EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") is dated as of
February 28, 2007, among MPLC, Inc., a Delaware corporation (the "COMPANY"), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a "PURCHASER" and collectively the "PURCHASERS").
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and Rule 506 promulgated thereunder, the Company desires
to issue and sell to each Purchaser, and each Purchaser, severally and not
jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement: (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Certificate of Designation (as defined
herein), and (b) the following terms have the meanings set forth in this Section
1.1:
"ACTION" shall have the meaning ascribed to such term in
Section 3.1(j).
"AFFILIATE" means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is
under common control with a Person, as such terms are used in and
construed under Rule 144 under the Securities Act. With respect to a
Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser
will be deemed to be an Affiliate of such Purchaser.
"APPROVED CHARTER AMENDMENT" means, pursuant to Delaware
General Corporation Law, the affirmative vote by the shareholders of
the Corporation to amend the articles or certificate of incorporation
of the Corporation (i) to effect a 1:300 reverse stock split of the
Common Stock and (ii) to increase the number of authorized shares of
Common Stock of the Corporation from 75,000,000 to 100,000,000.
"BUSINESS DAY" means any day except Saturday, Sunday, any day
which shall be a federal legal holiday in the United States or any day
on which banking institutions in the State of New York are authorized
or required by law or other governmental action to close.
"CERTIFICATE OF DESIGNATION" means the Certificate of
Designation to be filed prior
to the Closing by the Company with the Secretary of State of Delaware,
in the form of EXHIBIT A attached hereto.
"CLOSING" means the closing of the purchase and sale of the
Securities pursuant to Section 2.1.
"CLOSING DATE" means the Trading Day when all of the
Transaction Documents have been executed and delivered by the
applicable parties thereto, and all conditions precedent to (i) the
Purchasers' obligations to pay the Subscription Amount and (ii) the
Company's obligations to deliver the Securities have been satisfied or
waived.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock of the Company, par
value $0.01 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed into.
"COMMON STOCK EQUIVALENTS" means any securities of the Company
or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt,
preferred stock, rights, options, warrants or other instrument that is
at any time convertible into or exercisable or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.
"COMPANY COUNSEL" means Xxxxxx Xxxxxxxx & Markiles, LLP, with
offices located at 00000 Xxxxxxx Xxxxxxxxx, 00xx Xxxxx, Xxxxxxx Xxxx,
XX 00000.
"CONVERSION PRICE" shall have the meaning ascribed to such
term in the Certificate of Designation.
"DISCLOSURE SCHEDULES" shall have the meaning ascribed to such
term in Section 3.1.
"EFFECTIVE DATE" means the date that the initial Registration
Statement filed by the Company pursuant to the Registration Rights
Agreement is first declared effective by the Commission.
"ELECTION OF DIRECTORS" means, pursuant to Delaware General
Corporation Law, (i) the affirmative vote by the shareholders of the
Corporation to elect Xxx Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxx as members
of the board of directors of the Corporation and (ii) the seating of
such persons as directors.
"ESCROW AGENT" means Signature Bank, a New York State
chartered bank, with offices located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
"ESCROW AGREEMENT" means the Escrow Deposit Agreement entered
into prior to the date hereof, by and among the Company and the Escrow
Agent pursuant to which the Purchasers, shall deposit Subscription
Amounts with the Escrow Agent to be applied to
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the transactions contemplated hereunder.
"EVALUATION DATE" shall have the meaning ascribed to such term
in Section 3.1(r).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"EXEMPT ISSUANCE" means the issuance of (a) shares of Common
Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose by a
majority of the non-employee members of the Board of Directors of the
Company or a majority of the members of a committee of non-employee
directors established, (b) securities upon the exercise or exchange of
or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares
of Common Stock issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of
this Agreement to increase the number of such securities or to decrease
the exercise, exchange or conversion price of such securities, and (c)
securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company,
provided that any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company
receives benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.
"FWS" means Xxxxxxx Xxxxxxxxx & Xxxxx LLP, with offices
located at 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000-0000.
"GAAP" shall have the meaning ascribed to such term in Section
3.1(h).
"INDEBTEDNESS" shall have the meaning ascribed to such term in
Section 3.1(aa).
"INTELLECTUAL PROPERTY RIGHTS" shall have the meaning ascribed
to such term in Section 3.1(o).
"LEGEND REMOVAL DATE" shall have the meaning ascribed to such
term in Section 4.1(c).
"LIENS" means a lien, charge, security interest, encumbrance,
right of first refusal, preemptive right or other restriction.
"MATERIAL ADVERSE EFFECT" shall have the meaning ascribed to
such term in Section 3.1(b).
"MATERIAL PERMITS" shall have the meaning ascribed to such
term in Section 3.1(m).
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"MAXIMUM RATE" shall have the meaning ascribed to such term in
Section 5.17.
"PERSON" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
"PLACEMENT AGENT" means Xxxxxxx Xxxxxx Xxxxxx, with offices
located at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"PREFERRED STOCK" means the maximum of 8,334 shares of the
Company's Series D 8% Convertible Preferred Stock issued hereunder,
having the rights, preferences and privileges set forth in the
Certificate of Designation, in the form of EXHIBIT A hereto.
"PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated the date hereof, among the Company and the Purchasers,
in the form of EXHIBIT B attached hereto.
