SECURITIES PURCHASE
AGREEMENT
HeartWare
International, Inc.
205 Newbury
Street, Suite 101
Framingham,
Massachusetts 01701
Ladies &
Gentlemen:
The undersigned (the “ Investor ”), hereby
confirms its agreement with you as follows:
1. This
Securities Purchase Agreement is made as of August 10, 2009 between
HeartWare International, Inc., a company organized under the laws
of the state of Delaware (the “ Company ”), and
the Investor.
2. The
Company will issue up to an aggregate of 1,113,534 Shares
(“ Firm Shares ”) and seek shareholder
authorization for the issuance of up to an aggregate of
additional 1,386,466 Shares (“ Additional Shares
” and together with the Firm Shares, the “
Shares ”) to certain investors in a private placement
(the “ Offering ”).
3. The
Company and the Investor agree that, subject to the conditions
referred to in this Agreement, the Investor will purchase from the
Company and the Company will issue and sell to the Investor ______
Shares for a purchase price of US $22.00 per Share, or an aggregate
purchase price of US $______.00, pursuant to the Terms and
Conditions for Purchase of Shares attached hereto as
Annex I and incorporated herein by reference as if
fully set forth herein (the “ Terms and Conditions
”). The Shares purchased pursuant to this
Agreement shall consist of (i) ______ Firm Shares and (ii) such
number of Additional Shares allocated on a pro rata basis in the
same proportion as the Firm Shares to be purchased by the Investor
bears to the total number of Firm Shares purchased by all Investors
less 182,184 Firm Shares; provided however, if the proceeds
from the Australian Offering (as defined below) are less than
$5,000,000 the number of Firm Shares issued to the Investor under
this Agreement shall be increased on the same basis as the pro rata
allocation described in clause (ii) of this paragraph
3. This Securities Purchase Agreement, together with the
Terms and Conditions, may hereinafter be referred to as the “
Agreement .” In addition, the Company may
make an offer of shares to various Australian investors upon
similar terms and conditions as the Shares being purchased in the
Offering (the “ Australian Offering ”), and such
shares purchased outside the United States will be made pursuant to
a form of Australian Subscription Agreement in accordance with the
requirements of Australian corporate and securities
laws. Unless otherwise requested by the Investor, the
Shares purchased by the Investor will be registered in the
Investor’s name and address as set forth below.
Please confirm that the foregoing correctly sets
forth the agreement between us by signing in the space provided
below for that purpose. This Agreement may be executed
in separate counterparts, each of which shall be deemed to be an
original and all of which taken together shall constitute one and
the same instrument.
AGREED AND
ACCEPTED :
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HeartWare
International, Inc.
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Investor:
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Address:
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Tax ID
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Contact
name:
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Telephone:
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Name in which
shares should be registered (if different):
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE
OF SHARES
1.
Authorization and Sale of the Shares . Subject to
these Terms and Conditions, the Company will issue up to an
aggregate of 2,500,000 shares (the “ Shares
”) of common stock, par value $0.001 per share (the “
Common Stock ”), and to the extent the number of
shares of Common Stock sold in the offering exceeds approximately
15.0% of the Common Stock outstanding prior to the offering (the
“ Firm Shares ”), seek shareholder authorization
for the issue of any additional shares (the “ Additional
Shares ”).
2.
Agreement to Sell and Purchase the Shares; Subscription Date
.
2.1
At the Closing (as defined in Section 4), the Company will
sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions hereinafter set forth, the
number of Shares as set forth in Section 3 of the Securities
Purchase Agreement to which these Terms and Conditions are attached
at the purchase price set forth thereon.
