Exhibit 4.8
XX0.XXX INC.
UNIT SUBSCRIPTION AGREEMENT
THIS UNIT SUBSCRIPTION AGREEMENT (this "AGREEMENT") is entered into as
of January 29, 2001 by and among XX0.XXX INC., a Delaware corporation (the
"COMPANY"), and ABANAT LIMITED, a British Virgin Islands corporation (the
"INVESTOR"). Certain capitalized terms used in this Agreement without definition
shall have the meanings given them in Section 10 hereof.
In consideration of the mutual promises, representations, warranties
and covenants set forth in this Agreement, the parties to this Agreement agree
as follows:
1. PURCHASE AND SALE OF UNITS.
(a) The Company has duly authorized for sale, issue and
delivery to the Investor of up to an aggregate of $2.0 million principal amount
of Series A Convertible Debentures due 2005 (the "DEBENTURES"), substantially in
the form attached hereto as EXHIBIT A and convertible as provided therein into
shares of the Company's Common Stock, $0.01 par value per share (the "COMMON
STOCK"). The Company has further authorized for sale, issue and delivery to the
Investor warrants (the "WARRANTS") to acquire Common Stock during the period
ending five years after the date of issuance thereof. The form of the Warrant is
attached to this Agreement as EXHIBIT B.
(b) Subject to the terms of this Agreement, the Investor
agrees to purchase, and the Company agrees to sell to the Investor, an aggregate
of 200 Units. Each unit (a "Unit") consists of: (i) $10,000 principal amount of
Debentures and (ii) one Warrant to purchase 6,667 shares of Common Stock
(rounded to the nearest whole share). The aggregate purchase price to be paid by
the Investor for the Units shall be $2.0 million (the "AGGREGATE COMMITMENT").
(c) On the date hereof (the "FIRST CLOSING DATE"), the Company
shall deliver to the Investor, 75 Units consisting of debentures that represents
$750,000 principal amount of Debentures being purchased by it and warrant
certificates that represent 500,025 Warrants being purchased by it, in all cases
against delivery to the Company by the Investor by wire transfers of immediately
available funds of the purchase price of the Units being purchased by the
Investor of $750,000 (the "FIRST CLOSING PURCHASE PRICE").
(d) In addition, on the date hereof, the Investor will
contribute an amount equal to the Aggregate Commitment less the First Closing
Purchase Price into an escrow fund, pursuant to the terms of the Escrow
Agreement (the "ESCROW FUND").
(e) Until the Investor contributes the full Aggregate
Commitment, the Investor will contribute the balance of the Aggregate Commitment
from the Escrow Fund at one or more closings (each, a "SUBSEQUENT CLOSING") to
be held on one or more dates, each of which shall be a Business Day (each, a
"SUBSEQUENT CLOSING DATE"), concurrently with either (i) any settlement of a
draw down notice of the Company under the Company's common stock purchase
agreement with Crossover Ventures, Inc. or (ii) any other investment in the
Company (whether public or
private) (any investment under clause (i) or (ii) hereof shall be referred to
herein as a "CO-INVESTMENT").
At least five Business Days prior to any Subsequent Closing
Date, the Company shall provide a written notice (each, a "CLOSING NOTICE")
stating the portion of the balance of the Aggregate Commitment to be contributed
at each Subsequent Closing, which shall be equal to the amount of the
Co-Investment (the "SUBSEQUENT CLOSING PURCHASE PRICE"). Upon delivery of the
Closing Notice to the Investor, the Investor shall be obligated to purchase, and
the Company shall become committed to sell to such Investor, an amount of Units
equal to the Subsequent Closing Purchase Price at the Subsequent Closing
referred to in such Closing Notice; provided, however, that the Investor shall
under no circumstances be obligated to purchase the Units if the Company has not
met the requirements of Section 5 hereof. Notwithstanding the foregoing or
anything to the contrary contained in this Agreement or any other Transaction
Document, the Investor need not have a Subsequent Closing unless and until the
amount of any Subsequent Closing Purchase Price under the Aggregate Commitment
shall be for an amount of no less than $250,000; provided however, that should
the Escrow Fund carry at any time a balance that is less than $250,000, the
Company will be entitled under the circumstances otherwise provided for in this
Agreement and the other Transaction Documents to a final Subsequent Closing for
an amount equivalent to the balance of the monies in the Escrow Fund.
At each Subsequent Closing, the Company shall issue to the
Investor, an amount of Units consisting of debentures that represent the amount
of Debentures being purchased at such Subsequent Closing and warrant
certificates that represent the Warrants being purchased at such Subsequent
Closing, in all cases against delivery to the Company by the Investor at such
Subsequent Closing of funds from the Escrow Fund, equal to the Subsequent
Closing Purchase Price of the Units being purchased by the Investor at such
Subsequent Closing.
2. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
represents and warrants to, and confirms the agreement with, the Company, as
follows:
(a) The Investor is acquiring the Debentures and the Warrants
that comprise the Units (the "SECURITIES") for the Investor's own account, not
as nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act of 1933, as amended (the "SECURITIES ACT"). By executing
this Agreement, the Investor further represents that the Investor does not have
any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to any such person or to any third person, with
respect to the Securities.
(b) The Investor understands that (i) the Securities have not
been registered under either the Securities Act or the securities laws of any
state of the United States by reason of specific exemptions therefrom, (ii) the
Securities must be held by the Investor indefinitely, and, therefore, the
Investor must bear the economic risk of such investment indefinitely, unless a
subsequent disposition thereof is registered under the Securities Act and the
securities laws of any applicable state or is exempt from such registrations;
(iii) each certificate that represents the Securities will be endorsed with
legends as required by the Investor's Rights Agreement; and (iv)
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the Company will instruct any transfer agent not to register the transfer of any
of the Securities unless the conditions specified in the foregoing legend are
satisfied.
(c) The Investor has been furnished with such materials and
has been given access to such information relating to the Company as the
Investor or the Investor's qualified representative has requested. The Investor
has been afforded the opportunity to ask questions regarding the Company and the
Securities as it has found necessary to make an informed investment decision.
