SECURITIES PURCHASE AGREEMENT
Exhibit
4.1
This
Securities Purchase Agreement (this “Agreement”)
is made and entered into as of March 23, 2010 (the “Execution
Date”), by and among OCZ Technology Group, Inc., a Delaware corporation
(the “Company”),
and each of the purchasers listed on Schedule A attached
hereto (collectively, the “Purchasers”
and individually, a “Purchaser”).
RECITALS
WHEREAS,
the Company desires to sell to the Purchasers, and the Purchasers desire to
purchase from the Company, on the terms and conditions set forth in this
Agreement, up to an aggregate of (i) 10,000,000 shares (the “Shares”)
of common stock, par value $0.0025 per share, of the Company (the “Common
Stock”), and (ii) warrants, in substantially the form attached hereto as
Exhibit B
(the “Warrants,”
and the shares issuable upon exercise thereof, the “Warrant
Shares”), to acquire up to that number of additional shares of Common
Stock equal to 50% of the number of shares purchased by Purchasers;
and
WHEREAS,
the Company and each Purchaser are executing and delivering this Agreement in
reliance upon exemption from securities registration afforded by Regulation D
(“Regulation
D”) as promulgated by the Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities
Act”).
NOW,
THEREFORE, in consideration of the foregoing, the mutual promises hereinafter
set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT TO PURCHASE AND
SELL STOCK.
(a) Company
Authorization. The Company’s board of directors (the “Board of
Directors”) has authorized the issuance and sale, pursuant to the terms
and conditions of this Agreement, of the Shares, the Warrants, and the Warrant
Shares (collectively, the “Purchased
Securities”).
(b) Agreement to Purchase and
Sell Securities. Subject to the terms and conditions of this
Agreement, each Purchaser, severally and not jointly, agrees to purchase, and
the Company agrees to sell to each Purchaser, at the Closing (as defined below),
that number of Shares of Common Stock set forth opposite such Purchaser’s name
on Schedule A
attached hereto. In addition, each Purchaser shall receive a Warrant
to acquire up to that number of Warrant Shares set forth opposite such
Purchaser’s name on Schedule A attached
hereto, which amount shall equal to 50% of the number of Shares purchased by the
Purchaser (rounded up to the nearest whole share). The purchase price
of each Share shall be $3.00 and shall be payable as hereafter set
forth. The Warrants shall have an exercise price equal to $5.25 per
Warrant Share payable as set forth in the Warrant.
(c) Use of
Proceeds. The Company intends to apply the net proceeds for
working capital and general corporate purposes as determined by the Company from
time to time.
(d) Obligations Several, Not
Joint. The obligations of each Purchaser under this Agreement
are several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under this Agreement. The decision of each of
the Purchasers to purchase the Purchased Securities pursuant to this Agreement
has been made by such Purchaser independently of any other
Purchaser. Nothing contained herein, and no action taken by any
Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by
this Agreement. Each Purchaser shall be entitled to independently
protect and enforce such Purchaser’s rights, including, without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.
2. CLOSING. The
purchase and sale of the Purchased Securities may occur in one or more closings,
which shall take place at the offices of DLA Piper LLP (US), 0000 Xxxxxxxxxx
Xxxxxx, Xxxx Xxxx Xxxx, Xxxxxxxxxx 00000, at 11:00 a.m. Pacific Time, not later
than two (2) Business Days (as defined below) following the Execution Date, or
at such other time and place as the Company and Purchasers representing a
majority of the Purchased Securities to be purchased, mutually agree upon (which
time and place are referred to in this Agreement as the “Closing”). At
the Closing, against delivery of full payment for the Purchased Securities sold
hereunder by wire transfer of immediately available funds in accordance with the
Company’s instructions, the Company shall issue and deliver or cause to be
delivered to each Purchaser one or more stock certificates registered in the
name of each Purchaser (or in such nominee name(s) as designated by such
Purchaser in the Stock Certificate Questionnaire, attached hereto as Appendix I (the
“Stock
Certificate Questionnaire”)) representing the number of shares of Common
Stock set forth opposite the appropriate Purchaser’s name on Schedule A hereto,
and bearing the legend set forth in Section 4(j)(i)
herein; provided,
however, that the Company may furnish to each Purchaser a copy of the
irrevocable instructions to the Company’s transfer agent instructing the
transfer agent to deliver a certificate or certificates evidencing the number of
shares of Common Stock purchased by such Purchaser, registered in the name of
such Purchaser (or designated nominee). Promptly after the Closing,
the Company shall issue and deliver or cause to be delivered to each Purchaser
one or more Warrants registered in the name of each Purchaser (or in such
nominee name(s) as designated by such Purchaser in the Stock Certificate
Questionnaire) representing the number of shares of Warrant Shares set forth
opposite the appropriate Purchaser’s name on Schedule A hereto,
and bearing the legend set forth in Section
4(j)(i). Closing documents, other than the stock certificates
representing the Purchased Securities, may be delivered by facsimile or other
electronic transmission on the Closing Date, with original signature pages sent
by overnight courier.
For
purposes of this Agreement, “Closing
Date” means the date of the Closing, and “Business
Day” means any day except Saturday, Sunday and any day which shall be a
federal legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other governmental action to
close.
3. REPRESENTATIONS,
WARRANTIES AND CERTAIN AGREEMENTS OF THE COMPANY. The Company
hereby represents and warrants to each Purchaser that, except as set forth in
the SEC Documents (as defined below):
(a) Organization Good Standing
and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all corporate power and authority required to (i) own, operate
and occupy its properties and to carry on its business as presently conducted
and (ii) enter into this Agreement and the other agreements, instruments and
documents contemplated hereby, and to consummate the transactions contemplated
hereby and thereby. The Company is qualified to do business and is in
good standing in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a Material Adverse Effect. As used in
this Agreement, “Material Adverse
Effect” means a material adverse effect on, or a material adverse change
in, or a group of such effects on or changes in, the business, operations,
financial condition, results of operations, assets or liabilities of the Company
and the Subsidiaries (as defined below), taken as a whole.
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(b) Capitalization. The
capitalization of the Company is as follows:
(i) The
authorized capital stock of the Company consists of 120,000,000 shares of Common
Stock and 20,000,000 shares of preferred stock, par value $0.0025 per share
(“Preferred
Stock”). 2,000,000 shares of the Preferred Stock have been
designated Series A Preferred Stock (the “Series A
Preferred”).
(ii) As
of March 1, 2010, the issued and outstanding capital stock of the Company
consisted of 21,308,352 shares of Common Stock and 60,990 shares of Series A
Preferred. The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and have not been issued in violation of or are not otherwise
subject to any preemptive or other similar rights.
(iii) As
of March 1, 2010, the Company had (1) 2,812,747 shares of Common Stock reserved
for issuance upon exercise of outstanding options granted under the Company’s
2004 Stock Incentive Plan (the “Stock Incentive
Plan”) and (2) 142,564 shares of Common Stock and 140,520 shares of
Series A Preferred reserved for issuance upon exercise of outstanding
warrants.
(iv) As
of March 1, 2010, the Company had 1,625,978 shares of Common Stock available for
future grant under the Stock Incentive Plan.