2.2
The Company may enter into (i) the same or substantially similar
form of Securities Purchase Agreement, including these Terms and
Conditions, with certain other investors in the United States (the
“U.S. Investors”), and (ii) a form of subscription
agreement for the sale of its securities in accordance with the
requirements of Australian corporate and securities laws, with
certain other investors outside the United States (collectively,
the “ Other Investors ”). The Investor, the
other U.S. Investors, and the Other Investors are hereinafter
sometimes collectively referred to as the “ Investors
,” and the Securities Purchase Agreement to which these Terms
and Conditions are attached (the " Agreement ") (including
attached Terms and Conditions) and the Australian form of
subscription agreement, as applicable, executed by the Other
Investors are hereinafter sometimes collectively referred to as the
“ Agreements .” The Company may
accept executed Agreements from Investors for the purchase of
Shares commencing upon the date on which the Company provides the
Investors with the proposed purchase price per Share and concluding
upon the date (the “ Subscription Date ”) on
which the Company is no longer accepting additional Agreements from
Investors for the purchase of Shares. The Company may
not enter into any Agreements after the Subscription
Date.
2.3
The obligations of each Investor under any Agreement are several
and not joint, and no Investor shall be responsible in any way for
the performance of the obligations of any other Investor under any
Agreement. Nothing contained herein, and no action taken
by any Investor hereto, shall be deemed to constitute the Investors
as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Investors are in any
way acting in concert or as a group with respect to such
obligations or the transactions contemplated hereby, provided that
such obligations or the transactions contemplated hereby may be
modified, amended or waived in accordance with Section 10
below. Each Investor shall be entitled to independently
protect and enforce its rights, including without limitation the
rights arising out of this Agreement (provided, that such rights
may be modified, amended or waived in accordance with
Section 10 below), and it shall not be necessary for any Other
Investor to be joined as an additional party in any proceeding for
such purpose.
3.
Holding of subscription monies
3.1
The business day after the Subscription Date, the Company shall
transfer the subscription monies relating to the Additional Shares
(“ Escrow Funds ”) into the escrow account
established and operated in accordance with this clause 3 and the
Escrow Agreement between the Company and Citibank, N.A., dated as
of August 10, 2009 (the “Escrow Agreement”).
3.2
In the event that (a) the Additional Conditions (as defined herein)
are satisfied on or before December 15, 2009, the Company shall
direct the Escrow Agent to release the Escrow Funds to the Company
promptly upon becoming aware that the Additional Conditions have
been satisfied; or (b) stockholder approval is not obtained at the
Special Meeting (or at any adjournment of that meeting) or the
Additional Conditions are not satisfied on or before December 15,
2009, the Company shall direct the Escrow Agent to release the
Escrow Funds to the Company for refund to Investors on the earlier
of the business day after (i) the Special Meeting (if the
resolution approving the offering was not passed); or (ii) the
Company becomes aware that the Additional Conditions are not
capable of being satisfied; or (iii) December 15, 2009.
3.3
Upon receipt of the Escrow Funds from the Escrow Agent in
accordance with section 3.2(b), the Company shall promptly refund
the Escrow Funds to the Investors.
3.4
Interest shall accrue on the Escrow Funds while in the Escrow
Account in accordance with the terms of the Escrow Agreement and
shall follow the principal amount and shall be paid to the Company
or refunded to Investors (as the case may be) at the same time as
payment of the corresponding principal.
4.
Delivery of the Shares at Closing .
4.1.
It is expected that the completion of the purchase and sale of the
Shares (the “ Closing ”) shall occur
electronically on or about August 14, 2009 (the “ Closing
Date ”). On or prior to the Closing, the
Company shall provide to the Investor copies of the physical
certificated Shares for the number of Firm Shares, in each
case as is set forth in Section 3 of the Securities Purchase
Agreement. Upon written notice to the Company at least
one business day prior to the Closing Date, the Investor may elect
to receive thirty-five restricted CHESS Depository Interests for
each Share. Within seven (7) days following the Closing Date, the
Company shall cause the original certificates to be delivered to
the Investor or its nominee as instructed overnight, receipted
delivery.
The Company’s obligation to issue the Firm
Shares on the Closing Date to the Investor shall be subject to the
following additional conditions, any one or more of which may be
waived by the Company: (a) receipt by the Company of a certified or
official bank check or wire transfer of funds in the full amount of
the purchase price for the Shares being purchased hereunder as set
forth in Section 3 of the Securities Purchase Agreement; and
(b) the accuracy of the representations and warranties made by the
Investors and the fulfillment of those undertakings of the
Investors to be fulfilled prior to the Closing.
