SECURITIES PURCHASE
AGREEMENT
Dated as of March 27, 2003
among
INTELLI-CHECK, INC.
and
THE PURCHASERS LISTED ON EXHIBIT A
ARTICLE I Purchase and Sale of Preferred Stock and Warrants 1
Section 1.1 Purchase and Sale of Preferred Stock and Warrants 1
Section 1.2 Purchase Price and Closing 1
Section 1.3 Warrants 1
Section 1.4 Conversion Shares and Warrant Shares 2
ARTICLE II Representations and Warranties 2
Section 2.1 Representations and Warranties of the Company 2
Section 2.2 Representations and Warranties of the Purchasers 12
ARTICLE III Covenants 14
Section 3.1 Securities Compliance 14
Section 3.2 Registration and Listing 14
Section 3.3 Inspection Rights 14
Section 3.4 Compliance with Laws 15
Section 3.5 Keeping of Records and Books of Account 15
Section 3.6 Reporting Requirements 15
Section 3.7 Other Agreements 15
Section 3.8 Subsequent Financings; Right of First Refusal 15
Section 3.9 Reservation of Shares 16
Section 3.10 Confidentiality 16
ARTICLE IV Conditions 17
Section 4.1 Conditions Precedent to the Obligation of the Company to
Close and to Sell the Shares and Warrants 17
Section 4.2 Conditions Precedent to the Obligation of the Purchasers to
Close and to Purchase the Shares and Warrants 18
ARTICLE V Certificate Legend 21
Section 5.1 Legend 21
ARTICLE VI Termination 22
Section 6.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing Date by
the mutual written consent of the Company and the
Purchaser. 22
Section 6.2 Effect of Termination 22
ARTICLE VII Indemnification 22
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Section 7.1 General Indemnity 22
Section 7.2 Indemnification Procedure 22
ARTICLE VIII Miscellaneous 24
Section 8.1 Fees and Expenses 24
Section 8.2 Specific Enforcement; Consent to Jurisdiction. 24
Section 8.3 Entire Agreement; Amendment 25
Section 8.4 Notices 25
Section 8.5 Waivers 26
Section 8.6 Headings 26
Section 8.7 Successors and Assigns 26
Section 8.8 No Third Party Beneficiaries 26
Section 8.9 Governing Law 26
Section 8.10 Survival 26
Section 8.11 Counterparts 27
Section 8.12 Publicity 27
Section 8.13 Severability 27
Section 8.14 Further Assurances 27
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SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT this ("Agreement"), dated as of March
27, 2003, by and between Intelli-Check, Inc., a Delaware corporation (the
"Company"), and the entities listed on Exhibit A hereto (each a "Purchaser" and
collectively, the "Purchasers"), for the purchase and sale by the Purchasers of
shares of the Company's Series A 8% Convertible Preferred Stock, par value $.01
per share (the "Preferred Stock"), and warrants to purchase shares of the
Company's common stock, par value $.001 per share (the "Common Stock").
The parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Preferred Stock and Warrants
Section 1.1 Purchase and Sale of Preferred Stock and Warrants. Upon the
following terms and conditions, the Company shall issue and sell to the
Purchasers, and the Purchasers shall purchase from the Company, 30,000 shares of
Preferred Stock (the "Shares") at a price per share of $100 for an aggregate
purchase price of $3,000,000 (the "Purchase Price"), and warrants to purchase
shares of Common Stock, in substantially the form attached hereto as Exhibit B
(the "Warrants"). The Company and the Purchasers are executing and delivering
this Agreement in accordance with and in reliance upon the exemption from
securities registration afforded by Section 4(2) of the U.S. Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Securities Act"), including Regulation D ("Regulation D"), 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 to be made hereunder.
The Preferred Stock shall have such powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, as set forth in the
Certificate of Designation of Series A 8% Convertible Preferred Stock attached
hereto as Exhibit D, subject to the applicable terms and conditions of this
Agreement and the Registration Rights Agreement (as defined below).
Section 1.2 Purchase Price and Closing. The Company agrees to issue and
sell to the Purchasers and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchasers, severally but not jointly, agree to purchase the number of
Shares and Warrants set forth opposite their respective names on Exhibit A. The
closing of the purchase and sale of the Shares and Warrants to be acquired by
the Purchasers from the Company under this Agreement shall take place at the
offices of the Company located at 000 Xxxxxxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxx
00000 (the "Closing") at 10:00 a.m., Eastern Standard Time (i) on or before
March 27, 2003, provided, that all of the conditions set forth in Article IV
hereof and applicable to the Closing shall have been fulfilled or waived in
accordance herewith, or (ii) at such other time and place or on such date as the
Purchasers and the Company may agree upon (the "Closing Date").
Section 1.3 Warrants. At the Closing, the Company shall issue to the
Purchasers Warrants to purchase an aggregate of 113,636 shares of Common Stock.
The Warrants shall be exercisable for five (5) years from the date of issuance
and shall have an exercise price equal to one hundred percent (100%) of the last
sales price (regular way during normal trading hours) of the Common Stock on the
trading day immediately preceding the Closing Date.
Section 1.4 Conversion Shares and Warrant Shares. The Company has
authorized and reserved and covenants to continue to reserve, out of its
authorized but unissued Common Stock or its Common Stock held in treasury, a
number of shares of Common Stock equal to the aggregate number of shares of
Common Stock necessary to effect the conversion of the Preferred Stock and the
exercise of the Warrants. The Company shall, from time to time, in accordance
with the General Corporation Law of the State of Delaware, increase the
authorized amount of its Common Stock if at any time the authorized amount of
its Common Stock remaining unissued shall not be sufficient to permit the
conversion of all shares of the Preferred Stock at the time outstanding,
subject, however, to stockholder approval. If any shares of Common Stock
required to be reserved for issuance upon conversion of shares of the Preferred
Stock or exercise of the Warrants hereunder require registration with or
approval of any governmental authority under any federal or state law before the
shares may be issued, the Company will cause the shares to be so registered and
approved. All shares of Common Stock delivered upon conversion of the Preferred
Stock or exercise of the Warrants shall, upon delivery, be duly authorized and
validly issued, fully paid and nonassessable, free from all taxes, liens and
charges with respect to the issue thereof. Any shares of Common Stock issuable
upon conversion of the Preferred Stock (and such shares when issued) are herein
referred to as the "Conversion Shares". Any shares of Common Stock issuable upon
exercise of the Warrants (and such shares when issued) are herein referred to as
the "Warrant Shares". The Shares, the Conversion Shares, the Warrants and the
Warrant Shares are sometimes collectively referred to herein as the
"Securities".
ARTICLE II
Representations and Warranties
Section 2.1 Representations and Warranties of the Company. In order to
induce the Purchasers to enter into this Agreement and to purchase the Shares
and Warrants, the Company hereby makes the following representations and
warranties to the Purchasers:
(a) Organization, Good Standing and Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power to own, lease and
operate its properties and assets and to conduct its business as it is now being
conducted. The Company does not have any Subsidiaries (as defined in Section
2.1(g)) or own securities of any kind in any other entity, except as set forth
on Schedule 2.1(g) hereto. The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except for any jurisdiction(s) (alone or in the
aggregate) in which the failure to be so qualified will not have a Material
Adverse Effect. For the purposes of this Agreement, "Material Adverse Effect"
means, with respect to the Company, any adverse effect on the business,
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operations, assets, prospects or financial condition of the Company and which is
material to the Company or which is likely to materially hinder the performance
by the Company of its obligations hereunder and under the other Transaction
Documents (as defined in Section 2.1(b) hereof).