The Investor has been solely responsible for its own due diligence investigation
of the Company and its business, for its own analysis of the merits and risks of
its investment made pursuant to this Agreement and for its own analysis of the
terms of its investment.
(d) The Investor is in a financial position to hold the
Securities and is able to bear the economic risk and withstand a complete loss
of the Investor's investment in the Securities. The Investor recognizes that the
Securities involve a high degree of risk. The Investor understands and
acknowledges that there can be no assurance that the Company will be able to
meet its projected goals and that the Company will need significant additional
capital to be successful, which capital may not be available readily.
(e) The Investor acknowledges hereby that the Investor has
been advised to obtain and has obtained, to the extent the Investor deems
necessary, professional (including legal) advice with respect to the risks
inherent in the investment in the Units, the condition of the Company, the
suitability of the investment in the Units in light of Investor's condition and
investment needs, and the terms and conditions of this Agreement and documents
relating to the investment in the Units. The Investor, either alone or with the
assistance of such professional advisors, is a sophisticated investor, is able
to fend for itself in the transaction contemplated by this Agreement, and has
such knowledge and experience in financial and business matters that the
Investor is capable of evaluating the merits and risks of the prospective
investment in the Units.
(f) The investment in the Units is suitable for the Investor
based upon the Investor's investment objectives and financial needs, and the
Investor has adequate net worth and means for providing for its current
financial needs and contingencies and has no need for liquidity of the
investment with respect to the Units. The Investor's overall commitments to
investments that are illiquid or not readily marketable are not disproportionate
to the Investor's net worth, and investment in the Units will not cause such
overall commitment to become excessive.
(g) The Investor represents that the Investor is a not U.S.
person, as defined by Regulation S, and is not purchasing the Debenture for the
account or benefit of a U.S. person and agrees that this Debenture is being
acquired for investment and that such Investor will not offer, sell or otherwise
dispose of this Debenture or the shares of Common Stock issuable upon conversion
thereof except in compliance with the provisions of Regulation S, pursuant to
registration under the Act or pursuant to an available exemption from
registration and under circumstances which will not result in a violation of the
Act or any applicable state Blue Sky or foreign laws or similar laws relating to
the sale of securities. The Investor further agrees that it
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will not engage in hedging transactions with regard to the Debenture or the
shares of Common Stock issuable upon conversion thereof unless in compliance
with the Act. The Investor represents and agrees that neither it, nor any of its
affiliates, nor any person acting on its or their behalf has engaged or will
engage in any direct selling efforts with respect to the shares of Common Stock.
(h) The Investor also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
(as that term is defined by Regulation S) with respect to the distribution of
the shares of Common Stock, except with the prior written consent of the
Company. The Investor acknowledges that the Company is not obligated to take any
action that will permit the offer or sale of the shares of Common Stock or the
distribution of any offering memorandum or any other offering material relating
to the shares in any non-U.S. jurisdiction where action for that purpose is
required and the Company will have no responsibility with respect to the right
of any person to offer or sell shares or distribute any offering memorandum or
any other offering material relating to the shares in any non-U.S. jurisdiction.
The Investor represents and agrees that it will obtain any consent, approval or
authorization required for it to offer or sell shares of Common Stock, or to
distribute any offering memorandum or any other offering material relating to
the shares, under the law or regulations of any jurisdiction where it proposes
to make offers or sales of shares, or to distribute any offering memorandum or
any other offering material relating to the shares.
(i) The execution, delivery, and performance by the Investor
of this Agreement and each other Transaction Document have been duly authorized
by all necessary actions of the Investor. The Investor has duly and validly
executed and delivered this Agreement and each other Transaction Document, and
this Agreement and each other Transaction Document constitutes a valid, binding,
and enforceable obligation of the Investor in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
on the Schedule of Exceptions attached hereto as Schedule A, which has been
delivered to the Investor prior to the Investor's execution hereof, the Company
represents and warrants to the Investor as follows:
(a) ORGANIZATION, STANDING AND POWER. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all requisite power and authority to own, lease
and operate its properties and to carry on its businesses as now being
conducted, and as proposed to be conducted, and is duly qualified and in good
standing to do business in each jurisdiction in which a failure to so qualify
would have a material adverse effect on the business condition of the Company.
Each of the subsidiaries of the Company (the "SUBSIDIARIES") is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite power and authority to own,
lease and operate its properties and to carry on its businesses as now being
conducted, and as proposed to be conducted, and is duly qualified and in good
standing to do business in each jurisdiction in which a failure to so qualify
would have a material adverse effect on the business condition of such
subsidiary.
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(b) COMPANY CAPITAL STRUCTURE AND OWNERSHIP. The authorized
capital stock of the Company on the date hereof consists of 100,000,000 shares
of Common Stock of which 26,953,533 shares are issued and outstanding and
20,000,000 shares of preferred stock, par value $0.01 per share, of which
400,000 shares of Series A Preferred Stock are issued and outstanding, 34,100
shares of Series B Preferred Stock are issued and outstanding, 1,644,304 shares
of Series C Preferred Stock are issued and outstanding, 924,527 shares of Series
C-II Preferred Stock are issued and outstanding and 2,049,839 shares of Series
C-III Preferred Stock are issued and outstanding. All outstanding shares of the
Common Stock are validly issued, fully paid, and nonassessable, are not subject
to any preemptive rights and were issued in compliance with applicable state and
federal laws regarding the issuance of securities. Except as set forth in the
Company's consolidated quarterly financial statements as of September 30, 2000
(the "2000 FINANCIAL STATEMENTS"), including the notes thereto, and except as
set forth on the Schedule of Exceptions, there are no options, warrants, calls,
conversion rights, commitments, agreements, contracts, understandings,
restrictions, arrangements or rights of any character to which the Company is a
party or by which the Company may be bound obligating the Company to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
the capital stock of the Company, or obligating the Company to grant, extend or
enter into any such option, warrant, call, conversion right, commitment,
agreement, contract, understanding, restriction, arrangement or right. The
Company does not have outstanding any bonds, debentures, notes or other
indebtedness, the holders of which have the right to vote (or convertible or
exercisable into securities having the right to vote) with holders of the Common
Stock on any matter. The Company has not received any notice from the American
Stock Exchange questioning or threatening the continued inclusion of the Common
Stock on such market.
