EXHIBIT 4.1
DEBENTURE PURCHASE AGREEMENT
THIS DEBENTURE PURCHASE AGREEMENT (the "Agreement") is made as of April
4, 2002, by and among Bakers Footwear Group, Inc., a Missouri corporation
("Company"), and the persons on the attached signature pages (the "Purchasers").
Defined terms have the respective meanings ascribed thereto in Section 7 of this
Agreement unless otherwise defined herein.
WITNESSETH
WHEREAS, the Company and the Purchasers are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by the provisions 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; and
WHEREAS, the Purchasers wish to purchase from the Company, severally
and not jointly, and the Company wishes to sell and issue to the Purchasers,
upon the terms and conditions stated in this Agreement an aggregate of
$4,900,000 in face amount of the Company's Convertible Subordinated Debentures
in the form attached hereto as Exhibit A (the "Debentures"); and
WHEREAS, contemporaneous with the issuance and sale of the Debentures,
the parties hereto will execute and deliver a Registration Rights Agreement, in
the form attached hereto as Exhibit B (the "Registration Rights Agreement"),
pursuant to which the Company will agree to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, and applicable state securities laws.
NOW, THEREFORE, in consideration of the mutual promises made herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. ISSUANCE AND SALE OF DEBENTURES; CLOSING DELIVERIES.
1.1 The Debentures. Subject to and upon the terms and conditions set
forth herein, at the Closing the Company shall issue and sell to each Purchaser,
and each Purchaser shall purchase from the Company, severally and not jointly,
Debentures in the principal amount set forth on the attached signature pages.
1.2 Closing. (a) Upon confirmation that the conditions to closing
specified herein have been satisfied, the Company shall deliver to Xxxxxxxxxx
Xxxxxxx PC, in trust, Debentures, registered in such name or names as the
Purchasers may designate, in the aggregate principal amount specified herein,
with instructions that such Debentures are to be held for release to the
Purchasers only upon payment of the Purchase Price to the Company. Upon receipt
by Xxxxxxxxxx Xxxxxxx PC of the Debentures, each Purchaser shall promptly cause
a wire transfer in same day funds to be sent to the account of the Company as
instructed in writing by the Company, in an amount representing such Purchaser's
pro rata portion of the Purchase Price as
set forth on the signature pages to this Agreement. On the date (the "Closing
Date") the Company receives such funds, the Debentures shall be released to the
Purchasers (the "Closing").
(b) The Closing will take place at the offices of Xxxxx Xxxx LLP, 000
Xxxxx Xxxxxxxx, Xx. Xxxxx, XX 00000, or at such other places as the parties
hereto may agree.
1.3 Closing Deliveries (a) On or prior to the Closing Date, the Company
shall deliver or cause to be delivered to the Purchasers the following:
(i) The Debentures, registered in such name or names as the Purchasers
may designate, in the aggregate principal amount specified herein,
(ii) Copies of any and all consents, permits, approvals, registrations
and waivers necessary or appropriate for consummation of the purchase and sale
of Debentures, all of which shall be in full force and effect.
(iii) The Registration Rights Agreement, duly executed on behalf of the
Company.
(iv) A Certificate, executed on behalf of the Company by its Secretary,
dated as of the Closing Date, certifying the resolutions adopted by the Board of
Directors of the Company approving the transactions contemplated by this
Agreement and the other Transaction Documents and the issuance of the
Debentures, certifying the current versions of the Articles of Incorporation and
Bylaws of the Company and certifying as to the signatures and authority of
persons signing the Transaction Documents and related documents on behalf of the
Company.
(v) An opinion from Xxxxx Xxxx LLP, the Company's counsel, dated as of
the Closing Date, in substantially the form of Exhibit C attached hereto.
(b) On or prior to the Closing Date, the Purchasers shall deliver to
the Company the following:
(i) The Registration Rights Agreement, duly executed on behalf of the
Purchasers.
(ii) The Purchase Price.
(iii) The Lock-Up Agreement ("Lock-Up") in the form attached hereto as
Exhibit D, duly executed by each of the Purchasers.
(iv) The Intercreditor Subordination Agreement in the form attached
hereto as Exhibit E, duly executed by each of the Purchasers.
1.4 Use of Debenture Proceeds. The net proceeds of the Debentures shall
be used to meet working capital requirements of Company, including without
limitation the repayment of any amounts owing under the Company's revolving
credit facility, or any expenses related to the purchase of store locations, the
opening of new stores, or the remodeling of existing stores.
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SECTION 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
In order to induce the Purchasers to enter into this Agreement and to
purchase the Debentures, Company makes the following representations, warranties
and agreements, which shall survive the execution and delivery of this Agreement
and the Debentures.
2.1 Corporate Status. The Company (i) has been duly organized and is a
validly existing corporation in good standing under the laws of the State of
Missouri; (ii) has the power and authority (corporate and other) to own its
property and assets and to transact the business in which it is engaged; and
(iii) is duly qualified as a foreign corporation and in good standing in each
jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification. The Company does not own,
directly or indirectly, any equity interest in any other Person.