(b) Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and perform this Agreement, the Registration
Rights Agreement, the Warrants, and the other agreements and documents
contemplated hereby and thereby and executed by the Company or to which the
Company is party (collectively, the "Transaction Documents"), and to issue and
sell the Shares and the Warrants in accordance with the terms hereof. The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by it of the transactions contemplated thereby have been
duly and validly authorized by all necessary corporate action, and, except as
set forth in Schedule 2.1(b), no further consent or authorization of the Company
or its Board of Directors or stockholders is required. This Agreement has been
duly executed and delivered by the Company. The other Transaction Documents will
have been duly executed and delivered by the Company at the Closing. Each of the
Transaction Documents constitutes, or shall constitute when executed and
delivered, a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor's rights and remedies or by equitable
principles or remedies of general application.
(c) Capitalization. The authorized capital stock of the Company and the
shares thereof currently issued and outstanding as of March 21, 2003 are set
forth on Schedule 2.1(c) hereto. All of the outstanding shares of the Company's
Common Stock and any other security of the Company have been duly and validly
authorized. Except as set forth on Schedule 2.1(c) hereto, no shares of Common
Stock or any other security of the Company are entitled to preemptive rights or
registration rights and there are no outstanding options, warrants, scrip,
rights to subscribe to, call or commitments of any character whatsoever relating
to, or securities or rights convertible into, any shares of capital stock of the
Company. Furthermore, except as set forth on Schedule 2.1(c) hereto or in any
Commission Documents (as defined below) and except for the Transaction
Documents, there are no contracts, commitments, understandings, or arrangements
by which the Company is or may become bound to issue additional shares of the
capital stock of the Company or options, securities or rights convertible into
shares of capital stock of the Company. Except for customary transfer
restrictions contained in agreements entered into by the Company in order to
sell restricted securities or as provided on Schedule 2.1(c) hereto and except
as disclosed in any Commission Documents, the Company is not a party to or bound
by any agreement or understanding granting registration or anti-dilution rights
to any person with respect to any of its equity or debt securities. Except as
set forth on Schedule 2.1(c) or in any Commission Documents, the Company is not
a party to, and it has no knowledge of, any agreement or understanding
restricting the voting or transfer of any shares of the capital stock of the
Company. Except as set forth on Schedule 2.1(c) hereto or in any Commission
Documents, the offer and sale of all capital stock, convertible securities,
rights, warrants, or options of the Company issued prior to the Closing complied
with all applicable federal and state securities laws, and to the best knowledge
of the Company, no holder of such securities has a right of rescission or has
made or threatened to make a claim for rescission or damages with respect
thereto which could have a Material Adverse Effect. The Company has furnished or
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made available to the Purchasers true and correct copies of the Company's
Certificate of Incorporation as in effect on the date hereof (the
"Certificate"), and the Company's Bylaws as in effect on the date hereof (the
"Bylaws").
(d) Issuance of Securities. The Shares and the Warrants to be issued at the
Closing have been duly authorized by all necessary corporate action and, when
paid for or issued in accordance with the terms hereof, the Shares shall be
validly issued and outstanding, fully paid and nonassessable and free and clear
of all liens, encumbrances and rights of first refusal of any kind and the
holders shall be entitled to all rights accorded to a holder of Preferred Stock.
When the Conversion Shares are issued in accordance with the terms of the
Preferred Stock, such shares will be duly authorized by all necessary corporate
action and validly issued and outstanding, fully paid and nonassessable, free
and clear of all liens, encumbrances and rights of first refusal of any kind and
the holders shall be entitled to all rights accorded to a holder of Common
Stock. When the Warrant Shares are issued and paid for in accordance with the
terms of this Agreement and as set forth in the Warrants, such shares will be
duly authorized by all necessary corporate action and validly issued and
outstanding, fully paid and nonassessable, free and clear of all liens,
encumbrances and rights of first refusal of any kind and the holders shall be
entitled to all rights accorded to a holder of Common Stock.
(e) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not (i) violate any
provision of the Certificate or Bylaws, (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, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation to
which the Company is a party or by which the Company's properties or assets are
bound, (iii) create or impose a lien, mortgage, security interest, charge or
encumbrance of any nature on any property or asset of the Company under any
agreement or any commitment to which the Company is a party or by which the
Company is bound or by which any of their respective properties or assets are
bound, or (iv) result in a violation of any federal, state, local or foreign
statute, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected, except, in all cases
other than violations pursuant to clauses (i) or (iv) (with respect to federal
and state securities laws) above, for such conflicts, defaults, terminations,
amendments, acceleration, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect. The business
of the Company is not being conducted in violation of any laws, ordinances or
regulations of any governmental entity, except for possible violations which
singularly or in the aggregate do not and will not have a Material Adverse
Effect. The Company is not required under federal, state, foreign or local law,
rule or regulation 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 the Transaction
Documents or issue and sell the Shares, the Conversion Shares, the Warrants or
the Warrant Shares in accordance with the terms hereof or thereof (other than
any filings which may be required to be made by the Company with the Securities
and Exchange Commission (the "Commission"), the American Stock Exchange prior to
or subsequent to the Closing, or state securities administrators subsequent to
the Closing, or any registration statement which may be filed pursuant hereto or
thereto).
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(f) Commission Documents; Commission Filings; Financial Statements. The
Common Stock is registered pursuant to Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, except as disclosed
on Schedule 2.1(f) hereto, the Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
Commission pursuant to the reporting requirements of the Exchange Act, including
material filed pursuant to Section 13(a) or 15(d) of the Exchange Act (all of
the foregoing, including filings incorporated by reference therein, being
referred to herein as the "Commission Documents"). The Company has delivered or
made available to the Purchasers true and complete copies of the Commission
Documents filed with the Commission since December 31, 2000. The Company has not
provided to the Purchasers any material non-public information or other
information which, according to applicable law, rule or regulation, should have
been disclosed publicly by the Company but which has not been so disclosed,
other than with respect to the transactions contemplated by this Agreement. At
the time of its filing, the Form 10-Q for the fiscal quarter ended September 30,
2002 (the "Form 10-Q") complied in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission promulgated
thereunder and other federal, state and local laws, rules and regulations
applicable to such documents, and the Form 10-Q did not contain any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. At the time of its
filing, the Form 10-K for the fiscal year ended December 31, 2001 (the "Form
10-K") complied in all material respects with the requirements of the Exchange
Act and the rules and regulations of the Commission promulgated thereunder and
other federal, state and local laws, rules and regulations applicable to such
documents, and the Form 10-K did not contain any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. As of their respective dates, the
financial statements of the Company included in the Commission Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the Notes thereto
or (ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements), and fairly present
in all material respects the financial position of the Company as of the dates
thereof and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
(g) Subsidiaries. The Company has no Subsidiaries. For the purposes of this
Agreement, "Subsidiary" shall mean any corporation or other entity of which at
least a majority of the securities or other ownership interest having ordinary
voting power (absolutely or contingently) for the election of directors or other
persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other Subsidiaries.
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(h) No Material Adverse Change. Since September 30, 2002, the Company has
not experienced or suffered any Material Adverse Effect, except as disclosed on
Schedule 2.1(h) hereto.
(i) No Undisclosed Liabilities. Except as disclosed on Schedule 2.1(i)
hereto, the Company has no liabilities, obligations, claims or losses (whether
liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those set forth on the balance sheet included in the
Form 10-Q or incurred in the ordinary course of the Company's business since
September 30, 2002 and which, individually or in the aggregate, do not or would
not have a Material Adverse Effect on the Company.
(j) No Undisclosed Events or Circumstances. Since September 30, 2002,
except as disclosed on Schedule 2.1(j) hereto, no event or circumstance has
occurred or exists with respect to the Company or its business, properties,
prospects, operations or financial condition, which, under applicable law, rule
or regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed.
(k) Indebtedness. Schedule 2.1(k) hereto sets forth as of the date hereof
all outstanding secured and unsecured Indebtedness of the Company, or for which
the Company has commitments, which Indebtedness is not disclosed in any
Commission Documents. For the purposes of this Agreement, "Indebtedness" shall
mean (a) any liabilities for borrowed money in excess of $100,000 (other than
trade accounts payable incurred in the ordinary course of business), (b) all
guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others in excess of $100,000, whether or not the same are or
should be reflected in the Company's balance sheet (or the Notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business, and (c)
the present value of any lease payments in excess of $100,000 due under leases
required to be capitalized in accordance with GAAP. Except as disclosed on
Schedule 2.1(k) or in any Commission Documents, the Company is not in default
with respect to any Indebtedness.
