EXHIBIT 4.3
EXHIBIT A
FORM OF EQUITY PURCHASE AGREEMENT
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITY HAS BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND REGISTRATION IS
THEREFORE NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. ANY
TRANSFEREE OF THIS EQUITY PURCHASE AGREEMENT SHOULD CAREFULLY REVIEW THE TERMS
OF THIS EQUITY PURCHASE AGREEMENT, INCLUDING SECTION 2(E)(VI) HEREOF. THE
AVAILABLE AMOUNT UNDER THIS EQUITY PURCHASE AGREEMENT MAY BE LESS THAN THE
AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 2(E)(VI) OF THIS EQUITY
PURCHASE AGREEMENT.
EQUITY PURCHASE AGREEMENT
XXXX.XXX, INC. EQUITY PURCHASE AGREEMENT NO. __
[ISSUANCE DATE] AVAILABLE AMOUNT $6,000,000
XXXX.XXX, INC., a Georgia corporation (the "COMPANY"), hereby grants to
FUSION CAPITAL FUND II, LLC or its permitted assigns ("HOLDER") purchase rights
with respect to the aggregate Available Amount (as defined below) of Six Million
Dollars ($6,000,000) in accordance with the terms hereof.
1. PAYMENTS. The Holder agrees to make payments to the Company as
described in Section 2(b) hereof. All payments made under this Equity Purchase
Agreement shall be made in lawful money of the United States of America by check
or wire transfer of immediately available funds to such account as the Company
may from time to time designate by written notice in accordance with the
provisions of this Equity Purchase Agreement. Whenever any amount expressed to
be due by the terms of this Equity Purchase Agreement is due on any day which is
not a Trading Day (as defined below), the same shall instead be due on the next
succeeding day which is a Trading Day. For purposes of this Equity Purchase
Agreement, "TRADING DAY" shall mean any day on which the Principal Market (as
defined below) is open for customary trading. Capitalized terms used herein, and
not otherwise defined herein, shall have the meaning ascribed thereto in the
Master Facility Agreement, dated ________, 2000, pursuant to which this Equity
Purchase Agreement was originally entered into (as amended, restated,
supplemented or otherwise modified from time to time, the "MASTER FACILITY
AGREEMENT"). This Equity Purchase Agreement is entered into by the Company and
the Holder on the date hereof (the "ISSUANCE DATE") pursuant to the Master
Facility Agreement.
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2. PURCHASE OF AVAILABLE AMOUNT. The Holder shall purchase shares of
the Company's common stock, par value $___ per share (the "COMMON STOCK"), on
the terms and conditions set forth in this Section up to the Available Amount.
(a) CERTAIN DEFINED TERMS. For purposes of this
Equity Purchase Agreement, the following terms shall have the
following meanings:
(i) "AVAILABLE AMOUNT" means initially $6,000,000 in
the aggregate which amount shall be reduced by the Purchase
Amount as the Holder purchases shares of Common Stock pursuant
to Section 2 hereof.
(ii) "CLOSING BID PRICE" means, for any security as
of any date, the last closing bid price for such security on
the Principal Market as reported by Bloomberg Financial
Markets ("BLOOMBERG"), or, if the Principal Market is not the
principal securities exchange or trading market for such
security, the last closing bid price of such security on the
principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg.
(iii) "CLOSING SALE PRICE" means, for any security as
of any date, the last closing trade price for such security on
the Principal Market as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or
trading market for such security, the last closing trade price
of such security on the principal securities exchange or
trading market where such security is listed or traded as
reported by Bloomberg.
(iv) "FIXED PURCHASE PRICE" means $16.50
appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other
similar transaction.
(v) "MANDATORY PURCHASE RIGHTS" means the mandatory
purchase rights of the Company pursuant to Section 2(d)(iii).