(v) With
the exception of the foregoing in this Section 3(b), the
Purchased Securities and securities issuable pursuant to the Company’s
engagement agreement with Xxxxxxxx Curhan Ford & Co. (“Xxxxxxxx”)
to serve as the Company’s financial advisor, there are no outstanding
subscriptions, options, warrants, convertible or exchangeable securities or
other rights granted to or by the Company to purchase shares of Common Stock or
other securities of the Company and there are no commitments, plans or
arrangements to issue any shares of Common Stock or any security convertible
into or exchangeable for Common Stock.
(c) Subsidiaries. Except
as set forth in the SEC Documents, the Company does not have any subsidiaries
(the entities listed in the SEC Documents or any exhibit thereto as the
Company’s subsidiaries are referred to herein, collectively, as the “Subsidiaries”),
and the Company does not own any capital stock of, assets comprising the
business of, obligations of, or any other interest (including any equity or
partnership interest) in, any person or entity. Each of the
Subsidiaries is duly organized and validly existing in good standing under the
laws of the jurisdiction of its incorporation or organization. Each
of the Subsidiaries has full power and authority to own, operate and occupy its
properties and to conduct its business as presently conducted and is registered
or qualified to do business and in good standing in each jurisdiction in which
it owns or leases property or transacts business and where the failure to be so
qualified would reasonably be expected to have a Material Adverse
Effect.
(d) Due
Authorization. All corporate actions on the part of the
Company necessary for the authorization, execution, delivery of, and the
performance of all obligations of the Company under this Agreement, including
the authorization, issuance, reservation for issuance and delivery of all the
Purchased Securities being sold under this Agreement, have been taken and no
further consent or authorization of the Company, the Board of Directors or the
Company’s stockholders is required, and this Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except (i) as may be limited by (1) applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors’ rights generally and (2)
the effect of rules of law governing the availability of equitable remedies and
(ii) as rights to indemnity or contribution may be limited under federal or
state securities laws or by principles of public policy thereunder.
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(e) Valid Issuance of the
Purchased Securities. The Purchased Securities will be, upon
payment therefor by the Purchasers in accordance with this Agreement, duly
authorized, validly issued, fully paid and non-assessable, free and clear from
all taxes and liens, claims and encumbrances imposed by the Company, other than
restrictions on transfer provided for in this Agreement, the Registration Rights
Agreement, dated the date hereof, among the Company and the Purchasers (the
“Registration
Rights Agreement”), and any other documents or agreements executed in
connection with the transactions contemplated hereunder (the “Transaction
Documents”), with respect to the issuance of such Purchased Securities
and will not be subject to any preemptive rights or similar rights.
(f) Compliance with Securities
Laws. Subject to the accuracy of the representations and
warranties made by the Purchasers in Section 4 hereof, the
Purchased Securities will be issued and sold to the Purchasers in compliance
with applicable exemptions from the registration and prospectus delivery
requirements of the Securities Act.
(g) Governmental
Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, or notice
to, any federal, state or local governmental authority or self regulatory agency
on the part of the Company is required in connection with the issuance and sale
of the Purchased Securities to the Purchasers by the Company or the consummation
of the other transactions contemplated by this Agreement, except (i) such
filings as have been made prior to the date hereof, (ii) the filings under
applicable securities laws required to comply with the Company’s registration
obligations under the Registration Rights Agreement and (iii) such additional
post-Closing filings as may be required to comply with applicable state and
federal securities laws, including, but not limited to, the filing of a Form D
relating to the sale of the Purchased Securities pursuant to Regulation
D.
(h) Non-Contravention. Assuming
the accuracy of the representations and warranties made by the Purchasers in
Section 4
hereof, the execution, delivery and performance of this Agreement by the
Company, and the consummation by the Company of the transactions contemplated
hereby (including the issuance of the Purchased Securities), do
not: (i) contravene or conflict with the certificate of
incorporation, as amended (the “Certificate of
Incorporation”) or bylaws, as amended (the “Bylaws”)
of the Company or any of the Subsidiaries; (ii) to the knowledge of the Company,
constitute a violation of any provision of any federal, state, local or foreign
law, rule, regulation, order or decree applicable to the Company or any of the
Subsidiaries; or (iii) constitute a default or require any consent under, give
rise to any right of termination, cancellation or acceleration of, or to a loss
of any material benefit to which the Company or any of the Subsidiaries is
entitled under, or result in the creation or imposition of any lien, claim or
encumbrance on any asset of the Company or any of the Subsidiaries under, any
material contract to which the Company or any of the Subsidiaries is a party or
any material permit, license or similar right relating to the Company or any of
the Subsidiaries or by which the Company or any of the Subsidiaries may be bound
or affected, except in the case of clauses (ii) and (iii), for such violations,
breaches or defaults as would not reasonably be expected to have a Material
Adverse Effect.
(i) Litigation. There
is no action, suit, proceeding, claim, arbitration or investigation (“Action”)
pending or, to the Company’s knowledge, threatened: (i) against the
Company or any of the Subsidiaries, their activities, properties or assets, or,
to the Company’s knowledge, against any officer, director or employee of the
Company or any of the Subsidiaries in connection with such officer’s, director’s
or employee’s relationship with, or actions taken on behalf of, the Company or
any of the Subsidiaries, that would reasonably be expected to have a Material
Adverse Effect, or (ii) that seeks to prevent, enjoin, adversely alter,
challenge or delay the transactions contemplated by this
Agreement. The Company is not a party to nor subject to the
provisions of, any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality that could reasonably be expected to
prevent, enjoin, adversely alter, challenge or delay the consummation of the
transactions contemplated by this Agreement or would reasonably be expected to
have a Material Adverse Effect. No Action is currently pending nor
does the Company currently intend to initiate any Action that could reasonably
be expected to have a Material Adverse Effect. The SEC has not issued
any stop order or other order suspending the effectiveness of any registration
statement filed by the Company under the Securities Act or the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”).
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(j) Compliance with Law and
Charter Documents. The Company is not in violation or default
of any provisions of the Certificate of Incorporation or the
Bylaws. The Company has complied and is currently in compliance with
all applicable statutes, laws, rules, regulations and orders of the United
States of America and all states thereof, foreign countries and other
governmental bodies and agencies having jurisdiction over the Company’s business
or properties, except for any instance of non-compliance that has not had, and
would not reasonably be expected to have, a Material Adverse
Effect. Neither the Company nor any of the Subsidiaries is in default
(and there exists no condition which, with or without the passage of time or
giving of notice or both, would constitute a default) in any material respect in
the performance of any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries is bound or by which
the properties of the Company are bound, which default has not been waived and
would reasonably be expected to have a Material Adverse Effect.
(k) Material Non-Public
Information. The Company has not provided to the Purchasers
any material non-public information other than information related to the
transactions contemplated by the Transaction Documents, all of which information
shall be disclosed by the Company pursuant to Section 9(m)
hereof.
(l) SEC
Documents.