2.2 Power and Authority; Legal Capacity. The Company has the power and
authority (corporate and other) to execute, deliver and perform the terms and
provisions of the Transaction Documents and to issue and sell the Securities and
has taken all necessary corporate action to authorize the execution, delivery
and performance by it of each of this Agreement and the Debentures. The Company
has duly executed and delivered the Transaction Documents and each Transaction
Document constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
2.3 Issuance of Securities. The Debenture Shares have been duly
authorized and reserved for issuance and, upon the due conversion of the
Debentures, the Debenture Shares shall be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances; provided, however,
that the Debenture Shares may be subject to restrictions on transfer under state
and/or federal securities laws as set forth herein or as otherwise required by
such laws at the time a transfer is proposed. The issuance and sale of the
Securities is not subject to any preemptive rights, rights of first refusal or
other similar rights.
2.4 Offering. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 3 hereof, the offer, issue,
and sale of the Securities is and will be exempt from the registration and
prospectus delivery requirements of the 1933 Act, and have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit, or qualification requirements of all applicable state
securities laws.
2.5 No conflict or violation. The execution and delivery of the
Transaction Documents by the Company, the performance by the Company of its
obligations thereunder (including the offer, issue, and sale of the Securities)
does not (i) conflict with or violate the Articles of Incorporation or By-laws
of the Company (both as in effect as of the date hereof, true and complete
copies of which have been delivered to the Purchasers), (ii) result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which any of
the properties or assets of the Company is subject, or (iii) violate any
statute, rule, regulation or
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other law, or any order or judgment, of any court or governmental agency or body
having jurisdiction over the Company or any of its properties, except, in the
case of clauses (ii) and (iii) only, to such extent as, individually or in the
aggregate, does not and could not reasonably be expected to have a Material
Adverse Effect, provided that the Company is required to obtain, and has
received, written consent to the sale of the Debentures hereunder from the
lender under the Company's revolving credit facility. No consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Registration Rights Agreement, or the
Debentures, or the issuance of common stock pursuant to the Debentures, or the
consummation of the transactions contemplated hereby or thereby, other than as
referred to in Sections 2.3 and 2.4.
2.6 Financial Statements. Set forth in the Disclosure Document (as
defined below) are the audited balance sheets of the Company as of December 30,
2000 and January 5, 2002 and the related statements of operations, shareholders'
equity (deficit), and cash flows for the two fiscal years ended January 5, 2002,
and all notes and schedules thereto (collectively, the "Financial Statements").
The Financial Statements for each of the fiscal two years in the period ended
January 5, 2002 have been audited by Ernst & Young, LLP. The Financial
Statements (i) are true, complete, and correct, (ii) present fairly, in all
material respects, the financial position, results of operations, and cash flows
of the Company at the dates and for the periods indicated, and (iii) have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis.
2.7 No Material Adverse Change. Since January 5, 2002, except as
identified and disclosed in the Disclosure Document or on Schedule 2.7, there
has not been:
(i) any change in the consolidated assets, liabilities,
financial condition or operating results of the Company from that reflected in
the Financial Statements, except for changes in the ordinary course of business
and which have not and could not reasonably be expected to have a Material
Adverse Effect, individually or in the aggregate;
(ii) any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock of the
Company, or any redemption or repurchase of any securities of the Company;
(iii) any material damage, destruction or loss, whether or not
covered by insurance to any assets or properties of the Company;
(iv) any waiver, not in the ordinary course of business, by
the Company of a material right or of a material debt owed to it;
(v) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except for those done
in the ordinary course of business and which have not or could not reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate;
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(vi) any change or amendment to the Company's Articles of
Incorporation or by-laws, or material change to any material contract or
arrangement by which the Company is bound or to which any of its assets or
properties is subject;
(vii) any material labor difficulties or labor union
organizing activities with respect to employees of the Company;
(viii) any material transaction entered into by the Company
other than in the ordinary course of business;
(ix) the loss of the services of any key employee, or material
change in the composition or duties of the senior management of the Company;
(x) the loss or threatened loss of any customer which has had
or could reasonably be expected to have a Material Adverse Effect; or
(xi) any other event or condition of any character that has
had or could reasonably be expected to have a Material Adverse Effect.
2.8. Broker and Finder. The Company has not engaged, and owes no
payment or success fee to, any broker or finder in connection with the offering
or sale of the Debentures other than Xxxx Xxxx & Co., LLC ("Xxxx Xxxx") pursuant
to an engagement letter dated October 10, 2001 ("Xxxx Xxxx Engagement Letter").
The Company shall pay all fees and expenses owed to Xxxx Xxxx under the Xxxx
Xxxx Engagement Letter.
2.9 Capitalization. The authorized capital stock of the Company
consists solely of 3,000,000 shares of Class A common stock, par value $0.001
per share, 500,000 shares of Class B common stock, par value $0.001 per share,
and 1,500,000 shares of Class C common stock, par value $0.001 per share, of
which 1,693,244.92 shares of Class A common stock, 271,910 shares of Class B
common stock and no shares of Class C common stock are outstanding as of the
date hereof (collectively, the issued and outstanding Class A common stock,
Class B common stock and Class C common stock are referred to herein as the
"Shares"). All the Shares were duly authorized and validly issued and are fully
paid and non-assessable, and were issued in compliance with applicable law and
any pre-emptive, subscription or other similar rights which have not been
waived. Except as contemplated by this Agreement or disclosed in the Disclosure
Document or on Schedule 2.9, there are no outstanding warrants, options,
convertible securities or other rights, agreements or arrangements of any
character under which the Company is or may be obligated to issue any equity
securities of any kind and except as contemplated by this Agreement, the Company
is not currently in negotiations for the issuance of any equity securities of
any kind. Except as disclosed in the Disclosure Document or on Schedule 2.9 and
except for the Registration Rights Agreement, there are no voting agreements,
buy-sell agreements, option or right of first purchase agreements or other
agreements of any kind among the Company and any of the securityholders of the
Company relating to the securities of the Company held by them. Except as
disclosed in the Disclosure Document or on Schedule 2.9, the Company has not
granted any Person the right to require the Company to register any securities
of the Company under the 1933 Act, whether on a demand basis or in connection
with the registration of securities
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of the Company for its own account or for the account of any other Person. The
issuance and sale of the Securities will not result in any anti-dilution or
similar adjustment in any outstanding securities of the Company. Except as
disclosed in the Disclosure Document or on Schedule 2.9, the Company does not
have outstanding shareholder purchase rights or any similar arrangement in
effect giving any Person the right to purchase any equity interest in the
Company upon the occurrence of certain events. Notwithstanding the foregoing,
the Company presently intends to effect a recapitalization including a stock
split as disclosed in the Disclosure Document at such time as shall be
determined by Company and subject to certain conditions precedent, including,
without limitation, approval of the holders of the Shares.
