EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
Odyssey Marine Exploration, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
The undersigned, _____________________________ (the "Investor"), hereby
confirms its agreement with you, in accordance with and pursuant to the terms
and conditions set forth in Annex I attached hereto and incorporated herein
by reference, as follows:
1. This Securities Purchase Agreement (this "Agreement") is made as of
November ___, 2006, between Odyssey Marine Exploration, Inc., a Nevada
corporation (the "Company"), and the Investor.
2. The Company has authorized the sale and issuance of up to 2,500,000
shares (the "Common Shares") of common stock, par value $0.0001 per share
(the "Common Stock"), and warrants in the form of Exhibit B attached to this
Agreement (the "Warrants") to purchase up to 500,000 shares of Common Stock
(the "Warrant Shares"), of the Company to certain investors in a private
placement (the "Offering"). The Common Shares, the Warrants, and the Warrant
Shares are sometimes hereinafter collectively referred to as the
"Securities."
3. The Company and the Investor agree that the Investor will purchase
from the Company and the Company will issue and sell to the Investor (a)
__________ Common Shares and (b) a Warrant to purchase up to _________
Warrant Shares, for an aggregate purchase price of $____________, pursuant to
the Terms and Conditions for Purchase of Securities incorporated herein by
reference as if fully set forth herein (the "Terms and Conditions"). Unless
otherwise requested by the Investor, certificates representing the Common
Shares and the Warrant purchased by the Investor will be registered in the
Investor's name and address as set forth below.
4. The Investor represents that, except as set forth below, (a) it has
had no position, office or other material relationship within the past three
years with the Company or persons known to it to be affiliates of the
Company, (b) neither it, nor any group of which it is a member or to which it
is related, beneficially owns (including the right to acquire or vote) any
securities of the Company and (c) it has no direct or indirect affiliation or
association with any NASD member as of the date hereof. Exceptions:
__________________________________________________________________________
(If no exceptions, write "none." If left blank, response will be deemed to
be "none.")
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose. By
executing this Agreement, you acknowledge that the Company may use the
information in paragraph 4 above and the name and address information below
in preparation of the Registration Statement (as defined in Annex I).
AGREED AND ACCEPTED:
ODYSSEY MARINE EXPLORATION, INC. Investor:_____________________________
By:___________________________________
__________________________________ Print Name:___________________________
By: Xxxx X. Xxxxxx, President
Title:________________________________
Address:______________________________
______________________________________
Tax ID No.:___________________________
Telephone:____________________________
Name in which securities should be
registered (if different):
______________________________________
OFFERING DOCUMENTS
NOVEMBER 15, 2006
TERMS AND CONDITIONS FOR PURCHASE OF SECURITIES
1. Authorization and Sale of the Securities. Subject to these Terms
and Conditions, the Company has authorized the sale of up to 2,500,000 Common
Shares and Warrants to purchase up to 500,000 Warrant Shares. The Company
reserves the right, in its sole discretion, to increase or decrease these
numbers at any time prior to the Closing.
2. Agreement to Sell and Purchase the Securities; Subscription Date.
2.1. At the Closing (as defined in Section 3), the Company will
sell to the Investor, and the Investor will purchase from the Company, upon
the terms and conditions hereinafter set forth, the number of Common Shares
and a Warrant to purchase that number of Warrant Shares set forth in Section
3 of the Securities Purchase Agreement to which these Terms and Conditions
are attached at the purchase price set forth therein.
2.2. The Company may enter into the same form of Securities
Purchase Agreement, including these Terms and Conditions, with certain other
investors (the "Other Investors") and expects to complete sales of Securities
to them. (The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the "Investors," and the Securities Purchase
Agreement to which these Terms and Conditions are attached and the Securities
Purchase Agreements (including the Terms and Conditions contained in Annex I
thereto and incorporated therein by reference) executed by the Other
Investors are hereinafter sometimes collectively referred to as the
"Agreements.") The Company may accept executed Agreements from Investors for
the purchase of Common Shares and Warrants commencing upon the date on which
the Company provides the Investors with the proposed purchase price for the
Securities and concluding upon the date (the "Subscription Date") on which
the Company has (a) executed Agreements with Investors for the purchase of
the Common Shares and the Warrants, and (b) notified potential investors that
it is no longer accepting additional Agreements from Investors for the
purchase of the Common Shares and the Warrants. The Company may not enter
into any Agreements after the Subscription Date.
3. Delivery of the Securities at Closing. The completion of the
purchase and sale of the Common Shares and the Warrants (the "Closing") shall
occur (the "Closing Date") on November 22, 2006, at the offices of the
Company. The Company shall (a) deliver to the Investor a Warrant to purchase
the number of Warrant Shares set forth in Section 3 of the Securities
Purchase Agreement at the Closing, and (b) use its best efforts to cause to
be delivered to the Investor one or more stock certificates representing the
Common Shares by the date that is 14 days after the Closing Date, but in any
event by the date that is 30 days after the Closing Date. Each such
certificate and Warrant to be registered in the name of the Investor or, if
so indicated on the signature page of the Securities Purchase Agreement, in
the name of a nominee designated by the Investor.
The Company's obligation to issue the Common Shares and the Warrants to
the Investor shall be subject to the following conditions, any one or more of
which may be waived by the Company: (a) receipt by the Company of a certified
or official bank check or wire transfer of funds in the full amount of the
purchase price for the Common Shares and the Warrants being purchased
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hereunder as set forth in Section 3 of the Securities Purchase Agreement; (b)
completion of the purchases and sales under the Agreements with the Other
Investors; and (c) the accuracy of the representations and warranties made by
the Investors and the fulfillment of those undertakings of the Investors to
be fulfilled prior to the Closing.