(l) Title to Assets. The Company has good and marketable title to all of
its real and personal property, free and clear of any mortgages, pledges,
charges, liens, security interests or other encumbrances of any nature
whatsoever, except for those indicated on Schedule 2.1(l) hereto or disclosed in
any Commission Documents or such that, individually or in the aggregate, do not
have a Material Adverse Effect. All material leases of the Company are valid and
subsisting and in full force and effect.
(m) Actions Pending. Except as set forth in the Commission Documents or
Schedule 2.1(m) hereto, there is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or other proceeding pending
or, to the knowledge of the Company, threatened against the Company which
questions the validity of this Agreement or any of the other Transaction
Documents or any of the transactions contemplated hereby or thereby or any
action taken or to be taken pursuant hereto or thereto. Except as set forth in
any Commission Document or on Schedule 2.1(m) hereto: (i) there is no action,
suit, claim, investigation, arbitration, alternate dispute resolution proceeding
6
or other proceeding pending or, to the knowledge of the Company, threatened
against or involving the Company or any of its properties or assets, which
individually or in the aggregate, would have a Material Adverse Effect, and (ii)
there are no outstanding orders, judgments, injunctions, awards or decrees of
any court, arbitrator or governmental or regulatory body against the Company or
any officers or directors of the Company in their capacities as such, which
individually, or in the aggregate, would have a Material Adverse Effect.
(n) Compliance with Law. The business of the Company has been and is
presently being conducted in accordance with all applicable federal, state and
local governmental laws, rules, regulations and ordinances, except as set forth
in the Commission Documents or on Schedule 2.1(n) hereto or such that,
individually or in the aggregate, the noncompliance therewith would not have a
Material Adverse Effect. The Company has all franchises, permits, licenses,
consents and other governmental or regulatory authorizations and approvals
necessary for the conduct of its business as now being conducted by it unless
the failure to possess such franchises, permits, licenses, consents and other
governmental or regulatory authorizations and approvals, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(o) Taxes. Except as set forth on Schedule 2.1(o) hereto or disclosed in
the Commission Documents, the Company has accurately prepared and filed all
federal, state and other tax returns required by law to be filed by it, has paid
or made provisions for the payment of all taxes shown to be due and all
additional assessments, and adequate provisions have been and are reflected in
the financial statements of the Company for all current taxes and other charges
to which the Company is subject and which are not currently due and payable.
Except as disclosed on Schedule 2.1(o) hereto, none of the federal income tax
returns of the Company have been audited by the Internal Revenue Service. Except
as disclosed in the Commission Documents, the Company has no knowledge of any
additional assessments, adjustments or contingent tax liability (whether federal
or state) of any nature whatsoever, whether pending or threatened against the
Company for any period, nor of any basis for any such assessment, adjustment or
contingency.
(p) Certain Fees. Except as set forth on Schedule 2.1(p) hereto, the
Company has not employed any broker or finder or incurred any liability for any
brokerage or investment banking fees, commissions, finders' structuring fees,
financial advisory fees or other similar fees in connection with the Transaction
Documents.
(q) Disclosure. To the best of the Company's knowledge, neither this
Agreement or any Transaction Document contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements made herein or therein, in the light of the circumstances under which
they were made herein or therein, not misleading.
(r) Intellectual Property. Schedule 2.1(r) contains a complete and correct
list of all patents, trademarks, domain names (whether or not registered) and
any patentable improvements or copyrightable derivative works thereof, websites
and intellectual property rights relating thereto, service marks, trade names,
copyrights, licenses and authorizations, and all rights with respect to the
foregoing held by the Company (collectively, the "Proprietary Rights"). The
Company owns or possesses all the Proprietary Rights, which are necessary for
the conduct of its business as now conducted without any conflict with the
rights of others. Except as disclosed in the Commission Documents or Schedule
2.1(r) hereto, (i) as of the date of this Agreement, the Company has not
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received any written notice that any Proprietary Rights have been declared
unenforceable or otherwise invalid by any court or governmental agency, and (ii)
as of the date of this Agreement, there is, to the knowledge of the Company, no
material existing infringement, misuse or misappropriation of any Proprietary
Rights by others that could have a Material Adverse Effect. From September 30,
2002 to the date of this Agreement, the Company has not received any written
notice alleging that the operation of the business of the Company infringes in
any material respect upon the intellectual property rights of others.
(s) Environmental Compliance. Except as disclosed on Schedule 2.1(s) hereto
or the Commission Documents, the Company has obtained all material approvals,
authorization, certificates, consents, licenses, orders and permits or other
similar authorizations of all governmental authorities, or from any other
person, that are required under any Environmental Laws. Schedule 2.1(s) hereto
sets forth all material permits, licenses and other authorizations issued under
any Environmental Laws to the Company. "Environmental Laws" shall mean all U.S.
Federal or state laws applicable to the Company relating to the protection of
the environment including, without limitation, all requirements pertaining to
reporting, licensing, permitting, controlling, investigating or remediating
emissions, discharges, releases or threatened releases of hazardous substances,
chemical substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of hazardous
substances, chemical substances, pollutants, contaminants or toxic substances,
material or wastes, whether solid, liquid or gaseous in nature. Except as set
forth on Schedule 2.1(s) hereto, the Company has all necessary governmental
approvals required under all Environmental Laws and used in its business, except
for such instances as would not individually or in the aggregate have a Material
Adverse Effect. The Company is also in compliance with all other limitations,
restrictions, conditions, standards, requirements, schedules and timetables
required or imposed under all Environmental Laws where non-compliance could have
a Material Adverse Effect. Except for such instances as would not individually
or in the aggregate have a Material Adverse Effect or as disclosed in the
Commission Documents, there are no past or present events, conditions,
circumstances, incidents, actions or omissions relating to or in any way
affecting the Company that violate or may violate any Environmental Law after
the Closing or that may give rise to any Environmental Liabilities, or otherwise
form the basis of any claim, action, demand, suit, proceeding, hearing, study or
investigation (i) under any Environmental Law, or (ii) based on or related to
the manufacture, processing, distribution, use, treatment, storage (including,
without limitation, underground storage tanks), disposal, transport or handling,
or the emission, discharge, release or threatened release of any hazardous
substance. "Environmental Liabilities" means all liabilities of a person
(whether such liabilities are owed by such person to governmental authorities,
third parties or otherwise) currently in existence or arising hereafter and
which arise under or relate to any Environmental Law.
(t) Books and Records; Internal Accounting Controls. The books, records and
documents of the Company accurately reflect in all material respects the
information relating to the business of the Company, the location and collection
of their assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of the Company. The Company maintains a
system of internal accounting controls sufficient, in the judgment of the
Company's board of directors, to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
8
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate actions are taken with respect to any differences.
(u) Material Agreements. Except for the Transaction Documents or as set
forth on Schedule 2.1(u) hereto, or those that are included as exhibits to the
Commission Documents, the Company is not a party to any written or oral
contract, instrument, agreement, commitment, obligation, plan or arrangement, a
copy of which would be required to be filed with the Commission if the Company
were registering securities under the Securities Act (collectively, "Material
Agreements"). Except as set forth in the Commission Documents or on Schedule
2.1(u) hereto, the Company has in all material respects performed all the
obligations required to be performed by them to date under the foregoing
agreements, have received no notice of default and, to the best of the Company's
knowledge, are not in default under any Material Agreement now in effect, the
result of which could cause a Material Adverse Effect. No written or oral
contract, instrument, agreement (other than the Certificate of Designation with
respect to the Preferred Stock, this Agreement or any other Transaction
Document(s)), commitment, obligation (other than any obligation imposed by state
law), plan or arrangement of the Company limits or shall limit the payment of
dividends on its Common Stock.
