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EXHIBIT 99.2
SECURITIES PURCHASE AGREEMENT
by and among
TRIPATH IMAGING, INC.,
ROCHE INTERNATIONAL LTD.
and
CERTAIN STOCKHOLDERS OF TRIPATH IMAGING, INC.
dated as of September 26, 2000
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SECTION 1. SALE OF THE SHARES AND WARRANTS .........................................................1
SECTION 2. SALE OF THE SHARES.......................................................................1
SECTION 3. DELIVERY OF THE SHARES AND THE WARRANTS AT THE CLOSING...................................1
SECTION 4. NASDAQ MATTERS...........................................................................2
SECTION 5. REPRESENTATIONS AND WARRANTIES OF TRIPATH................................................2
5.1. ORGANIZATION AND QUALIFICATION........................................................2
5.2. AUTHORIZED CAPITAL STOCK..............................................................3
5.3. CONSENTS; DUE EXECUTION; DELIVERY AND PERFORMANCE OF THE AGREEMENT....................3
5.4. EXEMPT TRANSACTION....................................................................4
5.5. COMPLIANCE WITH RULE 144..............................................................4
5.6. DISCLOSURE............................................................................4
5.7. ADDITIONAL INFORMATION................................................................4
5.8. NO MATERIAL CHANGES...................................................................5
5.9. GOVERNMENTAL CONSENTS.................................................................5
5.10. COMPLIANCE WITH LAWS; LITIGATION......................................................5
5.11. FINANCIAL STATEMENTS..................................................................5
5.12. MATERIAL CONTRACTS....................................................................5
5.13. TAXES.................................................................................6
5.14. INTELLECTUAL PROPERTY.................................................................6
5.15. ENVIRONMENTAL COMPLIANCE..............................................................6
5.16. FINDER'S FEES.........................................................................7
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER..........................................7
6.1. INVESTMENT CONSIDERATIONS.............................................................7
6.2. DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENT..............................8
SECTION 7. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER...........................................8
7.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES............................................9
7.2. PERFORMANCE...........................................................................9
7.3. OPINION OF COUNSEL....................................................................9
7.4. CONSENTS AND APPROVALS................................................................9
7.5. HART-SCOTT-RODINO.....................................................................9
7.6. CERTIFICATES AND DOCUMENTS............................................................9
7.7. NASDAQ LISTING........................................................................9
7.8. OTHER MATTERS.........................................................................9
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SECTION 8. CONDITIONS TO THE OBLIGATIONS OF TRIPATH................................................10
8.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES...........................................10
8.2. HART-SCOTT-RODINO....................................................................10
8.3. PERFORMANCE..........................................................................10
8.4. STOCKHOLDER APPROVAL.................................................................10
SECTION 9. COVENANTS OF TRIPATH....................................................................10
9.1. CONSUMMATION OF AGREEMENT............................................................10
9.2. REGISTRATION OF SHARES...............................................................10
9.3. INDEMNIFICATION......................................................................12
9.4. "STAND-OFF" AGREEMENT................................................................14
9.5. TERMINATION..........................................................................14
9.6. ELECTION OF DIRECTOR.................................................................14
SECTION 10. COVENANTS OF THE PURCHASER.............................................................15
10.1. CONSUMMATION OF AGREEMENT............................................................15
10.2. LOCK-UP OF SHARES....................................................................15
10.3. PROFIT SHARING.......................................................................16
10.4. VOTING RESTRICTIONS..................................................................16
SECTION 11. STOCKHOLDER VOTING AGREEMENT...........................................................17
SECTION 12. MISCELLANEOUS..........................................................................17
12.1. NOTICES..............................................................................17
12.2. ENTIRE AGREEMENT.....................................................................17
12.3. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS; ASSIGNABILITY OF RIGHTS......17
12.4. ASSIGNMENT...........................................................................18
12.5. AMENDMENTS AND WAIVERS...............................................................18
12.6. HEADINGS.............................................................................18
12.7. SEVERABILITY.........................................................................18
12.8. GOVERNING LAW........................................................................18
12.9. JURISDICTION.........................................................................18
12.10. COUNTERPARTS.........................................................................19
12.11. EXPENSES.............................................................................19
12.12. PUBLICITY............................................................................19
12.13. WAIVER OF JURY TRIAL.................................................................19
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT dated as of September 26, 2000 (the
"Agreement") is made among TRIPATH IMAGING, INC., a corporation organized under
the laws of the State of Delaware having its principal offices at 780 Plantation
Drive, Burlington, NC 27215, ("TriPath"), ROCHE INTERNATIONAL LTD., a
corporation organized under the laws of Bermuda (the "Purchaser") and certain
stockholders of TriPath whose names appear on the signature page hereto (the
"Stockholders").
R E C I T A L
TriPath desires to sell to the Purchaser, and the Purchaser desires to
purchase from TriPath, shares of TriPath's common stock and warrants to purchase
shares of TriPath's common stock on the terms described herein (the
"Transaction").
NOW THEREFORE, in consideration of the premises and of the covenants herein
contained, the parties hereto mutually agree as follows:
SECTION 1. SALE OF THE SHARES AND WARRANTS. Subject to the terms and
conditions of this Agreement, TriPath has authorized the sale to the Purchaser
of 5,000,000 shares of the Common Stock, par value $0.01 per share (the "Common
Stock"), of TriPath at a price per share of eight United States dollars ($8.00
USD). Collectively, the shares of Common Stock which may be purchased pursuant
to this Section 1 are referred to herein as the "Shares." Subject to the terms
and conditions of this Agreement, TriPath has authorized the sale to the
Purchaser of 5,000,000 warrants (collectively, the "Warrants" to purchase shares
of Common Stock (the "Warrant Shares") on the terms set forth in Warrant No. 1,
Warrant No. 2 and Warrant No. 3 attached hereto as EXHIBIT A (collectively, the
"Warrant Agreements"). The aggregate purchase price for the Warrants shall be
$3,000,000 USD.
SECTION 2. SALE OF THE SHARES. TriPath shall sell to the Purchaser, and the
Purchaser shall purchase from TriPath, upon the terms and conditions hereinafter
set forth, the Shares and the Warrants (collectively, the "Securities"). The
aggregate purchase price for the Securities (the "Aggregate Purchase Price")
shall be $43,000,000 USD.
