Exhibit 10.6
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SECURITIES PURCHASE AGREEMENT
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THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of December
1 , 2000, by and among Condor Capital Inc., a Nevada corporation, with
headquarters located at 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 0000 Xxx Xxxxx, Xxxxxx
00000 (the "Company"), and the Buyers listed on Schedule I attached hereto
(individually, a "Buyer" or collectively "Buyers" ).
WITNESSETH:
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WHEREAS, the Company and the Buyer(s) are executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D ("Regulation D") as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act");
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Buyer(s),
as provided herein, and the Buyer(s) shall purchase up to One Million Three
Hundred Thousand Dollars ($1,300,000) of convertible debentures (the
"Convertible Debentures"), which shall be convertible into shares of the
Company's Common Stock, (the "Common Stock") (as converted, the "Conversion
Shares"), for a total purchase price of and up to One Million Three Thousand
Dollars ($1,300,000) (the "Purchase Price") in the respective amounts set forth
opposite each Buyer(s) name on Schedule I ( the "Subscription Amount"); and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement") pursuant to which the Company has agreed to
provide certain registration rights under the 1933 Act and the rules and
regulations promulgated there under, and applicable state securities laws; and
WHEREAS, the Convertible Debentures are being offered through The May Xxxxx
Group, Inc. (the "Placement Agent"), as the Company's exclusive placement agent
for the offering; and
WHEREAS, the aggregate proceeds of the sale of the Convertible Debentures
contemplated hereby shall be held in escrow pursuant to the terms of an escrow
agreement substantially in the form of the Escrow Agreement attached hereto as
Exhibit B.
NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and the Buyer(s)hereby agree
as follows:
1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.
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(a) Purchase of Convertible Debentures. Subject to the satisfaction
(or waiver) of the terms and conditions of this Agreement, each Buyer
agrees, severally and not jointly, to purchase at Closing (as defined
herein below) and the Company agrees to sell and issue to each Buyer,
severally and not jointly, at Closing, Convertible Debentures in amounts
corresponding with the Subscription Amount set forth opposite each Buyer's
name on Schedule I hereto. Upon execution hereof by a Buyer, the Buyer
shall wire transfer the Subscription Amount set forth opposite his name on
Schedule I in same-day funds or a check payable to "First Union National
Bank, as Escrow Agent for Condor Capital Inc., / The May Xxxxx Group,
Inc.", which Subscription Amount shall be held in escrow pursuant to the
terms of the Escrow Agreement (as hereinafter defined) and disbursed in
accordance therewith. Notwithstanding the foregoing, a Buyer may withdraw
his Subscription Amount and terminate this Agreement as to such Buyer at
any time after the execution hereof and prior to Closing (as hereinafter
defined).
(b) Closing Date. The closing of the purchase and sale of the
Convertible Debentures (the "Closing") shall take place at 10:00 a.m.
Eastern Standard Time on the fifth business day ("Closing Date") following
the date hereof, subject to notification of satisfaction (or waiver) of the
conditions to the Closing set forth in Sections 6 and 7 below (or such
later date as is mutually agreed to by the Company and the Buyers). The
Closing shall occur on the Closing Date at the offices of Xxxxxx Xxxxxxxx
LLP, 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0, Xxxxx, XX 00000 (or such other place
as is mutually agreed to by the Company and the Buyers).
(c) Escrow Arrangements; Form of Payment. Upon execution hereof by
Buyer(s) and pending Closing, the aggregate proceeds of the sale of the
Convertible Debentures to Buyer(s) pursuant hereto, plus the fees and
expenses of the Placement Agent, shall be deposited in a non-interest
bearing escrow account with First Union National Bank, as escrow agent
("Escrow Agent"), pursuant to the terms of an escrow agreement between the
Company, the Placement Agent and the Escrow Agent in the form attached
hereto as Exhibit B (the "Escrow Agreement"). Subject to the satisfaction
of the terms and conditions of this Agreement, on the Closing Date, (i) the
Escrow Agent shall deliver to the Company in accordance with the terms of
the Escrow Agreement such aggregate gross proceeds for the Convertible
Debentures to be issued and sold to such Buyer(s) at the Closing minus the
fees and expenses of the Placement Agent, by wire transfer of immediately
available funds in accordance with the Company's written wire instructions,
and (ii) the Company shall deliver to each Buyer, Convertible Debentures
which such Buyer(s) is purchasing in amounts indicated opposite such
Buyer's name on Schedule I, duly executed on behalf of the Company.
2. BUYER'S REPRESENTATIONS AND WARRANTEES.
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Each Buyer represents and warrants, severally and not jointly, that:
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(a) Investment Purpose. Each Buyer is acquiring the Convertible
Debentures and, upon conversion of Convertible Debentures, the Buyer will
acquire the Conversion shares then issuable, for its own account for
investment only and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales
registered or exempted under the 1933 Act; provided, however, that by
making the representations herein, such Buyer reserves the right to dispose
of Conversion Shares at any time in accordance with or pursuant to an
effective registration statement covering such Conversion Shares or an
available exemption under the 1933 Act.
