EXHIBIT B
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SECURITIES PURCHASE AGREEMENT
by and among
OLYMPIC CASCADE FINANCIAL CORPORATION,
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇
Dated as of August 14, 2002
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of August
14, 2002, by and among Olympic Cascade Financial Corporation, a Delaware
corporation, with headquarters located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the "COMPANY"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇, with an address
at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("PURCHASER").
WHEREAS, the Company desires to sell 600 shares (the "SHARES") of the
Company's Series A convertible preferred stock, par value $.01 per share (the
"SERIES A PREFERRED STOCK"), and Purchaser desires to purchase the Series A
Preferred Stock, on the terms and subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the promises and of the respective
representations, warranties, covenants, agreements and conditions contained
herein, each of the parties hereto agrees as follows:
ARTICLE I
PURCHASE AND SALE OF THE SECURITIES
Section 1.1 Purchase and Sale.
(a) At the Closing on the Closing Date (each as defined in Section
1.2) and in accordance with the provisions of this Agreement, Purchaser shall
purchase from the Company, and the Company shall issue and sell to Purchaser,
600 shares of Series A Preferred Stock at a purchase price equal to $100 per
share (the "PER SHARE PRICE"), against receipt by the Company of the total
aggregate consideration set forth in Section 1.2 below.
Section 1.2 Payment of Consideration; Delivery of Shares.
(a) In consideration for the delivery and transfer to Purchaser of the
Shares of Series A Preferred Stock, Purchaser shall pay and deliver to the
Company an amount equal to Sixty Thousand Dollars ($60,000) (the "PURCHASE
PRICE") on the Closing Date (as defined below), in cash by wire transfer of
immediately available funds to a bank account as shall have been designated by
the Company prior to the Closing (as defined below), and the Company shall
deliver to Purchaser a certificate representing 1,500 shares of Series A
Preferred Stock.
(b) Notwithstanding anything to the contrary herein, under no
circumstances shall any Series A Preferred Stock be issued by the Company in
contravention of the Listing Standards, Policies and Requirements of The
American Stock Exchange ("AMEX"), including without limitation Sections 711 and
713 thereof.
Section 1.3 Closing. The closing (the "CLOSING") shall take place at the
offices of ▇▇▇▇▇▇▇ Krooks & ▇▇▇▇ P.C., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ at 10:00 a.m. New York City time on August 14, 2002 (the "CLOSING DATE")
or at such other time and place
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and such other date as Purchaser and the Company mutually agree. All events
occurring at the Closing will, unless otherwise specified, be deemed to have
simultaneously occurred.
ARTICLE II
CLOSING DELIVERIES
Section 2.1 Company Deliveries. At the Closing, the Company shall
deliver to Purchaser:
(a) a stock certificate representing 600 shares of Series A
Preferred Stock registered in the name of Purchaser, bearing
the legend set forth in Section 4.9;
(b) the certificate referred to in Section 7.2(b) of this
Agreement; and
(c) such other documents as Purchaser may reasonably request.
Section 2.2 Purchaser Deliveries. At the Closing, Purchaser shall deliver
to the Company:
(a) the Purchase Price, as provided in Section 1.2(a);
(b) the certificate referred to in Section 7.1(b) of this
Agreement; and
(c) such other documents as the Company may reasonably request.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the schedules herein or in the SEC Documents (as
defined in Section 3.5), the Company represents and warrants to Purchaser as
follows:
Section 3.1 Organization and Qualification. (a) The Company and each of
its subsidiaries (as defined below) is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of its
jurisdiction of existence, has all requisite corporate power and authority to
own, lease and operate its assets and properties to the extent owned, leased and
operated and to carry on its business as it is now being conducted and is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its assets and properties
makes such qualification necessary, other than in such jurisdictions where the
failure to be so qualified and in good standing would not, when taken together
with all other such failures, reasonably be expected to have a material adverse
effect on the business, properties, condition (financial or otherwise),
prospects (other than effects that are the result of general economic changes or
industry-specific risks) or results of operations of the Company and its
subsidiaries taken as a whole (any such material adverse effect being hereafter
referred to as a "COMPANY MATERIAL ADVERSE EFFECT"). As used in this Agreement,
the term "SUBSIDIARY" of a person shall mean any corporation or other entity
(including partnerships and other business associations) of which a majority of
the
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outstanding capital stock or other voting securities having voting power
under ordinary circumstances to elect directors or similar members of the
governing body of such corporation or entity shall at the time be held, directly
or indirectly, by such person.
(b) National Securities Corporation (the "BROKER-DEALER SUBSIDIARY")
is a member in good standing with the National Association of Securities
Dealers, Inc. ("NASD"), and, to the knowledge of the Company, there has not
been, nor is there currently pending or threatened, any inquiry investigation or
disciplinary proceeding undertaken by the NASD concerning the Broker-Dealer
Subsidiary or any of its officers, directors, registered principals, or
registered representatives.
(c) The Broker-Dealer Subsidiary is duly registered with the
Security Investors Protection Corporation ("SIPC") and has paid or has made
adequate provision for the payment of all SIPC assessments as of and through the
date hereof.
