Exhibit 99.2
EXECUTION COPY
REPURCHASE AND EXCHANGE AGREEMENT
by and among
ASPEN TECHNOLOGY, INC.
and
the HOLDERS named herein
Dated as of June 1, 2003
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; PRINCIPLES OF INTERPRETATION ................ 1
Section 1.01 Definitions ....................................... 1
Section 1.02 Interpretation and Rules of Construction .......... 1
ARTICLE II CLOSING ................................................ 1
Section 2.01 Closing ........................................... 1
Section 2.02 Transactions at the Closing ....................... 1
Section 2.03 Closing Deliveries ................................ 1
Section 2.04 Contemporaneous Closings .......................... 1
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY .......... 1
Section 3.01 Existence and Power ............................... 1
Section 3.02 Authorization/Enforcement/Valid Issuance .......... 1
Section 3.03 Governmental Authorization ........................ 1
Section 3.04 Noncontravention .................................. 1
Section 3.05 Finders' Fees ..................................... 1
Section 3.06 Public Reports; Financial Statements .............. 1
Section 3.07 Absence of Certain Changes Since Balance Sheet
Date............................................... 1
Section 3.08 Litigation; Regulatory Compliance ................. 1
Section 3.09 Compliance with Laws .............................. 1
Section 3.10 Licenses and Permits .............................. 1
Section 3.11 Affiliate Transactions ............................ 1
Section 3.12 Accounting Controls ............................... 1
Section 3.13 Private Placement ................................. 1
Section 3.14 Non-Investment Company ............................ 1
Section 3.15 U.S. Real Property Holding Corporation ............ 1
Section 3.16 Nasdaq National Market ............................ 1
Section 3.17 Application of Takeover Protections ............... 1
Section 3.18 Disclosure ........................................ 1
Section 3.19 Acknowledgment Regarding Holders .................. 1
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF EACH HOLDER ........... 1
Section 4.01 Existence and Power ............................... 1
Section 4.02 Authorization ..................................... 1
Section 4.03 Governmental Authorization ........................ 1
Section 4.04 Noncontravention .................................. 1
Section 4.05 Title to Repurchased Shares and Existing Warrants . 1
Section 4.06 Private Placement ................................. 1
Section 4.07 Access to Information ............................. 1
Section 4.08 General Solicitation .............................. 1
Section 4.09 Reliance .......................................... 1
Section 4.10 Absence of Litigation ............................. 1
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Section 4.11 Finders' Fees ..................................... 1
Section 4.12 Representations Exclusive ......................... 1
ARTICLE V AGREEMENTS OF THE PARTIES ............................... 1
Section 5.01 Further Assurances ................................ 1
Section 5.02 Securities Laws Disclosure; Publicity ............. 1
Section 5.03 Additional Series B Matters ....................... 1
Section 5.04 Transfer Restrictions ............................. 1
Section 5.05 Acknowledgment of Dilution ........................ 1
Section 5.06 Integration ....................................... 1
Section 5.07 Reservation and Listing of Securities ............. 1
Section 5.08 Conversion and Exercise Procedures ................ 1
Section 5.09 Survival/Indemnification .......................... 1
Section 5.10 Shareholders Rights Planv1
Section 5.11 General Release ................................... 1
Section 5.12 Transfer of Series B Preferred Stock .............. 1
Section 5.13 Update of Disclosure .............................. 1
Section 5.14 Rule 144 .......................................... 1
Section 5.15 Series C Notes .................................... 1
ARTICLE VI CONDITIONS TO CLOSING .................................. 1
Section 6.01 Conditions to Each Holder's Obliga1ions
Section 6.02 Conditions to Company's Obligations ............... 1
ARTICLE VII MISCELLANEOUS ......................................... 1
Section 7.01 Notices ........................................... 1
Section 7.02 Amendments and Waivers ............................ 1
Section 7.03 Expenses; Documentary Taxes ....................... 1
Section 7.04 Termination ....................................... 1
Section 7.05 Successors and Assigns ............................ 1
Section 7.06 Governing Law; Venue; Waiver Of Jury Trial ........ 1
Section 7.07 Counterparts; Facsimile Signatures; Effectiveness . 1
Section 7.08 Entire Agreement .................................. 1
Section 7.09 Headings .......................................... 1
Section 7.10 Remedies .......................................... 1
Section 7.11 Payment Set Aside ................................. 1
Section 7.12 Usury ............................................. 1
Section 7.13 Independent Nature of Holders ..................... 1
SCHEDULES
SCHEDULE A -- SECURITYHOLDERS
SCHEDULE B -- SHARES OF SERIES B PREFERRED STOCK
SCHEDULE C -- EXISTING WARRANTS
SCHEDULE D -- REPURCHASED SHARES
SCHEDULE E -- NEW WARRANT SHARE AMOUNTS AND EXPIRATION DATES
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SCHEDULE F -- LEGAL OPINION
SCHEDULE 3.04 -- REQUIRED CONSENTS
SCHEDULE 5.11 --
EXHIBITS
EXHIBIT A -- FORM OF NEW WARRANT
EXHIBIT B -- FORM OF SERIES C NOTE
EXHIBIT C -- FORM OF AMENDMENT AND TERMINATION AGREEMENT
EXHIBIT D -- FORM OF VOTING AGREEMENT AND IRREVOCABLE PROXY
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REPURCHASE AND EXCHANGE AGREEMENT
This
REPURCHASE AND EXCHANGE Agreement (this "AGREEMENT"), dated as of
June 1, 2003, is by and among Aspen Technology, Inc., a
Delaware corporation
(the "COMPANY"), and the securityholders of the Company identified on SCHEDULE A
(each, a "HOLDER," and collectively, the "HOLDERS").
BACKGROUND
A. The Holders are holders of (i) shares of Series B-I Convertible
Preferred Stock, par value $0.10 per share, of the Company (the "SERIES B-I
PREFERRED STOCK") and Series B-II Convertible Preferred Stock, par value $0.10
per share, of the Company (the "SERIES B-II PREFERRED STOCK" and, together with
the Series B-I Preferred Stock, the "SERIES B PREFERRED STOCK"), as identified
with respect to each Holder on SCHEDULE B, and (ii) certain warrants (as
amended, each an "EXISTING WARRANT") to acquire shares of Common Stock, par
value $0.10 per share, of the Company (the "COMMON STOCK"), as identified with
respect to each Holder on SCHEDULE C.
B. Contemporaneously herewith, the Company is entering into the
Securities Purchase Agreement, dated as of even date herewith, by and among the
Company and the several purchasers named on Schedule 2.01 thereto (as it may be
amended hereafter, the "SERIES D AGREEMENT"), providing for, among other things,
the issuance by the Company of shares of Series D-2 Convertible Preferred Stock,
par value $0.10 per share, of the Company (the "SERIES D-2 PREFERRED STOCK") and
warrants to purchase Common Stock of the Company ("Series D Warrants") to the
Holders in exchange for a portion of the shares of Series B Preferred Stock held
by each Holder.
C. Contemporaneously with the completion of the transactions contemplated
by the Series D Agreement (the "SERIES D CLOSING"), (i) the Company desires to
repurchase all of the shares of Series B Preferred Stock held by each Holder
that are not exchanged for shares of Series D-2 Preferred Stock and Series D
Warrants pursuant to the Series D Agreement (such shares of Series B Preferred
Stock, the "REPURCHASED SHARES") from the Holders for cash as more fully set
forth in SCHEDULE D, and the Holders desire to so sell the Repurchased Shares to
the Company, and (ii) the Company and the Holders desire to exchange the
Existing Warrants for certain newly issued warrants to acquire shares of Common
Stock, in each case as further described in, and on the terms and conditions of,
this Agreement.
D. The Company and the Holders further desire to provide for (i) certain
additional rights of the Holders in consideration for entering into this
Agreement, (ii) an understanding effective for the periods described herein
regarding certain of the Company's and the Holders' rights under the Certificate
of Designations filed by the Company with the Secretary of State of the State of
Delaware on March 19, 2002, setting forth the designation, number of shares,
powers, preferences, rights, qualifications, limitations and restrictions of the
Series B Preferred Stock (the "SERIES B CERTIFICATE OF DESIGNATIONS"), (iii)
certain representations, warranties and covenants of the Company and the Holders
with respect to the transactions contemplated by this Agreement, and (iv)
certain other matters set forth herein, in each case as further described in,
and on the terms and conditions of, this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF INTERPRETATION
Section 1.01 DEFINITIONS.
(a) Capitalized terms used in this Agreement without definition
shall have the respective meanings given them in the Series D Agreement.
(b) The following terms, as used herein, have the following
meanings:
"AMENDMENT AND TERMINATION AGREEMENT" means the Amendment and
Termination Agreement, substantially in the form of EXHIBIT C, by and among the
Company and the Holders terminating certain rights under the Series B Purchase
Agreement and the related Amended and Restated Registration Rights Agreement.
"CONFIDENTIALITY AGREEMENT" means each of (i) the letter agreement,
dated April 29, 2003, between the Company and ▇▇▇▇▇▇▇ Capital Corp., and (ii)
the letter agreement, dated April 29, 2003, between the Company and Highbridge
Capital Management LLC.
"EQUITY CONDITIONS" has the meaning given it in the Series B
Certificate of Designations.
"NEW WARRANT" means each of the warrants to acquire shares of Common
Stock, in the form of EXHIBIT A, to be issued to the Holders hereunder in
exchange for the Existing Warrants pursuant to Section 2.02(b).
"REDEMPTION NOTICE" has the meaning given it in the Series B
Certificate of Designations.
"REDEMPTION PRICE" has the meaning given it in the Series B
Certificate of Designations.
"REGISTRATION RIGHTS AGREEMENT" means the Amended and Restated
Registration Rights Agreement, dated as of March 19, 2002, among the Company and
the Holders.
"REPURCHASE PRICE" means, with respect to a Holder, the amount equal
to the product of (i) the Per Share Repurchase Price and (ii) the number of
Repurchased Shares held by such Holder immediately prior to the Closing.
"SERIES B DOCUMENTS" means this Agreement, the New Warrants, the
Amendment and Termination Agreement, and the Series C Notes.
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"SERIES B PURCHASE AGREEMENT" means the Amended and Restated
Securities Purchase Agreement, dated as of March 19, 2002, among the Company and
the Holders.
"SERIES C PREFERRED STOCK" means the Series C Preferred Stock, par
value $0.10 per share, of the Company.
"SERIES C NOTES" means a promissory note of the Company in the form
of EXHIBIT B.
"STATED VALUE" has the meaning given it in (a) the Series B
Certificate of Designations or (b) the Certificate of Designations filed by the
Company with the Secretary of State of the State of
Delaware on March 19, 2002,
setting forth the designation, number of shares, powers, preferences, rights,
qualifications, limitations and restrictions of the Series C Preferred Stock, as
the case may be.
"WARRANT SECURITIES" means, collectively, the New Warrants and the
Warrant Shares.
"WARRANT SHARES" means the shares of Common Stock which may be
acquired by a Holder upon exercise by such Holder of such Holder's New Warrant.