(vi) "MATURITY DATE" means _____________, [INSERT
DATE THAT IS SIX MONTHS FROM THE CLOSING DATE]WHICH SUCH DATE
MAY BE EXTENDED BY UP TO AN ADDITIONAL SIX MONTHS BY THE
COMPANY, IN ITS SOLE DISCRETION, BY WRITTEN NOTICE TO THE
HOLDER.
(vii) "MONTHLY BASE AMOUNT" means One Million Dollars
($1,000,000) per Monthly Period.
(viii) "MONTHLY PURCHASE AMOUNT" means a portion of
the Available Amount equal to the Monthly Base Amount for such
Monthly Period plus the Monthly Base Amount for any prior
Monthly Periods which has not been previously used to purchase
Common Stock pursuant to Section 2 hereof; PROVIDED, HOWEVER,
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that to the extent that the Company exercises its Mandatory
Purchase Rights, the Monthly Purchase Amount for any remaining
Monthly Periods shall be reduced by any amount subject to the
Mandatory Purchase Rights in reverse chronological order
(I.E., the Monthly Purchase Amount for the last remaining
Monthly Period shall be reduced first); PROVIDED FURTHER, on
or after the _____________, [INSERT DATE THAT IS SIX MONTHS
FROM THE CLOSING DATE], the Monthly Purchase Amount shall
thereafter be the entire remaining Available Amount.
(ix) "MONTHLY PERIOD" means each of the following
periods of time:
Issuance Date to __________;
___________ to __________;
___________ to __________;
___________ to __________;
___________ to __________;
and ___________ to __________;
[SIX PERIODS EACH HAVING APPROXIMATELY 30 CALENDAR DAYS.
SPECIFIC DATES TO BE ENTERED AT CLOSING.]
(x) "PERSON" means an individual or entity including
any 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.
(xi) "PRINCIPAL MARKET" means The Nasdaq National
Market.
(xii) "PURCHASE AMOUNT" means the portion of the
Available Amount submitted in a Purchase Notice to be used to
purchase Common Stock pursuant to Section 2 hereof.
(xiii) "PURCHASE DATE" means the actual date that the
Holder submits a Purchase Notice to the Company to purchase
Common Stock hereunder so long as the Holder shall transmit by
facsimile (or otherwise deliver) to the Company on or prior to
11:59 p.m., Central Time on such date.
(xiv) "PURCHASE PRICE" means, as of any Purchase Date
or other date of determination, the lower of the (A) Fixed
Purchase Price and the (B) Variable Purchase Price, each in
effect as of such date.
(xv) "SALE PRICE" means, for any security as of any
date, the trade price for such security on the Principal
Market as reported by Bloomberg, or, if the Principal Market
is not the principal securities exchange or trading market for
such security, the trade price of such security on the
principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg.
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(xvi) "VARIABLE PURCHASE PRICE" means, as of any
Purchase Date or other date of determination, the lower of:
(A) the lowest Sale Price of the Common Stock on the Purchase
Date or such other date of determination and (B) the
arithmetic average of any two (2) Closing Bid Prices for the
Common Stock, selected by the Holder, during the ten (10)
consecutive Trading Days ending on the Trading Day immediately
preceding such Purchase Date or other date of determination
(to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other
similar transaction occurring during such ten (10) Trading
Days).
(b) HOLDER'S PURCHASE RIGHTS AND OBLIGATIONS. Subject to the
provisions of Sections 2(d) and 7 below, during each Monthly Period,
the Holder shall have the right to purchase shares of Common Stock up
to the Monthly Purchase Amount for such Monthly Period in accordance
with Section 2(e), at the Purchase Rate (as defined below). Subject to
the provisions of Sections 2(d) and 7 below, at any time on or after
the Maturity Date, the Holder shall have the right to purchase shares
of Common Stock up to the entire remaining Available Amount in
accordance with Section 2(e), at the Purchase Rate. Within three (3)
Trading Days of receipt of Purchase Shares, the Holder shall pay to the
Company an amount equal to the Purchase Amount with respect to such
Purchase Shares as full payment for the Purchase Shares so received.
