Exhibit 10.1
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
CRESCENT INTERNATIONAL LTD.
AND
INTERNATIONAL FIBERCOM, INC.
DATED AS OF JUNE 18, 2001
TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS.............................................2
Section 1.1. "Affiliate"...............................................2
Section 1.2. "Capital Shares"..........................................2
Section 1.3. "Certificate of Designation"..............................2
Section 1.4. "Closing".................................................2
Section 1.5. "Closing Date"............................................2
Section 1.6. "Closing Statement".......................................2
Section 1.7. "Closing Trade Price".....................................2
Section 1.8. "Commitment Period".......................................2
Section 1.9. "Commitment Shares".......................................2
Section 1.10. "Common Stock"............................................3
Section 1.11. "Condition Satisfaction Date".............................3
Section 1.12. "Conversion Shares".......................................3
Section 1.13. "Daily Trading Value".....................................3
Section 1.14. "Damages".................................................3
Section 1.15. "Effective Date"..........................................3
Section 1.16. "Exchange Act"............................................3
Section 1.17. "First Sale"..............................................3
Section 1.18. "Incentive Warrant".......................................3
Section 1.19. "Incentive Warrant Shares"................................3
Section 1.20. "Investment Amount".......................................3
Section 1.21. "Legend"..................................................4
Section 1.22. "Material Adverse Effect".................................4
Section 1.23. "Maximum Commitment Amount"...............................4
Section 1.24. "Maximum Sale Amount".....................................4
Section 1.25. "Minimum Sale Amount".....................................4
Section 1.26. "Minimum Time Interval"...................................4
Section 1.27. "NASD"....................................................4
Section 1.28. "Outstanding".............................................4
Section 1.29. "Person"..................................................4
Section 1.30. "Preferred Stock".........................................4
Section 1.31. "Principal Market"........................................4
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Section 1.32. "Protective Warrant"......................................5
Section 1.33. "Protective Warrant Shares"...............................5
Section 1.34. "Purchase Price"..........................................5
Section 1.35. "Registrable Securities"..................................5
Section 1.36. "Registration Rights Agreement"...........................5
Section 1.37. "Registration Statement"..................................5
Section 1.38. "Regulation D"............................................5
Section 1.39. "Representative"..........................................5
Section 1.40. "Sale"....................................................5
Section 1.41. "Sale Date"...............................................6
Section 1.42. "Sale Fees"...............................................6
Section 1.43. "Sale Notice".............................................6
Section 1.44. "Sale Notice Date"........................................6
Section 1.45. "Sale Notice Period"......................................6
Section 1.46. "SEC".....................................................6
Section 1.47. "SEC Documents"...........................................6
Section 1.48. "Section 4(2)"............................................6
Section 1.49. "Securities Act"..........................................6
Section 1.50. "Short Sale"..............................................6
Section 1.51. "Strategic Investor"......................................6
Section 1.52. "Subscription Date".......................................6
Section 1.53. "Subscription Fee"........................................6
Section 1.54. "Subsequent Sale".........................................7
Section 1.55. "Subsequent Sale Shares"..................................7
Section 1.56. "Subsidiary"..............................................7
Section 1.57. "Trading Day".............................................7
Section 1.58. "Transfer Agent Instructions".............................7
Section 1.59. "Underwriter".............................................7
Section 1.60. "Warrants"................................................7
Section 1.61. "Warrant Shares"..........................................7
ARTICLE II SALE AND PURCHASE OF COMMON STOCK, WARRANTS AND
PREFERRED STOCK; TERMINATION OF OBLIGATIONS.....................7
Section 2.1. Sales.....................................................7
Section 2.2. Twenty Percent Limitation.................................8
Section 2.3. Sale Notice...............................................8
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Section 2.4. Closings..................................................8
Section 2.5. Termination of Agreement and Investment Obligation........9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF INVESTOR......................9
Section 3.1. Intent...................................................10
Section 3.2. Sophisticated Investor...................................10
Section 3.3. Authority................................................10
Section 3.4. Not an Affiliate.........................................10
Section 3.5. Organization and Standing................................10
Section 3.6. Absence of Conflicts.....................................10
Section 3.7. Disclosure; Access to Information........................11
Section 3.8. Manner of Sale...........................................11
Section 3.9. Resale Restrictions......................................11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................11
Section 4.1. Organization of the Company..............................11
Section 4.2. Authority................................................12
Section 4.3. Corporate Documents......................................12
Section 4.4. Books and Records........................................12
Section 4.5. Capitalization...........................................12
Section 4.6. Registration and Listing of Common Stock.................13
Section 4.7. Financial Statements.....................................13
Section 4.8. SEC Documents............................................13
Section 4.9. Exemption from Registration; Valid Issuances;
New Issuances............................................14
Section 4.10. No General Solicitation or Advertising...................14
Section 4.11. No Conflicts.............................................14
Section 4.12. No Material Adverse Change...............................15
Section 4.13. No Undisclosed Liabilities...............................15
Section 4.14. No Undisclosed Events or Circumstances...................15
Section 4.15. No Integrated Offering...................................16
Section 4.16. Litigation and Other Proceedings.........................16
Section 4.17. No Misleading or Untrue Communication....................16
Section 4.18. Material Non-Public Information..........................16
ARTICLE V COVENANTS OF THE INVESTOR......................................16
Section 5.1. Compliance...............................................16
Section 5.2. Short Sale...............................................16
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ARTICLE VI COVENANTS OF THE COMPANY.......................................17
Section 6.1. Registration Rights......................................17
Section 6.2. Reservation of Common Stock..............................17
Section 6.3. Listing of Common Stock..................................17
Section 6.4. Exchange Act Registration................................17
Section 6.5. Legends..................................................17
Section 6.6. Corporate Existence......................................18
Section 6.7. Additional SEC Documents.................................18
Section 6.8. Notice of Certain Events Affecting Registration;
Suspension of Right to Make a Subsequent Sale............18
Section 6.9. Consolidation; Merger....................................18
Section 6.10. Issuance of Shares.......................................19
Section 6.11. Legal Opinions...........................................19
Section 6.12. No Similar Arrangement; Right of First Refusal...........19
Section 6.13. Public Announcements.....................................20
Section 6.14. Series A, Series B, and Series C Preferred Stock.........20
Section 6.15. Delivery of Share Certificates...........................20
ARTICLE VII CONDITIONS TO DELIVERY OF SALE NOTICES AND CONDITIONS
TO CLOSING.....................................................21
Section 7.1. Conditions Precedent to the Obligation of the
Company to Issue and Sell Preferred Stock and
Common Stock.............................................21
Section 7.2. Conditions Precedent to the Right of the Company
to Deliver a Sale Notice and the Obligation of
the Investor to Purchase Preferred Stock and
Common Stock.............................................21
Section 7.3. Due Diligence Review; Non-Disclosure of
Non-Public Information...................................24
ARTICLE VIII LEGENDS........................................................25
Section 8.1. Legends..................................................25
Section 8.2. No Other Legend or Stock Transfer Restrictions...........26
Section 8.3. Investor's Compliance....................................26
ARTICLE IX INDEMNIFICATION; ARBITRATION...................................27
Section 9.1. Indemnification..........................................27
Section 9.2. Method of Asserting Indemnification Claims...............27
Section 9.3. Arbitration..............................................30
ARTICLE X MISCELLANEOUS..................................................31
Section 10.1. Fees and Transaction Costs...............................31
Section 10.2. Reporting Entity for the Common Stock....................32
Section 10.3. Brokerage................................................32
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Section 10.4. Conversion Notice........................................32
Section 10.5. Notices..................................................32
Section 10.6. Assignment...............................................33
Section 10.7. Amendment; No Waiver.....................................34
Section 10.8. Annexes and Exhibits; Entire Agreement...................34
Section 10.9. Survival.................................................34
Section 10.10. Severability.............................................34
Section 10.11. Title and Subtitles......................................34
Section 10.12. Counterparts.............................................34
Section 10.13. Choice of Law............................................34
Section 10.14. Other Expenses...........................................34
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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
CRESCENT INTERNATIONAL LTD.
AND
INTERNATIONAL FIBERCOM, INC.
DATED AS OF JUNE 18, 2001
This STOCK PURCHASE AGREEMENT is entered into as of the 18th day of June,
2001 (this "AGREEMENT"), by and between Crescent International Ltd. (the
"INVESTOR"), an entity organized and existing under the laws of Bermuda, and
International FiberCom, Inc., a corporation organized and existing under the
laws of the State of Arizona (the "COMPANY").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Investor,
from time to time as provided herein, and the Investor shall purchase, up to
$20,000,000 worth of securities, including (i) shares of Common Stock (as
defined below) and (ii) shares of Preferred Stock (as defined below);
WHEREAS, pursuant to the terms of and in partial consideration for the
Investor entering into this Agreement, the Company is required to issue to the
Investor an Incentive Warrant (as defined below), exercisable from time to time
within five years following the date of issuance, for the purchase of a number
of shares of Common Stock at a price to be determined as described in such
Incentive Warrant;
WHEREAS, pursuant to the terms of and in partial consideration for the
Investor entering into this Agreement, the Company may be required to issue
Protective Warrants (as defined below) to the Investor, each of which may become
exercisable from time to time, for the purchase of a number of shares of Common
Stock at a price to be determined as described in each such Protective Warrant;
and
WHEREAS, such investments will be made in reliance upon the provisions of
Section 4(2) ("SECTION 4(2)") and Regulation D ("REGULATION D") of the U.S.
Securities Act of 1933, as amended and the rules and regulations promulgated
thereunder (the "SECURITIES ACT"), and/or upon such other exemption from the
registration requirements of the Securities Act as may be available with respect
to any or all of the investments in Common Stock to be made hereunder.
NOW, THEREFORE, in consideration of the premises, representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. "AFFILIATE" shall mean any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by, or is under
direct or indirect common control with any other Person. For the purposes of
this definition, "control," when used with respect to any Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the term "controls" and "controlled" have meanings correlative to
the foregoing.
Section 1.2. "CAPITAL SHARES" shall mean the Common Stock, and any shares
of any other class of common stock whether now or hereafter authorized, having
the right to participate in the distribution of dividends (as and when declared)
or assets (upon liquidation of the Company).
Section 1.3. "CERTIFICATE OF DESIGNATION" shall mean the Statement pursuant
to Section 10-602 of the Arizona Corporation Law, filed by the Company with the
Arizona State Corporation Commission prior to the Closing Date of the First
Sale.
Section 1.4. "CLOSING" shall mean one of the closings of a purchase and
sale of the Preferred Stock or the Common Stock and the issuance of the Warrants
pursuant to Section 2.1 of this Agreement.
Section 1.5. "CLOSING DATE" shall mean with respect to a Closing the second
Trading Day following the Sale Date related to such Closing, provided all
conditions to such Closing have been satisfied on or before such Trading Day.
Section 1.6. "CLOSING STATEMENT" shall mean the closing statement in the
form of EXHIBIT A attached hereto, executed by the Company and the Investor on
the Subscription Date and on each Sale Date, setting forth the actions taken by
the Company and the Investor on the Subscription Date and on such Sale Date, as
applicable, and setting forth the actions to be taken by the Company and the
Investor on the applicable Closing Date, and the amounts due on such Closing
Date to the payee entities set forth on Schedule 10.1 hereto.
