Exhibit 4.1
STOCK PURCHASE AGREEMENT
BETWEEN
Renegade Venture Corporation
AND
CERTAIN INVESTORS
(AS LISTED ON SCHEDULE A)
DATED
STOCK PURCHASE AGREEMENT
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This STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as
of day of , 2004 by and among Renegade Venture Corporation, a corporation
organized and existing under the laws of the State of Nevada ("Renegade Venture
Corporation" or the "Company"), and certain investors, (hereinafter referred to
collectively as "Investor" or "Investors") as listed on Schedule A herein (each
agreement with an Investor being deemed a separate and independent agreement
between the Company and such Investor).
PRELIMINARY STATEMENT:
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WHEREAS, the Investors wish to purchase, upon the terms and subject to the
conditions of this Agreement, a minimum of ..... of the Common Stock of the
Company with the right, upon the purchase of each share of Common Stock, to
receive common stock purchase warrants (each share of Common Stock and
corresponding stock purchase warrant are referred to herein as a "Unit"); and
WHEREAS, the parties intend to memorialize the purchase and sale of such
Units;
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby conclusively acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
INCORPORATION BY REFERENCE, SUPERSEDER AND DEFINITIONS
1.1 Incorporation by Reference. The foregoing recitals, Schedule A and the
Exhibits attached hereto and referred to herein, are hereby acknowledged to be
true and accurate, and are incorporated herein by this reference.
1.2 Superseder. This Agreement, to the extent that it is inconsistent with any
other instrument or understanding among the parties governing the affairs of the
Company, shall supersede such instrument or understanding to the fullest extent
permitted by law. A copy of this Agreement shall be filed at the Company's
principal office.
1.3 Certain Definitions. For purposes of this Agreement, the following
capitalized terms shall have the following meanings (all capitalized terms used
in this Agreement that are not defined in this Article 1 shall have the meanings
set forth elsewhere in this Agreement):
1.3.1 "1933 Act" means the Securities Act of 1933, as amended.
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1.3.2 "1934 Act" means the Securities Exchange Act of 1934, as amended.
1.3.3 "Affiliate" means a Person or Persons directly or indirectly, through
one or more intermediaries, controlling, controlled by or under common control
with the Person(s) in question. The term "control," as used in the immediately
preceding sentence, means, with respect to a Person that is a corporation, the
right to the exercise, directly or indirectly, of more than 50 percent of the
voting rights attributable to the shares of such controlled corporation and,
with respect to a Person that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such controlled Person.
1.3.4 "Articles". The Articles of Organization of the Company, as the same
maybe amended from time to time.
1.3.5 "Closing Date" means the earlier of or upon all of the conditions of
Article VIII and Article IX herein are satisfied, unless extended by mutual
consent by the Company and the Investors.
1.3.6 "Common Stock" means the shares of common stock of Renegade Venture
Corporation, par value $0.001 per share.
1.3.7 "Effective Date" shall mean the date the Registration Statement of
the Company covering the Shares being subscribed for hereby is declared
effective.
1.3.8 "Material Adverse Effect" shall mean any adverse effect on the
business, operations, properties or financial condition of the Company that is
material and adverse to the Company and its subsidiaries and affiliates, 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 the Registration Rights
Agreement or to perform its obligations under any other material agreement.
1.3.9 "Nevada Act" means the Nevada revised Statutes, as amended.
1.3.10 "Person" means an individual, partnership, firm, limited liability
company, trust, joint venture, association, corporation, or any other legal
entity.
1.3.11 "Purchase Price" means the purchase price for the Units.
1.3.12 Registration Rights Agreement" shall mean the registration rights
agreement between the Investors and the Company attached hereto as Exhibit .
1.3.13 "Registration Statement" shall mean the registration statement under
the 1933 Act to be filed with the Securities and Exchange Commission for the
registration of the Shares pursuant to the Registration Rights Agreement
attached hereto as Exhibit .
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1.3.14 "SEC" means the Securities and Exchange Commission.
1.3.15 "SEC Documents" shall mean the Company's latest Form 10-K or 10-KSB
as of the time in question, all Forms 10-Q or 10-QSB and 8-K filed thereafter,
and the Proxy Statement for its latest fiscal year as of the time in question
until such time as the Company no longer has an obligation to maintain the
effectiveness of a Registration Statement as set forth in the Registration
Rights Agreement.
1.3.16 "Shares" shall mean, collectively, the shares of Common Stock of the
Company being subscribed for hereunder and those shares of Common Stock issuable
to the Investor upon exercise of the Warrants.
1.3.17 "Units" shall mean the Common Stock and the Warrants collectively.
