SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated
as of October 26, 2005, among MAVERICK OIL AND GAS, INC., a Nevada
corporation (the "Company"), and TRIDENT GROWTH FUND, L.P., a Delaware limited
partnership, (the "Purchaser").
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to an exemption from registration contained in Section
4(2) of the Securities Act of 1933, as amended (the "Securities Act") and Rule
506 promulgated thereunder, the Company desires to issue and sell to Purchaser,
and Purchaser desires to purchase from the Company, securities of the Company as
more fully described in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and Purchaser agree as
follows:
DEFINITIONS
Definitions. In addition to the terms defined elsewhere in this
Agreement: (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Debenture(s) (as defined herein), and (b)
the following terms have the meanings indicated in this Section 1.1:
"Action" shall have the meaning ascribed to such term in
Section 3.1(i).
"Affiliate" means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is
under common control with a Person, as such terms are used in and
construed under Rule 144 under the Securities Act. With respect to
Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as Purchaser will be
deemed to be an Affiliate of Purchaser.
"Business Day" means any day except Saturday, Sunday and any
day which shall be a federal legal holiday in the United States or a
day on which banking institutions in the State of Texas are authorized
or required by law or other government action to close.
"Change of Control Transaction" means the occurrence after the
date hereof of any of (i) an acquisition after the date hereof by an
individual or legal entity or "group" (as described in Rule 13d-5(b)(1)
promulgated under the Exchange Act) of beneficial ownership (as
described in Rule 13d-3 of the Exchange Act) of in excess of 40% of the
voting securities of the Company, or (ii) a replacement at one time or
within a one year period of more than one-half of the members of the
Company's board of directors which is not approved by a majority of
those individuals who are members of the board of directors on the date
hereof (or by those individuals who are serving as members of the board
of directors on any date whose nomination to the board of directors was
approved by a majority of the members of the board of directors who are
members on the date hereof or as constituted within 14 days of the
Closing Date), or (iii) the execution by the Company of an agreement to
which the Company is a party or by which it is bound, providing for any
of the events set forth above in (i) or (ii).
"Closing" means the closing of the purchase and sale of the
Securities pursuant to Section 2.1.
"Closing Date" means the Business Day when all of the
Transaction Documents have been executed and delivered by the
applicable parties thereto, and all conditions precedent to (i)
Purchaser's obligations to pay the Subscription Amount and (ii) the
Company's obligations to deliver the Securities have been satisfied or
waived. There may be multiple Closing Dates.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par
value $.001 per share, and any securities into which such common stock
shall hereinafter have been reclassified into.
"Common Stock Equivalents" means any securities of the Company
which would entitle the holder thereof to acquire at any time Common
Stock, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible
into or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
"Debenture" means, the 12% Senior Secured Convertible
Debenture, in the form of Exhibit A.
"Disclosure Schedules" shall have the meaning ascribed to such
term in Section 3.1 hereof.
"Effective Date" means the date that the initial registration
statement filed by the Company for the Registrable Securities or Common
Stock is first declared effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exempt Issuance" means the issuance of (a) shares of Common
Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan currently in place as of the date
hereof which has been duly adopted by the Board of Directors and has or
subsequently will be approved by its shareholders of the Company, (b)
securities upon the exercise of or conversion of any securities issued
hereunder, convertible securities, options or warrants issued and
outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to
increase the number of such underlying shares in connection therewith,
(c) securities issued pursuant to acquisitions or strategic
transactions, provided any such issuance shall only be to a Person
which is, itself or through its subsidiaries, an operating company in a
business synergistic with the business of the Company and in which the
Company receives benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities, (d) shares of Common
Stock or Common Stock Equivalents issued in connection with a
Qualifying Transaction, and (e) any issuances specifically approved by
Purchaser in writing to be included as an Exempt Issuance.
"Fully Diluted Basis" shall mean all Common Stock or Common
Stock Equivalents of the Company including the exercise or conversion
of all rights, options, derivative and convertible securities and
further including (whether convertible or not) of all other common or
preferred stock equivalents outstanding or required to be issued by the
Company.
"Fundamental Transaction" shall mean (A) the Company effects
any merger or consolidation of the Company with or into another Person,
(B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender offer
or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities, cash or property,
or (D) the Company effects any reclassification of the Common Stock or
any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or
property; provided, however, that in the case of (A), (C), and (D) that
a Change of Control occurs.
"Intellectual Property Rights" shall have the meaning ascribed
to such term in Section 3.1(n).
"Legend Removal Date" shall have the meaning ascribed to such
term in Section 4.1(c).
"Liens" means a lien, charge, security interest, encumbrance,
right of first refusal, preemptive right, or other restriction.
"Material Adverse Effect" shall have the meaning assigned to
such term in Section 3.1(b) hereof.
"Material Permits" shall have the meaning ascribed to such
term in Section 3.1(l).
"Maximum Rate" shall have the meaning ascribed to such term in
Section 6.17.
"Participation Maximum" shall have the meaning ascribed to
such term in Section 4.13.
"Person" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
"Pledge Agreement" means the Pledge Agreement in the form of
Exhibit G attached hereto
"Pre-Notice" shall have the meaning ascribed to such term in
Section 4.13.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Public Offering Date" the date that the Company first
registers the Common Stock pursuant to Section 12 under the Exchange
Act, or merges into a corporation (by or through one or a series of
related transactions) already registered pursuant to Section 12 under
the Exchange Act.
"Purchaser Party" shall have the meaning ascribed to such term
in Section 4.11.
"Purchaser's Designee" shall have the meaning ascribed to such
term in Section 4.16.
"Qualifying Transaction" shall mean (i) an equity or
debt/equity financing wherein the Company receives gross proceeds equal
to at least $3,000,000 from the sale of Common Stock or Common Stock
Equivalents issued by the Company to unaffiliated third parties or (ii)
a Fundamental Transaction.
"Registrable Securities" means (i) all Underlying Shares
(exercised and unexercised); (ii) any securities issued or transferred
to Purchaser in connection with or arising out of any Transaction
Document; and (iv) any securities issued or issuable upon any stock
split, dividend or other distribution recapitalization or similar event
with respect to the foregoing.
"Registration Statement" means a registration statement
covering the sale or resale of the Registrable Securities.
"Required Minimum" means, as of any date, the maximum
aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including
any Underlying Shares issuable upon exercise of the Warrant or
conversion of the Debenture, ignoring any exercise limits set forth
therein.
"Rule 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"SBA" shall have the meaning ascribed to such term in Section
5.1.
"SBA Documents" shall have the meaning ascribed to such term
in Section 5.1(b).