(c) Each of the following terms is defined in the provision hereof
identified opposite such term:
TERM SECTION
8-K Filing Section 5.02
Agreement Preamble
Closing Section 2.01
Common Stock Background
Company Preamble
Company Officer Certificate Section 6.01(b)
Election Date Section 5.03(a)
Existing Warrants Background
Expense Reimbursement Amount Section 7.03(b)
Holder Preamble
Holder Closing Certificate Section 6.02(b)
Holder Liens Section 4.05
Per Share Repurchase Price Section 2.02(a)
Public Reports Section 3.06
Repurchased Shares Background
Series B Certificate of Designations Background
Series B Preferred Stock Background
Series B-I Preferred Stock Background
Series B-II Preferred Stock Background
Series C Exchange Right Section 5.03(c)
Series D Agreement Background
Series D Closing Background
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TERM SECTION
Series D-2 Preferred Stock Background
Series D Warrants Background
Section 1.02 INTERPRETATION AND RULES OF CONSTRUCTION. Definitions
contained in this Agreement apply to singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders of
such terms. Words in the singular shall be held to include the plural and vice
versa, and words of one gender shall be held to include the other gender as the
context requires. The terms "hereof," "herein," "hereby" and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole and not to any particular provision of this Agreement.
The terms "includes" and the word "including" and words of similar import shall
be deemed to be followed by the words "without limitation." Article, Section and
paragraph and Schedule and Exhibit references are to the Articles, Sections and
paragraphs of and Schedules and Exhibits to this Agreement unless otherwise
specified. The word "or" shall not be exclusive. For purposes of this Agreement,
the terms "Company" and "Subsidiary" shall include any entity which is, in whole
or in part, a predecessor of the Company or any Subsidiary, unless the context
expressly requires otherwise.
ARTICLE II
CLOSING
Section 2.01 CLOSING. The closing of the transactions contemplated by
Sections 2.02 and 2.03 (the "Closing") shall take place at the offices of ▇▇▇▇
and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, contemporaneously
with the Series D Closing, or at such other time and place as the Company and
the Holders mutually agree upon in writing (the "CLOSING DATE").
Section 2.02 TRANSACTIONS AT THE CLOSING. At the Closing:
(a) The Company shall repurchase from each Holder, and each Holder
shall sell to the Company, all of such Holder's Repurchased Shares, including
any accrued dividends thereon on the Closing Date, at the price per share of
$850.00 plus an amount in cash or Common Stock equal to the accrued dividends on
such share through the Closing Date (the "PER SHARE REPURCHASE PRICE");
PROVIDED, HOWEVER, that (x) Common Stock may only be used to pay dividends if
(I) all conditions provided in clauses (ii) and (iii) of the definition of
"Equity Conditions" contained in the Series B Certificate of Designations are
satisfied at such time and (II) such issuance would be permitted without
violating the rules or regulations of any Trading Market (as defined in the
Series B Certificate of Designations) and (y) if Common Stock is to be used to
pay dividends, (i) the Company shall send to the Holders irrevocable notice of
the Company's intention to do so at least ten Trading Days prior to the Closing
and shall specify the Closing Date, (ii) the total number of shares of Common
Stock issuable in payment of accrued dividends shall be calculated as set forth
in Section 3(e) of the Series B Certificate of Designations, and two Trading
Days prior to the Closing Date shall be for such purposes the "dividend payment
date." For purposes of clarity, the aforesaid dividends shall be paid at the
Closing by crediting the number of shares of Common Stock to which each Holder
shall be entitled for such dividend to such Holder's balance account with The
Depository Trust
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Corporation through its Deposit Withdrawal Agent Commission System specified in
writing to the Company by each Holder prior to the Closing.
(b) Each Holder shall exchange each Existing Warrant held by such
Holder for a New Warrant exercisable for the number of shares of Common Stock,
and with the expiration date, specified with respect to such New Warrant on
SCHEDULE E; and
(c) The Registration Rights Agreement and the effectiveness of
Sections 4.7 and 4.12 of the Series B Purchase Agreement shall be amended or
terminated, as applicable, by execution and delivery of the Amendment and
Termination Agreement by all parties thereto.
Section 2.03 CLOSING DELIVERIES.
(a) At the Closing, the Company shall deliver or cause to be
delivered to each Holder the following:
(i) the amount of such Holder's Repurchase Price, in United
States dollars and in immediately available funds, by wire transfer to an
account designated by such Holder to the Company in writing for such purpose;
(ii) a New Warrant in definitive form and registered in the
name of such Holder or an Affiliate of such Holder designated by such Holder to
the Company in writing not later than two Business Days prior to the Closing
Date, pursuant to which such Holder (or Affiliate) shall have the right to
acquire that number of shares of Common Stock, and which shall have the
expiration date, set forth opposite such Holder's name on SCHEDULE E;
(iii) the Amendment and Termination Agreement, duly executed
by the Company;
(iv) the legal opinion of Company Counsel in the form of
EXHIBIT F, executed by such counsel and delivered to the Holders;
(v) the Company Officer Certificate executed by an
appropriate officer of the Company; and
(vi) any other documents reasonably requested by the Holders
in connection with the Closing.
(b) At the Closing, each Holder shall deliver or cause to be
delivered to the Company the following:
(i) one or more stock certificates evidencing all of such
Holder's Repurchased Shares, duly endorsed in blank or with stock powers or
other instruments of transfer thereof reasonably acceptable to the Company and
duly executed by such Holder, for cancellation by the Company, or in lieu of the
foregoing, an indemnification undertaking reasonably satisfactory to the
Company;
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(ii) each Existing Warrant identified with respect to such
Holder on SCHEDULE C, together with an instrument of transfer thereof reasonably
acceptable to the Company and duly executed by such Holder, for cancellation by
the Company, or in lieu of the foregoing, an indemnification undertaking
reasonably satisfactory to the Company;
(iii) the Amendment and Termination Agreement, duly executed
by such Holder; and
(iv) the Holder Closing Certificate executed by a duly
authorized representative of such Holder.
(c) At the Closing, each Holder shall deliver or cause to be
delivered to each other Holder the Amendment and Termination Agreement, duly
executed by the delivering Holder.
Section 2.04 CONTEMPORANEOUS CLOSINGS. The obligations described in
Sections 2.02 and 2.03 above of the Company and each Holder at the Closing shall
be satisfied contemporaneously with, and only contemporaneously with, the Series
D Closing. The Series D Closing shall occur contemporaneously with, and only
contemporaneously with, the Closing hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter to the Series D Agreement,
dated the date of this Agreement (the "DISCLOSURE LETTER"), the Company hereby
represents and warrants to the Holders, as of the date hereof and as of the
Closing Date, as set forth below. The disclosure letter in the Series D
Agreement is arranged in sections corresponding to Sections contained in that
Agreement, and the disclosures in any section of that Disclosure Letter shall
qualify (i) the sections of this Agreement referencing the Disclosure Letter
section and (ii) all other sections to this Agreement to the extent
(notwithstanding the absence of a specific cross reference) that such disclosure
reasonably relates to other sections to this Agreement.
Section 3.01 EXISTENCE AND POWER. The Company (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of
Delaware; (b) has the full corporate power to own, lease and operate its
properties and assets and to carry on its business as now conducted; and (c) is
duly qualified to transact business as a foreign corporation and is in good
standing in each jurisdiction in which the failure so to qualify would have, or
would reasonably be expected to have, a Material Adverse Effect.
Section 3.02 AUTHORIZATION/ENFORCEMENT/VALID ISSUANCE. The execution,
delivery and performance by the Company of this Agreement and the other Series B
Documents and the consummation by the Company of the transactions contemplated
hereby and thereby are within the Company's corporate powers and have been duly
authorized by all necessary corporate action on the part of Company. This
Agreement and each of the other Series B Documents each constitute, or will
constitute upon execution, a valid and binding agreement of the Company,
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enforceable against the Company in accordance with their respective terms.
Without limiting the foregoing: (w) the Company has full corporate power and
authority to execute and deliver the Series C Notes and to perform all of the
obligations thereunder, and all necessary corporate action has been taken by the
Company in connection therewith, (x) the Series C Notes, upon delivery, will
constitute the legal, valid, and binding obligations of the Company, enforceable
against the Company in accordance with their terms, (y) the New Warrants, when
issued in accordance with the terms of this Agreement, (i) will be duly and
validly issued, fully paid and nonassessable, (ii) will constitute the legal,
valid, and binding obligations of the Company, enforceable against the Company
in accordance with their terms, (iii) will be free and clear of all Liens, (iv)
shall not be subject to preemptive rights or similar rights of stockholders and
(v) based in part on the representations of the Holders in this Agreement, shall
be issued in compliance with all applicable federal and state securities laws,
as presently in effect, and (z) the shares of Common Stock issuable upon
exercise of the New Warrants have been duly and validly reserved for issuance
and, upon issuance in accordance with the terms of the New Warrants, (i) shall
be duly and validly issued, fully paid and nonassessable, (ii) shall be free and
clear of all Liens, and (iii) based in part on the representations of the
Holders in this Agreement and in the New Warrants (including the required notice
of exercise), shall be issued in compliance with all applicable federal and
state securities laws, as presently in effect.
Section 3.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement and each other Series B Documents
and the consummation of the transactions contemplated hereby and thereby require
no action by or in respect of, or filing with, any governmental body, agency or
official by the Company other than (a) the filing of the Certificate of
Designation and the Charter Amendment with the Secretary of State of
Delaware,
(b) any filings, authorizations, consents and approvals as may be required under
the HSR Act; (c) the filing by the Company with the Commission of such reports
and other documents under the Securities Act or the Exchange Act as may be
required in connection with this Agreement and the other Series B Documents and
the transactions contemplated hereby and thereby to be effected at or prior to
the Closing, and filings required to be made pursuant to the rules of Nasdaq;
(d) any necessary filings with any state securities commission under state blue
sky laws or filings under the Securities Act, the Exchange Act and/or pursuant
to Nasdaq rules in connection with a registration of securities pursuant to the
Investor Rights Agreement; and (e) filings, notices or novations required with
respect to customer contracts with governmental customers. The execution and
delivery by the Company of this Agreement and each of the other Series B
Documents and the performance by the Company of its obligations set forth in
Article V require no action by or in respect of, or filing with any governmental
body agency or official by the Company (other than as specifically contemplated
by Article V).
Section 3.04 NONCONTRAVENTION. The execution, delivery and performance by
the Company of this Agreement and each other Series B Documents and the
consummation of the transactions contemplated hereby and thereby do not and will
not (a) violate the certificate of incorporation or bylaws of the Company, (b)
violate the certificate of incorporation, bylaws, operating, limited liability
or partnership agreement of any Subsidiary, (c) violate any material law, rule,
regulation, judgment, injunction, order or decree applicable to the Company or
any Subsidiary, (d) except as contemplated by Section 3.03 (other than SECTION
3.03(e)) or as otherwise disclosed on SCHEDULE 3.04 of the Disclosure Letter,
require any consent or other action by any Person under, constitute a default
under, or give rise to termination, cancellation or
7
acceleration of any right or obligation of the Company or any Subsidiary or to a
loss of any benefit to which the Company or any Subsidiary is entitled under,
and are not inconsistent with, any provision of any Material Contract binding
upon the Company or any Subsidiary, in each case in a manner that would
individually or in the aggregate have a Material Adverse Effect, or (e) result
in the creation or imposition of any Lien on any material asset of the Company
or any Subsidiary. Except for the consent of Silicon Valley Bank (which has been
obtained), the execution, delivery and performance by the Company of this
Agreement and each other Series B Documents and the consummation of the
transactions contemplated by Article V hereof do not and will not require any
consent or other action by any Person under, constitute a default under, or give
rise to termination, cancellation or acceleration of any right or obligation of
the Company or any Subsidiary or to a loss of any benefit to which the Company
or any Subsidiary is entitled under, and are not inconsistent with, any
provision of any Material Contract binding upon the Company or any Subsidiary,
in each case in a manner that would individually or in the aggregate have a
Material Adverse Effect.
