EXHIBIT 4.1
SUBORDINATED CONVERTIBLE NOTE PURCHASE AGREEMENT
SUBORDINATED CONVERTIBLE NOTE PURCHASE AGREEMENT ("Agreement") dated as
of February ___, 1998 between Xxxxxx Industries Inc., a Florida corporation (the
"Company"), and each person or entity who executes a counterpart signature page
to this Agreement and is listed as an investor on Schedule I attached to this
Agreement (each individually an "Investor" and collectively the "Investors").
W I T N E S S E T H:
WHEREAS, the Company desires to sell and issue to the Investors, and
the Investors desire to purchase from the Company, up to an aggregate principal
amount of $17,000,000 of the Company's eight and one-quarter percent (8 1/4%)
Subordinated Convertible Notes Due February 23, 2003 with the terms set forth in
the Notes, in the identical form and substance of Exhibit A attached hereto (the
"Notes") on the terms and conditions set forth herein; and
WHEREAS, the Notes will be convertible into shares ("Common Shares") of
common stock, par value $0.001, of the Company ("Common Stock"), pursuant to the
terms set forth in the form of Note, and the Investors will have registration
rights with respect to such Common Shares issuable upon conversion, pursuant to
the terms herein;
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"Closing" and "Closing Date" shall have the meanings ascribed to such
terms in Section 1.3 herein.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Registrable Securities" shall mean: (i) the Common Shares issued to
each Holder or its permitted transferee or designee upon conversion of the Notes
or upon any stock split, stock dividend, recapitalization or similar event with
respect to such Common Shares; (ii) any securities
issued or issuable to each Holder upon the exchange or conversion of any Notes
or Common Shares; or (iii) any other security of the Company issued as a
dividend or other distribution with respect to, in exchange of or in replacement
of Registrable Securities.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, reasonable fees and disbursements of Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP or other counsel for Holders (using a single counsel selected by a
majority in the interest of the Holders) for a "due diligence" examination of
the Company and review of the Registration Statement and related documents, and
the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company).
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses".
"Holder" and "Holders" shall include an Investor or the Investors,
respectively, and any transferee of the Notes or Common Shares or Registrable
Securities which have not been sold to the public to whom the registration
rights conferred by this Agreement have been transferred in compliance with this
Agreement.
"Registration Statement" shall have the meaning set forth in Section
4.1(a) herein.
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Securities Act" or "Act" shall mean the Securities Act of 1933, as
amended.
ARTICLE I
PURCHASE AND SALE OF NOTES
Section 1.1 PURCHASE AND SALE OF NOTES. Upon the following terms and
conditions, the Company shall issue and sell to each Investor severally, and
each Investor severally shall purchase from the Company, the principal amount of
Notes indicated next to such Investor's name on Schedule I attached hereto.
Section 1.2 PURCHASE PRICE. The Notes shall be offered in $1,000
denominations (the "Purchase Price").
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Section 1.3 THE CLOSING.
(a) The initial closing of the purchase and sale of the Notes
(the "initial Closing"), shall take place at the offices of Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP, at 10:00 a.m., local time following acceptance by the Company of
subscriptions representing not less than $11,000,000 aggregate principal amount
of Notes on the later of the following: (i) the date on which the last to be
fulfilled or waived of the conditions set forth in Article V hereof and
applicable to any Closing Date (as defined herein) shall be fulfilled or waived
in accordance herewith, or (ii) such other time and place and/or on such other
date as the Investors and the Company may agree. Subsequent Closings, if any,
will be held at such times as are agreed upon by the Company and the Investors.
The date on which the initial Closing and any subsequent Closings, if any,
occurs is referred to herein as the "Closing Date."
(b) On any Closing Date, the Company shall deliver to each
Investor certificates (with the number of and denomination of such certificates
reasonably requested by such Investor) representing the Notes purchased
hereunder by such Investor registered in the name of such Investor or its
nominee or deposit such Notes into accounts designated by such Investor, and
such Investor shall deliver to the Company the Purchase Price for the principal
amount of Notes purchased by such Investor hereunder by wire transfer in
immediately available funds to an account designated in writing by the Company.
In addition, each party shall deliver all documents, instruments and writings
required to be delivered by such party pursuant to this Agreement at or prior to
any Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby makes the following representations and warranties to each of the
Investors (except for those Investors who did not close on the initial Closing
Date) as of the date hereof and the initial Closing Date. The Company hereby
makes the following representations and warranties to each of the Investors who
did not close on the initial Closing Date as of the date hereof and any
subsequent Closing Date:
(a) ORGANIZATION AND QUALIFICATION; MATERIAL ADVERSE EFFECT.