2.10 S Election. The Company has made a valid election to be treated as
an S Corporation within the meaning of Section 1361 of the Internal Revenue
Code, and such election has been in effect for each taxable year of the Company
commencing January 1, 1984. The Company has qualified and will qualify as an S
Corporation at all times from the effective date of election up to and including
the date hereof.
2.11 Tax Matters. The Company has timely prepared and filed all tax
returns required to have been filed by the Company with all appropriate
governmental agencies and timely paid all taxes shown thereon or otherwise owed
by it, except to the extent that failure to do so would not have a Material
Adverse Effect, individually or in the aggregate. The charges, accruals and
reserves on the books of the Company in respect of taxes for all fiscal periods
are adequate in all material respects, and there are no material unpaid
assessments against the Company nor, to the Company's Knowledge, any basis for
the assessment of any additional taxes, penalties or interest for any fiscal
period or audits by any federal, state or local taxing authority except for any
assessment which is not material to the Company. All taxes and other assessments
and levies that the Company is required to withhold or to collect for payment
have been duly withheld and collected and paid to the proper governmental entity
or third party when due. There are no tax liens or claims pending or, to the
Company's Knowledge, threatened against the Company any of its assets or
property. There are no outstanding tax sharing agreements or other such
arrangements between the Company and any Subsidiary or other corporation or
entity.
2.12 Title to Properties. Except as disclosed in Schedule 2.12 or the
Disclosure Document, the Company has good and marketable title to all real
properties and all other properties and assets owned by it, free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or currently planned to be made thereof
by them; and except as disclosed in the Disclosure Document, the Company holds
any leased real or personal property under valid and enforceable leases, except
to the extent that such failure to so hold would not have a Material Adverse
Effect, individually or in the aggregate.
2.13 Certificates, Authorities and Permits. The Company possesses all
required certificates, authorities, licenses or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now operated
by it, and the Company has not received any notice of proceedings relating to
the revocation or modification of any such certificate, authority, license or
permit that, if determined adversely to the Company, could reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate.
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2.14 No Labor Disputes. No material labor dispute with the employees of
the Company exists or, to the Company's Knowledge, is imminent.
2.15 Intellectual Property. Except as disclosed in Schedule 2.15 or the
Disclosure Document:
(a) All Intellectual Property of the Company is currently in
compliance with all legal requirements (including timely filings, proofs and
payments of fees) and is valid and enforceable. No Intellectual Property of the
Company which is necessary for the conduct of Company's business as currently
conducted or as currently proposed to be conducted has been or is now involved
in any cancellation, dispute or litigation, and, to the Company's Knowledge, no
such action is threatened. No patent of the Company has been or is now involved
in any interference, reissue, re-examination or opposition proceeding.
(b) All of the licenses and sublicenses and consent, royalty
or other agreements concerning Intellectual Property which are necessary for the
conduct of Company's business as currently conducted or as currently proposed to
be conducted to which the Company is a party or by which any of its assets or
properties are bound (other than generally commercially available, non-custom,
off-the-shelf software application programs having a retail acquisition price of
less than $10,000 per license) (collectively, "License Agreements") are valid
and binding obligations of the Company and, to the Company's Knowledge, the
other parties thereto, enforceable in accordance with their terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally, and there exists no
event or condition which will result in a material violation or breach of or
constitute (with or without due notice or lapse of time or both) a default by
the Company under any such License Agreement.
(c) The Company owns or has the valid right to use all of the
Intellectual Property that is necessary for the conduct of Company's business as
currently conducted or as currently proposed to be conducted and for the
ownership, maintenance and operation of the Company's properties and assets,
free and clear of all liens, encumbrances, adverse claims or obligations to
license all such owned Intellectual Property, other than licenses entered into
in the ordinary course of the Company's business. The Company has a valid and
enforceable right to use all other Intellectual Property used or held for use in
the Company's business. The Company has the right to use all of the owned and
licensed Intellectual Property which is necessary for the conduct of Company's
business as currently conducted or as currently proposed to be conducted in all
jurisdictions in which it conducts its business.