1.3.18 "Warrants" shall mean the Common Stock purchase warrants in the form
attached hereto Exhibit
ARTICLE II
SALE AND PURCHASE OF Renegade Venture Corporation's UNITS AND PURCHASE PRICE
2.1 Sale of Renegade Venture Corporation Units Upon the terms and subject to the
conditions set forth herein, and in accordance with applicable law, the Company
agrees to sell, and the Investors, severally and not jointly, agree to purchase
the following Units with an aggregate principal amount of Three million two
hundred and sixty four thousand dollars in accordance with the commitments set
forth on Schedule A attached hereto, at the Purchase Price on the Closing Date,
each Unit consisting of:
2.1.1 Common Stock Simultaneous with the execution and delivery of this
Agreement and the Company's receipt of the Purchase Price (as described herein),
each Investor shall execute a Registration Rights Agreement and receive shares
of Common Stock of the Company at a price of $ per share. The Company shall
register those shares of Common Stock pursuant to the terms and conditions of a
Registration Rights Agreement attached hereto as Exhibit The Registration Rights
Agreement shall include, but not be limited to, such terms and conditions as the
immediate registration of the shares of Common Stock sold hereunder, one demand
right if all the shares of Common Stock sold hereunder are not registered or the
Registration Statement is subsequently not effective, unlimited "piggy back"
registration rights, and liquidated damages to the Investor of of the Purchase
Price per annum payable on a monthly basis if the shares of Common Stock are not
registered pursuant to an effective Registration Statement within six months of
the Closing Date or if the shares of Common Stock are registered pursuant to an
effective Registration Statement and such Registration Statement or other
Registration Statement including the shares of Common Stock is not effective in
the period from six months following the Closing Date through two years
following the Closing Date, except that the obligation of the Company terminates
when the holder of shares of Common Stock no longer holds more than twenty
percent (20%) of their shares of Common Stock as acquired herein. The parties
agree that the only damages payable for a violation of the terms of this
Agreement with respect to which liquidated damages are expressly provided shall
be such liquidated damages.
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The parties hereto agree that the liquidated damages provided for in this
Section 2.1.1 constitute a reasonable estimate of the damages that may be
incurred by the Purchaser by reason of the failure of the Registration Statement
to be filed or declared effective in accordance with the provisions hereof.
2.1.2 Warrants Upon execution and delivery of this Agreement and the Company's
receipt of the Purchase Price (as described herein), each Investor shall receive
Warrants for every share of Common Stock purchased. The Warrant, a form of which
is attached hereto as Exhibit shall include, but not be limited to, such terms
and conditions as an exercise price of $ share for the Warrants (as adjusted
from time to time as provided in the Warrant), an expiration date of five (5)
years from the date of issuance or eighteen months of effectiveness of a
Registration Statement, whichever is longer .
2.2 Purchase Price. The purchase price, $ per share, to be paid by each
Investor on the Closing Date (as defined section 1.3.5), shall be paid, as
the case may be, in accordance with Schedule A attached hereto, and shall
be payable in United States Dollars. Payment to the Escrow Agent of the
Purchase Price shall be made at the Closing Date as follows:
Payment by check to the Escrow Agent shall be sent by an overnight courier
service as follows:
2.3 Escrow. The funds received by (the "Escrow Agent") in accordance with
Section 2.2 of this Agreement shall be held in escrow pursuant to the terms
and conditions of this Section 2.3 of the Agreement. The funds shall be
held in an interest bearing account, for the benefit of the Company. The
Escrow Agent shall disburse the funds to the Company, or as the Company
shall in writing direct, upon the closing of:
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all in accordance with a Stock Purchase Agreement dated among the Company, and
the Investors, and receipt of written confirmation from the Investors that each
of them consents to the distribution agreed to by the Company.
The Investors and the Company, jointly and severally, agree to indemnify Escrow
Agent for, and to hold it harmless against, any loss, liability, damage or
expense incurred by Escrow Agent arising out of, or in connection with, this
Agreement, any litigation arising in connection with this Agreement or any
transaction related in any way hereto, including but not limited to attorneys'
fees incurred by Escrow Agent in the event of any question as to the provisions
hereof or its duties hereunder, and other costs and expenses incurred by Escrow
Agent in fulfilling its duties and responsibilities hereunder, or incurred by
Escrow Agent defending itself against any claim of liability (other than, in all
such cases, for Escrow Agent's willful misconduct or gross negligence). Escrow
Agent shall have no duties arising from this Agreement except those expressly
set forth in this Section 2.3 and it shall not be bound by any notice of claim
or demand, or any waiver, modification or amendment unless it shall have given
its prior written consent thereto.
ARTICLE II
CLOSING DATE AND DELIVERIES AT CLOSING
3.1 Closing Date The closing of the transactions contemplated by this Agreement
(the "Closing"), unless expressly determined herein, shall be held at the
offices of the Company, at 5:00 P.M. local time, on the Closing Date or on such
other date and at such other place as may be mutually agreed by the parties,
including closing by facsimile with originals to follow.