Each of the Company and its Subsidiary (as defined below) is a corporation duly
incorporated and existing in good standing under the laws of its respective
jurisdiction of incorporation and the Company and the Subsidiary each have the
requisite corporate power to own its properties and to carry on its business as
now being conducted. The Company owns 100% of the outstanding capital stock of
Systemone Technologies Inc., a Florida corporation (the "Subsidiary"). The
Company does not have any other direct or indirect subsidiaries. Each of the
Company and the Subsidiary is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary other than those in which the failure so to qualify would not have a
Material Adverse Effect. "Material Adverse Effect" means any adverse effect on
the business, operations, properties, prospects, or financial condition of the
entity with respect to which such term is used
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and which is material to such entity and other entities controlling or
controlled by such entity taken as a whole, and any material adverse effect on
the transactions contemplated under this Agreement or any other agreement or
document contemplated hereby or thereby.
(b) AUTHORIZATION; ENFORCEMENT. (i) The Company has the
requisite corporate power and authority to enter into and perform this Agreement
and to issue the Notes in accordance with the terms hereof, (ii) the execution
and delivery of this Agreement by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including the issuance of the
Notes, have been duly authorized by all necessary corporate action, and no
further consent or authorization of the Company or its Board of Directors or
stockholders is required, (iii) this Agreement has been duly executed and
delivered by the Company, and (iv) this Agreement constitutes the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of creditors' rights and
remedies or by other equitable principles of general application.
(c) CAPITALIZATION. The authorized capital stock of the
Company consists of 25,000,000 shares of Common Stock and 1,500,000 shares of
preferred stock; without giving effect to this offering, there are 4,601,309
shares of Common Stock and no shares of preferred stock issued and outstanding,
respectively. All of the outstanding shares of the Common Stock have been
validly issued and are fully paid and non-assessable. No shares of Common Stock
or preferred stock are entitled to preemptive rights; without giving effect to
this offering, 213,180 shares of Common Stock (including any shares of Common
Stock issuable upon the exercise of any outstanding options, warrants or rights
or upon the exchange or conversion of any exchangeable or convertible securities
of the Company) are entitled to registration rights; and without giving effect
to this offering, there are outstanding options for 113,180 shares of Common
Stock and outstanding warrants for 100,000 shares of Common Stock. There are no
other scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights exchangeable or convertible
into, any shares of capital stock of the Company, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of capital stock of the Company or options, warrants,
scrip, rights to subscribe to, or commitments to purchase or acquire, any
shares, or securities or rights convertible into shares, of capital stock of the
Company (except as contemplated by this Agreement or disclosed in the SEC
Documents (as defined below)).
(d) ISSUANCE OF COMMON SHARES. The Common Shares issuable upon
conversion of the Notes (the "Underlying Shares") are duly authorized and will
be as of any Closing Date reserved for issuance and, upon such conversion in
accordance with the terms of the Note, such Underlying Shares will be validly
issued, fully paid and non-assessable, free and clear of any and all liens,
claims and encumbrances, and the holders of such Underlying Shares shall be
entitled to all rights and preferences accorded to a holder of Common Shares.
The outstanding Common Shares are currently listed on the Nasdaq SmallCap Market
("Nasdaq").
(e) NO CONFLICTS. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions
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contemplated hereby and thereby do not and will not (i) result in a violation of
the Charter or By-Laws of the Company or the Subsidiary or (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent,
patent license or instrument to which the Company or the Subsidiary is a party,
or result in a violation of any federal, state, local or foreign law, rule,
regulation, order, judgment or decree (including Federal and state securities
laws and regulations) applicable to the Company or the Subsidiary or by which
any property or asset of the Company or the Subsidiary is bound or affected
(except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect); provided that, for purposes of such
representation as to Federal, state, local or foreign law, rule or regulation,
no representation is made herein with respect to any of the same applicable
solely to the Investors and not to the Company or the Subsidiary. Neither the
business of the Company nor of the Subsidiary is being conducted in violation of
any law, ordinance or regulation of any governmental entity, except for
violations which either singly or in the aggregate do not and will not have a
Material Adverse Effect. The Company is not required under Federal, state, local
or foreign law, rule or regulation to obtain any consent, authorization or order
of, or to make any filing or registration with, any court or governmental agency
in order for it to execute, deliver or perform any of its obligations under this
Agreement or issue and sell the Notes in accordance with the terms hereof and
issue the Underlying Shares upon conversion thereof, except for the registration
provisions provided for herein, provided that, for purposes of the
representation made in this sentence, the Company is assuming and relying upon
the accuracy of the relevant representations and agreements of the Investors
herein.