(v) Transactions with Affiliates. Except as set forth on Schedule 2.1(v)
hereto or disclosed in any of the Commission Documents, there are no loans,
leases, agreements, contracts, royalty agreements, management contracts or
arrangements or other continuing transactions between (i) the Company or any of
its customers or suppliers, on the one hand, and (ii) on the other hand, any
officer, employee, consultant or director of the Company, or any person owning
any capital stock of the Company or any member of the immediate family of such
officer, employee, consultant, director or stockholder or any corporation or
other entity controlled by such officer, employee, consultant, director or
stockholder.
(w) Securities Act of 1933. Assuming the accuracy and completeness of the
representations, warranties and covenants of the Purchasers contained herein,
the Company has complied and will comply with all applicable federal and state
securities laws in connection with the offer, issuance and sale of the Shares,
the Conversion Shares, the Warrants and the Warrant Shares hereunder. Neither
the Company nor anyone acting on its behalf, directly or indirectly, has or will
sell, offer to sell or solicit offers to buy any of the Securities, or similar
securities to, or solicit offers with respect thereto from, or enter into any
preliminary conversations or negotiations relating thereto with, any person, or
has taken or will take any action so as to require registration of the issuance
and sale of any of the Securities under the registration provisions of the
Securities Act and applicable state securities laws. Neither the Company nor any
of its affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
any of the Securities.
(x) Governmental Approvals. Except as set forth on Schedule 2.1(x) hereto,
and except for the filing of any notice prior or subsequent to the Closing that
may be required under applicable state and/or federal securities laws (which if
9
required, shall be filed on a timely basis), no authorization, consent,
approval, license, exemption of, filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, is or will be necessary for, or in connection with, the
execution or delivery of the Shares and the Warrants, or, except as set forth in
this Agreement or any other Transaction Document, for the performance by the
Company of its obligations under the Transaction Documents.
(y) Employees. The Company does not have any collective bargaining
arrangements or agreements covering any of its employees. Except as set forth in
the Commission Documents or on Schedule 2.1(y) hereto, the Company does not have
any employment contract, agreement regarding proprietary information,
non-competition agreement, non-solicitation agreement, confidentiality
agreement, or any other similar contract or restrictive covenant, relating to
the right of any officer, employee or consultant to be employed or engaged by
the Company. Since September 30, 2002, no officer, consultant or key employee of
the Company whose termination, either individually or in the aggregate, could
have a Material Adverse Effect, has terminated or, to the knowledge of the
Company, has any present intention of terminating his or her employment or
engagement with the Company.
(z) Absence of Certain Developments. Except as set forth in the Commission
Documents or on Schedule 2.1(z) hereto, since September 30, 2002, Company has
not:
(i) issued any stock, bonds or other corporate securities or any
rights, options or warrants with respect thereto;
(ii) borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except current liabilities incurred in
the ordinary course of business which are comparable in nature and amount
to the current liabilities incurred in the ordinary course of business
during the comparable portion of its prior fiscal year, as adjusted to
reflect the current nature and volume of the Company's business;
(iii) discharged or satisfied any material lien or encumbrance or paid
a material amount of any obligation or liability (absolute or contingent),
other than current liabilities paid in the ordinary course of business;
(iv) declared or made any payment or distribution of cash or other
property to stockholders with respect to its stock, or purchased or
redeemed, or made any agreements so to purchase or redeem, any shares of
its capital stock;
(v) sold, assigned or transferred any other tangible assets, or
canceled any debts or claims, except in the ordinary course of business;
(vi) sold, assigned or transferred any patent rights, trademarks,
trade names, copyrights, trade secrets or other intangible assets or
intellectual property rights, which sale, assignment or transfer has had a
Material Adverse Effect, or disclosed any proprietary confidential
10
information to any person except in the ordinary course of business or to
the Purchasers or their representatives;
(vii) suffered any substantial losses or waived any rights of material
value, whether or not in the ordinary course of business, or suffered the
loss of any material amount of prospective business;
(viii) made any changes in employee compensation except in the
ordinary course of business and consistent with past practices;
(ix) made capital expenditures or commitments therefor that aggregate
in excess of $25,000;
(x) entered into any other transaction other than in the ordinary
course of business, or entered into any other material transaction, whether
or not in the ordinary course of business;
(xi) made charitable contributions or pledges in excess of $25,000;
(xii) suffered any material damage, destruction or casualty loss,
whether or not covered by insurance;
(xiii) experienced any material problems with labor or management in
connection with the terms and conditions of their employment; or (xiv)
entered into an agreement, written or otherwise, to take any of the
foregoing actions.
(aa) Use of Proceeds. Except as set forth on Schedule 2.1(aa), the proceeds
from the sale of the Shares and the Warrants will be used by the Company for
working capital purposes and, except as set forth on Schedule 2.1(aa), shall not
be used to repay any outstanding Indebtedness or any loans to any officer,
director, affiliate or insider of the Company.
(bb) Public Utility Holding Company Act and Investment Company Act Status.
The Company is not a "holding company" or a "public utility company" as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
The Company is not, and as a result of and immediately upon Closing will not be,
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
(cc) ERISA. No liability to the Pension Benefit Guaranty Corporation has
been incurred with respect to any Plan by the Company which is or would cause a
Material Adverse Effect. The execution and delivery of this Agreement and the
issue and sale of the Shares and the Warrants will not involve any transaction
which is subject to the prohibitions of Section 406 of ERISA or in connection
with which a tax could be imposed pursuant to Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"); provided that, if any Purchaser,
or any person or entity that owns a beneficial interest in any Purchaser, is an
"employee pension benefit plan" (within the meaning of Section 3(2) of ERISA)
11
with respect to which the Company is a "party in interest" (within the meaning
of Section 3(14) of ERISA), the requirements of Sections 407(d)(5) and 408(e) of
ERISA, if applicable, are met. As used in this Section 2.1(cc), the term "Plan"
shall mean an "employee pension benefit plan" (as defined in Section 3 of ERISA)
which is or has been established or maintained, or to which contributions are or
have been made, by the Company or by any trade or business, whether or not
incorporated, which, together with the Company, is under common control, as
described in Section 414(b) or (c) of the Code.
(dd) Delisting Notification. The Company has not received a delisting
notification from the American Stock Exchange, and to its knowledge, there are
no existing facts or circumstances that could give rise to the delisting of the
Common Stock from the American Stock Exchange.
Section 2.2 Representations and Warranties of the Purchasers. Each of the
Purchasers hereby makes the following representations and warranties to the
Company with respect solely to itself and not with respect to any other
Purchaser:
(a) Organization and Standing of the Purchasers. If the Purchaser is an
entity, such Purchaser is a corporation, limited liability company or
partnership duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization.
(b) Authorization and Power. Each Purchaser has the requisite power and
authority to enter into and perform the this Agreement, the Registration Rights
Agreement, the Warrants, and the other agreements and documents contemplated
hereby and thereby and executed by the Purchaser or to which the Purchaser is
party (collectively, the "Purchaser Transaction Documents") and to purchase the
Shares and Warrants being sold to it hereunder. The execution, delivery and
performance of the Purchaser Transaction Documents by each Purchaser and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate or partnership action, and no further
consent or authorization of such Purchaser or its Board of Directors,
stockholders, or partners, as the case may be, is required. This Agreement has
been duly authorized, executed and delivered by each Purchaser. Each of the
Purchaser Transaction Documents constitutes, or shall constitute when executed
and delivered, valid and binding obligations of each Purchaser enforceable
against such Purchaser in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor's
rights and remedies or by equitable principles or remedies of general
application.
(c) Acquisition for Investment. Each Purchaser is purchasing the Shares and
acquiring the Warrants solely for its own account for the purpose of investment
and not with a view to or for sale in connection with any distribution thereof.