Section 3.05 FINDERS' FEES. Other than for the fees and disbursements in
the amounts and to the entities described in SCHEDULE 3.21 of the Disclosure
Letter (all of which shall be paid by the Company) and except for the fees and
expenses of the Purchasers to be paid by the Company pursuant to the terms of
the Series D Agreement, no investment banker, broker, finder or other
intermediary has been retained by or is authorized to act on behalf of the
Company or any Subsidiary who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement and the other
Series B Documents.
Section 3.06 PUBLIC REPORTS; FINANCIAL STATEMENTS.
(a) Since July 1, 2002, the Company has filed with the Commission
all forms, reports, schedules, proxy statements (collectively, and in each case
including all exhibits and schedules thereto and documents incorporated by
reference therein and including all registration statements and prospectuses
filed with the Commission, the "PUBLIC REPORTS") required to be filed by the
Company with the Commission. As of its date of filing, except to the extent
otherwise disclosed in subsequently filed Public Reports, each Public Report
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and the rules and regulations promulgated
thereunder and, except to the extent revised or superseded by a subsequent
filing with the Commission prior to the date hereof, none of such Public Reports
(including any and all financial statements included therein) when filed
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein not misleading, in light of the circumstances under which they were
made.
(b) Except to the extent otherwise disclosed in Public Reports, each
of the consolidated financial statements (including the notes thereto) included
in the Public Reports complied as to form in all material respects, as of its
date of filing with the Commission, with applicable accounting requirements and
the published rules and regulations of the Commission with respect thereto, was
prepared in accordance with GAAP (except as may otherwise be indicated in the
notes thereto) and fairly presents in all material respects the consolidated
financial position of Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the
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case of unaudited financial statements, to (i) normal year-end adjustments, (ii)
the absence of footnote disclosure required to be included in audited financial
statements and (iii) as otherwise permitted by the Commission on Form 10-Q under
the Exchange Act, which collectively were not or are not expected to be in the
aggregate material).
(c) The information set forth in Schedule 3.07(c) of the Disclosure
Letter is true and accurate.
Section 3.07 ABSENCE OF CERTAIN CHANGES SINCE BALANCE SHEET DATE. The
Company and the Subsidiaries have conducted their businesses since the Balance
Sheet Date in the ordinary course. Without limiting the generality of the
foregoing, since the Balance Sheet Date, except as disclosed in SCHEDULE 3.08 of
the Disclosure Letter, there has not been any:
(a) event or series of related events which, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect;
(b) notice, whether written or oral, received by the Company from
any staff member of the FTC or other FTC personnel regarding the FTC
Investigation that the Bureau of Competition, or office of comparable authority,
of the FTC has made, or has concluded that it will make, a recommendation to the
Commissioners of the FTC that the Company or any Subsidiary will be required to
take any action, or that the FTC intends to initiate litigation against the
Company or any Subsidiary, in each case, which would, or would reasonably be
expected to, result in the Company's inability to satisfy the conditions set
forth in SECTION 7.01(h) of the Series D Agreement;
(c) declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company (other
than dividends on the Series B Preferred Stock paid in shares of Common Stock),
or any repurchase, redemption or other acquisition by the Company or any
Subsidiary of any outstanding shares of capital stock or other securities of the
Company or any Subsidiary;
(d) incurrence, assumption or guarantee by the Company or any
Subsidiary of any Indebtedness, other than in the ordinary course of business,
consistent with past practices and which, individually or in the aggregate, has
not had, and would not reasonably be expected to have, a Material Adverse
Effect;
(e) creation or other incurrence by the Company or any Subsidiary of
any Lien on any material asset other than in the ordinary course of business
consistent with past practices;
(f) making of any loan, advance or capital contributions to or
investment by the Company or any Subsidiary in any Person, other than (i) loans,
advances or capital contributions to or investments in wholly-owned Subsidiaries
and (ii) loans to employees to advance reasonable and customary expenses to be
incurred by them in the performance of their duties on behalf of the Company or
any Subsidiary, in each case made in the ordinary course of business consistent
with past practices;
(g) acquisition, disposition or similar transaction by the Company
or any Subsidiary involving any material assets, properties or liabilities
(other than sales of inventory in
9
the ordinary course of business consistent with past practices), whether by
merger, purchase or sale of stock, purchase or sale of assets or otherwise;
(h) damage, destruction or other casualty loss (whether or not
covered by insurance) which has not had, or would reasonably be expected to
have, a Material Adverse Effect;
(i) Tax election or change in any method of accounting or accounting
practice by the Company or any Subsidiary, except for any such change after the
date hereof required by reason of a concurrent change in U.S. generally accepted
accounting principles;
(j) resignation or, except as approved by the Board, any termination
or removal of any Executive Officers;
(k) increase in the compensation of, or Employee Benefits made
available to, any of the Executive Officers or in the rate of pay or Employee
Benefits of any of its employees, except as part of regular compensation
increases in the ordinary course consistent with past practices;
(l) labor dispute, other than routine individual grievances, or
written notice of any, or, to the Company's Knowledge, any threatened, activity
or proceeding by a labor union or representative thereof to organize any
employees of the Company or any Subsidiary, which employees were not subject to
a collective bargaining agreement at the Balance Sheet Date, or any lockouts,
strikes, slowdowns, or work stoppages by or with respect to any employees of the
Company or any Subsidiary, nor, to the Company's Knowledge, has any Person
threatened to initiate any such activity;
(m) Material Contract (other than the Transaction Documents) entered
into, or any relinquishment or waiver by the Company or any Subsidiary of any
material right under any Material Contract, and none of the Company or any of
its Subsidiaries has taken or omitted to take, and, to the Company's Knowledge,
no third party has taken or omitted to take, any action that constitutes, or
would with the passage of time constitute, a default under any Material
Contract; or
(n) (i) "plant closing" (as defined in the WARN Act), or (ii) "mass
layoff" (as defined in the WARN Act); nor has the Company or any of the
Subsidiaries engaged in or given notice of layoffs or employment terminations
sufficient in number to trigger application of any similar state or local law,
with respect to which, under either (i) or (ii) above or under state or local
law, the Company or any of the Subsidiaries has any current liability material
to the Company and the Subsidiaries taken as a whole.
Section 3.08 LITIGATION; REGULATORY COMPLIANCE.
(a) Except as set forth in SCHEDULE 3.10(a) of the Disclosure
Letter, none of the Company or any of the Significant Subsidiaries has been
served with, or has otherwise received written notice of, any Suit against the
Company or any of the Significant Subsidiaries and, to the Company's Knowledge,
no Suit is pending against the Company or any Significant Subsidiary for which
service of process or other written notice has not yet been received. To the
Company's
10
Knowledge, (i) no Suit has been threatened against the Company or any of the
Significant Subsidiaries, or as to matters related to the business of the
Company or any of its current or former Subsidiaries, against any Affiliate of
the Company or any of the Subsidiaries, and (ii) there is no reasonable basis
upon which any Suit may be initiated against the Company or any of the
Significant Subsidiaries, in each case, which is reasonably expected to have a
Material Adverse Effect.
(b) Except as set forth in SCHEDULE 3.10(c) of the Disclosure
Letter, neither the Company nor any Subsidiary is party to or bound by (i) any
agreement to pay damages or fines to, or provide indemnification, contribution
or expense reimbursement to any Person with respect to any Active Proceedings,
or (ii) any release of any claims that it may have against any Person with
respect to any matter that is the subject of the Active Proceedings. No such
Person has given written notice to the Company or any of the Subsidiaries of its
intention to seek such indemnification or expense reimbursement.
(c) Neither the Company nor any Subsidiary is a named party in any
material outstanding order, writ, injunction, judgment, arbitration award or
decree of any court, arbitrator, government agency, or instrumentality.
Section 3.09 COMPLIANCE WITH LAWS.
(a) The Company and each of the Subsidiaries has complied with, is
not in violation of, and has not received any written notices alleging any
violation with respect to, any applicable provisions of any Laws with respect to
the conduct of its business, or the ownership or operation of its properties or
assets, except for failures to comply or violations that have not had, and would
not reasonably be expected to have, a Material Adverse Effect.
(b) The Company has had in effect a policy regarding ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
since at least January 1997, and the Company is not aware of any violation
thereof.
Section 3.10 LICENSES AND PERMITS. The Company and each of the
Subsidiaries has all material Permits necessary to permit the ownership of
property and the conduct of business as presently conducted by the Company and
the Subsidiaries, and all such Permits are valid and in full force and effect.
No such Permit is reasonably expected to be terminated as a result of the
execution of this Agreement, the Transaction Documents or consummation of the
transactions contemplated hereby or thereby.
Section 3.11 AFFILIATE TRANSACTIONS. Since June 30, 2002, all
transactions (other than those relating to services as directors or employees)
between or among the Company or any Subsidiary, on the one hand, and any
Affiliate of the Company (other than a Subsidiary), on the other hand, have been
in the ordinary course of business, consistent with past practices, and have
been on fair and reasonable terms, no less favorable to the Company or any
Subsidiary than such terms as reasonably could be expected to be obtained in a
comparable arm's-length transaction with an unaffiliated Person.
Section 3.12 ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
specific authorizations, (b) transactions are
11
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles and to maintain assets
accountability, (c) access to assets is permitted only in accordance with
management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Section 3.13 PRIVATE PLACEMENT. Neither the Company, nor any Person
authorized to, or with authority to, act on its behalf, has engaged in a general
solicitation or general advertising (within the meaning of Regulation D of the
Securities Act) of investors with respect to offers or sales of the New
Warrants. The Company has not, directly or indirectly, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the New
Warrants sold pursuant to this Agreement.
Section 3.14 NON-INVESTMENT COMPANY. The Company has been advised of the
rules and requirements under the Investment Company Act. The Company is not, and
immediately after receipt of payment for the New Warrants will not be, an
"investment company" or an entity "controlled" by an "investment company" within
the meaning of the Investment Company Act.
Section 3.15 U.S. REAL PROPERTY HOLDING CORPORATION. The Company is not
now, and has never been a "United States Real Property Holding Corporation" as
defined in Section 897(c)(2) of the Code and Section 1.897-2(b) of the Treasury
Regulations promulgated thereunder.