"SBIC" shall have the meaning ascribed to such term in
Section 5.1.
"SBIC Act" shall have the meaning ascribed to such term in
Section 5.1(a).
"Securities" means the Debenture, the Warrant, and the
Underlying Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement, dated as of
the date hereof, between the Company and Purchaser, in the form of
Exhibit B attached hereto.
"Security Documents" shall mean the Security Agreement and any
other documents and filing required thereunder in order to grant
Purchaser a first priority security interest in all of the assets of
the Company, including all UCC-1 filing receipts.
"Subscription Amount" means, as to Purchaser, the aggregate
amount to be paid for the Debenture and the Warrant purchased hereunder
as specified in Section 2.1 herein, in United States Dollars and in
immediately available funds.
"Subsequent Financing" shall have the meaning ascribed to such
term in Section 4.13.
"Subsequent Financing Notice" shall have the meaning ascribed
to such term in Section 4.13.
"Subsidiary" means any corporation or limited liability
company of which at least 50% of the outstanding securities having
ordinary voting powers for the election of Board of Directors (or
similar governing body) are at the time owned by the Company. As used
herein, the term "Company" shall be deemed to include all of the
Company's Subsidiaries, if any.
"Trading Market" means, as applicable, the following markets
or exchanges on which the Common Stock is listed or quoted for trading
on the date in question: the American Stock Exchange, the New York
Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market,
the OTC Bulletin Board or the "Pink Sheets" published by the Pink
Sheets LLC.
"Transaction Documents" means this Agreement, the Debenture,
the Security Agreement, the Warrant and any other documents or
agreements executed in connection with the transactions contemplated
hereunder.
"Underlying Shares" means the shares of Common Stock issuable
upon exercise of the Warrants or conversion of the Debenture, or any
other shares of Common Stock acquired by Purchaser hereby.
"Warrant" means the Common Stock Purchase Warrant, in the form
of Exhibit C delivered to Purchaser at the Closing in accordance with
Section 2.2 hereof, which Warrant shall be exercisable immediately and
be exercisable until the close of business on the fifth anniversary
following the Initial Exercise Date (as defined in the Warrant). The
Company and Purchaser agree that the value of the Warrant as of the
date hereof is less than $1,000.
PURCHASE AND SALE
Closing. On the Closing Date, upon the terms and subject to the
conditions set forth herein, concurrent with the execution and delivery of this
Agreement by the parties hereto, the Company agrees to sell, and Purchaser
agrees to purchase the Debenture and the Warrant for an aggregate amount of
$2,000,000 (the "Subscription Amount"). On the Closing Date, Purchaser shall
deliver to the Company via wire transfer of immediately available funds equal to
the Subscription Amount (less all expenses and fees due hereunder), and the
Company shall deliver to Purchaser the Debenture, the Warrant, and the other
items set forth in Section 2.2 issuable at the Closing. On the Closing Date,
contemporaneous with the funding of the purchase made the basis hereof, the
Company shall promptly pay to the order of Purchaser a commitment fee in the
amount of 0%, and an origination fee of 3% of the Subscription Amount, such
amounts to be offset from the Subscription Amount wire transfer contemplated
above. Upon satisfaction of the conditions set forth in Section 2.2, the Closing
shall occur at the offices of Purchaser, or such other location as the parties
shall mutually agree.
2.2 Deliveries
a) On the Closing Date, the Company shall deliver or
cause to be delivered to Purchaser, unless otherwise
indicated, the following:
(i) this Agreement (along with all Disclosure
Schedules) duly executed by the Company;
(ii) a Debenture with a principal amount equal to the
Subscription Amount, registered in the name of
Purchaser;
(iii) a Warrant registered in the name of Purchaser to
purchase up to a such number of shares of Common
Stock at the exercise price as set forth in the
Debenture;
(iv) the Security Agreement along with all Security
Documents;
(v) the Pledge Agreement;
(vi) completed and executed copies of SBA Form 480
(Size Status Declaration), SBA Form 652
(Assurance of Compliance) and SBA Form 1031
(Portfolio Finance Report), Parts A and B, in
the forms of Exhibit D, Exhibit E and Exhibit F,
respectively, attached hereto;
(vii) Approval by the Board of Directors of the
Company, done in conformance with all applicable
law and the bylaws of the Company, certified by
the Secretary of the Company as of the Closing
Date, approving or otherwise ratifying the
transactions contemplated by this Agreement, and
approving the form of this Agreement and the
Transaction Documents, and authorizing
execution, delivery, and performance thereof;
(viii) Specimen signatures of each officer of the
Company executing this Agreement and the
Transaction Documents, and the officer
authorized to sell the Securities under the
Transaction Documents, certified by the
Secretary of the Company;
(ix) A copy of the Articles of Incorporation of the
Company, certified by an official of the
Company's jurisdiction of formation or
incorporation and further certified by the
Secretary of Company not to have been altered or
amended since certification by such official; a
Certificate of Good Standing dated within 30
days of the date first written above from the
Secretary of State of the Company's
jurisdiction; and a copy of the Bylaws of the
Company, certified as true and correct by the
Secretary of the Company;
(x) Payment of the origination and commitment fees,
if any, referenced in Section 2.1 hereof; and
(xi) Such other instruments, documents or items as
Purchaser may reasonably request.
b) On the Closing Date, Purchaser shall deliver or cause
to be delivered to the Company the following:
(i) this Agreement duly executed by Purchaser;
(ii) Purchaser's Subscription Amount by wire transfer
to the account as specified in writing by the
Company; and
(iii) the Security Agreement, duly executed by
Purchaser.
Closing Conditions.
a) The obligations of the Company hereunder in connection with
the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects when made
and on the Closing Date of the representations
and warranties of the Purchaser contained
herein;
(ii) all obligations, covenants and agreements of
Purchaser required to be performed at or prior
to the Closing Date shall have been performed;
and
(iii) the delivery by Purchaser of the items set forth
in Section 2.2(b) of this Agreement.
b) The obligations of Purchaser hereunder in connection with the
Closing are subject to the following conditions being met:
(i) the accuracy in all material respects on
the Closing Date of the representations and
warranties of the Company contained herein;
(ii) all obligations, covenants and
agreements of the Company required to be performed at
or prior to the Closing Date shall have been
performed;
(iii) the delivery by the Company of the
items set forth in Section 2.2(a) of this Agreement;
and
(iv) there shall have been no Material
Adverse Effect with respect to the Company since the
date hereof;
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth
under the corresponding section of the disclosure schedules delivered to
Purchaser concurrently herewith (the "Disclosure Schedules") which Disclosure
Schedules shall be deemed a part hereof, the Company makes the representations
and warranties set forth below to Purchaser.
a) Subsidiaries. The Company does not have any Subsidiaries.
b) Organization and Qualification. The Company is an entity
duly incorporated, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, with the requisite power and
authority to own and use its properties and assets and to carry on its
business as currently conducted. The Company is not in violation or
default of any of the provisions of its certificate or articles of
incorporation, bylaws, or other organizational or charter documents.