(i) Reports. The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Exchange Act and the rules and regulations promulgated thereunder, since
December 4, 2009. The Company has made available to the Purchasers
prior to the date hereof copies of its quarterly report on Form 10-Q for the
fiscal quarter ended November 30, 2009 (“Form
10-Q”) and any other documents, including exhibits thereto, filed or
submitted by the Company with the SEC since December 4, 2009, pursuant to the
reporting requirements of the Exchange Act, including without limitation, any
Current Report on Form 8-K for events occurring since January 1, 2010 (“Form
8-Ks”) filed by the Company with the SEC (the Form 10-Q, the Form 8-Ks,
and the Form 10, as amended, filed by the Company with the SEC on December 4,
2009 are collectively referred to herein as the “SEC
Documents”). Each of the SEC Documents, as of the respective
dates thereof (or, if amended or superseded by a filing or submission, as the
case may be, prior to the Closing Date, then on the date of such filing or
submission, as the case may be), (1) did not contain any untrue statement of a
material fact nor omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading and (2) complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Document.
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(ii) Xxxxxxxx-Xxxxx. The
Company is in material compliance with all requirements of the Xxxxxxxx-Xxxxx
Act of 2002 which are applicable to it as of the Closing Date.
(iii) Financial
Statements. The consolidated financial statements of the
Company included in the SEC Documents (1) comply in all material respects with
the applicable accounting rules and regulations of the SEC with respect thereto
as were in effect at the time of filing and (2) except as may be otherwise
specified in such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes required by United
States generally accepted accounting principles (“GAAP”),
present fairly, in all material respects, the consolidated financial position of
the Company as of the dates indicated therein, and the consolidated results of
its operations and cash flows for the periods therein specified, subject, in the
case of unaudited financial statements, to normal, immaterial year-end audit
adjustments.
(m) Absence of Certain Changes
Since the Balance Sheet Date. Since November 30, 2009, the
business and operations of the Company and its Subsidiaries have been conducted
in the ordinary course consistent with past practice, and there has not
been:
(i) any
declaration, setting aside or payment of any dividend or other distribution of
the assets of the Company with respect to any shares of capital stock of the
Company or any repurchase, redemption or other acquisition by the Company or any
of its Subsidiaries of any outstanding shares of the Company;
(ii) any
damage, destruction or loss to the Company’s or any of the Subsidiaries’
business or assets, whether or not covered by insurance, except for such
occurrences, individually and collectively, that have not had, and would not
reasonably be expected to have, a Material Adverse Effect;
(iii) any
waiver by the Company or any of the Subsidiaries of a valuable right or of a
material debt owed to it, except for such waivers, individually and
collectively, that have not had, and would not reasonably be expected to have, a
Material Adverse Effect;
(iv) any
material change or amendment to, or any waiver of any material right under a
material contract or arrangement by which the Company, any of the Subsidiaries
or any of their assets or properties is bound or subject;
(v) any
change by the Company in its accounting principles, methods or practices or in
the manner in which it keeps its accounting books and records, except any such
change required by a change in GAAP or by the SEC; or
(vi) any
other event or condition of any character, except for such events and conditions
that have not resulted, and would not reasonably be expected to result, either
individually or collectively, in a Material Adverse Effect.
(n) Intellectual
Property. The Company and each of the Subsidiaries own or
possess sufficient rights to use all inventions, trade secrets, know-how,
trademarks, service marks, trade names, copyrights or other information and, to
the Company’s knowledge, patents, patent rights and licenses (collectively,
“Intellectual
Property”), which are necessary to conduct their businesses as currently
conducted, except where the failure to own or possess such sufficient rights
would not reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect. Neither the Company nor any
of the Subsidiaries has received any written notice of, and has no actual
knowledge of, any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property which, either individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to have a Material Adverse Effect, and to the Company’s
and any of the Subsidiaries’ knowledge, none of the patent rights owned or
licensed by the Company or any of the Subsidiaries are unenforceable or
invalid.
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(o) Registration
Rights. Except as provided in the Registration Rights
Agreement and for certain warrants issuable to Xxxxxxxx, effective upon the
Closing and in connection with the transactions contemplated by the Transaction
Documents, the Company is not currently subject to any agreement providing any
person or entity any rights (including piggyback registration rights) to have
any securities of the Company registered with the SEC or registered or qualified
with any other governmental authority.
(p) Title to Property and
Assets. The properties and assets of the Company and each of
its Subsidiaries that are material to the business of the Company and its
Subsidiaries and that are owned by the Company or each Subsidiary are free and
clear of all mortgages, deeds of trust, liens, charges, encumbrances and
security interests, except for (i) statutory liens for the payment of current
taxes that are not yet delinquent and (ii) liens, encumbrances and security
interests that arise in the ordinary course of business and do not in any
material respect affect the business of the Company and any of the Subsidiaries
as currently conducted. With respect to the property and assets that
are material to the business of the Company and that it leases, each of the
Company and the Subsidiaries is in compliance with such leases in all material
respects.
(q) Taxes. Except
for matters that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, the Company and each of the
Subsidiaries have filed or have valid extensions of the time to file all
necessary federal, state, and foreign income and franchise tax returns due prior
to the date hereof and has paid or accrued all taxes shown as due thereon, and
neither the Company nor any of the Subsidiaries has knowledge of any material
tax deficiency which has been asserted or threatened against it.
(r) Insurance. The
Company and each of the Subsidiaries maintain insurance of the types and in the
amounts that the Company reasonably believes are prudent and adequate for their
business, all of which insurance is currently in effect.
(s) Labor
Relations. No material labor dispute exists or, to the
knowledge of the Company or any of the Subsidiaries, is imminent with respect to
any of the employees of the Company or any of the Subsidiaries.
(t) Internal Accounting
Controls. The
Company and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(u) Transactions With Officers
and Directors. None of the officers or directors of the
Company has entered into any transaction with the Company or any of the
Subsidiaries that would be required to be disclosed pursuant to Item 404(a), (b)
or (c) of Regulation S-K of the SEC.
(v) General
Solicitation. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 4, neither
the Company nor any other Person (as defined below) authorized by the Company to
act on its behalf has engaged in a general solicitation or general advertising
(within the meaning of Regulation D) of investors with respect to offers or
sales of the Purchased Securities. For purposes of this Agreement,
“Person”
means an individual or corporation, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
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(w) Registration Statement
Matters. The Company currently meets the eligibility
requirements for use of a Form S-1 Registration Statement for the registration
of the resale of the Registrable Shares (as defined below) by the
Purchasers. Assuming the completion and timely delivery of the
Registration Statement/Suitability Questionnaire, attached hereto as Appendix II (the
“Registration
Statement Questionnaire”), by each Purchaser to the Company, the Company
is not aware of any facts or circumstances that would prohibit or delay the
preparation and filing of a registration statement with respect to the
Registrable Shares.
(x) No Integrated
Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 4, to the
knowledge of the Company, neither the Company, nor any Affiliate (as hereafter
defined) of the Company, nor any person acting on its behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Purchased Securities to be integrated with prior offerings by the Company for
purposes of the Securities Act which would prevent the Company from selling the
Purchased Securities pursuant to Regulation D and Rule 506 thereof under the
Securities Act.
For the
purposes of this Agreement, an “Affiliate”
of any specified Person means any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with such
specified Person. For purposes of this definition, “control”
means the power to direct the management and policies of such person or firm,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.
(y) Market. The
Company has not taken and will not take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock of the Company to
facilitate the sale or resale of the Purchased Securities.
(z) Investment
Company. The Company is not an “investment company” within the
meaning of such term under the Investment Company Act of 1940, as amended, and
the rules and regulations of the SEC thereunder.