The Investor's obligation to purchase the Securities shall be subject to
the following conditions, any one or more of which may be waived by the
Investor: (a) Investors shall have executed Agreements for the purchase of
the Common Shares and the Warrants, and (b) the representations and
warranties of the Company set forth herein shall be true and correct as of
the Closing Date in all material respects (except for representations and
warranties that speak as of a specific date, which representations and
warranties shall be true and correct as of such date).
4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Investor,
as follows:
4.1. Organization. The Company is duly organized and validly
existing in good standing under the laws of the State of Nevada. The Company
and each of its Subsidiaries (as defined in Rule 405 under the Securities Act
of 1933, as amended (the "Securities Act")) has full power and authority to
own, operate and occupy its properties and to conduct its business as
presently conducted and as described in the documents filed by the Company
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including, without limitation, the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2005, the Company's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2006, June 30, 2006 and September
30, 2006, the Company's Proxy Statement on Schedule 14A for the Annual
Meeting of Stockholders held May 5, 2006, the Company's Current Reports on
Form 8-K since January 1, 2006 (collectively, the "Exchange Act Documents"),
and is registered or qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted by it or the
location of the properties owned or leased by it requires such qualification
and where the failure to be so qualified would have a material adverse effect
upon the condition (financial or otherwise), earnings, business or business
prospects, properties or operations of the Company and its Subsidiaries,
considered as one enterprise (a "Material Adverse Effect"), and no proceeding
has been instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority
or qualification.
4.2. Due Authorization and Valid Issuance. The Company has all
requisite power and authority to execute, deliver and perform its obligations
under the Agreements, and the Agreements have been duly authorized and
validly executed and delivered by the Company and constitute legal, valid and
binding agreements of the Company enforceable against the Company in
accordance with their terms, except as rights to indemnity and contribution
may be limited by state or federal securities laws or the public policy
underlying such laws, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
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whether such enforceability is considered in a proceeding in equity or at
law). The Common Shares and the Warrants are duly authorized and, upon
issuance in accordance with the terms hereof, shall be validly issued and
free from all taxes, liens and charges with respect to the issue thereof and
the Common Shares shall be fully paid and nonassessable with the holders
being entitled to all rights accorded to a holder of Common Stock. As of the
Closing Date, the Company shall have duly authorized and reserved for
issuance a number of shares of Common Stock that equals the number of Warrant
Shares. Upon exercise in accordance with the Warrant, the Warrant Shares
will be validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock.
4.3. Non-Contravention. The execution and delivery of the
Agreements, the issuance and sale of the Securities under the Agreements, the
fulfillment of the terms of the Agreements and the consummation of the
transactions contemplated thereby will not (A) conflict with or constitute a
violation of, or default (with the passage of time or otherwise) under, (i)
any material bond, debenture, note or other evidence of indebtedness, lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture
or other agreement or instrument to which the Company or any Subsidiary is a
party or by which it or any of its Subsidiaries or their respective
properties are bound, (ii) the charter, by-laws or other organizational
documents of the Company or any Subsidiary, or (iii) any law, administrative
regulation, ordinance or order of any court or governmental agency,
arbitration panel or authority applicable to the Company or any Subsidiary or
their respective properties, except in the case of clauses (i) and (iii) for
any such conflicts, violations or defaults which are not reasonably likely to
have a Material Adverse Effect or (B) result in the creation or imposition of
any lien, encumbrance, claim, security interest or restriction whatsoever
upon any of the material properties or assets of the Company or any
Subsidiary or an acceleration of indebtedness pursuant to any obligation,
agreement or condition contained in any material bond, debenture, note or any
other evidence of indebtedness or any material indenture, mortgage, deed of
trust or any other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them is bound or to which any of the
material property or assets of the Company or any Subsidiary is subject. No
consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or
other governmental body in the United States or any other person is required
for the execution and delivery of the Agreements and the valid issuance and
sale of the Securities to be sold pursuant to the Agreements, other than such
as have been made or obtained, and except for any post-closing securities
filings or notifications required to be made under federal or state
securities laws or under the rules of American Stock Exchange.
4.4. Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (x) 100,000,000 shares of Common
Stock, of which as of the date hereof, 46,146,408 shares are issued and
outstanding, 4,190,921 shares are reserved for issuance pursuant to the
Company's employee incentive plans, 5,670,000 shares are reserved for
issuance pursuant to securities (other than the Warrants) exercisable or
exchangeable for, or convertible into, shares of Common Stock as of the date
hereof, and 100,000 shares are reserved for issuance pursuant to securities
(other than the Warrants) exercisable or exchangeable for, or convertible
into, shares of Common Stock (but not exercisable or exchangeable for, or
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convertible as of the date hereof), and (y) 9,300,000 shares of preferred
stock, par value $0.0001 per share, of which as of the date hereof, 2,500,000
shares have been designated as Series D Convertible Preferred Stock, all of
which are issued and outstanding. All of such outstanding shares have been,
or upon issuance will be, validly issued and are fully paid and
nonassessable. Except as disclosed in the Exchange Act Documents: (a) no
shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by
the Company; (b) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into, or exercisable or exchangeable for,
any shares of capital stock of the Company or any of its Subsidiaries, or
contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares
of capital stock of the Company or any of its Subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into,
or exercisable or exchangeable for, any shares of capital stock of the
Company or any of its Subsidiaries; (c) with the exception of a $3.0 million
credit facility provided by Mercantile Bank, a loan in the approximate amount
of $1.0 million payable to Mercantile Bank secured by a remotely operated
vehicle and a loan of approximately $2.5 million secured by a mortgage on the
company's office building, there are no outstanding debt securities, notes,
credit agreements, credit facilities or other agreements, documents or
instruments evidencing indebtedness of the Company or any of its Subsidiaries
or by which the Company or any of its Subsidiaries is or may become bound;
(d) there are no financing statements, except as relates to the Mercantile
Credit Facility, ROV loan and building mortgage securing obligations in any
material amounts, either singly or in the aggregate, filed in connection with
the Company; (e) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the Securities Act (except pursuant to this
Agreement); (f) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (g)
there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (h) the
Company does not have any stock appreciation rights or "phantom stock" plans
or agreements or any similar plan or agreement; and (i) the Company and its
Subsidiaries have no liabilities or obligations required to be disclosed in
the Exchange Act Documents but not so disclosed in the Exchange Act
Documents, other than those incurred in the ordinary course of the Company's
or any Subsidiary's respective businesses and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect.