Section 3.2 Capitalization. The authorized capital stock of the Company
consists of 60,000,000 shares of common stock, par value $.02, of the Company
(the "COMMON STOCK"), and 100,000 shares of preferred stock, par value $.01 per
share (the "PREFERRED STOCK") of which 30,000 shares have been designated Series
A Preferred Stock. As of the date hereof, there were (i) 2,274,449 issued and
outstanding shares of Common Stock and (ii) 27,225 issued and outstanding shares
of Series A Preferred Stock. In addition, as of the date hereof, (i) 848,868
shares of Common Stock were reserved for issuance pursuant to grants made in
accordance with the Company's stock option plans, (ii) 887,500 shares of Common
Stock were authorized for issuance pursuant to the 2001 Stock Option Plan, and
(iii) 436,350 shares of Common Stock were reserved for issuance pursuant to
securities exercisable for, or convertible into or exchangeable for, shares of
Common Stock. All of the issued and outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and non-assessable.
Except for the Series A Preferred Stock or as set forth in Section 3.3 herein,
there are no outstanding subscriptions, options, calls, contracts, voting
trusts, proxies, rights or warrants, including any right of conversion or
exchange under any outstanding security, instrument or other agreement,
obligating the Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock of the
Company, or obligating the Company to grant, extend or enter into any such
agreement or commitment.
Section 3.3 Authority; Non-Contravention; Statutory Approvals; Compliance.
(a) The execution, delivery and performance of this Agreement and
the transactions contemplated hereby, are within the Company's power and
authority and have been duly authorized by the board of directors of the
Company, and no other corporate act or proceeding on the part of the Company is
necessary to approve the execution and delivery of this Agreement, the
performance of the Company's obligations hereunder or the consummation of the
transactions contemplated hereby. The execution, delivery and performance by the
Company of this Agreement, do not and will not (i) contravene the articles of
incorporation or by-laws of the Company or any of its subsidiaries, (ii)
conflict with, result in a breach of or entitle any party (with due notice or
lapse of time or both) to terminate, accelerate or call a default with respect
to, any agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound, (iii)
result in any material liability to the
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Company (including, without limitation, any "change of control" payments), (iv)
result in any violation by the Company or any of its subsidiaries of any law,
rule or regulation applicable to it or its business as it is now conducted or
(v) result in the creation of any lien. This Agreement constitutes the legal,
valid and binding obligation of the Company enforceable against it in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to the
enforcement of creditors' rights generally and general equitable principles.
(b) The Series A Preferred Stock that are being purchased by
Purchaser hereunder, when issued, sold and delivered in accordance with the
terms of this Agreement for the consideration expressed herein, (i) will be duly
and validly issued, fully paid and non-assessable, (ii) will be free from all
taxes, liens and charges with respect to such issuance and (iii) will be free of
restrictions on transfer other than restrictions on transfer under this
Agreement and under applicable state and federal securities laws.
(c) The shares of Common Stock issuable upon conversion of the
Series A Preferred Stock have been reserved for issuance and, when so issued,
(i) will be duly and validly issued, fully paid and non-assessable, (ii) will be
free from all taxes, liens and charges with respect to such issuance and (iii)
will be free of restrictions on transfer other than restrictions on transfer
under this Agreement and under applicable state and federal securities laws.
(d) No consent, license, permit, approval, order or authorization
of, or filing with (other than informational filings) any governmental or
judicial authority is required to be obtained or made in connection with the
execution, delivery or performance by the Company of this Agreement. No consent
of any party to any agreement, contract, lease, mortgage, indenture or
arrangement to which the Company or any of its subsidiaries is a party is
required for the execution, delivery or performance by the Company of this
Agreement and such instruments and documents executed in connection therewith
which has not been obtained.
(e) No declaration, filing or registration with, or notice to or
authorization, consent or approval of, any federal, state, local or foreign
government, any instrumentality, subdivision, court, administrative agency or
commission or authority thereof, or any quasi-governmental or private body
exercising any regulatory, taxing, importing or other governmental or
quasi-governmental authority or regulatory body (including the NASD, Amex and
any other similar federal, state or foreign self- regulatory body or
organization having jurisdiction over the Company and any of its subsidiaries or
affiliates) or any other authority (each, a "GOVERNMENTAL AUTHORITY") is
necessary for the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby, except for
those required under or in relation to (A) state securities or "blue sky" laws
(the "BLUE SKY LAWS"), (B) the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), (C) the Delaware General Corporation Law with respect to filing
the Certificate of Designation, (D) the rules and regulations of the Amex, and
(E) such consents, approvals, order, authorizations, registrations, declarations
and filings the failure to obtain, make or give which would reasonably be
expected to have, in the aggregate, a Company Material Adverse Effect
(collectively, the "COMPANY REQUIRED STATUTORY APPROVALS"), it being understood
that references in this Agreement to "obtaining" such Company Required Statutory
Approvals shall mean making such declarations, filings or registrations; giving
such notice; obtaining such consents or approvals; and having
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such waiting periods expire as are necessary to avoid a violation of law.
(f) Neither the Company nor any of its subsidiaries is in violation
of or, to the knowledge of the Company, under investigation with respect
thereto, or has been given notice of any purported violation of, any applicable
law, ordinance, regulation, decree or order of any court or governmental entity
to which it or its business or any of its properties or assets is subject,
except for violations which would not reasonably be expected to have, in the
aggregate, a Company Material Adverse Effect.