(f) SEC DOCUMENTS; FINANCIAL STATEMENTS. The Common Stock of
the Company is registered pursuant to Section 12(g) of the Exchange Act and the
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Commission pursuant to the reporting
requirements of the Exchange Act, including material filed pursuant to Section
13(a) or 15(d), in addition to one or more registration statements and
amendments thereto heretofore filed by the Company with the Commission (all of
the foregoing including filings incorporated by reference therein being referred
to herein as the "SEC Documents"). The Company has delivered or made available
to the Investors true and complete copies of all SEC Documents (including,
without limitation, proxy information and solicitation materials and
registration statements) filed with the Commission since September 27, 1996 and
all annual SEC Documents filed with the Commission since September 27, 1996. The
Company has not provided to any Investor any information which, according to
applicable law, rule or regulation, should have been disclosed publicly by the
Company but which has not been so disclosed. As of their respective dates, the
SEC Documents (as amended by any amendments filed prior to the date of this
Agreement or any Closing Date and provided to each Investor) complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder and other federal, state
and local laws, rules and regulations applicable to such SEC Documents, and none
of the SEC Documents 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 light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
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in the SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company as
of 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
year-end audit adjustments).
(g) PRINCIPAL EXCHANGE/MARKET. The principal market on which
the Common Shares are currently traded is Nasdaq.
(h) NO MATERIAL ADVERSE CHANGE. Since September 30, 1997, the
date through which the most recent quarterly report of the Company on Form 10-Q
has been prepared and filed with the Commission, a copy of which is included in
the SEC Documents, no event which had or is likely to have a Material Adverse
Effect has occurred or exists with respect to the Company or the Subsidiary,
except as otherwise disclosed or reflected in press releases or other SEC
Documents prepared through or as of a date subsequent to September 30, 1997.
(i) NO UNDISCLOSED LIABILITIES. Neither the Company nor the
Subsidiary has any liabilities or obligations not disclosed in the SEC
Documents, other than those liabilities incurred in the ordinary course of its
respective business since September 30, 1997 or liabilities or obligations,
individually or in the aggregate, which do not or would not have a Material
Adverse Effect on the Company or the Subsidiary, taken as a whole.
(j) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. No event or
circumstance has occurred or exists with respect to the Company, the Subsidiary
or their respective business, properties, prospects, operations or financial
condition, which, under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so publicly
announced or disclosed.
(k) NO GENERAL SOLICITATION. None of the Company, the
Subsidiary or, to the Company's knowledge, any of their respective affiliates or
any person acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Notes.
(l) NO INTEGRATED OFFERING. None of the Company, the
Subsidiary, or, to the Company's knowledge, any of their respective affiliates,
or 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 require registration of the Notes.
(m) INTELLECTUAL PROPERTY. Each of the Company and the
Subsidiary owns or has licenses to use certain patents, copyrights and
trademarks ("intellectual property") associated with its respective business.
Each of the Company and the Subsidiary has all
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intellectual property rights which are needed to conduct its respective business
as it is now being conducted or as proposed to be conducted as disclosed in the
SEC Documents. The Company has no reason to believe that the intellectual
property rights owned by the Company or the Subsidiary are invalid or
unenforceable or that the use of such intellectual property by the Company or
the Subsidiary infringes upon or conflicts with any right of any third party,
and neither the Company nor the Subsidiary has received notice of any such
infringement or conflict. The Company has no knowledge of any infringement of
the Company's or the Subsidiary's intellectual property by any third party.
(n) NO LITIGATION. Except as set forth in the SEC Documents
delivered to the Investors prior to the date of this Agreement ("Pre-Agreement
SEC Documents") no litigation or claim (including those for unpaid taxes)
against the Company or the Subsidiary is pending or, to the Company's knowledge,
threatened, and no other event has occurred, which if determined adversely would
have a Material Adverse Effect on the Company or the Subsidiary, taken as a
whole or would materially adversely effect the transactions contemplated hereby.
The legal proceedings described in the Pre-Agreement SEC Documents will not have
an effect on the transactions contemplated hereby, and will not have a Material
Adverse Effect on the Company or the Subsidiary, taken as a whole.
(o) BROKERS. The Company has taken no action which would give
rise to any claim by any person, other than Credit Suisse First Boston
Corporation or Josephthal & Co. Inc., for brokerage commissions, finder's fees
or similar payments by any Investor relating to this Agreement or the
transactions contemplated hereby.