Each Purchaser does not have a present intention to sell any of the Securities,
nor a present arrangement (whether or not legally binding) or intention to
effect any distribution of any of the Securities to or through any person or
entity; provided, however, that by making the representations herein and subject
to Section 2.2(e) below, each Purchaser does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to
12
dispose of any of the Securities at any time in accordance with federal and
state securities laws applicable to such disposition provided that the Company
receives an opinion of its counsel to the effect that such disposition complies
with such laws. Each Purchaser acknowledges that it (i) has such knowledge and
experience in financial and business matters such that such Purchaser is capable
of evaluating the merits and risks of its investment in the Company, (ii) is
able to bear the financial risks associated with an investment in the
Securities, and (iii) has been given full access to such records of the Company
and to the officers of the Company as it has deemed necessary or appropriate to
conduct its due diligence investigation.
(d) Rule 144. Each Purchaser understands that the Securities must be held
indefinitely unless such Securities are registered under the Securities Act or
an exemption from registration is available. Each Purchaser acknowledges that it
is familiar with Rule 144 of the rules and regulations of the Commission, as
amended, promulgated pursuant to the Securities Act ("Rule 144"), and that such
Purchaser has been advised that Rule 144 permits resales only under certain
circumstances. Each Purchaser understands that to the extent that Rule 144 is
not available, such Purchaser will be unable to sell any Securities without
either registration under the Securities Act or the existence of another
exemption from such registration requirement, provided that the Company receives
an opinion of its counsel to the effect that such sale is exempt from such
registration requirement.
(e) General. Each Purchaser understands that the Securities are being
offered and sold in reliance on a transactional exemption from the registration
requirements of federal and state securities laws and the Company is relying
upon the truth, accuracy and completeness of the representations, warranties,
agreements, acknowledgments and understandings of such Purchaser set forth
herein and in the other Purchaser Transaction Documents in order to determine
the applicability of such exemptions and the suitability of such Purchaser to
acquire the Securities. Each Purchaser understands that no United States federal
or state agency or any government or governmental agency has passed upon or made
any recommendation or endorsement with respect to any of the Securities.
(f) Opportunities for Additional Information. Each Purchaser acknowledges
that such Purchaser has had the opportunity to ask questions of and receive
answers from, or obtain additional information from, the executive officers of
the Company concerning the financial and other affairs of the Company, and to
the extent deemed necessary by such Purchaser in light of such Purchaser's
personal knowledge of the Company's affairs, such Purchaser has asked such
questions and received answers to the full satisfaction of such Purchaser, and
such Purchaser desires to invest in the Company.
(g) No General Solicitation. Each Purchaser acknowledges that the
Securities were not offered to such Purchaser by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media, or broadcast over television or radio, or (ii) any seminar or meeting to
which such Purchaser was invited by any of the foregoing means of
communications.
13
(h) Accredited Investor. Each Purchaser is an accredited investor (as
defined in Rule 501 of Regulation D), and such Purchaser has such experience in
business and financial matters that it is capable of evaluating the merits and
risks of an investment in the Securities. Each Purchaser acknowledges that an
investment in the Securities is speculative and involves a high degree of risk.
ARTICLE III
Covenants
The Company covenants with each Purchaser as follows, which covenants are
for the benefit of each Purchaser and their respective permitted assignees.
Section 3.1 Securities Compliance. The Company shall notify the Commission
in accordance with their rules and regulations, of the transactions contemplated
by any of the Transaction Documents and shall take all other necessary action
and proceedings as may be required and permitted by applicable law, rule and
regulation, for the legal and valid issuance of the Securities to the
Purchasers, or their respective subsequent holders. Each Purchaser shall
cooperate with the Company and its officers, counsel and representatives and
provide information regarding Purchaser and the transactions contemplated hereby
and by any of the other Purchaser Transaction Documents as reasonably requested
by the Company.
Section 3.2 Registration and Listing. The Company will cause its Common
Stock to continue to be registered under Section 12(b) or 12(g) of the Exchange
Act, will comply in all respects with its reporting and filing obligations under
the Exchange Act, will comply with all requirements related to any registration
statement filed pursuant to this Agreement, and will not take any action or file
any document (whether or not permitted by the Securities Act or the rules
promulgated thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under the Exchange Act
or Securities Act, except as permitted herein. The Company shall use its best
efforts to continue the listing or trading of its Common Stock on the American
Stock Exchange or any successor market. The Company will promptly file the
"Listing Application" for, or in connection with, the issuance and delivery of
the Shares, the Conversion Shares, the Warrants and the Warrant Shares.
Section 3.3 Inspection Rights. In the event the Registration Statement (as
defined in the Registration Rights Agreement) is not effective, has been
suspended or is otherwise no longer effective, the Company shall permit, during
normal business hours and upon reasonable request and reasonable notice, a
Purchaser or any employees, agents or representatives thereof that are parties
to an effective confidentiality agreement with the Company of appropriate scope,
so long as a Purchaser shall be obligated hereunder to purchase the Shares or
shall beneficially own the Shares or Conversion Shares, or shall own Warrant
Shares or the Warrants which, in the aggregate, represent more than two percent
(2%) of the total combined voting power of all voting securities then
outstanding, to examine and make reasonable copies of and extracts from the
records and books of account of, and visit and inspect, during the term of the
Warrants, the properties, assets, operations and business of the Company, and to
14
discuss the affairs, finances and accounts of the Company with any of its
officers, consultants, directors, and key employees.
Section 3.4 Compliance with Laws. The Company shall comply with all
applicable laws, rules, regulations and orders, the noncompliance with which
could have a Material Adverse Effect.
Section 3.5 Keeping of Records and Books of Account. The Company shall keep
adequate records and books of account, in which complete entries will be made in
accordance with GAAP consistently applied.
Section 3.6 Reporting Requirements. The Company shall furnish two (2)
copies of the following to the Purchasers in a timely manner so long as the
Purchasers shall be obligated hereunder to purchase the Shares or shall
beneficially own the Shares or Warrants, or shall own Conversion Shares or
Warrant Shares which, in the aggregate, represent more than one percent (1%) of
the total combined voting power of all voting securities then outstanding:
(a) Quarterly Reports filed with the Commission on Form 10-Q as soon as
available, and in any event within forty-five (45) days after the end of each of
the first three (3) fiscal quarters of the Company;
(b) Annual Reports filed with the Commission on Form 10-K as soon as
available, and in any event within ninety (90) days after the end of each fiscal
year of the Company; and
(c) Copies of all notices and information, including without limitation
notices and proxy statements in connection with any meetings, that are provided
to holders of shares of Common Stock, contemporaneously with the delivery of
such notices or information to such holders of Common Stock.
Section 3.7 Other Agreements. The Company shall not enter into any
agreement containing any provision that would violate the terms of, or cause a
default under, any material term of any Transaction Document.