Section 1.7. "CLOSING TRADE PRICE" shall mean, with respect to Common
Stock, the per share closing trade price for such Common Stock as reported by
Bloomberg L.P. in accordance with Section 10.2 of this Agreement.
Section 1.8. "COMMITMENT PERIOD" shall mean the period commencing on the
Subscription Date and expiring on the earlier to occur of (i) the date on which
the Investor shall have purchased Commitment Shares and Preferred Stock pursuant
to this Agreement for an aggregate Purchase Price of the Maximum Commitment
Amount, (ii) the date this Agreement is terminated pursuant to Section 2.5
hereof, or (iii) the date occurring 18 months from the Subscription Date.
Section 1.9. "COMMITMENT SHARES" shall mean the Conversion Shares and the
Subsequent Sale Shares, collectively.
Section 1.10. "COMMON STOCK" shall mean the Company's common stock, no par
value per share.
Section 1.11. "CONDITION SATISFACTION DATE" shall have the meaning set
forth in Section 7.2 of this Agreement.
Section 1.12. "CONVERSION SHARES" shall mean all shares of Common Stock
into which shares of Preferred Stock are or may be converted.
Section 1.13. "DAILY TRADING VALUE" shall mean, on any Trading Day, the
Closing Trade Price multiplied by the trading volume of the Common Stock.
Section 1.14. "DAMAGES" shall mean any and all losses, claims, damages,
liabilities, costs and expenses (including, without limitation, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in defense or settlement of, any action, suit or
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proceeding between any indemnified party and any indemnifying party or between
any indemnified party and any third party, or otherwise, or any claim asserted).
Section 1.15. "EFFECTIVE DATE" with respect to each Sale of Registrable
Securities or Preferred Stock shall mean the earlier to occur of: (i) the
applicable date on which the SEC has declared effective a Registration Statement
registering resale of Registrable Securities as set forth in the Registration
Rights Agreement and (ii) the date on which such Registrable Securities first
become eligible for resale pursuant to Rule 144 of the Securities Act.
Section 1.16. "EXCHANGE ACT" shall mean the U.S. Securities Exchange Act of
1934, as amended and the rules and regulations promulgated thereunder.
Section 1.17. "FIRST SALE" shall have the meaning set forth in Section
2.1(a) of this Agreement.
Section 1.18. "INCENTIVE WARRANT" shall mean the Incentive Warrant in the
form of Exhibit B hereto issued pursuant to Section 2.1(d) of this Agreement,
together with any new or replacement warrant issued in accordance with the terms
of the Incentive Warrant.
Section 1.19. "INCENTIVE WARRANT SHARES" shall mean all shares of Common
Stock issued or issuable pursuant to exercise of the Incentive Warrant.
Section 1.20. "INVESTMENT AMOUNT" shall mean the dollar amount to be
invested by the Investor to purchase (i) Preferred Stock pursuant to Section
2.1(a) hereof or (ii) Subsequent Sale Shares with respect to any Sale Date as
notified by the Company to the Investor in accordance with Section 2.3 hereof.
With respect to any Subsequent Sale, the Investment Amount (A) shall not exceed
the lesser of (i) twice the average of the Daily Trading Values during the 22
Trading Day period immediately preceding the applicable Sale Notice Date and
(ii) the Maximum Sale Amount, and (B) shall not be less than the Minimum Sale
Amount; provided, however, that if the Closing Trade Price on each Trading Day
during any Sale Notice Period is less than $1.00 or the Investment Amount as
calculated pursuant to clause (A) above would be less than the Minimum Sale
Amount, the Investment Amount shall be $25,000.
Section 1.21. "LEGEND" shall have the meaning specified in Section 8.1 of
this Agreement.
Section 1.22. "MATERIAL ADVERSE EFFECT" shall mean any effect on the
business, operations, properties, prospects, or financial condition of the
Company that is material and adverse to the Company or to the Company and such
other entities controlling or controlled by the Company, taken as a whole,
and/or any condition, circumstance, or situation that would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
its obligations under any of (i) this Agreement, (ii) the Registration Rights
Agreement and (iii) the Warrants.
Section 1.23. "MAXIMUM COMMITMENT AMOUNT" shall mean $20,000,000.
Section 1.24. "MAXIMUM SALE AMOUNT" shall mean $2,500,000, unless a higher
amount is agreed to by the Investor; provided, however, that the aggregate
amount of all Sales shall not exceed the Maximum Commitment Amount.
Section 1.25. "MINIMUM SALE AMOUNT" shall mean $200,000, unless a lesser
amount is agreed to by the Investor.
Section 1.26. "MINIMUM TIME INTERVAL" shall mean (i) 22 Trading Days from
the Effective Date relating the First Sale, (ii) if the previous Sale related to
the sale of unregistered Common Stock, 22 Trading Days from the Effective Date
relating to such Sale or (iii) if the previous Sale related to the sale of
registered Common Stock, 22 Trading Days from the previous Sale Date.
Section 1.27. "NASD" shall mean the National Association of Securities
Dealers, Inc.
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Section 1.28. "OUTSTANDING" when used with reference to Common Stock or
Capital Shares (collectively the "SHARES"), shall mean, at any date as of which
the number of such Shares is to be determined, all issued and outstanding
Shares, and shall include all such Shares issuable in respect of outstanding
scrip or any certificates representing fractional interests in such Shares;
provided, however, that "Outstanding" shall not refer to any such Shares then
directly or indirectly owned or held by or for the account of the Company.
Section 1.29. "PERSON" shall mean an individual, a corporation, a
partnership, an association, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
Section 1.30. "PREFERRED STOCK" shall mean the Company's series D
convertible preferred stock, $0.01 par value per share.
Section 1.31. "PRINCIPAL MARKET" shall mean the Nasdaq National Market, the
Nasdaq SmallCap Market, the American Stock Exchange, the Electronic Bulletin
Board or the New York Stock Exchange, whichever is at the time the principal
trading exchange or market for the Common Stock.
Section 1.32. "PROTECTIVE WARRANT" or "PROTECTIVE WARRANTS" shall mean any
and all Protective Warrant(s) in the form of Exhibit C hereto issued pursuant to
Section 2.1(c) of this Agreement.
Section 1.33. "PROTECTIVE WARRANT SHARES" shall mean all shares of Common
Stock issued or issuable pursuant to exercise of the Protective Warrants.
Section 1.34. "PURCHASE PRICE" shall mean (i) with respect to the First
Sale, $100 per share of Preferred Stock, and (ii) with respect to a Subsequent
Sale, the average of the lowest three consecutive Closing Trade Prices during
the 22 Trading Day period immediately preceding the applicable Sale Date and
(iii) with respect to an Effective Date, the average of the lowest three
consecutive Closing Trade Prices during the 22 Trading Day period immediately
preceding such Effective Date.
Section 1.35. "REGISTRABLE SECURITIES" shall mean (i) the Commitment
Shares, (ii) the Warrant Shares and (iii) any securities issued or issuable with
respect to any of the foregoing by way of exchange, stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (w) the applicable Registration Statement has been
declared effective by the SEC and all such Registrable Securities have been
disposed of pursuant to the applicable Registration Statement, (x) all such
Registrable Securities have been sold under circumstances under which all of the
applicable conditions of Rule 144 (or any similar provision then in force) under
the Securities Act ("RULE 144") are met, (y) such time as all such Registrable
Securities have been otherwise transferred to holders who may trade such shares
without restriction under the Securities Act, and the Company has delivered a
new certificate or other evidence of ownership for such securities not bearing a
restrictive legend or (z) in the opinion of counsel to the Company, which
counsel shall be reasonably acceptable to the Investor, all such Registrable
Securities may be sold by the Investor without registration and without any
time, volume or manner limitations pursuant to Rule 144(k) (or any similar
provision then in effect) under the Securities Act.
Section 1.36. "REGISTRATION RIGHTS AGREEMENT" shall mean the registration
rights agreement by and between the Company and the Investor, in the form of
Exhibit D hereto.
Section 1.37. "REGISTRATION STATEMENT" or "Registration Statements" shall
have the meaning set forth in the Registration Rights Agreement.
Section 1.38. "REGULATION D" shall have the meaning set forth in the
recitals of this Agreement.
Section 1.39. "REPRESENTATIVE" of a party shall mean any officer, director,
employee, agent, counsel, accountant, financial advisor, consultant or other
representative of such party.
Section 1.40. "SALE" shall mean the First Sale, together with any and all
Subsequent Sales.
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Section 1.41. "SALE DATE" shall mean with respect to the First Sale, the
Subscription Date, and with respect to Subsequent Sales, the Trading Day on
which a Sale Notice Period expires.
Section 1.42. "SALE FEES" shall have the meaning specified in Section
10.1(b) hereof.
Section 1.43. "SALE NOTICE" shall mean a written notice to the Investor in
the form of Exhibit E hereto, setting forth, INTER ALIA, the intended Closing
Date, the Investment Amount and the number of shares of Common Stock that the
Company intends to require the Investor to purchase pursuant to the terms of
this Agreement.
Section 1.44. "SALE NOTICE DATE" shall mean the Trading Day during the
Commitment Period upon which a Sale Notice to sell Common Stock to the Investor
is deemed delivered pursuant to Section 2.3(b) hereof.
Section 1.45. "SALE NOTICE PERIOD" shall mean a period beginning on a Sale
Notice Date and ending 7 Trading Days after a Sale Notice Date.
Section 1.46. "SEC" shall mean the U.S. Securities and Exchange Commission.
Section 1.47. "SEC DOCUMENTS" shall mean the Company's latest Form 10-K as
of the time in question, all Forms 10-Q and 8-K filed thereafter, and the Proxy
Statement for its latest fiscal year as of the time in question until such time
the Company no longer has an obligation to maintain the effectiveness of a
Registration Statement as set forth in the Registration Rights Agreement.
Section 1.48. "SECTION 4(2)" shall have the meaning set forth in the
recitals of this Agreement.
Section 1.49. "SECURITIES ACT" shall have the meaning set forth in the
recitals of this agreement.
Section 1.50. "SHORT SALE" shall have the meaning specified in Rule 3b-3 of
the Exchange Act.
"STRATEGIC INVESTOR" shall mean any Person (i) that intends to participate
in the corporate governance of the Company or in the conduct of its business or
(ii) as to whom the Company's Board of Directors has made a determination in
good faith that such Person will develop a material strategic relationship with
the Company, including without limitation an acquisition of another entity or
assets, in connection with and related to the Company's present or future
business.
Section 1.51. "SUBSCRIPTION DATE" shall mean the date on which this
Agreement is executed and delivered by the parties hereto.
Section 1.52. "SUBSCRIPTION FEE" shall have the meaning set forth in
Section 10.1(a) hereof.
Section 1.53. "SUBSEQUENT SALE" shall have the meaning set forth in Section
2.1(b) of this Agreement.