(c) AUTHORITY. All corporate action on the part of the
Company, its directors and shareholders necessary for the authorization,
execution, delivery and performance by the Company of the Transaction Documents
and the consummation of the transaction contemplated herein and therein, and for
the authorization, issuance and delivery of the Debentures and the Warrants have
been taken or will be taken prior to the Closing. This Agreement and the other
Transaction Documents are the legal, valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
other laws of general application affecting enforcement of creditors' rights
generally, rules of law governing specific performance and injunctive relief or
other equitable remedies. The execution, delivery and performance by the Company
of the Transaction Documents and compliance herewith and therewith and the sale
and issuance of the Debentures and the Warrants (a) will not result in any
violation of and will not conflict with, or result in a breach of any of the
terms of, or constitute a default under the Company's Certificate of
Incorporation or Bylaws, each as amended or any Federal, state or local statute,
rule, regulation or other law (collectively, "LAWS"); (b) do not and will not
(i) conflict with, contravene, result in any violation or breach of or default
under any material contract (with or without the giving of notice or the lapse
of time or both), (ii) create in any other person or entity a right or claim of
termination or amendment of any material contract, or (iii) require
modification, acceleration or cancellation of any security issued by such person
or entity in any material agreement, undertaking, contract, indenture, mortgage,
deed of trust or other instrument or arrangement (whether in writing or
otherwise) to which such person or entity or its property is bound, or any
amendment of any of the foregoing (collectively, "CONTRACTUAL OBLIGATIONS");
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and (c) do not and will not (other than pursuant to the Transaction Documents)
result in the creation of any mortgage, deed of trust, pledge, hypothecation,
assignment, lien (statutory or otherwise), charge, claim, restriction or
preference, security interest or preferential arrangement or any other
encumbrance (or obligation to create a lien) of any kind or nature
(collectively, "LIENS") against any property, asset or business of the Company
or the suspension, revocation, impairment, forfeiture or non renewal of any
material permit, license, authorization or approval applicable to the Company,
or its businesses or operations or any of its assets or properties. No
shareholder has any preemptive rights or rights of first refusal by reason of
issuance of the Units.
(d) SEC MATTERS. The Company has made available to the
Investor a true, correct, and complete copy of the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1999, and its Quarterly Report on
Form 10-QSB for the quarters ended March 31, 2000, June 30, 2000 and September
30, 2000, as filed with SEC (collectively, the "COMPANY SEC REPORTS"). As of
their respective filing dates, the Company SEC Reports (i) complied as to form
in all material respects with the requirements of the SEC and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made not
misleading. The financial statements (including the notes thereto) included in
the Company SEC Reports complied as to form in all material aspects with the
published rules and regulations of the SEC. Since June 16, 1999, the Company has
filed all required reports, schedules, forms, statements and other documents
with the SEC as and when any such documents were required to be filed and no
Company SEC Reports were filed after the filing deadline therefor (after giving
effect to all extensions) or otherwise in an untimely manner. The Company has
not provided to the Investor any information which, according to applicable law,
rule or regulation, should have been disclosed publicly by the Company but which
has not been so disclosed, other than with respect to the transactions
contemplated by this Agreement.
(e) AUTHORIZATION. The execution and delivery by the Company
of this Agreement and each other Transaction Document, the performance by the
Company of its obligations hereunder and thereunder, and the issuance to the
Investor of the Debentures, the Warrants and the shares of Common Stock
underlying the Debentures and the Warrants (the "UNDERLYING COMMON STOCK"), as
herein provided, have been duly authorized by all necessary corporate action of
the Company. When issued upon due conversion of the Debentures, the shares of
Underlying Common Stock into which the Debentures are convertible will be
validly authorized and, when issued upon the conversion of the Debentures, will
be fully paid and nonassessable. When issued upon due exercise of the Warrants
and upon payment of the exercise price thereunder as required by the Warrants,
the shares of Underlying Common Stock that underlie the Warrants will be validly
authorized, duly issued and fully paid and nonassessable shares of the Company.
To the Company's knowledge, all outstanding shares of capital stock of the
Company have been issued in compliance with all applicable federal and state
securities laws. To the Company's knowledge, other than the agreements set forth
in the Schedule of Exceptions, there are no voting trusts or agreements,
stockholders agreements, pledge agreements, buy-sell agreements or proxies
relating to any capital stock of the Company.
(f) COMPLIANCE WITH LAWS. Neither the Company nor any of its
Subsidiaries has violated any Requirement of Law (as defined below), which
violation would reasonably be
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expected to have a material adverse effect upon the financial condition,
operating results, assets, operations or business prospects of the Company and
its Subsidiaries, taken as a whole, and neither the Company nor any of its
Subsidiaries has received notice of any such violation. "REQUIREMENT OF LAW"
means, with respect to the Company or any Subsidiary, its articles or
certificate of incorporation, formation or organization, partnership or
operating agreements and bylaws or other organizational or governing documents,
and any law, treaty, rule, regulation, right, privilege, qualification, license
or franchise or determination of an arbitrator or a court or other Governmental
Authority (as defined below), in each case applicable to or binding upon the
Company or any of its Subsidiaries or any of its or their property or to which
the Company or any Subsidiary or any of its or their property is subject or
pertaining to any or all the transactions contemplated or referred to herein.