3.2 Deliveries by the Company. In addition to and without limiting any other
provision of this Agreement, but subject to the terms and conditions of this
Agreement, the Company agrees to deliver, or cause to be delivered, to the
Investors, the following:
(a) Within seven (7) business days, Certificates representing Renegade
Venture Corporation Shares (with the appropriate restrictive legend as
set forth in Article 7.3 herein), which certificates shall be duly
endorsed to the Investor;
(b) At or prior to Closing, an executed Agreement;
(c) At or prior to Closing, executed Warrants in the name of the Investor
in the form attached hereto as Exhibit ;
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(d) At or prior to Closing, an executed Registration Rights Agreement
between the Investor and the Company in the form attached hereto as
Exhibit ;
(e) At or prior to Closing, confirmation that the provisions of Paragraph
6.6 herein have been satisfied or commenced, as appropriate; and
(f) Such other documents or certificates necessary to effect Closing as
shall be reasonably requested by each Investor or its counsel.
3.3 Deliveries by Investor. In addition to and without limiting any other
provision of this Agreement, each Investor agrees to deliver, or cause to be
delivered, to the Company, as appropriate, the following:
(a) At or prior to Closing, the Purchase Price.
(b) At or prior to Closing, an executed Registration Rights Agreement
between the Investor and the Company in the form attached hereto as
Exhibit; and,
(c) such other documents or certificates necessary to effect Closing as
shall be reasonably requested by the Company or its counsel.
In the event any document provided to the other party in Paragraphs 3.2 and 3.3
herein are provided by facsimile, the party shall forward an original document
to the other party within seven (7) business days.
3.4 Further Assurances. The Company and each Investor shall, upon request, on or
after the Closing Date, cooperate with each other (specifically, the Company
shall cooperate with each Investor, and each Investor shall cooperate with the
Company, and no Investor is required to cooperate with any other Investor) by
furnishing any additional information, executing and delivering any additional
documents and/or other instruments and doing any and all such things as may be
reasonably required by the parties or their counsel to consummate or otherwise
implement the transactions contemplated by this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RENEGADE VENTURE CORPORATION
Renegade Venture Corporation represents and warrants to the Investors
(which warranties and representations shall survive the Closing regardless of
what examinations, inspections, audits and other investigations the Investor has
heretofore made or may hereinafter make with respect to such warranties and
representations) as follows:
4.1 Organization and Qualification. Renegade Venture Corporation is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada, and has the requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as it is now
being conducted and is duly qualified to do business in any other jurisdiction
by virtue of the nature of the businesses conducted by it or the ownership or
leasing of its properties, except where the failure to be so qualified will not,
when taken together with all other such failures, have a Material Adverse Effect
on the business, operations, properties, assets, financial condition or results
of operation of Renegade Venture Corporation and its subsidiaries taken as a
whole.
4.2 Articles of Incorporation and By-Laws. The complete and correct copies of
Renegade Venture Corporation's Articles of Incorporation and By-Laws, as amended
or restated to date, which have been filed with the Securities and Exchange
Commission are a complete and correct copy of such document as in effect on the
date hereof and as of the Closing Date.
4.3 Capitalization.
4.3.1 The authorized and outstanding capital stock of Renegade Venture
Corporation is set forth in Renegade Venture Corporation's Annual Report on Form
10-KSB, filed on April 24, 2003 with the Securities and Exchange Commission and
updated on all subsequent SEC Documents. All shares of capital stock have been
duly authorized and are validly issued, and are fully paid and non-assessable,
and free of preemptive rights.
4.3.2 Except pursuant to this Agreement, and as set forth in Renegade
Venture Corporation's Annual Report on Form 10-KSB, filed on March 30, 2004 with
the SEC, as of the date hereof and as of the Closing Date, there are not now
outstanding options, warrants, rights to subscribe for, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of any class of capital stock of Renegade Venture
Corporation, or agreements, understandings or arrangements to which Renegade
Venture Corporation is a party, or by which Renegade Venture Corporation is or
may be bound, to issue additional shares of its capital stock or options,
warrants, scrip or rights to subscribe for, calls or commitment of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, any shares of any class of its capital stock, except as set forth in those
certain Employment Agreements The Company agrees to inform the Investors in
writing of any additional warrants granted prior to the Closing Date.
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4.3.3 The Company on the Closing Date (i) will have full right, power, and
authority to sell, assign, transfer, and deliver, by reason of record and
beneficial ownership, to each Investor, Renegade Venture Corporation Shares
hereunder, free and clear of all liens, charges, claims, options, pledges,
restrictions, and encumbrances whatsoever; and (ii) upon delivery of and payment
by each Investor of the Purchase Price to the Company, such Investor will
acquire good and marketable title to such Company Stock, free and clear of all
liens, charges, claims, options, pledges, restrictions, and encumbrances
whatsoever.
4.4 Authority. Renegade Venture Corporation has all requisite corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Renegade Venture Corporation and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and no other corporate proceedings on the part
of Renegade Venture Corporation is necessary to authorize this Agreement or to
consummate the transactions contemplated hereby except as disclosed in this
Agreement. This Agreement has been duly executed and delivered by Renegade
Venture Corporation and constitutes the legal, valid and binding obligation of
Renegade Venture Corporation, enforceable against Renegade Venture Corporation
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally and general principles of equity.