The Company is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or property owned by it
makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not have or
reasonably be expected to result in (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Documents,
(ii) a material adverse effect on the results of operations, assets,
business, prospects or financial condition of the Company, or (iii) a
material adverse effect on the Company's ability to perform in any
material respect on a timely basis its obligations under any
Transaction Documents (any of (i), (ii) or (iii), a "Material Adverse
Effect") and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail
such power and authority or qualification.
c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been
duly authorized by all necessary action on the part of the Company.
Each Transaction Documents has been (or upon delivery will have been)
duly executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms
except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
d) No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the
Company of the other transactions contemplated thereby do not and will
not: (i) conflict with or violate any provision of the Company's
certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or
both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company, or give to others
any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company debt or
otherwise) or other understanding to which the Company is a party or by
which any property or asset of the Company is bound or affected, or
(iii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company is subject
(including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected; except
in the case of each of clauses (ii) and (iii), such as could not have
or reasonably be expected to result in a Material Adverse Effect.
e) Filings, Consents and Approvals. Other than as set forth on
Schedule 3.1(e) and except for filing of a Form D and/or state "blue
sky" securities filings, the Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make
any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the
Transaction Documents.
f) Issuance of the Securities. The Securities are duly
authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by
the Company other than restrictions on transfer provided for in the
Transaction Documents. The Underlying Shares, when issued in accordance
with the terms of the Transaction Documents, will be validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by
the Company or any third party. The Company has reserved from its duly
authorized capital stock a number of shares of Common Stock for
issuance of the Underlying Shares at least equal to the Required
Minimum on the date hereof. The Company has not, and to the knowledge
of the Company, no Affiliate of the Company has sold, offered for sale
or solicited offers to buy or otherwise negotiated in respect of any
security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that
would require the registration under the Securities Act of the sale of
the Securities to Purchaser.
g) Capitalization. The capitalization of the Company is as
described in Schedule 3.1(g). The Company has not issued any capital
stock other than as set forth on Schedule 3.1(g). No Person has any
right of first refusal, preemptive right, right of participation, or
any similar right to participate in the transactions contemplated by
the Transaction Documents. Except as a result of the purchase and sale
of the Securities or as set forth on Schedule 3.1(g), there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving
any Person any right to subscribe for or acquire, any shares of the
Company's capital stock, or contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue
additional shares of its capital stock, or securities or rights
convertible or exchangeable into shares of its capital stock. The
issuance and sale of the Securities will not obligate the Company to
issue shares of Common Stock or other securities to any Person (other
than Purchaser) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price
under such securities. All of the outstanding shares of capital stock
of the Company are validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws,
and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any stockholder,
the Board of Directors of the Company or others is required for the
issuance and sale of the Securities. Except as disclosed in Schedule
3.1(g), there are no stockholders agreements, voting agreements or
other similar agreements with respect to the Company's capital stock to
which the Company is a party or, to the knowledge of the Company,
between or among any of the Company's stockholders. A complete list of
stockholders of the Company that are officers, directors and
individuals holding 5% or more of the outstanding Common Stock is
included in Schedule 3.1(g).
h) Financial Statements. Other than as set forth on Schedule
3.1(h), there are no audited financial statements of the Company.
i) Litigation. Other than as set forth on Schedule 3.1(i),
there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, or any of its respective properties
before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an "Action") which (i) adversely affects or
challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any director or
officer thereof, is or has been the subject of any Action involving a
claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to
the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or
former director or officer of the Company.
j) Labor Relations. No material labor dispute exists or, to
the knowledge of the Company, is imminent with respect to any of the
employees of the Company which could reasonably be expected to result
in a Material Adverse Effect.
k) Compliance. The Company (i) is not in default under or in
violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the
Company), nor has the Company received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not
such default or violation has been waived), (ii) is not in violation of
any order of any court, arbitrator or governmental body, or (iii) is
not or has not been in violation of any statute, rule or regulation of
any governmental authority, including without limitation all foreign,
federal, state and local laws applicable to its business except in each
case as could not have a Material Adverse Effect.
l) Regulatory Permits. The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state,
local or foreign regulatory authorities necessary to conduct their
respective businesses as described in Schedule 3.1(l), except where the
failure to possess such permits could not have or reasonably be
expected to result in a Material Adverse Effect ("Material Permits"),
and the Company has not received any notice of proceedings relating to
the revocation or modification of any Material Permit.
m) Title to Assets. Except as set forth on Schedule 3.1(m),
the Company has good and marketable title in (or licenses or rights to
use) all personal property that is material to the business of the
Company, in each case free and clear of all Liens. The Company does not
own any real property. Any real property and facilities held under
lease by the Company are held by it under valid, subsisting and
enforceable leases of which the Company is in compliance. The Company
has not granted, and no third party has obtained in any manner, other
than as contemplated by the Transaction Documents, any security
interest in the assets of the Company. Schedule 3.1(m) sets forth and
details which, if any, of such assets are owned by any Subsidiary.
n) Intellectual Property.
(i) Schedule 3.1(n) contains a list of the Company's
Intellectual Property. For purposes hereof, "Intellectual
Property" means any or all of the following and all rights and
goodwill, arising out of or associated therewith: (A) all
United States, international, and foreign patents and
applications therefor (including provisional applications) and
all reissues, reexaminations, divisions, renewals, extensions,
provisionals, continuations and continuations-in-part thereof;
(B) all inventions (whether patentable or not), invention
disclosures, improvements, trade secrets, proprietary
information, know-how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing
throughout the world; (C) all international, U.S. and foreign
registered trademarks, trade names, service marks, logos,
slogans, and designs, applications to register trademarks,
trade names, service marks, logos, slogans, and designs,
intent-to-use applications, or other registrations or
applications related to trademarks, service marks, common law
trademarks, trade names, service marks, logos, slogans, and
designs and all associated goodwill associated with all of the
foregoing; (D) all copyrights, copyright registrations and
applications therefor, and all other rights corresponding
thereto throughout the world; (E) all industrial designs and
any registrations and applications therefor throughout the
world; (F) all URL's, domain names, trade names, logos,
slogans, designs, common law trademarks and service marks,
trademark and service xxxx registrations and applications
therefor throughout the world; (G) all databases and data
collections and all rights therein throughout the world; (H)
all moral and economic rights of authors and inventors,
however denominated, throughout the world; and (I) any other
intellectual property that is the subject of an application,
certificate, filing, registration or other document issued,
filed with, or recorded with any federal, state, local or
foreign government or other public body; (J) any similar or
equivalent rights to any of the foregoing anywhere in the
world. For purposes hereof, "Company Intellectual Property"
means any Company Intellectual Property owned or licensed by
the Company, and "Company Registered Intellectual Property"
means any items of Intellectual Property described in
subsections (A), (C), or (D) of this paragraph.