"REGISTRATION STATEMENT" means a registration statement
meeting the requirements set forth in the Registration Rights Agreement
and covering the resale of the Underlying Shares by each Purchaser as
provided for in the Registration Rights Agreement.
"REQUIRED APPROVALS" shall have the meaning ascribed to such
term in Section 3.1(e).
"REQUIRED MINIMUM" means, as of any date, the maximum
aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including
any Underlying Shares issuable upon conversion in full of all shares of
Preferred Stock.
"RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"SEC REPORTS" shall have the meaning ascribed to such term in
Section 3.1(h).
"SECURITIES" means the Preferred Stock and the Underlying
Shares.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
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"SHAREHOLDER APPROVAL" means, collectively, the Approved
Charter Amendment and the Election of Directors.
"SHORT SALES" means all "short sales" as defined in Rule 200
of Regulation SHO under the Exchange Act (but shall not be deemed to
include the location and/or reservation of borrowable shares of Common
Stock).
"STATED VALUE" means $1,200.00 per share of Preferred Stock.
"SUBSCRIPTION AMOUNT" shall mean, as to each Purchaser, the
aggregate amount to be paid for the Preferred Stock purchased hereunder
as specified below such Purchaser's name on the signature page of this
Agreement and next to the heading "Subscription Amount," in United
States dollars and in immediately available funds.
"SUBSIDIARY" means any subsidiary of the Company as set forth
on SCHEDULE 3.1(A), and shall include, without limitation, New Motion,
Inc., a Delaware corporation.
"TRADING DAY" means a day on which the Common Stock is traded
on a Trading Market.
"TRADING MARKET" means the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in
question: the American Stock Exchange, the Nasdaq Capital Market, the
Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board.
"TRANSACTION DOCUMENTS" means this Agreement, the Certificate
of Designation, the Registration Rights Agreement and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.
"UNDERLYING SHARES" means the shares of Common Stock issued
and issuable upon conversion of the Preferred Stock.
"VWAP" means, for any date, the price determined by the first
of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average
price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or
quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the
OTC Bulletin Board is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date)
on the OTC Bulletin Board; (c) if the Common Stock is not then quoted
for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the "Pink Sheets" published by Pink Sheets,
LLC (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the Common
Stock so reported; or (d) in all other cases, the
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fair market value of a share of Common Stock as determined by as
determined by the Board of Directors of the Corporation in good faith.
ARTICLE II
PURCHASE AND SALE
2.1 CLOSING. On the Closing Date, upon the terms and subject to the
conditions set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell,
and each Purchaser, severally and not jointly, agrees to purchase, up to an
aggregate of $10,000,800 of shares of Preferred Stock with an aggregate Stated
Value equal to such Purchaser's Subscription Amount. The aggregate number of
shares of Preferred Stock sold hereunder shall be up to 8,334. Each Purchaser
shall deliver to the Escrow Agent via wire transfer or a certified check of
immediately available funds equal to their Subscription Amount and the Company
shall deliver to each Purchaser its respective shares of Preferred Stock as
determined pursuant to Section 2.2(a) and the other items set forth in Section
2.2 issuable at the Closing. Upon satisfaction of the conditions set forth in
Sections 2.2 and 2.3, the Closing shall occur at the offices of FWS or such
other location as the parties shall mutually agree and the Company and the
Placement Agent shall deliver to the Escrow Agent the duly executed Escrow
Release Notice (as defined in the Escrow Agreement).
2.2 DELIVERIES.
(a) On the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) a legal opinion of Company Counsel, in the form of
EXHIBIT C attached hereto;
(iii) a certificate evidencing a number of shares of
Preferred Stock equal to such Purchaser's
Subscription Amount divided by the Stated Value,
registered in the name of such Purchaser;
(iv) a certificate, executed by the Chief Executive
Officer or the Chief Financial Officer of the Company
certifying that, on the day immediately preceding the
date hereof, the Company holds cash and marketable
securities of an aggregate value that equals or
exceeds $10,000,000; and
(v) the Registration Rights Agreement duly executed by
the Company.
(b) On or before the Closing Date, each Purchaser shall deliver or
cause to be delivered to the Company the following:
(i) this Agreement duly executed by such Purchaser;
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(ii) such Purchaser's Subscription Amount by wire transfer
or certified check to the Escrow Agent; and
(iii) the Registration Rights Agreement duly executed by
such Purchaser.
2.3 CLOSING CONDITIONS.
(a) The obligations of the Company hereunder in connection with
the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects when made and
on the Closing Date of the representations and
warranties of the Purchasers contained herein;
(ii) all obligations, covenants and agreements of the
Purchasers required to be performed at or prior to
the Closing Date shall have been performed;
(iii) the delivery by the Purchasers of the items set forth
in Section 2.2(b) of this Agreement; and
(iv) the Company shall have completed the acquisition of
New Motion, Inc., a Delaware corporation.
