Exhibit 10.1
FORM OF
SECURITIES PURCHASE
AGREEMENT
THIS SECURITIES PURCHASE
AGREEMENT (the
“Agreement” ), is made and entered into as of
August 2, 2004, by and among Cybex International, Inc. a New York
corporation (the “ Company ”), and the
undersigned prospective investor (the “ Investor
”) who is subscribing for shares (the “ Shares
”) of common stock of the Company, par value $0.10 per share
(the “ Common Stock ”).
1.
PURCHASE AND SALE OF SHARES;
CLOSING
a. Purchase and Sale of the
Shares .
i. Subject to the terms and
conditions of this Agreement, the Investor agrees to purchase from
the Company the number of Shares indicated on the signature page
hereto (the “Subscription Amount” ) at a
purchase price of $3.30 per Share (the “Share
Price” ) for an aggregate purchase price indicated on the
signature page hereto (the “ Aggregate Purchase
Price” ). The Company reserves the right in its sole
discretion to accept or reject the Subscription (as defined below)
in whole or in part or to allot to the Investor less than the
Subscription Amount. The actual Subscription Amount, if any,
accepted by the Company is referred to in this Agreement as the
“Actual Subscription Amount” . In the event the
Actual Subscription Amount differs from the Subscription Amount,
the term Aggregate Purchase Price as utilized herein shall refer to
the sum derived by multiplying the Share Price by the Actual
Subscription Amount. Subject to the terms and conditions of this
Agreement, the Company shall issue and sell to the Investor the
number of Shares equal to the Actual Subscription
Amount.
ii. Within two (2) business day of
the date of this Agreement, the Investor shall deliver the
Aggregate Purchase Price by wire transfer to The American Stock
Transfer & Trust Company, as escrow agent (the “Escrow
Agent” ), in accordance with the wire transfer
instructions attached hereto as Exhibit A.
b. Aggregate Number of Shares
Offered . The Company has entered and intends to enter into
this same form of Securities Purchase Agreement with certain other
investors (the “Other Investors” ) and desires
to offer and sell (the “Offering” ) up to
2,430,000 Shares (the “Offering Amount”
).
c. Escrow Account . All
payments for Shares made by the Investor as contemplated by Section
1.1 above will be held by the Escrow Agent for the Investor’s
benefit in a non-interest bearing escrow account. The payment will
be returned promptly, without interest or deduction, if the
Investor’s Subscription is rejected or the Offering is
terminated by the Company for any reason.
d. Binding Effect of this
Agreement . The Investor acknowledges and agrees that this
Agreement shall be binding upon the Investor upon the submission to
the Company or Oppenheimer & Co. Inc. (the “Placement
Agent” ) of the Investor’s signed counterpart
signature page to this Agreement (the
“Subscription” ); provided that, in the event
the Closing Date (as
defined below) shall not have occurred on or
prior to August 6, 2004 (the “Termination Date”
), this Agreement shall be terminated and be of no force and
effect. The Company may terminate the Offering at any time prior to
the Closing Date. The execution of this Agreement by the Investor
or solicitation of the investment contemplated hereby shall create
no obligation on the part of the Company or the Placement Agent to
accept any Subscription, in part or in full, or complete the
Offering. The Investor hereby acknowledges and agrees that the
Subscription hereunder is irrevocable by the Investor, and that,
except as required by law, the Investor is not entitled to cancel,
terminate or revoke this Agreement or any agreements of the
Investor hereunder and that if the Investor is an individual this
Agreement shall survive the death or disability of the Investor and
shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal
representatives and permitted assigns. The Investor also agrees
that each of the Company and the Placement Agent may reduce such
Investor’s Subscription with respect to the number of Shares
to be purchased without any prior notice or further consent of the
Investor. If such a reduction occurs, the part of the Subscription
Amount attributable to the reduction shall be promptly returned,
without interest, offset or deduction.
e. Delivery of Shares at
Closing.
i. The completion of the purchase
and sale of the Shares (the “Closing” ) shall
occur, subject to the satisfaction or waiver of the conditions set
forth in Section 1.6 and Section 1.7 (other than those intended to
be satisfied at Closing), at the offices of Archer & Greiner, a
Professional Corporation, One Centennial Square, Haddonfield, New
Jersey 08033. The date upon which the Closing actually occurs is
herein referred to as the “Closing Date”
.