The Company shall not issue any fraction of a share of Common Stock
upon any purchase. All shares of Common Stock (including fractions
thereof) issuable upon a purchase under this Equity Purchase Agreement
shall be aggregated for purposes of determining whether the purchase
would result in the issuance of a fraction of a share of Common Stock.
If, after the aforementioned aggregation, the issuance would result in
the issuance of a fraction of a share of Common Stock, the Company
shall round such fraction of a share of Common Stock up or down to the
nearest whole share.
(c) PURCHASE RATE. The number of shares of Common Stock
issuable upon purchase of a Purchase Amount of this Equity Purchase
Agreement pursuant to Section 2(b) shall be determined according to the
following formula (the "PURCHASE RATE"):
PURCHASE AMOUNT
Purchase Price
(d) LIMITATIONS ON PURCHASE.
(i) LIMITATION ON BENEFICIAL OWNERSHIP. The Company
shall not effect any purchase under this Equity Purchase
Agreement and the Holder shall not have the right to purchase
shares of Common Stock under this Equity Purchase Agreement
pursuant to Section 2(b) to the extent that after giving
effect to such purchase such Person (together with such
Person's affiliates) would beneficially own in excess of 4.99%
of the outstanding shares of the Common Stock following such
purchase. For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by a Person and
its affiliates or acquired by a Person and its affiliates, as
the case may be, shall include the number of shares of Common
Stock issuable upon a purchase under this Equity Purchase
Agreement with respect to
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which the determination is being made, but shall exclude
the number of shares of Common Stock which would be
issuable upon (i) a purchase of the remaining Available
Amount which has not been submitted for purchase, and (ii)
exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company (including,
without limitation, any warrants) subject to a limitation
on conversion or exercise analogous to the limitation
contained herein beneficially owned by such Person and its
affiliates. For purposes of this Section, in determining
the number of outstanding shares of Common Stock the Holder
may rely on the number of outstanding shares of Common
Stock as reflected in (1) the Company's most recent Form
10-Q or Form 10-K, as the case may be, (2) a more recent
public announcement by the Company or (3) any other written
communication by the Company or its transfer agent setting
forth the number of shares of Common Stock outstanding.
Upon the reasonable written or oral request of the Holder,
the Company shall promptly confirm orally and in writing to
the Holder the number of shares Common Stock then
outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to
any purchases under this Equity Purchase Agreement by the
Holder since the date as of which such number of
outstanding shares of Common Stock was reported. Except as
otherwise set forth herein, for purposes of this Section
2(d)(i), beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended.
(ii) COMPANY'S RIGHT TO BLOCK PURCHASES. The right of
the Holder to purchase shares of Common Stock under this
Equity Purchase Agreement pursuant to this Section 2 shall be
limited as set forth below. If on any Trading Day the Closing
Sale Price of the Common Stock is below the Fixed Purchase
Price, the Company shall have three (3) Trading Days to give
written notice (a "PURCHASE SUSPENSION NOTICE") to the Holder
suspending any and all purchases. The Purchase Suspension
Notice shall be effective only for purchases which have a
Purchase Date later than three (3) Trading Days after receipt
of the Purchase Suspension Notice by the Holder. Any purchases
submitted by the Holder which have a Purchase Date not later
than three (3) Trading Days after receipt by the Holder of the
Company's Purchase Suspension Notice must be honored by the
Company as otherwise provided herein. Such purchase suspension
shall continue in effect until the earlier of: (A) revocation
in writing by the Company, at its sole discretion; or (B) such
time as the Sale Price of the Common Stock is above the Fixed
Purchase Price.
