Exhibit 10.1
SUBSCRIPTION AND PURCHASE AGREEMENT
SUBSCRIPTION AND PURCHASE AGREEMENT (the "Agreement") dated as of the 7th
day of April, 1997, by and between XXXXXXX INVESTMENTS, INC., a Minnesota
corporation (the "Company"), and XXXXXXX X. XXXXXX, a natural person (the
"Subscriber").
RECITALS:
WHEREAS, Subscriber and the Company have arranged for this Subscription and
Purchase Agreement (the "Agreement") to provide for the subscription and, if
such subscription as set forth in this Agreement is accepted by the Company, the
purchase by the Subscriber, on the terms and subject to the conditions set forth
in this Agreement, of 325,000 units (the "Units") at a purchase price of $5.25
per Unit, and
WHEREAS, each Unit consists of one share of the Company's Common Stock, par
value $.02 per share ("Shares") and a five-year warrant ("Warrants") to purchase
one share of the Company's Common Stock at $6.00 per share ("Warrant Shares")
substantially in the form attached hereto as Exhibit A; and
WHEREAS, the Company's Common Stock is listed for trading on the Nasdaq
National Market, and the Company is subject to the reporting requirements of
Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and has been subject to such filing requirements for the past ninety (90)
days; and
WHEREAS, the Subscriber is an "accredited investor" as such term is defined
in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended (the "Act"); and
WHEREAS, the Units, Shares, Warrants and Warrant Shares (collectively, the
"Securities") shall not be registered securities under federal or state
securities laws or quoted or listed for trading on any securities exchange,
organized market or quotation system at the time of acquisition hereunder; and
WHEREAS, in order to induce the Subscriber to enter into this Agreement and
to subscribe for and purchase the Securities on the terms and subject to the
conditions hereof, the Company is granting certain registration rights hereunder
with respect to the Shares and the Warrant Shares as hereinafter set forth; and
WHEREAS, in reliance upon certain representations made by the Subscriber
herein, the transactions contemplated by this Agreement are such that the offer
and sale of the Securities by the Company hereunder will be exempt from
registration under applicable federal and state securities laws pursuant to
exemptions made available under such laws.
AGREEMENTS:
NOW, THEREFORE, for and in consideration of the premises, and the mutual
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1. Subscription for and Purchase of Securities. On the basis of the
representations, warranties, covenants and agreements, and subject to the terms
and conditions set forth herein, the Company agrees to sell, transfer, convey
and deliver to the Subscriber, and the Subscriber agrees to purchase, acquire
and accept delivery from the Company, 325,000 Units at $5.25 per Unit for an
aggregate purchase price of $1,706,250. Simultaneously with the execution of
this Agreement, Subscriber has delivered to the Company, by wire transfer or
personal check, the purchase price for the Units being purchased. Upon receipt
by the Company of the purchase price for the Units being purchased, the Company
has caused certificates representing the Shares and the Warrants to be delivered
to the Subscriber.
2. Representations, Warranties and Covenants of Subscriber. In connection
with this Agreement, the Subscriber hereby represents, warrants and covenants to
the Company as follows:
a. Investment Intent. The Subscriber represents and warrants that the
Securities being purchased are being acquired solely for the Subscriber's own
account, for investment purposes only and not with a view toward the
distribution or resale to others. Subscriber acknowledges, understands and
appreciates that the Securities have not been registered under the Securities
Act of 1933, as amended (the "Act") by reason of a claimed exemption under the
provisions of such Act which depends, in large part, upon Subscriber's
representations as to investment intention, investor status and related and
other matters set forth herein. Subscriber understands that, in the view of the
United States Securities and Exchange Commission (the "SEC"), among other
things, a purchase now with an intent to distribute or resell would represent a
purchase and acquisition with an intent inconsistent with its representation to
the Company, and the SEC might regard such a transfer as a deferred sale for
which the registration exemption is not available. Subscriber agrees and
consents to the placement of a legend on the Securities stating that such
Securities have not been registered under the Act or applicable state securities
laws.
