SECURITIES PURCHASE AGREEMENT
Exhibit
10.1
SECURITIES
PURCHASE AGREEMENT
(the
"Agreement"),
dated
as of February 15, 2007, by and among Millennium Cell Inc., a Delaware
corporation, with headquarters located at Xxx Xxxxxxxxxx Xxx Xxxx, Xxxxxxxxx,
Xxx Xxxxxx 00000 (the "Company"),
and
the investors listed on the Schedule of Buyers attached hereto (individually,
a
"Buyer"
and
collectively, the "Buyers").
WHEREAS:
A. The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of
the
Securities Act of 1933, as amended (the "1933
Act"),
and
Rule 506 of Regulation D ("Regulation D")
as
promulgated by the United States Securities and Exchange Commission (the
"SEC")
under
the 1933 Act.
B. The
Company has authorized a new series of convertible debentures of the Company,
in
the form attached hereto as Exhibit
A
(the
"Debentures"),
which
Debentures shall be convertible into the Company's common stock, par value
$0.001 per share (the "Common
Stock")
(as
converted, the "Conversion
Shares"),
in
accordance with the terms of the Debentures.
C. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, (i) that aggregate principal amount of
the
Debentures set forth opposite such Buyer's name in column (3) on the Schedule
of
Buyers (which aggregate principal amount for all Buyers shall be $6,000,000)
and
(ii) a warrant, in substantially the form attached hereto as Exhibit
B
(collectively, the "Warrants"),
to
acquire that number of shares of Common Stock set forth opposite such Buyer's
name in column (4) on the Schedule of Buyers (as exercised, collectively, the
"Warrant
Shares").
D. The
Debentures bear interest, which at the option of the Company, subject to certain
conditions, may be paid in shares of Common Stock (the "Interest
Shares").
E. 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
C
(the
"Registration
Rights Agreement"),
pursuant to which the Company will agree to provide certain registration rights
with respect to the Registrable Securities (as defined in the Registration
Rights Agreement) under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.
F. The
Debentures, the Conversion Shares, the Interest Shares, the Warrants and the
Warrant Shares collectively are referred to herein as the "Securities".
G. The
Debentures will rank senior to all outstanding and future indebtedness of the
Company except for (x) the Company's Unsecured Convertible Debentures Due 2007
(the "Parri
Passu Debentures")
and
(y) the Permitted Pari Passu Indebtedness (as defined in the Debentures), which
will rank pari
passu
with the
Debentures.
NOW,
THEREFORE,
the
Company and each Buyer hereby agree as follows:
1. PURCHASE
AND SALE OF DEBENTURES AND WARRANTS.
(a) Purchase
of Debentures and Warrants.
(i) Debentures
and Warrants. Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 6 and
7
below, the Company shall issue and sell to each Buyer, and each Buyer severally,
but not jointly, agrees to purchase from the Company on the Closing Date (as
defined below), a principal amount of Debentures as is set forth opposite such
Buyer's name in column (3) on the Schedule of Buyers, along
with Warrants to acquire that number of Warrant Shares set forth opposite such
Buyer's name in column (4) on the Schedule of Buyers (the "Closing").
(ii) Closing.
The
date and time of the Closing (the "Closing
Date")
shall
be 10:00 a.m., New York City time, on the date hereof (or such later date as
is
mutually agreed to by the Company and each Buyer) after notification of
satisfaction (or waiver) of the conditions to the Closing set forth in Sections
6 and 7 below at the offices of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, subject to notification of satisfaction (or waiver)
of
the conditions to the Closing set forth in Sections 6 and 7 below.
(iii) Purchase
Price.
The
aggregate purchase price for the Debentures and the Warrants to be purchased
by
each such Buyer at the Closing (the "Purchase
Price")
shall
be the amount set forth opposite each Buyer's name in column (5) of the Schedule
of Buyers. Each Buyer shall pay $1,000 for each $1,000 of principal amount
of
Debenture and related Warrants to be purchased by such Buyer at the
Closing.
(b) Form
of Payment.
On the
Closing Date, (i) each Buyer shall pay its Purchase Price to the Company for
the
Debentures and the Warrants to be issued and sold to such Buyer at the Closing,
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
the Debentures (allocated in the principal amounts as such Buyer shall request)
which such Buyer is then purchasing hereunder along with the Warrants (allocated
in the amounts as such Buyer shall request) such Buyer is purchasing, duly
executed on behalf of the Company and registered in the name of such Buyer
or
its designee.
2. BUYER'S
REPRESENTATIONS AND WARRANTIES.
Each
Buyer represents and warrants with respect to only itself that:
(a) No
Sale or Distribution.
Such
Buyer is acquiring the Debentures and the Warrants, and upon conversion of
the
Debentures and exercise of the Warrants (other than pursuant to a Cashless
Exercise (as defined in the Warrants)) will acquire the Conversion Shares
issuable upon conversion of the Debentures and the Warrant Shares issuable
upon
exercise of the Warrants, for its own account and not with a view towards,
or
for resale in connection with, the 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 does not agree to hold any of
the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act and pursuant to the
applicable terms of the Transaction Documents (as defined in Section 3(b)).
Such Buyer is acquiring the Securities hereunder in the ordinary course of
its
business. Such Buyer does not presently have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the
Securities.
(b) Accredited
Investor Status.
Such
Buyer is an "accredited investor" as that term is defined in Rule 501(a) of
Regulation D.
(c) Reliance
on Exemptions.
Such
Buyer understands that the Securities 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 herein in order to determine the availability of such
exemptions and the eligibility of such Buyer to acquire the
Securities.
(d) Information.
Such
Buyer and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities that have been requested by such Buyer.
Such Buyer and its advisors, if any, have been afforded the opportunity to
ask
questions of the Company. 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 herein. Such Buyer
understands that its investment in the Securities involves a high degree of
risk
and is able to afford a complete loss of such 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
Securities.
(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 Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits
of the offering of the Securities.
(f) Transfer
or Resale.
Such
Buyer understands that except as provided in the Registration Rights Agreement:
(i) the Securities 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) registered thereunder, (B) such Buyer shall have
delivered to the Company an opinion of counsel, in a form and from a law firm
reasonably acceptable to the Company and its legal counsel (with Xxxxxxx Xxxx
& Xxxxx LLP being deemed acceptable), 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, or (C) such Buyer provides the Company
with reasonable assurance that such Securities can be sold, assigned or
transferred pursuant to Rule 144(k) promulgated under the 1933 Act, as amended,
(or a successor rule thereto); (ii) any sale of the Securities made in reliance
on Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a
successor rule thereto) (collectively, "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 the Securities under circumstances in which the
seller (or the Person (as defined in Section 3(s)) 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 thereunder; and (iii) neither the Company
nor
any other Person is under any obligation to register the Securities under the
1933 Act or any state securities laws or to comply with the terms and conditions
of any exemption thereunder.
(g) Legends.
Such
Buyer understands that the certificates or other instruments representing the
Debentures and the Warrants and, until such time as the resale of the Conversion
Shares and the Warrant Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Conversion Shares and the Warrant Shares, except as set forth
below, shall bear any legend as required by the "blue sky" laws of any state
and
a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
THE
SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE
BEEN][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 MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL,
IN A
FORM REASONABLY ACCEPTABLE TO THE COMPANY AND ITS LEGAL COUNSEL, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO
RULE
144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.
The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which
it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection
with
a sale, assignment or other transfer, such holder provides the Company with
an
opinion of a law firm reasonably acceptable to the Company (with Xxxxxxx Xxxx
& Xxxxx LLP being deemed acceptable), in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Securities may be made
without registration under the applicable requirements of the 1933 Act, or
(iii)
such holder provides the Company with reasonable assurance that the Securities
can be sold, assigned or transferred pursuant to Rule 144.
(h) Authorization;
Validity; Enforcement.
This
Agreement and the Registration Rights Agreement have been duly and validly
authorized, executed and delivered on behalf of such Buyer and shall constitute
the legal, valid and binding obligations of such Buyer enforceable against
such
Buyer in accordance with their respective terms, except as such enforceability
may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.
(i) No
Conflicts.
The
execution, delivery and performance by such Buyer of this Agreement and the
Registration Rights Agreement to which such Buyer is a party and the
consummation by such Buyer of the transactions contemplated hereby and thereby
will not (i) result in a violation of the organizational documents of such
Buyer
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 such Buyer is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to such Buyer, except
in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of
such
Buyer to perform its obligations hereunder.
(j) Residency.
Such
Buyer is a resident of that jurisdiction specified below its address on the
Schedule of Buyers. Such Buyer is duly organized and validly existing and,
to
the extent legally applicable, in good standing under the laws of the
jurisdiction in which it was formed.
(k) Broker-Dealer.
Such
Buyer is not registered with the SEC as a broker-dealer.
(l) Series
C and 2005 Warrant Anti-Dilution.