(b) Accredited Buyer Status. Each Buyer is an "accredited Buyer" as
that term is defined in Rule 501(a)(3) of Regulation D, and as a condition
to the purchase of the Convertible Debenture hereunder, shall complete,
execute and deliver to the Placement Agent and the Company, an Investor
Questionaire ( the "Investor Questionaire") in the form attached hereto as
Exhibit D.
(c) Reliance on Exemptions. Each Buyer understands that the
Convertible Debentures are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United States
Federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and such Buyer's compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of such Buyer set forth in the Investor Questionaire and herein in order to
determine the availability of such exemptions and the eligibility of such
Buyer to acquire such securities.
(d) Information. Such Buyer and its advisors (and his or, its
counsel), if any, have been furnished with all materials relating to the
business, finances and operations of the Company and information that the
Buyer(s) =deems material to making an informed investment decision
regarding the Buyer(s) purchase of the Convertible Debentures and the
Conversion Shares, which have been requested by such Buyer. Such Buyer and
its advisors, if any, have been afforded the opportunity to ask questions
of the Company and its management. Neither such inquiries nor any other due
diligence investigations conducted by such Buyer or its advisors, if any,
or its representatives shall modify, amend or affect such Buyer's right to
rely on the Company's representations and warranties contained in Section 3
below. Such Buyer understands that its investment in the Convertible
Debentures and the Conversion Shares involves a high degree of risk. Buyer
is in a position regarding the Company, which, based upon employment,
family relationship or economic bargaining power, enabled and enables Buyer
to obtain information from the Company in order to evaluate the merits and
risks of this investment. Such Buyer has sought such accounting, legal and
tax advice, as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Convertible Debentures and
the Conversion Shares.
(e) No Governmental Review. Such Buyer understands that no United
States Federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the
Convertible Debentures or the Conversion Shares, or the fairness or
suitability of the investment in the Convertible Debentures or the
Conversion Shares, nor have such authorities passed upon or endorsed the
merits of the offering of the Convertible Debentures or the Conversion
Shares.
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(f) Transfer or Resale. Such Buyer understands that except as provided
in the Registration Rights Agreement: (i) the Convertible Debentures have
not been and are not being registered under the 1933 Act or any state
securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered there under, or (B) such
Buyer shall have delivered to the Company an opinion of counsel, in a
generally acceptable form, to the effect that such securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an
exemption from such registration requirements; (ii) any sale of such
securities made in reliance on Rule 144 under the 1933 Act (or a successor
rule thereto) ("Rule 144") may be made only in accordance with the terms of
Rule 144 and further, if Rule 144 is not applicable, any resale of such
securities under circumstances in which the seller (or the person through
whom the sale is made) may be deemed to be an underwriter (as that term is
defined in the 0000 Xxx) may require compliance with some other exemption
under the 1933 Act or the rules and regulations of the SEC there under; and
(iii) neither the Company nor any other person is under any obligation to
register such securities under the 1933 Act or any state securities laws or
to comply with the terms and conditions of any exemption there under. The
Company reserves the right to place stop transfer instructions against the
shares and certificates for the Conversion Shares .
(g) Legends. Such Buyer understands that the certificates or other
instruments representing the Convertible Debentures and or the Conversion
Shares shall bear a restrictive legend in substantially the following form
(and a stop transfer order may be placed against transfer of such stock
certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Conversion Shares upon
which it is stamped, if, unless otherwise required by state securities
laws, (i) in connection with a sale transaction, provided the Conversion
Shares are registered under the 1933 Act or (ii) in connection with a sale
transaction, such holder provides the Company with an opinion of counsel,
in form acceptable to the Company and its counsel, to the effect that a
public sale, assignment or transfer of the Conversion Shares may be made
without registration under the 1933 Act.
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(h) Authorization, Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of such Buyer and is a
valid and binding agreement of such Buyer enforceable in accordance with
its terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and remedies.
(i) Receipt of Documents. Such Buyer and his or its counsel has
received and read in their entirety: (i) this Agreement and each
representation, warranty and covenant set forth herein, the Registration
Rights Agreement, and the Escrow Agreement; (ii) all due diligence and
other information necessary to verify the accuracy and completeness of such
representations, warranties and covenants; (iii) the Company's report on
Form 10KSB for the period ended December 1 30, 1999 (iv) the Company's Form
10-QSB for the fiscal quarter June 30, 2000 ended ; and (v) answers to all
questions the Buyer submitted to the Company regarding an investment in the
Company; and the Buyer has relied on the information contained therein and
has not been furnished any other documents, literature, memorandum or
prospectus.