4.5 No Conflict; Required Filings and Consents. The execution and delivery of
this Agreement by Renegade Venture Corporation does not, and the performance by
Renegade Venture Corporation of their respective obligations hereunder will not:
(i) conflict with or violate the Articles or By-Laws of Renegade Venture
Corporation; (ii) conflict with, breach or violate any federal, state, foreign
or local law, statute, ordinance, rule, regulation, order, judgment or decree
(collectively, "Laws") in effect as of the date of this Agreement and applicable
to Renegade Venture Corporation; or (iii) result in any breach of, constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, give to any other entity any right of termination, amendment,
acceleration or cancellation of, require payment under, or result in the
creation of a lien or encumbrance on any of the properties or assets of Renegade
Venture Corporation pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Renegade Venture Corporation is a party or by Renegade Venture
Corporation or any of its properties or assets is bound. Excluding from the
foregoing are such violations, conflicts, breaches, defaults, terminations,
accelerations, creations of liens, or incumbency that would not, in the
aggregate, have a Material Adverse Effect.
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4.6 Report and Financial Statements. Renegade Venture Corporation's Annual
Report on Form 10-KSB, with the Securities and Exchange Commission contains the
audited financial statements of Renegade Venture Corporation as of (the
"Financial Statements"). Each of the balance sheets contained in or incorporated
by reference into any such Financial Statements (including the related notes and
schedules thereto) fairly presented the financial position of Renegade Venture
Corporation as of its date, and each of the statements of income and changes in
stockholders' equity and cash flows or equivalent statements in such Financial
Statements (including any related notes and schedules thereto) fairly presents
and will fairly present the results of operations, changes in stockholders'
equity and changes in cash flows, as the case may be, of Renegade Venture
Corporation for the periods to which they relate, in each case in accordance
with United States generally accepted accounting principles ("U.S. GAAP")
consistently applied during the periods involved, except in each case as may be
noted therein, subject to normal year-end audit adjustments in the case of
unaudited statements. The books and records of Renegade Venture Corporation have
been, and are being, maintained in all material respects in accordance with U.S.
GAAP and any other applicable legal and accounting requirements and reflect only
actual transaction.
4.7 Compliance with Applicable Laws. Renegade Venture Corporation is not in
violation of, or, to the knowledge of Renegade Venture Corporation is under
investigation with respect to or has been given notice or has been charged with
the violation of any Law of a governmental agency, except for violations which
individually or in the aggregate do not have a Material Adverse Effect.
4.8 Brokers. Except for no broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or Commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Renegade Venture Corporation.
4.9 SEC Documents. Renegade Venture Corporation acknowledges that Renegade
Venture Corporation is a publicly held company and has made available to the
Investors after demand true and complete copies of any requested SEC Documents.
The Company has registered its Common Stock pursuant to Section 12 of the 1934
Act, and the Common Stock is listed and traded on the OTC Bulletin Board Market
of the National Association of Securities Dealers, Inc. The Company has received
no notice, either oral or written, with respect to the continued eligibility of
the Common Stock for such listing, and the Company has maintained all
requirements for the continuation of such listing. The Company has not provided
to the Investors any information that, according to applicable law, rule or
regulation, should have been disclosed publicly prior to the date hereof by the
Company, but which has not been so disclosed. As of their respective dates, the
SEC Documents complied in all material respects with the requirements of the
1934 Act, and rules and regulations of the SEC promulgated thereunder and the
SEC Documents 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 light of the circumstances under which they were
made, not misleading that the Investor has received from the Company reports
with the Securities and Exchange Commission .
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4.10 Litigation. To the knowledge of Renegade Venture Corporation, except as
already disclosed, (See Exhibit 1) no litigation, claim, or other proceeding
before any court or governmental agency is pending or threatened against
Renegade Venture Corporation.
4.11 Exemption from Registration. Subject to the accuracy of the Investors'
representations in Article V, except as required pursuant to the Registration
Rights Agreement, the sale of the Units will not require registration under the
1933 Act and/or any applicable state securities law. When validly converted in
accordance with the terms of the Warrants, the Shares underlying the Warrants
will be duly and validly issued, fully paid, and non-assessable. The Company is
issuing the Units in accordance with and in reliance upon the exemption from
securities registration afforded, inter alia, by Rule 506 under Regulation D as
promulgated by the SEC under the 1933, and/or Section 4(2) of the 1933 Act.
4.12 No General Solicitation or Advertising in Regard to this Transaction.
Neither the Company nor any of its Affiliates nor, to the knowledge of the
Company, any Person acting on its or their behalf (i) has conducted or will
conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D as promulgated by the SEC under the 0000 Xxx) or general
advertising with respect to the sale of the Units, or (ii) made any offers or
sales of any security or solicited any offers to buy any security under any
circumstances that would require registration of the Units, under the 1933 Act,
except as required herein.
