Exhibit F
SERIES C CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
THIS SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
dated as of August 24, 1999 (this "Agreement"), between XXXXXX
INDUSTRIES INC., a Florida corporation (the "Company"), and
HANSEATIC AMERICAS LDC, a Bahamian limited duration company (the
"Investor").
WHEREAS, the Company wishes to issue and sell to the
Investor an aggregate of 69,000 shares (the "Series C Preferred
Shares") of the authorized but unissued shares of Series C
Convertible Preferred Stock, $1.00 par value, of the Company (the
"Series C Preferred Stock") at a purchase price of $100 per
share; and
WHEREAS, the Investor wishes to purchase the Series C
Preferred Shares upon the terms and subject to the conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises
and the covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Closing" and "Closing Date" shall have the meanings
ascribed to such terms in Section 1.3 herein.
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering
the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Material Adverse Effect" means any adverse effect on the
business, operations, properties, prospects, or financial
condition of the entity with respect to which such term is used
and which is material to such entity and other entities
controlled by such entity taken as a whole, and any material
adverse effect on the transactions contemplated under this
Agreement or any other agreement or document contemplated hereby
or thereby.
"Registrable Securities" shall mean (A) the shares (the
"Common Shares") of the Company's common stock, par value $.001
per share (the "Common Stock"), issued or issuable upon
conversion of the Series C Preferred Shares, and upon conversion
of any shares of Series C Preferred Stock issued as a dividend
thereon (which for all purposes of this Agreement shall be deemed
included in the Series C Preferred Shares), and (B) any
securities of the Company or securities of any successor
corporation issuable upon the conversion or exercise of any
warrant, right or other security that is issued as a dividend or
other distribution with respect to, in exchange for, or in
replacement of the Series C Preferred Shares, which in either
case (i) have not been resold pursuant to an effective
registration statement or pursuant to Rule 144 under the
Securities Act and (ii) may not be resold pursuant to Rule 144
under the Securities Act. For purposes of this Agreement,
securities will be considered ineligible for resale pursuant to
Rule 144 under the Securities Act unless the Company's transfer
agent has accepted an instruction from the Company specifying
that such securities are eligible for sale pursuant to Rule 144.
The term "holder of Registrable Securities" includes any person
who holds securities which are convertible into or exercisable
for Registrable Securities.
The terms "register", "registered" and "registration" shall
refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration
or ordering of the effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses to be
incurred by the Company in connection with the Investor's
registration rights under this Agreement, including, without
limitation, all registration and filing fees, printing expenses,
fees and disbursements of counsel for the Company and its
independent certified public accountants, blue sky fees and
expenses, reasonable fees and disbursements of counsel for the
Investor for a "due diligence" examination of the Company and
review of the Registration Statement and related documents, and
the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular
employees of the Company, which shall be paid in any event by the
Company).
"Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable
Securities and all fees and disbursements of counsel for the
Investor not included within "Registration Expenses."
"Registration Statement" shall have the meaning set forth in
Section 4.1(a) herein.
"Regulation D" shall mean Regulation D as promulgated
pursuant to the Securities Act, and as subsequently amended.
"Securities Act" or "Act" shall mean the Securities Act of
1933, as amended.
ARTICLE I
Purchase and Sale of Series C Preferred Shares
Section 1.1 Authorization of the Series C Preferred
Shares. The Company has authorized the sale and issuance to the
Investor of an aggregate of 69,000 shares of its Series C
Convertible Preferred Stock having the rights, restrictions,
privileges and preferences set forth in the Company's Articles of
Incorporation, as amended, in the form attached hereto as Exhibit
A (as amended, the "Articles"), which has been filed with the
Secretary of State of the State of Florida.
Section 1.2 Issuance, Sale and Delivery of the Series C
Preferred Shares. Subject to the terms and conditions hereof and
in reliance upon the representations, warranties, covenants and
agreements contained herein, the Company hereby agrees to issue
and sell to the Investor, and the Investor hereby agrees to
purchase from the Company at the Closing (as hereinafter
defined), an aggregate of 69,000 Series C Preferred Shares at a
purchase price of $100 per Series C Preferred Share (the
"Purchase Price").
Section 1.3 The Closing.
(a) The closing of the purchase and sale of the
Series C Preferred Shares (the "Closing"), shall take place at
the offices of Xxxxxxxxx Traurig, P.A., 0000 Xxxxxxxx Xxxxxx,
Xxxxx, Xxxxxxx 00000 at 10:00 a.m., local time on August 24, 1999
(the "Closing Date") or at such other time and place and/or on
such other date as shall be mutually agreed upon by the Company
and the Investor.
(b) On the Closing Date, the Company shall issue
and countersign, or cause to be issued and countersigned by its
transfer agent, for delivery upon the order of the Investor,
certificates representing the number of Series C Preferred Shares
being purchased by the Investor, registered in the name of the
Investor or its nominee, or deposit such Series C Preferred
Shares into an account or accounts designated by the Investor,
and the Investor shall deliver to the Company the Purchase Price
for such Series C Preferred Shares by wire transfer in
immediately available funds to an account designated in writing
prior to Closing by the Company. In addition, each party shall
deliver all documents, instruments and writings required to be
delivered by such party pursuant to this Agreement at or prior to
the Closing.