SECTION 3. DELIVERY OF THE SHARES AND THE WARRANTS AT THE CLOSING. The
closing of the purchase and sale of the Securities (the "Closing") shall occur
no later than five business days after the last to occur of (i) the expiration
or termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, or (ii) the approval of the sale
of the Shares and the Warrants by the stockholders of TriPath, to the extent
necessary, or (iii) the designation of the Nonvoting Preferred Stock (as defined
below), to the extent necessary, or at such other time and date and at a place
to be agreed upon by TriPath and the Purchaser (the "Closing Date"). Subject to
the terms and conditions of this Agreement, at the Closing, the Purchaser shall
pay to TriPath an amount in cash or by wire transfer equal to the Aggregate
Purchase Price, and TriPath shall deliver to the Purchaser one or more stock
certificates representing the Shares and duly executed Warrant Agreements, each
registered in the name of the Purchaser, or in such nominee name(s) as
designated by the Purchaser.
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SECTION 4. NASDAQ MATTERS. The parties acknowledge that, as of the date of this
Agreement, a request has been made to Nasdaq concerning a determination of the
necessity of obtaining approval of the stockholders of TriPath to issue the
Shares and the Warrant Agreements ("TriPath Stockholder Approval"), and that
certain proposals, described in more detail in Sections 4(a) and 4(b) hereof,
have been made to Nasdaq. Upon receipt of a final determination letter from
Nasdaq regarding the necessity of stockholder approval (the "Determination
Letter"), the following shall occur, as applicable:
(a) if Nasdaq indicates in the Determination Letter that no TriPath
Stockholder Approval will be required if the Purchaser agrees to voting
restrictions substantially as set forth in Section 10.4 (the "Voting
Restrictions"), then, to the extent that counsel to both TriPath and the
Purchaser determine that the Voting Restrictions will not violate applicable
law, the Voting Restrictions shall apply to the Purchaser;
(b) if Nasdaq indicates in the Determination Letter that no TriPath
Stockholder Approval will be required only if the Purchaser acquires Warrants to
purchase Nonvoting Preferred Stock in lieu of Common Stock (and will be required
if the Purchaser acquires Warrants to purchase Common Stock with the Voting
Restrictions), then, to the extent that counsel to both TriPath and the
Purchaser determine that the issuance of the Nonvoting Preferred Stock will not
violate applicable law, the Purchaser shall acquire Warrants to purchase
Nonvoting Preferred Stock in lieu Warrants to purchase Common Stock, and all
references herein to the Warrants shall refer to Warrants to purchase Nonvoting
Preferred Stock. "Nonvoting Preferred Stock" shall mean preferred stock of
TriPath designated by the Board of Directors of TriPath out of authorized "blank
check" preferred stock which shall (i) convert into shares of Common Stock at a
rate of 1,000 shares of Common Stock for each share of Nonvoting Preferred Stock
(ii) be nonvoting until converted into shares of Common Stock, (iii) convert
automatically upon a transfer of such shares to an unaffiliated third party (and
not be convertible prior to such time), (iv) rank pari passu with the Common
Stock with respect to dividends and liquidation preference (which shall be
defined to include any merger or similar transaction or tender offer by TriPath
or with its approval), (v) provide for a class vote in the event of any
amendment to TriPath's charter or bylaws that affects the Nonvoting Preferred
Stock adversely in a manner different than the Common Stock and (v) contain such
other terms as may be mutually agreed between the parties. In the event that
TriPath issues Warrants to purchase Nonvoting Preferred Stock to the Purchaser
pursuant to this Section 4(b), then share amounts and exercise prices per share
set forth herein with respect to the Warrants shall be appropriately adjusted,
as applicable, to reflect the conversion ratio of the Nonvoting Preferred Stock;
(c) if Nasdaq indicates in the Determination Letter that TriPath
Stockholder Approval is required, then TriPath shall promptly seek TriPath
Stockholder Approval in accordance with the terms of Section 9.1 hereof.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF TRIPATH. TriPath hereby
represents and warrants to the Purchaser as follows:
5.1. ORGANIZATION AND QUALIFICATION. TriPath and each TriPath
subsidiary (as defined below) is a corporation duly organized, validly existing
and in good standing under the
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laws of the State of Delaware and has all requisite corporate power and
authority to conduct its business as currently conducted.
5.2. AUTHORIZED CAPITAL STOCK. As of the date hereof, the authorized
capital stock of TriPath consists of (a) 49,000,000 shares of Common Stock, of
which 28,711,934 were validly issued and outstanding, fully paid and
non-assessable on August 25, 2000, and (b) 1,000,000 shares of undesignated
preferred stock, $0.01 par value per share, none of which are issued and
outstanding. As of July 31, 2000, there were 763,540 shares of Common Stock
reserved for issuance under TriPath's 1996 Equity Incentive Plan (the "Equity
Plan"), and options to purchase 2,665,529 shares of Common Stock were
outstanding as of such date under the Equity Plan. As of July 31, 2000, there
were 190,000 shares of Common Stock reserved for issuance under TriPath's 1997
Director Stock Option Plan (the "Director Plan"), and options to purchase
110,000 shares of Common Stock were outstanding as of such date under the
Director Plan. As of July 31, 2000, there were 405,703 shares of Common Stock
reserved for issuance under the NeoPath 1989 Stock Option Plan (the "1989
Plan"), and options to purchase 405,703 shares of Common Stock were outstanding
as of such date under the 1989 Plan. As of July 31, 2000, there were 166,969
shares of Common Stock reserved for issuance under the NeoPath 1999 Plan (the
"1999 Plan"), and options to purchase 166,969 shares of Common Stock were
outstanding as of such date under the 1999 Plan. As of July 31, 2000, there were
103,527 shares of Common Stock reserved for issuance under the NeoPath Director
Plan (the "NeoPath Director Plan"), and options to purchase 103,527 shares of
Common Stock were outstanding as of such date under the NeoPath Director Plan.