Section 3.4 Reports and Financial Statements. The Company is a reporting
company under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
Act"), and files annual and periodic reports (the "SEC DOCUMENTS") with the
Securities and Exchange Commission (the "SEC"). With respect to SEC Documents
filed in 2002 only, as of their respective filing dates, the SEC Documents (a)
complied in all material respects with the requirements of the Exchange Act,
applicable to the Company, (b) the financial statements contained therein (i)
were prepared in accordance with generally accepted accounting principles, (ii)
are true and complete and fairly present the Company's consolidated financial
condition and the consolidated results of its operations as of their respective
dates and for the periods then ended, and (iii) contain and reflect all
necessary adjustments and accruals for a fair presentation of the Company's
consolidated financial condition as of their respective dates, and (c) to the
knowledge of the Company, none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except to the extent
corrected by a subsequently filed document with the SEC. With respect to SEC
Documents filed in 2001 only, to the knowledge of the Company, nothing has come
to the attention of the Company to indicate that the SEC Documents were not true
and correct as of their respective filing dates.
Section 3.5 Litigation. Except as set forth in the SEC Documents, there
are no claims, suits, actions or proceedings pending or, to the knowledge of the
Company, threatened against, relating to or affecting the Company or any of its
subsidiaries, before any court, governmental department, commission, agency,
instrumentality or authority, or any arbitrator that would reasonably be
expected, either alone or in the aggregate with all such claims, actions or
proceedings, to have a Company Material Adverse. Except as referred to in the
Company's SEC Documents, neither the Company nor any of its subsidiaries is
subject to any judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or authority, or
any arbitrator which prohibits or restricts the consummation of the transactions
contemplated hereby or would have a Company Material Adverse Effect.
Section 3.6 Board Approval. The Company's board of directors (the "BOARD
OF Directors"), by resolutions duly adopted by unanimous vote of those voting at
a meeting duly called and held and not subsequently rescinded or modified in any
way (the "COMPANY BOARD APPROVAL"), has duly (i) determined that this Agreement
and the transactions contemplated hereby are fair to and in the best interests
of the Company and its stockholders and declared the transactions contemplated
hereby to be advisable, and (ii) approved this Agreement and the transactions
contemplated hereby.
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Section 3.7 No Brokers. The Company has taken no action which would give
rise to any claim by any person for brokerage commissions, finder's fees or
similar payments relating to this Agreement or the transactions contemplated
hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company as follows:
Section 4.1 Capacity. Purchaser has the capacity to enter into this
Agreement and has the full right, power and authority to execute and deliver
this Agreement and to consummate the Transactions.
Section 4.2 Authority; Non-contravention and Statutory Approvals.
(a) The execution, delivery and performance of this Agreement and
the transactions contemplated hereby, are within Purchaser's power and authority
and have been duly authorized by Purchaser. The execution, delivery and
performance by Purchaser of this Agreement, do not and will not conflict with,
result in a breach of or entitle any party (with due notice or lapse of time or
both) to terminate, accelerate or call a default with respect to, any agreement
or instrument to which Purchaser is a party or by which Purchaser is bound. This
Agreement constitutes the legal, valid and binding obligation of Purchaser
enforceable against it in accordance with its terms.
(b) No consent, license, permit, approval, order or authorization
of, or filing with (other than informational filings) any governmental or
judicial authority is required to be obtained or made in connection with the
execution, delivery or performance by Purchaser of this Agreement. No consent of
any party to any agreement, contract, lease, mortgage, indenture or arrangement
to which Purchaser is a party or by which Purchaser is bound is required for the
execution, delivery or performance by Purchaser of this Agreement and such
instruments and documents executed in connection therewith which has not been
obtained.
(c) Other than as may be required by the New York Stock Exchange,
Chicago Stock Exchange, NASD, SEC or Amex, no declaration, filing or
registration with, or notice to or authorization, consent or approval of, any
Governmental Authority is necessary for the execution and delivery of this
Agreement by Purchaser or the consummation by Purchaser of the transactions
contemplated hereby.
(d) Purchaser is not in violation of any applicable law, ordinance,
regulation, decree or order of any court or governmental entity to which it or
any of its properties or assets is subject, except for violations which either
singly or in the aggregate would not, when taken together with all other such
failures, reasonably be expected to have a material adverse effect (any such
material adverse effect being hereafter referred to as a "PURCHASER MATERIAL
ADVERSE EFFECT").
Section 4.3 Investment Purpose. As of the date hereof, Purchaser is
purchasing the Series A Preferred Stock for its own account and not with a
present view towards the public sale
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or distribution thereof, except pursuant to sales registered or exempted from
registration under the Securities Act or permitted assignments hereunder.
Section 4.4 Accredited Investor Status. Purchaser is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D ("REGULATION
D") as promulgated by the SEC under the Securities Act (an "ACCREDITED
INVESTOR").
Section 4.5 Information. Purchaser and its respective 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
Series A Preferred Stock which have been requested by the Purchaser or its
advisors. Purchaser and its respective advisor, if any, have been afforded the
opportunity to ask questions of the Company. Neither such inquiries nor any
other due diligence investigation conducted by Purchaser or its advisors or
representatives shall modify, amend or affect Purchaser's right to rely on the
Company's representations and warranties contained in Article III. Purchaser
understands that its investment in the Series A Preferred Stock involves a
significant degree of risk.
Section 4.6 No Brokers. Purchaser has taken no action which would give
rise to any claim by any person for brokerage commissions, finder's fees or
similar payments relating to this Agreement or the transactions contemplated
hereby.