"GOVERNMENTAL AUTHORITY" means the government of any country where the Company
conducts business or any state, county or parish, city, locality or other
political subdivision of any thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
(g) GOVERNMENTAL APPROVALS; CONSENTS. Other than as set forth
on the Schedule of Exceptions, except for filings required to be made with any
Governmental Authority or Person (as defined below) that governs the Investor,
the Company is not required to obtain any order, consent, approval or
authorization of, or make any declaration or filing with, any Governmental
Authority or other Person (as defined below) in connection with (i) the
negotiation, execution, delivery and performance of this Agreement or any of the
other Transaction Documents, (ii) the offer, issuance, sale and delivery to the
Investor of the Units, or (iii) the consummation of any of the transactions
contemplated by this Agreement or any of the Transaction Documents. "PERSON"
means an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.
(h) LITIGATION. Except as disclosed in the Company SEC Reports
or the Schedule of Exceptions, there is no action, suit, claim, proceeding or
investigation pending or, to the Company's knowledge, threatened against or
affecting the Company or any of its Subsidiaries, at law or in equity, or before
or by any federal, state, municipal or other governmental department,
commission, board, bureau agency or instrumentality, domestic or foreign, which
could reasonably be expected to have a material adverse effect on the business,
financial condition, operations or prospects of the Company and its
Subsidiaries, taken as a whole, or materially adversely affect the Company's
ability to consummate the transactions contemplated by the Transaction Documents
(a "MATERIAL ADVERSE EFFECT"). Neither the Company nor any of its Subsidiaries
is in default with respect to any order, writ, injunction, or decree known to or
served upon the Company of any court or of any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign. Except as disclosed in the Company SEC
Reports, there is no material action or suit by the Company or any Subsidiary
pending or threatened against others. The Company and each of its Subsidiaries
have all necessary permits, licenses and other authorizations required to
conduct their respective businesses as conducted and as proposed to be
conducted, except where the failure to obtain any such permit, license or
authorization could not reasonably be expected to have a Material
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Adverse Effect. The Company has complied in all material respects with all laws,
rules and regulations (including, without limitation, laws relating to
employment, including wages, hours, equal opportunity, collective bargaining,
payment of social security and other taxes, and ERISA), and any orders,
injunctions and decrees applicable to it, except where such non-compliance could
not reasonably be expected to have a Material Adverse Effect.
(i) TAX MATTERS. The Company has filed all tax returns and
reports, federal, state, county and local, required to be filed by it, and these
returns and reports are true and correct in all material respects, and the
Company has paid all taxes shown to be due by such returns as well as all other
taxes, assessments and governmental charges which have become due or payable,
including without limitation, all taxes which the Company is obligated to
withhold from amounts owing to creditors and third parties. The Company has
withheld or collected from each payment made to each of its employees, in all
material respects, the amount of all taxes, including, but not limited to,
federal income taxes, Federal Insurance Contribution Act taxes and Federal
Unemployment Tax Act taxes required to be withheld or collected there from, and
has paid the same to the proper tax receiving officers or authorized
depositories. No deficiency assessment with respect to or proposed adjustment of
the Company's federal, state, county and local taxes is pending or, to the
Company's knowledge threatened. There is no tax lien, whether imposed by any
federal, state, county or local taxing authority, outstanding against the
assets, properties or business of the Company.
(j) CORPORATE POWER. The Company has or will have at the
Closing all requisite corporate power and authority to execute and deliver this
Agreement and the Transaction Documents, sell and issue the Debentures and the
Warrants and to carry out and perform its obligations under the terms of the
Transaction Documents.
(k) OUTSTANDING DEBT. The Company has no outstanding
indebtedness for borrowed money and is not a guarantor or indemnitor or
otherwise continently liable for any indebtedness for borrowed money (including,
without limitation, liability by way of agreement, contingent or otherwise, to
purchase, provide funds for payment, supply funds or otherwise invest in any
debtor or otherwise to insure any creditor against loss). There exists no
material default under the provisions of any instrument evidencing any such
indebtedness or otherwise or of any agreement relating thereto.
(l) MATERIAL CONTRACTS AND OTHER COMMITMENTS. The Company has
satisfied in full or provided for all of its liabilities and obligations under
each material contract requiring performance prior to the date hereof in all
material respects, and is not in default under any of them, nor, to the actual
knowledge of the Company, does any condition exist that with notice or lapse of
time or both would constitute such a default. To the actual knowledge of the
Company, no other party to any such material contract is in default thereunder,
nor does any condition exist that with notice or lapse of time or both would
constitute such a default. No approval or consent of any person or entity is
needed for all of the material contracts to continue to be in full force and
effect.
(m) STOCKHOLDERS, DIRECTORS AND OFFICERS: CONFLICT OF
INTEREST. The Company is not currently indebted to its officers or directors
other than for travel, relocation, and other
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expenses that are advanced and reimbursed in the ordinary course of business. To
the Company's knowledge, none of the officers or directors or significant
employees or consultants of the Company, or their respective relatives, (a)
owns, directly or indirectly, any interest in (excepting less than 5% stock
holdings for investment purposes in securities of publicly held and traded
companies), or is an officer, director, employee or consultant of, any person or
entity that is, or is engaged in business as, a competitor, lessor, lessee,
distributor, sales agent or customer of, or lender to or borrower from, the
Company; or (b) owns, directly or indirectly, in whole or in part, any tangible
or intangible property that the Company uses in the conduct of business; or (c)
has any cause of action or other claim whatsoever against, or owes or has
advanced any amount to, the Company, except for claims in the ordinary course of
business such as for accrued vacation pay, accrued benefits under employee
benefit plans, and similar matters and agreements existing on the date hereof.
(n) TITLE TO PROPERTIES; LIENS AND ENCUMBRANCES. The Company
has good and marketable title to its tangible properties and has good title to
all its leasehold interests, in each case subject to no mortgage, pledge, lien,
lease, security interest, conditional sale agreement, encumbrance or charge,
except (i) tax, materialmen's or like liens for obligations not yet due or
payable or being contested in good faith by appropriate proceedings, or (ii)
possible minor liens or encumbrances which do not in any case materially detract
from the value of the property subject thereto or materially impair the
operations of the Company and which have not arisen otherwise than in the
ordinary course of business of the Company.
