AGREEMENT
AGREEMENT
This
AGREEMENT,
dated
as of December 28,
2007
(the
“Agreement”), by and among TXP Corporation, a Nevada corporation (the “Company”)
and the investors named on the signature pages annexed hereto (collectively,
the
“Investor”). This agreement will expire on January 16, 2009. This agreement also
extends the terms of previous JVE-TXP Collateral Agreements dated July 28,
2006
and October 12, 2006 to expire concurrently with this agreement on January
16,
2009.
BACKGROUND
WHEREAS,
the
Investor desires to pledge an aggregate of $2,000,000 in free-trading shares
of
common stock of Fossil Incorporated (NASDAQ: FOSL), or such other shares of
free-trading common stock having a value of $2,000,000 in the aggregate as
may
be agreed upon after the date hereof between the parties hereto (the
“Collateral”), on behalf of the Company in favor of First Bank of Canyon Creek,
or such other lending or financing institution as may be agreed upon after
the
date hereof between the parties hereto (a “Lender”), as Collateral for a loan to
the Company from a Lender in an amount up to $2,000,000 (the “Loan”), which will
be further guaranteed personally and through the pledge of Common Stock (as
defined below) beneficially owned by Xxxxxxx X. Xxxxxx, the Company’s Chief
Executive Officer.
WHEREAS,
the
Company wishes to issue to the Investor warrants (the “Warrants”), in the form
annexed hereto as Exhibit
“A”,
to
purchase 1,280,000 shares of the Company’s common stock, par value $.001 per
share (the “Common Stock), exercisable into shares of the Company’s Common Stock
at a price equal to $0.40, subject to adjustment as set forth in the Warrants,
as consideration and in exchange for the Investor agreeing to: (i) pledge the
Collateral on behalf of the Company for the Loan, and (ii) execute such
additional documentation as may be required to effectuate the pledge of the
Collateral to a Lender (collectively, the “Transaction Documents”).
WHEREAS,
the
issuance of the Warrants will be made in reliance upon the provisions of Section
4(2) ("Section 4(2)") and/or Section 4(6) of the United States Securities Act
of
1933, as amended, and/or Regulation D ("Regulation D") and the other rules
and
regulations promulgated thereunder (the "Securities Act"), and/or upon such
other exemption from the registration requirements of the Securities Act as
may
be available with respect to any or all of the investments in securities to
be
made hereunder.
All
capitalized terms not otherwise defined herein shall have the meanings given
to
them in the Transaction Documents.
NOW
THEREFORE in
consideration of the premises and the mutual covenants, agreements,
representations and warranties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto hereby agree as follows:
ARTICLE
1.
THE
AGREEMENTS
1.1
Agreements.
Subject
to the terms and conditions set forth in this Agreement, the New Warrants,
and
Transaction Documents, the Company and the Investor hereby agree to execute
this
Agreement containing the following provisions which shall be effective as of
the
date hereof:
1.2
Consideration.
In
consideration of the Investors agreement to pledge the Collateral to a Lender,
the Company agrees to:
(a) issue
to
the Investor Warrants to purchase an aggregate of 1,280,000 shares of Common
Stock at an exercise price equal to $0.40, subject to adjustment as set forth
in
the Warrants; and
(b) pay
to
the Investor commitment fee equal of 100,000 shares of TXP stock within 90
days
of “FOSL” and/or other shares being deposited into First Bank of Canyon Creek
and/or any other agreed upon Federally Regulated Banking Institution account
(such stock deposit date shall be the “Closing Date”)
1.3
Registration
Rights.
(a)
Piggy-Back
Registrations.