b. Certain Risk. The Subscriber has conducted his own due diligence review
of the Company and recognizes that the purchase of the Securities involves a
degree of risk in that (i) an investment in the Company is highly speculative
and only investors who can afford the loss of their entire investment should
consider investing in the Company; (ii) an investor may not be able to liquidate
his investment; (iii) transferability of the Securities is extremely limited;
(iv) in the event of a disposition of the Company an investor could sustain the
loss of his entire investment; (v) no return on investment, whether through
distributions, appreciation, transferability or otherwise, and no performance
by, through or of the Company, has been promised, assured, represented or
warranted by the Company, or by any director, officer, employee, agent or
representative thereof; and (vi) while the Company's Common Stock is
presently quoted and traded on the Nasdaq National Market and while the
Subscriber is a beneficiary of certain registration rights provided herein,
neither the Units nor the Warrants are quoted, traded or listed for trading or
quotation on any organized market or quotation system and there is therefore no
market for the Units or the Warrants, and there can be no assurance that the
Company's Common Stock will continue to be quoted, traded or listed for trading
or quotation on the Nasdaq National Market or on any other organized market or
quotation system.
c. Transfer Restrictions.
i. The Subscriber understands and hereby acknowledges that the
Company is under no obligation to register the Securities under the
Act, with the exception that the Company is obligated to provide those
registration rights set forth in Section 4 hereof. The Subscriber will
not transfer the Securities unless the Securities are registered under
the Act and any applicable state "blue sky" laws ("Securities Laws") or
unless an exemption is available therefrom. The Subscriber acknowledges
that the Company will permit the transfer of the Securities out of its
name only when its request for transfer is accompanied by an opinion of
counsel reasonably satisfactory to the Company that neither the sale
nor the proposed transfer results in a violation of the Act and
applicable Securities Laws. The Subscriber agrees to hold the Company
and its directors, officers and controlling persons and their
respective heirs, representatives, successors and assigns harmless and
to indemnify them against all liabilities, costs and expenses incurred
by them as a result of any misrepresentation made by the Subscriber
contained herein or any sale or distribution by the Subscriber in
violation of any Securities Laws.
ii. The Subscriber understands that the Company at a future
date may file a registration or offering statement (the "Registration
Statement") with the Securities and Exchange Commission to facilitate a
public offering of its shares. The Subscriber agrees, for the benefit
of the Company, that should such a public offering be made and should
the managing underwriter of such offering require, the Subscriber, or
any transferee of the Subscriber, will not, without the prior written
consent of the Company and such underwriter, during the period
commencing on the effective date of the Registration Statement and
ending 180 days thereafter or such shorter period required of
affiliates of the Company (the "Lockup Period") (i) sell, transfer or
otherwise dispose of, or agree to sell, transfer or otherwise dispose
of any of the Securities beneficially held by the Subscriber during the
Lockup Period, (ii) sell, transfer or otherwise dispose of, or agree to
sell, transfer or otherwise dispose of any options, rights or warrants
to purchase any of the Securities beneficially held by the Subscriber
during the Lockup Period, or (iii) sell or grant, or agree to sell or
grant, options, rights or warrants with respect to any of the
Securities. The foregoing lockup would not prohibit, during the Lockup
Period, gifts to donees or restrictions set forth herein or transfers
by will or the laws of descent to heirs or beneficiaries provided such
donees, heirs and beneficiaries shall be bound by the restrictions set
forth herein.
d. Accredited Investor; Residency. The Subscriber represents that (i) it is
an "accredited investor" as defined in Regulation D under the Act; (ii) it has
adequate means of providing for the Subscriber's current financial needs and
possible contingencies and has no need
for liquidity of the Subscriber's investment in the Securities; (iii) it is able
to bear the economic risks inherent in an investment in the Securities and that
an important consideration bearing on its ability to bear the economic risk of
the purchase of Securities is whether the Subscriber can afford a complete loss
of the Subscriber's investment in the Securities and the Subscriber represents
and warrants that the Subscriber can afford such a complete loss; (iv) it has
such knowledge and experience in business, financial, investment and banking
matters (including, but not limited to, investments in restricted, non-listed
and non-registered securities) that the Subscriber is capable of evaluating the
merits, risks and advisability of an investment in the Securities; and (v) he is
a resident of the state indicated on the signature page hereof.
e. Documents, Information and Access. The Subscriber acknowledges that (i)
its decision to purchase the Securities is not based on any promotional,
marketing or sales materials, and (ii) it and its representatives have been
afforded, prior to purchase thereof, the opportunity to ask questions of, and to
receive answers from, the Company and its management, and has had access to all
documents and information which Subscriber deems material to an investment
decision with respect to the purchase of Securities hereunder, including,
without limitation, copies of certain documents which have been filed with the
SEC pursuant to Sections 13(a), 14(a), 14(c) or 15(d) of the Exchange Act since
December 31, 1995.
f. Accuracy or Representations and Warranties. Subscriber represents that
all of the representations, warranties, understandings and acknowledgements that
Subscriber has made herein are true and correct in all material respects as of
the date of execution hereof, and that Subscriber will perform and comply fully
in all material respects with all covenants and agreements set forth herein and
Subscriber covenants and agrees that until the acceptance of this Agreement by
the Company, Subscriber shall inform the Company immediately in writing of any
changes in any of the representations or warranties provided or contained
herein.