(iii) COMPANY'S MANDATORY PURCHASE RIGHTS. If (A) the
Closing Sale Price of the Common Stock on each of the five (5)
Trading Days immediately prior to the first Trading Day of any
Monthly Period is at least twenty-five percent (25%) of the
Fixed Purchase Price and (B) no Event of Default has occurred,
then the Company shall have the right, by delivering written
notice (a "MANDATORY PURCHASE NOTICE") to the Holder that, so
long as no Event of Default has occurred and so long as the
Sale Price of the Common Stock remains at least twenty-five
percent (25%) of the Fixed Purchase Price, on or prior to the
first Trading Day of such Monthly Period,
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to require that the Holder purchase at the Purchase Rate
such Available Amount as specified by the Company in the
Mandatory Purchase Notice during the next two Monthly
Periods on such Trading Days during such Monthly Periods as
the Holder shall determine. The Company acknowledges and
agrees that the Company's mandatory purchase rights
represent an agreement by the Holder to extend financial
accommodations to the Company. Accordingly, it shall be a
condition to the exercise of the Company's mandatory
purchase rights that no Event of Default shall have
occurred, and the Company's delivery of a Mandatory
Purchase Notice shall be deemed a representation to the
Holder that no Event of Default has occurred. The Company
may revoke a Mandatory Purchase Notice, in whole or in
part, by delivering written notice thereof to the Holder (a
"REVOCATION OF MANDATORY PURCHASE NOTICE"). A Revocation of
Mandatory Purchase Notice shall be effective only as to
purchases which are in excess of the Monthly Purchase
Amount and which have a Purchase Date later than three (3)
Trading Days after receipt by the Holder of the Revocation
of Mandatory Purchase Notice. Any purchases submitted by
the Holder which have a Purchase Date not later than three
(3) Trading Days after receipt by the Holder of the
Revocation of Mandatory Purchase Notice must be honored by
the Company as otherwise provided herein.
(e) MECHANICS OF PURCHASING. The purchase of shares of Common
Stock under this Equity Purchase Agreement shall be conducted in the
following manner:
(i) HOLDER'S DELIVERY REQUIREMENTS. To purchase
shares of Common Stock under this Equity Purchase Agreement on
any date, the Holder hereof shall transmit by facsimile (or
otherwise deliver) on or prior to 11:59 p.m., Central Time on
such date, a copy of a fully executed notice of purchase in
the form attached hereto as Exhibit I (the "PURCHASE NOTICE")
to the Company.
(ii) COMPANY'S RESPONSE. Upon receipt by the Company
of a copy of a Purchase Notice, the Company shall as soon as
practicable, but in no event later than one (1) Trading Day
after receipt of such Purchase Notice, send via facsimile (or
otherwise deliver), a confirmation of receipt of such Purchase
Notice in the form attached hereto as Exhibit II (a "COMPANY
CONFIRMATION OF PURCHASE NOTICE") to (1) the Holder and (2)
along with a copy of the Purchase Notice, the Company's
designated transfer agent (the "TRANSFER AGENT"), which
confirmation shall constitute an irrevocable instruction to
the Transfer Agent to process such Purchase Notice in
accordance with the terms herein. Upon receipt by the Transfer
Agent of a copy of the executed Purchase Notice and a copy of
the applicable Company Confirmation of Purchase Notice, the
Transfer Agent shall, on the first (1st) Trading Day following
the date of receipt of the Company Confirmation of Purchase
Notice, (A) use its best efforts to issue and surrender to a
common carrier for overnight delivery to the address as
specified in the Purchase Notice, a certificate, registered in
the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder shall be entitled
or (B) provided the Transfer Agent is participating in The
Depository Trust Company ("DTC") Fast Automated Securities
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Transfer Program, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder
shall be entitled to the Holder's or its designee's balance
account with DTC through its Deposit Withdrawal Agent
Commission system.