If, at
any time (x) prior to the expiration of the Registration Period (as hereinafter
defined) and (y) after the filing of the initial registration statement by
the
Company pursuant to the March 2007 Registration Rights Agreement between the
Company and YA Global Investments, L.P. that there
is
not an effective Registration Statement covering all of the Warrant
Shares,
the
Company proposes to file with the SEC a Registration Statement for its own
account or the account of others under the 1933 Act of any of its securities
(other than a Registration Statement on Form S-4 or Form S-8 (or their
equivalents at such time) relating to securities to be issued solely in
connection with any acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee benefit plans),
the
Company shall promptly send to the Investor written notice of the Company's
intention to file a Registration Statement and of the Investor's rights under
this Section 1.3(a) and, if within five (5) days after receipt of such notice,
the Investor shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Warrant shares the Investor
requests to be registered for resale, subject to the priorities set forth in
this Section 1.3(a). The obligations of the Company under this Section 1.3(a)
may be waived by the Investor. In the event that the Registration Statement
being filed by the Company under this Section 1.3(a) is for an underwritten
offering, the Investor shall, unless otherwise agreed to by the Company, offer
and sell the Warrant Shares in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement,
on
the same terms and conditions as other shares of Common Stock included in such
underwritten offering. If the managing underwriter(s) advise the Company, in
writing, that in their reasonable good faith opinion, marketing or other factors
dictate that a limitation on the number of shares of Common Stock which may
be
included in the Registration Statement is necessary to facilitate and not
adversely affect the proposed offering, then the Company shall include in such
registration:
2
(1) first,
all securities the Company proposes to sell for its own account;
and
(2) second,
up to the full number of securities proposed to be registered for the account
of
the holders of securities entitled to inclusion of their securities in the
Registration Statement by reason of demand or mandatory registration
rights.
(b)
The
Company shall keep each of the Registration Statement required to be filed
hereunder effective pursuant to Rule 415 at all times until the earlier of
(i)
the life that all or a portion of the Collateral is pledged by the Investor;
(ii) the date as of which the Investor may sell all of the Warrant Shares
covered by such Registration Statement pursuant to Rule 144(k) promulgated
under
the 1933 Act (or successor thereto) or (iii) the date on which (A) the Investor
shall have sold all of the Warrant Shares covered by such Registration Statement
and (B) none of the Warrants are outstanding (the "Registration Period"), each
of which Registration Statements (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(c) The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and
the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
be
necessary to keep such Registration Statement effective at all times during
the
Registration Period, and, during such period, comply with the provisions of
the
1933 Act with respect to the disposition of all Warrant Shares of the Company
covered by such Registration Statement until such time as all of such Warrant
Shares shall have been disposed of in accordance with the intended methods
of
disposition by the Investor as set forth in such Registration Statement.
(d)
The
Investor agrees that the Company shall not be precluded from registering any
additional shares of its Common Stock underlying the securities of the Company
in the Registration Statement.
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1.4
|
The
Loan.
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(a) Term
of the Loan. The
Company agrees that the term of the Loan shall not exceed January 16th,
2009
(the “Term”).
(b) Investor
Approval.
The
Company agrees that it shall not procure any Loan with a Lender, or execute
any
definitive documentation in connection with a proposed Loan, without the prior
written consent of the Investor, which shall not be unreasonably withheld.
The
Company shall provide written notice to the Investor which sets forth the terms
of a proposed Loan at least 5 business days prior to the execution of definitive
documentation in connection with such proposed Loan.
The
Investor shall have 3
business
days following receipt of the notice to reasonably object to the terms proposed
Loan. In the event such terms and conditions are modified during the notice
period, the Investors shall be given prompt notice of such modification and
shall have the right during the 3
business
days following the notice of modification, whichever is longer, to reasonably
object to the terms proposed Loan.
3
(c) Pledge
and Guaranty of the Company’s Chief Executive Officer. The
Company shall use its best efforts to cause its Chief Executive Officer to
pledge such number of shares of Common Stock beneficially owned by the Chief
Executive Officer equal to 100% of the initial amount of the Collateral pledged
by the Investor at a price of $.50 per share, as further collateral for the
Loan. In addition, the Company shall use its best efforts to cause its Chief
Executive Officer to personally guarantee the Loan.
ARTICLE
2.
REPRESENTATIONS
AND WARRANTIES OF THE INVESTORS
2.1
Compliance
with Law.
The
Investor’s trading activities with respect to shares of the Company’s Common
Stock will be in compliance with all applicable state and federal securities
laws, rules and regulations and rules and regulations of the principal market
on
which the Company’s Common Stock is listed.
2.2
Intent.
The
Investor is entering into this Agreement for his own account for investment
purposes only and not with a view to or for sale in connection with any
distribution of the Warrants. The Investor has no present arrangement (whether
or not legally binding) at any time to sell the Warrants to or through any
person or entity; provided, however, that by making the representations herein,
the Investor does not agree to hold such securities for any minimum or other
specific term and reserves the right to dispose of the shares underlying the
Warrants at any time in accordance with federal and state securities laws
applicable to such disposition.
2.3
Investment
Experience.
The
Investor acknowledges that he can bear the economic risk and complete loss
of
its investment in the securities and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits
and
risks of the investment contemplated hereby.
2.4.
Authorization
and Power.