(aa) Application of Anti-Takeover
Provisions. There is no control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Certificate of
Incorporation (or similar charter documents) that would become applicable to the
Purchasers as a result of the issuance of the Purchased Securities.
(bb) Trading and Registration
Matters. The Common Stock of the Company is quoted on the OTC
Bulletin Board under the ticker symbol “OCZT.OB.” The Company has
taken no action designed to terminate, or which would reasonably be expected to
have the effect of terminating, the registration of the Common Stock under the
Exchange Act.
(cc) Foreign Corrupt
Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.
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(dd) Foreign Assets
Control. Neither the Company nor, to the knowledge of the
Company, any director, officer, employee of the Company, is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”),
except for any such sanctions that would not be reasonably likely to result in a
Material Adverse Effect; and the Company will not directly or indirectly use the
proceeds of the offering of the Purchased Securities contemplated hereby, or
knowingly lend, contribute or otherwise make available such proceeds to any
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC, except as would
not be reasonably likely to result in a Material Adverse Effect.
(ee) Delivery of Stock
Certificates. The Company agrees that it will, no later than
ten calendar days after the Closing, deliver or cause to be delivered to each
Purchaser (i) a stock certificate representing the Shares and (ii) a Warrant, in
each case in the amounts set forth on Schedule A and issued with a restrictive
legend as set forth in Section
4(j).
4. REPRESENTATIONS,
WARRANTIES AND CERTAIN AGREEMENTS OF THE PURCHASERS. Each Purchaser,
severally and not jointly, hereby represents and warrants to the Company, and
agrees that:
(a) Organization. The
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with all corporate,
limited liability company, partnership, trust or individual, as the case may be,
power and authority required to enter into this Agreement and the other
agreements, instruments and documents contemplated hereby, and to consummate the
transactions contemplated hereby and thereby and otherwise to carry out its
obligations hereunder and thereunder.
(b) Due
Authorization. All corporate, limited liability company,
partnership, trust or individual, as the case may be, action on the part of the
Purchaser necessary for the authorization, execution, delivery of and the
performance of the transactions contemplated by the Transaction Documents and
all obligations of the Purchaser under the Transaction Documents have been taken
and no further consent or authorization of the Purchaser or its board of
directors, stockholders, members, or partners, as the case may be, is necessary,
and each Transaction Document, when delivered by the Purchaser in accordance
with the terms hereof, will constitute such Purchaser’s legal, valid and binding
obligation, enforceable in accordance with its terms, except (i) as may be
limited by (1) applicable bankruptcy, insolvency, reorganization or other laws
of general application relating to or affecting the enforcement of creditors’
rights generally and (2) the effect of rules of law governing the availability
of equitable remedies and (ii) as rights to indemnity or contribution may be
limited under federal or state securities laws or by principles of public policy
thereunder.
(c) Litigation. There
is no Action pending to which such Purchaser is a party that is reasonably
likely to prevent, enjoin, adversely alter or delay the transactions
contemplated by this Agreement.
(d) Purchase for Own
Account. The Purchased Securities are being acquired for
investment for the Purchaser’s own account, not as a nominee or agent, in the
ordinary course of business, and not with a view to the public resale or
distribution thereof within the meaning of the Securities Act. The
Purchaser also represents that it has not been formed for the specific purpose
of acquiring the Purchased Securities. The Purchaser does not have
any agreement or understanding, direct or indirect, with any other Person to
sell or otherwise distribute the Purchased
Securities. Notwithstanding the foregoing, the parties hereto
acknowledge the Purchaser’s right at all times to sell or otherwise dispose of
all or any part of such securities in compliance with applicable federal and
state securities laws and as otherwise contemplated by this
Agreement.
-9-
(e) Investment
Experience. The Purchaser understands that the purchase of the
Purchased Securities involves substantial risk. The Purchaser has
experience as an investor in securities of companies similar to the Company and
acknowledges that it can bear the economic risk of its investment in the
Purchased Securities and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of this
investment in the Purchased Securities and protecting its own interests in
connection with this investment.
(f) Accredited Purchaser
Status. The Purchaser is an “accredited investor” within the
meaning of Regulation D.
(g) Reliance Upon Purchaser’s
Representations. The Purchaser understands that the offer and
sale of the Purchased Securities to it will not be registered under the
Securities Act on the ground that such offer and sale will be exempt from
registration under the Securities Act, and that the Company’s reliance on such
exemption is based on each Purchaser’s representations set forth
herein.
(h) Receipt of
Information. The Purchaser acknowledges that it has reviewed
the SEC Documents and has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the sale of the
Purchased Securities and the business, properties, prospects and financial
condition of the Company and to obtain any additional information requested and
has received and considered all information it deems relevant to make an
informed decision to purchase the Purchased Securities. Neither such
inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect such
Purchaser’s right to rely on the truth, accuracy and completeness of such
information and the Company’s representations and warranties contained in this
Agreement.
(i) Restricted Securities and
Restrictions on Transfer.
(i) The
Purchaser understands that the Purchased Securities have not been registered
under the Securities Act and the Purchaser agrees that it will not sell, offer
to sell, assign, pledge, hypothecate or otherwise transfer any of the Purchased
Securities (except as permitted in Section 4(j) below)
unless (1) pursuant to an effective registration statement under the Securities
Act, (2) the Purchaser provides a reasonably acceptable legal opinion to the
Company, to the effect that a sale, assignment, pledge, hypothecation or other
transfer of the Purchased Securities may be made without registration under the
Securities Act and the transferee agrees to be bound by the terms and conditions
of this Agreement, (3) the Purchaser provides the Company a “no
action” letter from the SEC to the effect that the transfer of the Purchased
Securities without registration will not result in a recommendation by the Staff
of the SEC that enforcement action by taken with respect thereto, (4) the
Purchaser provides the Company with reasonable assurances (in the form of seller
and broker representation letters) that the Purchased Securities can be sold
pursuant to Rule 144 promulgated under the Securities Act (“Rule
144”), or (5) pursuant to any other exception contained in the Securities
Act provided that the Purchaser provides a reasonably acceptable legal opinion
to the Company. Notwithstanding anything to the contrary contained in
this Agreement, the Purchaser may transfer the Purchased Securities to its
Affiliates provided that (x) the Purchaser provides the Company with a
reasonably acceptable legal opinion, (y) such Affiliate is an “accredited
investor” under Regulation D and (z) each such Affiliate agrees to be bound by
the terms and conditions of this Agreement, and in particular, confirms to the
Company that all of the representations set forth in Section 4 of this
Agreement are true and correct as to such Affiliate as of the date of the
transfer to such Affiliate.
-10-
(ii) Prior
to any proposed transfer pursuant to clause (2), (3), (4) or (5) in Section 4(i) above,
the Purchaser shall give written notice to the Company of such Purchaser’s
intention to effect such transfer. Each such notice shall describe
the manner and circumstances of the proposed transfer in sufficient detail, and
shall be accompanied by the applicable legal opinion, “no action” letter or
seller and broker representation letters.