Each of
the Buyers that hold any of the outstanding shares of Series C2 Preferred Stock
of the Company and/or any of the warrants (the "Original
Warrants")
of the
Company issued pursuant to that certain Securities Purchase Agreement, dated
as
of April 20, 2005, by and among the Company and the buyers party thereto, hereby
waive, effective as of the Closing, (x) the anti-dilution rights arising under
Section 2(f) of the Certificate of Designations, Preferences and Rights of
Series C2 Convertible Preferred Stock of Millennium Cell Inc. filed with the
Secretary of State of the State of Delaware on June 30, 2005 as a result of
the
issuance of the Securities and (y) the anti-dilution rights arising under
Section 2 of the Original Warrants as a result of the issuance of the
Securities, as applicable.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Buyers that, as of the date
hereof and as of the Closing:
(a) Organization
and Qualification.
The
Company and its "Subsidiaries"
(which
for purposes of this Agreement means any entity in which the Company, directly
or indirectly, owns at least a majority of the capital stock or holds an equity
or similar interest) are entities duly organized and validly existing and,
to
the extent legally applicable, in good standing under the laws of the
jurisdiction in which they are formed, and have the requisite power and
authorization 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 entity to do business and to the extent legally applicable, is in good
standing in every jurisdiction in which its ownership of property or 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. As used in this Agreement, "Material
Adverse Effect"
means
any material adverse effect on the business, properties, assets, operations,
results of operations or financial condition of the Company and its
Subsidiaries, taken as a whole, or on the transactions contemplated hereby
or by
the agreements and instruments to be entered into in connection herewith or
therewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents. The Company does not hold any
equity or similar interest in any entity except as set forth on Schedule
3(a).
(b) Authorization;
Enforcement; Validity.
The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement, the Debentures, the Registration
Rights Agreement, the Irrevocable Transfer Agent Instructions (as defined in
Section 5(b)), the Voting Agreements, the Warrants and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the "Transaction
Documents")
and to
issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby,
including, without limitation, (i) the issuance of the Debentures and the
Warrants, (ii) the reservation for issuance, and the issuance, of the
Conversion Shares issuable
upon conversion of the Debentures, and (iii) the reservation for issuance,
and the issuance, of Warrant Shares issuable upon exercise of the Warrants,
have
been duly authorized by the Company's Board of Directors and other than as
set
forth in Section 3(e), no further filing, consent or authorization is required
by the Company, its Board of Directors or its stockholders. This Agreement
and
the other Transaction Documents of even date herewith have been duly executed
and delivered by the Company, and constitute the legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally,
the
enforcement of applicable creditors' rights and remedies.
(c) Issuance
of Securities.
The
issuance of the Debentures and the Warrants are duly authorized, and upon
issuance in accordance with the terms hereof, shall be validly issued and free
from all taxes, liens and charges with respect to the issue thereof (other
than
transfer restrictions imposed by the 1933 Act). As of the Closing, a number
of
shares of Common Stock shall have been duly authorized and reserved for issuance
which equals or exceeds (i) 140% of the aggregate of the maximum number of
shares of Common Stock issuable upon conversion of the Debentures (assuming
for
purposes hereof, that the Debentures are convertible at an Initial Conversion
Price (as defined in the Debentures) equal to the arithmetic average of the
VWAP
(as defined in the Debentures) of the Common Stock over the thirty (30)
consecutive Trading Days (as defined in the Debentures) ending on the Trading
Day immediately preceding the Closing Date and without taking into account
any
limitations on the conversion of the Debentures set forth in the Debentures),
(ii) 100% of the maximum number of Interest Shares issuable pursuant to the
terms of the Debentures and (iii) 100% of the maximum number of shares of Common
Stock issuable upon exercise of the Warrants (without taking into account any
limitations on the exercise of the Warrants set forth in the Warrants). Upon
issuance, conversion or exercise in accordance with the Debentures or the
Warrants, as the case may be, the Conversion Shares, the Interest Shares and
the
Warrant Shares, respectively, will be validly issued, fully paid and
nonassessable and free from all preemptive or similar rights, taxes, liens
and
charges with respect to the issue thereof (other than transfer restrictions
imposed by the 1933 Act), with the holders being entitled to all rights accorded
to a holder of Common Stock. Assuming the accuracy of each of the
representations and warranties set forth in Section 2 of this Agreement, the
offer and issuance by the Company of the Securities is exempt from registration
under the 1933 Act.
(d) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby
and
thereby (including, without limitation, the issuance of the Debentures and
Warrants and reservation for issuance and issuance of the Conversion Shares,
Interest Shares and the Warrant Shares) will not (i) result in a violation
of
any certificate of incorporation, certificate of formation, certificate of
designations, bylaws or other constituent documents of the Company or any of
is
Subsidiaries, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) in any material
respect under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) 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 Capital Market (the "Principal
Market"))
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,
in
the case of clauses (ii) or (iii), for such violations as would not be
reasonably expected to have a Material Adverse Effect.
(e) Consents.
The
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by
the
Transaction Documents, in each case in accordance with the terms hereof or
thereof, except for the following consents, authorizations, orders, filings
and
registrations (none of which is required to be filed or obtained before the
Closing): (i) the filing with the SEC of one or more Registration Statements
in
accordance with the requirements of the Registration Rights Agreement, (ii)
the
filing of a listing application for the listing of the Conversion Shares, the
Interest Shares and the Warrant Shares with the Principal Market, which shall
be
done pursuant to the rules of the Principal Market, (iii) appropriate blue
sky filings with necessary state regulatory authorities and (iv) a Form D
under Regulation D of the 1933 Act. The Company and its Subsidiaries are unaware
of any facts or circumstances that are reasonably likely to prevent the Company
from obtaining or effecting any of the registration, application or filings
pursuant to the preceding sentence.
(f) Acknowledgment
Regarding Buyer's Purchase of Securities.
The
Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm's length purchaser with respect to the Transaction Documents and
the
transactions contemplated hereby and thereby. The Company further acknowledges
that no Buyer is acting as a financial advisor or fiduciary of the Company
(or
in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby, and any advice given by a Buyer
or
any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely
incidental to such Buyer's purchase of the Securities. The Company further
represents to each Buyer that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by
the
Company and its representatives.
(g) No
General Solicitation; Placement Agent's Fees.
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) in connection with the offer or sale of
the
Securities.
(h) No
Integrated Offering.
None of
the Company, its Subsidiaries, any of their affiliates, and any Person acting
on
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 any of the Securities under the 1933 Act or cause
this offering of the Securities to be integrated with prior offerings by the
Company for purposes of the 1933 Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations
of
any exchange or automated quotation system on which any of the securities of
the
Company are listed or designated. None of the Company, its Subsidiaries, their
affiliates and any Person acting on their behalf will take any action or steps
referred to in the preceding sentence that would require registration of any
of
the Securities under the 1933 Act or cause the offering of the Securities to
be
integrated with other offerings.
(i) Dilutive
Effect.
The
Company understands and acknowledges that the number of Conversion Shares
issuable upon conversion of the Debentures and the Warrant Shares issuable
upon
exercise of the Warrants will increase in certain circumstances in accordance
with the respective terms of the Debentures and the Warrants. The Company
further acknowledges that, its obligation to issue Conversion Shares upon
conversion of the Debentures in accordance with this Agreement and the
Debentures and
its
obligation to issue the Warrant Shares upon exercise of the Warrants in
accordance with this Agreement and the Warrants is, in each case, except as
provided in the Debentures and the Warrant, respectively, absolute and
unconditional regardless of the dilutive effect that such issuance may have
on
the ownership interests of other stockholders of the Company.
(j) Application
of Takeover Protections; Rights Agreement.
The
Company and its board of directors have taken all necessary action, if any,
in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
(as defined in Section 3(q)) or the laws of the state of its incorporation
which
is or could become applicable to any Buyer as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company's
issuance of the Securities and any Buyer's ownership of the Securities.
(k) SEC
Documents; Financial Statements.
During
the three (3) years prior to the date hereof, the Company has filed all reports,
schedules, forms, statements and other filings required to be filed by it with
the SEC pursuant to the reporting requirements 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 each Buyer or their respective designees true, correct
and complete copies of the SEC Documents not available on the XXXXX system.
As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to
be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in
the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with
respect thereto as in effect at the time of filing. 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 unaudited 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 unaudited statements, to normal year-end audit
adjustments).
(l) Absence
of Certain Changes.