Section 4.7 Ability to Bear the Risk. Purchaser's financial situation is
such that Purchaser can afford to bear the economic risk of holding the Series A
Preferred Stock for an indefinite period. Purchaser can afford to suffer the
complete loss of his investment in the Series A Preferred Stock and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Series A Preferred
Stock.
Section 4.8 Restricted Securities. Purchaser understands that the Series A
Preferred Stock it is purchasing are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that, under such
laws and applicable regulations, such securities may be resold without
registration under the Securities Act, only in certain limited circumstances. In
connection with the representation in this Section 4.8, Purchaser represents
that it is familiar with Rule 144 of the Securities Act, as presently in effect,
and understands the resale limitations imposed thereby and by the Securities
Act.
Section 4.9 Legends. Purchaser acknowledges that the Series A Preferred
Stock shall bear legends substantially similar to the following:
"THIS STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS BY REASON
OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH
STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED, ASSIGNED OR
OTHERWISE DISPOSED OF IN ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS, IN THE OPINION OF COUNSEL TO THE COMPANY, AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE."
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Section 4.10 No Need For Liquidity. Purchaser has adequate means of
providing for Purchaser's current financial needs and foreseeable contingencies
and has no need for liquidity of the investment in the Series A Preferred Stock
for an indefinite period of time.
Section 4.11 General Solicitation. Purchaser is not purchasing the
Securities as a result of or subsequent to any advertisement, article, notice or
other communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.
ARTICLE V
REGISTRATION RIGHTS
Section 5.1 Intentionally Omitted.
Section 5.2 Incidental Registration. (a) Whenever the Company proposes to
file a registration statement, at any time and, from time to time (a
"REGISTRATION"), it will, prior to such filing, give written notice to Purchaser
of its intention to do so and, upon the written request of Purchaser, given
within fifteen (15) days after the Company provides such notice (which request
shall state the intended method of distribution of such shares), the Company
shall use its best efforts to cause all such shares which the Company has been
requested to include by Purchaser, to be included in the Registration; provided,
that the Company shall have the right to postpone or withdraw any Registration
effected pursuant to this Section 5.2 without obligation to Purchaser.
(b) In connection with any offering under this Section 5.2 involving
an underwritten offering, if, in the opinion of the underwriters, inclusion of
all, or part of, the shares which Purchaser has requested to be included would
materially or adversely affect such public offering, then the Company may reduce
the number of such shares to zero, in the case of a Registration on Form S-1,
and to 33 1/3% of the shares of Common Stock (calculated on an as-converted
basis) issued, in the case of all subsequent underwritten offerings. In
addition, the Company shall not be required to include any such shares in such
underwritten offering unless Purchaser thereof accept the terms of the offering
as agreed upon between the Company and the underwriters selected by it, and
execute and deliver an underwriting agreement, and then only in such quantity as
will not, in the opinion of the underwriters, jeopardize the success of the
offering by the Company, as described above. If the number of such shares to be
included in the underwritten offering in accordance with the foregoing is less
than the total number of shares which Purchaser has requested to be included,
then Purchaser and other holders of the Common Stock entitled to include shares
of Common Stock in such registration (together with Purchaser, the "SELLING
SHAREHOLDERS") shall participate in the underwritten offering pro rata based
upon their total ownership of shares of Common Stock of the Company (calculated
on an as-converted basis). If Purchaser would thus be entitled to include more
shares than Purchaser requested to be registered, the excess shall be allocated
among the Selling Shareholders pro rata based upon their total ownership of
shares of Common Stock of the Company (calculated on an as-converted basis).
Section 5.3 Registration Procedures. (a) If and whenever the Company is
required by the provisions of this Agreement to effect the registration of any
of the shares of Common Stock
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issuable upon conversion of the Series A Preferred Stock (the "REGISTRABLE
SHARES") under the Securities Act, the Company shall:
(i) file with the SEC a registration statement with respect to
such Registrable Shares and use its best efforts to cause that registration
statement to become and remain effective;
(ii) as expeditiously as possible, prepare and file with the
SEC any amendments and supplements to the registration statement and the
prospectus included in the registration statement as may be necessary to keep
the registration statement effective until such Registrable Shares are sold;
(iii) as expeditiously as possible, furnish to Purchaser such
reasonable number of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as Purchaser may reasonably request in order to facilitate the
public sale or other disposition of the Shares; and
(iv) as expeditiously as possible, use its best efforts to
register or qualify the Registrable Shares covered by the registration statement
under the securities or Blue Sky laws of such states as Purchaser shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable Purchaser to consummate the public sale or
other disposition in such states of the Registrable Shares; provided, however,
that the Company shall not be required in connection with this clause (iv) to
qualify as a foreign corporation or execute a general consent to service of
process in any jurisdiction.
(b) If the Company has delivered preliminary or final prospectuses
to Purchaser, and after having done so the prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly notify
Purchaser and, if requested, Purchaser shall immediately cease making offers of
the Registrable Shares and return all prospectuses to the Company. The Company
shall promptly provide Purchaser with revised prospectuses and, following
receipt of the revised prospectuses, Purchaser shall be free to resume making
offers of the Registrable Shares.
