, is there any reasonable basis therefor. The Company is not in default
with respect to any judgment, order or decree of any court or governmental
agency or instrumentality which, singly or in the aggregate, would have a
material adverse effect on the assets, properties or business of the Company.
4.10 Intellectual Property
Other than as disclosed in the Company Documents (as defined below),
(a) the Company, to the best of its knowledge in the
course of diligent inquiry, owns or is licensed to use all patents, patent
applications, inventions, trademarks, trade names, applications for
registration of trademarks, service marks, service xxxx applications,
copyrights, know-how, manufacturing processes, formulae, trade secrets,
licenses and rights in any thereof and any other intangible property and
assets that are material to the business of the Company as now conducted
and as proposed to be conducted (in this Agreement called the "Proprietary
Rights"), or is seeking, or will seek, to obtain rights to use such
Proprietary Rights that are material to the business of the Company as
proposed to be conducted;
(b) the Company does not have any knowledge of, and
the Company has not given or received any notice of, any pending conflicts
with or infringement of the rights of others with respect to any Proprietary
Rights or with respect to any license of Proprietary Rights which are material
to the business of the Company;
(c) no action, suit, arbitration, or legal,
administrative or other proceeding, or investigation is pending, or, to the
best knowledge of the Company, threatened, which involves any Proprietary
Rights, nor, to the best knowledge of the Company, is there any reasonable
basis therefor;
(d) the Company is not subject to any judgment, order,
writ, injunction or decree of any court or any Federal, state, local, foreign
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any arbitrator, and has not entered
into or is not a party to any contract which restricts or impairs the use of
any such Proprietary Rights in a manner which would have a material adverse
effect on the use of any of the Proprietary Rights;
(e) the Company has not received written notice of any
pending conflict with or infringement upon any third party proprietary rights;
(f) the Company has not entered into any consent,
indemnification, forbearance to xxx or settlement agreement with respect to
Proprietary Rights other than in the ordinary course of business. No claims
have been asserted by any person with respect to the validity of the Company's
ownership or right to use the Proprietary Rights and, to the best knowledge of
the Company, there is no reasonable basis for any such claim to be successful;
(g) the Company has complied, in all material respects,
with its obligations relating to the protection of the Proprietary Rights
which are material to the business of the Company used pursuant to licenses;
and
(h) to the best knowledge of the Company, no person is
infringing on or violating Proprietary Rights that are material to the Company.
4.11 Permits
The Company possesses and is operating in compliance with all material
licenses, certificates, consents, authorities, approvals and permits from all
state, federal, foreign and other regulatory agencies or bodies necessary to
conduct the businesses now operated by it, and the Company has not received any
notice of proceedings relating to the revocation or modification of any such
permit or any circumstance which would lead it to believe that such proceedings
are reasonably likely which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely affect
the condition, financial or otherwise, or the earnings, assets, business affairs
or business prospects of the Company.
4.12 Due Execution, Delivery and Performance
(a) This Agreement has been duly executed and delivered
by the Company. This Agreement, when executed and delivered by the Company,
constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
(b) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated in this
Agreement and the fulfillment of the terms of this Agreement, including the
sale, issuance and delivery of the Shares, (i) have been duly authorized by
all necessary corporate action on the part of the Company, its directors and
stockholders; (ii) will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, any
contract, indenture, mortgage, loan agreement, deed, trust, note, lease,
sublease, voting agreement, voting trust or other instrument or agreement to
which the Company is a party or by which it may be bound, or to which any of
the property or assets of the Company is subject; (iii) will not trigger
anti-dilution rights or other rights to acquire additional equity securities
of the Company; and (iv) will not result in any violation of the provisions
of the articles of incorporation or bylaws of the Company or any applicable
statute, law, rule, regulation, ordinance, decision, directive or order.
4.13 Properties
Other than as set forth in the Company Documents (as defined below), the
Company has good and marketable title to its properties, free and clear of all
material security interests, mortgages, pledges, liens, charges, encumbrances
and claims of record. The properties of the Company are, in the aggregate, in
good repair (reasonable wear and tear excepted), and suitable for their
respective uses. Any real property held under lease by the Company is held
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the conduct of the business of the Company.
The Company owns or leases all such properties as are necessary to its business
or operations as now conducted.
4.14 Compliance
The Company has conducted and is conducting its business in compliance with
all applicable Federal, state, local and foreign statutes, laws, rules,
regulations, ordinances, codes, decisions, decrees, directives and orders,
except where the failure to do so would not, singly or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or on the
earnings, assets, business affairs or business prospects of the Company.
4.15 Security Measures
The Company takes security measures designed to enable the Company to assert
trade secret protection in its non-patented technology.
4.16 Contributions
To the best of the Company's knowledge, neither the Company nor any employee
or agent of the Company has made any payment of funds of the Company or received
or retained any funds in violation of any law, rule or regulation.