4.5. Legal Proceedings. There is no material legal or
governmental proceeding pending or, to the knowledge of the Company,
threatened to which the Company or any Subsidiary is or may be a party or of
which the business or property of the Company or any Subsidiary is subject
that is not disclosed in the Exchange Act Documents.
4.6. No Violations. Neither the Company nor any Subsidiary is in
violation of its charter, bylaws, or other organizational document, or in
violation of any law, administrative regulation, ordinance or order of any
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court or governmental agency, arbitration panel or authority applicable to
the Company or any Subsidiary, which violation, individually or in the
aggregate, would be reasonably likely to have a Material Adverse Effect, or
is in default (and there exists no condition which, with the passage of time
or otherwise, would constitute a default) in any material respect in the
performance of any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company or any Subsidiary is a party or
by which the Company or any Subsidiary is bound or by which the properties of
the Company or any Subsidiary are bound, which would be reasonably likely to
have a Material Adverse Effect.
4.7. Governmental Permits, Etc. With the exception of the matters
which are dealt with separately in Sections 4.1, 4.12, 4.13, and 4.14, each
of the Company and its Subsidiaries has all necessary franchises, licenses,
certificates and other authorizations from any foreign, federal, state or
local government or governmental agency, department, or body that are
currently necessary for the operation of the business of the Company and its
Subsidiaries as currently conducted and as described in the Exchange Act
Documents, except where the failure to currently possess would not reasonably
be expected to have a Material Adverse Effect.
4.8. Intellectual Property. Except as specifically disclosed in
the Exchange Act Documents (a) each of the Company and its Subsidiaries owns
or possesses sufficient rights to use all material patents, patent rights,
trademarks, copyrights, licenses, inventions, trade secrets, trade names and
know-how (collectively, "Intellectual Property") described or referred to in
the Exchange Act Documents as owned or possessed by it or that are necessary
for the conduct of its business as now conducted or as proposed to be
conducted as described in the Exchange Act Documents, except where the
failure to currently own or possess would not have a Material Adverse Effect,
(b) neither the Company nor any of its Subsidiaries is infringing, or has
received any notice of, or has any knowledge of, any asserted infringement by
the Company or any of its Subsidiaries of, any rights of a third party with
respect to any Intellectual Property that, individually or in the aggregate,
would have a Material Adverse Effect and (c) neither the Company nor any of
its Subsidiaries has received any notice of, or has any knowledge of,
infringement by a third party with respect to any Intellectual Property
rights of the Company or of any Subsidiary that, individually or in the
aggregate, would have a Material Adverse Effect.
4.9. SEC Documents; Financial Statements. As of their respective
dates, the Exchange Act Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Securities and Exchange Commission (the "SEC") promulgated thereunder
applicable to the Exchange Act Documents, and none of the Exchange Act
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The financial statements of the Company and the related notes contained in
the Exchange Act Documents present fairly, in accordance with generally
accepted accounting principles, the financial position of the Company and its
Subsidiaries as of the dates indicated, and the results of its operations and
cash flows for the periods therein specified consistent with the books and
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records of the Company and its Subsidiaries except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which are not expected to be material in amount. Such financial
statements (including the related notes) have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified, except as may be disclosed in the
notes to such financial statements, or in the case of unaudited statements,
as may be permitted by the SEC on Form 10-Q under the Exchange Act and except
as disclosed in the Exchange Act Documents. The other financial information
contained in the Exchange Act Documents has been prepared on a basis
consistent with the financial statements of the Company.
4.10. No Material Adverse Change. Except as disclosed in the
Exchange Act Documents, since December 31, 2006, there has not been (a) any
material adverse change in the financial condition of the Company and its
Subsidiaries considered as one enterprise, (b) any material adverse event
affecting the Company or its Subsidiaries, (c) any obligation, direct or
contingent, that is material to the Company and its Subsidiaries considered
as one enterprise, incurred by the Company, except obligations incurred in
the ordinary course of business, (d) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of its
Subsidiaries, or (e) any loss or damage (whether or not insured) to the
physical property of the Company or any of its Subsidiaries which has been
sustained which has a Material Adverse Effect.
4.11. American Stock Exchange Compliance. The Company's Common
Stock is registered pursuant to Section 12(b) or Section 12(g) of the
Exchange Act and is listed on American Stock Exchange (the "Principal
Market"), and the Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act or de-listing the Common Stock from the Principal Market, nor,
except as disclosed in the Exchange Act Documents, has the Company received
any notification that the SEC or the Principal Market is contemplating
terminating such registration or listing.
4.12. Reporting Status. The Company has filed in a timely manner
all documents that the Company was required to file under the Exchange Act
during the 12 months preceding the date of this Agreement. The Exchange Act
Documents, as filed with the SEC pursuant to the Exchange Act during the
preceding 12 months from the date hereof, complied in all material respects
with the SEC's requirements as of their respective filing dates, and the
information contained therein as of the date thereof did not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein in light of
the circumstances under which they were made not misleading.
4.13. Listing. The Company shall comply with all requirements of
the Principal Market with respect to the issuance of the Common Shares and
the Warrants and the listing thereof on the Principal Market.