As of August 25, 2000, there were warrants outstanding to purchase 302,283
shares of Common Stock at an average exercise price of $5.419 per share. All of
the issued and outstanding shares of TriPath's capital stock have been duly
authorized and validly issued and are fully paid and nonassessable and have been
issued in compliance with applicable Federal and state securities laws. Except
as described herein, (i) no subscription, warrant, option, convertible security
or other right (contingent or otherwise) to purchase or acquire any shares of
capital stock of TriPath or any TriPath subsidiary is authorized or outstanding,
(ii) there is not any commitment or offer of TriPath to issue any subscription,
warrant, option, convertible security or other such right or to issue or
distribute to holders of any shares of its or any TriPath subsidiary's capital
stock any evidences of indebtedness or assets of TriPath or any TriPath
subsidiary, (iii) neither TriPath nor any TriPath subsidiary has any obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any shares of
its or any TriPath Subsidiary's capital stock or any interest therein or to pay
any dividend or make any other distribution in respect thereof and (iv) there
are no restrictions on the transfer of TriPath's capital stock other than those
arising from securities laws or under this Agreement. Except as contemplated by
this Agreement or otherwise disclosed in Schedule 5.2, no person or entity is
entitled to (i) any preemptive or similar right with respect to the issuance of
any capital stock of TriPath or any TriPath subsidiary, or (ii) any rights with
respect to the registration of any capital stock of TriPath under the Securities
Act of 1933, as amended
5.3. CONSENTS; DUE EXECUTION; DELIVERY AND PERFORMANCE OF THE
AGREEMENT. Except as otherwise disclosed in Schedule 5.3, TriPath's execution,
delivery and performance of this Agreement (a) has been duly authorized under
Delaware law by all requisite corporate action by TriPath, (b) will not violate
any law or the Restated Certificate of Incorporation, as amended or Restated
By-laws of TriPath or any other corporation of which TriPath owns at least 50%
of the outstanding voting stock (a "TriPath Subsidiary") or any provision of any
material indenture,
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mortgage, agreement, contract or other material instrument to which TriPath or
any TriPath Subsidiary is a party or by which any of their respective properties
or assets is bound as of the date hereof or (c) require any consent by any
person or entity under, constitute or result (upon notice or lapse of time or
both) in a breach of any term, condition or provision of, or constitute a
default or give rise to any right of termination or acceleration under any such
indenture, mortgage, agreement, contract or other material instrument or result
in the creation or imposition of any lien, security interest, mortgage, pledge,
charge or other encumbrance, of any material nature whatsoever, upon any
properties or assets of TriPath or any TriPath Subsidiary. The issuance, sale
and delivery of the Shares in accordance with this Agreement, and the issuance
and delivery of the Warrant Shares (and, if applicable, the shares of Common
Stock issuable upon conversion of Nonvoting Preferred Stock), have been duly
authorized and reserved for issuance, as the case may be, by all necessary
corporate action on the part of TriPath. The Shares when so issued, sold and
delivered against payment therefor in accordance with the provisions of this
Agreement, and the Warrant Shares, when issued upon exercise of the Warrants
(and, if applicable, the shares of Common Stock issuable upon conversion of the
Nonvoting Preferred Stock), will be duly and validly issued, fully paid and
non-assessable. Upon its execution and delivery, and assuming the valid
execution thereof by the Purchaser, the Agreement will constitute a valid and
binding obligation of TriPath, enforceable against TriPath 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).
5.4. EXEMPT TRANSACTION. Subject to the accuracy of the Purchaser's
representations in Section 6 of this Agreement, the issuance of the Shares will
constitute a transaction exempt from the registration requirements of Section 5
of the Securities Act of 1933, as amended (the "Securities Act") in reliance
upon Regulation D under the Securities Act.
5.5. COMPLIANCE WITH RULE 144. At the written request of a Purchaser
at any time and from time to time, TriPath shall furnish to such Purchaser,
within three days after receipt of such request, a written statement confirming
TriPath's compliance with the filing requirements of the Securities and Exchange
Commission (the "SEC") set forth in SEC Rule 144 as amended from time to time.
5.6. DISCLOSURE. Neither this Agreement, nor any other items prepared
or supplied to any Purchaser by or on behalf of TriPath with respect to the
transactions contemplated hereby contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make each statement
contained herein or therein not misleading. There is no fact which TriPath has
not disclosed to the Purchaser in writing and of which any of its directors or
executive officers is aware (other than general economic conditions) and which
has had or would reasonably be expected to have a material adverse effect upon
the financial condition, operating results, assets, customer or supplier
relations, employee relations or business prospects of TriPath or TriPath
Subsidiaries taken as a whole (an "MAE").
5.7. ADDITIONAL INFORMATION. All reports (the "Exchange Act Reports")
filed by TriPath with the SEC pursuant to the reporting requirements of the
Securities Act and Securities
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Exchange Act of 1934, as amended (the "Exchange Act"), when filed, did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances in which they were made, not misleading.
TriPath has made all filings with the SEC which it is required to make, and
TriPath has not received any request from the SEC to file any amendment or
supplement to any such reports.
5.8. NO MATERIAL CHANGES. As of the date hereof, there has been no
event, occurrence, development or state of circumstances or facts which has had
or could reasonably be expected to have, individually or in the aggregate, an
MAE since the filing date of TriPath's last Exchange Act Report.
5.9. GOVERNMENTAL CONSENTS. Except as disclosed in any Exchange Act
Report and except for applicable requirements under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, no permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required, which has not been obtained, in connection with the execution,
delivery and performance by TriPath of this Agreement or the Warrant Agreements,
the consummation of any of the transactions contemplated hereby or thereby, or
the conduct or operation of the business of TriPath and the TriPath
Subsidiaries.
5.10. COMPLIANCE WITH LAWS; LITIGATION. Neither TriPath nor any
TriPath Subsidiary has violated any law or any governmental regulation or
requirement in any material respect. Except as disclosed in any Exchange Act
Report there is no material claim, suit, litigation, investigation, arbitration
or other proceeding pending or threatened against TriPath, the TriPath
Subsidiaries or any of its or their executive officers.
5.11. FINANCIAL STATEMENTS. The audited consolidated balance sheet as
of December 31, 1999 and the related audited consolidated statement of
operations and cash flows for the year ended December 31, 1999 and the unaudited
interim consolidated balance sheet for the six months ended June 30, 2000 and
the related unaudited interim consolidated statements of operations and cash
flows for the six months ended June 30, 2000 of TriPath and the TriPath
Subsidiaries as set forth in the applicable Exchange Act Report fairly present,
in conformity with GAAP applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of TriPath
and the TriPath Subsidiaries as of the dates thereof and their consolidated
results of operations and cash flows for the periods then ended (subject to
normal year-end adjustments in the case of any unaudited interim financial
statements).
5.12. MATERIAL CONTRACTS. Each of the agreements, contracts, leases
and commitments listed as an exhibit to any report filed by TriPath with the SEC
is a legal and valid agreement, binding on TriPath, pursuant to its terms as of
the date filed of TriPath or a Subsidiary, as the case may be, and is in full
force and effect, and none of TriPath, such Subsidiary or, to the knowledge of
TriPath, any other party thereto is in default or breach, in each case in any
material respect, and, no event or circumstance with respect to any such
agreement, contract, lease or commitment has occurred that, with notice or lapse
of time or both, would reasonably be expected to constitute an MAE.
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5.13. TAXES. Each of TriPath and the TriPath Subsidiaries have duly
filed all federal, state and other tax returns required by law to be filed by it
and have paid all federal, state and other taxes, assessments and other
governmental charges or levies which are due and payable by TriPath or any
TriPath Subsidiary, except any such taxes, assessments or other governmental
charges or levies (i) the payment of which is being contested in good faith by
appropriate proceedings, and (ii) for which adequate reserves have been provided
on the books of TriPath or a TriPath Subsidiary, as applicable.