(b) The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following
conditions being met:
(i) the accuracy in all material respects when made and
on the Closing Date of the representations and
warranties of the Company contained herein;
(ii) all obligations, covenants and agreements of the
Company required to be performed at or prior to the
Closing Date shall have been performed;
(iii) the delivery by the Company of the items set forth in
Section 2.2(a) of this Agreement;
(iv) the aggregate Subscription Amounts payable hereunder
shall equal or exceed $8,000,000;
(v) the Company shall have completed the acquisition of
New Motion, Inc., a Delaware corporation;
(vi) there shall have been no Material Adverse Effect with
respect to the Company since the date hereof; and
(vii) from the date hereof to the Closing Date, trading in
the Common Stock shall not have been suspended by the
Commission or the Company's
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principal Trading Market (except for any suspension
of trading of limited duration agreed to by the
Company, which suspension shall be terminated prior
to the Closing), and, at any time prior to the
Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been
suspended or limited, or minimum prices shall not
have been established on securities whose trades are
reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared
either by the United States or New York State
authorities nor shall there have occurred any
material outbreak or escalation of hostilities or
other national or international calamity of such
magnitude in its effect on, or any material adverse
change in, any financial market which, in each case,
in the reasonable judgment of each Purchaser, makes
it impracticable or inadvisable to purchase the
Preferred Stock at the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
under the corresponding section of the disclosure schedules delivered to the
Purchasers concurrently herewith (the "DISCLOSURE Schedules"), which Disclosure
Schedules shall be deemed a part hereof and to qualify any representation or
warranty otherwise made herein to the extent of such disclosure, the Company
hereby makes the following representations and warranties to each Purchaser:
(a) SUBSIDIARIES. The Company has no direct or indirect
Subsidiaries other than those listed in the SEC Reports.
Except as disclosed in the SEC Reports, the Company owns,
directly or indirectly, all of the capital stock or other
equity interests of each Subsidiary free and clear of any
Liens, and all of the issued and outstanding shares of capital
stock or other equity interests of each Subsidiary are validly
issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities. If the Company has no subsidiaries, all other
references to the Subsidiaries or any of them in the
Transaction Documents shall be disregarded.
(b) ORGANIZATION AND QUALIFICATION. The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own
or lease and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor any
Subsidiary is in violation or default of any of the provisions
of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of
the Company and the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or
other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in (i) a material
adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on
the results of operations, assets, business or
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condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company's ability to perform in any material
respect on a timely basis its obligations under any
Transaction Document (any of (i), (ii) or (iii), a "MATERIAL
ADVERSE EFFECT") and no Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.
(c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company,
its board of directors or its stockholders in connection
therewith other than in connection with the Required Approvals
and the adoption of the Approved Charter Amendments. Each
Transaction Document has been (or upon delivery will have
been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as
limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief
or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.
(d) NO CONFLICTS. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by
the Company of the other transactions contemplated hereby and
thereby do not and will not: (i) conflict with or violate any
provision of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizational or
charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would
become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any material agreement,
credit facility, debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other
understanding (as determined pursuant to Item 601(b)(10) of
Regulation SB) to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the
Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to
which the Company or a Subsidiary is subject (including
federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is
bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.
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(e) FILINGS, CONSENTS AND APPROVALS. The Company is not required
to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any
court or other federal, state, local or other governmental
authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction
Documents, other than (i) filings with the Commission
disclosing the transactions contemplated hereby, (ii) the
filing with the Commission of the Registration Statement,
(iii) the notice and/or application(s) (if any) to each
applicable Trading Market for the issuance and sale of the
Securities and the listing of the Underlying Shares for
trading thereon in the time and manner required thereby and
(iv) the filing of Form D with the Commission and such filings
as are required to be made under applicable state securities
laws (collectively, the "REQUIRED APPROVALS").
(f) ISSUANCE OF THE SECURITIES. The Securities are duly authorized
and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents. The
Underlying Shares, when issued in accordance with the terms of
the Transaction Documents, will be validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company. The Company will reserve, following the adoption of
the Approved Charter Amendments, from its duly authorized
capital stock a number of shares of Common Stock for issuance
of the Underlying Shares at least equal to the Required
Minimum on the date hereof.
(g) CAPITALIZATION. The capitalization of the Company is as set
forth on SCHEDULE 3.1(G), which SCHEDULE 3.1(G) shall also
include the number of shares of Common Stock owned
beneficially, and of record, by Affiliates of the Company as
of the date hereof. The Company has not issued any capital
stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee
stock options under the Company's stock option plans, the
issuance of shares of Common Stock to employees pursuant to
the Company's employee stock purchase plan and pursuant to the
conversion or exercise of Common Stock Equivalents outstanding
as of the date of the most recently filed periodic report
under the Exchange Act. To the Company's knowledge, no Person
has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except
as a result of the purchase and sale of the Securities or
except for Common Stock Equivalents outstanding as of the date
of the most recently filed periodic report under the Exchange
Act, there are no outstanding options, warrants, scrip rights
to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving
any Person any right to subscribe for or acquire, any shares
of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or
Common Stock Equivalents. To the Company's knowledge, the
issuance and sale of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to
any Person (other than the Purchasers) and will not result in
a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price
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under any of such securities. All of the outstanding shares of
capital stock of the Company are validly issued, fully paid
and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase
securities. Other than the adoption of the Approved Charter
Amendment, no further approval or authorization of any
stockholder, the Board of Directors of the Company or others
is required for the issuance and sale of the Securities. There
are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company's capital stock
to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company's stockholders.