4.14. No Manipulation of Stock. The Company has not taken and
will not, in violation of applicable law, take, any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Securities.
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4.15. Company not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act of
1940, as amended (the "Investment Company Act"). The Company is not, and
immediately after receipt of payment for the Common Shares and the Warrants
will not be, an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act and
shall conduct its business in a manner so that it will not become subject to
the Investment Company Act.
4.16. Foreign Corrupt Practices. Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on behalf of the
Company, has (a) directly or indirectly, used any corrupt funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (b) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (c) failed to
disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is in violation of
law, or (d) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.
4.17. Contracts. The contracts described in the Exchange Act
Documents that are material to the Company are in full force and effect on
the date hereof, and neither the Company nor, to the Company's knowledge, any
other party to such contracts is in breach of or default under any of such
contracts which would have a Material Adverse Effect.
4.18. Taxes. The Company has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all
taxes shown as due thereon, and the Company has no knowledge of a tax
deficiency which has been or might be asserted or threatened against it which
would have a Material Adverse Effect.
4.19. Transfer Taxes. On the Closing Date, all stock transfer or
other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Common Shares and the Warrant to
be sold to the Investor hereunder will be, or will have been, fully paid or
provided for by the Company and all laws imposing such taxes will be or will
have been fully complied with.
4.20. Private Offering. Assuming the accuracy and correctness of
the representations and warranties of the Investors set forth in Section 5
hereof, the offer and sale of the Common Shares and the Warrant hereunder is
exempt from registration under the Securities Act. The Company has not
distributed and will not distribute prior to the Closing Date any offering
material in connection with this Offering and sale of the Common Shares and
the Warrant other than the documents of which this Agreement is a part or the
Exchange Act Documents. The Company has not in the past nor will it
hereafter take any action to sell, offer for sale or solicit offers to buy
any securities of the Company which would bring the offer, issuance or sale
of the Common Shares and the Warrant as contemplated by this Agreement,
within the provisions of Section 5 of the Securities Act, unless such offer,
issuance or sale was or shall be within the exemptions of Section 4 of the
Securities Act. However, the Company shall not be restricted from the
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issuance of (a) equity securities issued or sold in connection with
commercial or strategic partnership arrangements entered into for primarily
non-equity financing purposes, (b) equity securities issued on a pro rata
basis to all holders of a class of outstanding equity securities of the
Company as a result of a stock spilt or stock dividend, (c) equity securities
or options to acquire equity securities issued pursuant to employee stock
option, purchase or similar equity-based stock incentive plans in effect as
of the date of this Agreement, (d) equity securities sold or otherwise
disposed of pursuant to plans adopted in compliance with Rule 10b5-1 under
the Exchange Act, and (e) equity securities issued in connection with
acquisitions where such equity securities are issued by the Company as
consideration to the purchaser in such acquisition.
4.21. Internal Accounting and Disclosure Controls. The Company
and each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (a) transactions are
executed in accordance with management's general or specific authorizations,
(b) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (c) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (d) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities
at reasonable intervals and appropriate action is taken with respect to any
difference. The Company maintains disclosure controls and procedures (as
such term is defined in Rule 13a-14 under the 0000 Xxx) that are effective in
ensuring that information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is recorded, processed,
summarized and reported, within the time periods specified in the rules and
forms of the SEC, including, without limitation, controls and procedures
designed in to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act is
accumulated and communicated to the Company's management, including its
principal executive officer or officers and its principal financial officer
or officers, as appropriate, to allow timely decisions regarding required
disclosure.
4.22. Disclosure. The representations and warranties of the
Company contained in this Section 4 as of the date hereof and as of the
Closing Date, do not intentionally contain any untrue statement of a material
fact or intentionally omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except with
respect to the material terms and conditions of the transaction contemplated
by the Agreements, which shall be publicly disclosed by the Company pursuant
to Section 15(b) hereof, the Company confirms that neither it nor any person
acting on its behalf has provided Investor with any information that the
Company believes constitutes material, non-public information. The Company
understands and confirms that Investor will rely on the foregoing
representations in effecting transactions in the securities of the Company.
5. Representations, Warranties and Covenants of the Investor.
5.1. The Investor represents and warrants to, and covenants with,
the Company that: (a) the Investor is an "accredited investor" as defined in
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Regulation D under the Securities Act and the Investor is also knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions
with respect to investments in shares presenting an investment decision like
that involved in the purchase of the Securities, including investments in
securities issued by the Company and investments in comparable companies, and
has requested, received, reviewed and considered all information it deemed
relevant in making an informed decision to purchase the Securities; (b) the
Investor is acquiring the Securities in the ordinary course of its business
and for its own account for investment only and with no present intention of
distributing any of such Securities or any arrangement or understanding with
any other persons regarding the distribution of such Securities; (c) the
Investor will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Securities except in compliance with
the Securities Act, applicable state securities laws and the respective rules
and regulations promulgated thereunder; (d) the Investor has answered all
questions on the Investor Questionnaire for use in preparation of the
Registration Statement and the answers thereto are true, correct and complete
as of the date hereof and will be true, correct and complete as of the
Closing Date; (e) if necessary under applicable law, the Investor will notify
the Company immediately of any change in any of such information until such
time as the Investor has sold all of its Securities or until the Company is
no longer required to keep the Registration Statement effective; and (f) the
Investor has, in connection with its decision to purchase the Securities,
relied only upon the Exchange Act Documents and the representations and
warranties of the Company contained herein. The Investor understands that
its acquisition of the Securities has not been registered under the
Securities Act or registered or qualified under any state securities law in
reliance on specific exemptions therefrom, which exemptions may depend upon,
among other things, the bona fide nature of the Investor's investment intent
as expressed herein. Investor has completed or caused to be completed and
delivered to the Company the Investor Questionnaire, which questionnaire is
true, correct and complete in all material respects.