5.14. INTELLECTUAL PROPERTY. TriPath and each TriPath Subsidiary owns,
or has the legal right to use, all material intellectual property rights
necessary for each of them to conduct its business. Except as disclosed in any
Exchange Act Report, no claim has been asserted and is pending by any person or
entity challenging or questioning the use of any such intellectual property
right or the validity or effectiveness of any such intellectual property right,
nor does TriPath know of any facts or circumstances that could provide a
reasonable basis for any such claim. Except as disclosed in any Exchange Act
Report, to the knowledge of TriPath, the use of such intellectual property
rights by TriPath and the TriPath Subsidiaries does not infringe on the rights
of any person or entity.
5.15. ENVIRONMENTAL COMPLIANCE. (a) No notice, notification, demand,
request for information, citation, summons, complaint or order has been issued,
no complaint has been filed, no penalty has been assessed and no investigation
or review is pending, or to TriPath's knowledge, threatened by any governmental
or other entity (i) with respect to any alleged material violation by TriPath or
any TriPath Subsidiary of any Environmental Law, (ii) with respect to any
alleged failure by TriPath or any TriPath Subsidiary to have any material
Environmental Permit or (iii) with respect to any release, as defined in 42
U.S.C. ss.9601(22), of any Hazardous Substance. To the knowledge of TriPath, no
release, as defined in 42 U.S.C. ss.9601(22), of any Hazardous Substance has
occurred at or on any property now or previously owned or leased by TriPath or
any of the TriPath Subsidiaries which could reasonably be expected to have,
individually or in the aggregate, an MAE. There are no material Environmental
Liabilities.
(b) For purposes of this Section:
"ENVIRONMENTAL LAWS" means any federal, state, local or foreign law
(including, without limitation, common law), treaty, judicial decision,
regulation, rule, judgment, order, decree, injunction, permit or governmental
restriction or requirement or any agreement with any governmental authority or
other Person, whether now or hereafter in effect, relating to human health and
safety, the environment or to hazardous substances.
"ENVIRONMENTAL LIABILITIES" means all liabilities of TriPath and the
TriPath Subsidiaries, whether contingent or fixed, known or unknown, which arise
under or relate to matters covered by Environmental Laws.
"ENVIRONMENTAL PERMITS" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of governmental
authorities relating to or required by
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Environmental Laws and affecting, or relating in any way to, the business of
TriPath or any TriPath Subsidiary.
"HAZARDOUS SUBSTANCES" means any pollutant, contaminant, waste or chemical
or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous
substance, waste or material, or any substance, waste or material having any
constituent elements displaying any of the foregoing characteristics, including,
without limitation, petroleum, its derivatives, by-products and other
hydrocarbons, and any substance, waste or material regulated under any
Environmental Law.
5.16. FINDER'S FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of TriPath or any of its affiliates which might be entitled to any fee or
commission from TriPath or any of its affiliates upon consummation of the
transactions contemplated by this Agreement or the Warrant Agreements.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
6.1. INVESTMENT CONSIDERATIONS. The Purchaser represents and warrants
to TriPath that:
(a) the Purchaser is 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 Securities, including investments in securities issued by companies
comparable to TriPath, and has requested, received, reviewed and considered all
information it deems relevant in making an informed decision to purchase the
Shares and the Securities;
(b) the Purchaser is acquiring the Securities 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 Securities or any arrangement or
understanding with any other persons regarding the distribution of such
Securities.
(c) the Purchaser understands that the Securities are "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from TriPath in an exempt transaction pursuant to Regulation D under
the Securities Act and that under such laws and applicable regulations such
securities may be resold without registration under the Securities Act only in
certain limited circumstances. In this connection the Purchaser represents that
it is familiar with Regulation D and SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act;
(d) the Purchaser qualifies as an "accredited investor" within the meaning
of Rule 501(a)(3) of Regulation D promulgated under the Securities Act and is
not a resident of any of the United States of America;
(e) the Purchaser agrees to resell the Securities only pursuant to
registration under the Securities Act, or pursuant to an available exemption
from registration and agrees not to engage
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in hedging transactions with regard to such Securities unless in compliance with
the Securities Act; and
(f) the Purchaser understands that the certificates evidencing the Shares
and the Warrant Shares shall bear the following legend unless and until the
resale of the Shares and the Warrant Shares pursuant to an effective
Registration Statement or until the Shares and the Warrant Shares may be sold
under Rule 144 without restrictions.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT , OR, AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO TRIPATH THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH SUCH ACT.
6.2. DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENT. The
Purchaser further represents and warrants to, and covenants with, TriPath that
(a) such Purchaser is a corporation duly organized and validly existing and in
good standing under the laws of Bermuda and 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, (b) the execution,
delivery and performance of this Agreement will not violate any law or the
charter documents of such Purchaser or any other corporation of which such
Purchaser owns at least 50% of the outstanding voting stock (a "Purchaser
Subsidiary") or any provision of any material indenture, mortgage, agreement,
contract or other material instrument to which such Purchaser or any Purchaser
Subsidiary is a party or by which such Purchaser, any Purchaser Subsidiary, or
any of their respective properties or assets is bound as of the date hereof, or
result in a breach of or constitute (upon notice or lapse of time or both) a
default under any such indenture, mortgage, agreement, contract or other
material instrument or result in the creation or imposition of any lien,
security interest, mortgage, pledge, charge or encumbrance, of any material
nature whatsoever, upon any assets of such Purchaser or any Purchaser
Subsidiary, and (c) upon the execution and delivery of this Agreement, and
assuming the valid execution thereof by TriPath, this Agreement shall constitute
a valid and binding obligation of such Purchaser enforceable 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).
SECTION 7. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER.
The obligations of the Purchaser under this Agreement are subject to
the fulfillment, or the waiver by the Purchaser in its sole discretion, of the
conditions set forth in this Section 7 on or before the Closing Date.
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<PAGE> 12
7.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each representation
and warranty of TriPath contained in this Agreement shall be true on and as of
the Closing Date with the same effect as though such representation and warranty
had been made on and as of that date.
7.2. PERFORMANCE. TriPath shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by TriPath prior to or at the Closing.
7.3. OPINION OF COUNSEL. The Purchaser shall have received an opinion
from Palmer & Dodge LLP, counsel to TriPath, dated as of the Closing Date,
addressed to the Purchaser, and substantially in the form attached hereto as
EXHIBIT B.
7.4. CONSENTS AND APPROVALS. TriPath shall have delivered to the
Purchaser all of the required consents or approvals as disclosed in Schedule 5.3
herein.