Section 3.16 NASDAQ NATIONAL MARKET. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act and is listed on the Nasdaq
National Market under the symbol "AZPN," and, except as contemplated by this
Agreement, the Company has taken no action designed to, or expected to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq National Market. Except as set
forth in SCHEDULE 3.23 of the Disclosure Letter, the Company has not received
any notification that the Commission or Nasdaq is contemplating terminating such
registration or listing. The Company is not currently in violation of the Nasdaq
listing standards. There are no matters with respect to which the Company has
received notice of violation or deficiency from Nasdaq that, to the Company's
Knowledge, remain open or unresolved.
Section 3.17 APPLICATION OF TAKEOVER PROTECTIONS. The Company and its
Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company's certificate of incorporation or the
laws of its state of incorporation that is or could become applicable to the
Holders or the Purchasers as a result of the Holders or Purchasers, as
applicable, and the Company fulfilling their obligations or exercising their
rights under the Series B Documents or the Series D Agreement.
Section 3.18 DISCLOSURE. The Company confirms that neither it nor any
other Person acting on its behalf has provided any of the Holders or their
agents or counsel with any information that constitutes or could reasonably be
expected to constitute material, nonpublic
12
information (other than information to be disclosed in the 8-K Filing). The
Company understands and confirms that each of the Holders will rely on the
foregoing representations in effecting transactions in securities of the
Company. The Company acknowledges and agrees that no Holder makes or has made
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Article IV below and those
specifically made in Article IV of the Series D Agreement.
Section 3.19 ACKNOWLEDGMENT REGARDING HOLDERS. The Company acknowledges
and agrees that each of the Holders is acting solely in the capacity of an arm's
length party with respect to this Agreement and the transactions contemplated
hereby. The Company further acknowledges that no Holder is 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. The Company confirms
that it has been advised (and knows of no facts as a basis to doubt) that each
of the Holders is acting solely in the capacity of an individual arm's length
party with respect to this Agreement and the transactions contemplated hereby
and that no Holder is acting as a financial advisor or fiduciary (or in any
similar capacity) of or for any other Holder with respect to this Agreement and
the transactions contemplated hereby. The Company further represents to each
Holder that the Company's decision to enter into this Agreement has been based
solely on the independent evaluation of the Company and its representatives.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EACH HOLDER
Each Holder, severally as to itself and no other Holder, hereby
represents and warrants to the Company and to each other Holder, as of the date
hereof and (except where there is a specific reference to the date hereof) as of
the Closing Date, that:
Section 4.01 EXISTENCE AND POWER. Such Holder is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.
Section 4.02 AUTHORIZATION. Such Holder has the requisite corporate power
to execute, deliver and perform its obligations under this Agreement and the
other Series B Documents to which it is a party and has taken all necessary
action to authorize the execution and delivery by it of this Agreement and such
other Series B Documents. This Agreement constitutes, and each of the other
Series B Documents, when executed and delivered by such Holder, will constitute,
a valid and binding agreement of such Holder, enforceable against such Holder in
accordance with its terms.
Section 4.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by such Holder of this Agreement and the other Series B Documents to
which it is a party, and the consummation of the transactions contemplated
hereby and thereby, require no material approval of, or material filing with,
any governmental body, agency or official, in each case to be made or obtained
by such Holder, other than the filing by such Holder with the Commission of such
reports under the Exchange Act as may be required in connection with this
Agreement and the other Series B Documents and the transactions contemplated
hereby and thereby to be effected at or prior to the Closing, and such filings
as may be required to be made pursuant to Nasdaq rules.
13
Section 4.04 NONCONTRAVENTION. The execution, delivery and performance by
such Holder of this Agreement and the other Series B Documents to which it is a
party, and the consummation by such Holder of the transactions contemplated
hereby and thereby, do not and will not violate the organizational documents of
such Holder, if such Holder is other than a natural person, or any applicable
material law, rule, regulation, judgment, injunction, order or decree in effect
on the date hereof and applicable to such Holder.
Section 4.05 TITLE TO REPURCHASED SHARES AND EXISTING WARRANTS. Such
Holder has good and valid title to (i) the shares of Series B Preferred Stock
identified with respect to such Holder on SCHEDULE B, and (ii) the Existing
Warrant identified with respect to such Holder on SCHEDULE C, in each case free
and clear of any and all Liens, other than Liens created by the Company or
arising from any act or omission (where the Company has an obligation to act) of
the Company, and other than restrictions imposed by Law, under the "Transaction
Documents" (as defined in the Series B Purchase Agreement) or under any other
agreement between such Holder and the Company or the organizational documents of
the Company (collectively, the "HOLDER LIENS"). After the consummation of the
repurchase by the Company from Holders of the Repurchase Shares pursuant hereto
and the exchange by such Holder of shares of Series B Preferred Stock for shares
of Series D-2 Preferred Stock and Series D Warrants pursuant to the Series D
Agreement, such Holder will own no shares of Series B Preferred Stock, whether
beneficially or of record.
Section 4.06 PRIVATE PLACEMENT. Such Holder is acquiring the applicable
New Warrant pursuant to this Agreement for investment and not with a view to the
resale or distribution thereof or the Warrant Shares or any interest therein
other than in a transaction that is registered or exempt from registration under
the Securities Act; PROVIDED that this representation is without prejudice to
such Holder's right to dispose of such New Warrant or the Warrant Shares in
compliance with such New Warrant and applicable securities laws. Nothing
contained herein shall be deemed a representation or warranty by such Holder to
hold the Warrant Securities for any period of time. Such Holder does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Warrant Securities. At all times since the time such
Holder was initially offered the New Warrant, such Holder has been an
"accredited investor" as such term is defined in Regulation D under the
Securities Act.
Section 4.07 ACCESS TO INFORMATION. Such Holder acknowledges that it has
been afforded: (a) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the New Warrants and the
merits and risks of investing in the Warrant Securities; (b) access to
information about the Company and the Subsidiaries and their respective
financial condition sufficient to enable it to evaluate its investment; and (c)
the opportunity to obtain such additional information that the Company possesses
or can acquire without unreasonable effort or expense that is necessary to make
an informed investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of such Holder
or its representatives or counsel, nor any other provisions of this Section
4.07, shall modify, amend or affect such Holder's right to rely on the truth,
accuracy and completeness of the representations and warranties contained in
this Agreement, any other Series B Document or the Series D Agreement.
14
Section 4.08 GENERAL SOLICITATION. Such Holder is not acquiring the
applicable New Warrant as a result of any advertisement, article, notice or
other communication regarding the New Warrants published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.
Section 4.09 RELIANCE. Such Holder understands and acknowledges that (a)
the applicable New Warrant is being offered and sold to it without registration
of such New Warrant or the related Warrant Shares under the Securities Act in a
private placement that is exempt from the registration provisions of the
Securities Act and (b) the availability of such exemption depends in part on,
and the Company will rely upon the accuracy and truthfulness of, the foregoing
representations and such Holder hereby consents to such reliance.
Section 4.10 ABSENCE OF LITIGATION. To the actual knowledge of such
Holder, there is no Suit pending or threatened by or before any court or other
governmental body or arbitrator against such Holder or any of its Affiliates as
of the date hereof in which an unfavorable outcome, ruling or finding in any
said matter, or for all such matters taken as a whole, questions this Agreement
or any of the other Series B Documents or seeks to or would reasonably be
expected to delay or prevent the consummation of the transactions contemplated
hereunder or thereunder, or the right of such Holder to execute, deliver and
perform hereunder or thereunder.
Section 4.11 FINDERS' FEES. Except for the fees and expenses to be paid
by the Company pursuant to the terms of this Agreement and the Series D
Agreement, there is no investment banker, broker, finder or other intermediary
which has been retained by such Holder who is or will be entitled to any fee or
commission from the Company arising from consummation of the transactions
contemplated by this Agreement and the other Series B Documents.
Section 4.12 REPRESENTATIONS EXCLUSIVE. The Holder acknowledges and
agrees that the Company has made no representation or warranty with respect to
the transactions contemplated hereby other than those specifically set forth in
Article III above and in the Transaction Documents.
ARTICLE V
AGREEMENTS OF THE PARTIES
Section 5.01 FURTHER ASSURANCES. Each of the Holders, severally as to
itself, agrees to use commercially reasonable efforts to cause the conditions to
Closing set forth in Sections 6.01(b) and 6.02(d) to be satisfied. The Company
agrees to use commercially reasonable efforts to cause the conditions to Closing
set forth in Sections 6.01(b), 6.01(c), 6.01(d), 6.01(f), 6.01(g) and 6.01(h) to
be satisfied.
Section 5.02 SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall,
within one Trading Day of the date hereof, issue a press release reasonably
acceptable to the Holders disclosing all terms of the transactions contemplated
hereby, by the other Series B Documents and by the Transaction Documents. The
Company shall, within two Trading Days after the date
15
hereof, file a Current Report on Form 8-K with the Commission describing the
material terms of the transactions contemplated by the Series B Documents and
the Transaction Documents in the form required by the Exchange Act, and
attaching the material Series B Documents and material Transaction Documents as
exhibits to such Form ▇-▇ (▇▇▇ "▇-▇ ▇▇▇▇▇▇"). Thereafter, the Company shall
timely file any filings and notices required by the Commission or applicable law
with respect to the transactions contemplated hereby and provide copies thereof
to the Holders promptly after filing. The Company shall, at least two Trading
Days prior to the filing or dissemination of any disclosure required by this
paragraph, provide a copy thereof to legal counsel to the Holders for its
review, except that with respect to the 8-K Filing as contemplated by the second
sentence of this Section 5.02, the Company shall provide such copy thereof to
the legal counsel to the Holders for its review by no later than 5:00 P.M.,
Eastern Standard Time, on the first Trading Day following the date hereof.
Counsel to the Holders shall be required to provide all comments that it and the
Holders may have on the 8-K Filing by 1:00 P.M., Eastern Standard Time on the
second Trading Day following the date hereof. The Company and legal counsel to
each Holder shall consult with each other in issuing any press releases or
otherwise making public statements or filings and other communications with the
Commission or any regulatory agency or Trading Market with respect to the
transactions contemplated hereby, by the other Series B Documents and by the
Transaction Documents, and no party shall issue any such press release or
otherwise make any such public statement, filing or other communication without
the prior consent of the other (which consent shall not be unreasonably
withheld), except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of
such public statement, filing or other communication. As of the time of the
filing of the 8-K Filing with the Commission, no Holder shall be in possession
of any material, nonpublic information received from the Company, any of its
Subsidiaries or any of its respective officers, directors, employees or agents,
that is not disclosed in the 8-K Filing. The Company shall not, and shall cause
each of its Subsidiaries and its and each of their respective officers,
directors, employees and agents, not to, provide any Holder with any material
nonpublic information regarding the Company or any of its Subsidiaries from and
after the filing of the 8-K Filing with the Commission without the express
written consent of such Holder. In the event of a breach of the foregoing
covenant by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees and agents, in addition to any other
remedy provided herein, the other Series B Documents or in the Transaction
Documents, a Holder shall have the right to make a public disclosure, in the
form of a press release, public advertisement or otherwise, of any material,
nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Holder shall have any liability to the Company, its Subsidiaries,
or any of its or their respective officers, directors, employees, shareholders
or agents for any such disclosure.