4.17 Use of Proceeds; Investment Company
The Company intends to use the proceeds from the sale of the Shares for
working capital and other general corporate purposes. The Company is not now,
and after the sale of the Shares under this Agreement and under all other
agreements and the application of the net proceeds from the sale of the Shares
described in the proceeding sentence will not be, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
4.18 Prior Offerings
All offers and sales of capital stock of the Company before the date of this
Agreement were at all relevant times duly registered or exempt from the
registration requirements of the Securities Act and were duly registered or
subject to an available exemption from the registration requirements of the
applicable state securities or Blue Sky laws.
4.19 Taxes
The Company has filed all material tax returns required to be filed, which
returns are true and correct in all material respects, and the Company is not in
default in the payment of any taxes, including penalties and interest,
assessments, fees and other charges, shown thereon due or otherwise assessed,
other than those being contested in good faith and for which adequate reserves
have been provided or those currently payable without interest which were
payable pursuant to said returns or any assessments with respect thereto.
4.20 Other Governmental Proceedings
To the Company's knowledge, there are no rulemaking or similar proceedings
before any Federal, state, local or foreign government bodies that involve or
affect the Company, which, if the subject of an action unfavorable to the
Company, could involve a prospective material adverse change in or effect on the
condition, financial or otherwise, or in the earnings, assets, business affairs
or business prospects of the Company.
4.21 Non-Competition Agreements
To the knowledge of the Company, any full-time employee who has entered into
any non-competition, non-disclosure, confidentiality or other similar agreement
with any party other than the Company is neither in violation of nor is expected
to be in violation of that agreement as a result of the business currently
conducted or expected to be conducted by the Company or such person's
performance of his or her obligations to the Company. The Company has not
received written notice that any consultant or scientific advisor of the Company
is in violation of any non-competition, non-disclosure, confidentiality or
similar agreement.
4.22 Transfer Taxes
On the Closing Date, all stock transfer or other taxes (other than income
taxes) that are required to be paid in connection with the sale and transfer of
the Shares to be sold to the Purchasers under this Agreement will be, or will
have been, fully paid or provided for by the Company and all laws imposing such
taxes will be or will have been fully complied with.
4.23 Insurance
The Company maintains insurance of the type and in the amount that the
Company reasonably believes is adequate for its business, including, but not
limited to, insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.
4.24 Governmental/ Regulatory Consents
Except as set forth in this Agreement, no registration, authorization,
approval, qualification or consent with or required by any court or
governmental/ regulatory authority or agency is necessary in connection with the
execution and delivery of this Agreement or the offering, issuance or sale of
the Shares under this Agreement.
4.25 Securities and Exchange Commission Filings
The Company has timely filed with the Securities and Exchange Commission (the
"Commission") all documents required to be filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act.")
4.26 Additional Information
The Company represents and warrants that the information contained in the
following documents (the "Company Documents") was true and correct in all
material respects as of their respective filing dates:
(a) the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000;
(b) the Company's Quarterly Reports on Form 10-Q for
the fiscal quarters ended March 31, 2001, June 30, 2001 and September 30,
2001;
(c) the Company's Proxy Statement for its 2001 Annual
Meeting of Stockholders;
(d) the Company's Current Report on Form 8-K dated
February 7, 2001; and
(e) all other documents, if any, filed by the Company
with the Commission since November 14, 2001 pursuant to the reporting
requirements of the Securities Exchange Act.
4.27 Contracts
The contracts described in the Company Documents or incorporated by reference
therein are in full force and effect on the date hereof, except for contracts
the termination or expiration of which would not, singly or in the aggregate,
have a material adverse effect on the business, properties or assets of the
Company. Neither the Company nor, to the best knowledge of the Company, any
other party is in material breach of or default under any such contracts.
4.28 No Integrated Offering
Neither the Company, nor any of its affiliates, nor any person acting on its
or their behalf, has directly or indirectly made any offers or sales in any
security or solicited any offers to buy any security under circumstances that
would require registration under the Securities Act of the issuance of the
Shares to the Purchasers. The issuance of the Shares to the Purchasers will not
be integrated with any other issuance of the Company's securities (past, current
or future) for purposes of the Securities Act or any applicable rules of Nasdaq
(or of any national securities exchange on which the Company's Common Stock is
then traded). The Company will not make any offers or sales of any security
(other than the Shares) that would cause the offering of the Shares to be
integrated with any other offering of securities by the Company for purposes of
any registration requirement under the Securities Act or any applicable rules of
Nasdaq (or of any national securities exchange on which the Company's Common
Stock is then traded).
4.29 Listing of Shares
The Company agrees to promptly secure the listing of the Shares upon each
national securities exchange or automated quotation system upon which shares of
Common Stock are then listed and, so long as any Purchaser owns any of the
Shares, shall use its commercially reasonable efforts maintain such listing of
all Shares. The Company has taken no action designed to delist, or which is
likely to have the effect of delisting, the Common Stock from any of the
national securities exchange or automated quotation system upon which the shares
of Common Stock are then listed.