(j) Due Formation of Corporate and Other Buyers. If the Buyer(s) is a
corporation, trust, partnership or other entity that is not an individual
person, it has been formed and validly exists and has not been organized
for the specific purpose of purchasing the Convertible Debentures and is
not prohibited from doing so, and must also considered an Accredited
Investor as that term in defined in Rule 501(a)(3) of Regulation D, and, as
a condition to the purchase of the Convertible Debentures hereunder, shall
complete, execute and deliver to the Placement Agent and the Company, an
Investor Questionaire.
(k) Due Authorization of Fiduciary Buyers. If the Buyer(s) is
purchasing the in a fiduciary capacity for another person or entity,
including without limitation a corporation, partnership, trust or any other
entity, the Buyer(s) has been duly authorized and empowered to execute this
Agreement and such other person fulfills all the requirements for purchase
of the Convertible Debentures and agrees to be bound by the obligations,
representations, warranties, and covenants contained herein. Upon request
of the Company, the Buyer(s) will provide true, complete and current copies
of all relevant documents creating the Buyers, authorizing its investment
in the Company and/or evidencing the satisfaction of the foregoing. Such
trust or other entity must must also considered an Accredited Investor as
that term in defined in Rule 501(a)(3) of Regulation D, and, as a condition
to the purchase of the Convertible Debentures hereunder, shall complete,
execute and deliver to the Placement Agent and the Company, an Investor
Questionaire.
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(l) Further Representations by Foreign Buyers. If Buyer(s) is not a
U.S. Person (as defined), such Buyer hereby represents that such Buyer(s)
is satisfied as to full observance of the laws of such Buyer's jurisdiction
in connection with any invitation to subscribe for the securities or any
use of this Agreement, including: (i) the legal requirements of such
Buyer's jurisdiction for the purchase of the securities, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any governmental
or other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, which may be relevant to the purchase,
holding, redemption, sale, or transfer of the securities. Such Buyer's
subscription and payment for, and such Buyer's continued beneficial
ownership of, the securities will not violate any applicable securities or
other laws of such Buyer's jurisdiction. The term "U.S. Person" as used
herein shall mean any person who is a citizen or resident of the United
States or Canada, or any state, territory or possession thereof, including
but not limited to any estate of any such person, or any corporation,
partnership, trust or other entity created or existing under the laws
thereof, or any entity controlled or owned by any of the foregoing.
(m) No Legal Advice From the Company. The Buyer(s) acknowledge that it
had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with his or its own legal counsel and
investment and tax advisors. The Buyer is relying solely on such counsel
and advisors and not on any statements or representations of the Company or
any of its representatives or agents for legal, tax or investment advice
with respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants to each of the Buyer (s) that:
(a) Organization and Qualification. The Company and its subsidiaries
are corporations duly organized and validly existing in good standing under
the laws of the jurisdiction in which they are incorporated, and have the
requisite corporate power to own their properties and to carry on their
business as now being conducted. Each of the Company and its subsidiaries
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 by it makes such qualification necessary, except to the extent
that the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole.
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(b) Authorization, Enforcement, Compliance with Other Instruments. (i)
The Company has the requisite corporate power and authority to enter into
and perform this Agreement, the Registration Rights Agreement and any
related agreements, and to issue the Convertible Debentures and the
Conversion Shares, in accordance with the terms hereof and thereof, (ii)
the execution and delivery of this Agreement, the Registration Rights
Agreement and any related agreements by the Company and the consummation by
it of the transactions contemplated hereby and thereby, including without
limitation the issuance of the Convertible Debentures, the Conversion
Shares and the reservation for issuance and the issuance of the Conversion
Shares issuable upon conversion or exercise thereof, have been duly
authorized by the Company's Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders, (iii) this Agreement and the Registration Rights Agreement
and any related agreements have been duly executed and delivered by the
Company, (iv) this Agreement, the Registration Rights Agreement and any
related agreements constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies.
(c) Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 100,000,000 shares of Common Stock, par
value $0.001 per share, of which as of DecemberDecember 1 , 2000, shares
were issued and outstanding and 25,000,000 shares of Preferred Stock od
which no shares have been isued. All of such outstanding shares have been
validly issued and are fully paid and nonassessable. Except as disclosed in
the SEC Documents, no shares of Common Stock are subject to preemptive
rights or any other similar rights or any liens or encumbrances suffered or
permitted by the Company. Except as disclosed in the SEC Documents , as of
the date of this Agreement, (i) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, or
contracts, commitments, understandings or arrangements by which the Company
or any of its subsidiaries is or may become bound to issue additional
shares of capital stock of the Company or any of its subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible
into, any shares of capital stock of the Company or any of its
subsidiaries, (ii) there are no outstanding debt securities and (iii) there
are no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of their securities
under the 1933 Act (except pursuant to the Registration Rights Agreements).