Section 5.03 ADDITIONAL SERIES B MATTERS.
(a) Notwithstanding the last sentence of Section 9(a)(iv) of the
Series B Certificate of Designations, each of the Holders, severally as to
itself, and the Company agrees that if, on or prior to the later of (x) December
31, 2003 or (y) 30 days after the termination of this Agreement (such later
date, the "ELECTION DATE"), any Holder duly gives a Redemption Notice to the
Company requesting redemption of such Person's shares of Series B Preferred
Stock pursuant to Section 9(a) of the Series B Certificate of Designations (and
in compliance with Section 5.03(b) hereof), then the Company may pay or cause
the payment of the
16
Redemption Price with respect to the shares of Series B Preferred Stock covered
by such Redemption Notice, at the Company's sole option and in its sole
discretion, (i) in cash or in Common Stock or in any combination thereof, to the
extent the Equity Conditions are satisfied at such time (it being understood
that cash or Common Stock shall be used for redemptions if the Equity Conditions
are satisfied at such time), and (ii) in cash or in Series C Preferred Stock or
in any combination thereof, to the extent the Equity Conditions are not
satisfied at such time (it being understood that cash or Series C Preferred
Stock shall be used for redemptions if the Equity Conditions are not satisfied
at such time).
Notwithstanding anything to the contrary, including, without limitation,
in the Series B Transactions Documents and herein, the Company may not issue any
shares of Series C Preferred Stock unless and until (i) the Company has issued
the number of shares of Common Stock equal to the Issuable Maximum (as defined
in the Series B Purchase Agreement) and (ii) has submitted to its stockholders
for a stockholder vote (in accordance with the provisions of the Series B
Purchase Agreement), a request to approve the issuance of additional shares of
Common Stock (x) in an amount not less than such amount as the Company
reasonably estimates would be required to redeem all shares of Series B
Preferred Stock pursuant to the applicable provisions of the Series B
Certificate of Designations in shares of Common Stock and (y) in a manner such
that no further stockholder approval will be required under the Nasdaq
Stockholder Approval Rule (as defined in the Series B Purchase Agreement) for
the issuances of Underlying Shares (as defined in the Series B Purchase
Agreement), and such request shall not have received the requisite vote
necessary for such approval at a duly called meeting of the Company's
stockholders. From the date of this Agreement through the earliest of (i)
December 31, 2003, (ii) the Closing and (iii) termination of this Agreement, the
Company shall not accrue any of the quantified penalties set forth in Section 3
of the Registration Rights Agreement. The Company shall not accrue any
specifically quantified penalties in the Series B Transaction Documents during
the period in which it is seeking the stockholder approval set forth herein.
Furthermore, the Company shall not be required to submit any matter to a vote of
its stockholders in accordance with the terms of this Section 5.03 (i) prior to
the termination of the Series D Agreement, or (ii) if the Company has (x)
diligently and in good faith pursued a favorable Nasdaq determination that the
applicable stockholder vote will satisfy the Nasdaq Stockholder Approval Rule
and (y) after the Company has in good faith exhausted all reasonable courses of
action to obtain such favorable determination (including, without limitation,
consultation with the Holders and any reasonable modification to this or any
other agreement), Nasdaq has nonetheless finally determined that no stockholder
vote will satisfy the Nasdaq Stockholder Approval Rule.
(b) Each of the Holders, severally as to itself, agrees that, after
the execution of this Agreement through the earliest of (i) December 31, 2003,
(ii) the Closing and (iii) termination of this Agreement, such Holder shall not
request repurchase or redemption of any of the shares of Series B Preferred
Stock held by such Holder (whether beneficially or of record) by the Company
pursuant to Section 9(a)(i) of the Series B Certificate of Designations during
such period, provided that each such Holder's obligations under this Section
5.03(b) shall terminate immediately upon the occurrence of an event described in
Section 1(b)(ii)(D) of the form of Certificate of Designations attached as
EXHIBIT A to the Series D Agreement as originally executed. The Company
expressly agrees that no failure to act by any Holder during the period
described in this Section shall prejudice any rights of a Holder against the
Company.
17
(c) In the event that the Company issues Series C Preferred Stock as
a result of any event occurring on or prior to the End Date (as defined below),
each Holder shall have the right (the "SERIES C EXCHANGE RIGHT") with respect to
any Series C Preferred Stock that the Company ultimately issues, directly or
indirectly, as a result of such event, exercisable at any time on or prior to
the thirtieth Trading Day following the delivery of certificates for the
applicable Series C Preferred Stock to such Holder (but not thereafter) subject
to the limitations contained in this Section 5.03(c), to exchange any or all of
the shares of Series C Preferred Stock received or to be received by it for one
or more Series C Notes payable to such Holder (or Holder's Affiliate and in such
denominations as Holder may request) in the aggregate principal amount equal to
the Stated Value (including any accrued dividends) of the shares of Series C
Preferred Stock being so exchanged for the Series C Notes. In the event that a
Holder indicates in writing prior to receipt of shares of Series C Preferred
Stock that it intends to exchange shares of Series C Preferred Stock to be
received by such Holder, the Company shall, in lieu of issuing any Series C
Preferred Stock it would have otherwise issued, issue one or more Series C Notes
payable to such Holder in the aggregate principal amount equal to the Stated
Value of the Series C Preferred Stock to have been issued. In no event, however,
shall the Company be required to issue nor shall the Holders be entitled to
receive an amount of Series C Notes in excess of (i) $60,000,000 less (ii) the
amount of cash or Common Stock paid in redemption or repurchase of Series B
Preferred Stock on or prior to the issuance of the Series C Note. With respect
to each Holder, this Section 5.03(c) shall require that there be an action taken
by such Holder within 90 days after the End Date that directly or indirectly
ultimately results in the issuance of Series C Preferred Stock, or the Series C
Exchange Right shall terminate with respect to such Holder. The "END DATE" shall
be the date thirty (30) days after the later of (i) December 31, 2003, if this
Agreement is terminated on or before December 1, 2003 or (ii) the termination of
this Agreement.
(d) The Holders agree that notwithstanding anything to the contrary
in the Series B Transaction Documents, during any period set forth in Section
5.03(c), (i) any redemption or repurchase of Series B Preferred Stock requested
by the Holders pursuant to the Series B Transaction Documents that is based upon
the failure of the Company to be permitted under the rules and regulations of
the NASDAQ National Market to issue all shares of Common Stock then required to
be issued pursuant to the Series B Transaction Documents solely as a result of
the absence of the stockholder approval described in Section 5.03(a) above shall
be at a price per share of Series B Preferred Stock equal to the initial Stated
Value of the Series B Preferred Stock being redeemed plus all accrued but unpaid
dividends thereon through the date of payment, and (ii) in such event, none of
the Holders (or any transferee hereof) shall be entitled to any Warrant Damage
Amount (as defined in the Series B Transaction Documents).
Section 5.04 TRANSFER RESTRICTIONS.
(a) Warrant Securities may only be disposed of pursuant to an
effective registration statement under the Securities Act or pursuant to an
available exemption from the registration requirements of the Securities Act,
and in compliance with any applicable state securities laws. In connection with
any transfer of Warrant Securities other than pursuant to an effective
registration statement or to the Company or pursuant to Rule 144(k), except as
otherwise set forth herein, the Company may require the transferor to provide to
the Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be
18
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration under the Securities Act. Notwithstanding the
foregoing, the Company hereby consents to and agrees to register on the books of
the Company and with its transfer agent, without any such legal opinion, any
transfer of Warrant Securities by a Holder to an Affiliate of such Holder,
PROVIDED that the transferee certifies to the Company that it is an "accredited
investor" as defined in Rule 501(a) under the Securities Act and is purchasing
such Warrant Securities for investment and not with a view to distributing or
reselling such Warrant Securities in violation of securities laws and agrees in
writing to be bound by the provisions of this Agreement.
(b) Each Holder agrees to the imprinting, so long as is required by
this Section 5.04(b), of the following legend on any certificate evidencing
Warrant Securities:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR
BLUE SKY LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
Certificates or instruments evidencing Warrant Securities shall not be required
to contain such legend or any other legend (i) pursuant to or following any sale
of such Warrant Securities pursuant to an effective Registration Statement
covering the resale of such Warrant Securities under the Securities Act, (ii)
following any sale of such Warrant Securities pursuant to Rule 144, (iii) if
such Warrant Securities are eligible for sale under Rule 144(k), or (iv) if such
legend is not, in the reasonable opinion of the Company counsel, required under
the circumstances under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Staff of the
Commission). Following the effectiveness of the shelf registration statement to
be filed pursuant to Section 2.4 of the Investors Rights Agreement or at such
earlier time as a legend is no longer required for certain Warrant Securities,
the Company will, no later than three Trading Days following the delivery by a
Holder to the Company or the Company's transfer agent of a legended certificate
or instrument representing such Warrant Securities, deliver or cause to be
delivered to such Holder a certificate or instrument, as applicable,
representing such Warrant Securities that is free from all restrictive and other
legends. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section, except as may be required by applicable
law.
19
(c) The Company acknowledges and agrees that a Holder may from time
to time pledge pursuant to a bona fide margin agreement or grant a security
interest in some or all of the Warrant Securities and, if required under the
terms of such arrangement, such Holder may transfer pledged or secured Warrant
Securities to the pledgees or secured parties. Such a pledge or transfer would
not be subject to approval of the Company and no legal opinion of the pledgee,
secured party or pledgor shall be required in connection therewith except as
required by applicable law. Further, no notice shall be required of such pledge.
At the appropriate Holder's expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Warrant Securities may
reasonably request in connection with a pledge or transfer of the Warrant
Securities, including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling
Stockholders thereunder.
Section 5.05 ACKNOWLEDGMENT OF DILUTION. The Company acknowledges that
the issuance of the Warrant Securities will result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under
certain market conditions. The Company further acknowledges that, subject to the
satisfaction by the Holders of their obligations under the Series B Documents,
the Company's obligations under the Series B Documents, including without
limitation its obligation to issue the Warrant Securities pursuant to the Series
B Documents, are unconditional and absolute and not subject to any right of set
off, counterclaim, delay or reduction, regardless of the effect of any such
dilution or any claim that the Company may have against any Holder.
Section 5.06 INTEGRATION. The Company shall not, and shall use its best
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Warrant Securities in a manner that would require the
registration under the Securities Act of the sale of the Warrant Securities to
the Holders, or that would be integrated with the offer or sale of the Warrant
Securities for purposes of the rules and regulations of any Trading Market.
Section 5.07 RESERVATION AND LISTING OF SECURITIES. The Company shall
maintain a reserve of a sufficient number of shares of Common Stock for issuance
pursuant to the New Warrants of all Warrant Shares that are exercisable from
time to time thereunder, less any shares of Common Stock issued upon exercise of
the New Warrants.
Section 5.08 CONVERSION AND EXERCISE PROCEDURES. The exercise
requirements included in the Warrants and in the Certificate of Designations set
forth the totality of the procedures required in order to exercise the New
Warrants or convert the Shares on or after the Closing. No additional legal
opinion or other information or instructions shall be necessary to enable the
Holders to exercise their New Warrants or convert their Shares except as may be
required by law. The Company shall honor exercises of the New Warrants and
conversions of the Shares and shall deliver underlying Common Stock in
accordance with the terms, conditions and time periods set forth in the Series B
Documents or Certificate of Designations, as applicable.