4.30 No Manipulation of Stock
The Company has not taken and will not, in violation of applicable law, take
any action outside the ordinary course of business designed to or that might
reasonably be expected to cause or result in unlawful manipulation of the price
of the Common Stock to facilitate the sale or resale of the Shares.
5. Representations, Warranties and Covenants of the Purchasers
5.1 Securities Law Representations and Warranties
Each Purchaser, severally and for itself only, hereby represents, warrants
and covenants to the Company as follows:
(a) The Purchaser is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved
in the purchase of the Shares, including investments in securities issued by
the Company, and has requested, received, reviewed and considered all
information it deems relevant in making an informed decision to purchase the
Shares.
(b) With the exception of Lombard Odier & Cie ("Lombard")
which makes separate representations in Section 5.6 below, the Purchaser is
acquiring the number of Shares set forth in Section 2 above in the ordinary
course of its business and for its own account for investment (as defined for
purposes of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976 and the
regulations thereunder) only, and has no present intention of distributing
any of the Securities nor any arrangement or understanding with any other
persons regarding the distribution of such Securities within the meaning of
Section 2(11) of the Securities Act, other than as contemplated in Section 7
of this Agreement.
(c) The Purchaser will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers
to buy, purchase or otherwise acquire or take a pledge of) any of the Shares
except in compliance with the Securities Act and the rules and regulations
promulgated thereunder (the "Rules and Regulations").
(d) The Purchaser has completed or caused to be
completed the Stock Certificate Questionnaire and the Registration Statement
Questionnaire, attached to this Agreement as Appendices I and II, for use in
preparation of the Registration Statement (as defined in Section 7.3 below),
and the answers to the Questionnaires are true and correct as of the date of
this Agreement and will be true and correct as of the effective date of the
Registration Statement; provided that the Purchasers shall be entitled to
update such information by providing notice thereof to the Company before
the effective date of such Registration Statement.
(e) The Purchaser has, in connection with its decision
to purchase the number of Securities set forth in Section 2 above, relied
solely upon the Company Documents and the representations and warranties
of the Company contained in this Agreement.
(f) With the exception of Lombard which makes separate
representations in Section 5.6 below, each Purchaser is an "accredited
investor" within the meaning of Rule 501 of Regulation D promulgated under
the Securities Act.
5.2 Resales of Securities
(a) The Purchaser hereby covenants with the Company not
to make any sale of the Shares without satisfying the requirements of the
Securities Act and the Rules and Regulations, including, in the event of any
resale under the Registration Statement, the prospectus delivery requirements
under the Securities Act, and the Purchaser acknowledges and agrees that such
Shares are not transferable on the books of the Company pursuant to a resale
under the Registration Statement unless the certificate submitted to the
transfer agent evidencing the Shares is accompanied by a separate officer's
certificate
(i) in the form of Appendix III to this Agreement;
(ii) executed by an officer of, or other authorized
person designated by, the Purchaser; and
(iii) to the effect that (A) the Shares have been
sold in accordance with the Registration Statement and (B) the requirement of
delivering a current prospectus has been satisfied.
(b) The Purchaser acknowledges that there may occasionally
be times when the Company determines, in good faith following consultation with
its Board of Directors or a committee thereof, the use of the prospectus forming
a part of the Registration Statement (the "Prospectus," as further defined in
Section 7.3.1 below) should be suspended until such time as an amendment or
supplement to the Registration Statement or the Prospectus has been filed by the
Company and any such amendment to the Registration Statement is declared
effective by the Commission, or until such time as the Company has filed an
appropriate report with the Commission pursuant to the Exchange Act. The
Purchaser hereby covenants that it will not sell any Shares pursuant to the
Prospectus during the period commencing at the time at which the Company gives
the Purchaser written notice of the suspension of the use of the Prospectus and
ending at the time the Company gives the Purchaser written notice that the
Purchaser may thereafter effect sales pursuant to the Prospectus. The Company
may, upon written notice to the Purchasers, suspend the use of the Prospectus
for up to thirty (30) days in any 365-day period based on the reasonable
determination of the Company's Board of Directors that there is a significant
business purpose for such determination, such as pending corporate developments,
public filings with the Commission or similar events. The Company shall in no
event be required to disclose the business purpose for which it has suspended
the use of the Prospectus if the Company determines in its good faith judgment
that the business purpose should remain confidential. In addition, the Company
shall notify each Purchaser (i) of any request by the Commission for an
amendment or any supplement to such Registration Statement or any related
prospectus, or any other information request by any other governmental agency
directly relating to the offering, and (ii) of the issuance by the Commission of
any stop order suspending the effectiveness of such Registration Statement or of
any order preventing or suspending the use of any related prospectus or the
initiation or threat of any proceeding for that purpose.