The Investor’s obligation to purchase the
Shares shall be subject to the following conditions, any one or
more of which may be waived by the Investor: (a) the
representations and warranties of the Company set forth herein
shall be true and correct as of the Closing Date (except for
representations and warranties that speak as of a specific date,
which representations and warranties shall be true and correct as
of such date) in all material respects and the fulfillment in all
material respects of those undertakings of the Company in this
Agreement to be fulfilled on or prior to the Closing Date, (b) a
legal opinion of the Company’s U.S. counsel, dated as of the
Closing Date, in the form attached hereto as Exhibit A executed by
such counsel and addressed to the Investor, and (c) the Investor
shall have received such documents as such Investor shall
reasonably have requested in connection with the
Offering.
4.2.
The Company’s obligation to issue the Additional Shares to
the Investor shall be subject to the conditions in Section 4.1
hereof, and upon the following additional conditions: (a) the
Company has received the approval of the requisite number of
Company shareholders for the offer and sale of the Additional
Shares under the ASX Listing Rules and Nasdaq Stock Market Rule
5635(d); and (b) all other requirements of the ASX Listing Rules
and Nasdaq Stock Market Rules applicable to the Offering have been
satisfied in relation to the offering (“ Additional
Conditions ”). Promptly upon satisfaction of
the Additional Conditions and the release of the Escrow Funds from
escrow, the Company shall deliver to the Investor the number of
Additional Shares, in each case as is set forth in Section 3 of the
Securities Purchase Agreement.
5.
Representations, Warranties and Covenants of the Company
. The Company hereby represents and warrants to, and
covenants with, the Investor, as follows:
5.1
Organization . The Company is a corporation duly
organized and validly existing in good standing under the laws of
the state of Delaware, and has the requisite power to own or lease
its properties and to conduct its business as presently
conducted. The Company is duly registered or qualified
as a foreign corporation to do business and is in good standing in
every jurisdiction in which the nature of the business conducted by
it or the location of the properties owned or leased by it requires
such registration or qualification and where the failure to be so
registered or so qualified would have a material adverse effect
upon the condition (financial or otherwise), earnings, business,
properties or operations of the Company and its subsidiaries taken
as a whole (a “ Material Adverse Effect ”), and
no proceeding has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority, registration or
qualification.
5.2
Due Authorization and Valid Issuance . The
Company has all requisite power and authority to execute, deliver
and, subject to the approval referred to in clause 4.2(b) above and
5.4 below, perform its obligations under each Agreement, and each
Agreement has been duly authorized and validly executed and
delivered by the Company and constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in
accordance with its terms, except as rights to indemnity and
contribution may be limited by applicable securities laws or the
public policy underlying such laws, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law). The Shares being
purchased by the Investor hereunder will, upon issuance and payment
therefor pursuant to the terms hereof and subject to the approval
referred to in clause 4.2(b) above and 5.4 below, be duly
authorized, validly issued, fully-paid and
non-assessable.
5.3
Non-Contravention . The execution and delivery of
each Agreement, the issuance and sale of the Shares under each
Agreement, the fulfillment of the terms of each Agreement and the
consummation of the transactions contemplated thereby will not (A)
conflict with or constitute a violation of, or default (with the
passage of time or otherwise) under, (i) any bond, debenture, note
or other evidence of indebtedness, lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which the Company is a party or by which
it or its properties are bound, (ii) the certificate of
incorporation and other organizational documents of the Company, or
(iii) any law, administrative regulation, ordinance or order of any
court or governmental agency, arbitration panel or authority
applicable to the Company, or its properties, except in the case of
clauses (i) and (iii) for any such conflicts, violations or
defaults that are not reasonably likely to have a Material Adverse
Effect, or (B) result in the creation or imposition of any lien,
encumbrance, claim, security interest or restriction whatsoever
upon any of the properties or assets of the Company or an
acceleration of indebtedness pursuant to any obligation, agreement
or condition contained in any bond, debenture, note or any other
evidence of indebtedness or any indenture, mortgage, deed of trust
or any other agreement or instrument to which the Company is a
party or by which it is bound or to which any of the material
property or assets of the Company is subject, except for such
liens, encumbrances, claims, security interests or restrictions
upon any of the properties or assets of the Company or
accelerations of indebtedness that are not reasonably likely to
have a Material Adverse Effect. No consent, approval,
authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, or other
governmental body or any other person is required for the execution
and delivery of the Agreements, and the valid issuance and sale of
the Shares to be sold pursuant to the Agreements, other than the
stockholder approval referred to in Section 4 or such as have been
made or obtained, and except for any post-closing securities
filings or notifications required to be made under applicable
securities laws.