20
Section 5.09 SURVIVAL/INDEMNIFICATION.
(a) All of the representations and warranties of the Company and the
Purchasers contained in this Agreement and in the other Transaction Documents
shall survive the execution and delivery hereof and thereof and the consummation
of the transactions contemplated hereby, and shall remain in full force and
effect until the Survival Date. All covenants and agreements of the Company and
the Purchasers contained in this Agreement and in the other Transaction
Documents shall survive the execution and delivery hereof and thereof and the
transactions contemplated hereby, and shall remain in full force and effect in
accordance with their respective terms. Without limiting the generality of the
foregoing, with respect to a breach of any representation or warranty for which
notice is given prior to 5:00 p.m., New York City time, on the Survival Date,
the indemnification obligation set forth below shall survive the Survival Date
until the claim identified in the notice is finally resolved.
(b) From and after the date hereof and prior to the Series D Closing
(and with respect to the matters described in item (ii) below), from and after
the date hereof and on and after the Closing),, the Company agrees to indemnify,
defend and hold harmless, (i) each Holder and (ii) such Holder's Related Parties
(collectively, "HOLDER INDEMNIFIED PARTIES") from and against any and all
losses, claims, damages, liabilities, costs and expenses, including without
limitation reasonable attorneys' fees and disbursements and other expenses
incurred in connection with investigating, preparing, settling or defending any
action, claim or proceeding (each a "PROCEEDING"), pending or threatened, and
the costs of enforcement thereof (collectively, "LOSSES"), which any of such
Holder Indemnified Parties may suffer or to which any Holder Indemnified Party
may become subject to the extent arising from (i) any breach of any
representation, warranty, covenant or agreement, made by, or to be performed on
the part of, the Company under this Agreement, and (ii) the Company (or any
persons to whom a proxy is granted) exercising any right that has been granted
by any Holder pursuant to those certain Voting Agreements entered into on the
date hereof, and in each case to reimburse any such Holder Indemnified Party for
all such Losses as they are incurred by such Holder Indemnified Party.
Notwithstanding the foregoing, for purposes of this Section 5.09(b), "Losses"
shall not include any losses, claims, damages, liabilities, costs and expenses
(including reasonable attorneys' fees) and disbursements and other expenses
incurred or suffered by the Company that the Holder, as a holder of the
Company's outstanding equity securities, would also have suffered, either
directly or indirectly, by virtue of maintaining an equity interest in the
Company in the absence of the Series B Documents, the Transaction Documents
and/or the transactions contemplated thereby. The provisions of this Section
5.09(b) shall be of no force or effect and shall terminate upon the closing of
the transactions contemplated by this Agreement. For purposes of this Agreement,
a person's "Related Parties" shall mean such person's Affiliates and any
officer, director, partner, member, controlling person, employee or agent of
such person or any of its Affiliates; provided that none of the Series D-1
Purchasers shall be considered Related Parties of the Company for purposes of
Section 5.09(c).
(c) From and after the date hereof, each Holder severally as to
itself and no other Holder, agrees to indemnify, defend and hold harmless, the
Company and its Related Parties from and against any and all Losses incurred in
connection with investigating, preparing, settling or defending any Proceeding,
pending or threatened, which the Company or any of its Related Parties may
suffer or become subject to arising solely from any breach of any covenant
21
or agreement, made by, or to be performed on the part of, such Holder under this
Agreement, and in each case to reimburse the Company and its Related Parties for
all such Losses as they are incurred by the Company or any of its Related
Parties; PROVIDED that for purposes of clarity in this Section 5.09(c), "Losses"
shall not include any losses, claims, damages, liabilities, costs and expenses
(including reasonable attorneys' fees) and disbursements and other expenses
incurred or suffered by the Company that the Company would have suffered in the
absence of the Series B Documents, the Transaction Documents and/or the
transactions contemplated thereby.
(d) From and after the Series D Closing, the Company agrees to
indemnify, defend and hold harmless, each Holder Indemnified Party from and
against any and all Losses incurred in connection with investigating, preparing,
settling or defending any Proceeding initiated by a third party (other than the
Company) against such Holder Indemnified Party, which such Holder Indemnified
Party may suffer or to which such Holder Indemnified Party may become subject to
the extent arising from any breach of any representation, warranty, covenant or
agreement, made by, or to be performed on the part of, the Company under this
Agreement, and/or the consummation of the transactions contemplated by this
Agreement (other than to the extent resulting from actions or omissions by such
Holder in breach of this Agreement or actions by Holder unrelated to this
Agreement and the transactions contemplated hereby), and in each case to
reimburse any such Holder Indemnified Party for all such Losses as they are
incurred.
(e) Any Person seeking indemnity hereunder (the "INDEMNIFIED
PERSON") shall promptly give notice to the Person from whom indemnity is being
sought (the "INDEMNIFYING PERSON") of any demand, claim or event which would, or
would reasonably be expected to, give rise to a claim or the commencement of any
Proceeding in respect of which indemnity may be sought under this Section 5.09.
Notwithstanding the foregoing, the failure to so give prompt notice to the
Indemnifying Person will not relieve the Indemnifying Person from liability,
except to the extent such failure or delay materially prejudices the
Indemnifying Person. The Indemnifying Person may participate in and, to the
extent that it shall elect by written notice delivered to the Indemnified Person
promptly after receiving such notice from the Indemnifying Person, shall be
entitled to control the defense of any such Proceeding at its own expense with
counsel reasonably satisfactory to the Indemnified Person. After notice from the
Indemnifying Person to such Indemnified Person of its election to control the
defense thereof, the Indemnifying Person shall not be liable to such Indemnified
Person for any legal expenses subsequently incurred by such Indemnified Person
in connection with the defense thereof, PROVIDED, HOWEVER, that if the named
parties in any Proceeding (including any impleaded parties) include both the
Indemnified Person and the Indemnifying Person and there exists or shall exist a
conflict of interest that would make it inappropriate, in the opinion of counsel
to the Indemnified Person, for the same counsel to represent both the
Indemnified Person and the Indemnifying Person or any affiliate or associate
thereof, the Indemnified Person shall be entitled to retain its own counsel at
the expense of the Indemnifying Person; PROVIDED, HOWEVER, that the Indemnifying
Person shall not be responsible for the fees and expenses of more than one
separate counsel for all Indemnified Persons. The Indemnifying Person shall not
be liable under this Section 5.09 for the settlement of any Proceeding in
respect of which indemnity may be sought hereunder if such settlement was
effected without the consent of the Indemnifying Person (which consent will not
be unreasonably denied, withheld or delayed).
22
Section 5.10 SHAREHOLDERS RIGHTS PLAN. In the event that a shareholders
rights plan is adopted by the Company, no claim will be made or enforced by the
Company or any other Person that any Holder is an "Acquiring Person" under any
such plan or in any way could be deemed to trigger the provisions of such plan
by virtue of receiving Warrant Securities or Shares under the Series B Documents
or the Series D Agreement.
Section 5.11 GENERAL RELEASE. In further consideration of the Holder
entering into this Agreement, effective as of the date of this Agreement, the
Company on behalf of itself and, to the extent permitted by law, its
administrators, devisees, trustees, partners, directors, officers, shareholders,
employees, consultants, representatives, predecessors, principals, agents,
parents, associates, affiliates, subsidiaries, attorneys, accountants,
successors, successors-in-interest and assignees (collectively, the "COMPANY
RELEASING PERSONS"), hereby waives and releases, to the fullest extent permitted
by law, any and all claims and causes of action, which to the actual knowledge
of the President, Chief Financial Officer, General Counsel or other executive
officers of the Company (identified as such in the most recent Public Reports of
the Company as of the date hereof) exist as of the date hereof (collectively,
the "COMPANY CLAIMS"), that any of the Company Releasing Persons had or
currently has against (i) the Holder, (ii) any of the Holder's current or former
parents, members, partners, shareholders, affiliates, subsidiaries, predecessors
or assigns, or (iii) any of the Holder's or such other persons' or entities'
current or former officers, directors, members, partners, shareholders,
employees, agents, principals, signatories, advisors, consultants, spouses,
heirs, estates, executors, attorneys, auditors and associates and members of
their immediate families (collectively, the "HOLDER RELEASED PERSONS"),
including, without limitations, any Company Claims arising out of the Series B
Purchase Agreement or any of the "Transaction Documents" (which solely for
purpose of this sentence shall be as defined in the Series B Purchase
Agreement). Company Claims that to the actual knowledge of the President, Chief
Financial Officer, General Counsel or other executive officers (identified as
such in the most recent Public Reports of the Company as of the date hereof) of
the Company become known on or after the date of this Agreement are not waived
or released hereby. In addition, Company Claims relating to any matter set forth
on SCHEDULE 5.11 hereto are not waived or released hereby. Notwithstanding the
foregoing, the Holder acknowledges that the release set forth above does not
affect, waive or release any claim that any Company Releasing Person may have
under the Series B Documents or the Transaction Documents.
Section 5.12 TRANSFER OF SERIES B PREFERRED STOCK. Each Holder
acknowledges and agrees that any sale, transfer or other disposition of shares
of Series B Preferred Stock or any interest therein ("TRANSFER") prior to the
earlier of the Closing or the termination of this Agreement shall comply with
the restrictions on transfer imposed by Law and any other agreement applicable
to such Holder's shares. No Holder will exercise or transfer any Existing
Warrants or convert or transfer any Series B Preferred Stock prior to or on the
earlier of (X) the Closing or (Y) termination of this Agreement, other than to
(x) an Affiliate of the Holder or (y) any other Holder or any of its Affiliates.
In addition, such Holder shall (a) give written notice of such Transfer to the
Company, and (b) cause the transferee, to the extent such transferee is not then
a party to this Agreement and the Transaction Documents to the extent applicable
to such transferring Holder, as a condition precedent to such Transfer, to
execute and deliver a written instrument to the Company by which such transferee
agrees to be bound by the obligations imposed under this Agreement and the
Transaction Documents to the extent applicable to such transferring Holder.
23
Section 5.13 UPDATE OF DISCLOSURE. On or prior to the Closing Date, the
Company shall deliver to the Holders written notice of any event or development
that: (a) renders any statement, representation or warranty of the Company in
this Agreement or the Transaction Documents (including the Disclosure Letter to
the Series D Agreement) inaccurate or incomplete in any material respect; (b)
constitutes or results in a breach by the Company of, or a failure by the
Company to comply with, any agreement or covenant in this Agreement or the
Transaction Documents applicable to it; and (c) occurs after the date hereof
which, if it had occurred prior to the date hereof, would have caused or
constituted, or would have reasonably been expected to have caused or
constituted, a breach or default of any of the representations or warranties of
the Company contained in or referred to in this Agreement or any Transaction
Document (including any Schedules or Annexes). Any disclosure made by the
Company pursuant to clause (a) of the prior sentence that specifically
references the provisions of this SECTION 5.13 shall be deemed to amend and
supplement the Disclosure Letter for all purposes of this Agreement other than
SECTION 7.04(a)(iii).