7.5. HART-SCOTT-RODINO. The applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired or been terminated.
7.6. CERTIFICATES AND DOCUMENTS. TriPath shall have delivered to
counsel to the Purchaser:
(a) a certificate of the Secretary or Assistant Secretary of TriPath dated
as of the Closing Date, certifying as to (i) the incumbency of officers of
TriPath executing this Agreement, the Warrant Agreements, and all other
documents executed and delivered in connection herewith, (ii) a copy of the
By-Laws of TriPath, as in effect on and as of the Closing Date, and (iii) a copy
of the resolutions of the Board of Directors of TriPath authorizing and
approving TriPath's execution, delivery and performance of this Agreement, the
Warrant Agreements and all matters in connection with this Agreement and the
Warrant Agreements, and the transactions contemplated thereby; and
(b) a certificate, executed by the President of TriPath as of the Closing
Date, certifying to the fulfillment of all of the conditions to the Purchaser's
obligations under this Agreement, as set forth in this Section 7.
7.7. NASDAQ LISTING. TriPath shall deliver to the Purchaser evidence
that the Shares and the Warrant Shares (or, if applicable, the shares of Common
Stock issuable upon conversion of the Nonvoting Preferred Stock) have been
approved for listing on the Nasdaq Stock Market.
7.8. OTHER MATTERS. All corporate and other proceedings in connection
with the transactions contemplated at the Closing by this Agreement, and all
documents and instruments incident to such transactions, shall be reasonably
satisfactory in substance and form to the Purchaser and its counsel, and the
Purchaser and its counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably request.
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<PAGE> 13
SECTION 8. CONDITIONS TO THE OBLIGATIONS OF TRIPATH.
The obligations of TriPath under this Agreement are subject to the
fulfillment, or the waiver by TriPath in its sole discretion, of the conditions
set forth in this Section 8 on or before the Closing Date.
8.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each representation
and warranty of the Purchaser contained in this Agreement shall be true on and
as of the Closing Date with the same effect as though such representations and
warranties had been made on and as of that date.
8.2. HART-SCOTT-RODINO. The applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired or been terminated.
8.3. PERFORMANCE. The Purchaser shall have performed and complied with
all agreements and conditions contained in this Agreement required to be
performed or complied with by the Purchaser prior to or at the Closing.
8.4. STOCKHOLDER APPROVAL. The TriPath stockholders shall have, to the
extent necessary, duly approved the issuance of the Shares and the Warrants on
the terms described herein.
SECTION 9. COVENANTS OF TRIPATH.
9.1. CONSUMMATION OF AGREEMENT. TriPath shall use its best efforts to
perform and fulfill all conditions and obligations to be performed and fulfilled
by it under this Agreement and further to ensure that to the extent in its
control or capable of influence by it, no breach of any of its representations,
warranties and agreements hereunder or contemplated hereby occurs or exists on
or prior to the Closing to the end that the transactions contemplated by this
Agreement shall be fully carried out in a timely fashion. TriPath will take all
reasonable actions necessary or desirable to consummate the transactions
contemplated by this Agreement, including, without limitation, the preparation
and filing of a Notification and Report Form for Certain Mergers and
Acquisitions promulgated under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the preparation and filing with the SEC of a proxy
statement regarding approval of the transaction contemplated hereby, to the
extent necessary, and the conduct of a stockholder meeting regarding such
approval, and will promptly cooperate with and furnish information to any party
hereto necessary in connection with any such requirements imposed upon any of
them or in connection with the consummation of the transactions contemplated by
this Agreement.
9.2. REGISTRATION OF SHARES.
(a) DEMAND REGISTRATION. Commencing 270 days following the Closing Date, if
on any occasion the Purchaser shall notify TriPath in writing that it intends to
offer or cause to be offered any Registrable Shares (which term shall mean (i)
the Shares, (ii) the Warrant Shares (or, if applicable, the shares of Common
Stock issuable upon conversion of the Nonvoting Preferred Stock) and (iii) any
other shares of common stock held by the Purchaser or any affiliate (as such
term is defined in Section 144(a)(1) of Rule 144 under the Securities Act) of
the Purchaser on the
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<PAGE> 14
date hereof) for public sales, in accordance with Section 10.2 hereof, TriPath
covenants and agrees that it will:
(i) promptly following such notice, prepare and file a
registration statement (including, if so requested by the Purchaser, a shelf
registration) on one or more Forms S-1, or Forms S-3 if TriPath meets the
eligibility requirements set forth in paragraph I of the General Instructions to
Form S-3 for the use of such Form for the registration of securities in a
transaction involving secondary offerings, as described in such General
Instructions, covering the resale of all (or such part as may be requested by
the Purchaser) of the Registrable Shares by the Purchaser (or any other form of
registration statement promulgated by the SEC which would cover the resale of
the Registrable Shares); provided that, TriPath shall not be required to effect
more than one registration hereunder in any 12-month period, and TriPath shall
use its best efforts to cause such registration statement to become effective in
order that the Purchaser may sell its Registrable Shares in accordance with the
proposed plan of distribution;
(ii) prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration statement(s) and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the resale of the Registrable Shares covered by
such registration statement(s) until such time as the Purchaser can sell all
Registrable Shares then held by the Purchaser, together with any Warrant Shares
issuable upon exercise of unexercised Warrants (or, if applicable, the shares of
Common Stock issuable upon conversion of the Nonvoting Preferred Stock), in any
three-month period;
(iii) furnish the Purchaser with such number of copies of such
prospectus as it may reasonably request in order to facilitate the resale of the
Registrable Shares;
(iv) take any other actions as may be necessary or useful, in the
Purchaser's reasonable judgment, to facilitate the resales contemplated by such
registration statement(s), including sending appropriate officers of TriPath to
attend any "road shows" (scheduled at times and places mutually convenient to
TriPath and the Purchaser) and otherwise using its reasonable efforts to
cooperate in the marketing of securities so registered;
(v) file documents required of TriPath for blue sky clearance in
states specified in writing by the Purchaser; PROVIDED, HOWEVER, that TriPath
shall not be required to qualify to do business or consent to service of process
in any jurisdiction in which it is now not so qualified or has not so consented;
and
(vi) bear all expenses in connection with the procedures set
forth in paragraphs (i) through (v) of this Section 9.2(a) and the registration
of the Registrable Shares pursuant to the registration statement(s), other than
fees and expenses, if any, of counsel or other advisors to the Purchaser.
(b) PIGGYBACK REGISTRATION.
(i) TriPath will notify the Purchaser in writing at least 30
days prior to the filing of any registration statement under the Securities Act
for purposes of a public offering of securities of TriPath (including, but not
limited to, registration statements relating to
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<PAGE> 15
secondary offerings of securities of TriPath, but excluding registration
statements relating to employee benefit plans or with respect to corporate
reorganizations or other transactions under Rule 145 of the Securities Act) and
will afford the Purchaser an opportunity to include in such registration
statement all or part of such Registrable Shares held by the Purchaser. If the
Purchaser desires to include in any such registration statement all or any part
of the Registrable Shares held by it, it will, within 15 days after the
above-described notice from TriPath, so notify TriPath in writing. Such notice
will state the intended method of disposition of the Registrable Shares by the
Purchaser. If the Purchaser decides not to include all of its Registrable Shares
in any registration statement thereafter filed by TriPath, the Purchaser will
nevertheless continue to have the right to include any Registrable Shares in any
subsequent such registration statement or registration statements as may be
filed by TriPath with respect to offerings of its securities, all upon the terms
and subject to the conditions set forth herein.