Section 3.8 Subsequent Financings; Right of First Refusal. (a) Until such
time as all of the Shares are redeemed or converted to Conversion Shares, the
Company covenants and agrees to promptly notify (in no event later than five (5)
days after making or receiving an applicable offer) in writing (a "Rights
Notice") the Purchasers of the terms and conditions of any proposed offer or
sale to or exchange with (or other type of distribution to) any third party (a
"Subsequent Financing"), of any securities of the Company (whether equity, debt
or otherwise), including convertible and non-convertible securities
(collectively, the "Financing Securities"). The Rights Notice shall describe, in
reasonable detail, the proposed Subsequent Financing, the proposed closing date
of the Subsequent Financing, which shall not be within twenty (20) calendar days
from the date of the Rights Notice nor later than forty five (45) calendar days
from the date of the Rights Notice, including, without limitation, all of the
material terms and conditions thereof. The Rights Notice shall provide each
Purchaser an option (the "Rights Option") during the ten (10) trading days
following delivery of the Rights Notice (the "Option Period") to purchase all or
any portion of the Financing Securities contemplated by such Subsequent
15
Financing on the same, absolute terms and conditions as contemplated by such
Subsequent Financing (the "First Refusal Rights"). Delivery of any Rights Notice
constitutes a representation and warranty by the Company that there are no other
material terms and conditions, arrangements, agreements or otherwise except for
those disclosed in the Rights Notice, to provide additional compensation to any
party participating in any proposed Subsequent Financing, including, but not
limited to, additional compensation based on changes in the purchase price or
any type of reset or adjustment of a purchase or conversion price or to issue
additional securities at any time after the closing date of a Subsequent
Financing. If the Company does not receive notice of exercise of the Rights
Option from any of the Purchasers within the Option Period, the Company shall
have the right to close the Subsequent Financing on the scheduled closing date
with a third party; provided that all of the material terms and conditions of
the closing are the same as those provided to the Purchasers in the Rights
Notice. If the closing of the proposed Subsequent Financing does not occur on
that date, any closing of the contemplated Subsequent Financing or any other
Subsequent Financing shall be subject to all of the provisions of this Section
3.8, including, without limitation, the delivery of a new Rights Notice.
(b) For purposes of this Agreement, a Permitted Financing (as defined
hereinafter) shall not be considered a Subsequent Financing. A "Permitted
Financing" shall mean (i) shares of Common Stock to be issued to strategic
partners and/or in connection with a strategic merger or acquisition; (ii)
shares of Common Stock or the issuance of options to purchase shares of Common
Stock to employees, officers, directors, consultants and vendors in accordance
with the Company's equity incentive policies; (iii) the issuance of securities
pursuant to an underwritten public offering of the Company's securities; or (iv)
the conversion or exercise of convertible or exercisable securities issued or
outstanding prior to the date hereof; provided, that, the conversion price or
exercise price shall not be reset to provide for the issuance of additional
shares of Common Stock.
Section 3.9 Reservation of Shares. So long as the Shares or Warrants remain
outstanding, the Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, the maximum number of
shares of Common Stock to effect the conversion of the Shares and the exercise
of the Warrants.
Section 3.10 Confidentiality. Each Purchaser covenants and agrees to keep
confidential any and all material non-public information which it has heretofore
obtained or shall hereafter obtain, directly or indirectly, from the Company
pursuant to this Agreement or any other Transaction Document or otherwise, and
agrees not to use the same except for the purpose of this Agreement or any other
Transaction Document or to disclose the same to any party except as provided
below, without the Company's prior written consent; provided that the terms of
this Section 3.10 shall not extend to any such information that :
(a) is already publicly known:
(b) has become publicly known without any fault of such Purchaser;
(c) is required to be disclosed by such Purchaser to any governmental
authority or court of law as a result of operation of law, regulation or court
order; provided, however, that such Purchaser shall have first given prompt
16
written notice of such requirement to the Company (if permissible) and
cooperates with the Company to restrict such disclosure and/or obtain
confidential treatment thereof.
The foregoing notwithstanding, the Purchaser may disclose such information to
each of its directors, officers, employees, partners and representatives (which
representatives have a need to know such information); provided that such
Purchaser informs such persons of the restrictions set forth in this Section
3.10 with respect to such information and such persons agree to comply with the
provisions of this Section 3.10. Each Purchaser further agrees to give prompt
notice to the Company of any disclosure made by such Purchaser or any of its
directors, officers, employees, partners or representatives in breach of this
Section 3.10, to the extent such Purchase has knowledge of such disclosure;
provided that such Purchaser shall have no liability for losses incurred by the
Company or any of its directors, officers, employees, stockholders or
representatives solely as the result of the Company's failure, following its
actual receipt of notice from such Purchaser of disclosure of information in
breach of this Agreement, to make prompt public disclosure of the information so
disclosed in compliance with Regulation FD. For purposes of this Section 3.10,
the knowledge of a Purchaser shall mean the actual knowledge of the person
executing this Agreement on such Purchaser's behalf or any successor to such
person.
ARTICLE IV
Conditions
Section 4.1 Conditions Precedent to the Obligation of the Company to Close
and to Sell the Shares and Warrants. The obligation hereunder of the Company to
close and issue and sell the Shares and the Warrants to the Purchasers on the
Closing Date is subject to the satisfaction or waiver, at or before the Closing,
of the conditions set forth below. These conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion.
(a) Accuracy of the Purchasers' Representations and Warranties. The
representations and warranties of each Purchaser Transaction Documents shall be
true and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which shall be true
and correct in all material respects as of such date.
(b) Performance by the Purchasers. Each Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Purchasers at or prior to the Closing Date.
(c) No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.
17
(d) No Proceedings or Litigation. No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company, or any of the officers, directors or affiliates of the Company,
seeking to restrain, prevent or changes the transactions contemplated by this
Agreement, or seeking damages in connection with such transactions.
(e) Resolutions. The Board of Directors of each Purchaser or body or
persons having similar authority on behalf of such Purchaser shall have adopted
resolutions consistent with Section 2.2(b) hereof in a from reasonably
acceptable to the Company (the "Purchaser Resolutions").
(f) Delivery of Purchase Price. The Purchase Price for the Shares and
Warrants shall have been delivered to the Company at the Closing.
(g) Delivery of Purchaser Transaction Documents. The Purchaser Transaction
Documents shall have been duly executed and delivered by the Purchasers to the
Company.
(h) Amex Approval. The American Stock Exchange shall have approved issuance
of the Securities under the terms of the Transaction Documents.
(i) Receipt of Documents. The Company shall have received such certificates
and documents as the Company or its counsel shall reasonably require incident to
the Closing.
(j) Secretary's Certificate. Each Purchaser that is an entity shall have
delivered to the Company a secretary's certificate, dated as of the Closing
Date, as to (i) the Purchaser Resolutions, and (ii) the authority and incumbency
of the officers or other representatives of such Purchaser executing the
Purchaser Transaction Documents and any other documents required to be executed
or delivered in connection therewith.
(k) Officer's or Purchaser's Certificate. On the Closing Date, each
Purchaser shall have delivered to the Company a certificate (if such Purchaser
is an entity, the certificate shall be of an executive officer of, or person
holding a position of similar authority with, such Purchaser), dated as of the
Closing Date, confirming the accuracy of such Purchaser's representations,
warranties and covenants contained herein and in each of the other Purchaser
Transaction Documents as of the Closing Date and confirming the compliance by
such Purchaser with the conditions precedent set forth in this Section 4.1 as of
the Closing Date.
Section 4.2 Conditions Precedent to the Obligation of the Purchasers to
Close and to Purchase the Shares and Warrants. The obligation hereunder of the
Purchasers to purchase the Shares and Warrants and consummate the transactions
contemplated by this Agreement is subject to the satisfaction or waiver, at or
before the Closing, of each of the conditions set forth below. These conditions
are for the Purchasers' sole benefit and may be waived by the Purchasers at any
time in their sole discretion.
18
(a) Accuracy of the Company's Representations and Warranties. Each of the
representations and warranties of the Company in this Agreement and in each of
the Transaction Documents shall be true and correct in all material respects as
of the Closing Date, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.
(b) Performance by the Company. The Company shall have performed, satisfied
and complied in all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Closing Date.
(c) No Suspension, Etc. Trading in the Company's Common Stock shall not
have been suspended by the Commission (except for any suspension of trading of
limited duration agreed to by the Company, which suspension shall be terminated
prior to the Closing), and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg Financial Markets ("Bloomberg")
shall not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by Bloomberg, or on the New
York Stock Exchange or the American Stock Exchange, nor shall a banking
moratorium have been declared either by the United States or New York State
authorities, nor shall there have occurred any national or international
calamity or crisis of such magnitude in its effect on any financial market
which, in each case, in the reasonable judgment of the Purchasers, makes it
impracticable or inadvisable to purchase the Shares.
(d) No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.