Since
the date of the last audited financial statements included in the SEC Documents,
except as disclosed in Schedule
3(l),
(i)
there has been no change or development that has had a Material Adverse Effect,
and (ii) the Company has not (A) declared or paid any dividends, (B) sold any
assets, individually or in the aggregate, in excess of $250,000 outside of
the
ordinary course of business or (C) had capital expenditures, individually or
in
the aggregate, in excess of $250,000. The Company has not filed a petition
or
commencement of a proceeding under any bankruptcy law and, to the Company’s
knowledge, none of the Company’s creditors have initiated involuntary bankruptcy
proceedings against the Company and the Company does not have actual knowledge
of any fact that would reasonably lead a creditor to do so. The Company is
not
as of the date hereof, and after giving effect to the transactions contemplated
hereby to occur at the Closing, will not be Insolvent (as defined below). For
purposes of this Section 3(l), "Insolvent"
means,
with respect to any Person (as defined in Section 3(s)), (i) the present fair
saleable value of such Person's assets is less than the amount required to
pay
such Person's total Indebtedness (as defined in Section 3(s)), (ii) the Company
is unable to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured, (iii)
such
Person intends to incur or believes that it will incur debts that would be
beyond its ability to pay as such debts mature or (iv) such Person has
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be
conducted.
(m) Patriot
Act.
To the
extent applicable, both the Company and its Subsidiaries are in compliance,
in
all material respects, with the (i) Trading with the Enemy Act, as amended,
and
each of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (ii) Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept
and
Obstruct Terrorism (USA Patriot Act of 2001).
(n) Conduct
of Business; Regulatory Permits.
Neither
the Company nor its Subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation, any certificate of designations of
any
outstanding series of preferred stock of the Company or Bylaws or their
organizational charter or bylaws, respectively. Neither the Company nor any
of
its Subsidiaries is in violation of any judgment, decree or order or any
statute, ordinance, rule or regulation applicable to the Company or its
Subsidiaries, except for possible violations which could not, individually
or in
the aggregate, reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company is not in violation of
any
of the applicable rules, regulations or requirements of the Principal Market
and
has no knowledge of any facts or circumstances which would reasonably lead
to
delisting or suspension of the Common Stock by the Principal Market in the
next
twelve months, except for any violations that would not have, individually
or in
the aggregate, a Material Adverse Effect. Except as disclosed on Schedule
3(n),
since
December 31, 2005, (i) the Common Stock has been designated for quotation on
the
Principal Market, (ii) trading in the Common Stock has not been suspended by
the
SEC or the Principal Market and (iii) other than in connection with the events
leading to the movement of the listing of the Common Stock from the Nasdaq
National Market to the Principal Market, the Company has received no
communication, written or oral, from the SEC or the Principal Market to the
effect that the Company is not in compliance with the listing or maintenance
requirements of the Principal Market regarding the suspension or delisting
of
the Common Stock from the Principal Market. The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would
not have, individually or in the aggregate, a Material Adverse Effect, 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.
(o) Foreign
Corrupt Practices.
Neither
the Company, nor any of its Subsidiaries, nor to the Company's knowledge, any
director, officer, agent, employee or other Person acting on behalf of the
Company or any of its Subsidiaries has, in the course of its actions for, or
on
behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign
or
domestic government official or employee.
(p) Xxxxxxxx-Xxxxx
Act.
The
Company is in compliance with any and all applicable requirements of the
Xxxxxxxx-Xxxxx Act of 2002 that are effective as of the date hereof, and any
and
all applicable rules and regulations promulgated by the SEC thereunder that
are
effective as of the date hereof, except where such noncompliance would not
have,
individually or in the aggregate, a Material Adverse Effect.
(q) Transactions
With Affiliates.
Except
as set forth in the SEC Documents filed at least two days prior to the date
hereof and other than the grant of stock options disclosed on Schedule
3(q),
none of
the officers, directors or employees of the Company is presently a party to
any
transaction with the Company or any of its Subsidiaries (other than for ordinary
course services as employees, officers or 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 such officer, director or employee or, to
the
knowledge of the Company, any corporation, partnership, trust or other entity
in
which any such officer, director, or employee has a substantial interest or
is
an officer, director, trustee or partner.
(r) Equity
Capitalization.
As of
February 13, 2007, the authorized capital stock of the Company consists of
(x)
120,000,000 shares of Common Stock, of which 52,602,775 are issued and
outstanding, 5,544,436 shares are reserved for issuance pursuant to the
Company’s stock option and purchase plans and 16,864,040 shares are reserved for
issuance pursuant to securities (other than the aforementioned options and
the
Debentures and the Warrants) exercisable or exchangeable for, or convertible
into, shares of Common Stock, and (y) 5,000,000 of preferred stock of the
Company, of which (1) 155,724 have been designated as Series A2-0 Convertible
Preferred Stock, par value $0.001 per share (“Series
A2-0 Preferred Stock”)
and
155,724 shares of Series A2-0 Preferred Stock are issued and outstanding, (2)
300,000 shares have been designated as Series A2-1 Convertible Preferred Stock,
par value $0.001 per share (“Series
A2-1 Preferred Stock”)
and
138,150 shares of Series A2-1 Preferred Stock are issued and outstanding, (3)
225,000 shares have been designated as Series A2-2 Convertible Preferred Stock,
par value $0.001 per share (“Series
A2-2 Preferred Stock”)
and no
shares of Series A2-2 Preferred Stock are issued and outstanding, (3) 475,000
shares have been designated as Series A2-3 Convertible Preferred Stock, par
value $0.001 per share (“Series
A2-3 Preferred Stock”)
and no
shares of Series A2-3 Preferred Stock are issued and outstanding, (4) 539,000
shares have been designated as Series A2-4 Convertible Preferred Stock, par
value $0.001 per share (“Series
A2-4 Preferred Stock”
and,
together with the Series A2-0 Preferred Stock, the Series A2-1 Preferred Stock,
the Series A2-2 Preferred Stock and Series A2-3 Preferred Stock, the
“Series
A2 Preferred Stock”),
and
no shares of Series A2-4 Preferred Stock are issued and outstanding, (5) 300,000
have been designated as Series B-1 Convertible Preferred Stock, par value $0.001
per share (“Series
B-1 Preferred Stock”)
and
71,429 shares of Series B-1 Preferred Stock are issued and outstanding, (6)
225,000 shares have been designated as Series B-2 Convertible Preferred Stock,
par value $0.001 per share (“Series
B-2 Preferred Stock”)
and no
shares of Series B-2 Preferred Stock are issued and outstanding, (7) 475,000
shares have been designated as Series B-3 Convertible Preferred Stock, par
value
$0.001 per share (“Series
B-3 Preferred Stock”)
and no
shares of Series B-3 Preferred Stock are issued and outstanding, (8) 539,000
shares have been designated as Series B-4 Convertible Preferred Stock, par
value
$0.001 per share (“Series
B-4 Preferred Stock”
and,
together with the Series B-1 Preferred Stock, the Series B-2 Preferred Stock
and
Series B-3 Preferred Stock, the “Series
B Preferred Stock”))
and
no shares of Series B-4 Preferred Stock are issued and outstanding, and (9)
10,000 shares have been designated as Series C2 Convertible Preferred Stock,
par
value $0.001 per share (“Series
C-2 Preferred Stock”
and
3,918 shares of Series C2 Preferred Stock are issued and outstanding. All of
such outstanding shares have been, or upon issuance will be, validly issued
and
are fully paid and nonassessable. Except as disclosed in Schedule
3(r):
(i)
none of the Company's shares of capital stock are subject to preemptive rights
or any other similar rights or any liens or encumbrances suffered or permitted
by the Company (other than any liens or encumbrances created pursuant to the
Transaction Documents); (ii) 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, or exercisable or
exchangeable for, 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,
or
exercisable or exchangeable for, any shares of capital stock of the Company
or
any of its Subsidiaries; (iii) there are no outstanding debt securities, notes,
credit agreements, credit facilities or other agreements, documents or
instruments evidencing Indebtedness (as defined in Section 3(s)) of the Company
or any of its Subsidiaries or by which the Company or any of its Subsidiaries
is
or may become bound; (iv) there are no financing statements securing obligations
in any material amounts, either singly or in the aggregate, filed in connection
with the Company; (v) 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 the Registration Rights Agreement);
(vi) there are no outstanding securities or instruments of the Company or any
of
its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries; (vii) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (viii) the Company does not have
any stock appreciation rights or "phantom stock" plans or agreements or any
similar plan or agreement; and (ix) the Company and its Subsidiaries have no
liabilities or obligations required to be disclosed in the SEC Documents but
not
so disclosed in the SEC Documents, other than those incurred in the ordinary
course of the Company's or its Subsidiaries' respective businesses and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect. The Company has made available to the Buyer true, correct and complete
copies of the Company's Amended and Restated Certificate of Incorporation,
as
amended and as in effect on the date hereof (the "Certificate
of Incorporation"),
and
the Company's Bylaws, as amended and as in effect on the date hereof (the
"Bylaws"),
and
the terms of all securities convertible into, or exercisable or exchangeable
for, shares of Common Stock and the material rights of the holders thereof
in
respect thereto.
(s) Indebtedness
and Other Contracts.