(c) The Purchaser further covenants to notify the Company
promptly of the sale of any of its Shares, other than sales pursuant to a
Registration Statement contemplated in Section 7 of this Agreement or sales
upon termination of the transfer restrictions pursuant to Section 7.4 of this
Agreement.
5.3 Due Execution, Delivery and Performance
(a) This Agreement has been duly executed and delivered by
the Purchaser and constitutes a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
(b) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated in this
Agreement and the fulfillment of the terms of this Agreement have been duly
authorized by all necessary corporate, agency or other action and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Purchaser pursuant to, any contract, indenture, mortgage, loan
agreement, deed, trust, note, lease, sublease, voting agreement, voting trust
or other instrument or agreement to which the Purchaser is a party or by which
it or any of them may be bound, or to which any of the property or assets of
the Purchaser is subject, nor will such action result in any violation of the
provisions of the charter or bylaws of the Purchaser or any applicable statute,
law, rule, regulation, ordinance, decision, directive or order.
5.4 Restriction on Short Sales
The Purchaser represents and warrants to and covenants with the Company that
the Purchaser has not engaged and will not engage in any short sales of the
Company's Common Stock. Each party to this Agreement acknowledges that each
Purchaser is a third party beneficiary to the representations, warranties and
covenants made by each other Purchaser under this Section 5.4.
5.5 No Legal, Tax or Investment Advice
The Purchaser understands that nothing in this Agreement or any other
materials presented to the Purchaser in connection with the purchase of the
Shares constitutes legal, tax or investment advice. The Purchaser has consulted
such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its purchase of the Shares
and understands that the Placement Agent (as defined below) has acted as
placement agent for the Company and not in any of the foregoing capacities on
behalf of the Purchaser.
5.6 Separate Representations of Lombard
(a) Lombard is acquiring the number of Shares set forth
on Schedule A in the ordinary course of its business for its account, the
account of the Lombard Odier Nutrition Fund ("LONF"), or for the account
of its clients for investment (as defined for purposes of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvement Act of 1976 and the regulations thereunder) only, and
has no present intention of distributing any of the Shares other than as
contemplated in Section 7 of this Agreement. Lombard's clients have represented
to Lombard that such clients are acquiring the Shares for investment only, and
with no present intention of distributing any of the Shares other than as
contemplated in Section 7 of this Agreement.
(b) Lombard represents that it, LONF, and any of its
clients to which it attributes the Shares is an "accredited investor" within
the meaning of Rule 501 of Regulation D promulgated under the Securities Act.
6. Survival of Representations, Warranties and Agreements
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchasers in this Agreement and in the certificates for the Shares
delivered pursuant to this Agreement shall survive the execution of this
Agreement, the delivery to the Purchasers of the Shares being purchased and the
payment therefore.
7. Form D Filing; Registration; Compliance with the Securities Act;
Covenants
7.1 Form D Filing; Registration of Shares
7.1.1 Registration Statement; Expenses. The Company shall:
(a) file in a timely manner a Form D relating to the sale
of the Shares under this Agreement, pursuant to Securities and Exchange
Commission Regulation D.
(b) (as soon as practicable after the Closing Date, but
in no event later than the twentieth (20th) day following the Closing Date,
prepare and file with the Commission a Registration Statement on Form S-3 (or,
if the Company is ineligible to use Form S-3, then on Form S-1) relating to
the sale of the Shares by the Purchasers from time to time on the Nasdaq
National Market (or the facilities of any national securities exchange on
which the Company's Common Stock is then traded) or in privately negotiate
transactions (the "Registration Statement");
(c) provide to Purchasers any information required to
permit the sale of the Shares under Rule 144A of the Securities Act;
(d) subject to receipt of necessary information from
the Purchasers, use its best efforts to cause the Commission to notify the
Company of the Commission's willingness to declare the Registration Statement
effective on or before 90 days after the Closing Date;
(e) notify Purchasers promptly upon the Registration
Statement, and any post-effective amendment thereto, being declared effective
by the Commission;
(f) prepare and file with the Commission such amendments
and supplements to the Registration Statement and the Prospectus (as defined
in Section 7.3.1 below) and take such other action, if any, as may be
necessary to keep the Registration Statement effective until the earlier o
(i) three years after the effective date of the Registration Statement, (ii)
the date on which the Shares may be resold by the Purchasers without
registration and without regard to any volume limitations by reason of Rule
144(k) under the Securities Act or any other rule of similar effect or (iii)
all of the Shares have been sold pursuant to the Registration Statement or
Rule 144(k) under the Securities Act or any other rule of similar effect;
(g) promptly furnish to the Purchasers with respect to
the Shares registered under the Registration Statement such reasonable
number of copies of the Prospectus, including any supplements to or
amendments of the Prospectus, in order to facilitate the public sale or
other disposition of all or any of the Shares by the Purchasers;
(h) during the period when copies of the Prospectus are
required to be delivered under the Securities Act or the Exchange Act, file
all documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time periods required by the
Exchange Act and the rules and regulations promulgated thereunder;
(i) file documents required of the Company for customary
Blue Sky clearance in all states requiring Blue Sky clearance; provided,
however, that the Company shall not be required to qualify to do business
or consent to service of process in any jurisdiction in which it is not now
so qualified or has not so consented; and
(j) bear all expenses in connection with the procedures
in paragraphs (a) through (i) of this Section 7.1.1 and the registration
of the Shares pursuant to the Registration Statement, including fees and
expenses (whether external or internal) of up to 15,000 of each Purchaser,
but not including any fees and expenses of any other advisers to the
Purchasers or brokerage fees and commissions incurred by the Purchasers.