(ii) No Company Intellectual Property or product or
service of the Company's business related to the Company
Intellectual Property is subject to any proceeding or
outstanding decree, order, judgment, agreement or stipulation
restricting in any manner the use, transfer or licensing
thereof by the Company, or which may affect the validity, use
or enforceability of such Company Intellectual Property. Each
item of Company Registered Intellectual Property is valid and
subsisting. All necessary registration, maintenance and
renewal fees currently due in connection with the Company
Registered Intellectual Property have been made and all
necessary documents, recordations and certifications in
connection with such Company Registered Intellectual Property
have been filed with the relevant patent, copyright, trademark
or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purpose of
maintaining such Company Registered Intellectual Property.
(iii) The Company owns and has good and exclusive
title to, or has licenses (any Intellectual Property subject
to any license to be identified as such in Schedule 3.1(n))
(sufficient for the conduct of the Company's business as
currently conducted) to use each item of the Company's
Intellectual Property free and clear of any Lien; and the
Company is the exclusive owner or exclusive licensee of all
trademarks and service marks, trade names and domain names
used in connection with and material to the operation or
conduct of the Company's business, including the sale of any
products or the provision of any services by same, free and
clear of all Liens. The Company Intellectual Property, other
than future improvements, derivations, and additions to be
made by the Company or on behalf of the Company, constitutes
all of the Intellectual Property used or contemplated for use
in connection with the Company's current business and in the
performance of any contract, proposal or letter of intent in
connection with same.
(iv) To the extent that any Company Intellectual
Property has been developed or created by a third party for
the Company, the Company has a written agreement with such
third party with respect thereto and the Company thereby
either (A) has obtained ownership of and is the exclusive
owner of, or (b) has obtained a license (sufficient for the
conduct of the Company's business as currently conducted) to
all of such third party's Intellectual Property in such work,
material or invention by operation of law or by valid
assignment, to the fullest extent it is legally possible to do
so, each such agreement being listed on Schedule 3.1(n).
(v) The operation of the Company's business as it is
currently conducted, including the Company's design,
development, marketing and sale of the products or services of
the Company (including with respect to products currently
under development) has not, does not and will not infringe or
misappropriate in any manner the Intellectual Property of any
third party or, to the knowledge of the Company, constitute
unfair competition or trade practices under the laws of any
jurisdiction.
(vi) The Company has no knowledge, and has not
received written notice or any other overt threats from any
third party, that the operation of the Company's business as
it is currently conducted, or any act, product or service of
the Company's business, infringes or misappropriates the
Intellectual Property of any third party or constitutes unfair
competition or trade practices under the laws of any
jurisdiction. The Company's Intellectual Property is not the
subject of any third party communications relating to validity
or enforceability, cease and desist orders, demand letters,
warnings or prior settlement agreements. The Company's
Intellectual Property is not currently the subject of any
pending or threatened re-examinations, oppositions,
interferences, or infringement actions.
(vii) To the knowledge of the Company, no Person has
or is infringing or misappropriating any Company Intellectual
Property.
(viii) The Company has taken reasonable steps to
protect the rights of the Company in the confidential
information and trade secrets of the Company used in the
Company's business or any trade secrets or confidential
information of third parties used in same, and, without
limiting the foregoing, the Company has enforced a policy
requiring each employee and contractor to execute a
proprietary information/confidentiality agreement, and except
under confidentiality obligations or in the context of the
attorney-client relationship, there has not been any
disclosure by the Company of any such trade secrets or
confidential information.
o) Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the
Company is engaged, including directors and officers insurance at least
equal to the aggregate principal amount of the Debenture. To the best
of Company's knowledge, such insurance contracts and policies are
accurate and complete. The Company has no reason to believe that it
will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a
significant increase in cost.
p) Transactions With Affiliates and Employees. None of the
officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to
any transaction with the Company (other than for services as employees,
officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of
$50,000 other than (i) for payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf
of the Company and (iii) for other employee benefits, including stock
option agreements under any stock option plan of the Company.
q) Internal Accounting Controls. The Company maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only
in accordance with management's general or specific authorization, and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
r) Certain Fees. Other than as set forth on Schedule 3.1(r),
no brokerage or finder's fees or commissions are or will be payable by
the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect
to the transactions contemplated by this Agreement. Purchaser shall
have no obligation with respect to any fees or with respect to any
claims made by or on behalf of other Persons for fees of a type
contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement.
s) Private Placement. Assuming the accuracy of Purchaser's
representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and
sale of the Securities by the Company to Purchaser as contemplated
hereby.
t) Investment Company. The Company is not, and is not an
Affiliate of, and immediately after receipt of payment for the
Securities, will not be or be an Affiliate of, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not
become subject to the Investment Company Act.
u) Material Changes. Since the date of the Company's most
recent financial statements provided to the Company and since the date
of the last public filing with the Commission (i) there has been no
event, occurrence or development that has had or that could reasonably
be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than
(A) trade payables and accrued expenses incurred in the ordinary course
of business consistent with past practice and (B) liabilities not
required to be reflected in the Company's financial statements pursuant
to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting,
(iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or
made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company
stock option plans. The Company does not have pending before the
Commission any request for confidential treatment of information..
v) Application of Takeover Protections. The Company and its
Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company's
Certificate of Incorporation (or similar charter documents) or the laws
of its state of incorporation that is or could become applicable to
Purchaser as a result of Purchaser and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company's issuance of
the Securities and the Purchaser's ownership of the Securities.
w) Disclosure. The Company confirms that neither it nor any
other Person acting on its behalf has provided Purchaser or its agents
or counsel with any information that constitutes or might constitute
material, nonpublic information. The Company understands and confirms
that Purchaser will rely on the foregoing representations and covenants
in effecting transactions in securities of the Company. All written
statements provided to Purchaser regarding the Company, its business
and the transactions contemplated hereby, including the Disclosure
Schedules to this Agreement, furnished by or on behalf of the Company
with respect to the representations and warranties made herein are true
and correct with respect to such representations and warranties and do
not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
x) No Integrated Offering. Assuming the accuracy of
Purchaser's representations and warranties set forth in Section 3.2,
neither the Company, nor any of its affiliates, nor any Person acting
on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the Securities to
be integrated with prior offerings by the Company for purposes of the
Securities Act or any applicable shareholder approval provisions.