(ii) If the registration statement under which Tripath gives
notice under this Section 9.2(b) is for an underwritten offering, TriPath will
so advise the Purchaser as a part of such notice. In such event, the right of
the Purchaser to be included in a registration pursuant to this Section 9.2(b)
will be conditioned upon the Purchaser's participation in such underwriting and
the inclusion of the Purchaser's Registrable Shares in the underwriting to the
extent provided herein. If the Purchaser proposes to distribute Registrable
Shares through such underwriting, it will enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by TriPath. Notwithstanding any other provision of the Agreement,
if the underwriter determines in good faith that marketing factors require a
limitation of the number of shares to be underwritten, the number of shares that
may be included in the underwriting will be allocated: first, to TriPath;
second, to the Purchaser and, third, to all other holders of TriPath Common
Stock requesting to be included in such registration.
(iii) TriPath will have the right to terminate or withdraw any
registration initiated or withdraw any registration initiated by it under this
Section 9.2(b) prior to the effectiveness of such registration whether or not
the Purchaser has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration will be borne by TriPath in
accordance with Section 9.2(b)(iv).
(iv) TriPath shall bear all expenses in connection with the
procedures set forth in this Section 9.2(b) and the registration of the
Registrable Shares pursuant to the registration statement(s), other than fees
and expenses, if any, of counsel or other advisors to the Purchaser.
9.3. INDEMNIFICATION. For the purpose of this Section 9.3,
(a) the term "Selling Stockholder" shall mean the Purchaser and any
officer, director, employee, agent, affiliate or person deemed to be in control
of the Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act;
(b) the term "Registration Statement" shall mean any final prospectus,
exhibit, supplement or amendment included in or relating to the registration
statement referred to in Section 9.2; and
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<PAGE> 16
(c) the term "untrue statement" shall mean any untrue statement or alleged
untrue statement of, or any omission or alleged omission to state, in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
TriPath agrees to indemnify and hold harmless each Selling Stockholder from
and against any losses, claims, damages or liabilities to which such Selling
Stockholder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement of a
material fact contained in the Registration Statement on the effective date
thereof, or arise out of any failure by TriPath to fulfill any undertaking
included in the Registration Statement and TriPath will reimburse such Selling
Stockholder for any reasonable legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; PROVIDED, HOWEVER, that TriPath shall not be liable in any such case to
the extent that such loss, claim, damage or liability arises out of, or is based
upon, an untrue statement made in such Registration Statement in reliance upon
and in conformity with written information furnished to TriPath by or on behalf
of such Selling Stockholder specifically for use in preparation of the
Registration Statement, or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to such Selling
Stockholder prior to the pertinent sale or sales by such Selling Stockholder.
The Purchaser agrees to indemnify and hold harmless TriPath (and each
person, if any, who controls TriPath within the meaning of Section 15 of the
Securities Act, each officer of TriPath who signs the Registration Statement and
each director of TriPath) from and against any losses, claims, damages or
liabilities to which TriPath (or any such officer, director or controlling
person) may become subject (under the Securities Act or otherwise), insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement of a
material fact contained in the Registration Statement on the effective date
thereof if such untrue statement was made in reliance upon and in conformity
with written information furnished by or on behalf of a Purchaser specifically
for use in preparation of the Registration Statement, and the Purchaser will
reimburse TriPath (or such officer, director or controlling person, as the case
may be), for any legal or other expenses reasonably incurred in investigating,
defending, or preparing to defend any such action, proceeding or claim;
PROVIDED, HOWEVER, that no Purchaser shall be liable for any statement or
omission in any Prospectus that is corrected in any subsequent Prospectus that
was delivered to such Purchaser prior to the pertinent sale or sales by such
Purchaser.
Promptly after receipt by any indemnified person of a notice of a claim or
the commencement of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 9.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person; PROVIDED, HOWEVER, that the indemnifying person shall not
agree to a settlement of any such action without the consent of the indemnified
person, which consent shall not be unreasonably
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<PAGE> 17
withheld. After notice from the indemnifying person to such indemnified persons
of its election to assume the defense thereof, such 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 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 such
indemnifying person or any officer, director, employee, agent, affiliate or
person deemed to be in control of such indemnifying person within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, the
indemnified person shall be entitled to retain its own counsel at the expense of
such indemnifying person. It is understood, however, that any indemnifying
person shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits, or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such indemnified parties not having actual or potential differing interests
with such indemnifying person or among themselves.
9.4. "STAND-OFF" AGREEMENT. If the Purchaser holds any Shares or
Warrant Shares representing more than 5% of the outstanding common stock (if
applicable, assuming the conversion of all Nonvoting Preferred Stock) or at any
such time as a Purchaser Representative (as hereinafter defined) is a member of
TriPath's Board of Directors at such time as TriPath proposes, at any time after
the Closing Date, to offer shares of its Common Stock or other securities for
sale in a registered underwritten public offering, then the Purchaser agrees not
to sell or otherwise transfer or dispose of any such Shares or other securities
of TriPath held by it during the period commencing 10 days prior to, and
expiring 180 days after, such registered public offering has become effective,
provided, that all executive officers and directors of TriPath enter into
similar agreements and provided further that such restrictions shall not apply
to any disposition of Shares or Warrant Shares (or, if applicable, shares of
Common Stock issuable upon conversion of Nonvoting Preferred Stock) by the
Purchaser pursuant to the request for a firm commitment underwritten demand
registration (but not shelf registration) delivered to TriPath prior to the date
that TriPath files any documents with respect to its underwritten public
offering with the SEC. TriPath may impose stop transfer instructions with
respect to the Shares or other securities subject to the foregoing restriction
until the end of any stand-off period.
9.5. TERMINATION. The Purchaser's registration rights hereunder
(including its shelf registration) shall be exercisable from time to time for so
long as Purchaser holds the Shares, the Warrants or the Warrant Shares and
shall, notwithstanding the foregoing, terminate at such time as the Purchaser
can sell all Shares and Warrant Shares (or, if applicable, the shares of Common
Stock issuable upon conversion of the Nonvoting Preferred Stock) then held by
the Purchaser, together with any Warrant Shares issuable upon exercise of
unexercised Warrants (or, if applicable, the Common Stock issuable upon
conversion of the Nonvoting Preferred Stock), in any three-month period in
reliance upon Rule 144 under the Securities Act.