3. Representations, Warranties and Covenants of the Company. In order to
induce Subscriber to enter into this Agreement and to purchase the Securities,
the Company hereby represents, warrants and covenants to Subscriber as follows:
a. Organization, Authority, Qualification. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Minnesota. The Company has full corporate power and authority to own,
lease and operate its properties and assets and to conduct and carry on its
business as it is now being conducted and operated. The Company is duly
qualified to do business as a foreign corporation in good standing in each
jurisdiction in which the ownership or lease of its properties, or the conduct
of its business as it is now being conducted and operated, requires such
qualification and in which the failure to be qualified or in good standing would
have a material adverse effect on the business of the Company.
b. Authorization. The Company has full power and authority to execute and
deliver this Agreement and to perform its obligations under and consummate the
transactions contemplated by this Agreement. Upon the execution of this
Agreement by the Company and delivery of the Securities, this Agreement and the
Securities shall have been duly and validly executed and delivered by the
Company and this Agreement and the Warrants shall constitute
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with its terms except as enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors' rights and remedies generally
and except as rights to indemnification and contribution hereunder may be
limited by applicable securities laws and policies. The Company has sufficient
shares of Common Stock duly authorized by its Articles of Incorporation to issue
the Shares and the Warrant Shares upon exercise of the Warrants.
c. Ownership of, and Title to, Securities: Exemption from Registration.
i. The Shares and Warrant Shares have been duly authorized
and, when issued and delivered pursuant to this Agreement and the terms
of the Warrants, will be validly issued, fully paid and nonassessable
shares of the Common Stock of the Company. Upon consummation of the
acquisition of the Shares and Warrant Shares pursuant to this Agreement
and the Warrants, the Subscriber will own and acquire title to the
Shares and Warrant Shares free and clear of any and all proxies, voting
trusts, pledges, options, restrictions or other legal or equitable
encumbrance of any nature whatsoever (other than those restrictions
created by the Subscriber and the restrictions on transfer due to
securities laws or as otherwise provided for in this Agreement).
ii. The Company represents and warrants that the offer and
sale of the Securities to the Subscriber in accordance with the terms
and provisions of this Agreement is being effected in accordance with
the Act pursuant to (i) a private placement exemption to the
registration provisions of the Act pursuant to Section 3(b) or 4(2) of
such Act and Regulation D promulgated under such Act.
d. No Violation of Agreements. The Company is not in violation of its
Articles of Incorporation or Bylaws. The Company is not in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any bond, debenture, note or other evidence of
indebtedness or in any contract, indenture, mortgage, loan agreement, joint
venture or other agreement or instrument to which the Company is a party or by
which the Company or its properties are bound, and there does not exist any
state of facts which constitutes an event of default on the part of the Company
or which, with notice or lapse of time or both, would constitute such an event
of default under these agreements. The performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a breach
or violation of any of the terms and provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to (i) any
indenture, mortgage, deed of trust, loan agreement, bond, debenture, note,
agreement or other evidence of indebtedness, lease, contract or other agreement
or instrument to which the Company is a party or by which the property or assets
of the Company is bound, or (ii) the Company's Articles of Incorporation or
Bylaws or (iii) any statute or any order, rule or regulation of any court,
governmental agency or body having jurisdiction over the Company.
4. Registration Rights. In order to induce the Subscriber to enter into
this Agreement and purchase the Securities, the Company hereby covenants and
agrees to grant to
the Subscriber the rights set forth in this Section 4 with respect to the
registration of the Shares and the Warrant Shares.
a. Demand Registration. Subject to the terms of Section 4 hereof, the
Company agrees that, upon the request of the Subscriber at any time after the
third anniversary of the issuance of the Warrants, the Company shall prepare and
file with the SEC, a registration statement on Form S-3 (or successor form) and
such other documents, including a prospectus, as may be necessary in the opinion
of counsel for the Company in order to comply with the provisions of the Act, so
as to permit a public offering and sale of the Shares and the Warrant Shares. In
connection with the offering of such Common Stock registered pursuant to this
Section 4, the Company shall take such actions as shall be reasonably necessary
to qualify the Common Stock covered by such registration statement under such
Securities Laws as shall be reasonably necessary to permit the public offering
and sale of shares of Common Stock covered by such registration statement;
provided, however, that the Company shall not be required (i) to qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph, (ii) to subject itself to
taxation in any such jurisdiction. It is expressly agreed that in no event are
any registration rights being granted to the Units or the Warrants, but only
with respect to the Shares and the Warrant Shares issuable upon exercise of the
Warrants.