5.4
Capitalization . As of the date hereof, the
capital of the Company is as set out in the “Summary of Terms
and Conditions”. All of the Company’s shares
have been duly and validly issued and are fully paid and
non-assessable, have been issued in compliance with all applicable
securities laws, and were not issued in violation of any preemptive
rights or similar rights to subscribe for or purchase
securities. The Shares to be sold pursuant to the
Agreements, when they are issued and paid for in accordance with
the terms of the Agreements, will be duly and validly issued, fully
paid and non-assessable. Without limiting the foregoing, no
preemptive right, co-sale right, right of first refusal or other
similar right exists with respect to the Shares or the issuance and
sale thereof. Except as set forth in Section 4 above, no
further approval or authorization of any stockholder, the Board of
Directors of the Company or others is required for the issuance and
sale of the Shares. Except as may be disclosed in the
Company's SEC Documents, there are no stockholders agreements,
voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or,
to the knowledge of the Company, between or among any of the
Company’s stockholders. The issuance and sale of
the Shares will not result in a right of any current holder of
Company securities to adjust the exercise, conversion, exchange or
reset price under such securities. Except for options
issued to officers, directors and employees of the Company under
its employee benefit plans or as otherwise set forth in the Company
SEC Documents (as defined in Section 5.5 hereof), there are no
outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any unissued shares of capital stock or
other equity interest in the Company, or any contract, commitment,
agreement, understanding or arrangement of any kind to which the
Company is a party or of which the Company has knowledge and
relating to the issuance or sale of any capital stock of the
Company, any such convertible or exchangeable securities or any
such rights, warrants or options. Subject to the filing
of the notification with the Nasdaq Stock Market, Inc. and the
receipt of stockholder approval, the issuance and sale of the
Shares under the Agreements do not contravene the rules and
regulations of the Nasdaq Stock Market, Inc.
5.5
Reporting Status. The Company has
made or filed all required disclosures or obtained appropriate
waivers with the Nasdaq Stock Market, Inc. The Company
has filed all forms, documents and reports required to be filed
prior to the date hereof by it with the Securities
and Exchange Commission (the “ Company SEC
Documents ”). As of their respective dates, or
if amended, as of the date of the last such amendment, the Company
SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the “
Securities Act ”) and the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”) as the
case may be, and the applicable rules and regulations
promulgated thereunder, and none of the Company
SEC Documents contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading. At the date hereof the Company meets the
requirements for use of Form S-3 under the Securities Act to
register the sale of the Shares by the Investor.
5.6
Legal Proceedings; Disagreements with Advisors
. There are no material legal or governmental
investigations, actions, suits or proceeding pending or, to the
knowledge of the Company, threatened to which the Company is or may
be a party or of which the business or property of the Company is
subject that are not disclosed in the Company SEC
Documents. There are no material disagreements presently
existing, or reasonably anticipated by the Company to arise,
between the accountants presently employed by the
Company.
5.7
No Violations . The Company is not (i) in
violation of its charter, bylaws, or other organizational document;
(ii) in violation of any applicable law, administrative regulation,
ordinance or order of any court or governmental
agency,
arbitration panel or authority applicable to the Company, which
violation, individually or in the aggregate, would be reasonably
likely to have a Material Adverse Effect; or (iii) in default (and
there exists no condition which, with the passage of time or
otherwise, would constitute a default) in the performance of any
bond, debenture, note or any other evidence of indebtedness in any
indenture, mortgage, deed of trust or any other agreement or
instrument to which the Company is a party or by which the Company
is bound or by which the properties of the Company are bound, which
would be reasonably likely to have a Material Adverse
Effect.