5.2. The Investor acknowledges, represents and agrees that no
action has been or will be taken in any jurisdiction outside the United
States by the Company that would permit an offering of the Securities, or
possession or distribution of offering materials in connection with the issue
of the Securities, in any jurisdiction outside the United States where legal
action by the Company for that purpose is required. Each Investor outside
the United States will comply with all applicable laws and regulations in
each foreign jurisdiction in which it purchases, offers, sells or delivers
Securities or has in its possession or distributes any offering material, in
all cases at its own expense.
5.3. The Investor hereby covenants with the Company not to make
any sale of the Securities without complying with the provisions of this
Agreement and without causing the prospectus delivery requirement under the
Securities Act to be satisfied, and the Investor acknowledges that the
certificates evidencing the Common Shares, the Warrant, and the Warrant
Shares will be imprinted with a legend that prohibits their transfer except
in accordance therewith. The Investor acknowledges that there may
occasionally be times when the Company determines that it must suspend the
use of the Prospectus forming a part of the Registration Statement, as set
forth in Section 7.2(c).
9
5.4. The Investor further represents and warrants to, and
covenants with, the Company that (a) the Investor has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and (b)
this Agreement constitutes a valid and binding obligation of the Investor
enforceable against the Investor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except
as the indemnification agreements of the Investors herein may be legally
unenforceable.
5.5. The Investor has not, during the 15 days prior to the date of
this Agreement, directly or indirectly, traded in the Common Stock or
established any hedge or other position in the Common Stock that is
outstanding on the Closing Date and that is designed to or could reasonably
be expected to lead to or result in a direct or indirect sale, offer to sell,
solicitation of offers to buy, disposition of, loan, pledge or grant of any
right with respect to (collectively, a "Disposition") by the Investor or any
other person or entity. Such prohibited hedging or other transactions would
include without limitation effecting any short sale or having in effect any
short position (whether or not such sale or position is against the box and
regardless of when such position was entered into) or any purchase, sale or
grant of any right (including without limitation any put or call option) with
respect to the Common Stock or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from the Common Stock. The Investor
acknowledges that the Securities shall bear a restrictive legend to the
effect that the Securities have not been registered under the Securities Act
and such Securities may not be sold or transferred in the absence of an
effective registration statement or pursuant to an available exemption from
registration.
5.6. The Investor understands that nothing in the Exchange Act
Documents, this Agreement or any other materials presented to the Investor in
connection with the purchase and sale of the Securities constitutes legal,
tax or investment advice. The Investor has consulted such legal, tax and
investment advisors, as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of Securities.
6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the
delivery to the Investor of the Securities being purchased and the payment
therefor.
7. Registration of the Common Shares and the Warrant Shares;
Compliance with the Securities Act.
7.1. Registration Procedures and Other Matters. The Company
shall:
10
(a) subject to receipt of necessary information from the Investors
after prompt request from the Company to the Investors to provide such
information, prepare and file with the SEC, within 60 days after the Closing
Date, a registration statement on Form S-3 (the "Registration Statement") to
enable the resale of (i) the Common Shares, (ii) the Warrant Shares issued or
issuable upon exercise of the Warrants, and (iii) any shares of capital stock
issued or issuable with respect to the Common Shares, the Warrant Shares or
the Warrants as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to
any limitations on exercise of the Warrants (collectively, the "Registrable
Securities") by the Investors from time to time through the Principal Market
or in privately-negotiated transactions pursuant to Rule 415 of the
Securities Act;
(b) use its commercially reasonable efforts, subject to receipt of
necessary information from the Investors after prompt request from the
Company to the Investors to provide such information, to cause the
Registration Statement to become effective within 60 days after the
Registration Statement is filed by the Company (unless the Registration
Statement is reviewed by the SEC), such efforts to include, without limiting
the generality of the foregoing, preparing and filing with the SEC in such
60-day period any financial statements that are required to be filed prior to
the effectiveness of such Registration Statement;
(c) use its commercially reasonable efforts to prepare and file
with the SEC such amendments and supplements to the Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep
the Registration Statement current, effective and free from any material
misstatement or omission to state a material fact for a period not exceeding
the earlier of (i) the second anniversary of the Closing Date, (ii) the date
on which the Investor may sell all Registrable Securities then held by the
Investor without restriction pursuant to Rule 144(k) promulgated under the
Securities Act, or (iii) such time as all Registrable Securities purchased by
such Investor in this Offering have been sold pursuant to a registration
statement;
(d) furnish to the Investor with respect to the Registrable
Securities registered under the Registration Statement such number of copies
of the Registration Statement, Prospectuses and Preliminary Prospectuses in
conformity with the requirements of the Securities Act and such other
documents as the Investor may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Registrable Securities
by the Investor; provided, however, that the obligation of the Company to
deliver copies of Prospectuses or Preliminary Prospectuses to the Investor
shall be subject to the receipt by the Company of reasonable assurances from
the Investor that the Investor will comply with the applicable provisions of
the Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such Prospectuses or Preliminary
Prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Investor and use its
commercially reasonable efforts to maintain such blue sky qualifications
during the period the Company is required to maintain the effectiveness of
11
the Registration Statement pursuant to Section 7.1(c); provided, however,
that the Company shall not be required to qualify to do business or consent
to service of process in any jurisdiction in which it is not now so qualified
or has not so consented;
(f) bear all expenses in connection with the procedures in
paragraph (a) through (e) of this Section 7.1 and the registration of the
Registrable Securities pursuant to the Registration Statement; and
(g) advise the Investor, promptly after it shall receive notice or
obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its commercially reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if such
stop order should be issued.