(h) SEC REPORTS; FINANCIAL STATEMENTS. To the Company's knowledge,
the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (or such shorter period as
the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits
thereto and documents incorporated by reference therein, being
collectively referred to herein as the "SEC REPORTS") on a
timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the
expiration of any such extension. To the Company's knowledge,
as of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading. To the Company's knowledge, the
financial statements of the Company included in the SEC
Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods
involved ("GAAP"), except as may be otherwise specified in
such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects
the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results
of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(i) MATERIAL CHANGES Since the date of the latest audited
financial statements included within the SEC Reports, except
as specifically disclosed in a subsequent SEC Report filed
prior to the date hereof, (i) there has been no event,
occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required
to be reflected in the Company's financial statements pursuant
to GAAP or disclosed in filings
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made with the Commission, (iii) the Company has not altered
its method of accounting, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing
Company stock option plans. The Company does not have pending
before the Commission any request for confidential treatment
of information. Except for the issuance of the Securities
contemplated by this Agreement or as set forth on SCHEDULE
3.1(I), no event, liability or development has occurred or
exists with respect to the Company or its Subsidiaries or
their respective business, properties, operations or financial
condition, that would be required to be disclosed by the
Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed at
least 1 Trading Day prior to the date that this representation
is made.
(j) LITIGATION. There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an "ACTION") which
(i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any
Subsidiary, nor, to the Company's knowledge, any current
director or officer thereof (in his capacity as such), is or
has been the subject of any Action involving a claim of
violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not
been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the Commission
involving the Company or, to the Company's knowledge, any
current director or officer of the Company (in his capacity as
such). The Commission has not issued any stop order or other
order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the
Exchange Act or the Securities Act.
(k) LABOR RELATIONS. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of
the employees of the Company which could reasonably be
expected to result in a Material Adverse Effect. None of the
Company's or its Subsidiaries' employees is a member of a
union that relates to such employee's relationship with the
Company, and neither the Company or any of its Subsidiaries is
a party to a collective bargaining agreement, and the Company
and its Subsidiaries believe that their relationships with
their employees are good. No executive officer, to the
knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract
or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all U.S. federal, state,
local and foreign laws and regulations relating to employment
and
12
employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(l) COMPLIANCE. Neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or
both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound (whether or not
such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or
governmental body having jurisdiction over the Company or its
properties or assets, or (iii) is or has been in violation of
any statute, rule or regulation of any governmental authority,
except in each case as could not have or reasonably be
expected to result in a Material Adverse Effect.
(m) REGULATORY PERMITS. The Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to
possess such permits could not have or reasonably be expected
to result in a Material Adverse Effect ("MATERIAL PERMITS"),
and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or
modification of any Material Permit.
(n) TITLE TO ASSETS. The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned
by them that is material to the business of the Company and
the Subsidiaries and good and marketable title in all personal
property owned by them that is material to the business of the
Company and the Subsidiaries, in each case free and clear of
all Liens, except for Liens as do not materially affect the
value of such property and do not materially interfere with
the use made and proposed to be made of such property by the
Company and the Subsidiaries and Liens for the payment of
federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties. Any real property and
facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries
are in compliance.
(o) PATENTS AND TRADEMARKS. The Company and the Subsidiaries have,
or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and
other intellectual property rights and similar rights
necessary or material for use in connection with their
respective businesses as described in the SEC Reports and
which the failure to so have could have a Material Adverse
Effect (collectively, the "INTELLECTUAL PROPERTY RIGHTS").
Neither the Company nor any Subsidiary has received a notice
(written or otherwise) that the Intellectual Property Rights
used by the Company or any Subsidiary violates or infringes
upon the rights of any Person. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by
13
another Person of any of the Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of
all of their intellectual properties, except where failure to
do so could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(p) INSURANCE. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and
customary in the businesses in which the Company and the
Subsidiaries are engaged. Neither the Company nor any
Subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without
a significant increase in cost.
(q) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as set
forth in the SEC Reports, none of the officers or directors of
the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or,
to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in
each case in excess of $60,000 other than for (i) payment of
salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company
and (iii) other employee benefits, including stock option
agreements under any stock option plan of the Company.
(r) XXXXXXXX-XXXXX; DISCLOSURE CONTROLS. The Company is in
material compliance with all provisions of the Xxxxxxxx-Xxxxx
Act of 2002 which are applicable to it as of the Closing Date.
The Company has established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the Company and designed such disclosure controls and
procedures to ensure that information required to be disclosed
by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission's rules
and forms. The Company's certifying officers have evaluated
the effectiveness of the Company's disclosure controls and
procedures as of the end of the period covered by the
Company's most recently filed periodic report under the
Exchange Act (such date, the "EVALUATION DATE"). The Company
presented in its most recently filed periodic report under the
Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures
based on their evaluations as of the Evaluation Date. Except
as set forth in Schedule 3.1(r) of the Disclosure Schedule,
since the Evaluation Date, there have been no changes in the
Company's internal control over financial reporting (as such
term is defined in the Exchange Act) that has materially
affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
14
(s) CERTAIN FEES. Except for fees payable to Xxxxxxx Xxxxxx
Xxxxxx, no brokerage or finder's fees or commissions are or
will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Purchasers
shall have no obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be
due in connection with the transactions contemplated by the
Transaction Documents.
(t) PRIVATE PLACEMENT. Assuming the accuracy of the Purchasers
representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the
offer and sale of the Securities by the Company to the
Purchasers as contemplated hereby. The issuance and sale of
the Securities hereunder does not contravene the rules and
regulations of the Trading Market.