Except
as disclosed in Schedule
3(s),
neither
the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness
(as
defined below), (ii) is a party to any contract, agreement or instrument, the
violation of which, or default under which, by the other party(ies) to such
contract, agreement or instrument, could reasonably be expected to result in
a
Material Adverse Effect, (iii) is in violation of any term of or in default
under any contract, agreement or instrument relating to any Indebtedness, except
where such violations and defaults would not result, individually or in the
aggregate, in a Material Adverse Effect, or (iv) is a party to any contract,
agreement or instrument relating to any Indebtedness, the performance of which,
in the judgment of the Company's officers, has or is expected to have a Material
Adverse Effect. For purposes of this Agreement: (x) "Indebtedness"
of any
Person means, without duplication (A) all indebtedness for borrowed money,
(B)
all obligations issued, undertaken or assumed as the deferred purchase price
of
property or services, including (without limitation) "capital leases" in
accordance with generally accepted accounting principals (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and
other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect
to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in
the
event of default are limited to repossession or sale of such property), (F)
all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment
of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
above; (y) "Contingent
Obligation"
means,
as to any Person, any direct or indirect liability, contingent or otherwise,
of
that Person with respect to any indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto; and (z) "Person"
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
(t) Absence
of Litigation.
Except
as set forth in Schedule
3(t),
there
is no action, suit, proceeding, inquiry or investigation before or by the
Principal Market, any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against the Company or any of the Company's Subsidiaries or any of the Company's
or the Company's Subsidiaries' officers or directors in their capacities as
such, which action, suit, proceeding, inquiry or investigation, if determined
adversely to the Company, its Subsidiary or their respective officer or
director, as the case may be, would have a Material Adverse Effect.
(u) 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 have a Material
Adverse Effect.
(v) Employee
Relations.
(i)
Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining
agreement or employs any member of a union. No current executive officer of
the
Company (as defined in Rule 501(f) of the 0000 Xxx) has notified the Company
that such officer intends to leave the Company or otherwise terminate such
officer's employment with the Company. To the Company’s knowledge, no executive
officer of the Company, is in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement or any other similar contract or agreement, or any
restrictive covenant pertaining to the subject matter of any such contract
or
agreement, and the continued employment of each such executive officer does
not
subject the Company or any of its Subsidiaries to any liability with respect
to
any of the foregoing matters.
(ii) The
Company and its Subsidiaries are in compliance with all applicable federal,
state, local and foreign laws and regulations respecting labor, employment
and
employment practices and benefits, terms and conditions of employment and wages
and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
(w) Title.
The
Company and its Subsidiaries have good and marketable title in fee simple to
all
real property owned by them and good and marketable title to all personal
property owned by them which is material to the business of the Company and
its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except (i) as described in Schedule
3(w)
or (ii)
which do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company and
any of its Subsidiaries. Any real property and facilities held under lease
by
the Company and any of 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.
(x) Intellectual
Property Rights.
The
Company and its Subsidiaries own or possess adequate rights or licenses to
use
all trademarks, service marks and all applications and registrations therefor,
trade names, patents, patent rights, copyrights, original works of authorship,
inventions, trade secrets and other intellectual property rights ("Intellectual
Property Rights")
necessary to conduct their respective businesses as now conducted. Except as
disclosed on Schedule 3(x),
none of
the Company's registered Intellectual Property Rights have expired or terminated
or have been abandoned, or by their terms shall expire within three (3) years
from the date of this Agreement. The Company has not received a written notice
that the
Intellectual Property Rights of
the
Company and its Subsidiaries infringes upon the Intellectual Property Rights
of
any other Person. There is no claim, action or proceeding pending or, to the
knowledge of the Company, threatened in writing, against the Company or its
Subsidiaries regarding its Intellectual Property Rights. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their Intellectual Property
Rights.
(y) Environmental
Laws.
The
Company and its Subsidiaries (i) are in compliance with any and all
Environmental Laws (as hereinafter defined), (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 where, in each
of
the foregoing clauses (i), (ii) and (iii), the failure to so comply could be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect. The term "Environmental
Laws"
means
all federal, state, local or foreign laws applicable to the Company relating
to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or
toxic
or hazardous substances or wastes (collectively, "Hazardous
Materials") into
the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, notices or notice letters, orders, plans or regulations
issued, entered, promulgated or enforced by any governmental authority
thereunder.
(z) Subsidiary
Rights.
The
Company or one of its Subsidiaries has the unrestricted right to vote, and
(subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of its Subsidiaries as owned by the
Company or such Subsidiary.
(aa) Tax
Status.
The
Company and each of its Subsidiaries (i) has made or filed all foreign, federal
and state income and all other tax returns, reports and declarations required
to
be made or filed by it by any jurisdiction to which it is subject, (ii) 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 (iii) 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.
(bb) Internal
Accounting and Disclosure 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 and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities
at
reasonable intervals and appropriate action is taken with respect to any
difference. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-14 under the 0000 Xxx) that are effective in
ensuring that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is recorded, processed, summarized
and reported, within the time periods specified in the rules and forms of the
SEC, including, without limitation, controls and procedures designed in to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the 1934 Act is accumulated and communicated
to
the Company's management, including its principal executive officer or officers
and its principal financial officer or officers, as appropriate, to allow timely
decisions regarding required disclosure. During the twelve months prior to
the
date hereof neither the Company nor any of its Subsidiaries have received any
notice or correspondence from any accountant relating to any potential material
weakness in any part of the system of internal accounting controls of the
Company or any of its Subsidiaries.
(cc) Off
Balance Sheet Arrangements.
There
is no transaction, arrangement, or other relationship between the Company and
an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its Exchange Act filings and is not so disclosed
or
that otherwise would be reasonably likely to have a Material Adverse
Effect.
(dd) Investment
Company Status.
The
Company is not, and upon consummation of the sale of the Securities will not
be,
an "investment company," a company controlled by an "investment company" or
an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company" as such terms are defined in the Investment Company Act
of
1940, as amended.
(ee) Form
S-3 Eligibility.
The
Company is eligible to register the Conversion Shares, Interest Shares and
the
Warrant Shares for resale by the Buyers using Form S-3 promulgated under the
1933 Act.
(ff) Transfer
Taxes.
On the
Closing Date, all stock transfer or other taxes (other than income or similar
taxes) which are required to be paid in connection with the sale and transfer
of
the Securities to be sold to each Buyer hereunder will be, or will have been,
fully paid or provided for by the Company, and all laws imposing such taxes
will
be or will have been complied with.
(gg) Manipulation
of Price.
The
Company has not, and to its knowledge no one acting on its behalf has, (i)
taken, directly or indirectly, any action designed to cause or to result in
the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or, paid any compensation for soliciting purchases of, any of the
Securities, or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(hh) Real
Property Holding Corporation.
The
Company is not, nor has ever been, a U.S. real property holding corporation
within the meaning of Section 897 of the Internal Revenue Code of 1986, as
amended, and the Company shall so certify upon Buyer's request.
(ii) OFAC.
Neither
the Company nor any of its Subsidiaries (i) is a Person whose property or
interest in property is blocked or subject to blocking pursuant to Section
1 of
Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions
prohibited by Section 2 of such executive order, or is otherwise associated
with
any such Person in any manner violative of Section 2 of such executive order,
or
(iii) is a Person on the list of Specially Designated Nationals and Blocked
Persons or subject to the limitations or prohibitions under any other U.S.
Department of Treasury's Office of Foreign Assets Control regulation or
executive order.
(jj) Ranking
of Debentures.
No
Indebtedness of the Company is senior to the Debentures in right of payment,
whether with respect of payment of redemptions, interest, damages or upon
liquidation or dissolution or otherwise. Except for the Pari Passu Debentures,
no Indebtedness of the Company ranks pari
passu
with the
Debentures in right of payment, whether with respect of payment of redemptions,
interest, damages or upon liquidation or dissolution or otherwise.
(kk) Disclosure.
The
Company confirms that neither it nor any other Person acting on its behalf
has
provided any of the Buyers or their agents or counsel with any information
that
constitutes material, nonpublic information. The Company understands and
confirms that each of the Buyers will rely on the foregoing representations
in
effecting transactions in securities of the Company. All disclosure provided
to
the Buyers regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement, is true and correct in all
material respects and does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
in
all material respects not misleading. No event or circumstance has occurred
or
information exists with respect to the Company or any of its Subsidiaries or
its
or their business, properties, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or
disclosed.
(ll) Acknowledgement
Regarding Buyers' Trading Activity.
Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
it is understood and acknowledged by the Company (i) that none of the Buyers
have been asked to agree, nor has any Buyer agreed, to desist from purchasing
or
selling, long and/or short, securities of the Company, or "derivative"
securities based on securities issued by the Company or to hold the Securities
for any specified term; (ii) that any Buyer, and counter parties in "derivative"
transactions to which any such Buyer is a party, directly or indirectly,
presently may have a "short" position in the Common Stock, and (iii) that each
Buyer shall not be deemed to have any affiliation with or control over any
arm's
length counter-party in any "derivative" transaction. The Company further
understands and acknowledges that one or more Buyers may engage in hedging
activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value
of
the Conversion Shares, the Warrant Shares and Interest Shares deliverable with
respect to Securities are being determined.
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
and Blue Sky.
The
Company agrees to file a Form D with respect to the Securities 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 in order to obtain an
exemption for or to qualify the Securities 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 (or to obtain an exemption from such qualification).
The Company shall make all filings and reports relating to the offer and sale
of
the Securities required under applicable securities or "Blue Sky" laws of the
states of the United States following the Closing Date.
(c) Reporting
Status.
Until
the date on which the Investors (as defined in the Registration Rights
Agreement) shall have sold all the Conversion Shares, Interest Shares and
Warrant Shares and
none
of the Debentures or
Warrants is outstanding (the "Reporting
Period"),
the
Company shall timely file all reports required to be filed with the SEC pursuant
to the 1934 Act, and the Company shall not terminate its status as an issuer
required to timely file reports under the 1934 Act even if the 1934 Act or
the
rules and regulations thereunder would otherwise permit such
termination.
(d) Use
of
Proceeds.
The
Company will use the proceeds from the sale of the Securities for working
capital and general corporate purposes and not for the repayment of any
outstanding Indebtedness of the Company or any of its Subsidiaries or redemption
or repurchase of any of its equity securities, except in connection with an
acquisition of assets or securities by the Company not for capital raising
purposes.
(e) Financial
Information.
The
Company agrees to send the following to each Investor during the Reporting
Period (i) unless the following are filed with the SEC through XXXXX and are
available to the public through the XXXXX system, within one (1) Business Day
after the filing thereof with the SEC, a copy of its Annual Reports on Form
10-K, its Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and
any registration statements (other than on Form S-8) or amendments filed
pursuant to the 1933 Act, and (ii) copies of any notices and other information
made available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders. For the purposes of this Section 4(e) only, the Company may send
notice to the Investors by electronic mail to their respective electronic mail
addresses as set forth in the Schedule of Buyers attached hereto. As used
herein, "Business
Day"
means
any day other than Saturday, Sunday or other day on which commercial banks
in
The City of New York are authorized or required by law to remain
closed.
(f) Listing.
The
Company shall use its best efforts to promptly secure the listing of all of
the
Registrable Securities (as defined in the Registration Rights Agreement) upon
each national securities exchange and automated quotation system, if any, upon
which the Common Stock is then listed (subject to official notice of issuance)
and shall use its best efforts to maintain, so long as any other shares of
Common Stock shall be so listed and in accordance with the Debentures and
Warrants, such listing of all Registrable Securities from time to time issuable
under the terms of the Transaction Documents. The Company shall use its best
efforts to maintain the Common Stocks' authorization for quotation on the
Principal Market. Neither the Company nor any of its Subsidiaries shall take
any
action which would be reasonably expected to result in the delisting or
suspension of the Common Stock on the Principal Market; provided, however,
that
the Company makes no covenant regarding the trading price of the Common Stock.
The Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(f).
(g) Fees.
The
Company and the Buyers hereby acknowledge that the Company has advanced to
Portside Growth & Opportunity Fund an amount equal to $25,000 for fees and
expenses of the Buyers in connection with the preparation, execution and
performance of the Transaction Documents and the transactions contemplated
hereby and thereby. Subject to Section 8 below, at the Closing, subject to
receipt of appropriate supporting documentation, the Company shall reimburse
Portside Growth & Opportunity Fund (a Buyer) or its designee(s) (in addition
to any other amounts paid to any Buyer or its designee prior to the date of
this
Agreement) for its reasonable fees and expenses in connection with the
preparation, execution and performance of the Transaction Documents and the
transactions contemplated hereby and thereby, in an amount not to exceed
$50,000, which amount shall be withheld from such Buyer's Purchase Price at
the
Closing. The Company shall be responsible for the payment of any placement
agent's fees, financial advisory fees, or broker's commissions (other than
for
Persons engaged by any Buyer or its agents) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation,
reasonable attorney's fees and out-of-pocket expenses) arising in connection
with any claim relating to any such payment. Except as otherwise set forth
in
the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to the
Buyers.
(h) Pledge
of Securities.
The
Company acknowledges and agrees that the Securities may be pledged by an
Investor (as defined in the Registration Rights Agreement) in connection with
a
bona fide margin agreement or other loan or financing arrangement that is
secured by the Securities. The pledge of Securities shall not be deemed to
be a
transfer, sale or assignment of the Securities hereunder, and no Investor
effecting a pledge of Securities shall be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to
this Agreement or any other Transaction Document, including, without limitation,
Section 2(f) hereof; provided that an Investor and its pledgee shall be required
to comply with the provisions of Section 2(f) hereof in order to effect a sale,
transfer or assignment of Securities to such pledgee. The Company hereby agrees
to execute and deliver such documentation acknowledging the existence of a
pledge as a pledgee of the Securities may reasonably request in connection
with
a pledge of the Securities to such pledgee by an Investor.
(i) Disclosure
of Transactions and Other Material Information.
On or
before 8:30 a.m., New York City time, on the first Business Day following the
date hereof, the Company shall file a Current Report on Form 8-K describing
the
terms of the transactions contemplated by the Transaction Documents in the
form
required by the 1934 Act and attaching the material Transaction Documents
(including, without limitation, this Agreement the form of Debenture, the form
of Warrant, the form of the Voting Agreement and the form of the Registration
Rights Agreement) as exhibits to such filing (including all attachments, the
"8-K
Filing").
From
and after the filing of the 8-K Filing with the SEC, no Buyer shall be in
possession of any material, nonpublic information received from the Company,
any
of its Subsidiaries or any of its respective officers, directors, employees
or
agents, that is not disclosed in the 8-K Filing. The Company shall not, and
shall cause each of its Subsidiaries and its and each of their respective
officers, directors, employees and agents, not to, provide any Buyer with any
material, nonpublic information regarding the Company or any of its Subsidiaries
from and after the filing of the 8-K Filing with the SEC without the express
written consent of such Buyer. If, notwithstanding the foregoing, the Company,
its Subsidiaries or each of their respective officers, directors, employees
and
agents, provide any Buyer with any material, nonpublic information, regarding
the Company or any of its Subsidiaries, the Buyer shall provide the Company
with
written notice thereof. The Company shall, within five (5) Trading Days of
receipt of such notice, make public disclosure of such material, nonpublic
information. In the event of a breach of the foregoing covenant by the Company,
any of its Subsidiaries, or any of its or their respective officers, directors,
employees and agents, in addition to any other remedy provided herein or in
the
Transaction Documents, a Buyer shall have the right to make a public disclosure,
in the form of a press release, public advertisement or otherwise, of such
material, nonpublic information without the prior approval by the Company,
its
Subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Buyer shall have any liability to the Company, its Subsidiaries,
or any of its or their respective officers, directors, employees, stockholders
or agents for any such disclosure. Subject to the foregoing, neither the Company
nor any Buyer shall issue any press releases or any other public statements
with
respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of any Buyer, to make
any
press release or other public disclosure with respect to such transactions
(i)
in substantial conformity with the 8-K Filing and contemporaneously therewith
and (ii) as is required by applicable law and regulations (provided that in
the
case of clause (i) each Buyer shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its
release).
(j) Additional
Registration Statements.
Until
the date that the Registration Statement (as defined in the Registration Rights
Agreement) is first declared effective by the SEC (the "Effective
Date"),
the
Company shall not file a registration statement under the 1933 Act relating
to
securities that are not the Securities.
(k) Additional
Debentures; Variable Securities; Dilutive Issuances.
So long
as any Buyer beneficially owns any Debentures, the Company will not issue any
Debentures other than to the Buyers as contemplated hereby and the Company
shall
not issue any other securities that would cause a breach or default under the
Debentures. For so long as 25% or more of the Debentures or Warrants remain
outstanding, the Company shall not, in any manner, issue or sell any rights,
warrants or options to subscribe for or purchase Common Stock or directly or
indirectly convertible into or exchangeable or exercisable for Common Stock
at a
price which varies or may vary with the market price of the Common Stock,
including by way of one or more reset(s) to any fixed price unless the
conversion, exchange or exercise price of any such security cannot be less
than
the then applicable Conversion Price (as defined in the Debentures) with respect
to the Common Stock into which any Debenture is convertible or the then
applicable Exercise Price (as defined in the Warrants) with respect to the
Common Stock into which any Warrant is exercisable. For so long as any
Debentures or Warrants remain outstanding, the Company shall not, in any manner,
enter into or affect any Dilutive Issuance (as defined in the Debentures) if
the
effect of such Dilutive Issuance is to cause the Company to be required to
issue
upon conversion of any Debenture or exercise of any Warrant any shares of Common
Stock in excess of that number of shares of Common Stock which the Company
may
issue upon conversion of the Debentures, and exercise of the Warrants without
breaching the Company's obligations under the rules or regulations of the
Principal Market.