(iii) Notwithstanding
the foregoing provisions of this Section 4(i), no
registration statement, legal opinion or “no action” letter shall be necessary
for a transfer of the Purchased Securities (1) by a Purchaser that is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date of this Agreement, (2) by a Purchaser
that is a limited liability company to a member of such limited liability
company, (3) by a Purchaser that is a partnership or limited liability company
to the estate of any partner, retired partner, or member thereof or (4) by any
partner or member of a Purchaser that is a partnership or limited liability
company by gift, will or intestate succession to such partner or member’s spouse
or to the siblings, lineal descendants, ancestors of such partner or member or
his or her spouse.
(j) Legends.
(i) The
Purchaser agrees that, to the extent necessary, the certificates representing
the Shares, the Warrants, and any certificates representing the Warrant Shares
shall bear substantially the following legend:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT
COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT OR (II) THE
TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND, IF THE
COMPANY REQUESTS, AN OPINION SATISFACTORY TO THE COMPANY TO SUCH
EFFECT HAS BEEN RENDERED BY COUNSEL.”
(ii) Certificates
evidencing the Purchased Securities shall not contain the legend set forth in
Section
4(j)(i)(1) while a registration statement (including the Registration
Statement (as defined in the Registration Rights Agreement)) covering the resale
of such security is effective under the Securities Act, (2) following any sale
of such Purchased Securities pursuant to Rule 144 or (3) if such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the
SEC). The Company shall cause its counsel to issue a legal opinion to
the Company’s transfer agent promptly after the date on which the Registration
Statement is declared effective (the “Effective
Date”) if such legal opinion is required by the Company’s transfer agent
to effect the removal of the legend hereunder. The Company agrees
that following the Effective Date or at such time as such legend is no longer
required under this Section 4(j), it
will, no later than five (5) Business Days following the delivery by a Purchaser
to the Company or to the Company’s transfer agent of a certificate representing
Purchased Securities issued with such restrictive legend, deliver or cause to be
delivered to such Purchaser a certificate representing such Purchased Securities
that is free from such restrictive legend. The Company may not make
any notation on its records or give instructions to any transfer agent of the
Company that enlarge the restrictions on transfer set forth in Section 4(i) or this
Section
4(j).
-11-
(iii) Each
Purchaser, severally and not jointly with the other Purchasers, will offer and
sell any and all Purchased Securities pursuant to all applicable federal and
state securities laws, including pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and agrees that the removal of the
restrictive legend from certificates representing the Purchased Securities as
set forth in this Section 4(j) is
predicated upon the Company’s reliance on such Purchaser’s representations and
contained herein.
(iv) In
addition, the Purchaser agrees that the Company may place stop transfer orders
with its transfer agent with respect to such certificates in order to implement
the restrictions on transfer set forth in this Agreement. The
appropriate portion of the legend and the stop transfer orders will be removed
promptly upon delivery to the Company of such satisfactory evidence as
reasonably may be required by the Company that such legend or stop transfer
orders are not required to ensure compliance with the Securities
Act.
(k) Questionnaires. The
Purchaser has completed or caused to be completed the Stock Certificate
Questionnaire, attached as Appendix I hereto,
and the Registration Statement Questionnaire, and the answers to such
questionnaires are true and correct as of the date of this
Agreement.
(l) Restrictions on Short
Sales. Neither the Purchaser nor any Affiliate of such
Purchaser which (i) had knowledge of the transactions contemplated hereby, (ii)
has or shares discretion relating to such Purchaser’s investments or trading or
information concerning such Purchaser’s investments, including in respect of the
Purchased Securities, or (iii) is subject to such Purchaser’s review or input
concerning such Affiliate’s investments or trading, has or will, directly or
indirectly, during the period beginning on the date on which Xxxxxxxx first
contacted such Purchaser regarding the transactions contemplated by this
Agreement until the time of the filing of the Current Report on Form 8-K
required by Section
9(m), engage in (1) any “short sales” (as such term is defined in Rule
3b-3 promulgated under the Exchange Act) of the Common Stock, including, without
limitation, the maintaining of any short position with respect to, establishing
or maintaining a “put equivalent position” (within the meaning of Rule 16a-1(h)
under the Exchange Act) with respect to, entering into any swap, derivative
transaction or other arrangement (whether any such transaction is to be settled
by delivery of Common Stock, other securities, cash or other consideration) that
transfers to another, in whole or in part, any economic consequences or
ownership, or otherwise dispose of, any of the Purchased Securities by the
Purchaser or (2) any hedging transaction which establishes a net short position
with respect to the Purchased Securities (clauses (1) and (2) together, a “Short
Sale”). Each Purchaser understands and acknowledges, severally
and not jointly with any other Purchaser, that the SEC currently takes the
position that coverage of Short Sales “against the box” prior to the effective
date of the Registration Statement with the SEC is a violation of Section 5 of
the Securities Act, as set forth in Compliance and Disclosure Interpretations of
the Division of Corporation Finance regarding the Securities Act.
(m) Independent
Investment. The Purchaser has not agreed to act with any other
Purchaser for the purpose of acquiring, holding or disposing of any of the
Purchased Securities for purposes of Section 13(d) of the Exchange Act, and such
Purchaser is acting independently with respect to its investment in the
Purchased Securities.
-12-
(n) General
Solicitation. Each Purchaser acknowledges that the Purchased
Securities were not offered to such Purchaser by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement,
article, notice or other communication published in any newspaper, magazine, or
similar media, or broadcast over television or radio, or (ii) any seminar or
meeting to which Purchaser was invited by any of the foregoing means of
communication, or any other general solicitation or general
advertisement.
(o) Confidentiality. The
Purchaser agrees to use any information it receives in the course of and in
connection with the transactions contemplated under this Agreement for the sole
purpose of evaluating a possible investment in the Purchased Securities and the
Purchaser hereby acknowledges that it is prohibited from reproducing or
distributing any such information, this Agreement, or any other offering
materials provided by the Company or any of its Affiliates in connection with
the Purchaser’s consideration of its investment in the Company, in whole or in
part, or divulging or discussing any of their contents except to its advisors
and representatives for the purpose of evaluating such investment. The foregoing
agreements shall not apply to any information that (i) is or becomes publicly
available through no fault of the Purchaser, (ii) was already known to the
Purchaser prior to its disclosure by the Company or any of its Affiliates to the
Purchasers, as evidenced by documentation or other evidence reasonably
satisfactory to the Company, (iii) is or becomes available to the Purchaser on a
non-confidential basis from a source other than the Company or any of its
Affiliates (so long as the Purchaser is not aware such disclosure is in breach
of a confidentiality obligation to the Company), (iv) is independently developed
by the Purchaser’s personnel without access to or use of the confidential
information received from the Company or any of its Affiliates, as evidenced by
documentation or other evidence reasonably satisfactory to the Company or (v) is
legally required to be disclosed by the Purchaser under operation of law or
judicial or other governmental order; provided, however, that if
the Purchaser is requested or ordered to disclose any such information pursuant
to any court or other governmental order or any other applicable legal
procedure, it shall provide the Company with reasonably prompt notice of any
such request or order to enable the Company to seek an appropriate protective
order and shall provide the Company with reasonable assistance in obtaining such
protective order at the Company’s sole expense. Other than to other
Persons party to this Agreement, the Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).