b. Participatory Registration. If at any time after the third anniversary
of the issuance of the Warrants, the Company proposes to register under the 1933
Act (except by a Form S-4 or Form S-8 Registration Statement or any successor
forms thereto) or qualify for a public distribution under Section 3(b) of the
1933 Act, any of its securities, it will give written notice to the Subscriber
of its intention to do so and, on the written request of the Subscriber given
within twenty (20) days after receipt of any such notice from the Company (which
request shall specify the Shares and Warrant Shares intended to be sold or
disposed of by the Subscriber), the Company will use its best efforts to cause
all such Shares and Warrant Shares, to be included in such registration
statement proposed to be filed by the Company; provided, however, that if a
greater number of Shares and Warrant Shares is offered for participation in the
proposed offering than in the reasonable opinion of the managing underwriter of
the proposed offering can be accommodated without adversely affecting the
proposed offering, then the amount of Shares and Warrant Shares proposed to be
offered by the Subscriber for registration, as well as the number of securities
of any other selling shareholders participating in the registration, shall be
proportionately reduced to a number deemed satisfactory by the managing
underwriter, which may be zero.
c. Current Registration Statement. Once effective, the Company shall use
its reasonable efforts to cause any registration statement filed under Section
4.a. hereof to remain current and effective for a period of one (1) year or
until the Shares and Warrant Shares covered by such registration statement are
sold by the Subscriber, whichever is less. The Subscriber shall promptly provide
all such information and materials and take all such action as may be required
in order to permit the Company to comply with all applicable requirements of the
SEC and to obtain any desired acceleration of the effective date of such
registration statement.
d. Other Provisions. In connection with the offering of any Shares or
Warrant Shares registered pursuant to this Section 4, the Company shall furnish
to the Subscriber such number of copies of any final prospectus as it may
reasonably request in order to effect the offering and sale of the Shares and
Warrant Shares to be offered and sold. In connection with any offering of Shares
and Warrant Shares registered pursuant to this Section 4, the Company shall
instruct any transfer agent and registrar of the Shares and Warrant Shares to
release immediately any stop transfer order, and to remove any restrictive
legend, with respect to Shares and Warrant Shares included in any registration
becoming effective pursuant to this Agreement.
e. Costs. Subject to the immediately following sentence, the Company shall
in all events pay and be responsible for all fees, expenses, costs and
disbursements associated with the registration statement under this Section 4,
including filing fees, fees, costs and disbursements of any counsel, accountants
and other consultants representing the Company in connection therewith.
Notwithstanding anything set forth herein to the contrary, Subscriber shall be
responsible for any and all underwriting discounts and commissions in connection
with the sale of the Shares and Warrant Shares pursuant hereto and all fees of
its legal counsel and other advisors retained in connection with reviewing any
registration statement.
f. Successors. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business, properties, stock or assets of the Company,
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no such
succession had taken place.
g. Indemnification.
i. The Company will indemnify and hold harmless the
Subscriber, its directors and officers, and any underwriter (as defined
in the Act) for the Subscriber and each person, if any, who controls
the Subscriber or such underwriter within the meaning of the Act, from
and against, and will reimburse the Subscriber and each such
underwriter and controlling person with respect to, any and all loss,
damage, liability, cost and expense to which such holder or any such
underwriter or controlling person may become subject under the Act or
otherwise, insofar as such losses, damages, liabilities, costs or
expenses are caused by any untrue statement or alleged untrue statement
of any material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement thereto, or
arise out of, or are based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading; provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, damage, liability, cost or expense arises out of, or is based
upon, an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by
the Subscriber, such underwriter or such controlling person in writing
specifically for use in the preparation thereof.
ii. The Subscriber will indemnify and hold harmless the
Company, its directors and officers, any controlling person and any
underwriter from and against, and will reimburse the Company, its
directors and officers, any controlling person and any underwriter with
respect to, any and all loss, damage, liability, cost or expense to
which the Company or any controlling person and/or any underwriter may
become subject under the Act or otherwise, insofar as such losses,
damages, liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material fact contained in
such registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of, or are based upon,
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was so made in reliance upon, and in strict conformity
with, written information furnished by, or on behalf of, the Subscriber
specifically for use in the preparation thereof.
