Common use of Breakup Fee Clause in Contracts

Breakup Fee. (a) If any person (other than Purchaser or any of its Affiliates) shall have made, proposed, communicated or disclosed a proposal for an acquisition of the Company or its assets or business, or a combination with the Company, or a financing transaction proposal as an alternative to the transactions contemplated by this Agreement (a "Competing Proposal") in a manner which is or becomes public and this Agreement is terminated following such proposal, then the Company shall, simultaneously with termination of this Agreement, pay to Purchaser a fee (the "Breakup Fee") in the amount of $500,000 or, if greater, 2.5% of the value of the Company established by a proposed transaction, if, following the announcement or proposal of a transaction, this Agreement is terminated. If (in the absence of a Competing Proposal) the stockholders do not approve the transactions contemplated by this Agreement, the Company shall pay to Purchaser the $100,000 required pursuant to the terms of the Management Services Agreement (the "Consulting Fee") and shall issue to Purchaser a warrant (the "Breakup Warrant") for 250,000 shares at the purchase price of $1.00 per share, which will be exercisable immediately and will expire if not exercised within five years, and will otherwise have the terms and conditions set forth on Exhibit F. The Consulting Fee shall be paid by wire transfer of immediately available funds. (b) The Company agrees that the agreement contained in Section 6.02(a) above is an integral part of the transactions contemplated by this Agreement and that the Consulting Fee constitutes liquidated damages and not a penalty. If Company fails to promptly pay to Purchaser any amount due under such Section 6.02(a), Company shall pay the costs and expenses (including reasonable legal fees and expenses) in connection with any action, including the filing of any lawsuit or other legal action, taken to collect payment thereof, together with interest on the amount of any unpaid amount at the annual rate of four percent (4%) above the publicly announced prime rate of Citibank, N.A. (or, if lower, the maximum rate permitted by law) from the date such amount was required to be paid to the date of payment. (c) The Company agrees to reserve 250,000 shares of its Common Stock for issuance in connection with the exercise of the Breakup Warrant, if the Breakup Warrant is issued. The obligation to reserve shares in connection with the Breakup Warrant shall survive termination of this Agreement pursuant to Section 6.03, below, and shall remain binding upon the Company. (d) Except as provided otherwise in paragraphs (a) and (b) above and in Section 6.01, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses, except that Company shall pay all costs and expenses (i) in connection with obtaining shareholder approval for this Agreement and the transactions contemplated hereby, including printing and mailing the proxy statement and (ii) of obtaining any consents of any third party.

Breakup Fee. (a) If any person (other than Purchaser ----------- or any of its Affiliates) shall have made, proposed, communicated or disclosed a proposal for an acquisition of the Company or its assets or business, or a combination with the Company, or a financing transaction proposal as an alternative to the transactions contemplated by this Agreement (a "Competing Proposal") in a manner which is or becomes public and this Agreement is terminated following such proposal, then the Company shall, simultaneously with termination of this Agreement, pay to Purchaser a fee (the "Breakup Fee") in the amount of $500,000 or, if greater, 2.5% of the value of the Company established by a proposed transaction, if, following the announcement or proposal of a transaction, this Agreement is terminated. If (in the absence of a Competing Proposal) the stockholders do not approve the transactions contemplated by this Agreement, the Company shall pay to Purchaser the $100,000 required pursuant to the terms of the Management Services Agreement (the "Consulting Fee") and shall issue to Purchaser a warrant (the "Breakup Warrant") for 250,000 shares at the purchase price of $1.00 per share, which will be exercisable immediately and will expire if not exercised within five years, and will otherwise have the terms and conditions set forth on Exhibit F. The Consulting Fee shall be paid by wire transfer of immediately available funds. (b) The Company agrees that the agreement contained in Section 6.02(a) above is an integral part of the transactions contemplated by this Agreement and that the Consulting Fee constitutes liquidated damages and not a penalty. If Company fails to promptly pay to Purchaser any amount due under such Section 6.02(a), Company shall pay the costs and expenses (including reasonable legal fees and expenses) in connection with any action, including the filing of any lawsuit or other legal action, taken to collect payment thereof, together with interest on the amount of any unpaid amount at the annual rate of four percent (4%) above the publicly announced prime rate of Citibank, N.A. (or, if lower, the maximum rate permitted by law) from the date such amount was required to be paid to the date of payment. (c) The Company agrees to reserve 250,000 shares of its Common Stock for issuance in connection with the exercise of the Breakup Warrant, if the Breakup Warrant is issued. The obligation to reserve shares in connection with the Breakup Warrant shall survive termination of this Agreement pursuant to Section 6.03, below, and shall remain binding upon the Company. (d) Except as provided otherwise in paragraphs (a) and (b) above and in Section 6.01, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses, except that Company shall pay all costs and expenses (i) in connection with obtaining shareholder approval for this Agreement and the transactions contemplated hereby, including printing and mailing the proxy statement and (ii) of obtaining any consents of any third party.