Section 1.54. "SUBSEQUENT SALE SHARES" shall have the meaning set forth in
Section 2.1(b) of this Agreement.
Section 1.55. "SUBSIDIARY" shall mean any Person in which the Company,
directly or indirectly through Subsidiaries or otherwise, beneficially owns more
than 50% of either the equity interests in, or the voting control of, such
Person.
Section 1.56. "TRADING DAY" shall mean any day during which the Principal
Market shall be open for business.
Section 1.57. "TRANSFER AGENT INSTRUCTIONS" shall have the meaning set
forth in Section 2.4(a) of this Agreement.
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Section 1.58. "UNDERWRITER" shall mean any underwriter participating in any
disposition of the Registrable Securities on behalf of the Investor pursuant to
a Registration Statement.
Section 1.59. "WARRANTS" shall mean the Protective Warrants and Incentive
Warrant.
Section 1.60. "WARRANT SHARES" shall mean the Protective Warrant Shares and
the Incentive Warrant Shares.
ARTICLE II
SALE AND PURCHASE OF COMMON STOCK, WARRANTS AND PREFERRED STOCK;
TERMINATION OF OBLIGATIONS
Section 2.1. SALES.
(a) FIRST SALE. In accordance with the terms and conditions set
forth herein (including without limitation the provisions of
Article VII hereof), the Sale Date of the First Sale shall occur
on the Subscription Date. On the Closing Date relating to the
First Sale, the Company shall issue and sell and, if so issued
and sold, the Investor shall purchase 100,000 shares of Preferred
Stock at a Purchase Price of $100 per share for an Investment
Amount of $10,000,000 (such transaction is referred to herein as
the "FIRST SALE").
(b) SUBSEQUENT SALES. If the Company elects to exercise a Subsequent
Sale, in accordance with the terms and conditions set forth
herein (including, without limitation, the provisions of Article
VII hereof), on any Sale Notice Date the Company shall exercise a
Subsequent Sale by the delivery of a Sale Notice. On the Closing
Date relating to each Subsequent Sale, the Company shall issue
and sell and the Investor shall purchase such number of shares of
Common Stock that are determined by dividing the Investment
Amount stated in the applicable Sale Notice by the applicable
Purchase Price (each such transaction is referred to herein as a
"SUBSEQUENT SALE," and all such shares are referred to herein as
the "SUBSEQUENT SALE SHARES").
(c) PROTECTIVE WARRANTS. In partial consideration for the Investor
entering into this Agreement if the Company elects to exercise
its right with respect to any Sale to require the Investor to
purchase shares of Common Stock that, at the time of the Closing
Date, have not been previously registered and are not covered by
a Registration Statement that has been filed with and declared
effective by the SEC, on each Closing Date relating to each such
Sale, the Company shall issue and deliver to the Investor a
Protective Warrant with an exercise price of $0.01 for each share
of Common Stock, for the purchase of such number of shares of
Common Stock as described in such Protective Warrant.
(d) INCENTIVE WARRANT. In partial consideration for the Investor
entering into this Agreement, on the Closing Date of the First
Sale, the Company shall issue and deliver to the Investor the
Incentive Warrant for the purchase of such number of shares of
Common Stock and with an exercise price as described in such
Incentive Warrant.
Section 2.2. TWENTY PERCENT LIMITATION. Unless the Company obtains the
requisite approval of its shareholders in accordance with the corporate laws of
Arizona and the applicable rules of the Principal Market, no more than 19.9% of
the Outstanding shares of Common Stock may be issued and sold pursuant to Sales,
the Warrants and upon conversion of the Preferred Stock; PROVIDED, that with
respect to the issuance of more than 19.9% of the Outstanding shares of Common
Stock pursuant to the Warrants, the Investor has the right to require the
Company to seek such shareholder approval and upon the written request of the
Investor the Company shall as soon as practicable after such request prepare and
file with the SEC a proxy statement to be distributed to shareholders of the
Company for the purpose of soliciting proxies for use at an annual or special
meeting of shareholders of the Company at which such shareholder approval is
sought, and in which proxy statement the Company will recommend to its
shareholders the foregoing approval.
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Section 2.3. SALE NOTICE.
(a) TIMING. At any time during the Commitment Period, the Company may
deliver a Sale Notice to the Investor, subject to the conditions
set forth in Section 7.2.
(b) DATE OF DELIVERY OF SALE NOTICE. A Sale Notice shall be deemed
delivered on (i) the Trading Day it is received by facsimile or
otherwise by the Investor if such notice is received prior to
12:00 noon New York time, or (ii) the immediately succeeding
Trading Day if it is received by facsimile or otherwise after
12:00 noon New York time on a Trading Day or at any time on a day
which is not a Trading Day. No Sale Notice will be deemed
delivered, on a day that is not a Trading Day.
Section 2.4. CLOSINGS.
SUBSCRIPTION DATE. On the Subscription Date (i) the Company and the
Investor shall execute the Registration Rights Agreement and (ii) the Company
shall execute and deliver irrevocable instructions to the transfer agent, in the
form of Exhibit F attached hereto (the "TRANSFER AGENT INSTRUCTIONS"), to
prepare and deliver to the Investor, following each Sale or conversion of the
Preferred Stock, a share certificate in the name of the Investor and in the
amount of the applicable Commitment Shares, the transfer agent shall confirm and
accept such instructions, and a copy of such instructions shall be delivered to
the Investor's legal counsel. In addition, on or prior to the Subscription Date,
each of the Company and the Investor shall deliver to the other all documents,
instruments and writings required to be delivered or reasonably requested by
either of them pursuant to this Agreement in order to implement and effect the
transactions contemplated herein.
CLOSING DATE. On each Closing Date (i) the Company shall issue and deliver
to the Investor a Protective Warrant, if required by Section 2.1(c) hereof, (ii)
with respect to the First Sale, the Company shall issue and deliver to the
Investor the Incentive Warrant, (iii) the Company shall instruct the transfer
agent to prepare and deliver to the Investor a share certificate in the name of
the Investor and in the amount of the applicable Common Stock, in accordance
with the Transfer Agent Instructions, and the Company shall take all other
actions necessary to ensure the prompt delivery of such share certificate to the
Investor, (iv) with respect to the First Sale, the Company shall prepare and
deliver to the Investor a share certificate in the name of the Investor and in
the amount of the shares of Preferred Stock, (v) the Investor shall deliver to
the Company and the Company shall execute a Closing Statement, and (vi) the
Investor shall deliver to the Company the Investment Amount specified in the
Closing Statement, less applicable fees and costs determined in accordance with
Section 10.1, by wire transfer of immediately available funds to the account
designated in writing in the Sale Notice. In addition, on or prior to each
Closing Date, each of the Company and the Investor shall deliver to the other
all documents, instruments and writings required to be delivered or reasonably
requested by either of them pursuant to this Agreement in order to implement and
effect the transactions contemplated herein.
Section 2.5. TERMINATION OF AGREEMENT AND INVESTMENT OBLIGATION. The
Company shall have the right to terminate this Agreement at any time upon 30
days' written notice to the Investor. The Investor shall have the right to
immediately terminate this Agreement (including with respect to any Sale, notice
of which has been given but the applicable Closing Date has not yet occurred) in
accordance with Section 6.12 or in the event that: (i) any Registration
Statement has not been declared effective by the SEC within the applicable time
periods set forth in Section 1.1 of the Registration Rights Agreement, PROVIDED,
that the Investor shall not be permitted to terminate this Agreement pursuant to
this clause (i) if the Company has, as solely determined by the Investor, used
its best efforts to obtain the effectiveness of such Registration Statement,
(ii) there shall occur any stop order or suspension of the effectiveness of any
Registration Statement for an aggregate of 30 Trading Days during the Commitment
Period, or (iii) the Company shall at any time fail to comply with the
requirements of Section 6.2, 6.3, 6.4, 6.5, 6.6, 6.8 or 6.9.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company that:
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Section 3.1. INTENT. The Investor is entering into this Agreement for its
own account, and the Investor has no view to the distribution of the Registrable
Securities, Preferred Stock, or Warrants and has no present arrangement (whether
or not legally binding) at any time to sell, assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of the Registrable Securities, Preferred Stock
or Warrants to or through any person or entity; provided, however, that by
making the representations herein, the Investor does not agree to hold the
Registrable Securities, Preferred Stock or Warrants for any minimum or other
specific term and reserves the right to dispose of the Registrable Securities,
Preferred Stock or Warrants at any time pursuant to the Registration Statement
and in accordance with federal and state securities laws applicable to such
disposition.
Section 3.2. SOPHISTICATED INVESTOR. The Investor is a sophisticated
investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited
investor (as defined in Rule 501 of Regulation D), and the Investor has such
experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in the Common Stock and the Preferred
Stock. The Investor acknowledges that an investment in the Common Stock and the
Preferred Stock is speculative and involves a high degree of risk.
Section 3.3. AUTHORITY. Each of this Agreement and the Registration Rights
Agreement has been duly authorized by all necessary corporate action and no
further consent or authorization of the Investor, or its Board of Directors or
stockholders is required. Each of this Agreement and the Registration Rights
Agreement was validly executed and delivered by the Investor and each is a valid
and binding agreement of the Investor enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, or similar laws
relating to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application.
Section 3.4. NOT AN AFFILIATE. The Investor is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of the
Company.
Section 3.5. ORGANIZATION AND STANDING. The Investor is duly organized,
validly existing, and in good standing under the laws of Bermuda.
Section 3.6. ABSENCE OF CONFLICTS. The execution and delivery of this
Agreement and any other document or instrument contemplated hereby, and the
consummation of the transactions contemplated thereby, and compliance with the
requirements thereof, will not to the Investor's knowledge (a) violate any law,
rule, regulation, order, writ, judgment, injunction, decree or award binding on
the Investor, (b) violate any provision of any indenture, instrument or
agreement to which the Investor is a party or is subject, or by which the
Investor or any of its assets is bound, (c) conflict with or constitute a
material default thereunder, (d) result in the creation or imposition of any
lien pursuant to the terms of any such indenture, instrument or agreement, or
constitute a breach of any fiduciary duty owed by the Investor to any third
party, or (e) require the approval of any third-party (that has not been
obtained) pursuant to any material contract to which the Investor is subject or
to which any of its assets, operations or management may be subject.
Section 3.7. DISCLOSURE; ACCESS TO INFORMATION. The Investor has received
or had access to all documents, records, books and other information pertaining
to Investor's investment in the Company that have been requested by Investor.
The Investor has received and reviewed copies of the SEC Documents. Neither the
receipt by the Investor of such information, nor the access of the Investor to
such information shall modify, amend or affect the Investor's right to rely upon
the representations and warranties made by the Company pursuant to Article IV of
this Agreement.
Section 3.8. MANNER OF SALE. At no time was Investor presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.
Section 3.9. RESALE RESTRICTIONS. Investor acknowledges that any
Registrable Securities, Preferred Stock and Warrants to be acquired by Investor
have not been registered under the federal securities laws or any applicable
state securities laws in reliance upon exemptions available for non-public or
limited offerings. Investor understands that it must bear the economic risk of
the investment in the Registrable Securities, Preferred Stock and Warrants
because the Registrable Securities, Preferred Stock and Warrants have not been
so registered and therefore are subject to restrictions upon transfer such that
they may not be sold or otherwise transferred unless registered under the
applicable securities laws or an exemption from such registration is available.