y) Solvency. Based on the financial condition of the Company
as of the Closing Date after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i)
the Company's fair saleable value of its assets exceeds the amount that
will be required to be paid on or in respect of the Company's existing
debts and other liabilities (including known contingent liabilities) as
they mature; (ii) the Company's assets do not constitute unreasonably
small capital to carry on its business for the current fiscal year as
now conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements
and capital availability thereof; and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive, were
it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on
or in respect of its debt when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay
such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt).
z) Tax Status. Except for matters that would not, individually
or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company has filed all necessary federal,
state and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon, and the Company has no
knowledge of a tax deficiency which has been asserted or threatened
against the Company.
aa) No General Solicitation. Neither the Company nor any
person acting on behalf of the Company has offered or sold any of the
Securities by any form of general solicitation or general advertising.
The Company has offered the Securities for sale only to Purchaser and
certain other "accredited investors" within the meaning of Rule 501
under the Securities Act.
bb) Foreign Corrupt Practices. Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any corrupt funds for
unlawful contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution
made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt
Practices Act of 1977, as amended
cc) Indebtedness. Other than as set forth on Schedule 3.1(cc),
as of the Closing Date, the Company has no indebtedness.
dd) No Disagreements with Accountants and Lawyers. There are
no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the accountants and
lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and
lawyers.
ee) Acknowledgment Regarding Purchaser's Purchase of
Securities. The Company acknowledges and agrees that Purchaser is
acting solely in the capacity of an arm's length purchaser with respect
to the Transaction Documents and the transactions contemplated hereby
as they relate to the Company. The Company further acknowledges that
Purchaser 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 hereby and any advice given by Purchaser
or any of its respective representatives or agents to the Company in
connection with this Agreement and the transactions contemplated hereby
is merely incidental to the Purchaser's purchase of the Securities.
ff) Material Liabilities. The sole outstanding material
liabilities of the Company are set forth on Schedule 3.1(ff) .
gg) Material Agreements. Except for those agreements set forth
on Schedule 3.1(gg) hereof, there are no other material agreements to
which the Company is a party. To the Company's knowledge, each Material
Agreement is currently valid and in full force and effect, and is
enforceable by the Company in accordance with its terms. To the
Company's knowledge, the Company is not in default, and no party has
notified the Company that it is in default, under any such Material
Agreement. Seller has not waived any of its rights under any such
Material Agreement. The Material Agreements constitute all of the
contracts necessary to enable the Company to conduct the business of
the Company in the manner in which the business is currently being
conducted and in which the Company's predecessor in interest so
conducted same.
hh) Board of Directors. The Board of Directors of Company
consists of those persons set forth on Schedule 3.1(hh).
3.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants as of the date hereof and as of the Closing Date to
the Company as follows:
(a) Organization; Authority. Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or
partnership power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to
carry out its obligations thereunder. The execution, delivery and
performance by Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate or
similar action on the part of Purchaser. Each of the Transaction
Documents to which it is a party has been duly executed by Purchaser,
and when delivered by Purchaser in accordance with the terms hereof,
will constitute the valid and legally binding obligation of Purchaser,
enforceable against it in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited
by applicable law.
(b) Purchaser Representation. Purchaser understands that the
Securities are "restricted securities" and have not been registered
under the Securities Act or any applicable state securities law and is
acquiring the Securities as principal for its own account and not with
a view to or for distributing or reselling such Securities or any part
thereof, has no present intention of distributing any of such
Securities and has no arrangement or understanding with any other
persons regarding the distribution of such Securities (this
representation and warranty not limiting Purchaser's right to sell the
Securities pursuant to a Registration Statement or otherwise in
compliance with applicable federal and state securities laws).
Purchaser is acquiring the Securities hereunder in the ordinary course
of its business. Purchaser does not have any agreement or
understanding, directly or indirectly, with any Person to distribute
any of the Securities.
(c) Purchaser Status. At the time Purchaser was offered the
Securities, it was, and at the date hereof it is, and on each date on
which it exercises any Warrants it will be either: (i) an "accredited
investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or
(a)(8) under the Securities Act or (ii) a "qualified institutional
buyer" as defined in Rule 144A(a) under the Securities Act.
(d) Experience of Purchaser. Purchaser, either alone or
together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such
investment. Purchaser is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.
(e) Certain Fees. Purchaser has not entered into an agreement
whereby brokerage or finder's fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by this Agreement.
The Company acknowledges and agrees that Purchaser does not
make or has not made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set
forth in this Section 3.2.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
Transfer Restrictions.
(a) The Securities may only be disposed of in compliance with
state and federal securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement
or Rule 144, to the Company or to an Affiliate of Purchaser or in
connection with a pledge as contemplated in Section 4.1(b), the Company
may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not
require registration of such transferred Securities under the
Securities Act or any applicable state securities laws. As a condition
of transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights of Purchaser
under this Agreement.
(b) Purchaser agrees to the imprinting, so long as is required
by this Section 4.1(b), of a legend on any of the Securities in
substantially the following form:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES
ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS
AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
The Company acknowledges and agrees that Purchaser may from
time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all
of the Securities to a financial institution that is an "accredited
investor" as defined in Rule 501(a) under the Securities Act and who
agrees to be bound by the provisions of this Agreement and, if
required under the terms of such arrangement, Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties.
Such a pledge or transfer would not be subject to approval of the
Company and no legal opinion of legal counsel of the pledgee, secured
party or pledgor shall be required in connection therewith. Further,
no notice shall be required of such pledge. At the Purchaser's
expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of the
Securities.
(c) If in accordance with law, Certificates evidencing
Underlying Shares shall not contain any legend (including the legend
set forth in Section 4.1(b) hereof): (i) while a registration statement
covering the resale of such security is effective under the Securities
Act, or (ii) following any sale of such Underlying Shares pursuant to
Rule 144, or (iii) if such Underlying Shares are eligible for sale
under Rule 144(k), or (iv) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the
Commission); provided, however, in connection with the issuance of the
Underlying Shares, Purchaser hereby agrees to adhere to and abide by
all prospectus delivery requirements under the Securities Act and rules
and regulations of the Commission and all applicable state "blue sky"
securities laws. The Company shall cause its counsel to issue a legal
opinion to the Company's transfer agent (provided that such opinion may
be lawfully given) promptly after the Effective Date if required by the
Company's transfer agent to effect the removal of the legend hereunder.