Notwithstanding anything to the contrary herein, the Registration
Statement shall cover only the Registrable Securities. In no event at any
time before the Registration Statement becomes effective with respect to the
Registrable Securities shall the Company publicly announce or file any other
registration statement, other than registrations on Form S-8, without the
prior written consent of a majority in interest of the Investors.
7.2. Transfer of Securities After Registration; Suspension.
(a) The Investor agrees that it will not effect any disposition of
the Registrable Securities or its right to purchase the Registrable
Securities that would constitute a sale within the meaning of the Securities
Act except as contemplated in the Registration Statement referred to in
Section 7.1 and as described below or as otherwise permitted by law, and that
it will promptly notify the Company of any changes in the information set
forth in the Registration Statement regarding the Investor or its plan of
distribution.
(b) Except in the event that paragraph (c) below applies, the
Company shall (i) if deemed necessary by the Company, prepare and file from
time to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and so that, as thereafter delivered to purchasers of the
Registrable Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (ii) provide the Investor copies of any documents filed pursuant
to Section 7.2(b)(i); and (iii) inform each Investor that the Company has
complied with its obligations in Section 7.2(b)(i) (or that, if the Company
has filed a post-effective amendment to the Registration Statement which has
not yet been declared effective, the Company will notify the Investor to that
effect, will use its commercially reasonable efforts to secure the
effectiveness of such post-effective amendment as promptly as possible and
will promptly notify the Investor pursuant to Section 7.2(b)(i) hereof when
the amendment has become effective).
12
(c) Subject to paragraph (d) below, in the event (i) of any
request by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for
amendments or supplements to a Registration Statement or related Prospectus
or for additional information; (ii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; or (iv) of any event or circumstance which, upon the advice of its
counsel, necessitates the making of any changes in the Registration Statement
or Prospectus, or any document incorporated or deemed to be incorporated
therein by reference, so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or any omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact or any omission to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; then the Company shall deliver a certificate in writing
to the Investor (the "Suspension Notice") to the effect of the foregoing and,
upon receipt of such Suspension Notice, the Investor will refrain from
selling any Registrable Securities pursuant to the Registration Statement (a
"Suspension") until the Investor's receipt of copies of a supplemented or
amended Prospectus prepared and filed by the Company, or until it is advised
in writing by the Company that the current Prospectus may be used, and has
received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such Prospectus. In
the event of any Suspension, the Company will use its commercially reasonable
efforts to cause the use of the Prospectus so suspended to be resumed as soon
as reasonably practicable within 20 business days after the delivery of a
Suspension Notice to the Investor.
(d) Notwithstanding the foregoing paragraphs of this Section 7.2,
the Investor shall not be prohibited from selling Registrable Securities
under the Registration Statement as a result of Suspensions for more than 45
trading days in any 12-month period.
(e) Provided that a Suspension is not then in effect, the Investor
may sell Registrable Securities under the Registration Statement, provided
that it arranges for delivery of a current Prospectus to the transferee of
such Securities. Upon receipt of a request therefor, the Company has agreed
to provide an adequate number of current Prospectuses to the Investor and to
supply copies to any other parties requiring such Prospectuses.
7.3. Indemnification. For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" shall include the Investor and
any affiliate of such Investor;
(ii) the term "Registration Statement" shall include the
Prospectus in the form first filed with the SEC pursuant to Rule 424(b) of
the Securities Act or filed as part of the Registration Statement at the time
13
of effectiveness if no Rule 424(b) filing is required, together with any
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 7.1; and
(iii) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any omission or alleged omission to
state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless each
Selling Stockholder from and against any losses, claims, damages or
liabilities to which such Selling Stockholder may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or
are based upon (i) any breach of the representations or warranties of the
Company contained herein or failure to comply with the covenants and
agreements of the Company contained herein, (ii) any untrue statement of a
material fact contained in the Registration Statement as amended at the time
of effectiveness or any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (iii)
any failure by the Company to fulfill any undertaking included in the
Registration Statement as amended at the time of effectiveness, and the
Company will reimburse such Selling Stockholder for any reasonable legal or
other expenses reasonably incurred in investigating, defending or preparing
to defend any such action, proceeding or claim, or preparing to defend any
such action, proceeding or claim, provided, however, that the Company shall
not be liable in any such case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, an untrue statement made in such
Registration Statement or any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Selling Stockholder specifically for use in
preparation of the Registration Statement or the failure of such Selling
Stockholder to comply with its covenants and agreements contained in Section
7.2 hereof respecting sale of the Registrable Securities or any statement or
omission in any Prospectus that is corrected in any subsequent Prospectus
that was delivered to the Selling Stockholder prior to the pertinent sale or
sales by the Selling Stockholder. The Company shall reimburse each Selling
Stockholder for the amounts provided for herein on demand as such expenses
are incurred.
(b) The Investor agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act, each officer of the Company who signs
the Registration Statement and each director of the Company) from and against
any losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or
are based upon, (i) any failure to comply with the covenants and agreements
contained in Section 7.2 hereof respecting sale of the Registrable
Securities, or (ii) any untrue statement of a material fact contained in the
Registration Statement or any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading if
14
such untrue statement or omission was made in reliance upon and in conformity
with written information furnished by or on behalf of the Investor
specifically for use in preparation of the Registration Statement, and the
Investor will reimburse the Company (or such officer, director or controlling
person), as the case may be, for any legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim; provided that the Investor's obligation to indemnify the
Company shall be limited to the net amount received by the Investor from the
sale of the Registrable Securities.