9.6. ELECTION OF DIRECTOR. TriPath shall, at the next meeting of the
Board of Directors of TriPath following the Closing, elect to the Board of
Directors an individual designated in writing by the Purchaser (the "Purchaser
Representative"), and shall thereafter cause the Purchaser Representative to be
nominated and use its best efforts to cause such person
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<PAGE> 18
re-elected to the Board of Directors at the expiration of each term of the
Purchaser Representative as a Director of TriPath. The Purchaser may, at any
time, notify TriPath that a different individual has been selected by the
Purchaser to be the Purchaser Representative, and, upon the resignation of the
Purchaser Representative then in office, TriPath shall cause such different
individual to be elected as a Director of TriPath. The obligations of TriPath
under this Section 9.6 shall terminate and be of no further force and effect at
the earlier to occur of (i) the Purchaser holding less than 4,750,000 shares of
Common Stock or (ii) the Purchaser holding less than 7.5% of the outstanding
shares of Common Stock of TriPath.
SECTION 10. COVENANTS OF THE PURCHASER.
10.1. CONSUMMATION OF AGREEMENT. The Purchaser shall use its best
efforts to perform and fulfill all conditions and obligations to be performed
and fulfilled by it under this Agreement and further to ensure that to the
extent in its control or capable of influence by it, no breach of any of its
representations, warranties and agreements hereunder or contemplated hereby
occurs or exists on or prior to the Closing to the end that the transactions
contemplated by this Agreement shall be fully carried out in a timely fashion.
The Purchaser will take all reasonable actions necessary or desirable to
consummate the transactions contemplated by this Agreement, including, without
limitation, the preparation and filing of a Notification and Report Form for
Certain Mergers and Acquisitions promulgated under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and will promptly cooperate with
and furnish information to any party hereto necessary in connection with any
such requirements imposed upon any of them or in connection with the
consummation of the transactions contemplated by this Agreement.
10.2. LOCK-UP OF SHARES. The Purchaser hereby agrees that it will not,
directly or indirectly, (i) sell, offer, contract to sell, make any short sale,
pledge, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any of the Shares or the Warrant Shares (or, if applicable, the
shares of Common Stock issuable upon conversion of the Nonvoting Preferred
Stock) (collectively, the "Subject Shares") or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
or ownership of any of the Subject Shares, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise (collectively, "Transfer");
provided, that, the Purchaser may Transfer Subject Shares in the amounts
specified in the Lock-Up Schedule below at a price equal to or greater than the
price specified in the Lock-Up Schedule and provided, further, that, the
Purchaser may, in any event, Transfer up to 50% of the Subject Shares in any
12-month period following the 28-month anniversary of the Closing Date.
LOCK-UP SCHEDULE
<TABLE>
<CAPTION>
NUMBER OF SHARES MINIMUM
TIME PERIOD THAT CAN BE SOLD SALES PRICE
----------- ---------------- -----------
<S> <C> <C>
After 1st Anniversary 1,000,000
of Closing Date Subject Shares 20.00 USD
</TABLE>
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<PAGE> 19
<TABLE>
<S> <C> <C>
After 13-month
Anniversary of Closing 2,000,000 Additional
Date Subject Shares $25.00 USD
After 14-month
Anniversary of Closing 2,000,000 Additional
Date Subject Shares $30.00 USD
</TABLE>
10.3. PROFIT SHARING. The Purchaser hereby agrees that, in the event
that it sells any Subject Shares after the first anniversary of the Closing Date
and prior to the third anniversary of the Closing Date (the "Profit Sharing
Period"), it shall, within five business days of any such sale, notify TriPath
of the date of any such sale, the price at which such shares have been sold and
the amount of all sales commissions and/or underwriting discounts actually paid
in connection with such sale. If the sales price of any such shares, net of
sales commissions and underwriting discounts (the "Net Sales Price"), exceeds
$20.00 USD per share, then the notice described in the first sentence of this
Section shall be accompanied by a certificate tendered to TriPath, with a stock
power duly executed in blank, representing a number of shares of TriPath Common
Stock not less than the quotient of (A) amount by which the Net Sales Price
exceeds $20.00 USD multiplied by one half of the aggregate number of Subject
Shares sold divided by (B) the gross sales price of such Subject Shares (the
"Tendered Shares"). If the number of shares represented by the certificate
tendered to TriPath pursuant to the preceding sentence exceeds the number of
Tendered Shares, then TriPath shall promptly cause to be delivered to the
Purchaser a balance certificate representing the number of shares not so
tendered. The obligations of the Purchaser under this Section shall only apply
to the first 2,500,000 Subject Shares sold by the Purchaser during the Profit
Sharing Period.
10.4. VOTING RESTRICTIONS. In the event that the provisions of Section
4(a) are applicable, then the following provisions shall apply to the Purchaser:
(i) In the event that any action is submitted to the
stockholders of TriPath for their approval, either for consideration at a
meeting of the stockholders of TriPath or by written consent, the Purchaser
hereby agrees to vote all shares of Common Stock issuable upon exercise of the
Warrants (the "Restricted Shares") in the same manner (i.e. in favor of, against
and abstentions with respect to) proportionately to all other shares of TriPath
that are entitled to vote with respect to such matter. For example, if with
respect to a particular matter, the other shares of TriPath Common Stock are
voted 55% in favor of such matter, 40% against such matter and 5% abstentions,
then the Purchaser shall vote all Restricted Shares in the same proportions.
(ii) The Purchaser hereby appoints each of the Directors of
TriPath other than the Purchaser Representatives, acting severally, as its
proxy, with full power of substitution, in the name, place and stead of the
Purchaser to vote all Restricted Shares at any meeting of stockholders of
TriPath (and at any adjournment or adjournments thereof) or with respect to any
written consent of stockholders for purposes of voting such shares in the manner
indicated in Section 10.4(i). The Purchaser agrees that the proxy granted by it
in the preceding sentence is coupled with an interest and shall be irrevocable
until expiration of this Agreement.
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<PAGE> 20
(iii) Notwithstanding anything else contained herein, the
provisions of this Section 10.4 shall not bind any unaffiliated transferees of
the Purchaser of any shares of TriPath capital stock.
SECTION 11. STOCKHOLDER VOTING AGREEMENT. At every meeting of the
stockholders of TriPath with respect to any of the following, and at every
adjournment thereof, and on every action or approval by written consent of the
stockholders of TriPath with respect to any of the following, each of the
Stockholders shall vote all shares of capital stock of TriPath owned or
controlled by such Stockholder (i) in favor of approval of the issuance of the
Shares and the Warrants and any matter that could reasonably be expected to
facilitate the transactions contemplated hereby and (ii) against approval of any
proposal made in opposition to or competition with consummation of the
transactions contemplated hereby. Each Stockholder agrees not to take any
actions contrary to its obligations under this Agreement.