(e) No Proceedings or Litigation. No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company or any of the officers, directors or affiliates of the Company,
seeking to restrain, prevent or change the transactions contemplated by this
Agreement, or seeking damages in connection with such transactions.
(f) Opinion of Counsel, Etc. The Purchasers shall have received an opinion
of counsel to the Company, dated the Closing Date, substantially in the form of
Exhibit C hereto, and such other certificates and documents as the Purchasers or
their counsel shall reasonably require incident to the Closing.
(g) Warrants and Shares. The Company shall have delivered to the Purchasers
the originally executed Warrants (in such denominations as each Purchaser may
request but in no event in denominations of less than 100) and shall have
delivered certificates representing the Shares (in such denominations as each
Purchaser may request) being acquired by the Purchasers at the Closing.
19
(h) Resolutions. The Board of Directors of the Company shall have adopted
resolutions consistent with Section 2.1(b) hereof in a form reasonably
acceptable to the Purchasers (the "Resolutions").
(i) Certificate of Designations. As of the Closing Date, the Company shall
have filed with the Delaware Secretary of State a Certificate of Designations
authorizing the Preferred Stock in substantially the Form of Exhibit D attached
hereto.
(j) Reservation of Shares. As of the Closing Date, the Company shall have
reserved out of its authorized and unissued Preferred Stock, solely for the
purpose of effecting the issuance of the Shares, a number of shares of Preferred
Stock equal to the aggregate number of the Shares. As of the Closing Date, the
Company shall have reserved out of its authorized and unissued Common Stock,
solely for the purpose of effecting the conversion of the Shares and the
exercise of the Warrants, a number of shares of Common Stock equal to the number
of Conversion Shares and the number of Warrant Shares issuable upon conversion
of the Preferred Stock and the exercise of the Warrants, respectively, assuming
the Warrants are exercised and the Shares are converted on the Closing Date
(assuming the Warrants are fully exercisable and the Shares fully convertible on
such date regardless of any limitation on the timing or amount of such exercise
or conversion).
(k) Secretary's Certificate. The Company shall have delivered to the
Purchasers a secretary's certificate, dated as of the Closing Date, as to (i)
the Resolutions, (ii) the Certificate, (iii) the Bylaws, each as in effect at
the Closing, and (iv) the authority and incumbency of the officers of the
Company executing the Transaction Documents and any other documents required to
be executed or delivered in connection therewith.
(l) Officer's Certificate. On the Closing Date, the Company shall have
delivered to the Purchasers a certificate of an executive officer of the
Company, dated as of the Closing Date, confirming the accuracy of the Company's
representations, warranties and covenants contained herein and in each of the
other Transaction Documents as of the Closing Date and confirming the compliance
by the Company with the conditions precedent set forth in this Section 4.2 as of
the Closing Date.
(m) Fees and Expenses. As of the Closing Date, all fees and expenses
required to be paid by the Company in connection with the transactions
contemplated by this Agreement shall have been, or authorized to be, paid by the
Company.
(n) Registration Rights Agreement. As of the Closing Date, the parties
shall have entered into the Registration Rights Agreement in the Form of Exhibit
E attached hereto.
(o) Material Adverse Effect. No Material Adverse Effect shall have
occurred.
20
ARTICLE V
Certificate Legend
Section 5.1 Legend. Each certificate representing the Shares, the
Conversion Shares, the Warrants and the Warrant Shares shall be stamped or
otherwise imprinted with a legend substantially in the following form (in
addition to any legend required by applicable state securities or "blue sky"
laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES
ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR INTELLI-CHECK, INC. SHALL
HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED.
Each certificate representing any Shares shall also be stamped or otherwise
imprinted with a legend substantially in the following form:
INTELLI-CHECK, INC. WILL FURNISH TO EACH HOLDER OF ITS SERIES A 8%
CONVERTIBLE PREFERRED STOCK WHO SO REQUESTS WITHOUT CHARGE A COPY OF THE
CERTIFICATE OF DESIGNATION SETTING FORTH THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS
OF SUCH STOCK AND ANY OTHER CLASS OR SERIES THEREOF AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.
The Company agrees to reissue certificates representing any of the
Securities, without the legend set forth above, if at such time, prior to making
any transfer of any such Securities, such holder thereof shall give written
notice to the Company describing the manner and terms of such transfer and
removal as the Company may reasonably request. Such proposed transfer will not
be effected until: (a) the Company has notified such holder that either (i) in
the opinion of Company counsel, the registration of the Shares, the Conversion
Shares, Warrants or Warrant Shares under the Securities Act is not required in
connection with such proposed transfer, or (ii) a registration statement under
the Securities Act covering such proposed disposition has been filed by the
Company with the Commission and has become effective under the Securities Act;
and (b) the Company has notified such holder that either (i) in the opinion of
21
Company counsel, the registration or qualification under the securities or "blue
sky" laws of any state is not required in connection with such proposed
disposition, or (ii) compliance with applicable state securities or "blue sky"
laws has been effected. The Company will use its best efforts to respond to any
such notice from a holder within five (5) days. In the case of any proposed
transfer under this Section 5.1, the Company will use reasonable efforts to
comply with any such applicable state securities or "blue sky" laws, but shall
in no event be required, in connection therewith, to qualify to do business in
any state where it is not then qualified or to take any action that would
subject it to tax or to the general service of process in any state where it is
not then subject. The restrictions on transfer contained in this Section 5.1
shall be in addition to, and not by way of limitation of, any other restrictions
on transfer contained in any other section of this Agreement.
ARTICLE VI
Termination
Section 6.1 Termination by Mutual Consent. This Agreement may be terminated
at any time prior to the Closing Date by the mutual written consent of the
Company and the Purchasers.
Section 6.2 Effect of Termination. In the event of termination by the
Company or the Purchasers, written notice thereof shall forthwith be given to
the other party and the transactions contemplated by this Agreement shall be
terminated without further action by any party. If this Agreement is terminated
as provided in Section 6.1 herein, this Agreement shall become void and of no
further force and effect, except for Sections 3.10, 8.1 and 8.2, and Article VII
herein. Nothing in this Section 6.2 shall be deemed to release the Company or
any Purchaser from any liability for any breach under this Agreement, or to
impair the rights of the Company or such Purchaser to compel specific
performance by the other party of its obligations under this Agreement.
ARTICLE VII
Indemnification
Section 7.1 General Indemnity. The Company agrees to indemnify and hold
harmless each Purchaser (and its respective directors, officers, employees,
affiliates, agents, successors and assigns) from and against any and all losses,
liabilities, deficiencies, costs, damages and expenses (including, without
limitation, reasonable attorneys' fees, charges and disbursements) incurred by
each Purchaser or any such person as a result of any inaccuracy in or breach of
the representations, warranties or covenants made by the Company herein. The
Purchasers severally but not jointly agree to indemnify and hold harmless the
Company and its directors, officers, employees, affiliates, agents, successors
and assigns from and against any and all losses, liabilities, deficiencies,
costs, damages and expenses (including, without limitation, reasonable
attorneys' fees, charges and disbursements) incurred by the Company as result of
any inaccuracy in or breach of the representations, warranties or covenants made
by the Purchasers herein.
Section 7.2 Indemnification Procedure. Any party entitled to
indemnification under this Article VII (an "indemnified party") will give
written notice to the indemnifying party of any matters giving rise to a claim
for indemnification; provided, that the failure of any party entitled to
22
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Article VII except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
indemnified party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnified party a conflict of interest between it
and the indemnifying party may exist with respect to such action, proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. In the event that the indemnifying party advises an
indemnified party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any indemnification
notice to notify such person in writing of the indemnifying party's election to
defend, settle or compromise, at its sole cost and expense, any action,
proceeding or claim (or discontinues its defense at any time after it commences
such defense), then the indemnified party may, at its option, defend, settle or
otherwise compromise or pay such action or claim. In any event, unless and until
the indemnifying party elects in writing to assume and does so assume the
defense of any such claim, proceeding or action, the indemnified party's costs
and expenses arising out of the defense, settlement or compromise of any such
action, claim or proceeding shall be losses subject to indemnification
hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to such
action or claim. The indemnifying party shall keep the indemnified party fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense. The indemnifying party shall not be liable for any settlement of any
action, claim or proceeding effected without its prior written consent.