ii. At the Closing, the Company
shall (i) authorize its transfer agent to issue and the transfer
agent shall issue to the Investor one or more stock certificates
registered in the name of the Investor, or in such name of
nominee(s) designated by the Investor in writing, representing that
number of Shares.
f. Conditions to the
Company’s Obligation to Complete Purchase and Sale . Upon
acceptance of the Subscription, the Company’s obligation to
issue and sell the Shares to the Investor at Closing is subject to
the satisfaction, on or before the Closing Date, of each of the
following conditions, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at
any time in its sole discretion by providing the Investor with
prior written notice thereof:
i. Payment of Aggregate Purchase
Price . The Investor shall have delivered to the Escrow Agent
the Aggregate Purchase Price in accordance with Section 1.1;
and
ii. Representations and
Warranties; Covenants . The representations and warranties of
the Investor set forth in Article III hereof shall be true and
correct as of the date hereof and as of the Closing Date as though
made at that time (except for representations and warranties that
speak as of a specific date (which shall be true and correct as of
such date)), and the Investor shall have performed, satisfied and
complied with in all material respects the covenants, agreements
and conditions required by this Agreement to be performed,
satisfied or complied with by the Investor on or prior to the
Closing Date.
g. Conditions to the
Investor’s Obligation to Complete Purchase and Sale . The
obligation of the Investor hereunder to purchase the Shares from
the Company at the Closing is subject to the satisfaction, on or
before the Closing Date, of each of the following conditions,
provided that these conditions are for the Investor’s sole
benefit and may be waived by the Investor at any time in its sole
discretion by providing the Company with prior written notice
thereof:
i. Opinion of Counsel .
Receipt by the Placement Agent on behalf of the Investors of an
opinion letter of Archer & Greiner, counsel to the Company,
dated the Closing Date, in substantially the form attached hereto
as Exhibit B ;
ii. Representations and
Warranties; Covenants . The representations and warranties of
the Company set forth in Article II hereof shall be true and
correct in all material respects as of the date hereof and as of
the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date
(which shall be true and correct in all material respects as of
such date)), and the Company shall have performed, satisfied and
complied with in all material respects the covenants, agreements
and conditions required by this Agreement to be performed,
satisfied or complied with by the Company on or prior to the
Closing Date;
iii. Officer’s
Certificate . The Company shall have delivered to the Placement
Agent on behalf of the Investors a certificate, dated the Closing
Date, duly executed on behalf of the Company by its Chief Executive
Officer to the effect set forth in clause (b) above;
iv. Secretary’s
Certificate . The Company shall have delivered to the Investor
a certificate, dated the Closing Date, duly executed by its
Secretary or Assistant Secretary or other appropriate officer,
certifying that the attached copies of the Company’s
Certificate of Incorporation, by-laws and the resolutions of the
Board of Directors or Executive Committee of the Board of Directors
approving this Agreement and the transactions contemplated hereby,
are all true, complete and correct and remain unamended and in full
force and effect; and
v. No Litigation . On the
Closing Date, no legal action, suit or proceeding shall be pending
or overtly threatened which seeks to restrain or prohibit the
transactions contemplated by this Agreement.
vi. Conversion of Preferred
Stock . Prior to or at the Closing Date, all holders of the
Company’s Series B Convertible Cumulative Preferred Stock par
value $1.00 per share (the “ Series B Preferred Stock
”) will convert such Series B Preferred Stock into shares of
Common Stock, and thereby, the Company will have no shares of
preferred stock issued and outstanding at the closing of the
Offering.
2.
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
Except as set forth on the Schedule
of Exceptions attached hereto as Schedule A , the Company
hereby represents and warrants to the Investor as
follows:
a. Subsidiaries;
Organization. The Company has no subsidiaries (as defined by
Rule 405 under the Securities Act of 1933, as amended (the “
Securities Act ”) except as set forth in
Exhibit 21 to its Annual Report on Form 10-K for
the fiscal year ended December 31, 2003 and except for its newly
formed subsidiary in Hong Kong (the “ Subsidiaries
”). The Company and each of its Subsidiaries is duly
organized and validly existing and is in good standing under the
laws of the jurisdiction of its incorporation or organization. The
Company and each of its Subsidiaries has full corporate power and
authority to own, operate and occupy its properties and to conduct
its business as presently conducted and is registered or qualified
to do business and in good standing in each jurisdiction in which
it owns or leases property or transacts business and where the
failure to be so qualified would have a material adverse effect
upon the business, assets, financial condition or results of
operation of the Company and its Subsidiaries taken as a whole, and
to the Company’s knowledge, no proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or
qualification.