(d) The Company has taken reasonable steps to maintain, police
and protect the Intellectual Property which it owns and which is necessary for
the conduct of its business as currently conducted or as currently proposed to
be conducted, including the execution of appropriate confidentiality agreements
and intellectual property and work product assignments and releases. The conduct
of the Company's business as currently conducted does not infringe or otherwise
impair or conflict with (collectively, "Infringe") any Intellectual Property
rights of any third party, and, to the Company's Knowledge, the Intellectual
Property rights of the Company which are necessary for the conduct of Company's
business as currently conducted or as currently
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proposed to be conducted are not being Infringed by any third party. There is no
litigation or order pending or outstanding or, to the Company's Knowledge,
threatened or imminent, that seeks to limit or challenge or that concerns the
ownership, use, validity or enforceability of any Intellectual Property of the
Company or the Company's use of any Intellectual Property owned by a third
party, and, to the Company's Knowledge, there is no valid basis for the same.
(e) The consummation of the transactions contemplated hereby
will not result in the alteration, loss, impairment of or restriction on the
Company's ownership or right to use any of the Intellectual Property which is
necessary for the conduct of Company's business as currently conducted or as
currently proposed to be conducted.
(f) All software owned by the Company, and, to the Company's
Knowledge, all software licensed from third parties by the Company, (i) is free
from any material defect, bug, virus, or programming, design or documentation
error; (ii) operates and runs in a reasonable and efficient business manner; and
(iii) conforms in all material respects to the specifications and purposes
thereof.
(g) The Company has taken reasonable steps to protect the
Company's rights in its confidential information and trade secrets. Except under
confidentiality obligations, there has been no material disclosure of any of the
Company's confidential information or trade secrets to any third party.
2.16 Environmental Matters. The Company is not in violation of any
statute, rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "Environmental Laws"), owns or operates any real property
contaminated with any substance that is subject to any Environmental Laws, is
liable for any off-site disposal or contamination pursuant to any Environmental
Laws, and is subject to any claim relating to any Environmental Laws, which
violation, contamination, liability or claim has had or could reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate;
and there is no pending or, to the Company's Knowledge, threatened investigation
that might lead to such a claim.
2.17 Litigation. Except as described on Schedule 2.17, there are no
pending actions, suits or proceedings against or affecting the Company or any of
its assets or properties; and to the Company's Knowledge, no such actions, suits
or proceedings are threatened or contemplated.
2.18 Insurance Coverage. The Company maintains in full force and effect
insurance coverage that is customary for comparably situated companies for the
business being conducted and properties owned or leased by the Company, and the
Company reasonably believes such insurance coverage to be adequate against all
liabilities, claims and risks against which it is customary for comparably
situated companies to insure.
2.19 No Directed Selling Efforts or General Solicitation. Neither the
Company nor, to the Company's Knowledge, any Person acting on its behalf has
conducted any general solicitation
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or general advertising (as those terms are used in Regulation D) in connection
with the offer or sale of any of the Securities.
2.20 No Integrated Offering. Neither the Company nor, to the Company's
Knowledge, any of its Affiliates, nor any Person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any Company security or
solicited any offers to buy any security, under circumstances that would
adversely affect reliance by the Company on Section 4(2) for the exemption from
registration for the transactions contemplated hereby or would require
registration of the Securities under the 1933 Act.
2.21 Private Placement. The offer and sale of the Securities to the
Purchasers as contemplated hereby is exempt from the registration requirements
of the 1933 Act.
2.22 Questionable Payments. Neither the Company nor, to the Company's
Knowledge, any of its current or former shareholders, directors, officers,
employees, agents or other Persons acting on behalf of the Company, has on
behalf of the Company or in connection with its business since June 23, 1999:
(a) used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company; or (e) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment of any nature.
2.23 Transactions with Affiliates. Except as disclosed in the
Disclosure Document or as disclosed on Schedule 2.23, to the Company's
Knowledge, none of the officers or directors of the Company and, to the
Company's Knowledge, none of the employees of the Company is presently a party
to any transaction with the Company or to a presently contemplated transaction
(other than for services as employees, officers and directors) that would be
required to be disclosed pursuant to Item 404 of Regulation S-K promulgated
under the 0000 Xxx.
2.24 Suppliers. Except as set forth in the Disclosure Document or as
set forth in Schedule 2.24, since January 5, 2002, (i) the Company has not
entered into or made any contract or commitment for the purchase of merchandise
other than in the ordinary course of business consistent with past practice, and
(ii) there has not been (A) any material adverse change in the business
relationship of the Company with any of its suppliers or (B) any change in any
material term (including credit terms) of the supply agreements or related
arrangements with any such suppliers.
2.25 Customers. Except as set forth in the Disclosure Document or as
set forth in Schedule 2.25, since January 5, 2002, there has not been (i) any
material adverse change in the business relationship of the Company with any
customer (ii) any change in any material term (including credit terms) of the
sales agreements or related agreements with any customer, except for such
changes as have not and could not reasonably be expected to result in a Material
Adverse Effect, individually or in the aggregate.
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2.26 Disclosure. No representation or warranty of the Company contained
in this Agreement or in any other Transaction Document, and no statement
contained in any document, certificate or Schedule furnished or to be furnished
by or on behalf of the Company to the Purchasers or any of their representatives
pursuant to this Agreement (including, without limitation, the disclosure
document attached hereto as Exhibit F (the "Disclosure Document") but excluding
the financial projections described in the next sentence), contains any untrue
statement of a material fact, or omits to state any material fact necessary, in
light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading. The financial projections relating
to the Company and delivered to Purchasers were prepared on the basis of
assumptions the Company reasonably believed in good faith at the time of
preparation to be reasonable and the Company has no knowledge of any fact or
information that would lead it to believe that such assumptions are incorrect or
misleading in any material respect, provided that no representation or warranty
is made with regard to any assumption underlying such projections that related
to the timing or likelihood of the Company engaging in or consummating an
additional funding, including without limitation an initial public offering of
its securities.