The
Investor has the requisite power and authority to enter into and perform
this
Agreement and to purchase the Warrants being issued to him hereunder. The
execution, delivery and performance of this Agreement by the Investor and
the
consummation by him of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate or partnership action, and
no
further consent or authorization is required. This Agreement has been duly
authorized, executed and delivered by the Investor and constitutes, or shall
constitute when executed and delivered, a valid and binding obligation of
the
Investor enforceable against the Investor in accordance with the terms
thereof.
2.5.
No
Conflicts.
The
execution, delivery and performance of this Agreement and the consummation
by
the Investor of the transactions contemplated hereby or relating hereto do
not
and will not conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others
any rights of termination, amendment, acceleration or cancellation of any
agreement, indenture or instrument or obligation to which the Investor is
a
party or by which his properties or assets are bound, or result in a violation
of any law, rule, or regulation, or any order, judgment or decree of any
court
or governmental agency applicable to the Investor or his properties (except
for
such conflicts, defaults and violations as would not, individually or in
the
aggregate, have a material adverse effect on the Investor). The Investor
is not
required to obtain any consent, authorization or order of, or make any filing
or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or to acquire
the
Warrants in accordance with the terms hereof, provided that for purposes
of the
representation made in this sentence, the Investor is assuming and relying
upon
the accuracy of the relevant representations and agreements of the Company
herein.
4
2.6. Information
on Company.
The
Investor has been furnished with or has had access at the XXXXX Website of
the
Commission to the Company's Form 10-KSB for the year ended December 31, 2006
as
filed with the Commission, together with all subsequently filed Forms 10-QSB,
8-K, and filings made with the Commission available at the XXXXX website
(hereinafter referred to collectively as the "SEC Reports"). In addition, the
Investor has received in writing from the Company such other information
concerning its operations, financial condition and other matters as the Investor
has requested in writing (such other information is collectively, the "Other
Written Information"), and considered all factors the Investor deems material
in
deciding on the advisability of investing in the securities. The
Investor has had full opportunity to conduct, and has conducted, a complete
and
thorough due diligence investigation of the Company, and such opportunity has
been made available to the Investor’s professional representative(s) to ask
questions of and receive answers from representatives of the Company concerning
the Company and its financial condition and prospects, as well as request
additional information necessary to verify the accuracy of the SEC Reports
and
Other Written Information provided to Investor.
2.7. Information
on Investor.
The
Investor is, and will be at the time of the issuance of the Warrants, an
"accredited investor", as such term is defined in Regulation D promulgated
by
the Commission under the 1933 Act, is experienced in investments and business
matters, has made investments of a speculative nature and has purchased
securities of United States publicly-owned companies in private placements
in
the past and, with its representatives, has such knowledge and experience in
financial, tax and other business matters as to enable the Investor to utilize
the information made available by the Company to evaluate the merits and risks
of and to make an informed investment decision with respect to the proposed
purchase, which represents a speculative investment. The Investor has the
authority and is duly and legally qualified to purchase and own the Warrants.
The Investor is able to bear the risk of such investment for an indefinite
period and to afford a complete loss thereof. The information set forth on
the
signature page hereto regarding the Investor is accurate.
The
Investor is not required to be registered as a broker-dealer under Section
15 of
the Securities Exchange Act of 1934, as amended (the "1934 Act") and the
Investor is not a broker-dealer.
2.8. Receipt
of Warrants.
The
Investor will receive the Warrants as principal for his own account for
investment only and not with a view toward, or for resale in connection with,
the public sale or any distribution thereof.
5
2.9. Compliance
with Securities Act.
The
Investor understands and agrees that the Warrants have not been registered
under
the 1933 Act or any applicable state securities laws, by reason of their
issuance in a transaction that does not require registration under the 1933
Act
(based in part on the accuracy of the representations and warranties of Investor
contained herein), and that such Securities must be held indefinitely unless
a
subsequent disposition is registered under the 1933 Act or any applicable state
securities laws or is exempt from
such
registration.
Resales
of the securities by the Investor will be made in compliance with all applicable
securities laws including Regulation M of the Securities Exchange Act and
prospectus delivery requirements.
2.10. Communication
of Offer.
The
offer to sell the securities was directly communicated to the Investor by the
Company. At no time was the Investor presented with or solicited by any leaflet,
newspaper or magazine article, radio or television advertisement, or any other
form of general advertising or solicited or invited to attend a promotional
meeting otherwise than in connection and concurrently with such communicated
offer.
2.11. Confidentiality/Public
Announcement.