(o) FRANCHISES AND OTHER RIGHTS. The Company has all material
franchises, permits, and other similar authority necessary for the conduct of
its business. The Company has not received any notice of infringement upon or
conflict with the asserted rights of others and is not aware of any threats of
such a claim or assertion. Reasonable security measures have been taken by the
Company to protect the secrecy, confidentiality and value of the Company's
confidential, proprietary information. The Company owns or possesses adequate
licenses or other rights to use and license its customers the right to use (in
the manner and to the extent presently or proposed to be used or licensed) all
material patents, patent applications, trademarks, trademark applications,
service marks, service xxxx applications, trade names, copyrights, manufacturing
processes, formulae, trade secrets, customer lists and know-how (collectively,
"INTELLECTUAL PROPERTY") currently or proposed to be used in its business,
except the possibility exists that other persons or entities may have developed
trade secrets or technical information similar or identical to those of the
Company or filed patent, trademark or copyright applications or registrations.
No claim is pending or, to the knowledge of the Company threatened, to the
effect that any such Intellectual Property owned or licensed by the Company, or
which the Company otherwise has the right to use, is invalid or unenforceable by
the Company. None of the Intellectual Property that the Company owns or purports
to own is subject to any outstanding judgment or contract restricting the use
thereof by the Company.
(p) COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation of any term of its Certificate of Incorporation or Bylaws nor any term
of any mortgage, indenture, contract, agreement, instrument, judgment, decree,
order, statute, rule or regulation to which the Company is subject and a
violation of which, in all cases, would have a material adverse effect on the
condition, financial or otherwise, or operations of the Company. The Company is
not in
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violation of, or in default under, any franchise, permit, license, authorization
or approval that is material to the Company.
(q) LABOR AGREEMENTS AND ACTIONS. The Company is not bound by
or subject to (and none of its material assets or properties is bound by or
subject to) any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or, to the
knowledge of the Company, has sought to represent any of the employees,
representatives or agents of the Company. There is no strike or other labor
dispute involving the Company pending, or to the knowledge of the Company
threatened, which could have a material adverse effect on the assets,
properties, financial condition, operating results, or business of the Company
(as such business is presently conducted and as it is proposed to be conducted),
nor is the Company aware of any labor organization activity involving its
employees.
(r) ENVIRONMENTAL AND SAFETY LAWS. The Company is not in
material violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety and to the best of its knowledge,
no material expenditures are or will be required in order to comply with any
such existing statute, law or regulation. The Company has not caused or allowed,
or contracted with any party for, the generation, use, transportation,
treatment, storage or disposal of any Hazardous Substances (as defined below) in
material violation of any of the applicable Environmental Laws (as defined
below) in connection with the operation of its business or otherwise. For the
purposes of this Agreement, the term "ENVIRONMENTAL LAWS" shall mean any
federal, state or local law or ordinance or regulation pertaining to the
protection of human health or the environment, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Sections 9601, ET SEQ., the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. Sections 11001, ET SEQ., and the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, ET SEQ. For purposes of
this Agreement, the term "HAZARDOUS SUBSTANCES" shall include oil and petroleum
products, asbestos, polychlorinated biphenyls, urea formaldehyde and any other
materials classified as hazardous or toxic under the Environmental Laws.
(s) MINUTE BOOKS. The minute book of the Company contains
minutes of all official meetings of directors and shareholders and all actions
by written consent without a meeting by the directors and shareholders since
June 16, 1999 and reflects all actions by the directors (and any committee of
directors) and shareholders with respect to all transactions referred to in such
minutes accurately in all material respects.
(t) EMPLOYEES. Neither the Company nor any subsidiary has any
collective bargaining arrangements or agreements covering any of its employees,
except as set forth in the SEC Documents or on the Schedule of Exceptions.
Except as set forth in the SEC Documents or on the Schedule of Exceptions,
neither the Company nor any subsidiary is in breach of any employment contract,
agreement regarding proprietary information, noncompetition agreement,
nonsolicitation agreement, confidentiality agreement, or any other similar
contract or restrictive covenant, relating to the right of any officer, employee
or consultant to be employed or engaged by the Company or such subsidiary. Since
the date of the December 31, 1999 Form 10-KSB, no officer, consultant or key
employee of the Company or any subsidiary whose termination, either
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individually or in the aggregate, could have a Material Adverse Effect, has
terminated or, to the knowledge of the Company, has any present intention of
terminating his or her employment or engagement with the Company or any
subsidiary.
(u) REGISTRATION RIGHTS. At the First Closing Date, except as
set forth on the Schedule of Exceptions and as provided for in the Investor's
Rights Agreement, the Company will not be under any obligation to register any
of its currently outstanding securities or any of its securities issued
hereafter.
(v) SECURITIES ACT. Subject to the accuracy of the Investors'
representations in Section 2, the offer, sale, and issuance of the Debentures
and the Warrants in conformity with the terms of this Agreement constitute
transactions exempt from the registration requirement of Section 5 of the
Securities Act of 1933, as amended (the "SECURITIES ACT"). No form of general
solicitation or general advertising was used by the Company, or its
representatives in connection with the offer or sale of the Debentures and the
Warrants.
(w) INSURANCE. Except as disclosed in the Company SEC Reports,
the Company carries or will have the benefit of insurance in such amounts and
covering such risks as is adequate for the conduct of its business and the value
of its properties.
(x) FOREIGN CORRUPT PRACTICES ACT. The Company has not taken
any action which would cause it to be in material violation of the Foreign
Corrupt Practices Act of 1977, as amended, or any rules and regulations
thereunder.
(y) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since the date of
the financial statement contained in the most recently filed Form 10-Q or Form
10-K, whichever is most current, no event or circumstance has occurred or exists
with respect to the Company or its businesses, properties, operations or
financial condition, that, under applicable law, rule or regulation, requires
public disclosure or announcement prior to the date hereof by the Company but
which has not been so publicly announced or disclosed in the SEC Documents.