2.27. Small Business Matters. The Company, together with its
"affiliates" (as that term is defined in Title 13, Code of Federal Regulations,
Section 121.103), is a "small business concern" within the meaning of the Small
Business Investment Act of 1958 and the regulations thereunder, including Title
13, Code of Federal Regulations, Section 107.700. Prior to the Closing, the
Company shall complete and deliver to the Purchasers Small Business
Administration Forms 480, 652 and 1031. The information therein regarding the
Company is accurate and complete. Without limiting the generality of the
foregoing, (i) the Company had tangible net worth not in excess of $18 million,
and average net income after Federal income taxes (excluding any carry-over
losses) for the preceding two completed fiscal years not in excess of $6 million
and (ii) the Standard Industrial Classification Code for the industry in which
the Company is engaged is 5661 (NAICS Code 448210). The Company does not
presently engage in, and it shall not hereafter engage in, any activities, nor
shall the Company use directly or indirectly the proceeds from the sale of the
Debentures hereunder for any purpose for which a Small Business Investment
Company is prohibited from providing funds by the Small Business Investment Act
of 1958 and the regulations thereunder, including Title 13, Code of Federal
Regulations, Section 107.720.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
Each Purchaser severally, and not jointly, hereby represents and
warrants to and agrees with Company as follows:
3.1 Legal Power. Such Purchaser has the requisite legal power to enter
into this Agreement, to make the Debenture hereunder, to purchase the Securities
hereunder, and to carry out and perform such Purchaser's obligations under the
terms of this Agreement.
3.2 Due Execution. This Agreement has been duly authorized, executed
and delivered by such Purchaser, and, upon due execution and delivery by
Company, this Agreement will be a valid and binding agreement of such Purchaser.
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3.3 Investment Representations.
(a) This Agreement is made with each Purchaser in reliance upon the
representation of such Purchaser to the Company, and by its execution and
acceptance hereof each Purchaser hereby confirms, that the Securities are being
acquired for investment for such Purchaser's own account, not as a nominee or
agent, and not with a view to the sale or distribution of any part thereof in
violation of the 1933 Act, and that it has no present intention of selling,
granting participation in, or otherwise distributing the same in violation of
the 1933 Act. By executing this Agreement, each Purchaser further represents
that such Purchaser does not have any contract, undertaking, agreement, or
arrangement with any person to sell, transfer, or grant participations to such
person, or to any third person, with respect to any of the Securities in
violation of the 1933 Act.
(b) Such Purchaser understands that the sale and issuance of the
Securities are not, and will not be, registered under the 1933 Act on the ground
that the sale provided for in this Agreement and the issuance of the Securities
hereunder is exempt from registration under the 1933 Act and that the Company's
reliance on such exemption is predicated on such Purchaser's representations set
forth herein. Such Purchaser realizes that the basis for the exemption may not
be present if, notwithstanding such representations, such Purchaser has in mind
merely acquiring the Securities for a fixed or determinable period in the
future. Such Purchaser hereby confirms that it has no such intention, subject to
the right of such Purchaser to dispose of its assets as it determines in its
sole discretion, subject to the provisions of applicable law.
(c) Such Purchaser represents that:
(i) if Purchaser is a corporation, Massachusetts or similar
business trust, or partnership, that (X) it is not formed for the
purpose of acquiring the Securities and that it has total assets in
excess of $5,000,000, or (Y) all of the equity owners of such entity
satisfy the criteria in Section 3.3(c)(i)(X) or Section 3.3(c)(ii); or
(ii) if Purchaser is a natural person:
(A) he or she has individual (or has jointly with
such person's spouse) net worth that exceeds $1,000,000; or
(B) he or she had individual income in excess of
$200,000 (or together with such person's spouse had joint income in
excess of $300,000) in each of the two most recent years and has a
reasonable expectation of reaching the same income level in the current
year,
and therefore that such Purchaser is an "accredited investor" within the meaning
of Regulation D promulgated pursuant to the 1933 Act, and that such Purchaser is
experienced in evaluating and investing in companies such as the Company, is
able to fend for itself in the transactions contemplated by this Agreement, has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment and has the ability to bear
the economic risks of its investment. Such Purchaser further represents that it
has had, during the course of the transaction and prior to its purchase of its
Securities, the opportunity to ask
11
questions of, and receive answers from, the Company concerning the terms and
conditions of the offering and to obtain additional information necessary to
verify the accuracy of any information furnished to it or to which it had
access. Neither such inquiries nor any other due diligence investigation
conducted by the Purchaser shall modify, amend or affect the Purchaser's right
to rely on the Company's representations and warranties contained in this
Agreement and the other Transaction Documents.
(d) Such Purchaser understands that the Securities may not be sold,
transferred or otherwise disposed of without registration under the 1933 Act or
an exemption therefrom, and that in the absence of an effective registration
statement covering the Securities or an available exemption from registration
under the 1933 Act, the Securities must be held indefinitely. In particular,
such Purchaser is aware that the Securities may not be sold pursuant to Rule 144
promulgated under the 1933 Act unless all of the conditions of that Rule are
met. Among the conditions for use of Rule 144 is the availability of current
information to the public about the Company.