b. Due Authorization . The
Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement. This
Agreement has been duly authorized and validly executed and
delivered by the Company and, assuming due authorization, execution
and delivery by the other party hereto, constitutes a valid and
legally binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) to the extent
rights to indemnity and contribution may be limited by state or
federal securities laws or the public policy underlying such laws,
(ii) enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting creditors’ and contracting
parties’ rights generally and (iii) enforceability may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
c. Non-Contravention . The
execution and delivery of this Agreement, the issuance and sale of
the Shares to be sold by the Company under this Agreement, the
performance by the Company of its obligations under this Agreement
and the consummation of the transactions contemplated hereby will
not (A) conflict with or constitute a violation of, or default
(with or without the giving of notice or the passage of time or
both) under, (i) any material bond, debenture, note or other
evidence of indebtedness, or under any material lease, 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, by-laws or other organizational documents of the
Company or any of its Subsidiaries, or (iii) any law,
administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to
the Company, any of its Subsidiaries or their respective
properties, or (B) result in the creation or imposition of any
lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the material properties or assets of the
Company or any of its Subsidiaries or an acceleration of
indebtedness pursuant to any obligation, agreement or condition
contained in any material bond, debenture, note or any other
evidence of indebtedness or any material indenture, mortgage, deed
of trust or any other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Subsidiaries is subject. No
consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body,
administrative agency, self-regulatory organization, stock exchange
or market, or other governmental body in the United States is
required for the execution and delivery of this Agreement and the
valid issuance and sale of the Shares to be sold pursuant to this
Agreements, other than such as have been made or obtained, and
except for any securities filings required to be made under federal
or state securities laws.
d. Reporting Status . The
Company has filed in a timely manner all documents that the Company
was required to file under the Securities Exchange Act of 1934, as
amended (the “Exchange Act” ), since January 1,
1998 (the “ SEC Documents ”). The SEC Documents
complied as to form in all material respects with the Securities
and Exchange Commission’s (the “ SEC ”)
requirements as of their respective filing dates, and the
information contained therein as of the date thereof did not
contain an 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 to the extent that
information contained in any such document has been revised or
superseded by a later filed SEC Document.
e. Capitalization . As of the
date hereof, the authorized capital stock of the Company consists
of 20,500,000 shares of capital stock, of which 20,000,000 shares
are designated Common Stock and 500,000 shares are designated
Preferred Stock. As of July 19, 2004, there were approximately
8,868,107 shares of Common Stock issued and outstanding and 32,886
shares of Series B Preferred Stock issued and outstanding. As of
July 19, 2004 an aggregate of 1,198,628 shares of Common Stock were
reserved for issuance under the Company’s 1995 Omnibus
Incentive Plan and its 2002 Stock Retainer Plan for Non-employee
Directors, including the outstanding options listed in the next
sentence. As of July 19, 2004, 826,500 shares are issuable upon
exercise of outstanding stock options issued by the Company to
employees, consultants and directors of the Company. All
outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and nonassessable and were issued in compliance
with federal and U.S. state securities laws. Other than as
disclosed in the SEC Documents, and except as set forth above or in
Section 2.5 of Schedule A hereto, there are no outstanding rights,
options, warrants, preemptive rights, rights of first refusal,
agreements, commitments or similar rights for the purchase or
acquisition from the Company or any of its Subsidiaries of any
securities of the Company or any of its Subsidiaries. The Shares to
be sold pursuant to this Agreement have been duly authorized, and
when issued and paid for in accordance with the terms of this
Agreement will be validly issued, fully paid and nonassessable and
free and clear of all pledges, liens and encumbrances. 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. No further approval or authorization of any
shareholder or the Board of Directors of the Company is required
for the issuance and sale of the Shares. Except as set forth in the
SEC Documents, or in Section 2.5 of Schedule A hereto, no holder of
any of the securities of the Company has any rights
(“demand,” “piggyback” or otherwise) to
have such securities registered by reason of the intention to file,
filing or effectiveness of a Registration Statement (as defined in
Section 5.1 hereof).