4.13 No Material Adverse Change. Since , no Material Adverse Effect has occurred
or exists with respect to the Company that has not been disclosed in the SEC
Documents. No material supplier has given notice, oral or written, that it
intends to cease or reduce the volume of its business with the Company from
historical levels. Since , no event or circumstance has occurred or exists with
respect to the Company or its businesses, properties, prospects, operations or
financial condition, that, under any 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 writing to
the Investors.
4.14 Material Non-Public Information. The Company has not disclosed to the
Investors any material non-public information that (i) if disclosed, would
reasonably be expected to have a material effect on the price of the Common
Stock or (ii) according to applicable law, rule or regulation, should have been
disclosed publicly by the Company prior to the date hereof but which has not
been so disclosed.
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4.15 Internal Controls And Procedures. The Company maintains books and records
and internal accounting controls which provide reasonable assurance that (i) all
transactions to which the Company or any subsidiary is a party or by which its
properties are bound are executed with management's authorization; (ii) the
recorded accounting of the Company's consolidated assets is compared with
existing assets at regular intervals; (iii) access to the Company's consolidated
assets is permitted only in accordance with management's authorization; and (iv)
all transactions to which the Company or any subsidiary is a party or by which
its properties are bound are recorded as necessary to permit preparation of the
financial statements of the Company in accordance with U.S. generally accepted
accounting principles.
4.16 Full Disclosure. No representation or warranty made by Renegade Venture
Corporation in this Agreement and no certificate or document furnished or to be
furnished to the Purchaser pursuant to this Agreement contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor, severally and not jointly, as to himself or itself and not as to
any other Investor, represents and warrants to the Company with the Company
that:
5.1 Organization and Standing of the Investor. Where the Investor is a
corporation, such Investor is duly incorporated, validly existing and in good
standing under the laws of the state in which it was formed. The state in which
any offer to purchase shares hereunder was made or accepted by such Investor is
the state shown as such Investor's address. If an entity, the Investor was not
formed for the purpose of investing solely in the Units the subject of this
Agreement.
5.2 Authorization and Power. The Investor has the requisite power and authority
to enter into and perform this Agreement and to purchase the Units being sold to
it hereunder. The execution, delivery and performance of this Agreement by the
Investor and the consummation by the Investor of the transactions contemplated
hereby have been duly authorized by all necessary corporate action where
appropriate. This Agreement and the Registration Rights Agreement have been duly
executed and delivered by the Investor and at the Closing shall constitute valid
and binding obligations of the Investor enforceable against the Investor in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditors' rights and remedies or by other
equitable principles of general application.
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5.3 No Conflicts. The execution, delivery and performance of this Agreement and
the consummation by the Investor of the transactions contemplated hereby or
relating hereto do not and will not (i) result in a violation of such Investor's
charter documents or bylaws where appropriate or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement, indenture or
instrument to which the Investor is a party, or result in a violation of any
law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to the Investor or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a Material Adverse Effect on such Investor). The Investor is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of such Investor's obligations under this Agreement or to
purchase the Units in accordance with the terms hereof, provided that for
purposes of the representation made in this sentence, the Investor is assuming
and relying upon the accuracy of the relevant representations and agreements of
the Company herein.
5.4 Financial Risks. The Investor acknowledges that such Investor is able to
bear the financial risks associated with an investment in the Units and that it
has been given full access to such records of the Company and the subsidiaries
and to the officers of the Company and the subsidiaries as it has deemed
necessary or appropriate to conduct its due diligence investigation. The
Investor is capable of evaluating the risks and merits of an investment in the
Units by virtue of its experience as an investor and its knowledge, experience,
and sophistication in financial and business matters and the Investor is capable
of bearing the entire loss of its investment in the Units.
5.5 Accredited Investor. The Investor is (i) an "accredited investor" as that
term is defined in Rule 501 of Regulation D promulgated under the 1933 Act by
reason of Rule 501(a)(3) and (6), (ii) experienced in making investments of the
kind described in this Agreement and the related documents, (iii) able, by
reason of the business and financial experience of its officers (if an entity)
and professional advisors (who are not affiliated with or compensated in any way
by the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the entire loss of its investment
in the Units.
5.6 No Registration. Investor understands that the units being purchased
hereunder will not be registered under the Securities Act on the ground the sale
of the Securities provided for in this Agreement is exempt from registration
under the Securities Act and that the reliance of Company on this exemption is
predicated in part on Investor's representations set forth in this Agreement.
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5.7 Brokers. Except for who shall be paid by the Company, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
Commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Investors.
5.8 Knowledge of Company. Each Investor and such Investor's advisors, if any,
have been, upon request, furnished with all materials relating to the business,
finances and operations of the Company and materials relating to the offer and
sale of the Units. Each Investor and such Investor's advisors, if any, have been
afforded the opportunity to ask questions of the Company and have received
complete and satisfactory answers to any such inquiries.