(u) INVESTMENT COMPANY. The Company is not, and is not an
Affiliate of, and immediately after receipt of payment for the
Securities, will not be or be an Affiliate of, an "investment
company" within the meaning of the Investment Company Act of
1940, as amended. The Company shall conduct its business in a
manner so that it will not become subject to the Investment
Company Act of 1940, as amended.
(v) REGISTRATION RIGHTS. Other than each of the Purchasers, to the
Company's knowledge, no Person has any right to cause the
Company to effect the registration under the Securities Act of
any securities of the Company.
(w) LISTING AND MAINTENANCE REQUIREMENTS. The Company's Common
Stock is registered pursuant to Section 12(b) or 12(g) of the
Exchange Act, and the Company has taken no action designed to,
or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification
that the Commission is contemplating terminating such
registration. Except as specified in the SEC Reports, the
Company has not, in the 12 months preceding the date hereof,
received notice from any Trading Market on which the Common
Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has
no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and
maintenance requirements.
(x) DISCLOSURE. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other
Person acting on its behalf has provided any of the Purchasers
or their agents or counsel with any information that it
believes constitutes or might constitute material, nonpublic
information. The Company understands and confirms that the
Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company. All
disclosure furnished by or on behalf of the Company to the
Purchasers regarding the Company, its business and the
transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, is true and correct in all
15
material respects and does not contain any untrue statement of
a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. To
the Company's knowledge, the press releases disseminated by
the Company during the twelve months preceding the date of
this Agreement taken as a whole do not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make
the statements, in light of the circumstances under which they
were made and when made, not misleading. The Company
acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the
transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.
(y) NO INTEGRATED OFFERING. Assuming the accuracy of the
Purchasers' representations and warranties set forth in
Section 3.2, neither the Company, nor any of its Affiliates,
nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances
that would cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of
the Securities Act or any applicable shareholder approval
provision of any Trading Market on which any of the securities
of the Company are listed or designated.
(z) TAX STATUS. Except for matters that would not, individually or
in the aggregate, have or reasonably be expected to result in
a Material Adverse Effect, the Company and each Subsidiary has
filed all necessary federal, state and foreign income and
franchise tax returns and has paid or accrued all taxes shown
as due thereon, and the Company has no knowledge of a tax
deficiency which has been asserted or threatened against the
Company or any Subsidiary.
(aa) NO GENERAL SOLICITATION. Neither the Company nor any person
acting on behalf of the Company has offered or sold any of the
Securities by any form of general solicitation or general
advertising. The Company has offered the Securities for sale
only to the Purchasers and certain other "accredited
investors" within the meaning of Rule 501 under the Securities
Act.
(bb) FOREIGN CORRUPT PRACTICES. Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on
behalf of the Company, has (i) directly or indirectly, used
any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign
or domestic government officials or employees or to any
foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting
on its behalf of which the Company is aware) which is in
violation of law, or (iv) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as
amended.
(cc) ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF SECURITIES.
The Company acknowledges and agrees that each of the
Purchasers is acting solely in the
16
capacity of an arm's length purchaser with respect to the
Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is
acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any
advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely
incidental to the Purchasers' purchase of the Securities. The
Company further represents to each Purchaser that the
Company's decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent
evaluation of the transactions contemplated hereby by the
Company and its representatives.
(dd) ACKNOWLEDGEMENT REGARDING PURCHASERS' TRADING ACTIVITY.
Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Sections 3.2(f) and 4.5 hereof),
it is understood and acknowledged by the Company (i) that none
of the Purchasers have been asked to agree, nor has any
Purchaser agreed, to desist from purchasing or selling, long
and/or short, securities of the Company, or "derivative"
securities based on securities issued by the Company or to
hold the Securities for any specified term; (ii) that past or
future open market or other transactions by any Purchaser,
including Short Sales, and specifically including, without
limitation, Short Sales or "derivative" transactions, before
or after the closing of this or future private placement
transactions, may negatively impact the market price of the
Company's publicly-traded securities; (iii) that any
Purchaser, and counter-parties in "derivative" transactions to
which any such Purchaser is a party, directly or indirectly,
presently may have a "short" position in the Common Stock; and
(iv) that each Purchaser shall not be deemed to have any
affiliation with or control over any arm's length
counter-party in any "derivative" transaction. The Company
further understands and acknowledges that (a) one or more
Purchasers may engage in hedging activities at various times
during the period that the Securities are outstanding,
including, without limitation, during the periods that the
value of the Underlying Shares deliverable with respect to
Securities are being determined and (b) such hedging
activities (if any) could reduce the value of the existing
stockholders' equity interests in the Company at and after the
time that the hedging activities are being conducted. The
Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the
Transaction Documents.
(ee) NO DISAGREEMENTS WITH ACCOUNTANTS AND LAWYERS. There are no
disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and
the accountants and lawyers formerly or presently employed by
the Company and the Company is current with respect to any
fees owed to its accountants and lawyers.
(ff) REGULATION M COMPLIANCE. The Company has not, and to its
knowledge no one acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in
the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any
compensation for soliciting purchases of, any of the
securities of
17
the Company, or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses
(ii) and (iii), compensation paid to the Company's placement
agent in connection with the placement of the Securities.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:
(a) ORGANIZATION; AUTHORITY. Such Purchaser, if it is an entity,
is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization with full
right, corporate or partnership power and authority to enter
into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution, delivery
and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by
all necessary corporate or similar action on the part of such
Purchaser. Each Transaction Document to which it is a party
has been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its
terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by
laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be
limited by applicable law.