From the
date of this Agreement and until the Company makes a public announcement of
the
transactions contemplated by this Agreement by filing a Form 8-K, Investor
agrees he will not disclose publicly or privately the nature of the transactions
contemplated under this Agreement unless expressly agreed to in writing by
the
Company, or only to the extent required by law.
2.12. Authority;
Enforceability.
This
Agreement and other agreements delivered together with this Agreement or in
connection herewith have been duly authorized, executed and delivered by the
Investor and are valid and binding agreements enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to
or affecting creditors’ rights generally and to general principles of equity;
and Investor has full corporate power and authority necessary to enter into
this
Agreement and such other agreements and to perform his obligations hereunder
and
under all other agreements entered into by the Investor relating
hereto.
2.13. Restricted
Securities.
Investor understands that the securities have not been registered under the
1933
Act and the Investor will not sell, offer to sell, assign, pledge, hypothecate
or otherwise transfer any of the securities unless pursuant to an effective
registration statement under the 1933 Act. Notwithstanding anything to the
contrary contained in this Agreement, the Investor may transfer (without
restriction and without the need for an opinion of counsel) the securities
to
his Affiliates (as defined below) provided that each such Affiliate is an
“accredited investor” under Regulation D and such Affiliate agrees to be bound
by the terms and conditions of this Agreement. For the purposes of this
Agreement, an “Affiliate” of any person or entity means any other person or
entity directly or indirectly controlling, controlled by or under direct or
indirect common control with such person or entity. Affiliate includes each
subsidiary of the Company. For purposes of this definition, “control” means the
power to direct the management and policies of such person or firm, directly
or
indirectly, whether through the ownership of voting securities, by contract
or
otherwise.
2.14. No
Governmental Review.
The
Investor understands that no United States federal or state agency or any other
governmental or state agency has passed on or made recommendations or
endorsement of the securities or the suitability of the investment in the
securities nor have such authorities passed upon or endorsed the merits of
the
offering of the securities.
6
2.15.
No
Market Manipulation.
The
Investor has not taken, and will not take, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the
sale or resale of the securities or affect the price at which the securities
may
be issued or resold.
2.16.
Short
Position and Short Sales.
The
Investor covenants that neither he nor any of his affiliates will engage in
any
illegal short sales of or illegal hedging transactions with respect to the
Common Stock.
2.17. Correctness
of Representations.
The
Investor represents that the foregoing representations and warranties are true
and correct as of the date hereof and, unless the Investor otherwise notifies
the Company prior to the date hereof, shall be true and correct as of the date
hereof.
2.18. Survival.
The
foregoing representations and warranties shall survive for a period of two
years
from the date hereof.
ARTICLE
3.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
3.2. Authority.
(i)
The
Company has the requisite corporate power and corporate authority to enter
into
and perform its obligations under this Agreement and to issue the Warrants
and
the Warrant Shares pursuant to their respective terms, (ii)
the
execution, issuance and delivery of the this Agreement, the Warrants by the
Company and the consummation by it of the transactions contemplated thereby
have
been duly authorized by all necessary corporate action and no further consent
or
authorization of the Company or its Board of Directors or stockholders is
required, and (iii)
this
Agreement and the Warrants have been duly executed and delivered by the Company
and shall constitute valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws relating to, or affecting generally the enforcement of, creditors’ rights
and remedies or by other equitable principles of general application. The
Company has duly and validly authorized and reserved for issuance shares of
Common Stock sufficient in number for the conversion of the exercise of the
Warrants. The Company further acknowledges that its obligation to issue Warrant
Shares upon exercise of the Warrants in accordance with this Agreement is
absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the
Company.
7
3.3. Common
Stock.
The
Company has registered its Common Stock pursuant to Section 12(b)
or
(g)
of the
Exchange Act and is in full compliance with all reporting requirements of the
Exchange Act, and the Company is in compliance with all requirements for the
continued listing or quotation of its Common Stock, and such Common Stock is
currently listed or quoted on, the Principal Market. As of the date hereof,
the
Principal Market is the OTC Bulletin Board and the Company has not received
any
notice regarding, and to its knowledge there is no threat of, the termination
or
discontinuance of the eligibility of the Common Stock for such posting or
listing.
3.4. SEC
Documents.
The
SEC
Reports contain all material information relating to the Company and its
operations and financial condition as of their respective dates which
information is required to be disclosed therein. Since the date of the financial
statements included in the SEC Reports, there has been no material adverse
event
relating to the Company's business, financial condition or affairs not disclosed
in the SEC Reports. The SEC Reports do not contain any untrue statement of
a
material fact.