Section 5.14 RULE 144. The Company agrees that whenever (i) the Holder is
attempting to sell or transfer the Warrant, Warrant Shares, Series D-2 Preferred
Stock, the Common Stock into which the Series D Preferred Stock is convertible
into, the Series D Warrants and the Common Stock issuable upon exercise of the
Series D Warrants, and (ii) such sale or transfer requires an opinion of legal
counsel reasonably acceptable to the Company to the effect that such sale or
transfer is exempt from the registration requirements of the Securities Act, the
Company shall accept the opinion of Proskauer Rose LLP or ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇
LLP as satisfaction of such requirement.
Section 5.15 SERIES C NOTES. Upon the issuance of any Series C Notes, the
Company will not be in default of any of its representations, warranties,
covenants or obligations thereunder as if such Series C Notes had been issued on
the date hereof.
Section 5.16 ARTICLE V. The provisions of this Article V shall be
immediately and fully binding upon the parties hereto, and, subject to Section
7.04(b)(iii), shall survive termination of this Agreement.
ARTICLE VI
CONDITIONS TO CLOSING
Section 6.01 CONDITIONS TO EACH HOLDER'S OBLIGATIONS. The obligations of
each Holder at the Closing are subject to the satisfaction, at or prior to the
Closing Date, of the following conditions:
(a) No provision of any applicable law or regulation shall have been
enacted, no judgment, injunction, order, decree or arbitration award shall have
been issued, and no Suit, of which any party hereto shall have received notice,
shall be pending or threatened, in any case which seeks to prohibit, and which
would reasonably be expected to result in the enjoinment of, any of the
transactions contemplated by this Agreement or the other Series B Documents.
24
(b) The Company shall have received from each other party thereto
(i) a counterpart of each of the Series B Documents to which such other party is
a party, signed on behalf of such other party, or (ii) a facsimile transmission
of signature pages to each of the Series B Documents to which such other party
is a party, signed on behalf of such other party.
(c) The Company shall have performed in all material respects all of
its obligations hereunder required to be performed by it on or prior to the
Closing Date, (ii) the representations and warranties of the Company made to the
Holders in this Agreement or any other Series B Document which are qualified as
to "materiality," "Material Adverse Effect" or words of similar meaning shall
have been true and correct when made on the date hereof and shall be true and
correct at and as of the Closing Date, as if made at and as of such date (except
for representations and warranties made as of a particular date, which shall be
true and correct as of such date), (iii) all other representations and
warranties of the Company made to the Holders in this Agreement or any other
Series B Document shall have been true and correct in all material respects when
made on the date hereof and shall be true and correct in all material respects
at and as of the Closing Date, as if made at and as of such date (except for
representations and warranties made as of a particular date, which shall be true
and correct as of such date), and (iv) such Holder shall have received a
certificate (the "COMPANY OFFICER CERTIFICATE") signed by the Chief Executive
Officer or Chief Financial Officer of the Company to the foregoing effect.
(d) The transactions contemplated by the Series D Agreement shall be
completed on the Closing Date in a manner reasonably acceptable to such Holder,
and the Company shall have delivered evidence reasonably satisfactory to such
Holder to such effect.
(e) Such Holder shall have received from each other party thereto
either (i) a counterpart of each of the Series B Documents to which such other
party is a party, signed on behalf of such other party, or (ii) a facsimile
transmission of signature pages to each of the Series B Documents to which such
other party is a party, signed on behalf of such other party.
(f) Such Holder shall have received the Repurchase Price payable to
such Holder for such Holder's Repurchased Shares, as provided in Section
2.03(a)(i).
(g) Such Holder shall have received the New Warrant issuable to such
Holder or its designated Affiliate, as provided in Section 2.03(a)(ii).
(h) The Company shall have paid, in accordance with Section 7.03(a),
the reasonable expenses of the Holders incurred prior to the Closing Date in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents and the Series B Documents.
Section 6.02 CONDITIONS TO COMPANY'S OBLIGATIONS. The obligations of the
Company to each Holder at the Closing are subject to the satisfaction, at or
prior to the Closing Date, of the following conditions:
(a) No provision of any applicable law or regulation shall have been
enacted, no judgment, injunction, order, decree or arbitration award shall have
been issued, and no Suit, of which any party hereto shall have received notice,
shall be pending or threatened, in any case
25
which seeks to prohibit, and which would reasonably be expected to result in the
enjoinment of, any of the transactions contemplated by this Agreement or the
other Series B Documents.
(b) (i) Each of the Holders shall have performed in all material
respects all of its obligations hereunder required to be performed by it on or
prior to the Closing Date, (ii) the representations and warranties of all of the
Holders made to the Company in this Agreement or any other Series B Document
which are qualified as to "Material Adverse Effect" or words of similar meaning
shall have been true and correct when made on the date hereof and shall be true
and correct at and as of the Closing Date, as if made at and as of such date
(except for representations and warranties made as of a particular date, which
shall be true and correct as of such date), (iii) all other representations and
warranties of each of the Holders made to the Company in this Agreement or any
other Series B Document shall have been true and correct in all material
respects when made on the date hereof and shall be true and correct in all
material respects at and as of the Closing Date, as if made at and as of such
date (except for representations and warranties made as of a particular date,
which shall be true and correct as of such date), and (iv) the Company shall
have received from each of the Holders a certificate (the "HOLDER CLOSING
CERTIFICATE") to the foregoing effect with respect to such Holder, signed by a
duly authorized representative of such Holder.
(c) The Series D Closing shall have occurred simultaneously with the
Closing contemplated hereby.
(d) The Company shall have received from such Holder for
cancellation (i) the stock certificates representing all of its Repurchased
Shares and (ii) all of its Existing Warrants, duly endorsed in blank or together
with requisite stock powers or other instruments of transfer, all as provided in
Section 2.03(b).
ARTICLE VII
MISCELLANEOUS
Section 7.01 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile or similar writing)
and shall be given to such party at its address or facsimile number set forth on
the signature page hereof, or such other address or facsimile number as such
party may hereinafter specify for the purpose of this Section to the party
giving such notice. Each such notice, request or other communication shall be
effective (a) if given by facsimile transmission, when such facsimile is
transmitted to the facsimile number specified on the signature pages of this
agreement and the appropriate confirmation is received or, (b) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or, (c) if given by any other means,
when delivered at the address specified on the signature pages of this
Agreement.
Section 7.02 AMENDMENTS AND WAIVERS.
(a) Any provision of this Agreement may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by the Company and each Holder, or in the case of a waiver, by the
party against whom the waiver is to be effective.
26
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 7.03 EXPENSES; DOCUMENTARY TAXES.
(a) Except as expressly set forth in this Agreement or any other
Transaction Document or Series B Document, including Section 9.03(d) of the
Series D Agreement, the Company and each Holder will each pay its own costs and
expenses in connection with this Agreement and the other Transaction Documents
and Series B Documents and the transactions contemplated hereby or thereby.
(b) The Company agrees to pay any and all stamp, transfer and other
similar taxes payable or determined to be payable in connection with the
repurchase of the Repurchased Shares and the exchange of the Existing Warrants
for the New Warrants.
Section 7.04 TERMINATION.
(a) This Agreement may be terminated at any time prior to the
Closing:
(i) by mutual written agreement of the Company and each of
the Holders;
(ii) automatically, with no further action being necessary by
the Company, any Holder or any other Person, contemporaneously with the
termination of the Series D Agreement;
(iii) by any Holder if the Company shall have breached any of
its representations, warranties, covenants or agreements contained in this
Agreement or in any other Series B Document which, in any case, (A) would cause
the condition set forth in Section 6.01(c) not to be satisfied and (B) is not
cured to the reasonable satisfaction of such Holder within fifteen (15) days
after notice thereof is received by the Company;
(iv) by the Company if any Holder shall have breached any of
its representations, warranties, covenants or agreements contained in this
Agreement or in any other Series B Document which, in any case, (A) would cause
the condition set forth in Section 6.02(b) not to be satisfied and (B) is not
cured to the reasonable satisfaction of the Company within fifteen (15) days
after notice thereof is received by such Holder;
(v) by the Company or any Holder if there shall be enacted or
introduced any law or regulation, if any nonappealable final order, decree or
judgment of any court or governmental body having competent jurisdiction is
issued, or if any Suit is filed, in any case which makes consummation of the
transactions contemplated hereby in accordance with the terms and conditions
hereof illegal or otherwise permanently prohibited; or
27
(vi) by the Company or any Holder on or at any time after
December 31, 2003.
(b) If this Agreement is terminated as permitted by Section 7.04(a),
such termination shall be without liability of any party (or any Affiliate of
such party) to the other parties to this Agreement; PROVIDED that:
(i) if such termination shall result from the breach by any
party hereto of any of its representations, warranties, covenants or agreements
contained in this Agreement, the breaching party shall be liable for any Losses
resulting therefrom
(ii) subject to the immediately following clause (iii),
Article V and Article VII shall remain fully binding upon the parties hereto and
shall survive any termination of this Agreement; and
(iii) if (x) such termination shall result from a willful
breach by any Holder of any representation, warranty, covenant or agreement set
forth in this Agreement or the Series D Agreement or from the willful failure of
any Series D-2 Purchaser to fulfill an obligation under the Series D Agreement,
and (y) this Agreement is terminated pursuant to Section 7.04(a)(iv) or the
Series D Agreement is terminated by the Company or the Series D-1 Purchasers
pursuant to Sections 9.04(a)(iv) or 9.04(a)(viii) thereof as a result of such
willful breach or such willful failure to fulfill an obligation, then the
provisions of Section 5.03(c) shall terminate with respect to the Holders, and
no Holder shall be entitled to exercise the Series C Exchange Right.
(c) The provisions of Article V and Article VII shall survive the
termination of this Agreement.
Section 7.05 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED that (i) the Company may not assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of Holders holding a majority of the outstanding
shares of Series B Preferred Stock, and (ii) no Holder may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement, other
than to (x) an Affiliate of the Holder or (y) any other Holder or any of its
Affiliates, without the consent of the Company. Notwithstanding the foregoing,
(i) any Holder may assign or transfer, in whole or, from time to time, in part,
to (x) one or more of its Affiliates or (y) any other Holder or any of its
Affiliates, the right to be issued the New Warrant hereunder, and (ii) subject
to the terms and conditions of the applicable New Warrant and the Investor
Rights Agreement, from and after the Closing Date, any Holder or other holder of
a New Warrant may assign, pledge or otherwise transfer, in whole or from time to
time in part, its rights hereunder to any Person who acquires any interest in
such New Warrant. In addition, each Holder agrees that, if such Holder desires
to transfer, in any manner, any of such Holder's shares of Series B Preferred
Stock or Existing Warrants to either (x) an Affiliate of the Holder or (y) any
other Holder or any of its Affiliates, such Holder shall comply with the
provisions of Section 5.12 above.
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Section 7.06 GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF
DELAWARE. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE STATE OF
DELAWARE, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN
(INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS),
AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
EACH PARTY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.