The Investor will not reoffer, sell, assign, transfer, pledge, encumber,
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hypothecate or otherwise dispose of any Registrable Securities, Preferred Stock
or the Warrants in the absence of an effective registration statement,
qualification or authorization relating thereto under federal and applicable
state securities laws or an opinion of qualified counsel satisfactory to the
Company to the effect that the proposed transaction in the Registrable
Securities, Preferred Stock or the Warrants will neither constitute or result in
any violation of the federal or state securities laws. Subject to Section 8.1 of
this Agreement, any certificate or other document that may be issued
representing any shares of Registrable Securities, Preferred Stock or the
Warrants may be endorsed with a legend to this effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor on the Subscription Date
that, and will represent and warrant to the Investor on each Effective Date and
each Closing Date that:
Section 4.1. ORGANIZATION OF THE COMPANY. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Arizona and has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. Except as set
forth in the SEC Documents and except as set forth on SCHEDULE 4.1 attached
hereto, the Company does not own more than 50% of the outstanding capital stock
of or control any other Person. The Company 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.
Section 4.2. AUTHORITY. (i) The Company has the requisite corporate power
and authority to enter into and perform its obligations under this Agreement,
the Registration Rights Agreement and the Warrants and to issue the Commitment
Shares, the Preferred Stock, the Warrants and the Warrant Shares; (ii) the
execution and delivery of this Agreement and the Registration Rights Agreement,
and the execution, issuance and delivery of the Warrants, by the Company and the
consummation by it of the transactions contemplated hereby and thereby 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; and (iii) each of this Agreement and the Registration Rights Agreement
has been duly executed and delivered, and the Warrants have been duly executed,
issued and delivered, by the Company and constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws relating to, or affecting
generally the enforcement of, creditors' rights and remedies or by other
equitable principles of general application.
Section 4.3. CORPORATE DOCUMENTS. The Company has furnished or made
available to the Investor true and correct copies of the Company's Articles of
Incorporation, as amended and in effect on the date hereof (the "ARTICLES"), and
the Company's By-Laws, as amended and in effect on the date hereof (the
"BY-LAWS").
Section 4.4. BOOKS AND RECORDS. The minute books and other similar records
of the Company and its subsidiaries as made available to Investor prior to the
execution of this Agreement contain a true and complete record, in all material
respects, of all action taken at all meetings and by all written consents in
lieu of meetings of the stockholders, the boards of directors and committees of
the boards of directors of the Company and the subsidiaries. The stock transfer
ledgers and other similar records of the Company and the subsidiaries as made
available to Investor prior to the execution of this Agreement accurately
reflect all record transfers prior to the execution of this Agreement in the
capital stock of the Company and the subsidiaries. Neither the Company nor any
subsidiary has any of its books or records recorded, stored, maintained,
operated or otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of the Company or a
subsidiary.
Section 4.5. CAPITALIZATION. The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock, of which 36,162,542 shares are
issued and outstanding, and 10,000,000 shares of preferred stock designated as
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Series A, Series B, and Series C, of which none are issued and outstanding. All
shares of the Company's preferred stock designated as Series A, Series B, and
Series C have been retired by the Company. Except for (i) options to purchase
not more than 8,046,819 shares of Common Stock with purchase prices between
$0.94 and $19.94 per share; and (ii) warrants to purchase not more than 150,000
shares of Common Stock with a purchase prices of $7.50 per share and, except as
set forth on Schedule 4.5 attached hereto, there are no options, warrants,
preemptive rights for, or rights to subscribe to, securities, rights or
obligations convertible into or exchangeable for or giving any right to
subscribe for any shares of capital stock of the Company. Except as set forth on
Schedule 4.5 attached hereto, there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in any agreement
providing rights to security holders) that will be triggered by the issuance of
Common Stock or Preferred Stock pursuant to this Agreement. All of the
outstanding shares of Common Stock of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable.
Section 4.6. REGISTRATION AND LISTING OF COMMON STOCK. The Company has
registered its Common Stock pursuant to Section 12(b) or 12(g) of the Exchange
Act and is in full compliance with all reporting requirements of the Exchange
Act, and the Company has maintained all requirements for the continued listing
or quotation of its Common Stock, and such Common Stock is currently listed or
quoted on the Principal Market. As of the date hereof, the Principal Market is
the Nasdaq National Market.
Section 4.7. FINANCIAL STATEMENTS. Prior to the execution of this
Agreement, the Company has delivered to the Investor true and complete copies of
the following financial statements:
(a) the audited balance sheets of the Company and its consolidated
subsidiaries as of December 31, 2000, and the related audited consolidated
statements of operations, stockholders' equity and cash flows for each of the
fiscal years then ended, together with a true and correct copy of the report on
such audited information by BDO Xxxxxxx LLP, and all letters from such
accountants with respect to the results of such audits; and
(b) the unaudited balance sheets of the Company and its consolidated
subsidiaries as of March 31, 2001, and the related unaudited consolidated
statements of operations and stockholders' equity for the portion of the fiscal
year then ended.
The financial statements of the Company delivered to the Investor 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).
Section 4.8. SEC DOCUMENTS. The Company has timely filed all SEC Documents
and has delivered or made available to the Investor true and complete copies of
the SEC Documents (including, without limitation, audited financial statements,
proxy information and solicitation materials). The Company has not provided to
the Investor any information that, according to applicable law, rule or
regulation, should have been disclosed publicly prior to the date hereof by the
Company, but which has not been so disclosed. As of their respective dates, the
SEC Documents complied as to form and substance in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
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. None of the statements
made in any such SEC Documents is, or has been, required to be amended or
updated under applicable law (except for such statements as have been amended or
updated in subsequent filings prior to the date hereof). The financial
statements of the Company included in the SEC Documents comply as to form and
substance in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
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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 include summary notes
and 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).
Section 4.9. EXEMPTION FROM REGISTRATION; VALID ISSUANCES; NEW ISSUANCES.
The sale and issuance of the Warrants, the Warrant Shares, the Preferred Stock
and the Commitment Shares in accordance with the terms and on the basis of the
representations and warranties set forth in this Agreement, may and will be
properly issued pursuant to Section 4(2), Regulation D and/or any applicable
state law. When issued and paid for as provided herein and in the Warrants, the
Warrant Shares, the Commitment Shares and the Preferred Stock will be duly and
validly issued, fully paid, and nonassessable. Except as set forth on Schedule
4.9 attached hereto, neither the sales of the Commitment Shares, the Preferred
Stock, the Warrants, or the Warrant Shares pursuant to, nor the Company's
performance of its obligations under, this Agreement, the Registration Rights
Agreement or the Warrants will (i) result in the creation or imposition of any
liens, charges, claims or other encumbrances upon the Commitment Shares, the
Preferred Stock, the Warrant Shares, or any of the assets of the Company, or
(ii) entitle the holders of Outstanding Capital Shares or holders of preferred
stock of the Company to preemptive or other rights to subscribe to or acquire
the Capital Shares, such preferred stock or other securities of the Company. The
Commitment Shares, the Preferred Stock, and the Warrant Shares will not subject
the Investor to personal liability by reason of the ownership thereof. The
Commitment Shares, the Preferred Stock and Warrant Shares have been duly
authorized by the Company, but have not been issued (whether or not subsequently
repurchased by the Company) to any Person, and when issued to the Investor in
accordance with this Agreement and the Warrants will not have been issued
(whether or not subsequently repurchased by the Company) to any Person other
than the Investor.
Section 4.10. NO GENERAL SOLICITATION OR ADVERTISING. In regard to the
transactions contemplated hereby, neither the Company nor any of its Affiliates
nor any distributor or any person acting on its or their behalf (i) has
conducted or will conduct any general solicitation (as that term is used in Rule
502(c) of Regulation D) or general advertising with respect to any of the
Commitment Shares, the Preferred Stock, the Warrants, or the Warrant Shares, or
(ii) made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the Common
Stock under the Securities Act.
Section 4.11. NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, including without limitation the issuance of the Commitment
Shares, the Preferred Stock, the Warrants and the Warrant Shares do not and will
not (i) result in a violation of the Articles or By-Laws or (ii) conflict with,
or constitute a material default (or an event that 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 material agreement,
indenture, instrument or any "lock-up" or similar provision of any underwriting
or similar agreement to which the Company is a party, or (iii) 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,
or any rule, regulation, order, judgment or decree of any self-regulatory
organization having authority over the matters contemplated hereby, applicable
to the Company or by which any property or asset of the Company 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) nor is the Company otherwise in
violation of, conflict with or in default under any of the foregoing; provided,
however, that for purposes of the Company's representations and warranties as to
violations of foreign law, rule or regulation referenced in clause (iii), such
representations and warranties are made only to the best of the Company's
knowledge insofar as the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby are or may be affected by the status of the Investor under
or pursuant to any such foreign law, rule or regulation. The business of the
Company is not being conducted in violation of any law, ordinance or regulation
of any governmental or self-regulatory entity, except for possible violations
that either singly or in the aggregate do not and will not have a Material
Adverse Effect. The Company is not required under any federal, state or local
law, rule or regulation, order, judgment or decree (including federal and state
securities laws and regulations), or any rule, regulation, order, judgment or
decree of any self-regulatory organization having authority over the matters
contemplated hereby, to obtain any consent, authorization or order of, or make
any filing or registration with, any court or governmental agency in order for
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it to execute, deliver or perform any of its obligations under this Agreement or
issue and sell the Commitment Shares, the Preferred Stock, the Warrants, or the
Warrant Shares in accordance with the terms hereof (other than any SEC, NASD or
state securities filings that may be required to be made by the Company
subsequent to any Closing, any registration statement that may be filed pursuant
hereto, and any shareholder approval required by the rules applicable to
companies whose common stock trades on the Nasdaq National Market); 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 Investor herein.
Section 4.12. NO MATERIAL ADVERSE CHANGE. Since December 31, 2000 and
except as set forth on SCHEDULE 4.12 attached hereto, no event has occurred that
would have a Material Adverse Effect on the Company.
Section 4.13. NO UNDISCLOSED LIABILITIES. Except as set forth on SCHEDULE
4.13 hereto, the Company has no liabilities or obligations that are material,
individually or in the aggregate, other than those incurred in the ordinary
course of the Company's businesses since December 31, 2000 and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect on the Company.
Section 4.14. NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since December 31,
2000, no event or circumstance has occurred or exists with respect to the
Company or its businesses, properties, prospects, operations or financial
condition, that, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly disclosed or announced.
Section 4.15. NO INTEGRATED OFFERING. 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 require registration of the
Commitment Shares, the Preferred Stock, the Warrants or the Warrant Shares under
the Securities Act.