There are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Convertible
Debentures, the Conversion Shares, the Warrants, or the Warrant Shares as
described in this Agreement. The Company has furnished to the Buyer true
and correct copies of the Company's Articles of Incorporation, as amended
and as in effect on the date hereof (the "Articles of Incorporation"), and
the Company's By-laws, as in effect on the date hereof (the "By-laws"), and
the terms of all securities convertible into or exercisable for Common
Stock and the material rights of the holders thereof in respect thereto
other than stock options issued to employees and consultants.
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(d) Issuance of Securities. The Convertible Debentures are duly
authorized and, upon issuance in accordance with the terms hereof, shall be
duly issued, fully paid and nonassessable, are free from all taxes, liens
and charges with respect to the issue thereof. The Conversion Shares
issuable upon conversion of the Convertible Debentures have been duly
authorized and reserved for issuance. Upon conversion or exercise in
accordance with the Convertible Debentures or the terms of the Warrants and
receipt of payment therefore (in the case of the Warrant Shares), the
Conversion Shares and the Warrant Shares will be duly issued, fully paid
and nonassessable.
(e) No Conflicts. Except as disclosed in Schedule 3(e), the execution,
delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby will
not (i) result in a violation of the Articles of Incorporation, any
certificate of designations of any outstanding series of preferred stock of
the Company or By-laws or (ii) conflict with or constitute a default (or an
event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of The
Nasdaq Stock Market Inc.'s OTC Bulletin Board on which the Common Stock is
quoted) applicable to the Company or any of its subsidiaries or by which
any property or asset of the Company or any of its subsidiaries is bound or
affected. Except as disclosed in Schedule 3(e), neither the Company nor its
subsidiaries is in violation of any term of or in default under its
Certificate of Incorporation or By-laws or their organizational charter or
by-laws, respectively, or any material contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its subsidiaries.
The business of the Company and its subsidiaries is not being conducted,
and shall not be conducted in violation of any material law, ordinance,
regulation of any governmental entity. Except as specifically contemplated
by this Agreement and as required under the 1933 Act and any applicable
state securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform
any of its obligations under or contemplated by this Agreement or the
Registration Rights Agreement in accordance with the terms hereof or
thereof. Except as disclosed in Schedule 3(e), all consents,
authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof. The Company and its subsidiaries
are unaware of any facts or circumstance, which might give rise to any of
the foregoing.
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(f) SEC Documents: Financial Statements. Since , the Company has filed
all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC under of the Securities Exchange Act of 1934,
as amended (the "1934 Act") (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein, being
hereinafter referred to as the "SEC Documents"). The Company has delivered
to the Buyers or their representatives, or made available through the SEC's
website at xxxx://xxx.xxx.xxx., true and complete copies of the SEC
Documents. As of their respective dates, the financial statements of the
Company disclosed in the SEC Documents (the "Financial Statements")
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied, 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
un-audited interim statements, to the extent they may exclude 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 its operations and cash flows for the periods then ended
(subject, in the case of un-audited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the Company
to the Buyer which is not included in the SEC Documents, including, without
limitation, information referred to in Section 2(d) and (i) of this
Agreement, contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(g) 10(b)-5. The SEC Documents do not include any untrue statements of
material fact, nor do they omit to state any material fact required to be
stated therein necessary to make the statements made, in light of the
circumstances under which they were made, not misleading.
(h) Absence of Litigation. Except as disclosed on Schedule 3(h), there
is no action, suit, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory organization or
body pending against or affecting the Company, the Common Stock or any of
the Company's subsidiaries, wherein an unfavorable decision, ruling or
finding would (i) have a material adverse effect on the transactions
contemplated hereby (ii) adversely affect the validity or enforceability
of, or the authority or ability of the Company to perform its obligations
under, this Agreement or any of the documents contemplated herein, or (iii)
except as expressly disclosed in the SEC Documents, have a material adverse
effect on the business, operations, properties, financial condition or
results of operation of the Company and its subsidiaries taken as a whole.
(i) Acknowledgment Regarding Buyer's Purchase of the Convertible
Debentures. The Company acknowledges and agrees that the Buyer(s) is acting
solely in the capacity of an arm's length purchaser with respect to this
Agreement and the transactions contemplated hereby. The Company further
acknowledges that the Buyer(s) is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any advice given by
the Buyer(s) or any of their respective representatives or agents in
connection with this Agreement and the transactions contemplated hereby is
merely incidental to such Buyer's purchase of the Convertible Debentures or
the Conversion Shares. The Company further represents to the Buyer that the
Company's decision to enter into this Agreement has been based solely on
the independent evaluation by the Company and its representatives.
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(j) No General Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning
of Regulation D under the 0000 Xxx) in connection with the offer or sale of
the Convertible Debentures and the Conversion Shares.