(z) USE OF PROCEEDS. The proceeds from the sale of the Units
will be used by the Company and its subsidiaries for general corporate purposes.
(aa) ACKNOWLEDGMENT REGARDING INVESTOR'S PURCHASE OF UNITS.
The Company acknowledges and agrees that Investor is acting solely in the
capacity of arm's length purchaser with respect to this Agreement and the
transactions contemplated hereunder. The Company further acknowledges that the
Investor is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions
contemplated hereunder and any advice given by the Investor or any of its
representatives or agents in connection with this Agreement and the transactions
contemplated hereunder is merely incidental to the Investor's purchase of the
Units. The Company further represents to the Investor that the Company's
decision to enter into this Agreement has been based solely on the independent
evaluation by the Company and its own representatives and counsel
-11-
(bb) ABSENCE OF CERTAIN DEVELOPMENTS. Except as provided in
SEC Reports or on the Schedule of Exceptions, since the date of the financial
statement contained in the most recently filed Form 10-QSB or Form 10-KSB,
whichever is most current, neither the Company nor any subsidiary has:
(i) issued any stock, bonds or other corporate securities or
any rights, options or warrants with respect thereto;
(ii) borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except current liabilities
incurred in the ordinary course of business which are comparable in
nature and amount to the current liabilities incurred in the ordinary
course of business during the comparable portion of its prior fiscal
year, as adjusted to reflect the current nature and volume of he
Company's or such subsidiary's business;
(iii) discharged or satisfied any lien or encumbrance or paid
any obligation or liability (absolute or contingent), other than
current liabilities paid in the ordinary course of business;
(iv) declared or made any payment or distribution of cash or
other property to a stockholder with respect to its stock, or purchased
or redeemed, or made any agreements so to purchase or redeem, any
shares of its capital stock;
(v) sold, assigned or transferred any other tangible assets,
or cancelled any debts or claims, except in the ordinary course of
business;
(vi) sold, assigned or transferred any patent rights,
trademarks, trade names, copyrights, trade secrets or other intangible
assets or intellectual property rights, or disclosed any proprietary
confidential information to any person except to customers in the
ordinary course of business or to the Purchaser or its representatives;
(vii) suffered any material losses or waived any rights of
material value, whether or not in the ordinary course of business, or
suffered the loss of any material amount of prospective business;
(viii) made any changes in employee compensation except in the
ordinary course of business and consistent with past practices;
(ix) made capital expenditures or commitments therefor that
aggregate in excess of $500,000;
(x) entered into any other material transaction, whether or
not in the ordinary course of business;
(xi) suffered any material damage, destruction or casualty
loss, whether or not covered by insurance;
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(xii) experienced any material problems with labor or
management in connection with the terms and conditions of their
employment; or
(xiii) effected any two or more events of the foregoing kind
which in the aggregate would be material to the Company or its
Subsidiaries.
4. ADDITIONAL DOCUMENTS. Concurrently herewith, the Company and the
Investor shall have entered into the Investor's Rights Agreement and the Escrow
Agreement. In addition, the Company shall furnish to the Investor reasonable
evidence of the closing of a Co-Investment or Co-Investments in an amount equal
to or greater than the First Closing Purchase Price that closed in the 20 days
prior to the date hereof. On the First Closing Date, the Company shall also
furnish to the Investor an opinion of special counsel to the Company, dated the
First Closing Date, in the form attached hereto as EXHIBIT F.
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT EACH SUBSEQUENT CLOSING. The
obligations of the Investor under Section 1(b) and 1(f) of this Agreement are
subject to the fulfillment on or before each Subsequent Closing of each of the
following conditions, unless otherwise waived by the Investor:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 3 shall be true, in all material
respects, on and as of the applicable Subsequent Closing Date with the same
effect as though such representations and warranties had been made on and as of
such Subsequent Closing Date (except to the extent that such representations and
warranties were made as of a specified date, which representations and
warranties shall continue on each Subsequent Closing Date to be true, in all
material respects, as of such specified date); provided that prior to each
Subsequent Closing Date the Company shall have the right to supplement any
schedules hereto to reflect more recent information required by the provisions
of this Agreement; provided further that the representations and warranties made
in Section 3(d) shall be deemed to extend to any reports filed with the SEC
after the date hereof and prior to the date of the applicable Subsequent Closing
Date.
(b) COVENANTS. The Company shall have performed and complied
in all material respects with all covenants, agreements, obligations and
conditions contained in this Agreement and the Transaction Documents that are
required to be performed or complied with by it on or before the respective
Subsequent Closing.
(c) CO-INVESTMENT. A Co-Investment or Co-Investments in an
amount equal to or greater than the Subsequent Closing Purchase Price shall
close prior to or concurrently with each Subsequent Closing and the Company
shall furnish to the Investor reasonable evidence of such closing or closings.
(d) COMPLIANCE CERTIFICATE. The President or any Vice
President of the Company shall deliver to the Investor at a Subsequent
Closing a certificate stating that the conditions specified in Sections 5(a)
and 5(b) have been fulfilled and stating that there shall have been no change
in the financial condition or in any material agreement of the Company from
the date
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hereof to the applicable Subsequent Closing Date which has had or could
reasonably be expected to have a Material Adverse Effect.
(e) QUALIFICATIONS. All authorizations, approvals, or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Units pursuant to this Agreement shall be duly obtained and be effective
as of the applicable Subsequent Closing.
(f) MATERIAL ADVERSE EFFECT. No event which has a Material
Adverse Effect and no event including a merger, acquisition or similar
transaction whereby a successor entity shall have not agreed to perform the
Company's obligations shall have occurred.
(g) CONTINUED LISTING. The Common Stock shall continue to be
listed on the Amex or otherwise be listed on the Nasdaq National Market, Nasdaq
Small Cap Market, the New York Stock Exchange or over-the-counter.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT EACH SUBSEQUENT CLOSING.