SECTION 12. MISCELLANEOUS.
12.1. NOTICES. Any consent, notice or report required or permitted to
be given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by telephone, personal delivery or courier) or courier, postage
prepaid (where applicable), addressed to such other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor and shall be effective upon receipt by the
addressee.
<TABLE>
<S> <C>
If to TriPath: TriPath, Inc.
780 Plantation Drive
Burlington, North Carolina 27215
Attention: President
Telephone: (800) 426-2176
Telecopy: (336) 222-8819
with a copy to: Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Marc A. Rubenstein, Esq.
Telephone: (617) 573-0100
Telecopy: (617) 227-4420
If to Purchaser: to the address set forth below the
Purchaser's name on the signature page hereto
</TABLE>
12.2. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof. All
express or implied agreements and understandings, either oral or written,
heretofore made are expressly merged in and made a part of this Agreement.
12.3. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS;
ASSIGNABILITY OF RIGHTS. Notwithstanding any investigation made by any party to
this Agreement, all covenants, agreements, representations and warranties made
by TriPath and the Purchaser herein, except as
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<PAGE> 21
otherwise provided herein, shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares being purchased and the payment
therefor. Except as otherwise provided herein, (i) the covenants, agreements,
representations and warranties of TriPath made herein shall bind TriPath's
successors and assigns and shall insure to the benefit of the Purchaser's
successors and assigns and (ii) the covenants, agreements, representations and
warranties of the Purchaser made herein shall bind the Purchaser's successors
and assigns and shall insure to the benefit of TriPath's successors and assigns.
12.4. ASSIGNMENT. Neither this Agreement nor any of the rights and
obligations contained herein may be assigned or otherwise transferred by either
party without the consent of the other party; provided, however, that either
TriPath or a Purchaser may, without such consent, assign its rights and
obligations under this Agreement (i) to any affiliate, all or substantially all
of the equity interest of which is owned and controlled by such party or its
direct or indirect parent corporation, or (ii) in connection with a merger,
consolidation or sale of substantially all of such party's assets to an
unrelated third party; provided, however, that such party's rights and
obligations under this Agreement shall be assumed by its successor in interest
in any such transaction and shall not be transferred separate from all or
substantially all of its other business assets, including those business assets.
Any purported assignment in violation of the preceding sentence shall be void.
Any permitted assignee shall assume all obligations of its assignor under this
Agreement.
12.5. AMENDMENTS AND WAIVERS. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by TriPath and the
Purchaser. The waiver by either party hereto of any right hereunder or the
failure to perform or of a breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
12.6. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
12.7. SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12.8. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware (without giving effect to
the choice of law provisions thereof).
12.9. JURISDICTION. The parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement, the Warrant Agreements or the
transactions contemplated hereby or thereby shall be brought in the United
States District Court for the District of Delaware or any Delaware state court,
so long as one of such courts shall have subject matter jurisdiction over such
suit, action or proceeding, and each of the parties hereby irrevocably consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it
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may now or hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding which
is brought in any such court has been brought in an inconvenient forum.
12.10. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
12.11. EXPENSES. Except as otherwise specifically provided herein,
each party shall bear its own expenses in connection with this Agreement.
12.12. PUBLICITY. Neither party hereto shall issue any press releases
or otherwise make any public statement with respect to the transactions
contemplated by this Agreement without the prior written consent of the other
party, except as may be required by applicable law or regulation.
12.13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE WARRANT AGREEMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
[The remainder of this page is intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
TRIPATH, INC.
By: /s/ Paul R. Sohmer, M.D.
-------------------------------------------------------
Name: Paul R. Sohmer, M.D.
-----------------------------------------------------
Title: President & CEO
----------------------------------------------------
ROCHE INTERNATIONAL LTD.
By: /s/ John S. T. Stout /s/ P. B. Hubbard
-------------------------------------------------------
Name: John S. T. Stout P. B. Hubbard
-----------------------------------------------------
Title: Director Authorised Signatory
----------------------------------------------------
c/o Corange International Limited
The Corner House/3rd Floor
Church & Parliament Street
Hamilton, Bermuda HMHX
STOCKHOLDERS:
AMPERSAND SPECIALTY MATERIALS
AND CHEMICALS III LIMITED
PARTNERSHIP
By: ASMC-III Management Company Limited
Partnership, as General Partner
By: ASMC-III MCLP LLP,
as its General Partner
By: /s/ Richard A. Charpie
-----------------------------------
Name: Richard A. Charpie
Title: Managing General Partner
AMPERSAND SPECIALTY MATERIALS
AND CHEMICALS III COMPANION FUND
LIMITED PARTNERSHIP
By: ASMC-III Management Company Limited
Partnership, as General Partner
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<PAGE> 24
By: ASMC-III MCLP LLP,
as its General Partner
By: /s/ Richard A. Charpie
-----------------------------------
Name: Richard A. Charpie
Title: Managing General Partner
LABORATORY PARTNERS I LIMITED
PARTNERSHIP
By: Ampersand Lab Partners Management
Company Limited Partnership,
as General Partner
By: Ampersand Lab Partners MCLP LLP,
as its General Partner
By: /s/ Richard A. Charpie
-----------------------------------
Name: Richard A. Charpie
Title: Managing General Partner
LABORATORY PARTNERS COMPANION
FUND LIMITED PARTNERSHIP
By: Ampersand Lab Partners Management
Company Limited Partnership,
as General Partner
By: Ampersand Lab Partners MCLP LLP,
as its General Partner
By: /s/ Richard A. Charpie
-----------------------------------
Name: Richard A. Charpie
Title: Managing General Partner
DLJ CAPITAL CORPORATION
By: /s/ Robert E. Curry
-----------------------------------
Name: Robert E. Curry
Title: Divisional Vice Pres. and Attorney-in-Fact
SPROUT CAPITAL VII, L.P.
By: DLJ Capital Corporation,
as Managing General Partner
By: /s/ Robert E. Curry
-----------------------------------
Name: Robert E. Curry
Title: Divisional Vice Pres. and Attorney-in-Fact
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<PAGE> 25
DLJ FIRST ESC, L.L.C.
By: DLJ LBO Plans Management Corporation,
as Manager
By: /s/ Robert E. Curry
-----------------------------------
Name: Robert E. Curry
Title: Divisional Vice Pres. and Attorney-in-Fact
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation,
as Managing General Partner
By: /s/ Robert E. Curry
-----------------------------------
Name: Robert E. Curry
Title: Divisional Vice Pres. and Attorney-in-Fact
ALLEMANNI, LLC
By: /s/ James B. Powell
-----------------------------------
Name: James B. Powell
Title: Manager
22