Section 4.16. LITIGATION AND OTHER PROCEEDINGS. To the knowledge of the
Company after due inquiry, except as set forth in the SEC Documents, there are
no lawsuits or proceedings pending or threatened against the Company, nor has
the Company received any written or oral notice of any such action, suit,
proceeding or investigation, which have had or might have a Material Adverse
Effect. Except as set forth in the SEC Documents, no judgment, order, writ,
injunction or decree or award has been issued by or, so far as is known by the
Company, requested of any court, arbitrator or governmental agency which has
resulted in or might result in a Material Adverse Effect.
Section 4.17. NO MISLEADING OR UNTRUE COMMUNICATION. The Company, any
Person representing the Company, and, to the knowledge of the Company, any other
Person selling or offering to sell the Commitment Shares, the Preferred Stock,
the Warrants or the Warrant Shares in connection with the transactions
contemplated by this Agreement, have not made, at any time, any oral
communication in connection with the offer or sale of the same which contained
any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements, in the light of the circumstances
under which they were made, not misleading.
Section 4.18. MATERIAL NON-PUBLIC INFORMATION. The Company is not in
possession of, nor has the Company or its agents disclosed to the Investor, any
material non-public information that (i) if disclosed, would, or could
reasonably be expected to have, an effect on the price of the Common Stock or
(ii) according to applicable law, rule or regulation, should have been disclosed
publicly by the Company prior to the date hereof but which has not been so
disclosed.
ARTICLE V
COVENANTS OF THE INVESTOR
Section 5.1. COMPLIANCE. The Investor's trading activities with respect to
shares of the Company's Common Stock will be in compliance with all applicable
state and federal securities laws, rules and regulations and the rules and
regulations of the Principal Market on which the Company's Common Stock is
listed.
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Section 5.2. SHORT SALE. Neither the Investor nor any of its Affiliates
will directly or indirectly engage in any Short Sale of the Commitment Shares or
the Warrant Shares during the Commitment Period.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1. REGISTRATION RIGHTS. The Company shall cause the Registration
Rights Agreement to remain in full force and effect, and the Company shall
comply in all respects with the terms thereof.
Section 6.2. RESERVATION OF COMMON STOCK. As of the date hereof, the
Company has available and the Company shall reserve and keep available at all
times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue the Commitment Shares
and the Warrant Shares, such amount of shares of Common Stock to be reserved
shall be calculated based upon the Floor Price (as such term is defined in the
Certificate of Designation) of the Preferred Stock, and the Exercise Price of
the Incentive Warrant and the maximum number of Protective Warrant Shares
issuable pursuant to the Protective Warrants. The number of shares so reserved
from time to time, as theretofore increased or reduced as hereinafter provided,
may be reduced by the number of shares actually delivered.
Section 6.3. LISTING OF COMMON STOCK. During the Commitment Period and for
so long as the Investor holds or owns any Registrable Securities, Preferred
Stock or Warrants, the Company shall exercise best efforts to maintain the
listing or quotation of the Common Stock on a Principal Market, and as soon as
practicable (but in any event prior to the Closing Date for any Sale) will cause
the Commitment Shares and the Warrant Shares to be listed on the Principal
Market. The Company further shall, if the Company applies to have the Common
Stock traded on any other Principal Market, include in such application the
Commitment Shares and the Warrant Shares, and shall take such other action as is
necessary or desirable in the opinion of the Investor to cause the Common Stock
to be listed on such other Principal Market as promptly as possible. The Company
shall use commercially reasonable efforts to continue the listing and trading of
its Common Stock on the Principal Market (including, without limitation,
maintaining sufficient net tangible assets) and will comply in all respects with
the Company's reporting, filing and other obligations under the bylaws or rules
of the NASD and the Principal Market.
Section 6.4. EXCHANGE ACT REGISTRATION. The Company shall comply with all
applicable requirements set forth in the Registration Rights Agreement,
including without limitation its obligation to file each Registration Statement
with the SEC within the applicable time periods set forth in the Registration
Rights Agreement. After each Registration Statement becomes effective, the
Company shall cause the Common Stock covered by such Registration Statement to
continue to be registered under Section 12(g) or 12(b) 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 registration or to terminate or suspend its reporting and filing
obligations under the Exchange Act.
Section 6.5. LEGENDS. The certificates evidencing the Warrants, the
Commitment Shares, the Preferred Stock, and the Warrant Shares shall be free of
legends, except as provided for in Article VIII.
Section 6.6. CORPORATE EXISTENCE. During the Commitment Period and for so
long as the Investor holds or owns any Registrable Securities, Preferred Stock
or Warrants, the Company shall take all steps necessary to preserve and continue
the corporate existence of the Company or its successors by merger or
consolidation.
Section 6.7. ADDITIONAL SEC DOCUMENTS. Until all Registrable Securities
issued or issuable to the Investor pursuant to this Agreement may be sold by the
Investor without registration and without any time, volume or manner limitations
pursuant to Rule 144(k) (or any similar provision then in effect) under the
Securities Act, the Company shall, as and when the originals thereof are
submitted to the SEC for filing, notify the Investor in writing of any SEC
Documents furnished or submitted to the SEC, and upon the request of the
Investor the Company shall deliver to the Investor, as and when the originals
thereof are submitted to the SEC for filing, copies of all SEC Documents so
furnished or submitted to the SEC.
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Section 6.8. NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF
RIGHT TO MAKE A SUBSEQUENT Sale. The Company shall immediately notify the
Investor upon the occurrence of any of the following events in respect of a
Registration Statement or related prospectus in respect of an offering of
Registrable Securities: (i) receipt of any request for additional information by
the SEC or any other federal or state governmental authority during the period
of effectiveness of the Registration Statement for amendments or supplements to
the Registration Statement or related prospectus; (ii) the issuance by the SEC
or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the happening of any event
that makes any statement made in such Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related prospectus or documents so that,
in the case of a Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (v) the declaration by
the SEC of the effectiveness of a Registration Statement; and (vi) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate, and the Company shall promptly make available to
the Investor any such supplement or amendment to the related prospectus. The
Company shall not deliver to the Investor any Sale Notice during the
continuation of any of the foregoing events, except for (v) above.
Section 6.9. CONSOLIDATION; MERGER. During the Commitment Period and for so
long as the Investor holds or owns any Registrable Securities, Preferred Stock
or Warrants, the Company shall not, at any time after the date hereof, effect
any merger or consolidation of the Company with or into, or a transfer of all or
substantially all of the assets of the Company to, another entity unless the
resulting successor or acquiring entity (if not the Company) executes a written
instrument acknowledging and assuming the obligation to issue to the Investor,
upon any Sale, upon conversion of the Preferred Stock or upon the exercise of
any Warrant, in lieu of each share of Common Stock theretofore issuable upon
such Sale, upon such conversion of the Preferred Stock, or upon exercise of any
such Warrant, other securities, money or property receivable upon such merger,
consolidation or transfer had the Sale, conversion of the Preferred Stock or
exercise of such Warrant occurred immediately prior to such merger,
consolidation or transfer.
Section 6.10. ISSUANCE OF SHARES. The issuance and sale of the Preferred
Stock and the Subsequent Sale Shares, the issuance of the Warrants, the issuance
of the Warrant Shares pursuant to exercise of the Warrants and the issuance of
the Conversion Shares upon conversion of the Preferred Stock, shall be made in
accordance with the provisions and requirements of Regulation D and any
applicable state law. Issuance of the Warrant Shares pursuant to exercise of the
Warrants through a cashless exercise shall be made in accordance with the
provisions and requirements of Section 3(a)(9) under the Securities Act and any
applicable state law.
Section 6.11. LEGAL OPINIONS. The Company's independent counsel shall
deliver to the Investor on the Closing Date relating to the First Sale an
opinion in the form of Exhibit G, except for paragraph 7 thereof. The Company's
independent counsel shall deliver to the Investor, within 2 Trading Days of the
effective date of each Registration Statement, an opinion in the form of Exhibit
G hereto, including paragraph 7 thereof.
Section 6.12. NO SIMILAR ARRANGEMENT; RIGHT OF FIRST REFUSAL. The Company
shall refrain from entering into any other agreements, arrangements or
understandings granting to the Company the right to sell shares of its
securities to one or more investors, other than a Strategic Investor and other
than the Investor, in placements exempt from registration under the Securities
Act until 60 calendar days after this Agreement is terminated pursuant to
Section 2.5 hereof or the earlier expiration of the Commitment Period (the
"EXCLUSIVITY PERIOD"). If the Company, for the purpose of obtaining any
additional financing, wishes to sell shares of its securities in placements
exempt from registration under the Securities Act during the Exclusivity Period
(a "THIRD PARTY SALE") to a party other than a Strategic Investor and other than
the Investor (the "THIRD PARTY"), the Company shall first offer (the "OFFER") to
the Investor, in writing, the right to purchase such shares (the "OFFERED
SHARES") at the bona fide price offered by the Third Party (the "OFFER PRICE").
The Offer shall grant the Investor the right during the 5 Trading Days
immediately following the date of the Offer to elect to purchase any or all of
the Offered Shares. The Company, in connection with such a Third Party Sale,
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shall refrain from circumventing or attempting to circumvent the Investor's
right of first refusal by way of making such a Third Party Sale to any of its
Affiliates without first making an Offer to the Investor. If the Investor so
exercises its right to purchase any or all of the Offered Shares, the purchase
will be treated as a Subsequent Sale except that the purchase price for the
Offered Shares shall be the Offer Price. The closing and method of payment shall
be as provided for in Sections 2.3 and 2.4 hereof and the Closing Date shall be
7 Trading Days after the Investor exercises such right. If the Investor fails to
exercise its right to purchase any or all of the Offered Shares, then during the
60 calendar days immediately following the expiration of such right, the Company
shall be free to sell any or all of the Offered Shares to a purchaser for a
purchase price not lower than the Offer Price payable on terms and conditions
that are not more favorable to such purchaser than those contained in the Offer.
In the event that the Company effects a Third Party Sale, the Investor may
immediately terminate this Agreement. Notwithstanding anything in this Section
6.12 to the contrary, the restriction contained in this Section 6.12 shall not
apply to: (i) securities issued by the Company pursuant to agreements entered
into by the Company in connection with acquisitions of businesses related to the
business of the Company at the time of such acquisition (whether such
acquisitions are structured as mergers, stock purchases, asset purchases or as
other forms of acquisitions), or (ii) securities issued by the Company to its
employees, consultants, or its officers or directors pursuant to any stock
option plan of the Company, stock purchase plan of the Company, or stock bonus
plan of the Company.
Section 6.13. PUBLIC ANNOUNCEMENTS. The Company, its Representatives and
legal advisors, and the Investor will not issue or make any reports, statements
or releases to the public or to any third party with respect to this Agreement
or the transactions contemplated hereby without the consent of both the Company
and the Investor, which consent shall not be unreasonably withheld or delayed.
The Company, its Representatives and legal advisers, and the Investor also will
obtain the other party's prior approval of any press release to be issued
announcing the consummation of the transactions contemplated by this Agreement
or in any way referring to the other party or affiliates of the other party. If
either party is unable to obtain the approval of its public report, statement,
or press or other release from the other party and such report, statement, or
press or other release is, in the opinion of legal counsel to such party,
required by applicable law or by any rule or regulation of the Principal Market
in order to discharge such party's disclosure obligations, then such party may
make or issue the legally required report, statement, or press or other release
and promptly furnish the other party with a copy thereof.