(e) Such Purchaser agrees that it cannot place reliance on any
representations or warranties, express or implied, other than as expressly set
forth in this Agreement (including the Disclosure Document, Financial Statements
and Schedules included with this Agreement). Such Purchaser understands that the
Disclosure Document, Financials Statements and Schedules update and supersede
information previously provided to such Purchaser, including in its entirety the
Confidential Information Memorandum provided to the Purchaser (other than the
financial projections contained therein), and that any information updated and
superseded forms no basis of any representation or warranty hereunder.
(f) Such Purchaser understands that the Debentures may be treated for
tax purposes as having been issued with Original Issue Discount ("OID"), and
that the effect of OID treatment would require the Purchaser to recognize
income, for tax purposes, in excess of cash paid as interest by the Company on
the Debentures in early periods (including but not limited to when no cash
interest is paid at all), and to receive cash interest payments in excess of
income recognized in later periods. Such Purchaser has consulted such
Purchaser's own tax counsel with respect to this and all other implications
under the tax laws of an investment in the Debentures.
(g) Such Purchaser, if such Purchaser is domiciled in Missouri, agrees
and acknowledges that the Debentures are not registered and may be disposed of
only through a licensed broker-dealer. It is a felony to sell securities in
violation of the Missouri Securities Act.
(h) Such Purchaser's domicile is accurately set forth on the signature
page hereof.
(i) Such Purchaser, if such Purchaser is domiciled in New York,
represents and warrants that the Purchaser is an "institutional buyer" for
purposes of Section 359-e.1(a) of the Xxxxxx Act, as amended, under Article 23-A
of Chapter 20 of the New York General Business Law.
12
3.4 Legends; Stop Transfer.
(a) All certificates for the Securities shall bear the following
legend:
THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED
UNLESS (i) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (ii) SUCH
SECURITIES MAY BE SOLD PURSUANT TO RULE 144(k), OR (iii) THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT
THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS.
(b) The certificates for the Securities shall also bear any legend
required by any applicable state securities law.
(c) In addition, the Company shall make a notation regarding the
restrictions on transfer of the Securities in its stock books and the Securities
shall be transferred on the books of the Company only if transferred or sold
pursuant to an effective registration statement under the 1933 Act covering such
shares or pursuant to and in compliance with the legend described in Section
3.4(a).
(d) Upon the earlier of (i) registration for resale pursuant to the
Registration Rights Agreement and receipt by the Company of the Purchaser's
written confirmation that such Securities will not be disposed of except in
compliance with the prospectus delivery requirements of the 1933 Act or (ii)
Rule 144(k) becoming available the Company shall, upon a Purchaser's written
request, revoke any stop transfer instructions in effect with respect to such
Securities (except as provided in the Lock-Up) and shall promptly cause
certificates evidencing the Securities to be replaced with certificates which do
not bear such restrictive legends, and Debenture Shares subsequently issued in
respect of the Debentures shall not bear such restrictive legends provided the
provisions of either clause (i) or clause (ii) above, as applicable, are
satisfied with respect to such Debenture Shares. When the Company is required to
cause unlegended certificates to replace previously issued legended
certificates, if unlegended certificates are not delivered to a Purchaser within
three (3) Business Days of submission by that Purchaser of legended
certificate(s) to the Company or its transfer agent, as applicable, together
with a representation letter in customary form, the Company shall be liable to
the Purchaser for a penalty equal to 1% of the aggregate purchase price of the
Securities evidenced by such certificate(s) for each thirty (30) day period (or
portion thereof) beyond such three (3) Business Day period that the unlegended
certificates have not been so delivered; provided that the Company shall not be
subject to such penalty if, at least three (3) Business Days prior to receiving
Purchaser's written request to remove such legend, the Company shall have
notified Purchaser that it would voluntarily remove the legend and Purchaser
shall have decided not to have such legend removed at that earlier time.
13
4. Covenants and Agreements of the Company.
4.1 Reservation of Common Stock. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of providing for the conversion of the
Debentures, such number of shares of Common Stock as shall from time to time
equal the number of shares sufficient to permit the conversion of the Debentures
issued pursuant to this Agreement in accordance with their respective terms.
4.2 Reports. The Company will furnish to the Purchasers and/or
their assignees such information relating to the Company as from time to time
may reasonably be requested by such Purchasers and/or their assignees; provided,
however, that the Company shall not disclose material nonpublic information to
the Purchasers, or to advisors to or representatives of the Purchasers, unless
prior to disclosure of such information the Company identifies such information
as being material nonpublic information and provides the Purchasers, such
advisors and representatives with the opportunity to accept or refuse to accept
such material nonpublic information for review. In the event that a Purchaser
accepts any such material nonpublic information, such Purchaser (and the
Purchaser's advisors) shall keep such information confidential and shall not use
such information in violation of applicable law.
4.3 No Conflicting Agreements. The Company will not take any
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the obligations to the Purchasers under
the Transaction Documents.
4.4 Insurance. The Company shall not materially reduce the
insurance coverages described in Section 2.18.
4.5 Compliance with Laws. The Company will comply in all
material respects with all applicable laws, rules, regulations, orders and
decrees of all governmental authorities.