3.5. Exemption
from Registration; Valid Issuances.
Subject
to the accuracy of the Investor’s representations in Article 2, the sale of the
Warrants and the Warrant Shares will not require registration under the
Securities Act and/or any applicable state securities law (other than any SEC,
Principal Market or state securities filings that may be required to be made
by
the Company subsequent to closing and any registration statement that may be
filed pursuant hereto). When issued and paid for in accordance with the
Warrants, the Warrant Shares will be duly and validly issued, fully paid, and
non-assessable. Neither the sales of the Warrants or the Warrant Shares pursuant
to, nor the Company’s performance of its obligations under this Agreement and
the Warrants will (i)
result
in the creation or imposition by the Company of any liens, charges, claims
or
other encumbrances upon the Warrants or the Warrant Shares or, except as
contemplated herein, any of the assets of the Company, or (ii)
entitle
the holders of outstanding capital shares to preemptive or other rights to
subscribe for or acquire the capital shares or other securities of the Company.
None of the securities shall subject the Investor to personal liability to
the
Company or its creditors by reason of the possession thereof.
3.6. No
Directed Selling, General Solicitation or Advertising in Regard to this
Transaction.
Neither
the Company nor any of its affiliates nor, to the knowledge of the Company,
any
person acting on its or their behalf (i)
has
conducted or will conduct any general solicitation (as that term is used in
Rule
502(c)
of
Regulation D)
or
general advertising with respect to the sale of the Warrants, or (ii)
made any
offers or sales of any security or solicited any offers to buy any security
under any circumstances that would require registration of the sale of the
securities under the Securities Act.
3.7. No
Conflicts.
The
execution, delivery and performance of this Agreement and the consummation
by
the Company of the transactions contemplated hereby or relating hereto do not
and will not (i) result in a violation of the Company’s charter documents or
bylaws or other organizational documents or (ii) conflict with, or constitute
a
default (or an event which with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of any agreement, indenture or instrument or
obligation to which the Company is a party or by which its properties or assets
are bound, or result in a violation of any law, rule, or regulation, or any
order, judgment or decree of any court or governmental agency applicable to
the
Investor or its properties (except for such conflicts, defaults and violations
as would not, individually or in the aggregate, have a material adverse effect
on the Company). The Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court
or
governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement sell the Warrants in accordance with the terms
hereof, provided that for purposes of the representation made in this sentence,
the Company is assuming and relying upon the accuracy of the relevant
representations and agreements of the Investor herein.
8
3.8. No
Material Adverse Change.
Since
December 31, 2005 no material adverse effect has occurred or exists with respect
to the Company, except as disclosed in the SEC Reports filed prior to the date
hereof and available on XXXXX.
3.9. Litigation
and Other Proceedings.
Except
as disclosed in the SEC Reports, there are no lawsuits or proceedings pending
or, to the knowledge of the Company, threatened, against the Company, nor has
the Company received any written or oral notice of any such action, suit,
proceeding or investigation, which could reasonably be expected to have a
material adverse effect. Except as set forth in the SEC Reports, no judgment,
order, writ, injunction or decree or award has been issued by or, to the
knowledge of the Company, requested of any court, arbitrator or governmental
agency which could result in a material adverse effect. There is no action,
proceeding or investigation by the Company currently pending or that the Company
intends to initiate.
3.10. No
Misleading or Untrue Communication.
The
Company and, to the knowledge of the Company, any person representing the
Company, or any other person selling or offering to sell the Warrants in
connection with the transaction contemplated by this Agreement, have not made,
at any time, any oral communication in connection with the offer or sale of
the
same which, together with all such communications, including the SEC Reports,
taken as a whole, contained any untrue statement of a material
fact.
3.11 Reservation
of Common Stock.
As of
the date hereof, the Company has reserved and the Company shall continue to
reserve and keep available at all times shares of Common Stock for the purpose
of enabling the Company to issue the Warrant Shares pursuant to any exercise
of
the Warrants in an amount not less than the number needed to provide for the
issuance of Warrant Shares, as may be adjusted from time to time. The Company
further agrees that if at any time the number of shares of Common Stock
issuable
upon
conversion of the Warrants would cause the Company to be obligated to issue
a
number of shares of Common Stock in excess of its authorized capital (after
taking into account all other capital shares equivalents then existing), it
shall promptly commence all necessary corporate and stockholder action necessary
to increase its authorized capital so as to eliminate the aforesaid
condition.