The obligations of the Company to the Investor under this Agreement purchasing
at a Subsequent Closing are subject to the fulfillment on or before such
Subsequent Closing, as the case may be, of each of the following conditions by
the Investor:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Investor contained in Section 2 shall be true, in all material
respects, on and as of such Subsequent Closing with the same effect as though
such representations and warranties had been made on and as of such Subsequent
Closing (except to the extent that such representations and warranties were made
as of a specified date, which representations and warranties shall continue on
each Subsequent Closing Date to be true, in all material respects, as of such
specified date).
(b) COVENANTS. The Investor shall have performed and complied
in all material respects with all covenants, agreements, obligations and
conditions contained in this Agreement and the Transaction Documents that are
required to be performed or complied with by it on or before the respective
Subsequent Closing.
(c) QUALIFICATIONS. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Units pursuant to this Agreement shall be duly obtained and effective as
of the applicable Subsequent Closing Date.
7. EXISTING WARRANT CANCELLATION. In full and complete satisfaction and
discharge of the Company's obligations to Investor under the Existing Warrants,
the Company shall cancel the Existing Warrants and in their place issue 116,400
warrants with an exercise price of $1.68 (the "NEW WARRANTS"), substantially in
the form attached hereto as EXHIBIT C. In order to receive the New Warrants in
accordance with this Section 6, the Investor must surrender the Existing
Warrants to the Company for cancellation at its office at 000 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
8. COVENANTS BY THE COMPANY. The Company covenants with the Investor as
follows:
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(a) SECURITIES COMPLIANCE. If applicable, the Company shall
notify the American Stock Exchange, in accordance with their rules and
regulations, of the transactions contemplated by this Agreement, and shall take
all other necessary action and proceedings as may be required and permitted by
applicable law, rule and regulation, for the legal and valid issuance of the
Units to the Investor or subsequent holders.
(b) REGISTRATION AND LISTING. The Company will cause its
Common Stock to continue to be registered under Sections 12(b) or 12(g) of the
Exchange Act, will comply in all material respects with its reporting and filing
obligations under the Exchange Act, will comply with all requirements related to
any registration statement filed pursuant to the Transaction Documents, and will
not take any action or file any document (whether or not permitted by the
Securities Act or the Exchange Act or the rules promulgated thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under the Exchange Act or Securities Act, except as
permitted herein and in the other Transaction Documents. The Company will take
all action reasonably necessary to continue the listing or trading of its Common
Stock on the American Stock Exchange and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the American Stock Exchange and shall provide the Investor with copies of any
correspondence to or from the American Stock Exchange which questions or
threatens delisting of the Common Stock within three (3) Business Days of the
Company's receipt thereof, until the Investor has disposed of all of its Units.
(c) OTHER AGREEMENTS/BEST EFFORTS. The Company shall not enter
into any agreement the terms of which would restrict or impair the ability of
the Company to perform its obligations under this Agreement. The Company agrees
(i) to use all reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by the Transaction
Documents, (ii) to execute any documents, instruments or conveyances of any kind
that may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder and thereunder; and (iii) to cooperate with
the Investor in connection with the foregoing.
(d) CONSOLIDATION; MERGER. The Company shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with or
into, or a transfer of all or substantially all of the assets of the Company to,
another entity unless the resulting successor or acquiring entity (if not the
Company) assumes by written instrument or by operation of law the obligation to
deliver to the Investor such shares of stock and/or securities as the Investor
is entitled to receive pursuant to this Agreement.
9. COVENANTS BY THE INVESTOR. The Investor covenants with the Company
to not enter into any agreement the terms of which would restrict or impair the
ability of the Investor to perform its obligations under this Agreement. The
Investor agrees (i) to use all reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by the
Transaction Documents, (ii) to execute any documents, instruments or conveyances
of any kind that may be reasonably necessary or advisable to carry out any of
the transactions
-15-
contemplated hereunder and thereunder; and (iii) to cooperate with the Company
in connection with the foregoing.
10. INDEMNITY BY THE INVESTOR. The Investor agrees that it will
indemnify and hold harmless the Company, its affiliates, its Subsidiaries and
each of their respective officers, directors, employees and agents for any
costs, liabilities or losses caused by any misstatement of material fact by the
Investor with respect to the representations and warranties contained in Section
2 or any other written information furnished to the Company by the Investor in
connection with the investment contemplated by this Agreement.
11. INDEMNITY BY THE COMPANY. The Company agrees that it will indemnify
and hold harmless the Investor for any costs, liabilities or losses caused by
any misstatement of material fact by the Company with respect to the
representations and warranties contained in Section 3 or any other written
information furnished to the Investor by the Company in connection with the
investment contemplated by this Agreement, or a breach of any covenant or any
obligation of the Company set forth in this Agreement.
12. DEFINITIONS. As used in this Agreement, the following terms shall
have the following respective meanings:
(a) "Amex" means the American Stock Exchange.
(b) "Business Day" means any day other than a Saturday, Sunday
or a day on which commercial banks in New York City are required or authorized
to close.
(c) "Escrow Agreement" means the Escrow Agreement, dated the
date hereof, by and among the Company, Investor and McGuireWoods LLP, as escrow
agent, substantially in the form attached hereto as EXHIBIT D.
(d) "Existing Warrants" means the 116,400 warrants, dated as
of December 30, 1999, by the Company in favor of the Investor, with an exercise
price of $28.37.
(e) "Investor's Rights Agreement" means the Investor's Rights
Agreement, dated the date hereof, by and between the Company and Investor,
substantially in the form attached hereto as EXHIBIT E.
(f) "Material Adverse Effect" shall mean any adverse effect on
the business, operation, properties, or financial condition of the Company that
is material and adverse to the Company and its subsidiaries, taken as a whole,
and/or any condition, circumstance, or situation that would prohibit or
otherwise materially interfere with the ability of the Company to perform any of
its material obligations under this Agreement or any other Transaction Document.