(l) Corporate
Existence.
So long
as any Buyer beneficially owns any Debentures or Warrants, the Company shall
not
be party to any Fundamental Transaction (as defined in the Debentures) unless
the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Debentures and the
Warrants.
(m) Reservation
of Shares.
The
Company shall take all action necessary to at all times have authorized, and
reserved for the purpose of issuance, no less than the sum of (i) 140% of the
aggregate of the maximum number of shares of Common Stock issuable upon
conversion of the Debentures (assuming for purposes hereof, that the Debentures
are convertible at an Initial Conversion Price equal to the arithmetic average
of the VWAP of the Common Stock over the thirty (30) consecutive Trading Days
ending on the Trading Day immediately preceding the Closing Date and without
taking into account any limitations on the conversion of the Debentures set
forth in the Debentures), (ii) 100% of the maximum number of Interest Shares
issuable pursuant to the terms of the Debentures and (iii) 100% of the maximum
number of shares of Common Stock issuable upon exercise of the Warrants (without
taking into account any limitations on the exercise of the Warrants set forth
in
the Warrants). .
(n) Conduct
of Business.
The
business of the Company and its Subsidiaries shall not be conducted in violation
of any law, ordinance or regulation of any governmental entity applicable to
the
business of the Company and its Subsidiaries, except where such violations
could
not result, either individually or in the aggregate, in a Material Adverse
Effect.
(o) Additional
Issuances of Securities.
(i) For
purposes of this Section 4(o), the following definitions shall
apply.
(1) "Convertible
Securities"
means
any stock or securities (other than Options) convertible into or exercisable
or
exchangeable for shares of Common
Stock.
(2) "Options"
means
any rights, warrants or options to subscribe for or purchase shares of
Common
Stock or
Convertible Securities.
(3) "Common
Stock Equivalents"
means,
collectively, Options and Convertible Securities.
(ii) From
the
date hereof until the date that is thirty (30) Trading Days following the
Effective Date (as defined in the Registration Rights Agreement) (the
"Trigger
Date"),
the
Company will not, directly or indirectly, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition of) any of its or its Subsidiaries'
equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during
its
life and under any circumstances, convertible into or exchangeable or
exercisable for shares of Common Stock or Common Stock Equivalents (any such
offer, sale, grant, disposition or announcement being referred to as a
"Subsequent
Placement").
(iii) From
the
Trigger Date until the two year anniversary of the Closing Date, the Company
will not, directly or indirectly, effect any Subsequent Placement unless the
Company shall have first complied with this Section 4(o)(iii).
(1) The
Company shall deliver to each Buyer a written notice (the "Offer
Notice")
(which
will be used by the Buyer in compliance with applicable law) of any proposed
or
intended issuance or sale or exchange (the "Offer")
of the
securities being offered (the "Offered
Securities")
in a
Subsequent Placement, which Offer Notice shall (w) identify and describe the
Offered Securities, (x) describe the price and other terms upon which they
are to be issued, sold or exchanged, and the number or amount of the Offered
Securities to be issued, sold or exchanged, (y) identify the persons or
entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or
exchange with such Buyers a pro rata portion of 30% of the Offered Securities
allocated among such Buyers (a) based on such Buyer's pro rata portion of the
aggregate Debentures purchased hereunder (the "Basic
Amount"),
and
(b) with respect to each Buyer that elects to purchase its Basic Amount, any
additional portion of the Offered Securities attributable to the Basic Amounts
of other Buyers as such Buyer shall indicate it will purchase or acquire should
the other Buyers subscribe for less than their Basic Amounts (the "Undersubscription
Amount"),
which
process shall be repeated until the Buyers shall have an opportunity to
subscribe for any remaining Undersubscription Amount.
(2) To
accept
an Offer, in whole or in part, such Buyer must deliver a written notice to
the
Company prior to the end of the fifth (5th)
Business Day after such Buyer's receipt of the Offer Notice (the "Offer
Period"),
setting forth the portion of such Buyer's Basic Amount that such Buyer elects
to
purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the
Undersubscription Amount, if any, that such Buyer elects to purchase (in either
case, the "Notice
of Acceptance").
If
the Basic Amounts subscribed for by all Buyers are less than the total of all
of
the Basic Amounts, then each Buyer who has set forth an Undersubscription Amount
in its Notice of Acceptance shall be entitled to purchase, in addition to the
Basic Amounts subscribed for, the Undersubscription Amount it has subscribed
for; provided,
however,
that if
the Undersubscription Amounts subscribed for exceed the difference between
the
total of all the Basic Amounts and the Basic Amounts subscribed for (the
"Available
Undersubscription Amount"),
each
Buyer who has subscribed for any Undersubscription Amount shall be entitled
to
purchase only that portion of the Available Undersubscription Amount as the
Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that
have subscribed for Undersubscription Amounts, subject to rounding by the
Company to the extent its deems reasonably necessary. Notwithstanding the
foregoing, if the Company desires to modify or amend the terms and conditions
of
the Offer prior to the expiration of the Offer Period, the Company may deliver
to the Buyers a new Offer Notice and the Offer Period shall expire on the fifth
(5th) Business Day after such Buyer's receipt of such new Offer
Notice.
(3) The
Company shall have twenty (20) Business Days from the expiration of the Offer
Period above (i) to offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by
the
Buyers (the "Refused
Securities")
pursuant to a definitive agreement(s) (the "Subsequent
Placement Agreement"),
but
only to the offerees described in the Offer Notice (if so described therein)
and
only upon terms and conditions (including, without limitation, unit prices
and
interest rates) that are not more favorable to the acquiring person or persons
or less favorable to the Company than those set forth in the Offer Notice and
(ii) to publicly announce (a) the execution of such Subsequent Placement
Agreement, and (b) either (x) the consummation of the transactions contemplated
by such Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which shall be filed with the SEC on a Current Report
on
Form 8-K with such Subsequent Placement Agreement and any documents contemplated
therein filed as exhibits thereto.
(4) In
the
event the Company shall propose to sell less than all the Refused Securities
(any such sale to be in the manner and on the terms specified in Section
4(o)(iii)(3) above), then each Buyer may, at its sole option and in its sole
discretion, reduce the number or amount of the Offered Securities specified
in
its Notice of Acceptance to an amount that shall be not less than the number
or
amount of the Offered Securities that such Buyer elected to purchase pursuant
to
Section 4(o)(iii)(2) above multiplied by a fraction, (i) the numerator of which
shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued
or sold to Buyers pursuant to Section 4(o)(iii)(3) above prior to such
reduction) and (ii) the denominator of which shall be the original amount of
the
Offered Securities. In the event that any Buyer so elects to reduce the number
or amount of Offered Securities specified in its Notice of Acceptance, the
Company may not issue, sell or exchange more than the reduced number or amount
of the Offered Securities unless and until such securities have again been
offered to the Buyers in accordance with Section 4(o)(iii)(1)
above.
(5) Upon
the
closing of the issuance, sale or exchange of all or less than all of the Refused
Securities, the Buyers shall acquire from the Company, and the Company shall
issue to the Buyers, the number or amount of Offered Securities specified in
the
Notices of Acceptance, as reduced pursuant to Section Section 4(o)(iii)(3)
above
if the Buyers have so elected, upon the terms and conditions specified in the
Offer. The purchase by the Buyers of any Offered Securities is subject in all
cases to the preparation, execution and delivery by the Company and the Buyers
of a purchase agreement relating to such Offered Securities reasonably
satisfactory in form and substance to the Buyers and their respective
counsel.
(6) Any
Offered Securities not acquired by the Buyers or other persons in accordance
with Section 4(o)(iii)(3) above may not be issued, sold or exchanged until
they
are again offered to the Buyers under the procedures specified in this
Agreement.
(7) The
Company and the Buyers agree that if any Buyer elects to participate in the
Offer, (x) neither the Subsequent Placement Agreement with respect to such
Offer
nor any other transaction documents related thereto (collectively, the
"Subsequent
Placement Documents")
shall
include any term or provisions whereby any Buyer shall be required to agree
to
any restrictions in trading prior to the time such Buyer received the Offer
Notice relating to such Subsequent Placement as to any securities of the Company
owned by such Buyer prior to such Subsequent Placement, and (y) any registration
rights set forth in such Subsequent Placement Documents shall be similar in
all
material respects to the registration rights contained in the Registration
Rights Agreement.