Section 6.14. SERIES A, SERIES B, AND SERIES C PREFERRED STOCK. The
Company shall not reissue any shares of the Company's preferred stock designated
as Series A, Series B and Series C. With respect to any shares of the Company's
preferred stock designated as Series A, Series B, or Series C which have been
authorized but have never been issued by the Company, the Company shall not
issue such shares.
Section 6.15. DELIVERY OF SHARE CERTIFICATES. The Company shall use its
best efforts to cause its transfer agent to dispatch, using a nationally
recognized and reputable overnight courier, (i) share certificates representing
all Conversion Shares issuable upon a conversion of Preferred Stock within three
(3) Trading Days following the Conversion Date (as defined in the Certificate of
Designation) relating to such conversion, (ii) share certificates representing
shares of Common Stock issued pursuant to a Subsequent Sale within three (3)
Trading Days following the Closing Date relating to such Subsequent Sale, and
(iii) share certificates representing Warrant Shares issuable pursuant to an
exercise of the Incentive Warrant or the Protective Warrant within (3) Trading
Days following the Exercise Date (as defined in the Incentive Warrant or the
Protective Warrant, as applicable) relating to such exercise, all in accordance
with the provisions of the Transfer Agent Instructions (except that the
provisions in the Transfer Agent Instructions which permit the transfer agent to
dispatch such share certificates after a longer period has elapsed shall not
apply with respect to the obligations of the Company hereunder).
ARTICLE VII
CONDITIONS TO DELIVERY OF
SALE NOTICES AND CONDITIONS TO CLOSING
Section 7.1. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE
AND SELL PREFERRED STOCK AND COMMON STOCK. The obligation hereunder of the
Company to issue and sell the Preferred Stock or Common Stock, as applicable, to
the Investor incident to each Closing is subject to the satisfaction, at or
before each such Closing, of each of the conditions set forth below.
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(a) ACCURACY OF THE INVESTOR'S REPRESENTATION AND WARRANTIES. The
representations and warranties of the Investor shall be true and
correct in all material respects as of the date of this Agreement
and as of the date of each such Closing as though made at each
such time.
(b) PERFORMANCE BY THE INVESTOR. The Investor shall have performed,
satisfied and complied in all respects with all covenants,
agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Investor at or prior
to such Closing.
Section 7.2. CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A
SALE NOTICE AND THE OBLIGATION OF THE INVESTOR TO PURCHASE PREFERRED STOCK AND
COMMON STOCK. The right of the Company to deliver a Sale Notice, in the event of
a Subsequent Sale, and the obligation of the Investor hereunder to acquire and
pay for the Preferred Stock or Common Stock, as applicable, incident to a
Closing is subject to the satisfaction, on (i) the Subscription Date, (ii) the
applicable Sale Notice Date and (iii) the applicable Closing Date (each a
"CONDITION SATISFACTION DATE"), of each of the following conditions; provided,
however, that with respect to the Subscription Date and the Closing relating to
the First Sale only, the Investor waives the conditions set forth in paragraphs
(a), (b) and (k) of this Section 7.2:
(a) FILING OF REGISTRATION STATEMENTS WITH THE SEC. In accordance
with the provisions set forth in the Registration Rights
Agreement, the Company shall have filed with the SEC Registration
Statements covering the resale of Registrable Securities relating
to all prior Sales.
(b) EFFECTIVE REGISTRATION STATEMENTS. (1) The Company shall have
notified the Investor in accordance with Section 6.8 hereof that
all prior Registration Statements covering Registrable Securities
relating to the First Sale and any Subsequent Sales have been
declared effective by the SEC. (2) In accordance with the
Registration Rights Agreement, all such Registration Statements
shall remain effective on each Condition Satisfaction Date. (3)
Neither the Company nor the Investor shall have received notice
that the SEC has issued or intends to issue a stop order with
respect to a Registration Statement or that the SEC otherwise has
suspended or withdrawn the effectiveness of a Registration
Statement, either temporarily or permanently, or intends or has
threatened to do so (unless the SEC's concerns have been
addressed and the Investor is reasonably satisfied that the SEC
no longer is considering or intends to take such action). (4) No
other suspension of the use or withdrawal of the effectiveness of
such Registration Statement or related prospectus shall exist.
(c) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company shall be true and
correct as of each Condition Satisfaction Date as though made at
each such time (except for representations and warranties
specifically made as of a particular date).
(d) PERFORMANCE BY THE COMPANY. The Company shall have performed,
satisfied and complied in all respects with all covenants,
agreements and conditions required by this Agreement, the
Registration Rights Agreement and the Warrants to be performed,
satisfied or complied with by the Company at or prior to each
Condition Satisfaction Date.
(e) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered,
promulgated or adopted by any court or governmental authority of
competent jurisdiction that prohibits the transactions
contemplated by this Agreement or otherwise has a Material
Adverse Effect, and no actions, suits or proceedings shall be in
progress, pending or threatened by any Person, that seek to
enjoin or prohibit the transactions contemplated by this
Agreement or otherwise could reasonably be expected to have a
Material Adverse Effect. For purposes of this paragraph (e), no
proceeding shall be deemed pending or threatened unless one of
the parties has received written or oral notification thereof
prior to the applicable Closing Date.
(f) NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The
trading of the Common Stock shall not have been suspended by the
SEC, the Principal Market or the NASD, and the Common Stock shall
have been approved for listing or quotation on and shall not have
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been delisted from the Principal Market. The issuance of shares
of Common Stock with respect to the applicable Closing shall not
violate the shareholder approval requirements of the Principal
Market.
(g) LEGAL OPINION. On each Closing Date relating to each Subsequent
Sale, the Company shall have caused to be delivered to the
Investor, an opinion of the Company's independent counsel in the
form of Exhibit K hereto, addressed to the Investor.
(h) DUE DILIGENCE. No dispute between the Company and the Investor
shall exist pursuant to Section 7.3 as to the adequacy of the
disclosure contained in the Registration Statement.
(i) TEN PERCENT LIMITATION. On each Closing Date, the number of
Commitment Shares then to be purchased by the Investor shall not
exceed the number of such shares that, when aggregated with all
other shares of Common Stock and Registrable Securities then
owned by the Investor beneficially or deemed beneficially owned
by the Investor, as determined in accordance with the definition
of beneficial ownership in Rule 13d-3 promulgated under the
Exchange Act, would result in the Investor owning no more than
9.9% of all of such Common Stock as would be outstanding on such
Closing Date, as determined in accordance with Section 13(d) of
the Exchange Act and the regulations promulgated thereunder. For
purposes of this Section, in the event that the amount of Common
Stock outstanding as determined in accordance with Section 13(d)
of the Exchange Act and the regulations promulgated thereunder is
greater on a Closing Date than on the Sale Notice Date associated
with such Closing Date, the amount of Common Stock outstanding on
such Closing Date shall govern for purposes of determining
whether the Investor, when aggregating all purchases of Common
Stock made pursuant to this Agreement and, if any, Warrant Shares
would own more than 9.9% of the Common Stock following such
Closing Date.
(j) NO KNOWLEDGE. The Company shall have no knowledge of any event
more likely than not to have the effect of causing any
Registration Statement to be suspended or otherwise ineffective
(which event is more likely than not to occur within the fifteen
Trading Days following the Trading Day on which such notice is
deemed delivered).
(k) MINIMUM TIME INTERVAL. The Minimum Time Interval shall have
elapsed.
(l) SHAREHOLDER VOTE. The issuance of Commitment Shares, with respect
to the applicable Closing, if any, shall not violate the
shareholder approval requirements of the Principal Market. Each
Sale Notice shall provide the Investor with the following
information as of the applicable Sale Notice Date: (i) the total
number of shares of Outstanding Common Stock, (ii) the number of
Subsequent Sale Shares issuable with respect to the applicable
Closing, (iii) the number of Protective Warrant Shares issuable,
if any, with respect to the applicable Closing, (iv) the number
of shares of Commitment Shares issued pursuant to previous Sales,
(v) the number of Incentive Warrant Shares issued, (vi) the
number of Protective Warrant Shares previously issued pursuant to
previous Sales, and (vii) the number of Conversion Shares
previously issued and issuable upon conversion of the Preferred
Stock. If the issuance by the Company of a number of shares of
Commitment Shares equal to the sum of the amounts stated in
clauses (ii) through (vii), inclusive, hereof would result in a
violation by the Company of the shareholder approval requirements
of the Principal Market, the applicable Sale Notice shall be
deemed null and void.
(m) CERTIFICATE OF DESIGNATION. The Company, prior to the Closing
Date relating to the First Sale only, shall have duly filed the
Certificate of Designation with, and the Certificate of
Designation shall have been approved by, the State of Arizona
Corporation Commission.
(n) OTHER. On each Condition Satisfaction Date, the Investor shall
have received and been reasonably satisfied with such other
certificates and documents as shall have been reasonably
requested by the Investor in order for the Investor to confirm
the Company's satisfaction of the conditions set forth in this
Section 7.2., including, without limitation, a certificate in
substantially the form and substance of Exhibit H hereto,
executed in either case by an executive officer of the Company
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and to the effect that all the conditions to such Closing shall
have been satisfied as at the date of each such certificate.
(o) CERTAIN EVENTS. The Company shall not be permitted to deliver a
Sale Notice during any period in which the events described in
Section 6.8, except for clause (v) thereof, continue to occur.
Section 7.3. DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC
INFORMATION.
(a) The Company shall make available for inspection and review by the
Investor, advisors to and representatives of the Investor (who
may or may not be affiliated with the Investor and who are
reasonably acceptable to the Company), and any Underwriter, any
Registration Statement or amendment or supplement thereto or any
blue sky, NASD or other filing, all financial and other records,
all SEC Documents and other filings with the SEC, and all other
corporate documents and properties of the Company as may be
reasonably necessary for the purpose of such review, and cause
the Company's officers, directors and employees to supply all
such information reasonably requested by the Investor or any such
representative, advisor or Underwriter in connection with such
Registration Statement (including, without limitation, in
response to all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time after
the filing and effectiveness of such Registration Statement for
the sole purpose of enabling the Investor and such
representatives, advisors and Underwriters and their respective
accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of such
Registration Statement.
(b) None of the Company, its officers, directors, employees and
agents shall in any event disclose non-public information to the
Investor, advisors to or representatives of the Investor unless
prior to disclosure of such information the Company identifies
such information as being non-public information and provides the
Investor, such advisors and representatives with the opportunity
to accept or refuse to accept such non-public information for
review. As a condition to disclosing any non-public information
hereunder, the Company may require the Investor and the
Investor's advisors and representatives to enter into a
confidentiality agreement in form reasonably satisfactory to the
Company and the Investor.