(b) OWN ACCOUNT. Such Purchaser understands that the Securities
are "restricted securities" and have not been registered under
the Securities Act or any applicable state securities law and
is acquiring the Securities as principal for its own account
and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities
Act or any applicable state securities law, has no present
intention of distributing any of such Securities in violation
of the Securities Act or any applicable state securities law
and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the
distribution of such Securities (this representation and
warranty not limiting such Purchaser's right to sell the
Securities pursuant to the Registration Statement or otherwise
in compliance with applicable federal and state securities
laws) in violation of the Securities Act or any applicable
state securities law. Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its business.
(c) PURCHASER STATUS. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and on each
date on which it converts any shares of Preferred Stock, it
will be either: (i) an "accredited investor" as defined in
Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the
Securities Act or (ii) a "qualified institutional buyer" as
defined in Rule 144A(a) under the Securities Act. Such
Purchaser is not required to be registered as a broker-dealer
under Section 15 of the Exchange Act.
18
(d) EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either alone or
together with its representatives, has such knowledge,
sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks
of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such
Purchaser is able to bear the economic risk of an investment
in the Securities and, at the present time, is able to afford
a complete loss of such investment.
(e) GENERAL SOLICITATION. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice
or other communication regarding the Securities published in
any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other
general solicitation or general advertisement.
(f) SHORT SALES AND CONFIDENTIALITY PRIOR TO THE DATE HEREOF.
Other than the transaction contemplated hereunder, such
Purchaser has not directly or indirectly, nor has any Person
acting on behalf of or pursuant to any understanding with such
Purchaser, executed any disposition, including Short Sales, in
the securities of the Company during the period commencing
from the time that such Purchaser first received a term sheet
(written or oral) from the Company or any other Person setting
forth the material terms of the transactions contemplated
hereunder until the date hereof ("DISCUSSION TIME").
Notwithstanding the foregoing, in the case of a Purchaser that
is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such
Purchaser's assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser's assets,
the representation set forth above shall only apply with
respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the
Securities covered by this Agreement. Other than to other
Persons party to this Agreement, such Purchaser has maintained
the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and
terms of this transaction).
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 TRANSFER RESTRICTIONS.
(a) The Securities may only be disposed of in compliance with
state and federal securities laws. In connection with any
transfer of Securities other than pursuant to an effective
registration statement or Rule 144, to the Company or to an
Affiliate of a Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of
counsel selected by the transferor and reasonably acceptable
to the Company, the form and substance of which opinion shall
be reasonably satisfactory to the Company, to the effect that
such transfer does not require registration of such
transferred Securities under the Securities Act. As a
condition of transfer, any such transferee shall agree in
writing to be
19
bound by the terms of this Agreement and shall have the rights
of a Purchaser under this Agreement and the Registration
Rights Agreement.
(b) The Purchasers agree to the imprinting, so long as is required
by this Section 4.1, of a legend on any of the Securities in
the following form:
[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS
SECURITY IS CONVERTIBLE] HAS [NOT] BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON
CONVERSION OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
The Company acknowledges and agrees that a Purchaser may from
time to time pledge pursuant to a bona fide margin agreement
with a registered broker-dealer or grant a security interest
in some or all of the Securities to a financial institution
that is an "accredited investor" as defined in Rule 501(a)
under the Securities Act and who agrees to be bound by the
provisions of this Agreement and the Registration Rights
Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured
Securities to the pledgees or secured parties. Such a pledge
or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured
party or pledgor shall be required in connection therewith.
Further, no notice shall be required of such pledge. At the
appropriate Purchaser's expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured
party of Securities may reasonably request in connection with
a pledge or transfer of the Securities, including, if the
Securities are subject to registration pursuant to the
Registration Rights Agreement, the preparation and filing of
any required prospectus supplement under Rule 424(b)(3) under
the Securities Act or other applicable provision of the
Securities Act to appropriately amend the list of Selling
Stockholders thereunder.
(c) Certificates evidencing the Underlying Shares shall not
contain any legend (including the legend set forth in Section
4.1(b) hereof): (i) while a registration statement (including
the Registration Statement) covering the resale of such
security is effective
20
under the Securities Act, or (ii) following any sale of such
Underlying Shares pursuant to Rule 144, or (iii) if such
Underlying Shares are eligible for sale under Rule 144(k), or
(iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the
Commission). The Company shall cause its counsel to issue a
legal opinion to the Company's transfer agent promptly after
the Effective Date if required by the Company's transfer agent
to effect the removal of the legend hereunder. If all or any
shares of Preferred Stock are converted at a time when there
is an effective registration statement to cover the resale of
the Underlying Shares, or if such Underlying Shares may be
sold under Rule 144(k) or if such legend is not otherwise
required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued
by the staff of the Commission) then such Underlying Shares
shall be issued free of all legends. The Company agrees that
following the Effective Date or at such time as such legend is
no longer required under this Section 4.1(c), it will, no
later than three Trading Days following the delivery by a
Purchaser to the Company or the Company's transfer agent of a
certificate representing Underlying Shares, as applicable,
issued with a restrictive legend (such third Trading Day, the
"LEGEND REMOVAL Date"), deliver or cause to be delivered to
such Purchaser a certificate representing such shares that is
free from all restrictive and other legends. The Company may
not make any notation on its records or give instructions to
any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section.