f. Legal Proceedings . Except
as disclosed in the SEC Documents, or Section 2.6 of Schedule A
hereto, there is no action, suit or proceeding before any court,
governmental agency or body, domestic or foreign, now pending or,
to the knowledge of the Company or any of its Subsidiaries, overtly
threatened against the Company or its Subsidiaries wherein an
unfavorable decision, ruling or finding would reasonably be
expected to materially adversely affect the validity or
enforceability of, or the authority or ability of the Company to
perform its obligations under this Agreement.
g. No Violations . Neither
the Company nor any of its Subsidiaries is in violation of its
Certificate of Incorporation, by-laws, or other organizational
document, or is in violation of any law, administrative regulation,
ordinance or order of any court or governmental agency, arbitration
panel or authority applicable to the Company or any of its
Subsidiaries, which violation, individually or in the aggregate,
would be reasonably likely to have a material adverse effect on the
business, assets, financial condition or results of operation of
the Company and its Subsidiaries taken as a whole, or is in default
(and there exists no condition which, with or without the passage
of time or giving of notice or both, would constitute a default) in
any material respect in the performance of any bond, debenture,
note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust or any other material agreement or
instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound
or by which the properties of the Company are bound, which would be
reasonably likely to have a material adverse effect on the
business, assets, financial condition or results of operation of
the Company and its Subsidiaries taken as a whole.
h. Governmental Permits, Etc
. The Company and its Subsidiaries possess all necessary
franchises, licenses, certificates and other authorizations from
any foreign, federal, state or local government or governmental
agency, department or body that are currently necessary for the
operation of their respective business as currently conducted,
except where such failure to possess could not reasonably be
expected to have a material adverse effect on the business, assets,
financial condition or results of operation of the Company and its
Subsidiaries taken as a whole.
i. Intellectual Property .
The Company and its Subsidiaries own or possess sufficient rights
to use all patents, patent rights, trademarks, copyrights,
licenses, inventions, trade secrets, trade names and know-how that
are necessary for the conduct of their respective businesses as now
conducted except where the failure to own or possess would not have
a material adverse effect on the business, assets, financial
condition or results of operation of the Company and its
Subsidiaries taken as a whole (the “ Company Intellectual
Property ”). Except as set forth in the SEC Documents, or
in Section 2.9 of Schedule A hereto, (i) neither the Company nor
any of its Subsidiaries has received any written notice of, or has
any knowledge of, any infringement by the Company or its
Subsidiaries of intellectual property rights of any third party
that, individually or in the aggregate, would have a material
adverse effect on the business, assets, financial condition or
results of operation of the Company and its Subsidiaries taken as a
whole and (ii) neither the Company nor any of its Subsidiaries has
received any written notice of any infringement by a third party of
any Company Intellectual Property that, individually or in the
aggregate, would have a material adverse effect on the business,
assets, financial condition or results of operation of the Company
and its Subsidiaries taken as whole.
j. Financial Statements . The
consolidated financial statements of the Company and its
Subsidiaries and the related notes thereto included in the SEC
Documents present fairly, in all material respects, 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 as set forth in such financial statements, such financial
statements (including the related notes) have been prepared in
accordance with United States generally accepted accounting
principles applied on a consistent basis throughout the periods
therein specified.
k. No Material Adverse Change
. Except as publicly disclosed in the SEC Documents, press releases
or in other “public disclosures” as such term is
defined in Section
101(e) of Regulation FD of the Exchange Act,
since July 27, 2004 there has not been (i) any material adverse
change in the business, assets, financial condition or results of
operation of the Company or any of its Subsidiaries, (ii) any
obligation, direct or contingent, that is material to the Company
and its Subsidiaries taken as a whole, incurred by the Company or
any of its Subsidiaries, except obligations incurred in the
ordinary course of business, (iii) any dividend or distribution of
any kind declared, paid or made on the capital stock of the
Company, except for the payment of accrued dividends as required
upon conversion of the Company’s Series B Preferred Stock, or
(iv) any loss or damage (whether or not insured) to the physical
property of the Company or any of its Subsidiaries which has been
sustained which has had a material adverse effect on the business,
assets, financial condition or results of operation of the Company
and its Subsidiaries taken as a whole.