3.12. Listing
of Common Stock.
The
Company hereby agrees to maintain the listing or quotation of the Common Stock
on a principal market, and as soon as required by the rules of the principal
market to list the Warrant Shares on the principal market. The Company further
agrees, if the Company applies to have the Common Stock traded on any other
principal market, it will include in such application the Warrant Shares, and
will take such other action as is necessary or desirable in the opinion of
the
Investor to cause the Warrant Shares to be listed on such other principal market
as promptly as possible. The Company will take all action necessary to continue
the listing and trading of its Common Stock on a principal market and will
comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the principal market.
9
3.12. Exchange
Act Registration.
The
Company will cause its Common Stock to continue to be registered under Section
12(b)
or
(g)
of the
Exchange Act, will use its best efforts to comply in all respects with its
reporting and filing obligations under the Exchange Act.
3.13. Corporate
Existence; Conflicting Agreements.
The
Company will take all steps necessary to preserve and continue the corporate
existence of the Company. The Company shall not enter into any agreement, the
terms of which agreement would restrict or impair the right or ability of the
Company to perform any of its obligations under this Agreement or any of the
other Transaction Documents.
3.14. Issuance
of Warrant Shares.
The
sale of the Warrants and the issuance of the Warrant Shares pursuant to exercise
of the Warrants shall be made in accordance with the provisions and requirements
Section 4(2), 4(6)
or
Regulation D
and any
applicable state securities law. The Company shall make any necessary SEC and
“blue sky” filings required to be made by the Company in connection with the
sale of such securities to the Investor as required by all applicable
laws.
ARTICLE
4.
LEGENDS
| 4.1 |
Legends.
The Warrant Shares shall bear the following or similar legend:
|
"THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE STATE SECURITIES LAWS. THESE
SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO TXP CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
(i) Warrants
Legend.
The
Warrants shall bear the following or
similar legend:
"THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE
STATE
SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE
OF
THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID
ACT
OR ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO TXP CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED."
10
ARTICLE
5.
GENERAL
PROVISIONS
5.1 Specific
Performance. The
parties hereto acknowledge and agree that the breach of this Agreement would
cause irreparable damage to the non-breaching parties and that the non-breaching
parties will not have an adequate remedy at law. Therefore, the obligations
of
each of the parties under this Agreement, shall be enforceable by a decree
of
specific performance issued by any court of competent jurisdiction, and
appropriate injunctive relief may be applied for and granted in connection
therewith. Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.
5.2 Further
Assurances. The
parties hereto each agree to execute and deliver such other documents or
agreements and to take such other action as may be reasonably necessary or
desirable for the implementation of this Agreement and the consummation of
the
transactions contemplated hereby.
5.3 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
5.4 Headings. Section
headings of this Agreement are for reference purposes only and are to be given
no effect in the construction or interpretation of this Agreement.
5.5 Binding
Effect. This
Agreement is irrevocable and shall be binding upon and inure to the benefit
of
the parties and their respective successors and permitted assigns.
5.6 Counterparts.
This
Agreement may be executed in counterparts, each of which when executed by any
party will be deemed to be an original and all of which counterparts will
together constitute one and the same Agreement. Delivery of executed copies
of
this Agreement by telecopier will constitute proper delivery, provided that
originally executed counterparts are delivered to the parties within a
reasonable time thereafter.
5.7 Expenses.
Each
party shall pay its own expenses incident to the negotiation, preparation and
performance of this Agreement and the transactions contemplated hereby,
including all fees and expenses of its counsel and accountants for all
activities of such counsel and accountants undertaken pursuant to this
Agreement, whether or not the transactions contemplated hereby are
consummated.
11
5.8 Amendments;
Waivers.
This
Agreement may not be amended or modified, nor may compliance with any condition
or covenant set forth herein be waived, except by a writing duly and validly
executed by Investor and the Company, or, in the case of a waiver, the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any such right, power or privilege, or any
single or partial exercise of any such right, power or privilege, preclude
any
further exercise thereof or the exercise of any other such right, power or
privilege.
[Remainder
of page intentionally left blank.]
12
IN
WITNESS WHEREOF, this Agreement has been duly executed as of the day and year
first written above.
| TXP CORPORATION | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxx | |
|
Name:
Xxxxxxx X. Xxxxxx
Title:
Chief Executive Officer
|
||
| /s/ Xxxxx Xxx Xxx XX | ||
|
Xxxxx Xxx Xxx XX
|
||
13