Section 5.4 Allocation of Expenses. (a) The Company will pay all
registration expenses of all registrations under this Agreement. Purchaser will
pay all underwriting discounts on the Registrable Shares, selling commissions on
the Registrable Shares and the fees and expenses of the Selling Shareholder's
own counsel (other than the counsel selected to represent Purchaser as
contemplated by Section 5.4 (b) below). All other expenses of registered
offerings shall be borne pro rata among Purchaser, if it participates, the
Company.
(b) Registration expenses shall include all expenses incurred by the
Company in complying with this Article V, including, without limitation, all
registration and filing fees, exchange listing fees, printing expenses, fees and
disbursements of counsel for the Company and the fees and expenses of counsel of
Purchaser, state Blue Sky fees and expenses, and the expense of accountants and
any special audits incident to or required by any such registration.
Section 5.5 Indemnification. (a) In the event of any registration of any
of the Registrable Shares under the Securities Act pursuant to this Agreement,
the Company will indemnify and hold harmless Purchaser, each underwriter of such
Registrable Shares, and each other person, if any, who controls Purchaser or
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky Laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the registration
statement, or any amendment or supplement to such registration statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse such seller, underwriter
and each such controlling person for any legal or any other expenses reasonably
incurred by Purchaser, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such registration statement,
preliminary prospectus or prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such Purchaser, underwriter or controlling person
specifically for use in the preparation thereof.
(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, Purchaser will
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indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Company, such directors and officers, underwriter or controlling
person may become subject under the Securities Act, Exchange Act, state
securities or Blue Sky Laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the registration statement, or any amendment or
supplement to the registration statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statement therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of Purchaser,
specifically for use in connection with the preparation of such registration
statement, prospectus, amendment or supplement; provided, that Purchaser's
liability hereunder with respect to any registration shall be limited to an
amount equal to the net proceeds received by such seller from the Registrable
Shares sold by Purchaser pursuant to such Registration Statement.
Section 5.6 Contribution. If the indemnification provided for in this
Article V is unavailable to the indemnified parties in respect of any losses,
claims, damages, liabilities or judgments referred to herein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
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result of such losses, claims, damages, liabilities and judgments in such
proportion as to reflect the relative fault of the Company on the one hand and
Purchaser on the other in connection with the statements, omissions or acts
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of Purchaser on the other shall be determined by
reference to, among other things, the acts of the Company and of Purchaser that
gave rise to the losses, claims, damages, liabilities or judgments referred to
herein, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the party's relative intent, knowledge, access to
information and opportunity to correct; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of subsection 11 (f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation).
Section 5.7 Indemnification with Respect to Underwritten Offering. In the
event that the Registrable Shares are sold pursuant to a registration statement
in an underwritten offering pursuant to Section 5.1 or Section 5.2 of this
Agreement, the Company agrees to enter into an underwriting agreement containing
customary representations and warranties with respect to the business and
operations of the Company and customary covenants and agreements to be performed
by the Company, including without limitation customary provisions with respect
to indemnification by the Company of the underwriters of such offering.
Section 5.8 Information by Purchaser. Purchaser shall furnish to the
Company such information regarding Purchaser and the distribution proposed by
Purchaser as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Article V.
Section 5.9 "Stand-Off" Agreement. Purchaser, if requested by the Company
and an underwriter of Common Stock or other securities of the Company in
connection with an offering of the Company's Common Stock, shall agree not to
sell or otherwise transfer or dispose of any the Registrable Shares or other
securities of the Company held by Purchaser for such period not to exceed 180
days following the effective date of a registration statement covering shares of
the Company's common stock; provided, that all investors in capital stock of the
Company holding not less than the number of shares of Common Stock held by
Purchaser, and all officers and directors of the Company, enter into similar
agreements. Such agreement shall be in writing in a form satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions
with respect to the Registrable Shares or other securities until the end of the
stand-off period, subject to the foregoing restriction.
ARTICLE VI
COVENANTS
Section 6.1 Best Efforts. The parties shall use their reasonable best
efforts to satisfy in a timely fashion each of the conditions described in
Article VII.
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Section 6.2 Ordinary Course of Business. From the date hereof until the
Closing, except as otherwise required or expressly permitted pursuant to this
Agreement, the Company shall, and shall cause its subsidiaries to, carry on
their respective businesses in the ordinary course and in substantially the same
manner as heretofore conducted.
Section 6.3 Non-Interference. None of the parties shall cause to occur any
act, event or condition which would cause any of their respective
representations and warranties made in this Agreement to be or become untrue or
incorrect in any material respect as of the Closing Date, or would interfere
with, frustrate or render unreasonably expensive the satisfaction by the other
party or parties of any of the conditions precedent set forth in Article VII.
Section 6.4 Intentionally Omitted.
Section 6.5 Regulatory Approvals. The parties shall use their best efforts
to obtain all necessary statutory approvals and consents, and other approvals
and consents of any regulatory body or Governmental Authority.
Section 6.6 Access to Information. From the date hereof to the Closing
Date, Purchaser and his representatives shall be entitled, upon reasonable
notice, to make such investigation of the properties, businesses and operations
of the Company and such examination of the books, records and financial
condition of the Company as they reasonably request and to make extracts and
copies of such books and records, and the Company shall cooperate fully
therewith.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 Conditions Precedent to Obligation of the Company to Effect
the Closing.