ARTICLE II
Representations and Warranties
Section 2.1 Representations and Warranties of the
Company. The Company hereby makes the following representations
and warranties to the Investor:
(a) Organization and Qualification; Material
Adverse Effect. Each of the Company and its Subsidiary (as
defined below) is a corporation duly incorporated and existing in
good standing under the laws of its jurisdiction of incorporation
and the Company and the Subsidiary each have the requisite
corporate power to own its properties and to carry on its
business as now being conducted. The Company owns 100% of the
outstanding capital stock of SystemOne Technologies Inc., a
Florida corporation (the "Subsidiary"). The Company does not
have any other direct or indirect subsidiaries. Each of the
Company and the Subsidiary 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 other
than those in which the failure so to qualify would not have a
Material Adverse Effect.
(b) Authorization; Enforcement. (i) The Company
has the requisite corporate power and authority to enter into and
perform this Agreement and to issue the Series C Preferred Shares
in accordance with the terms hereof, and the Common Shares upon
conversion of the Series C Preferred Shares, (ii) the execution
and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby and
thereby, including the issuance of the Series C Preferred Shares,
and the Common Shares upon conversion thereof, have been duly
authorized by all necessary corporate action, and no further
consent or authorization of the Company or its Board of Directors
or stockholders is required, (iii) this Agreement has been duly
executed and delivered by the Company, and (iv) this Agreement
constitutes the 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, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally the
enforcement of creditors' rights and remedies or by other
equitable principles of general application.
(c) Capitalization. The authorized capital stock
of the Company consists of (i) 25,000,000 shares of Common Stock,
and (ii) 1,500,000 shares of preferred stock ("Preferred Stock"),
of which 150,000 shares have been designated Series B Convertible
Preferred Stock and 150,000 shares have been designated Series C
Convertible Preferred Stock. As of the date hereof and at
Closing (and without reference to the Series C Preferred Shares),
4,601,309 shares of Common Stock are and will be issued and
outstanding, 51,003 shares of Series B Convertible Preferred
Stock are and will be issued and outstanding, and no shares of
Series C Convertible Preferred Stock or other preferred stock are
or will be issued and outstanding, respectively. All of the
outstanding shares of the Common Stock and Series B Convertible
Preferred Stock, and the capital stock of the Subsidiary have
been validly issued and are fully paid and non-assessable. No
shares of Common Stock or Preferred Stock are entitled to
preemptive rights. As of the date hereof and at Closing, the
following additional securities are and will be issued and
outstanding: (i) options to purchase an aggregate of 395,997
shares of Common Stock, (ii) warrants to purchase 129,750 shares
of Common Stock, and (iii) subordinated debentures convertible
into an aggregate of 1,119,487 shares of Common Stock. There are
no other scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights
exchangeable or convertible into, any shares of capital stock of
the Company or the Subsidiary, or contracts, commitments,
understandings or arrangements by which the Company or the
Subsidiary is or may become bound to issue additional shares of
capital stock of the Company or the Subsidiary or options,
warrants, scrip, rights to subscribe to, or commitments to
purchase or acquire, any shares, or securities or rights
convertible into shares, of capital stock of the Company or the
Subsidiary (except as contemplated by this Agreement). No event
has occurred prior to the date hereof which, subsequent to the
date hereof, will cause any adjustment in any conversion or
exercise price or ratio with respect to any such securities
pursuant to any anti-dilution provisions thereunder, nor as a
result of any such event, will the number of shares of capital
stock issuable upon such conversion or such exercise, as the case
may be, be subject to adjustment. No such conversion or exercise
price or ratio will be subject to adjustment as a consequence of
the consummation of the transactions contemplated by the
Agreement, nor, as a consequence of such consummation, will the
numbers of shares of capital stock issuable upon such conversion
or such exercise, as the case may be, be subject to adjustment.
The Company has furnished or made available to the Investor true
and correct copies of the Articles and its bylaws (the "Bylaws"),
as in effect on the date hereof.
(d) Issuance of Series C Preferred Shares and
Common Shares. The issuance of the Series C Preferred Shares has
been duly authorized and, when paid for or issued in accordance
with the terms hereof, the Series C Preferred Shares shall be
validly issued, fully paid and non-assessable and entitled to the
rights and preferences set forth in the Articles and not subject
to any preemptive rights or adverse claims. The Common Shares
will be duly authorized and reserved for issuance and, upon
conversion in accordance with the Articles, will be validly
issued, fully paid and non-assessable, free and clear of any
mortgage, deed of trust, pledge, lien or other charge or
encumbrance created by the Company and not subject to any
preemptive rights or adverse claims, and the holders shall be
entitled to all rights and preferences accorded to a holder of
Common Stock.
(e) No Conflicts. The execution, delivery and
performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby and
thereby do not and will not (i) result in a violation of the
Articles or Bylaws or of the articles of incorporation or bylaws
of the Subsidiary or (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any
agreement, indenture, patent, patent license or instrument to
which the Company or the Subsidiary is a party, or result in a
violation of any federal, state, local or foreign law, rule,
regulation, order, judgment or decree (including Federal and
state securities laws and regulations) applicable to the Company
or the Subsidiary or by which any property or asset of the
Company or the Subsidiary is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect); provided that, for
purposes of such representation as to Federal, state, local or
foreign law, rule or regulation, no representation is made herein
with respect to any of the same applicable solely to the Investor
and not to the Company or the Subsidiary. Neither the business
of the Company nor of the Subsidiary is being conducted in
violation of any law, ordinance or regulation of any governmental
entity, except for violations which either singly or in the
aggregate do not and will not have a Material Adverse Effect.
The Company is not required under Federal, state, local or
foreign law, rule or regulation to obtain any consent,
authorization or order of, or to make any filing or registration
with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this
Agreement or issue and sell the Series C Preferred Shares in
accordance with the terms hereof and issue the Common Shares upon
conversion thereof, except for the registration provisions
provided for herein, provided that, for purposes of the
representation made in this sentence, the Company is assuming and
relying upon the accuracy of the relevant representations and
agreements of the Investor herein.
(f) SEC Documents; Financial Statements. The
Common Stock of the Company is registered pursuant to Section
12(g) of the Exchange Act and 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), in addition to one or
more registration statements and amendments thereto heretofore
filed by the Company with the Commission (all of the foregoing
including filings incorporated by reference therein being
referred to herein as the "SEC Documents"). The Company has
delivered or made available to the Investor true and complete
copies of all SEC Documents (including, without limitation, proxy
information and solicitation materials and registration
statements) filed with the Commission since September 27, 1996
and all annual SEC Documents filed with the Commission since
September 27, 1996. Without limiting any other representation or
warranty herein, the Company has not provided the Investor with
any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by the Company
but which has not been so disclosed. As of their respective
dates, the SEC Documents (as amended by any amendments filed
prior to the date of this Agreement or the Closing Date and
provided to the Investor) complied in all material respects with
the requirements of the Securities Act and 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 SEC Documents, and none of the SEC
Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
The financial statements of the Company included in the SEC
Documents comply 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 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) Principal Exchange/Market. The principal
market on which the Common Shares are currently traded is Nasdaq.
(h) No Material Adverse Change. Since June 30,
1999, the date through which the most recent quarterly report of
the Company on Form 10-QSB has been prepared and filed with the
Commission, a copy of which is included in the SEC Documents, no
event which had or is likely to have a Material Adverse Effect
has occurred or exists with respect to the Company or the
Subsidiary.
(i) No Undisclosed Liabilities. Neither the
Company nor the Subsidiary has any liabilities or obligations not
disclosed in the SEC Documents, other than those liabilities
incurred in the ordinary course of its respective business since
December 31, 1998 or liabilities or obligations, individually or
in the aggregate, which do not or would not have a Material
Adverse Effect on the Company or the Subsidiary, taken as a
whole.
(j) No Undisclosed Events or Circumstances. No
event or circumstance has occurred or exists with respect to the
Company, the Subsidiary or their respective 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) No General Solicitation. None of the
Company, the Subsidiary or, to the Company's knowledge, any of
their respective affiliates or 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) in connection
with the offer or sale of the Series C Preferred Shares.
(l) No Integrated Offering. None of the Company,
the Subsidiary, or, to the Company's knowledge, any of their
respective Affiliates (as defined pursuant to the Securities Act)
or any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would
require registration of the Series C Preferred Shares under the
Securities Act, and the offer and sale of the Series C Preferred
Shares hereunder, and the issuance of the Common Shares upon
conversion thereof, is exempt from the registration requirements
of the Securities Act.
(m) Intellectual Property. Each of the Company
and the Subsidiary owns or has licenses to use certain patents,
copyrights and trademarks ("intellectual property") associated
with its respective business. Each of the Company and the
Subsidiary has all intellectual property rights which are needed
to conduct its respective business as it is now being conducted
or as proposed to be conducted as disclosed in the SEC Documents.
The Company has no reason to believe that the intellectual
property rights owned by the Company or the Subsidiary are
invalid or unenforceable or that the use of such intellectual
property by the Company or the Subsidiary infringes upon or
conflicts with any right of any third party, and neither the
Company nor the Subsidiary has received notice of any such
infringement or conflict. The Company has no knowledge of any
infringement of the Company's or the Subsidiary's intellectual
property by any third party.
(n) No Litigation. Except as set forth in the
SEC Documents delivered to the Investor prior to the date of this
Agreement ("Pre-Agreement SEC Documents") no litigation or claim
(including those for unpaid taxes) against the Company or the
Subsidiary is pending or, to the Company's knowledge, threatened,
and no other event has occurred, which if determined adversely
would be likely to have a Material Adverse Effect on the Company
or the Subsidiary, taken as a whole; and the Company believes
that the legal proceedings described in the Pre-Agreement SEC
Documents will not have a Material Adverse Effect on the Company
or the Subsidiary, taken as a whole. No litigation or claim is
pending or to the Company's knowledge, threatened against the
Company or the Subsidiary which, if determined adversely would be
likely to adversely affect the transactions contemplated hereby.
(o) Brokers. The Company has taken no action
which would give rise to any claim by any person, other than
Xxxx, Xxxx & Co. (the fees and expenses of which shall be borne
by the Company) for brokerage commissions, finder's fees or
similar payments relating to this Agreement or the transactions
contemplated hereby.
(p) Taxes. The Company and the Subsidiary have
filed or caused to be filed all federal, state, municipal and
other tax returns, reports and declarations required to be filed
by them, respectively, so as to prevent any valid lien, charge or
encumbrance of any nature on their respective assets or
properties and have paid or shall pay all taxes which have been
or shall become due with respect to the periods covered by said
returns or pursuant to any assessment received by them in
connection therewith.
(q) Employee Benefit Plans. All pension, profit-
sharing, bonus, incentive, welfare and other employee benefit
plans in which the employees of the Company or the Subsidiary
participate comply in all material respects with all applicable
requirements of the Department of Labor and the Internal Revenue
Service promulgated under the Employee Retirement Income Security
Act of 1974, as amended, and all other applicable law. Without
limiting the foregoing, all required contributions under such
plans have been made, the respective fund or funds established
under such plans are funded in accordance with all applicable
laws, and no past service funding liability exists thereunder.
(r) Environmental Laws. Neither the consummation
of the transactions contemplated by this Agreement nor, to the
Company's knowledge, any real property utilized by the Company or
the Subsidiary, nor, to the Company's knowledge, any condition
thereon violates any Environmental Laws (as hereinafter defined),
other than any such violations which would not have a Material
Adverse Effect on the Company and the Subsidiary, taken as a
whole, and no provisions of any Environmental Laws or regulations
in any way affect the consummation of the transactions
contemplated by this Agreement. For purposes hereof,
"Environmental Laws" shall mean any and all federal, national,
state, or local laws, statutes, ordinances, rules, regulations,
orders or determinations of any federal, national, state, or
local governmental authority pertaining to health or the
environment.
(s) Disclosure. No representation or warranty
made under any provisions of this Agreement, and none of the
information furnished by the Company set forth herein or in any
document delivered to the Investor, or any authorized
representative of the Investor, pursuant to this Agreement,
contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements herein or
therein not misleading.
Section 2.2 Representations and Warranties of the
Investor. The Investor hereby makes the following
representations and warranties to the Company:
(a) Authorization; Enforcement. (i) The Investor
has the requisite power and authority to enter into and perform
this Agreement and to purchase the Series C Preferred Shares
being sold hereunder, (ii) the execution and delivery of this
Agreement by the Investor and the consummation by it of the
transactions contemplated hereby and thereby have been duly
authorized by all necessary limited duration company action, as
required, and (iii) this Agreement constitutes the valid and
binding obligation of the Investor enforceable against the
Investor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally the enforcement of
creditors' rights and remedies or by other equitable principles
of general application.
(b) No Conflicts. The execution, delivery and
performance of this Agreement and the consummation by the
Investor of the transactions contemplated hereby and thereby do
not and will not (i) result in a violation of any of the
Investor's organizational documents, (ii) conflict with any
agreement, indenture, or instrument to which the Investor is a
party, or (iii) result in a violation of any law, rule, or
regulation or any order, judgment or decree of any court or
governmental agency applicable to the Investor. The Investor is
not required to obtain any consent or authorization of any
governmental agency in order for them to perform their
obligations under this Agreement.
(c) Investment Representation. The Investor is
purchasing the Series C Preferred Shares for its own account and
not with a view to distribution in violation of any securities
laws. The Investor has no present intention to sell the Series C
Preferred Shares and the Investor does not have any present
arrangement (whether or not legally binding) to sell the Series C
Preferred Shares to or through any person or entity; provided,
however, that by their representations herein, the Investor does
not agree to hold the Series C Preferred Shares for any minimum
or other specific term and reserve the right to dispose of the
Series C Preferred Shares at any time in accordance with Federal
and state securities laws applicable to such disposition.
(d) Accredited Investor. The Investor is an
"accredited investor" as defined in Rule 501 promulgated under
the Securities Act. The Investor has such knowledge and
experience in financial and business matters in general and
investments in particular, so that the Investor is able to
evaluate the merits and risks of an investment in the Series C
Preferred Shares and to protect its own interests in connection
with such investment. In addition (but without limiting the
effect of the Company's representations and warranties contained
herein), the Investor has received such information as it
considers necessary or appropriate for deciding whether to
purchase the Series C Preferred Shares pursuant hereto.
(e) Rule 144. The Investor understands that
there is no public trading market for the Series C Preferred
Shares, that none is expected to develop, and that the Series C
Preferred Shares must be held indefinitely until the Series C
Preferred Shares or securities into which such Series C Preferred
Shares are converted are registered under the Securities Act or
an exemption from registration is available. The Investor has
been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act.
(f) Brokers. The Investor has not taken any
action which would give rise to any claim by any person for
brokerage commissions, finder's fees or similar payments by the
Company relating to this Agreement or the transactions
contemplated hereby.
(g) Reliance by the Company. The Investor
understands that the Series C Preferred Shares are being offered
and sold in reliance on a transactional exemption from the
registration requirements of Federal and state securities laws
and that the Company is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and
understandings of the Investor set forth herein in order to
determine the applicability of such exemptions and the
suitability of the Investor to acquire the Series C Preferred
Shares.
ARTICLE III
Covenants
Section 3.1 Registration and Listing. Until the later of
(i) such time as no Series C Preferred Shares are outstanding or
(ii) the expiration of the Effectiveness Period (as hereinafter
defined in Section 4.3), the Company will cause the Common Stock
to continue to be registered under Section 12(g) of the Exchange
Act, will comply in all respects, with its reporting and filing
obligations under the Exchange Act, and will not take any action
or file any document (whether or not permitted by the Exchange
Act or the rules thereunder) to terminate or suspend such
reporting and filing obligations. The Company shall take further
action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable
such holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such rule
may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Commission. Upon the request
of any holder of Registrable Securities, the Company shall
deliver to such holder a written statement as to whether it has
complied with such information and requirements. Until the later
of (i) such time as no Series C Preferred Shares are outstanding
or (ii) the expiration of the Effectiveness Period, the Company
shall use its best efforts to continue the listing or trading of
the Common Shares on Nasdaq, the Nasdaq National Market or a
principal exchange and comply in all respects with the Company's
reporting, filing and other obligations under the bylaws or rules
of Nasdaq and any exchange or market on which the Common Shares
are then traded.
Section 3.2 Certificates on Conversion. Upon any
conversion (automatic or optional) of Series C Preferred Shares,
the Company shall issue and deliver to the Investor (or the then
holder) within three (3) days of the conversion date a new
certificate or certificates for the Series C Preferred Shares
which has not yet been converted but which are evidenced in part
by the certificate(s) submitted to the Company in connection with
such conversion (with the number of and denomination of such new
certificate(s) designated by such Investor or holder).
Section 3.3 Replacement Certificates. The certificate(s)
representing the Series C Preferred Shares held by the Investor
(or then holders) may be exchanged by the Investor (or such
holders) at any time and from time to time for certificates with
different denominations representing an equal aggregate number of
Series C Preferred Shares, as reasonably requested by the
Investor (or such holders) upon surrendering the same. No
service charge will be made for such registration, transfer or
exchange.
Section 3.4 Securities Compliance. The Company shall
notify the Commission and Nasdaq, in accordance with their
requirements, of the transactions contemplated by this Agreement,
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 Series C Preferred Shares
hereunder and the Common Stock issuable upon conversion thereof
to the Investor or subsequent holders.
Section 3.5 Notices. The Company agrees to provide the
Investor (or any subsequent holders of Series C Preferred Shares)
with copies of all notices and information, including without
limitation notices and proxy statements in connection with any
meetings, that are provided to the holders of shares of Common
Shares, contemporaneously with the delivery of such notices or
information to such Common Share holders.
Section 3.6 Reservation of Stock Issuable Upon
Conversion. The Company shall at all times reserve and keep
available out of its authorized but unissued Common Stock, solely
for the purpose of effecting the conversion of the Series C
Preferred Shares, such number of shares of its Common Stock as
shall from time to time be sufficient to effect the conversion of
all outstanding Series C Preferred Shares, and if at any time the
number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of all the then
outstanding Series C Preferred Shares, the Company will take such
corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for
such purpose, including without limitation engaging in best
efforts to obtain the requisite shareholder approval.
Section 3.7. Board Observation Rights. So long as the
Investor holds any Series C Preferred Shares, the Investor shall
have the right to collectively designate an observer to receive
notice of and attend meetings of the Company's Board of
Directors. Such observer shall have no right to vote on or with
respect to any matter considered by the Board of Directors. Such
observer shall agree to maintain as confidential any non-public
information it obtains as a result of the provisions of this
Section 3.7. The Company agrees to reimburse the observer for
the reasonable travel and other expenses incurred by such
observer in connection with his or her attendance at meetings of
the Company's Board of Directors.
ARTICLE IV
Registration
Section 4.1 Registration Requirements. The Company shall
use its reasonable business efforts to effect the registration of
the Registrable Securities (including without limitation the
execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other
state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would permit or
facilitate the resale or distribution of all the Registrable
Securities in the manner (including manner of sale) and in all
states reasonably requested by the Holder. Such reasonable best
efforts by the Company shall include the following:
(a) the Company shall, as expeditiously as
reasonably possible after the Closing Date:
(i) Prepare and file a registration
statement with the Commission pursuant to Rule 415
under the Securities Act on such appropriate
registration form of the Commission as shall be
reasonably selected by the Company covering the
Registrable Securities ("Registration Statement")
within 45 days following the Closing Date. Thereafter
the Company shall use its reasonable business efforts
to cause such Registration Statement to be declared
effective by the Commission within 90 days following
the Closing Date. In the event that such Registration
Statement is not declared effective within 90 days
following the Closing Date, there shall be a 30 day
grace period. The Company shall use its reasonable
best efforts to cause the Registration Statement to
become effective during this 30 day grace period, if
applicable. In the event that such Registration
Statement has not been declared effective within 120
days from the Closing Date, then the Company shall,
until the Registration Statement is declared effective,
pay in cash to the Investor an amount equal to 2% of
the aggregate Liquidation Value of the Series C
Preferred Shares (the "Liquidated Damages") held by the
Investor for each 30 day period, or part thereof,
beginning on the 121st day following the Closing Date
(the "Default Period") that the Registration Statement
has not been declared effective; provided, however,
that the Default Period shall terminate and Liquidated
Damages shall cease to accrue on the date upon which
all such Registrable Securities may be immediately sold
under Rule 144 in the reasonable opinion of counsel to
the Company (provided that the Company's transfer agent
has accepted an instruction from the Company to such
effect). If any applicable Default Period is less than
30 days such cash payment shall be on a pro rata basis.
Such cash payment shall be calculated by the Company on
the earlier of (i) the effective date of such
Registration Statement or (ii) the last day of each
Default Period, and a check in lawful money of the
United States of America shall be sent within three (3)
business days of such calculation to the Investor at
the addresses set forth on the signature page hereof.
Following the initial effective date of such
Registration Statement, Liquidated Damages shall also
be payable to the Investor by the Company for periods
(in excess of the time period in which the Company is
required to file a Current Report on Form 8-K) during
which the Registration Statement does not remain
effective; provided, however, that such Liquidated
Damages shall not be payable by the Company in the
event that all such Registrable Securities may be
immediately sold by the Investor pursuant to Rule 144.
Notwithstanding the foregoing, if the Default Period
commences from the failure of the Company to cause to
become effective the Registration Statement solely by
reason of the failure of the Investor to provide such
information as (i) the Company may reasonably request
from the Investor to be included in the Registration
Statement or (ii) the Commission or Nasdaq may request
in connection with such Registration Statement, the
Company shall not be required to pay such Liquidated
Damages to the Investor during the period of delay
attributable to Investor's failure. The Company and
the Investor hereby acknowledge and agree that it may
be difficult, if not impossible, to determine with any
reasonable accuracy the actual damages arising from the
failure to secure effectiveness of the Registration
Statement by the time hereinbefore specified, or to
maintain the Registration Statement thereafter, and
that the amount of the Liquidated Damages is a
reasonable estimate thereof, provided that payment
thereof shall in no manner be construed as impairing
the Investor's right to require specific performance of
this Agreement.
(ii) Prepare and file with the Commission
such amendments and supplements to such Registration
Statement and the prospectus used in connection with
such Registration Statement as may be necessary to
comply with the provisions of the Act with respect to
the disposition of all securities covered by such
Registration Statement and notify the Investor of the
filing and effectiveness of such Registration Statement
and any amendments or supplements.
(iii) Furnish to the Investor such number
of copies of a current prospectus conforming with the
requirements of the Act, copies of the Registration
Statement, any amendment or supplement thereto and any
documents incorporated by reference therein and such
other documents as the Investor may reasonably require
in order to facilitate the disposition of Registrable
Securities owned by the Investor.
(iv) Use its best efforts to register and
qualify the securities covered by such Registration
Statement under such other securities or "Blue Sky"
laws of such jurisdictions as shall be reasonably
requested by the Investor; provided that the Company
shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file
a general consent to service of process in any such
states or jurisdictions.
(v) Notify the Investor immediately of the
happening of any event as a result of which the
prospectus (including any supplement thereto or
thereof) included in such Registration Statement, as
then in effect, includes an untrue statement of
material fact or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading in light of the
circumstances then existing, and use its best efforts
to promptly update and/or correct such prospectus.
(vi) Notify the Investor immediately of the
issuance by the Commission or any state securities
commission or agency of any stop order suspending the
effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The
Company shall use its reasonable best efforts to
prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the
earliest possible time.
(vii) Permit a single firm of counsel,
designated by the Investor, to review the Registration
Statement and all amendments and supplements thereto
within a reasonable period of time prior to each
filing, and shall not file any document in a form to
which such counsel reasonably objects.
(viii) Use its reasonable business efforts
to list the Registrable Securities covered by such
Registration Statement with all securities exchange(s)
and/or markets on which the Common Stock is then
listed, and prepare and file any required filings with
the National Association of Securities Dealers, Inc. or
any exchange or market where the Common Shares are
traded.
(ix) Otherwise use its reasonable business
efforts to comply with all applicable rules and
regulations of the SEC and make available to its
security holders, as soon as reasonably practicable,
earnings statements covering a period of twelve months
beginning with three months after the effective date of
the Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the
Securities Act.
(b) The Company shall make available for
inspection by the Investor and its representative(s), any
underwriter participating in any disposition pursuant to a
Registration Statement, and any attorney or accountant retained
by the Investor or underwriter, all financial and other records
customary for purposes of the Investor's due diligence
examination of the Company and all SEC Documents filed subsequent
to the Closing Date, pertinent corporate documents and properties
of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any
such representative, underwriter, attorney or accountant in
connection with such Registration Statement, provided that such
parties agree to keep such information confidential.
Section 4.2 Expenses of Registration. All Registration
Expenses incurred in connection with any registration,
qualification or compliance with registration pursuant to this
Section 4 shall be borne by the Company, and all Selling Expenses
of the Investor shall be borne by the Investor.
Section 4.3 Registration Period. In the case of the
registration effected by the Company pursuant to this Section 4,
the Company will use its reasonable business efforts to keep such
registration effective (the "Effectiveness Period") until the
earlier to occur of (a) two years from the Closing Date, provided
that, without limiting any provision of Section 4.1(a)(i), the
Company may suspend the effectiveness of the Registration
Statement if the Board of Directors determines, upon advice of
counsel, that in order to maintain effectiveness of the
Registration Statement, the Company would be required to disclose
a significant corporate development which disclosure would have a
material effect on the Company; provided, however, that the
period of time which such Registration Statement is required to
be effective shall be increased by the number of days that the
Registration Statement's effectiveness was suspended, if any,
during the two year period from the Closing Date, (b) the date on
which the Investor have completed the sale or distribution
described in the Registration Statement relating thereto, or (c)
the date on which such Registrable Securities may be sold under
Rule 144(k) in the reasonable opinion of counsel to the Company
(provided that the Company's transfer agent has accepted an
instruction from the Company to such effect).
Section 4.4 Indemnification.
(a) Company Indemnity. The Company will
indemnify each holder of Registrable Securities, each of its
officers, directors and partners, and each person controlling
such holder of Registrable Securities, within the meaning of
Section 15 of the Securities Act and the rules and regulations
thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each
underwriter, if any, and each person who controls, within the
meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, any underwriter, against all claims,
losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related
registration statement, notification or the like) incident to any
such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the
Securities Act or any state securities law or in either case, any
rule or regulation thereunder applicable to the Company and
relating to action or inaction required of the Company in
connection with any such registration, qualification or
compliance, and will reimburse each holder of Registrable
Securities, each of its officers, directors and partners, and
each person controlling such holder of Registrable Securities,
each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to a holder of
Registrable Securities to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any
untrue statement or omission based upon written information
relating to such holder or underwriter and furnished to the
Company by such holder or the underwriter (if any) therefor and
stated to be specifically for use therein. The indemnity
agreement contained in this Section 4.4(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Company (which consent will not be unreasonably
withheld).
(b) Holder Indemnity. Each holder of Registrable
Securities will, severally and not jointly, if Registrable
Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors, officers, partners,
and each underwriter, if any, of the Company's securities covered
by such a registration statement, each person who controls the
Company or such underwriter within the meaning of Section 15 of
the Securities Act and the rules and regulations thereunder, each
other holder of Registrable Securities (if any), and each of
their directors, officers and partners, and each person
controlling such other holder(s) of Registrable Securities
against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus,
offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated
therein or necessary to make the statement therein not
misleading, in each case only insofar as such untrue statement or
alleged untrue statement or omission relates to such holder of
Registrable Securities, and will reimburse the Company and such
other holder(s) of Registrable Securities and their directors,
officers and partners, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection
with investigating and defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information
furnished to the Company by such holder of Registrable Securities
and stated to be specifically for use therein, and provided that
the maximum amount for which such holder of Registrable
Securities shall be liable under this indemnity shall not exceed
the net proceeds received by such holder of Registrable
Securities from the sale of the Registrable Securities. The
indemnity agreement contained in this Section 4.4(b) shall not
apply to amounts paid in settlement of any such claims, losses,
damages or liabilities if such settlement is effected without the
consent of such holder of Registrable Securities (which consent
shall not be unreasonably withheld).
(c) Procedure. Each party entitled to
indemnification under this Article (the "Indemnified Party")
shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party
to assume the defense of any such claim in any litigation
resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the
failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its
obligations under this Article except to the extent that the
Indemnifying Party is materially and adversely affected by such
failure to provide notice. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself
or the claim in question as an Indemnifying Party may reasonably
request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation
resulting therefrom.
Section 4.5 Contribution. If the indemnification
provided for in Section 4 herein is unavailable to the
Indemnified Parties in respect of any losses, claims, damages or
liabilities referred to herein (other than by reason of the
exceptions provided therein), then each such Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute
to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages or liabilities as between
the Company on the one hand and any holder of Registrable
Securities on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of such holder of
Registrable Securities in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one
hand and of any holder of Registrable Securities on the other
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company or by such holder.
In no event shall the obligation of any Indemnifying Party
to contribute under this Section 4.5 exceed the amount that such
Indemnifying Party would have been obligated to pay by way of
indemnification if the indemnification provided for under Section
4.4(a) or 4.4(b) hereof had been available under the
circumstances.
The Company and the Investor agree that it would not be just
and equitable if contribution pursuant to this Section 4.5 were
determined by pro rata allocation (even if the holders or the
underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party
as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraphs shall be
deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
section, no holder of Registrable Securities or underwriter shall
be required to contribute any amount in excess of the amount by
which (i) in the case of any holder, the net proceeds received by
such holder from the sale of Registrable Securities or (ii) in
the case of an underwriter, the total price at which the
Registrable Securities purchased by it and distributed to the
public were offered to the public exceeds, in any such case, the
amount of any damages that such holder or underwriter has
otherwise been required to pay by reason of such untrue or
alleged untrue statement, omission or alleged omission. 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.
ARTICLE V
Conditions
Section 5.1 Conditions Precedent to the Obligation of the
Company to Issue and Sell the Series C Preferred Shares. The
obligation hereunder of the Company to issue and sell the Series
C Preferred Shares to the Investor is subject to the
satisfaction, at or before any Closing Date, of each 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 Investor Representations and
Warranties. The representations and warranties of the Investor
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 speak as of a
particular date) and the Investor shall deliver to the Company a
certificate executed by an executive officer of such Investor to
such effect.
(b) Performance by the Investor. The Investor
shall have performed all agreements and satisfied all conditions
required to be performed or satisfied by the Investor at or prior
to any Closing Date and the Investor shall deliver to the Company
a certificate executed by an executive officer of such Investor
to such effect.
(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.
Section 5.2 Conditions Precedent to the Obligation of the
Investor to Purchase the Series C Preferred Shares. The
obligation hereunder of the Investor to acquire and pay for the
Series C Preferred Shares is subject to the satisfaction, at or
before any Closing Date, of each of the conditions set forth
below. These conditions are for the Investor's sole benefit and
may be waived by the Investor at any time in its sole discretion.
(a) Accuracy of the Company's Representations and
Warranties. The representations and warranties of the Company
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 speak as of a
particular date) and the Company shall deliver to the Investor a
certificate executed by an executive officer of the Company to
such effect.
(b) Performance by the Company. The Company
shall have performed all agreements and satisfied all conditions
required to be performed or satisfied by the Company at or prior
to any Closing Date and the Company shall deliver to the Investor
a certificate executed by an executive officer of the Company to
that effect.
(c) Nasdaq. From the date hereof to any Closing
Date, trading in the Company's Common Stock shall not have been
suspended by the Commission or Nasdaq, and trading in securities
generally as reported by Nasdaq, shall not have been suspended or
limited, and the Common Stock shall not have been delisted from
any exchange or market where they are currently listed.
(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 or competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this
Agreement.
(e) Opinion of Counsel. At the Closing, the
Investor shall have received an opinion of counsel to the Company
in substantially the form attached hereto as Exhibit B and such
other opinions, certificates and documents as the Investor or its
counsel shall reasonably require incident to the Closing.
(f) Secretary's Certificate. The Company shall
have delivered to the Investor a certificate in form and
substance reasonably satisfactory to the Investor, executed by
the Secretary of the Company on behalf of the Company, certifying
as to the incumbency of signing officers, Charter, Bylaws, good
standing and authorizing resolutions of the Company.
(g) Consents. All consents, acknowledgements,
approvals, permits and orders with respect to the transactions
contemplated hereby shall have been obtained.
(h) Other Certificates. The Investor shall have
received such additional certificates, instruments and other
documents, in form and substance satisfactory to the Investor and
counsel for the Investor as it shall have reasonably requested in
connection with the transactions contemplated hereunder.
ARTICLE VI
Legend on Stock
Section 6.1. Certificates. Each certificate representing
the Series C Preferred Shares and, if appropriate, securities
issued upon conversion thereof, shall be stamped or otherwise
imprinted with a legend substantially in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. THEY MAY NOT BE SOLD OR
OFFERED FOR SALE EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAW OR
AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
Any Common Stock issued pursuant to conversion of the Series
C Preferred Shares shall bear a legend in the same form as the
legend on the Series C Preferred Shares.
ARTICLE VII
Termination
Section 7.1 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 Investor.
Section 7.2 Other Termination. This Agreement may be
terminated by action of the Board of Directors of the Company or
by the Investor at any time if the Closing shall not have been
consummated by August 31, 1999.
ARTICLE VIII
Miscellaneous
Section 8.1 Fees and Expenses. The Company shall pay the
fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by the Company
incident to the negotiation, preparation, execution, delivery and
performance of this Agreement, and shall promptly pay, or
reimburse the Investor for, all out-of-pocket fees and expenses
incurred by it, including, without limitation, the reasonable
fees and disbursements of its counsel, not to exceed an aggregate
of $20,000, in connection with such activities, and any other
documents or instruments required hereunder or thereunder,
whether or not the transactions contemplated hereunder are
consummated. The Company shall pay all stamp and other taxes and
duties levied in connection with the issuance of the Series C
Preferred Shares pursuant hereto.
Section 8.2 Default.
(a) It shall constitute an Event of Default if
the Company shall fail to perform its obligations hereunder or
shall fail to perform its obligations to any holder of the Series
C Preferred Shares as provided for in the Company's Articles of
Incorporation including the provisions set forth in Schedule I
hereto. If an Event of Default shall occur, the Investor shall
be entitled, to immediately commence legal action to recover
damages in respect of such default and/or to seek injunctive
relief.
(b) The Company and the Investor acknowledge and
agree that irreparable damage would occur in the event that any
of the provisions of this Agreement 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 and to enforce specifically the
terms and provisions hereof, this being in addition to any other
remedy to which either of them may be entitled by law or equity.
(c) Each of the Company and the Investor
(i) hereby irrevocably submit to the jurisdiction of the United
States District Court for the Southern District of Florida for
the purposes of any suit, action or proceeding arising out of or
relating to this Agreement 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 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. Each of the Company and the Investor 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 agree that such service
shall constitute good and sufficient service of process and
notice thereof. Nothing in this paragraph shall affect or limit
any right to serve process in any other manner permitted by law.
Section 8.3 Entire Agreement; Amendment. This Agreement
together with the agreements and documents executed in connection
herewith and therewith, contains the entire understanding of the
parties with respect to the matters covered hereby and thereby
and, except as specifically set forth herein or therein, neither
the Company nor the Investor make any representation, warranty,
covenant or undertaking with respect to such matters. No
provision of this Agreement may be waived or amended other than
by a written instrument signed by the party against whom
enforcement of any such amendment or waiver is sought.
Section 8.4 Notices. Any notice or other communication
required or permitted to be given hereunder shall be in writing
and shall be effective upon actual receipt of such mailing. The
addresses for such communications shall be:
to the Company: Xxxxxx Industries Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Chief
Executive Officer
with copies to: Xxxxxxxxx Xxxxxxx, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
to the Investor: Hanseatic Americas LDC
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx,
President
with a copy to: Krugman & Kailes LLP
Park 00 Xxxx - Xxxxx Xxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
Any party hereto may from time to time change its address for
notices by giving at least 10 days written notice of such changed
address to the other parties hereto.
Section 8.5 Indemnity. Each party shall indemnify each
other party against any loss, cost or damages (including
reasonable attorney's fees but excluding consequential damages)
incurred as a result of such parties' breach of any
representation, warranty, covenant or agreement in this
Agreement.
Section 8.6 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 8.7 Headings. The headings herein are for
convenience only, do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions
hereof.
Section 8.8 Successors and Assigns. Except as otherwise
provided herein, this Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted
assigns. The parties hereto may amend this Agreement without
notice to or the consent of any third party.
Section 8.9 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.
Section 8.10 Governing Law. This Agreement shall be
governed by and construed and enforced in accordance with the
internal laws of the State of Florida.
Section 8.11 Survival. The representations and warranties
and the agreements and covenants of the Company and the Investor
contained herein shall survive the Closing.
Section 8.12 Execution. This Agreement may be executed in
two or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign
the same counterpart. In the event any signature is delivered by
facsimile transmission, the party using such means of delivery
shall cause the manually executed signature page(s) to be
physically delivered to the other party within five days of the
execution hereof.
Section 8.13 Publicity. The Company agrees that it will
not disclose, and will not include in any public announcement,
the name of any of the Investor without their consent, unless and
until such disclosure is required by law or applicable
regulation, and then only to the extent of such requirement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
THE COMPANY:
XXXXXX INDUSTRIES, INC.
By: s/Xxxx X. Xxxxxx
--------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Executive
Officer
THE INVESTOR:
HANSEATIC AMERICAS LDC
By: Hansabel Partners LLC
By: Hanseatic Corporation
By: s/Xxxx X. Xxxxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
(..continued)