(k) 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 Convertible Debentures, the Conversion Shares, under
the 1933 Act or cause this offering of the Convertible Debentures, the
Conversion Shares, to be integrated with prior offerings by the Company for
purposes of the 1933 Act.
(l) Employee Relations. Neither the Company nor any of its
subsidiaries is involved in any labor dispute nor, to the knowledge of the
Company or any of its subsidiaries, is any such dispute threatened. None of
the Company's or its subsidiaries' employees is a member of a union and the
Company and its subsidiaries believe that their relations with their
employees are good.
(m) Intellectual Property Rights. The Company and its subsidiaries own
or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service xxxx registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their
respective businesses as now conducted. The Company and its subsidiaries do
not have any knowledge of any infringement by the Company or its
subsidiaries of trademark, trade name rights, patents, patent rights,
copyrights, inventions, licenses, service names, service marks, service
xxxx registrations, trade secret or other similar rights of others, and, to
the knowledge of the Company there is no claim. action or proceeding being
made or brought against, or to the Company's knowledge, being threatened
against, the Company or its subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names,
service marks, service xxxx registrations, trade secret or other
infringement; and the Company and its subsidiaries are unaware of any facts
or circumstances which might give rise to any of the foregoing.
(n) Environmental Laws. The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval.
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(o) Title. Any real property and facilities held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
(p) Insurance. The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
subsidiaries are engaged. Neither the Company nor any such subsidiary has
been refused any insurance coverage sought or applied for and neither the
Company nor any such subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
(q) Regulatory Permits. The Company and its subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.
(r) Internal Accounting Controls. The Company and each of its
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 generally accepted accounting principles and
to maintain asset accountability, and (iii) the recorded amounts for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(r) No Material Adverse Breaches, etc. Except as set forth in the SEC
Documents, neither the Company nor any of its subsidiaries is subject to
any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation which in the judgment of the Company's officers
has or is expected in the future to have a material adverse effect on the
business, properties, operations, financial condition, results of
operations or prospects of the Company or its subsidiaries. Neither the
Company nor any of its subsidiaries is in breach of any contract or
agreement which breach, in the judgment of the Company's officers, has or
is expected to have a material adverse effect on the business, properties,
operations, financial condition, results of operations or prospects of the
Company or its subsidiaries.
11
(s) Tax Status. The Company and each of its subsidiaries has made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject and
(unless and only to the extent that the Company and each of its
subsidiaries has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes) has paid all taxes and
other governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due
by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.
(t) Certain Transactions. Except as set forth in the SEC Documents and
except for arm's length transactions pursuant to which the Company makes
payments in the ordinary course of business upon terms no less favorable
than the Company could obtain from third parties and other than the grant
of stock options disclosed in the SEC Documents and loans from the
Company's CEO, none of the officers, directors, or employees of the Company
is presently a party to any transaction with the Company (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to
or by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee or partner.
(u) Fees and Rights of First Refusal. The Company is not obligated to
offer the securities offered hereunder on a right of first refusal basis or
otherwise to any third parties including, but not limited to, current or
former shareholders of the Company, underwriters, brokers, agents or other
third parties.
4. COVENANTS.
---------
(a) Best Efforts. Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in
Sections 6 and 7 of this Agreement.
(b) Form D. The Company agrees to file a Form D with respect to the
Conversion Shares as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Conversion Shares , or obtain an
exemption for the Conversion Shares for sale to the Buyers at the Closing
pursuant to this Agreement under applicable securities or "Blue Sky" laws
of the states of the United States, and shall provide evidence of any such
action so taken to the Buyers on or prior to the Closing Date.
12
(c) Reporting Status. Until the earlier of (i) the date as of which
the Investor(s) (as that term is defined in the Registration Rights
Agreement) may sell all of the Conversion Shares without restriction
pursuant to Rule 144(k) promulgated under the 1933 Act (or successor
thereto), or (ii) the date on which (A) the Buyer(s) shall have sold all
the Conversion Shares and (B) none of the Convertible Debentures are
outstanding (the "Registration Period"), the Company shall use its
commercially reasonable efforts to file in a timely manner all reports
required to be filed with the SEC pursuant to the 1934 Act and the
regulations of the SEC there under, and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the
1934 Act or the rules and regulations there under would otherwise permit
such termination.
(d) Use of Proceeds. The Company will use the proceeds from the sale
of the Convertible Debentures for general corporate purposes.
(e) Reservation of Shares. The Company shall take all action
reasonably necessary to at all times have authorized, and reserved for the
purpose of issuance, such number of shares of Common Stock as shall be
necessary to effect the issuance of the Conversion Shares and the Warrant
Shares. If at any time the Company does not have available such shares of
Common Stock as shall from time to time be sufficient to effect the
conversion of all of the Conversion Shares the Company shall call and hold
a special meeting within thirty (30) days of such occurrence, for the sole
purpose of increasing the number of shares authorized. The Company's
management shall recommend to the shareholders to vote in favor of
increasing the number of shares of Common Stock authorized. Management
shall also vote all of its shares in favor of increasing the number of
common shares authorized.