5.9 Risk Factors Each Investor understands that such Investor's investment in
the Units involves a high degree of risk. Each Investor understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Units.
Each Investor warrants that such Investor is able to bear the complete loss of
such Buyer's investment in the Units.
5.10 Full Disclosure. No representation or warranty made by the Investor in this
Agreement and no certificate or document furnished or to be furnished to
Renegade Venture Corporation pursuant to this Agreement contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading. Except as set forth or referred to in this Agreement, Investor does
not have any agreement or understanding with any person relating to acquiring,
holding, voting or disposing of any equity securities of the Company.
ARTICLE VI
COVENANTS OF THE COMPANY
6.1. Registration Rights. The Company shall cause the Registration Rights
Agreement to remain in full force and effect and the Company shall comply in all
material respects with the terms thereof.
6.2. Reservation Of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to issue the shares of Common Stock underlying the
Warrants.
6.3. Listing Of Common Stock. To the extent within the control of the Company,
the Company hereby agrees to maintain the listing of the Common Stock on a
publicly trading market. The Company will take all action to continue the
listing and trading of its Common Stock on a publicly traded market and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the a publicly traded market.
13
6.4. Exchange Act Registration. The Company will cause its Common Stock to
continue to be registered under Section 12(b) or (g) of the 1934 Act, will use
its best efforts to comply in all respects with its reporting and filing
obligations under the 1934 Act, and will not take any action or file any
document (whether or not permitted by the 1934 Act or the rules thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under the 1934 until the Investors have disposed of all
of their Shares or the shares of Common Stock underlying the Warrants.
6.5. Corporate Existence; Conflicting Agreements. The Company will take all
commercially reasonable steps necessary to preserve and continue the corporate
existence of the Company. The Company shall not enter into any agreement, the
terms of which agreement would restrict or impair the right or ability of the
Company to perform any of its obligations under this Agreement or any of the
other agreements attached as exhibits hereto.
6.6 Price Adjustment. If, within the 24 months following the Closing Date, the
Company closes on the sale of a note or notes, shares of Common Stock, or shares
of a new class of Preferred Stock at a price per share of Common Stock, or with
a conversion right to acquire Common Stock at a price per share of Common Stock,
that is less than the Purchase Price (as adjusted to the capitalization per
share as of the Closing Date, following any stock splits, stock dividends, or
the like) (collectively, the "Subsequent Purchase Price"), the Company shall
make a post-Closing adjustment in the Purchase Price so that the effective price
per share paid by the Investors at Closing is reduced to the Subsequent Purchase
Price as applied to the Investors' then current holdings. Within five business
days following the closing of the subsequent sale, the Company shall pay to the
Investors the product of the number of Shares owned by Investors on the date of
the subsequent sale times the difference between the Purchase Price and the
Subsequent Purchase Price. Payment shall be made in cash or issuance of the
notes, Preferred Stock, Common Stock, unit offering or whichever financing is
causing the triggering of this provision, at the option of each individual
Investor.
6.7 Insider Selling. The earliest any "insiders" can start selling their shares
shall be one year from closing. Investors shall not be considered insiders.
ARTICLE VII
COVENANTS OF THE INVESTORS
7.1 Compliance with Law. The Investor's trading activities with respect to
shares of the Company's Common Stock will be in compliance with all applicable
state and federal securities laws, rules and regulations and rules and
regulations of any public market on which the Company's Common Stock is listed.
14
7.2 Transfer Restrictions. The Investor's acknowledge that (1) the Shares,
Warrants and shares underlying the Warrants have not been registered under the
provisions of the 1933 Act, and may not be transferred unless (A) subsequently
registered thereunder or (B) the Investor's shall have delivered to the Company
an opinion of counsel, reasonably satisfactory in form, scope and substance to
the Company, to the effect that the Shares, Warrants and shares underlying the
Warrants to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; and (2) any sale of the Shares, Warrants and
shares underlying the Warrants made in reliance on Rule 144 promulgated under
the 1933 Act may be made only in accordance with the terms of said Rule and
further, if said Rule is not applicable, any resale of such Securities under
circumstances in which the seller, or the person through whom the sale is made,
may be deemed to be an underwriter, as that term is used in the 1933 Act, may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder.
7.3 Restrictive Legend. The Investor's acknowledge and agree that the Shares,
and, until such time as the Shares have been registered under the 1933 Act and
sold in accordance with an effective Registration Statement, certificates and
other instruments representing any of the Shares shall bear a restrictive legend
in substantially the following form (and a stop-transfer order may be placed
against transfer of any such Securities):
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT
WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, OR (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT."
15
7.4 Actions. The Investors will not take any action that would cause any of the
representations and warranties made by it/them in any of the Investor documents
not to be true and correct in all material respects on and as of the Closing
Date with the same force and effect as if such representations and warranties
had been made on and as of the Closing Date.