If all or any portion of a Warrant is exercised at a time when there is
an effective registration statement to cover the resale of the
Underlying Shares, or if such shares may be sold under Rule 144(k) or
if such legend is not otherwise required under applicable requirements
of the Securities Act (including judicial interpretations thereof) then
such shares shall be issued free of all legends. The Company agrees
that following the Effective Date or at such time as such legend is no
longer required under this Section 4.1(c), it will, no later than three
Business Days following the delivery by Purchaser to the Company or the
Company's transfer agent of a certificate representing Underlying
Shares, as applicable, issued with a restrictive legend (such third
Business Day, the "Legend Removal Date"), deliver or cause to be
delivered to Purchaser a certificate representing such shares that is
free from all restrictive and other legends. The Company may not make
any notation on its records or give instructions to any transfer agent
of the Company that enlarge the restrictions on transfer set forth in
this Section.
(d) In addition to Purchaser's other available remedies, the
Company shall pay to Purchaser, in cash, as partial liquidated damages
and not as a penalty, for each $500 of Underlying Shares (based on the
closing bid price of the Common Stock on the then principal Trading
Market on the date such Securities are submitted to the Company's
transfer agent) delivered for removal of the restrictive legend and
subject to this Section 4.1(c), $5 per Business Day (increasing to $10
per Business Day 5 Business Days after such damages have begun to
accrue) for each Business Day after the Legend Removal Date until such
certificate is delivered without a legend. Nothing herein shall limit
Purchaser's right to pursue actual damages for the Company's failure to
deliver certificates representing any Securities as required by the
Transaction Documents, and Purchaser shall have the right to pursue all
remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.
(e) Purchaser agrees that the removal of the restrictive
legend from certificates representing Securities as set forth in this
Section 4.1 is predicated upon the Company's reliance that Purchaser
will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus
delivery requirements, or an exemption therefrom.
4.2 Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Underlying Shares may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market
conditions. The Company further acknowledges that its obligations under the
Transaction Documents, including without limitation its obligation to issue the
Underlying Shares pursuant to the Transaction Documents, are unconditional and
absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of the effect of any such dilution or any claim the
Company may have against Purchaser and regardless of the dilutive effect that
such issuance may have on the ownership of the other stockholders of the
Company.
4.3 Furnishing of Information. If after the date hereof the Company
becomes subject to the rules and regulations of the Exchange Act and as long as
Purchaser owns restricted Securities, the Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. As long as Purchaser owns Securities, if the
Company is not required to file reports pursuant to the Exchange Act, it will
prepare and furnish to Purchaser and make publicly available in accordance with
Rule 144(c) such information as is required for Purchaser to sell the Underlying
Shares under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell such Underlying
Shares without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144.
4.4 Integration. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to Purchaser or, if then listed or
quoted on a Trading Market, that would be integrated with the offer or sale of
the Securities for purposes of the rules and regulations of any Trading Market.
4.5 Exercise Procedures. The form of Notice of Exercise (or Conversion
Notice) included in the Warrant (or Debenture) sets forth the totality of the
procedures required of Purchaser in order to exercise the Warrant or convert the
Debenture. No additional legal opinion or other information or instructions
shall be required of Purchaser to exercise its Warrants or convert the
Debenture. The Company shall honor exercises of the Warrant and conversions of
the Debenture and shall deliver Underlying Shares in accordance with the terms,
conditions and time periods set forth in such Transaction Documents.
4.6 Intentionally Omitted.
4.7 Shareholders Rights Plan. No claim will be made or enforced by the
Company or, to the knowledge of the Company, any other Person that Purchaser is
an "Acquiring Person" under any shareholders rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that Purchaser
could be deemed to trigger provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other
agreement between the Company and Purchaser.
4.8 Non-Public Information. If at any time while the Company is subject
to the reporting provisions of the Exchange Act, the Company covenants and
agrees that neither it nor any other Person acting on its behalf will provide
Purchaser or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information. The Company understands and confirms that Purchaser
shall be relying on the foregoing representations in effecting transactions in
securities of the Company.
4.9 Use of Proceeds. Except as set forth in Schedule 4.9, the Company
shall use the net proceeds from the sale of the Securities hereunder for working
capital purposes and not for the satisfaction of any portion of the Company's
debt (other than payment of trade payables in the ordinary course of the
Company's business and prior practices), to redeem any Common Stock or Common
Stock Equivalents or to settle any outstanding litigation. Schedule 4.9 shall
detail the Company's expected use of proceeds received from the sale of the
Securities hereunder.
4.10 Reimbursement. If Purchaser becomes involved in any capacity in
any Proceeding by or against any Person who is a stockholder of the Company
(except as a result of sales, pledges, margin sales and similar transactions by
Purchaser to or with any current stockholder), solely as a result of Purchaser's
acquisition of the Securities under this Agreement, and Purchaser is successful
in the Proceeding the Company will reimburse Purchaser for its reasonable legal
and other expenses (including the cost of any investigation preparation and
travel in connection therewith) incurred in connection therewith, as such
expenses are incurred. The reimbursement obligations of the Company under this
paragraph shall be in addition to any liability which the Company may otherwise
have, shall extend upon the same terms and conditions to any Affiliates of
Purchaser who are actually named in such action, proceeding or investigation,
and partners, directors, agents, employees and controlling persons (if any), as
the case may be, of Purchaser and any such Affiliate, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, Purchaser and any such Affiliate and any such
Person. The Company also agrees that neither Purchaser nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any
liability to the Company or any Person asserting claims on behalf of or in right
of the Company solely as a result of acquiring the Securities under this
Agreement.
4.11 Indemnification of Purchaser. Subject to the provisions of this
Section 4.11, the Company will indemnify and hold the Purchaser and its
directors, officers, managers, shareholders, partners, employees and agents
(each, a "Purchaser Party") harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys'
fees and costs of investigation that any such Purchaser Party may suffer or
incur as a result of or relating to (a) any breach of any of the
representations, warranties, the covenants or agreements made by the Company in
this Agreement or in the other Transaction Documents or (b) any action
instituted against Purchaser, or any of its Affiliates, by any stockholder of
the Company who is not an Affiliate of Purchaser, with respect to any of the
transactions contemplated by the Transaction Documents (unless such action is
based upon a breach of Purchaser's representation, warranties or covenants under
the Transaction Documents or any agreements or understandings Purchaser may have
with any such stockholder or any violations by Purchaser of state or federal
securities laws or any conduct by Purchaser which constitutes fraud, gross
negligence, willful misconduct or malfeasance). If any action shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, such Purchaser Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing. Any Purchaser Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser
Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Company and
the position of such Purchaser Party. The Company will not be liable to any
Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party
effected without the Company's prior written consent, which shall not be
unreasonably withheld or delayed; or (ii) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party's
breach of any of the representations, warranties, covenants or agreements made
by Purchaser in this Agreement or in the other Transaction Documents.