The obligation of the Company to consummate the Closing is subject to the
satisfaction of the following conditions on or prior to the Closing Date (unless
expressly waived in writing by the Company on or prior to the Closing Date):
(a) Compliance by Purchaser. All of the terms, covenants and
conditions of this Agreement to be complied with and performed by Purchaser on
or prior to the Closing Date shall have been complied with and performed by it
in all material respects, and the representations and warranties made by
Purchaser in this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date,
except that any such representations and warranties that are given as of a
particular date or period and relate solely to a particular date or period shall
be true and correct as of such date or period.
(b) Compliance Certificate. The Purchaser shall deliver to the
Company a certificate, dated the Closing Date certifying that the conditions
specified in Section 7.2(a) have been satisfied.
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(c) No Purchaser Material Adverse Effect. No Purchaser Material
Adverse Effect shall have occurred and there shall exist no fact or circumstance
that would have, or would be reasonably likely to have, a Purchaser Material
Adverse Effect.
Section 7.2 Conditions to the Obligation of Purchaser to Effect the
Closing. The obligation of Purchaser to consummate the Closing is additionally
subject to the satisfaction of the following conditions on or prior to the
Closing Date (unless expressly waived in writing by Purchaser on or prior to the
Closing Date):
(a) Compliance by the Company. All of the terms, covenants and
conditions of this Agreement to be complied with and performed by the Company on
or prior to the Closing Date shall have been complied with and performed by it
in all material respects, and the representations and warranties made by the
Company in this Agreement shall be true and correct in all material respects on
and as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date,
except that any such representations and warranties that are given as of a
particular date or period and relate solely to a particular date or period shall
be true and correct as of such date or period.
(b) Compliance Certificate. The Company shall deliver to Purchaser a
certificate, dated the Closing Date and signed by an executive officer of the
Company, certifying that the conditions specified in Section 7.2(a) have been
satisfied.
(c) No Company Material Adverse Effect. No Company Material Adverse
Effect shall have occurred and there shall exist no fact or circumstance that
would have, or would be reasonably likely to have, a Company Material Adverse
Effect.
(d) Material Adverse Change. There shall have been no Company
Material Adverse Effect or a material adverse change in the capital markets
generally.
ARTICLE VIII
TERMINATION
Section 8.1 General. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by the mutual written consent of Purchaser and the Company; or
(b) by either Purchaser or the Company, at any time on or after
August 16, 2002, if the transactions contemplated hereby shall not have been
consummated prior thereto; provided, that, the party seeking to effect such
termination of this Agreement shall not then be in breach or default of any
material representation, warranty, covenant, agreement or obligation imposed
upon such party by this Agreement; or
(c) by either Purchaser on the one hand, and the Company on the
other hand, if there has been a material misrepresentation, breach of warranty
or breach of covenant by the other party with respect to any representations,
warranties and covenants set forth in this Agreement; or
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Section 8.2 Effect of Termination. In the event of termination of this
Agreement pursuant to this Article VIII, prompt written notice shall be given by
the terminating party to the other parties hereto, and, unless the party seeking
to terminate this Agreement shall have no right to do so, no party to this
Agreement shall have any further liability to any other parties hereto.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification by the Company. The Company shall indemnify
and hold harmless the Purchaser from and against, and shall reimburse the
Purchaser for, any Damages which may be sustained, suffered or incurred by it,
whether as a result of any claim or of the commencement of any action or
proceeding (a "CLAIM") by any person who is not a party to this Agreement or an
affiliate of a party to this Agreement (a "THIRD PARTY CLAIM") or otherwise, and
which arise from or in connection with or are attributable to the breach of any
of the covenants, representations, warranties, agreements, obligations or
undertakings of the Company contained in this Agreement or in any schedule,
exhibit, certificate or agreement referred to therein or otherwise furnished in
connection therewith. This indemnity shall survive the Closing for a period of
one year after the Closing Date. Any Claim for indemnity asserted within the
relevant period shall survive until resolved. As used herein, "DAMAGES" means
the dollar amount of any loss, damage, expense or liability, including, without
limitation, reasonable attorneys' fees and disbursements incurred by an
Indemnified Party in any action or proceeding between the Indemnified Party and
the Indemnifying Party or between the Indemnified Party and a third party, which
is determined (as provided in Article IX) to have been sustained, suffered or
incurred by a Party and to have arisen from an event or state of facts which is
subject to indemnification under this Agreement or the amount agreed to upon
settlement in accordance with the terms of this Agreement, if a Third Party
Claim, or by the Parties, if a direct claim. For purposes hereunder the amount
of Damages deemed to be sustained by Purchaser shall be the amount equal to the
costs incurred by the Company with respect to any such action or proceeding in
excess of the insurance coverage therefor multiplied by Purchaser's "Ownership
Percentage." As used herein, the "PURCHASER'S OWNERSHIP PERCENTAGE" means the
percentage, expressed as a decimal fraction, of the outstanding Company Common
Stock owned by Purchaser and its Affiliates, on an as-converted basis, at the
time it asserts the Claim.
Section 9.2 Indemnification by the Purchaser. Purchaser shall indemnify
and hold harmless the Company from and against, and shall reimburse the Company
for, any Damages which may be sustained, suffered or incurred by the Company,
whether as a result of Third Party Claim or otherwise, and which arise or result
from or in connection with or are attributable to the breach of any of the
Purchaser's covenants, representations, warranties contained in this Agreement.