(c) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 7.3, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, but the omission
to so notify the indemnifying person will not relieve it from any liability
which it may have to any indemnified person under this Section 7.3 (except to
the extent that such omission materially and adversely affects the
indemnifying person's ability to defend such action) or from any liability
otherwise than under this Section 7.3. Subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified
person, the indemnifying person shall be entitled to participate therein,
and, to the extent that it shall elect by written notice delivered to the
indemnified person promptly after receiving the aforesaid notice from such
indemnified person, shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof, such indemnifying person shall not be liable to
such indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying
person; provided, however, that no indemnifying person shall be responsible
for the fees and expenses of more than one separate counsel (together with
appropriate local counsel) for all indemnified parties. In no event shall
any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved
the terms of such settlement; provided that such consent shall not be
unreasonably withheld. No indemnifying person shall, without the prior
written consent of the indemnified person, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified person
is or could have been a party and indemnification could have been sought
hereunder by such indemnified person, unless such settlement includes an
unconditional release of such indemnified person from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7.3
is unavailable to or insufficient to hold harmless an indemnified person
under subsection (a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying person shall contribute to the amount paid or
15
payable by such indemnified person as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as
is appropriate to reflect the relative fault of the Company on the one hand
and the Investor, as well as any other Selling Stockholders under such
registration statement on the other in connection with the statements or
omissions or other matters which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault shall be determined by
reference to, among other things, in the case of an untrue statement, whether
the untrue statement relates to information supplied by the Company on the
one hand or an Investor or other Selling Stockholder on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement. The Company and the Investor agree
that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the Investor
and other Selling Stockholders were treated as one entity for such purpose)
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified person as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), the Investor shall not be required to
contribute any amount in excess of the amount by which the net amount
received by the Investor from the sale of the Registrable Securities to which
such loss relates exceeds the amount of any damages which such Investor has
otherwise been required to pay by reason of such untrue statement. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Investor's
obligations in this subsection to contribute shall be in proportion to its
Investor sale of Registrable Securities to which such loss relates and shall
not be joint with any other Selling Stockholders.
(e) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel
during the negotiations regarding the provisions hereof including, without
limitation, the provisions of this Section 7.3, and are fully informed
regarding said provisions. They further acknowledge that the provisions of
this Section 7.3 fairly allocate the risks in light of the ability of the
parties to investigate the Company and its business in order to assure that
adequate disclosure is made in the Registration Statement as required by the
Act and the Exchange Act. The parties are advised that federal or state
public policy as interpreted by the courts in certain jurisdictions may be
contrary to certain of the provisions of this Section 7.3, and the parties
hereto hereby expressly waive and relinquish any right or ability to assert
such public policy as a defense to a claim under this Section 7.3 and further
agree not to attempt to assert any such defense.
7.4. Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of
the Registrable Securities shall cease and terminate as to any particular
number of the Registrable Securities when such Registrable Securities shall
have been effectively registered under the Securities Act and sold or
otherwise disposed of in accordance with the intended method of disposition
16
set forth in the Registration Statement covering such Registrable Securities
or at such time as an opinion of counsel reasonably satisfactory to the
Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
7.5. Information Available. So long as the Registration Statement
is effective covering the resale of Registrable Securities owned by the
Investor, the Company will furnish or otherwise make available to the
Investor:
(a) as soon as practicable after it is available, one copy
(excluding exhibits) of its Annual Report on Form 10-K, which Annual Report
on Form 10-K shall contain financial statements audited in accordance with
generally accepted accounting principles by a national firm of certified
public accountants;
(b) upon the request of the Investor, all exhibits excluded by the
parenthetical to subparagraph (a) of this Section 7.5 as filed with the SEC
and all other information that is made available to stockholders; and
(c) upon the reasonable request of the Investor, an adequate
number of copies of the Prospectuses to supply to any other party requiring
such Prospectuses; and upon the reasonable request of the Investor, the
President or the Chief Financial Officer of the Company (or an appropriate
designee thereof) will meet with the Investor or a representative thereof at
the Company's headquarters to discuss all information relevant for disclosure
in the Registration Statement covering the Registrable Securities and will
otherwise cooperate with any Investor conducting an investigation for the
purpose of reducing or eliminating such Investor's exposure to liability
under the Securities Act, including the reasonable production of information
at the Company's headquarters; provided, that the Company shall not be
required to disclose any confidential information to or meet at its
headquarters with any Investor until and unless the Investor shall have
entered into a confidentiality agreement in form and substance reasonably
satisfactory to the Company with the Company with respect thereto.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (a) if within the United
States by first-class registered or certified airmail, or nationally
recognized overnight express courier, postage prepaid, or by facsimile, or
(b) if delivered from outside the United States, by International Federal
Express or facsimile, and shall be deemed given (i) if delivered by first-
class registered or certified mail, three business days after so mailed, (ii)
if delivered by nationally recognized overnight carrier, one business day
after so mailed, (iii) if delivered by International Federal Express, two
business days after so mailed, or (iv) if delivered by facsimile, upon
electronic confirmation of receipt and shall be delivered as addressed as
follows:
(a) if to the Company, to:
Odyssey Marine Exploration, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, President
Facsimile: (000) 000-0000
17
if to the Investor, at its address on the signature page hereto, or at such
other address or addresses as may have been furnished to the Company in
writing.
9. Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor.
10. Headings. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed
to be part of this Agreement.
11. Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.
12. Governing Law; Venue. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York. The
parties hereto agree that all actions or proceedings, directly or indirectly,
arising out of or related to this Agreement or contesting the validity or
applicability of this Agreement shall be litigated exclusively in the Circuit
Court in and for Hillsborough County, Florida, or the United States District
Court for the Middle District of Florida, Tampa Division.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.
14. Rule 144. The Company covenants that it will use its commercially
reasonable efforts to timely file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder (or, if the Company is not required to file
such reports, it will, upon the request of any Investor holding Securities
purchased hereunder made after the first anniversary of the Closing Date,
make publicly available such information as necessary to permit sales
pursuant to Rule 144 under the Securities Act), and it will take such further
action as any such Investor may reasonably request, all to the extent
required from time to time to enable such Investor to sell Securities
purchased hereunder without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the SEC. Upon the request of the
Investor, the Company will deliver to such holder a written statement as to
whether it has complied with such information and requirements.