Reservation and Listing of Securities.
(a) The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the
Transaction Documents in such amount as may be required to fulfill its
obligations in full under the Transaction Documents.
(b) If, on any date, the number of authorized but unissued
(and otherwise unreserved) shares of Common Stock is less than the
Required Minimum on such date, then the Board of Directors of the
Company shall use commercially reasonable efforts to amend the
Company's certificate or articles of incorporation to increase the
number of authorized but unissued shares of Common Stock to at least
the Required Minimum at such time, as soon as possible and in any event
not later than the 75th day after such date.
(c) The Company shall, if then applicable: (i) in the time and
manner required by the Trading Market or if the Common Stock is listed
on another Trading Market, promptly prepare and file with such Trading
Market an additional shares listing application covering a number of
shares of Common Stock at least equal to the Required Minimum on the
date of such application, (ii) take all steps necessary to cause such
shares of Common Stock to be approved for listing on the Trading Market
as soon as possible thereafter, (iii) provide to Purchaser evidence of
such listing, and (iv) maintain the listing of such Common Stock on any
date at least equal to the Required Minimum on such date on such
Trading Market or another Trading Market.
4.13 Intentionally Omitted
4.14 Future Priced Securities. From the date hereof until the date that
less than 20% in principal amount of the Debenture initially issued is
outstanding, the Company shall be prohibited from effecting or entering into an
agreement to effect any Subsequent Financing involving a "Variable Rate
Transaction" (as defined below). The term "Variable Rate Transaction" shall mean
a transaction in which the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock (A) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, (B)
with a conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock, or
(C) whereby the number of underlying shares of Common Stock to be received upon
exercise, conversion, or exchange thereof, is variable in any respect in which
the number of such underlying shares could be increased.
4.15 Intentionally Omitted.
4.16 Intentionally Omitted.
4.17 Registration Rights.
(a) Piggyback Registrations. If at any time after
the date hereof, the Company shall file a registration
statement relating to any of its securities, it will notify
Purchaser in writing and, upon Purchaser's request, will
include the offer and sale of Registrable Securities in such
registration statement to the extent permitted by the
underwriter, if any. In the event that the Company fails to
include the Registrable Securities in a piggy back statement
as required herein, Purchaser shall give notice demanding a
registration, and within 75 days after the notice the Company
shall prepare and file a registration statement with the SEC
with respect to such Registrable Securities. If the Company
fails to file within said time period, then, at the option of
Purchaser, for each full calendar month that the Registrable
Securities are not fully registered, Company shall issue to
Purchaser 0.1 % of its common shares then outstanding computed
on a Fully Diluted Basis per day until the shares are
registered.
(b) Whenever required to include Registrable
Securities in any registration or to effect the registration
of any Registrable Securities pursuant to this Agreement, the
Company shall, as expeditiously as reasonably possible,
prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its absolute
best lawful efforts to cause such registration statement to
become effective, and use its absolute best efforts to keep
such registration statement effective until all such
Registrable Securities have been distributed. In addition, the
Company shall use its best lawful efforts to register and
qualify the securities covered by such registration statement
under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by Purchaser,
provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify as a
broker-dealer in any states or jurisdictions or to do business
or to file a general consent to service of process in any of
such states or jurisdictions.
(c) All expenses, other than underwriting discounts
and commissions incurred in connection the registrations
contemplated herein, including, without limitation, all
registration, filing and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the
Company, and the reasonable fees and disbursements of counsel
for the selling Purchaser, shall be borne by the Company.
(d) Subject to the terms and conditions of this
Agreement and the other Transaction Documents, the right to
cause the Company to register Registrable Securities pursuant
to this Agreement may be assigned by Purchaser to any
transferee or assignee of such securities; provided that said
transferee or assignee is a transferee or assignee of at least
five percent (5%) of Purchaser's Registrable Securities and
agrees to be bound by the terms hereof.
ARTICLE V.
SMALL BUSINESS INVESTMENT COMPANY
5.1 Small Business Investment Company Provisions. The Company
acknowledges that Purchaser, is a small business investment company ("SBIC")
licensed by the United States Small Business Administration (the "SBA"), and
makes the following representations, warranties and covenants to Purchaser for
so long as the Debenture held by Purchaser is outstanding:
(a) Small Business Concern. The Company represents and
warrants that it, taken together with its "affiliates" (as that term is
defined in 13 C.F.R. ss.121.103), is a "Small Business Concern" within
the meaning of 15 U.S.C. ss.662(5), that is Section 103(5) of the Small
Business Investment Act of 1958, as amended (the "SBIC Act"), and the
regulations thereunder, including 13 C.F.R. ss.107, and meets the
applicable size eligibility criteria set forth in 13 C.F.R.
ss.121.301(c)(1) or the industry standard covering the industry in
which the Company is primarily engaged as set forth in 13 C.F.R.
ss.121.301(c)(2). Neither the Company nor any of its Subsidiaries
presently engages in any activities for which a small business
investment company is prohibited from providing funds by the SBIC Act,
including 13 C.F.R. ss.107.
(b) Small Business Administration Documentation. On or before
the Closing Date, Purchaser shall have received SBA Form 480 (Size
Status Declaration) and SBA Form 652 (Assurance of Compliance) which
have been completed and executed by the Company, and SBA Form 1031
(Portfolio Finance Report), Parts A and B of which have been completed
by the Company (the "SBA Documents").
(c) Inspection. The Company will permit Purchaser or its
representatives, at the Company's expense, and examiners of the SBA to
visit and inspect the properties and assets of the Company, to examine
its books of account and records, and to discuss the Company's affairs,
finances and accounts with the Company's officers, senior management
and accountants, all at such reasonable times as may be requested by
Purchaser or the SBA.
(d) Informational Covenant. Within sixty (60) calendar days
after the end of the Company's fiscal year, the Company will furnish or
cause to be furnished to Purchaser information required by the SBA
concerning the economic impact of Purchaser's investment, for (or as of
the end of) each fiscal year, including but not limited to: (i) board
minutes, (ii) information concerning full-time equivalent employees,
(iii) federal, state and local income taxes paid, (iv) gross revenue,
(v) source of revenue growth, (vi) after-tax profit and loss, and (vii)
and federal, state and local income tax withholding. Such information
shall be forwarded by the Company on a form provided by Purchaser. The
Company also will furnish or cause to be furnished to Purchaser such
other information regarding the business, affairs and condition of the
Company as Purchaser may from time to time reasonably request.