Section 2.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each of
the Investors (except for those Investors who did not close on the initial
Closing Date), severally and not jointly, hereby makes the following
representations and warranties to the Company as of the date hereof and on the
initial Closing Date. Each of the Investors who did not close on the initial
Closing Date, severally and not jointly, hereby makes the following
representations and warranties to the Company as of the date hereof and on any
subsequent Closing Date:
(a) AUTHORIZATION; ENFORCEMENT. (i) Such Investor has the
requisite power and authority to enter into and perform this Agreement and to
purchase the Notes being sold hereunder, (ii) the execution and delivery of this
Agreement by such Investor and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate or partnership action, as required, and (iii) this Agreement
constitutes the valid and binding obligation of such Investor enforceable
against such Investor in accordance its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of creditors' rights and remedies or by other equitable principles of general
application.
(b) NO CONFLICTS. The execution, delivery and performance of
this Agreement and the consummation by such Investor of the transactions
contemplated hereby and thereby do not and will not (i) result in a violation of
such Investor's organizational documents, or (ii) conflict with any agreement,
indenture, or instrument to which such Investor is a party, or (iii)
7
result in a violation of any law, rule, or regulation or any order, judgment or
decree of any court or governmental agency applicable to such Investor. Such
Investor is not required to obtain any consent or authorization of any
governmental agency in order for it to perform its obligations under this
Agreement.
(c) INVESTMENT REPRESENTATION. Such Investor is purchasing the
Notes for its own account and not with a view to distribution in violation of
any securities laws. Such Investor has no present intention to sell the Notes
and such Investor has no present arrangement (whether or not legally binding) to
sell the Notes to or through any person or entity; provided, however, that by
the representations herein, such Investor does not agree to hold the Notes for
any minimum or other specific term and reserves the right to dispose of the
Notes at any time in accordance with Federal and state securities laws
applicable to such disposition.
(d) ACCREDITED INVESTOR. Such Investor is an "accredited
investor" as defined in Rule 501 promulgated under the Act. The Investor has
such knowledge and experience in financial and business matters in general and
investments in particular, so that such Investor is able to evaluate the merits
and risks of an investment in the Notes and to protect its own interests in
connection with such investment. In addition (but without limiting the effect of
the Company's representations and warranties contained herein), such Investor
has received such information as it considers necessary or appropriate for
deciding whether to purchase the Notes pursuant hereto.
(e) RULE 144. Such Investor understands that there is no
public trading market for the Notes, that none is expected to develop, and that
the Notes must be held until repaid in full unless such Notes are converted or
registered under the Act or an exemption from registration is available. Such
Investor has been advised or is aware of the provisions of Rule 144 promulgated
under the Act.
(f) BROKERS. Such Investor has taken no action which would
give rise to any claim by any person other than Credit Suisse First Boston
Corporation or Josephthal & Co. Inc., for brokerage commissions, finder's fees
or similar payments by the Company relating to this Agreement or the
transactions contemplated hereby.
(g) RELIANCE BY THE COMPANY. Such Investor understands that
the Notes are being offered and sold in reliance on a transactional exemption
from the registration requirements of Federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of such Investor set
forth herein in order to determine the applicability of such exemptions and the
suitability of such Investor to acquire the Notes.
ARTICLE III
COVENANTS
Section 3.1 REGISTRATION AND LISTING. Until the later of (i) such time
as no Notes are outstanding or (ii) the expiration of the Effectiveness Period
(as hereinafter defined in
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Section 4.3), the Company will cause the Common Shares to continue to be
registered under Section 12(g) of the Exchange Act, will comply in all respects,
with its reporting and filing obligations under the Exchange Act, and will not
take any action or file any document (whether or not permitted by the Exchange
Act or the rules thereunder) to terminate or suspend such reporting and filing
obligations. Until the later of (i) such time as no Notes are outstanding or
(ii) the expiration of the Effectiveness Period, the Company shall use its best
efforts to continue the listing or trading of the Common Shares on Nasdaq, the
Nasdaq National Market or a principal exchange and comply in all respects with
the Company's reporting, filing and other obligations under the bylaws or rules
of Nasdaq and any exchange or market where the Common Shares are then traded.
Section 3.2 CERTIFICATES ON CONVERSION. Upon any conversion (automatic
or optional) of the Notes, the Company shall issue and deliver to such Investor
(or the then holder) within three (3) days of the Conversion Date (as defined in
the Notes) a new certificate or certificates for the principal amount of Notes
which such Investor (or holder) has not yet been converted but which are
evidenced in part by the certificate(s) submitted to the Company in connection
with such conversion (with the number of and denomination of such new
certificate(s) designated by such Investor or holder).
Section 3.3 REPLACEMENT CERTIFICATES. The certificate(s) representing
the Notes held by any Investor (or then holder) may be exchanged by such
Investor (or such holder) at any time and from time to time for certificates
with different denominations representing an equal aggregate principal amount of
Notes, as reasonably requested by such Investor (or such holder) upon
surrendering the same. No service charge will be made for such registration,
transfer or exchange.