(f) Listings or Quotation. The Company shall promptly secure the
listing or quotation of the Conversion Shares upon each national securities
exchange, automated quotation system or over-the-counter bulletin board or
other market, if any, upon which shares of Common Stock are then listed or
quoted (subject to official notice of issuance) and shall use it best
efforts to maintain, so long as any other shares of Common Stock shall be
so listed, such listing of all Conversion Shares from time to time issuable
under the terms of this Agreement. The Company shall maintain the Common
Stock's authorization for quotation in the over-the counter market
(g) Expenses. Each of the Company and the Buyer(s) shall pay all costs
and expenses incurred by such party in connection with the negotiation,
investigation, preparation, execution and delivery of this Agreement and
the Registration Rights Agreement. The costs and expenses of the Placement
Agent and its counsel shall be paid for by the Company at Closing in
accordance with the terms of the Placement Agent Agreement between the
Company and the Placement Agent, dated December 1 , 2000.
(h) Corporate Existence. So long as any of the Convertible Debentures
remain outstanding, the Company shall not directly or indirectly consummate
any merger, reorganization, restructuring, consolidation, sale of all or
substantially all of the Company's assets or any similar transaction or
related transactions (each such transaction, a "Sale of the Company")
unless, prior to the consummation of a Sale of the Company, the Company
makes appropriate provision to insure that, upon the consummation of such
Sale of the Company, each of the holders of the Convertible Debentures will
thereafter have the right to acquire and receive such shares of stock,
securities or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon the conversion of such holder's Convertible
Debentures had such Sale of the Company not taken place. In any such case,
the Company will make appropriate provision with respect to such holders'
rights and interests to insure that the provisions of this Section 4(h)
will thereafter be applicable to the Convertible Debentures.
13
(i) Transactions With Affiliates. So long as any Convertible
Debentures are outstanding, the Company shall not, and shall cause each of
its subsidiaries not to, enter into, amend, modify or supplement, or permit
any subsidiary to enter into, amend, modify or supplement any agreement,
transaction, commitment, or arrangement with any of its or any subsidiary's
officers, directors, person who were officers or directors at any time
during the previous two years, stockholders who beneficially own 5% or more
of the Common Stock, or affiliates or with any individual related by blood,
marriage, or adoption to any such individual or with any entity in which
any such entity or individual owns a 5% or more beneficial interest (each a
"Related Party"), except for (a) customary employment arrangements and
benefit programs on reasonable terms, (b) any investment in an affiliate of
the Company, (c) any agreement, transaction, commitment, or arrangement on
an arms-length basis on terms no less favorable than terms which would have
been obtainable from a person other than such Related Party, (d) any
agreement transaction, commitment, or arrangement which is approved by a
majority of the disinterested directors of the Company, for purposes
hereof, any director who is also an officer of the Company or any
subsidiary of the Company shall not be disinterested director with respect
to any such agreement, transaction, commitment, or arrangement. "Affiliate"
for purposes hereof means, with respect to any person or entity, another
person or entity that, directly or indirectly, (i) has a 10% or more equity
interest in that person or entity, (ii) has 10% or more common ownership
with that person or entity, (iii) controls that person or entity, or (iv)
shares common control with that person or entity. "Control" or "controls"
for purposes hereof means that a person or entity has the power, direct or
indirect, to conduct or govern the policies of another person or entity.
(j) Transfer Agent. The Company covenants and agrees that, in the
event that the Company's agency relationship with the transfer agent should
be terminated for any reason prior to a date which is two (2) years after
the Closing Date, the Company shall immediately appoint a new transfer
agent and shall require that the transfer agent execute and agree to be
bound by the terms of the Irrevocable Instructions (as defined herein) to
Transfer Agent.