This indemnity shall survive the Closing for a period of one year after the
Closing Date.
Section 9.3 Notice, etc. A party required to make an indemnification
payment pursuant to this Agreement ("Indemnifying Party") shall have no
liability with respect to Third Party Claims or otherwise with respect to any
covenant, representation, warranty, agreement, undertaking or obligation under
this Agreement, unless the party entitled to receive such indemnification
payment ("Indemnified Party") gives notice to the Indemnifying Party in
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accordance with terms hereof, as soon as practical following the time at which
the Indemnified Party discovered such Claim (except to the extent the
Indemnifying Party is not prejudiced by any delay in the delivery of such
notice) and in any event prior to the applicable date specified in Section 9.1
or 9.2, specifying (i) the covenant, representation or warranty, agreement,
undertaking or obligation contained herein which it asserts has been breached,
(ii) in reasonable detail, the nature and dollar amount of any Claim the
Indemnified Party may have against the Indemnifying Party by reason thereof
under this Agreement, and (iii) whether or not the Claim is a Third Party Claim.
All Claims by any Indemnified Party under this Article IX shall be asserted and
resolved as follows:
(a) Third-Party Claims.
(i) In the event that an Indemnified Party becomes aware of a Third
Party Claim for which an Indemnifying Party would be liable to an Indemnified
Party hereunder, the Indemnified Party shall with reasonable promptness notify
in writing the Indemnifying Party of such Claim, identifying the basis for such
Claim or demand, and the amount or the estimated amount thereof to the extent
then determinable (which estimate shall not be conclusive of the final amount of
such Claim and demand; the "Claim Notice"); provided, however, that any failure
to give such Claim Notice will not be deemed a waiver of any rights of the
Indemnified Party except to the extent the rights of the Indemnifying Party are
actually prejudiced by such failure. The Indemnifying Party will notify the
Indemnified Party as soon as practicable whether the Indemnifying Party desires,
at its sole cost and expense, to defend the Indemnified Party against such Third
Party Claim. If the Indemnifying Party notifies the Indemnified Party that the
Indemnifying Party desires to defend the Indemnified Party with respect to the
Third Party Claim pursuant to this Section 9.3(a), the Indemnifying Party shall
retain counsel (who shall be reasonably acceptable to the Indemnified Party) to
represent the Indemnified Party and the Indemnifying Party shall pay the
reasonable fees and disbursements of such counsel with regard thereto; provided,
however, that any Indemnified Party is hereby authorized, prior to the date on
which it receives written notice from the Indemnifying Party designating such
counsel, to retain counsel, whose fees and expenses shall be at the expense of
the Indemnifying Party, to file any motion, answer or other pleading and take
such other action which it reasonably shall deem necessary to protect its
interests or those of the Indemnifying Party. After the Indemnifying Party shall
retain such counsel, the Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (x) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (y) the
named parties of any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate because a conflict or
potential conflict exists between the Indemnifying Party and the Indemnified
Party which makes representation of both Parties inappropriate under applicable
standards of professional conduct. The Indemnifying Party shall not, in
connection with any proceedings or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one such firm for the
Indemnified Party (except to the extent the Indemnified Party retained counsel
to protect its (or the Indemnifying Party's) rights prior to the selection of
counsel by the Indemnifying Party). If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with the Indemnifying Party and its
counsel in contesting any claim or demand which the Indemnifying Party defends
or, if appropriate and related to the Third Party Claim in question, in making
any
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counterclaim against the Person asserting the Third Party Claim or any
cross-complaint against any Person (other than the Indemnified Party or any of
its Affiliates). A Claim or demand may not be settled by either party without
the prior written consent of the other party (which consent will not be
unreasonably withheld or delayed) unless, as part of such settlement, the
Indemnified Party shall receive a full and unconditional release reasonably
satisfactory to the Indemnifying Party. Notwithstanding the foregoing, the
Indemnifying Party shall not settle any claim without the prior written consent
of the Indemnified Party if such Claim is not exclusively for monetary Damages.
(ii) If the Indemnifying Party fails to notify the Indemnified Party
that the Indemnifying Party desires to defend the Third Party Claim pursuant to
the preceding paragraph then the Indemnified Party will have the right to
defend, at the sole cost and expense of the Indemnifying Party, the Third Party
Claim by all appropriate proceedings, which proceedings will be vigorously and
diligently prosecuted by the Indemnified Party to a final conclusion or will be
settled at the discretion of the Indemnified Party (with the consent of the
Indemnifying Party, which consent will not be unreasonably withheld). The
Indemnified Party will have full control of such defense and proceedings,
including (except as provided in the immediately preceding sentence) any
settlement thereof; provided, however, that if requested by the Indemnified
Party, the Indemnifying Party will, at the sole cost and expense of the
Indemnifying Party, cooperate with the Indemnified Party and its counsel in
contesting any Third Party Claim which the Indemnified Party is contesting, or,
if appropriate and related to the Third Party Claim in question, in making any
counterclaim against the Person asserting the Third Party Claim, or any
cross-complaint against any Person (other than the Indemnifying Party or any of
its Affiliates). Notwithstanding the foregoing provisions of this paragraph, if
the Indemnifying Party has notified the Indemnified Party that the Indemnifying
Party disputes its liability hereunder to the Indemnified Party with respect to
such Third Party Claim and if such dispute is resolved in favor of the
Indemnifying Party the Indemnifying Party will not be required to bear the costs
and expenses of the Indemnified Party's defense pursuant to this paragraph or of
the Indemnifying Party's participation therein at the Indemnified Party's
request, and the Indemnified Party will reimburse the Indemnifying Party in
connection with such litigation. The Indemnifying Party may retain separate
counsel to represent it in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant to this paragraph, and the
Indemnifying Party will bear its own costs and expenses with respect to such
participation.