Section 3.4 SECURITIES COMPLIANCE. The Company shall notify the
Commission and Nasdaq, in accordance with their requirements, of the
transactions contemplated by this Agreement, and shall take all other necessary
action and proceedings as may be required and permitted by applicable law, rule
and regulation, for the legal and valid issuance of the Notes hereunder and the
Common Shares issuable upon conversion thereof.
Section 3.5 NOTICES. The Company agrees to provide all holders of Notes
with copies of all notices and information, including without limitation notices
and proxy statements in connection with any meetings, that are provided to the
holders of shares of Common Shares, contemporaneously with the delivery of such
notices or information to such Common Share holders.
Section 3.6 RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company
shall at all times reserve and keep available out of its authorized but unissued
Common Shares, solely for the purpose of affecting the conversion of the Notes,
such number of its Common Shares as shall from time to time be sufficient to
effect the conversion of all outstanding Notes, and if at any time the number of
authorized but unissued Common Shares shall not be sufficient to effect the
conversion of all the then outstanding Notes, the Company will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued Common
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Shares to such number of shares as shall be sufficient for such purpose,
including without limitation engaging in best efforts to obtain the requisite
shareholder approval.
ARTICLE IV
REGISTRATION
Section 4.1 REGISTRATION REQUIREMENTS. The Company shall use its
reasonable best efforts to effect the registration of the Registrable Securities
(including without limitation the execution of an undertaking to file
post-effective amendments, appropriate qualification under applicable blue sky
or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would permit or facilitate the
sale or distribution of all the Registrable Securities in the manner (including
manner of sale) and in all states reasonably requested by the Holder. Such
reasonable best efforts by the Company shall include the following:
(a) the Company shall, as expeditiously as reasonably possible
after the final Closing Date:
(i) Prepare and file a registration
statement with the Commission pursuant to Rule 415 under the
Securities Act on such appropriate registration form of the
Commission as shall be reasonably selected by the Company
covering the Registrable Securities ("Registration Statement")
within 45 days following the final Closing Date. Thereafter
the Company shall use its reasonable best efforts to cause
such Registration Statement to be declared effective by the
Commission within 90 days following the final Closing Date. In
the event that such Registration Statement is not declared
effective within 90 days following the final Closing Date,
there shall be a 30 day grace period. The Company shall use
its reasonable best efforts to cause the Registration
Statement to become effective during this 30 day grace period,
if applicable. In the event that such Registration Statement
has not been declared effective within 120 days from the final
Closing Date, then the Company shall until the Registration
Statement is declared effective, pay in cash to each Holder an
amount equal to 2% of the principal amount of the Note (the
"Liquidated Damages") held by such Holder for each 30 day
period beginning on the 121st day following the final Closing
Date (the "Default Period") that the Registration Statement
has not been declared effective; provided however, that the
Default Period shall terminate and Liquidated Damages shall
cease to accrue on the date upon which such Registrable
Securities may be sold under Rule 144(k) in the reasonable
opinion of counsel to the Company (provided that the Company's
transfer agent has accepted an instruction from the Company to
such effect). If any applicable Default Period is less than 30
days such cash payment shall be on a pro rata basis. Such cash
payment shall be calculated by the Company on the earlier of
(i) the effective date of such Registration Statement or (ii)
the last day of each Default Period and a check in lawful
money of the United States of America shall be sent within
three (3) business days of such calculation to the address of
each Holder as listed in the
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Note Register maintained by the Company pursuant to Section 7
of the Note. Notwithstanding the foregoing, if the Default
Period commences from the failure of the Company to cause to
become effective the Registration Statement solely by reason
of the failure of any Holder to provide such information as
(i) the Company may reasonably request from such Holder to be
included in the Registration Statement or (ii) the Commission
or Nasdaq may request in connection with such Registration
Statement (the "Late Holder"), the Company shall not be
required to pay such Liquidated Damages to any of the Holders;
provided, that the Company shall file the Registration
Statement excluding the Late Holder, within two (2) business
days after the initial day of the Default Period. The Company
agrees to promptly file an amendment to such Registration
Statement including the Late Holder once the requested
information has been provided.
(ii) Prepare and file with the Commission
such amendments and supplements to such Registration Statement
and the prospectus used in connection with such Registration
Statement as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities
covered by such Registration Statement and notify the Holders
of the filing and effectiveness of such Registration Statement
and any amendments or supplements.