(8) Notwithstanding
anything to the contrary in this Section 4(o) and unless otherwise agreed to
by
the Buyers, the Company shall either confirm in writing to the Buyers that
the
transaction with respect to the Subsequent Placement has been abandoned or
shall
publicly disclose its intention to issue the Offered Securities, in either
case
in such a manner such that the Buyers will not be in possession of material
non-public information, by the thirtieth (30th) Business Day following delivery
of the Offer Notice. If by the thirtieth (30th) following delivery of the Offer
Notice no public disclosure regarding a transaction with respect to the Offered
Securities has been made, and no notice regarding the abandonment of such
transaction has been received by the Buyers, such transaction shall be deemed
to
have been abandoned and the Buyers shall not be deemed to be in possession
of
any material, non-public information with respect to the Company. Should the
Company decide to pursue such transaction with respect to the Offered
Securities, the Company shall provide each Buyer with another Offer Notice
and
each Buyer will again have the right of participation set forth in this Section
4(o)(iii). The Company shall not be permitted to deliver more than one such
Offer Notice to the Buyers in any 60 day period.
(iv) The
restrictions contained in subsections (ii) and (iii) of this Section 4(o) shall
not apply in connection with the issuance of any Excluded Securities (as defined
in the Debentures).
(p) Stockholder
Approval.
The
Company shall provide each stockholder entitled to vote at a special or annual
meeting of stockholders of the Company (the "Stockholder
Meeting"),
which
shall be promptly called and held not later than May 31, 2007 (the "Stockholder
Meeting Deadline"),
a
proxy statement, substantially in the form which has been previously reviewed
by
the Buyers and a counsel of their choice, at the expense of the Company, not
to
exceed $5,000, which review shall be completed within five (5) Business Days
of
such counsel's receipt of the proxy statement and such review requirement shall
be waived if such counsel has not completed its review within such five (5)
Business Day period, soliciting each such stockholder's affirmative vote at
the
Stockholder Meeting for approval of resolutions (the "Stockholder
Resolutions")
providing for the Company's issuance of all of the Securities as described
in
the Transaction Documents in accordance with applicable law and the rules and
regulations of the Principal Market (such
affirmative
approval being referred to herein as the "Stockholder
Approval"),
and
the Company shall use its best efforts to solicit its stockholders' approval
of
such resolutions and to cause the Board of Directors of the Company to recommend
to the stockholders that they approve such resolutions. The Company shall be
obligated to seek to obtain the Stockholder Approval by the Stockholder Meeting
Deadline. If, despite the Company's best efforts the Stockholder Approval is
not
obtained on or prior to the Stockholder Meeting Deadline, the Company shall
either (x) cause an additional Stockholder Meeting to be held every six (6)
months thereafter until such Stockholder Approval is obtained or (y) cause
one
(1) additional Stockholder Meeting to be held within six (6) months
thereafter.
(q) Most
Favored Nations.
For so
long as any Debentures remain outstanding, if the Company issues any Permitted
Pari Passu Indebtedness and any of the terms, individually or in the aggregate,
of such Permitted Pari Passu Indebtedness are more beneficial to the investors
in such Permitted Pari Passu Indebtedness than those provided to the Buyers
in
the Debentures or the Warrants (including, without limitation, with respect
to
the warrant coverage thereunder if warrants are issued in connection with any
such Permitted Pari Passu Indebtedness), the Debentures or the Warrants, as
applicable, shall be, without any further action by any Buyer or the Company,
deemed amended and modified in an economically and legally equivalent manner
such that the Buyers shall receive the benefit of each such more favorable
term
of such Permitted Pari Passu Indebtedness. Notwithstanding the foregoing, the
Company hereby agrees, at its expense, to take such other actions (such as
entering into amendments to this Agreement, the Debenture or any other
Transaction Document) as any Buyer may reasonably request to further effectuate
the foregoing.
(r) Voting
Agreement.
The
Company shall use its reasonable best efforts to effectuate the transactions
contemplated by the Voting Agreement, substantially in the form attached hereto
as Exhibit
D
(the
"Voting
Agreement"),
executed by the Company and each of Xxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxxx,
Xxxx
Xxxx, Xxxxx Xxxxxxxx, Xxxxxx Xxxxxx and Xxxx Xxxxxxxxxx (the "Stockholders").
5. REGISTER;
TRANSFER AGENT INSTRUCTIONS.
(a) Register.
The
Company shall maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to each holder of
Securities), a register for the Debentures and the Warrants, in which the
Company shall record the name and address of the Person in whose name the
Debentures and
the
Warrants have been issued (including the name and address of each transferee),
the principal amount of Debentures held by such Person and the number of Warrant
Shares issuable upon exercise of the Warrants held by such Person. The Company
shall keep the register open and available at all times during business hours
for inspection of any Buyer or its legal representatives.
(b) Transfer
Agent Instructions.
The
Company shall issue irrevocable instructions to its transfer agent, and any
subsequent transfer agent, to issue certificates or credit shares to the
applicable balance accounts at The Depository Trust Company ("DTC"),
registered in the name of each Buyer or its respective nominee(s), for the
Conversion Shares, and the Warrant Shares issued at the Closing or upon
conversion of the Debentures or exercise of the Warrants in such amounts as
specified from time to time by each Buyer to the Company upon conversion of
the
Debentures or exercise of the Warrants in the form of Exhibit
E
attached
hereto (the "Irrevocable
Transfer Agent Instructions").
The
Company warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5(b), and stop transfer instructions
to
give effect to Section 2(g) hereof, will be given by the Company to its transfer
agent, and that the Securities shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement
and the other Transaction Documents. If a Buyer effects a sale, assignment
or
transfer of the Securities in accordance with Section 2(f), the Company shall
permit the transfer and shall promptly instruct its transfer agent to issue
one
or more certificates or credit shares to the applicable balance accounts at
DTC
in such name and in such denominations as specified by such Buyer to effect
such
sale, transfer or assignment. In the event that such sale, assignment or
transfer involves Conversion Shares, Interest Shares or Warrant Shares sold,
assigned or transferred pursuant to an effective registration statement or
pursuant to Rule 144, the transfer agent shall issue such Securities to the
Buyer, assignee or transferee, as the case may be, without any restrictive
legend. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to a Buyer. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Section 5(b) will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 5(b), that
a
Buyer shall be entitled, in addition to all other available remedies, to an
order and/or 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 Debentures and to
each
Buyer 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 by providing each Buyer with prior written notice
thereof:
(a) Such
Buyer shall have executed and delivered each of the Transaction Documents to
which it is a party and delivered the same to the Company
(b) Such
Buyer shall have delivered to the Company the Purchase Price (less, in the
case
of Portside Growth & Opportunity Fund, the amounts withheld pursuant to
Section 4(g)) for the Debentures and the related Warrants being purchased by
such Buyer at the Closing by wire transfer of immediately available funds
pursuant to the wire instructions provided by the Company.
(c) The
representations and warranties of such Buyer shall be true and correct in all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all 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, which shall remain true and correct as of such specific
date), and such Buyer 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 such Buyer at or prior
to the Closing Date.
7. CONDITIONS
TO EACH BUYER'S OBLIGATION TO PURCHASE. The
obligation of each Buyer hereunder to purchase the Debentures and
the
related Warrants 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 each Buyer's sole benefit and may be waived by such Buyer
at
any time in its sole discretion by providing the Company with prior written
notice thereof:
(a) The
Company shall have executed and delivered to such Buyer (i) each of the
Transaction Documents and (ii) the Debentures (allocated in such principal
amounts as such Buyer shall request), the related Warrants (allocated in such
amounts as such Buyer shall request) being purchased by such Buyer at the
Closing pursuant to this Agreement.
(b) The
Voting Agreement shall have been executed and delivered to such Buyer by the
Company and each of the Stockholders.
(c) Such
Buyer shall have received the opinion of Xxxxxxxxx Xxxxxxx LLP, the Company's
counsel, dated as of the Closing Date, in substantially the form of Exhibit
F
attached
hereto.
(d) The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer
Agent Instructions, in the form of Exhibit
E
attached
hereto, which instructions shall have been delivered to and acknowledged in
writing by the Company's transfer agent.
(e) The
Company shall have delivered to such Buyer a certificate evidencing the
formation and good standing of the Company issued by the Secretary of State
of
the State of Delaware, as of a date within 10 days of the Closing
Date.
(f) The
Company shall have delivered to such Buyer a certificate evidencing the
Company's qualification as a foreign corporation and good standing issued by
the
Secretary of State of the State of New Jersey as of a date within 10 days of
the
Closing Date.
(g) The
Company shall have delivered to such Buyer a certified copy of the Certificate
of Incorporation as certified by the Secretary of State of the State of Delaware
within 10 days of the Closing Date.
(h) The
Company shall have delivered to such Buyer a certificate, executed by the
Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions as adopted by the Executive Committee of the Company's Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
of
Incorporation and (iii) the Bylaws, each as in effect at the Closing in the
form
attached hereto as Exhibit
G.