5. ADVISORY
FEE. The Purchasers
acknowledge that the Company intends to pay to Xxxxxxxx, as financial advisor, a
fee consisting of cash, shares of Common Stock and a warrant to purchase shares
of Common Stock in respect of the sale of the Purchased
Securities. Each of the parties to this Agreement hereby represents
that, on the basis of any actions and agreements by it, there are no other
brokers or finders entitled to compensation in connection with the sale of the
Purchased Securities to the Purchasers. The Company shall indemnify
and hold harmless the Purchasers from and against all fees, commission or other
payments owing by the Company to Xxxxxxxx or any other Person acting on behalf
of the Company hereunder. Each Purchaser shall, severally and not jointly,
indemnify and hold harmless the Company from and against all fees, commission or
other payments owing by such Purchasers to any Person acting on behalf of the
Purchasers hereunder.
6. CONDITIONS
TO THE PURCHASERS’ OBLIGATIONS AT CLOSING. The obligations
of the Purchasers to consummate the transactions contemplated herein are subject
to the fulfillment or waiver, on or before the Closing, of each of the following
conditions:
(a) Representations and
Warranties True. Each of the representations and warranties of
the Company contained in Section 3 shall be
true and correct in all material respects on and as of the date hereof (provided, however, that such
qualification shall only apply to representations or warranties not otherwise
qualified by materiality) and on and as of the Closing Date with the same effect
as though such representations and warranties had been made as of the Closing
(except for representations and warranties that speak as of a specific
date).
-13-
(b) Performance. The
Company shall have performed and complied in all material respects with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein; provided, however, as
provided in Section
2 hereof, the Company may furnish to each Purchaser a copy of the
irrevocable instructions to the Company’s transfer agent instructing the
transfer agent to deliver a certificate or certificates evidencing the number of
shares of Common Stock purchased by such Purchaser, registered in the name of
such Purchaser and may deliver the Warrants promptly after the
Closing.
(c) Company Compliance
Certificate. The Company will have delivered to the Purchasers
a certificate signed on its behalf by its Chief Executive Officer or Chief
Financial Officer, dated as of the Closing Date, certifying that the conditions
specified in Sections
6(a) and 6(b) hereof have been
fulfilled.
(d) Agreement. The
Company shall have executed and delivered to the Purchasers this Agreement and
the Registration Rights Agreement.
(e) Securities
Exemptions. The offer and sale of the Purchased Securities to
the Purchasers pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act and the registration and/or qualification
requirements of all applicable state securities laws.
(f) Good Standing
Certificate. The Company shall have delivered to the
Purchasers a certificate of the Secretary of State of the State of Delaware,
dated as of a date within five days of the date of the Closing, with respect to
the good standing of the Company.
(g) Secretary’s
Certificate. The Company shall have delivered to the
Purchasers a certificate of the Company executed by the Company’s Secretary (or
other appropriate officer), dated as of the Closing Date, attaching and
certifying to the truth and correctness of (i) the Certificate of Incorporation,
(ii) the Bylaws and (iii) the resolutions adopted by the Company’s Board of
Directors in connection with the transactions contemplated by this
Agreement.
(h) Opinion of Company
Counsel. The Purchasers will have received an opinion on
behalf of the Company, dated as of the Closing Date, from DLA Piper LLP (US),
counsel to the Company, substantially in the form attached hereto as Exhibit
A.
(i) No Statute or Rule
Challenging Transaction. No statute, rule, regulation,
executive order, decree, ruling, injunction, action, proceeding or
interpretation shall have been enacted, entered, promulgated, endorsed or
adopted by any court or governmental authority of competent jurisdiction or any
self-regulatory organization or the staff of any of the foregoing, having
authority over the matters contemplated hereby which questions the validity of,
or challenges or prohibits the consummation of, any of the transactions
contemplated by this Agreement.
(j) Other
Actions. The Company shall have executed such certificates,
agreements, instruments and other documents, and taken such other actions as
shall be customary or reasonably requested by the Purchasers in writing in
connection with the transactions contemplated hereby.
-14-
7. CONDITIONS
TO THE COMPANY’S OBLIGATIONS AT CLOSING. The obligations
of the Company to consummate the transactions contemplated herein are subject to
the fulfillment or waiver, on or before the Closing, of each of the following
conditions:
(a) Representations and
Warranties True. Each of the representations and warranties of
the Purchasers contained in Section 4 shall be
true and correct in all material respects on and as of the date hereof (provided, however, that such
qualification shall only apply to representations and warranties not otherwise
qualified by materiality) and on and as of the Closing Date with the same effect
as though such representations and warranties had been made as of the Closing
(except for representations and warranties that speak as of a specific
date).
(b) Performance. The
Purchasers shall have performed and complied in all material respects with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by them on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
(c) Agreement. Each
Purchaser shall have executed and delivered to the Company this Agreement (and
Appendices I
and II hereto)
and the Registration Rights Agreement.
(d) Securities
Exemptions. The offer and sale of the Purchased Securities to
the Purchasers pursuant to this Agreement shall be exempt from the registration
requirements of the Securities Act and the registration and/or qualification
requirements of all applicable state securities laws.
(e) Payment of Purchase
Price. The Purchasers shall have delivered to the Company by
wire transfer of immediately available funds, full payment of the purchase price
for the Purchased Securities as specified in Section
1(b).
(f) No Statute or Rule
Challenging Transaction. No statute, rule, regulation,
executive order, decree, ruling, injunction, action, proceeding or
interpretation shall have been enacted, entered, promulgated, endorsed or
adopted by any court or governmental authority of competent jurisdiction or any
self-regulatory organization or the staff of any of the foregoing, having
authority over the matters contemplated hereby which questions the validity of,
or challenges or prohibits the consummation of, any of the transactions
contemplated by this Agreement.
(g) Other
Actions. The Purchasers shall have executed such certificates,
agreements, instruments and other documents, and taken such other actions as
shall be customary or reasonably requested by the Company in connection with the
transactions contemplated hereby.
8. MISCELLANEOUS.
(a) Successors and
Assigns. The terms and conditions of this Agreement will inure
to the benefit of and be binding upon the respective successors and permitted
assigns of the parties. The Company shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of the
Purchasers holding at least a majority of the total aggregate number of
Purchased Securities then held by all Purchasers. Any Purchaser may
assign its rights under this Agreement to any person to whom such Purchaser
assigns or transfers any of the Purchased Securities, provided that such
transferee agrees in writing to be bound by the terms and provisions of this
Agreement, and such transfer is in compliance with the terms and provisions of
this Agreement and permitted by federal and state securities laws.
-15-
(b) Governing
Law. This Agreement will be governed by and construed and
enforced under the internal laws of the State of New York, without reference to
principles of conflict of laws or choice of laws. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(c) Survival. The
representations and warranties of the Company contained in Section 3 of this
Agreement and of the Purchasers contained in Section 4 of this
Agreement shall survive until the first (1st) anniversary of the Closing
Date.
(d) Counterparts. This
Agreement may be executed in two (2) or more counterparts, each of which will be
deemed an original, but all of which together will constitute one (1) and the
same instrument.
(e) Headings. The
headings and captions used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement. All references in this Agreement to sections, paragraphs,
exhibits and schedules will, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits and schedules attached hereto, all of which
exhibits and schedules are incorporated herein by reference.