(g) "SEC" means the Securities and Exchange Commission.
(h) "Transaction Documents" means this Agreement, the
Debentures, the Warrants, the Escrow Agreement and the Investor's Rights
Agreements entered into under this Agreement.
-16-
13. TERMINATION.
(a) Unless otherwise terminated in accordance with Section
11.2 herein, the term of this Agreement shall be forty-eight (48) months from
the date hereof; provided, however, that the termination will not affect any
obligations arising prior to the date of such termination.
(b) OTHER TERMINATION. The Investor may terminate this
Agreement upon five (5) Business Day's notice if (i) an event resulting in a
Material Adverse Effect has occurred and has not been cured for a period of 60
days, (ii) the Common Stock is de-listed from the American Stock Exchange unless
such de-listing is in connection with the listing of the Common Stock on the
Nasdaq National Market, Nasdaq Small Cap Market or the New York Stock Exchange,
or (iii) the Company files for protection from creditors under any applicable
law.
(c) EFFECT OF TERMINATION. In the event of termination by the
Investor, written notice thereof shall forthwith be given to the other party and
the transactions contemplated by this Agreement shall be terminated without
further action by either party. Nothing in this Section 11(c) shall be deemed to
release the Company or the Investor from any liability for any breach under this
Agreement, or to impair the rights of the Company and the Investor to compel
specific performance by the other party of its obligations under this Agreement.
14. MISCELLANEOUS.
(a) EXPENSES. Each party will bear its own expenses in respect
of the transactions contemplated by this Agreement, whether or not the Closing
or the Subsequent Closing occurs, except that the Company will pay the legal
fees of the Investor up to the lesser of (i) half of the aggregate legal fees
owed by the Investor to White & Case LLP or (ii) $15,000.
(b) FURTHER ASSURANCES. Upon the terms and subject to the
conditions contained herein, the parties agree (i) to use all reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement; (ii) to execute any documents,
instruments or conveyances of any kind that may be reasonably necessary or
advisable to carry out any of the transactions contemplated hereunder; and (iii)
to cooperate with each other in connection with the foregoing.
(c) NOTICES. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be deemed to be delivered when received by certified mail, postage
prepaid, return receipt requested, when delivered by an expedited delivery
service or when sent by facsimile or e-mail after confirmation. All notices
shall be directed to the parties at the respective addresses set forth below or
to such other address as either party may, from time to time, designate by
notice to the other party:
If to the Company: 000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: CFO and General Counsel
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Tel: (000) 000-0000
Fax: (000) 000-0000
With copies to: XxXxxxx Xxxxx LLP
0 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Investor: Abanat Limited
__________________
__________________
Attn:______________
Tel:
Fax:
With copies to: White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
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(d) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or terminated and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company and the Investor. Any
amendment, termination or waiver effected in accordance with this Section shall
be binding upon each holder of any securities issued pursuant to this Agreement
(including securities into which such securities have been converted or
exchanged), each future holder of any or all such securities, and the Company.
(e) ASSIGNABILITY. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Neither this Agreement nor
any rights, duties or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other parties hereto, except
that vested rights to receive payment or to initiate legal action with respect
to causes of action that have accrued hereunder shall be assignable by devise,
descent or operation of law
(f) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement, and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
(g) GOVERNING LAW AND VENUE. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York,
without regard to any conflicts of laws provisions. Each of the parties hereby
(i) irrevocably consents and agrees that any legal or equitable action or
proceeding arising under or in connection with this Agreement shall be brought
exclusively in the Federal or state courts sitting in New York, New York, and
any court to which an appeal may be taken in any such litigation, and (ii) by
execution and delivery of this Agreement, irrevocably submits to and accepts,
with respect to any such action or proceeding, for itself and in respect of its
properties and assets, generally and unconditionally, the jurisdiction of the
aforesaid courts, and irrevocably waives any and all rights such party may now
or hereafter have to object to such jurisdiction.
(h) BINDING EFFECT. Except as herein otherwise expressly
stipulated to the contrary, this Agreement shall be binding upon and inure to
the benefit of the parties signatory hereto, and their respective successors and
permitted assigns.
(i) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(j) ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements with respect to the
subject matter hereof.
(k) WAIVER OF JURY TRIAL. Each of the Company and the other
parties hereto waives its right to a jury trial with respect to any action or
claim arising out of any dispute in connection with this agreement, any rights
or obligations hereunder or the performance of such
-19-
rights and obligations. Except as prohibited by law, each of the Company and the
other parties hereto hereby waives any right it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each of the Company and other parties hereto (x) certifies that
no representative, agent or attorney of any party hereto has represented,
expressly or otherwise, that such party would not, in the event of litigation,
seek to enforce the foregoing waivers and (y) acknowledges that the parties
hereto have been induced to enter into this Agreement by, among other things,
the waivers and certifications contained herein.
(l) PUBLICITY. Except as may be required by applicable law,
neither party hereto shall issue a publicity release or announcement or
otherwise make any public disclosure concerning this Agreement or the
transactions contemplated hereby, without prior approval of the Company and the
Investor. If any announcement is required by law to be made by any party hereto,
prior to making such announcement such party will deliver a draft of such
announcement to the other parties and shall give the other parties an
opportunity to comment thereon.
[Signature Page Follows]
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This Unit Subscription Agreement has been executed as of the date and
year first written above.
XX0.XXX INC.
By:
--------------------------------
Name:
Title:
ABANAT LIMITED
By:
--------------------------------
Name:
Title:
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EXHIBIT A
[Form of Debenture]
-22-
EXHIBIT B
[Form of Warrant]
-23-
EXHIBIT C
[Form of New Warrant]
-24-
EXHIBIT D
[Form of Escrow Agreement]
-25-
EXHIBIT E
[Form of Investor's Rights Agreement]
-26-
EXHIBIT F
[Form of Opinion of McGuireWoods LLP]
-27-
SCHEDULE A
SCHEDULE OF EXCEPTIONS
-28-