14
5. TRANSFER AGENT INSTRUCTIONS.
---------------------------
The Company shall issue irrevocable instructions in the form attached
hereto as Exhibit D to its transfer agent to issue certificates, registered
in the name of the Buyer(s) or its respective nominee(s), for the
Conversion Shares representing such amounts of Convertible Debentures as
specified from time to time by the Buyer(s) to the Company upon conversion
of the Convertible Debentures and payment therefore (the "Irrevocable
Transfer Agent Instructions"). Prior to registration of the Conversion
Shares under the 1933 Act, all such certificates shall bear the restrictive
legend specified in Section 2(g) of this Agreement. The Company warrants
that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5, and stop transfer instructions to give
effect to Section 2(f) hereof (in the case of the Conversion Shares , prior
to registration of such shares under the 0000 Xxx) will be given by the
Company to its transfer agent and that the Conversion Shares shall
otherwise be freely transferable on the books and records of the Company as
and to the extent provided in this Agreement and the Registration Rights
Agreement. Nothing in this Section 5 shall affect in any way the Buyer's
obligations and agreement to comply with all applicable securities laws
upon resale of Conversion Shares. If the Buyer(s) provides the Company with
an opinion of counsel, reasonably satisfactory in form, and substance to
the Company, that registration of a resale by the Buyer(s) of any of the
Conversion Sharesis not required under the 1933 Act, the Company shall
permit the transfer, and, in the case of the Conversion Shares promptly
instruct its transfer agent to issue one or more certificates in such name
and in such denominations as specified by the Buyer. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Buyer by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Section 5 will
be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Section 5, that the Buyer(s) shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or
other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
-----------------------------------------------
The obligation of the Company hereunder to issue and sell the
Convertible Debentures to the Buyer(s) at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole
discretion:
(a) Each Buyer shall have executed this Agreement and the Registration
Rights Agreement and delivered the same to the Company.
(b) The Buyer(s) shall have delivered to the Escrow Agent the Purchase
Price for Convertible Debentures in respective amounts as set forth next to
each Buyer as outlined on Schedule and the Escrow Agent shall have
delivered such funds to the Company by wire transfer of immediately
available U.S. funds pursuant to the wire instructions provided by the
Company.
15
(c) The representations and warranties of the Buyer(s) shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer(s) shall have
performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Buyer(s) at or prior to the
Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
------------------------------------------------
The obligation of the Buyer(s) hereunder to purchase the Convertible
Debenture at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Buyer's sole benefit and may be waived by the
Buyer(s) at any time in its sole discretion:
(a) The Company shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to the Buyer(s).
(b) The Common Stock shall be authorized for quotation on The National
Association of Securities Dealers, Inc., OTC Bulletin Board, trading in the
Common Stock shall not have been suspended for any reason and all of the
Conversion Shares issuable upon conversion of the Convertible Debentures
shall be approved for listing or quotation on The National Association of
Securities Dealers, Inc., OTC Bulletin Board.
(c) The representations and warranties of the Company shall be true
and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in
Section 3 above, in which case, such representations and warranties shall
be true and correct without further qualification) as of the date when made
and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date) and the
Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or
prior to the Closing Date. The Buyer shall have received a certificate,
executed by the Chief Executive Officer of the Company, dated as of the
Closing Date, to the foregoing effect and as to such other matters as may
be reasonably requested by the Buyer including, without limitation an
update as of the Closing Date regarding the representation contained in
Section 3(c) above.
(e) The Company shall have executed and delivered to the Buyer(s) the
Convertible Debentures in the respective amounts set forth opposite each
Buyer(s) name on Schedule I and in accordance with all the terms of this
Agreement.
16
(f) As of the Closing Date, the Company shall have reserved out of its
authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Convertible Debentures ,shares of Common Stock to
effect the conversion of all of the Conversion Shares .
(g) The Irrevocable Transfer Agent Instructions, in form and substance
satisfactory to the Buyer, shall have been delivered to and acknowledged in
writing by the Company's transfer agent.
8. INDEMNIFICATION.
---------------
(a) In consideration of the Buyer's execution and delivery of this
Agreement and acquiring the Convertible Debentures and the Conversion
Shares hereunder, and in addition to all of the Company's other obligations
under this Agreement, the Company shall defend, protect, indemnify and hold
harmless the Buyer(s) and each other holder of the Convertible Debentures
and the Conversion Shares, and all of their officers, directors, employees
and agents (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the "
Buyer Indemnitees") from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities and damages, and
expenses in connection therewith (irrespective of whether any such Buyer
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities"), incurred by the Buyer Indemnitees or any of
them as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in this Agreement, the Convertible Debentures or the Registration
Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement
or obligation of the Company contained in this Agreement, , or the
Registration Rights Agreement or any other certificate, instrument or
document contemplated hereby or thereby, or (c) any cause of action, suit
or claim brought or made against such Indemnitee and arising out of or
resulting from the execution, delivery, performance or enforcement of this
Agreement or any other instrument, document or agreement executed pursuant
hereto by any of the Indemnities, any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Convertible Debentures or the status of the Buyer or
holder of the Convertible Debentures, the Conversion Shares, as a Buyer of
Convertible Debentures in the Company. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities, which is permissible under applicable law.
17
(b) In consideration of the Company's execution and delivery of this
Agreement, and in addition to all of the Buyer's other obligations under
this Agreement, the Buyer shall defend, protect, indemnify and hold
harmless the Company and all of it's officers, directors, employees and
agents (including, without limitation, those retained in connection with
the transactions contemplated by this Agreement) (collectively, the Company
Indemnitees") from and against any and all Indemnified Liabilities incurred
by the Indemnitees or any of them as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Buyer(s) in this Agreement, , instrument or document
contemplated hereby or thereby executed by the Buyer, (b) any breach of any
covenant, agreement or obligation of the Buyer(s) contained in this
Agreement, the Registration Rights Agreement or any other certificate,
instrument or document contemplated hereby or thereby executed by the
Buyer, or (c) any cause of action, suit or claim brought or made against
such Company Indemnitee based on material misrepresentations or due to a
material breach and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of the
Company Indemnities. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities, which is permissible under applicable law.