5.8
Governmental Permits, Etc . The Company has all
necessary franchises, licenses, certificates and other
authorizations from any applicable government or governmental
agency, department, or body that are currently necessary for the
operation of the business of the Company as currently conducted and
as described in the Company SEC Documents except where the failure
to currently possess would not have a Material Adverse
Effect.
5.9
Compliance in Clinical Trials. The clinical trials conducted
by or on behalf of the Company have been conducted in accordance
with accepted professional scientific standards. The
Company has not received any notices or correspondence from the FDA
or any other governmental agency requiring the termination,
suspension or modification of any clinical trials currently
conducted by, or on behalf of, the Company or in which the Company
has participated, if any, or the results of which are referred to
in its publicly available documents and press releases.
5.10
Intellectual Property . Except as specifically
disclosed in the Company SEC Documents (i) the Company owns
or possesses sufficient rights to use all patents, patent rights,
trademarks, copyrights, licenses, inventions, trade secrets, trade
names and know-how (including trade secrets and other unpatented
and/or unpatentable property or confidential information, systems,
processes or procedures) (collectively, “ Intellectual
Property ”) described or referred to in the Company SEC
Documents as owned or possessed by them or that are necessary for
the conduct of its business as now conducted as described in the
Company SEC Documents except where the failure to
currently own or possess would not have a Material Adverse Effect,
(ii) to its knowledge, the Company is not infringing, and have not
received any notice of any asserted infringement by the Company of
any rights of a third party with respect to any Intellectual
Property that, individually or in the aggregate, would have a
Material Adverse Effect and (iii) the Company has not received any
notice of, and has no knowledge of, infringement by a third party
with respect to any Intellectual Property rights of the Company,
individually or in the aggregate, would have a Material Adverse
Effect.
5.11
Financial Statements; Obligations to Related Parties
. (a) The financial statements of the Company and the
related notes contained in the Company SEC Documents present
fairly, in accordance with generally accepted accounting principles
as applied in the United States (“ GAAP ”), the
financial position of the Company as of the dates indicated, and
the results of its operations and cash flows for the periods
therein specified except that the unaudited interim financial
statements were or are subject to normal and recurring year-end
adjustments that are not expected to be material in
amount. Such financial statements (including the related
notes) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods therein specified, except
as may be disclosed in the notes to such financial
statements and except as disclosed in the Company SEC
Documents. The other financial information contained in
the Company SEC Documents has been prepared on a basis consistent
with the financial statements of the Company.
5.12 Except
as set forth in any Company SEC Documents, there are no obligations
of the Company to officers, directors, stockholders or employees of
the Company or its subsidiaries other than (i) for payment of
salary for services rendered and for bonus payments; (ii)
reimbursements for reasonable expenses incurred on behalf of the
Company; (iii) for other standard employee benefits made generally
available to all employees (including stock option agreements
outstanding under any stock option plan approved by the Board of
Directors of the Company); and (iv) obligations listed in the
Company’s financial statements.
5.13
No Material Adverse Change . Except as disclosed
in the Company SEC Documents, since December 31, 2008, there has
not been (i) any material adverse change in the financial
condition or earnings of the Company, (ii) any material
adverse event affecting the Company, (iii) any obligation,
direct or contingent, that is material to the Company, incurred by
the Company, except obligations incurred in the ordinary course of
business, (iv) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company, or
(v) any loss or damage (whether or not insured) to the
physical property of the Company which has been sustained which had
a Material Adverse Effect.