(b) Direct Claims. In the event any Indemnified Party shall have a direct
claim against any Indemnifying Party hereunder, the Indemnified Party shall send
a Claim Notice with respect to such Claim to the Indemnifying Party.
(c) Books and Records. After delivery of a Claim Notice, so long as any
right to indemnification exists pursuant to this Article IX, the affected
parties each agree to retain all books and records related to such Claim Notice.
In each instance, the Indemnified Party shall have the right to be kept fully
informed by the Indemnifying Party and its legal counsel with respect to any
legal proceedings.
Section 9.4 Payment/Offset. Any payment of the indemnity obligations of
the Company set forth in Section 9.1 may be made, at the option of Purchaser, by
the Company issuing shares of the Company's Common Stock, which shares, for such
purpose, shall be valued
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at the Market Price (as defined below) of the Common Stock on the date such
liability is finally determined, provided that, if the Common Stock is then
listed on an exchange and the exchange requires that such value be determined as
the greater of the Market Price or the per share book value, the value shall be
determined as such greater amount. Such shares shall be delivered promptly after
such liability is finally determined. As used herein, "MARKET PRICE" means, with
respect to a particular date, the average closing price of the Company's Common
Stock for the five (5) trading days ending on the trading day before such date,
as reported by The Wall Street Journal, but in no event less than $1.50 per
share.
Section 9.5 Limitations.
(a) Other than for Claims under Sections 3.7 and 4.6 (as to which
the below-referenced "basket" shall not apply), no Party shall be required to
indemnify another Party under this Article IX for Claims for breaches of
representations or warranties unless the aggregate of all amounts for which
indemnity would otherwise be due against it exceeds the sum of $25,000, in which
case the amount for which indemnity shall be due shall be equal to the excess
over that amount.
(b) The maximum aggregate liability of the Company for all Claims
pursuant to this Article IX shall be $60,000.
Section 9.6 Representations and Warranties. For purposes of indemnity
under this Article IX for breach of a representation or warranty of a party, the
representations and warranties shall be the representations and warranties of a
party made herein as of the date hereof, and shall be deemed to be made again as
of the Closing Date without regard to supplementation, modification or
amendment, and in each instance without regard to any materiality qualifications
or standards otherwise contained therein.
ARTICLE X
GOVERNING LAW; MISCELLANEOUS
Section 10.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in the State of New York (without regard to
principles of conflict of laws). All of the parties irrevocably consent to the
jurisdiction of the United States Federal courts and the state courts located in
New York with respect to any suit or proceeding based on or arising under this
Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby, and irrevocably agree that all
claims in respect of such suit or proceeding may be determined in such courts.
All of the parties irrevocably waive the defense of an inconvenient forum to the
maintenance of such suit or proceeding. All of the parties further agree that
service of process upon a party mailed by first class mail shall be deemed in
every respect effective service of process upon the party in any such suit or
proceeding. Nothing herein shall affect any party's right to serve process in
any other manner permitted by law. All of the parties agree that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
Section 10.2 Counterparts; Signatures by Facsimile. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement and
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shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to another party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.
Section 10.3 Headings. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
Section 10.4 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 or the validity or enforceability of this Agreement
in any other jurisdiction.
Section 10.5 Entire Agreement; Amendments. This Agreement, the schedules
and exhibits hereto 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 Purchaser make any representation, warranty, covenant or undertaking
with respect to such matters. No provision of this Agreement may be waived or
amended other than by an instrument in writing signed by the party to be charged
with enforcement. In no event may the terms of this Agreement be terminated or
amended by the Company except with the unanimous written consent of all of the
independent directors of the Board of Directors of the Company.
Section 10.6 Notices. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and shall be effective
five days after being placed in the mail, if mailed by regular United States
mail, or upon receipt, if delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile, in each case addressed
to a party. The addresses for such communications shall be:
If to the Company:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇ P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇ Traurig, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. Annex, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each party shall provide notice to the other parties of any change
in address.
Section 10.7 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor Purchaser shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other parties.
Notwithstanding the foregoing, Purchaser may assign his rights hereunder to (i)
any of its "affiliates," as that term is defined under the Exchange Act and (ii)
any person that purchases Series A Preferred Stock in a private transaction from
Purchaser, without the consent of the Company.
Section 10.8 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.
Section 10.9 Publicity. The Company and Purchaser shall have the right to
review a reasonable period of time before issuance of any press releases,
filings with the SEC, the Amex or any stock exchange or interdealer quotation
system, 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 Purchaser, to make any press release or public
filings with respect to such transactions as is required by applicable law and
regulations (although Purchaser shall be consulted by the Company in connection
with any such press release prior to its release and shall be provided with a
copy thereof and be given an opportunity to comment thereon).
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Section 10.10 Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
Section 10.11 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.
[The remainder of this page has been intentionally left blank]
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IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused
this Agreement to be duly executed as of the date first above written.
OLYMPIC CASCADE FINANCIAL CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
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