(e) Use of Proceeds. The Company will deliver to Purchaser
from time to time promptly following Purchaser's request, a written
report, certified as correct by an officer, verifying the purposes and
amounts for which proceeds from the Debenture have been disbursed. The
Company will supply to Purchaser such additional information and
documents as Purchaser reasonably requests with respect to the
Company's use of proceeds, and will permit Purchaser to have access to
any and all the Company's records and information and personnel as
Purchaser deems necessary to verify how such proceeds have been or are
being used, and to assure that the proceeds have been used for the
purposes specified on Schedule 4.9.
Activities and Proceeds.
(i) Neither the Company nor any of its Affiliates will
engage in any activities or use directly or
indirectly the proceeds from the Debenture for any
purpose for which a SBIC prohibited from providing
funds by the SBIC Act, including 13 C.F.R. ss.107.
(ii) Without obtaining the prior written approval of
Purchaser, the Company will not change, within one
(1) year of the Closing Date, the Company's business
activity from that described on Schedule 5.1(f) to a
business activity which a small business investment
company is prohibited from providing funds by the
SBIC Act. The Company agrees that any such changes
in its business activity without such prior written
consent of Purchaser will constitute a material
breach of the obligations of the Company under the
Transaction Documents (an "Activity Event of
Default").
MISCELLANEOUS
6.1 Intentionally Deleted.
6.2 Fees and Expenses. At the closing, the Company shall reimburse
Purchaser for its legal fees and expenses in the amount of $20,000. Except as
expressly set forth above and in the Transaction Documents to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all transfer agent fees, stamp taxes and other
taxes and duties levied in connection with the issuance of any Securities.
6.3 Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
6.4 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto prior to 5:30 p.m. (Dallas,
Texas time) on a Business Day, (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that
is not a Business Day or later than 5:30 p.m. (Dallas, Texas time) on any
Business Day, (c) the second Business Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the signature pages
attached hereto.
6.5 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.
6.6 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
6.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of Purchaser. Purchaser may assign any or all
of its rights under this Agreement to any Person to whom Purchaser assigns or
transfers any Securities, provided such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions hereof that
apply to the Purchaser.
6.8 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.10.
6.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Texas, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of
Dallas, Texas. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Dallas,
Texas for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper or inconvenient venue
for such proceeding. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY. If
either party shall commence an action or proceeding to enforce any provisions of
the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys' fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
6.10 Survival. The representations and warranties contained herein
shall survive the Closing and the delivery and/or exercise of the Securities,
for a period of one (1) year following the satisfaction or complete conversion
of the Debenture.
6.11 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
6.12 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
6.13 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever Purchaser exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights; provided, however, in
the case of a rescission of an exercise of a Warrant, Purchaser shall be
required to return any shares of Common Stock subject to any such rescinded
exercise notice.
6.14 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.
6.15 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, Purchaser and
the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
6.16 Payment Set Aside. To the extent that the Company makes a payment
or payments to Purchaser pursuant to any Transaction Documents or Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
6.17 Usury. To the extent it may lawfully do so, the Company hereby
agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of,
usury laws wherever enacted, now or at any time hereafter in force, in
connection with any claim, action or proceeding that may be brought by Purchaser
in order to enforce any right or remedy under any Transaction Documents.
Notwithstanding any provision to the contrary contained in any Transaction
Documents, it is expressly agreed and provided that the total liability of the
Company under the Transaction Documents for payments in the nature of interest
shall not exceed the maximum lawful rate authorized under applicable law (the
"Maximum Rate"), and, without limiting the foregoing, in no event shall any rate
of interest or default interest, or both of them, when aggregated with any other
sums in the nature of interest that the Company may be obligated to pay under
the Transaction Documents exceed such Maximum Rate. It is agreed that if the
maximum contract rate of interest allowed by law and applicable to the
Transaction Documents is increased or decreased by statute or any official
governmental action subsequent to the date hereof, the new maximum contract rate
of interest allowed by law will be the Maximum Rate applicable to the
Transaction Documents from the effective date forward, unless such application
is precluded by applicable law. If under any circumstances whatsoever, interest
in excess of the Maximum Rate is paid by the Company to Purchaser with respect
to indebtedness evidenced by the Transaction Documents, such excess shall be
applied by Purchaser to the unpaid principal balance of any such indebtedness or
be refunded to the Company, the manner of handling such excess to be at
Purchaser's election.
6.18 Liquidated Damages. The Company's obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.
(Signature Page Follows)
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
COMPANY
MAVERICK OIL AND GAS, INC. Address for Notice and Delivery:
--------------------------------
000 Xxxx Xxx Xxxx Xxxx., Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
By: /s/ V. Xxx Xxxxxx
_______________________________
Name: V. Xxx Xxxxxx
Title: Chief Executive Officer
PURCHASER
TRIDENT GROWTH FUND, L.P. Address for Notice and Delivery:
--------------------------------
700 Gemini
By: TRIDENT MANAGEMENT, LLC, its Xxxxxxx, XX 00000
GENERAL PARTNER Attn: Xxxxx St. Xxxxxx
By: /s/ Xxxxx XxXxxx
_________________________________________
Name: Xxxxx XxXxxx
Title: Authorized Member
ATTACHMENTS
Exhibit A Form of Debenture
---------
Exhibit B Form of Security Agreement
---------
Exhibit C Form of Warrant
---------
Exhibit D SBA Form 480
---------
Exhibit E SBA Form 652
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Exhibit F SBA Form 1031
---------
Exhibit G Pledge Agreement
---------
Schedule 3.1(a) Subsidiaries
Schedule 3.1(e) Filings, Consents and Approvals
Schedule 3.1(g) Capitalization
Schedule 3.1(h) Financial Statements
Schedule 3.1(i) Litigation
Schedule 3.1(l) Regulatory Permits
Schedule 3.1(m) Title to Assets (Outstanding liens)
Schedule 3.1(n) Intellectual Property
Schedule 3.1(r) Certain Fees (Broker Fees)
Schedule 3.1(u) Registration Rights
Schedule 3.1(cc) Indebtedness
Schedule 3.1(ff) Material Liabilities
Schedule 3.1(gg) Material Agreements
Schedule 3.1(hh) Board of Directors
Schedule 4.9 Use of Proceeds
Schedule 5.1(f) Business Activity
DISCLOSURE SCHEDULE