(iii) Furnish to each Holder such numbers of
copies of a current prospectus conforming with the
requirements of the Act, copies of the Registration Statement,
any amendment or supplement thereto and any documents
incorporated by reference therein and such other documents as
such Holder may reasonably require in order to facilitate the
disposition of Registrable Securities owned by such Holder.
(iv) Use its best efforts to register and
qualify the securities covered by such Registration Statement
under such other securities or "Blue Sky" laws of such
jurisdictions as shall be reasonably requested by each Holder;
provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business
or to file a general consent to service of process in any such
states or jurisdictions.
(v) Notify each Holder immediately of the
happening of any event as a result of which the prospectus
(including any supplement thereto or thereof) included in such
Registration Statement, as then in effect, includes an untrue
statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading in light of the
circumstances then existing, and use its best efforts to
promptly update and/or correct such prospectus.
(vi) Notify each Holder immediately of the
issuance by the Commission or any state securities commission
or agency of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any
proceedings for that purpose. The Company shall use its
reasonable best efforts to
11
prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the earliest
possible time.
(vii) Permit a single firm of counsel,
designated as Holders' counsel by the Holders of a majority of
the Registrable Securities included in the Registration
Statement, to review the Registration Statement and all
amendments and supplements thereto within a reasonable period
of time prior to each filing, and shall not file any document
in a form to which such counsel reasonably objects.
(viii) Use its reasonable best efforts to
list the Registrable Securities covered by such Registration
Statement with all securities exchange(s) and/or markets on
which the Common Shares are then listed, and prepare and file
any required filings with the National Association of
Securities Dealers, Inc. or any exchange or market where the
Common Shares are traded.
(b) The Company shall make available for inspection by the
Holders, representative(s) of all the Holders together, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney or accountant retained by any Holder or underwriter, all financial and
other records customary for purposes of the Holders' due diligence examination
of the Company and all SEC Documents filed subsequent to the final Closing Date,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such representative, underwriter, attorney or accountant in
connection with such Registration Statement, provided that such parties agree to
keep such information confidential.
Section 4.2 EXPENSES OF REGISTRATION. All Registration Expenses
incurred in connection with any registration, qualification or compliance with
registration pursuant to this Section 4 shall be borne by the Company, and all
Selling Expenses of a Holder shall be borne by such Holder.
Section 4.3 REGISTRATION PERIOD. In the case of the registration
effected by the Company pursuant to this Section 4, the Company will use its
best efforts to keep such registration effective (the "Effectiveness Period")
until the earlier to occur of (a) two years from the final Closing Date,
provided that the Company may suspend the effectiveness of the Registration
Statement if the Board of Directors determines, upon advice of counsel, that in
order to maintain effectiveness of the Registration Statement, the Company would
be required to disclose a significant corporate development which disclosure
would have a material effect on the Company; provided, however, that the period
of time which such Registration Statement is required to be effective shall be
increased by the number of days that the Registration Statement's effectiveness
was suspended, if any, during the two year period from the final Closing Date,
(b) the date on which all the Holders have completed the sales or distribution
described in the Registration Statement relating thereto or, (c) the date on
which such Registrable Securities may be sold under Rule 144(k) in the
reasonable opinion of counsel to the Company (provided that the Company's
transfer agent has accepted an instruction from the Company to such effect).
Section 4.4 INDEMNIFICATION.
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(a) COMPANY INDEMNITY. The Company will indemnify each Holder,
each of its officers, directors and partners, and each person controlling each
Holder, within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls, within the meaning of Section 15 of the
Securities Act and the rules and regulations thereunder, any underwriter,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any state
securities law or in either case, any rule or regulation thereunder applicable
to the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each Holder, each of its officers, directors and partners, and each
person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to a Holder to the extent that any such claim, loss, damage, liability
or expense arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by such Holder or the
underwriter (if any) therefor and stated to be specifically for use therein. The
indemnity agreement contained in this Section 4.4(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent will
not be unreasonably withheld).
(b) HOLDER INDEMNITY. Each Holder will, severally and not
jointly, if Registrable Securities held by it are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors, officers, partners, and each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act and the rules and regulations
thereunder, each other Holder (if any), and each of their directors, officers
and partners, and each person controlling such other Holder(s) against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statement therein not misleading, in each case only insofar as such untrue
statement or alleged untrue statement or omission relates to such Holder, and
will reimburse the Company and such other Holder(s) and their directors,
officers and partners, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the
13
Company by such Holder and stated to be specifically for use therein, and
provided that the maximum amount for which such Holder shall be liable under
this indemnity shall not exceed the net proceeds received by such Holder from
the sale of the Registrable Securities. The indemnity agreement contained in
this Section 4.4(b) shall not apply to amounts paid in settlement of any such
claims, losses, damages or liabilities if such settlement is effected without
the consent of such Holder (which consent shall not be unreasonably withheld).