(iii) DISPUTE RESOLUTION. In the case of a dispute as
to the determination of the Purchase Price or the arithmetic
calculation of the Purchase Rate, the Company shall instruct
the Transfer Agent to issue to the Holder the number of shares
of Common Stock that is not disputed and shall submit the
disputed determinations or arithmetic calculations to the
Holder via facsimile within one (1) Trading Day of receipt of
the Holder's Purchase Notice. If the Holder and the Company
are unable to agree upon the determination of the Purchase
Price or arithmetic calculation of the Purchase Rate within
one (1) Trading Day of such disputed determination or
arithmetic calculation being submitted to the Holder, then the
Company shall within one (1) Trading Day submit via facsimile
(A) the disputed determination of the Purchase Price to an
independent, reputable investment bank selected by the Company
and approved by the Holder or (B) the disputed arithmetic
calculation of the Purchase Rate to the Company's independent,
outside accountant. The Company shall cause the investment
bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the
Holder of the results no later than the fifth (5th) day after
the date it receives the disputed determinations or
calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be
binding upon all parties absent manifest error.
(iv) RECORD HOLDER. The person or persons entitled to
receive the shares of Common Stock issuable upon a purchase of
this Equity Purchase Agreement shall be treated for all
purposes as the record holder or holders of such shares of
Common Stock on the Purchase Date.
(v) COMPANY'S FAILURE TO TIMELY DELIVER SHARES. If
within five (5) Trading Days after the Company's receipt of a
copy of the Purchase Notice (subject to extension in
accordance with Section 2(e)(iii) for a good faith dispute
made in accordance with the terms of Section 2(e)(iii)) (the
"SHARE DELIVERY PERIOD") the Transfer Agent shall fail to
issue a certificate to the Holder or credit the Holder's
balance account with DTC for the number of shares of Common
Stock to which such Holder is entitled upon such Holder's
purchase of the Available Amount (a "PURCHASE FAILURE"), in
addition to all other available remedies which such Holder may
pursue hereunder and under the Master Facility Agreement
(including indemnification obligations of the Company
therein), the Company shall pay additional damages to the
Holder on each day after such fifth (5th) Trading Day such
purchase is not timely effected in an amount equal to 1.0% of
the product of (I) the number of shares of Common Stock not
issued to the Holder on a timely basis pursuant to Section
2(e)(ii) and to which such Holder is entitled and (II) the
Closing Sale Price of the Common Stock on the last possible
date which the Company could have issued such Common Stock to
the Holder without violating Section 2(e)(ii).
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(vi) BOOK-ENTRY. Notwithstanding anything to the
contrary set forth herein, upon purchase of any portion of the
Available Amount in accordance with the terms hereof, the
Holder shall not be required to physically surrender this
Equity Purchase Agreement to the Company. The Holder and the
Company shall each maintain records showing the remaining
Available Amount and the dates and Purchase Amounts for each
purchase or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to
require physical surrender of this Equity Purchase Agreement
upon each purchase. The Holder and any assignee, by acceptance
of this Equity Purchase Agreement, acknowledge and agree that,
by reason of the provisions of this paragraph, following
purchase of any portion of the Available Amount, the remaining
Available Amount under this Equity Purchase Agreement shall be
less than the aggregate Available Amount set forth on the face
hereof.
(f) TAXES. The Company shall pay any and all taxes that may be
payable with respect to the issuance and delivery of Common Stock upon
the purchase of this Equity Purchase Agreement.
3. COMPANY'S TERMINATION RIGHTS. Subject to the terms and conditions of
this Section, at any time after the Issuance Date, and so long as the Company
has provided appropriate notice as described below, if during any ten (10)
consecutive Trading Days the Closing Sale Price of the Common Stock is below the
Fixed Purchase Price for each of such ten (10) Trading Days, the Company shall
have three (3) Trading Days to give written notice (a "COMPANY TERMINATION
NOTICE") to the Holder electing to terminate this Agreement without any
liability or payment to the Holder (a "COMPANY TERMINATION"). Any purchases
submitted by the Holder which have a Purchase Date which is not later than three
(3) Trading Days after receipt by the Holder of the Company Termination Notice,
must be honored by the Company as otherwise provided herein. No such termination
of this Agreement shall effect the Company's or the Holder's obligations under
this Agreement with respect to pending purchases and the Company and the Holder
shall complete their respective obligations with respect to any pending
purchases under this Agreement.