Certificates for Underlying Shares subject to legend removal
hereunder shall be transmitted by the transfer agent of the
Company to the Purchasers by crediting the account of the
Purchaser's prime broker with the Depository Trust Company
System. The Company shall reimburse a Purchaser for any loss
occasioned by any "buy-in" suffered by a Purchaser as a result
of the Company's failure to deliver or cause to be delivered
Underlying Shares without a legend on or before the Legend
Removal Date.
(d) Each Purchaser, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend
from certificates representing Securities as set forth in this
Section 4.1 is predicated upon the Company's reliance that the
Purchaser will sell any Securities pursuant to either the
registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a
Registration Statement, they will be sold in compliance with
the plan of distribution set forth therein.
4.2 ACKNOWLEDGMENT OF DILUTION. The Company acknowledges that the
issuance of the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligations under the Transaction
Documents, including without limitation its obligation to issue the Underlying
Shares pursuant to the Transaction Documents, are unconditional and absolute and
not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have
against any Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other stockholders of the Company.
21
4.3 USE OF PROCEEDS. Except as set forth on SCHEDULE 4.3 attached
hereto, the Company shall use the net proceeds from the sale of the Securities
hereunder for working capital purposes and shall not use such proceeds for the
satisfaction of any portion of the Company's debt (other than payment of trade
payables in the ordinary course of the Company's business and prior practices),
or to redeem any Common Stock or Common Stock Equivalents or to settle any
outstanding litigation.
4.4 EQUAL TREATMENT OF PURCHASERS. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. For
clarification purposes, this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated separately by each Purchaser, and
is intended for the Company to treat the Purchasers as a class and shall not in
any way be construed as the Purchasers acting in concert or as a group with
respect to the purchase, disposition or voting of Securities or otherwise.
4.5 SHORT SALES AND CONFIDENTIALITY AFTER THE DATE HEREOF. Each
Purchaser severally and not jointly with the other Purchasers covenants that
neither it nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any Short Sales during the period commencing
at the Discussion Time and ending at the time that the transactions contemplated
by this Agreement are first publicly announced. Each Purchaser, severally and
not jointly with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed by the
Company, such Purchaser will maintain the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and
terms of this transaction). Each Purchaser understands and acknowledges,
severally and not jointly with any other Purchaser, that the Commission
currently takes the position that coverage of short sales of shares of the
Common Stock "against the box" prior to the Effective Date of the Registration
Statement with the Securities is a violation of Section 5 of the Securities Act,
as set forth in Item 65, Section A, of the Manual of Publicly Available
Telephone Interpretations, dated July 1997, compiled by the Office of Chief
Counsel, Division of Corporation Finance. Notwithstanding the foregoing, no
Purchaser makes any representation, warranty or covenant hereby that it will not
engage in Short Sales in the securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced.
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser's assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser's assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by
this Agreement.
4.6 FURNISHING OF INFORMATION. As long as any Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. As long as any Purchaser owns Securities, if the Company is not
required to file reports pursuant to the Exchange Act, it will prepare and
furnish to the
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Purchasers and make publicly available in accordance with Rule 144(c) such
information as is required for the Purchasers to sell the Securities under Rule
144. The Company further covenants that it will take such further action as any
holder of Securities may reasonably request, to the extent required from time to
time to enable such Person to sell such Securities without registration under
the Securities Act within the requirements of the exemption provided by Rule
144.
4.7 FORM D; BLUE SKY FILINGS. The Company agrees to timely file a Form
D with respect to the Securities as required under Regulation D and to provide a
copy thereof, promptly upon request of any Purchaser. The Company shall take
such action as the Company shall reasonably determine is necessary in order to
obtain an exemption for, or to qualify the Securities for, sale to the
Purchasers at the Closing under applicable securities or "Blue Sky" laws of the
states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.
4.8 SHAREHOLDER APPROVAL. As soon as reasonably practicable following
the date hereof, the Company shall use best efforts to obtain Shareholder
Approval by: (a) obtaining a written consent of or holding a special meeting of
shareholders of the Company at the earliest practical date to obtain Shareholder
Approval; (b) providing an information statement, or soliciting proxies from its
shareholders in connection with Shareholder Approval in the same manner as the
Company has solicited proxies for other management proposals in recent proxy
statements of the Company; and (c) if applicable, voting all management proxies
in favor of Shareholder Approval. If the Company does not obtain Shareholder
Approval at the first special meeting of shareholders, the Company shall call a
special meeting every four months thereafter to seek Shareholder Approval.
4.9 SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall file a
Current Report on Form 8-K, disclosing the material terms of the transactions
contemplated hereby and including the Transaction Documents as exhibits thereto
within the time required by the Exchange Act. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or include the
name of any Purchaser in any filing with the Commission or any regulatory agency
or Trading Market, without the prior written consent of such Purchaser, except
(i) as required by federal securities law in connection with (A) any
registration statement contemplated by the Registration Rights Agreement and (B)
the filing of final Transaction Documents (including signature pages thereto)
with the Commission and (ii) to the extent such disclosure is required by law or
Trading Market regulations, in which case the Company shall provide the
Purchasers with prior notice of such disclosure permitted under this subclause
(ii).