7.5 Further Action. Upon the terms and subject to the conditions hereof, the
Investors shall use all commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all other things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement and to obtain in a timely manner
all necessary waivers, consents and approvals and effect all necessary filings.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
The obligation of the Company to consummate the transactions contemplated
hereby shall be subject to the fulfillment, on or prior to Closing Date, of the
following conditions:
8.1 No Termination. This Agreement shall not have been terminated pursuant to
Article X hereof.
8.2 Representations True and Correct. The representations and warranties of the
Investors contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as if made
on as of the Closing Date.
8.3 Compliance with Covenants. The Investors shall have performed and complied
in all material respects with all covenants, agreements, and conditions required
by this Agreement to be performed or complied by it prior to or at the Closing
Date.
8.4 No Adverse Proceedings. On the Closing Date, no action or proceeding shall
be pending by any public authority or individual or entity before any court or
administrative body to restrain, enjoin, or otherwise prevent the consummation
of this Agreement or the transactions contemplated hereby or to recover any
damages or obtain other relief as a result of the transactions proposed hereby.
8.5 Payment of Purchase Price. Concurrently with the Closing, Investors shall
have delivered to Company the Purchase Price in accordance with the terms of
this Agreement.
16
ARTICLE IX
CONDITIONS PRECEDENT TO INVESTOR'S OBLIGATIONS
The obligation of the Investors to consummate the transactions contemplated
hereby shall be subject to the fulfillment, on or prior to Closing Date unless
specified otherwise, of the following conditions:
9.1 No Termination. This Agreement shall not have been terminated pursuant to
Article X hereof.
9.2 Representations True and Correct. The representations and warranties of
Renegade Venture Corporation contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as if made on as of the Closing Date.
9.3 Compliance with Covenants . Renegade Venture Corporation shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied by it
prior to or at the Closing Date.
9.4 No Adverse Proceedings. On the Closing Date, no action or proceeding shall
be pending by any public authority or individual or entity before any court or
administrative body to restrain, enjoin, or otherwise prevent the consummation
of this Agreement or the transactions contemplated hereby or to recover any
damages or obtain other relief as a result of the transactions proposed hereby.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date:
10.1.1 by mutual written consent of the Investors and the Company;
10.1.2 by the Company upon a material breach of any representation,
warranty, covenant or agreement on the part of the Investor set forth in this
Agreement, or the Investor upon a material breach of any representation,
warranty, covenant or agreement on the part of Renegade Venture Corporation set
forth in this Agreement, or if any representation or warranty of Renegade
Venture Corporation or the Investor, respectively, shall have become untrue, in
either case such that any of the conditions set forth in Article VIII or Article
IX hereof would not be satisfied (a "Terminating Breach"), and such breach
shall, if capable of cure, not have been cured within five (5) days after
receipt by the party in breach of a written notice from the non-breaching party
setting forth in detail the nature of such breach;
17
10.1.3 by either party, if the Closing Date is after .
10.2 Effect of Termination. In the event of the termination of this Agreement
pursuant to Paragraph 10.1 hereof, there shall be no liability on the party of
Renegade Venture Corporation or the Investors or any of their respective
officers, directors, agents or other representatives and all rights and
obligations of any party hereto shall cease, except as expressed herein.
10.3 Amendment. This Agreement may be amended by the parties hereto any time
prior to the Closing Date by an instrument in writing signed by the parties
hereto.
10.4 Waiver. At any time prior to the Closing Date, Renegade Venture Corporation
or the Investors, as appropriate, may: (a) extend the time for the performance
of any of the obligations or other acts of other party or; (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto which have been made to it or them; or (c)
waive compliance with any of the agreements or conditions contained herein for
its or their benefit. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party or parties to be bound
hereby.
ARTICLE XI
GENERAL PROVISIONS
111 Transaction Costs. Except as otherwise provided herein, each of the parties
shall pay all of his or its costs and expenses (including attorney fees and
other legal costs and expenses and accountants' fees and other accounting costs
and expenses) incurred by that party in connection with this Agreement.
11.2 Indemnification. Each Investor, severally and not jointly agrees to defend,
indemnify and hold the Company (following the Closing Date) and its officers and
directors harmless against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities or damages, including
interest, penalties and reasonable attorney's fees, that it shall incur or
suffer, which arise out of, result from or relate to any breach of this
Agreement by such Investor or failure by such Investors to perform with respect
to any of its representations, warranties or covenants contained in this
Agreement or in any exhibit or other instrument furnished or to be furnished
under this Agreement. The Company agrees to defend and hold the Investor
harmless against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities or damages, including interest, penalties and
reasonable attorney's fees, that it shall incur or suffer, which arise out of,
result from or relate to any breach of this Agreement or failure by the Company
to perform with respect to any of its representations, warranties or covenants
contained in this Agreement or in any exhibit or other instrument furnished or
to be furnished under this Agreement.