(c) Nothing herein shall require the Company to disclose non-public
information to the Investor or its advisors or representatives,
and the Company represents that it does not disseminate
non-public information to any investors who purchase stock in the
Company in a public offering, to money managers or to securities
analysts; provided, however, that notwithstanding anything herein
to the contrary, the Company shall, as hereinabove provided,
immediately notify the advisors and representatives of the
Investor and any Underwriters of any event or the existence of
any circumstance (without any obligation to disclose the specific
event or circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the Company
specifically or generally during the course of due diligence by
such persons or entities), which, if not disclosed in the
prospectus included in the applicable Registration Statement
would cause such prospectus to include a material misstatement or
to omit a material fact required to be stated therein in order to
make the statements, therein, in light of the circumstances in
which they were made, not misleading. Nothing contained in this
Section 7.3 shall be construed to mean that such persons or
entities other than the Investor (without the written consent of
the Investor prior to disclosure of such information) may not
obtain non-public information in the course of conducting due
diligence in accordance with the terms and conditions of this
Agreement and nothing herein shall prevent any such persons or
entities from notifying the Company of their opinion that based
on such due diligence by such persons or entities, that such
Registration Statement contains an untrue statement of a material
fact or omits a material fact required to be stated in such
Registration Statement or necessary to make the statements
contained therein, in light of the circumstances in which they
were made, not misleading.
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ARTICLE VIII
LEGENDS
Section 8.1. LEGENDS. Each of the Warrants, the Preferred Stock and, unless
otherwise provided below, each certificate representing Registrable Securities
will bear the following legend (the "LEGEND"):
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE
UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO A TRANSACTION THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS CERTIFICATE IS THE BENEFICIARY OF CERTAIN OBLIGATIONS OF
THE COMPANY SET FORTH IN A STOCK PURCHASE AGREEMENT, DATED AS OF JUNE 18,
2001, BETWEEN INTERNATIONAL FIBERCOM, INC. AND CRESCENT INTERNATIONAL LTD.
A COPY OF THE PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH
OBLIGATIONS MAY BE OBTAINED FROM INTERNATIONAL FIBERCOM, INC.'S EXECUTIVE
OFFICES."
On the Subscription Date the Company shall issue to the transfer agent for
its Common Stock (and to any substitute or replacement transfer agent for its
Common Stock upon the Company's appointment of any such substitute or
replacement transfer agent) Transfer Agent Instructions, with a copy to the
Investor. Other than as required as a result of change in law, such instructions
shall be irrevocable by the Company from and after the date hereof or from and
after the issuance thereof to any such substitute or replacement transfer agent,
as the case may be, except as otherwise expressly provided in the Registration
Rights Agreement. It is the intent and purpose of such instructions, as provided
therein, to require the transfer agent for the Common Stock from time to time
upon transfer of Registrable Securities by the Investor to issue certificates
evidencing such Registrable Securities free of the Legend during the following
periods and under the following circumstances and without consultation by the
transfer agent with the Company or its counsel and without the need for any
further advice or instruction or documentation to the transfer agent by or from
the Company or its counsel or the Investor, and the Company agrees that it will,
and will cause its counsel to, provide the transfer agent with any and all
documentation requested or required by the transfer agent, the Investor or their
respective counsel, including without limitation the documentation and
confirmations referenced in the Transfer Agent Instructions:
(a) At any time after the applicable Effective Date, upon surrender
of one or more certificates evidencing Registrable Securities
that bear the Legend, to the extent accompanied by a notice
requesting the issuance of new certificates free of the Legend to
replace those surrendered; provided that (i) the applicable
Registration Statement shall then be effective and (ii) if
reasonably requested by the transfer agent the Investor confirms
to the transfer agent that the Investor has transferred the
Registrable Securities pursuant to such Registration Statement
and has complied with the prospectus delivery requirement; or
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(b) At any time upon any surrender of one or more certificates
evidencing Registrable Securities that bear the Legend, to the
extent accompanied by a notice requesting the issuance of new
certificates free of the Legend to replace those surrendered and
containing representations that the Investor is permitted to
dispose of such Registrable Securities without limitation as to
amount or manner of sale pursuant to Rule 144(k) under the
Securities Act.
Section 8.2. NO OTHER LEGEND OR STOCK TRANSFER RESTRICTIONS. No legend
other than the one specified in Section 8.1 has been or shall be placed on the
share certificates representing the Registrable Securities and the Preferred
Stock, and no instructions or "stop transfer orders," so called, "stock transfer
restrictions," or other restrictions have been or shall be given to the
Company's transfer agent with respect thereto other than as expressly set forth
in this Article VIII.
Section 8.3. INVESTOR'S COMPLIANCE. Nothing in this Article VIII shall
affect in any way the Investor's obligations to comply with all applicable
securities laws.
ARTICLE IX
INDEMNIFICATION; ARBITRATION
Section 9.1. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Investor,
its partners, Affiliates, officers, directors, employees, and
duly authorized agents, and each Person or entity, if any, who
controls the Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with
its controlling persons from and against any Damages, joint or
several, and any action in respect thereof to which the Investor,
its partners, Affiliates, officers, directors, employees, and
duly authorized agents, and any such controlling person becomes
subject to, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or
failure to perform any covenant or agreement on the part of
Company contained in this Agreement, as such Damages are
incurred, unless such Damages result primarily from the
Investor's gross negligence, recklessness or bad faith in
performing its obligations under this Agreement; provided,
however, that the maximum aggregate liability of the Company
shall be limited to the amount actually invested by the Investor
under this Agreement, and provided, further, that in no event
shall this provision be deemed to limit any rights to
indemnification arising under the Registration Rights Agreement.
(b) The Investor agrees to indemnify and hold harmless the Company,
its Affiliates, officers, directors, employees, and duly
authorized agents from and against any Damages, joint or several,
and any action in respect thereof to which the Company, its
Affiliates, officers, directors, employees, and duly authorized
agents becomes subject to, resulting from, arising out of or
relating to any misrepresentation, breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement
on the part of the Investor contained in this Agreement, as such
Damages are incurred, unless such Damages result primarily from
the Company's gross negligence, recklessness or bad faith in
performing its obligations under this Agreement; provided,
however, that the maximum aggregate liability of the Investor
shall be limited to the amount by which the total price at which
the Registrable Securities held by the Investor were sold to the
public exceeds the amount actually paid by the Investor under
this Agreement for such Registrable Securities sold to the
public, and provided, further, that in no event shall this
provision be deemed to limit any rights to indemnification
arising under the Registration Rights Agreement.
Section 9.2. METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for
indemnification by any Indemnified Party (as defined below) under Section 9.1
shall be asserted and resolved as follows:
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(a) In the event any claim or demand in respect of which any person
claiming indemnification under any provision of Section 9.1 (an
"INDEMNIFIED PARTY") might seek indemnity under Section 9.1 is
asserted against or sought to be collected from such Indemnified
Party by a person other than the Company, the Investor or any
Affiliate of the Company (a "THIRD PARTY CLAIM"), the Indemnified
Party shall deliver a written notification, enclosing a copy of
all papers served, if any, and specifying the nature of and basis
for such Third Party Claim and for the Indemnified Party's claim
for indemnification that is being asserted under any provision of
Section 9.1 against any person (the "INDEMNIFYING PARTY"),
together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of
such Third Party Claim (a "CLAIM NOTICE") with reasonable
promptness to the Indemnifying Party. If the Indemnified Party
fails to provide the Claim Notice with reasonable promptness
after the Indemnified Party receives notice of such Third Party
Claim, the Indemnifying Party shall not be obligated to indemnify
the Indemnified Party with respect to such Third Party Claim to
the extent that the Indemnifying Party's ability to defend has
been irreparably prejudiced by such failure of the Indemnified
Party. The Indemnifying Party shall notify the Indemnified Party
as soon as practicable within the period ending 30 calendar days
following receipt by the Indemnifying Party of either a Claim
Notice or an Indemnity Notice (as defined below) (the "DISPUTE
PERIOD") whether the Indemnifying Party disputes its liability or
the amount of its liability to the Indemnified Party under
Section 9.1 and whether the Indemnifying Party desires, at its
sole cost and expense, to defend the Indemnified Party against
such Third Party Claim.
(i) If the Indemnifying Party notifies the Indemnified Party
within the Dispute Period that the Indemnifying Party
desires to defend the Indemnified Party with respect to the
Third Party Claim pursuant to this Section 9.2(a), then the
Indemnifying Party shall have the right to defend, with
counsel reasonably satisfactory to the Indemnified Party, at
the sole cost and expense of the Indemnifying Party, such
Third Party Claim by all appropriate proceedings, which
proceedings shall be vigorously and diligently prosecuted by
the Indemnifying Party to a final conclusion or will be
settled at the discretion of the Indemnifying Party (but
only with the consent of the Indemnified Party in the case
of any settlement that provides for any relief other than
the payment of monetary damages or that provides for the
payment of monetary damages as to which the Indemnified
Party shall not be indemnified in full pursuant to Section
9.1). The Indemnifying Party shall have full control of such
defense and proceedings, including any compromise or
settlement thereof; provided, however, that the Indemnified
Party may, at the sole cost and expense of the Indemnified
Party, at any time prior to the Indemnifying Party's
delivery of the notice referred to in the first sentence of
this clause (i), file any motion, answer or other pleadings
or take any other action that the Indemnified Party
reasonably believes to be necessary or appropriate to
protect its interests; and provided further, that if
requested by the Indemnifying Party, the Indemnified Party
will, at the sole cost and expense of the Indemnifying
Party, provide reasonable cooperation to the Indemnifying
Party in contesting any Third Party Claim that the
Indemnifying Party elects to contest. The Indemnified Party
may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the
Indemnifying Party pursuant to this clause (i), and except
as provided in the preceding sentence, the Indemnified Party
shall bear its own costs and expenses with respect to such
participation. Notwithstanding the foregoing, the
Indemnified Party may take over the control of the defense
or settlement of a Third Party Claim at any time if it
irrevocably waives its right to indemnity under Section 9.1
with respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified
Party within the Dispute Period that the Indemnifying Party
desires to defend the Third Party Claim pursuant to Section
9.2(a), or if the Indemnifying Party gives such notice but
fails to prosecute vigorously and diligently or settle the
Third Party Claim, or if the Indemnifying Party fails to
give any notice whatsoever within the Dispute Period, then
the Indemnified Party shall have the right to defend, at the
sole cost and expense of the Indemnifying Party, the Third
Party Claim by all appropriate proceedings, which
proceedings shall be prosecuted by the Indemnified Party in
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a reasonable manner and in good faith or will be settled at
the discretion of the Indemnified Party (with the consent of
the Indemnifying Party, which consent will not be
unreasonably withheld). The Indemnified Party will have full
control of such defense and proceedings, including any
compromise or settlement thereof; provided, however, that if
requested by the Indemnified Party, the Indemnifying Party
will, at the sole cost and expense of the Indemnifying
Party, provide reasonable cooperation to the Indemnified
Party and its counsel in contesting any Third Party Claim
which the Indemnified Party is contesting. Notwithstanding
the foregoing provisions of this clause (ii), if the
Indemnifying Party has notified the Indemnified Party within
the Dispute Period that the Indemnifying Party disputes its
liability or the amount of its liability hereunder to the
Indemnified Party with respect to such Third Party Claim,
and if such dispute is resolved in favor of the Indemnifying
Party in the manner provided in clause (iii) below, the
Indemnifying Party will not be required to bear the costs
and expenses of the Indemnified Party's defense pursuant to
this clause (ii) or of the Indemnifying Party's
participation therein at the Indemnified Party's request,
and the Indemnified Party shall reimburse the Indemnifying
Party in full for all reasonable costs and expenses incurred
by the Indemnifying Party in connection with such
litigation. The Indemnifying Party may participate in, but
not control, any defense or settlement controlled by the
Indemnified Party pursuant to this clause (ii), and the
Indemnifying Party shall bear its own costs and expenses
with respect to such participation.