(i) The
representations and warranties of the Company shall be true and correct in
all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all 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, which shall be true and correct as of such specific
date)
and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date. Such 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 such Buyer in the form attached hereto as Exhibit
H.
(j) The
Company shall have delivered to such Buyer a letter from the Company's transfer
agent certifying the number of shares of Common Stock outstanding as of a date
within five Business Days of the Closing Date.
(k) The
Common Stock (i) shall be designated for quotation or listed on the Principal
Market and (ii) shall not have been suspended, as of the Closing Date, by the
SEC or the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of the
Closing Date, either (A) in writing by the SEC or the Principal Market or (B)
by
falling below the minimum listing maintenance requirements of the Principal
Market.
(l) The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, required to be obtained on or prior to the Closing Date
with respect to the sale of the Securities.
(m) The
Company shall have received a waiver, in form and substance reasonably
satisfactory to the Buyers, (the "Piggy-Back
Waiver")
from
The Dow Chemical Company ("Dow"),
whereby Dow shall agree to waive any rights it has to have the Common Stock
issuable upon (A) conversion of the Series A2 Preferred Stock and the Series
B
Preferred Stock and (B) exercise of the warrants to purchase Common Stock of
the
Company held by Dow included in any Registration Statement filed pursuant to
the
Registration Rights Agreement.
(n) The
Company shall have delivered to such Buyer such other documents relating to
the
transactions contemplated by this Agreement as such Buyer or its counsel may
reasonably request.
8. TERMINATION.
In the
event that the Closing shall not have occurred with respect to a Buyer on or
before five (5) Business Days from the date hereof due to the Company's or
such
Buyer's failure to satisfy the conditions set forth in Sections 6 and 7 above
(and the nonbreaching party's failure to waive such unsatisfied condition(s)),
the nonbreaching 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 8, the Company shall remain
obligated to reimburse the non-breaching Buyers for the expenses described
in
Section 4(g) above.
9. MISCELLANEOUS.
(a) Governing
Law; Jurisdiction; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(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;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if
the
signature were an original, not a facsimile signature.
(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.
(e) Entire
Agreement; Amendments.
This
Agreement supersedes all other prior oral or written agreements between the
Buyers, 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 amended other than by an instrument in writing signed
by
the Company and the holders of at least a majority of the Registrable
Securities then
outstanding, and any amendment to this Agreement made in conformity with the
provisions of this Section 9(e) shall be binding on all Buyers and holders
of
Securities. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No such
amendment shall be effective to the extent that it applies to less than all
of
the holders of the applicable Securities then outstanding. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents, holders of Debentures or holders of the Warrants, as the case may
be.
The Company has not, directly or indirectly, made any agreements with any Buyers
relating to the terms or conditions of the transactions contemplated by the
Transaction Documents except as set forth in the Transaction
Documents.
(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
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with an overnight courier 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:
Xxx
Xxxxxxxxxx Xxx Xxxx
Xxxxxxxxx,
Xxx Xxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: President
with
a
copy to:
Xxxxxxxxx
Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxx, Esq.
If
to the
Transfer Agent:
American
Stock Transfer & Trust Company
00
Xxxxxx
Xxxx
Xxx
Xxxx,
XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxx Xxxxx
If
to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers,
with copies to such Buyer's representatives as set forth on the Schedule of
Buyers,
with
a
copy (for informational purposes) to:
Xxxxxxx
Xxxx & Xxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx X. Xxxxx, Esq.
or
to
such other address and/or facsimile number and/or to the attention of such
other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by an
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.
(g) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns, including any purchasers of the
Debentures or the Warrants. The Company shall not assign this Agreement or
any
rights or obligations hereunder without the prior written consent of the holders
of at least a majority of the Debentures then outstanding, including by way
of a
Fundamental Transaction (unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Debentures and
the Warrants). A Buyer may assign some or all of its rights hereunder without
the consent of the Company in connection with a transfer by such Buyer of any
of
the Securities, in which event such assignee shall be deemed to be a Buyer
hereunder with respect to such assigned rights; provided
that
such assignment is in compliance with applicable securities laws and the terms
of the Transaction Documents.
(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 8, 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 shall survive the Closing. Each
Buyer
shall be responsible only for its own representations, warranties, agreements
and covenants hereunder.
(j) 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 any 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.
(k) Indemnification.
In
consideration of each Buyer's execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of
the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Buyer and each other holder
of
the Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
Persons' agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees")
from
and against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages (other than lost profits), and expenses
in connection therewith (irrespective of whether any such 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 any Indemnitee as a result of, or arising out of, or relating to
(a)
any breach of any representation or warranty made by the Company in the
Transaction Documents, or (b) any breach of any covenant, agreement or
obligation of the Company contained in the Transaction Documents or (c) any
cause of action, suit or claim brought or made against such Indemnitee by a
third party (including for these purposes a derivative action brought on behalf
of the Company) and arising out of or resulting from (i) the execution, delivery
or performance of the Transaction Documents, (ii) any transaction financed
or to
be financed in whole or in part, directly or indirectly, with the proceeds
of
the issuance of the Securities, or (iii) the status of such Buyer or holder
of
the Securities as an investor in the Company pursuant to the transactions
contemplated by the Transaction Documents; provided that indemnification
pursuant to this Section 9(k) shall not be available to the extent arising
from
such Buyer's bad faith, breach of the Transaction Documents, fraud, gross
negligence or willful misconduct. 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 that is permissible under applicable law. Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 9(k) shall be the same as those set forth in
Section 6 of the Registration Rights Agreement.
(l) 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.
(m) Remedies.
Each
Buyer and each holder of the Securities shall have all rights and remedies
set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract
and
all of the rights which such holders have under any law. Any Person having
any
rights under any provision of this Agreement shall be entitled to enforce such
rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all
of
its obligations under the Transaction Documents, any remedy at law may prove
to
be inadequate relief to the Buyers. The Company therefore agrees that the Buyers
shall be entitled to seek temporary and permanent injunctive relief in any
such
case without the necessity of proving actual damages and without posting a
bond
or other security.
(n) Rescission
and
Withdrawal Right.
Notwithstanding anything to the contrary contained in (and without limiting
any
similar provisions of) the Transaction Documents, whenever any Buyer exercises
a
right, election, demand or option under a Transaction Document and the Company
does not timely perform its related obligations within the periods therein
provided, then such Buyer may rescind or withdraw, in its sole discretion from
time to time upon written notice to the Company, any relevant notice, demand
or
election in whole or in part without prejudice to its future actions and
rights
(o) Payment
Set Aside.
To the
extent that the Company makes a payment or payments to the Buyers hereunder
or
pursuant to any of the other Transaction Documents or the Buyers enforce or
exercise their rights hereunder or thereunder, and such payment or payments
or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other Person under any
law
(including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment
had
not been made or such enforcement or setoff had not occurred.
(p) Independent
Nature of Buyers' Obligations and Rights.
The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under
any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall
be
deemed to constitute the Buyers as, and the Company acknowledges that the Buyers
do not so constitute, a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group, and the Company will not assert any such claim
with respect to such obligations or the transactions contemplated by the
Transaction Documents and the Company acknowledges that the Buyers are not
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. The Company acknowledges
and each Buyer confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Buyer shall be entitled to independently protect
and
enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Transaction Documents, and it shall not
be
necessary for any other Buyer to be joined as an additional party in any
proceeding for such purpose.
[Signature
Page Follows]
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
COMPANY:
|
|
|
By: /s/
Xxxx Xxxxxx
Name:
Xxxx Xxxxxx
Title:
CFO
|
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
BUYERS:
|
|
|
PORTSIDE
GROWTH & OPPORTUNITY FUND
By: /s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Authorized Signatory
|
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
OTHER
BUYERS:
|
|
|
MAINFIELD
ENTERPRISES, INC.
By: /s/
Avi Vigder
Name:
Avi Vigder
Title:
Authorized Signatory
|
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
GEMINI
INVESTMENT STRATEGIES, LLC
By: /s/
Xxxxxx X. Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
President of the Investment Manager
|
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
IROQUOIS
MASTER FUND LTD.
By: /s/
Xxxxxx Xxxxxxxxx
Name:
Xxxxxx Xxxxxxxxx
Title:
Authorized Signatory
|
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
JCB
CAPITAL L.P.
By: /s/
Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
President
|
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
JCB
CAPITAL OFFSHORE, LTD.
By: /s/
Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
President
|
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
SOLOMON
STRATEGIC HOLDINGS, INC.
By: /s/
Xxxxxx X. Xxxxxxxxx
Name:
Xxxxxx
X. Xxxxxxxxx
Title:
Director
|
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written
above.
|
THE
TAIL WIND FUND LTD.
By:
Tail Wind Advisory and Management Ltd., as investment
manager
By: /s/
Xxxxxx Xxx
Name:
Xxxxxx
Xxx
Title:
Portfolio
Manager
|
|