(c) PROCEDURE. Each party entitled to indemnification under
this Article (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Article
except to the extent that the Indemnifying Party is materially and adversely
affected by such failure to provide notice. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
Section 4.5 CONTRIBUTION. If the indemnification provided for in
Section 4 herein is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein (other than by reason
of the exceptions provided therein), then each such Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and any Holder on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 4.5 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 4.4(a) or 4.4(b) hereof had been
available under the circumstances.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4.5 were determined by PRO
RATA allocation (even if the Holders or the
14
underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraphs. The amount paid or payable
by an Indemnified Party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraphs shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this section, no Holder or underwriter shall be required to
contribute any amount in excess of the amount by which (i) in the case of any
Holder, the net proceeds received by such Holder from the sale of Registrable
Securities or (ii) in the case of an underwriter, the total price at which the
Registrable Securities purchased by it and distributed to the public were
offered to the public exceeds, in any such case, the amount of any damages that
such Holder or underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement, omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
ARTICLE V
CONDITIONS
Section 5.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO
ISSUE THE NOTES. The obligation hereunder of the Company to issue the Notes to
the Investors is subject to the satisfaction, at or before any Closing Date, of
each of the conditions set forth below. These conditions are for the Company's
sole benefit and may be waived by the Company at any time in its sole
discretion.
(a) ACCURACY OF THE INVESTORS' REPRESENTATIONS AND WARRANTIES.
The representations and warranties of each Investor shall be true and correct in
all material respects as of the date when made and as of any Closing Date as
though made at that time (except for representations and warranties that speak
as of a particular date).
(b) PERFORMANCE BY THE INVESTORS. Each Investor shall have
performed all agreements and satisfied all conditions required to be performed
or satisfied by such Investor at or prior to any Closing Date.
(c) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
Section 5.2 2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTORS
TO PURCHASE THE NOTES. The obligation hereunder of each Investor to acquire and
pay for the Notes is subject to the satisfaction, at or before any Closing Date,
of each of the conditions set forth below. These conditions are for the
Investors' sole benefit and may be waived by the Investors at any time in their
sole discretion.
15
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The representation and warranties of the Company shall be true and correct in
all material respects as of the date when made and as of any Closing Date as
though made at that time (except for representations and warranties that speak
as of a particular date).
(b) PERFORMANCE BY THE COMPANY. The Company shall have
performed all agreements and satisfied all conditions required to be performed
or satisfied by the Company at or prior to any Closing Date.
(c) NASDAQ. From the date hereof to any Closing Date, trading
in the Company's Common Shares shall not have been suspended by the Commission
or Nasdaq, and trading in securities generally as reported by Nasdaq, shall not
have been suspended or limited, and the Common Shares shall not have been
delisted from any exchange or market where they are currently listed.
(d) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority or competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
(e) OPINION OF COUNSEL. At any Closing Date the Investors
shall have received an opinion of counsel to the Company in substantially the
form attached hereto as Exhibit B and such other opinions, certificates and
documents as the Investors or their counsel shall reasonably require incident to
the Closing.
(f) MINIMUM SUBSCRIPTION. In connection with the initial
Closing Date, Notes in the aggregate principal amount of $11,000,000 shall have
been purchased by the Investors pursuant to this Agreement.
(g) SECRETARY'S CERTIFICATE. The Company shall have delivered
to the Investors a certificate in form and substance reasonably satisfactory to
the Investors, executed by the Secretary of the Company on behalf of the
Company, certifying as to satisfaction of closing conditions, incumbency of
signing officers, charter, by-laws, good standing and authorizing resolutions of
the Company.
ARTICLE VI
LEGEND AND STOCK
Each certificate representing the Notes shall be stamped or otherwise
imprinted with a legend substantially in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND THEY MAY
NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR
TRANSFERRED EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS
CURRENT WITH RESPECT TO THESE SECURITIES OR (II) PURSUANT TO A
16
SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT,
BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE
WRITTEN OPINION OF COUNSEL OF THE ISSUER, OR OTHER COUNSEL,
REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED
DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF
THE SECURITIES ACT AS WELL AS ANY APPLICABLE "BLUE SKY" OR
SIMILAR SECURITIES LAW.
Any Common Shares issued pursuant to conversion of Notes shall bear a
legend in the same form as the legend on the Notes indicated above.
ARTICLE VII
TERMINATION
Section 7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated at any time prior to the initial Closing Date by the mutual written
consent of the Company and the Investors.