(f) Notices. Any
notices and other communications required or permitted under this Agreement
shall be in writing and shall be delivered (i) personally by hand or by courier,
(ii) mailed by United States first-class mail, postage prepaid or (iii) sent by
facsimile or other electronic transmission directed (1) if to any Purchaser, at
such Purchaser’s address, facsimile number or other address for electronic
transmission set forth on the Purchaser’s signature page to this Agreement, or
at such address or facsimile number as such Purchaser may designate by giving at
least ten (10) days’ advance written notice to the Company or (2) if to the
Company, to its address or facsimile number or other address for electronic
transmission set forth below, or at such other address or facsimile number as
the Company may designate by giving at least ten (10) days’ advance written
notice to the Purchasers. All such notices and other communications
shall be deemed given upon (i) receipt or refusal of receipt, if delivered
personally, (ii) three (3) days after being placed in the mail, if mailed, or
(iii) confirmation of facsimile transfer or other electronic transmission, if
faxed.
If to the
Company:
OCZ
Technology Group, Inc.
0000 Xxx
Xxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000
Tel: (000)
000-0000
Fax: (000)
000-0000
Attention: Chief
Financial Officer
with a
copy to:
DLA Piper
LLP (US)
0000
Xxxxxxxxxx Xxxxxx
Xxxx Xxxx
Xxxx, Xxxxxxxxxx 00000
Tel: (000)
000-0000
Fax: (000)
000-0000
Attention:
Xxxxxx Xxxxx, Esq.
-16-
(g) Amendments and
Waivers. This Agreement may be amended and the observance of
any term of this Agreement may be waived only with the written consent of the
Company and the Purchasers holding at least a majority of the total aggregate
number of the Purchased Securities then held by all Purchasers. Any
amendment effected in accordance with this Section 9(g) will be
binding upon all Purchasers, the Company and their respective successors and
assigns.
(h) Severability. If
any provision of this Agreement is held to be unenforceable under applicable
law, such provision will be excluded from this Agreement and the balance of the
Agreement will be interpreted as if such provision were so excluded and will be
enforceable in accordance with its terms.
(i) Entire
Agreement. This Agreement and the Transaction Documents,
together with all exhibits and schedules hereto and thereto, constitute the
entire agreement and understanding of the parties with respect to the subject
matter hereof and thereof and supersede any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties with respect to the subject matter hereof and thereof.
(j) Further
Assurances. From and after the date of this Agreement, upon
the request of the Company or the Purchasers, the Company and the Purchasers
will execute and deliver such instruments, documents or other writings, and take
such other actions, as may be reasonably necessary or desirable to confirm and
carry out and to effectuate fully the intent and purposes of this
Agreement.
(k) Meaning of Include and
Including. Whenever in this Agreement the word “include” or
“including” is used, it shall be deemed to mean “include, without limitation” or
“including, without limitation,” as the case may be, and the language following
“include” or “including” shall not be deemed to set forth an exhaustive
list.
(l) Fees, Costs and
Expenses. All fees, costs and expenses (including attorneys’
fees and expenses) incurred by any party hereto in connection with the
preparation, negotiation and execution of the Transaction Documents and the
exhibits and schedules hereto or thereto and the consummation of the
transactions contemplated hereby and thereby (including the costs associated
with any filings with, or compliance with any of the requirements of any
governmental authorities), shall be the sole and exclusive responsibility of
such party; provided, however, that the
Company shall, at the Closing, reimburse the reasonable fees and expenses of
Xxxxxx Xxxx Nemerovski Xxxxxx Xxxx & Rabkin, P.C., counsel to the lead
Purchaser, not to exceed $10,000 (in the aggregate).
(m) 8-K Filing and
Publicity. As soon as practicable following the execution of
this Agreement, but in no event later than the fourth day following the
Execution Date, the Company shall file a Current Report on Form 8-K with the SEC
describing the material terms of the transactions contemplated by this Agreement
and attaching this Agreement and the press release referred to below as exhibits
to such filing (the “8-K
Filing” including all attachments). Neither the Company nor
any Purchaser shall issue any press releases or any other public statements with
respect to the transactions contemplated by this Agreement without the prior
approval of the other party; provided, however, that the
Company shall be entitled, without the prior approval of any Purchaser, to issue
any press release or make any other public disclosure (including a press release
(concerning the offering of the Purchased Securities) pursuant to Rule 135(c)
under the Securities Act) with respect to such transactions (i) in substantial
conformity with the 8-K Filing and (ii) as is required by applicable laws and
regulations; and, provided
further, that no such release may identify a Purchaser unless such
Purchaser has consented thereto in writing, or as required by law.
-17-
(n) Waivers. No
waiver by any party to this Agreement of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right accruing to
it thereafter.
(o) Stock Splits, Dividends and
other Similar Events. The provisions of this Agreement shall
be appropriately adjusted to reflect any stock split, stock dividend,
reorganization or other similar event that may occur with respect to the Company
after the date hereof.
(p) Remedies. In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each Purchaser and the Company will be
entitled to specific performance under this Agreement. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agree to waive in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.
(q) Warrant Coverage
Covenant. If, prior to the first anniversary of the first
Closing under this Agreement, the Company shall issue and sell debt securities,
including debt securities convertible into equity securities (collectively,
“Debt
Securities”) in a transaction for the primary purpose of raising capital,
and in connection with such transaction, the purchaser of such Debt Securities
(each, a “Subsequent
Investor”) shall receive warrants to acquire equity securities in the
Company, each Purchaser shall be entitled to receive, for no additional
consideration, upon the same terms and conditions as the warrants issued to the
Subsequent Investor, warrants to acquire an additional number of shares of
Common Stock (“Additional
Warrant Shares”) determined as provided in the next
sentence. For purposes hereof, the number of Additional Warrants
Shares shall equal the difference between (i) the number of shares of Common
Stock issuable to the Subsequent Investors multiplied by a fraction, the
numerator of which shall be the dollar amount of the investment made by such
Purchaser and the denominator of which shall equal the principal amount of the
Debt Securities purchased by the Subsequent Investors, less (ii) the number of
Warrant Shares issuable to such Purchaser pursuant to this Agreement; provided, however, that in no
event shall the Additional Warrant Shares be less than zero.
(r) Equity Issuance
Covenant. From the date of the Closing until a period of sixty
(60) days from the effectiveness of the Registration Statement, the Company
shall not (i) enter into any agreement to issue and sell equity securities or
equity-linked securities in a transaction for the primary purpose of raising
capital, or (ii) file any registration statement with the SEC other than a
registration statement filed pursuant to the Registration Rights
Agreement.
[Remainder of page intentionally left
blank. Signature pages follow.]
-18-
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first above written.
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OCZ
TECHNOLOGY GROUP, INC.
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By:
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Name:
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Title:
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[PURCHASER
SIGNATURE PAGES FOLLOW]
SIGNATURE
PAGE TO
DATED AS
OF MARCH ___, 2010
BY AND
AMONG
OCZ
TECHNOLOGY GROUP, INC.