7.1.2 Delay in Effectiveness of Registration Statement.
In the event that the Registration Statement is not declared effective on or
before the 120th day following the Closing Date (the "Penalty Date"), the
Company shall pay to each
Purchaser liquidated damages in an amount equal to 0.25% of the total purchase
price of the Shares purchased by such Purchaser pursuant to this Agreement for
each week after the Penalty Date that the Registration Statement is not declared
effective.
7.2 Transfer of Shares After Registration
Each Purchaser agrees that it will not effect any disposition of the Shares
or its right to purchase the Shares that would constitute a sale within the
meaning of the Securities Act, except as contemplated in the Registration
Statement referred to in Section 7.1 or as otherwise permitted by law, and that
it will promptly notify the Company of any changes in the information set forth
in the Registration Statement regarding the Purchaser or its plan of
distribution.
7.3 Indemnification
For the purpose of this Section 7.3, the term "Registration Statement" shall
include any preliminary or final prospectus, exhibit, supplement or amendment
included in or relating to the Registration Statement referred to in
Section 7.1.
7.3.1 Indemnification by the Company.
The Company agrees to indemnify and hold harmless each of the Purchasers and
each person, if any, who controls any Purchaser within the meaning of the
Securities Act, against any losses, claims, damages, liabilities or expenses,
joint or several, to which such Purchasers or such controlling person may become
subject, under the Securities Act, the Exchange Act, or any other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably withheld),
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, including the Prospectus, financial statements and
schedules, and all other documents filed as a part thereof, as amended at the
time of effectiveness of the Registration Statement, including any information
deemed to be a part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules and
Regulations, or the Prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state in any of them a material
fact required to be stated therein or necessary to make the statements in any of
them, in light of the circumstances under which they were made, not misleading,
or arise out of or are based in whole or in part on any inaccuracy in the
representations and warranties of the Company contained in this Agreement, or
any failure of the Company to perform its obligations under this Agreement or
under applicable law, and will reimburse each Purchaser and each such
controlling person for any legal and other expenses as such expenses are
reasonably incurred by such Purchaser or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment or supplement of the
Registration Statement or Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Purchaser
expressly for use in the Registration Statement or the Prospectus, or (ii) the
failure of such Purchaser to comply with the covenants and agreements contained
in Sections 5.2 or 7.2 of this Agreement respecting resale of the Shares, or
(iii) the inaccuracy of any representations made by such Purchaser in this
Agreement or (iv) any untrue statement or omission of a material fact required
to make such statement not misleading in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Purchaser before the pertinent
sale or sales by the Purchaser.
7.3.2 Indemnification by the Purchaser. Each Purchaser will
severally and not jointly indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses to which the
Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory law
or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Purchaser, which consent shall not be unreasonably withheld) insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon (i) any failure on the
part of such Purchaser to comply with the covenants and agreements contained
in Sections 5.2 or 7.2 of this Agreement respecting the sale of the Shares or
(ii) the inaccuracy of any representation made by such Purchaser in this
Agreement or (iii) any untrue or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any amendment
or supplement to the Registration Statement or Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Purchaser expressly for use
therein; provided, however, that the Purchaser shall not be liable for any
such untrue or alleged untrue statement or omission or alleged omission of
which the Purchaser has delivered to the Company in writing a correction
before the occurrence of the transaction from which such loss was incurred,
and the Purchaser will reimburse the Company, each of its directors, each of
its officers who signed the Registration Statement or controlling person for
any legal and other expense reasonably incurred by the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action.
7.3.3 Indemnification Procedure.
(a) Promptly after receipt by an indemnified party under
this Section 7.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Section 7.3, promptly notify the indemnifying
party in writing of the claim; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise under the indemnity agreement
contained in this Section 7.3 or to the extent it is not prejudiced as a result
of such failure.