Section 7.2 OTHER TERMINATION. This Agreement may be terminated by
action of the Board of Directors of the Company or by any of the Investors at
any time if the initial Closing Date shall not have been consummated by the
fifth business day following the date of this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 1 STAMP TAXES; AGENT FEES. The Company shall pay all stamp
and other taxes and duties levied in connection with the issuance of the Notes
pursuant hereto and the Common Shares issued upon conversion thereof.
Section 8.2 2 SPECIFIC ENFORCEMENT; CONSENT TO JURISDICTION.
(a) The Company and the Investors acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.
17
(b) The Company and each of the Investors (i) hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court, the New York State courts and other courts of the United States sitting
in New York County, New York for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement and (ii) hereby waives, and agrees
not to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. The Company and each of the Investors consents
to process being served in any such suit, action or proceeding by mailing a copy
thereof 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 in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.
Section 8.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement together with
the agreements and documents executed in connection herewith and therewith,
contains the entire understanding of the parties with respect to the matters
covered hereby and thereby and, except as specifically set forth herein or
therein, neither the Company nor any Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by a written instrument
signed by the party against whom enforcement of any such amendment or waiver is
sought.
Section 8.4 NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective upon
actual receipt of such mailing. The addresses for such communications shall be:
18
to the Company: Xxxxxx Industries Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Chief Executive Officer
with copies to: Xxxxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Xxxxx & Quentel, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
to the Investors: To each Investor at the address set
forth on Schedule I of this Agreement.
with copies to: Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxxxxx, Esq.
Any party hereto may from time to time change its address for notices by giving
at least 10 days written notice of such changed address to the other parties
hereto.
Section 8.5 INDEMNITY. Each party shall indemnify each other party
against any loss, cost or damages (including reasonable attorney's fees but
excluding consequential damages) incurred as a result of such parties' breach of
any representation, warranty, covenant or agreement in this Agreement.
Section 8.6 WAIVERS. No waiver by any party 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 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
accruing to it thereafter.
Section 8.7 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.
Section 8.8 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The parties hereto may amend
this Agreement without notice to or the consent of any third party. The Company
may not assign this Agreement or any rights or obligations hereunder without the
prior written consent of all Investors (which consent may be withheld for any
reason in their sole discretion), except that the Company may assign this
Agreement in connection with a merger, consolidation, business combination or
the sale of all or substantially all of its assets provided that the Company is
not released from any of its obligations hereunder, such
19
successor in interest or assignee assumes all obligations of the Company
hereunder, and appropriate adjustment of the provisions contained in this
Agreement is made, in form and substance satisfactory to the Investors, to place
the Investors in substantially the same position as they would have been but for
such assignment. Any Investor may assign this Agreement (in whole or in part) or
any rights or obligations hereunder without the consent of the Company in
connection with any sale or transfer of all or any portion of the Notes held by
such Investor, provided that no Investor may assign this Agreement prior to any
Closing Date without the Company's prior consent except to an affiliate or
affiliates of such Investor.
Section 8.9 NO THIRD PARTY BENEFICIARIES. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
Section 8.10 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without regard to such state's principles of conflict of laws.
Section 8.11 SURVIVAL. The representations and warranties and the
agreements and covenants of the Company and each Investor contained herein shall
survive the Closing.
Section 8.12 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
Section 8.13 PUBLICITY. The Company agrees that it will not disclose,
and will not include in any public announcement, the name of any Investor
without its consent, unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement.
Section 8.14 SEVERABILITY. The parties acknowledge and agree that the
Investors are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warrants, agreements, acts or omissions of
any other Investor, and that any rights granted to "Investors" hereunder shall
be enforceable by each Investor hereunder.
Section 8.15 LIKE TREATMENT OF HOLDERS. Neither the Company nor any of
its affiliates shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee, payment for the redemption or
exchange of Notes, or otherwise, to any holder of Notes, for or as an inducement
to, or in connection with the solicitation of, any consent, waiver or amendment
of any terms or provisions of the Notes or this Agreement, unless such
consideration is required to be paid to all holders of Notes bound by such
consent, waiver or amendment whether or not such holders so consent, waive or
agree to amend and whether or not such holders tender their Notes for redemption
or exchange. The Company shall not, directly or indirectly, redeem any Notes
unless such offer of redemption is made pro rata to all holders of Notes on
identical terms.
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
The Company:
XXXXXX INDUSTRIES, INC.
By: ________________________________
Name: Xxxx X. Xxxxxx
Title: Chief Executive Officer
INVESTOR:
By: ________________________________
Name:
Title:
____________________________________
Exact Name in Which Note(s) Should
be registered
21