(iii)If the Indemnifying Party notifies the Indemnified Party
that it does not dispute its liability or the amount of its
liability to the Indemnified Party with respect to the Third
Party Claim under Section 9.1 or fails to notify the
Indemnified Party within the Dispute Period whether the
Indemnifying Party disputes its liability or the amount of
its liability to the Indemnified Party with respect to such
Third Party Claim, the Damages in the amount specified in
the Claim Notice shall be conclusively deemed a liability of
the Indemnifying Party under Section 9.1 and the
Indemnifying Party shall pay the amount of such Damages to
the Indemnified Party on demand. If the Indemnifying Party
has timely disputed its liability or the amount of its
liability with respect to such claim, the Indemnifying Party
and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute, and if not resolved
through negotiations within the period of 30 calendar days
immediately following the Dispute Period, such dispute shall
be resolved by arbitration in accordance with Section 9.3.
(b) In the event any Indemnified Party should have a claim under
Section 9.1 against the Indemnifying Party that does not involve
a Third Party Claim, the Indemnified Party shall deliver a
written notification of a claim for indemnity under Section 9.1
specifying the nature of and basis for such claim, together with
the amount or, if not then reasonably ascertainable, the
estimated amount, determined in good faith, of such claim (an
"INDEMNITY NOTICE") with reasonable promptness to the
Indemnifying Party. The failure by any Indemnified Party to give
the Indemnity Notice shall not impair such party's rights
hereunder except to the extent that the Indemnifying Party
demonstrates that it has been irreparably prejudiced thereby. If
the Indemnifying Party notifies the Indemnified Party that it
does not dispute the claim or the amount of the claim described
in such Indemnity Notice or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes
the claim or the amount of the claim described in such Indemnity
Notice, the Damages in the amount specified in the Indemnity
Notice will be conclusively deemed a liability of the
Indemnifying Party under Section 9.1 and the Indemnifying Party
shall pay the amount of such Damages to the Indemnified Party on
demand. If the Indemnifying Party has timely disputed its
liability or the amount of its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party shall
proceed in good faith to negotiate a resolution of such dispute,
and if not resolved through negotiations within the period of 30
calendar days immediately following the Dispute Period, such
dispute shall be resolved by arbitration in accordance with
Section 9.3.
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Section 9.3. ARBITRATION. Any controversy, claim or dispute arising out of
or in connection with this Agreement, the Registration Rights Agreement or the
Warrants, including any question regarding its existence, validity,
interpretation, breach, or termination, shall be referred to and finally
resolved in accordance with the International Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitral
tribunal may be entered by any court having jurisdiction thereof or having
jurisdiction over any party or any party's assets.
(a) The tribunal shall consist of three arbitrators, two of whom
shall be appointed by the respective parties and the third, who
shall be the chairperson of the tribunal, by the two
party-appointed arbitrators within 30 days of the last of their
appointments. Save that, if either party should fail to appoint
an arbitrator within 30 days of receiving written notice of the
appointment of an arbitrator by the other party, the second
arbitrator shall, at the written request of the party which has
already made an appointment, be appointed forthwith by the
American Arbitration Association. Likewise, if the
party-appointed arbitrators fail to make an agreed appointment
for the chairperson within 30 days of the last of their
appointments, the chairperson shall, at the written request of
either party, be appointed forthwith by the American Arbitration
Association.
The place of arbitration shall be New York, New York.
This arbitration clause and the conduct of the arbitral
proceedings shall be governed by the Federal Arbitration Act, 9
U.S.C.A. sec. 1 et seq.
The language of the arbitration shall be English.
Nothing in these dispute resolution provisions shall be construed
as preventing either party from seeking conservatory or similar
interim relief in any court of competent jurisdiction.
To the extent practicable, the arbitral tribunal shall render its
award no more than 60 calendar days from the date that the three
member tribunal is constituted. The arbitral tribunal shall not
lose jurisdiction over the matter based on a failure to render an
award within this time period.
ARTICLE X
MISCELLANEOUS
Section 10.1. FEES AND TRANSACTION COSTS. In connection with the execution
of this agreement the following Sale Fees, Investor Legal Fees, and Due
Diligence Costs (as defined below) are payable by the Company to the payee
entities listed in Schedule 10.1. The Investor is authorized by the Company to
deduct such amounts from any sums due to the Company on the applicable Closing
Date.
(a) SUBSCRIPTION FEE. On the first Closing Date, the Company shall
pay to the Investor the subscription fee in the amount set forth
in Schedule 10.1 (the "SUBSCRIPTION FEE").
(b) SALE FEES. On each Closing Date, the Company shall pay to the
Investor an amount calculated in accordance with Schedule 10.1
(the "SALE FEE").
(c) TRANSACTION COSTS. The fees, expenses and disbursements of the
Investor's counsel (the "INVESTOR LEGAL FEES") shall be paid as
follows: (i) the Investor shall pay the initial $10,000 of
Investor Legal Fees and (ii) the Company shall pay all Investor
Legal Fees in excess of $10,000. The Company shall pay the
Investor due diligence costs in connection with the consummation
of this Agreement and the transactions contemplated hereby (the
"DUE DILIGENCE COSTS") up to a maximum amount of $10,000. The
Company shall pay to the Investor the Company's share of the
Investor Legal Fees and Due Diligence Costs on the Subscription
Date, to the extent such share of the Investor Legal Fees and Due
Diligence Costs can be determined on the Subscription Date. The
Company shall pay its share of the remaining Investor Legal Fees
and Due Diligence Costs to the Investor not later than 10 days
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after receipt of notice from the Investor that such amount is
due. The Company agrees to pay its own expenses incident to the
performance of its obligations hereunder.
Section 10.2. REPORTING ENTITY FOR THE COMMON STOCK. The reporting entity
relied upon for the determination of the Closing Trade Price or trading volume
of the Common Stock on the Principal Market on any given Trading Day for the
purposes of this Agreement shall be the Bloomberg L.P. The written mutual
consent of the Investor and the Company shall be required to employ any other
reporting entity.
Section 10.3. BROKERAGE. Except as disclosed in Section 10.1, each of the
parties hereto represents that it has had no dealings in connection with this
transaction with any finder or broker which would impose a legal obligation to
pay any fee or commission. The Company on the one hand, and the Investor, on the
other hand, agree to indemnify the other against and hold the other harmless
from any and all liabilities to any persons claiming brokerage commissions or
finder's fees on account of services purported to have been rendered on behalf
of the indemnifying party in connection with this Agreement or the transactions
contemplated hereby.
Section 10.4. CONVERSION NOTICE. Any conversion of the Preferred Stock
shall be effected in accordance with the Certificate of Designation and (i) any
conversion notice delivered thereunder by the Investor to the Company shall be
in the form of Exhibit I hereto, and (ii) any conversion notice delivered
thereunder by the Company to the Investor shall be in the form of Exhibit J
hereto.
Section 10.5. NOTICES. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith. Any notice or
other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile at the address or
number designated below (if delivered on a Trading Day during normal business
hours where such notice is to be received), or the first Trading Day following
such delivery (if delivered other than on a Trading Day during normal business
hours where such notice is to be received) or (b) on the third Trading Day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:
If to the Company:
International FiberCom, Inc.
0000 X. Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxxx Xxxxxxx Xxxx LLP
Renaissance Xxx Xxxxxxxx
0 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxxx III, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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if to the Investor:
Crescent International Ltd.
c/o GreenLight (Switzerland) SA
00, xx Xxxxx-Xxxxx
0000 Xxxxxx, Xxxxxxxx
Xxxxxxxxxxx
Attention: Xxx Xxxx/Maxi Brezzi
Telephone: x00 00 000 00 00
Facsimile: x00 00 000 00 00
with a copy (which shall not constitute notice) to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Either party hereto from time to time may change its address or facsimile
number for notices under this Section by giving at least ten (10) calendar
days' prior written notice of such changed address or facsimile number to
the other party hereto.
Section 10.6. ASSIGNMENT. Neither this Agreement nor any rights of the
Investor or the Company hereunder may be assigned by either party to any other
Person. Notwithstanding the foregoing, the Investor's interest in this Agreement
may be assigned at any time, in whole or in part, to any Affiliate of the
Investor upon the prior written consent of the Company, which consent shall not
to be unreasonably withheld provided, however, that any such assignment or
transfer shall relieve the Investor of its duties under this Agreement only upon
performance thereof by any such assignee or transferee.
Section 10.7. AMENDMENT; NO WAIVER. No party shall be liable or bound to
any other party in any manner by any warranties, representations or covenants
except as specifically set forth in this Agreement. Except as expressly provided
in this Agreement, neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
both parties hereto. The failure of the either party to insist on strict
compliance with this Agreement, or to exercise any right or remedy under this
Agreement, shall not constitute a waiver of any rights provided under this
Agreement, nor estop the parties from thereafter demanding full and complete
compliance nor prevent the parties from exercising such a right or remedy in the
future.
Section 10.8. ANNEXES AND EXHIBITS; ENTIRE AGREEMENT. All annexes and
exhibits to this Agreement are incorporated herein by reference and shall
constitute part of this Agreement. This Agreement, the Warrants and the
Registration Rights Agreement set forth the entire agreement and understanding
of the parties relating to the subject matter hereof and thereof and supersede
all prior and contemporaneous agreements, negotiations and understandings
between the parties, both oral and written, relating to the subject matter
hereof.
Section 10.9. SURVIVAL. The provisions of Articles VI, VIII, IX and X, and
of Section 7.3, shall survive the termination of this Agreement.
Section 10.10. SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement to
any party.
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Section 10.11. TITLE AND SUBTITLES. The titles and subtitles used in this
Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.
Section 10.12. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which may be executed by less than all of the parties and
shall be deemed to be an original instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute one and the same instrument.
Section 10.13. CHOICE OF LAW. This Agreement shall be construed under the
laws of the State of New York.
Section 10.14. OTHER EXPENSES. In the event that a dispute between the
parties is not determined by a Board of Arbitration, the non-prevailing party in
any action, suit or proceeding shall bear all investigative, legal and other
expenses reasonably incurred in connection with, and any and all amounts paid in
defense or settlement of such action, suit or proceeding.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.
CRESCENT INTERNATIONAL LTD.
By: _______________________________
Name:
Title:
INTERNATIONAL FIBERCOM, INC.
By: _______________________________
Name:
Title:
