SUBSCRIPTION AGREEMENT
Exhibit
10.1
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Ladies
and Gentlemen:
1. Purchase
and Sale of the Shares
and
Warrants.
The
undersigned hereby tenders this subscription and applies for the purchase of
the
number of shares (the “Shares”) of the common stock (the “Common Stock”), par
value $0.001 per Share, of Ionatron, Inc. at a price of $5.75 per Share. The
Company shall also issue to the undersigned warrants (the “Warrants”) to
purchase a number of shares of Common Stock (the “Warrant Shares”) equal to 20%
of the Shares (rounded to the next highest integer in the case of a fractional
Warrant Shares) purchased by the undersigned. The Warrants shall be exercisable
for a period of five (5) years commencing on the Closing Date (as defined below)
at an exercise price of $9.15 per share. Together with this Subscription
Agreement, the undersigned is delivering to the Company, a check payable to
the
Company or funds by wire transfer to an escrow account maintained at Continental
Stock Transfer & Trust Company (the “Transfer Agent”), in accordance with
the Escrow Agreement made as of August 1, 2006 by and among the Company, the
Transfer Agent and J Xxxxxxxx Securities Group (“J Xxxxxxxx”), the placement
agent for the Offering (defined below), in accordance with the instructions
of J
Xxxxxxxx, in the full amount of the purchase price for the Shares and Warrants
which the undersigned is subscribing for pursuant hereto. The form of the Escrow
Agreement is attached as Exhibit A hereto. The Shares and Warrants are being
offered, pursuant to this Subscription Agreement as part of an offering (the
“Offering”) of approximately 4,616,305 Shares and Warrants to purchase up to
923,260 Warrant Shares ($26,543,750), which maximum number of Shares and
Warrants is subject to increase upon the mutual consent of the Company and
J
Xxxxxxxx, on an “any or all basis.” The “Closing Date” means the date on which
the purchase price for the Shares and Warrants is released from escrow to the
Company and the Company accepts the undersigned’s subscription (the “Closing”).
The Closing shall occur as soon as practicable, following the undersigned’s
deposit of the purchase price into the escrow account and the Company’s
acceptance of the undersigned’s subscription and satisfaction of the conditions
to closing set forth in Section 5. Upon the Closing, the Company shall deliver
to its Transfer Agent irrevocable instructions to issue the Shares to the
undersigned and, promptly following the Closing, the Company shall deliver
to
the undersigned certificates representing the Warrants purchased by the
undersigned and cause its Transfer Agent to deliver the undersigned
certificates.
2. Representations,
Warranties and Agreements of the Subscriber.
(a)
The
undersigned acknowledges that the undersigned has access to and has reviewed
copies of (i) the Company’s filings with the Securities and Exchange Commission
(the “SEC”) via XXXXX, including, without limitation, the Company’s Form 10-K
for the year ended December 31, 2005 (including all of the exhibits thereto),
and the Company’s Form 10-Q for the quarter ended March 31, 2006 (including, in
each case, all of the exhibits thereto), the Company’s Current Reports on Form
8-K (including, in each case, as amended, and all of the exhibits thereto)
filed
since December 31, 2005 and the Company’s definitive proxy statement filed with
the SEC on May 22, 2006 (collectively, the “SEC Reports”), and (ii) the draft of
the Company’s Form 10-Q for the quarter ended June 30, 2006 which was
distributed to the undersigned with this Subscription Agreement on or subsequent
to August 4, 2006 (the “Draft Form 10-Q”), and the undersigned has performed its
own due diligence in connection with its subscription for the Shares and
Warrants and has had a reasonable opportunity to ask questions of and receive
answers from qualified representatives of the Company concerning the business
and financial condition of the Company, the terms and conditions of this
Subscription Agreement, and all of such questions have been answered to the
satisfaction of the undersigned.
(b) The
undersigned is an “accredited investor,” as such term is defined in Regulation D
of the Rules and Regulations promulgated under the Securities Act of 1933,
as
amended (the “Act”), and as set forth below by checking the appropriate
box(es):
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A
bank as defined in Section 3(a)(2) of the Act, or any savings and
loan
association or other institution as defined in Section 3(a)(5)(A)
of the
Act whether acting in its individual or fiduciary capacity; a broker
or
dealer registered pursuant to Section 15 of the Securities Exchange
Act of
1934 (the “Exchange Act”); an insurance company as defined in section
2(13) of the Securities Act; an investment company registered under
the
Investment Company Act of 1940 or a business development company,
as
defined in section 2(a)(48) of that act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under
Section
301 (c) or (d) of the Small Business Investment Act of 1958; a plan
established and maintained by a state, its political subdivisions,
or any
agency or instrumentality of a state or its political subdivisions,
for
the benefit of its employees, if such plan has total assets in excess
of
$5,000,000; an employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974 if the investment decision
is made
by a plan fiduciary, as defined in Section 3(21) of such act, which
is
either a bank, savings and loan association, insurance company, or
registered investment adviser, or if the employee benefit plan has
total
assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited
investors;
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A
private business development company as defined in Section 202(a)22
of the
Investment Advisers Act of 1940;
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An
organization described in Section 501(c)(3) of the Internal Revenue
Code,
corporation, Massachusetts or similar business trust, or partnership,
not
formed for the specific purpose of acquiring the securities offered,
with
total assets in excess of $5,000,000;
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A
director or executive officer of the Company;
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A
natural person whose individual net worth, or joint net worth with
that
person’s spouse, at the time of his purchase exceeds
$1,000,000;
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A
natural person who had an individual income in excess of $200,000
in each
of the two most recent years or joint income with that person’s spouse in
excess of $300,000 in each of those years and has a reasonable expectation
of reaching the same income level in the current year;
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A
trust, with total assets in excess of $5,000,000, not formed for
the
specific purpose of acquiring the securities offered, whose purchase
is
directed by a sophisticated person as described in Rule 506(b)(2)(ii);
and
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An
entity in which all of the equity owners are accredited
investors.
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(c) The
undersigned understands that the Company has determined that the exemption
from
the registration provisions of the Act, which is based upon non-public offerings
are applicable to the offer and sale of the Shares and Warrants based, in part,
upon the representations, warranties and agreements made by the undersigned
herein;
(d) The
undersigned understands that (A) none of Shares, Warrants or Warrant Shares
have
been registered under the Act or the securities laws of any state, based upon
an
exemption from such registration requirements for non-public offerings pursuant
to Regulation D under the Act; (B) the Shares, Warrants and Warrant Shares
are
and will be “restricted securities,” as said term is defined in Rule 144 of the
Rules and Regulations promulgated under the Act; (C) unless they have been
first
registered under the Act and all applicable state securities laws, the Shares,
Warrants and Warrant Shares may only be offered, sold or otherwise transferred
(1) to the Company, (2) pursuant to the exemption from registration under the
Act provided by Rule 144, or (3) pursuant to another exemption from registration
after providing a satisfactory legal opinion to the Company; (D) except as
set
forth in this Subscription Agreement, the Company is under no obligation to
register any of the Shares, Warrants or Warrant Shares under the Act or any
state securities laws, or to take any action to make any exemption from any
such
registration provisions available; (E) the certificates for the Shares, Warrants
and Warrant Shares will bear the legend set forth in Section 2(n); and (F)
stop
transfer instructions will be placed with the transfer agent for the Common
Stock;
(e) The
undersigned is acquiring the Shares and Warrants solely for the account of
the
undersigned, for investment purposes only, and not with a view towards the
resale or distribution thereof within the meaning of the Act;
(f) The
undersigned has full power and authority to execute and deliver this
Subscription Agreement and to perform the obligations of the undersigned
hereunder; and this Subscription Agreement is a legally binding obligation
of
the undersigned in accordance with its terms;
(g) The
address set forth below is the undersigned’s true and correct residence, and the
undersigned has no present intention of becoming a resident of any other state
or jurisdiction. (If a corporation, trust or partnership, the undersigned has
its principal place of business at the address set forth below and was not
organized (or has the jurisdiction of its organization and the address of its
investment manager as set forth on the signature page) for the specific purpose
of subscribing to this offering);
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(h) If
the
undersigned is a corporation or trust, the undersigned represents and warrants
that he is authorized to so sign; that the corporation or trust is authorized
by
the Articles (or Certificate) of Incorporation and Bylaws of the corporation
or
by the trust agreement, as the case may be, or applicable law to make this
investment and to enter into this Subscription Agreement; in the case of a
trust, the undersigned will, upon the request of the Company or counsel to
the
Company, furnish to the Company a true and correct copy of the trust agreement;
(i) If
the
undersigned is a partnership, by signing below the partner executing this
Subscription Agreement represents and warrants that each one of the foregoing
representations or agreements or understandings set forth herein applies to
each
partner (unless such representation, agreement or understanding is by its terms
applicable only to the partnership as an entity); that he is authorized to
so
sign; in the case of any partner that is a trust, a trustee (or co-trustee)
of
the trust is authorized by the trust agreement to make this investment and
to
enter into this Subscription Agreement and will, upon request of the Company
or
counsel to the Company, furnish to the Company a true and correct copy of the
trust agreement; and in the case of any partner that is a corporation, the
corporate officer so signing is authorized to sign on behalf of the corporation
and will, upon request of the Company or counsel to the Company, furnish to
the
Company a true and correct copy of the provisions of the Articles (or
Certificate) of Incorporation or Bylaws, or both, authorizing the corporation
to
make such investment, and a copy (certified by the secretary or other authorized
officer) of appropriate corporate resolutions authorizing the specific
investment;
(j) The
undersigned does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such person or
to
any third person, with respect to any of the Shares, Warrants or Warrant Shares
for which the undersigned is subscribing;
(k) The
foregoing representations, warranties and agreements shall survive the
execution, delivery and acceptance of this Subscription Agreement and the
closings of the sale of the Shares and Warrants and shall continue in full
force
and effect notwithstanding any subsequent disposition by the undersigned of
any
of the Shares, Warrants or Warrant Shares;
(l) The
undersigned understands that (i) this subscription is not binding upon the
Company until the Company accepts it, which acceptance is to be evidenced by
the
Company’s execution of this Subscription Agreement where indicated and (ii) the
Company may, in its sole discretion, reject this subscription, in which case
this Subscription Agreement shall be null and void or reduce this Subscription
in any amount;
(m) The
undersigned understands that neither this Subscription Agreement nor any of
the
rights of the undersigned hereunder may be transferred or assigned by the
undersigned prior to Closing; and
(n) (i)The
undersigned agrees to the imprinting of the following (or a substantially
similar) legend on any certificate representing the Shares, Warrants or Warrant
Shares:
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THE
SHARES [WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE HEREOF] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY
NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR
(ii) UPON THE DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, STATING THAT AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS
IS AVAILABLE FOR THE OFFER AND SALE OF SUCH SECURITIES.
Certificates
evidencing Shares, Warrants and/or Warrant Shares (collectively, the
“Securities”) shall not be required to contain a legend restricting transfer
under the Act (i) while a registration statement covering the resale of such
Securities is effective under the Act, or (ii) following any sale of such
Securities pursuant to Rule 144, or (iii) if such Securities are eligible for
sale under Rule 144(k), or (iv) if such legend is not required under applicable
requirements of the Act (including judicial interpretations and pronouncements
issued by the Staff of the SEC). The Company shall cause its counsel to issue
a
legal opinion to the Company’s transfer agent within three (3) business days
following the date the Registration Statement (defined below) is declared
effective by the SEC (the “Effective Date”) (provided that any transferee of the
undersigned must deliver an affidavit with respect to the matters set forth
in
this Section 2(n). Upon the written consent of the undersigned, following the
Effective Date or at such earlier time as a legend is no longer required for
certain Securities, the Company will no later than three trading days following
the delivery by the undersigned to the Company or the Company’s transfer agent
of a legended certificate representing such Securities, deliver or cause to
be
delivered to the undersigned a certificate representing such Securities that
is
free from all restrictive and other legends. The undersigned covenants
and agrees that it will comply with the prospectus delivery requirements set
forth in Section 5 of the Act, in connection with any sale of Securities
pursuant to the Registration Statement. The Company may, at its option, issue
a
blanket letter of instruction to its transfer agent placing “stop transfer”
orders on Securities, which stop transfer order may be lifted upon request
by
the transfer agent of written certification that the Shares are being sold
pursuant to an effective registration statement and a duly delivered
prospectus.
(ii) The
undersigned understands that any sales by it of any of the Shares, Warrants
or
Warrant Shares that are not made in compliance with this Section 2(n) could
subject the Company and the undersigned to possible civil and criminal liability
under applicable federal securities laws and state securities or “blue sky”
laws.
(iii) The
undersigned (i) will only sell the Securities in a bona fide transaction that
complies with the applicable federal and state securities laws, (ii) will not
sell or otherwise dispose of or transfer the Securities or any interest therein
in a transaction that is part of a plan or scheme to avoid the registration
requirements of the Act and (iii) acknowledges and agrees that notwithstanding
the removal of the legend set forth in this Section 2(n) from the Securities
upon effectiveness of a Registration Statement covering the Securities, the
Securities will remain “restricted securities,” and the undersigned, (iv) will
not sell or otherwise transfer the Shares other than pursuant to the
Registration Statement or, if applicable, Rule 144 promulgated under the Act,
(v) will remain responsible for compliance with the federal and state securities
laws in connection with any resale or other transfer of the Securities, any
such
sale or transfer will be made in compliance with Section 2(n) and the Company
and any Company Related Person (as defined below) may produce this Subscription
Agreement to any interested party in any proceeding or other inquiry with
respect to the matters set forth in this Section 2(n).
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(iv) The
undersigned understands that the Company, its officers, directors and agents
are
relying on the representation of the undersigned set forth in this Section
2(n)
in order to determine compliance with applicable securities laws in connection
with the sale of the Securities to the undersigned.
3. Representations
and Warranties of the Company.
The
Company hereby makes the following representations and warranties to the
undersigned as of the date hereof and the Closing Date.
Each of
the representations and warranties are qualified in their entirety by the
information contained in the SEC Reports, Draft Form 10-Q and Disclosure
Schedules hereto.
(a) As
of
their respective dates, each of the SEC Reports, as any of such documents may
have been subsequently amended by filings made by the Company with the SEC
prior
to the Closing Date, complied in all material respects with the requirements
of
the Exchange Act and the applicable rules and regulations of the SEC thereunder
and none of the SEC Reports contains, and on the Closing Date, none of the
SEC
Reports will contain any untrue statement of a material fact or omit to state
a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The
Company is eligible to register the Registrable Securities (defined below)
for
resale by the undersigned (provided that the undersigned is not a broker/dealer
registered with the National Association of Securities Dealers, Inc.) on a
registration statement on Form S-3 under the Act.
(b) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full power and authority,
corporate and other to own or lease, as the case may be, and operate its
properties, whether tangible or intangible, and to conduct its business as
described in the SEC Reports and is duly qualified as a foreign corporation
to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in
good standing would not have a material adverse effect on the
Company.
(c) The
Company’s subsidiaries are set forth in the Disclosure Schedules (the
“Subsidiaries”).
Unless the context requires otherwise, all references to the Company include
the
Subsidiaries. Each Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation as set forth
in the Disclosure Schedules, with full power and authority, corporate and other,
to own or lease, as the case may be, and operate its properties, whether
tangible or intangible, and to conduct its business as currently conducted.
Each
Subsidiary is duly qualified as a foreign corporation to transact business
and
is in good standing in each jurisdiction in which the conduct of its business
or
the ownership or leasing of property requires such qualification, except to
the
extent that the failure to be so qualified or be in good standing would not
have
a material adverse effect on the Company and the Subsidiaries taken as a whole.
The Company owns all of the issued and outstanding shares of capital stock
(or
other equity or ownership interests) of each Subsidiary, such ownership is
free
and clear of any security interests, liens, encumbrances, claims and charges,
and all of such shares have been duly authorized and validly issued, and are
fully paid and nonassessable.
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(d) The
Company does not presently own, directly or indirectly, an interest in any
corporation, association, or other business entity, and is not a party to any
joint venture, partnership, or similar arrangement, other than the
Subsidiaries.
(e) The
authorized capital stock of the Company conforms in all material respects to
the
description thereof contained in the SEC Reports and such description conforms
in all material respects to the rights in the instruments defining the
same.
The
issued and outstanding capital stock of the Company is as set forth in the
Disclosure Schedules.
(f) The
shares of common stock of the Company outstanding prior to the issuance of
the
Shares and Warrants have been duly authorized and are validly issued, fully
paid
and non-assessable.
(g) The
Shares to be sold under this Agreement have been duly authorized and, when
issued and sold and paid for by the undersigned in accordance with the terms
of
this Subscription Agreement, will be duly authorized, validly issued, fully
paid
and non assessable, and the undersigned will not be subject to personal
liability solely by reason of being such holders and will not be subject to
the
preemptive or similar rights of any holders of any security of the
Company.
The
Warrants to be sold under this Agreement have been duly authorized and, when
issued and sold and paid for by the undersigned in accordance with the terms
of
this Subscription Agreement, will be the valid and binding obligation of the
Company, enforceable in accordance with its terms. The Warrant Shares when
issued and paid for in accordance with the terms of the Warrants, will be duly
authorized, validly issued, fully paid and non assessable, and the undersigned
will not be subject to personal liability solely by reason of being such holders
and will not be subject to the preemptive or similar rights of any holders
of
any security of the Company. The issuance of the Shares and Warrants and the
Warrant Shares upon exercise of the Warrants will not result in the right of
any
holder of securities of the Company to adjust the exercise, conversion or
exchange price of such securities or otherwise reset the price paid for its
securities.
(h) The
Company has not granted or agreed to grant to any person any rights (including
“piggy-back” registration rights) to have any securities of the Company
registered with the SEC or any other governmental authority that have not been
satisfied or waived.
(i) This
Agreement has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company enforceable in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors’ rights generally (including, without
limitation, statutory or other laws regarding fraudulent preferential transfers)
and equitable principles of general applicability.
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(j) The
execution and delivery by the Company, and the performance by the Company of
its
obligations under this Subscription Agreement will not conflict with or
contravene in any material respect, cause a breach or violation of or default
under, any provision of applicable law or the certificate of incorporation
or
by-laws of the Company or any agreement or other instrument binding upon the
Company that is material to the Company, or any judgment, order or decree of
any
governmental body, agency or court having jurisdiction over the Company, and
no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company
of
its obligations under this Subscription Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares and Warrants and by Federal and state
securities laws with respect to the obligations of the Company under this
Subscription Agreement or the listing of the Shares and Warrants Shares on
the
Nasdaq Stock Market as may be required by the National Association of Securities
Dealers, Inc. which have been or will be obtained or such the failure of which
to obtain would not have a material adverse effect on the Company and the
Subscribers taken as a whole.
(k) There
has
not occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects of the Company whether
or
not arising in the ordinary course of business from that set forth in the SEC
Reports and the Draft Form 10-Q.
Except
as set forth in the SEC Reports and Draft From 10-Q, there has been no
obligation, contingent or otherwise, directly or indirectly incurred by the
Company or any Subsidiary made to the Company and other Subsidiaries taken
as a
whole.
(l) None
of
the Company nor any Subsidiary is in violation of its charter or by-laws or
in
default in the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other agreement
or instrument that is material to the Company and the Subsidiaries taken as
a
whole to which the Company or any Subsidiary is a party or by which the Company,
any Subsidiary or any of their properties is bound, except for such defaults
that would not, singly or in the aggregate, have a material adverse effect
on
the Company and the Subsidiaries taken as a whole.
(m) There
are
no legal or governmental proceedings, orders, judgments, writs, injunctions,
decrees or demands pending or, to the Company’s knowledge, threatened to which
the Company or any Subsidiary is a party or to which any of the properties
of
the Company or any Subsidiary is subject other than proceedings, orders,
judgments, writs, injunctions, decrees or demands accurately described in all
material respects in the SEC Reports and Draft Form 10-Q and proceedings,
orders, judgments, writs, injunctions, decrees or demands that would not have
a
material adverse effect on the Company and the Subsidiaries taken as a whole
or
on the power or ability of the Company to perform its obligations under this
Subscription Agreement or to consummate the transactions contemplated by this
Subscription Agreement
(n) The
Company and each Subsidiary (a) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”), (b) has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business, (c) is in compliance
with
all material terms and conditions of any such permit, license or approval,
(d)
is in compliance with any provisions of the employee Retirement Income Security
Act of 1974, as amended, (“ERISA”) or the rules and regulations promulgated
thereunder and (e) is in compliance with any provisions of the Foreign Corrupt
Practice Act or the rules and regulations promulgated thereunder, except, with
respect to clauses (a) through (e), where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals, or
noncompliance with ERISA or the Foreign Corrupt Practices Act or failure to
comply with the terms and conditions of such permits, licenses or approvals,
would not, singly or in the aggregate, have a material adverse effect on the
Company and the Subsidiaries, taken as a whole.
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(o) There
are
no costs or liabilities to the Company or any Subsidiary associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect on the Company
and the Subsidiaries taken as a whole.
(p) None
of
the Company nor any of the Subsidiaries is and, after giving effect to the
offering and sale of the Shares and Warrants and the application of the proceeds
from the sale of the Shares and Warrants will be, required to register as an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended.
(q) Neither
the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation
D, each an “Affiliate”)
has
directly, or through any agent, (a) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Shares
and
Warrants in a manner that would require the registration under the Act of the
Shares and Warrants or (b) offered, solicited offers to buy or sold the Shares
by any form of general solicitation or general advertising (as those terms
are
used in Regulation D) or in any manner involving a public offering within the
meaning of Section 4(2) of the Act.
No
registration under the Act of the Shares and Warrants is required for the sale
of the Shares and Warrants to the undersigned under this Subscription Agreement,
assuming the accuracy of the undersigned representations, warranties and
agreements set forth in Section 2.
(r) The
Company maintains a system of accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with
management’s general or specific authorization, (b) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets, (c) access to assets is permitted only in accordance with management’s
general or specific authorization and (d) the recorded accountability for assets
is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(s) The
Company and each Subsidiary owns or possesses, or has the right to use, all
material patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary
or
confidential information, systems or procedures), trademarks, service marks
and
trade names currently employed or required by it in connection with the business
currently conducted by it as described in the SEC Reports and Draft Form 10-Q,
except such as the failure to so own or possess or have the right to use would
not have, singly or in the aggregate, a material adverse effect on the Company
and the Subsidiaries taken as a whole. To the Company’s knowledge, there are no
valid and enforceable United States patents that are infringed by the business
currently conducted by the Company or any Subsidiary, or as currently proposed
to be conducted by the Company or any Subsidiary, as described in the SEC
Reports and Draft Form 10-Q and which infringement would have a material adverse
effect on the Company and the Subsidiaries taken as a whole. The Company is
not
aware of any basis for a finding that the Company or ay Subsidiary does not
have
valid title or license rights to the patents and patent applications referenced
in the SEC Reports as owned or licensed by the Company or any Subsidiary, and,
to the Company’s knowledge, neither the Company nor any Subsidiary is subject to
any judgment, order, writ, injunction or decree of any court or any Federal,
state, local, foreign or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or any arbitrator,
nor
has it entered into or is it a party to any contract, which restricts or impairs
the use of any of the foregoing which would have a material adverse effect
on
the Company and the Subsidiaries taken as a whole. Neither the Company nor
any
Subsidiary has received any written notice of infringement of or conflict with
asserted rights of any third party with respect to the business currently
conducted by it as described in the SEC Reports and which, if determined
adversely to the Company or any Subsidiary, would have a material adverse effect
on the Company and the Subsidiaries taken as a whole and the Company has no
knowledge of any facts or circumstances that would serve as a reasonable basis
for any such claims.
9
(t) Other
than with respect to Environmental Laws and ERISA (which are governed by Section
3(n) above) each of the Company and each Subsidiary has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each,
an
“Authorization”) of, and has made all filings with and notices to, all
appropriate federal, state, local or foreign governmental or regulatory
authorities and self regulatory organizations and all courts and other
tribunals, as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except to the extent the failure to
have
any such Authorization or to make any such filing or notice would not, singly
or
in the aggregate, have a material adverse effect on the Company and the
Subsidiaries taken as a whole. Each such Authorization is valid and in full
force and effect and the Company and each Subsidiary is in compliance with
all
the material terms and conditions thereof and with the rules and regulations
of
the authorities and governing bodies having jurisdiction with respect thereto,
and no event has occurred (including, without limitation, the receipt of any
notice from any authority or governing body) which allows or, after notice
or
lapse of time or both, would allow, revocation, suspension or termination of
any
such Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization except to the extent such failure to be valid and in full force
and effect or to be in compliance, the occurrence of any such event or the
presence of any such restriction would not, singly or in the aggregate, have
a
material adverse effect on the Company and the Subsidiaries taken as a
whole.
(u) There
are
no outstanding rights, warrants, options, convertible securities or commitments
to sell granted or issued by the Company entitling any person to purchase or
otherwise acquire any shares of the capital stock of the Company, except as
otherwise disclosed in the SEC Reports or Draft Form 10-Q and except for options
granted to directors and employees of the Company in the ordinary course of
business since June 30, 2006.
(v) The
financial statements included or incorporated by reference in the SEC Reports
as
the same may have been amended prior to the date of the SEC Reports, together
with related schedules and notes, present fairly in all material respects the
financial position, results of operations and changes in financial position
of
the Company and its consolidated subsidiaries on the basis stated therein at
the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein.
10
(w) There
are
no existing or, to the Company’s knowledge, threatened labor disputes with the
employees of the Company or any Subsidiary which would have a material adverse
effect on the Company and the Subsidiaries taken as a whole.
(x) The
Company’s manufacturing, distribution and marketing practices are in compliance
with all applicable laws, rules, regulations, orders, licenses, judgments,
writs, injunctions and decrees in each country in which the Company’s and the
Subsidiaries’ products are marketed, except for such noncompliances that,
individually or in the aggregate, would not have a material adverse effect
on
the Company and the Subsidiaries taken as a whole.
(y) Neither
the Company nor any Subsidiary, nor to the Company’s knowledge, any of its
officers, directors or Affiliates has taken, directly or indirectly, any action
designed to or which has constituted the stabilization or manipulation of the
price of the Common Stock of the Company and the Subsidiaries taken as a
whole.
(z) None
of
the Company nor any Subsidiary has received any written communication notifying
the Company or such Subsidiary as to the termination or threatened termination
or modification or threatened modification of any consulting, licensing,
marketing, research and development, cooperative or any similar agreement
described in this Subscription Agreement.
(aa) Each
of
the Company and each Subsidiary has filed all Federal, state, local and foreign
tax returns which are required to be filed through the date hereof (except
where
the failure to so file would not have a material adverse effect on the Company
and the Subsidiaries taken as a whole), which returns are true and correct
in
all material respects, or have received extensions thereof, and have paid all
taxes shown on such returns and all assessments received by them to the extent
that the same are material and have become due. All tax liabilities are
adequately provided for on the books of the Company and the Subsidiaries. To
the
Company’s knowledge, there are no tax audits or investigations pending, which if
adversely determined, would have a material adverse effect on the Company and
the Subsidiaries taken as a whole.
(bb) Each
of
the Company and each Subsidiary is insured against such losses and risks and
in
such amounts as are customary in the businesses in which it is engaged,
including but not limited to, insurance covering product liability and real
or
personal property owned or leased against theft, damage, destruction, act of
vandalism and all other risks customarily insured against. All policies of
insurance and fidelity or surety bonds insuring the Company, any Subsidiary
or
the Company’s or any Subsidiary’s businesses, assets, employees, officers and
directors are in full force and effect. The Company and each Subsidiary is
in
compliance with the terms of such policies and instruments in all material
respects. The Company has no reason to believe that it and the Subsidiaries
will
not be able to renew their existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business. Since January 1, 2004, neither the Company nor any
Subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.
11
(cc) The
Company and each Subsidiary has good and marketable title in fee simple to
all
real property and good and marketable title to all personal property owned
by
it, in each case free and clear of all liens, encumbrances and defects except
such as are described in the SEC Reports and Draft Form 10-Q or such as do
not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company or
such Subsidiary. Any real property and buildings held under lease by the Company
and any Subsidiary is held by it under valid, subsisting and enforceable leases
with such exceptions as are not material and do not materially interfere with
the use made and proposed to be made of such property and buildings by the
Company or such Subsidiary.
(dd) The
Company is subject to the reporting requirements of Section 13 or Section 15(d)
of the Exchange Act. Since January 1, 2004, the Company has timely filed with
the SEC all reports required to be filed under the Exchange Act and the Company
is and, as of the time of the Closing will be, current in its reporting
obligations under the Exchange Act. To the Company’s knowledge, the Company has
responded to all comments raised by the SEC with respect to the Company’s
reports, registration statements and other filings made with the SEC to the
SEC’s satisfaction, and there are no comments which could have an adverse effect
on the Company’s consolidated financial condition or results of operations (past
or future) or could require a restatement of previously filed financial
statements remained unresolved with the SEC.
(ee) There
is
and there has been no failure on the part of the Company or, to the Company’s
knowledge, any of the officers or directors of the Company in their capacities
as such to comply in all material respects with the Xxxxxxxx-Xxxxx Act of 2002
and the rules and regulations promulgated in connection therewith.
(ff) Neither
the Company nor any of its affiliates has directly or indirectly, solicited
any
offer to buy, sold or offered to sell or otherwise negotiated in respect of,
or
will solicit an offer to buy, sell or offer to sell, or otherwise negotiate
in
respect of any security which might be integrated with the sale of the Shares
in
a manner that would require the Shares to be registered
under
the Act. Neither the Company nor any of its Affiliates has directly or
indirectly, solicited any offer to buy, sold or offered to sell or otherwise
negotiated in respect of, or will solicit an offer to buy, sell or offer to
sell, or otherwise negotiate in respect of any security which might be
integrated with the sale of the Shares and Warrants in a manner that would
require the Shares to be registered under the Securities Act. There are no
persons with registration rights or similar rights to have any securities
registered by the Company under the Act that are not covered by an effective
registration statement or are eligible for sale without any restrictions on
transfer. No registration under the Act and Warrants is required for the sale
of
the Shares and Warrants to the undersigned under this Subscription Agreement,
assuming the accuracy of the undersigned’s representations, warranties and
agreements set forth in Section 2.
(gg) The
Company has established and maintains disclosure controls and procedures (as
such term in defined in Rule 13a-14 and 15d-14 under the Exchange Act); such
disclosure controls and procedures are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries,
is
made known to the Company’s Chief Executive Officer and its Chief Financial
Officer by others within those entities, and such disclosure controls and
procedures are reasonably effective to perform the functions for which they
were
established, subject to the limitation of any such control system; the Company’s
auditors and the Audit Committee of the Board of Directors of the Company have
been advised of: (A) any significant deficiencies in the Company’s ability to
record, process, summarize, and report financial data; and (B) any fraud,
whether or not material, that involves management or other employees who have
a
role in the Company’s internal controls; any material weaknesses in internal
controls have been identified for the Company’s auditors; and since the date of
the most recent evaluation of such disclosure controls and procedures, there
have been no significant changes in internal controls or in other factors that
could significantly affect internal controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.
12
(hh) The
Company has caused or will cause to be timely filed with each applicable
jurisdiction corresponding to the principal place(s) of business of the
undersigned (as same has been provided by the undersigned) and such other
jurisdictions as reasonably requested by the undersigned all appropriate
documentation required for the registration of the Offering under applicable
state law or required to secure an exemption from such registration
requirements.
(ii) The
Company represents and warrants that it has agreed to pay J Xxxxxxxx a fee
for
serving as placement agent in connection with the Offering equal to 6% of the
aggregate gross proceeds received by the Company for the Shares and Warrants.
In
addition, the Company has agreed that, if within twelve (12) months following
the Closing Date the Company sells, directly or indirectly, equity securities
to
the undersigned or any other purchaser of Shares and Warrants in the Offering
(other than securities in connection with a working capital loan or facility
or
project debt financing), J Xxxxxxxx will be entitled to receive the same
compensation with respect to such sale of securities as it will receive in
connection with the Offering.
4. Registration
Rights.
(a)
As used
herein the term “Registrable Security” means each of the Shares and Warrant
Shares; provided, however, that with respect to any particular Registrable
Security, such security shall cease to be a Registrable Security when, as of
the
date of determination, (i) it has been effectively registered under the Act
and
disposed of pursuant thereto, (ii) registration under the Act is no longer
required for subsequent public distribution of such security without any filing
requirement or volume limitation, or (iii) it has ceased to be outstanding.
In
the event of any merger, reorganization, consolidation, recapitalization or
other change in corporate structure affecting the Common Stock, such adjustment
shall be made to the definition of “Registrable Security” as is appropriate in
order to prevent any dilution or enlargement of the rights granted pursuant
to
this Section 4.
(b) The
Company shall use its best efforts to, within 45 days of the Closing Date (the
“Filing Date”), prepare and file with the SEC, at the sole expense of the
Company (other than the fees of any counsel retained by the undersigned in
connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Registrable Securities sold
by
the undersigned pursuant thereto), a registration statement (the “Registration
Statement”) and such other documents, including a prospectus, as may be
necessary, in order to comply with the provisions of the Act, so as to permit
a
public offering and sale of the Registrable Securities by the undersigned.
The
Company shall use its best efforts to have the Registration Statement declared
effective by the SEC within 150 days of the Closing Date (and as soon or
reasonably practicable (i) in the event the Company is notified by the SEC
that
the SEC will not review the Registration Statement, or (ii) following
notification from the SEC that it has no further comments with respect to the
Registration Statement) and to remain effective of the Registration Statement
in
order to permit a public offering and sale of the Registrable Securities for
a
period of two years from the date hereof or for such period that will terminate
when all the Registrable Securities have been sold pursuant to the Registrable
Securities or Rule 144 under the Act or cease to be Registrable Securities.
The
Company shall telephonically request effectiveness of a Registration Statement
as of 4:30 pm Eastern Time (or later) on a trading day. The Company shall
immediately notify the undersigned via facsimile of the effectiveness of a
Registration Statement on the same trading day that the Company telephonically
confirms effectiveness with the SEC, which shall be the date requested for
effectiveness of a Registration Statement. The Company shall, by 9:30 am Eastern
Time on the trading day after the Effective Date, file a Form 424(b) with the
SEC.
13
(c) If:
(i) a
Registration Statement is not filed on or prior to the Filing Date or (ii)
a
Registration Statement filed or required to be filed hereunder is not declared
effective by the SEC on or before 150 days after the date hereof (any such
failure being referred to as an “Event”, and the date on which such Event occurs
being referred to as “Event Date”), then, on each such Event Date and on each
monthly anniversary of each such Event Date (if the applicable Event shall
not
have been cured by such date) until the earlier of the applicable Event being
cured and the Registrable Securities being eligible to be sold under Rule 144
under the Act, the Company shall pay equal to 1.0% of the aggregate purchase
price paid by the undersigned for any Registrable Securities then held by the
undersigned; provided, however that the maximum amount payable to the
undersigned shall be 10% of the aggregate purchase price paid by the undersigned
for the Shares and Warrants. Notwithstanding anything to the foregoing, in
no
event shall the Company be required to make a partial liquidated damages payment
for more than one Event during any 30-day period.
(d) In
connection with the Company’s registration obligations hereunder, the Company
shall:
(i) Not
less
than five trading days prior to the filing of the Registration Statement or
one
trading day prior to the filing of any related prospectus or any amendment
or
supplement thereto in which any change is made with respect to disclosure
regarding the undersigned, the undersigned’s ownership of securities of the
Company or the “Plan of Distribution” section of the prospectus, the Company
shall, furnish to the undersigned copies of all such documents proposed to
be
filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of the undersigned.
(ii) (A)Prepare
and file with the SEC such amendments, including post-effective amendments,
to a
Registration Statement and the prospectus included therein used in connection
therewith as may be necessary to keep a Registration Statement continuously
effective as to the applicable Registrable Securities for the period set forth
in Section 4(b) and prepare and file with the SEC such additional Registration
Statements in order to register for resale under the Act all of the Registrable
Securities; (B) cause the related prospectus to be amended or supplemented
by
any required prospectus supplement (subject to the terms of this Subscription
Agreement), and as so supplemented or amended to be filed pursuant to Rule
424
under the Act; (C) respond as promptly as reasonably practicable to any comments
received from the SEC with respect to a Registration Statement or any amendment
thereto; (D) use reasonable efforts to comply in all material respects with
the
provisions of the Act and the Exchange Act with respect to the disposition
of
all Registrable Securities covered by a Registration Statement during the
applicable period in accordance (subject to the terms of this Subscription
Agreement) with the intended methods of disposition by the undersigned thereof
set forth in such Registration Statement as so amended or in such prospectus
as
so supplemented; and (E) promptly inform the undersigned in writing if, at
any
time during the period during the period set forth in Section 4(b), the Company
does not satisfy the conditions specified in Rule 172 under the Act and, as
a
result thereof, the undersigned are required to deliver a Prospectus in
connection with any disposition of Registrable Securities and take such other
actions as may be reasonably necessary to facilitate the registration of the
Registrable Securities hereunder; and make available to its security holders,
as
soon as reasonably practicable, but not later than the Availability Date
(defined below), an earnings statement covering a period of at least twelve
(12)
months, beginning after the effective date of each Registration Statement,
which
earnings statement shall satisfy the provisions of Section 11(a) of the Act,
including Rule 158 under the Act promulgated thereunder (for the purpose of
this
subsection 4(d)(ii), “Availability Date” means the 45th day following the end of
the fourth fiscal quarter that includes the effective date of such Registration
Statement, except that, if such fourth fiscal quarter is the last quarter of
the
Company’s fiscal year, “Availability Date” means the 90th day after the end of
such fourth fiscal quarter).
14
(iii) Use
its
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of
(A) any order suspending the effectiveness of a Registration Statement, or
(B)
any suspension of the qualification (or exemption from qualification) of any
of
the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(iv) Furnish
to the undersigned, if requested, without charge, at least one conformed copy
of
each such Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent reasonably requested by the
undersigned and all exhibits to the extent requested by the undersigned
(including those previously furnished or incorporated by reference) promptly
after the filing of such documents with the SEC.
(v) Promptly
deliver to the undersigned, without charge, as many copies of the prospectus
or
prospectuses (including each form of prospectus) and each amendment or
supplement thereto as the undersigned may reasonably request in connection
with
resales by the undersigned of Registrable Securities. Subject to the terms
of
this Subscription Agreement, the Company hereby consents to the use of such
prospectus and each amendment or supplement thereto by the undersigned in
connection with the offering and sale of the Registrable Securities covered
by
such prospectus and any amendment or supplement thereto, except after the giving
on any notice pursuant to Section 4(e).
(vi) The
Company shall use its best efforts to register or qualify the Registrable
Securities under all applicable state securities or “blue sky” laws of such
jurisdictions as the undersigned may reasonably request, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
the undersigned and underwriter to consummate the disposition in the
jurisdiction of such Registrable Securities owned by the undersigned;
provided, however,
that the Company shall not be required to (i) qualify as a foreign corporation
or as a dealer in securities in any jurisdiction where it would not otherwise
be
required to qualify but for this Section 4(d)(vi), or (ii) take any action
which
would subject it to general service of process or taxation in any such
jurisdiction where it is not then so subject;
15
(vii) If
requested by the undersigned, cooperate with the undersigned to facilitate
the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free, to the extent permitted by this Subscription
Agreement, of all restrictive legends, and to enable such Registrable Securities
to be in such denominations and registered in such names as the undersigned
may
request.
(viii) Upon
the
occurrence of any Registration Event (as defined below), as promptly as
reasonably possible under the circumstances taking into account the Company’s
good faith assessment of any adverse consequences to the Company and its
stockholders of the premature disclosure of such event, prepare a supplement
or
amendment, including a post-effective amendment, to a Registration Statement
or
a supplement to the related prospectus or any document incorporated or deemed
to
be incorporated therein by reference, and file any other required document
so
that, as thereafter delivered, neither a Registration Statement nor such
prospectus will 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. The
Company will use its best efforts to ensure that the use of the prospectus
may
be resumed as promptly as is practicable.
(ix) Comply
with all applicable rules and regulations of the SEC.
(x) With
a
view to making available to the undersigned the benefits of Rule 144 of the
Act
(or its successor rule) and any other rule or regulation of the SEC that may
at
any time permit the undersigned to sell Registrable Securities to the public
without registration, the Company covenants and agrees to: (i) make and keep
public information available, as those terms are understood and defined in
Rule
144, until the earlier of (A) six months after such date as all of the
Registrable Securities may be resold pursuant to Rule 144(k) or any other rule
of similar effect or (B) such date as all of the Registrable Securities shall
have been resold; (ii) file with the SEC in a timely manner all reports and
other documents required of the Company under the Exchange Act; and (iii)
furnish to each Investor upon request, as long as such Investor owns any
Registrable Securities, (A) a written statement by the Company that it has
complied with the reporting requirements of the Exchange Act, (B) a copy of
the
Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form
10-Q, and (C) such other information as may be reasonably requested in order
to
avail the undersigned of any rule or regulation of the SEC that permits the
selling of any such Registrable Securities without registration.
(xi) Notwithstanding
anything herein to the contrary, the undersigned may not include any of its
Registrable Securities in the Registration Statement pursuant to this Agreement
unless and until the undersigned (i) furnishes to the Company the information
required by the Questionnaire included as Annex I to this Subscription Agreement
and (ii) agrees to promptly furnish additional information required to be
disclosed in order to make the information previously furnished to the Company
by the undersigned not materially misleading.
16
(e) The
undersigned, upon receipt of notice from the Company that a Registration Event
(defined below) has occurred which requires a post-effective amendment to the
Registration Statement or a supplement to the prospectus included therein,
shall
promptly discontinue the sale of Registrable Securities until the undersigned
receives a copy of a supplemented or amended prospectus from the Company. The
Company shall notify the undersigned of the occurrence of a Registration Event
promptly following the occurrence of a Registration Event. The term
“Registration Event” means (i) the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness the Registration Statement or the initiation of
any
proceedings for that purpose, (ii) the happening of any event or the discovery
of any facts during the period the Registration Statement is effective which
makes any statement of a material fact made in the Registration Statement or
the
related prospectus untrue in any material respect or which requires the making
of any changes in the Registration Statement or prospectus in order to make
the
statements therein not misleading, (iii) the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (iv) any determination by
the
Company that a post-effective amendment to such Registration Statement would
be
appropriate;
(f) All
fees
and expenses incident to the performance of or compliance with this Section
4 by
the Company shall be borne by the Company whether or not any Registrable
Securities are sold pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i)
all
registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with Nasdaq, (B) in compliance
with applicable state securities or Blue Sky laws reasonably agreed to by the
Company in writing, (ii) fees and disbursements of counsel for the Company,
and
(iii) fees and expenses of all other persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Section 4. In addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions
contemplated by this Section 4 (including, without limitation, all salaries
and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder. In no event shall the Company be responsible for any broker
or similar commissions or any legal fees or other costs of the
undersigned.
(g) (i)The
Company shall, indemnify and hold harmless the undersigned, the officers,
directors, agents, brokers (including brokers who offer and sell Registrable
Securities as principal as a result of a pledge or any failure to perform under
a margin call of Common Stock), investment advisors and employees of each of
them, each Person who controls the undersigned (within the meaning of Section
15
of the Act or Section 20 of the Exchange Act) and the officers, directors,
agents and employees of each such controlling person, to the fullest extent
permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable
attorneys’ fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in a Registration Statement, any prospectus or
any
form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus
or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (x) such
untrue or alleged untrue statements or omissions or alleged omissions are based
solely upon information regarding the undersigned furnished in writing to the
Company by the undersigned expressly for use therein, or to the extent that
such
information relates to the undersigned or the undersigned’s proposed method of
distribution of Registrable Securities or (y) the failure of the undersigned
to
satisfy the prospectus delivery requests or, in the case of an occurrence of
a
Registration Event, of the use by the undersigned of an outdated or defective
prospectus after the Company has notified the undersigned in writing that the
prospectus is outdated or defective and prior to the receipt by the undersigned
of the notice contemplated in Section 4(e). The Company shall notify the
undersigned promptly of the institution, threat or assertion of any proceeding
arising from or in connection with the transactions contemplated by this Section
4 of which the Company is aware.
17
(ii) The
undersigned shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Act and Section 20 of
the
Exchange Act), and the directors, officers, agents or employees of such
controlling persons, to the fullest extent permitted by applicable law, from
and
against all Losses, as incurred, to the extent arising out of or based solely
upon: (x) the undersigned’s failure to comply with the prospectus delivery
requirements of the Act or (y) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading (A) to the extent, but only to the extent,
that such untrue or alleged untrue statement or omission or alleged omission
is
contained in any information so furnished in writing by the undersigned to
the
Company specifically for inclusion in such Registration Statement or such
prospectus or (B) to the extent that (1) such untrue or alleged untrue
statements or omissions or alleged omissions are based solely upon information
regarding the undersigned furnished in writing to the Company by the undersigned
expressly for use therein, or to the extent that such information relates to
the
undersigned or the undersigned’s proposed method of distribution of Registrable
Securities or (2) the failure of the undersigned to satisfy the prospectus
delivery requests or, in the case of a Registration Event, the use by the
undersigned of an outdated or defective prospectus after the Company has
notified the undersigned in writing that the prospectus is outdated or defective
and prior to the receipt by the undersigned of the notice contemplated in
Section 4(e). In no event shall the liability of the undersigned hereunder
be
greater in amount than the proceeds received from the sale of the Registrable
Securities.
(iii) If
any
proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify
the Person from whom indemnity is sought (the “Indemnifying Party”) in writing,
and the Indemnifying Party shall have the right to assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except to the extent that it shall
be
finally determined by a court of competent jurisdiction that such failure shall
have prejudiced the Indemnifying Party.
18
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall reasonably believe
that a material conflict of interest is likely to exist if the same counsel
were
to represent such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party,
the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of one separate counsel shall be at the expense
of all Indemnifying Parties). The Indemnifying Party shall not be liable for
any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of
any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party
from
all liability on claims that are the subject matter of such
Proceeding.
(iv) If
the
indemnification under this Section 4(g) is unavailable to an Indemnified Party
or insufficient to hold an Indemnified Party harmless for any Losses, then
each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Agreement, any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4(g)(iv) were determined by pro rata allocation or
by
any other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 4(g), the undersigned shall
not
be required to contribute, in the aggregate, any amount in excess of the amount
by which the proceeds actually received by the undersigned from the sale of
the
Registrable Securities subject to the proceeding exceeds the amount of any
damages that the undersigned has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, except
in the case of fraud by the undersigned.
19
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
(h) If
at any
time during the period set forth in Section 4(b) there is not an effective
Registration Statement covering all of the Registrable Securities and the
Company shall determine to prepare and file with the SEC a registration
statement relating to an offering for its own account or the account of others
under the Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Act) or their then equivalents relating
to
equity securities to be issued solely in connection with any acquisition of
any
entity or business or equity securities issuable in connection with the stock
option or other employee benefit plans, then the Company shall send to the
undersigned a written notice of such determination and, if within five days
after the date of such notice, the undersigned shall so request in writing,
the
Company shall include in such registration statement all or any part of such
Registrable Securities the undersigned requests to be registered.
5. Conditions
to the Undersigned’s Obligations.
The
obligations of the undersigned to purchase and pay for the Shares and Warrants
for which it is subscribing to purchase on the Closing Date are subject to
the
accuracy of the representations and warranties of the Company contained in
this
Agreement or in any certificate of any officer of the Company delivered pursuant
to this Agreement and to the following further conditions:
5.1 Officer’s
Certificate.
The
Company shall have delivered to J Xxxxxxxx, on behalf of the undersigned, on
the
Closing Date a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect that the representations and warranties
of
the Company contained in this Agreement are true and correct as of the Closing
Date and that the Company has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied hereunder on
or
before such Closing Date.
5.2 Opinion
of Counsel.
The
Company shall have delivered to J Xxxxxxxx, on behalf of the undersigned, on
the
Closing Date the opinion of Blank Rome LLP, counsel for the Company, dated
such
Closing Date, to the effect set forth in Exhibit B attached hereto. Such opinion
shall be rendered to the undersigned at the request of the Company and shall
so
state therein.
5.3 Good
Standing Certificate.
The
Company shall have delivered to J
Xxxxxxxx, on behalf of the undersigned, on the Closing Date a certificate,
dated
as of a reasonably current date prior to such Closing, issued by the proper
authority in Delaware to the effect that the Company is legally existing and
in
good standing.
20
6. Indemnification.
In
consideration of the undersigned's execution and delivery of this Subscription
Agreement and acquiring the Securities and in addition to all of the Company's
other obligations under this Subscription Agreement, the Company shall defend,
protect, indemnify and hold harmless the undersigned and each other holder
of
the Securities and all of their officers, directors, agents, Affiliates, brokers
(including brokers who offer and sell Registrable Securities as principal as
a
result of a pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees of each of them, each person who
controls the undersigned (within the meaning of Section 15 of the Act or Section
20 of the Exchange Act) and the officers, directors, agents, Affiliates and
employees of each such controlling person (collectively, the "Indemnitees")
from
and against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee
as
a result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in this
Subscription Agreement and the Warrant or any other certificate, instrument
or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in this Subscription Agreement
and the Warrant or any other certificate, instrument or document contemplated
hereby or thereby or (c) any cause of action, suit or claim brought or made
against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company) and arising out of or
resulting from the execution, delivery, performance or enforcement of this
Subscription Agreement and the Warrant or any other certificate, instrument
or
document contemplated hereby or thereby; provided that any indemnification
obligation arising out of Section 4 shall be governed by Section 4(g). To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment
and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 6(h)
shall be the same as those set forth in Section 4(g)(iii).
7. Miscellaneous.
(a) In
the event of rejection of this subscription, this Subscription Agreement and
any
other agreement entered into between the undersigned and the Company relating
to
this subscription shall thereafter have no force or effect and the Company
shall
promptly, but in no event later than two business days thereafter, return or
cause to be returned to the undersigned the subscription amount remitted to
the
Company by the undersigned, without interest thereon or deduction
therefrom.
(b) Except
as
otherwise provided herein, this Subscription Agreement shall be binding upon
and
inure to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and assigns. If the undersigned is more than
one person, the obligation of the undersigned shall be joint and several and
the
agreements, representations, warranties and acknowledgements herein contained
shall be deemed to be made by and be binding upon each such person and his
heirs, executors, administrators and successors.
(c) This
Subscription Agreement and the documents referenced herein contain the entire
agreement of the parties and there are no representations, covenants or other
agreements, except as stated or referred to herein and therein.
21
(d) This
Subscription Agreement shall be governed by and construed in accordance with
the
laws of the State of New York, without giving effect to conflicts of law
principles.
(e) This
Subscription Agreement (i) may only be modified by a written instrument executed
by the undersigned and the Company.
(f) Unless
the context otherwise requires, all personal pronouns used in this Subscription
Agreement, whether in the masculine, feminine or neuter gender, shall include
all other genders.
(g) All
notices or other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or mailed by certified
mail, return receipt requested, postage prepaid, as follows: if to the
undersigned, to the address set forth on the signature page; and if to the
Company, to Ionatron, Inc. at the address indicated above, Attention: Chief
Operating Officer, or to such other address as the Company or the undersigned
shall have designated to the other by like notice.
IN
WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this
_____ day of August 2006.
22
SIGNATURE
PAGE
|
Organization
Signature:
___________________________________________
Print
Name of Subscriber Organization
|
Individual
Signature(s): [If Joint Tenants or Tenants-In-Common,
both
persons must sign and print their names]:
___________________________________________
|
|
By:
________________________________________
(Signature
and Title)
|
_________________________________________________
Signature(s)
|
|
_________________________________________________
Print
Name and Title of Person Signing
___________________________________________
Print
Address of Subscriber
|
_________________________________________________
Print
Name of Subscriber
___________________________________________
Print
Name of Subscriber
___________________________________________
Print
Address of Subscriber
|
Number
of Shares subscribed for:
______
Shares
(at a purchase of $5.75 per Share) and
______
Warrants
[20% of the number of Shares]
-----------------------------------------------------------------------------------------------------------------------------------
(All
Subscribers
should please print information
below
exactly as you wish it to appear
in
the records of the Company)
|
_________________________________________________
Name
and capacity in which subscription is made -- see below for particular
requirements
|
_________________________________________________
Social
Security Number of Individual or other Tax-payer I.D.
Number
|
|
Address:
_________________________________________________
Number
and Street
_________________________________________________
City
State
Zip
Code
|
Address
for notice if different:
_________________________________________________
Number
and Street
_________________________________________________
City
State
Zip
Code
|
Please
check the appropriate box to indicate form of ownership (if
applicable):
|
r
TENANTS-IN-COMMON
(Both
Parties must sign above)
|
r
JOINT
TENANTS WITH RIGHT OF
SURVIVORSHIP
(Both
Parties must sign above)
|
23
ACCEPTANCE
OF SUBSCRIPTION
The
foregoing subscription is hereby accepted by Ionatron, Inc., this _____ day
of
August 2006 for __________ Shares and _________ Warrants.
By:
____________________________________
Name:
Title:
24
ANNEX
1
FORM
OF SELLING SECURITY HOLDER NOTICE AND QUESTIONNAIRE
The
undersigned prospective subscriber for, or beneficial owner of, shares (the
“Shares”) of Common Stock, $.001 par value (the “Common Stock”), of Ionatron,
Inc. (the “Company”), understands that the Company has filed or intends to file
with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 or another appropriate form (collectively, the “Shelf
Registration Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of the Registrable
Securities, in accordance with the terms of the Subscription Agreement, dated
as
of August __, 2006 (the “Subscription Agreement”), between the Company and the
undersigned. A copy of the Subscription Agreement is available from the Company
upon request at the address set forth below. All capitalized terms not otherwise
defined herein shall have the meaning ascribed thereto in the Subscription
Agreement.
Each
beneficial owner of Registrable Securities is entitled to the benefits of its
Subscription Agreement. In order to sell or otherwise dispose of any Registrable
Securities pursuant to the Shelf Registration Statement, a beneficial owner
of
Registrable Securities will be required to be named as a selling securityholder
in the related prospectus, deliver a prospectus to purchasers of Registrable
Securities in accordance with the Securities Act and the resales and
registrations thereunder and be bound by those provisions of the Subscription
Agreement applicable to such beneficial owner (including certain indemnification
provisions described below). Beneficial owners that do not complete this Notice
and Questionnaire and deliver it to the Company as provided below will not
be
named as selling securityholders in the prospectus and therefore will not be
permitted to sell any Registrable Securities pursuant to the Shelf Registration
Statement. Beneficial owners must complete and deliver this Notice and
Questionnaire at least 10 business days prior to the effectiveness of the
Initial Shelf Registration Statement so that such beneficial owners could be
named as selling securityholders in the related prospectus at the time of
effectiveness.
Certain
legal consequences arise from being named as a selling securityholder in the
Shelf Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their
own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and the
related prospectus.
NOTICE
If
the
undersigned is not an original subscribing party to the Subscription Agreement,
the undersigned, by signing and returning this Questionnaire, understands that
the undersigned will be bound by the terms and conditions of this Questionnaire
as if the undersigned were an original party thereto.
1
QUESTIONNAIRE
Please
respond to every item, even if your response is “none.” If you need more space
for any response, please attach additional sheets of paper. Please be sure
to
write your name and the number of the item being responded to on each such
additional sheet of paper and sign each such additional sheet of paper and
attach it to this Notice and Questionnaire. Please note that you may be asked
to
answer additional questions depending on your responses to the following
questions.