4.6 Listing of Underlying Shares and Related Matters. No later
than the consummation of any public offering of Common Stock, the Company shall
take all necessary action to cause the Debenture Shares to be listed on the
Nasdaq National Market or any other stock market or exchange on which the Common
Stock is traded. The Company will use commercially reasonable efforts to
continue the listing and trading of its Common Stock on the Nasdaq National
Market or such other stock market or exchange and, in accordance, therewith,
will use commercially reasonable efforts to comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
such market or exchange, as applicable.
4.7 Termination of Covenants. The provisions of Sections 4.2
through 4.5 shall terminate and be of no further force and effect with respect
to a Purchaser upon the earlier of (i) the mutual consent of the Company and the
Required Purchasers or (ii) the date on which the Company's obligations under
the Registration Rights Agreement to register or maintain the effectiveness of
any registration covering the Registrable Securities (as such term is defined in
the Registration Rights Agreement) shall terminate with respect to such
Purchaser.
14
5. Survival and Indemnification.
5.1 Survival. All representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to be representations,
warranties, covenants and agreements as of the date hereof and shall survive the
execution and delivery of this Agreement for a period of three (3) years from
the date of this Agreement; provided, however, that the provisions contained in
Section 4 hereof shall survive in accordance therewith.
5.2 Indemnification. The Company agrees to indemnify and hold
harmless, on an after-tax and after insurance recovery basis, each Purchaser and
its Affiliates and their respective directors, officers, employees and agents
from and against any and all losses, claims, damages, liabilities and expenses
(including without limitation reasonable attorney fees and disbursements and
other expenses incurred in connection with investigating, preparing or defending
any action, claim or proceeding, pending or threatened and the costs of
enforcement hereof) (collectively, "Losses") to which such Person may become
subject as a result of any breach of representation, warranty, covenant or
agreement made by or to be performed on the part of the Company under the
Transaction Documents, and will reimburse any such Person for all such amounts
as they are incurred by such Person.
5.3 Conduct of Indemnification Proceedings. Promptly after
receipt by any Person (the "Indemnified Person") of notice of any demand, claim
or circumstances which would or might give rise to a claim or the commencement
of any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to Section 5.2, such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; provided,
however, that the failure of any Indemnified Person so to notify the Company
shall not relieve the Company of its obligations hereunder except to the extent
that the Company is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed to the retention of such counsel; or (ii) in the reasonable
judgment of counsel to such Indemnified Person representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff, the Company shall indemnify and hold harmless such
Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. Without the prior written
consent of the Indemnified Person, which consent shall not be unreasonably
withheld, the Company shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Person from all liability arising out of such proceeding.
15
SECTION 6. MISCELLANEOUS.
6.1 Notices. All notices and other communications hereunder shall be
made in writing and shall be deemed given upon personal delivery during regular
business hours or three (3) days after mailing if mailed by first class mail,
postage prepaid, to the following addresses:
To Company:
Bakers Footwear Group, Inc.
0000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
with copies to:
Xxxxx Xxxx LLP
One Metropolitan Square
000 X. Xxxxxxxx Xxx. 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attn: J. Xxxx Xxxxxx
To Purchaser:
See Exhibit E
with copies to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx X. Xxxxxxxx
6.2 Governing Law; Consent to Jurisdiction.
This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York without regard to
the choice of law principles thereof. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York
located in New York County and the United States District Court for the Southern
District of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and the transactions contemplated
hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement. Each of
the parties hereto irrevocably consents to the jurisdiction of any such court in
any such suit, action or proceeding and to the laying of venue in such court.
Each party hereto irrevocably waives any objection to the laying of venue of any
such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
16
6.3 Counterparts. This Agreement may be executed in counterparts each
of which when so executed and delivered shall be in an original, but which shall
together constitute one and the same instrument.
6.4 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
6.5 Amendment or Waiver. The terms of this Agreement may not be
changed, waived, discharged or terminated unless such change, waiver, discharge
or termination is in writing signed by the Company and the Required Purchasers.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any Securities purchased under this Agreement at the
time outstanding, each future holder of all such securities, and the Company.
6.6 Successors and Assigns. This Agreement may not be assigned by a
party hereto without the prior written consent of the Company or the Required
Purchasers, as applicable, provided, however, a Purchaser may assign its rights
and delegate its duties hereunder in whole or in part to an Affiliate or to a
third party (which affiliate or third party agrees to be bound hereby and by the
Debentures) acquiring some portion or all of its Securities in a private
transaction in accordance with applicable law, without the prior written consent
of the Company or the other Purchasers, after notice duly given by such
Purchaser to the Company and the other Purchasers, provided, that no such
assignment or obligation shall affect the obligations of such Purchaser
hereunder. The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
6.7 Expenses. The parties hereto shall pay their own costs and expenses
in connection herewith, except that the Company shall pay the reasonable fees
and expenses of counsel to the Purchasers at the Closing, but not in excess of
$35,000 in the aggregate. The Company shall reimburse the Purchasers upon demand
for all reasonable out-of-pocket expenses incurred by the Purchasers, including
without limitation reimbursement of attorneys' fees and disbursements, in
connection with any amendment, modification or waiver of this Agreement or the
other Transaction Documents. In the event that legal proceedings are commenced
by any party to this Agreement against another party to this Agreement in
connection with this Agreement or the other Transaction Documents, the party or
parties which do not prevail in such proceedings shall severally, but not
jointly, pay their pro rata share of the reasonable attorneys' fees and other
reasonable out-of-pocket costs and expenses incurred by the prevailing party in
such proceedings.