iii. Promptly after receipt by an indemnified party pursuant
to the provisions of paragraph (i) or (ii) of this Section 4(g) of
notice of the commencement of any action involving the subject matter
of the foregoing indemnity provisions, such indemnified party will, if
a claim thereof is to be made against the indemnifying party pursuant
to the provisions of said paragraph (i) or (ii), promptly notify the
indemnifying party of the commencement thereof; but the omission to so
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than hereunder. In
case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party shall have the right to participate in, and, to the
extent that it may wish, assume the defense thereof; or, if there is a
conflict of interest which would prevent counsel for the indemnifying
party from also representing the indemnified party, the indemnified
parties have the right to select only one (1) separate counsel to
participate in the defense of such action on behalf of all such
indemnified parties. After notice from the indemnifying parties to such
indemnified party of the indemnifying parties' election so to assume
the defense thereof, the indemnifying parties will not be liable to
such indemnified parties pursuant to the provisions of said paragraph
(i) or (ii) for any legal or other expense subsequently incurred by
such indemnified parties in connection with the defense thereof, other
than reasonable costs of investigation, unless (i) the indemnified
parties shall have employed counsel in accordance with the provisions
of the preceding sentence; (ii) the indemnifying parties shall not have
employed counsel satisfactory to the indemnified parties to represent
the indemnified parties within a reasonable time after the notice of
the commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying parties.
5. Securities, Legends and Notices. Subscriber represents and warrants that
it has read, considered and understood that the following legends, substantially
in the form and substance set forth below, shall be placed on the Securities:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS. THE SECURITIES REPRESENTED
HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF ANY EFFECTIVE REGISTRATION STATEMENT AND
QUALIFICATION IN EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT
AND UNDER ANY APPLICABLE STATE SECURITIES LAW AND AN OPINION OF COUNSEL
FOR XXXXXXX INVESTMENTS, INC. THAT SUCH REGISTRATION AND QUALIFICATION
IS NOT REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
AN EXEMPTION THEREFROM.
SALE OR OTHER TRANSFER OF THESE SECURITIES IS FURTHER RESTRICTED FOR UP
TO 180 DAYS FOLLOWING A PUBLIC OFFERING OF SECURITIES OF THE COMPANY BY
THE TERMS OF A SUBSCRIPTION AND PURCHASE AGREEMENT, A COPY OF WHICH IS
AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY.
6. Miscellaneous.
a. Amendment; Waiver. Neither this Agreement nor the Warrants shall be
changed, modified or amended in any respect except by the mutual written
agreement of the parties hereto. Any provision of this Agreement or the Warrants
may be waived in writing by the party which is entitled to the benefits thereof.
No waiver of any provision of this Agreement or the Warrants shall be deemed to,
or shall constitute a waiver of, any other provision hereof or thereof (whether
or not similar), nor shall any such waiver constitute a continuing waiver.
b. Binding Effect; Assignment. Neither this Agreement nor any rights or
obligations hereunder are assignable by the Subscriber.
c. Governing Law. This Agreement and its validity, construction and
performance shall be governed in all respects by the internal laws of the State
of Minnesota without giving effect to such state's conflicts of law provisions.
d. Severability. Any term or provisions of this Agreement or the Warrants
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction only, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or thereof
affecting the validity or enforceability of such provision in any other
jurisdiction.
e. Headings. The captions, headings and titles preceding the text of each
or any Section, subsection or paragraph hereof are for convenience or reference
only and shall not affect the construction, meaning or interpretation of this
Agreement or the Debentures or any term or provisions hereof or thereof.
f. Counterparts. This Agreement may be executed in one or more original or
facsimile counterparts, each of which shall be deemed an original and all of
which shall be considered one and the same agreement, binding on all of the
parties hereto, notwithstanding that all parties are not signatories to the same
counterpart. Upon delivery of an executed counterpart by the undersigned
Subscriber to the Company, which in turn is executed and delivered by the
Company, this Agreement shall be binding as one original agreement between
Subscriber and the Company.
g. Transfer Taxes. Each party hereto shall pay all such sales, transfer,
use, gross receipts, registration and similar taxes arising out of, or in
connection with, the transactions contemplated by this Agreement and the
Warrants (collectively, the "Transfer Taxes") as are payable by such party under
applicable law, and the Company shall pay the cost of any documentary stock
transfer stamps, if any, to be affixed to the certificates representing the
Shares and Warrant Shares to be issued.