18
11.3 Headings. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.4 Entire Agreement. This Agreement (together with the Schedule, Exhibits,
Warrants and documents referred to herein) constitute the entire agreement of
the parties and supersede all prior agreements and undertakings, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof.
11.5 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given (i) on the date they are delivered if
delivered in person; (ii) on the date initially received if delivered by
facsimile transmission followed by registered or certified mail confirmation;
(iii) on the date delivered by an overnight courier service; or (iv) on the
third business day after it is mailed by registered or certified mail, return
receipt requested with postage and other fees prepaid as follows:
If to Renegade Venture Corporation by an overnight courier
service :
----------------------------------------------------------
Renegade Venture Corporation.
0000 X. Xxxx Xxxxxx
Xxxxxx, XX 00000
If to Renegade Venture Corporation by mail :
------------------------------------- ------
Renegade Venture Corporation
XX Xxx 00000
Xxxxxx, XX 00000
If to the Investors:
--------------------
To the address listed on Schedule A herein or to the
address provided to the Company by an Investor.
11.6 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any such term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.
19
11.7 Binding Effect. All the terms and provisions of this Agreement whether so
expressed or not, shall be binding upon, inure to the benefit of, and be
enforceable by the parties and their respective administrators, executors, legal
representatives, heirs, successors and assignees.
11.8 Preparation of Agreement. This Agreement shall not be construed more
strongly against any party regardless of who is responsible for its preparation.
The parties acknowledge each contributed and is equally responsible for its
preparation.
11.9 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Arizona, without giving effect to
applicable principles of conflicts of law.
11.10 Jurisdiction. This Agreement shall be exclusively governed by and
construed in accordance with the laws of the State of Arizona. If any action is
brought among the parties with respect to this Agreement or otherwise, by way of
a claim or counterclaim, the parties agree that in any such action, and on all
issues, the parties irrevocably waive their right to a trial by jury. Exclusive
jurisdiction and venue for any such action shall be the State Courts of Arizona.
In the event suit or action is brought by any party under this Agreement to
enforce any of its terms, or in any appeal therefrom, it is agreed that the
prevailing party shall be entitled to reasonable attorneys fees to be fixed by
the arbitrator, trial court, and/or appellate court.
11.11 Preparation and Filing of Securities and Exchange Commission filings. Each
Investor shall reasonably assist and cooperate with the Company in the
preparation of all filings with the SEC after the Closing Date due after the
Closing Date.
11.12 Further Assurances, Cooperation. Each party shall, upon reasonable request
by the other party, execute and deliver any additional documents necessary or
desirable to complete the transactions herein pursuant to and in the manner
contemplated by this Agreement. The parties hereto agree to cooperate and use
their respective best efforts to consummate the transactions contemplated by
this Agreement.
11.13 Survival The representations, warranties, covenants and agreements made
herein shall survive the Closing of the transaction contemplated hereby.
20
11.14 Third Parties Except as disclosed in this Agreement, nothing in this
Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
parties hereto and their respective administrators, executors, legal
representatives, heirs, successors and assignees. Nothing in this Agreement is
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.
11.15 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty, covenant or agreement herein, nor shall
nay single or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
11.16 Counterparts. This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. A facsimile transmission of this
signed Agreement shall be legal and binding on all parties hereto.
[SIGNATURES ON FOLLOWING PAGE]
21
IN WITNESS WHEREOF, the Investors and the Company have as of the date first
written above executed this Agreement.
Renegade Venture Corporation
Renegade Venture Corporation,
___________________________________
By: _______________________________
Title: ____________________________
INVESTORS
___________________________________
___________________________________ ___________________________________
Print Name: Print Name:
Entity (if appropriate):___________ Entity (if appropriate): __________
___________________________________ ___________________________________
Title: (if appropriate):___________ Title: (if appropriate)____________
___________________________________ ___________________________________
Print Name: Print Name:
Entity (if appropriate):___________ Entity (if appropriate): __________
___________________________________ ___________________________________
Title: (if appropriate):___________ Title: (if appropriate): __________
22
Schedule A
----------
NAME AND ADDRESS AMOUNT OF NUMBER OF SHARES OF NUMBER OF WARRANTS
INVESTMENT COMMON STOCK
Exhibit A
---------
Form of Warrant
---------------
Exhibit B
---------
Registration Rights Agreement
-----------------------------
EXHIBIT 2
---------
Creditors to be Paid Out of Escrow
----------------------------------
Name Amount Payment Instructions
---- ------ --------------------
Internal Revenue Service $637,390 Cashier's check, by courier to:
Xxxxx Xxxxxxx,
IRS
000 X. Xxxxxxxx
Xxxxxx, XX 00000
American Capital Ventures $266,149 By wire transfer to:
American Capital Ventures, LLC
Fidelity Federal Bank & Trust
ABA NO. 000000000
Acct. No. 1562835