(b) In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all other
indemnifying parties similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party
and the indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it or other indemnified parties that
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assume such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such indemnified party
under this Section 7.3 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless:
(i) the indemnified party shall have employed such
counsel in connection with the assumption of legal defenses in accordance with
the proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by such indemnifying party representing all of the
indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
action, in each of which cases the reasonable fees and expenses of counsel
shall be at the expense of the indemnifying party. Notwithstanding the
provisions of this Section 7.3, the Purchaser shall not be liable for any
indemnification obligation under this Agreement in excess of the amount of net
proceeds received by the Purchaser from the sale of the Shares.
7.3.4 Contribution. If the indemnification provided for in
this Section 7.3 is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
under this Section 7.3 in respect to any losses, claims, damages, liabilities
or expenses referred to in this Agreement, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
in this Agreement
(a) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Purchaser from the placement
of Common Stock or
(b) if the allocation provided by clause (a) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (a) above but the relative
fault of the Company and the Purchaser in connection with the statements or
omissions or inaccuracies in the representations and warranties in this
Agreement that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
respective relative benefits received by the Company on the one hand and each
Purchaser on the other shall be deemed to be in the same proportion as the
amount paid by such Purchaser to the Company pursuant to this Agreement for
the Shares purchased by such Purchaser that were sold pursuant to the
Registration Statement bears to the difference (the "Difference") between
the amount such Purchaser paid for the Shares that were sold pursuant to
the Registration Statement and the amount received by such Purchaser from
such sale. The relative fault of the Company and each Purchaser shall be
determined by reference to, among other things, whether the untrue or
alleged statement of a material fact or the omission or alleged omission to
state a material fact or the inaccurate or the alleged inaccurate
representation or warranty relates to information supplied by the Company
or by such Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 7.3.3, any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any action or claim. The provisions set forth in Section 7.3.3
with respect to the notice of the threat or commencement of any threat or action
shall apply if a claim for contribution is to be made under this Section 7.3.4;
provided, however, that no additional notice shall be required with respect to
any threat or action for which notice has been given under Section 7.3 for
purposes of indemnification. The Company and each Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 7.3
were determined solely by pro rata allocation (even if the Purchaser were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in
this paragraph. Notwithstanding the provisions of this Section 7.3, no
Purchaser shall be required to contribute any amount in excess of the amount
by which the Difference exceeds the amount of any damages that such Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Purchasers' obligations to contribute
pursuant to this Section 7.3 are several and not joint.
7.4 Termination of Conditions and Obligations
The restrictions imposed by Section 5 or this Section 7 upon the
transferability of the Shares shall cease and terminate as to any particular
number of the Shares upon the passage of two years from the Closing Date or at
such time as an opinion of counsel satisfactory in form and substance to the
Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
7.5 Information Available
From the date of this Agreement through the date the Registration Statement
covering the resale of Shares owned by any Purchaser is no longer effective, the
Company will furnish to such Purchaser:
(a) as soon as practicable after available (but in the
case of the Company's Annual Report to Stockholders, within ninety (90) days
after the end of each fiscal year of the Company), one copy of:
(i) its Annual Report to Stockholders (which
Annual Report shall contain financial statements audited in accordance with
generally accepted accounting principles by a national firm of certified
public accountants);
(ii) if not included in substance in the Annual
Report to Stockholders, its Annual Report on Form 10-K;
(iii) if not included in substance in its
Quarterly Reports to Stockholders, its quarterly reports on Form 10-Q; and
(iv) a full copy of the particular Registration
Statement covering the Shares (the foregoing, in each case, excluding exhibits);
(b) upon the request of the Purchaser, a reasonable number
of copies of the Prospectus to supply to any other party requiring the
Prospectus.
7.6 Rule 144 Information
Until the earlier of (i) the date on which the Shares may be resold by the
Purchasers without registration and without regard to any volume limitations by
reason of Rule 144(k) under the Securities Act or any other rule of similar
effect or (ii) all of the Shares have been sold pursuant to the Registration
Statement or Rule 144 under the Securities Act or any other rule of similar
effect, the Company shall file all reports required to be filed by it under the
Securities Act, the Rules and Regulations and the Exchange Act and shall take
such further action to the extent required to enable the Purchasers to sell the
Shares pursuant to Rule 144 under the Securities Act (as such rule may be
amended from time to time).