Breakup Fee. (a) If any person (other than Purchaser or any of its Affiliates) shall have made, proposed, communicated or disclosed a proposal for an acquisition of the Company or its assets or business, or a combination with the Company, or a financing transaction proposal as an alternative to the transactions contemplated by this Agreement (a "Competing Proposal") in a manner which is or becomes public and this Agreement is terminated following such proposalbefore the Closing hereunder and Seller materially breaches Section 5.8 hereof, then the Company shall, simultaneously with termination and if (a) Buyer shall not have breached materially any provision of this Agreement, and (b) Buyer shall have acted in good faith at all times in its negotiation and dealings with Seller and shall have proceeded diligently toward the Closing hereunder, and (c) Seller shall not have received or discovered any information about Buyer which could reasonably be expected to have a material adverse effect on Seller's willingness to proceed to the Closing hereunder, and (d) within six months after the date of such termination or breach, Seller signs a binding definitive acquisition agreement with an unrelated third party providing for the acquisition by such unrelated third party of all or a majority of its stock, assets or Business, through purchase, merger, consolidation or otherwise, and such acquisition is ultimately consummated by such unrelated third party pursuant to such acquisition agreement and results in a change in control of Seller, then, immediately upon the closing of such acquisition, Seller shall pay to Purchaser a fee (Buyer the "Breakup Fee") in the amount sum of $500,000 or, if greater, 2.5% 125,000. Because of the value difficulty of the Company established by a proposed transactiondetermining actual damages, ifin any such case, following the announcement or proposal of a transaction, this Agreement is terminated. If (in the absence of a Competing Proposal) the stockholders do not approve the transactions contemplated by this Agreement, the Company shall pay to Purchaser the such $100,000 required pursuant to the terms of the Management Services Agreement (the "Consulting Fee") and shall issue to Purchaser a warrant (the "Breakup Warrant") for 250,000 shares at the purchase price of $1.00 per share, which 125,000 will be exercisable immediately constitute liquidated damages and will expire if not exercised within five years, and will otherwise have serve as the terms and conditions set forth on Exhibit F. The Consulting Fee shall be paid by wire transfer of immediately available fundssole remedy for Buyer. (b) The Company agrees that the agreement contained in Section 6.02(a) above is an integral part of the transactions contemplated by If this Agreement and that is terminated before the Consulting Fee constitutes liquidated damages and not a penalty. If Company fails to promptly pay to Purchaser any amount due under such Section 6.02(a), Company shall pay the costs and expenses (including reasonable legal fees and expenses) in connection with any action, including the filing of any lawsuit or other legal action, taken to collect payment thereof, together with interest on the amount of any unpaid amount at the annual rate of four percent (4%) above the publicly announced prime rate of Citibank, N.A. (or, if lower, the maximum rate permitted by law) from the date such amount was required to be paid to the date of payment. (c) The Company agrees to reserve 250,000 shares of its Common Stock for issuance in connection with the exercise of the Breakup Warrant, if the Breakup Warrant is issued. The obligation to reserve shares in connection with the Breakup Warrant shall survive termination of this Agreement pursuant to Section 6.03, belowClosing hereunder, and shall remain binding upon the Company. (d) Except as provided otherwise in paragraphs if (a) Seller shall not have breached materially any provision of this Agreement, and (b) above Seller shall have acted in good faith at all times in its negotiation and in Section 6.01dealings with Buyer and shall have proceeded diligently toward the Closing hereunder, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses, except that Company shall pay all costs and expenses (i) in connection with obtaining shareholder approval for this Agreement and the transactions contemplated hereby, including printing and mailing the proxy statement and (iic) Buyer shall not have received or discovered any information about Seller which could reasonably be expected to have a material adverse effect on Buyer's willingness to proceed to the Closing hereunder, Buyer will pay Seller the sum of obtaining $125,000. Because of the difficulty of determining actual damages, in any consents of any third partysuch case, such $125,000 will constitute liquidated damages and will serve as the sole remedy for Seller.