4. DEFAULTS AND REMEDIES.
(a) EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall be deemed
to have occurred at such time as any of the following events:
(i) while any Registration Statement is required to
be maintained effective pursuant to the terms of the
Registration Rights Agreement entered into by the Company and
the Holder as of the Issuance Date (the "REGISTRATION RIGHTS
AGREEMENT"), the effectiveness of such Registration Statement
lapses for any reason (including, without limitation, the
issuance of a stop order) or is unavailable to the Holder for
resale of all of the Registrable Securities (as defined in the
Registration Rights Agreement) in accordance with the terms of
the Registration Rights Agreement, and such lapse or
unavailability continues for a period of ten (10)
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consecutive Trading Days or for more than an aggregate of
thirty (30) Trading Days in any 365-day period;
(ii) the suspension from trading or failure of the
Common Stock to be listed on the Principal Market for a period
of ten (10) consecutive Trading Days or for more than an
aggregate of thirty (30) Trading Days in any 365-day period;
(iii) the failure of the Company or the Common Stock
to fully meet the requirements for continued listing on the
Principal Market for a period of ten (10) consecutive Trading
Days or for more than an aggregate of thirty (30) Trading Days
in any 365-day period;
(iv) the Company's or the Transfer Agent's notice to
the Holder, including by way of public announcement, at any
time, of its intention not to comply with a proper request for
purchase of the Available Amount under this Equity Purchase
Agreement into shares of Common Stock that is tendered in
accordance with the provisions of this Equity Purchase
Agreement, the failure of the Company to deliver a Company
Confirmation of Purchase Notice to the Holder and to the
Transfer Agent in accordance with the provisions of this
Equity Purchase Agreement within two (2) Trading Days after
the receipt by the Company of a Purchase Notice (subject to
extension in accordance with Section 2(e)(iii) for a good
faith dispute made in accordance with the terms of Section
2(e)(iii)); or the failure of the Transfer Agent to comply
with a Company Confirmation of Purchase Notice tendered in
accordance with the provisions of this Equity Purchase
Agreement within five (5) Trading Days after the receipt by
the Company of the Purchase Notice;
(v) if at any time after the Issuance Date, the
Exchange Cap (as defined in Section 7) is reached;
(vi) the Company breaches any representation,
warranty, covenant or other term or condition of the Master
Facility Agreement, the Registration Rights Agreement, this
Equity Purchase Agreement or any other agreement, document,
certificate or other instrument delivered in connection with
the transactions contemplated thereby and hereby if such
breach could have a Material Adverse Effect (as defined in the
Master Facility Agreement) and except, in the case of a breach
of a covenant which is reasonably curable, only if such breach
continues for a period of at least ten (10) Trading Days;
(vii) any payment default under or acceleration prior
to maturity of any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company
or for money borrowed the repayment of which is guaranteed by
the Company, whether such indebtedness or guarantee now exists
or shall be created hereafter which is in excess of
$1,000,000;
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(viii) if any Person commences a proceeding against
the Company pursuant to or within the meaning of any
Bankruptcy Law (as defined below);
(ix) if the Company pursuant to or within the meaning
of any Bankruptcy Law; (A) commences a voluntary case, (B)
consents to the entry of an order for relief against it in an
involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its
property, (D) makes a general assignment for the benefit of
its creditors, (E) becomes insolvent, or (F) is generally
unable to pay its debts as the same become due; or
(x) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that; (A) is for relief
against the Company in an involuntary case, (B) appoints a
Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or
any subsidiary.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors. The
term "CUSTODIAN" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
(b) REMEDIES. If an Event of Default occurs from events described in
clauses (i) through and (ix) of Section 4(a), the Holder may terminate this
Agreement without any liability or payment to the Company. In the case of an
Event of Default arising from events described in clause (x) of Section 4(a),
this Equity Purchase Agreement shall automatically terminate with out any
liability or payment to any party without further action or notice. However,
notwithstanding the forgoing, in case of any such termination, no such
termination of this Agreement shall effect the Company's or the Holder's
obligations under this Agreement with respect to pending purchases and the
Company and the Holder shall complete their respective obligations with respect
to any pending purchases under this Agreement.