6.8 Publicity. No public release or announcement concerning the
transactions contemplated hereby shall be issued by the Company or the
Purchasers without the prior consent of the Company (in the case of a release or
announcement by the Purchasers) or Special Situations Fund III, L.P. ("SSF") (in
the case of a release or announcement by the Company) (which consents shall not
be unreasonably withheld), except as such release or announcement may be
required by law or the applicable rules or regulations of any securities
exchange or securities
17
market, in which case the Company or the Purchasers, as the case may be, shall
allow SSF or the Company, as applicable, to the extent reasonably practicable in
the circumstances, reasonable time to comment on such release or announcement in
advance of such issuance.
6.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.
6.10 Entire Agreement. This Agreement, including the Disclosure
Document, the Exhibits and the Schedules, and the other Transaction Documents
constitute the entire agreement among the parties hereof with respect to the
subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof and thereof.
6.11 Further Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
7. Definitions. In addition to those terms defined elsewhere in this
Agreement, for the purposes of this Agreement, the following terms shall have
the meanings here set forth:
"Affiliate" means, with respect to any Person, any other
Person which directly or indirectly Controls, is controlled by, or is under
common control with, such Person.
"Business Day" means a day, other than a Saturday or Sunday,
on which banks in New York City are open for the general transaction of
business.
"Common Stock" means the Class A common stock, par value
$0.001 per share, of the Company and any security into which the common stock
may be reclassified.
"Company's Knowledge" means the actual knowledge of the
executive officers of the Company, after reasonable inquiry. The executive
officers of the Company shall be those officers of the Company identified in the
Disclosure Document.
"Control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Debenture Shares" means the shares of Common Stock issuable
upon exercise of or otherwise pursuant to the Debentures.
18
"Intellectual Property" means all of the following: (i)
patents, patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice); (ii) trademarks, service
marks, trade dress, trade names, corporate names, logos, slogans and Internet
domain names, together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; (v) trade secrets, confidential information
and know-how (including but not limited to ideas, formulae, compositions,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, business and marketing plans,
and customer and supplier lists and related information); and (vi) proprietary
computer software (including but not limited to data, data bases and
documentation).
"Material Adverse Effect" means a material adverse effect on
the assets, liabilities, results of operations, condition (financial or
otherwise), business, or prospects of the Company.
"Person" means an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically listed
herein.
"Purchase Price" means $4,900,000.
"Required Purchasers" means the Purchasers agreeing to
purchase a majority of the Debentures being issued pursuant to this Agreement.
"Securities" means the Debentures and the Debenture Shares.
"Transaction Documents" means this Agreement, the Debentures
and the Registration Rights Agreement.
"1933 Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
19
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
BAKERS FOOTWEAR GROUP, INC.
BY: /s/ XXXXX XXXXXX
-------------------------------
Xxxxx Xxxxxx
Chairman
PURCHASER
Principal Amount of Debentures Purchased: $ 600,000
Purchaser Name (if not an individual): SPECIAL SITUATIONS PRIVATE EQUITY FUND,
L.P.
By: /S/ XXXXXX XXXXX
-------------------------------
Name: Xxxxxx Xxxxx
Title (if applicable): General Partner
Address: 000 X. 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000
PURCHASER
Principal Amount of Debentures Purchased: $ 600,000
Purchaser Name (if not an individual): SPECIAL SITUATIONS CAYMAN FUND, L.P.
By: /S/ XXXXXX XXXXX
-------------------------------
Name: Xxxxxx Xxxxx
Title (if applicable): General Partner
Address: 000 X. 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000
PURCHASER
Principal Amount of Debentures Purchased: $ 1,800,000
Purchaser Name (if not an individual): SPECIAL SITUATIONS FUND III, L.P.
By: /S/ XXXXXX XXXXX
-------------------------------
Name: Xxxxxx Xxxxx
Title (if applicable): General Partner
Address: 000 X. 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000
PURCHASER
Principal Amount of Debentures Purchased: $ 500,000
Purchaser Name (if not an individual):
By: /S/ XXXXXX XXXXXX
-------------------------------
Name: Xxxxxx Xxxxxx
Title (if applicable):
Address:
PURCHASER
Principal Amount of Debentures Purchased: $ 400,000
Purchaser Name (if not an individual): THE CROWN ADVISORS, LLC
By: /S/ XXXXX X. XXXXX
-------------------------------
Name: Xxxxx X. Xxxxx
Title (if applicable): President
Address: 000 Xxxxxxxxx Xxxxxx, Xx. Xxxxx, XX 00000
PURCHASER
Principal Amount of Debentures Purchased: $ 500,000
Purchaser Name (if not an individual): CROWN INVESTMENT PARTNERS, L.P.,
by its general partner
By: /S/ XXXXX X. XXXXX
-------------------------------
Name: Xxxxx X. Xxxxx
Title (if applicable): President
Address:
PURCHASER
Principal Amount of Debentures Purchased: $ 500,000
Purchaser Name (if not an individual): EAGLE FUND I, L.P., by Eagle Fund LLC,
its general partner, by Mississippi Valley Capital Company, its sole member
By: /S/ XXXXX XXXXXX
-------------------------------
Name: Xxxxx Xxxxxx
Title (if applicable): President
Address: 00000 Xxxxxxxxxx Xx., Xx. Xxxxx, XX 00000
[Disclosure Schedules and Exhibits omitted. The Registrant undertakes to furnish
supplementally a copy of such omitted schedules and exhibits to the Commission
upon request.]