4.10 NON-PUBLIC INFORMATION. Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents,
the Company covenants and agrees that neither it nor any other Person acting on
its behalf will provide any Purchaser or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the Company.
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4.11 INDEMNIFICATION OF PURCHASERS. Subject to the provisions of this
Section 4.11, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
"PURCHASER PARTY") harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against a
Purchaser, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such Purchaser, with respect to any of
the transactions contemplated by the Transaction Documents (unless such action
is based upon a breach of such Purchaser's representations, warranties or
covenants under the Transaction Documents or any agreements or understandings
such Purchaser may have with any such stockholder or any violations by the
Purchaser of state or federal securities laws or any conduct by such Purchaser
which constitutes fraud, gross negligence, willful misconduct or malfeasance).
If any action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party. Any Purchaser Party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (i) the employment thereof has
been specifically authorized by the Company in writing, (ii) the Company has
failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of such
separate counsel, a material conflict on any material issue between the position
of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (i) for any settlement by a Purchaser Party effected
without the Company's prior written consent, which shall not be unreasonably
withheld or delayed; or (ii) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party's breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents.
ARTICLE V
MISCELLANEOUS
5.1 TERMINATION. This Agreement may be terminated by any Purchaser, as
to such Purchaser's obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written
notice to the other parties, if the Closing has not been consummated on or
before February 28, 2007; PROVIDED, HOWEVER, that
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such termination will not affect the right of any party to xxx for any breach by
the other party (or parties).
5.2 FEES AND EXPENSES. At the Closing, the Company has agreed to
reimburse the Placement Agent the non-accountable sum of $______ for its legal
fees and expenses. Except as expressly set forth in the Transaction Documents to
the contrary, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all transfer agent fees,
stamp taxes and other taxes and duties levied in connection with the delivery of
any Securities to the Purchasers.
5.3 ENTIRE AGREEMENT. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
5.4 NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto prior to 5:30 p.m. (New York
City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the 2nd Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached
hereto.
5.5 AMENDMENTS; WAIVERS. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and each Purchaser or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right.
5.6 HEADINGS. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger). Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Securities, provided
25
such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the
"Purchasers".
5.8 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
5.9 GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
borough of Manhattan for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law. The parties hereby waive
all rights to a trial by jury. If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys' fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
5.10 SURVIVAL. The representations and warranties shall survive the
Closing and the delivery of Securities for the applicable statue of limitations.
5.11 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a ".pdf" format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or ".pdf" signature page were an original
thereof.
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5.12 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
5.13 RESCISSION AND WITHDRAWAL RIGHT. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights.
5.14 REPLACEMENT OF SECURITIES. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.
5.15 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agrees to waive
and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.
5.16 PAYMENT SET ASIDE. To the extent that the Company makes a payment
or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
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5.17 USURY. To the extent it may lawfully do so, the Company hereby
agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of,
usury laws wherever enacted, now or at any time hereafter in force, in
connection with any claim, action or proceeding that may be brought by any
Purchaser in order to enforce any right or remedy under any Transaction
Document. Notwithstanding any provision to the contrary contained in any
Transaction Document, it is expressly agreed and provided that the total
liability of the Company under the Transaction Documents for payments in the
nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the "MAXIMUM RATE"), and, without limiting the foregoing, in no
event shall any rate of interest or default interest, or both of them, when
aggregated with any other sums in the nature of interest that the Company may be
obligated to pay under the Transaction Documents exceed such Maximum Rate. It is
agreed that if the maximum contract rate of interest allowed by law and
applicable to the Transaction Documents is increased or decreased by statute or
any official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date forward, unless such
application is precluded by applicable law. If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to any
Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such Purchaser to the unpaid principal balance
of any such indebtedness or be refunded to the Company, the manner of handling
such excess to be at such Purchaser's election.
5.18 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under any Transaction Document. Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Documents. For reasons of administrative convenience only, Purchasers and their
respective counsel have chosen to communicate with the Company through FWS. FWS
does not represent any of the Purchasers but only the Placement Agent. The
Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by the Purchasers.
5.19 CONSTRUCTION. The parties agree that each of them and/or their
respective counsel has reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the
28
drafting party shall not be employed in the interpretation of the Transaction
Documents or any amendments hereto.
[Signature Page Follows]
29
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
MPLC, INC. ADDRESS/FACSIMILE NUMBER/E-MAIL ADDRESS
FOR NOTICE:
By: /s/ Xxxxxxx Xxxxx 00 XXXXXXXXX XXXX, XXXXX 000
------------------------ XXXXXX, XX 00000
Name: Xxxxxxx Xxxxx FACSIMILE: _________________
Title: President E-MAIL: ____________________
ATTENTION: _________________
With a copy to (which shall not
constitute notice):
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
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[PURCHASER SIGNATURE PAGES TO MPLC SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name of Purchaser: _____________________________________________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF PURCHASER: ________________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: _________________________________________________
Email Address of Authorized Signatory: _________________________________________
Fax Number of Authorized Signatory: ____________________________________________
Address for Notice of Purchaser:
Address for Delivery of Securities for Purchaser (if not same as above):
Subscription Amount: $____________
Shares of Preferred Stock: ____________
EIN Number: [PROVIDE THIS UNDER SEPARATE COVER]
[SIGNATURE PAGES CONTINUE]
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