7.7 Prohibition of Issuance of Certain Toxic Securities
The Company shall, within thirty (30) days of the Closing Date, adopt such
amendments to, with respect to (a) and (b) below, the Company's stock option
plans and By-laws, and, with respect to (c) and (d) below, the Company's By-laws
(together, the "Stock Option Plan and By-law Amendments") to provide that,
unless approved by the holders of a majority of the shares entitled to vote at a
duly convened meeting of shareholders, the Company shall not:
(a) grant any stock option, including stock appreciation
right, with an exercise price that is less than 100% of the fair market value
of the underlying stock on the date of grant;
(b) reduce the exercise price of any stock option,
including stock appreciation right, outstanding or to be granted in the future;
cancel and re-grant options at a lower exercise price (including entering into
any "6 month and 1 day" cancellation and re-grant scheme), whether or not the
cancelled options are put back into the available pool for grant; replace
underwater options with restricted stock in an exchange, buy-back or other
scheme; or replace any options with new options having a lower exercise price
or accelerated vesting schedule in an exchange, buy-back or other scheme;
(c) sell or issue any security of the Company convertible,
exercisable or exchangeable into shares of common stock, having a conversion,
exercise or exchange price per share which is subject to downward adjustment
based on the market price of the common stock at the time of conversion,
exercise or exchange of such security into common stock (except for appropriate
adjustments made to give effect to any stock splits or stock dividends); or
(d) enter into (i) any equity line or similar agreement
or arrangement; or (ii) any agreement to sell common stock (or any security
convertible, exercisable or exchangeable into shares of common stock ("Common
Stock Equivalent")) at a per share price (or, with respect to a Common Stock
Equivalent, at a conversion, exercise or exchange price, as the case may be
("Equivalent Price")) that is fixed after the execution date of the agreement,
whether or not based on any predetermined price-setting formula or calculation
method. Notwithstanding the foregoing, however, a price protection clause shall
be permitted in an agreement for sale of common stock or Common Stock
Equivalent, if such clause provides for an adjustment to the price per share of
common stock or, with respect to a Common Stock Equivalent, to the Equivalent
Price (provided that such price or Equivalent Price is fixed on or before the
execution date of the agreement) (the "Fixed Price") in the event that the
Company, during the period beginning on the date of the agreement and ending no
later than ninety (90) days after the closing date of the transaction, sells
shares of common stock or Common Stock Equivalent to another investor at a price
or Equivalent Price, as the case may be, below the Fixed Price. The Stock
Option Plan and By-law Amendments may not be further amended or repealed without
the affirmative vote of the holders of a majority of the shares entitled to vote
at a duly convened meeting of shareholders. Upon the adoption of the Stock
Option Plan and By-law Amendments, the Company shall promptly furnish a copy of
such amendments to the Purchasers. The Company agrees that, prior to the
adoption of the Stock Option Plan and By-law Amendments by all necessary
corporate action of the Company as described above, the Company shall not
conduct any of the actions specified in (a), (b), (c) or (d) above of this
Section 7.7.
8. Legal Fees and Other Transaction Expenses
At the Closing, the Company agrees to pay a flat fee of $7,500 to the State
of Wisconsin Investment Board for their legal and other transaction expenses
(whether internal or external) arising in connection with the transactions
contemplated by this Agreement.
9. Broker's Fee
The Purchasers acknowledge that the Company intends to pay to Xxxxx Fargo Xxx
Xxxxxx, LLC (the "Placement Agent"), a fee in respect of the sale of the Shares
to certain of the Purchasers. Each of the parties to this Agreement hereby
represents that, on the basis of any actions and agreements by it, there are no
other brokers or finders entitled to compensation in connection with the sale of
the Shares to the Purchasers. The Company shall indemnify and hold harmless the
Purchasers from and against all fees, commissions or other payments owing by the
Company to Xxxxx Fargo Xxx Xxxxxx, LLC or any other person or firm acting on
behalf of the Company hereunder.
10. Notices
All notices, requests, consents and other communications under this Agreement
shall be in writing, shall be mailed by first-class registered or certified
airmail, confirmed facsimile or nationally recognized overnight express courier
postage prepaid for next business day delivery, and shall be delivered as
addressed as follows:
(a) if to the Company, to:
Heska Corporation
0000 Xxxxxxxx Xxxxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx,
Chief Financial Officer
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and
(b) if to a Purchaser, at its address as set forth on the
signature page to this Agreement, or at such other address or addresses as may
have been furnished to the Company in writing; provided, however, that first
class registered or certified mail shall not be used to effectuate any such
notice, request, consent or other communication if the Purchaser to be so
notified is located outside of the United States.
Such notice shall be deemed effectively given one business day after
confirmation of receipt by facsimile, one business day after deposit with such
overnight courier or three days after deposit of such registered or certified
airmail with the U.S. Postal Service, as applicable.
11. Modification; Amendment
This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and each of the Purchasers.
12. Termination
This Agreement may be terminated as to any Purchaser, at the option of such
Purchaser, if the Closing has not occurred on or before February 28, 2002.
13. Headings
The headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.
14. Severability
If any provision contained in this Agreement should be held to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby.
15. Governing Law; Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws
of the state of Delaware and the federal law of the United States of America.
The Company hereby submits to the jurisdiction of the courts of the State of
Wisconsin, or of the United States of America sitting in the State of Wisconsin,
over any action, suit, or proceeding arising out of or relating to this
Agreement. Nothing herein shall affect the right of the Purchaser to serve
process in any manner permitted by law or limit the right of the Purchaser to
bring proceedings against the Company in the competent courts of any other
jurisdiction or jurisdictions.