h. Entire Agreement. This Agreement and the Warrants merge and supersede
any and all prior agreements, understandings, discussions, assurances, promises,
representations or warranties among the parties with respect to the subject
matter hereof, and contains the entire agreement among the parties with respect
to the subject matter set forth herein and therein.
i. No Brokers. Each of the parties hereto represents and warrants to the
other than there are no broker's, finder's or any other similar fees and
commissions due or payable with respect to the sale of the Securities by the
Company to the Subscriber and each of the parties hereby agrees to indemnify and
hold harmless the other with respect to such representation and warranty and any
breach thereof.
j. Notices. Except as otherwise specified herein to the contrary, all
notices, requests, demands and other communications required or desired to be
given hereunder shall only be effective if given in writing, by hand or by fax,
by certified or registered mail, return receipt requested, postage prepaid, or
by U.S. Express Mail service, or by private overnight mail service (e.g.,
Federal Express). Any such notice shall be deemed to have been given (i) on the
business day actually received if given by hand or by fax, (ii) on the business
day immediately subsequent to mailing, if sent by U.S. Express Mail service or
private overnight mail service, or (iii) five (5) business days following the
mailing thereof, if mailed by certified or registered mail, postage prepaid,
return receipt requested, and all such notices shall be sent to the addresses
identified on the signature page hereof (or to such other address or addresses
as a party may have advised the other in the manner provided in this Section).
k. No Third Party Beneficiaries. This Agreement and the rights, benefits,
privileges, interests, duties and obligations contained or referred to herein
shall be solely for the benefit of the parties hereto and no third party shall
have any rights or benefits hereunder as a third party beneficiary or otherwise
hereunder.
l. Public Announcements. Neither Subscriber nor any affiliate or affiliated
person or entity of Subscriber, shall make or issue any press releases or
otherwise make any public statements or make any disclosures to any third person
or entity with respect to the transactions
contemplated herein and will not make or issue any press releases or otherwise
make any public statements of any nature whatsoever with respect to the Company
without the express prior approval of the Company provided, however, that
Subscriber may make any such filings or disclosures that may be required by
applicable state and federal securities laws without such prior approval of the
Company. Neither the Company nor any officer, director, stockholder, employee,
affiliate or affiliated person or entity of the Company, shall make or issue any
press releases or otherwise make any public statements or make any disclosures
to any third person or entity with respect to the transactions contemplated
herein and will not make or issue any press releases or otherwise make any
public statements of any nature whatsoever with respect to Subscriber without
the express prior approval of Subscriber; provided, however, that the Company
may make any such filings or disclosures that may be required by applicable
state and federal securities laws without such prior approval of Subscriber.
m. Indemnity.
i. Subscriber hereby agrees to indemnify and hold harmless the
Company, and the Company's successors and assigns, from, against and in
all respects of any demands, claims, actions or causes of action,
assessments, liabilities, losses, costs, damages, penalties, charges,
fines or expenses (including, without limitation, interest, penalties,
and attorneys' and accountants' fees, disbursements and expenses),
arising out of or relating to any breach by Subscriber of any
representations, warranty, covenant or agreement made by Subscriber in
this Agreement. Such right to indemnification shall be in addition to
any and all other rights of the Company under this Agreement or
otherwise, at law or in equity.
ii. The Company hereby agrees to indemnify and hold harmless
the Subscriber, and the Subscriber's successors and assigns, from,
against and in all respects of any demands, claims, actions or causes
of action, assessments, liabilities, losses, costs, damages, penalties,
charges, fines or expenses (including, without limitation, interest,
penalties, and attorneys' and accountants' fees, disbursements and
expenses), arising out of or relating to any breach by the Company of
any representations, warranty, covenant or agreement made by the
Company in this Agreement. Such right to indemnification shall be in
addition to any and all other rights of the Subscriber under this
Agreement or otherwise, at law or in equity.
n. Survival. The Company and the Subscriber each expressly acknowledge and
agree that all of their respective representations, warranties, agreements and
covenants set forth in this Agreement shall be of the essence hereof and shall
survive the execution and delivery of this Agreement, the sale and purchase of
the Securities and the exercise of the Warrants.
IN WITNESS WHEREOF, each of the parties hereto have executed this Agreement
in the manner appropriate to each, all as of the date first above written.
XXXXXXX INVESTMENTS, INC.
By /s/ Xxxxxxx X. Xxxxxx
Its Chairman
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