5.14
Disclosure . The representations and warranties of the
Company contained in this Section 5 as of the date hereof and
as of the Closing Date, do not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. Except with respect to the material terms
and conditions of the transaction contemplated by the Agreements
and the anticipated use of the proceeds therefrom, which shall be
publicly disclosed by the Company pursuant to the Exchange Act, the
Company confirms that neither it nor any person acting on its
behalf has provided the Investors with any information that the
Company believes constitutes material, non-public
information. Subject to section 6.6 below, the Company
understands and confirms that the Investors will rely on the
foregoing representations in effecting transactions in the
securities of the Company.
5.15
Listing . The Company shall use reasonable
commercial efforts to comply with all requirements of the Nasdaq
Stock Market, Inc. with respect to the issuance of the Shares and
the listing of the Shares on the Nasdaq Global Market.
5.16
No Manipulation of Stock . The Company has not
taken and will not, in violation of applicable law, take, any
action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of its stock
to facilitate the sale or resale of the Shares.
5.17
Company not an “Investment Company”
. The Company has been advised of the rules and
requirements under the Investment Company Act of 1940 of the United
States, as amended (the “ Investment Company Act
”). The Company is not, and immediately after
receipt of payment for the Shares will not be, an “investment
company” or an entity “controlled” by an
“investment company” within the meaning of the
Investment Company Act and shall conduct its business in a manner
so that it will not become subject to the Investment Company
Act.
5.18
Contracts . The contracts described in the
Company SEC Documents that are material to the Company are in full
force and effect on the date hereof, and neither the Company nor,
to the Company's knowledge, any other party to such contracts is in
breach of or default, or received a notice of termination under any
of such contracts which would have a Material Adverse
Effect.
5.19
Taxes . The Company and its subsidiaries have
filed (or has obtained an extension of time within which to file)
all necessary tax returns and have paid all taxes shown as due on
such tax returns, except where the failure to so file or the
failure to so pay would not have a Material Adverse
Effect. The Company and its subsidiaries are not aware
of any tax deficiency that has been or might be asserted or
threatened against them that would have a Material Adverse
Effect.
5.20
Private Offering . Assuming the correctness of
the representations and warranties of the Investors set forth in
Section 6 hereof and assuming that the Company has not offered
or sold any of the Shares by any form of general solicitation or
advertising in the United States, the offer and sale of the Shares
hereunder is exempt from registration under the Securities
Act. The Company has not distributed and will not
distribute prior to the Closing Date any offering material in
connection with this Offering and sale of the Shares other than the
documents of which this Agreement is a part and the Company SEC
Documents and any documents in connection with the Australian
Offering. The Company has not in the past nor will it
hereafter take any action to sell, offer for sale or solicit offers
to buy any securities of the Company that would bring the offer,
issuance or sale of the Shares as contemplated by this Agreement
within the registration provisions of Section 5 of the Securities
Act, unless such offer, issuance or sale was or shall be within the
exemptions from registration available under the Securities Act.
Neither the Company nor any person acting on behalf
of the Company has offered or sold any of the Shares by any form of
general solicitation or general advertising in the United
States. The Company has offered the Shares on a private
placement basis in the United States for sale only to the Investors
and certain other “accredited investors” within the
meaning of Rule 501 under the Securities Act.
5.21
Transactions With Affiliates . There are no
business relationships or related-party transactions involving the
Company or any other person required to be described in the Company
SEC Documents that have not been described as required.
5.22
Rule 144A Information . At any time a Trading
Market ceases to exist with respect to the Shares, the Company
shall furnish to holders of the Shares, and to prospective
purchasers of the Shares, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act. A
“Trading Market” shall be deemed to exist at such time
as the Shares are (i) registered under the Exchange Act, and (ii)
traded on the Nasdaq Global Market or to any other approved
exchange.
5.23
Company Acknowledgement of Investor Representation
. The Company acknowledges and agrees that the Investor
does not make or has not made any representations or warranties
with respect to the transactions contemplated hereby other than
those specifically set forth in Sections 6 and 16(a) of this
Agreement, or in the Investor Questionnaire.
5.24
Placement Agents . The Company has taken
no action that would give rise to any claim by any person for
brokerage commissions, placement agent’s fees or similar
payments relating to this Agreement or the transactions
contemplated hereby, except for dealings with Canaccord Adams Inc.
and Summer Street Research Partners, whose commissions and fees
will be paid by the Company.