15. Public Statements. The Company shall, on or before 8:30 a.m.,
Eastern Time, on the first Business Day following execution of the
Agreements, issue a press release disclosing all material terms of the
Offering. Within one (1) Business Day after the Closing Date, the Company
shall file a Current Report on Form 8-K with the SEC (the "8-K Filing")
describing the terms of the Offering and including as exhibits to the 8-K
filing this Agreement in the form required by the Exchange Act. Thereafter,
18
the Company shall timely file any filings and notices required by the SEC or
applicable law with respect to the Offering and provide copies thereof to the
Investors promptly after filing. The Company shall not publicly disclose the
name of any Investor, or include the name of any Investor in any press
release without the prior written consent of such Investor.
16. Register; Transfer Agent Instructions.
(a) Register. The Company shall maintain at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to each holder of Securities), a register for the Common
Shares and the Warrants, in which the Company shall record the name and
address of the Person in whose name the Common Shares and the Warrants have
been issued (including the name and address of each transferee) and the
number of Warrant Shares issuable upon exercise of the Warrants held by such
Person. The Company shall keep the register open and available at all times
during business hours for inspection of any Buyer or its legal
representatives.
(b) Transfer Agent Instructions. The Company shall issue
irrevocable instructions to its transfer agent, and any subsequent transfer
agent, to issue certificates or credit shares to the applicable balance
accounts at The Depository Trust Company ("DTC"), registered in the name of
each Buyer or its respective nominee(s), for the Common Shares and the
Warrant Shares issued at the Closing or upon exercise of the Warrants in such
amounts as specified from time to time by each Buyer to the Company upon
exercise of the (the "Irrevocable Transfer Agent Instructions"). The Company
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 17(b), and stop transfer
instructions to give effect to Section 7.2(c) hereof, will be given by the
Company to its transfer agent, and that the Securities shall otherwise be
freely transferable on the books and records of the Company as and to the
extent provided in this Agreement and the other Transaction Documents. If a
Buyer effects a sale, assignment or transfer of the Securities in accordance
with Section 7.2, the Company shall permit the transfer and shall promptly
instruct its transfer agent to issue one or more certificates or credit
shares to the applicable balance accounts at DTC in such name and in such
denominations as specified by such Buyer to effect such sale, transfer or
assignment. In the event that such sale, assignment or transfer involves
Common Shares or Warrant Shares sold, assigned or transferred pursuant to an
effective registration statement or pursuant to Rule 144, the transfer agent
shall issue such Securities to the Buyer, assignee or transferee, as the case
may be, without any restrictive legend.
19
[Company Letterhead]
_________, 2006
Re: Odyssey Marine Exploration, Inc.; Registration Statement on Form S-3
Dear Selling Stockholder:
Enclosed please find five (5) copies of a prospectus dated __________,
2006 (the "Prospectus") for your use in reselling your shares of common
stock, no par value (the "Securities"), of Odyssey Marine Exploration, Inc.
(the "Company"), under the Company's Registration Statement on Form S-3
(Registration No. 333-_________) (the "Registration Statement"), which has
been declared effective by the Securities and Exchange Commission. As a
selling stockholder under the Registration Statement, you have an obligation
to deliver a copy of the Prospectus to each purchaser of your Securities,
either directly or through the broker-dealer who executes the sale of your
Securities.
The Company is obligated to notify you in the event that it suspends
trading under the Registration Statement in accordance with the terms of the
Securities Purchase Agreement between the Company and you. During the period
that the Registration Statement remains effective and trading thereunder has
not been suspended, you will be permitted to sell your Registrable Securities
that are included in the Prospectus under the Registration Statement. Upon a
sale of any Registrable Securities under the Registration Statement, you or
your broker will be required to deliver to the Transfer Agent, Computershare
Trust Company, Inc., 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000 (1)
your restricted stock certificate(s) representing the Registrable Securities,
(2) instructions for transfer of the Registrable Securities sold, and (3) a
representation letter from your broker, or from you if you are selling in a
privately negotiated transaction, or from such other appropriate party, in
the form of Exhibit A attached hereto (the "Representation Letter"). The
Representation Letter confirms that the Registrable Securities have been sold
pursuant to the Registration Statement and in a manner described under the
caption "Plan of Distribution" in the Prospectus and that such sale was made
in accordance with all applicable securities laws, including the prospectus
delivery requirements.
Please note that you are under no obligation to sell your Registrable
Securities during the registration period. However, if you do decide to
sell, you must comply with the requirements described in this letter or
otherwise applicable to such sale. Your failure to do so may result in
liability under the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended. Please remember that all sales of your
Securities must be carried out in the manner set forth under the caption
"Plan of Distribution" in the Prospectus if you sell under the Registration
Statement. The Company may require an opinion of counsel reasonably
satisfactory to the Company if you choose another method of sale. You should
consult with your own legal advisor(s) on an ongoing basis to ensure your
compliance with the relevant securities laws and regulations.
In order to maintain the accuracy of the Prospectus, you must notify the
undersigned upon the sale, gift, or other transfer of any Registrable
Securities by you, including the number of Registrable Securities being
transferred, and in the event of any other change in the information
regarding you which is contained in the Prospectus. For example, you must
notify the undersigned if you enter into any arrangement with a broker-dealer
for the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker-dealer.
Depending on the circumstances, such transactions may require the filing of a
supplement to the prospectus in order to update the information set forth
under the caption "Plan of Distribution" in the Prospectus.
Should you need any additional copies of the Prospectus, or if you have
any questions concerning the foregoing, please contact me at your
convenience. Thank you.
Sincerely,
Xxxx X. Xxxxxx
President and Chief Executive Officer