l. AMEX Listing . The
Company’s Common Stock is registered pursuant to Section
12(g) of the Exchange Act and is listed on American Stock Exchange
(the “ AMEX ”), and the Company has taken no
action designed to, or likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the AMEX, nor to the
Company’s knowledge is the AMEX currently contemplating
terminating such listing. The Company and the Common Stock meet and
the Company will use best efforts to ensure that the Company and
the Common Stock continue to meet the criteria for continued
listing and trading on the AMEX.
m. S-3 Compliance . The
Company meets and will use best efforts to continue to meet the
requirements for the use of a Registration Statement on Form S-3
for the registration of the resale of the Shares by the
Investors.
n. 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 the Common Stock to facilitate the sale or resale of the
Shares.
o. Insurance . The Company
and each of its Subsidiaries maintains and will continue to
maintain insurance against loss or damage by fire or other casualty
and such other insurance, including, but not limited to, product
liability insurance, in such amounts and covering such risks as is
reasonably adequate consistent with industry practice for the
conduct of their respective businesses and the value of their
respective properties.
p. Tax Matters . The Company
and each of its Subsidiaries has timely filed all material federal,
state, local and foreign income and franchise and other tax returns
required to be filed by any jurisdiction to which it is subject and
has paid all taxes due in accordance therewith, and no tax
deficiency has been determined adversely to the Company or any of
its Subsidiaries which has had (nor does the Company or any of its
Subsidiaries have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of its Subsidiaries,
would reasonably be expected to have) a material adverse effect on
the business, assets, financial condition or results of operation
of the Company or any of its Subsidiaries taken as a
whole.
q. Investment Company . The
Company is not an “investment company” within the
meaning of such term under the Investment Company Act of 1940 and
the rules and regulations of the SEC thereunder.
r. No Registration . Assuming
the accuracy of the representations and warranties made by, and
compliance with the covenants of, the Investors in Article III
hereof, no registration of the Shares under the Securities Act is
required in connection with the offer and sale of the Shares by the
Company to the Investors as contemplated by this
Agreement.
s. Lock-Up Agreements . All
executive officers and directors of the Company, as well as UM
Holdings Ltd., have entered into lock up agreements with the
Placement Agent in which, without prior approval of the Placement
Agent and the Investor, they will agree to not sell shares of
Common Stock held by them (including shares which may be issued to
them pursuant to the exercise of outstanding options or warrants or
conversion of Series B Preferred Stock) during the period ending 60
days after the effective date of the Registration
Statement.
t. Conversion of Series B
Preferred Stock . The conversion of the Series B Preferred
Stock and issuance of Common Stock pursuant to such conversion will
be conducted in accordance with (i) the Company’s Certificate
of Incorporation, by-laws, and any other applicable organizational
document of the Company, and (ii) all applicable laws, rules and
regulations (including Federal and state securities laws and
regulations and the rules and regulations of the AMEX).
u. Disclosure . None of the
representations and warranties of the Company appearing in this
Agreement or any information appearing in the Confidential Private
Placement Memorandum, dated July 19, 2004, delivered to the
Investors in connection with the Offering, when considered together
as a whole, contains, or on the Closing Date will contain, any
untrue statement of a material fact or omits, or on the Closing
Date will omit, to state any material fact required to be stated
herein or therein in order for the statements herein or therein, in
light of the circumstances under which they were made, not to be
misleading.
v. Non-Public Information.
The Company confirms that neither it nor any person acting on its
behalf has provided Investor with any information that the Company
believes constitutes material non-public information, except with
respect to the existence, terms and conditions of this offering or
as otherwise is disclosed in the Current Report on Form 8-K to be
filed by the Company in conjunction with the press release referred
to in Section 4.4 hereto.
3.
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE INVESTOR
The Investor represents, warrants
and covenants to the Company as follows:
a. Securities Law Representations
and Warranties .
i. The Investor is an
“accredited investor” as defined in Regulation D under
the Securities Act and the Investor has the knowledge,
sophistication and experience necessary to make, and is qualified
to make decisions with respect to, investments in securities
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, can bear
the economic risk of a total loss of its investment in the Shares
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 for its own account for investment only and not with a view
towards, or for resale in connection with, the public sale or
distribution thereof;
iii. The Investor was not organized
for the specific purpose of acquiring the 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 state securities laws and the respective
rules and regulations promulgated thereunder;
v. The Investor understands that the
Shares are being offered and sold to it in reliance on specific
exemptions from the registration requirements of the United States
federal and state securities laws and that the Company is relying
upon the truth and accuracy of, and the Investor’s
complianc