Notwithstanding anything in this Article VII to the contrary, the indemnifying
party shall not, without the indemnified party's prior written consent, which
consent may not be unreasonably withheld, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future
obligation on the indemnified party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of such claim. If
the indemnifying party fails or refuses to promptly assume the defense of any
such claim, proceeding or action, then the indemnification required by this
Article VII shall be made by periodic payments of the amount thereof during the
course of investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred, so long as the indemnified party
irrevocably agrees to refund such moneys if it is ultimately determined by a
court of competent jurisdiction that such party was not entitled to
indemnification. The indemnity agreements contained herein shall be in addition
to (a) any cause of action or similar rights of the indemnified party against
the indemnifying party or others, and (b) any liabilities the indemnifying party
may be subject to pursuant to applicable law.
23
ARTICLE VIII
Miscellaneous
Section 8.1 Fees and Expenses. Each party shall pay the fees and expenses
of its advisors, counsel, accountants and other experts, if any, and all other
expenses, incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement; provided, however, that,
upon presentment of appropriate documentation, the Company shall pay all fees
and expenses (including attorneys' fees and expenses) incurred by the Purchasers
in connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Transaction Documents and the transactions contemplated
thereunder up to $35,000, regardless of whether or not Closing occurs (unless
the failure of the Closing to occur is a result of a breach by any Purchaser of
this Agreement or the termination of this Agreement by any Purchaser for any
reason other than breach hereof by the Company, in which event the Company shall
not be required to pay such fees or expenses). In addition, the Company shall
pay all reasonable fees and expenses incurred by the Purchasers in connection
with any amendments, modifications or waivers of this Agreement or any of the
other Transaction Documents or incurred in connection with the enforcement of
this Agreement and any of the other Transaction Documents, including, without
limitation, all reasonable attorneys' fees, disbursements and expenses.
Section 8.2 Specific Enforcement; Consent to Jurisdiction.
(a) The Company and the Purchasers acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement or
the other Transaction Documents were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement or the other Transaction Documents
and to enforce specifically the terms and provisions hereof or thereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.
(b) The Company and each Purchaser (i) hereby irrevocably submit to the
non-exclusive jurisdiction of the United States District Courts sitting in the
Northern District of Texas and the Eastern or Southern District of New York for
the purposes of any suit, action or proceeding arising out of or relating to
this Agreement or any of the other Transaction Documents or the transactions
contemplated hereby or thereby, and (ii) hereby waive, and agree not to assert
in any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of each such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. The Company and each Purchaser consent to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section 8.2 shall affect
or limit any right to serve process in any other manner permitted by law. The
Company and the Purchasers hereby agree that the prevailing party in any suit,
action or proceeding arising out of or relating to the Shares, this Agreement,
the Registration Rights Agreement or the Warrants, shall be entitled to
reimbursement for reasonable legal fees from the non-prevailing party.
24
Section 8.3 Entire Agreement; Amendment. This Agreement, the Transaction
Documents and the Purchaser Transaction Documents contain the entire
understanding and agreement of the parties with respect to the matters covered
hereby and, except as specifically set forth herein or in any of the Transaction
Documents or Purchaser Transaction Documents, neither the Company nor any
Purchaser make any representation, warranty, covenant or undertaking with
respect to such matters. This Agreement, the Transaction Documents and the
Purchaser Transaction Documents supersede all prior understandings and
agreements with respect to said subject matter, all of which are merged herein.
No provision of this Agreement may be waived or amended other than by a written
instrument signed by the Company and the Purchasers and their permitted assigns
owning of record at least a majority in interest of the then- outstanding
Shares, and no provision hereof may be waived other than by a written instrument
signed by the party against whom enforcement of any such waiver is sought. No
amendment to this Agreement shall be effective to the extent that it applies to
less than all of the holders of the Shares then outstanding or violates any
provision of the General Corporation Law of Delaware or any requirements of the
American Stock Exchange. No consideration shall be offered or paid to any person
to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration is also offered to all of
the parties to the Transaction Documents or holders of Shares, as the case may
be.
Section 8.4 Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be deemed given and received (a) upon hand delivery or delivery by
telecopy or facsimile at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be
received), or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
If to the Company: Intelli-Check, Inc.
000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with copies (which copies
shall not constitute notice
to the Company) to: Xxxxxxx, Xxxxxxxxx & Xxxxxxxx, LLP
000 Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
25
If to any Purchaser: At the address of such Purchaser set forth on Exhibit A to
this Agreement.
with copies to: Xxxxxx X. Garden, Esq.
Fish & Xxxxxxxxxx P.C.
5000 Bank One Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Any party hereto may from time to time change its address for notices by
giving at least ten (10) days written notice of such changed address to the
other party or parties hereto in accordance with the provisions of this Section
8.3.
Section 8.5 Waivers. No waiver by any party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
Section 8.6 Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
Section 8.7 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. After the Closing, the assignment by a party to this Agreement of any
rights hereunder shall not affect the obligations of such party under this
Agreement.
Section 8.8 No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person (other than indemnified parties, as contemplated by Article
VII).
Section 8.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving effect to the choice of law provisions. This Agreement shall not be
interpreted or construed with any presumption against the party causing this
Agreement to be drafted.
Section 8.10 Survival. The representations and warranties of the Company
and the Purchasers contained in Sections 2.1(o), 2.1(s) and 3.10 shall survive
until the expiration of the applicable statutes of limitations, and those
contained in Article II, with the exception of Sections 2.1(o), 2.1(s) and 3.10,
shall survive the execution and delivery hereof and the Closing until the date
two (2) years from the Closing Date, and the agreements and covenants set forth
in Articles I, III, V, VII and VIII of this Agreement shall survive the
execution and delivery hereof and the Closing hereunder.
26
Section 8.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart.
Section 8.12 Publicity. The Company agrees that it will not disclose, and
will not include in any public announcement, the names of the Purchasers without
the consent of the Purchasers in accordance with Section 8.3, which consent
shall not be unreasonably withheld or delayed, or unless and until such
disclosure is required by law, rule or applicable regulation, and then only to
the extent of such requirement.
Section 8.13 Severability. The provisions of this Agreement are severable
and, in the event that any court of competent jurisdiction shall determine that
any one or more of the provisions or part of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement and this Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.
Section 8.14 Further Assurances. From and after the date of this Agreement,
upon the request of the Purchasers or the Company, the Company and each
Purchaser shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement, the Warrants
and the Registration Rights Agreement.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.
INTELLI-CHECK, INC.
By:/s/
-----------------------------------
Name:
Title:
GRYPHON MASTER FUND, L.P.
By: Gryphon Partners, L.P., its General Partner
By: Gryphon Management Partners, L.P.,
its General Partner
By: Gryphon Advisors, LLC,
its General Partner
By:
/s/
-------------------------------
X.X. Xxxx, XX, Authorized Agent
28
EXHIBIT A
---------
LIST OF PURCHASERS
Names and Addresses of Number of Shares Number of Warrants Dollar Amount
Purchasers Purchased Purchased of Investment
---------- --------- --------- -------------
Gryphon Master Fund, L.P. 30,000 113,636 $3,000,000
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: X.X. Xxxx, XX
X-0
XXXXXXX X
---------
FORM OF WARRANT
B-1
EXHIBIT C
---------
FORM OF OPINION
C-1
EXHIBIT D
---------
FORM OF CERTIFICATE OF DESIGNATIONS
D-1
EXHIBIT E
---------
FORM OF REGISTRATION RIGHTS AGREEMENT
E-1