Section 7.07 COUNTERPARTS; FACSIMILE SIGNATURES; EFFECTIVENESS. This
Agreement may be executed in any number of counterparts (including facsimile
signatures) each of which shall be an original with the same effect as if all
signatures were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received a counterpart hereof signed by each
other party hereto. No provision of this Agreement is intended to confer upon
any Person other than the parties hereto any rights or remedies hereunder.
Section 7.08 ENTIRE AGREEMENT. This Agreement and the other Series B
Documents (and the Series D Agreement and related Transaction Documents)
constitute the entire agreement and understanding between the parties hereto and
supersede any and all prior agreements and understandings, written or oral,
relating to the subject matter of the Series B Documents.
Section 7.09 HEADINGS. The headings in this Agreement are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 7.10 REMEDIES. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each of
the Holders and the Company will be entitled to specific performance under the
Series B Documents without posting any bond or other security. The parties agree
that monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.
29
Section 7.11 PAYMENT SET ASIDE. To the extent that the Company makes a
payment or payments to any Holder pursuant to any Series B Document or a Holder
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
Section 7.12 USURY. To the extent it may lawfully do so, the Company
hereby agrees not to insist upon or plead or in any manner whatsoever claim, and
will resist any and all efforts to be compelled to take the benefit or advantage
of, usury laws wherever enacted, now or at any time hereafter in force, in
connection with any claim, action or proceeding that may be brought by any
Purchaser in order to enforce any right or remedy under any Series B Document.
Notwithstanding any provision to the contrary contained in any Series B
Document, it is expressly agreed and provided that the total liability of the
Company under the Series B Documents for payments in the nature of interest
shall not exceed the maximum lawful rate authorized under applicable law (the
"Maximum Rate"), and, without limiting the foregoing, in no event shall any rate
of interest or default interest, or both of them, when aggregated with any other
sums in the nature of interest that the Company may be obligated to pay under
the Series B Documents exceed such Maximum Rate. It is agreed that if the
maximum contract rate of interest allowed by law and applicable to the Series B
Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest
allowed by law will be the Maximum Rate of interest applicable to the Series B
Documents from the effective date forward, unless such application is precluded
by applicable law. If under any circumstances whatsoever, interest in excess of
the Maximum Rate is paid by the Company to any Holder with respect to
indebtedness evidenced by the Series B Documents, such excess shall be applied
by such Holder to the unpaid principal balance of any such indebtedness or be
refunded to the Company, the manner of handling such excess to be at such
Holder's election.
Section 7.13 INDEPENDENT NATURE OF HOLDERS. The obligations of each
Holder under any Series B Document or other Transaction Documents are several
and not joint with the obligations of any other Holder or Purchaser, and no
Holder shall be responsible in any way for the performance of the obligations of
any other Holder or Purchaser under any Series B Document or Transaction
Documents. The decision of each Holder to enter into this Agreement and/or to
purchase Shares and Series D Warrants pursuant to the Series D Agreement has
been made by such Holder independently of any other Holder or Purchaser and
independently of any information, materials, statements or opinions as to the
business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company or of
the Subsidiary which may have been made or given by any other Holder or
Purchaser or by any agent or employee of any other Holder or Purchaser. Nothing
contained herein or in any Series B Document or Transaction Document, and no
action taken by any Holder or Purchaser pursuant thereto, shall be deemed to
constitute the Holders or Purchasers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption
30
that the Holders or Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Series
B Documents or the Transaction Documents. The Company expressly acknowledges
that the Holders and Purchasers are not in any manner acting as a group. Each
Holder shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of
the other Series B Documents or the Transaction Documents, and it shall not be
necessary for any other Holder or Purchaser to be joined as an additional party
in any proceeding for such purpose.
Section 7.14 ADJUSTMENTS IN SHARE NUMBERS AND PRICES. In the event of any
stock split, stock subdivision or reverse stock, in each case however
consummated, of the Common Stock (or other securities or rights convertible
into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock) occurring after the date hereof, each reference in the Series B
Documents to a number of shares or a price per share shall be amended to
appropriately account for such event.
Section 7.15 SERIES B CONSENT AND AGREEMENT. Each Holder consents to the
Company entering into the Transaction Documents and the consummation of the
transactions contemplated thereby. Each Holder agrees not to give notice under
Section 16(a) of the Series B Certificate of Designations of an increase in
percentage prior to the earliest of (i) the Closing, (ii) the termination of
this Agreement, or (iii) December 31, 2003.
Section 7.16 TERMINATION OF CONFIDENTIALITY AGREMEENTS. Each of the
Confidentiality Agreements is hereby terminated effective two Trading Days after
the 8-K Filing and shall, after such time, be of no further force or effect and
no party thereto shall have any liability thereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
31
IN WITNESS WHEREOF, the parties hereto have caused this
Repurchase and
Exchange Agreement to be duly executed by their respective authorized
signatories as of the date first above written.
ASPEN TECHNOLOGY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: President and Chief Executive
Officer
--------------------------------
Address for notices:
Aspen Technology, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer and
General Counsel
Facsimile: 617.949.1717
with a copy to:
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: 617.526.5000
S-1
PINE RIDGE FINANCIAL INC.
By: /s/ Avi Vigder
-----------------------------------
Name: Avi Vigder
---------------------------------
Title: Authorized Signatory
--------------------------------
Address for notices:
Pine Ridge Financial Inc.
c/▇ ▇▇▇▇▇▇▇ Capital Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: 212.651.9010
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Attn: Avi Vigder
with a copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: 212.969.2900
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
S-2
SMITHFIELD FIDUCIARY LLC
By: /s/ ▇▇▇▇ ▇. Chill
-----------------------------------
Name: ▇▇▇▇ ▇. Chill
Title: Authorized Signatory
Address for notices:
Address for notices:
Smithfield Fiduciary LLC
c/o Highbridge Capital Management, LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: 212.751.0755
Telephone ▇▇▇.▇▇▇.▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇ / ▇▇▇▇ ▇. Chill
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: 212.593.5955
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
S-3
PERSEVERANCE LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Address for notices:
Perseverance LLC
c/▇ ▇▇▇▇▇▇▇ Capital Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: 212.651.9010
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Attn: Avi Vigder
with a copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: 212.969.2900
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
S-4
SCHEDULE A
SECURITYHOLDERS
Pine Ridge Financial, Inc.
c/▇ ▇▇▇▇▇▇▇ Capital Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Smithfield Fiduciary LLC
c/o Highbridge Capital Management, LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Perseverance LLC
c/▇ ▇▇▇▇▇▇▇ Capital Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE B
SHARES OF SERIES B PREFERRED STOCK (AS OF THE DATE HEREOF)
SHARES OF SHARES OF
HOLDER SERIES B-I PREFERRED STOCK SERIES B-II PREFERRED STOCK
------ -------------------------- ---------------------------
Pine Ridge Financial, Inc. 19,000 10,000
Smithfield Fiduciary LLC 15,000 6,000
Perseverance LLC 6,000 4,000
SCHEDULE C
EXISTING WARRANTS (AS OF THE DATE HEREOF)
PINE RIDGE FINANCIAL, INC.:
EXERCISE NUMBER
DESCRIPTION PRICE EXPIRATION DATE OF SHARES
----------- -------- --------------- ---------
Warrant Agreement dated February 6, 2002 $23.99 February 6, 2007 182,927
Warrant Agreement dated February 28, 2002 $20.64 February 28, 2007 141,730
Warrant Agreement dated March 19, 2002 $23.99 March 19, 2007 56,692
TOTAL 381,349
SMITHFIELD FIDUCIARY LLC:
EXERCISE NUMBER
DESCRIPTION PRICE EXPIRATION DATE OF SHARES
----------- -------- --------------- ---------
Warrant Agreement dated February 6, 2002 $23.99 February 6, 2007 109,756
Warrant Agreement dated February 28, 2002 $20.64 February 28, 2007 85,038
Warrant Agreement dated March 19, 2002 $23.99 March 19, 2007 42,519
TOTAL 237,313
PERSEVERANCE LLC:
EXERCISE NUMBER
DESCRIPTION PRICE EXPIRATION DATE OF SHARES
----------- -------- --------------- ---------
Warrant Agreement dated February 6, 2002 $23.99 February 6, 2007 73,171
Warrant Agreement dated February 28, 2002 $20.64 February 28, 2007 56,692
Warrant Agreement dated March 19, 2002 $23.99 March 19, 2007 42,519
TOTAL 172,382
SCHEDULE D
REPURCHASED SHARES (AS OF THE DATE HEREOF)
REPURCHASE PRICE REPURCHASE PRICE
SHARES OF SERIES FOR SERIES B-I SHARES OF SERIES FOR SERIES B-II AGGREGATE
B-I PREFERRED STOCK PREFERRED B-II PREFERRED PREFERRED REPURCHASE
HOLDER REPURCHASED STOCK* STOCK REPURCHASED STOCK* PRICE*
------ ------------------- ----------------- ------------------ ------------------ ----------
Pine Ridge Financial, Inc. 10,906 $9,270,100 5,741 $4,879,850 $14,149,950
Smithfield Fiduciary LLC 6,176 $5,249,600 2,471 $2,100,350 $7,349,950
Perseverance LLC 6,000 $5,100,000 4,000 $3,400,000 $8,500,000
TOTAL 23,082 $19,619,700 12,212 $10,380,200 $29,999,900
* Does not include accrued dividends.
SCHEDULE E
NEW WARRANT SHARE AMOUNTS AND EXPIRATION DATES
HOLDER SHARE AMOUNTS* EXPIRATION DATE
------ -------------- ---------------
Pine Ridge Financial, Inc. 182,927 February 6, 2007
141,730 February 28, 2007
56,692 March 19, 2007
Smithfield Fiduciary LLC 109,756 February 6, 2007
85,038 February 28, 2007
42,519 March 19, 2007
Perseverance LLC 73,171 February 6, 2007
56,692 February 28, 2007
42,519 March 19, 2007
TOTAL 791,044
* AMOUNT SUBJECT TO ADJUSTMENT BASED UPON ADJUSTMENT EVENTS OR EXERCISE OF
WARRANTS.
SCHEDULE F
LEGAL OPINION
SCHEDULE 3.04
REQUIRED CONSENTS
SCHEDULE 5.11
Certain holders of Series B Preferred Stock have claimed that the
issuance of shares of Common Stock relating to the March 31, 2003 dividend date
at $2.59 per share (a price less than the initial conversion prices of the
Series B-I Preferred Stock and Series B-II Preferred Stock), has caused an
adjustment to the initial conversion prices of the Series B-I Preferred Stock
and Series B-II Preferred Stock and to the initial exercise prices of warrants
(issued in February and March of 2002) held by the holders of Series B Preferred
Stock. As a result, these holders have claimed that they have a right to convert
their Series B Preferred Stock at the price per share at which the Common Stock
issued in payment of their Series B Preferred Stock dividends was issued.
EXHIBIT A
FORM OF NEW WARRANT
EXHIBIT B
FORM OF SERIES C NOTE
EXHIBIT C
FORM OF AMENDMENT AND TERMINATION AGREEMENT
EXHIBIT D
FORM OF VOTING AGREEMENT AND IRREVOCABLE PROXY