5. HOLDER'S RIGHT TO TERMINATE AGREEMENT. If by the Maturity Date, for
any reason or for no reason the full Available Amount under this Agreement has
not been used to purchase shares of Common Stock as provided for in Section 2 of
this Agreement, the Holder shall have the right to terminate this Agreement
without any liability or payment to the Company. No such termination of this
Agreement shall effect the Company's or the Holder's obligations under this
Agreement with respect to pending purchases and the Company and the Holder shall
complete their respective obligations with respect to any pending purchases
under this Agreement.
6. RESERVATION OF SHARES. The Company shall, so long as any Available
Amount of the Equity Purchase Agreement is outstanding, reserve and keep
available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the purchase of the Equity Purchase Agreement, such number
of shares of Common Stock as shall from time to time be sufficient to effect the
purchase of the entire remaining Available Amount of the Equity Purchase
Agreement without regard to any restrictions or limitations on purchases.
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7. EXCHANGE CAP; LIMITATION ON NUMBER OF PURCHASE SHARES. The "Exchange
Cap" shall be deemed to be reached at such time if, upon any Purchase Notice
submitted under this Equity Purchase Agreement, the issuance of such shares of
Common Stock would exceed that number of shares of Common Stock which the
Company may issue under this Equity Purchase Agreement without breaching the
Company's obligations under the rules or regulations of the Principal Market, in
which case, the Company shall not be obligated to issue any such shares of
Common Stock.
8. CHANGES TO THE TERMS OF THIS EQUITY PURCHASE AGREEMENT. This Equity
Purchase Agreement and any provision hereof may only be amended by an instrument
in writing signed by the Company and the Holder. The term "Equity Purchase
Agreement" and all reference thereto, as used throughout this instrument, shall
mean this instrument as originally executed, or if later amended or
supplemented, then as so amended or supplemented.
9. ENFORCEMENT AND OTHER COSTS. If: (i) this Equity Purchase Agreement
is placed in the hands of an attorney for enforcement or is enforced through any
legal proceeding; or (ii) an attorney is retained to represent the Holder in any
bankruptcy, reorganization, receivership or other proceedings affecting
creditors' rights and involving a claim under this Equity Purchase Agreement; or
(iii) an attorney is retained to represent the Holder in any other proceedings
whatsoever in connection with this Equity Purchase Agreement, then the Company
shall pay to the Holder all reasonable cost and expenses including attorneys'
fees incurred in connection therewith, in addition to all other amounts due
hereunder.
10. GOVERNING LAW; JURISDICTION; JURY TRIAL. The corporate laws of the
State of Georgia shall govern all issues concerning the relative rights of the
Company and its shareholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Equity Purchase Agreement and
the other Transaction Documents shall be governed by the internal laws of the
State of Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Illinois. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the adjudication of any dispute hereunder or under the other Transaction
Documents or in connection herewith or therewith, 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 HEREWITH OR ARISING OUT OF THIS EQUITY
PURCHASE AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
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11. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
remedies provided in this Equity Purchase Agreement shall be cumulative and in
addition to all other remedies available under this Equity Purchase Agreement,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), no remedy contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing herein
shall limit the Holder's right to pursue actual damages for any failure by the
Company to comply with the terms of this Equity Purchase Agreement. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.
12. CONSTRUCTION. This Equity Purchase Agreement shall be deemed to be
jointly drafted by the Company and the Holder and shall not be construed against
any person as the drafter hereof.
13. FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part
of this Equity Purchase Agreement in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Buyer, including by merger or
consolidation. The Buyer may not assign its rights under this Agreement without
the consent of the Company, other than to an affiliate of the Buyer controlled
by Xxxxxx X. Xxxxxx or Xxxxxx X. Xxxxxxxxxx.
15. 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 Trading Day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
xxxx.xxx, Inc
0000 XxxxxXxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx Xx.
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With a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 404-572-5100
Attention: Xxxxxx X. Xxxx
If to the Holder:
Fusion Capital Fund II, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to:
Ungaretti & Xxxxxx
0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 312-977-4405
Attention: Xxxxx X. Xxxxxxxxxx
If to the Company's Transfer Agent:
American Stock Transfer
0000 00xx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxx
or at 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 three (3) Trading 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 a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a
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nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
* * * *
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IN WITNESS WHEREOF, the Holder and the Company have caused this Equity
Purchase Agreement to be duly executed as of the date first written above.
THE COMPANY:
XXXX.XXX, INC.
By:_______________________________________
Name:
Its:
HOLDER:
FUSION CAPITAL FUND II, LLC
BY: FUSION CAPITAL PARTNERS II, LLC
BY: SGM HOLDINGS CORP.
By:_______________________
Name: Xxxxxx X. Xxxxxx
Title: President
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EXHIBIT I
XXXX.XXX, INC.
FORM OF PURCHASE NOTICE
Reference is made to the Equity Purchase Agreement (the "EQUITY
PURCHASE AGREEMENT") between XXXX.XXX, INC. (the "COMPANY") and FUSION CAPITAL
FUND II, LLC dated __________. In accordance with and pursuant to the Equity
Purchase Agreement, the undersigned hereby elects to purchase shares of Common
Stock, par value $____ per share (the "COMMON STOCK"), of the Company for the
Available Amount indicated below of as of the date specified below.
Purchase Date: __________________________________________________
Remaining Available Amount
PRIOR TO this purchase: _________________________________________
Available Amount to be purchased: _______________________________
Remaining Available Amount
AFTER this purchase: ____________________________________________
Please confirm the following information:
Purchase Price per share: _______________________________________
/ / Fixed Purchase Price of $_____
/ / Low Sale Price on Date Hereof
/ / Average of 2/10 Closing Bid Prices for _________($_____) and
__________($_____)
Number of shares of Common Stock to be issued:
Please issue the shares of Common Stock in the following name and to the
following address:
Issue to: _______________________________________________________
_______________________________________________________
_______________________________________________________
Authorized Signature: ___________________________________________
Name: ___________________
Title: __________________
Phone #: ________________
Broker DTC Participant Code: ________________
Account Number *: ________________
*NOTE THAT RECEIVING BROKER MUST INITIATE TRANSACTION ON DWAC SYSTEM.
EXHIBIT II
XXXX.XXX, INC.
FORM OF COMPANY CONFIRMATION OF PURCHASE NOTICE
Reference is made to the Equity Purchase Agreement (the "EQUITY
PURCHASE AGREEMENT") between XXXX.XXX, INC. (the "COMPANY") and FUSION CAPITAL
FUND II, LLC dated __________. In accordance with and pursuant to the Equity
Purchase Agreement, the undersigned hereby confirms and authorizes the issuance
of shares of Common Stock, par value $___ per share (the "COMMON STOCK") of the
Company, in connection with the Purchase Notice (as defined in the Equity
Purchase Agreement) attached hereto. Specifically, the Company hereby confirms
the following information:
Purchase Date: ______________________________________
Remaining Available Amount
PRIOR TO this purchase: _____________________________
Available Amount to be purchased: ___________________
Remaining Available Amount
AFTER this purchase: ________________________________
Purchase Price per share: ___________________________
Number of shares of Common
Stock to be issued: _________________________________
The shares of Common Stock shall be issued in the name and to the address as set
forth in the applicable Purchase Notice.
Authorized Signature _______________________________
Name: _________________________
Title: ________________________
Phone #: ______________________
Fax #: ________________________
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