5.25
Insurance . The Company is insured by insurers
of recognized financial responsibility against such losses and
risks and in such amounts as the Company believes are prudent and
customary for a company (i) in the businesses and location in which
the Company is engaged, (ii) with the resources of the Company, and
(iii) at a similar stage of development as the
Company. The Company has not received any written notice
that the Company will not be able to renew
its existing
insurance coverage as and when such coverage
expires. The Company believes it will be able to obtain
similar coverage at reasonable cost from similar insurers as may be
necessary to continue its business.
6.
Representations, Warranties and Covenants of the Investor
.
6.1
The Investor represents and warrants to, and covenants with, the
Company that: (i) the Investor is an “accredited
investor” as defined in Regulation D under the Securities Act
and the Investor is also knowledgeable, sophisticated and
experienced in making, and is qualified to make decisions with
respect to investments in shares presenting an investment decision
like that involved in the purchase of the Shares, including
investments in securities issued by the Company and investments in
comparable companies, and has requested, received, reviewed and
considered all information it deemed relevant in making an informed
decision to purchase the Shares; (ii) the Investor is
acquiring the Shares set forth in Section 3 of this Agreement in
the ordinary course of its business and for its own account for
investment only and with no present intention of distributing any
of such Shares; (iii) the Investor has not entered into any
arrangement or understanding with any other persons regarding the
distribution of such Shares; (iv) the Investor will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Shares except in compliance
with the Securities Act, applicable securities laws and the
respective rules and regulations promulgated thereunder;
(v) the Investor shall furnish to the Company such information
regarding such Investor and the distribution proposed by such
Investor as the Company may reasonably request in writing and as
shall be reasonably required in connection with any U.S.
Registration; and (vi) the Investor has, in connection with its
decision to purchase the number of Shares set forth in Section 3 of
this Agreement relied only upon the Company SEC Documents and the
representations and warranties of the Company contained
herein. The Investor understands that its acquisition of
the Shares has not been registered under the Securities Act or
registered or qualified under any applicable securities law in
reliance on specific exemptions therefrom, which exemptions may
depend upon, among other things, the bona fide nature of the
Investor’s investment intent as expressed
herein. The Investor has completed or caused to be
completed and delivered to the Company the Investor Questionnaire,
which questionnaire is true, correct and complete in all material
respects.
6.2
The Investor shall not offer, sell, contract to sell or
otherwise dispose of or deliver any of the Shares unless: (i) the
Shares are sold in a transaction that does not require registration
under the Securities Act or any applicable laws and regulations of
the states of the United States governing the offer and sale of
securities and, (ii) prior to and as a condition to the execution
of the offer, sale or delivery described in subclause (i) above,
such Investor has furnished to the Company a written opinion
of counsel reasonably satisfactory to the Company to such effect,
unless the Company waives receipt of such opinion.
6.3
The Investor further represents and warrants to, and covenants
with, the Company that (i) the Investor has full right, power,
authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all
necessary action to authorize the execution, delivery and
performance of this Agreement, and (ii) this Agreement
constitutes a valid and binding obligation of the Investor
enforceable against the Investor in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally
and except as enforceability may be subject to general principles
of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law) and except as the
indemnification agreements of the Investors herein may be legally
unenforceable.
6.4
The Investor has not engaged in any short sales or similar
transactions with respect to the Company’s capital stock, nor
has the Investor, directly or indirectly, caused any person to
engage in any short sales or similar transactions with respect to
the Company’s capital stock. Without limiting the
foregoing, Investor will not use any of the Shares acquired
pursuant to the Agreements to cover any short position in the
capital stock of the Company if doing so would be in violation of
applicable securities laws and Investor will otherwise comply with
federal securities laws of the United States in the holding and
resale of the Shares.
6.5
The Investor understands that nothing in the Company SEC Documents,
the Agreements, or any other materials presented to the Investor in
connection with the purchase and sale of the Shares constitutes
legal, tax or investment advice. The Investor has
consulted such