1. Your
Identity and Background as the Beneficial Owner of the Registrable
Securities.
|
(a)
|
Your
full legal name:
|
|
| ________________________________________________________ | ||
|
(b)
|
Your
business address (including street address) (or residence if no business
address), telephone number and facsimile number:
|
|
|
Address:
|
_____________________________________________ | |
|
_____________________________________________
|
||
|
Telephone
No.:
|
_____________________________________________ | |
|
Fax
No.:
|
_____________________________________________ | |
|
(c)
|
Are
you a broker-dealer registered pursuant to Section 15 of the Exchange
Act?
|
|
|
o
Yes
|
||
|
o
No
|
||
|
(d)
|
If
your response to Item 1(c) above is no, are you an “affiliate” of a
broker-dealer registered pursuant to Section 15 of the Exchange
Act?
|
|
|
o
Yes
|
||
|
o
No
|
||
2. Your
Relationship with the Company.
|
(a)
|
Have
you or, to your knowledge, any of your affiliates, officers, directors
or
principal equity holders (owners of 5% or more of the equity securities
of
the undersigned) held any position or office or have you had any
other
material relationship with the Company (or its predecessors or affiliates)
within the past three years?
|
|
|
o
Yes
|
||
|
o
No
|
||
|
(b)
|
If
your response to Item 2(a) above is yes, please state the nature
and
duration of the position or office or your relationship with the
Company
(or its predecessors or affiliates):
|
2
3.
Your
Interest in the Registrable Securities.
|
(a)
|
State
the number of such Registrable Securities beneficially owned by you
which
were purchased pursuant to the Subscription Agreement. Check any
of the
following that applies to you.
|
|
| Number of shares of Common Stock which were purchased pursuant to the Subscription Agreement: | ||
| ________________________________________________________ | ||
|
Number
of shares of Common Stock issuable upon exercise of Warrants purchased
pursuant to the Subscription Agreement:
|
||
| ________________________________________________________ | ||
|
(b)
|
Other
than as set forth in your response to Item 3(a) above, do you beneficially
own any other securities of the Company?
|
|
|
o
Yes
|
||
|
o
No
|
||
|
(c)
|
If
your answer to Item 3(b) above is yes, state the type, and aggregate
amount of such other securities of the Company beneficially owned
by
you:
|
|
|
|
Type: ____________________________________________
|
|
|
|
Aggregate
amount:
________________________________________
|
|
|
(d)
|
Did
you acquire the securities listed in Item 3(a) above in the ordinary
course of business?
|
|
|
o
Yes
|
||
|
o
No
|
||
|
(e)
|
At
the time of your purchase of the securities listed in Item 3(a) above,
did
you have any agreements or understandings, directly or indirectly,
with
any person to distribute the securities?
|
|
|
o
Yes
|
||
|
o
No
|
||
|
(f)
|
If
your response to Item 3(e) above is yes, please describe such agreements
or understandings:
|
|
4.
Nature
of Your Beneficial Ownership.
|
(a)
|
If
the name of the beneficial owner of the Registrable Securities set
forth
in your response to Item 1(a) above is that of a general or limited
partnership, state the names of the general partners of such
partnership:
|
|
| ________________________________________________________ | ||
| ________________________________________________________ | ||
| ________________________________________________________ | ||
|
(b)
|
With
respect to each general partner listed in Item 4(a) above who is
not a
natural person, and is not publicly held, name each shareholder (or
holder
of partnership interests, if applicable) of such general partner.
If any
of these named shareholders are not natural persons or publicly held
entities, please provide the same information. This process should
be
repeated until you reach natural persons or a publicly held
entity.
|
|
|
________________________________________________________
________________________________________________________
________________________________________________________
|
3
|
(c)
|
Name
your controlling shareholder(s) (the “Controlling Entity”). If the
Controlling Entity is not a natural person and is not a publicly
held
entity, name each shareholder of such Controlling Entity. If any
of these
named shareholders are not natural persons or publicly held entities,
please provide the same information. This process should be repeated
until
you reach natural persons or a publicly held entity.
|
|
| ________________________________________________________ | ||
| ________________________________________________________ | ||
| ________________________________________________________ | ||
|
(A)(i)
|
Full
legal name of Controlling Entity(ies) or natural person(s) who have
sole
or shared voting or dispositive power over the Registrable
Securities:
|
|
|
(ii)
|
Business
address (including street address) (or residence if no business address),
telephone number and facsimile number of such person(s):
|
|
|
Address:
|
________________________________________________________ | |
|
Telephone:
|
________________________________________________________ | |
|
Fax:
|
________________________________________________________ | |
|
(iii)
|
Name
of shareholders:
|
|
|
(B)(i)
|
Full
legal name of Controlling Entity(ies):
|
|
|
(ii)
|
Business
address (including street address) (or residence if no business address),
telephone number and facsimile number of such person(s):
|
|
|
Address:
|
________________________________________________________ | |
|
Telephone:
|
________________________________________________________ | |
|
Fax:
|
________________________________________________________ | |
|
(iii)
|
Name
of shareholders:
|
|
| ________________________________________________________ |
If
you need more space for this response, please attach additional sheets of paper.
Please be sure to indicate your name and the number of the item being responded
to on each such additional sheet of paper, and to sign each such additional
sheet of paper before attaching it to this Notice and Questionnaire. Please
note
that you may be asked to answer additional questions depending on your responses
to the following questions.
4
5. Plan
of Distribution.
Except
as set forth below, the undersigned (including the undersigned’s donees or
pledgees) intends to distribute the Registrable Securities listed above in
Item
3 pursuant to the Shelf Registration Statement only as follows (if at all):
Such
Registrable Securities may be sold from time to time directly by the undersigned
or, alternatively, through underwriters, broker-dealers or agents. If the
Registrable Securities are sold through underwriters, broker-dealers or agents,
the undersigned will be responsible for underwriting discounts or commissions
or
agents’ commissions. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. Such
sales may be effected in transactions (which may involve block transactions)
(i)
on any national securities exchange or quotation service on which the
Registrable Securities may be listed or quoted at the time of sale, (ii) in
the
over-the-counter market, (iii) in transactions otherwise than on such exchanges
or services or in the over-the-counter market, (iv) through the writing of
options or any other method permitted by law. In connection with sales of the
Registrable Securities or otherwise, the undersigned may enter into hedging
transactions with broker-dealers or others, who may in turn engage in short
sales of, or other hedging transactions involving, the Registrable Securities
or
the shares of Common Stock in the course of hedging positions they assume.
The
undersigned may also sell Registrable Securities short and deliver Registrable
Securities to close out short positions, or loan or pledge Registrable
Securities to broker-dealers or others who in turn may sell such
securities.
State
any
exceptions here:
|
Note:
|
In
no event will such method(s) of distribution take the form of an
underwritten offering of the Registrable Securities without the prior
written agreement of the Company.
|
The
undersigned acknowledges the undersigned’s obligation to comply with the
applicable prospectus delivery and other provisions of the Securities Act,
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M (or any successor rules or regulations), in connection
with any offering or sale of Registrable Securities pursuant to the Subscription
Agreement. The undersigned agrees that the undersigned will not, and will not
instruct any person acting on the undersigned’s behalf to, engage in any
transaction in violation of such provisions.
If
the
undersigned transfers all or any portion of the Registrable Securities listed
in
Item (3) above after the date of this Questionnaire, the undersigned agrees
to
notify the transferee(s) at the time of the transfer of such transferee(s)
rights and obligations under this Questionnaire and the Subscription
Agreement.
In
accordance with the undersigned’s obligation under the Subscription Agreement to
provide such information as may be required by law for inclusion in the Shelf
Registration Statement, the undersigned agrees to promptly notify the Company
of
any inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while a Shelf Registration Statement
remains effective.
By
signing below, the undersigned acknowledges that the undersigned has executed
the Subscription Agreement for, or is, the beneficial owner of the Registrable
Securities set forth herein, represents that the information provided herein
is
accurate, consents to the disclosure of the information contained in Sections
1(a) and (c), 2, 3 and 4(c)(A)(i) this Questionnaire and the inclusion of such
information in the Shelf Registration Statement and the related prospectus.
The
undersigned understands that the Company will rely on such information in
connection with the preparation or amendment of the Shelf Registration Statement
and the related prospectus and any filing of a new Shelf Registration
Statement.
5
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by a duly
authorized agent of the undersigned.
NAME
OF
BENEFICIAL OWNER:
____________________________________________
(Please
Print Full Legal Name)
Signature:
_____________________________________
(Please
Print Name and Title If Signed on Behalf of an Entity)
Date:
________________________________________
6