9. GOVERNING LAW: MISCELLANEOUS.
----------------------------
(a) Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York without regard to the
principles of conflict of laws. The parties further agree that any action
between them shall be heard in New York City, New York, and expressly
consent to the jurisdiction and venue of the Supreme Court of New York and
the United States District Court for the Southern District of New York for
the adjudication of any civil action asserted pursuant to this Paragraph.
(b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party. In the event any signature
page is delivered by facsimile transmission, the party using such means of
delivery shall cause four (4) additional original executed signature pages
to be physically delivered to the other party within five (5) days of the
execution and delivery hereof
(c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of the remainder of this
Agreement in that jurisdiction or the validity or enforceability of any
provision of this Agreement in any other jurisdiction.
18
(e) Entire Agreement, Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyer(s), the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No
provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with enforcement.
(f) Notices. Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon confirmation of receipt, when sent by
facsimile, ; (iii) three (3) days after being sent by U.S. certified mail,
return receipt requested, or (iv) one (1) day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:
If to the Company, to:
Messrs. Xxx Xxxx and Xxx Xxxxxxx
Condor Capital Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 0000
Xxx Xxxxx, Xxxxxx 00000
Telephone:(000) 000-0000
Facsimile:(000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Wenthur & Chachas
0000 Xx Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Transfer Agent, to:
American Securities Transfer & Trust, Inc.
00000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
19
If to the Buyer(s), to its address and facsimile number on Schedule I,
with copies to the Buyer's counsel as set forth on Schedule I. Each party
shall provide five (5) days' prior written notice to the other party of any
change in address or facsimile number.
(g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns. Neither the Company nor any Buyer shall assign this Agreement or
any rights or obligations hereunder without the prior written consent of
the other party hereto.
(h) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
(i) Survival. Unless this Agreement is terminated under Section 9(l),
the representations and warranties of the Company and the Buyers contained
in Sections 2 and 3, the agreements and covenants set forth in Sections 4,
5 and 9, and the indemnification provisions set forth in Section 8, shall
survive the Closing for a period of one (1) year following the date on
which the Convertible Debentures are converted in full. The Buyer(s) shall
be responsible only for its own representations, warranties, agreements and
covenants hereunder.
(l) Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
(m) Termination. In the event that the Closing shall not have occurred
with respect to the Buyers on or before five (5) business days from the
date hereof due to the Company's or the Buyer's failure to satisfy the
conditions set forth in Sections 6 and 7 above (and the non-breaching
party's failure to waive such unsatisfied condition(s)), the non-breaching
party shall have the option to terminate this Agreement with respect to
such breaching party at the close of business on such date without
liability of any party to any other party; provided, however, that if this
Agreement is terminated pursuant to this Section 9(l), the Company shall
remain obligated to reimburse the Buyer(s) for the expenses described in
Section 4(g) above.
20
(n) Finder. The Company acknowledges that it has engaged The May Xxxxx
Group, Inc., as the placement agent in connection with the sale of the
Convertible Debentures. The Company shall be responsible for the payment of
any placement agent fees (which includes cash and warrants to purchase
Common Stock) relating to or arising out of the transactions contemplated
hereby and from the proceeds thereof.
(o) No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any
party.
[REMAINDER PAGE INTENTIONALLY LEFT BLANK]
21
IN WITNESS WHEREOF, the Buyers and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first
written above.
CONDOR CAPITAL INC.
By: /s/ Xxx Xxxx
-----------------------------------
Name: Xxx Xxxx
Title: President/CEO
By:
Name:
Title:
22
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
FORM OF ESCROW AGREEMENT
EXHIBIT C
FORM OF WARRANT
EXHIBIT D
TRANSFER AGENT INSTRUCTIONS
SCHEDULE I
SCHEDULE OF BUYERS
Amount of
Name Address/Facsimile Number of Buyer Subscription
--------------- --------------------------------- -------------
--------------- --------------------------------- -------------
--------------- --------------------------------- -------------
--------------- --------------------------------- -------------
SCHEDULE 3(c)
Capitalization
--------------
SCHEDULE 3(e)
Conflicts
---------
SCHEDULE 3(h)
Litigation
----------
SCHEDULE 3(g)
Changes
-------
SCHEDULE 3(n)
Intellectual Property
---------------------
SCHEDULE 3(p)
Title
-----
SCHEDULE 4(d)
Use of Proceeds
---------------