16. No Conflicts of Interest
The Company represents, warrants, and covenants that, to the best of its
knowledge, no trustee or employee of the State of Wisconsin Investment Board
identified on the attached list, either directly or indirectly (a) currently
holds, except as may be specifically set forth below, a personal interest in the
Company or any of its affiliates (together, the "Entity") or the Entity's
property or securities, or (b) will, in connection with the investment made
pursuant to this Agreement, receive (i) a personal interest in the Entity or
the Entity's property or securities or (ii) anything of substantial economic
value for his or her private benefit from the Entity or anyone acting on its
behalf. As to ownership of an interest in the Entity's publicly traded
securities, "knowledge" hereunder is based on an examination of record holders
of the Entity's securities and actual knowledge of the undersigned.
17. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party to this Agreement and delivered to
the other parties.
18. Currency
All references to "dollars" or "$" in this Agreement shall be deemed to refer
to United States dollars.
(Remainder of page intentionally left blank)
[Signature pages follow]
IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.
"COMPANY"
HESKA CORPORATION,
A DELAWARE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Its: Executive Vice President and CFO
"PURCHASERS"
STATE OF WISCONSIN INVESTMENT BOARD
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Its: Investment Director
"PURCHASERS"
CHARTER VENTURES II, L.P.
By: /s/ X. Xxxx Xxxxx
------------------------------------
Title:
"PURCHASERS"
XXXXXXX CAPITAL GROUP LLC, AS AGENT AND
ATTORNEY-IN-FACT FOR THE PURCHASERS LISTED ON
SCHEDULE A DESIGNATED WITH AN ASTERISK (*)
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Title: Managing Director
"PURCHASERS"
LOMBARD ODIER & CIE
By: /s/ Xxxxxxxxx Xxxxx and Xxxxxxxx Xxxxx
Xxxx
----------------------------------------
Title: Vice President and Assistant Manager
"PURCHASERS"
FSVK INVESTMENT INC.
By: /s/ Xxxxxxxxx Xxxxxxxxx
------------------------------------
Title: Finance Manager
"PURCHASERS"
RHINO CAPITAL LLC
By: /s/ Xxxxxxxx Xxxxxx
------------------------------------
Title: Member
SCHEDULE A
PURCHASERS
NUMBER OF
COMMON
STOCK OF AGGREGATE
NAME AND ADDRESS SHARES PURCHASE PRICE
----------------------------------- ---------- --------------
State of Wisconsin Investment Board 1,454,546 $1,120,000.42
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
State of Wisconsin Investment Board 363,636 $ 279,999.72
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Charter Ventures II, L.P. 2,207,793 $1,700,000.61
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Lombard Odier & Cie 649,351 $ 500,000.27
00, Xxx xx xx Xxxxxxxxxx
0000 Xxxxxx
Xxxxxxxxxxx
Facsimile: x00-00-000-00-00
FSVK Investment Inc. 259,741 $ 200,000.57
c/o Wells Fargo Xxx Xxxxxx, LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Facsimile: (415) 954- 8364
Rhino Capital LLC 259,741 $ 200,000.57
0 Xxxxxxx Xxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Xxxxxxx Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000/6329
Signing on behalf of the following parties:
A. Xxxxx Xxxxxxx* 26,000 $ 20,020.00
Xxxxx Xxxxxxx Xxxxxx* 26,000 $ 20,020.00
Xxxxxx X. Xxxxxxx* 130,000 $ 100,100.00
Asphalt Green, Inc.* 32,000 $ 24,640.00
Xxxxxx Xxxxxx Xxxxxxx* 117,000 $ 90,090.00
Xxxxx Xxxxxxx* 19,000 $ 14,630.00
HBL Charitable Unitrust* 32,000 $ 24,640.00
Psychology Associates* 32,000 $ 24,640.00
Xxxxx Foundation* 52,000 $ 40,040.00
Xxxxx Xxxxxx* 65,000 $ 50,050.00
Xxxx X. Xxxxxxxx Revocable Trust dtd 65,000 $ 50,050.00
7/6/99, Xxxx X. Xxxxxxxx Trustee*
Xxxxxx Capital, LLC* 32,000 $ 24,640.00
NFIB Corporate Account* 162,000 $ 124,740.00
Xxxxxx Xxxxxxx Xxxxxx* 32,000 $ 24,640.00
Norwalk Employees' Pension Plan* 221,000 $ 170,170.00
Public Employee Retirement System of Idaho* 1,038,960 $ 799,999.20
City of Stamford Firemen's Pension Fund* 182,000 $ 140,140.00
Theeuwes Family Trust, Xxxxx Xxxxxxxx Trustee* 66,000 $ 50,820.00
Xxxx X. & Xxxxxx X. Xxxxxxxx 1993 Trust* 66,000 $ 50,820.00
Xxxxx Family LLC* 202,000 $ 155,540.00
======== =============
TOTAL 7,792,768 $6,000,431.36