AND EACH
PURCHASER NAMED THEREIN
The
undersigned hereby executes and delivers to OCZ Technology Group, Inc., the
Securities Purchase Agreement (the “Agreement”)
to which this signature page is attached effective as of the date of the
Agreement, which Agreement and signature page, together with all counterparts of
such Agreement and signature pages of the other Purchasers named in such
Agreement, shall constitute one and the same document in accordance with the
terms of such Agreement.
|
Number
of Shares Purchased:
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|||||||
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Purchaser:
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Signature:
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Name:
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Title:
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Address:
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Telephone:
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Facsimile:
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E-mail:
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Tax
ID Number:
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SCHEDULE
A
SCHEDULE
OF PURCHASERS
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Name and
Address
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Total Purchase
Price
|
Number of
Shares
|
Number of Warrant
Shares
|
APPENDIX
I
STOCK
CERTIFICATE QUESTIONNAIRE
Pursuant
to Section 4(k)
of the Agreement, please provide us with the following information:
1. The
exact name that the Purchaser’s Purchased Securities are to be registered in
(this is the name that will appear on your stock certificate(s)). A
nominee name may be used if appropriate:
2. The
relationship between the Purchaser of the Purchased Securities and the
Registered Holder listed in response to Item 1 above:
3. The
mailing address of the Registered Holder listed in response to Item 1
above:
4. The
Social Security Number or Tax Identification Number of the Registered Holder
listed in response to Item 1 above:
APPENDIX
II
REGISTRATION
STATEMENT/SUITABILITY QUESTIONNAIRE
Pursuant
to Section 4(k)
of the Agreement, please provide the information below. All
capitalized terms not defined in this Appendix II shall have the meanings
assigned to them in the Agreement.
PART A
In
connection with the preparation of the Registration Statement, please provide us
with the following information:
1. Pursuant
to the “Selling Stockholder” section of the Registration Statement, please state
the Purchaser’s name exactly as it should appear in the Registration
Statement:
2. Please
provide the number of shares of Common Stock that the Purchaser will own
immediately after Closing, including those shares purchased by the Purchaser
pursuant to the Agreement, issuable upon exercise of Warrants, and those shares
purchased by the Purchaser through other transactions:
3. Please
explain the nature of the beneficial ownership of the shares of Common Stock
owned by any Purchaser that is not a natural person, including any shares of
Common Stock not held of record by the Purchaser:
4. If
the Purchaser is not a natural person, please identify each natural person who
will exercise sole or shared voting and/or dispositive power with respect to the
shares of Common Stock owned by the Purchaser immediately after the
Closing. Please also specify in what capacity such person(s) will
exercise their voting and/or dispostive power with respect to such
shares.
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Natural Person(s)
|
Relationship to
Purchaser
|
5. Disclose
the details of any rights to acquire shares of Common Stock that the Purchaser
may have (other than the right to acquire Warrant Shares or Additional Warrant
Shares):
6. Has
the Purchaser or any of its affiliates, officers, directors, or principal equity
holders (owners of 5% or more of the Purchaser’s equity securities) held any
position or office or had any material relationship within the past three years
with the Company or any of its Subsidiaries or affiliates?
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Yes ¨
|
No ¨
|
If yes,
please indicate the nature of any such relationships below:
7. Is
the Purchaser a broker-dealer registered with the SEC?
Yes ¨ No ¨
If yes, please
indicate if you received any Purchased Securities as compensation for investment
banking services:
Yes ¨ No ¨
8. Is
the Purchaser affiliated with any registered broker-dealer?
Yes ¨ No ¨
If yes, please
certify that you acquired your Purchased Securities in the ordinary course of
business and that, at the time of acquisition, you had no agreements or
understandings, directly or indirectly, with any person to distribute such
shares:
Yes ¨ No ¨
In addition, please
identify such broker-dealer and explain the relationship that such registered
broker-dealer has with the Purchaser (including details of any affiliation or
other relationship).
|
Registered Broker-Dealer
|
Relationship to
Purchaser
|
PART B
Pursuant
to Section 4 of
the Agreement, please provide us with the following information, and we will use
the Purchaser’s responses to qualify the Purchaser for purposes of federal and
state securities laws:
9. IDENTIFICATION
Name: ______________________________________________________________________________________________
Address
of principal place of business:
State (or Country) of formation or
incorporation:_______________________________________________________
Contact
Person:________________________________________________________________________________
Telephone
Number:_____________________________________________________________________________
Facsimile
Number:______________________________________________________________________________
Email
Address:_________________________________________________________________________________
Type of Entity (corporation,
partnership, trust,
etc.):_____________________________________________________
Social Security or Taxpayer or Employer
Identification Number:_____________________________________________
10. STATUS AS AN
ACCREDITED INVESTOR
Please
confirm that the Purchaser is an “accredited investor” as defined under the
Securities Act of 1933, as amended (the “Act”), by checking all applicable boxes
to indicate the exemption qualifying you as an accredited investor, as provided
in Rule 501(a) under the Securities Act of 1933, as amended.
¨ an
organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust or partnership, in each
case, not formed for the purpose of this investment, with total assets in excess
of $5,000,000;
¨ a
private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;
¨ a
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;
¨
a plan established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political subdivisions, for
the benefit of its employees, with total assets in excess of
$5,000,000;
¨ an
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that
Act;
¨ a
bank as defined in Section 3(a)(2) of the Securities Act or a savings and loan
association or other institution defined in Section 3(a)(5)(A) of the Securities
Act acting in either an individual or fiduciary capacity;
¨ a
broker or dealer registered pursuant to Section 15 of the Exchange
Act;
¨ an
insurance company as defined in Section 2(13) of the Securities
Act;
¨ an
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 whose investment decision is made by a fiduciary which is
either a bank, savings and loan association, insurance company, or registered
investment advisor, or whose total assets exceed $5,000,000, or, if a
self-directed plan, a plan whose investment decisions are made solely by persons
who are accredited investors;
¨ a
director, executive officer or general partner of the issuer of the securities
being offered or sold;
¨ a
natural person whose individual net worth, or joint net worth with your spouse,
at the time of purchase exceeds $1,000,000;
¨ a
natural person who had an individual income in excess of $200,000 in each of the
two most recent years or joint income with your spouse in excess of $300,000 in
each of those years and has a reasonable expectation of reaching the same income
level in the current year;
¨ a
trust with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of the Securities
Act;
¨ an
entity in which all the equity owners are accredited investors; or
¨ other
– Please describe:
11. RESIDENCE
INFORMATION
Please indicate the jurisdiction in
which the Purchaser resides, if the Purchaser is a natural person, or in which
the Purchaser is chartered and the jurisdiction in which it maintains its
principal offices:
12. INVESTMENT
REPRESENTATION
Is the
Purchaser purchasing the securities offered for its and for investment purposes
only?
Yes ¨ No ¨
If no,
please state for whom Purchaser is the investing and/or the reason for
investing.
13. SIGNATURE
The above
information is true and correct in all material respects and the undersigned
recognizes that the Company and its counsel are relying on the truth and
accuracy of such information in reliance on the exemption under the Securities
Act. The undersigned agrees to notify the Company promptly of any changes in the
foregoing information which may occur prior to the investment.
Executed
at _________________________, _____________________ on ___________,
2010.
Name of
Entity:___________________________________________________________
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By:
|
|||||
|
Name:
|
|||||
|
Its:
|
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IF
THE INVESTMENT WILL BE MADE BY MORE THAN ONE ENTITY, WHETHER OR NOT
AFFILIATED, PLEASE COMPLETE A COPY OF THIS QUESTIONNAIRE FOR EACH
ENTITY.
